Opinion
B292099
02-25-2021
AZAD HOVSEPYAN, Plaintiff and Appellant, v. THE ANSCHUTZ ENTERTAINMENT GROUP, INC. et al. Defendants and Respondents.
Cheren and Associates and Daniel J. Cheren for Plaintiff and Appellant. Wood, Smith, Henning & Berman, Kevin D. Smith, Nicholas M. Gedo; Wayne & Associates; Altman, Blitstein & Wayne and Eric J. Wayne for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC585653) APPEAL from an order of the Superior Court of Los Angeles County, Georgina T. Rizk, Judge. Affirmed. Cheren and Associates and Daniel J. Cheren for Plaintiff and Appellant. Wood, Smith, Henning & Berman, Kevin D. Smith, Nicholas M. Gedo; Wayne & Associates; Altman, Blitstein & Wayne and Eric J. Wayne for Defendants and Respondents.
* * * * * *
After slipping and falling on a patch of wet floor at a sports arena, a man sued the arena's owner and the janitorial company he believed was "most likely" servicing the arena at that time. As it turns out, the man named the wrong company. The man sought to amend his pleadings to "correct[]" what he claimed was "a mistake in the name of a party" under Code of Civil Procedure section 473, but the trial court ruled that section 473 did not apply because the janitorial company the man sought to add was "a completely different entity" than the company he initially named. Under the deferential review we give such rulings, we cannot conclude that the trial court abused its discretion under section 473. Accordingly, we affirm the trial court's order.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
On October 7, 2013, Azad Hovsepyan (plaintiff) attended an event at Staples Center. While there, he slipped and fell on a patch of wet floor as he walked along one of the passages—colorfully called a "vomitorium"—that connects the third-floor concourse that rings the Center to the stadium seating in its interior. Plaintiff sustained injuries that necessitated surgery.
This name comes from the apocryphal belief that ancient Romans would use such passages to vomit and thus make room in their stomachs for continued feasting. There is no evidence that the wet patch in this case was, in fact, vomit.
II. Procedural Background
A. Initial pleadings
On June 18, 2015, plaintiff sued The Anschutz Entertainment Group, Inc., whom he believed to be the "owner, operator and/or manager" of Staples Center, for negligence and premises liability based on the failure to warn.
In the same complaint, plaintiff's wife sued for loss of consortium. Because she has not appealed, her claim is not before us.
On July 15, 2015, LA Arena Company, LLC (LA Arena) answered the complaint, explaining it had been "[e]rroneously sued" as The Anschutz Entertainment Group.
Plaintiff subsequently substituted LA Arena for The Anschutz Entertainment Group, Inc., although he purportedly did so by substituting LA Arena as "Doe No. 1" rather than by substituting it for the named defendant.
B. Amendment to add janitorial services company as a "Doe" defendant
In a December 2015 discovery response, LA Arena stated that "ABM Janitorial Services" had "perform[ed] janitorial services" at Staples Center on the date of plaintiff's accident.
On a date not specified in the record, plaintiff's lawyers thereafter searched the California Secretary of State's online Business Entities Portal for "ABM Janitorial Services" and got eight responses, including "ABM Janitorial Services—Southwest, Inc." Because all eight responses were listed as either "merged out" or "converted out," plaintiff's lawyer searched the Business Entities Portal for "ABM" and got 164 responses. The lawyer then conducted unspecified, "further research" as to the "several ABM entities that were possibly correct and which existed" at the time of the accident, and ultimately "determined that ABM Industries Incorporated" was "the most likely candidate."
On July 1, 2017, plaintiff filed a form amendment substituting "ABM Industries Incorporated" for "Doe 1" defendant.
C. Attempt to amend "Doe" amendment to add correct janitorial services company
On July 17, 2017, ABM Industries Incorporated filed an answer that generally denied the allegations in plaintiff's complaint and asserted 14 affirmative defenses. At no point in its answer did ABM Industries Incorporated inform plaintiff that it was the wrong entity to be sued because it had not provided Staples Center with janitorial services on the date of plaintiff's accident.
On August 18, 2017, the lawyer representing ABM Industries Incorporated became counsel for LA Arena as well. Because LA Arena's records included its contract for janitorial services in effect on the date of plaintiff's accident and because that contract identified the janitorial services company as "ABM Janitorial Services—Southwest, Inc.," the lawyer who represented both LA Arena and ABM Industries Incorporated (collectively, defendants) had access to that contract and to the knowledge that plaintiff had sued the wrong entity with ABM in its name. But instead of sharing this knowledge with plaintiff, the lawyer opted to have ABM Industries Incorporated defend the case on the merits by seeking discovery, by responding to plaintiff's discovery, and even by participating in mediation. At no point in all of these efforts did ABM Industries Incorporated inform plaintiff that it was the wrong entity to be sued.
It was not until July 9, 2018—less than two months before the date set for trial—that the lawyer for ABM Industries Incorporated and LA Arena disclosed that (1) "ABM Industries Incorporated" was "not the correct ABM entity responsible for the janitorial services at Staples Center," and (2) the pertinent "janitorial services agreement" was between LA Arena and "ABM Janitorial Services—Southwest, Inc." The lawyer further explained that, as of January 1, 2017, ABM Janitorial Services—Southwest, Inc. had become ABM Industry Groups, LLC.
On the same day he received this letter, plaintiff filed a form amendment requesting court permission to correct the name of "ABM Industries Incorporated" to "ABM Industry Groups, LLC." Defendants objected to the amendment. In response to a trial court order, plaintiff and defendants briefed the propriety of the requested amendment.
Following a hearing on July 30, 2018, the trial court denied plaintiff's request to amend. The court acknowledged that, under section 473, courts have the discretion to allow a plaintiff to correct a mistake in naming a defendant if the plaintiff "committed an 'excusable mistake attributable to dual entities with strikingly similar business names.'" However, the court declined to exercise that discretion because plaintiff's mistake in naming the wrong ABM entity was not "excusable" because plaintiff "knew" from the December 2015 discovery responses "the identity of the actual janitorial services company contracting with Staples" and nevertheless named "a completely different entity" in his "Doe 1" amendment. Because plaintiff had no procedural mechanism by which to add ABM Industry Groups, LLC to the case in 2018 as a defendant liable for the 2013 accident, his claim against ABM Industry Groups, LLC was time- barred as outside the applicable two-year limitations period. The court also declined to toll the limitations period on equitable estoppel grounds because plaintiff had been "given the correct name" in discovery.
D. Appeal
Plaintiff filed this timely appeal.
DISCUSSION
Plaintiff argues that the trial court erred in denying his request to amend his complaint to correct the name of the janitorial services company to ABM Industry Groups, LLC.
Though an order denying leave to amend a complaint is ordinarily not appealable (Figueroa v. Northridge Hospital Medical Center (2005) 134 Cal.App.4th 10, 12), we have jurisdiction over plaintiff's appeal because the trial court's order in this case effectively leaves nothing to be decided between plaintiff and ABM Industry Groups, LLC. (Accord, Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 741; Ingram v. Superior Court (1979) 98 Cal.App.3d 483, 489 (Ingram).) --------
It is factually undisputed that, as of the date plaintiff tried to add ABM Industry Groups, LLC as a party in July 2018, the applicable two-year statute of limitations for the October 2013 accident had run. (§ 335.1.) And it is legally undisputed that "a complaint may not be amended to add a new defendant after the statute of limitations has run." (McGee Street Productions v. Workers' Comp. Appeals Bd. (2003) 108 Cal.App.4th 717, 724; Woo v. Superior Court (1999) 75 Cal.App.4th 169, 175-178 (Woo).) Accordingly, the only way that any claim by plaintiff against ABM Industry Groups, LLC is timely is if plaintiff is able to add ABM Industry Groups, LLC to his lawsuit through a mechanism that allows him to substitute that party for an already-named (and hence, timely named) defendant and thereby invoke the relation-back doctrine. (Woo, at p. 176.)
There are typically two such mechanisms: (1) "correct[ing] a misnomer by which an 'old'"—but named—"defendant was sued," pursuant to section 473 (Hawkins v. Pacific Coast Bldg. Products, Inc. (2004) 124 Cal.App.4th 1497, 1503 (Hawkins); Kupka v. Board of Administration (1981) 122 Cal.App.3d 791, 795 (Kupka)), or (2) substituting the party for a fictitiously named "Doe" defendant, pursuant to section 474 (Kerr-Mcgee Chem. Corp. v. Superior Court (1984) 160 Cal.App.3d 594, 597 (Kerr-McGee)). The second mechanism is unavailable here because plaintiff did not seek to substitute ABM Industry Groups, LLC for "Doe 2" and because any such "Doe" substitution would have been untimely in July 2018 because it was more than three years after plaintiff filed his complaint in June 2015 (§§ 583.210, subd. (a), 583.250; Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1118). Accordingly, the sole mechanism potentially available to plaintiff is section 473.
Section 473 grants a trial court the discretion, "in furtherance of justice," to "allow a party to amend any pleading . . . by correcting a mistake in the name of a party . . . ." (§ 473, subd. (a)(1).) We review orders denying relief under section 473 solely for an abuse of discretion. (Cherrigan v. San Francisco (1968) 262 Cal.App.2d 643, 653; Ford v. Loaney (1959) 169 Cal.App.2d 503, 508.) In undertaking this review, we uphold any express or implied findings of the trial court as long as they are supported by substantial evidence in the record. (Stratton v. Beck (2017) 9 Cal.App.5th 483, 496.) In assessing whether there is substantial evidence, we must "review the record in the light most favorable to the" ruling by resolving all conflicts and drawing all reasonable inferences in favor of that ruling. (King v. State of California (2015) 242 Cal.App.4th 265, 278.) And where, as here, there is no claim of legal error and the party challenging the sufficiency of the evidence is also the party that bore the burden of proof below, we must affirm unless the record contains no substantial evidence to support the court's ruling. (Lobo v. Tamco (2014) 230 Cal.App.4th 438, 442, fn. 2.) I. Section 473 , Generally
A. The general rule
As a general rule, courts have construed section 473's language allowing a plaintiff to "correct[] a mistake in the name of a party" once the statute of limitations has run to permit amendment when the plaintiff's "mistake" entails "'merely a misnomer or defect in the description or characterization'" of a party, but not when the plaintiff seeks to effect "'a substitution or entire change of parties.'" (Thompson v. Palmer Corp. (1956) 138 Cal.App.2d 387, 390 (Thompson); Hawkins, supra, 124 Cal.App.4th at p. 1504; Diliberti v. Stage Call Corp. (1992) 4 Cal.App.4th 1468, 1470 (Diliberti).) A misnomer subject to correction by amendment includes "[a] mistake in the name of a natural person" or in the name of a collective entity. (Nisbet v. Clio Mining Co. (1905) 2 Cal.App. 436, 441; cf. Diliberti, at pp. 1469-1470; Ingram, supra, 98 Cal.App.3d at p. 491; Clarkson v. Moir (1921) 53 Cal.App. 775, 777-778.) But an attempt to swap one entity or individual for another—even if the entities happen to have similar names—is not a "correction" subject to amendment under section 473. (Mayberry v. Coca Cola Bottling Co. (1966) 244 Cal.App.2d 350, 352 (Mayberry) [substituting a corporation for a partnership with the same name generally not permitted]; Thompson, at p. 395 [same]; accord, Diliberti, at pp. 1469-1470 [substituting the passenger as plaintiff in a personal injury suit for the driver, despite the same last name, not permitted].) The reason for this distinction is straightforward: If an amendment effecting a "change of identity" in the party sued is allowed under section 473, then section 473 would effectively allow a new party to be named for the first time after the statute of limitations period has expired, a result at odds with the strong public policy in favor of repose embodied by statutes of limitation. (Mayberry, at pp. 352-353; see also Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 396 [noting "strong" policy of "repose" underlying "statute of limitations" periods]; Quarry v. Doe. I (2012) 53 Cal.4th 945, 981 [same].)
To be sure, there is language quoted in some opinions that could be read to suggest that section 473 authorizes an amendment that swaps one party for another as long as the "'nature of the action'" remains unchanged. Both Hawkins, supra, 124 Cal.App.4th at p. 1504, and Diliberti, supra, 4 Cal.App.4th at p. 1470, cite a passage from Witkin's treatise on California Procedure that states: "[T]he allowance of amendment and relation back to avoid the statute of limitations does not depend on whether the parties are technically or substantially changed; rather the inquiry is as to whether the nature of the action is substantially changed." (5 Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 1147, p. 564.) To the extent that this language is read to allow a plaintiff to swap one party for another simply because "the nature of the action is substantially [un]changed," we reject that reading for several reasons. To begin, it comes from a treatise, to which we owe no deference. Further, neither Hawkins nor Diliberti applied the language so broadly; instead, Hawkins applied an exception allowing a change in name from the fictitious name by which an entity did business and the true name of the entity, and Diliberti prohibited a correction of the misnaming of one sister for another as the plaintiff because the pleading had "fail[ed] to name the right party as plaintiff." (Diliberti, at p. 1471.) And most persuasively, a broad reading of this language flatly contradicts a solid wall of precedent that prohibits courts, after the statute of limitations period has run, from "drop[ping] one party to the action and add[ing] another who up to the time of amendment was not a party to the proceedings"—and this prohibition applies regardless of whether "the nature of the action" remains the same. (Stephens v. Berry (1967) 249 Cal.App.2d 474, 478; Kupka, supra, 122 Cal.App.3d at p. 795 [court may not "add an entirely new party"]; Kerr-Mcgee, supra, 160 Cal.App.3d at pp. 598-599 [same]; Chitwood v. County of Los Angeles (1971) 14 Cal.App.3d 522, 525 (Chitwood) [same].)
B. Exception to the general rule
Notwithstanding this general rule, and in recognition of "modern business practices" that "often divide integrated business operations . . . among a group of artificial legal entities," the courts have built into section 473 an "'exception'" to the above stated "'general rule'"—namely, that a court may authorize an amendment substituting one business entity for another under section 473 where "[(1)] the plaintiff has committed an excusable mistake attributable [(2a)] to dual entities with strikingly similar business names or [(2b)] to the use of fictitious names" "under which a defendant was doing business." (Mayberry, supra, 244 Cal.App.2d at p. 353; Milam v. Dickman Constr. Co. (1964) 229 Cal.App.2d 208, 211 (Milam).) As this formulation suggests, showing "'excusable neglect'" by itself is not enough to fit within the exception. (Kupka, supra, 122 Cal.App.3d at p. 795; Chitwood, supra, 14 Cal.App.3d at p. 525.) The plaintiff must also show that the mistake was due to the defendant's use of "dual entities" involved "in an integrated production enterprise" (Mayberry, at p. 354; Carr v. Barnabey's Hotel Corp. (1994) 23 Cal.App.4th 14, 20-23; Caudros v. Superior Court (1992) 6 Cal.App.4th 671, 678) or to the defendant's use of a fictitious name to do business (Milam, at p. 211; Hawkins, supra, 124 Cal.App.4th at pp. 1504-1505). In assessing whether to allow an amendment that fits within this exception, courts may also examine "additional factors," such as (1) "the real tortfeasor's knowledge of the lawsuit," and (2) "the desirability of protecting substantive rights." (Mayberry, at p. 353; Canifax v. Hercules Powder Co. (1965) 237 Cal.App.2d 44, 57-58 [noting that amendment may be appropriate "'[w]here full notice is given'" to the "'party intended to be named as the defendant'"].)
II. Application
The trial court did not abuse its discretion under section 473 in denying plaintiff's request to amend his complaint to correct the name of the janitorial services company to ABM Industry Groups, LLC because plaintiff has not established that the record contains no substantial evidence to support the court's ruling. Even if we assume for the sake of argument that plaintiff committed excusable neglect in naming ABM Industries Incorporated instead of ABM Industry Groups, LLC, plaintiff presented no evidence regarding the relationship between ABM Industries Incorporated and ABM Industry Groups, LLC beyond the fact that they both have "ABM" in their names. At best, plaintiff offers the inference that the representation of ABM Industries Incorporated and LA Arena by the same lawyer means, by virtue of the Rules of Professional Conduct, that those two entities had a unity of interest. Even if we accept this inference, however, it falls short of showing that AMB Industries Incorporated and ABM Industry Groups, LLC were "dual entities" involved "in an integrated production enterprise" (Mayberry, supra, 244 Cal.App.2d at pp. 353-354) or of showing that one of those two entities was a fictitious business name for the other (Milam, supra, 229 Cal.App.2d at p. 211). Although we might be able to infer a relationship if we were viewing the evidence in the light most favorable to plaintiff, the trial court's ruling denying plaintiff's request requires us to view the evidence in the light most favorable to that ruling. In that light, all we have before us is evidence regarding two seemingly independent entities that happened to have the same three-letter acronym in their names, and this evidence constitutes substantial evidence supporting the trial court's finding that ABM Industry Groups, LLC was "a completely different entity." Given this failure of proof, we do not even know if anyone associated with ABM Industry Groups, LLC knew about plaintiff's lawsuit. Because section 473 does not allow a party to effect "a substitution or entire change of parties" (Thompson, supra, 138 Cal.App.2d at p. 390), the trial court did not abuse its discretion in denying plaintiff's request to amend under section 473.
Plaintiff resists this conclusion with what boil down to two arguments.
First, he contends that LA Arena and ABM Industries Incorporated misled him about whether he had named the appropriate janitorial services company as a defendant, and that their conduct warrants application of the doctrine of equitable estoppel. For support, plaintiff cites Kleinecke v. Montecito Water Dist. (1983) 147 Cal.App.3d 240 (Kleinecke). The record certainly supports—and may even downright dictate—a finding that the lawyer who jointly represented LA Arena and ABM Industries Incorporated waited until the eve of trial to tell plaintiff that he had sued the wrong janitorial services company, despite having access to this information for nearly a year prior. Such conduct is wholly inappropriate. (Le Mire v. Queirolo (1967) 250 Cal.App.2d 799, 804 ["playing hide and seek or blindman's bluff with plaintiff" is conduct unbecoming an officer of the court].) Moreover, the doctrine of equitable estoppel can supply a basis for tolling the statute of limitations period. (Kleinecke, at p. 245; Doe v. Marten (2020) 49 Cal.App.5th 1022, 1028 ["In appropriate cases, a defendant may be equitably estopped from asserting a statutory limitations period"].) But the question whether to toll a limitations period based on the doctrine of equitable estoppel only arises after a person or entity is properly joined to the lawsuit as a party. (E.g., Kleinecke, at p. 245 [party estopped had been added to the lawsuit].) Where, as here, ABM Industry Groups, LLC never became a party to this lawsuit in the first place because plaintiff did not satisfy the requirements of section 473, there is no reason to examine whether the statute of limitations as to this nonparty should be tolled on account of equitable estoppel. What is more, plaintiff offers no authority for the proposition that the doctrine of equitable estoppel can be used as a fulcrum to modify the test for amending pleadings under section 473, and our independent research has not revealed any such authority. Nor do we perceive a sound basis for using misconduct by one entity's lawyer to justify adding a wholly separate entity to a lawsuit after the limitations period has run.
Second, plaintiff refers us to a number of general principles that tend to favor his position, including that the law (1) favors liberal amendment of pleadings (§§ 452, 475; Ingram, supra, 98 Cal.App.3d at pp. 491-492 ["great liberality is allowed" in substituting named defendants for "Doe" defendants]), and (2) abhors a forfeiture of the right to consider a case on the merits due to technicalities (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 ["the law favors disposing of cases on their merits"]). However compelling these maxims are in the abstract, they are not controlling when they conflict with competing concerns of repose and fairness that counsel against dragging entirely new parties into a lawsuit after the limitations period for doing so has long expired. Section 473 embodies the compromise between these competing policies, and we are not at liberty to rewrite it to strike a different balance.
DISPOSITION
The order is affirmed. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
/s/_________, J.
HOFFSTADT We concur: /s/_________, P. J.
LUI /s/_________, J.
CHAVEZ