Motion-Secondary: COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS)

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SCOTT D. LONG (SBN203505)

Fidelity National Law Group ELECTRONICALLY
A Division of Fidelity National Title Group, Inc. FILED
1550 Parkside Drive, Suite 300 soot ooetercl
Walnut Creek, CA 94596 ‘altfornia,
Telephone: (925) 280-3362 07/23/2015
Facsimile: (925) 930-9588 Clerk of the Court
BY:MICHAEL RAYRAY
Attorneys for Commonwealth Land Title Deputy Clerk

Insurance Company

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO
COMMONWEALTH LAND TITLE CASE NO. CGC-10-503332
INSURANCE COMPANY, (Consolidated for all purposes with CGC-11-512102)
Plaintiff, Reservation No. 05060709-02
vs. PLAINTIFF COMMONWEALTH LAND TITLE

INSURANCE COMPANY’S OPPOSITION TO
FEDEX OFFICE AND PRINT SERVICES, | JAY SHAH’S RECALENDARED MOTION FOR

INC.; WINSTON LUM; KAUSHAL LEAVE TO FILE CROSS-COMPLAINT
NIROULA; JAY CHANDRAKANT

SHAH; ELVIA PALOMINO; MORAD Date: August 5, 2015

AFRAIMI; MELVIN LEE EMERICH; Time: 9:30 a.m.

MARTINI & CHNOOGLE; GRACHELLE Dept.: 501
LANGUBAN; MERCHANTS BONDING
COMPANY, and DOES 1-25. Trial Scheduled: August 31, 2015

Defendants.

IL INTRODUCTION
Defendant Jay Shah — already convicted of participating in a scheme to fraudulently steal real
property and deceitfully obtain over $2 million in loans on that property — now seeks leave to file a
cross-complaint based upon the fiction that it was really the negligence of others that allowed the
scheme to succeed, not his own involvement. Shah’s motion for leave to file a cross-complaint should
be denied because Shah has been derelict in waiting to bring the cross action more than four years after
he answered Plaintiff Commonwealth Land Title Insurance Company’s (“Commonwealth”) complaint

in 2010. The interest of justice dictates that Shah should not be allowed to make such a claim now.

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COMMONWEALTH’S OPP. TO SHAH MOTION FOR LEAVE TO FILE CROSS-COMPLAINTThe motion should also be denied because, contrary to Shah’s contentions, the cross-complaint
inserts new issues into the case. The negligence causes of action against FedEx Office and Print
Services, Inc. (“FedEx”) — the employer of the notary involved in the fraudulent scheme — have been
dismissed by the plaintiffs and currently no cross-complaint exists against FedEx.

The motion should also be denied because Shah improperly seeks to bring FedEx back into the
case. FedEx, formerly a defendant in both of the cases consolidated here, settled with Plaintiff
Commonwealth and Plaintiff Shirley S. Hwang almost a year ago and has subsequently been dismissed
from the consolidated cases. Shah’s proposed cross-complaint would not only bring FedEx back into
the case but it would complicate matters by making an affirmative negligence claim against
Commonwealth. This is the sort of cross-complaint that should have been made years ago.

Shah’s motion should also be denied because the proposed cross-complaint’s only cause of
action against Commonwealth (for “title insurer” negligence) is demurrable. California Insurance Code
section 12340.11 specifically protects title insurers such as Commonwealth from liability for
preliminary title reports. Shah also lacks standing to bring this claim and the claim is untimely. This
demurrability alone is sufficient to deny the motion.

Shah’s motion should also be denied because he has failed to provide any competent evidence
supporting it. While there is extensive reference to uncited “facts” in the motion, there is no evidentiary
support for these “facts” and they should not be considered.

Shah’s motion should also be denied because if his concurrent motion for stay is granted, then
this motion is moot. If this case is stayed pending resolution of Shah’s appeal of his criminal
convictions, then his assertion of a negligence-based cross-complaint would only be feasible if he wins
his appeal. If he loses his appeal, then Shah’s liability for his intentional fraud is established by his
criminal conviction and it would be ludicrous for him to then claim that the negligence of others
allowed his scheme to succeed,

Lastly, Shah’s contention that his prior counsel’s failure to file a cross-complaint constituted
legal malpractice is irrelevant to this motion. If Shah believes that he has such a claim that would be
adjudicated separately and has no bearing on whether Shah should be able to file a cross-complaint
now.

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The interest of justice does not support Shah’s motion. He has been represented by counsel. He
has had time to bring this cross-complaint over that period. It is now too late to do so and to allow him
to do so would only operate to further complicate this already drawn out lawsuit. Shah’s motion should
be denied.

Il. RELEVANT FACTS

This case arises out of a highly publicized criminal conspiracy in which plaintiffs Shirley S.
Hwang and Commonwealth were victimized by a scheme to steal title to three condominiums
owned by Ms. Hwang, mortgage the stolen property, and launder the proceeds. (See Consolidated
and Second Amended Felony Complaint, San Francisco County Superior Court, Case Nos.
10018652, 10009193, 100009191, and 10003838, attached as Exhibit A to Declaration of Scott D.
Long [“Long Decl.”].) The scheme took place in early 2009, the conspirators were arrested in 2010,
and tried to a criminal jury in 2012. Jay Shah was convicted of multiple felony counts, including
procuring and recording the fraudulent deeds and deeds of trust. (See San Francisco County
Superior Court Minutes dated September 19, 2012, attached as Exhibit B to Long Decl.)

On September 8, 2010, Commonwealth filed its civil complaint against Shah and others
involved in the criminal scheme, including FedEx as the employer of the notary who notarized the
fraudulent deeds and deeds of trust. (Long Decl., at 4.) Shah responded to the complaint by filing
an answer on December 30, 2010. (Long Decl., at 5.)

In January 2014, Commonwealth and Hwang settled their claims against FedEx at mediation
with Michael Ornstil of JAMS. (Long Decl., at 6.) As the result of an office clerical error,
Commonwealth filed its Request for Dismissal of FedEx on May 8, 2015, though Commonwealth
had considered FedEx dismissed from the case for over a year before then. (Long Decl, at 7.)

I. ARGUMENT

A. Shah Was Derelict In Failing to Seek Leave to File a Cross-Complaint Earlier

Shah seeks leave to bring a cross-complaint more than four-and-a-half years after he answered
Commonwealth’s original complaint. During that time, Shah has been represented by counsel and has
had the opportunity to engage in discovery and otherwise participate in the case. Now, with trial set two
months away, Shah seeks leave to file a cross-complaint. This is a dereliction of his participation in this

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case which should not be awarded by a last-minute granting of leave to file a cross-complaint. While
this Court has discretion to determine whether or not to grant leave, such dereliction is sufficient to
deny the motion. (Glogau v. Hagan (1951) 107 Cal. App. 2d 313 [dereliction in waiting 11 months
after answering before seeking leave to file cross-complaint was sufficient basis to deny motion.].) The
only case cited in Shah’s motion affirmed a trial court’s denial of a motion for leave to file a cross-
complaint based upon years of delay by the party seeking to assert it. (Crocker Nat. Bank v. Emerald
(1990) 221 Cal. App. 3d 852, 864.) Shah’s delay and inaction preclude him from properly asserting a
cross-complaint at this late date. The motion should be denied.

B. Shah’s Proposed Cross-Complaint Asserts New Claims Not Previously At Issue

Contrary to Shah’s assertions in his motion that there is “no meaningful difference between the
claims and defenses of various plaintiffs and defendants already part of this complex case” and his new
claims asserted in the proposed cross-complaint, Shah is proposing to add entirely new issues into the
case as well as issues that have already been dismissed. (Shah’s Memorandum of Points and
Authorities in Support of Motion for Leave to File Cross-Complaint, at 5:11-13.) First, Shah’s motion
fails to identify the pleadings that assert the issues that he claims are already at issue. Commonwealth’s
operative complaint, its Second Amended Complaint, asserts negligence only against the now-missing
notary (Ms. Languban) and her employer, FedEx. (See Commonwealth’s Second Amended Complaint
at 9:15, 11:3, 14:11.) Since Commonwealth has now dismissed FedEx and Ms. Languban’s default has
been taken, these issues will not be part of any trial. It is difficult to see how the issues of
Commonwealth’s alleged “title insurer” negligence and FedEx’s negligence will continue to be at issue.
Even if they will continue to be issues, Shah has not described how that will be. This insertion of

confusion regarding new issues is sufficient to deny the motion.

Cc. Allowing Shah’s Cross-Complaint Would Unfairly Bring A Previously Dismissed
Defendant Back Into the Case

Contrary to Shah’s assertion in his moving papers, the proposed cross-complaint would also
inject a new party (or revive an old one) into the lawsuit. FedEx, while previously a defendant, has
settled with and been dismissed by all Plaintiffs and is currently not a party to this case. (Long Decl., at

6 and 7.) Shah has had almost five years to assert cross claims against FedEx and Commonwealth.

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Shah was represented by counsel who could have done that on his behalf, despite his imprisonment.
Years later, this case should not now be allowed to be brought against FedEx, resurrecting these claims
that have been resolved through settlement.
D. Shah’s Proposed Cross-Complaint is Defective and Will Be Subject to Demurrer
Shah’s proposed cross-complaint against Commonwealth asserts a single cause of action for

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negligence in Commonwealth’s “carry[ing] out its reporting and insuring responsibilities in a
reasonably careful manner....” (Shah’s Proposed Cross-Complaint for Damages: Negligence, Negligent
Supervision, Equitable Indemnity, Ratification (“Proposed Cross-Complaint”), at 11:9-10.) This
assertion of negligence against Commonwealth as a title insurer is improper on several grounds and
Commonwealth will demur to the cross-complaint. The fact that a proposed cross-complaint is
demurrable is ample grounds for denying leave to file it. (Glogau, supra, 107 Cal.App.2d at 320;
Pollard v. Forest Lawn Memorial Park Association (1936) 15 Cal.App.2d 77, 82.)

Without turning this brief into a brief supporting a demurrer, the “title insurer” negligence
asserted by Shah against Commonwealth is subject to demurrer. For example, the proposed cross-
complaint alleges that Commonwealth should have used “reasonable care in issuing reports concerning
title” to real property as issue. (Proposed Cross-Complaint, at 11:11-12.) But, by statute, a title
company cannot be held liable for the negligent preparation of a preliminary title report. (See Insurance
Code section 12340.11; Lee v. Fidelity Nat. Title Ins. Co. (2010) 188 Cal. App. 4th 583, 596; Soifer v.
Chicago Title Co. (2010) 187 Cal. App. 4th 365, 371-372.) Moreover, it is questionable whether Shah
has standing to assert such a negligence cause of action and whether the claim is precluded by the
running of the statute of limitations. All of these issues would need to be addressed in a demurrer to the
proposed cross-complaint. The mere fact that the proposed cross-complaint is subject to demurrer is
grounds for denying leave for its filing.

E. Shah’s Motion Lacks Any Evidentiary Basis

Shah’s motion should be denied simply on the basis that there are no facts to support its
granting. Law and motion matters should be decided on the basis of declarations, affidavits or other
evidence in written form. (See California Rules of Court, Rule 3.1306[a].) Declarations or affidavits

must be from competent witnesses having personal knowledge of the facts stated therein, rather than

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hearsay or conclusions. (Pajaro Valley Water Mgmt. Agency v. McGrath (2005) 128 Cal.App.4th 1093,
1107.) The memorandum of points and authorities in support of Shah’s motion contains lists of facts,
but no evidence to support those facts. Even the sole piece of evidence — the declaration of Shah’s
attorney, Mr. Schaffer — neglects to offer any facts supporting much of that put forth in the
memorandum. That is not surprising since Mr. Schaffer would not be able to assert many of those facts
as coming from his own personal knowledge. Declarations by moving party’s counsel as to essential
facts are generally objectionable as hearsay except where the lawyer somehow has personal knowledge
of the facts. (Star Motor Imports, Inc. v. Sup.Ct. (1979) 88 Cal.App.3d 201, 204.) The motion should be
denied based solely on this lack of evidence to support it.

EB If The Stay Sought by Shah is Granted, Then This Motion is Moot

Shah’s proposed cross-complaint is based upon the theory that Shah was somehow a dupe
conned by the others convicted with him in this criminal scheme to squeeze money out of property
owned by Ms. Hwang. (See Proposed Cross-Complaint, at 6:12-16.) He asserts that FedEx and
Commonwealth had a duty to protect him from this fraud through the exercise of diligence in their
respective duties. (See Proposed Cross-Complaint, at 9:41-42, 10:48-49, 11:7-23.) While these
assertions ignore the fact that Shah, himself, was convicted in this fraudulent scheme, his seeking of a
trial stay in this action does not. If that stay, based upon Shah’s appeal of his criminal convictions, is
granted, then he would not need to bring this cross-complaint right now. Moreover, if his criminal
appeal is denied and his convictions are available to establish his civil liability here, it would be
ludicrous to allow him to cross-complain that the negligence of FedEx and Commonwealth allowed his
fraudulent scheme to succeed. Thus, if this Court is to grant the stay, then this motion should be

continued, if not outright denied at this point.

G. Shah’s Possible Action for Legal Malpractice Against His Former Civil Counsel
Has No Bearing on this Action

Shah’s assertion that if he is not granted leave to file a cross-complaint, he will have “no
alternative” to suing his prior counsel for malpractice should not be considered here. The looming ghost

of a possible legal malpractice action is a separate issue between Shah and his prior counsel. The

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COMMONWEALTH’S OPP. TO SHAH MOTION FOR LEAVE TO FILE CROSS-COMPLAINT1 || Court’s weighing of the interests of Shah’s prior counsel or of Shah's possible claim against his prior

2 || counsel would be an injustice to Commonwealth and the other parties here.

3 IV. CONCLUSION

4 Shah’s last-minute effort to file a new cross-complaint four-and-a-half years after his entry into
5 | the case should be denied. There is nothing to explain Shah’s delay in asserting such a cross-complaint.
6 || The cross-complaint would only complicate and disrupt matters that have already been resolved, The

7 || motion should be denied.

8 || Dated: July 23, 2015 FIDELITY NATIONAL LAW GROUP

Scott D. Long
11 Attomeys for Plaintiff
Insurance Company

mmonwealth Land Title

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COMMONWEALTH'’S OPP. TO SHAH MOTION FOR LEAVE TO FILE CROSS-COMPLAINToN DN

PROOF OF SERVICE

Tam employed in the County of Contra Costa, State of California. I am over the age of 18 years
and not a party to the within action. My business address is 1550 Parkside Drive, Suite 300, Walnut
Creek, California 94596. On July 23, 2015, I served the within document PLAINTIFF
COMMONWEALTH LAND TITLE INSURANCE COMPANY’S OPPOSITION TO JAY
SHAH’S RECALENDARED MOTION FOR LEAVE TO FILE CROSS-COMPLAINT on the
parties in said action by placing a true copy thereof as indicated below, addressed as follows:

Attorney for Shirley Hwang Attorneys for Jay C. Shah and Elvia Palomino
Morgan Lopez, Esq. Dylan L. Schaffer

Glynn & Finley, LLP J. Edward Kerley

One Walnut Creek Center Kerley Schaffer LLP

100 Pringle Avenue, Suite 500 1939 Harrison St., Suite 500
Walnut Creek, CA 94596 Oakland, CA 94612

Fax: (925) 945-1975 PH: 510.379.5801
mlopez(@GlynnFinley.com dylan@kslaw.us

In Pro Per Defendant,****BY MAIL ONLY Attorney Pro Se

Winston Lum, AP2537 Melvin L. Emerich

CCC Legal Mail Dept. 209 Portola Court

P.O. Box 790 Los Altos, CA 94022
Susanville, CA 96127-0790 mlemerich@yahoo.com
Attorneys for Fed-Ex Office and Print Co-Counsel for Fed-Ex Office and Print Services
Services Laurie Book, Esq.

Michael L. Smith, Esq. Clinton & Clinton

Manning & Kass 100 Oceangate Blvd., 14" Fl.
2 Rincon Center

121 Spear St. Suite 200 Long Beach, CA 90802

San Francisco, CA 94105 Fax: (562) 216-5001

Fax: (415) 217-6999 Ibook@clinton-clinton.com

mls(@manningllp.com

XX]

BY MAIL: I caused such envelope(s) with postage thereon fully prepaid to be placed for
collection and mailing at my place of business. Following ordinary business practices, said
correspondence will be deposited with the United States Postal Service at Walnut Creek,
California, on the referenced date in the ordinary course of business. There is delivery service
by United States mail at the place so addressed in the City of Walnut Creek, County of Contra
Costa, State of California.

& BY ELECTRONIC: | caused the aforementioned document(s) to be served through One Legal
addressed to all parties appearing on the One Legal electronic service list in the above-entitled
action. The file transmission was reported as completed and a copy of the One Legal Filing
Receipt will be maintained with the original document(s) in our office.

I declare under the penalty of perjury under the laws of the State of California, that the foregoing
is true and correct.

Dated: July 23, 2015 Lileglya Mbt
MARLENA NOBLE

Proof of Service