Preview
1 Jeffrey H. Lowenthal (State Bar No. 111763)
Edward Egan Smith (State Bar No. 169792)
2 Matthew W. Delbridge (State Bar No. 343636)
STEYER LOWENTHAL BOODROOKAS
3 ALVAREZ & SMITH LLP
235 Pine Street, 15th Floor
4 San Francisco, California 94104
Telephone: (415) 421-3400
5 Facsimile: (415) 421-2234
E-mail: jlowenthal@steyerlaw.com
6 esmith@steyerlaw.com
mdelbridge@steyerlaw.com
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Attorneys for Defendant and Cross-Complainant
8 United States Real Estate Corporation
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Jacoby Perez (State Bar No. 315990)
10 GERACI LAW FIRM
90 Discovery
11 Irvine, CA 92618
Telephone: (949) 379-2600
12 Direct: (949) 504-4195
Email: j.perez@geracillp.com
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Co-counsel for Defendant and Cross-Complainant
14 United States Real Estate Corporation
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16 SUPERIOR COURT OF THE STATE OF CALIFORNIA
17 FOR THE COUNTY OF SANTA CRUZ
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19 JASON NEEL, Case No. 22CV01758
20 Plaintiff,
EX PARTE APPLICATION TO CONTINUE
21 v. TRIAL OR, ALTERNATIVELY, FOR ORDER
SHORTENING TIME; MEMORANDUM OF
22 SUPERIOR LOAN SERVICING, ASSET POINTS AND AUTHORITIES
DEFAULT MANAGEMENT, INC.,
23 UNITED STATES REAL ESTATE Date: April 3, 2024
CORPORATION and DOES 1 through Time: 1:00 p.m.
24 100, inclusive, Dept: 10
25 Defendants.
Action Filed: August 10, 2021 [Alameda Superior]
26 Trial Date: August 12, 2024
AND RELATED CROSS-ACTION(S).
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 Pursuant to Santa Cruz Local Rule 2.2.07(b)(2), defendant and cross-complainant United
2 States Real Estate Corporation (“USREC”) hereby makes this ex parte application for a
3 continuance of the August 12, 2024 trial set in this matter to November 4, 2024, just under 90
4 days, or as soon thereafter as permitted by the Court’s calendar, with all pre-trial dates tied to the
5 new trial date. Alternatively, USREC requests an order shortening time to permit the request for
6 continuance to be heard on shortened notice.
7 Pursuant to California Rule of Court 3.1332(c)(1), there is good cause for a continuance of
8 the August 2024 trial date to mitigate against the prejudice resulting from the stay on all
9 discovery imposed by defendant and cross-defendant Donald Schwartz’s (“Schwartz”) anti-
10 SLAPP Special Motion to Strike USREC’s Cross-Complaint pursuant to Code of Civil Procedure
11 section 425.16 (“anti-SLAPP Motion”), which motion is scheduled for hearing on April 22, 2024,
12 at 8:30 a.m. in Department 5. Schwartz’s anti-SLAPP Motion was filed on February 13, 2024,
13 the day before plaintiff Jason Neel’s deposition and just a week before Schwartz’s own
14 deposition, halting all discovery. The Court scheduled the hearing for April 22, 2024, more than
15 two months later, and could not grant the parties’ stipulated request to advance the hearing,
16 effectively resulting in a loss of three months of discovery and preparation for the August 12,
17 2024 trial.
18 The requested continuance is necessary to mitigate the prejudice to USREC and, in fact,
19 all parties resulting from the delayed hearing on Schwartz’s anti-SLAPP Motion, which is
20 preventing USREC from completing necessary discovery, including plaintiff’s deposition, and
21 will effectively bar USREC from bringing a dispositive motion by the April 25, 2024 filing
22 deadline under the current trial date. The August 12, 2024 trial setting is the first trial date
23 scheduled in this action, and no prior continuances have been requested or granted. No party will
24 be prejudiced by the brief continuance, which to the contrary, will simply parallel and mitigate
25 the delay resulting from Schwarz’s anti-SLAPP motion.
26 There is good cause to grant the relief requested herein ex parte under Local Rule
27 2.2.07(b)(2) expressly provides for consideration of trial continuance requests on the Court’s ex
28 parte calendar, and because a motion brought on regular notice likely could not be heard under
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 the Court’s procedures for 45 to 60 days, long after the April 22, 2024 antic-SLAPP motion
2 hearing and just over a month before the fact discovery cut-off. Alternatively, based on the same
3 good cause, USREC requests that the Court enter an order shortening time to permit this motion
4 to be heard on shortened notice.
5 Pursuant to Rule of Court 3.1202 and Rule of Court 3.1203, as set forth in the Declaration
6 of Edward Egan Smith filed herewith, counsel for USREC timely gave notice of this application
7 to all parties by telephone and email prior to 10:00 a.m. on April 2, 2024. The contact
8 information for counsel and parties in this action is as follows:
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10 Thornton Davidson Pamela D. Simmons
Pamela Simmons William Purdy
11 Thornton Davidson, P.C. LAW OFFICE OF SIMMONS & PURDY
1195 W. Shaw Lane, Suite A 2425 Porter Street, Suite 10
12 Fresno, CA 93711 Soquel, California 95073
Ph: 559-476-5064 Tel: (831) 464-6884
13 Fax: 559-421-0368 Fax: (831) 464-6885
Email: thornton@thorntondavidsonlaw.com E-mail: pamela@pamelaw.com
14 pamela@pamelaw.com E-mail: bill@pamelaw.com
Leticia Sanches
15 Asst: tish@thorntondavidsonlaw.com [Co-counsel for Plaintiff Jason Neel]
16 [Attorneys for Plaintiff Jason Neel]
17 Jacoby Perez Donald Charles Schwartz
Geraci Law Firm Law Offices of Donald C. Schwartz
18 90 Discovery 7960 Soquel Drive, No. 291
Irvine, CA 92618 Aptos, CA 95003
19 Ph: (949) 379-2600 Ph: (831) 331-9909
Direct: (949) 504-4195 Fax: (815) 301-6556
20 Email: j.perez@geracillp.com Email:
concierge@geracillp.com donald@lawofficedonaldschwartz.com
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[Co-counsel for Defendant and Cross- [In Pro Per - Attorney for Cross-
22 Complainant United States Real Estate Defendant Donald Charles Schwartz]
Corporation]
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RUSHMYFILE, INC. Michael T. Beuselinck
24 380 Beach Road, Suite “B” Michael Beuselinck P.C.
Burlingame, CA 94010 490 43rd Street, #37
25 Email: scenario@rushmyfile.com Oakland, CA 94609
[Counsel withdrawn] Email: mike@lawmtb.com
26 Ph: (925) 800-3032
27 [Attorneys for CNA Equity Group, Inc.- in
bankruptcy]
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 USREC’s ex parte application for a trial continuance is based on this application and the
2 accompanying memorandum of points and authorities and declaration of Edward Egan Smith
3 filed herewith, the pleadings and files in this action, and all other evidence and argument that may
4 be submitted at or before the hearing on this matter.
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Dated: April 2, 2024 STEYER LOWENTHAL BOODROOKAS
6 ALVAREZ & SMITH LLP
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By:______________________________
8 Jeffrey H. Lowenthal
Edward Egan Smith
9 Matthew W. Delbridge
Attorneys for Defendant and Cross-
10 Complainant United States Real Estate
Corporation
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 There is good cause for granting this request for a brief continuance of the August 12,
4 2024 trial in this matter, just under 90 days, to mitigate the prejudice to defendant and cross-
5 complainant United States Real Estate Corporation (“USREC”) resulting from the current stay on
6 all discovery imposed by the last-minute anti-SLAPP Special Motion to Strike (“anti-SLAPP
7 Motion”) filed by defendant and cross-defendant Donald Schwartz (“Schwartz”) on February 13,
8 2024, the day before the deposition of plaintiff Jason Neel (“Plaintiff”) and just a week before the
9 deposition of Schwartz himself. In addition to blocking those scheduled depositions, the stay is
10 likewise now preventing USREC from noticing follow-up depositions of the broker cross-
11 defendants CNA Equity Group, Inc. (“CNA”) and Rushmyfile, Inc. (“RMF”), Plaintiff’s attorney-
12 in-fact cross-defendant Cody Molica, the loan servicing agent and the foreclosing trustee for the
13 subject loan, and as many as four additional third-party lenders and escrow agents involved in the
14 subject loan transactions. The requested continuance is in the interest of justice because the
15 discovery stay imposed under the anti-SLAPP statute, Code of Civil Procedure section 425.16(g),
16 will remain in effect until the Court rules on Schwartz’s motion after the April 22, 2024 hearing,
17 resulting in the effective loss of as much as three months trial preparation.
18 Even if the stay is lifted immediately after the April 22, 2024 hearing, and setting aside
19 the possibility of an appeal, as a practical matter, depositions will not commence again until they
20 are re-noticed into May 2024, only two months before the fact discovery cut-off, and given the
21 number of depositions to be taken, fact discovery will be ongoing even after commencement of
22 expert discovery, which is anticipated to include as many as six disclosed experts. Moreover, as a
23 result of the stay, USREC has lost entirely the ability to complete the key depositions, including
24 Plaintiff, needed to prepare and file a timely summary judgment or adjudication motion in
25 advance of the August 12, 2024 trial.
26 Alternatively, at a minimum, USREC submits that the foregoing establishes good cause to
27 set the hearing on its motion to continue trial on shortened notice in order to alleviate the ongoing
28 prejudice resulting from the anti-SLAPP stay and so that these issues may be resolved well in
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 advance of the April 22, 2024 hearing on Schwartz’s anti-SLAPP Motion and the August 12,
2 2024 trial date and attendant pre-trial deadlines.
3 II. BACKGROUND
4 A. FACTUAL BACKGROUND AND PLEADINGS
5 Plaintiff Jason Neel initiated this action to challenge the validity of a $439,000 Deed of
6 Trust recorded on September 9, 2020, against Plaintiff’s real property at 144 Palo Verde Terrace,
7 Santa Cruz, California (“Property”) to secure a refinance loan made to Plaintiff by lender USREC
8 (“USREC Deed of Trust”). The USREC loan proceeds were used to pay off, among other things,
9 a $384,631 existing Deed of Trust and a $22,697 existing HOA lien Plaintiff had against the
10 Property. The USREC Deed of Trust went into default by early 2021. Plaintiff filed his original
11 Complaint in Alameda County on August 17, 2021. Plaintiff and USREC subsequently stipulated
12 through counsel to transfer the action to Santa Cruz County, and on or about October 7, 2022,
13 Plaintiff filed his operative First Amended Complaint (“FAC”).
14 Plaintiff alleges that he was not competent when he signed a Power of Attorney (“POA”)
15 in favor of third-party Cody Molica, who had previously been appointed by this Court as
16 Plaintiff’s Guardian ad Litem in a prior action and who signed the USREC Deed of Trust and
17 other loan documents as Plaintiff’s attorney-in-fact. Plaintiff, who had multiple pending criminal
18 charges against him at the time, was found competent by this Court in those proceedings prior to
19 his execution of the POA. Plaintiff also challenges the USREC Deed of Trust based on alleged
20 defects in the instrument and alleged violation of consumer lending regulations and named CNA
21 Equity Group and Rushmyfile, Inc., the broker entities involved in the loan, and Superior Loan
22 Servicing and Asset Default Management, Inc., the loan servicer and foreclosing trustee under the
23 USREC Deed of Trust.
24 USREC denies Plaintiff’s allegations, and on December 14, 2022, USREC answered the
25 FAC and filed a Cross-Complaint against Plaintiff, CNA Equity Group, Rushmyfile, Inc. and
26 Cody Molica.
27 On November 20, 2023, Plaintiff filed a Doe amendment naming Schwartz, one of his
28 former attorneys, as Doe 1 under Plaintiff’s First Amended Complaint (“FAC”). Schwartz filed
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 an Answer to the FAC on or about November 27, 2023. Thereafter, on January 26, 2024, USREC
2 filed a Roe amendment naming Schwartz as Roe 25 under USREC’s Cross-Complaint.
3 B. THE CURRENT AUGUST 12, 2024 TRIAL SETTING
4 This action is set for a trial readiness call on August 1, 2024 and set for trial to commence
5 on August 12, 2024. The August 12, 2024 trial was set by the Court on December 11, 2023 and
6 is the first trial setting in this action. At the December 11, 2023 hearing in which the Court set
7 the current trial date, the Court denied plaintiff Jason Neel’s (“Plaintiff”) ex parte motion for a
8 preferential trial setting. The Court set the August 12, 2024 trial date after conferring over
9 available dates and calendar conflicts with counsel for Plaintiff, counsel for USREC and
10 defendant and cross-defendant Schwartz, pro per, all of whom appeared and participated in the
11 hearing. There have been no prior trial continuances requested or granted. (Smith Decl., ¶2).
12 C. ANTI-SLAPP MOTION AND CURRENT STAY OF DISCOVERY
13 The parties were scheduled to take Plaintiff’s deposition on February 14, 2024, and
14 Schwartz’s deposition on February 21, 2024. However, on February 13, 2024, the day before
15 Plaintiff’s deposition, Schwartz filed his anti-SLAPP Motion challenging USREC’s Cross-
16 Complaint pursuant to Code of Civil Procedure section 425.16, blocking the scheduled
17 depositions. (Smith Decl., ¶¶4-5). Pursuant to section 425.16(g) of the anti-SLAPP discovery,
18 “[a]ll discovery proceedings in the action shall be stayed upon the filing of a notice of motion
19 made pursuant to this section.”
20 The anti-SLAPP Motion is scheduled for hearing on April 22, 2024, at 8:30 a.m. in
21 Department 5. Although the parties submitted a written Stipulation to advance the hearing date,
22 the Court declined to advance the hearing. Efforts to confer over the possibility of re-opening
23 discovery while the anti-SLAPP motion remained pending were unsuccessful, therefore, all
24 discovery remains stayed, notwithstanding the August 12, 2024 trial date and the approaching
25 attendant pre-trial deadlines. (Smith Decl., ¶6).
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 III. DISCUSSION
2 A. THE AUGUST 12, 2024 TRIAL DATE SHOULD BE CONTINUED TO
MITIGATE THE PREJUDICE FROM A THREE-MONTH ANTI-SLAPP STAY
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Under California Rule of Court 3.1332(c), the Court may grant a continuance of trial upon
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a “showing of good cause justifying the continuance,” considering each request for a continuance
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“on its own merits.” See Capital Nat. Bank of Sacramento v. Smith (1944) 62 Cal.App.2d 328,
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339 (whether to grant trial continuance is within the sound discretion of trial court; courts have
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held that liberality should be exercised in granting continuances when they are not prejudicial to
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other parties). Among the circumstances indicating good cause is, a “significant, unanticipated
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change in the status of the case” necessitating a continuance of the trial date. Cal. Rule Ct.
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3.1332(c).
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There is good cause here to continue the August 12, 2024 based on the anti-SLAPP
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Motion’s stay of discovery. Because this Court will not hear the anti-SLAPP Motion until April
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22, 2024, USREC and the other parties to this case will be unable to re-notice the previously
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pending depositions of Plaintiff and his prior attorney Schwartz until after that date, at the
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earliest. At least seven additional party and third-party fact depositions also remain to be taken,
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and those will likely be pushed out well into June and July 2024; these include the two brokers
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involved in USREC’s loan, CNA Equity Group and Rushmyfile, Inc.; the prior lender refinanced
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with the USREC loan, Sax Mortgage; a second attorney previously representing Plaintiff, Daniel
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Russo; and the two title companies involved in Plaintiff’s prior loan, Fidelity National Title
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Company and Chicago Title Insurance Company. (Plaintiff has indicated an intention to take
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USREC’s deposition, as well.) Likewise, no written discovery may be served until after April 22,
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2024, at the earliest, meaning that responses to such discovery will not be obtained until late May
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2024 or early June 2024. As a result, discovery will be effectively stayed for at least three
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months, and the parties will still be in the middle of completing fact discovery as the pre-trial
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expert disclosure and discovery deadlines arrive in June 2024. Plaintiff’s counsel has indicated
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an intention to disclose three experts, leading to the likelihood of at least six additional
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depositions for disclosed experts. (Smith Decl., ¶8).
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 If the current August 12, 2024 trial date is not continued, the three-month halt on all
2 discovery imposed by the pending anti-SLAPP Motion will severely prejudice USREC’s ability
3 to complete necessary discovery and prepare for trial, and likewise has already prevented USREC
4 from completing the discovery necessary to file a timely summary judgment or adjudication
5 motion, which would have to be filed by April 25, 2024, three days after the anti-SLAPP Motion
6 hearing. A brief trial continuance of less than 90 days is reasonably necessary to mitigate this
7 prejudice by providing the parties with three months for discovery to make up for the three
8 months they will lose because of the anti-SLAPP stay. (Smith Decl., ¶¶8-9, 14).
9 No party will be prejudiced if the Court grants the requested trial continuance. Plaintiffs’
10 FAC was not at issue until December 8, 2023, when Plaintiff dismissed the last of the un-served
11 defendants named therein, delaying depositions of parties and third parties.1 Absent a trial
12 continuance, however, USREC (and, in truth, all parties) will be severely prejudiced because they
13 will have lost three months of discovery and trial preparation, will be forced to complete intensive
14 fact discovery while extensive expert discovery commences and have already been deprived of
15 the opportunity to file timely motions for summary judgment or adjudication. Schwartz’s last-
16 minute anti-SLAPP Motion has again delayed completion of those depositions and, moreover,
17 prevented USREC from bringing a timely motion for summary judgment or adjudication. (Smith
18 Decl., ¶¶9-14). See Cal. Rule of Court 3.1332(d)(4), (d)(5), (d)(9), and (d)(10).
19 IV. CONCLUSION
20 Accordingly, USREC respectfully submits that good cause exists to continue the current
21 August 12, 2024 trial date for just under 90 days, to November4, 2024, or the next date thereafter
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23 Nevertheless, USREC has at all times pursued the preparation of its defense with diligence,
conducting extensive party and third party written discovery concerning the transactions and the
24 bases of Plaintiff’s allegations. In addition to serving Plaintiff with five (5) sets of written
discovery, USREC has served twelve (12) business records subpoenas to date in this action,
25 obtaining records from the lenders, brokers and title companies involved with the subject loan
transactions involving Plaintiff’s Property, records from the two attorneys who represented
26 Plaintiff at the time of and in connection with those transactions, Daniel Russo and Donald
Schwartz, and records from the psychiatrist, psychologist and hospital that have evaluated and/or
27 treated Plaintiff over the years. USREC also subpoenaed records from and took the deposition of
the notary who notarized Plaintiff’s signature on the operative POA at issue in this action. (Smith
28 Decl., ¶¶9-13).
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
1 available on the Court's calendar, with all pre-trial deadlines tied to the new continued trial date.
2 Alternatively, USREC requests that the Court enter an order shortening the time for hearing
3 USREC’s motion to continue trial so that it may be heard well in advance of the the April 22,
4 2024 anti-SLAPP hearing and the approaching trial and attendant pre-trial deadlines.
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Dated: April 2, 2024 STEYER LOWENTHAL BOODROOKAS
6 ALVAREZ & SMITH LLP
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By:______________________________
8 Jeffrey H. Lowenthal
Edward Egan Smith
9 Matthew W. Delbridge
Attorneys for Defendant and Cross-
10 Complainant United States Real Estate
Corporation
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EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING
TIME; MEMORANDUM OF POINTS AND AUTHORITIES
2077862.2 - NATC.JNEEL
Preview
1 Jeffrey H. Lowenthal (State Bar No. 111763) Edward Egan Smith (State Bar No. 169792) 2 Matthew W. Delbridge (State Bar No. 343636) STEYER LOWENTHAL BOODROOKAS 3 ALVAREZ & SMITH LLP 235 Pine Street, 15th Floor 4 San Francisco, California 94104 Telephone: (415) 421-3400 5 Facsimile: (415) 421-2234 E-mail: jlowenthal@steyerlaw.com 6 esmith@steyerlaw.com mdelbridge@steyerlaw.com 7 Attorneys for Defendant and Cross-Complainant 8 United States Real Estate Corporation 9 Jacoby Perez (State Bar No. 315990) 10 GERACI LAW FIRM 90 Discovery 11 Irvine, CA 92618 Telephone: (949) 379-2600 12 Direct: (949) 504-4195 Email: j.perez@geracillp.com 13 Co-counsel for Defendant and Cross-Complainant 14 United States Real Estate Corporation 15 16 SUPERIOR COURT OF THE STATE OF CALIFORNIA 17 FOR THE COUNTY OF SANTA CRUZ 18 19 JASON NEEL, Case No. 22CV01758 20 Plaintiff, EX PARTE APPLICATION TO CONTINUE 21 v. TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF 22 SUPERIOR LOAN SERVICING, ASSET POINTS AND AUTHORITIES DEFAULT MANAGEMENT, INC., 23 UNITED STATES REAL ESTATE Date: April 3, 2024 CORPORATION and DOES 1 through Time: 1:00 p.m. 24 100, inclusive, Dept: 10 25 Defendants. Action Filed: August 10, 2021 [Alameda Superior] 26 Trial Date: August 12, 2024 AND RELATED CROSS-ACTION(S). 27 28 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 Pursuant to Santa Cruz Local Rule 2.2.07(b)(2), defendant and cross-complainant United 2 States Real Estate Corporation (“USREC”) hereby makes this ex parte application for a 3 continuance of the August 12, 2024 trial set in this matter to November 4, 2024, just under 90 4 days, or as soon thereafter as permitted by the Court’s calendar, with all pre-trial dates tied to the 5 new trial date. Alternatively, USREC requests an order shortening time to permit the request for 6 continuance to be heard on shortened notice. 7 Pursuant to California Rule of Court 3.1332(c)(1), there is good cause for a continuance of 8 the August 2024 trial date to mitigate against the prejudice resulting from the stay on all 9 discovery imposed by defendant and cross-defendant Donald Schwartz’s (“Schwartz”) anti- 10 SLAPP Special Motion to Strike USREC’s Cross-Complaint pursuant to Code of Civil Procedure 11 section 425.16 (“anti-SLAPP Motion”), which motion is scheduled for hearing on April 22, 2024, 12 at 8:30 a.m. in Department 5. Schwartz’s anti-SLAPP Motion was filed on February 13, 2024, 13 the day before plaintiff Jason Neel’s deposition and just a week before Schwartz’s own 14 deposition, halting all discovery. The Court scheduled the hearing for April 22, 2024, more than 15 two months later, and could not grant the parties’ stipulated request to advance the hearing, 16 effectively resulting in a loss of three months of discovery and preparation for the August 12, 17 2024 trial. 18 The requested continuance is necessary to mitigate the prejudice to USREC and, in fact, 19 all parties resulting from the delayed hearing on Schwartz’s anti-SLAPP Motion, which is 20 preventing USREC from completing necessary discovery, including plaintiff’s deposition, and 21 will effectively bar USREC from bringing a dispositive motion by the April 25, 2024 filing 22 deadline under the current trial date. The August 12, 2024 trial setting is the first trial date 23 scheduled in this action, and no prior continuances have been requested or granted. No party will 24 be prejudiced by the brief continuance, which to the contrary, will simply parallel and mitigate 25 the delay resulting from Schwarz’s anti-SLAPP motion. 26 There is good cause to grant the relief requested herein ex parte under Local Rule 27 2.2.07(b)(2) expressly provides for consideration of trial continuance requests on the Court’s ex 28 parte calendar, and because a motion brought on regular notice likely could not be heard under 2 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 the Court’s procedures for 45 to 60 days, long after the April 22, 2024 antic-SLAPP motion 2 hearing and just over a month before the fact discovery cut-off. Alternatively, based on the same 3 good cause, USREC requests that the Court enter an order shortening time to permit this motion 4 to be heard on shortened notice. 5 Pursuant to Rule of Court 3.1202 and Rule of Court 3.1203, as set forth in the Declaration 6 of Edward Egan Smith filed herewith, counsel for USREC timely gave notice of this application 7 to all parties by telephone and email prior to 10:00 a.m. on April 2, 2024. The contact 8 information for counsel and parties in this action is as follows: 9 10 Thornton Davidson Pamela D. Simmons Pamela Simmons William Purdy 11 Thornton Davidson, P.C. LAW OFFICE OF SIMMONS & PURDY 1195 W. Shaw Lane, Suite A 2425 Porter Street, Suite 10 12 Fresno, CA 93711 Soquel, California 95073 Ph: 559-476-5064 Tel: (831) 464-6884 13 Fax: 559-421-0368 Fax: (831) 464-6885 Email: thornton@thorntondavidsonlaw.com E-mail: pamela@pamelaw.com 14 pamela@pamelaw.com E-mail: bill@pamelaw.com Leticia Sanches 15 Asst: tish@thorntondavidsonlaw.com [Co-counsel for Plaintiff Jason Neel] 16 [Attorneys for Plaintiff Jason Neel] 17 Jacoby Perez Donald Charles Schwartz Geraci Law Firm Law Offices of Donald C. Schwartz 18 90 Discovery 7960 Soquel Drive, No. 291 Irvine, CA 92618 Aptos, CA 95003 19 Ph: (949) 379-2600 Ph: (831) 331-9909 Direct: (949) 504-4195 Fax: (815) 301-6556 20 Email: j.perez@geracillp.com Email: concierge@geracillp.com donald@lawofficedonaldschwartz.com 21 [Co-counsel for Defendant and Cross- [In Pro Per - Attorney for Cross- 22 Complainant United States Real Estate Defendant Donald Charles Schwartz] Corporation] 23 RUSHMYFILE, INC. Michael T. Beuselinck 24 380 Beach Road, Suite “B” Michael Beuselinck P.C. Burlingame, CA 94010 490 43rd Street, #37 25 Email: scenario@rushmyfile.com Oakland, CA 94609 [Counsel withdrawn] Email: mike@lawmtb.com 26 Ph: (925) 800-3032 27 [Attorneys for CNA Equity Group, Inc.- in bankruptcy] 28 3 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 USREC’s ex parte application for a trial continuance is based on this application and the 2 accompanying memorandum of points and authorities and declaration of Edward Egan Smith 3 filed herewith, the pleadings and files in this action, and all other evidence and argument that may 4 be submitted at or before the hearing on this matter. 5 Dated: April 2, 2024 STEYER LOWENTHAL BOODROOKAS 6 ALVAREZ & SMITH LLP 7 By:______________________________ 8 Jeffrey H. Lowenthal Edward Egan Smith 9 Matthew W. Delbridge Attorneys for Defendant and Cross- 10 Complainant United States Real Estate Corporation 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 There is good cause for granting this request for a brief continuance of the August 12, 4 2024 trial in this matter, just under 90 days, to mitigate the prejudice to defendant and cross- 5 complainant United States Real Estate Corporation (“USREC”) resulting from the current stay on 6 all discovery imposed by the last-minute anti-SLAPP Special Motion to Strike (“anti-SLAPP 7 Motion”) filed by defendant and cross-defendant Donald Schwartz (“Schwartz”) on February 13, 8 2024, the day before the deposition of plaintiff Jason Neel (“Plaintiff”) and just a week before the 9 deposition of Schwartz himself. In addition to blocking those scheduled depositions, the stay is 10 likewise now preventing USREC from noticing follow-up depositions of the broker cross- 11 defendants CNA Equity Group, Inc. (“CNA”) and Rushmyfile, Inc. (“RMF”), Plaintiff’s attorney- 12 in-fact cross-defendant Cody Molica, the loan servicing agent and the foreclosing trustee for the 13 subject loan, and as many as four additional third-party lenders and escrow agents involved in the 14 subject loan transactions. The requested continuance is in the interest of justice because the 15 discovery stay imposed under the anti-SLAPP statute, Code of Civil Procedure section 425.16(g), 16 will remain in effect until the Court rules on Schwartz’s motion after the April 22, 2024 hearing, 17 resulting in the effective loss of as much as three months trial preparation. 18 Even if the stay is lifted immediately after the April 22, 2024 hearing, and setting aside 19 the possibility of an appeal, as a practical matter, depositions will not commence again until they 20 are re-noticed into May 2024, only two months before the fact discovery cut-off, and given the 21 number of depositions to be taken, fact discovery will be ongoing even after commencement of 22 expert discovery, which is anticipated to include as many as six disclosed experts. Moreover, as a 23 result of the stay, USREC has lost entirely the ability to complete the key depositions, including 24 Plaintiff, needed to prepare and file a timely summary judgment or adjudication motion in 25 advance of the August 12, 2024 trial. 26 Alternatively, at a minimum, USREC submits that the foregoing establishes good cause to 27 set the hearing on its motion to continue trial on shortened notice in order to alleviate the ongoing 28 prejudice resulting from the anti-SLAPP stay and so that these issues may be resolved well in 5 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 advance of the April 22, 2024 hearing on Schwartz’s anti-SLAPP Motion and the August 12, 2 2024 trial date and attendant pre-trial deadlines. 3 II. BACKGROUND 4 A. FACTUAL BACKGROUND AND PLEADINGS 5 Plaintiff Jason Neel initiated this action to challenge the validity of a $439,000 Deed of 6 Trust recorded on September 9, 2020, against Plaintiff’s real property at 144 Palo Verde Terrace, 7 Santa Cruz, California (“Property”) to secure a refinance loan made to Plaintiff by lender USREC 8 (“USREC Deed of Trust”). The USREC loan proceeds were used to pay off, among other things, 9 a $384,631 existing Deed of Trust and a $22,697 existing HOA lien Plaintiff had against the 10 Property. The USREC Deed of Trust went into default by early 2021. Plaintiff filed his original 11 Complaint in Alameda County on August 17, 2021. Plaintiff and USREC subsequently stipulated 12 through counsel to transfer the action to Santa Cruz County, and on or about October 7, 2022, 13 Plaintiff filed his operative First Amended Complaint (“FAC”). 14 Plaintiff alleges that he was not competent when he signed a Power of Attorney (“POA”) 15 in favor of third-party Cody Molica, who had previously been appointed by this Court as 16 Plaintiff’s Guardian ad Litem in a prior action and who signed the USREC Deed of Trust and 17 other loan documents as Plaintiff’s attorney-in-fact. Plaintiff, who had multiple pending criminal 18 charges against him at the time, was found competent by this Court in those proceedings prior to 19 his execution of the POA. Plaintiff also challenges the USREC Deed of Trust based on alleged 20 defects in the instrument and alleged violation of consumer lending regulations and named CNA 21 Equity Group and Rushmyfile, Inc., the broker entities involved in the loan, and Superior Loan 22 Servicing and Asset Default Management, Inc., the loan servicer and foreclosing trustee under the 23 USREC Deed of Trust. 24 USREC denies Plaintiff’s allegations, and on December 14, 2022, USREC answered the 25 FAC and filed a Cross-Complaint against Plaintiff, CNA Equity Group, Rushmyfile, Inc. and 26 Cody Molica. 27 On November 20, 2023, Plaintiff filed a Doe amendment naming Schwartz, one of his 28 former attorneys, as Doe 1 under Plaintiff’s First Amended Complaint (“FAC”). Schwartz filed 6 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 an Answer to the FAC on or about November 27, 2023. Thereafter, on January 26, 2024, USREC 2 filed a Roe amendment naming Schwartz as Roe 25 under USREC’s Cross-Complaint. 3 B. THE CURRENT AUGUST 12, 2024 TRIAL SETTING 4 This action is set for a trial readiness call on August 1, 2024 and set for trial to commence 5 on August 12, 2024. The August 12, 2024 trial was set by the Court on December 11, 2023 and 6 is the first trial setting in this action. At the December 11, 2023 hearing in which the Court set 7 the current trial date, the Court denied plaintiff Jason Neel’s (“Plaintiff”) ex parte motion for a 8 preferential trial setting. The Court set the August 12, 2024 trial date after conferring over 9 available dates and calendar conflicts with counsel for Plaintiff, counsel for USREC and 10 defendant and cross-defendant Schwartz, pro per, all of whom appeared and participated in the 11 hearing. There have been no prior trial continuances requested or granted. (Smith Decl., ¶2). 12 C. ANTI-SLAPP MOTION AND CURRENT STAY OF DISCOVERY 13 The parties were scheduled to take Plaintiff’s deposition on February 14, 2024, and 14 Schwartz’s deposition on February 21, 2024. However, on February 13, 2024, the day before 15 Plaintiff’s deposition, Schwartz filed his anti-SLAPP Motion challenging USREC’s Cross- 16 Complaint pursuant to Code of Civil Procedure section 425.16, blocking the scheduled 17 depositions. (Smith Decl., ¶¶4-5). Pursuant to section 425.16(g) of the anti-SLAPP discovery, 18 “[a]ll discovery proceedings in the action shall be stayed upon the filing of a notice of motion 19 made pursuant to this section.” 20 The anti-SLAPP Motion is scheduled for hearing on April 22, 2024, at 8:30 a.m. in 21 Department 5. Although the parties submitted a written Stipulation to advance the hearing date, 22 the Court declined to advance the hearing. Efforts to confer over the possibility of re-opening 23 discovery while the anti-SLAPP motion remained pending were unsuccessful, therefore, all 24 discovery remains stayed, notwithstanding the August 12, 2024 trial date and the approaching 25 attendant pre-trial deadlines. (Smith Decl., ¶6). 26 /// 27 /// 28 7 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 III. DISCUSSION 2 A. THE AUGUST 12, 2024 TRIAL DATE SHOULD BE CONTINUED TO MITIGATE THE PREJUDICE FROM A THREE-MONTH ANTI-SLAPP STAY 3 Under California Rule of Court 3.1332(c), the Court may grant a continuance of trial upon 4 a “showing of good cause justifying the continuance,” considering each request for a continuance 5 “on its own merits.” See Capital Nat. Bank of Sacramento v. Smith (1944) 62 Cal.App.2d 328, 6 339 (whether to grant trial continuance is within the sound discretion of trial court; courts have 7 held that liberality should be exercised in granting continuances when they are not prejudicial to 8 other parties). Among the circumstances indicating good cause is, a “significant, unanticipated 9 change in the status of the case” necessitating a continuance of the trial date. Cal. Rule Ct. 10 3.1332(c). 11 There is good cause here to continue the August 12, 2024 based on the anti-SLAPP 12 Motion’s stay of discovery. Because this Court will not hear the anti-SLAPP Motion until April 13 22, 2024, USREC and the other parties to this case will be unable to re-notice the previously 14 pending depositions of Plaintiff and his prior attorney Schwartz until after that date, at the 15 earliest. At least seven additional party and third-party fact depositions also remain to be taken, 16 and those will likely be pushed out well into June and July 2024; these include the two brokers 17 involved in USREC’s loan, CNA Equity Group and Rushmyfile, Inc.; the prior lender refinanced 18 with the USREC loan, Sax Mortgage; a second attorney previously representing Plaintiff, Daniel 19 Russo; and the two title companies involved in Plaintiff’s prior loan, Fidelity National Title 20 Company and Chicago Title Insurance Company. (Plaintiff has indicated an intention to take 21 USREC’s deposition, as well.) Likewise, no written discovery may be served until after April 22, 22 2024, at the earliest, meaning that responses to such discovery will not be obtained until late May 23 2024 or early June 2024. As a result, discovery will be effectively stayed for at least three 24 months, and the parties will still be in the middle of completing fact discovery as the pre-trial 25 expert disclosure and discovery deadlines arrive in June 2024. Plaintiff’s counsel has indicated 26 an intention to disclose three experts, leading to the likelihood of at least six additional 27 depositions for disclosed experts. (Smith Decl., ¶8). 28 8 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 If the current August 12, 2024 trial date is not continued, the three-month halt on all 2 discovery imposed by the pending anti-SLAPP Motion will severely prejudice USREC’s ability 3 to complete necessary discovery and prepare for trial, and likewise has already prevented USREC 4 from completing the discovery necessary to file a timely summary judgment or adjudication 5 motion, which would have to be filed by April 25, 2024, three days after the anti-SLAPP Motion 6 hearing. A brief trial continuance of less than 90 days is reasonably necessary to mitigate this 7 prejudice by providing the parties with three months for discovery to make up for the three 8 months they will lose because of the anti-SLAPP stay. (Smith Decl., ¶¶8-9, 14). 9 No party will be prejudiced if the Court grants the requested trial continuance. Plaintiffs’ 10 FAC was not at issue until December 8, 2023, when Plaintiff dismissed the last of the un-served 11 defendants named therein, delaying depositions of parties and third parties.1 Absent a trial 12 continuance, however, USREC (and, in truth, all parties) will be severely prejudiced because they 13 will have lost three months of discovery and trial preparation, will be forced to complete intensive 14 fact discovery while extensive expert discovery commences and have already been deprived of 15 the opportunity to file timely motions for summary judgment or adjudication. Schwartz’s last- 16 minute anti-SLAPP Motion has again delayed completion of those depositions and, moreover, 17 prevented USREC from bringing a timely motion for summary judgment or adjudication. (Smith 18 Decl., ¶¶9-14). See Cal. Rule of Court 3.1332(d)(4), (d)(5), (d)(9), and (d)(10). 19 IV. CONCLUSION 20 Accordingly, USREC respectfully submits that good cause exists to continue the current 21 August 12, 2024 trial date for just under 90 days, to November4, 2024, or the next date thereafter 22 1 23 Nevertheless, USREC has at all times pursued the preparation of its defense with diligence, conducting extensive party and third party written discovery concerning the transactions and the 24 bases of Plaintiff’s allegations. In addition to serving Plaintiff with five (5) sets of written discovery, USREC has served twelve (12) business records subpoenas to date in this action, 25 obtaining records from the lenders, brokers and title companies involved with the subject loan transactions involving Plaintiff’s Property, records from the two attorneys who represented 26 Plaintiff at the time of and in connection with those transactions, Daniel Russo and Donald Schwartz, and records from the psychiatrist, psychologist and hospital that have evaluated and/or 27 treated Plaintiff over the years. USREC also subpoenaed records from and took the deposition of the notary who notarized Plaintiff’s signature on the operative POA at issue in this action. (Smith 28 Decl., ¶¶9-13). 9 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL 1 available on the Court's calendar, with all pre-trial deadlines tied to the new continued trial date. 2 Alternatively, USREC requests that the Court enter an order shortening the time for hearing 3 USREC’s motion to continue trial so that it may be heard well in advance of the the April 22, 4 2024 anti-SLAPP hearing and the approaching trial and attendant pre-trial deadlines. 5 Dated: April 2, 2024 STEYER LOWENTHAL BOODROOKAS 6 ALVAREZ & SMITH LLP 7 By:______________________________ 8 Jeffrey H. Lowenthal Edward Egan Smith 9 Matthew W. Delbridge Attorneys for Defendant and Cross- 10 Complainant United States Real Estate Corporation 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 EX PARTE APPLICATION TO CONTINUE TRIAL OR, ALTERNATIVELY, FOR ORDER SHORTENING TIME; MEMORANDUM OF POINTS AND AUTHORITIES 2077862.2 - NATC.JNEEL