Preview
PATRICIA H. LYON, (State Bar No. 126761)
MARY ELLMANN TANG, (State Bar No. 154340)
KEVIN E. FUSCH (State Bar No. 255877)
FRENCH LYON TANG
A Professional Corporation
1990 N. California Blvd., Suite 300
Walnut Creek, CA 94596
Telephone: (415) 597-7800
Attorneys for Defendant
EAST WEST BANK
SUPERIOR COURT OF UNLIMITED JURSIDICTION
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
MAHNAZ KHAZEN, ) Case No. 18CV328954
)
) MEMORANDUM OF POINTS AND
Plaintiff, ) AUTHORITIES IN SUPPORT OF
) DEFENDANT EAST WEST BANK’S
v. ) MOTION TO STRIKE PORTIONS OF
) PLAINTIFF’S COMPLAINT
EAST WEST BANK, DOES 1-20, inclusive.
Hearing:
Date: December 13, 2018
Time: 9:00 a.m.
Department: 9
Location: 191 North First Street
San Jose, CA
Defendants.
Action Filed: 05/25/18
OSE
Defendant EAST WEST BANK (the “Bank”) respectfully submits the following
memorandum of points and authorities in support of its motion to strike portions of the
Complaint filed by Plaintiff MAHNAZ KHAZEN (“Plaintiff”).
ele
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO STRIKEYN Dw BF BN
IL INTRODUCTION
Portions of Plaintiffs cause of action for breach of contract are time barred. Plaintiff
alleges breaches that occurred from 2010 through 2013. She did not file her complaint until May
25, 2018, over four years after the breach occurred. Since these breaches are barred by the
applicable statute of limitations, they should be stricken from Plaintiffs Complaint.
Il. FACTUAL SUMMARY
On or about March 17, 2004, East West Bank made a loan to Plaintiff in the original
principal amount of $735,000.00 (the “Loan’”), which was secured by real property more
commonly known as 14519 Big Basin Way, Saratoga, California (the “Property”). Complaint 4
4.
After property values declined in 2007 and 2008, Plaintiff stopped paying the property
taxes and petitioned the County of Santa Clara to reassess them. Complaint §{ 8, 13. While she
was doing this, the Bank agreed to extend the loan maturity date of the Loan and increase the
principal amount. Complaint §§ 5, 6. Plaintiff assigned her CD accounts as additional collateral
for the Loan. Complaint {if 6, 9.
On or about July 15, 2010, the Santa Clara County Assessor’s Office denied the lower tax
assessment Plaintiff requested. Complaint { 10. Thereafter, the property taxes remained unpaid
until a tax lien sale was scheduled. Complaint § 13. East West Bank liquidated Plaintiff's CD to
pay the back property taxes. /d.
The loan matured on October 1, 2017. Complaint, Exhibit C. Plaintiff did not pay off
the loan until over four months later on February 9, 2018. Complaint § 25. She disputed the
amount due and East West Bank refunded her $9,442.01. Complaint { 26. Still unhappy,
Plaintiff initiated this suit on May 25, 2018, alleging a number of instances of alleged
misapplication of payments against the Bank.
Ill. LEGAL ANALYSIS
The court may strike any irrelevant, false, or improper matter inserted in any pleading.
CCP § 435(a). The grounds for a motion to strike must appear on the face of the pleading or
2-
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO STRIKEfrom matter which the court may judicially notice. CCP § 437. A general demurrer does not lie
to a portion of a cause of action. Daniels v. Select Portfolio Servicing, Inc. (2016) 246
Cal.App.4th 1150, 1167. Thus, where there is a substantive defect affecting only a portion of a
claim, the proper challenge is by motion to strike. PH II, Inc. v. Sup.Ct. (Ibershof) (1995) 33
Cal.App.4th 1680, 1682-1683 (legal malpractice claim based on several incidents of alleged
malpractice, one of which was not actionable as a matter of law).
Portions of Plaintiff's claim for breach of contract is time-barred. An action on “any
contract, obligation or liability founded upon an instrument in writing” must be commenced
within 4 years after breach. CCP §337. Plaintiff alleges she discovered the breach of the CD
assignments in 2010 and continually worked to have it resolved until 2013. Complaint § 11.
Plaintiff knew of her damages and the existence of the breach in 2013. Complaint § 14. She
even attached an email from 2010 showing her request to release the CD collateral. Complaint,
Exhibit B. Despite knowing of the breach in 2010, Plaintiff did not file her complaint until May
25, 2018, more than five years later. As such, it is barred on its face by the statute of limitations.
Plaintiff also alleges payments that were not credited to her loan from 2013 and 2014.
Her payments on 8/23/2013; 10/10/2013; and 5/12/2014 were all allegedly not credited more
than four years before Plaintiff filed this action. Complaint § 16. These claims are time barred
on their face.
Plaintiff asserted in meet and confer efforts that the statute of limitations does not run
during the period that the parties have off-setting claims and cited Code of Civil Procedure
section 431.70. Plaintiff stated that since she disputed the amount owed, that essentially tolled
the statute of limitations period. Plaintiff's reliance on section 431.70 is misplaced.
A claim for setoff under section 431.70 “may only be used defensively, being in nature a
defensive pleading asserting that the claim constituted prior payment for the amount sought in
plaintiff's complaint.” Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29
Cal.4th 189, 197-198. Section 431.70 expressly refers to the setoff claim as “the defense of
3+
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO STRIKEoo
oo
payment” and that “one who has paid a liability in full or in part can allege that payment as a
defense to a cause of action.” /d. at 198.
Plaintiff is not using section 431.70 defensively, she is attempting to use it offensively to
avoid the statute of limitations. This is not the purpose or proper use of a setoff. Plaintiff is
seeking affirmative relief by way of her complaint. She is not alleging a setoff against an
amount claimed due by the Bank.
Plaintiffs breach of contract cause of action is clearly barred by the statute of limitations.
There is no exception to or way to plead around the statute. Plaintiff has clearly pled that she
discovered and knew of the breach in 2013. Since she did not file suit within four years. the
motion to strike should be granted.
IV. CONCLUSION
For the foregoing reasons, the motion to strike should be granted. The alleged breach of
contract which occurred more than four years ago should be stricken from the Complaint as they
are barred by the applicable statute of limitations.
Dated: August 17 2018 FRENCH LYON TAN!
A Poke nal Compo ON,
By: IC a
tl E. FUSC
Attorneys for Defendant,
EAST WEST BANK
-4-
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO STRIKE,