On February 03, 2017 a
Motion-Secondary
was filed
involving a dispute between
Capital Equity Management Group Inc,
and
Brenda Gillum,
Carter, Mary Rose,
Carter, William Keith,
Castleberry, George,
Castleberry, Richard,
Clements, Jamee Lynn,
Clements, Rick,
George Castleberry,
Gillum, Brenda,
Jamee Lynn Clements,
Kenneth A Swanger,
Mark Tillotson,
Mary Rose Carter,
Norcal Redevelopment Corp,
Northcutt, Richard,
Northern California Investments Lp,
Richard Castleberry,
Richard Northcutt,
Rick Clements,
Steven A Swanger,
Swan Construction,
Swanger, Kenneth A,
Swanger Properties Llc,
Swanger, Steven A,
Swan Investments Inc,
Tillotson, Mark,
William Keith Carter,
for Fraud: Unlimited
in the District Court of Stanislaus County.
Preview
Electronically Filed
Michael J. Dyer SBN 109297 1/27/2020 11:24 AM
NA Dustin J. Dyer SBN 274308 Superior Court of California
DYER LAW FIRM County of Stanislaus
5250 Claremont Ave, Ste. 119 Clerk of the Court
Stockton. CA 95207 By: Nicole Nelson, Deputy
Attorney for Plaintiffs, CEMG
(209) 472-3668; FAX 472-3675
Email: ddyer@dyerlawrm.com
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SUPERIOR COURT OF THE STATE OF CALIFORNIA,
IN AND FOR THE COUNTY OF STANISLAUS
CAPITAL EQUITY MANAGEMENT Case No.: 2023519
GROUP, INC.
Plaintiffs ’
MEMORANDUM 0F POINTS AND
AUTHORITIES IN SUPPORT OF
vs. MOTION FOR ABATEMENT OF THE
CURRENT ACTION, INCLUDING THE
STEVEN. A. SWANGER; KENNETH A. PENDING DEMURRERS, UNTIL
SWANGER; BRENDA GILLUM; RICK DETERMINATION OF STANISLAUS
CLEMENTS; SWAN CONSTRUCTION; SUPERIOR COURT CASE NO.: 2009158
SWAN INVESTMENTS, INC; SWANGER
PROPERTIES, LLC; NORTHERN Date: February 20, 2020
CALIFORNIA INVESTMENTS, L.P.; Time: 8:30 AM
NORCAL REDEVELOPMENT CORR; Dept: 21
RICHARD CASTLEBERRY. GEORGE Trial date: None
CASTLEBERRY; JAMIE LYNN CLEMENTS;
MARY ROSE CARTER; WILLIAM KEITH
CARTER; MARK TILLOTSON, RICHARD
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NORTHCUTT and DOES l TO 100, inclusive,
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Defendants
I. INTRODUCTION
Plaintiff has brought the current motion in the interest ofjudicial economy. Currently
pending in this litigation are multiple demurrers attacking Plaintiff s Second Amended
Complaint. These demurrer hearings have been continued through stipulation of the parties for
more than two years in order to accommodate the prosecution of a related litigation in Stanislaus
County, case no. 2009158 (hereinafter the “2014 litigation”).
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POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR ABATEMENT
The 2014 litigation is now set for trial in June of 2020. Given the similarity of issues,
properties and parties between the 2014 litigation and the present litigation (hereinafter “2017
litigation”), it is necessary for the Court to abate this litigation until a nal determination has
been made regarding the 2014 litigation.
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II. STATEMENT 0F FACTS
Beginning prior to January 2009 and continuing past December 201 1, in various counties
throughout California, including Stanislaus County, Plaintiff engaged in the practice of buying
distressed real estate properties at various bank and/or governmental and/or private property
sales with the intent to acquire the properties, repair those properties and resale them at a prot
or retain such properties for long term rentals. To this end Plaintiff used proprietary processes to
research numerous properties and analyzed and determined their current “AS IS” value, physical
condition, title, encumbrances, repair costs, repaired resale value and maximum bid price to
target the properties for purchase by Plaintiff and targeted for purchase properties meeting
Plaintiff’s condential criteria, which had economic value of timely targeting properties with
superior prot potential.
Plaintiff has alleged that Defendants, and each of them, participated in a conspiracy to
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use Plaintiff’s information for their own personal benet, instead of Plaintiff. These acts, which
are outlined in detail in the Fourth Amended Complaint to the 2014 Litigation caused Plaintiff
significant damage. (See Plaintiff‘s Request For Judicial Notice
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#1 ).
On November 11, 2014, Plaintiff led the initial complaint in the 2014 Action alleging
fraud, conspiracy and numerous other causes of action against many of the same parties who are
Defendants in the present litigation. Numerous stays and other related delays caused Plaintiff to
be unable to conduct discovery in the 2014 Litigation.
Despite the numerous delays. Plaintiff eventually was able to discover numerous
additional distressed properties not previously listed in the 2014 Action which Defendants
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POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR ABATEMENT
conspired against Plaintiff for their own nancial gain and to Plaintiff s detriment. Given the
newly discover information conrming a greater scheme by Defendants than Plaintiff was
previously made aware of, Plaintiff led the 2017 litigation on February 3, 201 7. The 201 7
Litigation’s complaint mirrors many ofthe same allegations and facts of the 2014 Litigation;
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however, the properties in the two litigations are not identical.
On or about September 5. 201 7, Defendants Rick Clements, Jamie Lynn Clements, Swan
Construction, Swan Investments, Inc., Swanger Properties, LLC, Northern California
Investments, LP and Richard Northcutt led a demurrer to Plaintiff s Second Amended
Complaint in the present litigation. Additionally, on or about September 5, 201 7, Defendants
Steven Swanger, Kenneth Swanger and Brenda Gillum led a separate demurrer to Plaintiff‘s
Second Amended Complaint. On or about September 11, 2017, Defendant Tillotson led an
additional demurrer against Plaintiff’s Second Amended Complaint. Finally, each Defendant,
including the Castleberry Defendants, have led joinders to the above stated demurrers.
On or about December 6, 201 7, Plaintiff sought abatement of the present litigation via an
ex parte application. As a result of the hearing, Defendants’ demurrer hearings were continued to
February of 2018. The Court additionally required that any abatement motion be sought through
regular noticed motion. In February of 201 8, the parties stipulated to continue the hearings to
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May 15, 201 8. The parties stipulated to continue the hearings to August 16, 2018. The parties
stipulated to continue the hearings to October 3 l, 201 8. The parties stipulated to continue the
hearings to January 9, 2019. The parties stipulated to continue the hearings to April 3, 2019. The
parties stipulated to continue the hearings to July 2, 201 9. The parties stipulated to continue the
hearings to October 8, 201 9. The parties stipulated to continue the hearings to December 10,
201 9. The parties stipulated to continue the hearings to February 20, 2020.
In Defendants’ demurrers to Plaintiff’s 2017 Litigation Second Amended Complaint,
Defendants argued that the 201 7 Litigation is same as the 2014 Litigation other than inclusion of
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POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR ABATEMENT
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different properties and some additional defendants. “The Allega
tions Comprising The Core
Theory Of Wrongdoing And Harm In This Case Are Based On The Same
Allegations Made In A
Complaint Filed In November 2014 In This Court” (Swanger Demur
rer Points and Authorities
Pg. 2: 17—19). Additionally, each defendant, through either their own
motion ofjoinder of another
defendant’s motion has asserted that the current action “must
be abated because there is another
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cause of action pending between the same parties on the same cause of action.” (Northcutt
Demurrer Points and Authorities Pg. 329-10 (See Plaintiff‘s Reque
st for Judicial Notice #2)).
“The Court must abate this case in favor of CEMG's 2014
action that is already pending before
the Court concerning the same facts, parties. and legal issues.
Accordingly, this action must be
abated as a matter of right.” Swanger Demurrer Points and Authorities Pg. 2:8-10
(See Plaintiff’s
Request for Judicial Notice #3). Defendant Tillotsonjoined the
arguments presented in the
Swanger and Northcutt demurrers, including the above stated abatem
ent argument. (Tillotson
Demurrer Points and Authorities Pg. 1128-224 (See Plaintiff‘s Reque
st for Judicial Notice #4).
The Castleberry Defendants joined the arguments presented in the Swang
er and Northcutt
demurrers. including the above stated abatement argument.
(Castleberry Defendant Joinders to
Demurrer (See Plaintiff’s Request for Judicial Notice #5 and
#6).
Given the arguments presented by Defendants in their demurrers, Plaint
iff determined it
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was in the best interest of all parties and the Court that the 2017
Litigation claims be added to the
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2014 Litigation. The most efficient route to achieve such as outcom
e was to amend the 201 4
Litigation’s complaint to encompass the 201 7 Litigation issues. Therefore, Plaintiff led a
motion to amend in the 201 4 Litigation. This motion was grante
d and Plaintiff amended the
complaint. The 2014 litigation Fourth Amended Complaint has
withstood each of the Defendants
demurrer attacks and the pleadings are set. The 2014 litigation
is scheduled for trial on June 9,
2020 in Department 22 of the Stanislaus County Superior Court.
//
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POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR ABATEMENT
III. LEGAL ARGUMENT
A. COURTS HAVE INHERENT AUTHORITY TO GRANT THE REQUESTED
ABATEMENT
In general Courts have inherent equity, supervisory, and administrative powers to control
litigation before them. (See Cal. Civ. Code §128). It is well established that:
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“Courts have inherent equity, supervisory and administrative powers as well as
inherent power to control litigation before them. Inherent powers of the court are
derived from the state Constitution and are not conned by or dependent on
statute” (Cattle v. Superior Court, (1962) 3 Cal. App. 4th 1367, 1377 (Internal
cites omitted»
Under these inherent powers, the trial court has the “broad power to grant a continuance
or stay proceedings.” (Ehrhart & Assoc. v. Superior Court (1960) 185 Cal.App.2d 1, 4-6). A
ground for abatement may be raised when it appears on the face of the complaint or is evident
from any matters of which the court must [Evid. Code §45 l] or may [Evid. Code §452] take
judicial notice [Code Civ. Proc. §430.30(a)]. Thus, for the reasons of conserving resources of
both the Court and the parties stated above. the Court should abate the current litigation until a
determination has been made in the 2014 Litigation.
“The pendency of another earlier action growing out of the same transaction and between
the same parties is a ground for abatement of the second action where the court determines
there is another action pending raising substantially the same issues between the same parties, it
is to enter the interlocutory judgment specied in Code of Civil Procedure section 597.
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(Under Code of Civil Procedure section 597, when such a judgment is entered, ‘no trial of other
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issues shall be had until the nal determination of that other action.’ Abatement of the second
action is a matter of right. A trial court has no discretion to allow the second action to proceed if
it nds the rst involves substantially the same controversy between the same parties.”
(Leadford v. Lead/0rd (1992) 6 Cal. App. 4th 571, 574.)
It is without dispute that the causes of action and properties involved in the 2014
Litigation and 201 7 Litigation are similar. Each Defendant through either their own demurrer or
their joinder to another Defendant’s demurrer presents the argument that the litigations involve
similar causes of action, properties and parties. Given this agreement between the parties, it is
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POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR ABATEMENT
necessary to abate the current action until a determination has been made in the 2014 Litigation.
B. NO PARTY WOULD BE HARMED BY ABATEMENT
It cannot be argued that any party to the present litigation would be harmed by abating
the current proceedings until a determination could be made regarding the 2014 Action. In the
present litigation, there is no pending discovery. No discovery has been conducted by any party
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in over 2 years. Additionally, the parties would incur no additional expense due to abating the
current action. Finally, with no trial date has been set and given the 2014 Litigation there is no
risk that an abatement of the proceedings would negatively affect any party’s ability to conduct
reasonable discovery.
IV. CONCLUSION
For the reasons set forth in this application, PLAINTIFF respectfully requests the
Court grant its motion to abate the present litigation until a determination has been made
on the 2014 Litigation and continue the pending demurrer motions until after the
abatement has been removed.
Date: January 22, 2020 THE D
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.___
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Dustin J. Dyer
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CAPITAL EQUITY
Attorneys for Plaintiff,
MANAGEMENT GROUP, INC.
(JIAOJN—‘OCDWVODUIAOJNA
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POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR ABATEMENT