Mike Silverman & Assoc. v. Drai

• Decision Date: 01 May 1987
• Docket Number: No. CV 87-00615-DT.,CV 87-00615-DT.
• Citation: 659 F. Supp. 741
• Court: U.S. District Court — Central District of California
• Parties: MIKE SILVERMAN & ASSOCIATES, Plaintiff, v. Victor DRAI, Marti Trugman & Associates, Inc., a Corporation, inclusive, Defendants.

659 F. Supp. 741

MIKE SILVERMAN & ASSOCIATES, Plaintiff, v. Victor DRAI, Marti Trugman & Associates, Inc., a Corporation, inclusive, Defendants.

No. CV 87-00615-DT.

United States District Court, C.D. California.

May 1, 1987.

Gilbert D. Seton, Los Angeles, Cal., for Mike Silverman & Associates.

Robert A. Rees & Diane B. Sherman, Rintala, Smoot, Jaenicke & Brunswick, Los Angeles, Cal., for Victor Drai.

Gail M. Title, Rosenfeld, Meyer & Susman, Beverly Hills, Cal., for Marti Trugman.

MEMORANDUM OF DECISION TO SUPPLEMENT COURT'S ORDER OF MARCH 9, 1987

TEVRIZIAN, District Judge.

Plaintiff, a California corporation, filed this action in state court on September 16, 1981, to collect a real estate commission. The original defendants included Victor Drai ("Drai"), a French citizen, Marti Trugman & Associates, Inc. ("Trugman"), a California corporation, and Does 1 through 10. On June 14, 1982, plaintiff filed an At-Issue Memorandum in state court pursuant to California Rule of Court 206. At the time plaintiff filed this Memorandum, Drai and Trugman remained the only named defendants.

On July 16, 1986, plaintiff noticed a motion to specially set this action for trial. The state court, by minute order dated August 1, 1986, set the trial for October 29, 1986. Plaintiff voluntarily dismissed Trugman on September 2, 1986. Thereafter, the state court, on October 23, 1986, granted Drai's motion to continue the trial to January 29, 1987. On the day this case was scheduled for trial in state court, January 29, 1987, Drai filed for removal to this Court. Plaintiff now moves for an order remanding the action, claiming that Drai's removal was untimely.

The issue presented here is to determine when this action became removable on the basis of diversity jurisdiction. Plaintiff argues the action became removable on September 2, 1986, because Drai had notice prior to the dismissal of Trugman that plaintiff had no intention of serving any fictitiously named defendants. If the case became removable on this date, the petition to remove on January 29, 1987, was not timely filed under 28 U.S.C. Section 1446(b) and this action must be remanded to state court.¹ Defendant Drai contends, however, that his petition for removal was timely filed because complete diversity was not assured until the scheduled first day of trial, January 29, 1987, when it became apparent the fictitious defendants would not be identified and served.

I. Plaintiff's At-Issue Memorandum.

Plaintiff argues that the filing of its At-Issue Memorandum in state court placed defendants on notice that it no longer intended to serve the fictitious defendants. The Ninth Circuit has established that a cause of action becomes removable only when the plaintiff takes some affirmative action to sever the claim against potentially non-diverse Doe defendants. Preaseau v. Prudential Ins. Co., 591 F.2d 74, 76-77 (9th Cir.1979); Schmidt v. Capitol Life Insurance Co., 626 F.Supp. 1315, 1318 (N.D.Cal.1986); Southern Pacific Co. v. Haight, 126 F.2d 900, 905 (9th Cir.), cert. denied 317 U.S. 676, 63 S.Ct. 154, 87 L.Ed. 542 (1942); Cf. Bryant v. Ford Motor Co., 794 F.2d 450, 452 n. 1 (9th Cir.1986) ("Preaseau does not address the situation in which a defendant comes forward within the initial thirty days permitted by 28 U.S.C. Section 1446(b) and claims that removal is appropriate because the Does are fictitious"). Thus, this Court must first determine whether plaintiff's filing of the At-Issue Memorandum was an "affirmative action" which indicated that plaintiff no longer intended to identify and serve the fictitious defendants.

In Barngrover v. M. V. Tunisian Reefer, 535 F.Supp. 1309, (C.D.Cal.1982), Judge Tashima held that a case became removable when the plaintiff filed an At-Issue Memorandum which expressly stated that "No other parties will be served with a summons prior to the time of trial." Id. at 1312. Subsequently, the court in Goodman v. Travelers Ins. Co., 561 F.Supp. 1111 (N.D.Cal.1983), concluded, without mentioning Barngrover, that filing an At-Issue Memorandum alone was not sufficient to give a named defendant notice that the plaintiff intended to sever all claims against the Doe defendants. Instead, according to Goodman, this act "should be considered along with other factors in determining the intent of the plaintiff at the time the petition for removal was filed." Id. at 1113; see also, Herzig v. Twentieth Century Fox Film Corp., 129 F.Supp. 845, 848 (S.D.Cal.1955) (case properly removed where plaintiff filed At-Issue Memorandum and further stated at oral argument he intended to dismiss all non-diverse fictitious defendants). Gottlieb v. Firestone Steel Products Co., 524 F.Supp. 1137, 1139 (E.D. Penn.1981) ("the pre-trial memorandum which listed the unknown defendants did not properly afford the named defendant the opportunity to determine from it that plaintiff had dropped the non-diverse, unknown defendants") (emphasis original).²

In Solorzano v. American Nat. Ins. Co., 609 F.Supp. 144 (C.D.Cal.1985), Judge Rymer adopted the Goodman approach and distinguished Barngrover on two grounds. First, the court noted that the Barngrover At-Issue Memorandum specifically stated that all defendants had been served, while the Solorzano memorandum made no such representation. Second, the court found additional evidence the Solorzano plaintiff had indicated she planned to add defendants following further discovery, while no comparable evidence existed in Barngrover. Id. at 145.³

Like the At-Issue Memorandum in Solorzano, the Memorandum in the present action makes no representation that other parties will not be served. Accordingly, plaintiff's filing of this document in state court did not place defendants on notice that plaintiff intended to sever its claims against the fictitious defendants. Moreover, nothing in the record indicates that plaintiff ever represented at oral argument or elsewhere that all defendants were before the state court. Thus, following Goodman and Solorzano, this Court concludes that plaintiff's At-Issue Memorandum, filed June 14, 1982, did not sever plaintiff's claims against the Doe defendants, and therefore could not form the basis for removal of this action.⁴

II. California Code of Civil Procedure, Section 583.210.

Neither party briefed the implications of California Code of Civil Procedure, Section 583.210 on the removability of this case. This statute, however, appears dispositive of the issue presented.

Section 583.210(a) states in pertinent part: "The summons and complaint shall be served upon a defendant within three years after the action is commenced against the defendant." This statute "applies to any defendant sued by a fictitious name from the time the complaint is filed." Cal.Civ.Proc.Code Section 583.210 legislative committee comment (West Supp.1987); Brennan v. Lermer Corp., 626 F.Supp. 926, 934 (N.D.Cal.1986); see also Lesko v. Superior Court, 127 Cal.App.3d 476, 481-82, 179 Cal.Rptr. 595 (1982); Warren v. A.T. & S.F.Ry.Co., 19 Cal.App.3d 24, 38, 96 Cal.Rptr. 317 (1971).⁵ Additionally, California Code of Civil Procedure, Section 583.250 provides in relevant part that if service is not made within the time provided in Section 583.210(a), "the action shall not be further prosecuted and no further proceedings shall be held in the action."

Thus, under California law, a plaintiff's failure to identify and serve fictitious defendants within three years of the date the complaint is filed bars any later action against those defendants. Brennan, supra, 626 F.Supp. at 934. It necessarily follows, therefore, that once the three year time period has expired, the remaining named defendants must be considered on notice that all parties are before the court.⁶

Plaintiff filed the present action on September 16, 1981. Under Section 583.210, it had until September 16, 1984, to identify and serve the Doe defendants. When plaintiff failed to effect service on the Doe defendants by this date, Drai knew, or should have known, that all parties were before the state court. Accordingly, this action became removable as soon as Drai learned that plaintiff had voluntarily dismissed Trugman and complete diversity was thereby assured.⁷

III. Notice of the Trugman Dismissal.

Drai argues he never received written notice of the Trugman dismissal as required by Section 1446(a), and thus the action did not become removable until the day this matter was set for trial. Although plaintiff failed to provide written notice of the Trugman dismissal as required by California Rules of Court, Rule 383,⁸ Drai admits he received telephone notice of the Trugman dismissal from Trugman's counsel on October 15, 1986. More importantly, Drai learned of Trugman's dismissal on October 23, 1986, when all remaining parties were before the state court on Drai's motion to continue trial.

Section 1446(b) provides that a case becomes removable when the Defendant receives "a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." Several courts have held, however, that oral statements through which the defendant can ascertain that the action has become removable constitute adequate notice. See Heniford v. American Motors Sales Corp., 471 F.Supp. 328, 334 (D.S.C.1979), appeal dismissed without opinion, 622 F.2d 584 (4th Cir.1980) (case became removable during closing arguments in jury trial when plaintiff's counsel admonished the jury not to return a verdict against the sole remaining non-diverse defendant); First National Bank v. Johnson & Johnson, 455 F.Supp. 361, 362 (E.D.Ark.1978) (removal was proper at the time plaintiff's counsel made and court granted oral motion to dismiss the non-diverse defendant); Fugua v. Gulf, Colorado and Santa Fe Railway Co., 206 F.Supp. 814, 815-16 (E.D.Okl.1962) (case became removable the same day deposition testimony revealed that non-diverse defend...