Jacobson vs. LaVine & Associates Inc.

The Stipulation was not executed under penalty of perjury and makes no attempt to individually authenticate documents. (¶14 of Smith Declaration and Exhibit C thereto [ROA No. 808].) Indeed, the stipulation indicates it was not an admission as to “[t]he truth of any statement contained within any document” or “[t]he authorship of any particular document where authorship is disputed.” (Ibid. at ¶8.)

As noted by Defendant, the above fails to authenticate the “hundreds of pages of transaction documents, emails, handwritten notes, and accounting documents” included within the Exhibit. (See Objection No. 11 to Smith Declaration [ROA

No. 826.]) Moreover, the stipulation offered is not binding on Defendant BBK: “A Stipulation is an agreement between counsel respecting business before the court [citation], and like any other agreement or contract, it is essential that the parties or their counsel agree to its terms.” (Palmer v. City of Long Beach (1948) 33 Cal.2d 134, 142.)

Finally, it is worth noting that, to the extent Plaintiffs offer the documents for the truth of the statements therein, much of the information included within Exhibit D is hearsay.

Turning to the merits, as explained by the California Supreme Court in Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, “how the parties moving for, and opposing, summary judgment may each carry their burden of persuasion and/or production depends on which would bear what burden of proof at trial.” (Id. at p. 851.)

Where a statute of limitations defense is raised, a moving defendant bears the initial burden to demonstrate the claim is barred. (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1197.) Once that burden is met, the burden shifts to plaintiff “to demonstrate his claims survive based on one or more...exception[] to the basic limitations period.” (Ibid.; See also Glue-Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1030 and Acosta v. Glenfed Development Corp. (2005) 128 Cal.App.4th 1278, 1292-1293.)

“That plaintiffs may have anticipated defendants’ reliance on a limitations defense by alleging facts supporting a statutory exception to that defense is not sufficient to justify shifting the burden that otherwise would be imposed on plaintiffs.” (Acosta v. Glenfed Development Corp. (2005) 128 Cal.App.4th 1278, 1293.)

“The statute of limitations usually commences when a cause of action ‘accrues,’ and it is generally said that ‘an action accrues on the date of injury.’” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 743.) “Alternatively, it is often stated that the statute commences ‘upon the occurrence of the last element essential to the cause of action.’” (Ibid.)

The Fourth Amended Complaint alleges conduct spanning between May of 2005 through to September 25, 2014, which depleted the assets of the Trust. (See ¶38- ¶59 and ¶113 of 4AC [ROA No. 597].) Per the Complaint, moving Defendant aided and abetted Jeffrey Jacobson, in the above conduct. (See ¶137 of 4AC [ROA No. 597].)

The claims against Defendant BBK arise from the conduct of Bruce G. Holden, who is alleged to have been acting in his capacity as a representative of Defendants BBK and GRSM. (¶13, ¶15 and ¶105 of 4AC [ROA No. 597.]) These parties are designated the “Holden Defendants.” (Id. at ¶15.)

While the Complaint vaguely alleges acts of fraud in 2017 by Defendant Holden (¶168 of 4AC [ROA No. 597]) and vaguely alleges the “Holden Defendants” aided and abetted Jeffrey Jacobson “between in or about September 2005 and August 2021” (¶137 of 4AC [ROA No. 597]), the Complaint does not identify any injuries sustained in connection to the above. Nor have Plaintiffs identified within their opposition, any allegations of an injury past 2014, which would affect accrual.

Moreover, regardless, Defendant has established that any conduct attributable to it occurred in 2012 or before. (See SSUF No. 1 [ROA No. 803]; See also ¶3-¶5 of Holden Declaration [Roa No. 758].) In response to the above, Plaintiffs indicate they “do not dispute that Bruce Holden was employed by BBK before joining GRSM in approximately 2012.” (See Responsive Separate Statement, at SSUF No. 1 [ROA No. 803].) While Plaintiffs proceed to “dispute any implication that BBK’s potential liability is limited solely by the date Mr. Holden changed firms” (See ROA No. 803), this attempted dispute is directly contrary to the allegations in the Complaint.

Within a section labelled “BB&K,” the Complaint alleges that “at various times when defendant Holden made the representations and/or omissions alleged herein, he was acting within the course and scope of his employment and authority for the defendant BB&K during those years in which he was employed with BBK.” (¶105 of 4AC [ROA No. 597].) Thereafter, the Complaint alleges that “at various other times when defendant Holden made the representations and/or omissions alleged herein, he was acting within the course and scope of his employment and authority for the defendant GRSM during those years in which he was employed with GRSM.” (Id. at ¶106.) “Plaintiffs are informed and believe, and thereon allege, that during all relevant times BB&K acted through its agent Holden in carrying out the acts and/or omissions alleged herein.” (Id. at ¶110.)

Finally, the Complaint alleges Defendant BBK “intentionally failed to disclose” information, “[c]ommencing in or about 2005 and continuing until such time as Holden was no longer employed by or acting as an agent for BB&K.” (Id. at ¶113.)

“[T]he burden of a defendant moving for summary judgment only requires that he or she negate plaintiff’s theories of liability as alleged in the complaint.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493.)

Additionally, Plaintiffs failed to offer admissible evidence demonstrating any conduct by BBK post-2012.

Given Defendant has established that any conduct attributable to it occurred prior to 2012 and given the Complaint alleges conduct spanning between May of 2005 through to September 25, 2014, which depleted the assets of the Trust (¶38-¶59 of 4AC [ROA No. 597]), Defendant has established accrual no later than 2014.

As relevant to Plaintiffs’ remaining claims against moving Defendant, the statute of limitations for fraud is generally 3 years. (Code Civ. Proc., § 338, subd. (d).) The statute of limitations for a UCL claim is 4 years. (Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 732 and Bus. & Prof. Code, § 17208.)

As this action was initiated on July 11, 2022, more than 4 years after 2014, Defendant met its initial burden, as to both remaining claims.

Consequently, the burden to establish an exception to the statutory limitation periods shifted to Plaintiffs. (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1197.)

To avoid the bar of the statute of limitations, the Fourth Amended Complaint alleges “Plaintiffs did not discover, and could not reasonably discover, the facts constituting BB&K’s willful acts and omissions until at least August 9, 2021.” (¶116 of 4AC [ROA No. 597].)

As noted above, “[t]he statute of limitations usually commences when a cause of action ‘accrues,’ and it is generally said that ‘an action accrues on the date of injury.’” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 743.) However, “[t]hese general principles have been significantly modified by the common law ‘discovery rule,’ which provides that the accrual date may be ‘delayed until the plaintiff is aware of her injury and its negligent cause.’” (Ibid.) “[U]nder the discovery rule, ‘the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her.” (Ibid.)

Stated similarly, “[a] plaintiff has reason to discover a cause of action when he or she ‘has reason at least to suspect a factual basis for its elements.’” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) “Under the discovery rule, suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period.” (Ibid.) The term elements, as used above, refers to the “generic” elements of wrongdoing, causation, and harm. (Ibid.) “In so using the term ‘elements,’ we do not take a hypertechnical approach to the application of the discovery rule.

Rather than examining whether the plaintiffs suspect facts supporting each specific legal element of a particular cause of action, we look to whether the plaintiffs have reason to at least suspect that a type of wrongdoing has injured them.” (Ibid.)

Significantly, “‘ignorance of the identity of the defendant is not essential to a claim and therefore will not toll the statute.” (Vaca v. Wachovia Mortgage Co. (2011) 198 Cal.App.4th 737, 743.) “The discovery rule does not delay accrual in that situation because the identity of the defendant is not an element of a cause of action.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) This principle is based on “the commonsense assumption” that once a party has knowledge of the cause of action, “he ‘normally’ has ‘sufficient opportunity,’ within the ‘applicable limitations period,’ ‘to discover the identify’ of the former.” (Ibid.)

It is undisputed Plaintiffs are alleging Defendant BBK engaged in fraud and unfair business practices, to aid and abet breaches of fiduciary duty, fraud, and acts of conversion by Jeffrey Jacobson. (See ¶67 and ¶137 of 4AC [ROA No. 597].)

Fatal to Plaintiffs’ claims is their admission they “became aware of the allegations and concerns regarding Jeffrey Jacobson’s handling of family assets” in September of 2017. (See SSUF Nos. 3, response [ROA No. 803]; See also ¶5 of Lawrence Declaration.) Similarly, “Plaintiffs do not dispute they received and reviewed the Probate Petition,” filed by Daniel Jacobson, no later than June of 2018. (Id. at SSUF No. 5.)

Like the Fourth Amended Complaint herein, the Probate Petition alleged Jeffrey Jacobson improperly organized the sale of the Gladys Factory and the acquisition of the Freeman Factory, via a 1031-exchange, designed to personally benefit Jeffrey Jacobson and his individual businesses. (See ¶38-¶59 of 4AC [ROA No. 597] and ¶19-¶26 of Probate Petition [Exhibit 1 of Defense RJN] [ROA No. 758].) Likewise, the Petition alleged Jeffrey Jacobson obtained loans, to the detriment of the trust and/or was indebted to the trust. (See ¶52-¶54 of 4AC [ROA No. 597], and ¶40 and ¶61 of Petition [Exhibit 1 of Defense RJN] [ROA No. 758].)

Indeed, Plaintiff Lawrence Jacobson concedes having learned information in 2017 that caused concern, led him to “questions Jeffrey Jacobson’s handling of certain assets” and led him to believe further investigation was necessary. (¶6-¶8 of Lawrence Declaration [ROA No. 797].) Similarly, Plaintiff Darlene Boliver declares that she “became aware of information that caused [her] to investigate family assets and trust-related matters,” in approximately February of 2018. (¶10, ¶15 and ¶42 of Boliver Declaration [ROA No. 799].)

In responding to this motion, Plaintiffs repeatedly assert they did not “possess the internal accounting records, tracing analysis, debt schedules, ownership analysis, communications, historical summaries, or other documents maintained within professional files,” until after discovery was produced within the probate proceeding (¶7 of Lawrence Declaration [ROA No. 797]; See also ¶8-¶20 and ¶28 of Lawrence Declaration and ¶9, ¶13-¶24, ¶27 and ¶33 of Boliver Declaration [ROA No. 799]); however, “[a]ggrieved parties generally need not know the exact manner in which their injuries were ‘effected, nor the identities of all parties who may have played a role therein.” (Vaca v. Wachovia Mortgage Co. (2011) 198 Cal.App.4th 737, 744.)

Similar to the above, Plaintiffs repeatedly refer to the discovery of “all material facts,” “all facts underlying every claim” and “all material information” (Opposition: 9:25, 10:7, 11:4-5, 11:8, 11:10, 13:6, 14:28-15:1 and 18:24 [ROA No. 801]) as the necessary trigger for the statute of limitations; however, as noted above, “we look to whether the plaintiffs have reason to at least suspect that a type of wrongdoing has injured them.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.)

Here, Plaintiffs have conceded they had reason to suspect wrongdoing was the cause of their injuries, as early as September of 2017 and June of 2018.

Similar to the circumstances in Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, the above was sufficient to trigger the statute of limitations. Even if Plaintiffs were ignorant of the role Defendant BBK purportedly played in the fraud, by June of 2018 they were aware of their injury and its wrongful cause. (Id. at p. 744.)

Additionally, to take advantage of delayed discovery, “plaintiff must affirmatively excuse his failure to discover the fraud within three years after it took place, by establishing facts showing that he was not negligent in failing to make the discovery sooner and that he had no actual or presumptive knowledge of facts sufficient to put him on inquiry.” (Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 414, 437.) Stated similarly, Plaintiff must show “(1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.) The plaintiff must show that “despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period.” (Id. at p. 809.)

Plaintiffs failed to offer evidence which demonstrates that, despite diligent investigation, they could not discover the claims against Defendant BBK within the limitations period.

Plaintiffs assert they were not in possession of accounting records or any internal records held by Defendant LaVine, in 2017 or 2018, and did not gain possession of any such records until after discovery was conducted in the probate action.

(¶14-¶24 and ¶33-¶41 of Boliver Declaration [ROA No. 799] and ¶3, ¶7-¶21, ¶24(F), ¶28-¶32 and ¶35 of Larence Declaration [ROA No. 797].) The above, however, does not demonstrate diligent investigation of their claims.

While Plaintiffs declare “[s]ubpoenas were issued seeking records maintained by LaVine” and “[l]itigation concerning the production of those records followed” (¶31-¶32 of Boliver Declaration [ROA No. 799] and ¶26-¶27 of Lawrence Declaration [ROA No. 797]), Plaintiffs do not state they engaged in this discovery or participated in this litigation. Per Plaintiffs’ Counsel, the relevant discovery requests and subpoenas were served by Plaintiffs’ brother Daniel Jacobson. (¶8-¶9 of Smith Declaration [ROA No. 808].) Similarly, the motion to compel which ultimately resulted in production was pursued by Daniel Jacobson. (¶11 and ¶13 of Smith Declaration and Exhibit B thereto [ROA No. 808].)

Likewise, while Plaintiff Lawrence Jacobson declares that he spoke to his brother Jeffrey Jacobson and “monitored developments relating to the dispute....” (¶24(A) and ¶24(B) of Lawrence Declaration [ROA No. 797]), this does not establish diligent investigation.

Plaintiffs declare the probate production “materially expanded” their understanding of “the involvement of professionals” (¶39 of Boliver Declaration [ROA No. 799] and ¶33 of Lawrence Declaration [ROA No. 797]); however, they do not explain how the documents revealed involvement specifically by Defendant BBK. Plaintiffs’ Declarations confusingly address only their knowledge of conduct by LaVine, which is not the moving Defendant herein. (See ¶36, ¶38 and ¶39 of Lawrence Declaration [ROA No. 797] and ¶42, ¶44, and ¶45 of Boliver Declaration [ROA No. 799].)

Consequently, Plaintiffs have not established the time and manner of discovery or the inability to earlier discover their claims, as required. (Fox v. Ethicon Endo- Surgery, Inc. (2005) 35 Cal.4th 797, 808.)

Additionally, the Fourth Amended Complaint includes allegations of fraud: “Defendant BB&K willfully concealed the facts constituting the wrongful act or omission when those facts were known to BB&K....” (¶116 of 4AC [ROA No. 597].)

As noted by the Court in Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, “a defendant may be equitably estopped from asserting the statute of limitations when, as the result of intentional concealment, the plaintiff is unable to discover the defendant’s actual identity.” (Id. at p. 745.) “For a defendant to be equitably estopped from asserting a statute of limitations, the plaintiff must be ‘directly prevented...from filing [a] suit on time.” (Id. at p. 746.)

Plaintiffs offer no evidence that Defendant BBK took any action which directly prevented Plaintiffs from bringing suit on time.

Based on all the above, summary judgment is GRANTED.