Opinion
H042787
10-22-2018
AMR MOHSEN, Plaintiff and Appellant, v. CADENCE DESIGN SYSTEMS, INC. et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-10-CV-171136)
In this appeal plaintiff Amr Mohsen seeks review of an order sustaining a demurrer to his second amended complaint without leave to amend in his action alleging "fraud on [the c]ourt" against Cadence Design Systems (Cadence), Quickturn Design Systems (Quickturn), and numerous individuals associated with prior patent litigation in federal district court. Representing himself, as he has throughout the proceedings, Mohsen contends that reversal is required because he stated a timely and substantively sufficient claim. We disagree and therefore must affirm.
Background
We need not recount the factual history underlying these proceedings; it is adequately captured in several federal decisions of which we have taken judicial notice. (See United States v. Mohsen (N.D. Cal., May 30, 2012) 2012 U.S. Dist. LEXIS 74959 (Mohsen III); United States v. Mohsen (9th Cir. 2009) 587 F.3d 1028 (Mohsen II); Aptix Corp. v. Quickturn Design Sys., Inc. (Fed. Cir. 2001) 269 Fed.3d 1369 (Aptix I); Aptix Corp. v. Quickturn Design Sys., Inc. (Fed. Cir. 2005) 148 Fed.Appx 924 (Aptix II); and In re Mohsen (N.D. Cal. 2013) 506 B.R. 96 (Mohsen IV).) Briefly stated, Mohsen, on behalf of himself and his company, Aptix Corporation, brought this lawsuit against Cadence, Quickturn, and agents of those companies, alleging "fraud on [the] court" committed by those individuals during litigation over a patent held by Aptix. In that prior litigation Aptix had submitted falsified engineering notebooks to the court and later appeared to have staged a "theft" of his notebooks. The federal district court refused to enforce Aptix's patent and dismissed the lawsuit, based on Aptix's attempt " 'to defraud the Court and to strengthen its patent through a premeditated and sustained campaign of lies and forgery.' " (Aptix I, supra, at p. 1373.) The federal circuit court upheld the factual findings in light of the clear and convincing evidence of "extreme litigation misconduct," noting that the district court had properly made adverse inferences against Mohsen when he asserted his Fifth Amendment privilege and refused to testify about the "forgery, disappearance, and reappearance" of the notebooks. (Aptix I, supra, at p. 1374.) Subsequently the district court found that Aptix had fraudulently transferred its assets to Mohsen in order to impede Quickturn's recovery of $4.2 million in attorney fees awarded by the district court. (Aptix II, supra, at p. 927; In re Mohsen (9th Cir., Mar. 28, 2007, BAP9) 2007 Bankr LEXIS 4866 *4 (Mohsen I).)
Respondents' request for judicial notice is granted. Mohsen's request is granted in part. This court will take judicial notice of the accompanying Exhibit C, Exhibit E, and the docket entries in Exhibit D.
According to the federal district court Cadence acquired QuickTurn in 1999. (Mohsen III, supra, 74959 at p. 6.) The named individuals are not parties to this appeal.
Over the chief judge's dissent, the majority of the circuit court vacated the part of the judgment that declared the patent unenforceable. (Aptix I, supra, at p. 1378.)
As a result of his misconduct associated with the patent litigation, Mohsen was convicted of three counts of perjury, subornation of perjury, obstruction of justice, eight counts of mail fraud, contempt of court, witness tampering, and soliciting arson. (See Mohsen II, supra, 587 F.3d 1028 [upholding Mohsen's conviction].) Mohsen was sentenced to 17 years in prison. (Mohsen IV, supra, 506 B.R. at p. 100.)
Mohsen filed his initial complaint in this action in May 2010, alleging five causes of action: fraud on the court, abuse of legal process, and inequitable conduct; violations of 18 U.S.C.A. § 1961 (RICO); conspiracy to violate RICO; malicious prosecution; and unfair business practices (Bus. & Prof. Code, § 17200 et seq.) The pleading at issue on appeal, however, is the second amended complaint, filed (with permission of the court) on October 21, 2014. Unlike his previous pleadings, in which Mohsen purported to sue Aptix as a shareholder, this time he named himself as an individual plaintiff along with Aptix, "a Nominal Party." He asserted only one cause of action, alleging that the attorneys representing Quickturn and Aptix had committed "fraud on the court" by concealing facts from the court in the patent litigation "and taking the opposite, contrary and inconsistent position that the specifications disclosure in [Quickturn's] Patent '473 could be used to invalidate the claims of [Aptix's] Patent '069." Mohsen alleged that he had discovered this fraud around the end of December 2006. He requested $1 billion in damages and requested a constructive trust for plaintiffs' benefit.
Mohsen asked the court to allow his complaint to be filed nunc pro tunc on December 25, 2009, the date it was deposited in the mail. That request was denied.
Mohsen explained in the complaint, however, that Aptix had been declared bankrupt and had assigned its cause of action to Mohsen personally.
Cadence and Quickturn, respondents on appeal, demurred, asserting insufficiency of the complaint to state a cause of action for fraud. The pleading, they pointed out, lacked the requisite specificity to allege " 'how, when, where, to whom, and by what means' " the defendants misrepresented any facts to the district court during the patent litigation. Noting Mohsen's claim that he had discovered the fraud in December 2006, respondents further asserted the bar of the three-year statute of limitations for fraud, as prescribed in Code of Civil Procedure section 338, subdivision (d).
All further statutory references are to the Code of Civil Procedure.
After multiple continuances of the hearing on the demurrer, the court finally heard the matter on June 30, 2015. The court initially noted that no opposition to the demurrer had been filed until June 26, and the court had received it only the day before the hearing. Respondents' counsel had not received the opposition until after filing their reply, the day before the reply was due. Along with the opposition was a purported third amended complaint, which both the court and respondents' counsel had received on June 29, 2015. The court, however, made it clear to the parties that the only pleading before it was the second amended complaint.
The filing date of the opposition in the record is actually June 30, 2015, the same date that Mohsen's son, with power of attorney, signed the opposition and accompanying declaration.
The court explained to Mohsen that he could not repeatedly file complaints without court permission, which had not been granted with respect to his third amended complaint.
The court sustained the demurrer, finding that (1) Mohsen's opposition had not been timely filed; (2) he had failed to plead all the elements of fraud with the requisite specificity; and (3) he had failed to serve the summons and complaint within three years of the date it was filed, contrary to section 583.210. The court also ruled that Mohsen had not submitted his third amended complaint as a properly noticed motion and had failed to explain why the pleading should be permitted. On August 25, 2015, the court denied Mohsen's motion for reconsideration for untimeliness and for failing to explain why he could not have presented the asserted " 'different state of facts' " earlier. Mohsen then filed this appeal.
Mohsen filed his motion for reconsideration on August 17, 2015, well beyond the 10-day limit prescribed in section 1008. Mohsen protested that it was "deemed filed" on July 10, 2015, the day he delivered it to prison authorities.
Discussion
1. Appealability
At the outset we must consider whether this appeal is cognizable, since "[t]he existence of an appealable judgment is a jurisdictional prerequisite to an appeal. A reviewing court must raise the issue on its own initiative whenever a doubt exists as to whether the trial court has entered a final judgment or other order or judgment made appealable by Code of Civil Procedure section 904.1. [Citations.]" (Jennings v. Marralle (1994) 8 Cal.4th 121, 126-127.)
Following the denial of Mohsen's motion for reconsideration, he filed a notice of appeal from the June 30, 2015 order. But that order was not appealable. "An order sustaining a demurrer without leave to amend is not an appealable order; only a judgment entered on such an order can be appealed." (I. J. Weinrot & Son, Inc. v. Jackson (1985) 40 Cal.3d 327, 331; see also Evans v. Dabney (1951) 37 Cal.2d 758, 759 ["It is settled that an order sustaining a demurrer is not appealable.") It is not a matter of filing a premature notice of appeal; there is no judgment of dismissal. Accordingly, we could dismiss this appeal as beyond our jurisdiction.
"On occasion, however, appellate courts have reviewed such orders, based upon justifications such as the avoidance of delay, the interests of justice, and the apparent intent of the trial court to have a formal judgment filed. [Citation.] And when the trial court has sustained a demurrer to all of the complaint's causes of action, appellate courts may deem the order to incorporate a judgment of dismissal, since all that is left to make the order appealable is the formality of the entry of a dismissal order or judgment." (Sisemore v. Master Financial, Inc. (2007) 151 Cal.App.4th 1386, 1396; Thaler v. Household Finance Corp. (2000) 80 Cal.App.4th 1093, 1098.)
In the procedural context of this case it is evident that the court had every intention of ensuring finality of this lawsuit; indeed, in its order denying reconsideration it stated, "Dismissal is mandatory pursuant to [section] 583.250(b)." In the interests of judicial economy and to avoid yet another appeal, we will accordingly deem the order to incorporate a judgment of dismissal and will review it. 2. Scope of Review
Respondents do not seek dismissal of the appeal on this ground, nor do they even raise Mohsen's procedural oversight.
"In reviewing a trial court's order sustaining a demurrer, we review the order de novo to determine whether the complaint states a cause of action as a matter of law. [Citation.] We give the complaint a reasonable interpretation, reading it as a whole and its parts in context. [Citations.] We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters that may be judicially noticed. [Citation.] We affirm if any ground offered in support of the demurrer was well taken but find error if the plaintiff has stated a cause of action under any possible legal theory. [Citations.] We are not bound by the trial court's stated reasons, if any, supporting its ruling; we review the ruling, not its rationale." (Mendoza v. Town of Ross (2005) 128 Cal.App.4th 625, 631; Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank).)
In this case the trial court cited several reasons for sustaining respondents' demurrer. Keeping in mind that we must affirm "if any one of the several grounds of demurrer is well taken" (Longshore v. County of Ventura (1979) 25 Cal.3d 14, 21), we examine the rationale based on section 581.210, which the trial court found dispositive both in sustaining the demurrer and in denying reconsideration. 3. Application of section 583 .210
Section 583.210 provides that a plaintiff must serve a defendant with the summons and complaint "within three years after the action is commenced against the defendant." (§ 583.210, subd. (a).) The action is "commenced" within the meaning of the statute at the time the complaint is filed. (Ibid.)
Mohsen concedes that he served the defendants with only the October 21, 2014 second amended complaint, long after the action was officially filed in May 2010. He acknowledges that section 583.250 makes dismissal mandatory if service is not effected within the three-year limit. (§ 583.250, subd. (a).) Nevertheless, he invokes subdivision (b) of that provision, which states, "The requirements of this article are mandatory and are not subject to extension, excuse, or exception except as expressly provided by statute." (Italics added.) The applicable exception, Mohsen argues, is found in section 583.240, subdivision (d), which permits tolling during any period in which service "was impossible, impracticable, or futile due to causes beyond the plaintiff's control." Here, Mohsen suggests, "it was 'impracticable and futile' for the Plaintiffs and beyond their control to proceed with the service of the summons and the [second amended complaint] during the pendency of the criminal proceedings," because his criminal case extended to March 31, 2014.
On appeal Mohsen continues to assert that the "constructive" filing date of the action was December 25, 2009 based on the "prison delivery rule," thus bringing him within the three-year statute of limitations for fraud. (§ 338, subd. (d).) Of course, that earlier date only makes service of his pleadings even more untimely.
Section 583.250, subdivision (a), states that if service is not made within the prescribed time, "(1) The action shall not be further prosecuted and no further proceedings shall be held in the action. [¶] (2) The action shall be dismissed by the court on its own motion or on motion of any person interested in the action, whether named as a party or not, after notice to the parties." The record indicates that respondents were served January 7, 2015.
Mohsen's argument is without merit. First, the judgment on his criminal conviction was final on October 4, 2010, in Mohsen v. United States (2010) 562 U.S. 840 when the United States Supreme Court denied certiorari following the Ninth Circuit's November 25, 2009 opinion upholding the district court's judgment. Second, Mohsen makes no effort to demonstrate how his failure to serve the defendants was excused by the pendency of the criminal proceedings. Indeed, there appears to have been no impediment to filing the original complaint and the first amended complaint. Mohsen did move to defer service in October 2010 and to stay the matter in July 2011 and May 2012, but those requests—all unsuccessful in spite of repeated continuances (including a one-year continuance)—were made after the United States Supreme Court upheld the conviction. Moreover, the first motion was made on the ground that "a favorable fraud decision . . . will necessarily invalidate the conviction in the pending criminal parallel case . . . ." One would have expected Mohsen to request an expedited civil proceeding for that reason, not a stay. In any event, he made no showing in superior court—nor in this court—that failing to serve the defendants had anything to do with his criminal case. Nor has he offered any other excuse for failing to effect service of the pleadings that preceded the second amended complaint.
Mohsen did thereafter submit multiple petitions and motions, including a motion to vacate his sentence, but none was successful. (See, e.g., Mohsen III, supra, 74959; United States v. Mohsen (N.D. Cal., Sept. 21, 2012) No. CR 03-0095 WBS .)
The cases cited by Mohsen do not offer him any relief. Neither Heck v. Humphrey (1994) 512 U.S. 477 (Heck) nor Wallace v. Kato (2007) 549 U.S. 384 (Wallace) is apposite. In Heck, the plaintiff inmate brought a federal civil rights action against county prosecutors and a state police investigator. The United States Supreme Court held "that, in order to recover damages for allegedly unconstitutional conviction or imprisonment, or for other harm caused by actions whose unlawfulness would render a conviction or sentence invalid, a [42 U.S.C.] § 1983 plaintiff must prove that the conviction or sentence has been reversed on direct appeal, expunged by executive order, declared invalid by a state tribunal authorized to make such determination, or called into question by a federal court's issuance of a writ of habeas corpus . . . A claim for damages bearing that relationship to a conviction or sentence that has not been so invalidated is not cognizable under [42 U.S.C.] § 1983. Thus, when a state prisoner seeks damages in a [42 U.S.C.] § 1983 suit, the district court must consider whether a judgment in favor of the plaintiff would necessarily imply the invalidity of his conviction or sentence; if it would, the complaint must be dismissed unless the plaintiff can demonstrate that the conviction or sentence has already been invalidated. But if the district court determines that the plaintiff's action, even if successful, will not demonstrate the invalidity of any outstanding criminal judgment against the plaintiff, the action should be allowed to proceed, in the absence of some other bar to the suit." (Heck, supra, 512 U.S. at pp. 486-487, fns. omitted.) Wallace, merely refused to extend Heck to preclude a civil action when a criminal conviction is only anticipated; instead, the statute of limitations began to run when the petitioner was bound over for trial. If a plaintiff files a false-arrest (or related) claim before he or she has been convicted, the trial court may stay the civil action; but if conviction ultimately follows, then the civil action will be dismissed. (Wallace, supra, at pp. 393-394.)
Mohsen's reliance on Heck and Wallace is unavailing, as neither the facts nor the law represented by those cases is applicable here. Thus, neither decision offers support for Mohsen's argument that the assertedly nonfinal status of his criminal case excused his failure to serve the defendants with his pleadings. It was his burden to establish the applicability of the limited exception provided in section 583.240, subdivision (d), by showing that service on the defendants was "impossible, impracticable, or futile due to causes beyond [his] control." (Torrey Hills Community Coalition v. City of San Diego (2010) 186 Cal.App.4th 429, 437-438; Shipley v. Sugita (1996) 50 Cal.App.4th 320, 324.) As he demonstrated no viable reason for the superior court to find that it was " 'impracticable and futile' " and "beyond [his] control to proceed with the service of the summons," the court properly sustained respondents' demurrer based on his failure to comply with the mandatory service requirements of section 583.210.
Though unnecessary to the disposition of this appeal, we further agree with the lower court that Mohsen's "fraud on the court" claim was legally unsustainable. To establish fraud a plaintiff must allege and prove that "(1) the defendant made a false representation as to a past or existing material fact; (2) the defendant knew the representation was false at the time it was made; (3) in making the representation, the defendant intended to deceive the plaintiff; (4) the plaintiff justifiably relied on the representation; and (5) the plaintiff suffered resulting damages." (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792 (West), citing Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar).)
Each element of fraud must be pleaded with specificity, not with general, conclusionary allegations. (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166 (Daniels).) "The specificity requirement serves two purposes: 'to apprise the defendant of the specific grounds for the charge and [to] enable the court to determine whether there is any basis for the cause of action.' [Citation.]" (Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1008; Daniels, supra, at p. 1167.)
"The specificity requirement means [that] a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made." (West, supra, 214 Cal.App.4th at p. 793; Lazar, supra, 12 Cal.4th at p. 645.) In addition, the plaintiff must plead and prove " 'detriment proximately caused' by the defendant's tortious conduct. (Civ. Code, § 3333.) Deception without resulting loss is not actionable fraud." (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1818.) Thus, not only must the injury or damage be distinctly alleged, but " 'its causal connection with the reliance on the representations must be shown.' [Citation.]" (Ibid.) In other words, the specificity required in pleading applies to each element, including causation and damage. (See Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 776.)
Mohsen failed to meet these strict pleading requirements. We are presented with only the allegation that the defendants took inconsistent legal positions in different judicial proceedings affecting Aptix's patent claim. He alleged no justifiable reliance and no facts showing how the defendants' conduct caused him personally to suffer one billion dollars in damages. Thus, even treating respondents' demurrer as admitting all material facts properly pleaded, as we must, we conclude that the superior court properly sustained respondents' demurrer on this substantive ground as well.
When, as here, a demurrer is sustained without leave to amend, "we must decide whether there is a reasonable possibility the plaintiff could cure the defect with an amendment. [Citation.] If we find that an amendment could cure the defect, we conclude that the trial court abused its discretion and we reverse; if not, no abuse of discretion has occurred." (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 (Schifando); City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865; Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1190.) Furthermore, "leave to amend is liberally allowed as a matter of fairness, unless the complaint shows on its face that it is incapable of amendment. [Citations.]" (City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 747 ["second amended complaint does not on its face foreclose any reasonable possibility of amendment"].) However, " '[l]eave to amend should be denied where the facts are not in dispute, and the nature of the plaintiff's claim is clear, but, under the substantive law, no liability exists.' [Citations.]" (Kilgore v. Younger (1982) 30 Cal.3d 770, 781.) It is not the reviewing court's role to figure out how a complaint can be amended; rather, the burden is "squarely on the plaintiff" to show a reasonable possibility that amendment will cure the defect. (Blank, supra, 39 Cal.3d at p. 318; Schifando, supra, at p. 1082; see also Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [plaintiff seeking to amend "must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading"].)
Mohsen elaborated on the allegations of his second amended complaint by proffering a third amended complaint, which contained seven causes of action and which the trial court rejected. He did not, however, show how this new pleading remedied the fundamental defects in the second amended complaint, nor does he make that showing on appeal. Leave to amend was properly denied.
Disposition
The June 30, 2015 order, construed as a judgment of dismissal, is affirmed.
/s/_________
ELIA, ACTING P. J. WE CONCUR: /s/_________
BAMATTRE-MANOUKIAN, J. /s/_________
MIHARA, J.