Sanger v. Ahn

Background

Priya Sanger and Michael Sanger had one existing claim under California’s version of the Uniform Voidable Transactions Act. They sought permission to amend their complaint after the scheduling-order deadline. The proposed amendment would allege, based on information and belief, that Ahe Ahn—not her daughter, non-party Leah Ahn—owned the disputed real property. The Sangers also sought to add a quiet-title claim based on that theory, remove all allegations and claims against Lance Ahn, and remove their request for money damages.

The proposed amendment relied primarily on Ahe Ahn’s July 10, 2019 deposition testimony. In that testimony, Ahe Ahn said that she had supplied the money for the property, made the mortgage payments, and considered the unit hers. The Sangers argued that this testimony supported a theory that Ahe Ahn’s lien had been extinguished through merger because she also owned the property.

The scheduling order set May 15, 2019, as the deadline to seek leave to amend pleadings. The Sangers first sought dates for Ahe Ahn’s deposition on March 28, 2019, but the deposition did not occur until July 10, 2019. The Sangers filed their motion on August 2, 2019, after receiving the deposition transcript. The Ahns had already filed a summary-judgment motion, which had not yet been heard or decided.

Court’s analysis

Federal Rule of Civil Procedure 16(b)(4) allows a scheduling order to be changed only for good cause and with the judge’s consent. The court applied the Ninth Circuit’s diligence-focused standard. Under that standard, if the party seeking a deadline change was not diligent, the court’s inquiry ends.

The court found that the Sangers had reason to believe before the deadline that Ahe Ahn’s testimony might support their ownership and merger theory. A 2017 arbitration brief by the Sangers had argued that Ahe Ahn’s testimony could help determine whether she owned the property and whether the merger theory was viable. Their first amended complaint also alleged that Ahe Ahn might have provided funds to obtain an unrecorded ownership interest.

The court identified three steps the Sangers could have taken: propose a later amendment deadline, notice Ahe Ahn’s deposition before the deadline, or ask for an extension or stipulation because the deposition might support an amendment. Instead, before the deadline, their counsel made three requests for available deposition dates but did not communicate that the deposition needed to occur before the amendment deadline. The court therefore concluded that the Sangers had not acted diligently and did not reach the parties’ remaining arguments.

Ruling

The court denied the Sangers’ motion for relief from the scheduling order. Because that relief was denied, the court also denied the proposed amendment as untimely. The court stated that the Sangers could voluntarily dismiss their claim against Lance Ahn and their request for damages, but those changes had not occurred at the time of the order.

Because the request for damages remained in the complaint, the court denied the motion to strike the Ahns’ jury demand, without prejudice to renewing that motion after resolution of the Ahns’ pending summary-judgment motion. Judge Joseph C. Spero ordered that the Sangers’ motion was denied.