Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-05399/USCOURTS-cand-3_06-cv-05399-4/pdf.json

Parties Involved:
Russell H. Frye
Plaintiff
Carl Gelsman
Defendant
Edward Gelsman
Defendant
The Wine Library, Inc
Defendant

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

RUSSELL H. FRYE,

Plaintiff,

 v.

THE WINE LIBRARY, INC., a

California Corporation; EDWARD

GELSMAN, an individual; and CARL

GELSMAN, an individual,

Defendants.

 

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Case No. 06-5399 SC

ORDER DENYING

DEFENDANTS' MOTION TO

STRIKE PLAINTIFF'S

EXPERT WITNESS

DISCLOSURE; GRANTING

IN PART AND DENYING

IN PART DEFENDANTS'

MOTION FOR SUMMARY

JUDGMENT; DENYING

PLAINTIFF'S MOTION

FOR LEAVE TO AMEND

COMPLAINT; AND

DENYING PLAINTIFF'S

MOTION TO MODIFY

CURRENT SCHEDULE

I. INTRODUCTION

This matter comes before the Court on the Motion to Strike

Plaintiff's Expert Witness Disclosure ("Motion to Strike") and the

Motion for Summary Judgment filed by the defendants The Wine

Library, Inc. ("TWL"), Edward Gelsman, and Carl Gelsman

(collectively "Defendants"), as well as the Motion for Leave to

Amend Complaint ("Motion for Leave") and the Motion to Modify

Current Schedule ("Motion to Modify") filed by plaintiff Russell

Frye ("Plaintiff" or "Frye"). See Docket Nos. 36, 28, 29, 32. 

The parties filed Oppositions and Replies to all four motions. 

See Docket Nos. 38, 40, 42 45, 46, 49, 56, 59. For the following

reasons, the Court DENIES Defendants' Motion to Strike; GRANTS IN

PART and DENIES IN PART Defendants' Motion for Summary Judgment;

DENIES Plaintiff's Motion for Leave; and DENIES Plaintiff's Motion

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1 In his Complaint Plaintiff states that he purchased "53 or

more bottles of wine . . . ." Compl. ¶ 11. In his Opposition to

Summary Judgment, Plaintiff states "TWL sold Plaintiff Russell Frye

60 bottles . . . ." Opp'n to Summ. J. at 1. This apparent

discrepancy is not relevant to the issues now before the Court.

2

to Modify. 

II. BACKGROUND

The following facts are not disputed unless otherwise noted. 

Plaintiff is an avid collector of fine wines. Seeking to add to

his collection, Plaintiff was informed by several friends that

Defendants, as purveyors of fine wines, would likely be able to

sell Plaintiff additional rare bottles. Compl. ¶ 1. Defendant

TWL is a fine-wine retailer. Mot. for Summ. J. at 2. Defendant

Edward Gelsman owns TWL and his brother, Carl Gelsman, is a fulltime employee. Id. Casey Decl. Ex. C. E. Gelsman Dep. at 72, 86. 

Between June 2000 and February 2003 Plaintiff purchased between 53

and 60 bottles of fine wines at an aggregate purchase price

Plaintiff estimates to be $565,000.1 Compl. ¶ 11. Over this

period, Defendants kept Plaintiff's credit card information and

signature on file and, as Plaintiff would call in or fax orders

for wine, Defendants would charge Plaintiff's credit card. Opp'n

to Summ. J. at 14. Defendants would often hold the bottles that

Plaintiff had purchased at TWL's facilities until Plaintiff

arranged for refrigerated transportation to his storage facility. 

Mot. for Summ. J. at 2; Opp'n to Summ. J. at 13-14. The first

shipment of bottles occurred on May 18, 2001, and included nine of

the bottles at issue. Mot. for Summ. J. at 2; Casey Decl. ¶ 6,

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2

 Although Defendants' counsel William Casey states in his

declaration that "[t]he records produced in this action do not

reflect the date(s) of delivery for the following seven bottles . .

.," Casey Decl. ¶ 9, the list of wine that appears directly below

this statement contains eight, not seven bottles. This discrepancy

is also of no significance to the matters at hand.

3

Ex. D. In April 2002 the next shipment of 30 bottles was sent to

Plaintiff. Id. ¶ 7. Seven more of the bottles were shipped in

December 2002. Id. ¶ 8. The parties' records do not reflect when

the remaining bottles were shipped.2

 Id. ¶ 9.

By December 2005, Plaintiff had amassed a collection of

approximately 10,000 bottles of fine wines. Compl. ¶ 12. 

Plaintiff then decided to sell a substantial portion of his

collection at auction. Id. In preparation for auction,

representatives of the auctioneer Sotheby's inspected the wines

that Plaintiff intended to auction. Id. After inspecting the

wines, the Sotheby's representatives advised Plaintiff that

Sotheby's was unwilling to auction various bottles of Plaintiff's

wine, including but not limited to most of the bottles Plaintiff

had purchased from Defendants. Id. ¶ 13; Mot. for Summ. J. at 3. 

According to Sotheby's representatives, Sotheby's was unwilling to

auction these wines because of questions regarding the wine's

authenticity. Compl. ¶ 14; Mot. for Summ. J. at 3. In June 2006,

Plaintiff hired his own wine expert who concluded that 34 of the

bottles purchased from Defendants were counterfeit and 12 of the

bottles purchased from Defendants were suspect. Compl. ¶ 4. 

On August 31, 2006, Plaintiff filed his Complaint, alleging

the following causes of action: (1) fraud; (2) constructive fraud;

(3) negligent misrepresentation; (4) unlawful business practices;

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(5) fraudulent business practices; (6) breach of contract; and (7)

breach of warranty. Trial is scheduled to begin January 14, 2008. 

See Civil Minutes, Docket No. 26. 

III. DISCUSSION

A. Motion to Strike Plaintiff's Expert Witness

October 30, 2007, was the deadline for expert disclosures,

pursuant to Federal Rule of Civil Procedure 26. See Mot. to

Strike at 2. Defendants complied with the deadline and served

Plaintiff with two expert reports. Defendant received no expert

disclosures from Plaintiff and, on November 2, filed a Motion for

Summary Judgment. Plaintiff then served Defendants with a Rule 26

Expert Disclosure and Expert Report on November 8, which

identified Michael Egan as Plaintiff's expert and provided several

of his reports. Id. at 3. Defendants now seek to have

Plaintiff's Expert Report and Disclosure stricken, thereby

precluding Plaintiff from using it at summary judgment and/or

trial.

Federal Rule of Civil Procedure 37(c)(1) provides, in

relevant part:

A party that without substantial

justification fails to disclose

information required by Rule 26(a) or

26(e)(1) . . . is not, unless such

failure is harmless, permitted to use as

evidence at a trial, at a hearing, or on

a motion any witness or information not

so disclosed.

Fed. R. Civ. P. 37(c)(1).

Defendants argue that the late disclosure was not harmless

because Defendants relied in their summary judgment motion on

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Plaintiff's failure to proffer any evidence regarding the

authenticity of the wine. Although Defendants did make such an

argument in support of summary judgment, this argument was one of

approximately five distinct theories for summary judgment. More

importantly, Defendants have known that Plaintiff was relying on

Mr. Egan and his reports since at least November 2, 2006, when

Plaintiff's attorney sent Defendants a letter stating, in part: 

I also wanted to provide you with

additional information regarding

Plaintiff's experts in this case. As we

have discussed both in our call and on

many occasions previously, Michael Egan

will be acting as Plaintiff's principal

authenticity expert in this matter. We

have already produced his reports and

work in this case . . . . I am also,

however, including an additional copy of

these materials with this letter so that

you have a copy of the relevant reports

pursuant to Federal Rule of Civil

Procedure 26(a)(2)(B).

Dunlap Decl. in Support of Opp'n to Summ. J. Ex. P. Defendants'

argument that Plaintiff's late disclosure was not harmless is

clearly contradicted by this letter. Not only were Defendants on

notice of Mr. Egan's involvement with the case as Plaintiff's

expert, but they also had numerous copies of his reports

approximately a year before filing the present Motion to Strike.

Finally, Defendants' own Reply brief in this matter undercuts

their position that Plaintiff's late disclosure was not harmless. 

Defendants state: "Mr. Egan's opinions are considered by the

defense to be incomplete, lacking in foundation, speculative,

biased and generally of minimal relevance to the issues in this

case." Reply at 2 n.1. Thus, according to Defendants, Mr. Egan's

participation in the case is hardly consequential. For these

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reasons, the Court DENIES Defendants' Motion to Strike Plaintiff's

Expert Witness Disclosure.

B. Defendants' Motion for Summary Judgment

Entry of summary judgment is proper "if the pleadings, the

discovery and disclosure materials on file, and any affidavits,

show that there is no genuine issue as to any material fact and

that the movant is entitled to judgment as a matter of law." Fed.

R. Civ. P. 56(c). "Summary judgment should be granted where the

evidence is such that it would require a directed verdict for the

moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250

(1986). Thus, "Rule 56(c) mandates the entry of summary judgment

. . . against a party who fails to make a showing sufficient to

establish the existence of an element essential to that party's

case, and on which that party will bear the burden of proof at

trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In

addition, entry of summary judgment in a party's favor is

appropriate when there are no material issues of fact as to the

essential elements of the party's claim. Anderson, 477 U.S. at

247-49. The Court addresses each of Defendants' arguments for

summary judgment in turn.

1. Fraud

Defendants argue that summary judgment is appropriate on

Plaintiff's first cause of action for fraud because Plaintiff "has

adduced no evidence that TWL knew the falsity of [its]

representations or intended to deceive Frye." Mot. at 4. 

According to Defendants, none of the evidence put forward by

Plaintiff indicates that "TWL knowingly misrepresented the

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authenticity of the wines it was selling with the intent to

deceive Frye." Id. 

Plaintiff has presented evidence indicating that Defendants

told Plaintiff that Defendants had personal knowledge of both the

quality of wine and the origins of the wine when, in fact,

Defendants did not. For example, in his deposition, Edward

Gelsman concedes that although he told Plaintiff that certain of

the bottles were in fact in "mint condition," Gelsman had not seen

the bottles, had no firsthand knowledge of whether this statement

was true, and instead was merely repeating what a third party had

told him. See Dunlap Decl. Ex. A Excerpts of E. Gelsman Dep. at

199-200. In another example, Edward Gelsman communicated to

Plaintiff that he could secure for Plaintiff wine from "one of the

world's greatest collection with the best provenance and condition

I have ever seen in all my years in the wine business." Id. at

216. During questioning at the deposition, however, Edward

Gelsman conceded that this statement was based on Gelsman's

"speculation . . . that I previously sold wines from this

collection and that these wines which were up for sale now were

identified to me as being from the same collection that I

previously sold wines from and had wines delivered to me an had

delivered to my clients." Id. at 218. Gelsman conceded that he

had not "seen the collection" but had rather "seen some bottles

that had come out of the collection . . . ." Id. at 218-19. This

evidence is sufficient to convince the Court that triable issues

of material fact exist regarding Defendants' knowledge of the

falsity of their representations and intention to deceive

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3 Although Defendants also argue that Plaintiff has failed to

demonstrate a fiduciary relationship, Plaintiff's claim for

constructive fraud only alleges the existence of a confidential

relationship. See Compl. ¶ 88. The Court therefore only addresses

the issue of whether a confidential relationship existed. 

8

Plaintiff. Defendants' Motion for Summary Judgment on Plaintiff's

fraud claim is DENIED. 

2. Constructive Fraud

Defendants argue that Plaintiff's claim for constructive

fraud fails as a matter of law because Plaintiff cannot establish,

as he must under a constructive fraud claim, that there existed a

confidential relationship between the parties.3 "Constructive

fraud is a unique species of fraud applicable only to a fiduciary

relationship or confidential relationship." Dealertrack, Inc. v.

Huber, 460 F. Supp. 2d 1177, 1183 (C.D. Cal. 2006) (internal

quotation marks omitted). 

Plaintiff argues that because Defendants held themselves out

to Plaintiff as wine experts and because Plaintiff relied

completely on Defendants' opinion when purchasing wines, often

purchasing the wines without ever having seen the actual bottles,

a confidential relationship existed. "A confidential relationship

exists when one party gains the confidence of the other and

purports to act or advise with the other's interest in mind." 

Younan v. Equifax Inc., 111 Cal. App. 3d 498, 517 n.15 (Ct. App.

1980). "The existence of a confidential relationship is generally

a question of fact." Tyler v. Children's Home Soc'y, 29 Cal. App.

4th 511, 549 (Ct. App. 1994). The Court finds that there are

triable issues of material fact regarding whether a confidential

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4

 Plaintiff filed his Complaint on August 31, 2006.

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relationship existed between Plaintiff and Defendants. 

Defendants' Motion for Summary Judgment on this claim is DENIED.

3. Statutes of Limitations

Defendants argue that various statutes of limitations

preclude Plaintiff from bringing various claims with respect to 39

of the bottles at issue. Each of the statutes of limitations

asserted by Defendants is four years. Plaintiff does not dispute

that 39 of the bottles were purchased by and delivered to

Plaintiff before August 31, 2002.4

 Instead, Plaintiff argues that

because he did not discover that the bottles were allegedly

counterfeit until December 2005 and February and March 2006, when

the bottles were inspected by Sotheby's in anticipation of a wine

auction, all applicable statutes of limitations should be tolled. 

The Court addresses the parties' arguments in turn. 

a. California Commercial Code Section 2725

Defendants argue that Plaintiff's breach of contract, breach

of implied warranty and negligent misrepresentation claims with

respect to the 39 bottles are barred by section 2725. Section

2725 states, in pertinent part:

(1) An action for breach of any contract

for sale must be commenced within four

years after the cause of action has

accrued. . . .

(2) A cause of action accrues when the

breach occurs, regardless of the

aggrieved party's lack of knowledge of

the breach. A breach of warranty occurs

when tender of delivery is made . . . .

(4) This section does not alter the law

on tolling of the statute of limitations

. . . .

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Cal. Com. Code § 2725.

 Plaintiff argues that the delayed discovery doctrine is

applicable to his claims and section 2725 therefore does not

preclude his action. The delayed discovery rule "may be applied

to breaches which can be, and are, committed in secret and,

moreover, where the harm flowing from those breaches will not be

reasonably discoverable by plaintiffs until a future time." April

Enters. v. KTTV & Metromedia, Inc., 147 Cal. App. 3d 805, 832 (Ct.

App. 1983). "The discovery rule protects those who are ignorant

of their cause of action through no fault of their own." Id.

Although section 2725 clearly permits tolling of the statute

of limitations, it is equally clear that delayed accrual is not

permitted. The delayed discovery rule is exactly that--delayed

accrual. See April Enters., 147 Cal. App. at 832 (stating that

the delayed discovery doctrine "permits delayed accrual until a

plaintiff knew or should have known of the wrongful conduct at

issue"). Thus, tolling of the four year statute of limitations

would be permitted under section 2725 if, for example, there were

some intervening act after the limitations period began accruing

that prevented Plaintiff from filing his claim. See Cal. Com.

Code § 2725(2). Section 2725, by its very language, however,

prohibits the type of delayed accrual on which Plaintiff bases his

delayed discovery argument. The authority cited by Plaintiff is

inapposite as none of the cases involve section 2725. For these

reasons, Plaintiff's breach of contract claim may only be asserted

for those bottles of wine purchased less than four years before

Plaintiff filed his Complaint, or, in other words, purchased after

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August 31, 2002. Defendants' Motion for Summary Judgment on this

issue is GRANTED.

Defendants also argue that Plaintiff's breach of implied

warranty claim is time-barred by section 2725. "Section 2725 of

the California Uniform Commercial Code provides that an action for

breach of warranty accrues on tender of delivery. Krieger v. Nick

Alexander Imports, Inc., 234 Cal. App. 3d 205, 215 (Ct. App.

1991). "An exception is made where a warranty 'explicitly extends

to future performance of the goods and discovery of the breach

must await the time of such performance.'" Id. (quoting Cal. Com.

Code § 2725(2)). Defendants assume, and Plaintiff does not

contest, that section 2725 applies to implied warranties in

addition to express warranties. 

"A defendant who moves for summary judgment bears the burden

of negating the applicability of the discovery exception for

accrual of an action on a future warranty." Kreiger, 234 Cal.

App. at 216. The issue before the Court, then, is whether the

implied warranty "explicitly extend[ed] to future performance of

the goods . . . ." Cal. Com. Code § 2725(2). It would be a

difficult stretch to find than anything 'implied' contained any

'explicit' provisions. Therefore, by the plain meaning of the

language, the Court is bound to conclude that the implied warranty

did not contain an explicit extension to future performance. 

Section 2725's exception to a claim for breach of warranty

accruing at the time the breach was discovered is therefore not

applicable and Plaintiff's breach of implied warranty claim is

also barred as to the bottles purchased prior to August 31, 2002. 

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Defendants' Motion for Summary Judgment is GRANTED on this issue.

Finally, Defendants argue that section 2725 precludes

Plaintiff's negligent misrepresentation claim for all bottles

purchased before August 31, 2002. Defendants assert that because

the gravamen of Plaintiff's negligent misrepresentation claim is

in fact to recover damages for Defendants' failure to provide

goods conforming to the parties' sales contracts, the limitations

period of section 2725 applies.

"To determine the statute of limitations which applies to a

cause of action it is necessary to identify the nature of the

cause of action, i.e., the 'gravamen' of the cause of action. 

Hensler v. City of Glendale, 8 Cal. 4th 1, 22 (1994). "The nature

of the right sued upon and not the form of action nor the relief

demanded determines the applicability of the statute of

limitations under our code." Id. at 23 (internal quotation marks

and citations omitted). 

Plaintiff argues that the gravamen of his negligent

representation claim is in fraud, not contract. Fraud requires,

in part, "knowledge of falsity (or 'scienter') [and] . . . intent

to defraud . . . ." Lazar, 12 Cal. 4th at 638 (internal quotation

marks omitted). Negligent misrepresentation, on the other hand,

requires, in part, a "misrepresentation of a past or existing

material fact, without reasonable ground for believing it to be

true, and with intent to induce another's reliance on the fact

misrepresented . . . ." Home Budget Loans, Inc. v. Jacoby &

Meyers Law Offices, 207 Cal. App. 3d 1277, 1285 (Ct. App. 1989).

The issue, then, is whether the gravamen of Plaintiff's

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negligent misrepresentation claim lies in fraud or contract. 

Defendants' have not demonstrated that Plaintiff's negligent

misrepresentation claim sounds in contract. To the contrary, the

negligent misrepresentation claim appears to be plead in

conjunction with or as an alternative to Plaintiff's fraud claim. 

Defendants cite a district court case from Massachusetts in

support of their argument that Plaintiff's negligent

misrepresentation claim should be barred by section 2725. In that

case, however, the court based its ruling on its finding that "the

plaintiff [was] really trying to avoid the statute of limitations

on a breach of warranty claim." Wilson v. Hammer Holdings, 671 F.

Supp. 94, 97-98 (D. Mass. 1997). As noted above, this Court

interprets Plaintiff's negligent misrepresentation claim as a

companion claim to Plaintiff's fraud claim, and not as an end-run

around the limitations period for contracts. In addition, the

plaintiff in Wilson, unlike the Plaintiff here, had not even

raised a fraud claim. Id. at 95. Finally, the fact that this

claim arises out of the same facts that give rise to Plaintiff's

claims for breach of contract and breach of implied warranty does

not, in this Court's view, necessarily conflate the negligent

misrepresentation claim with the claims sounding in contract. For

these reasons, Defendants' Motion for Summary Judgment on this

issue is DENIED.

b. California Business and Professions Code

Section 17200

Defendants argue that they are entitled to summary judgment

with respect to 39 of the bottles on Plaintiff's Fourth and Fifth

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Causes of Action for unlawful and fraudulent business practices

pursuant to Section 17200. Defendants argue that Plaintiff has

failed to bring his claim within the four-year statue of

limitations as provided for in Section 17208. Plaintiff

apparently concedes that his section 17200 claims for these 39

bottles are governed by this four-year statute of limitations but

argues that equitable tolling should be granted and that

Plaintiff's business dealings with Defendants were ongoing and the

section 17208 limitations period did not accrue until the date of

the last sale.

i. Equitable Tolling

Both parties cite federal law for the standard for equitable

tolling. The underlying statutes, however, are all California

laws, as are the relevant statutes of limitations. Accordingly,

the appropriate standard for equitable tolling is the standard

under California, rather than federal, law. See, e.g., Jones v.

Blanas, 393 F.3d 918, 927 (9th Cir. 2004) (stating that "[f]or

actions under 42 U.S.C. § 1983, courts apply the forum state's

statute of limitations for personal injury actions, along with the

forum state's law regarding tolling, including equitable tolling,

except to the extent an of these laws is inconsistent with federal

law"); Fink v. Shedler, 192 F.3d 911, 916 (9th Cir. 1999) (holding

that if equitable tolling is proper, district court should apply

California law because the plaintiff's claim was brought under a

California statute). 

Under California law, "application of the doctrine of

equitable tolling requires timely notice, and lack of prejudice,

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5

 The factor of whether Plaintiff's notice was timely is

largely irrelevant to the present case. In any event, Defendants

have been on notice since the action was filed that Plaintiff's

claims involved all of the bottles.

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to the defendant, and reasonable and good faith conduct on the

part of the plaintiff." Addison v. Cal., 21 Cal. 3d 313, 319

(1978).

Plaintiff has presented evidence that he acted reasonably and

in good faith by relying on Defendants' assertions that the wine

was genuine. In addition, there are triable issues of material

fact regarding Plaintiff's expectation that it was not necessary

to have the wine independently verified after purchasing it from

Defendants. After all, it is likely that the very reason

Plaintiff engaged in business with Defendants was because he

believed that they were wine experts.

The prejudice that may be faced by Defendants is minimal. 

Defendants concede that only 39, rather than all, of the bottles

are possibly barred by the limitations period of section 17208. 

Thus, Defendants are prepared to defend on the merits for the

remaining bottles. It is hard to imagine how the addition of the

39 bottles will be overly prejudicial; the expert witnesses that

each side intends to call will merely be required to discuss these

additional bottles. Furthermore, the additional bottles in no way

alter the parameters of Plaintiff's legal claims.5 

Finally, "the equitable tolling doctrine fosters the policy

of the law of this state which favors avoiding forfeitures and

allowing good faith litigants their day in court." Addison, 21

Cal. 3d at 321. Given the facts of the present case and the

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6 The Court need not reach Plaintiff's additional argument

that the business dealings constituted an ongoing sales

transaction, rather than numerous individual sales, and that the

accrual date for the limitations period of section 17208 was in

fact the date of the final purchase.

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policy driving California law, equitable tolling is appropriate. 

The Court DENIES Defendants' Motion for Summary Judgment on

Plaintiff's Fourth and Fifth Causes of Action.6

4. Plaintiff's Claims Against Edward and Carl Gelsman

Finally, Defendants seek summary judgment with respect to

Plaintiff's first three causes of action against Edward and Carl

Gelsman. As noted above, Edward and Carl Gelsman are the sole

corporate officers of TWL. Edward is the president, director and

sole shareholder and Carl is the treasurer/secretary of TWL. The

Court finds that triable issues of fact exist with respect to the

role of both of these individuals in Plaintiff's claims for fraud,

constructive fraud and negligent misrepresentation. Defendants'

Motion for Summary Judgment on the claims against Edward and Carl

Gelsman is therefore DENIED.

5. Authenticity of Wines at Issue

The Court denied Defendants' Motion to Strike Plaintiff's

Expert Witness Disclosure. The Court therefore considers

Plaintiff's expert witness evidence in analyzing Defendants'

Motion for Summary Judgment. Defendants' argument that Plaintiff

has failed to put forth any evidence indicating that the wine

purchased by Plaintiff from Defendants was counterfeit is

therefore contradicted by Plaintiff's expert evidence. 

Defendants' Motion for Summary Judgment on this issue is DENIED.

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C. Plaintiff's Motion for Leave to Amend Complaint

Plaintiff seeks leave to file an amended complaint adding

three new parties as defendants. These parties, Royal Wine

Merchants, LTD ("Royal"), Jeb Wine Trading LTD ("Jeb") and

Bordeaux Wine Locators, Inc. ("Bordeaux"), are allegedly wine

sellers who supplied Defendants with some of the wine that

Plaintiff alleges is counterfeit. Plaintiff further alleges that

recent discovery has indicated that "some of these vendors

actually knew that the bottles they sold Defendant[s] . . . were

counterfeit." Mot. for Leave at 2. 

"In determining whether leave to amend is appropriate, the

district court considers the presence of any of four factors: bad

faith, undue delay, prejudice to the opposing party, and/or

futility." Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d

708, 712 (9th Cir. 2001) (internal quotation marks omitted).

Although "[t]he court should freely give leave when justice

so requires," Fed. R. Civ. P. 15(a)(2), the timing of the

Plaintiff's Motion presents a significant hurdle for Plaintiff to

overcome. See Schlacter-Jones v. Gen. Tel. of Cal., 936 F.2d 435,

443 (9th Cir. 1991) (abrogated on other grounds) (stating that the

"timing of the motion [for leave to amend], [filed] after the

parties had conducted discovery and a pending summary judgment

motion had been fully briefed, weighs heavily against allowing

leave"). This is especially true given that Defendants identified

at least two of these suppliers, Royal and Bordeaux, to Plaintiff

as early as November 29, 2006, in Defendants' Rule 26 Initial

Disclosure Statement. See Casey Decl. Ex. A. All three of the

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suppliers were again identified to Plaintiff in Defendants'

Responses to Plaintiff's Special Interrogatories, served on

January 25, 2007. See id. Ex. B. Moreover, as early as July 11,

2007, Plaintiff's counsel communicated to Defendants' counsel that

Plaintiff was considering seeking to amend his Complaint to add

Royal and Jeb as defendants. See id. ¶ 6. In light of this

evidence, and given the advanced stage of the proceedings,

Plaintiff's argument that this Motion for Leave could not have

been filed any sooner is not persuasive. 

In addition, contrary to Plaintiff's argument, Defendants

would be prejudiced if Plaintiff were permitted to add new

defendants. As Defendants rightly note, not only would new

defendants seek discovery from the current Defendants but the

current Defendants would also likely need to conduct their own

discovery. The costs and delays associated with this additional

discovery are not insignificant. The Court therefore finds that

the factors of undue delay and prejudice to Defendants weigh

strongly against granting leave to amend. The Court need not

reach the other factors and DENIES Plaintiff's Motion for Leave to

Amend Complaint. 

D. Plaintiff's Motion to Modify Current Schedule

Plaintiff seeks to re-open discovery and set a new discovery

deadline of August 1, 2008, and move the trial, scheduled to begin

in just over a month on January 14, 2008, to October 6, 2008. "A

schedule may be modified only for good cause and with the judge's

consent." Fed. R. Civ. P. 16(b)(4). "Rule 16(b)'s 'good cause'

standard primarily considers the diligence of the party seeking

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the amendment." Johnson v. Mammoth Recreations, Inc., 975 F.2d

604, 609 (9th Cir. 1992). "The district court may modify the

pretrial schedule 'if it cannot reasonably be met despite the

diligence of the party seeking extension.'" Id. (citing Fed. R.

Civ. P. 16).

For the reasons discussed in the previous section, Plaintiff

has not demonstrated good cause. Plaintiff's Motion to Modify

Current Schedule is therefore DENIED.

IV. CONCLUSION

For the foregoing reasons, the Court holds the following:

1. Defendants' Motion to Strike Plaintiff's Expert

Witness Disclosure is DENIED.

2. Defendants' Motion for Summary Judgment is GRANTED

IN PART and DENIED IN PART.

3. Plaintiff's Motion for Leave to Amend Complaint is

DENIED.

4. Plaintiff's Motion to Modify Current Schedule is

DENIED.

IT IS SO ORDERED.

Dated: December 11, 2007 

UNITED STATES DISTRICT JUDGE

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