Filed 11/16/21 Brown v. Zive CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

CHERIE BROWN,

Plaintiff and Appellant,

v.

YOUVAL ZIVE et al.,

Defendants and 

Respondents.

 B300415

 (Los Angeles County

 Super. Ct. No. BC475181)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Malcolm Mackey, Judge. Reversed and 

remanded with instructions.

The Zabetian Firm, Arash H. Zabetian; JDR Law Inc. and 

John D. Rowell for Plaintiff and Appellant.

Locke Lord, Daniel A. Solitro and Simon M. Feng for 

Defendant and Respondent Deutsche Bank National Trust 

Company.

Haeri & Zelli and Nedda Haeri for Defendant and 

Respondent Adi Perez.
2

Cherie Brown sued Youval Zive, Vaca Partnership, Pacific 

Holdings, Phoenix Realty Investments, LLC (collectively Zive 

parties) and others for fraud, quiet title and related claims on 

December 13, 2011. On May 8, 2019 the trial court granted a 

motion to dismiss pursuant to Code of Civil Procedure 

sections 583.310 and 583.360,1finding Brown had failed to bring 

her lawsuit to trial within five years. On appeal Brown argues 

the court erred in finding this action was not subject to automatic 

stays arising out of the bankruptcy petitions of various 

defendants and failing to toll the mandatory five-year period as a 

result. We reverse and remand for further proceedings on the 

quiet title and fraudulent conveyance causes of action and direct 

the trial court to reconsider the motion to dismiss as to the fraud 

cause of action.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Real Estate Transaction and Foreclosure 

Proceedings

In January 2007 Brown purchased a home on Lankershim 

Boulevard in Los Angeles from Vaca Partnership. According to 

Brown, Zive, the general partner of Vaca, had assured Brown he 

would arrange financing and handle the transaction for her. 

Prior to taking title to the property Brown executed an allinclusive purchase money promissory note in favor of Zive for 

approximately $1 million with an interest rate of “7.2 (Variable) 

percent,” which Brown alleged she signed at Zive’s direction. The 

promissory note, executed in November 2006, provided for 

monthly payments of $3,030 “or more,” a $30,000 principal 

1 Statutory references are to this code unless otherwise 

stated.
3

payment on December 20, 2006 and a maturity date of 

March 1, 2008. The promissory note stated the principal amount 

included the balance due on two underlying promissory notes 

executed by Zive in favor of Washington Mutual Bank and 

secured by deeds of trust encumbering the Lankershim property. 

The original amounts of the underlying notes were $980,000 and 

$46,142. The promissory note was secured by a deed of trust 

encumbering the Lankershim property listing Zive as the 

beneficiary. In March 2008 Zive and Brown executed an 

addendum to the promissory note extending the maturity date to 

March 1, 2010 conditioned upon Brown’s timely payments of 

$30,000 to Zive on a specified schedule.

Brown alleges that, prior to 2009, she made payments on 

the promissory note by delivering to Zive and his associate Liat 

Menahem checks payable to the financial institution lenders on

the underlying notes. Zive assured Brown he was delivering her 

payments to those financial institutions. Beginning in 2009, 

Brown alleges, Zive did not deliver her payments to the lenders 

but instead deposited them in his own bank account.

In early 2011 Zive, through his authorized agent, initiated 

nonjudicial foreclosure proceedings against Brown. A notice of 

default and election to sell was issued and recorded on 

January 25, 2011. The notice directed Brown to contact Pacific 

Holdings, of which Zive and Menahem are alleged to be owners 

and/or employees,to arrange for payment of the amount due. 

Notices of trustee’s sale were recorded on July 1, 2011, 

July 5, 2011 and July 14, 2011. On September 7, 2011 Zive

executed an assignment of deed of trust assigning all rights in 

the deed of trust to Phoenix Realty Investments LLC.
4

On September 14, 2011 a trustee’s deed upon sale was 

recorded. The deed stated the Lankershim property had been 

sold at public auction to Phoenix Realty, the successful bidder at 

the trustee’s sale. In late September 2011 Phoenix Realty filed 

unlawful detainer proceedings to evict Brown from the home. 

The verification of the unlawful detainer complaint was signed by 

Menahem on behalf of Phoenix Realty.

2. The Complaint and Demurrer

On December 13, 2011 Brown sued the Zive parties, 

Menahem and 50 Doe defendants for fraud, wrongful foreclosure 

and quiet title.2 The Zive parties and Menahem demurred.

On September 26, 2012 the court sustained the demurrer to 

the fraud cause of action without leave to amend against Zive, 

Vaca Partnership and Pacific Holdings.

3

 Leave to amend the 

2 The original complaint also named Yoseph Ovadia as a 

defendant. He was not included in the operative second amended 

complaint.

3 The trial court’s ruling was based, in part, on the fact that 

18 months prior to filing her complaint in this action Brown had 

sued Zive, Vaca Partnership and Pacific Holdings for fraud, 

negligent misrepresentation, failure to disclose seller financing, 

legal malpractice and breach of fiduciary duty. The court found 

the allegations in the complaint in this action were almost 

identical to the allegations in the prior lawsuit and were 

therefore barred by section 430.10, subdivision (c).

Brown’s earlier action proceeded to trial in 2013 on the 

failure to disclose seller financing cause of action. The jury found 

in favor of Brown and awarded her $392,500 in damages. Our 

colleagues in Division Five affirmed the judgment but reduced 

the damage award to $325,283. The court also reversed the trial 

court’s order granting nonsuit on the fraud claim and remanded 
5

fraud cause of action was granted as to Menahem and Phoenix

Realty. The demurrer to the wrongful foreclosure cause of action 

was sustained against all defendants without leave to amend. 

The demurrer to the quiet title cause of action was overruled.

3. The First Amended Complaint and Demurrer

Brown filed her first amended complaint on 

October 18, 2012 alleging causes of action for fraud against 

Menahem, Phoenix Realty and the Doe defendants and quiet title 

against all defendants. On April 18, 2013 the trial court 

sustained the Zive parties’ demurrer without leave to amend and 

entered an order of dismissal.

4. The Motion To Vacate the Dismissal and Second 

Amended Complaint

On August 21, 2013 Brown, representing herself, moved to 

vacate the dismissal on the basis of excusable neglect (§ 473, 

subd. (b)). The trial court granted the motion on 

September 11, 2013 over the defendants’ opposition and granted 

leave to Brown to file a second amended complaint.

Brown filed the second amended complaint on October 30,

2013. In addition to the Zive parties and Menahem, Brown 

named two additional defendants, Lanker Partnership and 

H5 Dev. Partnership. The pleading alleged Zive was the majority 

owner and managing general partner of Lanker Partnership. 

for retrial on that cause of action. (Brown v. Zive (Apr. 16, 2015, 

B250561) [nonpub. opn.] (Brown I).) On remand the fraud cause 

of action was tried to a jury, which found in favor of Brown and 

awarded $25,000 in damages. Judgment was entered on 

December 3, 2018. 
6

The fraud and quiet title causes of action in the second 

amended complaint remained substantially the same as in

previous iterations of the pleading. Brown alleged generally that 

Menahem, Phoenix Realty and the Doe defendants had 

committed fraud by conspiring with Zive to misrepresent 

material facts concerning the financing and purchase of Brown’s 

home; they had assisted one another in foreclosing on the home 

with knowledge of the fraudulent transactions; and Phoenix 

Realty had acquired title to the home with knowledge of the 

fraud perpetrated against Brown.

The quiet title cause of action, brought against all 

defendants except Menahem, alleged Brown was the equitable 

owner of the property, the trustee’s deed upon sale purporting to 

transfer the property to Phoenix Realty was void and the 

defendants had no legal or equitable rights to the property.

The fraudulent transfer cause of action, alleged against 

Zive, Vaca Partnership, Menahem, Phoenix Realty, Lanker 

Partnership and H5 Dev., contained allegations not included in 

prior pleadings. Brown alleged a series of three fraudulent 

transfers: First, she alleged Zive had assigned his interest in the 

promissory note to Phoenix Realty for no consideration and 

caused Phoenix Realty to purchase Brown’s home at the 

foreclosure sale in an effort to prevent any interest in the 

property from being used to satisfy any judgment Brown might 

obtain in Brown I.

4

 Second, after the jury verdict in Brown’s 

favor in Brown I, but before judgment had been entered, Phoenix

Realty transferred the property to Lanker Partnership without 

4 As discussed, the complaint in Brown I was filed in 

June 2010 and the assignment to Phoenix Realty and subsequent 

foreclosure sale took place in September 2011.
7

consideration to prevent the property from being used to satisfy 

the forthcoming judgment.5 Third, after judgment was entered in 

Brown I, Lanker Partnership transferred the property without 

consideration to H5 Dev. to further hinder Brown’s collection

efforts.6

The Zive parties and Menahem demurred to the second 

amended complaint on December 3, 2013, and Brown filed an 

opposition on April 10, 2014. The trial court overruled the 

demurrer on April 23, 2014.

5. The Intervening Bankruptcies7

a. The Zive bankruptcy proceedings

On February 24, 2014, while the Zive parties’ demurrer to 

the second amended complaint was pending, Zive filed a 

voluntary petition for relief under Chapter 13 of the United 

States Bankruptcy Code (Chapter 13). Zive filed a request for 

voluntary dismissal on April 9, 2014, and the case was dismissed 

on April 14, 2014. It does not appear that notice of the 

5 The jury returned its verdict in Brown I in early May 2013. 

The transfer of the property from Phoenix Realty to Lanker 

Partnership took place on May 21, 2013. Judgment was entered 

in Brown I on June 13, 2013.

6 The record does not contain information regarding the date 

of the alleged transfer to H5 Dev. However, as is crucial to the 

issues on appeal, it is undisputed Lanker Partnership owned the 

property as of the filing of its bankruptcy petition in 2015.

7 Deutsche Bank requested we take judicial notice of 

five documents filed in the Zive, Vaca Partnership and 

Lanker Partnership bankruptcy proceedings. Because those 

documents are either already in the record and/or are not 

necessary to our resolution of the appeal, we deny the request.
8

bankruptcy proceeding was filed in this action;

8 nevertheless, no 

documents were filed in this case between the filing of Zive’s

bankruptcy petition and the request for dismissal.

Zive filed a second voluntary petition for relief under 

Chapter 13 on November 13, 2014 and filed a notice of the 

resulting automatic stay in these proceedings on 

December 19, 2014. The bankruptcy petition was dismissed on 

February 6, 2015 after Zive failed to appear at a meeting with 

creditors. 

b. The Lanker Partnership bankruptcy proceeding

On July 12, 2015 Lanker Partnership filed a voluntary 

petition for relief under Chapter 11 of the United States 

Bankruptcy Code (Chapter 11). The schedules filed in the 

bankruptcy proceeding identified the Lankershim property as 

property of Lanker Partnership.

On August 10, 2016 Brown, again represented by counsel, 

filed a notice of bankruptcy and automatic stay in this action

informing the trial court of Lanker Partnership’s bankruptcy 

proceeding and its claimed interest in the Lankershim property. 

The docket reflects that, on August 16, 2016, this action was 

placed on “special status” for a “Bankruptcy Stay.” 

On October 20, 2017 Brown filed a document titled “Notice 

that Action Remains Stayed,” informing the court that “the 

bankruptcy stay with respect to defendant Lanker Partnership 

remains in effect and this matter remains stayed.” 

On October 24, 2017 counsel for the Zive parties sent a 

letter to Brown’s counsel stating, “The bankruptcy of Lanker is 

8 A notice of Zive’s bankruptcy filing and resulting automatic 

stay of proceedings was filed in Brown I.
9

still ‘pending,’ therefore, the automatic stay prevents the court 

from taking further action (other than continuances). [¶] Please 

confirm that this is your understanding of the nature of the case.” 

Two days later the Zive parties filed a document titled “Notice of 

Bankruptcy Pending,” in which they informed the trial court,

“[T]he related bankruptcy action of Lanker Partnership . . . is 

still pending” and, as a result, requested the trial court continue 

trial in this matter for at least six months. 

On June 7, 2018 the bankruptcy court granted Lanker 

Partnership’s motion to dismiss its bankruptcy proceeding and 

dismissed the action.

On July 10, 2018 Brown filed an ex parte application to 

continue the trial date in this case to allow for discovery she had 

been unable to conduct while the bankruptcy stays were in effect. 

Brown stated, “This matter has been repeatedly stayed as a 

result of . . . Youval Zive filing two petitions for bankruptcy, as 

well as bankruptcy filings by Lanker Partners[ship] . . . .” 

The docket reflects the special status due to the bankruptcy 

stay was extinguished on August 3, 2018.

c. The Vaca Partnership bankruptcy proceeding

On January 11, 2018, while the Lanker Partnership 

bankruptcy proceeding was ongoing, Vaca Partnership filed a 

voluntary petition for relief under Chapter 11. The bankruptcy 

court granted the trustee’s motion to dismiss the petition, and the 

case was dismissed on March 5, 2018.

6. Amendments To Substitute Doe Defendants

On August 7, 2015 Brown filed form amendments to the 

complaint substituting Deutsche Bank National Trust Company, 
10

Adi Perez and Erik Imas in place of three Doe defendants.9 Perez 

and Imas are the owners of Lanker Partnership. Deutsche Bank

appears to be the successor in interest to the holder of one of the 

notes executed by Zive and secured by the Lankershim property.

7. The Motion To Dismiss

On April 3, 2019 the Zive parties moved to dismiss this

action pursuant to sections 583.310 and 583.360 on the ground 

Brown had failed to bring the lawsuit to trial within five years, 

even as extended by the Zive and Vaca Partnership bankruptcies. 

The Zive parties argued the Lanker Partnership bankruptcy did 

not toll the five-year deadline because the second amended 

complaint named “Lanker Partners” as a defendant rather than 

Lanker Partnership. Further, even if Lanker Partnership had 

been a party to the action, the Zive parties argued, any stay 

resulting from that bankruptcy proceeding would apply only to 

the bankruptcy debtor and not to the other defendants.

On April 16, 2019 Deutsche Bank filed a notice of joinder in 

the motion to dismiss. Perez also joined in the motion during the 

hearing on May 8, 2019.

After hearing argument the trial court granted the motion 

to dismiss the case, agreeing with the Zive parties, Deutsche 

Bank and Perez’s position that the “bankruptcy stays only tolled 

the five-year period as to the bankrupt parties, and there was a 

9 Brown also filed a form amendment substituting Quality 

Loan Service Corporation in place of a Doe defendant. Quality 

Loan filed a declaration of nonmonetary status pursuant to Civil 

Code section 2924l, stating it had been named solely in its 

capacity as trustee and not due to any acts or omissions on its 

part. Brown did not object to the declaration, and it appears 

Quality Loan Service has not participated in the litigation. 
11

possibility of trial as to codefendants, during the five-year period 

limit to get to trial.” The court dismissed the complaint with 

prejudice in its entirety. An order of dismissal was entered on 

May 16, 2019 and a judgment on July 2, 2019.

8. Brown’s Motion for Reconsideration

On June 3, 2019, before judgment had been entered, Brown 

filed a motion for reconsideration pursuant to section 1008, 

arguing she had learned after the motion to dismiss hearing that 

Lanker Partnership had purportedly transferred the Lankershim 

property in April 2019. Brown also argued the five-year limit for 

the claims against Deutsche Bank and Perez did not begin to run

until they were added by amendment to the complaint. Brown 

argued she had not been able to raise this issue in her opposition 

to the motion to dismiss because the joinders by Deutsche Bank 

and Perez had not put her on notice of their position. 

The Zive parties, Deutsche Bank and Perez10 opposed the 

motion for reconsideration, arguing Brown had failed to present 

any new or different facts that could not have been submitted 

prior to the court’s ruling, nor would the purportedly new facts 

necessitate a different outcome.

The motion for reconsideration was denied on 

August 29, 2019.

10 In his declaration in support of his opposition, Perez stated,

“Soon after I was named as a defendant in this action, the matter 

was stayed due to a Chapter 11 Bankruptcy filling [sic] around 

the middle of 2016. The Chapter 11 Bankruptcy was dismissed 

on June 7, 2018.” 
12

DISCUSSION

1. Sections 583.310 and 583.340 and the Standard of 

Review

Section 583.310 provides, “An action shall be brought to 

trial within five years after the action is commenced against the 

defendant.” In computing the five-year period within which an 

action must be brought to trial, however, “there shall be excluded 

the time during which any of the following conditions existed: [¶] 

(a) The jurisdiction of the court to try the action was suspended. 

[¶] (b) Prosecution or trial of the action was stayed or enjoined. 

[¶] (c) Bringing the action to trial, for any other reason, was 

impossible, impracticable, or futile.” (§ 583.340.) Dismissal is 

mandatory if the requirements of section 583.310 are not met and 

an exception provided by statute does not apply. (§ 583.360, 

subd. (b); Gaines v. Fidelity National Title Ins. Co. (2016) 

62 Cal.4th 1081, 1090 (Gaines); see McDonough Power 

Equipment Co. v. Superior Court (1972) 8 Cal.3d 527, 530.)

“[I]in construing these provisions the policy favoring trial 

or other resolution on the merits is generally to be preferred over

the policy requiring dismissal for failure to prosecute.” (Dowling 

v. Farmers Ins. Exchange (2012) 208 Cal.App.4th 685, 693; see 

§ 583.130 [“the policy favoring trial or other disposition of an 

action on the merits [is] generally to be preferred over the policy 

that requires dismissal for failure to proceed with reasonable 

diligence in the prosecution of an action in construing the 

provisions of this chapter”].) Accordingly, the tolling provisions of 

section 583.340 must be liberally construed. (Dowling, at p. 693.) 

The interpretation of section 583.340 and any relevant 

federal bankruptcy statutes are questions of law, which we 

review de novo. (See Gaines, supra, 62 Cal.4th at p. 1100 [trial 
13

court’s conclusions of law in applying section 583.340 are 

reviewed de novo]; In re Marriage of Vaughn (2018) 

29 Cal.App.5th 451, 455-456 [interpretation of federal 

bankruptcy statutes is a question of law subject to independent 

review]; Tanguilig v. Neiman Marcus Group, Inc. (2018) 

22 Cal.App.5th 313, 324 [trial court’s interpretation of 

section 583.340 is reviewed de novo].) To the extent the trial 

court’s order is based on its evaluation of factual matters relating 

to whether the prosecution of the action was impossible, 

impracticable or futile under section 583.340, subdivision (c), we 

review that ruling for abuse of discretion. (See Gaines, at 

p. 1100; Bruns v. E-Commerce Exchange, Inc. (2011) 51 Cal.4th 

717, 731 (Bruns).)

2. The Trial Court Erred in Dismissing the Quiet Title and 

Fraudulent Conveyance Causes of Action

a. Relevant federal bankruptcy law

“Upon the filing of a bankruptcy proceeding, federal 

bankruptcy law imposes an automatic stay on all state and 

federal proceedings outside the bankruptcy court against the 

debtor and the debtor’s property. [Citations.]” “‘The automatic 

stay is self-executing and is effective upon filing the bankruptcy 

petition. [Citation.]’ [Citation.] Section 362(a)(3) of title 11 of 

the United States Code provides for an automatic stay of ‘any act 

to obtain possession of property of the estate or of property from 

the estate or to exercise control over property of the estate.’” 

(Shaoxing County Huayue Import & Export v. Bhaumik (2011) 

191 Cal.App.4th 1189, 1196; accord, Kertesz v. Ostrovsky (2004) 

115 Cal.App.4th 369, 373 [section 362(a) “stays a wide range of 

actions that would affect or interfere with property of the estate, 

property of the debtor or property in the custody of the estate”].) 
14

“‘Section 362 is “extremely broad in scope” and “should apply to 

almost any type of formal or informal action against the debtor or 

the property of the estate.”’” (Kertesz, at p. 374.) 

“The purpose of the automatic stay ‘“is to give the debtor a 

breathing spell from his creditors, to stop all collection efforts, 

harassment and foreclosure actions. [Citations.] The automatic 

stay also prevents piecemeal diminution of the debtor’s estate.”’” 

(Cavanagh v. California Unemployment Ins. Appeals Bd. (2004) 

118 Cal.App.4th 83, 90; accord, In re Levine (C.D.Cal. 2018) 

583 B.R. 231, 235 [“the automatic stay helps ensure the orderly 

distribution of estate property in a way that will maximize the 

benefit to creditors”].)

b. The Lanker Partnership bankruptcy stayed the quiet 

title and fraudulent conveyance causes of action

The parties dispute whether the automatic stay triggered 

by the Lanker Partnership bankruptcy applied to the other 

defendants in this lawsuit and, therefore, whether the time the 

stay was in place should have been excluded from the trial court’s 

calculation of the five-year period under section 583.340, 

subdivision (b). 

Absent any extensions or exclusions, the five-year period in 

which Brown was required to proceed to trial terminated on 

December 13, 2016. However, the period after the case had been 

dismissed and before the trial court vacated that dismissal 

(146 days)11 must be excluded, as it was impossible for Brown to 

11 The order of dismissal was entered on April 18, 2013, and 

the motion to vacate the dismissal was granted on 

September 11, 2013.
15

have proceeded during that time.12 That exclusion extended the 

expiration of the five-year period to May 8, 2017. 

The Lanker Partnership bankruptcy proceeding was filed 

on July 12, 2015 and dismissed on June 7, 2018, resulting in an 

automatic stay of 1,061 days. If the Lanker Partnership 

bankruptcy stayed this action, as Brown contends, the resulting 

expiration of the five-year period for Brown to bring the case to 

trial concluded on April 3, 2020, making the dismissal under 

section 583.310 almost one year premature.13

The trial court’s finding the Lanker Partnership 

bankruptcy stay did not apply here was based solely on its 

determination the bankruptcy stay applied to actions against the 

debtor only and not to actions against the non-debtor 

12 Deutsche Bank and Perez do not directly address Brown’s 

argument the time between the case’s dismissal and 

reinstatement must be excluded from the five-year period’s 

calculation. Given that the dismissal ended the litigation (at 

least temporarily), there can be no reasonable argument against 

excluding that time pursuant to section 583.340, subdivision (c). 

(See Howard v. Thrifty Drug & Discount Stores (1995) 10 Cal.4th 

424, 438 [“there are some circumstances in which it can be said 

almost invariably that [tolling for impossibility] applies. Such is 

the case when a default judgment has been entered in favor of 

the plaintiff, effectively bringing the litigation to a standstill”].) 

13 Given our conclusion the Lanker Partnership bankruptcy 

stay applied to the quiet title and fraudulent conveyance causes 

of action and is dispositive in determining the issue on appeal as 

to those claims, we need not determine whether or to what extent 

the Zive and Vaca Partnership bankruptcy stays may have also 

extended the five-year period. 
16

codefendants.14 The trial court was correct that “the general rule 

is that bankruptcy stays only toll the five-year period as to the 

bankrupt.” (Santa Monica Hospital Medical Center v. Superior 

Court (1988) 203 Cal.App.3d 1026, 1036.) However, the plain 

language of the statute is broader than the general rule might 

suggest: The automatic stay applies to all actions against or 

seeking possession of debtor property. (See 11 U.S.C. § 362(a)(2) 

& (3).) This is true for lawsuits against non-debtor defendants, 

even those in which the debtor is not a party. (See In re Levine, 

supra, 583 B.R. at p. 237 [automatic bankruptcy stay applied to 

bank’s action against non-debtor where debtor had interest in 

real property sought by bank; “Bank cannot take enforcement 

actions against the Real Properties without also affecting the 

bankruptcy estate’s property rights. Accordingly, the Real 

Properties fall entirely within the scope of the automatic stay”]; 

In re Franco (Bankr. D.N.M. 2017) 574 B.R. 730, 740 [action 

seeking to quiet title in mineral rights against debtor and others 

was subject to automatic stay]; In re Saint Vincents Catholic 

Medical Centers of New York (S.D.N.Y. 2011) 449 B.R. 209, 217 

[“the automatic stay provision is not limited solely to actions 

against the debtor, but rather bars actions . . . even against thirdparties that would have an adverse impact on the property of the

estate”].)

Here, Brown’s quiet title cause of action alleged, “[N]one of 

the defendants . . . had any right to title or interest in the subject 

14 Even presuming this analysis were correct, it is not clear 

on what basis the claims against Lanker Partnership could have 

been dismissed pursuant to section 583.310 given that the trial 

court appeared to agree the action had been stayed as to Lanker 

Partnership.
17

property and no right to entertain any rights of ownership” and 

sought “a judicial declaration that the title to the Property is 

vested in plaintiff alone.” The fraudulent conveyance cause of 

action alleged Lanker Partnership had received the property as 

part of a scheme to hinder Brown from collecting on a judgment 

and sought “[a]voidance of the purported transfers of the 

Property to [Phoenix Realty and Lanker Partnership] and H5,” 

an “injunction against further disposition of the Property or its 

proceeds,” and that Brown “be allowed to levy execution of the 

judgment in [Brown I] on the Property.” Given that Lanker 

Partnership listed the Lankershim property as an asset in its 

bankruptcy filings, there can be no doubt these two causes of 

action fall squarely within the Bankruptcy Code’s prohibition of 

proceedings against, or to obtain possession of, a debtor’s 

property.15 In fact, none of the defendants objected to Brown’s 

repeated filings from 2016 to 2018 informing the trial court this 

action was stayed in its entirety due to the Lanker Partnership’s 

15 As discussed, neither Deutsche Bank nor Perez addressed

the bankruptcy stay’s applicability to actions involving the 

debtor’s property, but they instead focus their arguments on the 

improbable claim Lanker Partnership is not a defendant in the 

action because it was not correctly named in the caption of the 

second amended complaint (although it was properly identified in 

the body of the pleading) and because Brown did not have the 

trial court’s permission to add a new party to the second amended 

complaint (although the court rejected that argument in ruling on 

the demurrer to the second amended complaint). Regardless, 

whether Lanker Partnership is a party to the proceeding is not 

relevant to the analysis whether the action is stayed because it 

seeks property of a bankruptcy estate. (See In re Levine, supra, 

583 B.R. at p. 237.)
18

bankruptcy proceeding, and the Zive parties’ attorney recognized 

the stay in a letter to counsel and subsequent filing in 2017. 

Even Perez’s declaration submitted in 2019 recognized the 

matter had been stayed.

16

 Accordingly, the automatic 

bankruptcy stay applied to those causes of action and the length 

of time the stay was in effect should have been excluded by the 

trial court from its calculation of the five-year period in which 

Brown was required to bring the case to trial. 

3. Remand Is Necessary for the Trial Court To Reconsider 

the Motion To Dismiss Regarding the Fraud Cause of 

Action17

a. Section 583.340, subdivision (c)

“Under 583.340(c), the trial court must determine what is 

impossible, impracticable, or futile ‘in light of all the 

16 While Brown did not argue estoppel in opposition to the 

motion to dismiss or on appeal, the defendants’ apparent prior 

recognition of the automatic stay certainly undermines their 

arguments in favor of dismissal. 

17 The record reflects the second amended complaint alleged 

fraud against Menahem, Phoenix Realty and the Doe defendants, 

which includes Deutsche Bank and Perez because they were 

substituted for Doe defendants. The demurrer to the second 

amended complaint was overruled. In the appellant’s opening 

brief Brown states the fraud cause of action was alleged against 

only Menahem and Phoenix Realty. During oral argument, 

Brown’s counsel stated the fraud claim was no longer at issue in 

the case. The dismissal pursuant to section 583.310 refers to the 

second amended complaint in its entirety and does not 

distinguish among the causes of action. If in fact the fraud cause 

of action has been eliminated, the trial court will have no need to 

reconsider the motion to dismiss on remand. 
19

circumstances in the individual case, including the acts and 

conduct of the parties and the nature of the proceedings 

themselves. [Citations.] The critical factor in applying these 

exceptions to a given factual situation is whether the plaintiff 

exercised reasonable diligence in prosecuting his or her case.’ 

[Citations.] A plaintiff’s reasonable diligence alone does not 

preclude involuntary dismissal; it is simply one factor for 

assessing the existing exceptions of impossibility, 

impracticability, or futility. [Citation.]” “Determining whether 

the subdivision (c) exception applies requires a fact-sensitive 

inquiry and depends ‘on the obstacles faced by the plaintiff in 

prosecuting the action and the plaintiff’s exercise of reasonable 

diligence in overcoming those obstacles.’ [Citation.] 

‘“[I]mpracticability and futility” involve a determination of 

“‘excessive and unreasonable difficulty or expense,’” in light of all 

the circumstances of a particular case.’” (Bruns, supra, 

51 Cal.4th at pp. 730-731; see also Howard v. Thrifty Drug & 

Discount Stores (1995) 10 Cal.4th 424, 438.)

In determining whether a cause of action is impossible, 

impracticable or futile the trial court must consider “a great 

variety of factors, including, among others, the expense, 

complexity, and quantity of the evidentiary duplication that 

severance would entail, the potential problems that inconsistent 

judicial determinations would produce, and the degree of 

hardship or prejudice to the defendants occasioned by the delay.” 

(Brunzell Constr. Co. v. Wagner (1970) 2 Cal.3d 545, 554, fns. 

omitted; accord, Dowling v. Farmers Ins. Exchange, supra,

208 Cal.App.4th at p. 698.)

“The plaintiff bears the burden of proving the 

circumstances justifying application of section 583.340, 
20

subdivision (c)’s exception for impossibility, impracticability or 

futility.” (Martinez v. Landry’s Restaurants, Inc. (2018) 

26 Cal.App.5th 783, 794; accord, Bruns, supra, 51 Cal.4th at 

p. 731.) “[A] condition of impossibility, impracticability, or 

futility need not take the plaintiff beyond the five-year deadline 

to be excluded; it will be excluded even if the plaintiff has a 

reasonable time remaining after the period to bring the case to 

trial.” (Gaines, supra, 62 Cal.4th at p. 1101.) However, the 

plaintiff must establish a causal connection between the claimed 

circumstances of impracticability and the failure to proceed to 

trial. (Ibid.; see De Santiago v. D & G Plumbing, Inc. (2007) 

155 Cal.App.4th 365, 372; Tamburina v. Combined Ins. Co. of 

America (2007) 147 Cal.App.4th 323, 328.)

“‘The question of impossibility, impracticability, or futility 

is best resolved by the trial court, which “is in the most 

advantageous position to evaluate these diverse factual matters 

in the first instance.”’” (Gaines, supra, 62 Cal.4th at p. 1100 & 

fn. 8.) Accordingly, as discussed, we review for an abuse of 

discretion the trial court’s determination not to exclude periods 

during which plaintiff contends it was impossible, impracticable 

or futile to bring the action to trial within the meaning of 

section 583.340, subdivision (c). (Gaines, at p. 1100 & fn. 8.)

b. The trial court erred by failing to consider the 

potential impact of the Lanker Partnership bankruptcy 

on the fraud cause of action

To reiterate, in the second amended complaint Brown 

alleged generally that Menahem, Phoenix Realty, Deutsche Bank 

and Perez committed fraud by misrepresenting material facts in 

connection with Brown’s purchase of the Lankershim property 

and then foreclosed on the property with knowledge of the 
21

fraudulent transaction. As a result, Brown alleged, she suffered 

economic and noneconomic damages and sought compensatory 

and punitive damages. Accordingly, the fraud cause of action did 

not directly seek possession of the Lankershim property and 

therefore was not subject to the automatic stay triggered by the 

Lanker Partnership bankruptcy. The trial court did not err in 

failing to exclude the Lanker Partnership bankruptcy stay from 

its calculation of the five-year period pursuant to section 583.340, 

subdivision (b), in relation to the fraud claim.

However, this does not end the analysis. “A circumstance 

that does not qualify for automatic tolling under 

section 583.340(b) may nonetheless be excludable from the 

five-year period if the circumstance makes it ‘impossible, 

impracticable, or futile’ to bring the action to trial.” (Gaines, 

supra, 62 Cal.4th at p. 1100.) Brown argues, albeit in a 

conclusory fashion, that it would have been impracticable to try 

any of her claims against the defendants while Lanker 

Partnership claimed title to the property in its ongoing 

bankruptcy proceeding. 

Because the trial court found as a matter of law that the 

bankruptcy stay did not apply, it failed to consider whether 

section 583.340, subdivision (c)’s exception for impracticability 

applied to a separate trial on the fraud cause of action due to

duplicative expenses and possibly inconsistent legal rulings or 

factual findings. It is appropriate for the trial court to consider 

those issues in the first instance.18 (See Dowling v. Farmers Ins. 

18 Because we reverse on the quiet title and fraudulent 

conveyance causes of action and remand for the trial court to 

reconsider the motion to dismiss as to the fraud cause of action, 
22

Exchange, supra, 208 Cal.App.4th at p. 699 [remanding for trial 

court to “exercise its discretion by deciding whether the 

particular circumstances of this case, common legal questions 

and practical realities made it impracticable or futile to bring this 

case to trial”].)

DISPOSITION

The judgment and order granting the motion to dismiss are 

reversed, and the cause remanded with directions to enter a new 

order denying the motion to dismiss as to the causes of action for 

quiet title and fraudulent conveyance, to reconsider the motion as 

to the cause of action for fraud and for further proceedings not 

inconsistent with this opinion. Brown is to recover her costs on 

appeal.

PERLUSS, P. J.

We concur:

SEGAL, J.

FEUER, J.

we need not reach Brown’s argument the court erred in denying 

her motion for reconsideration.