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Case 2:18-cv-09392-R-FFM Document 16 Filed 11/16/18 Page 1 of 26 Page ID #:172

1 KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP


DALE F. KINSELLA (SBN 063370)
2 dkinsella@kwikalaw.com
SUANN C. MACISAAC (SBN 205659)
3 smacisaac@kwikalaw.com
ZACHARY T. ELSEA (SBN 279252)
4 zelsea@kwikalaw.com
808 Wilshire Boulevard, 3rd Floor
5 Santa Monica, California 90401
Telephone: 310.566.9800
6 Facsimile: 310.566.9850
7 Attorneys for Plaintiffs Neal Moritz and
Neal H. Moritz, Inc.
8
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 UNITED STATES DISTRICT COURT


10 CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
TEL 310.566.9800 • FAX 310.566.9850

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808 WILSHIRE BOULEVARD, 3RD FLOOR
SANTA MONICA, CALIFORNIA 90401

12 NEAL MORITZ and NEAL H. Case No. 2:18-cv-09392-R-FFM


MORITZ, INC.,
13 NOTICE OF MOTION AND MOTION
Plaintiffs, FOR LEAVE TO FILE FIRST
14 AMENDED COMPLAINT;
vs. MEMORANDUM OF POINTS AND
15 AUTHORITIES; AND
UNIVERSAL CITY STUDIOS LLC, DECLARATIONS OF SUANN C.
16 FFSO PRODUCTIONS LLC, and MACISAAC AND HOWARD
DOES 1 through 50, inclusive, ABRAMSON FILED
17 CONCURRENTLY HEREWITH
Defendants.
18 Judge: Hon. Manuel L. Real
Date: December 17, 2018
19 Time: 10:00 a.m.
Crtrm.: 880
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Trial Date: None Set
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PLAINTIFFS’ MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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1 TO ALL PARTIES AND THEIR COUNSEL OF RECORD:


2 PLEASE TAKE NOTICE that on December 17, 2018 at 10:00 a.m., or as
3 soon thereafter as the matter may be heard, in Courtroom 880 of the Edward R.
4 Roybal United States Courthouse, located at 255 East Temple Street, Los Angeles,
5 California 90012, before the Honorable Manuel L. Real, United States District
6 Judge, Plaintiffs Neal Moritz and Neal H. Moritz, Inc. (collectively, “Moritz”), and
7 each of them, will appear and move the Court for leave to file a first amended
8 complaint to add an individual defendant, Universal Pictures President James
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 (“Jimmy”) Horowitz, to Moritz’s third claim for promissory fraud. A copy of the
10 proposed first amended complaint is attached to the Declaration of Suann C.
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11 MacIsaac (“MacIsaac Decl.”) as Exhibit A.


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12 This Motion is made pursuant to Rule 15 of the Federal Rules of Civil


13 Procedure and 28 U.S.C. § 1447(e) on the grounds that all six factors that must be
14 considered by the Court in determining whether to grant leave to amend after
15 removal strongly favor allowing Moritz to amend his complaint to add Horowitz as
16 an individual defendant. Moreover, if this motion is denied, Moritz will have to
17 consider initiating another promissory fraud action against Horowitz in Los Angeles
18 County Superior Court, which would clearly result in avoidable prejudice, expense,
19 and judicial inefficiency. It could also result in inconsistent rulings.
20 This Motion is based upon: this Notice; the attached Memorandum of Points
21 and Authorities; the attached Declarations of Suann C. MacIsaac and Howard
22 Abramson and the Proposed Order filed concurrently herewith; all papers and
23 pleadings on file in this action; and on such other and further evidence and argument
24 as the Court may, in its discretion, lawfully consider in deciding this Motion.
25 / / /
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1 PLEASE TAKE FURTHER NOTICE that this Motion is made following


2 the conference of counsel pursuant to Local Rule 7-3, which took place in an initial
3 telephonic conference on November 6, 2018, and in follow-up communications
4 thereafter. (See MacIsaac Decl. at ¶ 6.)
5
DATED: November 16, 2018 KINSELLA WEITZMAN ISER KUMP
6
& ALDISERT LLP
7
8
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 By: /s/ Dale F. Kinsella


Dale F. Kinsella
10
Attorneys for Neal Moritz and Neal H.
TEL 310.566.9800 • FAX 310.566.9850

11 Moritz, Inc.
808 WILSHIRE BOULEVARD, 3RD FLOOR
SANTA MONICA, CALIFORNIA 90401

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1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ............................................................................................. 4
4 II. RELEVANT BACKGROUND AND PROCEDURAL HISTORY................. 6
5 A. Moritz’s Enormous Contribution To The FF Franchise. ........................ 6
6 B. Universal’s And Horowitz’s Fraudulent Promises And
Representations To Moritz Relating To Hobbs and Shaw. .................... 7
7
C. Universal and Horowitz Deny The Oral Producer Deal With
8 Moritz On The Eve Of Filming For Hobbs and Shaw............................ 8
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 D. Moritz Files A Complaint In Superior Court. ......................................... 9


10 E. Universal Files An Early Answer And Notice Of Removal To
Prevent Moritz From Naming Horowitz. .............................................. 10
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III. THE COURT SHOULD GRANT MORITZ LEAVE TO AMEND


12 THE COMPLAINT TO ADD HOROWITZ AS A DEFENDANT ............... 11
13 A. Legal Standard For Amendment Following Removal. ......................... 11
14 B. All Six Factors Strongly Support Granting Moritz Leave to
Amend The Complaint To Name Horowitz As A Defendant. ............. 12
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1. Joinder of Horowitz is required here. ......................................... 12
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2. Moritz’s claim against Horowitz is not time barred. .................. 15
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3. Moritz’s proposed amendment is timely. ................................... 16
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4. Moritz’s motive for joinder is valid............................................ 17
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5. Moritz’s fraud claim against Horowitz is valid. ......................... 18
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6. Moritz will clearly be prejudiced if this motion is denied. ........ 20
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IV. CONCLUSION ............................................................................................... 20
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1 TABLE OF AUTHORITIES
2 Page
3
FEDERAL CASES
4
Clinco v Roberts
5 41 F. Supp. 2d 1080 (C.D. Cal. 1999)............................................................. 16
6 Delafontaine v. Volvo Cars of N. Am., LLC
No. 16-07154, 2016 WL 7338404 (C.D. Cal. Dec. 19, 2016) ........................ 20
7
Forward-Rossi v. Jaguar Land Rover N. Am., LLC
8 No. 216-CV-00949, 2016 WL 3396925 (C.D. Cal. June 13, 2016) ............... 18
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 Gamboa v. Wal-Mart Stores, Inc.


No. CV 18-2553, 2018 WL 3129776 (C.D. Cal. June 21, 2018)........ 12, 14, 16
10
Graunstadt v. USS-Posco Indus.
TEL 310.566.9800 • FAX 310.566.9850

11 No. C 10-03225, 2010 WL 3910145 (N.D. Cal. Oct. 5, 2010) ....... 6, 13, 15, 17
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12 IBC Aviation Servs. v. Compania Mexicana de Aviacion, S.A. de C.V.


125 F. Supp. 2d 1008 (N.D. Cal. 2000) .......................................................... 16
13
Jackson v. Dollar Tree Distribution, Inc.
14 No. CV 18-2302, 2018 WL 2355983 (C.D. Cal. May 23, 2018).................... 17
15 Jackson v. Family Dollar, Inc.
No. CV 18-5126, 2018 WL 3701962 (C.D. Cal. Aug. 2, 2018) ..................... 11
16
Lara v. Bandit Industries, Inc.
17 2013 WL 1155523 (E.D. Cal. Mar. 19, 2013) ................................................ 16
18 Morales v. Sprint Connect, LLC
No. CV 18-2816, 2018 WL 2448466 (C.D. Cal. May 30, 2018).. 12, 13, 14, 16
19
Negrete v. Meadowbrook Meat Co.
20 No. 11-1861, 2012 WL 254039 (C.D. Cal. Jan. 25, 2012) ......................... 6, 12
21 Sandhu v. Volvo Cars of N. America, LLC
2017 403495 (N.D. Cal. Jan. 31, 2017).......................................................... 12
22
Taylor v. Honeywell Corp.
23 2010 WL 1881459 (N.D. Cal. May 10, 2010) ................................................ 19
24 Yang v. Swissport USA, Inc.
No. C 09-03823, 2010 WL 2680800 (N.D. Cal. July 6, 2010) ....................... 17
25
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STATE CASES
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Tarmann v. State Farm Mut. Auto Ins. Co.
28 2 Cal.App.4th 153 (1991) ................................................................................ 19
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1 Tenzer v. Superscope, Inc.


39 Cal.3d 18 (1985) ......................................................................................... 19
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STATUTES
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28 U.S.C. § 1447................................................................................................. passim
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Cal. Civ. Code § 1710................................................................................................ 19
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Cal. Civ. Code § 3294................................................................................................ 15
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Cal. Code Civ. P. § 338 ............................................................................................. 16
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Fed. R. Civ. P 15(a) ................................................................................................... 11
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

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TREATISES
TEL 310.566.9800 • FAX 310.566.9850

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808 WILSHIRE BOULEVARD, 3RD FLOOR
SANTA MONICA, CALIFORNIA 90401

5 Witkin, Summary of California Law


12 (11th ed.), Torts § 34 ....................................................................................... 15
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1 I. INTRODUCTION
2 Plaintiffs Neal Moritz and Neal H. Moritz, Inc. (collectively, “Moritz”)
3 respectfully request leave from the Court to amend their complaint (the
4 “Complaint”) against Defendants Universal City Studios, LLC and FFSO
5 Productions, LLC (collectively, “Universal”) to add Universal President, Jimmy
6 Horowitz, as a defendant with respect to their third claim for promissory fraud. A
7 copy of the proposed First Amended Complaint is attached hereto as Exhibit A.
8 Plaintiff Neal Moritz is a producer of motion pictures and television, and one
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 of the main forces behind the blockbuster motion picture franchise, The Fast and the
10 Furious (the “FF Franchise”). Moritz has been involved in every aspect of the
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11 Franchise from its inception until very recently. Universal is the distributor of the FF
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12 Franchise. This case arises out of Universal’s numerous fraudulent promises and
13 representations to Moritz over a year-and-a half period regarding his production of
14 the next installment of the FF Franchise, Hobbs and Shaw.
15 As can be gleaned from multiple specific references in the Complaint, the
16 principal perpetrator of Universal’s fraud was its President, Jimmy Horowitz.
17 However, when the case was filed in Los Angeles County Superior Court (“superior
18 court”) on October 17, 2018, Moritz named only Universal in its promissory fraud
19 claim and did not name Horowitz individually. This was because at the time, the
20 parties were still discussing a possible early resolution of the dispute. Moritz had
21 worked with Horowitz for a number of years and maintained a vain hope that he
22 would finally do the right thing and honor the previous agreements and
23 representation he had made. As it turns out, no good deed goes unpunished.
24 On Sunday, November 4, 2018, Universal retaliated against Moritz by
25 advising his long-time counsel that Universal was exercising its pay-or-play clause
26 with respect to The Fast and the Furious 9 (“FF9”), and removing Moritz from
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1 work on that picture as well. 1 (Declaration of Howard Abramson (“Abramson


2 Decl.”), ¶ 3, Ex. “D.”) Fully anticipating that Moritz would respond by amending
3 his superior court Complaint to name Horowitz as an individual defendant,
4 Universal had already taken numerous steps to try to prevent that from happening.
5 On Friday, November 2, 2018, and unbeknownst to Moritz, Universal had
6 answered the Complaint in superior court and filed a notice of removal in this Court.
7 (Declaration of Suann C. MacIsaac (“MacIsaac Decl.,), ¶¶ 4-5, Exs. “B,” “C.”) This
8 was a full two weeks before Universal’s response to the Complaint was due in
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 superior court. Notably, Universal served the answer by FedEx for Monday morning
10 delivery on November 5, 2018, and did not serve an email “courtesy copy” of the
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11 notice of removal until November 5 as well. (Id.) Universal understood that by the
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12 time it pay-or-played Moritz from FF9, it would be too late for Moritz to add
13 Horowitz as an individual defendant in the superior court action.
14 Universal’s obvious goal was to forum shop and try to prevent Moritz from
15 naming Horowitz as an individual defendant in this case. This blatant gamesmanship
16 should not be tolerated. On the face of the Complaint, it is clear that Horowitz, a
17 California resident and the President of Universal Pictures, perpetrated the alleged
18 fraud against Moritz. Indeed, his name is mentioned sixteen times in the Complaint.
19 Pursuant to the relevant six-part analysis under 28 U.S.C. section 1447(e), this is
20 precisely the type of case where district courts routinely allow leave to amend to add
21 a diversity-destroying defendant.
22 “District courts in California routinely hold that a defendant has failed to
23 show that a party is not necessary under Rule 19(a) where the diversity-destroying
24 party is the existing defendant’s employee and also the employee who allegedly did
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FF9 is scheduled to be the next film in the FF Franchise after Hobbs and
Shaw. Because Universal and Moritz have a written agreement that covers sequels
27 such as FF9, Universal was unable to deny this agreement.
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1 the act that harmed the plaintiff.” Negrete v. Meadowbrook Meat Co., No. 11-1861,
2 2012 WL 254039, at *3 (C.D. Cal. Jan. 25, 2012). In particular, district courts have
3 allowed “plaintiff[s] . . . to join the very employee . . . whose conduct allegedly
4 made [his employer] liable for fraud.” Graunstadt v. USS-Posco Indus., No. C 10-
5 03225, 2010 WL 3910145, at *3 (N.D. Cal. Oct. 5, 2010).
6 As described below, all six relevant factors strongly favor allowing Moritz to
7 amend his Complaint to add Horowitz as an individual defendant. Moreover, if this
8 motion is denied, Moritz will have to consider initiating another promissory fraud
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 action against Horowitz in superior court, which would clearly result in avoidable
10 prejudice, expense, and judicial inefficiency. It could also result in inconsistent
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11 rulings. Accordingly, Moritz respectfully requests that the Court grant this motion
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12 for leave to amend, and remand the matter to superior court.2


13 II. RELEVANT BACKGROUND AND PROCEDURAL HISTORY
14 A. Moritz’s Enormous Contribution To The FF Franchise.
15 Moritz has been a driving force behind every installment of the FF Franchise
16 since its inception in 2001. (Complaint, ¶ 3.) To date, the FF Franchise includes
17 eight major motion pictures. Notably, Moritz has been the lead producer and
18 common denominator on all of the films (“FF films”), which at times have involved
19 different directors, writers, casts and studio executives. (Id.)
20 After completion of principal photography of The Fate of the Furious, the
21 eighth FF film, Moritz and screenwriter, Chris Morgan, first came up with the basic
22 storyline for Hobbs and Shaw. (Id., ¶ 31.) The idea was to focus on the relationship
23 and an unlikely alliance between two characters, and shift the story line more toward
24 a buddy cop film with international spy aspects. (Id.) In or around spring 2017,
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Moritz has filed a companion motion for remand.
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1 Moritz and Morgan pitched Universal Pictures Chairman, Donna Langley, with the
2 idea for Hobbs and Shaw. Langley absolutely loved the concept. (Id., ¶ 32.)
3 B. Universal’s And Horowitz’s Fraudulent Promises And
4 Representations To Moritz Relating To Hobbs and Shaw.
5 At or around that same time, Moritz had conversations with the President of
6 Universal Pictures, Jimmy Horowitz, where they discussed Moritz’s producer deal
7 for Hobbs and Shaw. Horowitz orally promised Moritz that his producer deal on
8 Hobbs and Shaw would return to a first dollar gross deal, and would be modeled
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 after the first dollar gross option from his last producer deal with Universal. (Id., ¶
10 33.) As it turns out, the evidence strongly supports that Horowitz made this oral
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11 promise without any intent of honoring the deal. (Id., ¶¶ 73-80.)


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12 However, in reliance on that oral agreement, Moritz began diligently working


13 on the production of Hobbs and Shaw. (Id., ¶ 35.) For the next approximately year-
14 and-a half, Moritz worked on all aspects of the production of Hobbs and Shaw,
15 taking hundreds of meetings with key studio executives, cast, and crew, securing
16 stars and a director for the film, and working extensively on all aspects of casting,
17 locations, budgeting, planning, and scheduling. (Id., ¶ 36.)
18 Throughout this period, Universal executives repeatedly acknowledged that
19 Horowitz had orally agreed that Moritz would receive a $2 million advance against
20 6% of the first dollar gross of Hobbs and Shaw. (Id.,¶ 39.) At or around the same
21 time, and in recognition of their oral producer deal, Horowitz was communicating
22 with Moritz regarding the producer credit he, and potential others, would receive on
23 Hobbs and Shaw. (Id., ¶ 40.)
24 For example, on or about May 10, 2018, Horowitz emailed Moritz that he
25 would receive both first position producer and production company credit on Hobbs
26 and Shaw. (Id.) The following day, Horowitz again emailed Moritz explaining that
27 he had convinced others on the film to take a lesser producer credit. Notably, in his
28 May 11 email, Horowitz wrote Moritz that it was “[t]ime to turn our focus to
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1 making a great movie.” At or around this same time, Horowitz confirmed that
2 Moritz would also receive his own individual and production company cards on
3 Hobbs and Shaw. (Id.) In retrospect, all of these representations by Universal and
4 Horowitz were designed to keep Moritz working on Hobbs and Shaw throughout the
5 summer of 2018, which was a critical time in pre-production of the film.
6 During the summer of 2018, Moritz continued working steadily on production
7 of Hobbs and Shaw, including numerous conversations between Moritz and
8 Horowitz regarding checklists for production. (Id., ¶ 51.) In August 2018, just one
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 month before filming was set to begin on Hobbs and Shaw, Horowitz and other
10 executives at Universal asked Moritz if he would amend his oral producer
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11 agreement on the picture from a first dollar gross deal to a post-breakeven pool. (Id.
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12 ¶¶ 45-50.) However, at no point during these conversations did anyone from


13 Universal ever deny that it had reached a binding oral agreement with Moritz back
14 in 2017, or claim that Universal was free to proceed with Hobbs and Shaw without
15 including Moritz or fully honoring his oral deal. (Id., ¶ 49.)
16 Hobbs and Shaw was set to begin pre-shooting on September 9, 2018, and
17 principal photography was to start on September 12, 2018. (Id., ¶ 51.) Having made
18 three trips to London paid for by Universal, Moritz’s entire summer was largely
19 spent working on the production of Hobbs and Shaw. (Id.)
20 C. Universal and Horowitz Deny The Oral Producer Deal With
21 Moritz On The Eve Of Filming For Hobbs and Shaw.
22 On or about September 5, 2018, Moritz participated in an approximately 1.5
23 hour telephone conference with Horowitz and all the other key executives at
24 Universal and from the production to go over every aspect of the final checklist for
25 Hobbs and Shaw. (Id., ¶ 52.) Although Moritz had not agreed to amend his oral
26 producer deal, never during this meeting or any of the previous conversations and
27 meetings, did anyone from Universal take the position that it had not reached a
28 binding oral producer agreement with Moritz for Hobbs and Shaw. (Id., ¶ 49.)
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1 Remarkably, on September 7, 2018—the Friday before filming on Hobbs and


2 Shaw was set to begin in London—Moritz’s long-time attorney received a letter
3 from the Deputy General Counsel of Universal stating for the first time that
4 “Universal is under no obligation to involve Mr. Moritz in the production [of Hobbs
5 and Shaw], nor to compensate him in connection with it.” (Id., ¶ 53.) The letter also
6 advised that “until such time as an agreement is reached, Mr. Moritz and his
7 employees may not render any services in connection with the Picture or be
8 involved in the production in any capacity.” (Id., ¶ 54.) This was obviously a blatant
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9 and abusive attempt by Universal and Horowitz to force Moritz to accept a dramatic
10 reduction in his producer deal on the eve of filming.
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11 As Universal was well aware, Moritz’s production associate was already in


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12 London working on the film, and Moritz was set to arrive the following week. (Id., ¶
13 55.) Indeed, Moritz’s production executive, Amanda Lewis, had moved to London
14 at Universal’s expense with her husband and her two young children. (Id.) Clearly,
15 Universal and Horowitz assumed that if it strung Moritz along until the eve of
16 filming, they could have the best of both worlds. Universal could exploit all of
17 Moritz’s creative ideas and hard work in connection with Hobbs and Shaw, but then
18 strong arm Moritz on the eve of filming into amending his oral deal to accept
19 substantially inferior terms. (Id.)
20 When Moritz refused to go along with Universal’s and Horowitz’s
21 extraordinary bad faith and fraud, Universal banned him from the production of
22 Hobbs and Shaw and this lawsuit followed. (Id., ¶ 56.)
23 D. Moritz Files A Complaint In Superior Court.
24 On October 17, 2018, Moritz filed his Complaint in superior court. Moritz
25 plead three causes of action for breach of oral contract, breach of implied contract,
26 and the California tort of promissory fraud. Moritz named Universal Studios, LLC
27 and FFSO Productions LLC as defendants on each claim. As detailed in numerous
28 specific references in the Complaint, the principal perpetrator of Universal’s fraud
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1 was its President, Jimmy Horowitz. Horowitz’s name is mentioned sixteen times in
2 the Complaint. (Complaint, ¶¶ 33-34, 40-41, 45-46, 51-52, 75.)
3 When the case was filed in superior court, however, Moritz named only
4 Universal as a defendant in its promissory fraud claim and did not name Horowitz
5 individually. This was because at the time, the parties were still discussing a
6 possible early resolution of the dispute. (Abramson Decl., ¶ 2.) Moritz had worked
7 with Horowitz for a number of years and hoped that he would finally do the right
8 thing and honor his previous agreements and representation. Moritz did not want to
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 sue Horowitz individually if there was still a possibility of early resolution.


10 E. Universal Files An Early Answer And Notice Of Removal To
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11 Prevent Moritz From Naming Horowitz.


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12 On Sunday, November 4, 2018, Universal retaliated against Moritz for filing


13 suit by advising his long-time counsel that Universal was exercising its pay-or-play
14 clause with respect to FF9—which was the next FF film after Hobbs and Shaw and
15 a sequel to an earlier picture. (Abramson Decl., ¶ 3, Ex. “D.”) This meant that
16 Universal was doubling down on its attempt to cut Moritz out of the FF Franchise,
17 and any early resolution of the superior court action was highly unlikely.
18 Fully anticipating that Moritz would respond by amending his superior court
19 Complaint to name Horowitz as an individual defendant, Universal had already
20 taken numerous steps to try to prevent that from happening. On Friday, November
21 2, 2018, and unbeknownst to Moritz, Universal had answered the Complaint in
22 superior court and filed a notice of removal in this Court. (MacIsaac Decl., ¶¶ 4-5,
23 Exs. “B,” “C.”) This was a full two weeks before Universal’s response to the
24 Complaint was due in superior court.
25 Notably, Universal served its answer by FedEx for Monday morning delivery
26 on November 5, 2018, and did not serve an email “courtesy copy” of the notice of
27 removal until November 5 as well. (Id.) Clearly, Universal understood that by the
28
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1 time it pay-or-played Moritz from FF9, it would be too late for Moritz to add
2 Horowitz as an individual defendant in the superior court action.
3 III. THE COURT SHOULD GRANT MORITZ LEAVE TO AMEND THE
4 COMPLAINT TO ADD HOROWITZ AS A DEFENDANT
5 A. Legal Standard For Amendment Following Removal.
6 Generally, a plaintiff may amend a complaint as a matter of course 21 days
7 after service of defendant’s responsive pleading. Fed. R. Civ. P 15(a). Federal Rule
8 of Civil Procedure 15 states that “[i]n all other cases . . . [t]he court should freely
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 give leave” to amend “when justice so requires.” Id.


10 Notwithstanding Federal Rule of Civil Procedure 15, “[s]ome courts have
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11 concluded that ‘the logic and policy of Rule 15(a) do not apply’ in the case of a
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12 potentially diversity-destroying amendment, and that the analysis is instead


13 performed solely under 28 U.S.C. § 1447.” Jackson v. Family Dollar, Inc., No. CV
14 18-5126, 2018 WL 3701962, at *2 (C.D. Cal. Aug. 2, 2018). Horowitz is a
15 California citizen, and his joinder would destroy diversity jurisdiction because both
16 Moritz parties are California citizens.
17 28 U.S.C. § 1447(e) provides that “[i]f after removal the plaintiff seeks to join
18 additional defendants whose joinder would destroy subject matter jurisdiction, the
19 court may deny joinder, or permit joinder and remand the action to the State court.”
20 Courts of this district have held as follows:
21 When determining whether to permit joinder under §
22 1447(e), the court should consider the following factors:
23 (1) whether the party sought to be joined is needed for just
24 adjudication and would be joined under Federal Rule of
25 Civil Procedure 19(a); (2) whether the statute of
26 limitations would prevent the filing of a new action against
27 the new defendant should the court deny joinder;
28 (3) whether there has been unexplained delay in seeking
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1 the joinder; (4) whether the joinder is solely for the


2 purpose of defeating federal jurisdiction; and (5) whether
3 the claim against the new party seems valid.
4 Gamboa v. Wal-Mart Stores, Inc., No. CV 18-2553, 2018 WL 3129776, at *2 (C.D.
5 Cal. June 21, 2018) (citations omitted) (permitting amendment to join Wal-Mart
6 employee as defendant and remanding). “In addition, many courts also consider
7 whether denying joinder will prejudice the plaintiff.” Morales v. Sprint Connect,
8 LLC, No. CV 18-2816, 2018 WL 2448466, at *3 (C.D. Cal. May 30, 2018)
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 (permitting amendment to join Sprint employee as defendant and remanding) (citing


10 Sandhu v. Volvo Cars of N. America, LLC, 2017 403495, at *2 (N.D. Cal. Jan. 31,
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11 2017)). As demonstrated in detail below, all of these factors strongly favor allowing
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12 Moritz to amend his complaint here.


13 B. All Six Factors Strongly Support Granting Moritz Leave to Amend
14 The Complaint To Name Horowitz As A Defendant.
15 1. Joinder of Horowitz is required here.
16 “While courts consider the Rule 19 standard when determining whether to
17 permit joinder under § 1447(e), ‘amendment under § 1447(e) is a less restrictive
18 standard than for joinder under [Rule 19].’” Gamboa, 2018 WL 3129776, at *2
19 (quoting IBC Aviation, 125 F. Supp. 2d at 1011-12); see also Morales, 2018 WL
20 2448466, at *3 (“Amendment under [Section] 1447(e) is a less restrictive standard
21 than for joinder under Rule 19.”)
22 Under Section 1447(e), “[t]he standard is met when failure to join will lead to
23 separate and redundant actions, but it is not met when defendants are only
24 tangentially related to the cause of action or would not prevent complete relief.”
25 Gamboa, 2018 WL 3129776, at *2. In that context, “[d]istrict courts in California
26 routinely hold that a defendant has failed to show that a party is not necessary under
27 Rule 19(a) where the diversity-destroying party is the existing defendant’s employee
28 and also the employee who allegedly did the act that harmed the plaintiff.” Negrete,
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1 2012 WL 254039, at *3 (granting leave to amend to join plaintiff’s supervisors and


2 remanding to superior court).
3 In a closely analogous case, a plaintiff filed six causes of action, including
4 fraud and concealment, against defendant USS-Posco Industries (“UPI”) and its
5 corporate parents. After UPI removed to federal court under Section 1332(a), the
6 “plaintiff [sought] to join the very employee, Brevig, whose conduct allegedly made
7 UPI liable for fraud.” Graunstadt, 2010 WL 3910145, at *3. The district court
8 granted plaintiff’s motion and remanded the case to superior court.
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 The district court reasoned that “[i]f the facts alleged are true, UPI cannot be
10 found liable for fraud without first finding that Brevig intentionally did not disclose
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11 [certain information], Brevig knew that [information], Brevig intended to deceive


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12 plaintiff with this concealment, plaintiff reasonably relied on this misrepresentation,


13 and plaintiff has suffered damages as a result.” Id. at *3. The district court therefore
14 found that “[t]he factual nexus is so great, that denying joinder and forcing plaintiff
15 to seek redress against Brevig in state court would lead to redundant litigation and
16 potentially inconsistent results and obligations.” Id.
17 In another directly analogous case, Morales v. Sprint Connect, LLC, the
18 plaintiff filed California employment and retaliation claims against Sprint Connect
19 and Sprint Corporation in superior court. 2018 WL 2448466, at *2. The plaintiff had
20 alleged inter alia that Ali Latif, a district manager at Sprint Connect, engaged in
21 “inappropriate behavior” and “fraudulent activity.” Id. at *1. After the Sprint
22 defendants removed the case to federal court under section 1332(a), the plaintiff
23 requested leave to amend the complaint to add Latif as a defendant and to allege
24 additional defamation claims against all defendants. Id. at *2.
25 The district court granted the plaintiff’s motion and remanded the case to
26 superior court. The district court emphasized that the “Plaintiff's allegations against
27 Latif demonstrate that Latif was predominantly involved in the conduct that gave
28
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1 rise to Plaintiff's claims against Sprint Connect.” Id. at *4. The district court further
2 noted that:
3 Plaintiff’s defamation claim against Latif is based on the
4 exact same allegations as her defamation claim against
5 Sprint Connect. In addition, Plaintiff's allegations against
6 Latif are intertwined with her other claims against Sprint
7 Connect because Latif was a direct participant in the
8 activities that gave rise to her claims against Sprint
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 Connect. . . . Thus, resolution of Plaintiff’s claims against


10 both Latif and Sprint Connect will likely require many of
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11 the same documents and witnesses and will implicate


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12 many of the same factual and legal issues.


13 Id. at *4. The district court also reasoned that “if Plaintiff is forced to pursue her
14 claim against Latif in a separate state court action, Plaintiff will be required to
15 pursue redundant actions because her defamation claim against Sprint Connect is
16 factually identical to her defamation claim against Latif. Thus, there is a risk of
17 inconsistent verdicts that may have a preclusive effect.” Id.
18 In another analogous case, Gamboa v. Wal-Mart Stores, Inc., the plaintiff
19 filed suit against Wal-Mart for premises liability, and then sought to add the relevant
20 Wal-Mart store manager as a defendant after Wal-Mart had removed to federal
21 court. Gamboa, 2018 WL 3129776, at *1. Gamboa alleged that the manager was
22 responsible for maintaining the conditions at the Wal-Mart store where she was
23 injured, and that she had an interaction with the manager on the day of the incident.
24 Id. at *2-3. The district court granted leave to amend and remanded to superior
25 court, finding that that the store manager “is more than tangentially related to the
26 asserted causes of action.” Id. at *3. The district court “conclude[d] that [the
27 manager’s] joinder will be necessary for complete adjudication of liability issues,
28 including issues relating to respondeat superior liability.” Id. at *3.
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1 As in each of the above cases, Horowitz is the Universal employee who


2 carried out the alleged tort against Moritz. As detailed in numerous specific
3 references in the Complaint, the principal perpetrator of Universal’s fraud was
4 Horowitz. Indeed, Horowitz’s name is mentioned sixteen times in Complaint,
5 including several times in the fraud claim. (Complaint, ¶¶ 33-34, 40-41, 45-46, 51-
6 52, 75.) Additionally, Horowitz is a required party for complete and just
7 adjudication of Moritz’s claims. Under California law, Horowitz is liable for his
8 own fraudulent statements and conduct. See 5 Witkin, Summary of California Law
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 (11th ed.), Torts § 34, at 151 (“An agent or employee is always liable for that
10 person’s own torts. This is so whether the principal or employer is liable or not.”)
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11 While Universal obviously is liable for torts that Horowitz committed in the
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12 scope of his employment under the doctrine of respondeat superior, Universal is


13 only liable for punitive damages caused by Horowitz’s oppression, fraud, or malice
14 if Universal knew that Horowitz was likely to inflict injury, or if it authorized or
15 ratified Horowitz’s acts. Cal. Civ. Code § 3294(b). Thus, the standards and elements
16 of proof for punitive damages against Horowitz and Universal are different, and
17 Moritz is entitled to pursue claims against both parties.
18 Moreover, if Moritz is not permitted to join Horowitz in this action, he will
19 have to strongly consider filing a parallel action against Horowitz in superior court.
20 In addition to the enormous expense and judicial inefficiency, this creates an
21 obvious risk of inconsistent rulings. Accordingly, this factor weighs heavily in favor
22 of granting Moritz’s leave to amend to join Horowitz as a defendant.
23 2. Moritz’s claim against Horowitz is not time barred.
24 “Generally, if a statute of limitations does not bar a plaintiff from filing suit in
25 state court, a federal court may be less inclined to permit joinder of a non-diverse
26 defendant because he could still theoretically seek relief from state court.”
27 Graunstadt, 2010 WL 3910145, at *3. “But where, as here, requiring a plaintiff to
28 litigate essentially identical issues turning on the same facts in two forums would
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1 waste judicial resources and invite the risk of inconsistent results, the fact that a
2 statute of limitations has not yet tolled should not prevent joinder.” Id.
3 The applicable statute of limitations does not bar Moritz from filing a state
4 court action against Horowitz for promissory fraud. The fraudulent representations
5 were made in 2017 and 2018, and the statute of limitations for the tort of promissory
6 fraud is three years from the discovery of the facts constituting the fraud or mistake.
7 Cal. Code Civ. P. § 338(d). However, as explained above, if this motion is denied,
8 Moritz will have to consider filing a complaint for promissory fraud against
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 Horowitz in superior court.


10 Here, “even though a state court action against Mr. [Horowitz] might be
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11 possible, requiring [Moritz] to litigate essentially the same issues in two forums
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12 would be a waste of judicial resources and risks inconsistent results.” IBC Aviation
13 Servs. v. Compania Mexicana de Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008 (N.D.
14 Cal. 2000) at 1012 (permitting joinder of corporate defendant’s Vice President of
15 Sales and remanding to Superior Court). Thus, this factor also favors Moritz.
16 3. Moritz’s proposed amendment is timely.
17 “When determining whether to allow amendment to add a nondiverse party,
18 courts consider whether the amendment was attempted in a timely fashion.”
19 Gamboa, 2018 WL 3129776, at *3 (quoting Clinco v Roberts, 41 F. Supp. 2d 1080,
20 1083 (C.D. Cal. 1999). “California district courts have held that amendment as late
21 as nine months after the original complaint was filed is still timely under Section
22 1447(e) if no dispositive motions have been filed and the discovery completed thus
23 far will be relevant whether the case is litigated in federal court or state court.”
24 Morales, 2018 WL 2448466, at *4 (citations omitted); see also Gamboa, 2018 WL
25 3129776, at *3 (finding no unreasonable delay in seeking joinder and remand six
26 months after complaint was filed); Lara v. Bandit Industries, Inc., 2013 WL
27 1155523, at *3 (E.D. Cal. Mar. 19, 2013) (finding that filing motion for leave to
28 amend five months after initial complaint and three months after removal was not
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1 untimely when parties had not filed dispositive motions); Yang v. Swissport USA,
2 Inc., No. C 09-03823, 2010 WL 2680800, at *4 (N.D. Cal. July 6, 2010) (granting
3 motion to amend filed nine months after removal, where “no dispositive motions
4 have been filed”).
5 Moritz has obviously not delayed here. Moritz filed his Complaint less than
6 one month ago in superior court, and Universal removed only two weeks later. In
7 fact, if Universal had not filed an early answer in superior court, Moritz could have
8 dismissed his Complaint without prejudice as a matter of right, and re-filed naming
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 Horowitz as defendant. Universal was well aware of this rule, which is presumably
10 why it filed an answer two weeks before it was due and prior to removal. Moreover,
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11 no discovery has been taken in the action, and no dispositive motions have been
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12 filed. Accordingly, this factor also strongly favors granting Moritz leave to amend.
13 4. Moritz’s motive for joinder is valid.
14 “The motive of a plaintiff in seeking joinder of a non-diverse defendant is
15 relevant to a court's decision as to whether to grant leave to amend his original
16 complaint.” Graunstadt, 2010 WL 3910145, at *4. “There is a ‘general
17 presumption’ that joinder is not fraudulent, that is, there is a general presumption
18 that a plaintiff’s sole purpose is not to defeat diversity jurisdiction.” Jackson v.
19 Dollar Tree Distribution, Inc., No. CV 18-2302, 2018 WL 2355983, at *4 (C.D.
20 Cal. May 23, 2018) (citations omitted) (allowing joinder of Defendant’s employee
21 and remanding even when “the Court is skeptical of the situation and [the proposed
22 employee Defendant] is not necessarily an indispensable party”). Moreover,
23 “suspicion of diversity destroying amendments is not as important now that
24 § 1447(e) gives courts more flexibility in dealing with the addition of such
25 defendants. Because of this, ‘when considering motive, courts often consider
26 whether plaintiff is attempting unreasonably to delay proceedings.’” Graunstadt,
27 2010 WL 3910145, at *4. (Citations and quotes omitted).
28
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1 Moritz had a valid reason for not naming Horowitz in his initial filing. Given
2 the very long relationship between the parties, Moritz maintained a shred of
3 misplaced faith that Universal would finally do the right thing and seek to
4 expeditiously resolve the lawsuit. (Abramson Decl., ¶ 2.) Moritz believed that
5 naming Horowitz might close that door prematurely. But instead, Universal
6 retaliated against Moritz by evoking its pay-or-play option to remove him from FF9.
7 (Id., ¶ 3, Ex. “D.”) Now, Moritz seeks to proceed with his case against Universal
8 and Horowitz as he always intended. As the case was initiated less than a month
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 ago, Moritz cannot possibly be said to be attempting to unreasonably delay the


10 proceedings.
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11 Moreover, it is Universal—not Moritz—that is attempting to forum shop. It is


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12 no accident that Universal communicated its retaliatory pay-or-play to Moritz on


13 Sunday, November 4, 2018. On Friday, November 2, 2018, and unbeknownst to
14 Moritz, Universal had answered the Complaint in superior court and filed a notice of
15 removal in this Court. (MacIsaac Decl., ¶¶ 4-5, Exs. “B,” “C.”) This was a full two
16 weeks before Universal’s response to the Complaint was due in superior court.
17 Universal also served its answer by FedEx for Monday morning delivery on
18 November 5, 2018, and did not serve an email “courtesy copy” of the notice of
19 removal until November 5 as well. (Id.)
20 Universal clearly understood that by the time it removed Moritz from the
21 production of FF9, it would be too late for Moritz to add Horowitz as an individual
22 defendant in the superior court action. Universal should not be rewarded for
23 engaging in such blatant gamesmanship.
24 5. Moritz’s fraud claim against Horowitz is valid.
25 “The existence of a facially legitimate claim against the putative defendant
26 weighs in favor of permitting joinder under § 1447(e).” Forward-Rossi v. Jaguar
27 Land Rover N. Am., LLC, No. 216-CV-00949, 2016 WL 3396925, at *4 (C.D. Cal.
28 June 13, 2016) (citing Taylor v. Honeywell Corp., 2010 WL 1881459, at *3 (N.D.
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1 Cal. May 10, 2010); see also Graunstadt, 2010 WL 3910145, at *4 (“If a plaintiff
2 seeking joinder states meritorious claims against a non-diverse defendant, joinder is
3 favored.”) Clearly, a valid promissory fraud claim exist against Horowitz.
4 California Civil Code § 1710(4) specifically defines actionable “deceit” to
5 include “[a] promise, made without any intention of performing it.” California case
6 law clearly recognizes claims for promissory fraud as independent causes of action,
7 even where a breach of contract claim has also been asserted. See Tenzer v.
8 Superscope, Inc., 39 Cal.3d 18, 30 (1985); Tarmann v. State Farm Mut. Auto Ins.
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 Co., 2 Cal.App.4th 153, 158-159 (1991) ( “A false promise is actionable on the


10 theory that a promise implies an intention to perform, that intention to perform or
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11 not to perform is a state of mind, and that misrepresentation of such a state of mind
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12 is a misrepresentation of fact.”) (Emphasis in original.)


13 To maintain a cause of action for promissory fraud, a litigant must allege that
14 the defendant (1) made a promise that it did not intend to perform at the time the
15 promise was made, (2) the defendant made the promise with the intent to deceive
16 and/or induce the plaintiff to do or not do a particular thing, and (3) the plaintiff
17 relied on the false promise, which resulted in damages to the plaintiff. Tarmann, 2
18 Cal. App.4th at 159. In his proposed First Amended Complaint, Moritz has plainly
19 stated all of these elements against the Defendants, including Horowitz, with
20 particularity. (MacIsaac Decl., ¶ 2, Ex. “A.”)
21 Moreover, Universal has already tacitly acknowledged that Moritz can plead a
22 facially valid promissory fraud claim against Horowitz. In his initial Complaint,
23 Moritz pleaded a promissory fraud against Universal, which was primarily based on
24 Horowitz’s intentional misrepresentations. (Complaint, ¶¶ 73-80.) Universal did not
25 demurrer to Moritz’s claim of promissory fraud, and instead answered the
26 Complaint. Thus, the facial validity of Moritz’s claim for promissory fraud is
27 undisputed. Again, this factor weighs heavily in favor of allowing Moritz leave to
28 amend the Complaint to name Horowitz as a defendant.
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1 6. Moritz will clearly be prejudiced if this motion is denied.


2 Courts have held that it prejudices the plaintiff to require him or her to choose
3 between abandoning claims against a potential defendant, or pursuing duplicative
4 and expensive litigation in state court. See Delafontaine v. Volvo Cars of N. Am.,
5 LLC, No. 16-07154, 2016 WL 7338404, at *4 (C.D. Cal. Dec. 19, 2016) (“To force
6 Plaintiff to proceed with expensive litigation in state court against [the putative
7 defendant] would create avoidable prejudice.”) (citation omitted) (granting leave to
8 join non-diverse car dealership defendant in “lemon law” case and remanding to
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9 superior court). That is precisely what will happen here if the Court denies Moritz’s
10 motion for leave to amend.
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11 If the Court denies the motion, Moritz will have to strongly consider filing a
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12 fraud claim against Horowitz in superior court. However, it will be very expensive
13 and inefficient to litigate two parallel actions relating to exact same circumstances.
14 It would also require extensive duplicative discovery, and could easily lead to
15 inconsistent rulings. Given the obvious prejudice to Moritz if the motion is denied,
16 this factor also weighs heavily in favor of permitting the joinder of Horowitz.
17 By contrast, there is no prejudice to Universal if the motion is granted.
18 Universal Pictures’ principal place of business is Los Angeles County, California.
19 Moritz’s Complaint involves all state law claims. There is no prejudice to
20 Universal proceeding in superior court.
21 IV. CONCLUSION
22 As demonstrated herein, Universal is engaging in blatant forum shopping in
23 an attempt to keep its President, Jimmy Horowitz, from being personally named in
24 the action. All of the factors that district courts consider when determining whether
25 to allow joinder following removal support Moritz’s request to join Horowitz as a
26 defendant in the promissory fraud claim. Moreover, if this motion is denied, Moritz
27 will be forced to strongly consider initiating duplicative litigation in superior court
28
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1 and risk inconsistent judgments. Accordingly, Moritz respectfully requests that this
2 Court grant Moritz’s motion for leave to amend to allow joinder of Horowitz.
3
4 DATED: November 16, 2018 KINSELLA WEITZMAN ISER KUMP
& ALDISERT LLP
5
6
7
By: /s/ Dale F. Kinsella
8 Dale F. Kinsella, Attorneys for Neal Moritz
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

and Neal H. Moritz, Inc.


9
10
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1 DECLARATION OF SUANN C. MACISAAC


2 I, Suann C. MacIsaac, declare as follows:
3 1. I am an attorney duly admitted to practice before this Court. I am a
4 partner with Kinsella Weitzman Iser Kump & Aldisert LLP (“KWIKA”), attorneys
5 of record for Plaintiffs Neal Moritz and Neal H. Moritz, Inc. (collectively,
6 “Moritz”). If called as a witness, I could and would competently testify to all the
7 facts within my personal knowledge except where stated upon information and
8 belief.
KINSELLA WEITZMAN ISER KUMP & ALDISERT LLP

9 2. Attached hereto as Exhibit “A” is a true and correct copy of the First
10 Amended Complaint that Moritz is seeking leave to file in this action. This First
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11 Amended Complaint adds as a Defendant the President of Universal Pictures, James


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12 (“Jimmy”) Horowitz, to the third claim for promissory fraud.


13 3. On October 17, 2018, Moritz filed his original complaint (the
14 “Complaint”) in this action against Defendants Universal City Studios, LLC and
15 FFSO Productions, LLC’s (collectively, “Universal”) in Los Angeles County
16 Superior Court (“superior court”). Because Moritz immediately served the
17 Complaint, Universal’s answer was due on or about November 16, 2018.
18 4. On Friday, November 2, 2018, Universal filed its answer (the
19 “Answer”) to the Complaint in superior court. This was approximately two weeks
20 before it was due. Universal served the Answer by Federal Express, which meant
21 that it was not received by KWIKA until Monday, November 5, 2018. Attached
22 hereto as Exhibit “B” is a true and correct copy of Universal’s Answer with the
23 attached proof of service showing that it was served by Federal Express.
24 5. On Friday, November 2, 2018, Universal also filed a notice of removal
25 in this Court. Universal’s counsel waited until Monday, November 5, 2018 at 5:50
26 p.m., to email KWIKA a courtesy email copy of the notice of removal. Attached
27 hereto as Exhibit “C” is a true and correct copy of an email that I received from
28
10054.00004/605938
22 2:18-cv-09392-R-FFM
PLAINTIFFS’ MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
Case 2:18-cv-09392-R-FFM Document 16 Filed 11/16/18 Page 26 of 26 Page ID #:197

1 Universal's counsel, Dylan Bonfigli, on November 5, 2018, attaching inter alia


2 Universal's notice of removal.
3 6. On November 6, 2018, my partner, Dale Kinsella, had a telephone
4 conference with Universal's lead counsel, Bruce Van Dalsem, regarding inter alia
5 Moritz's motion for leave to amend the Complaint to add Universal Pictures
6 President, Jimmy Horowitz, as an individual defendant on the third claim for
7 promissory fraud. Mr. Van Dalsem refused to stipulate to leave to amend, or to the
8 remand of the action to superior court. Mr. Kinsella informed me ofthis
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a 9 conversation just after it took place. On the following day, I am informed Dale
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x 10 Kinsella had a second telephone conference with Mr. Van Dalsem where they again
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o 12 Mr. Van Dalsem informed Mr. Kinsella that Universal would oppose both motions.
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r,~~U• 14 I declare under penalty of perjury under the laws of the United States of
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N J ~~ 16 Executed November 16, 2018, at Santa~/Ionica, Califo~,nia.
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10054.00004/605938 23 2:18-cv-09392-R-FFM
PLAINTIFFS' MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT