Damian v. Yahia Meftah Sole Prop.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 MELANIE E. DAMIAN, 7 Case No. 22-cv-02573-JCS Plaintiff, 8 v. ORDER GRANTING SUMMARY 9 JUDGMENT AS TO YAHIA MEFTAH YAHIA MEFTAH, et al., 10 Re: Dkt. Nos. 118, 130 Defendants. 11

12 The Court previously issued an order to show cause (dkt. 130)1 why Defendants’ motion to 13 dismiss (dkt. 118) should not be converted to summary judgment under Rule 12(d) of the Federal 14 Rules of Civil Procedure, and why summary judgment should not be granted in Defendants’ favor 15 under that rule and Rule 56(f). The Court has reviewed Plaintiff Melanie Damian’s response (dkt. 16 131) to the order to show cause,2 and remains satisfied that for the purpose of Florida Statutes 17 section 726.110(1), Damian “could reasonably have . . . discovered” the contents of documents at 18 issue no later than the date those documents were delivered to Damian or her agents. 19 Conditioning the limitations period on an expected rate of review, presumptions of which 20 documents would be reviewed first, and other such considerations of how a claimant might 21 approach information that is in the claimant’s possession would render the standard of reasonable 22 discovery overly subjective and unworkable. While exceptions to that principle might be 23 appropriate if, for example, documents are concealed, encrypted, or otherwise inaccessible, no 24 such circumstances are present here, and the mere volume of documents produced to Damian does 25 to change the fact that she could have discovered the transactions at issue once the document were 26

27 1 Damian v. Meftah, No. 22-cv-02573-JCS, 2022 WL 17835612 (N.D. Cal. Dec. 21, 2022). 1 delivered simply by reading one of those documents. As noted in the order to show cause, this 2 conclusion does not impose an unjust burden on claimants who receive voluminous document 3 productions, because even if a claimant does not actually discover potentially fraudulent 4 transactions reflected therein until some period of days or weeks after receiving the documents, 5 the claimant has a full year from receipt to discover the transactions and bring a claim. 6 Damian does not dispute that the CFTC presented her or her agents with documents 7 disclosing the transfers of funds to Defendant Yahia Meftah (or his alter ego, Yahia Meftah Sole 8 Proprietorship) more than one year before she entered a tolling agreement to preserve any 9 remaining claims. The claims at issue against Yahia were therefore time-barred at the time 10 Damian entered the tolling agreement, were not preserved by that agreement, and remained barred 11 when Damian later filed this action. Accordingly, for the reasons stated in this order and the 12 previous order to show cause, summary judgment is GRANTED in favor of Yahia. 13 As for Defendant Zak Meftah, however, Damian now argues that her claims are not barred 14 because she still does not know the details of subsequent transfers from Yahia to Zak. Pl.’s 15 Response (dkt. 131) at 12. It is not clear why Damian did not raise this argument in her original 16 opposition brief, where she argued only that her claim against Zak related back to her original 17 complaint, which she contended was timely based solely on her delayed actual discovery of the 18 transfers to Yahia. That said, she has raised the argument now, and despite having an opportunity 19 to respond, Defendants have not done so. 20 In the context of relation back, Defendants argued that Damian’s original complaint 21 demonstrates that she was aware of the same facts regarding Zak’s role when she commenced this 22 action, even though she did not name Zak as a party at that time. Mot. (dkt. 118) at 11–12 & n.4; 23 Reply (dkt. 122) at 5. If true, that would indicate that Damian actually discovered the transfer to 24 Zak more than one year before bringing a claim against him,3 thus undermining her new argument 25 that her claim is timely in relation to discovery of the subsequent transfer to Zak. Contrary to 26 Defendants’ argument, though, the original complaint did not include the same allegations with 27 ] respect to Zak. Instead, Damian originally alleged that Zak directed AIP to pay his share of the 2 || proceeds of the illegal trading scheme to Yahia, and that Yahia received those payments “on 3 || behalf of’ Zak. Compl. (dkt. 1) § 10(B). Those allegations do not necessarily indicate that Yahia 4 || ever transferred the funds he received from AIP to Zak, as Damian has now alleged in her 5 operative second amended complaint. The Court declines to infer from Damian’s original 6 || allegations that at the time she commenced this action, she knew about the subsequent transfer to 7 || Zak that she now alleges. 8 Even so, it is not entirely clear whether the timing of Damian’s discovery of the later 9 || transfer to Zak is relevant to the limitations period for her claim. The Court is aware of only one 10 || case considering how a similar statute of limitations applied to a defendant who received funds in 11 a second transaction subsequent to the original purportedly fraudulent transfer. Interpreting 12 California’s version of the UFTA, a district court held that “[t]he relevant fraudulent transfer for 13 statute of limitations purposes is the initial fraudulent transfer, not any subsequent transfer.” So v. 14 || Land Base, LLC, No. CV 08-03336 DDP (AGRx), 2010 WL 3894797, at *1 (C.D. Cal. Oct. 1, 3 15 || 2010). But the So court provided no analysis to support that conclusion, and the parties here have a 16 || not addressed the issue beyond Damian’s similarly bare assertion that the statute of limitations for 3 17 || her claim against Zak should run from when she reasonably could have discovered the subsequent 18 || transfer from Yahia to Zak. 19 In the absence of reasoned caselaw or arguments on this issue, the Court declines to grants 20 || summary judgment sua sponte as to Damian’s claim against Zak. The parties should be prepared 21 to address at the February 10, 2023 case management conference how they wish to proceed on that 22 || claim.4 23 IT ISSO ORDERED. 24 || Dated: February 6, 2023 25 5 C Zn JOSEPH C. SPERO 26 ief Magistrate Judge 27 28 yt. Pees or consented to the jurisdiction of a magistrate judge for all purposes under 28