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ELECTRONICALLY FILED Alan M. Goldberg SBN: 136988 Superior Court of California LAW CRAFTERS LEGAL SERVICES, INC. County of Santa Barbara 5660 Etiwanda Avenue, Suite 3 Darrel E. Parker, Executive Officer Tarzana, CA 91356 8/24/2021 12:42 PM 818-921-2226 By: Elizabeth Spann, Deputy lawcrafters@ gmail.com Attorneys for Plaintiff/Cross-Defendant Rebecca Brand SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA BARBARA -ANACAPA DIVISION REBECCA BRAND, Case No. 20CV 0032110 Plaintiff, [Assigned to Honorable Colleen K. Sterne, SB vs. Dept.5]1112 MICHAEL ALAN BRAND, JR; 1125 VERONICA SPRINGS ROAD, LLC, a PLAINTIFF’S SECOND AMENDED13 Califomia limited liability company; and COMPLAINT FOR: DOES 1 through 10, inclusive,14 1) QUIET TITLE TO REAL PROPERTY Cross-Defendants. 2) CONSTRUCTIVE TRUST15 3) FRAUDULENT INDUCEMENT16 MIMI BRAND, f/k/a/ MICHAEL ALAN 4) FRAUD BRAND, JR,, an individual and 1125 5) TORTIOUS BREACH OF CONTRACT17 VERONICA SPRINGS ROAD LLC, a 6) BREACH OF CONTRACT Califomia limited liability company, 7) BREACH OF FIDUCIARY DUTY18 8) SPECIFIC PERFORMANCE Cross-Complainants, 9) CANCELLATION OF WRITTEN19 INSTRUMENTS vs.20 REBECCA BRAND, an individual; 112521 VERONICA SPRINGS ROAD, LLC, a California limited liability company, and22 ROES 1 through 50 inclusive, Cross-Complaint Filed: January 17, 2020 Cross-Cross-Defendants. Trial Date: None set232425 COMES NOW Plaintiff REBECCA BRAND ("Plaintiff') who, for cause of action, alleges:26 PARTIES27 1 Plaintiff Rebecca is now, and at all times relevant to this action was, a resident of28 1 PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTthe County of Santa Barbara, State of California. 2 Plaintiff Rebecca is informed and believes and thereon alleges that Defendant MIMI BRAND fka MICHAEL ALAN BRAND, JR. ("Mimi") is a resident of the County of Los Angeles, State of California; Mimi was a resident of the County of Santa Barbara, State of California during certain times relevant to this action. 3 Plaintiff Rebecca is informed and believes and thereon alleges that Defendant 1125 VERONICA SPRINGS ROAD LLC (the "LLC") is a California limited liability company doing business in the County of Santa Barbara, State of Califomia. 4 Plaintiff Rebecca is ignorant of the true names and capacities of defendants sued herein as DOES 1 through 10, and therefore sues these defendants by such fictitious names.10 Plaintiff Rebecca will amend this complaint to allege their true names and capacities when11 ascertained. Plaintiff Rebecca is informed and believes and thereon alleges that each of these12 fictitiously named defendants claim some right, title, estate, lien, or interest in the hereinafter-13 described property adverse to Plaintiff Rebecca’s title and their claims, and each of them,14 constitute a cloud on Plaintiff Rebecca’s title to that property.15 5. Plaintiff Rebecca is the sole owner of the beneficial interest in and the fee simple16 title to that certain real property, located in Santa Barbara County, California, commonly known as17 1125 Veronica Springs Road (Assessor's Parcel No. 049-040-042) (the "Property") and more18 particularly described in Exhibit A attached hereto and incorporated herein.19 JURISDICTION AND VENUE20 6 The Superior Court has jurisdiction over this action pursuant to California Code of21 Civil Procedure section 760.040.22 7 The Property is located within the County of Santa Barbara, State of California;23 thus, Santa Barbara Superior Court is the proper venue to hear this Complaint pursuant to California Code of Civil Procedure section 760.050.24 INTRODUCTION25 8 The basis of Plaintiff Rebecca’s title is a Quitclaim Deed from John Palminteri26 ("Palminteri") granting the Property in fee simple to the LLC, dated December 18, 2009, and27 recorded in the Official Records of the County of Santa Barbara on December 21, 2009, as28 2 PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTDocument No. 2009-0075830 (the "2009 Deed"). A copy of the 2009 Deed is attached hereto and incorporated herein as Exhibit B. 9 At the time of the recording of the 2009 Deed, Plaintiff Rebecca was the sole member of the LLC and the intended holder of the beneficial interest of the Property, subject to certain conditions. A copy of the 2009 Assignment of LLC Interest from Palminteri to Plaintiff Rebecca, dated December 21, 2009, is attached hereto and incorporated herein as Exhibit C. 10. The conditions of Plaintiff Rebecca’s interests in the LLC and the Property were pursuant to a Confidential Settlement A greement dated December 18, 2009, a corresponding Agreement with Palminteri dated December 21, 2009, and a Residential Lease with the LLC dated December 21, 2009. A copy of the Indemnity Agreement is attached hereto and incorporated herein as Exhibit D. A copy of the Residential Lease is attached hereto and incorporated herein as Exhibit E.12 11. Paragraph 2 of the Indemnity Agreement required Plaintiff Rebecca to:13 a. Pay all costs and expenses associated with the LLC and the Property; and14 b Refinance, fully satisfy, or fully assume the existing mortgage debt on the15 Property on or before December 18, 2016, or face the following monetary obligations to16 Palminteri:17 1 $50,000 if the requirement above was met between December 18,18 2016 and December 17, 2017;19 ii. $100,000 if the requirement above was met between December 18,20 2017 and December 17, 2018; and21 iii. $150,000 if the requirement above was met between December 18,22 2018 and December 18, 2019.23 Cc. If Plaintiff Rebecca failed to refinance, fully satisfy, or fully assume the existing mortgage debt on the Property on or before December 18, 2019, the legal and equitable24 title to the Property would have reverted to Palminteri.25 12. In 2011, Plaintiff Rebecca was anticipating a remarriage at some point in the future26 and wanted to avoid the contemplated spouse from inadvertently gaining a community property interest in the LLC or the Property. In furtherance of this goal, prior to executing formal estate 3 PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTplanning documents, Plaintiff Rebecca transferred her interest in the LLC and the LLC's interest in the Lease, to Mimi, who is Plaintiff Rebecca's eldest child. Plaintiff Rebecca has three children to whom she intended to leave the property to in her estate. Therefore, in the interest of preventing a marital dispute regarding the property that could drag on for years and be very costly, Plaintiff Rebecca transferred via a Lease Assignment and Assignment of the LLC to Mimi, who is Plaintiff Rebecca’s eldest child, to hold it in trust, and the only one at the time over the age of 18 years old. Plaintiff Rebecca’s intention was not to grant a community property interest to any future marital partner but to leave the Property to her children in her Will upon her death. Copies of the 2011 Assignment of LLC Interest and Lease Assignment from Plaintiff Rebecca to Mimi are attached hereto and incorporated herein as Exhibit F.10 13. In or about 2015, there were family conversations about refinancing the property11 and wanting to do the refinance as a family and since Defendant Mimi was graduating law school,12 she and agreed to be a leader in the refinance. The agreement was that her brothers would follow13 when they graduated school and joining in on the property mortgage as they would become able as14 well, since they were still in school. Everyone in the family knew there would be loan penalties15 paid to Palminteri at certain future dates if the property was not refinanced in a timely manner. As16 Plaintiff Rebecca was approaching the initial deadline for the initial financing obligation under the17 Indemnity Agreement, and as consideration for Mimi’s participation and to hold the property in18 trust, Plaintiff Rebecca made efforts to help Defendant Mimi qualify to refinance the Property by19 giving Defendant Mimi $105,000. The property was held in the LLC at the time.20 14, On or about January 9, 2016, the initial deadline for Plaintiff Rebecca’s refinancing21 obligation under the Indemnity Agreement, which was actually still another year away, Mimi22 qualified to refinance the Property with Rebecca’s financial assistance. Mimi signed an Individual Quitclaim Deed from the LLC to Mimi, dated January 9, 2016, which was recorded in the Official23 Records of the County of Santa Barbara on January 14, 2016, as Document No. 2016-000170424 (the "2016 Deed"). A copy of the 2016 Deed is attached hereto and incorporated herein as Exhibit25 G26 15. On or about January 9, 2016, Mimi signed a Deed of Trust to Timios Title, which27 was recorded in the Official Records of the County of Santa Barbara on January 14, 2016, as28 4. PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTDocument No. 2016-0001705. A copy of the 2016 Deed of Trust is attached hereto and incorporated herein as Exhibit H. 16. Plaintiff Rebecca is now, and has been since 2005, in possession of the Property. 17. Plaintiff Rebecca has paid all costs and expenses associated with the LLC and the Property since in or about December 2009, including, but not limited to, the mortgage and property taxes. 18. Plaintiff Rebecca is informed and believes and on such information and belief alleges that Mimi claims an interest in the Property as the holder of the bare legal title, which interest is adverse to Plaintiff Rebecca. 19. Plaintiff Rebecca is informed and believes and on such information and belief10 alleges that the LLC, under the direction of Mimi, might claim an interest in the Property, which11 interest is adverse to Plaintiff Rebecca. The claim of the LLC, if any, is uncertain and would be12 contrary to the terms of the agreement.13 20. Plaintiff Rebecca is informed and believes and on such information and belief14 alleges that the unknown defendants, designated as DOES 1 through 10, might claim interests in15 the Property as assignees, and/or successors, and/or creditors of Mimi, which interests are adverse16 to Plaintiff Rebecca. The claims of DOES 1 through 10, if any, are unknown.17 FIRST CAUSE OF ACTION18 Quiet Title19 21. Plaintiff Rebecca realleges and incorporates herein Paragraphs 1 through 20.20 22. Plaintiff Rebecca is seeking to quiet title against the claims of Defendants as21 follows:22 a. The claim of Mimi described in Paragraph 18, pursuant to the 2016 Deed.23 b The uncertain claim of the LLC described in Paragraph 19, pursuant to the 2009 Deed.24 Cc. The claims of DOES 1 through 10 described in Paragraph 10, whether or25 not the claim or cloud is known to Plaintiff Rebecca.26 23. The claims of Defendants are without any right whatever, and such defendants have27 no right, title, estate, lien, or interest whatever in the Property or any part thereof except the28 5 PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTfollowing: a. The Right of Way held by the County of Santa Barbara recorded June 29, 1970 as Instrument No. 16799, in Book 2312, Page 1360 of Official Records. Records of Santa Barbara County. 24. The basis of Plaintiff Rebecca’s title to the property described as 1125 Veronica Springs Road, Santa Barbara, California 93105, was derived as follows: Plaintiff Rebecca resided in the property since 2005 with John Palminteri and her three children. On or about December 18, 2009, Plaintiff Rebecca entered into an agreement between herself and John Palminteri, who transferred the property to Plaintiff Rebecca via a Quitclaim deed, with an accompanying Assignment of LLC, Residential Lease and Indemnity Agreement.10 25. At the time of the recording of the 2009 Deed, Plaintiff Rebecca was the sole11 member of the LLC and the intended holder of the beneficial interest of the Property, subject to12 certain conditions.13 26. Plaintiff Rebecca has been in continuous possession of the real property by virtue14 of both legal and equitable title from Palminteri as set forth in the LLC, Lease, and quit claim15 deed, since 2009 until January 9, 2016, when Defendant Mimi refused to concurrently execute the16 new LLC that included the family. After many family meetings and attempts, Defendant Mimi17 refused to execute the new LLC agreement that included the family. Plaintiff Rebecca has18 continued to pay the mortgage, all taxes, expenses, improvements, maintenance and assessments19 that have been levied or assessed against the real property described in paragraph 24 of this20 complaint.21 27. In 2011, Plaintiff Rebecca transferred the title to the LLC to Mimi in order to22 protect the property in the event of a marital issue. Plaintiff Rebecca never intended to relinquish23 legal or equitable title to Mimi and the reason she seeks to quiet title is because of the fraud committed by Mimi in stating that Mimi would hold the property in constructive trust for Plaintiff24 Rebecca and the family and participated in refinancing the property and once the loan was25 obtained, Mimi promised to transfer the property back to Plaintiff Rebecca in the form of an LLC26 document. Even though Defendant Mimi refused to abide by her agreement as constructive27 trustee, Rebecca continued and does continue to pay all mortgage and expenses of the property28 6 PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTand lives in the property. 28. All Defendants named herein claim an interest in the property adverse to Plaintiff Rebecca in that Defendant Mimi asserts she is the owner of the property as a result of the transfer of the property by Plaintiff Rebecca to her. 29. Plaintiff Rebecca seeks to quiet title in her favor. SECOND CAUSE OF ACTION Equitable Interest in the Property Pursuant to a C onstructive Trust 30. Plaintiff Rebecca realleges and incorporates herein Paragraphs 1 through 29. 31. Alternatively, the Property is held by Defendant Mimi in a constructive trust for Plaintiff Rebecca. Civil Code section 2223.10 32. Here, Plaintiff Rebecca transferred bare legal title to the Property to Defendant11 Mimi for the purpose of preserving her separate property and refinancing.12 33. A constructive trust may be imposed upon showing that the retention of the13 property by another would constitute unjust enrichment. Calistoga Civic Clubv. City of Calistoga14 (1983) 143 Cal.App.3d 111, 116.15 34. The retention of a legal interest in the Property by Mimi would result in16 Mimi's unjust enrichment.17 35. Mimi has no legal or equitable right, claim or interest in the Property, but instead,18 Mimi is an involuntary trustee holding the Property and any profits therefrom in constructive trust19 for Plaintiff Rebecca with the duty to convey the same to Plaintiff Rebecca forthwith.20 THIRD CAUSE OF ACTION21 (For Fraudulent Inducement)22 36. Plaintiff Rebecca realleges and incorporates herein Paragraphs 1 through 35.23 37. After many conversations, between 2011 until January 9, 2016, Plaintiff Rebecca, Mimi and the family regarding Plaintiff Rebecca’s anticipation of marriage at some point and her24 concems about the Property, Mimi agreed to hold the property in trust for Plaintiff Rebecca and25 the family. On January 9, 2016, Defendant Mimi signed the refinancing papers and, on that date,26 refused to simultaneously rewrite an LLC to reflect the property to be held by Rebecca, and27 continued to refuse to do so. With the financial assistance from Plaintiff Rebecca in the amount of28 7. PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINT$105,000, Mimi did in fact qualify for a refinance of the mortgage. Plaintiff Rebecca is now and has been in possession of the property since 2005, has been making the mortgage payments, expenses, improvements and paying the taxes on the Property. In 2011, Plaintiff Rebecca assigned the LLC interest to Defendant Mimi for the purpose of preserving her separate property in the event of marriage. Defendant Mimi was picked because Mimi was the oldest and only child over 18 years of age and agreed to help as the family was in the process of creating a trust. The other two siblings were under 18 years of age. 38. Defendant Mimi knew Plaintiff Rebecca was vulnerable and used coercion because she was aware that Plaintiff Rebecca needed to get a refinance loan on the house to release Palminteri from the house mortgage loan in a couple of years or else start paying penalties or10 worse, eventually the property would revert back to Palminteri in entirety. Defendant Mimi knew11 her mother Plaintiff Rebecca had a strong preference for the family to be involved with any12 refinancing of the property. Her mother Rebecca voiced that it was more preferable than getting13 any outsiders involved with the property. All of the children agreed. Defendant Mimi offered to14 participate as the first of the children to graduate from law school and have ajob. The other15 children were still in school. Plaintiff Rebecca trusted Mimi to help navigate through a refinance,16 and Rebecca gave Mimi a $105,000 in order to qualify for a refinance loan. Defendant Mimi17 promised to create an LLC instrument immediately after the loan refinance to give the property18 back to Plaintiff Rebecca and continue with the family to create a trust. Rebecca relied on this19 representation to continue forward with the refinance and the agreement. The real estate, this20 family house, is and always had been the major asset of the family’s estate. Rebecca’s wishes and21 the family conversations had been and continue to be that after Rebecca’s death, the children22 would inherit the house.23 39. Mimi has no legal or equitable right, claim or interest in the Property as actual trustee, but became an involuntary trustee holding the Property and any profits therefrom in24 constructive trust for Plaintiff Rebecca with the duty to convey to her the same when she breached25 the agreement to sign the property back over to Rebecca.26 40. For 8 months leading up to about January 2016, Plaintiff Rebecca made efforts to27 help Mimi qualify to refinance the Property, which was held in the LLC at the time, with Mimi28 8 PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTholding an interest to the membership interests of the LLC, in order to refinance, so the property would not have to pay penalties nor revert back to Palminteri. This was the refinancing clause within the Indemnity Agreement. Plaintiff Rebecca gave approximately $105,000 to Mimi for the refinancing qualification which was consideration in exchange for the transfer. 41. With Plaintiff Rebecca’s assistance of the financial contribution, Mimi qualified to refinance the Property and Mimi signed an Individual Quitclaim Deed. 42. On or about January 9, 2016, Mimi signed a Deed of Trust to Timios Title, which was recorded in the Official Records of the County of Santa Barbara on January 14, 2016. 43. Before that time, Mimi made the false representation that she would hold the Property in Trust, not retain the Property and would return the Property to Plaintiff Rebecca and10 family (siblings) as the family asset. The representation was material to the transaction.11 44. Mimi made the representation either with the knowledge that it was false or with12 reckless disregard as to the truth.13 45. Mimi made the representation with the intent of inducing Plaintiff Rebecca to assist14 with $105,000 for the refinancing in order for Mimi’s name to be placed on the real estate title as15 the sole owner with no intention of following through on promises to hand property back to16 Plaintiff Rebecca and/or execute a new LLC as discussed prior to creating the constructive trust.17 46. Plaintiff Rebecca reasonably relied on Mimi’s misrepresentation when entering into18 the contract.19 47. In reliance of the promises and representations of Defendant Mimi, Plaintiff20 Rebecca assisted in loan refinance. If Plaintiff Rebecca had known the true intention of Defendant21 Mimi at the time this transaction was entered into, Plaintiff Rebecca would not have agreed to22 enter into the family plan of assisting Mimi to obtain a refinance mortgage loan.23 48. Defendant Mimi’s misrepresentation caused injury to Plaintiff Rebecca in that Plaintiff Rebecca could now lose her home to Mimi because of her fraud and fraudulent24 inducement based on the lie that she would prepare a new LLC and retum the property to Plaintiff25 Rebecca.26 49. Plaintiff Rebecca has been injured and suffered monetary damages as a result of27 Defendant Mimi’s willful misrepresentations and failure to perform her promises in an amount to28 9. PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTbe shown according to proof at the time of trial. However, Plaintiff Rebecca wants the retum of the property which is the family home. 50. The acts of Mimi were done with fraud, oppression and malice, and with the intention of depriving Plaintiff Rebecca of her legal rights and otherwise causing injury and was despicable conduct that subjected Plaintiff Rebecca to cruel and unjust hardship in conscious disregard of her rights, so as to justify an award of exemplary and punitive damages. FOURTH CAUSE OF ACTION (For Fraud) 51. Plaintiff Rebecca realleges and incorporates herein Paragraphs 1 through 50. 52. In early 2011, Plaintiff Rebecca had a conversation with Mimi and her other two10 children that at some point she may get married again, and if so, she wanted to make sure the11 property did not have another person claiming any ownership. Plaintiff Rebecca thought it was12 best to put the house in the children’s names at least for a time and then she would take the13 property back and would look into correct legal scenarios in order to create a family trust.14 53. Plaintiff Rebecca surmised that the easiest way to do this would be just to assign15 the LLC to the children, but then Defendant Mimi was the only one over 18 years of age.16 Defendant Mimi stated that may be an issue however, she agreed to temporarily place the house in17 her name, until later where the family would configure a better way, with a lawyer. In May 2011,18 all three of the children were present and the paperwork regarding the LLC had been done. This19 was over two (2) years after the deed had changed to Plaintiff Rebecca from Palminteri. Plaintiff20 Rebecca did this because people she was dating had spoken of marriage and she had heard horror21 stories from friends about new husbands getting involved with owning someone's house they22 owned. Plaintiff Rebecca did not want to take that chance, knowing that one day she would leave23 the house to children upon her death. Plaintiff Rebecca also wanted to have the financial power of owning the house, the equity, money for improvements, maintenance, and did not want anyone to24 claim any equity in the house that she may marry in the future.25 54. Plaintiff Rebecca desired that eventually the house would be passed onto her26 children. The children and Plaintiff Rebecca spoke about wanting the house to be kept forever, for27 them and their families to be able to visit, stay, as life continued, and how wonderful it was to28 -10- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINThave this particular beautiful home with the incredibly beautiful and large yard for future generations. It is a special property, a treasure, and the family all felt the same about this and spoke about it often. 55. Defendant Mimi agreed that she would become the LLC sole member, then later, the family would regroup and Plaintiff Rebecca would prepare a better way of holding title so that no one could take the house away. Plaintiff Rebecca and the children discussed that at some point, Rebecca would need to work with a lawyer to prepare the necessary trust documents of how to handle the house title and the trust in the event of her death. The family agreed that this was not an urgent need to do immediately. Plaintiff Rebecca also wanted all the children to be able to be part of it, as one of the children, Landon was only 14 at the time and Clayton still under 18 years10 of age. Plaintiff Rebecca believed that eventually a good trust was to be made, which was11 discussed as the family all wanted an iron clad vehicle that another third person would not get12 involved with any of the house ownership.13 56. Subsequent to the family conversations, Defendant Mimi made representations to14 Plaintiff Rebecca, individually, and as the subsequent temporary owner of the Property, that she15 would retain the Property in the constructive trust and retum the Property to the Plaintiff Rebecca.16 Defendant Mimi said she would work with her mother and her other siblings in efforts to get a17 properly written legal vehicle that would protect the Property as the family asset.18 57. Defendant Mimi agreed to refinance. Plaintiff Rebecca then gave Mimi $105,00019 over an 8-month period preceding the refinance as consideration for Mimi’s cooperation, so Mimi20 had a sufficient amount of money in order to refinance.21 58. After the house loan refinanced and with Mimi refusing to create the new LLC22 giving back Rebecca the house, Rebecca asked why Mimi refused. Mimi said she was just “too23 tired.” Rebecca knew Mimi had just transitioned to being Transgender and had recently been suffering from mental illness. Mimi was at that time living in NYC. Plaintiff Rebecca went to24 visit Mimi in NYC and discovered that she was very depressed. Plaintiff Rebecca decided to stay25 in NYC with Mimi for about 3 weeks to help her get her things and life together to return to26 California. Defendant Mimi promised Plaintiff Rebecca that she would prepare a new LLC27 agreement giving back Plaintiff Rebecca ownership. At the time, Plaintiff Rebecca was seeking to28 -11- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTget a trust prepared now that Palminteri was off the loan and her children were all over 18 years of age. Plaintiff Rebecca’s plan was to get a trust together that included their biggest asset, the property. Defendant Mimi’s promise to prepare a new LLC would allow Plaintiff Rebecca to get the trust prepared. However, Defendant Mimi’s excuse for not preparing the new LLC was that she was exhausted and tired and just didn't do it after the loan was completed. Plaintiff Rebecca repeatedly asked Defendant Mimi and even offered to hire an attomey to prepare the new LLC yet Mimi said not to, that she was going to do it, soon. However, she never did. 59. These representations of Defendant Mimi were false. Mimi knew that the representations were false when she made them or made the representations recklessly and without regard for their truth.10 60. On Thanksgiving in 2016, at a family gathering with Plaintiff Rebecca’s children,11 Mimi was asked about preparing and signing a new LLC and she said she did not want to talk12 about it and was adamant. There were many occasions since Defendant Mimi’s refinance of the13 property where the question was put to Defendant Mimi, “When will you do this?” This occasion14 marks once again the way this conversation would happen within the family. Plaintiff Rebecca15 and her two other sons Clayton and Landon knew that Mimi was having issues. Since Defendant16 Mimi was so emotional in not wanting to discuss this topic of preparing the new LLC and spoke in17 loud and aggressive terms, Plaintiff Rebecca and sons Clayton and Landon also, Mimi’s siblings18 let it go for that moment, once again.19 61. On December 29, 2016, about a month later, at Picasso Restaurant in Las Vegas,20 Nevada, Plaintiff Rebecca, her two sons Landon, Clayton, Clayton's girlfriend and Mimi were21 having dinner. Plaintiff Rebecca stated again to Defendant Mimi that it was time to rewrite the22 LLC and work it all out with Clayton and Landon. That it was time and the family needed to all23 be together and agree that they would do this immediately. Defendant Mimi stated to everyone loudly at the table, that she was not going to do that, and the house was hers. Defendant Mimi24 further stated, "I'm not going to write any LLC, the House is my House." All of the family were25 witness to this statement, and it sent everyone in shock. When the family spoke later, they noted26 that this was awful and alarming. Plaintiff Rebecca, Clayton and Landon surmised that27 Defendant Mimi was just emotionally frazzled, and out of it.28 -12- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINT62. Defendant Mimi intended that Plaintiff Rebecca rely on the representations. 63. Plaintiff Rebecca reasonably relied on Defendant Mimi’s representations. 64. Long after the refinance, Plaintiff Rebecca provided Mimi more money, about $2,500 a month for six (6) months for an apartment in Beverly Hills also as consideration for Mimi’s performance of the agreement. At that time, Mimi worked fora law firm in Beverly Hills, Jamie Hall's law firm, who incidentally Defendant’s counsel in this case. Mimi stated that one day she would be able to eam more money since she was working as a Plaintiff's attomey and needed more settlements to happen, so asked her mother, Plaintiff Rebecca, to please keep continuing to pay Mimi’s rent in Beverly Hills. Defendant Mimi later quit working for Jamie Hall as a Legal Assistant, as she was having a very hard time emotionally.10 65. After Plaintiff Rebecca refused to pay rent for Mimi for her Beverly Hills11 apartment, then Mimi’s dad paid many months’ rent in Beverly Hills, then stopped as well. Mimi12 soon came to live with Plaintiff Rebecca at the property. Defendant Mimi lived with Plaintiff13 Rebecca for months, then about 4 months later, Plaintiff Rebecca began to see Mimi spiral into a14 deeper depression. There became friction about Defendant Mimi's lifestyle, and Mimi moved out.15 Plaintiff Rebecca has not spoken to Mimi since. About 4 months later, bill collectors were16 attempting to serve papers to Mimi. Plaintiff Rebecca discovered that lawsuits for credit cards17 were filed with the court system and became gravely concerned that the property would be18 encumbered with Defendant Mimi's name on the loan. Plaintiff Rebecca worried that some19 creditors may be able to foreclose on the property, Rebecca did not know what else Mimi may be20 involved in, and if the property might somehow have been used as security for Mimi’s debts.21 Plaintiff Rebecca was extremely worried about the title, and as a result she filed the instant22 lawsuit.23 66. Plaintiff Rebecca’s reliance on Defendant Mimi’s representations was a substantial factor in causing the harm. But for the representations made by Mimi, Plaintiff Rebecca would24 never have transferred the Property to Mimi, in 2011, nor participate in the refinancing of the25 Property in 2016.26 67. Asa direct result of Defendant Mimi’s conduct described above, Plaintiff Rebecca27 has suffered damages in an amount to be proven at trial.28 -13- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINT68. Defendant Mimi’s conduct was oppressive, fraudulent, and malicious, and constitutes despicable conduct in conscious disregard for Plaintiff Rebecca’s rights. Therefore, Plaintiff Rebecca is entitled to an award of exemplary or punitive damages under California Civil Code § 3294. FIFTH CAUSE OF ACTION (For Tortious Breach of C ontract) 69. Plaintiff Rebecca realleges and incorporates herein Paragraphs 1 through 68. 70. Plaintiff Rebecca and Defendant Mimi entered into the Contractual A greement to transfer Plaintiff Rebecca’s Property to Defendant Mimi in order to preserve her separate property. Defendant Mimi agreed to this arrangement and that she would retain the Property in Trust for10 Plaintiff Rebecca, as eldest of the siblings. Defendant Mimi knew and agreed that the intention11 was to maintain the Property in a constructive trust for Plaintiff Rebecca in order to preserve her12 separate Property, in case of a new marriage and subsequently transfer the Property to her three13 children, via her Will upon her death or a trust to be written later.14 71. Among other things, the Indemnity Agreement, Lease Assignment and Quit Claim15 Deed expressly granted Defendant Mimi the Property, however, the intention and agreement were16 for Mimi to hold the Property in Trust for Plaintiff Rebecca. Plaintiff Rebecca did not transfer the17 Property to Mimi for her to keep the Property for herself, Plaintiff Rebecca had two other children.18 There would be no reason for Plaintiff Rebecca to “give” the Property to Mimi and leave her other19 two children out of the family asset and forever more, their only substantial family asset.20 72. Defendant Mimi failed and refused to perform on rewriting the LLC to terms21 Plaintiff Rebecca and the family had discussed upon the refinance of the property. Defendant22 Mimi should have put it immediately back in Plaintiff Rebecca’s name. This is a direct and23 intentional breach of the agreement to transfer the property back to Plaintiff Rebecca and was done with intent and a depraved heart. Defendant Mimi knew, from the beginning, that she was to24 return the property to Plaintiff Rebecca and falsely agreed to return it. Defendant Mimi said she25 was willing and wanted to perform the agreement and therefore Plaintiff Rebecca forwarded her26 $105,000 up front to qualify for the loan as consideration to perform the agreement so the property27 would stay 100% in the family.28 -14- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINT73. Defendant Mimi made excuse after excuse, deliberately claimed she was too tired, or would do it soon, or some other excuse for about a year after the property was refinanced. During this time, many process servers came to the door, for Mimi, because she was in debt. This caused Plaintiff Rebecca great grief, stress, illness, and emotional turmoil as Plaintiff Rebecca worried the property may be foreclosed upon. This also caused stress in the family relationships as they were deteriorating because of the drama of Mimi lying about how she said she was “on board” as a “star quarterback,” “star of the team,” until Plaintiff Rebecca would soon take her part and refinance the loan. 74. Plaintiff Rebecca was worried about foreclosure of the property because of Mimi's actions, therefore, Plaintiff Rebecca investigated and discovered that Mimi had many lawsuits10 pending in the court for overdue credit card debt. Plaintiff Rebecca discovered that Mimi was11 over $75,000 in debt and worried that liens would be placed on the property. Plaintiff Rebecca12 finally had to bring the lawsuit in order to stop any liens from being placed on title and still13 worried that Defendant Mimi had other outstanding debts that may be attached to the property.14 75. At the end of July 2021, there was an individual parked in front of the house on15 several occasions. After asked, he said he was on a "stake out" for Defendant Mimi and would not16 divulge the purpose of the stake out. This situation worried Plaintiff Rebecca that Defendant17 Mimi may possibly have had a hard money loan that may attach to the house, or some other bad18 situation. It was not simply a process server as before, there were many of those, but this was19 different.20 76. Another reason for this tortious breach of contract is when Plaintiff Rebecca asked21 Defendant Mimi why she would not follow through on the LLC portion after getting the loan, one22 time in June 2019 she said, "I think I will just sell the house out from under you and take all the23 money and move to Mexico, so don't push me -- or do you want me to just slit my wrists right here?" Mimi was yelling and extremely aggressive. Plaintiff Rebecca did not know what to do,24 what to think and was frightened on every level. Frightened that Defendant Mimi may commit25 suicide, and also frightened she might just sell the house from under Plaintiff Rebecca and that she26 was fleeing to Mexico to escape some criminal activity. This was a harrowing experience for27 Plaintiff Rebecca.28 -15- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINT77. Defendant Mimi was not telling Plaintiff Rebecca the truth about any of her financial dealings, and this made Plaintiff Rebecca very frightened about the security of the property. Mimi was not looking for ajob like she told Plaintiff Rebecca she was, she was not tending to her depression and other issues. At one time, as consideration to cause Mimi to comply with the agreement, Plaintiff Rebecca tried to assist her with paperwork to get her California bar license and that seemed to go well but ultimately, she never finished the paperwork and did not get her license. Defendant Mimi let the time pass on without doing the same in New Y ork. Defendant Mimi passed both New Y ork and the California bar exams the first time, she is brilliant, but just would not follow through. 78. Defendant Mimi used her emotional issues as an excuse and as a way to stall out to10 everyone in the family that she was deceiving us in her promises to return the house to the LLC11 after the refinance and cooperate within our family.12 79. In January 2016, the refinance was underway and Mimi informed Plaintiff Rebecca13 that she was transgender, which was fine with Plaintiff Rebecca who was very supportive.14 Plaintiff Rebecca knew, though, that there was great risk of suicide with being transgender along15 with depression and other very difficult mental circ*mstances which may be inherent or develop in16 such a transition. Plaintiff Rebecca was very sympathetic and empathetic to this as she loves her17 daughter and was concerned about her well-being. Therefore, because of all these issues, Plaintiff18 Rebecca did not push Mimi too hard, suspecting that she as very fragile.19 80. Because Mimi refused to adhere to the family property deal, this limited Plaintiff20 Rebecca to the other financial leverage of the property as it needed repairs. Had Plaintiff Rebecca21 had the LLC in her name she would have been able to take some equity out in order to make the22 necessary repairs, (i.e., the termite eaten deck may actually be dangerous, the driveway that was23 crumbling and in dire need of repair and the septic system needed work). However, Plaintiff Rebecca was finally able to get it repaired but worried about the financial means to do more24 needed things. The property is an older property built in 1972 and needs maintenance.25 81. Plaintiff Rebecca performed all of her obligations under the contractual A greement.26 82. Defendant Mimi breached the Indemnity Agreement by, among other things,27 failing to execute, notarize, and record a revised LLC with the Califomia Secretary of State28 -16- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTimmediately after acquiring the Property. 83. Defendant Mimi’s intentional participation in the fraud and attempt to convert the Property into her sole possession constitutes deceit, fraud and is a direct cause of Defendant Mimi’s breach of the Indemnity Agreement. Defendant Mimi knew as early as December 29, 2016, while the family was at a restaurant for dinner that she had no intention of preparing a new LLC and returning the property to Plaintiff Rebecca because she stated, "I'm not going to write any LLC, the House is my House." 84. As a direct result of Defendant Mimi’s participation in the fraud and resulting breach of the Indemnity Agreement between Plaintiff Rebecca and Defendant Mimi, Plaintiff Rebecca has suffered damages in an amount to be determined at trial. Defendant Mimi essentially10 dragged out the preparation of the new LLC by making excuse after excuse and reassurance after11 reassurance and never prepared the new LLC.12 85. Defendant Mimi knew that Plaintiff Rebecca would rely primarily on the13 representation that Mimi would hold the Property in constructive Trust while Plaintiff Rebecca14 managed it and subsequently return the Property to Plaintiff Rebecca. Notwithstanding this15 knowledge, Defendant Mimi intentionally, willfully, fraudulently, and maliciously attempted to16 claim title to the from Plaintiff Rebecca to defraud and oppress Plaintiff Rebecca, thereby17 tortuously breaching the contract between Plaintiff Rebecca and Defendant Mimi. Plaintiff18 Rebecca is therefore entitled to recover punitive damages.19 SIXTH CAUSE OF ACTION20 (For Breach of Contract)21 86. Plaintiff Rebecca realleges and incorporates herein Paragraphs 1 through 85.22 87. On May 14, 2011, Plaintiff Rebecca and Defendant Mimi entered into a verbal23 contractual agreement whereby Plaintiff Rebecca would transfer the LLC to Mimi and Mimi agreed to hold Plaintiff Rebecca’s property in constructive Trust for Plaintiff Rebecca and the24 family. Mimi received the assurance that she would obtain a one-third interest in the property25 upon Plaintiff Rebecca’s death.26 88. In January 2016, as the deadline for the refinance was approaching, Defendant27 Mimi was to obtain a refinance mortgage on the property. In order to qualify for the refinance,28 -17- PLAINTIFF REBECCA BRAND’S SECOND AMENDED COMPLAINTPlaintiff Rebecca gave Mimi $105,000, as consideration for her performance. 87. At the end of the refinance, and for some time after, Plaintiff Rebecca also was paying Mimi’s rent in Beverly Hills, $2,500 a month, which was additional consideration. 88. It is interesting to note that Mimi agreed to fully get the refinance loan for the consideration of family wealth, to have use in visiting, for future use and value of the property and for inheritance eventually. At the time of the agreement, Defendant Mimi knew Plaintiff Rebecca had scleroderma and had knowledge of an average 8-year time span (Plaintiff Rebecca was diagnosed in 2014). The family had a “family plan” on enhancing the value of the property with improvements, possible buildouts, possible ADU development and more which this was part of the plan to enhance the value and use of the property. These future plans would also increase cash10 flow of the property, which was a benefit to the family. Plaintiff Rebecca has not been able to11 effectuate these plans because Defendant Mimi breached her agreement and refused to retum the12 property to Plaintiff Rebecca.13 89. Defendant Mimi was to immediately, upon obtaining the refinance sign a new LLC14 name and entity for Plaintiff Rebecca. Subsequently, Mimi refused to do so. The details of the15 new LLC had been discussed by the family and more details would be agreed upon together as16 Plaintiff Rebecca determined her Will and mechanics of Plaintiff Rebecca’s biggest asset and later17 a better family Trust would be created.18 90. At this time, Defendant Mimi agreed and knew she was to hold the Property in19 constructive Trust for Plaintiff Rebecca but subsequently decided to claim the Property as her20 own. It was never Plaintiff Rebecca’s intention to create a forfeiture of her home by directly21 giving the home to Defendant Mimi when Rebecca had two other children and Mimi did not even22 live in the property at that time.23 91. Plaintiff Rebecca p
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For Plaintiff Bui Simon: Patricia L. Glaser, Cynthia E. Organ, Alexander R. Miller, Bryan A. McIntyre, Glaser Weil Fink Howard Jordan & Shapiro LLP For Defendants Angela Scott, Scott Milden, and Milden, LLC: Bert H. Deixler, Patrick J. Somers, David T. Freenock, Kendall Brill & Kelly LLP RULING:(1) For the reasons set forth herein, the motion of defendant Scott Milden to disqualify counsel for plaintiff Bui Simon is denied.(2) The motion of plaintiff Simon to compel the deposition of defendant Scott Milden is granted to the extent set forth herein. The motion of defendant Milden for a protective order is denied. All requests for awards of monetary sanctions are denied.(3) On or before September 4, 2024, counsel for the parties shall meet and confer, in person, by telephone, or by video conference, as to the date, time, and place of the deposition of Scott Milden. If the parties are unable to agree as to a date, time, or place by that time, counsel for Simon shall, by September 9, communicate in writing three alternative dates during the weeks of September 16, 23, and 30 as suitable for the deposition; by September 10, counsel for Milden shall communicate in writing which of these dates are accepted for the deposition to occur. If counsel for Milden fails timely to communicate acceptance of one of these dates, Simon may notice the deposition to occur on any of the three dates previously communicated. Defendant Scott Milden shall appear for deposition at the date, time, and place agreed or noticed. The parties may otherwise agree in writing to a different date, time, or place for the deposition.BackgroundThis is a derivative action involving The Office of Angela Scott LLC (TOOAS or Company), a Texas limited liability company. As alleged in plaintiffs’ first amended complaint (FAC), plaintiff Bui Simon (Simon) is a 50 percent owner/ member of TOOAS and defendant Angela Scott (Scott) is the other 50 percent owner/ member. The FAC asserts claims against Scott, (her husband) defendant Scott Milden (Milden), and (Milden’s company) defendant Milden LLC, based upon alleged improper payments from TOOAS to Scott, Milden, and Milden LLC. There is a related action, Simon v. Scott, case No. 23CV03184, asserting similar claims brought by Simon individually.Simon filed this derivative action on June 2, 2023. Simon filed the FAC on September 12, 2023. The FAC asserts 16 causes of action: (1) declaratory relief; (2) breach of fiduciary duty; (3) aiding and abetting breach of fiduciary duty; (4) waste of corporate assets; (5) fraud; (6) aiding and abetting fraud; (7) conversion; (8) violation of Penal Code section 496; (9) third-party beneficiary breach of contract; (10) third-party beneficiary breach of the covenant of good faith and fair dealing; (11) inducing breach of contract; (12) intentional interference with contractual relations; (13) money had and received; (14) accounting; (15) restitution from unjust enrichment; and (16) injunctive relief. These claims are all asserted by Simon as a derivative action for the benefit of nominal defendant TOOAS.On October 12, 2023, defendants Scott, Milden, and Milden LLC (collectively, defendants) filed their answer to the FAC, generally denying the allegations thereof and asserting 32 affirmative defenses.On December 29, 2023, defendants filed a motion for judgment on the pleadings. On March 13, 2024, after striking the title of the so-called sixteenth cause of action, the court denied that motion in its entirety. Also on March 13, the court set trial for November 27, 2024.On June 7, 2024, on the stipulation of the parties, the court entered a protective order for the confidential designation of discovery.On July 19, 2024, Simon filed this motion to compel defendant Milden to appear for deposition. Also on July 19, Milden filed this motion to disqualify counsel for plaintiff.On July 22, 2024, Milden filed this motion for protective order relating to his deposition.All motions are opposed.Defendants have filed summary judgment/ summary adjudication motions that are pending. Trial is now set for December 18, 2024.Analysis(1) Motion to Disqualify Counsel“ ‘A trial court’s authority to disqualify an attorney derives from the power inherent in every court “[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.” [Citations.]’ [Citation.]” (In re Charlisse C. (2008) 45 Cal.4th 145, 159.)“Conflicts of interest commonly arise in one of two factual contexts: (1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client of the attorney; and (2) in cases of simultaneous representation, where an attorney seeks to represent in a single action multiple parties with potentially adverse interests. The primary fiduciary value at stake in each of these context differs, and the applicable disqualification standards vary accordingly. In successive representation cases, ‘the chief fiduciary value jeopardized is that of client confidentiality.’ [Citation.] Therefore, the disqualification standards we have developed for such cases focus on the former client’s interest ‘in ensuring the permanent confidentiality of matters disclosed to the attorney in the course of the prior representation.’ [Citation.] In simultaneous representation cases, ‘[t]he primary value at stake ... is the attorney’s duty—and the client’s legitimate expectation—of loyalty, rather than confidentiality.’ [Citation.] Because a conflict involving an attorney’s duty of loyalty is ‘[t]he most egregious’ kind of conflict, the disqualification standards we have developed for simultaneous representation cases are ‘more stringent’ than those that apply in successive representation cases; ‘[w]ith few exceptions, disqualification [in a case of simultaneous representation] follows automatically, regardless of whether the simultaneous representations have anything in common or present any risk that confidences obtained in one matter would be used in the other. [Citation.]’ [Citation.] This strict rule recognizes that ‘[a] client who learns that his or her lawyer is also representing a litigation adversary, even with respect to a matter wholly unrelated to the one for which counsel was retained, cannot long be expected to sustain the level of confidence and trust in counsel that is one of the foundations of the professional relationship. All legal technicalities aside, few if any clients would be willing to suffer the prospect of their attorney continuing to represent them under such circ*mstances.’ [Citation.]” (In re Charlisse C., supra, 45 Cal.4th at pp. 159–160.) (A) Nature of Prior RepresentationAs asserted in the declaration of Milden:Milden was hired by SeaVees, Inc. (SeaVees) in January 2015 as an Executive in Business Development. (Milden decl., ¶ 2.) SeaVees is a footwear brand and company located in Santa Barbara. (Ibid.) At the time Milden was hired, Milden lived in Dallas, Texas, and worked for Justin Boot Company as Vice President of International Sales. (Milden decl., ¶ 3.) Because SeaVees was located in Santa Barbara, after Milden accepted the position, he moved to California. (Ibid.)As part of Milden’s work for SeaVees, Milden discovered that the current management was overstating the company’s forecasted sales to the board, and refused go along with false representations to the SeaVees board and its investors, including in particular Herbert and Bui Simon. (Milden decl., ¶ 4.) Because Milden refused to cover up the inflated sales and valuation, SeaVees terminated Milden in May 2015. (Milden decl., ¶ 5.) Milden’s termination was extremely distressing, including causing him concern about his business reputation. (Ibid.)Upon learning of Milden’s termination, Simon, an investor in SeaVees with her husband Herbert Simon, expressed gratitude for Milden’s decision to blow the whistle. (Milden decl., ¶ 6.) For that reason, Simon secured joint representation for herself and Milden from the law firm Glaser Weil (GW) and agreed to pay all Milden’s legal expenses. (Ibid.) Milden retained GW as litigation counsel to protect his business reputation and acumen, respond to his unlawful termination from SeaVees, fight any false narrative about his termination, and negotiate an equitable settlement. (Ibid.) In retaining GW, Milden provided them with information about Milden’s business reputation and stated goals for Milden’s own employment and business opportunities. (Ibid.)Although GW agreed to jointly represent Milden and Simon, GW did not provide Milden with a written disclosure regarding the joint representation or obtain his informed written consent to the joint representation. (Milden decl., ¶ 7.) Because Milden was not so advised, Milden did not understand the risks and potential conflicts associated with joint representation. (Ibid.) Although GW agreed to represent Milden, GW did not prepare a written engagement letter for Milden to sign and Milden did not receive or sign any written engagement agreement. (Milden decl., ¶ 8.)On June 3, 2015, GW sent a letter to SeaVees, asserting that the facts surroundingMilden’s termination “raise serious issues and suggest substantial liability of the Company,” including “liability for intentional or negligent misrepresentation, as well as for violation of the State’s ‘Whistleblower Statute.” (Milden decl., ¶ 9 & exhibit A.) GW and SeaVees engaged in settlement negotiations through August 2015. (Milden decl., ¶ 10.) When SeaVees responded to GW’s demand letter by suggesting that Milden’s future interactions with others associated with SeaVees, including Simon, might need to be limited, Milden sought legal advice from GW. (Milden decl., ¶ 11.) After receiving advice from GW, Milden eventually declined a proposed settlement so that there were no limitations on his ability to work or interact with others, including with Simon and TOOAS. (Ibid.)During Milden’s work at TOOAS, Milden directly sent and received numerous emails to and from Simon, her agents, including Mark Bernstein, and other employees of TOOAS from his company email address, which appears in emails as “Scott Milden scott@theofficeofangelascott.com(link sends email),” regarding TOOAS business. (Milden decl., ¶ 12.)As asserted in the declaration of Simon:In early 2015, Simon was surprised to learn that Milden was working for SeaVees, a company in which Simon’s husband had recently acquired a minority ownership interest. (Simon decl., ¶ 2.) In May 2015, Milden reached out to Simon, explaining that he was in a difficult financial situation because of the threat of Milden losing his job. (Simon decl., ¶ 3.) Milden reached out to Simon almost every day with the details of his concerns and Simon attempted to coach Milden on communicating with his boss. (Ibid.) This came too late; Milden was terminated within days. (Ibid.) Milden and Scott (Milden’s wife and Simon’s business partner) pleaded for Simon’s assistance and guidance. (Ibid.)After many conversations with Milden, Simon wanted Milden to receive sound advice, so Simon reached out to her attorney Joel Klevens at GW. (Simon decl., ¶ 6.) Simon explained to Klevens the details of Milden’s situation and discussed with Klevens the SeaVees employment letter that Milden had sent to Simon. (Ibid.) Klevens had further questions about details that Milden had shared with Simon. (Ibid.) Simon brought Milden into the conversation with Klevens, and was present on most, if not all, subsequent phone calls and email communications between Milden and Klevens regarding Mr. Milden’s termination from SeaVees. (Ibid.) The details that Milden shared with Klevens about his situation at SeaVees had already been shared with Simon by Milden before Klevens’s involvement. (Ibid.) Simon’s intention in reaching out to Klevens was to get professional advice about if it was appropriate for Milden to send an appeal letter to obtain a severance that would allow him to have some money while searching for and transitioning to a new job. (Ibid.) After Milden and Simon spoke with Klevens, Klevens sent a letter to SeaVees asking for severance, and engaged in some back and forth about a potential settlement. (Ibid.) There was no discussion of TOOAS in connection with the settlement discussions. (Ibid.)GW’s invoices for Klevens’s time were sent directly to Simon, who paid the $4,097.50 in charges in full as the one who asked for Klevens’s help. (Simon decl., ¶ 7.) Milden was not expected to pay for any part of Klevens’s time because Simon was always clear that Simon was GW’s client. (Ibid.) Simon made it clear to Milden that if any legal work was required beyond the sending of a letter and reviewing the responding to that letter, Milden would need to obtain his own counsel. (Simon decl., ¶ 8.) Simon believes that the matter did not proceed any further. (Ibid.)From the evidence presented by the parties, including the two declarations summarized above, it is clear that an attorney-client relationship existed between Klevens of GW and Milden. Among other things, the letter written by Klevens to SeaVees dated June 3, 2015, states specifically that “This office represents Scott Milden.” (Milden decl., ¶ 9 & exhibit A, p. 5.) The evidence further shows that this representation of Milden as against SeaVees concluded in 2015. This action was filed in 2023 where GW represents Simon against Milden (and others). The applicable disqualification rules, therefore, are those applied to successive representation and not to simultaneous representation. (B) Successive Representation“A lawyer who has formerly represented a client in a matter shall not thereafter represent another person1 in the same or a substantially related matter in which that person’s* interests are materially adverse to the interests of the former client unless the former client gives informed written consent.*” (Rules Prof. Conduct, rule 1.9(a).)“After termination of a lawyer-client relationship, the lawyer owes two duties to a former client. The lawyer may not (i) do anything that will injuriously affect the former client in any matter in which the lawyer represented the former client, or (ii) at any time use against the former client knowledge or information acquired by virtue of the previous relationship. [Citations.] For example, (i) a lawyer could not properly seek to rescind on behalf of a new client a contract drafted on behalf of the former client and (ii) a lawyer who has prosecuted an accused person* could not represent the accused in a subsequent civil action against the government concerning the same matter. [Citations.] These duties exist to preserve a client’s trust in the lawyer and to encourage the client’s candor in communications with the lawyer.” (Rules Prof. Conduct, com. [1] foll. rule 1.9.) “Two matters are ‘the same or substantially related’ for purposes of this rule if they involve a substantial* risk of a violation of one of the two duties to a former client described above in Comment [1]. For example, this will occur: (i) if the matters involve the same transaction or legal dispute or other work performed by the lawyer for the former client; or (ii) if the lawyer normally would have obtained information in the prior representation that is protected by Business and Professions Code section 6068, subdivision (e) and rule 1.6, and the lawyer would be expected to use or disclose that information in the subsequent representation because it is material to the subsequent representation.” (Rules Prof. Conduct, com. [3] foll. rule 1.9.) “To determine whether there is a substantial relationship between successive representations, a court must first determine whether the attorney had a direct professional relationship with the former client in which the attorney personally provided legal advice and services on a legal issue that is closely related to the legal issue in the present representation. [Citation.] If the former representation involved such a direct relationship with the client, the former client need not prove that the attorney possesses actual confidential information. [Citation.] Instead, the attorney is presumed to possess confidential information if the subject of the prior representation put the attorney in a position in which confidences material to the current representation would normally have been imparted to counsel. [Citations.] When the attorney’s contact with the prior client was not direct, then the court examines both the attorney’s relationship to the prior client and the relationship between the prior and the present representation. If the subjects of the prior representation are such as to ‘make it likely the attorney acquired confidential information’ that is relevant and material to the present representation, then the two representations are substantially related. [Citations.] When a substantial relationship between the two representations is established, the attorney is automatically disqualified from representing the second client.” (City and County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839, 847.)“Contrary to defendants’ assertion, this materiality requirement is not satisfied by mere relevance. The presumption that former counsel possesses confidential information is triggered only if there is a substantial risk that confidential information would be used in the current representation, which occurs where it is ‘reasonable to conclude’ that the information ‘would materially advance the [present] client’s position.’ [Citations.] As one recent case put it, reversing an attorney disqualification, to support disqualification ‘ “ ‘the information acquired during the first representation [must] be “material” to the second; that is, ... directly at issue in, or have some critical importance to, the second representation.’ ” ’ [Citation.]” (Victaulic Company v. American Home Assurance Company (2022) 80 Cal.App.5th 485, 512.)Milden argues that there is a substantial relationship between the two representations based upon Simon’s allegations regarding Milden’s prior employment.“Additionally, Defendant Milden has used his wife’s connections with the Simon family to obtain a number of business opportunities for himself. For example, when Defendant Milden was invited to a Simon family Easter party as Defendant Scott’s guest, he networked his way into a job at the shoe company SeaVees, in which Plaintiff is also an investor. On information and belief, Defendant Milden was fired by SeaVees within months. Similarly, Defendant Milden obtained a position at the Jean Shop from a Simon family friend who he met at the Simon family home.” (FAC, ¶ 52.)“While Defendant Milden’s name appears on some of the initial formation documents for the Company, when Plaintiff invested in the Company she made it expressly clear that she was going into business with Defendant Scott, not her husband, and that Defendant Milden was not to be part of the Company. It was always Plaintiff’s goal to empower and support Defendant Scott, not her husband, especially in light of his track record in business.” (FAC, ¶ 53.)“This understanding is incorporated into the Operating Agreement. Again, among other things, section 4.4(D) provides that Defendant Scott has no power to hire employees without Plaintiff’s approval. Ex. A § 4.4(D) (‘[N]o Manager shall have authority to cause the Company to engage in the following transactions without first obtaining the approval of all of the Members: . . . The hiring of employees, accountants and attorneys for the Company.’).” (FAC, ¶ 54.)“Section 3.5 also provides that affiliates of members are not ‘entitled to remuneration for services rendered or goods provides to the Company,’ and Section 6.8(A) provides that if Defendant Scott and Defendant Milden divorce, Defendant Milden’s community property membership interest in TOOAS must be distributed to or be purchased by Defendant Scott (or Plaintiff, if Defendant Scott fails to execute such sale), ensuring that Defendant Milden would not obtain any interest in the Company in a divorce. Ex. A §§ 3.5, 6.8(A).” (FAC, ¶ 55.)From these allegations, Milden argues that central to Simon’s case is that Milden was not permitted to work at TOOAS or receive compensation from TOOAS because he was an alleged failed businessman. (Motion, at pp. 9-10.)In support of the motion, Milden points to Knight v. Ferguson (2007) 149 Cal.App.4th 1207 (Knight). In Knight, the plaintiff owned a restaurant and decided to open a second branch of that restaurant. (Id. at pp. 1210-1211.) The plaintiff found a potential partner and met with an attorney to discuss the lease and partnership agreement for the new restaurant. (Id. at p. 1211.) The attorney billed the plaintiff for his consultations. (Ibid.) The plaintiff did not form a partnership with this potential partner, so the plaintiff asked defendants—plaintiff’s sister and brother-in-law—to take the potential partner’s place in the ownership and management of the branch restaurant. (Ibid.) The defendants agreed. (Ibid.) The attorney with whom the plaintiff had previously met was also the attorney for the defendants. (Ibid.) Later, the plaintiff sued the defendants for breach of contract and sought dissolution of the partnership, alleging that the defendants breached their duties as corporate directors; the defendants filed a cross-complaint alleging fraud, breach of contract, and breach of fiduciary duty. (Ibid.) The same attorney substituted in to represent the defendants in this litigation. (Ibid.)In the trial court in Knight, the plaintiff moved to disqualify the attorney from representing the defendants. (Knight, supra, 149 Cal.App.4th at p. 1211.) In support of the motion, the plaintiff declared that she told the attorney of her feelings about litigation and her position relating to the lease, as well as her relationship with the first potential partner and her business plans. (Ibid.) In response, the attorney declared that he did not obtain confidential information from the plaintiff, that he met with the plaintiff with the plaintiff’s attorney at the request of the defendants who were also present, and that they discussed possible litigation with the potential partner arising out of their partnership agreement. (Id. at p. 1212.) The trial court granted the motion, finding that the attorney’s role as litigation counsel was brief, but was not peripheral, so that confidential material to the current dispute would normally have been imparted to the attorney. (Ibid.)The Knight court affirmed. (Knight, supra, 149 Cal.App.4th at p. 1217.) “The ‘court should “focus on the similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases.” ’ [Citation.]” (Id. at p. 1213.) Applying this standard, the court noted that, as a result of the meetings the attorney had with the plaintiff, the attorney discussed with plaintiff’s other attorney a strategy which anticipated possible future litigation relating to the agreement with the first potential partner. (Id. at p. 1215.) This set the framework for the defendants to take over the first potential partner’s interest, which was directly at issue in the litigation between the plaintiff and the defendants. (Ibid.)Simon distinguishes Knight by noting that, in Knight, the prior representation involved issues with the same lease and the same partnership agreement as in the subsequent litigation, leading to the conclusion that there was a substantial relationship between the two representations. (Opposition, at p. 10.) Simon argues that Milden’s employment issues in the prior relationship are different from the issues here and with a different employer, distinguishing Knight from the instant case. With respect to the allegations of the FAC, Simon asserts that these allegations are background and peripheral to the claims in the FAC.The evidence presented shows that GW’s prior representation of Milden was peripheral to the claims in this matter. The FAC alleges claims principally against Scott based upon allegations that Scott breached her fiduciary duties by using TOOAS funds improperly for her own benefit and that Scott employed and paid Milden and his company notwithstanding express obligations not to do so. As to the latter allegations, the breaches alleged based upon the employment of Milden by TOOAS stem from Milden’s status as Scott’s husband, from Milden’s receipt of such improperly paid funds, and from Scott hiring Milden without Simon’s approval in violation of the express terms of the operating agreement. (E.g., FAC, ¶ 54.) The reasons why Simon would not want Milden as an employee of TOOAS is not relevant to whether there is a breach of those contractual and fiduciary duties. Indeed, any reference to Milden’s employment with SeaVees, or with others apart from TOOAS, could be eliminated from the FAC without materially changing the nature or scope of Simon’s claims against Milden.The prior representation involved Milden’s issues with his prior employer. To whatever extent there was overlap in time with Milden’s employment issues with SeaVees and the development of the TOOAS operating agreement, the evidence indicates that the overlap was not a matter of confidences imparted in connection with the prior representation but a matter of communications among Simon, Scott, and Milden themselves.The court concludes that, within the standards of this motion, no substantial relationship, is shown to exist between the two representations. This is a sufficient alternative basis to deny this motion. (C) DelayAs both a separate basis for denial of the motion and an additional factor supporting denial of the motion, Simon argues that there is prejudicial delay in the making of this motion. This action was filed on June 2, 2023. Milden filed his answer to the FAC on October 12, 2023. Trial was set for November 27, 2024, at a case management conference on November 29, 2023. Milden, together with the other defendants filed a motion for judgment on the pleadings on December 29, 2023, that was heard and denied on March 13, 2024, at which time trial was confirmed for November 27, 2024. (The court has since continued the trial by three weeks to December 18.) According to counsel for defendants, attorney Patrick J. Somers, counsel first learned of the prior representation of GW on July 9, 2024, while preparing Milden for his deposition then scheduled for July 12. (Somers decl., ¶ 2.) “[A]ttorney disqualification can be impliedly waived by failing to bring the motion in a timely manner.” (Liberty National Enterprises, L.P. v. Chicago Title Ins. Co. (2011) 194 Cal.App.4th 839, 844 (Liberty National).) “[A]t least in California, the delay has to be extreme or unreasonable before it operates as a waiver. [Citations.] It has been held that when the party opposing the motion has made a prima facie showing of unreasonable delay causing prejudice, disqualification should not be ordered, and the burden shifts to the moving party to justify the delay. [Citation.] It has also been held that the prejudice to the opponent must be extreme.” (Id. at p. 845.)“[People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135 (SpeeDee Oil)] ... noted that ‘[d]epending on the circ*mstances’ [citation], a disqualification motion permits a trial court to consider such things as the financial burden that would accompany requiring a client to replace a disqualified counsel after the challenged counsel performed a substantial amount of work, and whether ‘despite knowing the pertinent facts, a party unreasonably delayed seeking disqualification and so caused its opponent significant prejudice.’ [Citation.]” (Antelope Valley Groundwater Cases (2018) 30 Cal.App.5th 602, 625.)“ ‘Factors relevant to the reasonableness of a delay include the “stage of litigation at which the disqualification motion is made” and the complexity of the case. [Citation.] Delay can also be “an indication that the alleged breach of confidentiality was not seen as serious or substantial by the moving party,” and can suggest “the possibility that the ‘party brought the motion as a tactical device ....’ ” [Citation.] “If the opposing party makes a prima facie showing of extreme delay and prejudice, the burden then shifts to the moving party to justify the delay.” [Citations.]’ [Citation.]” (Antelope Valley Groundwater Cases, supra, 30 Cal.App.5th at p. 625.)The court finds that Simon has met her burden to show unreasonable delay and prejudice. This matter is a Texas limited liability company derivative action; the related case involves an individual owner of a limited liability company against the other owner, who is also the manager, for breach of fiduciary duties owed to the plaintiff individually. Both cases involve nuanced distinctions between and among the respective rights at issue. These cases are relatively complex actions. At the time of the filing of this motion to disqualify on July 19, 2024, the action had been pending over one year. Trial is set for December 18, 2024. Defendants have filed motions for summary judgment or alternatively for summary adjudication that are set for hearing on November 6, 2024—nearly as late as such motions can be heard with the impending trial date—and are based upon five volumes of evidence. Granting the motion at this late stage would necessarily and substantially delay the disposition of the motions for summary judgment and trial.“The trial court must have discretion to find laches forecloses the former client’s claim of conflict. The burden then shifts back to the party seeking disqualification to justify the delay. That party should address: (1) how long it has known of the potential conflict; (2) whether it has been represented by counsel since it has known of the potential conflict; (3) whether anyone prevented the moving party from making the motion earlier, and if so, under what circ*mstances; and (4) whether an earlier motion to disqualify would have been inappropriate or futile and why.” (River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, 1309 (River West).)Milden does not provide a satisfactory response to any of the River West factors. Milden himself has known about the potential conflict since he was named as a defendant in this action in the FAC in September 2023. It is only Milden’s counsel who learned of this potential conflict later, when preparing Milden for deposition. Milden has been represented by counsel during the entirety of this litigation. There is no evidence that anyone prevented Milden from making the motion earlier. Indeed, Milden filed a motion for judgment on the pleadings in December 2023 in order to address the merits of this derivative action without any claim being made that there was a conflict with counsel. There is no showing that an earlier motion to disqualify would have been inappropriate.The court finds that Milden’s delay in bringing this motion is a sufficient basis to deny the motion, even if, contrary to the above analysis, there is found to exist a substantial relationship between the two representations. (D) Equitable Considerations“Ultimately, disqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility. [Citation.] The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar.” (SpeeDee Oil, supra, 20 Cal.4th at p. 1145.)Whether delay is sufficient by itself to deny the motion, prejudicial delay, together with the circ*mstances here, demonstrate that there is a strong basis for denying the motion. The undisputed evidence is that GW has been, significantly and for a long, continuous time, counsel for Simon, including Simon’s involvement with TOOAS. There would be a substantial burden on Simon to replace GW as counsel in this matter. At the same time, “[d]elay is significant not only from the perspective of prejudice to the nonmoving party, it is also an indication that the alleged breach of confidentiality was not seen as serious or substantial by the moving party.” (Liberty National, supra, 194 Cal.App.4th at p. 847.) Despite knowing that Simon had arranged and paid for Milden’s legal assistance in addressing his employment issue with SeaVees, Milden did not raise the issue of a potential conflict until immediately before Milden’s deposition. This effectively derailed the deposition and interfered with Simon’s own trial preparations, but, as the filing of the summary judgment motions demonstrate, did not derail Milden’s counsel’s own litigation efforts. These facts provide a strong inference that Milden did not view the potential conflict as “serious or substantial.” “It has also been held that one can properly consider the possibility that the ‘party brought the motion as a tactical device to delay litigation.’ [Citation.]” (Id. at p. 847.)Based upon the totality of the facts and circ*mstances here, and weighing the admissible evidence, the motion to disqualify GW will be denied.(2) Discovery MotionsThe two discovery motions also before the court involve the deposition of Milden. On July 19, 2024, Simon filed a motion to compel Milden to appear for deposition and to answer questions. Milden’s opposes this motion on the grounds that he does not dispute Simon’s right to take his deposition, but objects to the deposition being taken by Simon’s present counsel because of the conflict addressed in Milden’s motion to disqualify GW as counsel. Correspondingly, on July 22, 2024, Milden filed a motion for a protective order to prevent GW from deposing or cross-examining Milden.As discussed above, the court will deny the motion to disqualify GW. As a consequence, there is no reason why the deposition of Milden should not take place promptly and by Simon’s current counsel. Milden expressly does not move to preclude his deposition from being taken at all. (Motion for Protective Order, at pp. 14-15.) Milden’s motion for protective order is therefore denied.With respect to the motion to compel Milden’s deposition, Milden makes a number of procedural objections. Regardless of whether or not there is any merit to those objections, “[i]f the motion for a protective order is denied in whole or in part, the court may order that the deponent provide or permit the discovery against which protection was sought on those terms and conditions that are just.” (Code Civ. Proc., § 2025.420, subd. (g).) The court will therefore order the deposition of Milden to take place. The court will not address in this motion any matter relating to the conduct of that deposition except to overrule the objection regarding the deposition being conducted by GW as counsel for Simon. To the extent there are any objections to particular questions, the disposition of such objections would need to be the subject of a question-specific meet and confer process and a further motion.Each party has requested an award of monetary sanctions against the other. Although the court denied the motion to disqualify and found that the timing and circ*mstances justify an inference of gamesmanship in the making of that motion, the court does not find that motion to be frivolous. A consequence of making that motion, however, was to prevent the deposition of Milden to go forward until the disqualification issue was resolved. Under the totality of the circ*mstances, the court finds that an award of sanctions against Milden or its counsel would be unjust. All requests for awards of sanctions will therefore be denied. (See Code Civ. Proc., §§ 2025.420, subd. (g), 2025.450, subd. (g)(1), 2025.480, subd. (j).)
Ruling
24PR00349
Aug 29, 2024 |Judge Colleen K. Sterne |24PR00349
Appearances are required to update the court.
Ruling
24PR00323
Sep 03, 2024 |Judge James F. Rigali |24PR00323
Probate Notes:Appearances required, including the minor. (CRC 7.952.)Judicial Council form MC-356 must be completed and signed by a representative of the financial institution, attesting to the fact that the full settlement amount listed in the Order for the Deposit of Money Into Blocked Account (MC-356) was deposited into a blocked account.The Court has not received your Acknowledgment of Receipt of Order and Funds For Deposit In Blocked Account (MC-356), which proves to this Court that the funds belonging to the minor are protected in account that is blocked from withdrawal. If the MC-356 is not on file before the hearing, the Court may issue an OSC re: Sanctions.
Ruling
Lilly Teisher vs Steven R Andrade et al
Aug 30, 2024 |Judge Donna D. Geck |23CV04374
Tentative not yet posted, please check again.
Ruling
R Scott Turicchi et al vs Randy Quaid et al
Sep 09, 2024 |Judge Colleen K. Sterne |19CV06268
Tentative not yet posted.
Ruling
22CV00764
Sep 09, 2024 |Judge Colleen K. Sterne |22CV00764
Tentative not yet posted.
Ruling
Estate of Estate of Anne Lorine Tabuyo-Clonts
Sep 10, 2024 |Judge James F. Rigali |23PR00162
Probate Notes:Probate notes will be updated on a rolling basis, generally five days before the hearing. If no probate notes are posted two days prior to the hearing, appearance is required. (Local Rule 1721(b).) Appearances: The court is open to the public for court business. The court is also conducting hearings via Zoom videoconference.Meeting ID: 160 543 3416Passcode: 5053334
Ruling
24PR00390
Sep 03, 2024 |Judge James F. Rigali |24PR00390
Probate Notes: Appearances required.
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