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This case was last updated from Los Angeles County Superior Courts on 01/26/2021 at 16:19:41 (UTC).

CHRISTINE PETRIKAS IRELAND ET AL VS CHARLES DUNN COMPANY INC

Case Summary

On 07/13/2015 CHRISTINE PETRIKAS IRELAND filed a Contract - Other Contract lawsuit against CHARLES DUNN COMPANY INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are MARY H. STROBEL, DEBRE K. WEINTRAUB and RANDOLPH M. HAMMOCK. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****8007

  • Filing Date:

    07/13/2015

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

MARY H. STROBEL

DEBRE K. WEINTRAUB

RANDOLPH M. HAMMOCK

 

Party Details

Plaintiffs and Petitioners

14426 PALMDALE ROAD LLC

IRELAND CHRISTINE PETRIKAS

PETRIKAS FAMILY LIMITED PARTNERSHIP

Defendants and Respondents

CHARLES DUNN COMPANY INC.

DOES 1 THROUGH 25

HOLLYWOOD CARLTON PROPERTIES LLC

LOREN PROPERTIES LLC

MEHTA ROHIT

SOROUDI HAMID

XENON INVESTMENT CORP.

METRO EXCHANGE INCORPORATED

FRANK AKEF & CO. INC.

AKEF REZA

STEPP KIMBERLY ROBERTS

AKEF FRANK

AKEF NEDA

Not Classified By Court

TEST PARTY FOR TRUST CONVERSION

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

BAKER & HOSTETLER LLP

MATTHIAS MICHAEL ROLAND

Defendant and Respondent Attorneys

RYAN GREGORY R. ESQ.

PAULY ANDREW S. ESQ.

MANNING & KASS ELLROD RAMIREZ TRESTER

GENGA JOHN M. ESQ.

GOOCH FRANK III ESQ.

O'MEARA FRANCES ESQ.

MORRIS ERIC

WILK MICHAEL B

 

Court Documents

Amendment to Complaint (Fictitious/Incorrect Name)

10/22/2019: Amendment to Complaint (Fictitious/Incorrect Name)

Proof of Personal Service

12/17/2019: Proof of Personal Service

Order - ORDER 1/12/21 RULING

1/12/2021: Order - ORDER 1/12/21 RULING

PLAINTIFFS' EVIDENTIARY OBJECTIONS TO DECLARATION OF GREGORY R. RYAN, ESQ. IN SUPPORT OF DEFENDANTS' MOTION FOR ATTORNEYS' FEES AND COSTS FOLLOWING INTERLOCUTORY APPEAL

3/26/2018: PLAINTIFFS' EVIDENTIARY OBJECTIONS TO DECLARATION OF GREGORY R. RYAN, ESQ. IN SUPPORT OF DEFENDANTS' MOTION FOR ATTORNEYS' FEES AND COSTS FOLLOWING INTERLOCUTORY APPEAL

NOTICE OF CASE MANAGEMENT CONFERENCE

7/15/2015: NOTICE OF CASE MANAGEMENT CONFERENCE

NOTICE OF CASE MANAGEMENT CONFERENCE

9/14/2015: NOTICE OF CASE MANAGEMENT CONFERENCE

SUBSTITUTION OF ATTORNEY -

12/14/2015: SUBSTITUTION OF ATTORNEY -

NOTICE OF JOINDER OF DEFENDANTS ROHIT MEHTA, XENON INVESTMENT CORP., HOLLYWOOD CARLTON PROPERTIES, LLC, AND LOREN PROPERTIES LLC IN MOTION TO COMPEL ARBITRATION OF DEFENDANTS CHARLES DUNN COMPANY, INC

12/15/2015: NOTICE OF JOINDER OF DEFENDANTS ROHIT MEHTA, XENON INVESTMENT CORP., HOLLYWOOD CARLTON PROPERTIES, LLC, AND LOREN PROPERTIES LLC IN MOTION TO COMPEL ARBITRATION OF DEFENDANTS CHARLES DUNN COMPANY, INC

DEFENDANT FRANK AKEF & CO., INC.'S ANSWER TO FIRST AMENDED COMPLAINT

1/8/2016: DEFENDANT FRANK AKEF & CO., INC.'S ANSWER TO FIRST AMENDED COMPLAINT

Minute Order -

2/2/2016: Minute Order -

DECLARATION OF BLYTHE GOLAY IN SUPPORT OF PLAINTIFFS' OPPOSITION TO THE MOTION TO COMPEL ARBITRATION OF DEFENDANTS ROHIT MEHTA, XENON INVESTMENT CORP., HOLLYWOOD CARLTON PROPERTIES, LLC, AND LOREN PRO

2/18/2016: DECLARATION OF BLYTHE GOLAY IN SUPPORT OF PLAINTIFFS' OPPOSITION TO THE MOTION TO COMPEL ARBITRATION OF DEFENDANTS ROHIT MEHTA, XENON INVESTMENT CORP., HOLLYWOOD CARLTON PROPERTIES, LLC, AND LOREN PRO

NOTICE OF DEFAULT (UNLIMITED CIVIL APPEALS)

5/2/2016: NOTICE OF DEFAULT (UNLIMITED CIVIL APPEALS)

ORDER AND STIPULATION TO CONTINUE ?PLAINTIFFS? MOTION FOR ORDER REQUIRING PARTIES TO ENGAGE IN CODE CIV. PROC. ? 1281.6 PROCEDURE FOR APPOINTMENT OF ARBITRATOR, FOR ARBITRATION WITH DEFENDANTS ROHIT M

7/13/2016: ORDER AND STIPULATION TO CONTINUE ?PLAINTIFFS? MOTION FOR ORDER REQUIRING PARTIES TO ENGAGE IN CODE CIV. PROC. ? 1281.6 PROCEDURE FOR APPOINTMENT OF ARBITRATOR, FOR ARBITRATION WITH DEFENDANTS ROHIT M

CHARLES DUNN COMPANY, INC'S AND HAMID SOROUDI?S OPPOSITION TO PLAINTIFFS? MOTION FOR ORDER REQUIRING PARTIES TO ENGAGE IN CODE CIV. PROC. 1281.6

8/5/2016: CHARLES DUNN COMPANY, INC'S AND HAMID SOROUDI?S OPPOSITION TO PLAINTIFFS? MOTION FOR ORDER REQUIRING PARTIES TO ENGAGE IN CODE CIV. PROC. 1281.6

Minute Order -

3/2/2017: Minute Order -

SUBSTITUTION OF ATTORNEY -

6/9/2017: SUBSTITUTION OF ATTORNEY -

DECLARATION OF GREGORY R. RYAN, ESQ. IN SUPPORT OF DEFENDANT'S MOTION FOR ATTORNEYS' FEES AND COSTS FOLLOWING INTERLOCUTORY APPEAL

12/7/2017: DECLARATION OF GREGORY R. RYAN, ESQ. IN SUPPORT OF DEFENDANT'S MOTION FOR ATTORNEYS' FEES AND COSTS FOLLOWING INTERLOCUTORY APPEAL

Minute Order -

12/13/2017: Minute Order -

216 More Documents Available

 

Docket Entries

  • 06/13/2022
  • Hearing06/13/2022 at 09:30 AM in Department 47 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 05/03/2022
  • Hearing05/03/2022 at 09:30 AM in Department 47 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 03/25/2022
  • Hearing03/25/2022 at 08:30 AM in Department 47 at 111 North Hill Street, Los Angeles, CA 90012; Status Conference

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  • 01/19/2021
  • Docketat 09:30 AM in Department 47, Randolph M. Hammock, Presiding; Jury Trial - Not Held - Advanced and Vacated

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  • 01/18/2021
  • Docketat 09:30 AM in Department 47, Randolph M. Hammock, Presiding; Jury Trial - Not Held - Clerical Error

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  • 01/12/2021
  • Docketat 10:00 AM in Department 47, Randolph M. Hammock, Presiding; Hearing on Demurrer - without Motion to Strike - Held

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  • 01/12/2021
  • Docketat 10:00 AM in Department 47, Randolph M. Hammock, Presiding; Hearing on Demurrer - without Motion to Strike (To Third Amended Complaint by Defendants Frank Akef & Co. Inc, & Frank Akef) - Held

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  • 01/12/2021
  • Docketat 08:30 AM in Department 47, Randolph M. Hammock, Presiding; Final Status Conference - Not Held - Advanced and Vacated

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  • 01/12/2021
  • DocketOrder (1/12/21 Ruling); Filed by Clerk

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  • 01/12/2021
  • DocketMinute Order ( (Hearing on Demurrer - without Motion to Strike To Third Amend...)); Filed by Clerk

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433 More Docket Entries
  • 08/28/2015
  • DocketPEREMPTORY CHALLENGE TO JUDICIAL OFFICER (CODE CIV. PROC., 170.6)

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  • 07/15/2015
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 07/15/2015
  • DocketNotice; Filed by Plaintiff/Petitioner

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  • 07/15/2015
  • DocketNOTICE OF PENDENCY OF ACTION AFFECTING REAL PROPERTY

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  • 07/15/2015
  • DocketNOTICE OF PENDENCY OF ACTION AFFECTING REAL PROPERTY

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  • 07/15/2015
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 07/15/2015
  • DocketNotice; Filed by Plaintiff/Petitioner

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  • 07/13/2015
  • DocketSUMMONS

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  • 07/13/2015
  • DocketComplaint; Filed by 14426 Palmdale Road, LLC (Plaintiff); Christine Petrikas Ireland (Plaintiff); Petrikas Family Limited Partnership (Plaintiff)

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  • 07/13/2015
  • DocketCOMPLAINT FOR: 1. BREACH OF FIDUCIARY DUTY; ETC

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Tentative Rulings

Case Number: BC588007    Hearing Date: January 12, 2021    Dept: 47

Christine Petrikas Ireland v. Charles Dunn Company, Inc., et al.

(1) DEMURRER TO THIRD AMENDED COMPLAINT BY DEFENDANTS FRANK AKEF & CO., INC. AND FRANK AKEF;

(2) DEFENDANTS REZA AKEF, NEDA AKEF, AND METRO EXCHANGE, INC.’S DEMURRER TO PLAINTIFFS’ THIRD AMENDED COMPLAINT;

(3) DEFENDANT FRANK AKEF’S JOINDER IN DEFENDANTS REZA AKEF, NEDA AKEF, AND METRO EXCHANGE, INC.’S DEMURRER TO PLAINTIFFS’ THIRD AMENDED COMPLAINT

MOVING PARTY: (1) Defendants Frank Akef & Co., Inc. and Frank Akef; (2) Defendants Reza Akef, Neda Akef, and Metro Exchange, Inc.; (3) Defendant Frank Akef

RESPONDING PARTY(S): (1)-(3) Plaintiffs Christine Petrikas Ireland, an individual and as trustee of the Petrikas Family Bypass Trust and the Petrikas Family Survivor Trust; Petrikas Family Limited Partnership; and 14426 Palmdale Road, LLC.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiffs alleges that Defendants breached fiduciary duties owed to Plaintiffs in connection with real estate transactions in order to obtain commissions.

Defendants Frank Akef (Doe 1), Frank Akef & Co., Inc., Reza Akef (Doe 2), Neda Akef (Doe 3), and Metro Exchange, Inc. demur to the third amended complaint in two separate demurrers. Defendant Frank Akef also filed a joinder to the other defendants’ demurrer.

TENTATIVE RULING (REVISED):

Defendants Frank Akef and Frank Akef & Co., Inc.’s demurrer is OVERRULED in its entirety. They are to file an Answer within 21 days.

Defendant Frank Akef’s joinder in the demurrer of Reza Akef, Neda Akef, and Metro Exchange, Inc. is DENIED.

Defendants Reza Akef, Neda Akef, and Metro Exchange, Inc.’s demurrer is SUSTAINED IN PART as to the standing of the five trust plaintiffs, and Christine Petrikas Ireland in her capacity as trustee only, to bring the challenged causes of action. The demurrer is otherwise OVERRULED.

Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) As to the five trust plaintiffs, Plaintiffs must demonstrate this possibility at the hearing. Otherwise, no leave to amend will be given.

Unless leave to amend is granted, Defendants Reza Akef, Neda Akef, and Metro Exchange, Inc. are ordered to file an Answer within 21 days.

DISCUSSION:

Demurrer: Frank Akef and Frank Akef & Co., Inc.

Meet and Confer

The Declaration of Attorney Michael B. Wilk reflects that the meet-and-confer requirement of CCP § 430.41(a) was met.

Request for Judicial Notice

Defendants request judicial notice of (1) an exchange agreement dated December 1, 2010; (2) an exchange agreement dated August 27, 2014; (3) an identification of replacement property document dated April 15, 2011; (4) excerpts from arbitration proceedings dated January 15, 2019; (5) excerpts from arbitration proceedings dated January 16, 2019; (6) excerpts of Plaintiff’s deposition taken in another case; and (7) a facsimile of a document Defendants “understand and believe” is a document referred to in the third amended complaint.

Per the Court’s minute order of January 4, 2021, Defendants’ request for judicial notice is GRANTED as to items 1, 3, and 7. The request for judicial notice is otherwise DENIED. Defendants have not shown that the documents in requests 2, 4, 5, and 6 fall under any of the categories in Evidence Code §§ 451 to 453, including facts and propositions not reasonably subject to dispute. (Evid. Code § 452(h).) Nor have Defendants shown that any of Plaintiff Ireland’s deposition testimony in a different case is inconsistent with her allegations here, and therefore Defendants have not shown any basis on which to take judicial notice of this testimony. (Williams v. Southern California Gas Co. (2009) 176 Cal.App.4th 591, 598-599.)

Analysis

Defendants demur to the sixteenth, seventeenth, eighteenth, nineteenth, twentieth, and twenty-first causes of action on the ground that they are untimely and that they each fail to state facts sufficient to constitute a cause of action against them. (CCP § 430.10(e).) These are the same grounds on which Defendant Frank Akef demurred to the sixteenth through twentieth causes of action in the second amended complaint.

Statute of Limitations

“A demurrer on the ground of the bar of the statute of limitations will not lie where the action may be, but is not necessarily barred.” (Favila v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189, 224.) “It must appear clearly and affirmatively that, upon the face of the complaint and matters of which the court may properly take judicial notice, the right of action is necessarily barred.” (Id., internal punctuation omitted.) On the other hand, “if on the face of the complaint the action appears barred by the statute of limitations, plaintiff has an obligation to anticipate the defense and plead facts to negative the bar.” (Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 25.)

Here, Plaintiffs’ claims are not time-barred. As to the sixteenth and seventeenth causes of action for breach of contract, a four-year statute of limitations applies. (CCP § 337(a).) These causes of action are subject to the delayed discovery rule where, as here, they are interrelated with alleged breaches of fiduciary duty and fraud. (NBC Universal Media, LLC v. Superior Court (2014) 225 Cal.App.4th 1222, 1233.) As to the eighteenth cause of action for breach of fiduciary duty (to the extent based on fraud or mistake), the nineteenth cause of action for constructive fraud, and the twenty-first cause of action for fraud, a three-year statute of limitations applies. (CCP § 338(d).) As to any cause of action based on fraud or mistake, the “cause of action is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (CCP § 338(d).) As to the twentieth cause of action for negligence, a two-year statute of limitations applies. (CCP § 335.1.) A cause of action based on negligence is also subject to the delayed discovery rule. (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1326.)

As to all of these causes of action, Plaintiffs have anticipated the statute of limitations defense and pled facts to negate the bar by alleging delayed discovery. (3AC ¶¶ 63-67.) Plaintiffs’ revised allegations (with changes/additions in bold) are as follows:

63. On or about February 24, 2015, Ms. Petrikas Ireland received a telephone call from Ms. Stepp who recommended that Ms. Petrikas Ireland seek out legal counsel to review the Transactions. In late May 2015, Ms. Stepp introduced Ms. Petrikas Ireland to her current legal counsel who then began looking at the Transactions. Up until Ms. Petrikas Ireland’s subsequent termination of Akef and Mr. Akef on or about September 2015, Akef and Mr. Akef continued to provide services as fiduciaries to Plaintiffs and Plaintiffs relied on Mr. Akef and Akef (and, in turn, Metro Exchange), as fiduciaries.

64. Akef and Mr. Akef (on behalf of Akef and Metro Exchange) acting as accountants and tax advisers to Plaintiffs, controlled Plaintiffs’ decisions by guiding and influencing (and/or by knowingly allowing third parties to persuade, guide, direct and influence) Ms. Petrikas Ireland with respect to business decisions and financial matters relating to the Transactions. Ms. Petrikas Ireland justifiably and reasonably relied upon the expertise and advice of Akef and Mr. Akef (on behalf of Akef and Metro) as fiduciaries and professionals with knowledge beyond the ability of laypersons to evaluate, and could not have known of, or understood, the wrongful actions and injury without the aid and assistance of an uninvolved professional.

65. Plaintiffs were not aware of (a) the identity of the identification letters received by Metro Exchange until Plaintiffs received Metro Exchange’s document production on or about January 8, 2018 in response to Plaintiff’s Requests for Production; and/or (b) Mr. Akef’s domination and control of Metro Exchange until Mr. Akef’s February 26, 2018 deposition (both of which occurred in connection with the arbitration proceeding involving Plaintiffs, Soroudi and other parties as to the Dismissed Causes of Action), and, therefore, Plaintiffs were unaware until early 2018 of Mr. Akef’s knowledge of and/or relationship to the purported identification letters and/or his principal operation and control status of Metro Exchange.

66. Ms. Petrikas Ireland placed her full trust, confidence and reliance upon Akef, Mr. Akef and Metro Exchange and, as such, Plaintiffs could not have made an earlier discovery of the allegations herein. Ms. Petrikas Ireland had no cause to review the Transactions until at Ms. Stepp’s behest Ms. Petrikas Ireland retained legal counsel, who then through a much belabored and contentious discovery process learned of the foregoing as late as early 2018.

67. Defendants took positive steps to conceal the fraud and misrepresentations relating to the Transactions as described above. Moreover, nondisclosure of material facts in the Transactions amounted to a representation of the nonexistence of the facts that Defendants failed to disclose. Thus, Plaintiffs could not, with the exercise of reasonable diligence, have earlier discovered the acts and omissions of these Defendants.

(3AC ¶¶ 63-67, bold emphasis added.)

With these allegations, Plaintiffs have sufficiently alleged delayed discovery.

Defendants argue that these amended allegations are sham allegations, relying in part on one of the judicially noticed documents, a facsimile dated April 15, 2011 that appears to have been sent on April 28, 2011. (Defendants’ RJN, Exh. G.) In this document, Plaintiff Christine Petrikas indicates that she has “signed the purchase agreement to purchase two properties as replacement properties,” which are listed, and authorizes and instructs Metro Exchange to “wire transfer such funds as directed by my brokers Hamid Soroudi or Kimberly Robert’s [sic] Stepp.” (Ibid.) Based on this document, Defendants argue that Plaintiffs’ allegation in Paragraph 65 that they “were not aware of (a) the identity of the identification letters received by Metro Exchange until Plaintiffs received Metro Exchange’s document production on or about January 8, 2018 in response to Plaintiff’s Requests for Production; and/or (b) Mr. Akef’s domination and control of Metro Exchange until Mr. Akef’s February 26, 2018 deposition (both of which occurred in connection with the arbitration proceeding involving Plaintiffs, Soroudi and other parties as to the Dismissed Causes of Action), and, therefore, Plaintiffs were unaware until early 2018 of Mr. Akef’s knowledge of and/or relationship to the purported identification letters and/or his principal operation and control status of Metro Exchange.” (3AC ¶ 65.)

Even if Defendants are correct as to the “identity of the identification letters,” however, the judicially noticed document does not establish any knowledge on Plaintiffs’ part as to Mr. Akef’s domination and control of Metro Exchange. Moreover, Plaintiffs acknowledge that they knew of the existence and contents of this letter but “did not know whether that particular document was the one actually received and accepted by Metro Exchange (and Mr. Akef) until Plaintiffs saw the First Identification Letter in Metro Exchange’s document production made in 2018.” (Oppo., at p. 10; 3AC ¶ 65.) Although this might be a distinction without a difference, at the demurrer stage the Court must give the 3AC a liberal construction. (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517).

Moreover, Defendants has not presented any persuasive reason that the Third Amended Complaint does not relate back to the First Amended Complaint as to the nature of the facts giving rise to their claims against Mr. Akef. In addition, given that the delayed discovery rule applies, it is unnecessary to address Defendants’ argument that Plaintiffs cannot allege equitable tolling.

The demurrer on the basis of the statutes of limitations is OVERRULED.

Failure to State a Cause of Action on Which Relief May Be Granted (CCP § 430.10(e))

Defendants do not make any individual arguments as to the six challenged causes of action, arguing instead that the entire 3AC (which Defendants continue to refer to as the “SAC” in their headings) fails to state a cause of action against them because (1) Ms, Petrikas “admits” that Frank Akef advised Plaintiffs’ agent, satisfying his duty; and (2) that Plaintiffs cannot “show” that Defendants caused them any harm.

The first argument – that the Plaintiff Petrikas Ireland “admits” that Frank Akef advised Plaintiffs’ agent – relies on extrinsic evidence that the Court has not judicially noticed: Plaintiff’s deposition testimony in another case and testimony during arbitration proceedings in that case. Moreover, Defendants have not otherwise shown that Plaintiffs’ allegations are in any way deficient as to duty, causation, or damages or any other elements of the five challenged causes of action. The sole issue raised by a general demurrer is whether the facts pleaded state a valid cause of action, not whether they are true. No matter how unlikely or improbable, plaintiff's allegations must be accepted as true for the purpose of ruling on the demurrer. (Citation omitted.) Furthermore, plaintiff’s possible inability or difficulty in proving the allegations of the complaint is of no concern.” (Kerivan v. Title Ins. & Trust Co. (1983) 147 Cal.App.3d 225, 229.)

The second argument – that Plaintiffs cannot “show” that Defendants caused them any harm – relies in part on two of the judicially noticed documents, although Defendants mention these documents only in their summary of the relevant facts (Demurrer, at pp. 11-12) and not in their actual argument (Demurrer, at pp. 19-20.) Defendants argue that the judicially noticed agreement and the judicially noticed “Identification of Replacement Property Document” show that Metro “advised Mrs. Petrikas of the 45 day requirement to designate replacement properties.” (Demurrer, at p. 12.) The Identification of Replacement Property Document does state, in all capital letters, “you have 45 days from the close of your relinquished property to return this form to Metro Exchange, Inc.” (Defendants’ RJN, Exh. C.) However, the failure to advise Ms. Petrikas of the 45-day requirement is not the sole basis of Plaintiffs’ allegations. For example, Plaintiffs allege that Defendants failed to advise Plaintiffs that “there was little rationale for the Plaintiffs to engage in a 1031 Exchange given the stepped-up basis in the 123 California Property.” (3AC ¶ 96(B).) Although Defendants’ argument may have some merit, a “general demurrer does not lie as to a portion of a cause of action.” (Elder v. Pacific Bell Telephone Co. (2012) 205 Cal.App.4th 841, 856 n. 14.)

Defendants additionally argue that the breach of contract causes of action are defective because they are “contrary to the actual language of the contract.” (Demurrer, at p. 20.) In support of this argument, Defendants rely on Section 4.2 of the judicially noticed Exchange Agreement dated December 1, 2010, between The Petrikas Family Limited Partnership and Metro Exchange, Incorporated. (Defendants’ RJN, Exh. A.) Defendants argue that, “[t]o the extent that the TAC alleges that the Exchange Agreements required Metro to distribute the sales proceeds to the Partnership once the 45 day limit was not meet [sic] is simply contrary to the actual language of the contract.” (Demurer, at p. 20.) They argue that, under the contract, the “duty to distribute the remaining funds after 45 days without a proper designation of replacement property is only triggered upon a written request, and the TAC does not, because it cannot, allege that any such request was made by Mrs. Petrikas or the Partnership.” (Ibid.)

The judicially noticed contract provides, in relevant part, as follows:

4.2 Maximum Term.

If Exchangor shall not have identified any Exchange Property within forty-five (45) days following the Conveyance Date with respect to the Property, the Closing Date shall be the forty-sixth (46th) day following such Conveyance Date. If any Exchange Property shall be identified by Exchangor within such forty-five (45) day period, the Closing Date shall be not later than one hundred eighty (180) days following the Conveyance Date with respect to the Property. If on the Closing Date there shall be any balance reflected in the exchange account, MEI shall, within ten (10) business days following receipt of Exchangor’s written request, disburse such balance by MEI’s check and the exchange shall be completed.

(Defendants’ RJN, Exh. A.)

Although Defendants are correct that Plaintiffs do not allege that any such written request was made, they do allege in both of the challenged breach of contract causes of action that their “performance has been prevented or otherwise excused by the conduct of Metro Exchange as alleged herein.” (3AC ¶¶ 69, 77.) Thus, their failure to allege their performance of one of those conditions is not fatal to these causes of action.

Accordingly, the demurrer on the ground that these six causes of action fail to state a cause of action upon which relief may be granted is OVERRULED.

Demurrer: Reza Akef, Neda Akef, and Metro Exchange, Inc.

Joinder by Frank Akef

A notice of joinder must be filed pursuant to the same deadlines as the papers for which the joinder was made. (Seee.g.Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 719; see also Grieves v. Superior Court (1982) 157 Cal.App.3d 159, 163 n.3 [noting that “the trial court treated [defendant’s] notice of joinder as a motion”].) 

Although this joinder was timely, the moving party has – again – included no memorandum of points and authorities and therefore no basis on which the Court is to conclude that it is similarly situated to the demurring parties with respect to the issues raised in the demurrer. Accordingly, the joinder of Frank Akef is DENIED.

Meet and Confer

The Declaration of Attorney Eric C. Morris reflects that the meet-and-confer requirement of CCP § 430.41(a) was met.

Alleged Procedural Impropriety

Plaintiffs are correct that, if Defendants demurred jointly, the demurrer could be overruled if the complaint was sufficient against any one of them. (Majestic Realty Co. v. Pacific Lighting Corp. (1974) 37 Cal.App.3d 641, 642-643.) This principle, however, is limited to special demurrers, as a “defendant may raise at any time, and presumably in any appropriate way, the fundamental and fatal defect that a plaintiff has not stated . . . facts sufficient to constitute a cause of action against that defendant.” (Id. at 643.) Moreover, Defendants here use the phrase “defendants, and/or each of them” throughout which, although awkward and imprecise, means that they were at least attempting to demur jointly and severally. Thus, the Court will consider the demurrer on the merits.

Analysis

Defendants demur to the sixteenth, seventeenth, eighteenth, nineteenth, and twenty-first causes of action on the grounds that (1) they are untimely; (2) Plaintiffs do not have standing or the legal capacity to sue; (3) they are uncertain; and (4) they each fail to state facts sufficient to constitute a cause of action against them.

Statute of Limitations

For the reasons discussed in connection with Defendants Frank Akef and Frank Akef & Co.’s demurrer, the demurrer on the ground that these causes of action are time-barred is OVERRULED.

Standing/Legal Capacity to Sue

Defendants argue that six of the seven Plaintiffs do not have standing to sue because the Petrikas Family Limited Partnership is the real party in interest.

This is an argument that Defendants could have raised in their previous demurrer and did not. Generally, if the demurrer is sustained and the complaint is amended, no subsequent demurrer can be brought on any grounds that could have been raised by demurrer to the earlier version of the complaint. (CCP § 430.41(b).)

However, Plaintiffs effectively concede that the trusts do not have standing based on the 3AC. (Oppo., at p. 1 n. 1.) Accordingly, the demurrer is SUSTAINED as to all of the challenged causes of action as to the five trust plaintiffs and Christine Petrikas Ireland as trustee. The allegations are sufficient as to Christine Petrikas Ireland in her individual capacity and the Petrikas Family Limited Partnership.

Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) As to the five trust plaintiffs, Plaintiffs must demonstrate this possibility at the hearing. Otherwise, no leave to amend will be given.

Uncertainty

Defendants also purport to demur on the ground that these causes of action are uncertain.

Demurrers for uncertainty are disfavored, because discovery can be used for clarification, and they apply only where defendants cannot reasonably determine what issues or claims are stated. (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 822; Khoury v. Maly's of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) That is not the case here. If the complaint is not so incomprehensible that Defendants cannot reasonably respond – and it is not – then the complaint is not uncertain. (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th 841, 848 n.3.) Moreover, a failure to specify what specific aspects of a cause of action are uncertain is another basis on which to overrule the demurrer. (Fenton v. Groveland Community Services Dist. (1982) 135 Cal.App.3d 797, 809, overruled on other grounds by Katzberg v. Regents of the University of California (2002) 29 Cal.4th 300, 328.)

Accordingly, the demurrer on the ground that these causes of action are uncertain is OVERRULED.

Failure to State a Cause of Action on Which Relief May Be Granted (CCP § 430.10(e))

Defendants do not make any individual arguments as to the five challenged causes of action, arguing instead that they fail to state a cause of action against Reza Akef and Neda Akef because Plaintiffs’ alter ego allegations are insufficient.

Plaintiffs allege as follows (as they did in the 2AC):

Upon information and belief, at all relevant times Metro Exchange was a mere shell instrumentality, organized and operated as the alter ego of defendants Mr. Akef, Reza Akef and Neda Akef for their personal benefit and advantage; these defendants are characterized by a unity of interest in ownership and control among themselves such that any individuality and separateness between them have ceased. Mr. Akef’s children, Reza Akef and Neda Akef were at all relevant times the only shareholders and officers of Metro Exchange. At all relevant times, Mr. Akef dominated and controlled Metro Exchange. At all relevant times, Mr. Akef, Reza Akef and Neda Akef failed to observe any of the corporate formalities as required under applicable law. Upon information and belief, Mr. Akef, Reza Akef and Neda Akef did not, at all relevant times, conduct any corporate shareholder meetings, and therefore did not maintain corporate minutes. Metro Exchange at all relevant times was a sham corporation created for the benefit of individuals, and the concealment and misrepresentation of the identity of the responsible ownership, management and financial interest, or concealment of personal business activities. Upon information and belief, Reza Akef and Neda Akef at all relevant times were the sole owners of Metro Exchange and no shares of stock of corporate defendant were issued. Mr. Akef, Reza Akef and Neda Akef and Metro Exchange have so disregarded corporate formalities that Metro Exchange was at all relevant times the alter ego of individual defendants Mr. Akef, Reza Akef and Neda Akef.

(3AC ¶ 14.)

These allegations are sufficient. Defendants argue that they are conclusory; however, Plaintiffs were required to “allege only ‘ultimate rather than evidentiary facts.’” (Rutherford Holdings, LLC v. Plaza Del Rey (20140) 223 Cal.App.4th 221, 236.) In Rutherford Holdings, for example, the plaintiff alleged that parties Caswell and PDR were alter egos in that “Caswell dominated and controlled PDR; that a unity of interest and ownership existed between Caswell and PDR; that PDR was a mere shell and conduit for Caswell’s affairs; that PDR was inadequately capitalized; that PDR failed to abide by the formalities of corporate existence; that Caswell used PDR assets as her own; and that recognizing the separate existence of PDR would promote injustice.” (Id. at 235.) Plaintiffs’ allegations mirror the allegations in Rutherford Holdings and are no more conclusory.

Accordingly, the demurrer on the ground that these causes of action fail to state a cause of action upon which relief may be granted is OVERRULED.

Demurring parties to give notice, unless waived.

IT IS SO ORDERED.

Dated: January 12, 2021 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

Case Number: BC588007    Hearing Date: January 24, 2020    Dept: 47

Christine Petrikas Ireland v. Charles Dunn Company, Inc., et al.

MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

MOVING PARTY: Plaintiffs Christine Petrikas Ireland, an individual and as trustee of the Petrikas Family Bypass Trust and the Petrikas Family Survivor Trust; Petrikas Family Limited Partnership; and 14426 Palmdale Road, LLC

RESPONDING PARTY(S): Defendants Frank Akef & Co., Inc. and Frank Akef (Doe 1); Metro Exchange, Inc.; Reza Akef (Doe 2); and Neda Akef (Doe 3).

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiffs alleges that Defendants breached fiduciary duties owed to Plaintiffs in connection with real estate transactions in order to obtain commissions.

This Court (Judge Weintraub presiding) granted Defendants’ motion to compel arbitration in part and denied it in part. The Court of Appeal reversed the portion of the order denying arbitration and ordered the trial court to grant the motion to compel arbitration in its entirety. On September 12, 2019, following arbitration, the stay was lifted as to the two remaining defendants who were not part of the arbitration, Metro Exchange and Frank Akef & Company. On October 22, 2019, Plaintiffs named three Doe defendants.

Plaintiffs now seek leave to file a second amended complaint.

TENTATIVE RULING:

Plaintiffs Christine Petrikas Ireland, an individual and as trustee of the Petrikas Family Bypass Trust and the Petrikas Family Survivor Trust; Petrikas Family Limited Partnership; and 14426 Palmdale Road, LLC’s motion for leave to file a second amended complaint is GRANTED.

Plaintiffs are to file a stand-alone copy of the second amended complaint today. The second amended complaint shall be deemed served as of the date of this order. Defendants are to respond within 30 days of the service of this order.

DISCUSSION:

Motion for Leave To File Second Amended Complaint

Plaintiff seeks leave to amend the complaint to supplement existing causes of action against Defendants Metro Exchange and Frank Akef & Co. and to add causes of action based on alter ego liability against recently named Defendants Frank Akef, Reza Akef, and Neda Akef.

The Court may, in furtherance of justice, and on such terms as may be proper, allow a party to amend any pleading. (CCP § 473(a)(1).) Amendments of pleadings can be permitted up to and during trial, absent prejudice to the adverse party. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.) Judicial policy favors liberal exercise of the discretion to permit amendment of the pleadings. (Royal Thrift & Loan Co. v. County Escrow, Inc. (2004) 123 Cal.App.4th 24, 41-42.) Absent prejudice to the Defendants, a denial of leave to amend is an abuse of discretion. (Kittridge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.)

The Declaration of Attorney Michael R. Matthias substantially complies with CRC Rule 3.1324, which requires a declaration setting forth the effect of the amendments, why the amendments are necessary and proper, when the facts giving rise to the amended allegations were discovered, and the reason why the request for amendment was not made earlier. (CRC Rule 3.1324(a)(2), (3)). The proposed additions and changes are set forth in the proposed 2AC attached as Exhibit A to the Matthias Declaration.

Although pleadings may be amended at any stage of the litigation (Moss Estate Co. v. Adler (1953) 41 Cal.2d 581, 585–586 [261 P.2d 732]; Record v. Reason (1999) 73 Cal.App.4th 472, 486 [86 Cal. Rptr. 2d 547]), if a party seeking amendment has been dilatory and/or the delay has prejudiced or will prejudice the opposing party, the trial court in its discretion may deny leave to amend. (See Solit v. Tokai Bank (1999) 68 Cal.App.4th 1435, 1448 [81 Cal. Rptr. 2d 243].)

(M&F Fishing, Inc. v. Sea-Pac Ins. Managers, Inc. (2012) 202 Cal. App. 4th 1509, 1534.)

Here, Defendants have not demonstrated prejudice that would justify denial of leave to amend. Where an additional theory of liability is proposed against an existing defendant, this does not constitute prejudice that justifies the denial of leave to amend. (See Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.) “[I]t is irrelevant that new legal theories are introduced as long as the proposed amendments ‘relate to the same general set of facts.’” (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.) Plaintiff’s new allegations in the 2AC are based on the same general set of facts as the original causes of action. Nor will the changes to the names of the Plaintiff trusts cause Defendants any prejudice. (Declaration of Marc L. Benezra ¶ 5.)

In addition, the the newly named Defendants have not demonstrated prejudice in connection with Plaintiffs’ new alter ego allegations. Plaintiffs had already alleged agency – a related concept – in the first amended complaint, and the newly named Defendants were substituted as Doe defendants as to that complaint. (1AC ¶ 17.) Under the circumstances, allowing the amendment is appropriate. (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 297 [holding that the trial court “should have permitted plaintiff to plead the alter ego issue,” in part because “[a]gency, a related concept, had been alleged in plaintiff's original complaint, to which defendant had been substituted as a Doe”].) Indeed, a trial court may amend a judgment to include alter egos as judgment debtors, even when the plaintiff did not allege alter ego liability in the underlying lawsuit. (Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1074-1075.) It stands to reason that an amendment to allege alter ego liability a year before trial will not prejudice the Defendants.

Defendants’ arguments regarding the statute of limitations would be more appropriately raised, if at all, by demurrer, although the Court notes that it is not apparent from the face of the complaint that the allegations set forth in the second amended complaint are time-barred.

Accordingly, Plaintiffs’ motion for leave to file a second amended complaint is GRANTED. Plaintiffs are to file a stand-alone copy of the second amended complaint today. The second amended complaint shall be deemed served as of the date of this order. Defendants are to respond within 30 days of the service of this order.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: January 24, 2020 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org

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