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This case was last updated from Los Angeles County Superior Courts on 07/04/2019 at 06:22:39 (UTC).

MICHAEL A ZUGSMITH ET AL VS ROBERT F SCULLIN ET AL

Case Summary

On 05/11/2015 MICHAEL A ZUGSMITH filed a Property - Other Real Property lawsuit against ROBERT F SCULLIN. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is GAIL FEUER. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****1496

  • Filing Date:

    05/11/2015

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Real Property

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

GAIL FEUER

 

Party Details

Plaintiffs and Cross Defendants

ZUGSMITH MICHAEL A.

ZUGSMITH RACHEL SUSAN

ZUGSMITH MICHAEL A. AS TRUSTEE OF THE ZUGSMITH FAMILY TRUST

ZUGSMITH RACHEL SUSAN AS TRUSTEE OF THE ZUGSMITH FAMILY TRUST

VENTURA GAVIOTA LLC

TRUSTEES OF THE ZUGSMITH FAMILY TRUST

Defendants and Respondents

ALL PERSONS UNKNOWN CLAIMING ANY LEGAL OR

DOES 1 THROUGH 250

SCULLIN CATHY B.

SCULLIN ROBERT F.

VENTURA GAVIOTA LLC

SCULLIN GERALD [DOE 4]

SCULLIN GERALD [DOE 3]

HIMMLER KENNETH [DOE 2]

HIMMLER KENNETH [DOE 1]

Defendants and Cross Plaintiffs

SCULLIN CATHY B.

SCULLIN CATHY B. AS TRUSTEE OF THE SCULLIN REVOCABLE FAMILY TRUST AND DERIVATIVELY AS A MEMBER OF VENTURA GAVIOTA LLC

Attorney/Law Firm Details

Plaintiff Attorneys

TEPPER & TAKVORYAN APC

LINZER KENNETH ALLEN

Defendant and Respondent Attorneys

TREYZON BORIS ESQ.

TREYZON BORIS

Cross Plaintiff Attorney

TREYZON & ASSOCIATES LLP

 

Court Documents

Declaration

11/5/2018: Declaration

Trial Brief

12/5/2018: Trial Brief

Notice

12/20/2018: Notice

Certificate of Mailing for

6/11/2019: Certificate of Mailing for

Notice of Change of Address or Other Contact Information

6/25/2019: Notice of Change of Address or Other Contact Information

NOTICE OF CASE MANAGEMENT CONFERENCE

5/15/2015: NOTICE OF CASE MANAGEMENT CONFERENCE

DEFENDANTS' DEMURRER TO PLAINTIFFS' COMPLAINT

7/6/2015: DEFENDANTS' DEMURRER TO PLAINTIFFS' COMPLAINT

AMENDMENT TO COMPLAINT

4/21/2016: AMENDMENT TO COMPLAINT

Minute Order

7/20/2016: Minute Order

PARTIES' JOINT EX PARTE APPLICATION TO CONTINUE TRIAL DATE

7/20/2016: PARTIES' JOINT EX PARTE APPLICATION TO CONTINUE TRIAL DATE

MONICA SZKOPEK'S DECLARATION IN SUPPORT OF DEFENDANTS' MOTION TO STRIKE TO THIRD, FOURTH, FIFTH AND SIXTH CAUSES OF ACTION OF PLAINTIFFS' FIRST AMENDED COMPLAINT

8/5/2016: MONICA SZKOPEK'S DECLARATION IN SUPPORT OF DEFENDANTS' MOTION TO STRIKE TO THIRD, FOURTH, FIFTH AND SIXTH CAUSES OF ACTION OF PLAINTIFFS' FIRST AMENDED COMPLAINT

DECLARATION OF KENNETH A. LINZER, ESQ. IN SUPPORT OF SPECIAL MOTION TO STRIKE BOTH CAUSES OF ACTION OF THE COMPLAINT, PURSUANT TO CODE CIV. PROC. SECTION 425.16

2/28/2017: DECLARATION OF KENNETH A. LINZER, ESQ. IN SUPPORT OF SPECIAL MOTION TO STRIKE BOTH CAUSES OF ACTION OF THE COMPLAINT, PURSUANT TO CODE CIV. PROC. SECTION 425.16

DECLARATION OF KENNETH A. LINZER, ESQ. IN SUPPORT OF MOTION TO QUASH DEPOSITION SUBPOENAS FOR MARK STEIN, AND STEIN ASSOCIATE INC.'S PERSON MOST QUALIFIED

3/3/2017: DECLARATION OF KENNETH A. LINZER, ESQ. IN SUPPORT OF MOTION TO QUASH DEPOSITION SUBPOENAS FOR MARK STEIN, AND STEIN ASSOCIATE INC.'S PERSON MOST QUALIFIED

Minute Order

3/17/2017: Minute Order

CATHY B. SCULLIN'S DECLARATION IN SUPPORT OF HER OFFER OF PROOF IN SUPPORT OF SUR-REPLY IN OPPOSITION TO CROSS-COMPLAINANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

4/4/2017: CATHY B. SCULLIN'S DECLARATION IN SUPPORT OF HER OFFER OF PROOF IN SUPPORT OF SUR-REPLY IN OPPOSITION TO CROSS-COMPLAINANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

CATHY SCULLIN'S SUR-REPLY TO CROSS-DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

4/4/2017: CATHY SCULLIN'S SUR-REPLY TO CROSS-DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

STIPULATION - DISCOVERY RESOLUTION

5/10/2017: STIPULATION - DISCOVERY RESOLUTION

NOTICE OF ERRATA TO CATHY SCULLIN'S NOTICE OF MOTION AND MOTION FOR: 1) AN ORDER COMPELLING DEPOSITIONS OF MARK STEIN, STEIN PSYCHOLOGICAL ASSOCIATES INC.'S PMQ, AMY WOLFSOHN, LEN ZANDER, RACHEL ZUGSM

6/1/2017: NOTICE OF ERRATA TO CATHY SCULLIN'S NOTICE OF MOTION AND MOTION FOR: 1) AN ORDER COMPELLING DEPOSITIONS OF MARK STEIN, STEIN PSYCHOLOGICAL ASSOCIATES INC.'S PMQ, AMY WOLFSOHN, LEN ZANDER, RACHEL ZUGSM

416 More Documents Available

 

Docket Entries

  • 06/25/2019
  • Notice of Change of Address or Other Contact Information; Filed by Boris Treyzon (Attorney)

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  • 06/20/2019
  • Notice (of Court Order RE: Related Cases); Filed by Michael A. Zugsmith,, as Trustee of the Zugsmith Family Trust, dated July 25, 1990 (Plaintiff); Rachel Susan Zugsmith,, as Trustee of the Zugsmith Family Trust, dated July 25, 1990 (Plaintiff)

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  • 06/11/2019
  • at 08:30 AM in Department 78; Court Order

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  • 06/11/2019
  • Certificate of Mailing for (Minute Order (Court Order) of 06/11/2019); Filed by Clerk

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  • 06/11/2019
  • Minute Order ( (Court Order)); Filed by Clerk

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  • 06/03/2019
  • Notice of Related Case; Filed by Michael A. Zugsmith,, as Trustee of the Zugsmith Family Trust, dated July 25, 1990 (Plaintiff); Rachel Susan Zugsmith,, as Trustee of the Zugsmith Family Trust, dated July 25, 1990 (Plaintiff)

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  • 03/25/2019
  • at 08:30 AM in Department 78; Hearing on Motion - Other (MOTION FOR CLARIFICATION OF A RULING FOLLOWING TRIAL ON NOVEMBER 29, 2018) - Not Held - Advanced and Continued - by Court

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  • 03/11/2019
  • at 08:30 AM in Department 78; Status Conference - Held

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  • 03/11/2019
  • Minute Order ( (Status Conference)); Filed by Clerk

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  • 02/22/2019
  • at 08:30 AM in Department 78; Hearing on Ex Parte Application (for Further Clarification of This Court's December 14, 2018 Statement of Decision) - Not Held - Taken Off Calendar by Party

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951 More Docket Entries
  • 07/15/2015
  • Proof-Service/Summons

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  • 07/15/2015
  • NOTICE OF CHANGE OF FIRM ADDRESS FOR COUNSEL FOR PLAINTIFFS

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  • 07/06/2015
  • Defendant's Demurrer; Filed by Cathy B. Scullin (Defendant); Robert F. Scullin (Defendant)

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  • 07/06/2015
  • DEFENDANTS' DEMURRER TO PLAINTIFFS' COMPLAINT

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  • 05/15/2015
  • NOTICE OF CASE MANAGEMENT CONFERENCE

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  • 05/15/2015
  • Notice of Case Management Conference; Filed by Clerk

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  • 05/11/2015
  • COMPLAINT FOR PARTITION

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  • 05/11/2015
  • SUMMONS

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  • 05/11/2015
  • Complaint; Filed by null

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  • 01/01/1900
  • at 08:32 AM in Department Legacy; Unknown event

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Tentative Rulings

Case Number: BC581496    Hearing Date: July 30, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Michael zugsmith, et al.;

Plaintiffs,

vs.

Robert F. scullin, et al.;

Defendants.

Case No.:

BC581496

Consolidated with: BC645362

Related Case:

19STCV18048

Hearing Date:

July 30, 2020

[TENTATIVE] RULING RE:

PLAINTIFFS’ MOTION TO DISMISS CATHY SCULLIN’S SECOND AMENDED CROSS-COMPLAINT FOR FAILURE TO JOIN AN INDISPENSABLE PARTY

plaintiffs’ motion for leave to file a third party cross-complaint against nai capital, inc. for indemnity and contribution

Plaintiffs’ Motion to Dismiss Cathy Sculling’s Second Amended Cross-Complaint for Failure to Join an Indispensable Party is DENIED.

Plaintiff’s Motion for Leave to File a Third Party Cross-Complaint Against NAI Capital, Inc. for Indemnity and Contribution is DENIED.

FACTUAL BACKGROUND

This is a case for the partition by sale of a co-owned LLC. Ventura Gaviota, LLC is a limited liability company. (Complaint ¶ 4.) The members of Ventura Gaviota are Plaintiffs Michael A. Zugsmith and Rachel Susan Zugsmith, Trustees of The Zugsmith Family Trust (collectively, “Zugsmith Trust”) and Defendants Robert F. Scullin and Cathy B. Scullin as Trustees of The Scullin Revocable Family Trust (collectively, “Scullin Trust”). (Complaint ¶¶ 3–4.) Zugsmith Trust and Scullin Trust each hold a fifty (50%) percent Membership interest in Ventura Gaviota, LLC. (Complaint ¶ 11.) Defendant Ventura Gaviota LLC is the owner of the fee title to the property at issue. (Complaint ¶ 5.) Zugsmith Trust alleges that Does 1 through 20 (“the Unknown Defendants”) each claim some right, title, estate, lien or interest in Ventura Gaviota, LLC adverse to Zugsmith Trust’s interest and their claims constitute a cloud on title. (Complaint ¶ 7.) Zugsmith Trust is presently aware of some but possibly not all liens or encumbrances on Ventura Gaviota, LLC, and if and when the existence of such lienholders become known to Zugsmith Trust, they will amend the Complaint to add them as Does 100 through 120. (Complaint ¶ 8.)

Zugsmith Trust seeks an order for partition of the Property by sale (the “Partition”) for the common benefit of the parties, to preserve and secure to each of them the parties’ respective interests and rights in the Property. (Complaint ¶ 13.) Plaintiffs allege that Partition by sale of the Property is more equitable than division in kind of the Property because the Property is an office building that cannot be divided. (Complaint ¶ 14.) In addition, such division would diminish all parties’ interests and value in the Property. (Id.)

Cathy Scullin as a Trustee of the Scullin Trust (“Cathy Scullin”) filed a Cross-Complaint against the Michael A. Zugsmith and Rachel Susan Zugsmith (the “Zugsmiths”). The action was taken derivatively of Ventura Gaviota, LLC (“Ventura Gavioa”), which is named as a nominal defendant. (First Amended Cross-Complaint (“FACC”) ¶ 4.) The FACC alleges that on October 2, 2001 the Scullin Trust and the Zugsmiths entered into an Operating Agreement for Ventura Gaviota. (FACC ¶ 9.) The FACC alleges that the Zugsmiths breached the Operating Agreement by mismanaging Ventura Gaviota and using company money in 2015 to “refurnish assets” owned by NAI Capital, Inc. without its consent. (FACC ¶ 10.) The FACC also alleges that the Zugsmiths breached the Operating Agreement by wrongfully extending a tenant’s lease against the best interests of Ventura Gaviota and without the Scullin Trust’s consent, specifically, by giving a company owned by the Zugsmiths’ son-in-law reduced rent, free parking and free tenant improvement worth thousands of dollars. (FACC ¶ 11.)

PROCEDURAL HISTORY

This Complaint was filed on May 11, 2015, and states one cause of action:

  1. For Partition of the Property against all Defendants

On September 28, 2015, this court overruled a demurrer by the Scullin Trust to the Complaint. The court on that date also entered a Case Management Order setting this matter for trial on June 28, 2016. On October 8, 2015, the Scullin Trust defendants filed their Answer to the Complaint.

Cathy Scullin filed her FACC on November 25, 2015, alleging two causes of action:

  1. Breach of Operating Agreement

  2. Breach of Fiduciary Duty

On April 12, 2016, this court overruled the Zugsmiths’ demurrer to the FACC and denied their Motion to Strike portions of the FACC. On April 22, 2016, the Zugsmiths filed their Answer to the FACC.

The Zugsmiths filed their First Amended Complaint on June 27, 2016, alleging six causes of action:

  1. Involuntary Dissolution of Limited Liability Company

  2. Partition

  3. An Accounting

  4. Negligence

  5. Breach of Fiduciary Duty

  6. Intentional Interference with Contractual Relationship

On September 2, 2016, this court issued its tentative ruling to grant Robert F. Scullin’s Motion to Strike the Third, Fourth, Fifth, and Sixth Causes of Action without leave to amend without prejudice, but pursuant to an agreement by the parties, the court struck the entire FAC and Zugsmith proceeded on the initial complaint filed on May 11, 2015.

On October 14, 2016, the Zugsmiths dismissed Kenneth Himmler as Trustee of the Robert F. Scullin Irrevocable Trust No. 1 as a defendant, without prejudice. On October 14, 2016, the Zugsmiths dismissed Gerald Scullin, as Trustee of the Cathy Scullin Irrevocable Trust No. 1 as a defendant, without prejudice.

On December 30, 2016, the Scullins filed their Complaint in the Related Case BC645362. On January 11, 2017, they filed their First Amended Complaint.

On March 3, 2017, this court denied Cathy Scullin’s Motion for Summary Adjudication of Issues.

On April 20, 2017, Cathy Scullin filed her Second Amended Cross-Complaint, alleging the same two causes of action.

On November 9, 2017, this court denied the Zugsmiths’ Motion for Summary Judgment against the FACC.

On October 26-28, 2018, this Court held a bench trial on defined issues in consolidated actions BC581496 and BC645362. The issues tried were the valuation of the LLC in BC654362, the procedure to be followed in that action with respect to the Scullins’ election to purchase the Zugsmiths’ interests in the LLC, the valuation of the Property in BC581496, and the procedure to be followed in that action in the event the Scullins did not perfect and complete their election to purchase the Zugsmiths’ interests in the LLC in BC654362.

On December 14, 2018, this Court issued a Tentative Statement of Decision Following Trial.

On February 5, 2019, the Court granted Defendants’ Motion for Clarification of a Ruling Following Trial. The Court clarified that Defendants are to make out a cashier’s check to the Zugsmiths, to be deposited into escrow, and Zugsmiths are to transfer Ventura Gaviota, LLC’s books and records and physical items to Ventura Gaviota, LLC within 10 days of receipt of the check.

On February 13, 2019, Scullins filed a Notice of Election to Purchase Zugsmiths’ Membership Interests in Ventura Gaviota, LLC.

On May 23, 2019, the Complaint was filed in Related Case 19STCV18048 (Rachel Howitt, et al. v. Cathy Scullin, et al.). On June 3, 2019, Plaintiffs filed a Notice of Related Case.

On November 26, 2019, Plaintiffs filed the instant Motion to Dismiss Cathy Scullin’s Second Amended Cross-Complaint for Failure to Join an Indispensable Party.

On December 17, 2019, Plaintiffs filed the instant Motion for Leave to File a Third Cross-Complaint against NAI Capital, Inc.

On February 3, 2020, non-party NAI Capital, Inc. filed a Notice of Filing of Petition for Relief Under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C., § 101, et seq., and Imposition of an Automatic Stay.

On July 17, 2020, Defendants filed an Opposition to the Motion to Dismiss and Motion for Leave to File Cross-Complaint.

On July 23, 2020 Plaintiffs filed a reply.

DISCUSSION

  1. MOTION TO DISMISS CATHY B. SCULLIN’S SECOND AMENDED CROSS-COMPLAINT FOR FAILURE TO JOIN AN INDISPENSIBLE PARTY

Defendants argue that Cathy Scullin failed to join an indispensable party, non-party NAI Capital, Inc. (“NAI”) to her Second Amended Cross-Complaint (“SAXC”) filed April 20, 2017. (Motion at p. 1.) Defendants contend that NAI is indispensable because complete relief cannot be afforded without NAI’s joinder because the question of NAI’s unpaid rent balance cannot be resolved unless NAI is bound by a judgment in this case. (Motion at p. 5.) They also argue that NAI has an interest in determining whether Cathy Sculling and/or VG LLC are entitled to monies claimed as owed in the SAXC. (Motion at p. 7.)

Under Code of Civil Procedure section 389, a Plaintiff (or Cross-Complainant), must join all persons whose interests are so involved in the case such that the court cannot render a judgment in this party’s absence. (Code Civ. Proc., § 389.)

“(a) A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.”

(Code Civ. Proc., § 389.)

Modern compulsory joinder rules are based on the weighing of “factors of practical realities and other considerations.” (Bianka M. v. Superior Court (2018) 5 Cal.5th 1004, 1018.)

In this case, there are several issues. First, Plaintiffs did not plead improper joinder as an affirmative defense to the SAXC when it was filed nearly three years ago. “A party who fails to plead affirmative defenses waives them.” (Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 813.) A party may object to a complaint’s misjoinder of parties pursuant to Code of Civil Procedure 430.10, subdivision (d). Further, California’s compulsory joinder statute is based on Federal Rule 19. In relation to Federal Rule 19, the amount of time that it takes party to bring a Motion to Dismiss for Nonjoinder is relevant to whether the motion should be granted.

“[W]hen the moving party is seeking dismissal in order to protect himself against a later suit by the absent person [] and is not seeking vicariously to protect the absent person against a prejudicial judgment [], his undue delay in making the motion can properly be counted against him as a reason for denying the motion. A joinder question should be decided with reasonable promptness, but decision may properly be deferred if adequate information is not available at the time.”

(Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 22.)

Here, Plaintiffs’ Motion does not make any mention or argument as to why they waited several years to bring this Motion. In fact, since the Plaintiffs control NAI, there should be no reason why they would have had inadequate information regarding NAI at the time that the SAXC was filed. (SAC, ¶ 10 [“NAI Capital, Inc. is a commercial real estate brokerage company controlled by Michael and Rachel Zugsmiths”].)

Further, Cathy Scullin argues in Opposition that NAI is not an indispensable party pursuant to section 389 because she is not seeking relief against NAI: “NAI did not breach a fiduciary duty to VG, LLC and it did not breach VG LLC’s operating agreement – Zugsmiths did.” (Oppo. at p. 2.)

In any event, the Court will not order the joinder NAI to the SAXC under section 389, subdivision (a) because NAI filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Federal Bankruptcy Code on January 21, 2020. Under U.S. Bankruptcy Code section 362, the commencement of judicial actions against NAI are automatically stayed. (11 U.S. Code, § 362(a)(1).) Accordingly, the Court may not order the joinder of NAI to the SAXC as the commencement of new judicial actions against NAI are presently stayed.

Interestingly, Cathy Scullin argues that Plaintiffs are seeking to join NAI because of the bankruptcy with the goal to “have NAI pay Zugsmiths’ bill. If granted they would inequitably allow Zugsmiths to discharge their personal debt and liability through NAI bankruptcy filed on January 31,2020 at minimal or no cost.” (Oppo. at p. 1.)

The statutory factors of whether a party who cannot be joined is indispensable are found in section 389(b). (County of Imperial v. Superior Court (2007) 152 Cal.App.4th 13, 35, as modified on denial of reh'g (July 13, 2007).)(b):

“(b) If a person as described in paragraph (1) or (2) of subdivision (a) cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person's absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.”

(Code Civ. Proc., § 389.)

“Section 389, subdivision (b), leaves the judge ‘with substantial discretion in considering which factors to weigh and how heavily to emphasize certain considerations in deciding whether the action should go forward in the absence of someone needed for a complete adjudication of the dispute.’” (Dreamweaver Andalusians, LLC v. Prudential Ins. Co. of America (2015) 234 Cal.App.4th 1168, 1176.)

Zugsmiths argue that not joining NAI would be prejudicial because NAI has a right to the monies at issue in the SAXC, and a judgment in Cathy Scullin’s favor would reduce the amount of money NAI “has a right to without being heard.” (Oppo. at p. 12.)

However, for all intents and purposes, Zugsmiths and NAI are one in the same. The non-joined NAI’s “litigation objective would duplicate the objective of the joined defendants. For this reason alone the interests of the non-joined parties are adequately represented by the defendants.” (Deltakeeper v. Oakdale Irrigation Dist. (2001) 94 Cal.App.4th 1092, 1103.) On the contrary, Cathy Scullin would sacrifice her ability to recover for breach of the operating agreement and fiduciary duty if the SAXC were dismissed. “The test for determining the ability to protect an absent party's interest is whether existing and absent parties' interests are sufficiently aligned that the absent party's rights necessarily will not be affected or impaired by the judgment or proceeding.” (County of Imperial v. Superior Court, supra, 152 Cal.App.4th at 38.) Because Zugsmiths control NAI, and the Complaint’s allegations are based on the actions of Zugsmiths, their interests are necessarily aligned and Zugsmiths will adequately protect the interests of NAI. (See Id.)

Accordingly the Motion to Dismiss is DENIED.

  1. LEAVE TO FILE A CROSS-COMPLAINT

Plaintiffs Zugsmiths seeks leave to file a Cross-Complaint against NAI. (Motion at pp. 1-2.) The proposed cross-complaint is entitled “Cross-Complaint of Third-Party Cross-Complainants Michael Zugsmith and Rachel Susan Zugsmith Against Third-Party Cross-Defendant NAI Capital, Inc. (Woollacott Decl., Exh. A.)

There are several issues with this Motion. First, Zugsmiths’ legal authority comes from Code of Civil Procedure section 438.10, which allows “a party against whom a cause of action has been asserted in a complaint or cross-complaint” to file a cross-complaint. (Code Civ. Proc., 438.10.) However, Zugsmiths do not cite any authority for this section authorizing them, as plaintiffs, to file a separate cross-complaint rather than amending their existing complaint.

In any event, the Court may will not grant the motion for leave to file a cross-complaint because the proposed cross-defendant, NAI, has filed a petition for Chapter 11 relief in Federal Bankruptcy court and the commencement of judicial actions against NAI are automatically stayed. (11 U.S. Code, § 362(a)(1).) Accordingly, Zugsmiths may not bring an action against NAI while the bankruptcy stay is pending.

The Motion for Leave to File an Amended Cross-Complaint is DENIED.

Dated: July 30, 2020

______________________________________

Hon. Robert S. Draper

Judge of the Superior Court

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