ADMIRE CAPITAL LENDING LLC ET AL VS HYUN SOON OH ET AL

Tentative Rulings

Case Number: ****6225 Hearing Date: November 12, 2021 Dept: 55

ADMIRE CAPITAL LENDING LLC v. HYUN SOON OH ****6225

Hearing Date: 11/12/21, Dept. 55

#7: MOTION TO SEVER EQUITABLE CLAIMS AND DEFENSES FROM CLAIMS TO BE TRIED BY THE JURY.

Notice: Okay

Opposition

MP: Plaintiffs/Cross-Defendants

RP: Defendants/Cross-Complainants DAVID RHEE and STEFFANY RHEE

Summary

On 12/7/17, plaintiffs ADMIRE CAPITAL LENDING, LLC and BELMONT TWO INVESTMENT HOLDINGS, LLC filed a Complaint having alleged theories, including that, plaintiffs are entitled to various security interests, and damages, related to business loans made, and that, about September 10, 2015, as an inducement to plaintiffs to grant financial accommodations to non-party, 450 5. Western, LLC, individual defendants executed written guaranty agreements, as to obligations of that non-party.

The causes of action are:

1. BREACH OF WRITTEN GUARANTY AGREEMENT

2. BREACH OF WRITTEN GUARANTY AGREEMENT

3. BREACH OF WRITTEN GUARANTY AGREEMENT

4. BREACH OF WRITTEN GUARANTY AGREEMENT

5. CLAIM AND DELIVERY

6. FORECLOSURE OF PERSONAL PROPERTY SECURITY

7. FORECLOSURE OF REAL PROPERTY SECURITY

8. FORECLOSURE OF REAL PROPERTY SECURITY.

On 5/25/18, defendants/cross-complainants HYUN SOONOH, STEFFANY RHEE, DAVID RHEE, GAJU MARKET CORPORATION, and CARMANITA CORPORATION, filed a Cross-Complaint, against plaintiffs, and others, alleging, inter alia, that cross-defendants Yi, Geo Kim and One Properties knowingly acted against Rhee’s interests, in connection with her execution of the loan documents at issue in this action, related to the California Marketplace, by placing their interests ahead of their client, thereby compromising her position in 450 S. Western, LLC.

The causes of action are:

1) BREACH OF FIDUCIARY DUTY

2) AIDING AND ABETTING BREACH OF FIDUCIARY DUTY

3) BREACH OF FIDUCIARY DUTY

4) FRAUDULENT MISREPRESENTATION

5) FRAUDULENT CONCEALMENT

6) CONSPIRACY TO DEFRAUD

7) UNFAIR COMPETITION IN VIOLATION OF BUSINESS AND PROFESSIONS CODE 17200

8) INDEMNITY.

MP Positions

Moving parties request the Court to sever equitable claims and defenses and issues of law from issues to be tried by the jury, on grounds including the following:

· Equitable claims and defenses in this case include (i) Plaintiffs’ Fifth Cause of Action for Claim and Delivery; and (ii) Plaintiffs’ Sixth Cause of Action for Foreclosure of Personal Property Security; (iii) Defendants’ Fifteenth Affirmative Defense for Rescission; (iv) Defendants’ Sixteenth Affirmative Defense for Unjust Enrichment; (v) Defendants’ Twenty-Second Affirmative Defense of Unenforceable Penalty; (vi) Cross-Complainants’ Seventh Cause of Action for Unfair Competition; and (vii) Cross-Defendants’ Twenty-Fourth Affirmative Defense of Release.

· Trial will also require adjudication of issues of law including, but not limited to, Defendants’ argument that the $10 million debt underlying the guaranty agreements has been “extinguished” by operation of law and no longer exists.

· These equitable claims and defenses and issues of law must be tried first by the Court.

· Additionally, the Court may sever an issue to avoid prejudicing the jury. C.C.P. ; 1048. Certain of these equitable claims and defenses and issues of law would likely confuse and mislead the jury, consume undue time and create substantial danger of undue prejudice.

RP Positions

Opposing parties advocate denying, for reasons including the following:

· Resolution of the "equitable" causes of action will not obviate the need for a jury trial to resolve the "legal" causes of action.

· Plaintiffs fail to make any cognizable showing as to how trying the alleged equitable claims and defenses, and legal issues together will “confuse and mislead the jury,” “consume undue time,” or “create substantial danger of undue prejudice.”

· Plaintiffs’ fail to make the required showing that severance will result in judicial efficiency. CCP ; 1048(b).

· Witnesses would have to be called twice to provide virtually the same testimony-- once for the court, and once for the jury.

· Virtually the same documentary evidence would have to be introduced into evidence twice.

· Defendants’ Affirmative Defense of Unjust Enrichment relates to a legal claim.

Tentative Ruling

The motion is denied, in the Court’s discretion.

"Code of Civil Procedure section 598 allows a party to seek an order before trial ‘that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case,\' where ‘the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby ….\'" Estate of Young (2008) 160 Cal. App. 4th 62, 90. In general, ‘[w]hether there shall be a severance and separate trials on issues in a single action is a matter within the discretion of the trial court . . . .’ " Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal. App. 4th 847, 911. Accord Regents of Univ. of Cal. v. Sheily (2004) 122 Cal. App. 4th 824, 833; Royal Surplus Lines Ins. Co. v. Ranger Ins. Co. (2002) 100 Cal. App. 4th 193, 205; Finley v. Sup. Ct. (2000) 80 Cal. App. 4th 1152, 1163; Grappo v. Coventry Financial Corp. (1991) 235 Cal.App.3d 496, 504.

Preferably, equitable issues are to be tried before legal issues in a case, although judges have discretion. Hoopes v. Dolan (2008) 168 Cal. App. 4th 146, 150–51, 157 (“While the trial judge should have considered the equitable defense first, and thus avoided an unnecessary jury trial, the order of trial was within the court\'s discretion and did not divest the judge of his duty to determine applicability of equitable estoppel.”).

“Where plaintiff\'s claims consist of a ‘mixed bag’ of equitable and legal claims, the equitable claims are properly tried first by the court.” Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1238 (citing, e.g., Walton v. Walton (1995) 31 Cal.App.4th 277, 293). A bifurcated, initial court trial of equitable issues, claims implicating legal issues, is proper. Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1244.

Where a ‘mixed bag’ of legal and equitable claims is presented in a case, a court trial of the equitable claims first may obviate the necessity of a jury trial on the legal claims, but otherwise the plaintiff cannot be denied the right to a jury trial on the legal causes of action.” DiPirro v. Bondo Corp. (2007) 153 Cal.App.4th 150, 184-85. “Where … there are equitable and legal remedies sought in the same action, the parties are entitled to have a jury determine the legal issues unless the trial court\'s initial determination of the equitable issues is also dispositive of the legal issues, leaving nothing to be tried by a jury.” Am. Motorists Ins. Co. v. Sup. Ct. (1998) 68 Cal. App. 4th 864, 871. Accord Raedeke v. Gibraltar Sav. & Loan Assoc. (1974) 10 Cal. 3d 665, 671.

“While the judge determines equitable causes of action, the judge may (in rare instances) empanel an advisory jury to make preliminary factual findings.” Hoopes v. Dolan (2008) 168 Cal.App.4^th 146, 156. “‘There can be no question that there may be an advisory jury in an equitable action, and that a trial court has the discretion to submit issues to a jury and adopt the jury\'s findings on factual matters.’” Caira v. Offner (2005) 126 Cal. App. 4th 12, 22 n.4 (quoting Saks v. Charity Mission Baptist Church (2001) 90 Cal.App.4th 1116, 1147).

Judges’ findings made in a first trial phase addressing equitable issues are binding on juries in the second phase, and, likewise, issues adjudicated by juries are binding in later phases of trial, and are not re-litigated. Hoopes v. Dolan (2008) 168 Cal.App.4^th 146, 157. "Issues adjudicated in earlier phases of a bifurcated trial are binding in later phases of that trial and need not be relitigated." Arntz Contracting Co. v. St. Paul Fire & Marine Ins. Co. (1996) 47 Cal.App.4th 464, 487.

Unjust enrichment involving a definite sum of money without an accounting goes to the jury. Am. Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal. App. 4th 1451, 1483.