This case was last updated from Los Angeles County Superior Courts on 05/24/2019 at 03:26:33 (UTC).

BRIAN W CRANE VS R R CRANE INVESTMENT CORPORATION INC

Case Summary

On 11/13/2017 BRIAN W CRANE filed a Contract - Business Governance lawsuit against R R CRANE INVESTMENT CORPORATION INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is ROBERT B. BROADBELT. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****3006

  • Filing Date:

    11/13/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Business Governance

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

ROBERT B. BROADBELT

 

Party Details

Plaintiff

CRANE BRIAN W.

Defendant

R.R. CRANE INVESTMENT CORPORATION INC.

Cross Plaintiff

CRANE KEVIN R

Attorney/Law Firm Details

Plaintiff Attorneys

MANKEY CAROLINE HOADLEY

MANKEY CAROLINE HOADLEY ESQ.

Defendant Attorney

MOTLEY DALE E. ESQ.

 

Court Documents

CROSS-DEFENDANTS' ANSWER TO CROSS-COMPLAINT

2/9/2018: CROSS-DEFENDANTS' ANSWER TO CROSS-COMPLAINT

NOTICE OF CHANGE OF LAW FIRM AND ADDRESS OF COUNSEL

2/22/2018: NOTICE OF CHANGE OF LAW FIRM AND ADDRESS OF COUNSEL

Unknown

2/22/2018: Unknown

Unknown

2/23/2018: Unknown

NOTICE OF MOTION AND MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE 2000; MEMORANDUM OF

3/9/2018: NOTICE OF MOTION AND MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE 2000; MEMORANDUM OF

Minute Order

3/13/2018: Minute Order

NOTICE OF NON-OPPOSITION BY PLAINTIFF AND CROSS-DEFENDANTS TO MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS

5/8/2018: NOTICE OF NON-OPPOSITION BY PLAINTIFF AND CROSS-DEFENDANTS TO MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS

REPLY TO NOTICE OF NON-OPPOSITION TO MOTION AND MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATION

5/14/2018: REPLY TO NOTICE OF NON-OPPOSITION TO MOTION AND MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATION

Minute Order

5/21/2018: Minute Order

Minute Order

5/21/2018: Minute Order

DEPARTMENT 53 LAW AND MOTION RULINGS

5/21/2018: DEPARTMENT 53 LAW AND MOTION RULINGS

ORDER GRANTING MOTION STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF PLAINTIFF'S SHARES OF R.R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE ? 2000

5/21/2018: ORDER GRANTING MOTION STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF PLAINTIFF'S SHARES OF R.R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE ? 2000

NOTICE OF ENTRY OF ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R.CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE SECTION 2000

5/25/2018: NOTICE OF ENTRY OF ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R.CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE SECTION 2000

NOTICE OF RULING ON MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE SECTION 2000

5/25/2018: NOTICE OF RULING ON MOTION FOR ORDER STAYING CASE AND APPOINTING APPRAISERS TO DETERMINE VALUE OF SHARES OF R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE SECTION 2000

DESIGNATION OF APPRAISER BY R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE ? 2000

6/7/2018: DESIGNATION OF APPRAISER BY R. R. CRANE INVESTMENT CORPORATION, INC. PURSUANT TO CORPORATIONS CODE ? 2000

REQUEST FOR REFUND

6/8/2018: REQUEST FOR REFUND

CIVIL BOND

6/8/2018: CIVIL BOND

PLAINTIFF BRIAN CRANE'S NOTICE OF DESIGNATION OF APPRAISER

6/8/2018: PLAINTIFF BRIAN CRANE'S NOTICE OF DESIGNATION OF APPRAISER

49 More Documents Available

 

Docket Entries

  • 05/13/2019
  • Docketat 08:30 AM in Department 53, Robert B. Broadbelt, Presiding; Hearing on Motion - Other (CONFIRM AWARD OF APPRAISERS) - Not Held - Continued - Court's Motion

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  • 05/13/2019
  • Docketat 08:30 AM in Department 53, Robert B. Broadbelt, Presiding; Hearing on Motion for Order (Setting a Deferred Valuation Date Pursuant to Corporations Code section 2000(f)) - Not Held - Continued - Court's Motion

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  • 05/13/2019
  • DocketNotice (of Further Continuance of Hearing); Filed by R.R. Crane Investment Corporation, Inc. (Defendant)

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  • 05/13/2019
  • DocketMinute Order ( (Hearing on Motion - Other CONFIRM AWARD OF APPRAISERS; Hearin...)); Filed by Clerk

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  • 04/25/2019
  • Docketat 08:30 AM in Department 53, Robert B. Broadbelt, Presiding; Hearing on Motion for Order (Setting a Deferred Valuation Date Pursuant to Corporations Code section 2000(f)) - Not Held - Advanced and Continued - by Court

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  • 04/25/2019
  • Docketat 08:30 AM in Department 53, Robert B. Broadbelt, Presiding; Hearing on Motion - Other (CONFIRM AWARD OF APPRAISERS) - Not Held - Advanced and Continued - by Court

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  • 04/24/2019
  • Docketat 11:19 AM in Department 53, Robert B. Broadbelt, Presiding; Non-Appearance Case Review

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  • 04/24/2019
  • DocketOrder (Confirming award of appraisers, and Motion for order setting valuation); Filed by Clerk

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  • 04/24/2019
  • DocketNotice (of Continuance of Hearings); Filed by R.R. Crane Investment Corporation, Inc. (Defendant)

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  • 04/24/2019
  • DocketMinute Order ( (Non-Appearance Case Review;)); Filed by Clerk

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95 More Docket Entries
  • 01/05/2018
  • DocketCROSS-COMPLAINT FOR DECLARATORY RELIEF

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  • 12/07/2017
  • DocketNotice and Acknowledgment of Receipt; Filed by Brian W. Crane (Plaintiff)

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  • 12/07/2017
  • DocketNOTICE OF ACKNOWLEDGEMENT OF RECEIPT - CIVIL

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  • 11/17/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 11/17/2017
  • DocketOSC-Failure to File Proof of Serv; Filed by Clerk

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  • 11/17/2017
  • DocketORDER TO SHOW CAUSE HEARING

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  • 11/17/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 11/13/2017
  • DocketSUMMONS

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  • 11/13/2017
  • DocketComplaint; Filed by Brian W. Crane (Plaintiff)

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  • 11/13/2017
  • DocketVERIFIED COMPLAINT FOR INVOLUNTARY DISSOLUTION OF R.R. CRANE INVESTMENT CORPORATION, INC.

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Tentative Rulings

Case Number: ****3006 Hearing Date: August 9, 2022 Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

brian w. crane, trustee of the crane family trust for the benefit of brian w. crane ;

Plaintiff,

vs.

r.r. crane investment corporation, inc. ;

Defendant.

Case No.:

****3006

Hearing Date:

August 9, 2022

Time:

10:00 a.m.

[Tentative] Order RE:

motion to set aside and vacate judgment

MOVING PARTY: Defendant and Cross-Complainant R.R. Crane Investment Corporation, Inc.

RESPONDING PARTY: Plaintiff and Cross-Defendant Brian W. Crane

Motion to Set Aside and Vacate Judgment

The court considered the moving, opposition, and reply papers filed in connection with this motion.

EVIDENTIARY OBJECTIONS

The court overrules Brian W. Crane’s July 15, 2022 evidentiary objections.

DISCUSSION

Defendant and Cross-Complainant R.R. Crane Investment Corporation (“RRCIC”) moves the court for an order (1) setting aside its June 7, 2022 judgment in favor of Brian Crane (“Crane”) and against RRCIC following the court’s order granting Crane’s motion for summary judgment against RRCIC’s First Amended Cross-Complaint and (2) entering a new order denying Crane’s motion for summary judgment. RRCIC moves for relief pursuant to Code of Civil Procedure section 663 on the ground that the court’s order granting Crane’s motion for summary judgment was supported by an incorrect or erroneous legal basis for the decision and was not consistent with or supported by the facts.

A motion to set aside and vacate a judgment and enter a different judgment under Code of Civil Procedure section 663 “is a remedy to be used when a trial court draws incorrect conclusions of law or renders an erroneous judgment on the basis of uncontroverted evidence.” (Simac Design, Inc. v. Alciati (1979) 92 Cal.App.3d 146, 153.) Section 663 provides that a judgment may be vacated on the ground of an “[i]ncorrect or erroneous legal basis for the decision, not consistent with or not supported by the facts . . . .” (Code Civ. Proc., 663; see Glen Hill Farm, LLC v. California Horse Racing Board (2010) 189 Cal.App.4th 1296, 1302 [noting that the court cannot “in any way change any finding of fact”].)

The court denies RRCIC’s motion to set aside and vacate judgment because RRCIC has not met its burden to establish that the court’s judgment was rendered on an incorrect or erroneous legal basis, not consistent with or not supported by the facts. (Code Civ. Proc., 663, subd. (1).)

First, the court finds that RRCIC failed to meet its burden of establishing an incorrect or erroneous legal basis for the court’s order granting Crane’s motion for summary judgment that is not consistent with or not supported by the facts on the ground that there were triable issues of fact that required denying Crane’s motion. The evidence supported a finding that (1) the statute of limitations began to accrue when Crane disputed the loan on February 14, 2008, and (2) any evidence demonstrating that Crane later acknowledged the loan occurred following the expiration of the statute of limitations for each of RRCIC’s causes of action and therefore could not revive RRCIC’s barred claims.

Second, the court notes that RRCIC failed to raise the issue of offset in (1) its operative First Amended Cross-Complaint, (2) its Answer to Crane’s Complaint, and (3) its opposition to Crane’s motion for summary judgment. Because offset is an affirmative defense, RRCIC was required to plead this defense in its Answer. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198 [“the defendant may only assert the setoff defensively”].) RRCIC failed to plead this theory in its Answer and therefore is deemed to have waived it. (Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 813.) The court notes that RRCIC contends that this defense may be pleaded in a cross-complaint. Even if the court were to accepted this contention, a review of RRCIC’s pleadings reveals that RRCIC failed to plead or request offset in its First Amended Cross-Complaint.

Third, even assuming that the issue of offset were not waived, the court finds that Code of Civil Procedure section 431.70 is inapplicable to the circumstances presented here. Under section 431.70, “[w]here cross-demands for money have existed between persons at any point in time when neither demand was barred by the statute of limitations, and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other, notwithstanding that an independent action asserting the person’s claim would at the time of filing the answer be barred by the statute of limitations.”

Crane filed his Complaint against RRCIC on November 13, 2017, asserting one cause of action for involuntary dissolution. (Compl., 12-15.) Crane’s prayer for relief requested (1) a decree that RRCIC be wound up and dissolved; (2) ancillary orders and decrees necessary to effectuate RRCIC’s winding up and dissolution; and (3) additional and further relief as the court deems proper. (Compl., Prayer, 1-3.) Crane’s Complaint did not contain a demand for money. The court therefore finds that section 431.70 is inapplicable because no “cross-demands for money [] existed between” Crane and RRCIC.

For the reasons set forth above, the court finds that RRCIC has failed to meet its burden of establishing that, in granting Crane’s motion for summary judgment and subsequently entering judgment in favor of Crane and against RRCIC on June 7, 2022, the court drew “incorrect conclusions of law or render[ed] an erroneous judgment on the basis of uncontroverted evidence.” (Simac Design, Inc., supra, 92 Cal.App.3d at p. 153.)

ORDER

The court denies R.R. Crane Investment Corporation, Inc.’s Motion to Set Aside and Vacate Judgment on its Cross-Complaint.

The court orders plaintiff and cross-defendant Brian W. Crane to give notice of this order.

IT IS SO ORDERED.

DATED: August 9, 2022

Robert B. Broadbelt III

Judge of the Superior Court



Case Number: ****3006 Hearing Date: March 25, 2022 Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

brian w. crane, trustee of the crane family trust for the benefit of brian w. crane ;

Plaintiff,

vs.

r.r. crane investment corporations, inc. ;

Defendant.

Case No.:

****3006

Hearing Date:

March 25, 2022

Time:

10:00 a.m.

[Tentative] Order RE:

motion for summary judgment or, in the alternative, summary adjudication

MOVING PARTY: Defendant and Cross-Complainant R.R. Crane Investment Corporation

RESPONDING PARTY: Plaintiff and Cross-Defendant Brian W. Crane

Motion for Summary Judgment or, in the Alternative, Summary Adjudication on the First Amended Cross-Complaint

The court considered the moving, opposition, and reply papers filed in connection with this motion.

EVIDENTIARY OBJECTIONS

The court overrules Cross-Defendant’s evidentiary objections dated January 14, 2022.

The court sustains Cross-Defendants evidentiary objections dated January 27, 2022 as to improper reply evidence.

New evidence is not permitted with reply papers, and “should only be allowed in the exceptional case….” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538 [internal citations omitted].) The evidence submitted by Cross-Complainant in reply should have been submitted with its moving papers. The court finds Cross-Complainant’s reply evidence to be improperly filed and therefore sustains Cross-Defendant’s objections thereto.

JUDICIAL NOTICE

The court grants Cross-Complainant’s request for judicial notice as to Exhibit P.

LEGAL STANDARD

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) For the purposes of motion for summary judgment and summary adjudication, “[a] plaintiff or cross-complainant has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc., 437c, subd. (p)(1).) “Once the plaintiff or cross-complainant has met that burden, the burden shifts to the defendant or cross-defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Code Civ. Proc., 437c, subd. (p)(1).) “When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467; Code Civ. Proc., 437c, subd. (c).)

DISCUSSION

Defendant and Cross-Complainant R.R. Crane Investment Corporation (“RRCIC”) moves for summary judgment on its First Amended Cross-Complaint against Plaintiff and Cross-Defendant Brian Crane (“Crane” or “Cross-Defendant”) or, in the alternative, summary adjudication.

  1. Motion for Summary Judgment

The court finds that RRCIC has not met its burden of showing that it is entitled to judgment on its First Amended Cross-Complaint.

A cross-complainant has met its burden of showing there is no defense to a cause of action “if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc., 437c, subd. (p)(1).) RRCIC’s moving papers fails to set forth the evidence establishing the elements of each cause of action alleged in its First Amended Cross-Complaint, instead generally presenting evidence in support of its contention that Crane admitted he owes a certain amount to RRCIC. RRCIC does not even appear to discuss its fourth cause of action for breach of contract, and fails to explain how its evidence establishes each element of its cause of action.

“Section 437c is a complicated statute. There is little flexibility in the procedural imperatives of the section…. As a result, section 437c is unforgiving; a failure to comply with any of its myriad requirements is likely to be fatal to the offending party.” (Hawkins v. Wilton (2006) 144 Cal.App.4th 936, 949.) RRCIC has failed to “prove[] each element of the cause[s] of action” in its operative First Amended Cross-Complaint. Moreover, RRCIC failed to identify each cause of action, claim for damages, issue of duty, or affirmative defense subject to the motion, and each supporting material fact claimed to be without dispute with respect to the cause of action, claim for damages, issue of duty, or affirmative defense in its Separate Statement, in violation of California Rules of Court, rule 3.1350. (Cal. Rules of Ct., rule 3.1350, subd. (d)(1).) RRCIC’s failure to comply with the separate statement requirements further evidences its failure to establish that each cause of action has merit, therefore precluding the court from granting its motion for summary judgment.

Moreover, the court has found, as discussed below, that RRCIC has failed to dispose of the affirmative defense of the statute of limitations. Because RRCIC has not shown that there is no defense to all of the causes of action alleged in its First Amended Cross-Complaint, the court finds RRCIC is not entitled to judgment as a matter of law.

The court therefore denies RRCIC’s motion for summary judgment.

  1. Improper Issues for Summary Adjudication

RRCIC alternatively moves for summary adjudication as to the following issues: (1) On April 13, 2013, Brian Crane owed RRCIC, based on the Brian Loan, the sum of $1,725,589.00; (2) Repayment of the Brian Loan was deferred until November 13, 2017; (3) Any statute of limitation for an action to collect the Brian Loan did not commence to run until November 13, 2017; (4) As the president of RRCIC, Brian Crane owed a fiduciary duty to RRCIC; (5) Brian Crane breached his fiduciary duty to RRCIC; and (6) Brian Crane is estopped from asserting as an affirmative defense any statute of limitation regarding the Brain Loan with respect to the claims asserted by RRCIC in this action. (Notice of Motion, p. 2:6-23.)

“A party may move or summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends…that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense to any cause of action…or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., 437c, subd. (f)(1).) A motion for summary adjudication may be granted “only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Ibid.)

Cross-Defendant correctly notes that a number of these issues cannot be determined on a motion for summary adjudication. None of the issues seeks summary adjudication of an entire cause of action or a claim for damages. The first issue relating to Crane’s owing the sum of $1,725,589.00 to RRCIC does not expressly go to the adjudication of a cause of action, affirmative defense, issue of duty, or claim for damages. Nor does the second issue of the deferment date of the Brian Loan’s repayment. While issue number five—seeking adjudication of whether Crane breached his fiduciary duty—speaks of Crane’s duty to RRCIC, it does not seek to adjudicate whether “one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Ibid.)

However, the court notes that the fourth issue permissibly seeks adjudication as to whether Crane “either owed or did not owe a duty to” RRCIC, and that adjudication of the issue would “completely dispose[] of…an issue of duty.” (Code Civ. Proc., 437c, subd. (f)(1).) The sixth issue properly seeks adjudication of, and would “completely dispose[] of,” the affirmative defense of statute of limitations.[1] (Ibid.)

Accordingly, the only issues properly before the court for summary adjudication are: (1) Issue Number Four: As the president of RRCIC, Crane owed a fiduciary duty to RRCIC, and (2) Issue Number Six: Crane is estopped from asserting as an affirmative defense any statute of limitation regarding the Brian Loan with respect to the claims asserted by RRCIC in this action.

  1. Crane’s Fiduciary Duty to RRCIC

“[A] fiduciary relationship is ‘any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party.’” (Cleveland v. Johnson (2012) 209 Cal.App.4th 1315, 1338.) “[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 221.)

The court finds that RRCIC has not met its burden of showing that Crane owed a fiduciary duty to RRCIC as its President. RRCIC cites law establishing that “an officer who participates in management of the corporation, exercising some discretionary authority, is a fiduciary of the corporation as a matter of law.” (Gab Bus. Servs. v. Lindsey & Newsom Claim Servs. (2000) 83 Cal.App.4th 409, 420-421 [overruled in part on other grounds].) Moreover, “[e]ven when an officer loses power or authority, that officer still owes a fiduciary duty to the corporation. To divest himself or herself of the duty, the officer must resign the office.” (Id. at 421.)

While RRCIC presents evidence that Crane acted as, or held himself out as, President of RRCIC until 2021, RCCIC fails to present evidence that Crane participated in the management of RRCIC. The evidence produced by RRCIC is as follows. First, the recorded minutes from a meeting held on October 20, 2000 by RRCIC’s Board of Directors identifies Crane to be President and Secretary. (Kevin Crane Decl., Ex. B. at RRCIC 00333.) Next, an email from Cross-Defendant to Kevin Crane, dated October 18, 2019, contains the following statements from Cross-Defendant Crane: “Let me set the record straight[.] I am now and still the President of RR Crane Investment Corp…. I never resigned or was terminated by the Board of Directories [sic] from the company.” (Kevin Crane Decl., Ex. J. at RRCIC 00559.) Finally, a January 29, 2021 email from Caroline Mankey, of Akerman LLP, stated that “In his continuing position as President of RR Crane, [Cross-Defendant] has certain rights…. However…we are willing to address the request for [his] resignation….” (Motley Decl., Ex. O.)

While RRCIC’s evidence establishes that Cross-Defendant Crane held the title of President, RRCIC failed to present any evidence establishing Crane’s participation in the management of the company. “[S]omething more than a bare title, and less than control, is required…. [S]o long as the officer has some discretion in managing corporate affairs, he or she is a fiduciary of the corporation.” (Gab Bus. Servs., supra, 83 Cal.App.4th at p. 420.) RRCIC’s evidence merely establishes Crane’s title as President, and fails to establish Crane’s participation in the management of RRCIC’s affairs. The court recognizes that RRCIC has attempted to introduce substantial reply evidence in an effort to demonstrate Cross-Defendant’s control over RRCIC. However, this evidence should have been submitted in support of its moving papers. The court declines to consider this evidence based on Cross-Defendant’s due process rights.

The court therefore denies RRCIC’s motion for summary adjudication as to the issue of whether Cross-Defendant Crane owed RRCIC a fiduciary duty. (Code Civ. Proc., 437c, subd. (p)(1), (f)(1).)

  1. Availability of Statute of Limitations Defense: Equitable Estoppel

An action upon a contract, obligation, or liability not founded upon an instrument of writing is subject to a two-year statute of limitations. (Code Civ. Proc., 339, subd. (1).) The statute of limitations for a breach of fiduciary duty is three years or four years, depending on whether the breach is fraudulent or nonfraudulent. (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1479.)

Equitable estoppel “comes into play only after the [statue of] limitations period has run and addresses…the circumstances in which a party will be estopped from asserting the statute of limitations as a defense to an admittedly untimely action because his conduct has induced another into forbearing suit within the applicable limitations period.” (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383.)

The court finds that RRCIC has not met its burden of showing that there is no merit to the affirmative defense of the statute of limitations. RRCIC’s moving papers assert that Cross-Defendant’s “breach of his fiduciary duty to the corporation clearly gives rise to an equitable estoppel” and that “everything [Cross-Defendant] either said or put in writing acknowledged his liability on the Brian Loan. When those facts are added to the fact that he breached his fiduciary duty to RRCIC by never disclosing his intention not to repay the Brian Loan based on the statute of limitations, an equitable estoppel arises.” (Mot., 14:11-12, 15:14-17.) The court has not found that Cross-Defendant breached his fiduciary duty, and has denied RRCIC’s motion for summary adjudication as to the issue of Cross-Defendant’s duty.

Therefore, to the extent that RRCIC’s motion is based on a finding that Cross-Defendant breached his fiduciary duty, the court does not find that the affirmative defense of statute of limitations has no merit and therefore denies summary adjudication on this ground.

It is unclear whether RRCIC contends that equitable estoppel applies independent of a finding that Cross-Defendant breached his fiduciary duty. In the event that RRCIC seeks to adjudicate whether the doctrine of equitable estoppel applies independent of Crane’s alleged breaches of fiduciary duty, the court finds that RRCIC has not met its burden of showing that there is no merit to the affirmative defense of the statute of limitations on that ground.

RRCIC introduces evidence demonstrating that Cross-Defendant had knowledge of the Brian Loan. (Cross-Compl. Material Fact No. 7, 13; Kevin Crane Decl., Ex. I [email from Cross-Defendant Crane to Kevin Crane stating that “the Loan due from Brian Crane is incorrect”]; Motley Decl., Ex. L, 20:23-24 [Crane’s deposition testimony indicating that he knew he owed the corporation money]; Motley Decl., Ex. M, 67:12-16 [Crane’s deposition testimony indicating that there existed an outstanding loan from RRCIC to Crane].) While this evidence establishes that Cross-Defendant may have had knowledge of the Brian Loan, the cited evidence does not establish that Cross-Defendant “induced [Cross-Complainant] into forbearing suit within the applicable limitations period.” (Lantzy, supra, 31 Cal.4th at 383.) Further, although Kevin Crane declares that he was led to believe that Cross-Defendant would repay the Brian Loan, there are no facts establishing that Cross-Defendant induced RRCIC into delaying this action to recover the sums due and owing on the Brian Loan. (See Cross-Compl. Material Fact No. 7; Kevin Crane Decl., 17.)

Finally, RRCIC appears to argue that the statute of limitations does not apply because the subject loan did not become due and owing “until either RRCIC needed money from the Brian Loan for an investment or [Cross-Defendant] declared his desire to cease his involvement as a shareholder of RRCIC,” such that the loan did not become due and owing until November 13, 2017. (Mot., 17:8-12.)

The court finds that RRCIC has not met its burden of showing that there is no merit to the affirmative defense of the statute of limitations on this ground, either. First, RRCIC does not cite to the applicable statute of limitations as to each of its causes of action to demonstrate that the accrual date of November 13, 2017 renders the filing of its Cross-Complaint timely.

Second, the evidence relied on by RRCIC does not establish that the parties agreed that the loan would become due upon Cross-Defendant’s desire to cease his involvement as shareholder. The meeting minutes do indicate that the Brian Laon would be “continued until such time that a suitable investment is found.” (Kevin Crane Decl., Ex. B at RRCIC 00333.) However, there is no language as to the Brian Loan becoming due upon Cross-Defendant’s desire to cease involvement as a shareholder, which is, evidently, the date upon which Cross-Complainant contends the statutes of limitations began to accrue, as November 13, 2017 is the date that Cross-Defendant filed the Complaint in this matter. Even if RRCIC had met its burden in establishing that fact, Cross-Defendant has met his burden to show that a triable issue of fact exists as to when Cross-Defendant declared his desire to cease involvement by presenting a letter addressed to Kevin Crane’s lawyer, dated August 29, 2014, indicating that Cross-Defendant “intend[ed] to seek a dissolution of the entities….” (Brian Crane Decl., 26; Ex. 12, 6.) Thus, the statute of limitations would begin to accrue in 2014, rendering the 2018 cross-complaint potentially untimely.

The court therefore denies Cross-Complainant’s motion for summary adjudication as to the affirmative defense of statute of limitations.

ORDER

The court denies Cross-Complainant’s motion for summary judgment or, in the alternative, summary adjudication.

The court orders Cross-Defendant Brian Crane to give notice of this ruling.

IT IS SO ORDERED.

DATED: March 25, 2022

Robert B. Broadbelt III

Judge of the Superior Court


[1] The third issue sought to be adjudicated by RRCIC—relating to whether the statute of limitations for an action to collect the Brian Loan did not commence until November of 2017—while perhaps incidental in determining the sixth issue, standing alone, does not expressly seek adjudication as to whether there is no affirmative defense to a cause of action and therefore is similarly improper.



b'

Case Number: ****3006 Hearing Date: August 30, 2021 Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

BRIAN W. CRANE, TRUSTEE OF THE

CRANE FAMILY TRUST FOR THE BENEFIT OF BRIAN W. CRANE ,

Plaintiff,

vs.

R.R. CRANE INVESTMENT CORPORATION ,

Defendant.

_____________________________________

AND RELATED CROSS-ACTION.

Case No.:

****3006

Hearing Date:

August 30, 2021

Time:

10:00 a.m.

[Tentative] Order RE:

MOTION FOR LEAVE TO FILE FIRST AMENDED CROSS-COMPLAINT

MOVING PARTY: Defendant and cross-complainant R.R. Crane Investment Corp, Inc.

RESPONDING PARTY: Plaintiff and cross-defendant Brian W. Crane, as Trustee of the Crane Family Trust for the Benefit of Brian W. Crane, and individually

R.R. Crane Investment Corporation, Inc.’s Motion for Leave to File First Amended Cross-Complaint

The court has considered the moving, opposition, and reply papers.

BACKGROUND

Prior to the initiation of this action, the sole shareholders of R.R. Crane Investment Corporation, Inc. (“R.R. Crane”) were the Crane Family Trust for the Benefit of Brian W. Crane and the Crane Family Trust for the Benefit of Kevin R. Crane. Each trust was a 50% shareholder.

On November 13, 2017, plaintiff Brian W. Crane, as Trustee of the Crane Family Trust for the Benefit of Brian W. Crane (“Plaintiff” or “BWC”) filed a complaint for Involuntary Dissolution of R.R. Crane Investment Corporation, Inc. (the “Complaint”). On January 5, 2018, R.R. Crane and Kevin R. Crane, Trustee of the Crane Family Trust for the Benefit of Kevin R. Crane (collectively, “Cross-Complainants”) filed a Cross-Complaint for Declaratory Relief (the “Cross-Complaint”). On January 5, 2018, Cross-Complainants also filed a notice of exercise of the statutory right to purchase BWC’s shares of the corporation pursuant to Corporations Code section 2000.

On May 21, 2018, the court issued an order granting R.R. Crane’s motion to stay the case and to appoint appraisers to determine the value of BWC’s shares of R.R. Crane pursuant to Corporations Code section 2000.

On September 9, 2019, R.R. Crane filed an Award of Appraisers Pursuant to Corporations Code ; 2000 signed by two of the three court appointed appraisers. Their award was confirmed by the court on December 21, 2020. On January 13, 2021, BWC’s shares of R.R. Crane were purchased pursuant to the court’s order.

R.R. Crane now moves, pursuant to Code of Civil Procedure section 473, subdivision (a)(1), for leave to amend the Cross-Complaint to add causes of action against BWC concerning an alleged outstanding loan and alleged breach of fiduciary duty. BWC opposes the motion.

LEGAL STANDARD

Code of Civil Procedure section 473, subdivision (a)(1) provides, in relevant part: “The court may . . . in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading . . . .” The court may, in furtherance of justice, allow the amendment of any pleading at any time before or after commencement of trial. (Code Civ. Proc., ; 576.) “[T]he court’s discretion will usually be exercised liberally to permit amendment of the pleadings. [Citations.] The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified.” (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.) “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend . . . .” (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.) Prejudice includes “delay in trial, loss of critical evidence, or added costs of preparation.” (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal.App.4th 1435, 1448.)

DISCUSSION

The proposed first amended cross-complaint includes causes of action for: (1) money lent; (2) money due on account stated; (3) money due on an open book account; (4) breach of contract; and (5) breach of fiduciary duty. R.R. Crane contends that its proposed first amended cross-complaint is appropriate because there has been a change in the ownership of the corporation, and BWC no longer has any ownership interest in R.R. Crane. R.R. Crane argues that, now that BWC is no longer an owner, officer, or director of the corporation, R.R. Crane can now take action to enforce payment of the loan allegedly paid to Plaintiff in his individual capacity (the “BWC Loan”).

BWC contends that R.R. Crane has unnecessarily delayed in bringing the cross-claims. BWC alleges that the proposed amendments are merely alternative legal theories for the previous cross-claim for breach of oral contract and that all of R.R. Crane’s legal theories should have been included in the initial Cross-Complaint. In response, R.R. Crane argues the motion could not have been brought sooner because the ownership of R.R. Crane was uncertain until January 2021, when the statutory right to purchase BWC’s shares was successfully exercised, and because of the discovery stay that was in place.

BWC further contends that R.R. Crane’s claims are barred by the two-year statute of limitations for breach of contract and three-year statute of limitations for breach of fiduciary duty, respectively. Specifically, BWC alleges that Plaintiff disputed the validity of the BWC Loan since 2008, and has not made a payment on the loan since 2014. (Decl. BWC, ¶¶ 4, 6-7.) In response, R.R. Crane alleges that, on numerous occasions, including in his deposition and in a hearing before Department 9, Plaintiff has acknowledged the existence of the loan and his obligation to repay it. R.R. Crane claims that the BWC Loan was made with the understanding that repayment would be deferred until R.R. Crane sought to make additional investments or Plaintiff expressed a desire to cease his involvement as a shareholder of R.R. Crane, which R.R. Crane alleges did not occur until November 2017. Therefore, R.R. Crane contends that the cross-claims are not time-barred and may be included in the proposed amended cross-complaint.

After considering the evidence and arguments presented, the court finds that R.R. Crane has demonstrated that granting it leave to file a first amended cross-complaint is in furtherance of justice and will not unduly prejudice cross-defendant BWC.

The court therefore grants R.R. Crane’s motion for leave to file its first amended cross-complaint.

ORDER

For the reasons set forth above, the court grants defendant and cross-complainant R.R. Crane Investment Corporation, Inc.’s motion for leave to file first amended cross-complaint. The court orders defendant and cross-complainant R.R. Crane Investment Corporation, Inc. to file its proposed First Amended Cross-Complaint (in the form attached as Exhibit 1 to its motion) within seven days of the date of this order.

The court orders defendant and cross-complainant R.R. Crane Investment Corporation, Inc. to give notice of this ruling.

IT IS SO ORDERED.

DATED: August 30, 2021

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court

'


Case Number: ****3006    Hearing Date: December 21, 2020    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

brian w. crane ,

Plaintiff,

vs.

r.r. crane investment corporation, inc. , et al.,

Defendants.

Case No.:

****3006

Hearing Date:

December 21, 2020

Time:

10:00 a.m.

Order RE:

motion for order confirming award of appraisers regarding value of shares of r.r. crane investment corporation, inc. pursuant to corporations code ; 2000

AND RELATED CROSS-ACTION

MOVING PARTY: Defendant/cross-complainant R.R. Crane Investment Corporation, Inc.

RESPONDING PARTY: Plaintiff/cross-defendant Brian W. Crane, Trustee of the Crane

Family Trust for the Benefit of Brian W. Crane

Motion for an Order Confirming Award of Appraisers Regarding Value of Shares of R.R. Crane Investment Corporation, Inc. Pursuant to Corporations Code ; 2000

The court considered the moving, opposition, and reply papers.

Background

On November 13, 2017, plaintiff Brian W. Crane, Trustee of the Crane Family Trust for the Benefit of Brian W. Crane (“BWC”) filed his complaint for involuntary dissolution of R.R. Crane Investment Corporation, Inc. (“R.R. Crane”). On January 5, 2018, R.R. Crane and Kevin R. Crane, Trustee of the Crane Family Trust for the Benefit of Kevin R. Crane (“KRC”) filed a Cross-Complaint for declaratory relief.

On May 21, 2018, the court issued an order granting R.R. Crane’s motion to stay the case and to appoint appraisers to determine the value of BWC’s shares of R.R. Crane pursuant to Corporations Code section 2000. Pursuant to the order, BWC and R.R. Crane were to each file and serve a designation of an appraiser on or before June 8, 2018. The two designated appraisers were then to select a third appraiser before June 28, 2018. In the event there was a disagreement, the court would select a third appraiser by July 9, 2018. The court ordered that, once the three appraisers have been selected, they shall ascertain the value of BWC’s shares in R.R. Crane, and then “the three appraisers, or a majority thereof” shall submit an award regarding the value of the shares by October 1, 2018.

On September 26, 2018, the court issued an order extending the time for the appraisers to submit their appraisal from October 1, 2018 to December 3, 2018. On December 4, 2018, R.R. Crane and KRC filed a notice of submission of appraisal by two of the appraisers, William Buckley (“Buckley”) and Raymond Moran (“Moran”). On December 5, 2018, BWC filed a notice of submission of appraisal by Glenn Garlick (“Garlick”).

On December 19, 2018, R.R. Crane filed an Award of Appraisers Pursuant to Corporations Code ; 2000 signed by two of the appraisers (Buckley and Moran). The December 19, 2018 award states that those two appraisers find that the value of the shares of R.R. Crane owned by BWC is $5,509,923. On December 20, 2018, BWC filed an objection to the December 19, 2018 award. On January 4, 2019, R.R. Crane moved for an order confirming the December 19, 2018 award.

On July 9, 2019, the court issued an order denying R.R. Crane’s motion to confirm the December 19, 2018 award on the ground that no majority fair value appraisal or majority award supported by such an appraisal was properly presented to the court. (Order, filed July 9, 2019, p. 7:18-24.) The court ordered (1) the three designated appraisers, Buckley, Moran, and Garlick, to appraise and ascertain the fair value of the shares of R.R. Crane owned by BWC, and (2) after determining the value of BWC’s shares of R.R. Crane, the three appraisers, or a majority thereof, to file with the court an award regarding the value of those shares and their appraisal report(s) supporting the award no later than September 10, 2019. (Order, filed July 9, 2019, pp. 7:25-8:4.) In the July 9, 2019 order, the court also considered and denied BWC’s motion to set a deferred valuation date because the court found the request was untimely and there was no good cause to grant such relief.

On September 9, 2019, R.R. Crane filed an Award of Appraisers Pursuant to Corporations Code ; 2000 signed by two of the appraisers (Buckley and Moran) (the “Award”). The Award states that those two appraisers find that the gross value of the shares of R.R. Crane owned by BWC is $6,182,918, and that the net value of BWC’s interest in R.R. Crane is $5,304,750 (the value of BWC’s shares offset by 50% of an obligation on an outstanding loan and accrued interest owed by BWC to R.R. Crane). On September 16, 2019, BWC filed an objection to the Award and a declaration of Garlick in support of BWC’s objection.

R.R. Crane now moves for an order confirming the Award. BWC opposes the motion.

OBJECTIONS

The court overrules R.R. Crane’s first and second objections, filed November 12, 2020.

DISCUSSION

“A section 2000 shareholder buyout is a special proceeding that supplants an action for involuntary dissolution of a corporation.” (Goles v. Sawhney (2016) 5 Cal.App.5th 1014, 1018.) “Section 2000 provides that when a shareholder sues for involuntary dissolution, the corporation, or the holders of 50 percent or more of the voting power of the corporation, may avoid the dissolution by purchasing for cash the shares owned by plaintiffs at their ‘fair value.’” (Ibid.) “The statute defines ‘fair value’ as the ‘liquidation value as of the valuation date but taking into account the possibility, if any, of sale of the entire business as a going concern in a liquidation.” (Ibid.) “If the parties cannot agree on a valuation, the trial court shall appoint three disinterested appraisers to appraise the fair value of the shares.” (Ibid.) “The order shall prescribe the time and manner of producing evidence, if evidence is required. The award of the appraisers or of a majority of them, when confirmed by the [trial] court, shall be final and conclusive upon all parties.” (Ibid.) “[W]hen the determination of the fair value of the shares by the appraisers, or a majority of them, is erroneous, it is the duty of the trial court to examine the matter de novo and to fix a proper value.” (Mart v. Severson (2002) 95 Cal.App.4th 521, 535 (internal quotations omitted).) An award pursuant to section 2000 “requires that at least two of the appraisals reach a consensus on fair value.” (Goles v. Sawhney, supra, 5 Cal.App.5th at p. 1020.)

R.R. Crane contends that the gross value of the shares set forth in the Award ($6,182,918) is fair because the majority of the appraisers (Buckley and Moran) have determined this value and have supported their determination with substantial evidence. R.R. Crane points out that the Award sets forth the data, methodology, and analysis that Buckley and Moran used to arrive at the Award, Buckley and Moran’s qualifications, and Buckley and Moran’s rationale for their conclusion. R.R. Crane acknowledges that the third appraiser, Garlick, disagrees with some of the conclusions of the majority of the appraisers, but contends that Garlick’s disagreements are regarding insignificant issues and do not warrant changing the Award. R.R. Crane points out that the Award references and takes into consideration Garlick’s analysis and opinions on a number of issues.

R.R. Crane also contends that the Award’s alternative net award of $5,304,750 to BWC is fair because it reflects the value of BWC’s shares of R.R. Crane ($6,182,918) offset by 50% of an obligation on an outstanding loan and accrued interest owed by BWC to R.R. Crane as of December 1, 2018 ($1,756,336 [total principal and accrued interest outstanding on the BWC loan as of December 1, 2018] x 50% = $878,168).

  1. The BWC Loan Offset

In opposition to the motion, BWC first contends that the Award’s alternative net award of $5,304,750 (which reflects an offset against the gross award of $6,182,918 for 50% of the amount due on a loan from R.R. Crane to BWC (the “BWC Loan”)) should not be confirmed by the court. BWC states that KRC’s Cross-Complaint in this action includes a cause of action for a declaration that R.R. Crane gave BWC a loan on which there is owed a principal balance of $804,978.58 plus interest at a rate of 7% since April 2013. BWC disputes the alleged loan balance and interest rate, and points out that the merits of KRC’s claim as to the loan obligation and interest due have not yet been litigated. BWC also contends that, since it has been more than seven years of dispute over the alleged loan balance, KRC’s claim is likely barred by the statute of limitations or laches. BWC also points out that the Award itself does not take a position on whether the loan balance should offset the value of BWC’s shares of R.R. Crane. Instead, the Award characterizes the BWC Loan as an “obligation outstanding for over 22-years with no written promissory note, no history of servicing, [and] held between related parties engaged in litigation,” and states that the BWC Loan has “no realizable value outside of the parties involved.” (Motion, filed October 10, 2019 p. 39.)[1]

In reply, R.R. Crane contends that the Award’s alternative net award properly includes an offset for the BWC Loan, and points out that the Award relied on the corporation’s tax returns and accounted for BWC and KRC’s payments towards the BWC Loan in determining the offset. R.R. Crane argues that the appraisers agreed that 50% of the value of the BWC Loan should be offset from the price of the stock because no ready, willing, and able reasonable buyer would ever want to purchase the corporation with the BWC Loan obligation in place. R.R. Crane also points out that, in the Declaration of Brian W. Crane filed in support of BWC’s opposition to this motion, BWC does not deny that he owes this obligation to the corporation and does not state that there has ever been a dispute as to the amount due on the BWC Loan.

The court finds that the Award should not include an offset for the BWC Loan because the court has not adjudicated KRC’s cross-claim as to the amount of principal and interest that BWC owns on the BWC Loan. Moreover, although the Award quantifies the principal and interest for the BWC Loan, and supports its evaluation of the BWC Loan with evidence, the Award also states, in relevant part:

The GR Analysis [Buckley] was the only report to quantify the principal and accrued interest for the BWC loan as per the information provided by Mr. Geller and the carry value on the balance sheet. As well, the GR analysis [Buckley] was the only report to address an offset for a 50% amount of the outstanding balance of the BWC loan . . . as requested by counsel. . . . .

[¶]

Application of the offset to the award of the appraisers is at the discretion of the trier of fact based on findings in the associated Cross-Complaint of RR Crane. Since it is highly unlikely that the litigants would write a check for the amount of the offset, the award of the appraisers will include both a gross value, a 50% share of the adjusted net assets of RR Crane, and a net value that incorporates the application of the offset to the 50% share of Brian Crane which should be part of the award.

(Motion, pp. 41-42.) Only one of the three appraisers quantified and applied the BWC Loan offset to the Award, and the Award states that application of the offset to the Award is at the discretion of the trier of fact based on findings in KRC’s cross-action. Accordingly, the court finds that the Award should not include an offset for the BWC Loan, and denies R.R. Crane’s request to confirm the alternative net award of $5,304,750, rather than the gross award of $6,182,918, set forth in the Award.

  1. BWC’s Request for Prejudgment Interest

Second, BWC contends that the Award, which values BWC’s shares in R.R. Crane as of November 13, 2017, deprives BWC of the time value of the money owed to BWC as of November 13, 2017, and that payment of prejudgment interest to BWC from November 13, 2017 to the date of the decree would represent a fair value of the shares. BWC therefore requests that he be awarded prejudgment interest on the purchase price payable to him as of November 13, 2017, at the rate of 10% per annum. BWC cites Civil Code section 3287, subdivision (a), which provides that a person who is entitled to recover damages certain, or capable of being made certain by calculation, is entitled also to recover interest thereon from that day. As R.R. Crane points out in its reply, the court’s decree to wind up and dissolve the corporation unless R.R. Crane pays the fair value of BWC’s shares within the time specified by the decree is not a money judgment or an award of “damages” to which the statutes authorizing awarding prejudgment interest apply. (Code Civ. Proc., ; 3287 [authorizing person who is entitled to recover damages to recover interest], ; 3288 [interest may be given in an action for the breach of an obligation not arising from contract].) The court therefore denies BWC’s request for prejudgment interest.

  1. Disputed Valuations

Third, BWC contends that the Award is not a fair valuation of the shares and requests that the court determine the value of the shares de novo. BWC contends that the determination of the fair value by the majority of appraisers is erroneous because the appraisers failed to take into account any of the objections raised by BWC. In his opposition, BWC disputes certain real estate appraisals (as to “Sunburst and Comanche” and the “Bryan-Irvine Partnership”), the “fictional transaction costs,” the application of the gains tax discount, and the discount on the “CFT or Graegin Note.”

With regard to the fair market value of the “Comanche Property” and the “Sunburst Property,” BWC argues, among other things, that the appraisers relied on outdated real property comparable sales and inconsistent or inflated cap rates. BWC then conclusorily states that “the only real estate appraisals that should be used are the Foss Consulting appraisals on which Cogent Valuation relied, which valued Comanche and Sunburst at $9,110,000 and $4,320,000 respectively.” (Opposition, p. 10:11-13.) BWC makes similar arguments with regard to the “Bryan-Irvine Partnership” valuation. In reply, R.R. Crane contends that the differences in the real estate valuations among the appraisers are not significant, and that BWC offers no competent evidence to challenge the appraisers’ real estate valuations. The court agrees, and does not find that the real estate valuations are erroneous.

With regard to “fictional transaction costs,” BWC contends that the Award’s reduction of the value of R.R. Crane for anticipated tax liabilities and sales commissions that would be incurred only if R.R. Crane liquidated its assets, when no liquidation will actually occur, is not consistent with the sale of the company as a going concern. BWC contends that these fictional transaction costs have resulted in the deduction of $4,837,955 from the appraised value of R.R. Crane. In reply, R.R. Crane contends that these transaction costs are proper to include in the valuation and that all of the appraisers, including Garlick, agreed they are proper adjustments for the sale of real property. R.R. Crane points to Exhibit 1 of the Award, which sets forth each appraiser’s “Adjustments for Sale of Real Property.” The court does not find that the deduction of transaction costs is erroneous.

With regard to the gains tax discount, BWC contends that it would be unfair to BWC to apply the federal corporate tax rate of 34% that was applicable when BWC filed his complaint in November 2017. BWC points out that the federal corporate tax rate has since been reduced to 21%. However, the valuation date in this case is November 13, 2017 (the date on which the action was commenced). (Corp. Code, ; 2000, subd. (f).) The court previously denied BWC’s motion to set a deferred valuation date.

With regard to the discount on the “CFT or Graegin Note,” BWC contends that the Award incorrectly applied a risk adjusted rate of 10.81% to the note. BWC also points out that Garlick, who previously agreed with the risk adjusted rate of 10.81%, changed his opinion after being given contextual information about the note and concluded that no discount should be applied to it because BWC is likely to pay off the loan. In reply, R.R. Crane contends that the appraisers correctly applied a risk adjusted rate and point to the facts that BWC has failed to make payments on the CFT Note, and continues to refuse to make further payments on the CFT Note, as evidence which supports that decision. R.R. Crane has submitted evidence of BWC’s refusal to make payments on the CFT Note. (Motion, Ex. D.) The court does not find that the discount on the CFT Note is erroneous.

  1. BWC’s Request for a Deferred Valuation Date

Finally, in its opposition, BWC requests an order setting a deferred valuation date pursuant to Corporations Code section 2000, subdivision (f). BWC contends that deferring the valuation date would afford BWC a fairer value. The court denies BWC’s renewed request to set a deferred valuation date for the following reasons.

First, Corporations Code section 2000, subdivision (f), provides that the valuation date shall be the date upon which that action was commenced, and that “the court may, upon the hearing of a motion by any party, and for good cause shown, designate some other date as the valuation date.” Thus, the court may only order the relief requested by BWC on a motion brought by BWC rather than in response to a request made in opposition to a motion to confirm the award of appraisers.

Second, as R.R. Crane argues in its reply, BWC previously made such a motion and the court denied BWC’s motion on July 9, 2019, finding that there was no good cause shown. (Order, filed July 9, 2019, p. 6:8-16.) Code of Civil Procedure section 1008 is the exclusive authority governing motions to reconsider and renewals of previous motions based on applications for an order to the court. (Code Civ. Proc., ; 1008, subd. (e) [“This section specifies the court’s jurisdiction with regard to applications for reconsideration of its orders and renewals of previous motions, and applies to all applications to reconsider any order of a judge or court, or for the renewal of a previous motion, whether the order deciding the previous matter or motion is interim or final. No application to reconsider any order or for the renewal of a previous motion may be considered by any judge or court unless made according to this section.”].) BWC’s request for a deferred valuation date is essentially a request for the court to reconsider its July 9, 2019 order, and must be made by noticed motion pursuant to Code of Civil Procedure section 1008.

  1. Conclusion

After reviewing the Award and the fair value appraisal report issued by a majority of the appraisers, as well as the arguments and evidence presented by the parties, the court finds that the majority of the three designated appraisers has appraised and ascertained the fair value of the shares of R.R. Crane owned by BWC on the basis of the liquidation value as of the valuation date but taking into account the possibility, if any, of sale of the entire business as a going concern in a liquidation. (Corp. Code, ; 2000, subd. (a).) The court finds that the gross award of $6,182,918 set forth in the Award of Appraisers Pursuant to Corporations Code ; 2000, filed September 9, 2019, reflects the fair value of the shares of R.R. Crane owned by BWC, and that gross award is not erroneous.

ORDER

For the reasons set forth above, the court grants defendant and cross-complainant R.R. Crane Investment Corporation, Inc.’s Motion for Order Confirming Award of Appraisers Regarding Value of Shares of R.R. Crane Investment Corporation, Inc.

The court confirms the gross award of $6,182,918 set forth in the Award of Appraisers Pursuant to Corporations Code ; 2000, filed September 9, 2019, as the fair value of the shares of R.R. Crane Investment Corporation, Inc. owned by plaintiff Brian W. Crane, Trustee of the Crane Family Trust for the Benefit of Brian W. Crane.

The court orders defendant R.R. Crane to pay $6,182,918 to plaintiff BWC no later than January 15, 2021, if R.R. Crane desires to prevent the winding up and dissolution of R.R. Crane. (Corp. Code, ; 2000, subd. (d).) If R.R. Crane does not make payment of that sum to plaintiff BWC no later than that date, then the court will enter judgment against defendant R.R. Crane and issue a decree for winding up and dissolution of R.R. Crane. (Corp. Code, ; 2000, subd. (c).)

On receiving payment of the $6,182,918 or tender thereof, plaintiff BWC shall transfer all of his shares of R.R. Crane to defendant R.R. Crane within 10 days. (Corp. Code, ; 2000, subd. (d).)

The court sets an Order to Show Cause re compliance with the terms of this order for hearing on ______________, 2021, at 11:00 a.m., in Department 53. The court orders the parties to file a joint report concerning the status of the case and compliance with the terms of this order no later than ______________, 2021.

If the parties wish to conduct the payment by defendant R.R. Crane and the transfer of shares by plaintiff BWC through an escrow, they may prepare and lodge with the court an appropriate stipulation and order providing the terms for the escrow.

The court orders defendant and cross-complainant R.R. Crane Investment Corporation, Inc. to give notice of this order.

IT IS SO ORDERED.

DATED: December 21, 2020

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court


[1] Because the Award, filed September 9, 2019, does not include page numbers, the court refers to the “Motion Page” numbers ascribed to a copy of the Award attached as Exhibit C to the motion.



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