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This case was last updated from Los Angeles County Superior Courts on 06/29/2020 at 15:56:58 (UTC).

SMITH EMERY INTERNATIONAL INC VS CITY OF LOS ANGELES ET AL

Case Summary

On 12/12/2017 SMITH EMERY INTERNATIONAL INC filed a Personal Injury - Other Personal Injury lawsuit against CITY OF LOS ANGELES. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****6568

  • Filing Date:

    12/12/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Personal Injury - Other Personal Injury

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiffs and Petitioners

SMITH EMERY INTERNATIONAL INC

FIRST NATIONAL INSURANCE COMPANY OF AMERICA

SMITH-EMERY INTERNATIONAL INC.

Defendants and Respondents

DEPARTMENT OF WATER AND POWER

LOS ANGELES CITY OF

DOES 1 TO 10

THE L. A. DEPARTMENT OF WATER AND POWER

CITY OF LOS ANGELES

Not Classified By Court

LIBERTY MUTUAL INSURANCE COMPANY

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

HUNTER JOHN LOGAN ESQ.

HUNTER JOHN LOGAN

POLANSKY MARC A

Defendant Attorney

DORNY DEBORAH

 

Court Documents

Request for Refund / Order

6/14/2019: Request for Refund / Order

Certificate of Mailing for - CERTIFICATE OF MAILING FOR MINUTE ORDER (COURT ORDER RE: REJECTION OF STIPULATION AND ORDER TO CONTINU...) OF 06/19/2019

6/19/2019: Certificate of Mailing for - CERTIFICATE OF MAILING FOR MINUTE ORDER (COURT ORDER RE: REJECTION OF STIPULATION AND ORDER TO CONTINU...) OF 06/19/2019

Notice of Intent to Appear by Telephone

6/26/2019: Notice of Intent to Appear by Telephone

Minute Order - MINUTE ORDER (POST-MEDIATION STATUS CONFERENCE (MSC))

6/28/2019: Minute Order - MINUTE ORDER (POST-MEDIATION STATUS CONFERENCE (MSC))

Notice of Settlement

2/11/2020: Notice of Settlement

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER) OF 04/14/2020

4/14/2020: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER) OF 04/14/2020

Minute Order - MINUTE ORDER (COURT ORDER)

4/14/2020: Minute Order - MINUTE ORDER (COURT ORDER)

Request for Dismissal

5/27/2020: Request for Dismissal

ANSWER TO PLAINTIFF'S COMPLAINT; DEMAND FOR JURY TRIAL

2/14/2018: ANSWER TO PLAINTIFF'S COMPLAINT; DEMAND FOR JURY TRIAL

NOTICE OF POSTING JURY FEES

4/3/2018: NOTICE OF POSTING JURY FEES

Minute Order - MINUTE ORDER (COURT ORDER)

3/20/2019: Minute Order - MINUTE ORDER (COURT ORDER)

Notice - NOTICE OF RESCHEDULING POST-MSC STATUS CONFERENCE

3/26/2019: Notice - NOTICE OF RESCHEDULING POST-MSC STATUS CONFERENCE

Response - RESPONSE DEFENDANT'S NON-OPPOSITION TO NATIONAL INSURANCE COMPANY OF AMERICA'S MOTION FOR LEAVE TO FILE INTERVENING COMPLAINT

4/3/2019: Response - RESPONSE DEFENDANT'S NON-OPPOSITION TO NATIONAL INSURANCE COMPANY OF AMERICA'S MOTION FOR LEAVE TO FILE INTERVENING COMPLAINT

Minute Order - MINUTE ORDER (HEARING ON MOTION FOR LEAVE TO INTERVENE)

4/24/2019: Minute Order - MINUTE ORDER (HEARING ON MOTION FOR LEAVE TO INTERVENE)

Summons - SUMMONS ON COMPLAINT

4/24/2019: Summons - SUMMONS ON COMPLAINT

Answer

5/6/2019: Answer

SUMMONS -

12/12/2017: SUMMONS -

UNVERIFIED COMPLAINT FOR DAMAGES: 1) INVERSE CONDEMNATION; ETC

12/12/2017: UNVERIFIED COMPLAINT FOR DAMAGES: 1) INVERSE CONDEMNATION; ETC

26 More Documents Available

 

Docket Entries

  • 07/31/2020
  • Hearing07/31/2020 at 10:00 AM in Department 19 at 111 North Hill Street, Los Angeles, CA 90012; Order to Show Cause Re: Dismissal (Settlement)

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  • 05/27/2020
  • DocketRequest for Dismissal; Filed by First National Insurance Company of America (Plaintiff in Intervention)

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  • 05/15/2020
  • Docketat 09:00 AM in Department 19; Order to Show Cause Re: Dismissal (Settlement) - Not Held - Advanced and Continued - by Court

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  • 04/28/2020
  • DocketNotice (of Rescheduling Order to Show Cause Re: Dismissal (Settlement)); Filed by Smith-Emery International, Inc. (Plaintiff)

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  • 04/21/2020
  • Docketat 09:30 AM in Department 19; Jury Trial - Not Held - Vacated by Court

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  • 04/14/2020
  • Docketat 1:40 PM in Department 19; Court Order

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  • 04/14/2020
  • DocketMinute Order ( (Court Order)); Filed by Clerk

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  • 04/14/2020
  • DocketCertificate of Mailing for ((Court Order) of 04/14/2020); Filed by Clerk

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  • 04/10/2020
  • Docketat 09:00 AM in Department 19; Final Status Conference - Not Held - Vacated by Court

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  • 02/28/2020
  • Docketat 09:00 AM in Department 19; Post-Mediation Status Conference - Not Held - Vacated by Court

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42 More Docket Entries
  • 02/14/2018
  • DocketAnswer; Filed by City of Los Angeles (Defendant); The L. A. Department of Water and Power (Defendant)

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  • 01/31/2018
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 01/31/2018
  • DocketNotice of Case Management Conference; Filed by Smith-Emery International, Inc. (Plaintiff)

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  • 01/26/2018
  • DocketPROOF OF SERVICE SUMMONS

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  • 01/26/2018
  • DocketProof-Service/Summons; Filed by Smith-Emery International, Inc. (Plaintiff)

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  • 12/21/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 12/21/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 12/12/2017
  • DocketComplaint; Filed by Smith-Emery International, Inc. (Plaintiff)

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  • 12/12/2017
  • DocketSUMMONS

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  • 12/12/2017
  • DocketUNVERIFIED COMPLAINT FOR DAMAGES: 1) INVERSE CONDEMNATION; ETC

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Tentative Rulings

Case Number: BC686568    Hearing Date: July 21, 2020    Dept: 37

HEARING DATE: July 21, 2020

CASE NUMBER: BC686568

CASE NAME: David Frith-Smith v. Frank Cornell, et al.

TRIAL DATE: September 1, 2020

PROOF OF SERVICE: OK

MOTION: Motion for Summary Judgment

MOVING PARTIES: Defendants, Frank W. Cornell and California Investors I

OPPOSING PARTY: Plaintiff David Frith-Smith

OPPOSITION: July 7, 2020

REPLY: July 15, 2020

TENTATIVE: Defendants’ motion for summary adjudication is GRANTED in its entirety. Defendant to provide notice and prepare a proposed Judgment.

MOTION: Motion to Compel Deposition of Plaintiff

MOVING PARTIES: Defendants, Frank W. Cornell and California Investors I

OPPOSING PARTY: Plaintiff David Frith-Smith

OPPOSITION: July 8, 2020

REPLY: July 15, 2020

TENTATIVE: Defendants’ motion to compel is MOOT. Defendant is to provide notice.

Background

The following background is common to both motions before the court and will only be stated once.

This action arises out of Plaintiff, David Frith-Smith (“Plaintiff”) and Defendant, Frank Cornell’s (“Cornell”) limited partnership, California Investors I (“CII”). Plaintiff contends that he is a limited partner of the partnership and that Cornell is a general partner. Plaintiff contends that Cornell has breached his duties as a general partner by failing to wind-up and dissolve the partnership after liquidation of the primary asset, as allegedly required by the partnership agreement. Plaintiff further contends that Cornell, in his capacity as a general partner, has failed to deliver accountings of the partnership upon reasonable demand. 

Plaintiff alleges that Cornell, CII and the other defendants have breached their fiduciary duties under the partnership agreement “in employing themselves and related parties upon terms and conditions which unjustly enrich themselves and their related parties to the detriment of the limited partners.” (Complaint, ¶ 7.) 

Plaintiff’s Complaint, filed December 12, 2017, alleges three causes of action: (1) “removal of general partner and for account,” (2) termination and dissolution of partnership, and (3) breach of fiduciary duty. 

Defendants, Cornell and CII (together, “Defendants”) now move for summary judgment, or, in the alternative, summary adjudication as to each of Plaintiff’s three causes of action. Defendants also move to compel Plaintiff to attend deposition.

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Factual Background

As a preliminary note, Plaintiff in opposition appears to dispute many of the below facts on the grounds that he has no knowledge of those facts. (see, e.g., Separate Statement in Support of Opposition (“PSS”), ¶¶ 5-17 [“Plaintiff has no knowledge and therefore disputes.”]) However, disputes as to material facts must be supported by evidence, so the lack of information does not create a disputed issue. Plaintiff does not submit his own evidence to dispute those facts and instead relies on solely on his apparent belief that such facts must be inaccurate. This is not the standard in opposing a motion for summary judgment.

CII is a California limited partnership and was formed on or about June 15, 1986 as a tax shelter. (Separate Statement of Undisputed Material Facts in Support of Motion (“DSS”), ¶ 1; Declaration of Frank W. Cornell (“Cornell Decl.”) at p. 2:8-10.) According to Plaintiff’s Complaint, CII’s governing agreement is the “Agreement of Limited Partnership of California Investors I, a California Limited Partnership.” (the “Limited Partnership Agreement.”) (DSS ¶ 2; Complaint at p 2:8-12.) CII’s principal asset was a low incoming housing project in Salinas, California (the “Salinas Project”), which has now been sold. (DSS ¶ 3; Cornell Decl. at p. 2:18-19.)

Cornell first became involved in CII in 1987 when Defendant’s company was hired to act as the property manager for CII’s Salinas Project by Michael Heaman. (DSS ¶ 5; Cornell Decl. at p. 2:23-25.) Shortly thereafter, CIIs then general partner terminated Cornell’s company as a property manager and replaced it with another company. (DSS ¶ 6; Cornell Decl. at pp. 2:27-3:2.)

In 1994, Cornell was contacted by CII’s then officers and asked to assume a position as Administrative General Partner. (DSS ¶ 7; Cornell Decl. at p. 3:3-6.) At the same time, the Salinas Project was failing, with a vacancy rate greater than 40%. (DSS ¶ 8; Cornell Decl. at p. 3:6-11.) Cornell agreed to become the Administrative General Partner provided that his company would serve as the property manager for the Salinas Project and be paid a management fee. (DSS ¶ 10; Cornell Decl. at p. 3:15-22.)

Thereafter, and according to Cornell, he “worked tirelessly” to save CII from “ruin” by investing into the Salinas Project, refinancing the Salinas Project’s mortgage, and other changes. (DSS ¶¶ 12-14; Cornell Decl. at pp. 3:26-4:4.) By 2002, CII was able to make distributions to its limited partners, which it had not previously done since inception. (DSS ¶¶ 11, 15; Cornell Decl. at pp. 3:22-26, 4:9-10.)

In 2007, Cornell contends that he saw an opportunity to further refinance the Salinas Project’s loan in such a manner that it would generate funds for CII to buy out certain limited partners who wanted to cash out. (DSS ¶ 16; Cornell Decl. at p. 4:6-9.) Further, and according to Cornell, the lender required that this refinancing agreement be personally guaranteed. (DSS ¶ 17; Cornell decl. at p. 4:9-10.) CII’s limited partners voted to approve this refinancing agreement and, according to Cornell, unanimously voted to give him a 25% limited partnership interest in CII in appreciation. (DSS ¶ 18; Cornell Decl. at p. 4:10-23.) From 2009 to 2017, Cornell caused CII to make “significant annual distributions” to CII’s limited partners. (DSS ¶ 20; Cornell Decl. at p. 27-5:2.) Cornell contends that Plaintiff received annual distribution checks in the amount of $14,913. (DSS ¶ 21.)

In 2017, Cornell began arranging for a sale of the Salinas Project. (DSS ¶¶ 22-24; Cornell Decl. at pp. 5:3-10.) According to Cornell, CII’s limited partners unanimously voted to permit him to sell the Salinas Project. (DSS ¶ 23; Cornell Decl. at p. 5:7-8.) Accordingly, Cornell was able to arrange for a sale of the Salinas Project for $9,550,000. (DSS ¶ 24; Cornell Decl. at p. 5:8-10.)

After the Salinas Project sale was complete, Cornell contends that he provided notice to each limited partner regarding exactly how much they would receive from the sale as a distribution and how the amount was calculated. (DSS ¶¶ 25-26; Cornell Decl. at pp. 5:11-14.) Further, Cornell contends that he required each limited partner to acknowledge that the amount they received was accurate and to release him from all claims regarding the sale, and that all of the limited partners, including Plaintiff, signed and returned the release. (DSS ¶ 27; Cornell Decl. at p. 5:14-18; Cornell Decl. Exhibit B.) According to Cornell, Plaintiff received a distribution of $415,347 in connection with sale of the Salinas Project. (DSS ¶ 29; Cornell Decl. at p. 5:22-24.)

Plaintiff appears to dispute that Cornell appropriately made distributions after the Salinas Project. (see Opposition 5; Boykin Decl. ¶ 2, Exhibit A (Cornell Deposition).) Specifically, Plaintiff appears to contend that Cornell failed to account for $700,000 of funds in CII “at the time of the sale of Shadow Brook.” (Id.) Further, Cornell testified that “there may have been” $700,000 on hand in CII at some point “after the sale of the property” and agreed that this amount would have been required to be distributed to the partners. (Bokyin Decl. ¶ 2, Exhibit A at pp. 85:3-86:2.)

Further, Plaintiff has allegedly received total distributions in the amount of $584,819 on his initial investment into CII. (DSS ¶ 30; Cornell Decl. at p. 5:23-24.) According to Cornell, Plaintiff has received a K-1 every year along with a letter explaining the status of CII. (DSS ¶ 31; Cornell Decl. at p. 5:25-28.) Further, Plaintiff was permitted to examine the books and records of CII upon request. (DSS ¶ 31; Declaration of Emil W. Herich (“Herich Decl.”) at p. 2:6-13.) Moreover, Cornell contends that he has provided the only “account” required under the Limited Partnership Agreement by providing tax documents on an annual basis. (DSS ¶¶ 40, 42; Cornell Decl. at p. 6:11-14.) According to Cornell, he has also not employed any “related parties” in breach of the Limited Partnership Agreement. (DSS ¶ 41; Cornell Decl. at p. 6:15-28.)

Plaintiff filed the instant action on December 12, 2017. (DSS ¶ 33; Cornell Decl. at pp. 5:28-6:3.)

Plaintiff’s Complaint alleges in support of his first cause of action that “a vote hereof is being conducted” regarding Cornell’s removal. (DSS ¶ 36; Plaintiff’s Complaint at p. 4:1-5.) However, Cornell contends that he is aware of no such vote being conducted as he has not been asked to vote on his own removal. (DSS ¶ 37; Cornell Decl. at p. 6:5-7.)

As to Plaintiff’s second cause of action, Cornell contends that he has elected not to dissolve and terminate CII and that there has not been a complete liquidation of CII or a final distribution of its funds. (DSS ¶¶ 48-49; Cornell Decl. at p. 6:9-11.) Cornell also contends that he has not “overly compensated himself or any relation” to the detriment of CII, and that he has not acquired interests of departing limited partners without fully disclosing the terms. (DSS ¶¶ 54-55; Cornell Decl. at pp. 4:10-23, 6:16-20.) Cornell is also not presently drawing compensation from CII and contends that he has never drawn compensation for his work for CII. (DSS ¶ 56; Cornell Decl. at p. 6:27-28.)

Discussion

  1. Legal Standard

“The purpose of the law of summary judgment 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.) Pursuant to Code of Civil Procedure, section 437c, subdivision (a):

A party may move for summary judgment in any action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct…. The motion shall be heard no later than 30 days before the date of trial, unless the court for good cause orders otherwise. The filing of the motion shall not extend the time within which a party must otherwise file a responsive pleading.

(Code Civ. Proc., § 437c, subd. (a).) A motion for summary judgment may be granted “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)

“The motion shall be supported by affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken. The supporting papers shall include a separate statement setting forth plainly and concisely all material facts that the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence. The failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denial of the motion.” (Code Civ. Proc., § 437c, subd. (b)(1); see also Cal. Rules of Court, rule 3.1350(c)(2) & (d).)

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294 (Hinsley).) Pursuant to Code Civ. Proc., § 437c, subdivision (p)(2):

A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff or cross-complainant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.

(Code Civ. Proc., § 437c, subd. (p)(2).) The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.” (Hinesley, 135 Cal.App.4th at p. 294; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 [Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”].) A motion for summary judgment must be denied where the moving party’s evidence does not prove all material facts, even in the absence of any opposition (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak (Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387).  

  1. Analysis

     

  1. First Cause of Action: Removal of General Partner and For Account

Plaintiff’s first cause of action for removal of general partner alleges that Defendant’s actions in managing CII constitute a breach of the Limited Partnership Agreement such that removal is warranted. (see Complaint at pp: 4:24-5:5.) Defendants contend that summary adjudication is warranted as to Plaintiff’s first cause of action because the undisputed material facts demonstrate that Cornell has not breached the Limited Partnership Agreement. (Motion, 7-9.)

The Limited Partnership Agreement at Section 10.2 provides as follows with respect to removal:

“Removal of General Partner. The General Partner shall be removed and cease to be the General Partner of the Partnership immediately upon the death, dissolution, legal incapacity, or bankruptcy of the General Partner. The General Partner may also be removed by a vote of the Limited Partners representing a Majority in Interest of all Limited Partners in the event of such General Partner’s material breach of this Agreement, gross negligence, or willful misconduct. The General Partner may not be removed except as provided in this Section 10.2”

(See Complaint, Exhibit A.)

First, Defendants specifically contends that Plaintiff’s first cause of action must fail because Plaintiff has not alleged and cannot demonstrate that a vote of CII’s limited partners was conducted pursuant to Section 10.2. (Motion, 7-8.) Further, and as discussed above, Defendants is aware of no such vote taking place.

Second, Defendants contends that California statutory law also demonstrates that Plaintiff’s first cause of action must fail. Defendant relies on California Corporations Code section 15906.03 for this proposition. California Corporations Code, section 15906.03 provides that a general partner is disassociated from a limited partnership under the following situations:

  1. The limited partnership has notice of the person’s express intent to withdraw;

  2. “An event agreed to in the partnership agreement” which causes withdraw;

  3. “the person’s expulsion” pursuant to the partnership agreement;

  4. The person’s expulsion “by the unanimous consent of the other partners” upon certain conditions;

  5. By judicial order upon application by the limited partnership;

  6. The person becoming a debtor in bankruptcy or going through related bankruptcy proceedings;

  1. The person’s death or incapacity, in the case of a person who is an individual

  2. In the case of a person that is a trust or estate, distribution of the trust or estate’s entire transferable interest in the limited partnership;

  1. “termination of a general partner that is not an individual, partnership, limited liability company, corporation, trust, or estate; or"

  2. The limited partnership’s participation in a conversion or merger;

Here, the Limited Partnership Agreement specifically provides that a general partner could only be removed following his death, incapacity, bankruptcy, or by a vote of the limited partners. Further, Cornell attests upon penalty of perjury that no vote has taken place regarding any such removal proceeding. Moreover, as Defendants correctly contend, California Corporations Code, section 15906.03 also provides that a general partner may only be removed upon incapacity or by agreement.

In opposition, Plaintiff appears to contend that “a limited partnership is a form of trust” and that, as such, the probate code applies to CII. (Opposition, 4-5.) Further, Plaintiff also appears to contend that the Limited Partnership Agreement is invalid and/or does not apply because “a fiduciary may be removed by the court” for breach of the operative agreement. (see, e.g., PSS ¶ 35.) However, Plaintiff cites to no authority for the proposition that the Probate Code’s requirements governing trusts also applies to CII and the court is aware of no such authority. Further, it is unclear whether Plaintiff actually disputes Defendants’ contention regarding the proper interpretation of the Limited Partnership Agreement, as Plaintiff’s separate statement then goes on to discuss the fact that Plaintiff had not been notified of termination under the Limited Partnership Agreement.

As such, and viewing the evidence submitted in the light most favorable to Plaintiff, the court finds that no triable issue of material fact exists with regard Plaintiff’s first cause of action. It is unclear whether Plaintiff in fact disputes Defendants’ interpretation of the Limited Partnership Agreement. In any event, Plaintiff has failed to submit admissible evidence which contradicts Defendants’ arguments with respect to the first issue.

Accordingly, summary adjudication is granted as to the first cause of action.

  1. Second Cause of Action: Termination and Dissolution of Partnership

Plaintiff’s second cause of action alleges that because CII has “liquidated all of [sic] substantially all of its assets” CII is required to be terminated and dissolved. (see Complaint at p. 4:14-16.) Plaintiff further alleges that Cornell has failed and refused to dissolve CII, produce an account, or otherwise undertake the winding-up of affairs. (Id.)

Defendants contends that summary adjudication is also warranted as to Plaintiff’s second cause of action because Defendant’s actions do not fulfill the Limited Partnership Agreement’s requirements for dissolution and termination. (Motion, 9-10.) Section 11.1 of the Partnership Agreement provides as follows:

“Dissolution and Termination. The Partnership may be dissolved and may be terminated upon the earlier to occur of any of the following:

  1. The resignation or removal of a General Partner, unless the remaining General Partners elect to continue the Partnership or, if there is no remaining General Partner, unless the Limited Partners elect to continue the Partnership and elect a successor General Partner as provided by Section 10.4;

  2. The adjudication of bankruptcy against the Partnership;

  1. The sale or other disposition of all or substantially all of the assets of the Partnership and the collection of all of the proceeds with respect thereto;

  2. The election by the General Partner to dissolve the Partnership; or

  1. December 31, 2020.”

(See Complaint, Exhibit A.)

First, Defendants contends that this cause of action must fail because Section 11.1 does not require that CII dissolve upon sale or disposition of all or substantially all of CII’s assets. (Motion, 9-10.) As discussed above, Defendants has attested that he chose not to dissolve CII based upon professional advice.

Second, Defendants contends that California statutory law also demonstrates that Plaintiff’s first cause of action must fail. Defendant relies on California Corporations Code section 15908.02 for this proposition. Corporations Code section 15908.02, subdivision (a) provides: “on application by a partner, a court of competent jurisdiction may order dissolution of a limited partnership if it is not reasonably practicable to carry on the activities of the limited partnership in conformity with the partnership agreement.” Defendants contends that Plaintiff has presented no evidence that any partner has applied for CII’s judicial dissolution. The court agrees and is aware of no such evidence.

In opposition, Plaintiff argues that CII is subject to termination under Section 11.4 of the Limited Partnership Agreement. (Opposition, 6.) However, Plaintiff offers no further explanation for this argument, other than his statements to this effect.

Given the foregoing, and viewing the evidence submitted in the light most favorable to Plaintiff, the court finds that no triable issue of material fact exists with regard to Plaintiff’s second cause of action. Defendants argue that CII was not required to be dissolved and submit admissible evidence in support of their argument. In opposition, Plaintiff merely contends that Defendants are incorrect without submitting any evidence in support of his opposition. As such, Plaintiff has failed to demonstrate the existence of a triable issue with respect to the second cause of action.

Accordingly, summary adjudication is granted as to the second cause of action.

  1. Third Cause of Action: Breach of Fiduciary Duty

Plaintiff’s third cause of action generally alleges that Defendants have breached their fiduciary duties to Plaintiff and the other limited partners by acting to “benefits themselves and in direct contravention” of the limited partners’ rights. (see Complaint at p. 5:2-5.)

Defendants contend that summary adjudication as to the third cause of action is warranted because Plaintiff cannot present any evidence that Defendants’ actions were in breach of any fiduciary duty. (Motion, 11-14.) Defendants point to the Limited Partnership Agreement at sections 11.3, 14.1, 14.2 and California Corporations Code section 15904.08 for the contention that Defendants’ actions do not breach any general partner’s duty of care. (Motion, 11-12.)

The Limited Partnership Agreement provides as follows at Section 11.3:

11.3 No recourse Against General Partner. Each Limited Partner shall look solely to the assets of the Partnership for all distributions with respect to the Partnership and his capital contribution thereto and share of profits or losses thereof and shall have no recourse for such distributions (upon dissolution or otherwise) against any General Partner or any Limited Partner. No Limited Partner shall have any right to demand or receive property other than cash upon dissolution and termination of the Partnership.

Further, the Limited Partnership Agreement provides as follows at Section 14:1:

14.1 Exoneration. Except in case of gross negligence or willful misconduct, the doing of any act or the failure to do any act by the General Partner the effect of which may cause or result in loss or damage to the Partnership, shall not subject the General Partner to any liability to the Partners or the Partnership.

Finally, the Limited Partnership Agreement provide as follows at Section 14.2:

14.2 Indemnification. Each Partnership employee and agent and each General Partner shall be indemnified and held harmless by the Partnership against any and all claims, actions, demands, losses, costs, expenses (including attorneys’ fees), damages, and threats of loss that might result from any claim or legal proceeding relating to the performance or nonperformance of any act concerning the activities of the Partnership; provided, however, the person or party against whom a claim is made or legal proceeding is directed must not a been culpable of gross negligence or willful misconduct.

(see Complaint, Exhibit A.)

Similarly, California Corporations Code section 15904.08 operates to limit a general partner’s duty of care to the limited partnership. (Motion, 11-12.) California Corporations Code section 15904.08 provides: “(c) A general partner’s duty of care to the limited partnership and the other partners in the conduct and winding up of the limited partnership’s activities is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.” Further, “(e) A general partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the general partner’s conduct furthers the general partner’s own interest.”

Defendants further contend that Plaintiff’s responses to interrogatories also demonstrates that Plaintiff has no evidence to support his third cause of action. (Motion, 12-14; DSS ¶ 53; Herich Decl., Exhibits C and D

In opposition, Plaintiff appears to contend that Defendants’ motion should be denied because “Defendant presents no evidence that he has met his reporting obligations.” (Opposition, 5.) Further, Plaintiff appears to contend that Defendant Cornell is subject to removal for failure to provide an accounting and “for breaching fiduciary duty in connection therewith.” (Id.)

Given the foregoing, and viewing the evidence submitted in the light most favorable to Plaintiff, the court finds that no triable issue of material fact exists with regard to Plaintiff’s third cause of action. Plaintiff’s opposition, read generally, appears to contend that Defendants are wrong about Plaintiff’s causes of action without providing admissible evidence to refute Defendants’ contentions. However, such an opposition fails to demonstrate the existence of triable issues of material fact. Accordingly, summary adjudication is granted as to the third cause of action.

Conclusion

Defendants’ motion for summary adjudication is GRANTED in its entirety. Defendant to provide notice and prepare a proposed Judgment.

DEFENDANT’S MOTION TO COMPEL PLAINTIFF TO ATTEND DEPOSITION

Because the Motion for Summary Judgment is granted, the motion to compel Plaintiff’s deposition is moot. Under the circumstances, an award of sanctions would be unjust

Defendant is to give notice.

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