This case was last updated from Los Angeles County Superior Courts on 09/09/2021 at 02:02:26 (UTC).

SOUTHEAST REGIONAL CENTER, LLC, A GEORGIA LIMITED LIABILITY COMPANY, ET AL. VS YOUNG HUN KIM, ET AL.

Case Summary

On 08/18/2020 SOUTHEAST REGIONAL CENTER, LLC, A GEORGIA LIMITED LIABILITY COMPANY filed a Property - Other Property Fraud lawsuit against YOUNG HUN KIM. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is YOLANDA OROZCO. The case status is Other.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******1339

  • Filing Date:

    08/18/2020

  • Case Status:

    Other

  • Case Type:

    Property - Other Property Fraud

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

YOLANDA OROZCO

 

Party Details

Plaintiffs and Appellants

SOUTHEAST REGIONAL CENTER LLC A GEORGIA LIMITED LIABILITY COMPANY

CHOI MOSES

ACE ATTORNEY SERVICE INC

Respondents and Defendants

KIM YOUNG HUN

8TH BRIDGE CAPITAL INC. A CALIFORNIA CORPORATION

MARU ASSETS LLC A CALIFORNIA LIMITED LIABILITY COMPANY

8TH BRIDGE CAPITAL LLC A LIMITED LIABILITY COMPANY

MANHATTAN REAL ESTATE FUND GP LLC A DELAWARE LIMITED LIABILITY COMPANY

KIM YNA

8BC LOAN FUND LLC A CALIFORNIA LIMITED LIABILITY COMPANY

879 LINDA FLORA LLC

YK BRIDGE CAPITAL LIMITED

Attorney/Law Firm Details

Plaintiff Attorney

RAPOPORT GREGG AARON

Defendant Attorneys

MCCORMICK PATRICK

SELMONT RUSSELL M.

MCCORMICK PATRICK EMERSON

 

Court Documents

Appeal - Clerk's Notice of Abandonment of Appeal - APPEAL - CLERK'S NOTICE OF ABANDONMENT OF APPEAL B311877, NA03/05/21

7/22/2021: Appeal - Clerk's Notice of Abandonment of Appeal - APPEAL - CLERK'S NOTICE OF ABANDONMENT OF APPEAL B311877, NA03/05/21

Notice - NOTICE ABANDONMENT OF APPEAL

7/16/2021: Notice - NOTICE ABANDONMENT OF APPEAL

Request for Dismissal

7/16/2021: Request for Dismissal

Stipulation and Order - STIPULATION AND ORDER (STIPULATION AND PROPOSED PROTECTIVE ORDER)

2/16/2021: Stipulation and Order - STIPULATION AND ORDER (STIPULATION AND PROPOSED PROTECTIVE ORDER)

Informal Discovery Conference

1/29/2021: Informal Discovery Conference

Reply - REPLY BRIEF ISO MOTION TO STAY PROCEEDINGS

1/20/2021: Reply - REPLY BRIEF ISO MOTION TO STAY PROCEEDINGS

Declaration - DECLARATION OF GREGG A. RAPOPORT IN OPPOSITION TO MOTION TO STAY

1/13/2021: Declaration - DECLARATION OF GREGG A. RAPOPORT IN OPPOSITION TO MOTION TO STAY

Opposition - OPPOSITION BY PLAINTIFFS TO MOTION TO STAY

1/13/2021: Opposition - OPPOSITION BY PLAINTIFFS TO MOTION TO STAY

Opposition - OPPOSITION TO DEFENDANTS' MOTION FOR PROTECTIVE ORDER

1/20/2021: Opposition - OPPOSITION TO DEFENDANTS' MOTION FOR PROTECTIVE ORDER

Opposition - OPPOSITION OPPOSITION TO EX PARTE APPLICATION TO ADVANCE HEARING ON MOTION FOR PROTECTIVE ORDER

11/2/2020: Opposition - OPPOSITION OPPOSITION TO EX PARTE APPLICATION TO ADVANCE HEARING ON MOTION FOR PROTECTIVE ORDER

Reply - REPLY TO DEFENDANTS' OPPOSITION TO APPLICATION FOR OSC RE PRELIMINARY INJUNCTION

11/6/2020: Reply - REPLY TO DEFENDANTS' OPPOSITION TO APPLICATION FOR OSC RE PRELIMINARY INJUNCTION

Declaration - DECLARATION OF RUSSELL SELMONT IN SUPPORT OF DEFENDANTS' MOTION FOR PROTECTIVE ORDER

10/23/2020: Declaration - DECLARATION OF RUSSELL SELMONT IN SUPPORT OF DEFENDANTS' MOTION FOR PROTECTIVE ORDER

Amendment to Complaint (Fictitious/Incorrect Name)

10/16/2020: Amendment to Complaint (Fictitious/Incorrect Name)

Proof of Personal Service

10/19/2020: Proof of Personal Service

Declaration - DECLARATION DECLARATION OF YNA KIM IN SUPPORT OF DEFENDANTS' OPPOSITION TO MOTION FOR PRELIMINARY INJUNCTION

10/6/2020: Declaration - DECLARATION DECLARATION OF YNA KIM IN SUPPORT OF DEFENDANTS' OPPOSITION TO MOTION FOR PRELIMINARY INJUNCTION

Declaration - DECLARATION OF GREGG A. RAPOPORT IN SUPPORT OF PLAINTIFFS' EX PARTE APPLICATION FOR ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION

8/25/2020: Declaration - DECLARATION OF GREGG A. RAPOPORT IN SUPPORT OF PLAINTIFFS' EX PARTE APPLICATION FOR ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION

Proof of Personal Service

8/26/2020: Proof of Personal Service

Proof of Personal Service

8/26/2020: Proof of Personal Service

98 More Documents Available

 

Docket Entries

  • 09/08/2021
  • DocketRequest for Dismissal; Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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  • 08/20/2021
  • Docketat 09:00 AM in Department 31, Yolanda Orozco, Presiding; Order to Show Cause Re: Dismissal (Settlement) - Not Held - Advanced and Continued - by Court

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  • 08/18/2021
  • Docketat 1:36 PM in Department 31, Yolanda Orozco, Presiding; Court Order

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  • 08/18/2021
  • DocketMinute Order ( (Court Order)); Filed by Clerk

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  • 07/22/2021
  • DocketAppeal - Clerk's Notice of Abandonment of Appeal (B311877, NA03/05/21); Filed by Clerk

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  • 07/16/2021
  • DocketRequest for Dismissal (- Not Entered 07/19/2021); Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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  • 07/16/2021
  • DocketNotice (Abandonment of Appeal); Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Appellant); Moses Choi (Appellant)

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  • 07/02/2021
  • Docketat 08:30 AM in Department 31, Yolanda Orozco, Presiding; Hearing on Motion to Compel Further Discovery Responses

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  • 06/29/2021
  • DocketNOTICE OF SETTLEMENT OF APPEAL; Filed by Clerk

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  • 06/29/2021
  • DocketAppeal - Notice Court Reporter to Prepare Appeal Transcript (NOA: 03/05/21 B311877); Filed by Clerk

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113 More Docket Entries
  • 08/26/2020
  • DocketProof of Personal Service; Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff)

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  • 08/26/2020
  • DocketProof of Personal Service; Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff)

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  • 08/26/2020
  • DocketProof of Service (not Summons and Complaint); Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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  • 08/25/2020
  • DocketDeclaration (Of Gregg A. Rapoport In Support Of Plaintiffs' Ex Parte Application For Order To Show Cause Re Preliminary Injunction); Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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  • 08/19/2020
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 08/19/2020
  • DocketSummons (on Complaint); Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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  • 08/18/2020
  • DocketCivil Case Cover Sheet; Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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  • 08/18/2020
  • DocketCivil Case Cover Sheet; Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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  • 08/18/2020
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 08/18/2020
  • DocketComplaint; Filed by Southeast Regional Center, LLC, a Georgia limited liability company (Plaintiff); Moses Choi (Plaintiff)

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Tentative Rulings

Case Number: 20STCV31339    Hearing Date: May 11, 2021    Dept: 82

Southeast Regional Center, LLC, et al.

v.

Young Hun Kim,

Judge Mary Strobel

Hearing: May 11, 2021

20STCV31339

Tentative Decision on Motion for Reconsideration or, in the Alternative, Renewed Motion for Preliminary Injunction

In August 2020, Plaintiffs Southeast Regional Center (“Center”) and Moses Choi (“Choi”) (collectively, “Plaintiffs”) moved for a preliminary injunction against Defendants Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; Yna Kim; 8th Bridge Capital, Inc.; 8BC Loan Fund, LLC; Maru Assets, LLC; Does 1-50 (collectively “Defendants”); and their employees, agents, affiliates, partners, assigns, attorneys, and all persons acting on behalf or in concert with any of the same (collectively, “Agents”) under the Uniform Voidable Transactions Act (“UVTA”). The OSC re: preliminary injunction was originally set by ex parte application. On November 19, 2020, after a hearing, the court denied the motion. Plaintiffs move for reconsideration of the court’s ruling, or, alternatively, bring a renewed motion for preliminary injunction pursuant to CCP section 1008.

Judicial Notice

Plaintiffs’ RJN Exhibits 1-4, 33-36 – Granted.

Procedural Background

On August 18, 2020, Plaintiffs filed a complaint against Defendants for intentional voidable transfers, fraudulent transfers, and accounting.

On August 27, 2020, Plaintiffs filed an Ex Parte Application for Order to Show Cause Re Preliminary Injunction. That same day, the court granted the application, scheduled a briefing schedule, and ordered Plaintiff to serve the Order to Show Cause on Defendants by August 28, 2020.

On September 24, 2020, the parties stipulated to continuing the briefing schedules, as permitted by the court. Per the stipulation, Defendant timely opposed the Order to Show Cause, and Plaintiffs timely replied.

On November 19, 2020, after a hearing, the court denied the OSC re: preliminary injunction. The court issued a detailed written ruling.

On December 7, 2020, Plaintiffs filed the instant motion for reconsideration, or, in the alternative, renewed motion for preliminary injunction.

On December 7, 2020, the court entered Plaintiffs’ request for dismissal of Defendants 8BC Loan Fund, LLC; Maru Assets, LLC; and 879 Linda Flora, LLC.

On December 16, 2020, a case management conference was held before Department 31, the assigned independent calendar department. The court set a jury trial for March 28, 2022. Department 31 has held an informal discovery conference and ruled on a motion to stay proceedings, a demurrer, and a motion for protective order.

On March 5, 2021, Plaintiffs filed a notice of appeal of the court’s ruling on motion for preliminary injunction.

On April 28, 2021, Defendant Kim filed an opposition to the motion for reconsideration or, in the alternative, renewed motion for preliminary injunction. On May 3, 2021, Plaintiffs filed a reply.

Pendency of Appeal

Plaintiff has not addressed whether this court has jurisdiction to consider a motion for reconsideration when Plaintiff has appealed the order for which reconsideration is sought.

"The perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order."  (CCP sec. 916(a).)  

In Young v. Tri-City Healthcare Dist. (2012) 210 Cal.App.4th 35, the Court of Appeal held that the respondent's appeal from the trial court's order denying respondent's anti-SLAPP motion divested the trial court of subject matter jurisdiction to grant reconsideration of the denial of the anti-SLAPP motion.  "The point is that both tracks address the same substantive ruling on the anti-SLAPP issues, and only the appellate court could have had subject matter jurisdiction on those same issues, once the appeal was perfected. It was a waste of judicial resources for dual tracks to be followed ...."  (Young, supra at 53.)  

By analogy to Young, there is a threshold issue of whether the court may even consider Plaintiff’s motion. The parties should address this at the hearing. Because the court would deny the motion for reconsideration in any event, the court addresses the merits of the motion below.

Legal Standard

Code of Civil Procedure section 1008 governs applications to reconsider and provides, in relevant part:

(a) When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.

(b) A party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown….[¶]

(e) This section specifies the court's jurisdiction.... No application to reconsider any order … may be considered by any judge or court unless made according to this section.

“A motion for reconsideration may only be brought if the party moving for reconsideration can offer ‘new or different facts, circumstances, or law’ which it could not, with reasonable diligence, have discovered and produced at the time of the prior motion. . . .A motion for reconsideration will be denied absent a strong showing of diligence.” (Forrest v. State of Cal. Dept. Of Corps. (2007) 150 Cal.App.4th 183, 202.)

“A trial court may not grant a party’s motion for reconsideration that does not comply with section 1008.’” (Cox v. Bonni (2018) 30 Cal.App.5th 287, 312.)

Analysis

Renewed Motion for Preliminary Injunction

Plaintiffs’ renewed motion for preliminary injunction is not properly before Department 82, a specialized writs and receivers department. Pursuant to Local Rule 2.8(b), Department 82 is assigned, among other matters, ex parte applications for a temporary restraining order, or an application for an order to show cause re preliminary injunction, made before the first scheduled date for an initial status conference or case management conference in the direct calendar court. Pursuant to this same rule, a noticed motion for preliminary injunction “whenever made” must be heard by the department “where the case is assigned,” which, in this case, is the assigned direct calendar court.

Here, the renewed motion is a noticed motion for preliminary injunction. Moreover, Department 31 has already held an initial status conference, set a jury trial, and ruled on other matters. Accordingly, the renewed motion is properly assigned to the independent calendar court. Department 82 does not rule on the renewed motion. At the hearing on November 19, the court instructed Plaintiffs to ensure that any renewed motion was filed in the proper department. (See Rapoport Decl. ¶ 67.) Given that instruction, Plaintiffs have no excuse for filing the renewed motion in the wrong department. The renewed motion is denied, without prejudice to filing in the independent calendar department.

Since reconsideration motions must be heard by the judge that originally ruled on the motion (see CCP § 1008(a)), the court interprets Rule 2.8(b) consistent with that procedure and rules on the motion for reconsideration.

Timeliness of Motion for Reconsideration

The court denied the OSC re: preliminary injunction on November 19, 2020. Defendants served notice of the ruling electronically on November 23, 2020, which extended Plaintiffs’ time to act by two court days. (CCP § 1010.6(a)(4)(B).) Plaintiffs filed the motion for reconsideration on December 7, 2020, within 10 days of written notice of the ruling (as extended by electronic service and because December 5, 2020, was a Saturday). Accordingly, the motion is timely. (CCP § 1008(a); see also CCP § 135 [Every Saturday is a judicial holiday].)

Reconsideration Based on New or Different Facts, Circumstances, or Law

To show the “new or different facts, circumstances, or law” required by CCP section 1008(a), Plaintiffs rely on the following statement in the declaration of attorney Gregg Rapoport:

Plaintiffs did not present the foregoing new and different facts, circumstances and law to the Court in connection with their previous Motion for Preliminary Injunction because when I prepared that motion (for which I conducted all the research), I encountered no authority requiring a UVTA plaintiff seeking a preliminary injunction to demonstrate the probable success on the merits of an underlying unliquidated claim, despite my having conducted diligent and extensive nationwide research of caselaw and treatises relating to the standards for obtaining a preliminary injunction under the UVTA. I did not anticipate, and could not with reasonable diligence have anticipated, that such a requirement would be imposed.

Defendants argued for this requirement in their Opposition (filed 10/6/20), but they cited no authority actually holding such a requirement existed. In response, based on my further research, Plaintiffs and addressed the argument at length in their Reply (filed 11/6/20) at pp. 1-4, showing that Defendants’ position was not supported by either the language of the UVTA or the caselaw Defendants cited. Plaintiffs also cited UVTA cases to the contrary from other jurisdictions. E.g., Lynd Co. v. Escalante Apartments SA, LP (Tex. Dist. 2004) 2004 WL 5358801, rev’d on oth. grds. (Tex. App. 2004) Metra United Escalante, L.P. v. Lynd Co., 158 S.W.3d 535, 542 (preliminary injunction under UVTA granted without finding as to probability of success of underlying claims); Farm Credit Bank of St. Louis v. Lynn (Ill. App. 1990) 561 N.E.2d 1355, 1357-58 (“The instant plaintiff’s verified complaint sufficiently alleged fraud under the Act. The injunction served to preserve the status quo and to prevent further possible fraud. Accordingly, we find that the court did not abuse its discretion in enjoining transfer of the property.”).

During oral argument before the Court (the Hon. Mary J. Strobel) on November 19, 2020, the Court acknowledged that there was “no clear case law” on this point, but denied my request for further briefing. I requested that the Court sua sponte reconsider its ruling and permit Plaintiffs to submit additional evidence to demonstrate their likely success in the underlying federal action, pursuant to Le Francois v. Goel (2005) 35 Cal.4th 1094, 1096-97. (Rapoport Decl. ¶¶ 65-67.)

When a motion for reconsideration is based on alleged new or different facts, it is not sufficient for the moving party merely to adduce facts not previously presented to the court. (Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 689-690.) Facts that were known to a party at the time of the hearing or ruling on the order sought to be reconsidered, by their very nature, are not “new” or “different.” (Id. at 690.) Furthermore, that party must make a strong showing that diligence was used in uncovering all pertinent facts before the original motion was made. (Forrest v. State of California Dept. of Corporations (2007) 150 Cal.App.4th 183, 202, disapproved of on other grounds by Shalant v. Girardi (2011) 51 Cal.4th 1164.) This diligence requirement also applies to motions on the basis of different law, and is not satisfied where the moving party presents a legal principle based on a case that was available and could have been provided to the trial court prior to the initial ruling. (Baldwin v. Home Sav. of America (1997) 59 Cal.App.4th 1192, 1196-1197.) The requirement of introducing new or different facts, circumstances or law cannot be satisfied on the theory that the trial court misinterpreted California law in its existing decision; thus, a party does not rely on “different” law when it reiterates its prior reasoning and authorities. (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500.)

As applied here, Plaintiffs do not cite any new law or relevant case authority that has been issued since the court’s ruling on the OSC re: preliminary injunction. Defendants argue, and Plaintiffs do not dispute, that the only new case discussed in the motion is from 1989. (Oppo. 7; see Reply 1-6.)

Plaintiffs assert that the court’s ruling on the OSC was “new law” on the question of whether “requiring a UVTA plaintiff seeking a preliminary injunction to demonstrate probable success on the merits of an unliquidated underlying claim.” (Mot. 12; Reply 1-6.) As phrased in reply, Plaintiffs contend that the “Court’s ruling requiring Plaintiffs to show probable success on their underlying unliquidated federal claim constituted ‘new or different’ law justifying their filing of this motion and submission of additional facts to meet the required additional showing.” (Reply 2.) Plaintiffs seem to contend that the court, sua sponte, raised this legal issue and thus Plaintiffs could not have anticipated the need to submit evidence about their probable success of the underlying claims, even in reply. (Reply 3:18-28 [“The Court did not accept Defendants’ arguments or cited authorities…. The Court then presented its own rationale that was different from Defendants’ arguments.”].)

For several reasons, Plaintiffs do not show “new or different facts, circumstances, or law” that would justify reconsideration. As a preliminary matter, Plaintiffs cite no authority that a trial court’s ruling on a legal issue, even one with “no clear case law,” constitutes “new law” within the meaning of CCP section 1008(a). More accurately, Plaintiffs seems to argue that the court’s ruling that a UVTA plaintiff must show some probable success on the underlying claim is a new or different circumstance.

However, Plaintiffs do not show that, with reasonable diligence, they could not have anticipated that a trial court would consider the likelihood of success of their underlying federal claims in a motion for preliminary injunction. As noted in the court’s November 19 ruling, “[t]he UVTA expressly provides that whether a pre-judgment injunction should be issued is dependent upon principles of equity and the otherwise applicable provisions of the Code of Civil Procedure.” (11/19 ruling at 4; Civ. Code § 3439.07.) In deciding whether or not to grant a preliminary injunction, the court looks to two factors, including “(1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief.” (White v. Davis (2003) 30 Cal.4th 528, 553-54.) In its ex parte application filed August 7, 2020, Plaintiffs relied heavily on Oiye v. Fox (2012) 211 Cal.App.4th 1036, which affirmed a trial court’s order granting a preliminary injunction under the UVTA. (See Ex parte 2-3, 5.) The Oiye court considered, at length, the plaintiff’s likelihood of success of her underlying claims. (Oiye, supra at 1050-57.) In opposition to the ex parte, Defendants argued:

Oiye v. Fox (2012) 211 Cal.App. 4th 1036, relied on by Plaintiffs, is particularly instructive in this regard. Oiye involved a motion for preliminary injunction under the UVTA where plaintiff’s entitlement to bring the UVTA claim was predicated on separate tort claims that had not yet been adjudicated or reduced to judgment, just as is the case here. Notably, in determining whether the plaintiff had met its burden of demonstrating a likelihood of prevailing on the merits, the court focused extensively on whether the plaintiff would prevail on the tort claims that created the alleged creditor-debtor relationship. Id. at 1049-1056.

If to obtain a preliminary injunction under the UVTA, the plaintiff in Oiye only needed to show the transactions were made with fraudulent intent (a separate issue the court also ruled on at page 1059-1060), the court never would have focused its opinion on whether plaintiff had provided sufficient evidence to show that its tort claims would likely result in a judgment. The fact that the Oiye court made this inquiry and determination evidences that under the law, proving the requisite “right to payment” under Civil Code Section 3439.01(b) requires proof of success on the underlying claims creating the alleged debtor-creditor relationship. (Oppo. to Ex parte 6.)

The legal analysis from Plaintiffs’ ex parte and in Defendants’ opposition presented a legal question for the court to decide regarding the scope of the “likelihood of success” element for a preliminary injunction motion brought under the UVTA. While the court may not have fully adopted Defendants’ position on this legal issue, the court did not raise the issue sua sponte, but rather ruled in response to the parties’ arguments and cited authorities. Based on the Oiye case and the plain language of section 3439.07, which incorporates the preliminary injunction standard in the CCP, Plaintiffs could have, with reasonable diligence, anticipated that Defendants would raise this issue in opposition and the court would need to decide the legal question. Even if Plaintiffs did not anticipate the legal question, they could have responded in reply with evidence regarding their likelihood of success on the underlying federal claims. Plaintiffs made a strategic litigation decision not to submit such evidence for the OSC. In these circumstances, the court’s ruling on this disputed legal question is not a new or different fact, circumstance, or law.

Plaintiffs submit additional evidence with their motion for reconsideration regarding the merits of their underlying federal claims. However, that evidence is not “new or different.” As argued persuasively in opposition, nearly all of this evidence was available and known to Plaintiffs prior to the filing of their ex parte application for a preliminary injunction in August 2020. (Oppo. 8; see Mot. for Reconsideration 13, citing RJN Exhibits 1-3 and 39.) Plaintiffs do not argue to the contrary in reply. (Reply 1-6.) Moreover, Plaintiffs contend that this evidence is “new” based on the theory, discussed above, that the court’s ruling on the OSC re: preliminary injunction presented some new or different circumstance or law. For the reasons discussed above, that argument is not persuasive.

Based on the foregoing, Plaintiffs do not show “new or different facts, circumstances, or law” that would justify reconsideration.

Conclusion

The motion for reconsideration is DENIED.

The renewed motion for preliminary injunction is DENIED, without prejudice to filing in the assigned independent calendar department. (See Local Rule 2.8(b).)

Case Number: 20STCV31339    Hearing Date: February 02, 2021    Dept: 31

DEFENDANTS' MOTION FOR PROTECTIVE ORDER IS GRANTED.

Background

On August 18, 2020, Plaintiffs Southeast Regional Center, LLC and Moses Choi filed the instant action against Defendants Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; Yna Kim; 8th Bridge Capital, Inc.; 8BC Loan Fund, LLC; Maru Assets, LLC; and Does 1 through 50. The Complaint asserts causes of action for: 

  1. Intentional Voidable Transfer pursuant to Civil Code § 3439, et seq.;

  2. Common Law Fraudulent Transfer; and

  3. Accounting. 

On October 16, 2020, Plaintiffs filed an Amendment to Complaint (Fictitious/Incorrect Name) naming 879 Flora LLC as Doe 21. On December 7, 2020, 8BC Loan Fund, LLC; Maru Assets, LLC; and 879 Linda Flora, LLC were dismissed without prejudice.

Defendants Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; Yna Kim; and 8th Bridge Capital, Inc. (hereinafter collectively referred to as “Defendants”) move for a protective order preventing Plaintiffs from using any evidence discovered in this action in the Federal Action, entitled Moses Choi, et al. v. 8th Bridge Capital, Inc., et al., United States District Court, Central District of California case number 2:17-cv-8958-CAS-AFM (the “Federal Action”).

Legal Standard

“The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (Code Civ. Proc., § 2025.420(b).) Courts have considerable discretion in granting and crafting protective orders. (Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588.)

Request for Judicial Notice

The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).)

Defendants request that the Court take judicial notice of a number of documents filed in the Federal Action. The request is GRANTED.

Plaintiffs similarly request that the Court take judicial notice of a number of documents filed in the Federal Action. The request is GRANTED.

Discussion

Defendants move for a protective order preventing Plaintiffs from using any evidence discovered in this action in the Federal Action.

Defendants argue that Plaintiffs have brought this state action as an attempted run-around the discovery cut-off date in the pending Federal Action. Defendants assert that Plaintiffs are now seeking discovery in this action that is relevant only to the Federal Action and refusing to stipulate that documents produced in this action are limited to use in this action. Defendants contend that the Proposed Protective Order is based on the Los Angeles County Protective Order form and modified only as much as necessary to prevent Plaintiffs from abusing the discovery process in this state action and circumventing the federal court’s orders and deadlines.

Defendants argue that the federal court has already ruled that plaintiffs’ state claims are unnecessary. Defendants assert that on July 13, 2020, the court in the Federal Action denied Plaintiffs’ motion for leave to amend wherein Plaintiffs sought to add the very causes of action asserted here. (RJN, Exh. E.) Defendants contend that the court denied Plaintiffs’ motion for leave to amend not because the remedies were unavailable to Plaintiffs, but rather, because it was unnecessary at that stage in the Federal Action. (RJN, Exh. E, at 7.)

Defendants assert that Plaintiffs have explicitly refused on multiple occasions to stipulate that discovery produced in this action will be embargoed from use in the Federal Action. (Selmont Decl. ¶ 3-4.)

Defendants contend that Plaintiffs’ requests for production illustrate that the instant action was filed in order to allow Plaintiffs to circumvent the federal court. Defendants argue that, for example, request for production 13 asks for all bank statements related to one of Defendant’s declarants in the Federal Action. (Selmont Decl. ¶ 5, Exh. F.) Defendants assert that requests nos. 36-44 are the same, seeking evidence related to testimony made in the Federal Action. (Selmont Decl. ¶ 5, Exh. F.) Defendants contend that Plaintiffs already have the entirety of Defendants’ financial records for 2019. Defendants argue that any additionally responsive documents to these requests, specifically financial records for 2020, would merely consist of documents created after the cut-off of fact-based discovery in the Federal Action and unavailable to them in the Federal Action.

Defendants further assert that Plaintiffs’ third-party subpoenas are clearly aimed at obtaining documents exclusively for use in the Federal Action. Defendants contend that Plaintiffs served procedurally defective subpoenas on third parties UCMK and SWC LLC which relate exclusively to the claims in the Federal Action and have no possible relevance or bearing on Plaintiffs’ claims here.

As to the subpoena served on SWC, LCC, Defendants argue that SWC, LLC is an unrelated investor of Defendant 8BC Loan Fund, LLC that is not a named defendant in this action, is not referenced in the complaint, and is in no way involved in this action. Defendants assert that payments from SWC, LLC, which is not owned or controlled by Young Kim or any defendant, to 8BC Loan Fund, LLC simply have no bearing on any fraudulent conveyance claim. Defendants contend that the SWC, LLC subpoena seeks “all documents constituting emails or other communications, from January 1, 2015” between SWC and non-parties YK Bridge and Corbrus, including Fu Shen Chang. (Selmont Decl., Exh. G.) Defendants argue that Corbrus and Fu Shen Chang are parties who are not referenced at all in Plaintiffs’ complaint in this action but who happen to be parties to the Federal Action who are adverse to Plaintiffs. Defendants assert that the only explanation for the inclusion of documents related to Corbrus and Fu Shen Chang is to utilize them in the Federal Action.

As to UCMK, Defendants contend that Plaintiffs already have the entirety of Defendants’ financial records for all relevant periods from UCMK in the Federal Action. (Selmont Decl. ¶ 8.) Defendants argue that the discovery cutoff has passed in the Federal Action and Plaintiffs now hope to obtain Defendants’ 2020 financial records in direct violation of the federal court’s order and scheduling. Defendants assert that this violation is not only wrongful, but it unfairly prejudices Defendants who continue to follow the federal court’s rules and would not have equal access to Plaintiffs’ 2020 financial records. Defendants contend that additionally, the UCMK subpoena seeks the entire financial history of non-parties SWC, Interquake Properties Inc., and YK Moda Inc. (Selmont Decl., Exh. H.) Defendants argue that, again, these entities are mentioned nowhere in the complaint.

In opposition, Plaintiffs argue Defendants do not dispute, and cannot, that the discovery in this action is relevant to the parties’ federal case given that the very reason Defendants brought this motion was to stop Plaintiffs from using evidence here. Plaintiffs assert that in the consolidated Federal Action, Plaintiffs are pursuing contract and tort claims for more than $3 million against Defendant Young Kim and his controlled affiliates. (Defendants’ RJN, Exh. B.) Plaintiffs contend that during discovery in that action, Plaintiffs learned that soon after litigation commenced, Defendant Young Kim transferred more than $1.4 million to his non-party affiliates, including a foreign entity he controls. Plaintiffs argue that they then filed this fraudulent transfer action to set aside those transfers. Plaintiffs assert that in the Federal Action, Defendants stipulated to blanket protective orders to guard against pre-trial public disclosure of sensitive materials and the court approved such orders. (Plaintiffs’ RJN, Exh. B-C.)

Plaintiffs contend that Defendants’ accusations of discovery abuse are unfounded. Plaintiffs argue that Defendants have not demonstrated good cause to restrict the parties as they have proposed. Plaintiffs assert that courts recognize that there is a “public interest in allowing the sharing of information to litigants in similar cases.” (Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 590.) Plaintiffs contend that any discovery designated as confidential in this case will be subject to protective orders in the parties’ pending Federal Action, thereby balancing and accommodating the public interest in information sharing and the private interest in protecting sensitive information. Plaintiffs argue that Defendants’ financial information relates both to Defendants’ alleged fraudulent transfers and the parties’ claim in the federal cases in which Plaintiffs seek damages based in part on the profits from the alleged joint venture with Defendants Young Kim and 8th Bridge Capital, while Defendants seek declaratory relief regarding such damages. (Defendants’ RJN, Exh. B; Plaintiffs’ RJN, Exh. D.)

In reply, Defendants argue that California case law permits limited sharing of evidence among cases to avoid duplicative discovery for evidence that might otherwise be discoverable in the collateral matter, whereas Plaintiffs are seeking sharing of evidence among cases in which fact-based discovery is closed and, as a result, any evidence discovered in this action is inherently not discoverable in the Federal Action. Defendants assert that Plaintiffs have had full and fair discovery in the Federal Action and the deadline for fact-based discovery has run for both Plaintiffs and Defendants. Defendants contend that denying Plaintiffs’ requested modification of the protective order does not require Plaintiffs to engage in potentially duplicative discovery practice in multiple cases as there are no other cases in which Plaintiffs are entitled to discovery.

The Court finds that Defendants have established good cause sufficient to warrant the entering of the protective order as requested. While Plaintiffs argue that Defendants cannot dispute that the information to be discovered in this action is relevant to the Federal Action, Plaintiffs also fail to acknowledge that discovery has closed in the Federal Action. Notably, Plaintiffs do not dispute Defendants’ contention that the discovery Plaintiffs seek in this action is relevant only to their claims in the Federal Action, yet the parties are foreclosed from seeking discovery in that action. If Plaintiffs believe they are entitled to additional discovery in the Federal Action, Plaintiffs may seek relief from the federal court. This Court is not inclined to issue an order that would effectively circumvent any decision or deadline in the Federal Action.

While the Court is cognizant that there exist protective orders that allow the dissemination of information between parties in similar or related cases, as Defendants point out, the parties would otherwise be entitled to such discovery and the issuance of such a protective order would therefore avoid duplicative discovery practice. Here, because discovery has closed in the Federal Action, Plaintiffs have failed to show that they would otherwise be entitled to such information.

Finally, the Court finds that Plaintiffs will not be prejudiced by the granting of this motion as the Court routinely enters such protective orders barring parties from disseminating and using evidence discovered in one action in another related or similar action.

Based on the foregoing, Defendants’ motion for protective order is GRANTED.

Conclusion

Defendants’ motion for protective order is GRANTED.

Moving parties to give notice.

The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All social distancing protocols will be observed at the Courthouse and in the courtrooms.

Case Number: 20STCV31339    Hearing Date: February 01, 2021    Dept: 31

DEMURRER IS OVERRULED.

Background

On August 18, 2020, Plaintiffs Southeast Regional Center, LLC and Moses Choi filed the instant action against Defendants Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; Yna Kim; 8th Bridge Capital, Inc.; 8BC Loan Fund, LLC; Maru Assets, LLC; and Does 1 through 50. The Complaint asserts causes of action for: 

  1. Intentional Voidable Transfer pursuant to Civil Code § 3439, et seq.;

  2. Common Law Fraudulent Transfer; and

  3. Accounting. 

On October 16, 2020, Plaintiffs filed an Amendment to Complaint (Fictitious/Incorrect Name) naming 879 Flora LLC as Doe 21. On December 7, 2020, 8BC Loan Fund, LLC; Maru Assets, LLC; and 879 Linda Flora, LLC were dismissed without prejudice.

Defendants Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; and 8th Bridge Capital, Inc. (hereinafter collectively referred to as “Defendants”) demur to the first and second causes of action on the ground that Plaintiffs have failed to name a necessary party to the action.

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747. When considering demurrers, courts read the allegations liberally and in context. (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) However, it does not accept as true deductions, contentions, or conclusions of law or fact. (Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.)

Request for Judicial Notice

The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).)

Defendants request that the Court take judicial notice of a number of documents filed in the United States District Court, Central District of California, case number 2:17-cv-08958-CAS-AFM entitled Moises Choi, et al. v. 8th Bridge Capital, Inc., et al. (the “Federal Action”) and meet and confer emails dated October 3, 2020. The request is GRANTED as to the documents filed in the Federal Action. The request is DENIED as to the meet and confer emails, as they are not the proper subject for judicial notice.

Plaintiffs similarly request that the Court take judicial notice of a document filed in the Federal Action. The request is GRANTED.

Discussion

Defendants demur to the first and second causes of action on the ground that Plaintiffs have failed to name a necessary party to the action.

First Cause of Action for Intentional Voidable Transfer pursuant to Civil Code § 3439, et seq. & Second Cause of Action for Common Law Fraudulent Transfer

California law allows a plaintiff to sue parties who are not in possession of the asset alleged to have been fraudulently transferred. Among the remedies available for creditors is avoidance of the transfer. (Civil Code § 3439.07(a)(1).) In such an action, the creditor may obtain judgment “against the person for whose benefit the transfer was made.” (Civ. Code § 3439.08(b)(1)(A).

Defendants demur to the first and second causes of action arguing that Plaintiffs have failed to join a necessary party as YK Bridge is not a defendant in this suit despite the FAC identifying YK Bridge in the complaint as a transferee.

In opposition, Plaintiffs argue that YK Bridge is not a necessary party, as Section 3439.08(b)(1)(A) explicitly allows for a cause of action for fraudulent transfer to be brought against the person for whose benefit the transfer was made. Plaintiff asserts that here, Defendant Kim is alleged to be the owner of YK Bridge and therefore qualifies as “the person for whose benefit the transfer was made.”

The Court finds that Plaintiffs have alleged facts sufficient to state causes of action for intentional voidable transfer pursuant to Civil Code section 3439, et seq., and common law fraudulent transfer. As provided in Section 3439.08(b)(1)(A), a creditor may obtain judgment against the person for whose benefit the transfer was made. Here, the complaint alleges that “YK Bridge Capital Limited (“YK Bridge”) is a Hong Kong entity that Young Kim has at all times owned and controlled.” (Complaint ¶ 11.) Accordingly, the statute contemplates that complete relief may be afforded without YK Bridge, as Young Kim is a Defendant in this action and judgment may be obtained against Defendant Kim.

Defendants have failed to cite to any case law holding that a common law claim for fraudulent transfer may only be brought against the transferee and not against the person for whose benefit the transfer was made. Defendants’ citation to Renda v. Nevarez ((2014) 223 Cal.App.4th 1231) is of no help to them as Renda did not hold who was a necessary party to a fraudulent transfer cause of action. Renda only held that under the particular circumstances of that case, a money judgment could not be entered against the debtor in a fraudulent transfer cause of action, not that the debtor was not a proper party or that it was not “the person for whose benefit the transfer was made.” (Id. at 1235-1236.) Moreover, Renda dealt with a fraudulent transfer cause of action which was brought pursuant to the UTVA, and not under a common law theory of fraudulent transfer.

Finally, to the extent the parties argue that YK Bridge is, in fact, a necessary party, such a determination requires a factual inquiry that necessitates the examination of documents beyond the Complaint and those judicially noticed. Such a determination is thus inappropriate on demurrer where the Court assumes the truth of the complaint’s properly pled allegations.

Based on the foregoing, Defendants’ demurrer to the first and second causes of action is OVERRULED.

Conclusion

Defendants’ demurrer to the Complaint is OVERRULED in its entirety.

Moving party is to give notice.

The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All social distancing protocols will be observed at the Courthouse and in the courtrooms.

Case Number: 20STCV31339    Hearing Date: January 27, 2021    Dept: 31

DEFENDANTS' MOTION FOR STAY IS DENIED.

Background

On August 18, 2020, Plaintiffs Southeast Regional Center, LLC and Moses Choi filed the instant action against Defendants Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; Yna Kim; 8th Bridge Capital, Inc.; 8BC Loan Fund, LLC; Maru Assets, LLC; and Does 1 through 50. The Complaint asserts causes of action for: 

  1. Intentional Voidable Transfer pursuant to Civil Code § 3439, et seq.;

  2. Common Law Fraudulent Transfer; and

  3. Accounting. 

On October 16, 2020, Plaintiffs filed an Amendment to Complaint (Fictitious/Incorrect Name) naming 879 Flora LLC as Doe 21. On December 7, 2020, 8BC Loan Fund, LLC; Maru Assets, LLC; and 879 Linda Flora, LLC were dismissed without prejudice.

Defendants Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; and 8th Bridge Capital, Inc. (hereinafter collectively referred to as “Defendants”) move for an order staying proceedings pending a final determination on the merits of a pending action in the Federal Court of the Central District of California entitled Moises Choi, et al. v. 8th Bridge Capital, Inc., et al., case number 2:17-cv-08958-CAS-AFM.

Legal Standard

“Trial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency.” (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.)

Request for Judicial Notice 

A court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).)  

Defendants request that the Court take judicial notice of various documents filed in this action and in the Federal Action entitled Moses Choi, et al. v. 8th Bridge Capital, Inc., et al., United States District Court, Central District of California case number 2:17-cv-8958-CAS-AFM. The request is GRANTED.

Discussion

Defendants move for an order staying proceedings pending a final determination on the merits of a pending action in the Federal Court of the Central District of California entitled Moises Choi, et al. v. 8th Bridge Capital, Inc., et al., case number 2:17-cv-08958-CAS-AFM (the “Federal Action”).

Federal Actions & Discretion of the Court

“It is black letter law that, when a Federal action has been filed covering the same subject matter as is involved in a California action, the California court has the discretion but not the obligation to stay the state court action. [Citations.]

“In exercising its discretion, the court should consider the importance of discouraging multiple litigation designed solely to harass an adverse party, and of avoiding unseemly conflicts with the courts of other jurisdictions. It should also consider whether the rights of the parties can best be determined by the court of the other jurisdiction because of the nature of the subject matter, the availability of witnesses, or the stage to which the proceedings in the other court have already advanced.” [Citation.] The California Supreme Court also has isolated another critical factor favoring a stay of the state court action in favor of the Federal action, a factor which happens to be present in this case—the Federal action is pending in California not some other state. [Citation.]” (Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal.App.4th 800, 804.)

Defendants argue that this action should be stayed as each factor weighs in favor of staying this action while the Federal Action proceeds with its determination of liability and damages. Defendants assert that on or about December 13, 2017, Plaintiffs filed a complaint in the Central District of California, Western Division, case no. 2:17-cv-08958-CAS-AFM against 8th Bridge Capital, Inc.; Young Hun Kim; 8th Bridge Capital, LLC; Manhattan Real Estate Fund GP, LLC; Manhattan Real Estate Fund, LP; Manhattan Real Estate Fund II, LP; Manhattan Real Estate Equity Fund, LP; and Patrick Jongwon Chang (collectively referred to as the “8BC Parties”). (RJN, Exh. A.) Defendants argue that in the operative pleading in the Federal Action, the First Amended Complaint (“FAC”), Plaintiffs allege 16 causes of action against the 8BC Parties centering around the alleged formation of a joint venture or partnership between Plaintiffs and the 8BC Parties and Plaintiffs alleged entitlement to profits and assets of the 8BC Parties based on the alleged partnership. Defendants assert that whether or not Plaintiffs are entitled to the 8BC Parties’ profits and assets, and if so, how much would be offset by the 8BC Parties’ entitlement to Plaintiffs’ profits and assets per the counterclaims of 8th Bridge Capital, LLC and 8th Bridge Capital, Inc. is thus squarely before the Federal Court, with trial set for June 1, 2021. (RJN, Exh. B-C.)

Defendants contend that on or about June 5, 2020, Plaintiffs moved for leave to file a second amended complaint in the Federal Action seeking to add the very causes of action they attempt to bring in this state action. (RJN, Exh. D.) Defendants argue that after a full briefing by Plaintiffs and the 8BC Parties as well as a hearing on the matter, the Honorable Christina A. Snyder denied Plaintiffs’ motion for leave to amend on July 13, 2020. (RJN, Exh. E.) Defendants assert that Judge Snyder denied Plaintiffs’ motion for leave to amend not because the remedies were unavailable to Plaintiffs, but rather because it was unnecessary at that stage in the Federal Action.

Defendants contend that over a month later, on August 18, 2020, Plaintiffs filed the verified complaint in the instant action. Defendants argue that the verified complaint alleges that Plaintiffs are “creditors” of four of the 8BC Parties – specifically, moving Defendants – “[b]y virtue of the federal claims.” (Complaint ¶ 65.) Defendants argue that outside of Plaintiffs’ claims in the Federal Action, Plaintiffs allege no other, independent basis for recovery of their claims in the verified complaint.

Defendants assert that the Federal Action was well underway when Plaintiffs brought this state action. Defendants contend that the Federal Action here involves issues that concern the over-arching alleged partnership assets/transfers referenced in the verified complaint as well as the broader issues of partnership formation and entitlement to profits. Defendants argue that to allow this state action to proceed will likely result in duplicative and/or deeply conflicting outcomes. Defendants assert that given that the Federal Action is almost ready for trial and this action is brand new, with the Federal Action pending here in Los Angeles, this action should be stayed pending resolution of the Federal Action.

Defendants contend that this state action was brought solely to harass Defendants and for Plaintiffs to acquire discovery for use in the Federal Action while circumventing Judge Snyder’s orders. Defendants argue that the discovery cut-off date has passed in the Federal Action. Defendants point to several of the discovery requests propounded by Plaintiffs in this action, as well as the motion for preliminary injunction, as evidence of this action’s impropriety and harassing nature. Defendants assert that Plaintiffs have explicitly refused on multiple occasions to stipulate that discovery produced in this action will be embargoed from use in the Federal Action. (Selmont Decl. ¶ 5, 8.) Defendants contend that they have thus been left with no other option but to file a motion for protective order. (Selmont Decl. ¶ 8.)

Defendants argue that staying this action will avoid unseemly conflicts with the Federal Court of the Central District of California. Defendants assert that there is significant risk that if this Court makes a determination on any issue regarding these alleged transfers of Defendant, it could be in direct conflict with the fully-litigated determination reached in the Federal Action.

Defendants contend that theory of recovery in the instant complaint is based solely on Plaintiffs’ potential recovery in the Federal Action. Defendants argue that Plaintiffs cannot prevail on their UVTA claim until a judgment on the federal tort claims has been entered in their favor. (Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1049-1056; Weisenburg v. Cragholm (1971) 5 Cal.3d 892, 895-896.)

Defendants finally assert that the rights of Plaintiffs and Defendants can best be determined by the Federal Court of the Central District of California. Defendants contend that the subject matter in the Federal Action is broader in scope and includes the subject matter of the instant action. Defendants argue that the resolution of the broader issues in the Federal Action will determine whether Plaintiffs are entitled to Defendants’ assets at all, including any reversal of any alleged transfers, and, if so, the proper amount of damages. Defendants further contend that there is no issue with the availability of witnesses in the Federal Action that would not also be an issue in the instant action as both are in Los Angeles and thus weighs in favor of staying the instant action in favor of the broad, older Federal Action. Defendants finally argue that the Federal Action is over two and a half years old and has a trial date of June 1, 2021, weighing heavily in favor of staying the instant action given just how much further advanced the proceedings are in the Federal Action than in the instant action.

In opposition, Plaintiffs argue that a stay is not warranted. Plaintiffs assert that this action was not filed solely to harass Defendants as Plaintiffs brought this action only after the federal court denied leave to add the same fraudulent transfer claims in the Federal Action. Plaintiffs contend that the federal court did not rule on the merits of these claims and nothing in the court’s order precluded Plaintiffs from bringing their fraudulent transfer claims in the instant action, whatever potential federal remedies might later exist post-judgment. Plaintiffs argue that, moreover, the accusation that they are harassing Defendants and third parties with discovery requests and records subpoenas is meritless as Plaintiffs are seeking discovery of evidence directly relevant to these causes of action. Plaintiffs assert that there is no authority that would bar Plaintiffs from using it in the federal case as well if it is admissible there in the absence of a protective order prohibiting such use.

Plaintiffs further contend that there is no risk of any unseemly conflict with the federal court as the Federal Action will not determine the rights of the parties with respect to the fraudulent transfer cause of action. Plaintiffs argue that the UVTA does not require the plaintiff to have obtained a liquidated judgment, but only that plaintiff be a “creditor,” meaning someone who holds “a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, [etc.].” (Civ Code. § 3439.01(b), (c).) Plaintiffs assert that Defendants have not provided any authority where a court has stayed a UTVA cause of action pending liquidation of the plaintiff’s underlying claims. Plaintiffs contend that they are “creditors” entitled to pursue their UTVA cause of action, whether before, during, or after the Federal Action concludes.

Plaintiffs argue that even if they were required to obtain a judgment in the Federal Action before going to trial on their fraudulent transfer causes of action here, that would present no conflict with the federal court because the trial here would simply be continued until after the Federal Action concludes.

Having weighed the factors set forth in Caiafa, the Court declines to stay the instant proceedings. While a determination of whether or not Plaintiffs are, in fact, entitled to any of Defendants’ profits is an element of Plaintiffs’ causes of action here, this action additionally requires an analysis of whether any alleged transfer was done with the intent to prevent Plaintiffs from reaching that interest to satisfy its claim. (Lo v. Lee (2018) 24 Cal.App.5th 1065, 1071.) Accordingly, Defendants are incorrect that the rights of the parties to this action can best be determined in the Federal Action. Moreover, nothing before the Court indicates that the instant litigation was initiated with an intent to solely harass Defendants. While Defendants are concerned about discovery in this action being used in the Federal Action, such concerns are more properly addressed in a motion for protective order, not in a motion for a stay of proceedings. Finally, while Defendants are concerned with conflicting rulings between this action and the Federal Action, to avoid such conflicting rulings, the Court may continue the trial date in this action until the Federal Action is decided, as necessary. As it stands, this action is currently set for trial on March 8, 2022, well after the scheduled trial date in the Federal Action.

Based on the foregoing, Defendants’ motion for stay of proceedings is DENIED.

Conclusion

Defendants’ motion for stay of proceedings is DENIED.

Moving party is to give notice.

The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All social distancing protocols will be observed at the Courthouse and in the courtrooms.

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