This case was last updated from Los Angeles County Superior Courts on 06/03/2019 at 00:09:26 (UTC).

TRIDENT GROUP, INC. VS ONLYBUSINESS.COM, LLC

Case Summary

On 01/17/2017 TRIDENT GROUP, INC filed a Contract - Debt Collection lawsuit against ONLYBUSINESS COM, LLC. This case was filed in Los Angeles County Superior Courts, Santa Monica Courthouse located in Los Angeles, California. The Judges overseeing this case are ELIZABETH ALLEN WHITE and GERALD ROSENBERG. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****6936

  • Filing Date:

    01/17/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Debt Collection

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

ELIZABETH ALLEN WHITE

GERALD ROSENBERG

 

Party Details

Plaintiff

TRIDENT GROUP INC.

Defendant

ONLYBUSINESS.COM LLC

Attorney/Law Firm Details

Plaintiff Attorneys

PICK & BOYDSTON

BOYDSTON BRIAN D.

Defendant Attorneys

BAKST PATRICIA M

BAKST PATRICIA M.

 

Court Documents

VERIFIED COMPLAINT FOR: BREACH OF CONTRACT, ETC

1/17/2017: VERIFIED COMPLAINT FOR: BREACH OF CONTRACT, ETC

SUMMONS

1/17/2017: SUMMONS

CIVIL CASE COVER SHEET

1/17/2017: CIVIL CASE COVER SHEET

NOTICE OF RELATED CASES

2/22/2017: NOTICE OF RELATED CASES

SUMMONS

4/17/2017: SUMMONS

Minute Order

5/11/2017: Minute Order

NOTICE OF CASE MANAGEMENT CONFERENCE

5/16/2017: NOTICE OF CASE MANAGEMENT CONFERENCE

Minute Order

5/31/2017: Minute Order

NOTICE OF RULING RE: DEFENDANTS' MOTION FOR SECURITY AND FURTHER CASE MANAGEMENT CONFERENCE

6/1/2017: NOTICE OF RULING RE: DEFENDANTS' MOTION FOR SECURITY AND FURTHER CASE MANAGEMENT CONFERENCE

Minute Order

8/14/2017: Minute Order

Unknown

9/18/2017: Unknown

Minute Order

9/26/2017: Minute Order

Minute Order

10/23/2017: Minute Order

Minute Order

10/30/2017: Minute Order

NOTICE RE: CONTINUANCE OF HEARING

11/2/2017: NOTICE RE: CONTINUANCE OF HEARING

Minute Order

11/13/2017: Minute Order

Minute Order

1/22/2018: Minute Order

Minute Order

2/26/2018: Minute Order

14 More Documents Available

 

Docket Entries

  • 03/08/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Status Conference - Held

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  • 03/08/2019
  • Minute Order ( (Status Conference)); Filed by Clerk

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  • 01/25/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Status Conference - Held - Continued

    Read MoreRead Less
  • 01/25/2019
  • Minute Order ( (Status Conference)); Filed by Clerk

    Read MoreRead Less
  • 11/16/2018
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Status Conference - Held - Continued

    Read MoreRead Less
  • 11/16/2018
  • Minute Order ((Status Conference)); Filed by Clerk

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  • 10/16/2018
  • at 08:31 AM in Department 48, Elizabeth Allen White, Presiding; Status Conference - Not Held - Continued - Court's Motion

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  • 10/16/2018
  • Minute Order ((Status Conference)); Filed by Clerk

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  • 10/16/2018
  • Minute order entered: 2018-10-16 00:00:00; Filed by Clerk

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  • 08/15/2018
  • at 08:30 AM in Department 48; Status Conference (Status Conference; Matter continued) -

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56 More Docket Entries
  • 02/22/2017
  • Notice-Related Cases ( REL/W - BC587482 AND BC651099 ); Filed by Attorney for Plaintiff

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  • 02/22/2017
  • Notice of Related Case; Filed by Trident Group, Inc. (Plaintiff)

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  • 02/22/2017
  • NOTICE OF RELATED CASES

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  • 01/17/2017
  • Summons Filed; Filed by Attorney for Plaintiff

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  • 01/17/2017
  • Complaint; Filed by Trident Group, Inc. (Plaintiff)

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  • 01/17/2017
  • Complaint Filed

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  • 01/17/2017
  • CIVIL CASE COVER SHEET

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  • 01/17/2017
  • VERIFIED COMPLAINT FOR: BREACH OF CONTRACT, ETC

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  • 01/17/2017
  • Summons; Filed by Plaintiff

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  • 01/17/2017
  • SUMMONS

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Tentative Rulings

Case Number: SC126936    Hearing Date: February 02, 2021    Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR SUMMARY JUDGMENT

On April 17, 2017, Plaintiff Trident Group, Inc. (“Plaintiff”) filed a first amended complaint (“FAC”) against Defendant OnlyBusiness.com, LLC (“Defendant”) alleging breach of contract. The FAC alleges Plaintiff and Defendant entered into a Loan Agreement dated April 15, 2008, a Promissory Note dated May 1, 2008, and a Tolling Agreement on February 15, 2016. The FAC alleges Plaintiff loaned Defendant $1,521,446.58 under the Loan Agreement, which Defendant did not repay, thereby breaching the Loan Agreement. (FAC ¶¶ 12, 13, 15, 16.) The FAC also alleges interest accrued, Defendant did not pay the interest, and Defendant breached the Promissory Note. (FAC ¶¶ 14-16.)

On May 15, 2017, Defendant filed a Case Management Statement saying that it did not dispute liability and the parties had settled and agreed to a stipulated judgment. However, the parties never submitted a stipulated judgment. On July 30, 2020, the Court granted Daniel Meyerov’s (“Meyerov”) motion for leave to intervene.

On October 16, 2020, Plaintiff filed a motion for summary judgment, which Meyerov opposed. Defendant filed a notice of non-opposition.

On October 26, 2020, Meyerov filed a motion for summary judgment, which Plaintiff opposed. On January 12, 2021, the Court denied that motion.

Plaintiff’s motion was also heard on January 12, 2021. At that time, the Court determined Plaintiff had proven each element of its claim for breach of the Loan Agreement, but had not addressed the allegations that Defendant failed to pay interest and breached the Promissory Note. The Court stated it could not grant summary judgment on only part of the FAC, and that it was unclear from Plaintiff’s position in its motion papers and at the hearing whether it was dismissing any claims for interest, or whether Plaintiff contended that it could obtain summary judgment on its claim for the principal and then pursue a claim for interest at another time, or whether Plaintiff was taking some other position.

The Court continued the hearing on Plaintiff’s motion and requested briefing on those questions. Plaintiff filed a supplemental brief on January 20, 2021. Meyerov filed a supplemental brief on January 24, 2021.

A. REQUESTS FOR JUDICIAL NOTICE

Meyerov requests that the Court take judicial notice of (1) excerpts of the Neutral Accounting Report of Grobstein Teeple, filed in Daniel Meyerov v. Mark Friendman, et al., Case No. BC651099; (2) the docket in this action; (3) Plaintiff’s complaint; (4) Plaintiff’s FAC; and (5) Trident’s motion for sanctions, dated November 24, 2020. Meyerov’s requests are granted.

Plaintiff’s request for judicial notice of its motion for sanctions is granted.

B. EVIDENTIARY OBJECTIONS

Meyerov’s Objection Nos. 1, 2, 5, 6, and 7 to the Declaration of David Friedman are overruled. Objection Nos. 3 and 4 are sustained.

C. FACTUAL BACKGROUND

On April 15, 2008, Plaintiff and Defendant entered into the Loan Agreement. (Plaintiff’s UMF 1.) The agreement required Defendant to repay the loan by April 30, 2012 if its cumulative net profits for the preceding three fiscal years were less than projected in the 2008 and 2009 budgets. (Plaintiff’s UMF 3.) But if the cumulative net profits for the preceding three fiscal years exceeded the budgets, Plaintiff would convert the loan into a membership interest in Defendant. (Plaintiff’s UMF 3.)

Defendant executed the Promissory Note in favor of Plaintiff. (Plaintiff’s UMF 2.) The Promissory Note states, “All interest theretofore accrued but unpaid shall be Payable at the end of each quarter after the occurrence of an Interest Trigger Event.” (D. Friedman Decl., Ex. B at § 2.2(a).) It also states, “Interest Trigger Event shall be determined by Lender by comparing the Net Profits before taxes of Borrower for the accounting period of the 2008 Budget and the 2009 Budget to the combined projected earnings results, as previously approved by Lender, contained in the 2008 Budget and the 2009 Budget (as such terms are defined in the Loan Agreement). Lender shall determine, in its reasonable discretion, whether such results have met or exceeded the Net Profits before taxes set forth in the Approved Budgets. In the event that such results are determined to be lower than those projected and approved in such budgets, interest shall begin to accrue on the principal amount of the Loan then outstanding in accordance with the provisions of Section 2 herein.” (D. Friedman Decl., Ex. B at p. 2.)

Plaintiff loaned $1,521,446.58 to Defendant, which Defendant did not pay back. (Plaintiff’s UMF 9, 5.)

Plaintiff contends Plaintiff and Defendant entered into the Tolling Agreement, which could be terminated upon thirty days’ written notice. (Plaintiff’s UMF 7.) On December 15, 2016, Plaintiff’s counsel gave Defendant written notice of termination and demanded payment for the outstanding balance of the loan agreement. (Plaintiff’s UMF 8.) Plaintiff then filed this case on January 17, 2017.

D. DISCUSSION

A plaintiff moving for summary adjudication must satisfy the initial burden of proof by proving each element of a cause of action. (Code Civ. Proc., § 437c, subd. (p)(1).) Then the burden shifts to the defendant to show that a triable issue of material fact exists as to the cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2).) To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.)

1. Initial Burden

Plaintiff “moves for summary judgment on its claim for breach of the loan agreement.” (Motion at p. 1.) A cause of action for breach of contract requires (1) the existence of a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff. (Wall Street Network, Ltd. v. New York Times Co.¿(2008) 164 Cal.App.4th 1171, 1178.) As discussed above, the FAC alleges Defendant breached breach the Promissory Note and the Loan Agreement by not paying the principal and interest, but Plaintiff’s motion focuses only on the breach of the Loan Agreement and states it is not seeking damages arising from the failure to pay the interest. (Motion at p.3.)

Plaintiff submits evidence that it and Defendant entered into the Loan Agreement, under which Plaintiff performed and loaned $1,521,446.58 to Defendant. (Motion at p. 4; Plaintiff’s UMF 1-3; D. Friedman Decl., Exs. A-C; Boydston Decl., Ex. I at p. 4.) Plaintiff also provides evidence that Defendant did not repay the loan by the April 30, 2012 deadline, resulting in Plaintiff being damaged in the amount of $1,521,446.58. (Motion at p. 4; Plaintiff’s UMF 5, 9; D. Friedman Decl. ¶ 5; Boydston Decl., Ex. I at p. 4.) Plaintiff submitted evidence that Plaintiff and Defendant entered into a Tolling Agreement on February 15, 2016, which was terminated on December 15, 2016. (Plaintiff’s UMF 7, 8.) Plaintiff has therefore met its initial burden, and the burden shifts to Defendant or Meyerov to show the existence of a triable issue of material fact.

2. Statute of Limitations

In opposition, Meyerov focuses on the statute of limitations. His arguments repeat those in his motion for summary judgment. These arguments fail for the reasons discussed in detail in the January 12, 2021 order denying Meyerov’s motion for summary judgment. The Court repeats parts of that discussion here:

Meyerov contends that the Promissory Note required Plaintiff to determine if an Interest Trigger Event occurred by comparing net profits to projected earnings. (Opposition at p. 11.) Plaintiff determined an Interest Trigger Event had occurred at the end of 2009. (Opposition at p. 11.) But Defendant “did not pay interest nor principal in the first quarter of 2010 or thereafter. Thus, the date of the breach was March 2010,” and Plaintiff’s lawsuit is years late. (Opposition at p. 12.)

This argument does not withstand scrutiny. The Promissory Note does not state that in the event of an Interest Trigger Event, both interest and principal must be paid in the next quarter. Rather it states, “All interest theretofore accrued but unpaid shall be payable at the end of the quarter after the occurrence of an interest Trigger Event.” (Promissory Note § 2.2(a).) Regarding payment of the principal, the Promissory Note states, “The principal amount of the Loan . . . together with all interest and other sums owed to Lender pursuant to any of the Loan Instruments, shall be due and payable . . . upon the Maturity Date.” (Promissory Note § 2.2(b).) The Promissory Note defines “Maturity Date” as having “the meaning set forth in Section 2.4(a) of the Loan Agreement.” (Promissory Note § 1.1.) The Loan Agreement defines “Maturity Date” as April 30, 2012, if the cumulative Net Profits after taxes for the three fiscal years ending after April 30, 2008 are less than those projected in the 2008 Budget and the 2009 Budget. (Loan Agreement § 2.4 (a)(i).) The parties do not dispute that the Maturity Date in the Loan Agreement was April 30, 2012. (Opposition at p. 15.) Therefore, the payment of principal was not due until April 30, 2012.

Because the payment of principal was not due until April 30, 2012, the statute of limitations for a cause of action based on the failure to pay the principal did not start until that date. “Courts have uniformly agreed . . . that other causes of action arising from payments made under a promissory note accrue when demand for payment is made or the payment is due. For example, when a note is payable in installments, the statute of limitations begins to run on the date each installment is due. [Citations.]” (Garver v. Brace (1996) 47 Cal.App.4th 995, 1000.)

Meyerov next argues that the Tolling Agreement, signed on February 15, 2016, cannot revive expired limitations periods, and the time to sue on the Promissory Note expired March 2014. But the four-year statute of limitations period for the failure to pay the principal due on April 30, 2012 ended on April 30, 2016. Thus, the limitations period had not expired when the parties signed the Tolling Agreement.

Meyerov cites Code of Civil Procedure section 360.5 for the requirement that “any tolling agreement must be in writing and signed by the party obligated.” (Opposition at p. 13.) However, “the Legislature never intended that section 360.5 apply to tolling agreements.” (Don Johnson Productions, Inc. v. Rysher Entertainment, LLC (2012) 209 Cal.App.4th 919, 930.) And in any event, both parties signed the Tolling Agreement.

Meyerov argues that the Tolling Agreement is ineffective because there is no evidence the fully-executed agreement was delivered to David Friedman (Opposition at pp. 16-17) or that it even exists. That is not correct. In the FAC, verified by David Friedman, Plaintiff stated the parties entered into the Tolling Agreement on February 15, 2016. (FAC ¶ 7.) That allegation is confirmed by the declarations of David Friedman and Mark Friedman, stating Plaintiff and Defendant agreed to and entered into the Tolling Agreement. (David Friedman Decl. ¶ 6; M. Friedman Decl. ¶ 2.) Mark Friedman attached a copy of the fully-executed Tolling Agreement to his declaration. Thus both signatories to the Tolling Agreement agree that Plaintiff and Defendant entered into the agreement. David Friedman does not contend the agreement was not effective because it was never delivered to him.

Meyerov argues that the notice provision of the Tolling Agreement prohibited any oral tolling agreement and required Defendant to mail or email a written copy of the Tolling Agreement to Plaintiff. (Opposition at pp. 17-18.) According to this argument, because the Tolling Agreement stated, “Any written notice under this Agreement shall be addressed” to David Friedman at a mailing address and email address, that meant Defendant could only enter into the Tolling Agreement by giving written notice under the Tolling Agreement to David Friedman at those addresses. This makes no sense and is circular. The notice provision applies to a “written notice under this Agreement.” If the Tolling Agreement did not become effective until Defendant sent a written notice to David Friedman of Defendant’s acceptance, then Defendant was not bound by the Tolling Agreement’s notice provision at the time Defendant accepted because Defendant had not yet given David Friedman written notice. Further, the notice provision in section 2.3 of the Tolling Agreement is immediately after section 2.2 stating a party could terminate the agreement “upon thirty (3) days written notice to the other Party.” Clearly, section 2.3 addresses how to give notice of termination under section 2.2. In addition, the Tolling Agreement states it is effective “as of February 15, 2016,” and the parties agreed “it shall be effective as of the Effective Date.” If they intended it to be effective only when David Friedman received written notice that Defendant had accepted it, they would have so stated.

Finally, according to Meyerov’s interpretation of the notice provision, even if both parties signed the Tolling Agreement together in person, the agreement would not be effective until they mailed or emailed copies of it to each other, which is nonsensical. An interpretation of a contract must be reasonable and not involve an absurdity. (Civ. Code §§ 1638, 1643.)

3. Waiver

Meyerov raises his affirmative defense of waiver, arguing Plaintiff’s “conduct in treating the funds it provided to [Defendant] as an investment, and not a loan, constitute an implied waiver of any right to recover these funds as a ‘loan.’” (Opposition at pp. 18-19.) Meyerov relies on the Neutral Accounting Report of Grobstein Teeple, filed in Daniel Meyerov v. Mark Friendman, et al., Case No. BC651099, which noted that Plaintiff did not follow the terms of the Loan Agreement and the Promissory Note when disbursing funds, Plaintiff did not inform Defendant that an Interest Trigger Event occurred, Plaintiff elected not to enforce its available remedies, Plaintiff made no requests or demands for payment owed, Defendant did not make any payments, Plaintiff advanced an additional $50,000 after both the Interest Trigger Event and maturity date, and until 2016, Defendant did not accrue any interest expense to Plaintiff in Defendant’s books. (Opposition at pp. 19-20; Meyerov RJN, Ex. 3.)

Meyerov has not shown the existence of a triable issue of fact as to this defense. First, Meyerov cites no legal authority that if a lender fails to demand repayment of a loan or the interest on a loan, does not elect a remedy to declare a default, or forgives interest, the loan is converted into equity.

Meyerov’s argument is contradicted by the plain language of the Loan Agreement that the loan would be converted into a membership interest in Defendant if the cumulative net profits for the three fiscal years ending after April 30, 2008 were more than projected in the approved budgets. (D. Friedman Decl., Ex. A § 2.4(a)(ii).) It is undisputed that profitability event did not occur, and Defendant was not profitable as of 2012. (Meyerov’s Opposition at p. 3; Meyerov Decl. ¶ 14; Plaintiff’s UMF 5.) Therefore Plaintiff’s contractual right to convert the loan into equity was not triggered. Additionally, the Loan Agreement and the Promissory Note state that Plaintiff’s delay, omission, or failure to exercise any right, power, or remedy shall not be construed as a release or waiver. (D. Friedman Decl., Ex. A § 9.3(a); D. Friedman Decl., Ex. B § 3.2(a).)

Also, Meyerov asked the Court to take judicial notice of the Neutral Accounting Report. When taking judicial notice of documents, the Court takes notice of their existence, but not of the truth of their contents. (See, e.g., Espinoza v. Calva (2008) 169 Cal.App.4th 1393, 1396.) Accordingly, the Court does not take judicial notice of the truth of the statements in the Neutral Accounting Report, upon which Meyerov relies for this argument.

4. Supplemental Briefs

In its supplemental brief, Plaintiff states it “is dismissing any claims for interest and does not contend that it can pursue a claim for interest at another time.” (Plaintiff’s Supp. Brief a pp. 1-2.) Plaintiff states it seeks as damages only the principal amount of $1,521,446.58. (Id. at p. 2.) In his supplemental brief, Meyerov states the Court cannot grant summary judgment on only part of a cause of action and that Plaintiff’s claims for principal and interest comprise one cause of action. (Meyerov Supp. Brief at p. 2.)

That the claim for unpaid interest and the claim for unpaid principal are alleged under the same heading of breach of contract does not mean that there is only one cause of action. “[S]uccessive causes of action for breach of contract may arise from a single contract with continuing obligations. (See § 1047 [‘[s]uccessive actions may be maintained upon the same contract or transaction, whenever, after the former action, a new cause of action arises therefrom’] [citations].)” (Jenni Rivera Enterprises, LLC v. Latin World Entertainment Holdings, Inc. (2019) 36 Cal.App.5th 766, 784.) Here, the Loan Agreement and Promissory Note, whether considered as one contract or two contracts, imposed the continuing obligations to pay interest “at the end of each quarter after the occurrence of an Interest Trigger Event” and pay the principal on the Maturity Date. (D. Friedman Decl., Ex. A at § 2.4(a), Ex. B at §§ 2.2(a), 2.2(b).) Defendant allegedly breached the contract in March 2010 when it failed to pay interest. Even after that alleged breach, Defendant still had the continuing obligation to pay the principal on the Maturity Date. Defendant allegedly breached the contract again in April 2012 when it failed to pay the principal.

Defendant states in its Supplemental Brief that it is dismissing any claims for interest and does not contend that it can pursue interest at another time. The Court hereby orders those claims dismissed. That leaves Plaintiff’s claim for the unpaid principal. Meyerov does not present any law for the position that once Defendant dismisses its claim for interest, the Court cannot grant summary judgment on Plaintiff’s cause of action alleging that Defendant breached the Loan Agreement by not paying the principal on the Maturity Date. With the dismissal of the claim for interest and the grant of summary judgment, nothing remains to be decided in this case. Therefore, this is not a situation where granting Plaintiff’s motion for summary judgment would not resolve the entire case.

Meyerov’s Supplemental Brief also re-argues whether Plaintiff’s claims are timely and whether the Tolling Agreement is valid and enforceable. First, Meyerov argues that the failure to pay interest triggered an event of default in 2010, starting the time for Plaintiff to file a lawsuit. (Meyerov Supp. Brief at p. 3.) According to Meyerov, even though the principal payment was not due until April 20, 2012, the statute of limitations for suing on the alleged breach for failure to pay the principal began to run in March 2010 when the interest payment was due. Meyerov cites no law for this position. The law is to the contrary. (Garver, supra, 47 Cal.App.4th at p. 1000.)

Meyerov’s position would lead to the absurdity of plaintiffs filing lawsuits years in advance for potential breaches that may never occur. This would be a waste of judicial resources. Also, contrary to Meyerov’s position, the Loan Agreement expressly states that in the event of a default, Plaintiff “may exercise” the right to declare all unpaid amount immediately due and payable, and that remedy is “in addition to, and not in substitution for, the rights and remedies which would otherwise vest in Lender for the recovery of damages, or otherwise, in the event of a breach of any of the undertakings of Borrower under any Loan Agreement.” (D. Friedman Decl., Ex. A § 8.2.) Thus, whether or not Plaintiff exercised its right to immediately demand payment of the principal (and the parties do not dispute that there was no demand for immediate payment of the principal), Plaintiff retained the right to sue for damages in the event of a breach, which is what Plaintiff did.

Second, Meyerov argues the Tolling Agreement was not valid because section 9.2 of the Loan Agreement has a notice provision requiring all notices, approvals, consents, requests and demands to be in writing and mailed or faxed to specific addresses. (Meyerov Supp. Brief at pp. 4-5.) According to Meyerov, because there is no evidence that the Tolling Agreement was mailed or faxed to those addresses, it is not enforceable. Meyerov states the Court ignored this argument in its tentative decision. In fact, the Court addressed this argument in its order denying Meyerov’s motion for summary judgment. Meyerov did not make this argument in its opposition to Plaintiff’s motion for summary judgment.

Meyerov cites no law for this argument that the Loan Agreement’s notice provision governs the procedure for the parties to enter into other agreements years later. Section 9.2 does not state that it applies to future agreements on other matters. And, section 9.2 is not reasonably susceptible to the interpretation that in 2008 when the parties signed the Loan Agreement, they intended for future agreements on other matters to be invalid unless the parties mailed or faxed each other copies of the future agreements according to the terms of section 9.2. As stated above, applying this provision to a future contract would lead to the absurdity that even if both parties signed a contract together in person, the contract would be ineffective until they mailed or faxed it to each other at the old addresses in the Loan Agreement.

CONCLUSION

Plaintiff’s motion for summary judgment is GRANTED. Plaintiff’s claims for interest are DISMISSED. Plaintiff is to file and serve a proposed judgment within five days of this order.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: SC126936    Hearing Date: January 27, 2021    Dept: 48

[TENTATIVE] ORDER RE: PLAINTIFF’S MOTION FOR SANCTIONS

On April 17, 2017, Plaintiff Trident Group, Inc. (“Plaintiff”) filed a first amended complaint (“FAC”) against Defendant OnlyBusiness.com, LLC (“Defendant”) alleging breach of contract. On July 30, 2020, the Court granted Daniel Meyerov’s (“Meyerov”) motion for leave to intervene. On October 16, 2020, Plaintiff filed a motion for summary judgment, and on October 26, 2020, Meyerov filed a motion for summary judgment. Meyerov’s motion argued, in part, that the tolling agreement presented by Plaintiff was invalid, and therefore the statute of limitations barred its claim. On December 22, 2020, Plaintiff filed this motion for sanctions based on Meyerov’s contentions in his motion for summary judgment.

The Court may impose sanctions on a party or attorney that presents a pleading, petition, motion, or other similar papers if (1) the document is presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; (2) the claims, defenses, and other legal contentions therein are not warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) the allegations and other factual contentions have no evidentiary support; or (4) the denials of factual contentions are not warranted on the evidence. (Code Civ. Proc., § 128.7, subd. (c).) Section 128.7 does not require a finding of subjective bad faith; it requires only that the Court find that the conduct be objectively unreasonable. (In re Marriage of Reese & Guy (1999) 73 Cal. App. 4th 1214, 1221.) “A claim is objectively unreasonable if ‘any reasonable attorney would agree that [it] is totally and completely without merit.’ ” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 189.) However, “sanctions should be ‘made with restraint’ [citation], and are not mandatory even if a claim is frivolous.” (Peake v. Underwood (2014) 227 Cal.App.4th 428, 448.)

Plaintiff seeks monetary sanctions and an order regarding issue preclusion. Plaintiff argues that Meyerov’s contentions in his motion for summary judgment lacked evidentiary support, and Meyerov knew that when he filed the motion. (Motion at p. 3.) Specifically, Plaintiff contends that “Meyerov asserted that the Tolling Agreement was not executed by [Plaintiff]. However, it was, and both Meyerov and his then counsel were apprised of that fact at the time and provided with a fully executed copy of the Tolling Agreement at that time.” (Id. at p. 4.) Plaintiff’s owner emailed a fully-executed copy of the Tolling Agreement to Meyerov on or about February 25, 2016. (M. Friedman Decl. ¶ 2 & Ex. A.) Additionally, Plaintiff’s counsel emailed a copy to Meyerov’s then-counsel on March 22, 2016. (FitzGibbon Decl. ¶ 2 & Ex. A.)

Plaintiff’s characterization of Meyerov’s motion is not accurate. Meyerov made a somewhat convoluted argument that by verifying the FAC, David Friedman was taking the position that the unsigned Tolling Agreement attached to the FAC was the operative agreement and that Plaintiff was bound by that position. Thus, Meyerov did not assert that the Tolling Agreement was not executed; rather, he asserted that the version attached to the FAC was not signed by Plaintiff. (Of course, as explained in the ruling on Meyerov’s summary judgment motion, Meyerov’s argument skipped over the allegation in the FAC stating that both parties had entered into the Tolling Agreement.)

Accordingly, the motion for sanctions is DENIED. Meyerov’s request for sanctions (Opposition at p. 8) is also denied.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: SC126936    Hearing Date: January 12, 2021    Dept: 48

[TENTATIVE] ORDER RE: MOTIONS FOR SUMMARY JUDGMENT

On April 17, 2017, Plaintiff Trident Group, Inc. (“Plaintiff”) filed a first amended complaint (“FAC”) against Defendant OnlyBusiness.com, LLC (“Defendant”) alleging breach of contract. The FAC alleges the Plaintiff and Defendant entered into a Loan Agreement dated April 15, 2008, a Promissory Note dated May 1, 2008, and a Tolling Agreement on February 15, 2016. The FAC alleged Plaintiff loaned Defendant $1,521,446.58 under the Loan Agreement, which Defendant did not repay, thereby breaching the Loan Agreement. (FAC ¶¶ 12, 13, 15, 16.) The FAC also alleges interest accrued and Defendant breached the Promissory Note. (FAC ¶¶ 14, 16.)

On May 15, 2017, Defendant filed a Case Management Statement saying that it did not dispute liability and the parties had settled and agreed to a stipulated judgment. However, the parties never submitted a stipulated judgment. On July 30, 2020, the Court granted Daniel Meyerov’s (“Meyerov”) motion for leave to intervene.

On October 16, 2020, Plaintiff filed a motion for summary judgment, which Meyerov opposed. Defendant filed a notice of non-opposition.

On October 26, 2020, Meyerov filed a motion for summary judgment, which Plaintiff oppposed.

REQUESTS FOR JUDICIAL NOTICE

Meyerov’s Motion

Meyerov requests that the Court take judicial notice of (1) excerpts of the Neutral Accounting Report of Grobstein Teeple, filed in Daniel Meyerov v. Mark Friendman, et al., Case No. BC651099; (2) the docket in this action; (3) Plaintiff’s complaint; (4) Plaintiff’s FAC; and (5) the declaration of David Friedman, filed on October 15, 2020. Meyerov’s requests are granted.

Plaintiff’s Motion

Meyerov requests that the Court take judicial notice of (1) excerpts of the Neutral Accounting Report of Grobstein Teeple, filed in Daniel Meyerov v. Mark Friendman, et al., Case No. BC651099; (2) the docket in this action; (3) Plaintiff’s complaint; (4) Plaintiff’s FAC; and (5) Trident’s motion for sanctions, dated November 24, 2020. Meyerov’s requests are granted.

Plaintiff’s request for judicial notice of its motion for sanctions is granted.

EVIDENTIARY OBJECTIONS

Meyerov’s Objection Nos. 1, 2, 5, 6, and 7 to the Declaration of David Friedman (in support of Plaintiff’s motion) are overruled. Objection Nos. 3 and 4 are sustained.

FACTUAL BACKGROUND

On April 15, 2008, Plaintiff and Defendant entered into the Loan Agreement. (Plaintiff’s UMF 1; Meyerov’s Motion Undisputed Material Facts “Meyerov’s UMF” 1.) The agreement required Defendant to repay the loan by April 30, 2012 if its cumulative net profits for the preceding three fiscal years were less than projected in the 2008 and 2009 budgets. (Plaintiff’s UMF 3.) But if the cumulative net profits for the preceding three fiscal years exceeded the budgets, Plaintiff would convert the loan into a membership interest in Defendant. (Plainitiff’s UMF 3.)

Defendant executed the Promissory Note in favor of Plaintiff. (Plaintiff’s UMF 2; Meyerov’s UMF 2.) The Promissory Note states, “All interest theretofore accrued but unpaid shall be Payable at the end of each quarter after the occurrence of an Interest Trigger Event.” (Meyerov’s UMF 4.) It also states, “Interest Trigger Event shall be determined by Lender by comparing the Net Profits before taxes of Borrower for the accounting period of the 2008 Budget and the 2009 Budget to the combined projected earnings results, as previously approved by Lender, contained in the 2008 Budget and the 2009 Budget (as such terms are defined in the Loan Agreement). Lender shall determine, in its reasonable discretion, whether such results have met or exceeded the Net Profits before taxes set forth in the Approved Budgets. In the event that such results are determined to be lower than those projected and approved in such budgets, interest shall begin to accrue on the principal amount of the Loan then outstanding in accordance with the provisions of Section 2 herein.” (Meyerov’s UMF 5.)

Plaintiff provided $1,521,446.58 to Defendant between April 17, 2008 and October 18, 2012. (Plaintiff’s UMF 9; Meyerov’s UMF 3.)

In 2012, Defendant was not profitable, so Plaintiff’s right to convert the loan into equity under the Loan Agreement was not triggered. (Plaintiff’s UMF 4; see Plaintiff’s Motion Additional Material Facts “Plaintiff’s AMF” 1; Meyerov’s UMF 6.) Defendant did not repay the loan by April 30, 2012. (Plaintiff’s UMF 5.) Defendant did not pay principal or interest, and Plaintiff did not request or demand payment until January 2016. (Plaintiff’s AMF 3-5; Meyerov’s UMF 8-10.)

Plaintiff contends Plaintiff and Defendant entered into the Tolling Agreement, which could be terminated upon thirty days’ written notice. (Plaintiff’s UMF 7; Meyerov’s UMF 11.) On December 15, 2016, Plaintiff’s counsel gave Defendant written notice of termination and demanded payment for the outstanding balance of the loan agreement. (Plaintiff’s UMF 8.) Plaintiff then filed this case on January 17, 2017.

MEYEROV’S MOTION FOR SUMMARY JUDGMENT

For each claim in the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by showing that one or more elements of a cause of action cannot be established or that there is a complete defense to a cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Then the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf, supra, 128 Cal.App.4th at p. 1520.) To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.)

Statute of Limitations

Meyerov contends the statute of limitations bars Plaintiff’s action because the Defendant “did not pay interest nor principal by March 31, 2010, as the purported Promissory Note required.” (Motion at p. 1.) According to Myereov, under the four-year statute of limitations (Code Civ. Proc., § 337, subd. (a)), the time to sue expired on March 31, 2014. (Motion at p. 1.)

More specifically, Meyerov contends that the Promissory Note required Plaintiff to determine if an Interest Trigger Event occurred by comparing net profits to projected earnings. (Motion at p. 7; see Meyerov Decl., Ex. 2.) Meyerov argues Plaintiff in fact did determine an Interest Trigger Event had occurred at the end of 2009. (Motion at p. 7.) But Defendant “did not any interest or principal in the first quarter of 2010 or thereafter.” (Motion at p. 8.) Therefore, Meyerov argues the date of the breach is March 2010, and the breach of contract cause of action is too late. (Motion at p. 8.)

Meyerov has not met his initial burden on this defense. The FAC alleges a breach of the Loan Agreement and a breach of the Promissory Note. Meyerov focuses solely on the alleged breach of the Promissory Note. The Promissory Note does not state that in the event of an Interest Trigger Event, both interest and principal must be paid, as Meyerov suggests when he states Defendant did not pay interest or principal in the first quarter of 2010. Rather the Promissory Note states, “All interest theretofore accrued but unpaid shall be payable at the end of the quarter after the occurrence of an interest Trigger Event.” (Promissory Note § 2.2(a).) Regarding payment of principal, the Promissory Note states, “The principal amount of the Loan . . . together with all interest and other sums owed to Lender pursuant to any of the Loan Instruments, shall be due and payable . . . upon the Maturity Date.” (Promissory Note § 2.2(b).) The Promissory Note defines “Maturity Date” as having “the meaning set forth in Section 2.4(a) of the Loan Agreement.” (Promissory Note § 1.1.) The Loan Agreement defines “Maturity Date” as April 30, 2012, if the cumulative Net Profits after taxes for the three fiscal years ending after April 30, 2008 are less than those projected in the 2008 Budget and the 2009 Budget. (Loan Agreement § 2.4 (a)(i).) The parties do not dispute that the Maturity Date in the Loan Agreement was April 30, 2012. (Motion at p. 11.) Therefore, the payment of principal was not due until April 30, 2012.

Because Meyerov focuses on the statute of limitations for the alleged breach of the Promissory Note (failure to pay accrued interest), he does not establish that the statute of limitations has run for the alleged breach of the Loan Agreement (failure to pay principal). Meyerov mentions the Loan Agreement only in passing, stating the maturity date of the loan was April 30, 2012, more than four years before Plaintiff filed this action.

However, Plaintiff and Defendant signed the Tolling Agreement on February 15, 2016. Meyerov argues the Tolling Agreement cannot revive expired limitations periods. (Motion at p. 8.) But the four-year statute of limitations period for a failure to pay the amount due on the April 30, 2012 maturity date in the Loan Agreement was April 30, 2016. Thus, the limitations period had not expired when the parties signed the Tolling Agreement.

Meyerov also argues the Tolling Agreement is ineffective because Defendant did not sign it. Meyerov points to the copy of the Tolling Agreement attached to the FAC, which does not contain Defendant’s signature. (Motion at pp. 9-10.)

Plaintiff provides a declaration from Mark Friedman, owner of Defendant. He declares that on February 25, 2016, he executed the Tolling and Non-Waiver Agreement on behalf of Defendant and sent a copy to Meyerov. (M. Friedman Decl. ¶ 2.) Mark Friedman attaches a copy of the Tolling Agreement containing signatures for both Plaintiff and Defendant and the email to Meyerov. (Id., Ex. A.)

In reply, Meyerov argues that the David Friedman verified the FAC and attached the unsigned version of the Tolling Agreement to the FAC. Meyerov therefore argues this must mean that David Friedman has never seen a fully executed Tolling Agreement. (Reply at p. 8.)

As an initial matter, the FAC, verified by David Friedman, states, “On February 15, 2016, OBL [Defendant] and Plaintiff entered into a written Tolling and Non-Waiver Agreement, a copy of which is attached hereto as Exhibit C, and incorporated herein by reference (‘Tolling Agreement’).” (FAC ¶ 7.) This statement under oath confirms both Plaintiff and Defendant entered into the Tolling Agreement. Exhibit C to the FAC is a copy of the agreement. While the copy is missing the signature of Defendant, the document is nonetheless a copy of the Tolling Agreement. The FAC does not state that Exhibit C is the fully-executed Tolling Agreement.

In addition, Meyerov cites Code of Civil Procedure section 360.5 for the requirement that “any tolling agreement must be in writing and signed by the party obligated.” Motion at p. 9. However, “the Legislature never intended that section 360.5 apply to tolling agreements.” (Don Johnson Productions, Inc. v. Rysher Entertainment, LLC (2012) 209 Cal.App.4th 919, 930.) And in any event, Defendant submitted a copy of the fully -executed Tolling Agreement.

Finally, Meyerov has not established that he has any personal knowledge to dispute the fact that both Plaintiff and Defendant signed the Tolling Agreement. Indeed, Mark Friedman sent Meyerov a copy of the fully-executed Tolling Agreement shortly after all parties had signed it.

Because Meyerov has not shown that both the alleged breach of the Promissory Note and the alleged breach of the Loan Agreement are time barred, his motion for summary judgment is denied.

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

A plaintiff moving for summary adjudication must satisfy the initial burden of proof by proving each element of a cause of action. (Code Civ. Proc., § 437c, subd. (p)(1).) Then the burden shifts to the defendant to show that a triable issue of material fact exists as to the cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2).) To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.)

Initial Burden

Plaintiff “moves for summary judgment on its claim for breach of the loan agreement.” (Motion at p. 1.) A cause of action for breach of contract requires (1) the existence of a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff. (Wall Street Network, Ltd. v. New York Times Co.¿(2008) 164 Cal.App.4th 1171, 1178.) As discussed above, the FAC alleges both a breach of the Promissory Note and a breach of the Loan Agreement, but Plaintiff’s motion focuses only on the breach of the Loan Agreement and states it is not seeking damages arising from the interest. (Motion at p.3.)

Plaintiff provides evidence that it and Defendant entered into the Loan Agreement, under which Plaintiff performed and loaned $1,521,446.58 to Defendant. (Motion at p. 4; Plaintiff’s UMF 1-3; D. Friedman Decl., Exs. A-C; Boydston Decl., Ex. I at p. 4.) Plaintiff also provides evidence that Defendant did not repay the loan by the April 30, 2012 deadline, resulting in Plaintiff being damaged in the amount of $1,521,446.58. (Motion at p. 4; Plaintiff’s UMF 5, 9; D. Friedman Decl. ¶ 5; Boydston Decl., Ex. I at p. 4.) Plaintiff has therefore met its initial burden, and the burden shifts to Defendant or Meyerov to show the existence of a triable issue of material fact.

Statute of Limitations

Meyerov makes the same statute of limitations arguments discussed above. Regarding the claim for breach of the Loan Agreement, those arguments fail for the reasons discussed above.

Meyerov argues that Plaintiff failed to meet its burden on summary judgment of proving the existence of a signed Tolling and Non-Waiver Agreement. (Opposition at p. 18.) With its moving papers, Plaintiff submitted the Declaration of David Friedman stating, “on February 15, 2016, OB and TGI entered into a written Tolling and Non-Wavier Agreement, a true and correct copy of which is attached hereto as Exhibit E (‘Tolling Agreement’).” (D. Friedman Decl. 6.) That statement is sufficient to satisfy Plaintiff’s burden of proving the parties entered into the Tolling Agreement.

Waiver

Meyerov raises his affirmative defense of waiver, arguing Plaintiff’s “conduct in treating the funds it provided to [Defendant] as an investment, and not a loan, constitute an implied waiver of any right to recover these funds as a ‘loan.’” (Opposition at pp. 18-19.) Meyerov relies on the Neutral Accounting Report of Grobstein Teeple, filed in Daniel Meyerov v. Mark Friendman, et al., Case No. BC651099, which noted that Plaintiff did not follow the terms of the Loan Agreement and the Promissory Note when disbursing funds, Plaintiff did not inform Defendant that an Interest Trigger Event occurred, Plaintiff elected not to enforce its available remedies, Plaintiff made no requests or demands for payment owed, Defendant did not make any payments, Plaintiff advanced an additional $50,000 after both the Interest Trigger Event and maturity date, and until 2016, Defendant did not accrue any interest expense to Plaintiff in Defendant’s books. (Opposition at pp. 19-20; Meyerov RJN, Ex. 3.)

Meyerov has not shown the existence of a triable issue of fact as to this defense. First, Meyerov cites no legal authority that if a lender fails to demand repayment of a loan or the interest on a loan, or if a lender forgives interest, the loan is converted into an investment.

Also, when taking judicial notice of documents, the Court takes notice of their existence, but not of the truth of their contents. (See, e.g., Espinoza v. Calva (2008) 169 Cal.App.4th 1393, 1396.) Accordingly, the Court cannot rely on Meyerov’s only evidence: the truth of the statements in the Neutral Accounting Report.

Next, Meyerov’s argument is contradicted by the plain language of the Loan Agreement that the loan would be converted into a membership interest in Defendant if the cumulative net profits for the three fiscal years ending after April 30, 2008 were more than projected in the approved budgets. (D. Friedman Decl., Ex. A § 2.4(a)(ii).) It is undisputed that Defendant was not profitable as of 2012, and therefore Plaintiff’s right to convert the loan into equity was not triggered. (Plaintiff’s UMF 5.) Additionally, the Loan Agreement and the Promissory Note state that Plaintiff’s delay, omission, or failure to exercise any right, power, or remedy shall not be construed as a release or waiver. (D. Friedman Decl., Ex. A § 9.3(a); D. Friedman Decl., Ex. B § 3.2(a).)

In sum, Plaintiff has proven each element of its claim for breach of the Loan Agreement. However, it did not address the allegations of breach of the Promissory Note. The Court cannot grant summary judgment on only part of the FAC. Therefore the motion for summary judgment is denied.

CONCLUSION

Meyerov’s motion for summary judgment is DENIED. Plaintiff’s motion for summary judgment is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: SC126936    Hearing Date: July 30, 2020    Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR LEAVE TO INTERVENE

On January 17, 2017, Plaintiff Trident Group, Inc. (“Plaintiff”) filed this action against Defendant OnlyBusiness.com, LLC (“Defendant”) alleging breach of contract. On April 17, 2017, Plaintiff filed a first amended complaint (“FAC”). According to the FAC, the parties entered into a loan agreement in April 2008, and Defendant executed a promissory note in favor of Plaintiff in May 2008. (FAC ¶ 6.) From 2008 to 2012, Plaintiff gave Defendant $1,521,446.58. (Id. at ¶ 13.) The parties entered into a tolling and non-waiver agreement on February 15, 2016. (Id. at ¶ 7.) Plaintiff terminated the agreement and demanded payment of the outstanding balance on the loan agreement on December 15, 2016. (Ibid.) Defendant has not repaid Plaintiff pursuant to the terms of the loan agreement and promissory note. (Id. at ¶¶ 8, 15.)

Defendant never responded to the complaint or FAC. It appeared on May 15, 2017, when it filed a Case Management Statement saying that it did not dispute liability, and the parties had settled and agreed to a stipulated judgment.

On May 11, 2017, the Court found that this case was related to two cases in which Daniel Meyerov is a plaintiff: Polaris Blue Holdings LLC, et al. v. Mark Friedman, et al., Case No. BC587482, and Daniel Meyerov v. Mark Friedman, et al., Case No. BC651099. Meyerov is a member of Defendant. Plaintiff and Mark Friedman are the other members of Defendant. On November 13, 2017, the Court stayed the related cases pending the preparation of a neutral accountant’s report.

The Court lifted the stay on March 8, 2019. On August 16, 2019, the Court ordered Defendant to respond to the FAC within 30 days. Defendant did not do so. Plaintiff did not seek an entry of default.

On February 13, 2020, Daniel Meyerov filed a motion to intervene. The trial is set for February 16, 2021.

Timeliness

Plaintiff argues this motion is untimely. Upon timely application, a court may permit a nonparty to intervene in an action or proceeding. (Code Civ. Proc., § 387, subd. (d).) Timeliness should be determined based on the date the proposed intervener knew or should have known his interest in the litigation was not being adequately represented. (Ziani Homeowners Assn. v. Brookfield Ziani LLC (2015) 243 Cal.App.4th 274, 282.)

Meyerov explains that he did not file this motion sooner because of the 15-month stay of the case while the neutral accountant conducted its forensic review. (Reply at p. 2.) He expected Defendant to take action to defend his interests after the Court lifted the stay on March 8, 2019. (Id. at pp. 2-3; Reply at p. 3.) Plaintiff has not shown that it will be prejudiced by Meyerov’s intervention at this stage. (See Truck Ins. Exchange v. Superior Court (Transco Syndicate No. 1) (1997) 60 Cal.App.4th 342, 351 [“[T]imeliness is hardly a reason to bar intervention when a direct interest is demonstrated and the real parties in interest have not shown any prejudice other than being required to prove their case.”].) This case is not at issue as Defendant never responded to the FAC, and Plaintiff did not obtain a default. Trial is set for February 16, 2021, leaving sufficient time for discovery and preparing for trial.

Because Code of Civil Procedure section 387 should be liberally construed in favor of intervention (Simpson Redwood Co. v. State of California (1987) 196 Cal.App.3d 1192, 1200) and Plaintiff has not shown any prejudice, the Court finds that the motion is timely.

Intervention

For mandatory intervention, a court must allow a nonparty to timely intervene in an action if a provision of law confers an unconditional right to intervene or if the person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person’s ability to protect that interest, unless that person’s interest is adequately represented by one or more of the existing parties. (Code Civ. Proc., § 387, subd. (d) (1).)

Meyerov seeks leave to intervene because he has a 31.343% ownership interest in Defendant and is a member of Defendant. (Motion at pp. 3-4.) He also has claims for damages against Plaintiff in two related actions. (Motion at p. 3.) According to Meyerov, if Plaintiff obtains a $2.2 million judgment against Defendant in this action, that will reduce the money available for his damages in the other actions. (Id. at pp. 3-4, 6.) Meyerov therefore contends that mandatory intervention is appropriate because he has an interest in the property or transaction and is so situated that the disposition of this action may impair or impede this ability to protect his interest. (Id. at p. 7.)

Alternatively, Meyerov seeks permissive intervention. A court may allow permissive intervention if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both. (Code Civ. Proc., § 387, subd. (d)(2).) The court permits intervention when the following factors are met: (1) the proper procedures have been followed; (2) the nonparty has a direct and immediate interest in the action; (3) the intervention will not enlarge the issues in the litigation; and (4) the reasons for the intervention outweigh any opposition by the parties presently in the action. (Siena Court Homeowners Ass’n v. Green Valley Corp. (2008) 164 Cal.App.4th 1416, 1428.) Meyerov contends that he will simply assert the defenses that Defendant should be asserting such as a statute of limitations defense and argument that the loan was actually an investment.

Plaintiff contends that Meyerov does not state specifically why Defendant’s inactivity is inadequate representation and that Meyerov’s propose defenses have no merit. Plaintiff does not dispute that the neutral accountant concluded that if the amount from Plaintiff to Defendant is considered a loan, Meyerov’s interests are negatively impacted.

The Court finds that Meyerov has a direct and immediate interest in the action. Whether the proposed defenses have merit cannot be decided here. Because Defendant never responded to the FAC, the Court cannot conclude that Defendant is protecting Meyerov’s interests. The filing of an answer in intervention as described by Meyerov will not enlarge the issues beyond defenses to Plaintiff’s claim. However, Meyerov did not include a copy of his proposed answer in intervention. (Code Civ. Proc., § 387, subd. (c).) His motion states that the proposed answer was lodge, but it does not appear in the case file.

Accordingly, the motion for leave to intervene is GRANTED subject to Meyerov filing a copy of the proposed answer in intervention.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

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