Jason Welsh vs Fiore Management Inc

Case Number

22CV00597

Case Type

Hearing Date / Time

Fri, 11/03/2023 - 10:00

Nature of Proceedings

CMC; Motion for Summary Judgment

Tentative Ruling

Jason Welsh v. Fiore Management, Inc.

Case No. 22CV00597

Hearing Date: November 3, 2023                                                      

HEARING:              Motion for Summary Judgment

ATTORNEYS:        For Plaintiff Jason Welsh: Self-represented

                                    For Defendant Fiore Management, Inc.: Frederick Warren Strasser, FW Strasser Associates LLC

                                   

TENTATIVE RULING:

For the reasons set forth herein, the motion of plaintiff Jason Welsh for summary judgment is denied. Appearances are required at the case management conference to be conducted concurrently with the hearing on the motion for summary judgment, and the parties are to be prepared to discuss the issues identified herein at that conference.

Background:

On February 15, 2022, petitioner Jason Welsh filed his petition pursuant to Corporations Code section 17711.06 to determine the fair value of Welsh’s membership interest.

On May 23, 2022, Welsh additionally filed a complaint asserting a cause of action for breach of contract and for violation of his dissenter’s rights.

On December 15, 2022, defendant Fiore Management, Inc., (Fiore) filed its general denial (answer) to the complaint, generally denying the allegations thereof and asserting one affirmative defense.

On July 28, 2023, Welsh filed this motion for summary judgment.

No opposition or other response to the motion has been filed.

Also set at the same time as the hearing on this motion is a case management conference.

Analysis:

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc., § 437c, subd. (a)(1).)

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

“The Separate Statement of Undisputed Material Facts in support of a motion must separately identify:

            “(A)     Each cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion; and

            “(B)     Each supporting material fact claimed to be without dispute with respect to the cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion.” (Cal. Rules of Court, rule 3.1350(d)(1).)

“The separate statement should include only material facts and not any facts that are not pertinent to the disposition of the motion.” (Cal. Rules of Court, rule 3.1350(d)(2).)

“The separate statement must be in the two-column format specified in (h). The statement must state in numerical sequence the undisputed material facts in the first column followed by the evidence that establishes those undisputed facts in that same column. Citation to the evidence in support of each material fact must include reference to the exhibit, title, page, and line numbers.” (Cal. Rules of Court, rule 3.1350(d)(3).)

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

“For purposes of motions for summary judgment and summary adjudication: [¶] (1) A plaintiff … has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action. Once the plaintiff … has met that burden, the burden shifts to the defendant … to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The defendant … shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(1).)

“[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) There is no obligation on the opposing party to establish anything by affidavit unless and until the moving party has by affidavit stated facts establishing every element necessary to sustain a judgment in his favor. (Consumer Cause, Inc. v. Smilecare (2001) 91 Cal.App.4th 454, 468.)

“A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment.” (Code Civ. Proc., § 437c, subd. (f)(2).) The notice of motion addresses only summary judgment and does not alternatively request summary adjudication of any individual cause of action. “The language in Code of Civil Procedure section 437c subdivision (f) makes it clear that a motion for summary adjudication cannot be considered by the court unless the party bringing the motion duly gives notice that summary adjudication is being sought.” (Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1545–1546.) Consequently, Welsh’s initial burden in this motion is to show entitlement to judgment in his favor as to the entirety of his complaint and petition.

Welsh addresses the cause of action seeking determination of the value of the shares subject to dissenter’s rights in his memorandum in support of the motion.

“If the limited liability company denies that a membership interest is a dissenting interest, or the limited liability company and a dissenting member fail to agree upon the fair market value of a dissenting interest, then the member or any interested limited liability company, within six months after the date when notice of the approval of the reorganization by the requisite vote or consent of the members was mailed to the member, but not later, may file a complaint in the superior court of the proper county praying the court to determine whether the interest is a dissenting interest, or the fair market value of the dissenting interest, or both, or may intervene in any action pending on such a complaint.” (Corp. Code, § 17711.06, subd. (a).)

“On the trial of the action, the court shall determine the issues. If the status of the membership interest as a dissenting interest is in issue, the court shall first determine that issue. If the fair market value of the dissenting interest is in issue, the court shall determine, or shall appoint one or more impartial appraisers to determine, the fair market value of the dissenting interest.” (Corp. Code, § 17711.06, subd. (c).)

“Subject to Section 17711.08, judgment shall be rendered against the limited liability company for payment of an amount equal to the fair market value, as determined by the court, of each dissenting interest that any dissenting member who is a party, or has intervened, is entitled to require the limited liability company to purchase, with interest thereon at the legal rate on judgments from the date of consummation of the reorganization.” (Corp. Code, § 17711.07, subd. (c).)

Plaintiff’s separate statement contains five facts asserted to be undisputed. None of these facts sets forth the fair market value of the dissenting interest as required for a judgment by Corporations Code sections 17711.06 and 17711.07. The separate statement also fails to provide any citation to the evidence supporting the separate statement facts. Thus, the separate statement does not contain the information required by Code of Civil Procedure section 437c, subdivision (b)(1) and California Rules of Court, rule 3.1350(d)(1), (3). This alone is a sufficient ground for the denial of the motion. (Code Civ. Proc., § 437c, subd. (b)(1).) (Note: The separate statement in support of the motion is also not in the format required by California Rules of Court, rule 3.1350.)

Alternatively, and additionally, Welsh’s complaint includes a cause of action for breach of contract. “A cause of action for breach of contract requires proof of the following elements: (1) existence of the contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant's breach; and (4) damages to plaintiff as a result of the breach.” (CDF Firefighters v. Maldonado (2008) 158 Cal.App.4th 1226, 1239.) Among other things, as with the Corporations Code claim, the amount of damages is not set forth in the separate statement and for the same reasons discussed above is deficient.

Because plaintiff Welsh has failed to meet his initial burden on summary judgment and has failed to meet the procedural requirements of a motion for summary judgment, the motion will be denied.

The court notes that concurrently with the hearing on the motion for summary judgment there is a case management conference. The court needs the parties to be prepared at the case management conference to address issues as to the status of this action, including particularly: Plaintiff’s complaint includes as a defendant Adrian Z. Sedlin. Defendant Sedlin has not appeared in this action, there is no proof of service on Sedlin in the court’s file, and there is no request for dismissal on file but plaintiff’s case management conference statement states that all parties named in the complaint have been served, have appeared, or have been dismissed (Plaintiff’s CMC Statement, filed July 28, 2023, ¶ 3a). What is the status as to defendant Sedlin and should he be dismissed from this action?