Judge Barbara M. Scheper, Case Number: 21STCV31784, Date: 2023-09-11 Tentative Ruling

Judge: Barbara M. Scheper, Case: 21STCV31784, Date: 2023-09-11 Tentative Ruling

Case Number: 21STCV31784 Hearing Date: September 11, 2023 Dept: 30

Dept. 30

Calendar No.

Park vs. Gi, et. al., Case No. 21STCV31784

Tentative Ruling re: Defendants’ Motion for Stay of Proceedings Pending Appeal

Defendants/Cross-Complainants 1500 Plaza, LLC, Crocker & Towne Wholesale Mart, LLC, Daniel Soungman Gi, and DS Capital, LLC (collectively, Cross-Complainants) move to stay this action pending the outcome of their appeal. The motion is granted.

“Except as provided in Sections 917.1 to 917.9, inclusive, and in Section 116.810, 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.” (Code Civ. Proc. § 916, subd. (a).)

“The purpose of the automatic stay provision of section 916, subdivision (a) ‘is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided. The [automatic stay] prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.’ [Citation.] . . . To accomplish this purpose, section 916, subdivision (a) stays all further trial court proceedings ‘upon the matters embraced’ in or ‘affected’ by the appeal.” (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189.) “[W]hether a matter is ‘embraced’ in or ‘affected’ by a judgment [or order] within the meaning of [section 916] depends on whether postjudgment [or postorder] proceedings on the matter would have any effect on the ‘effectiveness' of the appeal.” (Ibid.)

“In ruling on a motion for a stay order, the assigned judge must determine whether the stay will promote the ends of justice, considering the imminence of any trial or other proceeding that might materially affect the status of the action to be stayed, and whether a final judgment in that action would have a res judicata or collateral estoppel effect with regard to any common issue of the included actions.” (Rules of Court, rule 3.515(f).)

On June 1, 2023, the Court sustained in part Plaintiff/Cross-Defendant Jung Sam Park’s (Park) demurrer to Cross-Complainants’ Third Amended Cross-Complaint (TACC) without leave to amend, causing Cross-Complainant SPNP, Inc. to be dismissed from this action. Cross-Complainants filed a Notice of Appeal as to that order on June 21, 2023.

Cross-Complainants now move to stay the entirety of this action based on the perfecting of their appeal, pursuant to Code Civ. Proc. § 916, subd. (a). Park opposes the motion, arguing that the dismissed claims in the TACC are collateral to the Complaint and the remaining cross-claims, and thus are not subject to the automatic stay. The Court disagrees.

Both Park’s Second Amended Complaint and the dismissed claims in the TACC concern Park and Cross-Complainant Daniel Soungman Gi’s (Gi) dispute over their real estate investments and respective rights in the corporate parties (DS Capital, LLC, 1500 Plaza LLC, and Crocker & Towne Wholesale Mart LLC). For instance, in the SAC, Park alleges that Gi falsely represented he would pay Park for certain distributions and capital contributions. (SAC ¶ 129.) Cross-Complainants’ fifth cause of action for misrepresentation explicitly references Park’s allegations regarding the capital contributions, states that those allegations are false, and alleges that Park instead promised to repay Gi for the contributions. (TACC ¶¶ 174-176.) Similarly, the other dismissed causes of action in the TACC concern Park’s alleged breaches of his fiduciary duties to the corporate parties based on self-dealing (TACC ¶¶ 181-185), overlapping with allegations in the SAC that Gi engaged in self-dealing with respect to the same companies during the same period. (SAC ¶¶ 225-252.)

The remaining claims in both the TACC and Park’ claims in the SAC are “embraced” or “affected” by Cross-Complainants’ appeal of the June 1, 2023 Order, and so are subject to the automatic stay. The cases cited in Park’s Opposition “emphasize[] the discretion of the trial court to postpone the trial of issues raised by a cross-complaint.” (Olson v. Hopkins (1969) 269 Cal.App.2d 638, 645.) A court may “determine as a matter of procedure whether it should try the issues raised by the complaint and answer, and leave the issues formed by the cross-complaint to be determined later, or to await the action of a reviewing court to determine whether or not the cross-complaint was well founded, before proceeding with the trial.” (Hayes v. Pierce (1940) 15 Cal.2d 662, 667.) But these authorities are unavailing to Park in light of the significant overlap between the issues in the SAC and those in the TACC. Given this overlap, it is unlikely that the Court would be able to “try the issues raised by the complaint and answer, and leave the issues raised by the cross-complaint to be determined later” (Hayes, 15 Cal.2d at 667) without hindering the effectiveness of Cross-Complainants’ appeal.