Judge: Colin Leis, Case: 23STCV05102, Date: 2023-10-05 Tentative Ruling

Case Number: 23STCV05102    Hearing Date: October 5, 2023    Dept: 74

Skylars, LLC v. Julia Lee, et al.

Defendants’ Motion to Dismiss or Abate Action

The court considered the moving papers, opposition, and reply.

TENTATIVE RULING

            The court grants Defendants’ motion and will stay this action pending resolution of Yeo Bai Lee v. Christy Ryoo, et al., Santa Clara Superior Court, Case No. 21CV386912.

BACKGROUND 

            This action arises from a dispute over alleged embezzlement.

            On March 7, 2023, Skylars, LLC filed a complaint against Yeo Bai Lee (Lee) and Julia Lee. The complaint alleges the following causes of action: conversion; embezzlement; aiding and abetting embezzlement; breach of fiduciary duty; aiding and abetting breach of fiduciary duty; receipt of stolen property; and unjust enrichment.

            On August 7, 2023, Lee filed this motion to dismiss or abate this action.

LEGAL STANDARD

            When parties file suits against each other in different courts, and both suits relate to the same subject matter, the rule of exclusive concurrent jurisdiction applies. (See Franklin & Franklin v. 7-Eleven Owners for Fair Franchising (2000) 85 Cal.App.4th 1168, 1175.) The first court to assert subject matter jurisdiction assumes jurisdiction to the exclusion of all others and may enjoin the later proceedings in other courts. (Ibid.) Moreover, the second court may stay its action in favor of the first action. (Shaw v. Sup.Ct. (Beverages & More, Inc.) (2022) 78 Cal.App.5th 245, 257.)

            For the purposes of exclusive concurrent jurisdiction, it is sufficient that both actions deal with the same subject matter and the court in the first action has the power to grant complete relief. (Plant Insulation Co. v. Fireboard Corp. (1990) 224 Cal.App.3d 781, 788-789.)

            If the ground for abatement is timely raised (in an answer or demurrer), a defendant may move to dismiss or abate the action. (People ex rel. Garamendi v. American Autoplan, Inc. (1993) 20 Cal.App.4th 760, 771.) Many cases hold that abatement is mandatory when the requisite conditions are shown. (Lawyers Title Ins. Corp. v. Sup.Ct. (1984) 151 Cal.App.3d 455, 460.)

DISCUSSION

            As a preliminary matter, the court notes that Lee timely raised the ground for abatement in his answer. Lee first directs the court’s attention to Yeo Bai Lee v. Christy Ryoo, et al., Santa Clara Superior Court, Case No. 21CV386912 (Santa Clara Action). (Request for Judicial Notice, Ex. A.) In the Santa Clara action, Lee alleged eleven causes of action against Christy Ryoo (Ryoo). Skylars, LLC is also listed as a defendant. (Request for Judicial Notice; Ex. A.) There, Lee claims in part that Ryoo transferred ownership of Skylars, LLC from Lee to herself through fraud and financial elder abuse. The Santa Clara action will therefore determine if Ryoo is the rightful owner of Skylars, LLC.

            Meanwhile, this action concerns whether Lee wrongfully withdrew funds from Skylar, LLC’s banking account. The extent to which this withdrawal was wrongful will largely turn on whether Lee or Ryoo solely owned Skylars, LLC during the relevant period. Thus, the court finds that abatement of this action is warranted. (Franklin & Franklin v. 7-Eleven Owners for Fair Franchising, supra, 85 Cal.App.4th at p. 1175 [noting that rule of exclusive concurrent jurisdiction serves to prevent the same parties from litigating the same issues in two different courts at the same time].)

CONCLUSION

            Based on the foregoing, the court grants Defendants’ motion and will stay this action pending resolution of the Santa Clara action.

            Defendants are ordered to give notice.