Judge Elaine Lu, Case BC684506 2022-09-26 Tentative Ruling

On November 22, 2017, plaintiff Christopher Zangara-Payer (“Zangara”) filed the complaint in the instant action against his uncle, defendant David Payer (“Payer”) to seek the dissolution of the Nominal Defendant, Payer Family, LLC.

On February 2, 2018, Payer filed a Cross-Complaint against Zangara and Payer Family LLC for (1) Forgery, (2) Lack of Intent/Mistake, (3) Quiet Title, (4) Constructive Trust, (5) Accounting, and (6) Restitution and Offset. Plaintiff/Cross-Defendant Zangara filed a demurrer to the Cross-Complaint, which the court sustained in its entirety without leave to amend on June 6, 2018. (Minute Order 6/6/18.) On July 12, 2019, Payer dismissed the Cross-Complaint without prejudice as to the remaining defendant Payer Family LLC.

On July 15, 2019, the Court stayed the instant action pending Payer’s petition to reopen the probate matter. (Minute Order 7/15/19.) On September 22, 2021, the Court lifted the stay noting that the petition to reopen the probate matter had been denied on September 21, 2021. (Minute Order 9/22/21.)

On October 25, 2021, the Court granted Zangara’s motion for leave to file a First Amended Complaint which was filed the same day. (Order 10/25/21.) On December 2, 2021, Default was entered against Payer.

On January 21, 2022, pursuant to the parties’ stipulation, the Court vacated the default of Payer, and the Court permitted Zangara to file a Second Amended Complaint. (Minute Order 1/21/22.) On January 25, 2022, Zangara filed the operative Second Amended Complaint (“SAC”). The SAC asserts causes of action for (1) Judicial Dissolution of Payer Family LLC, (2) Breach of Fiduciary Duty, (3) Constructive Fraud, and (4) Fraud.

The SAC alleges that Zangara inherited his father’s fifty percent interest in Payer Family LLC through interstate secession on January 2, 2007. (SAC ¶¶ 5-14.) Payer owns the other fifty percent interest in Payer Family LLC. (SAC ¶ 8.) The only asset of Payer Family LLC is real property at 905 Dickson St., Marina Del Rey, CA (“Subject Property”). (SAC ¶ 9.) Zangara alleges that Payer breached his fiduciary duties by occupying the Subject Property without paying rent, preventing Zangara from access to the property, and failing to comply with terms of the Operating Agreement regarding the dissolution of Payer Family LLC, failing to file taxes for the Payer Family LLC, and failing to pay property taxes on the Subject Property. (SAC ¶¶ 15-21.) In addition, the SAC alleges that Payer secretly attempted to sell the Subject Property without consent for under market value. (SAC ¶¶ 22-32.)

On April 8, 2022, Plaintiff dismissed the third and fourth causes of action for constructive fraud and fraud. On July 19, 2022, the Court granted Zangara’s motion for summary adjudication as to the first cause of action for judicial dissolution of the Payer Family LLC and as to the existence of a fiduciary duty owed by Payer to Zangara. (Order 7/19/22.)

On March 10, 2022, Q5778 Group, LLC (“Buyer”) filed the related action – 22SMCV00340 (“Related Action”) – against the Payer Family LLC to enforce the sale of the Subject Property. On April 22, 2022, the Court found that the instant action was related to the Related Action. (Minute Order 4/22/22.)

On August 8, 2022, the parties in the instant action filed a stipulation – which the Court granted – under which the proceeds of the sale of the Subject Property would be deposited with the Court and distributed pursuant to the Court’s orders in the instant action. The stipulation noted that the parties had settled the Related Action on July 18, 2022, and under the settlement, the Subject Property would be sold to Buyer.

On August 29, 2022, Zangara filed the instant motion to enforce the settlement agreement in the Related Action and served the motion on all parties in both the instant action (BC684506) as well as the related action (22SMCV00340). On August 31, 2022, the Court granted Zangara’s ex parte application to advance the instant hearing to enforce the settlement agreement and advanced the instant hearing to September 26, 2022. (Minute Order 8/31/22.) On September 2, 2022, Zangara refiled the instant motion to enforce the settlement agreement. On September 6, 2022, Payer stated that he was unsure if he received notice of the instant motion and was served in open court with the instant motion.

On September 19, 2022, in the Related Action, Buyer filed a notice of settlement of the entire case. No opposition or reply has been filed to the instant motion to enforce settlement.

Code of Civil Procedure section 664.6 provides that “[i]f parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.” In ruling on a motion to enter judgment the trial court acts as a trier of fact. It must determine whether the parties entered into a valid and binding settlement. To do so it may receive oral testimony in addition to declarations. (Kohn v. Jaymar-Ruby, Inc. (1994) 23 Cal.App.4th 1530, 1533.) However, “the power of the trial court under section 664.6 ‘is extremely limited.’” (Howeth v. Coffelt (2017) 18 Cal.App.5th 126, 134.)

By way of the instant motion, Zangara seeks an order to sell the Subject Property and to require Payer to vacate and deliver possession of the property to Buyer upon the close of escrow of the sale of the Subject Property.

On October 8, 2021, without Zangara’s knowledge or consent, Payer entered into a California Residential Purchase Agreement and Joint Escrow Instructions (“RPA”) to sell the Subject Property on behalf of Payer Family, LLC to Buyer. (Zangara Decl. ¶ 4, Exh. A.) On March 9, 2022, Buyer filed the Related Action seeking to enforce the sale of the Subject Property pursuant to the RPA. (Zangara Decl. ¶ 5.) On July 18, 2022, Buyer, Payer Family LLC, Zangara, and Payer entered into a settlement agreement with Zangara and Payer signing in their capacity as the members of the Payer Family LLC and in their individual capacity. (Zangara Decl. ¶ 6, Exh. B.) The settlement agreement provides that Payer Family LLC will sell the Subject Property pursuant to the terms of the RPA with escrow closing on or before July 29, 2022. (Zangara Decl., Exh. B at ¶ 1(a).) Further, pursuant to the settlement agreement, “[Payer] expressly authorizes [Zangara], and [Zangara] shall have the authority, to execute on [Payer Family LLC]'s behalf, without the need for [Payer]'s signature, all papers necessary to sell the [Subject] Property to Buyer, including (but not limited to) escrow instructions, amendments, and documents of title.” (Zangara Decl. ¶ 7, Exh. B at ¶ 1(g).)

On August 21, 2022, Zangara deposited the grant deed transferring the Subject Property to Buyer to the escrow company. (Zangara Decl. ¶ 8, Exh. C.) The escrow company advised Zangara that the title company required confirmation that the Payer Family LLC is authorized to sell the Subject Property under the settlement agreement. (Zangara Decl. ¶ 9.) Zangara executed and deposited with the escrow company a resolution of the Payer Family LLC confirming that Payer and Zangara were the only members and that the Payer Family LLC was authorized to sell the Subject Property pursuant to the terms of the settlement agreement. (Zangara Decl. ¶ 9, Exh. D.) Zangara also mailed and personally delivered the resolution to Payer. However, Payer has refused to sign the resolution. (Zangara Decl. ¶ 10, Exh. E.) “Because Mr. Payer refuses to sign the resolution confirming that the [Payer Family LLC] is authorized to sell the [Subject] Property under the Settlement Agreement, the escrow and title company have refused to close the transaction unless or until the [Payer Family LLC] provides confirmation that it is authorized to sell the [Subject] Property.” (Zangara Decl. ¶ 11.) The escrow and title company have advised the Payer Family LLC that the sole issue preventing close of escrow is the confirmation that the Payer Family LLC is authorized to sell the Subject Property. (Zangara Decl. ¶ 12.)

In addition, Payer is still occupying the Subject Property. (Zangara Decl. ¶ 15.) Pursuant to the RPA which is expressly incorporated into the Settlement Agreement, the Payer Family LLC, Zangara, and Payer are required to provide possession of the Subject Property when the grant deed is recorded at the close of escrow. (Zangara Decl., Exh. A at ¶¶ 9(b), 30(d).)

Here, the parties – Zangara, Payer, and the Payer Family LLC – have agreed to sell the Subject Property to Buyer under the terms of the settlement agreement. Accordingly, pursuant to Code of Civil Procedure section 664.6, the Payer Family, LLC is ordered to sell the Subject Property pursuant to the settlement agreement.[1] Further, pursuant to the settlement agreement, Payer Family LLC and Payer are to vacate the property upon close of the escrow of the property.

Based on the foregoing, Plaintiff Christopher Zangara-Payer’s motion to enforce settlement pursuant to Code of Civil Procedure section 664.6 is GRANTED.

Based on the evidence presented, the Court also finds that apart from the settlement agreement, the Payer Family LLC is authorized to sell the property. The Payer Family LLC is ordered to sell 905 Dickson Street, Marina Del Rey, California 90292 pursuant to the Settlement Agreement.

Pursuant to the Settlement Agreement, Payer Family LLC and David Payer are ordered to vacate and deliver possession of 905 Dickson Street, Marina Del Rey, California 90292 upon close of escrow.

[1] Based on the evidence presented, the Court also finds that apart from the settlement agreement, the Payer Family LLC is authorized to sell the property.

Superior Court of California

County of Los Angeles

Department 26