Judge: James L. Crandall, Case: "Garciavs.2095N.BataviaStreet,LLC", Date: 2022-09-08 Tentative Ruling

Motion for Summary Judgment and/or Adjudication

Defendant 2095 N. Batavia Street, LLC’s motion for summary judgment as to the First Amended Complaint filed by plaintiffs’ Arturo Garcia Garcia and Leticia Jimenez Gonzalez is CONTINUED to November 10, 2022 at 10:00 AM.

In opposition to the Motion, Plaintiff argues that because Rupesh Shah is not only the sole managing member of Defendant but also the Co-President of MS International, knowledge is imputed to both organizations. Neither party has addressed the issue of when knowledge of common officers and directors of two companies can be imputed to the other company.

In Verder v. Am. Loan Soc. (1934) 1 Cal. 2d 17, the knowledge acquired by common officers’ and directors of two corporations was imputed to both corporations. Specifically, in Verder the court states: “It is argued that the knowledge of the Mortgage Co. was knowledge of the Loan Society through the unity of the officials and directorate of the two companies; and that by the fraudulent acts of such common officers, plaintiff was deprived of her security, and the Loan Society enabled to acquire its substitute or successor security, which later was transformed into record title in fee by process of trustee's sale.” (Verder v. Am. Loan Soc. (1934) 1 Cal. 2d 17, 26.)

“The knowledge of its agents acquired while acting for and on behalf of the Mortgage Co. must be imputed to that company. Likewise the knowledge of its agents acquired while acting in its behalf, must be imputed to the Loan Society. The agents of each company being the same, acting at the same instant in dual capacities in the transaction of their principals’ business inter sese, were carriers of such knowledge to both principals synchronously, with the result that each company principal is charged with all the knowledge and acts of its agents, gained or performed in transacting the business of the respective companies.” (Id. at 27.)

The court requests further briefing on the applicability of the Verder’s analysis as to imputing knowledge acquired by common officers’ and directors of both corporations to this case.

Defendant may file a supplemental brief no longer than 3 pages within 9 court days of the CONTINUED hearing. Plaintiffs may file a supplemental reply no longer than 3 pages long within 5 court days of the CONTINUED hearing.

Defendant to give notice.

Future hearing dates

2/3/23 – MSC

3/6/23 – Jury Trial