Judge: John J. Kralik, Case: 21BBCV01025, Date: 2024-03-15 Tentative Ruling

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Case Number: 21BBCV01025    Hearing Date: March 15, 2024    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiff Paul Baskaron (“Plaintiff”) commenced this action on December 8, 2021.  He filed the first amended complaint (“FAC”) against Defendant Calibliss LLC (“Calibliss”) for dissolution and sale of the LLC on December 9, 2021. 

Paul Baskaron alleges that he, John Mikhael, and Andrew Mekhail are each a member of Calibliss and they each hold a 1/3 interest in the LLC.  Paul Baskaron alleges that the only asset Calibliss has is a conditional permit from the City of Palm Springs to operate a marijuana dispensary on the land.  He alleges that Calibliss has no money to set up the store and has done nothing to maintain the permit.  He alleges that the LLC business has been abandoned.  Paul Baskaron alleges that there are other entities that want to buy the permit for at least $2 million, but Andrew Mekhail refuses to sell the permit.  Thus, Paul Baskaron seeks dissolution of Calibliss under Corporation Code, § 17707.03 and for an order that the marijuana license be sold.

On January 20, 2022, the default of Defendant Calibliss LLC was entered.

B.     Complaint-in-Intervention

On October 7, 2022, Intervenor and Real Party in Interest Andrew Mekhail filed a Complaint in Intervention. 

C.     Cross-Complaint

On January 22, 2024, Andrew Mekhail (a self-represented litigant) filed a cross-complaint against Paul Baskaron and St. Paul Trading, LLC for: (1) tortious interference; (2) fraud and misrepresentation; (3) declaratory relief; (4) breach of fiduciary duty; (5) breach of contract; (6) negligent interference with prospective economic advantages; and (7) declaratory and injunctive relief. 

D.    Motions on Calendar

On February 8, 2024, Cross-Defendants Paul Baskaron and St. Paul Trading, LLC (“Cross-Defendants”) filed a demurrer to the complaint and a motion to strike portions of the complaint. 

On March 8, 2024, Cross-Complainant Andrew Mekhail filed an untimely opposition brief.  That same day, Cross-Defendants filed a notice of non-opposition, stating that they were not in receipt of an opposition brief by March 4, 2024, the due date of the opposition brief. 

REQUEST FOR JUDICIAL NOTICE

            With the demurrer papers, Cross-Defendants request judicial notice of Exhibit A, which attaches Andrew Mekhail’s complaint filed on April 30, 2021 in the action Andrew Mekhail v. Paul Baskaron et al., in the Superior Court of the County of Riverside, Case No. CVSW2103528 (“Riverside Action”).  The request is granted.  (Evid. Code, § 452(d).)

DISCUSSION RE DEMURRER

            Cross-Defendants demur to the complaint on the grounds that another action is pending and there is a failure to join indispensable parties. 

First, Cross-Defendants argue that there is an identical action pending in Riverside County as the cross-action filed by Andrew Mekhail in this action.  CCP § 430.10(c) states that a party against whom a complaint has been filed may object by demurer to the pleading on the ground that there is another action pending between the same parties on the same causes of action. This is also known as a plea in abatement and in determining whether the causes of action are the same, the rule is that such a plea may be maintained only where a judgment in the first action would be a complete bar to the second action.  (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal. App. 3d 781, 787-788.)  The rule of exclusive jurisdiction is that when two or more tribunals in this state have concurrent jurisdiction, the tribunal first assuming jurisdiction retains it to the exclusion of all other tribunals in which the action might have been initiated.  (Stearns v. Los Angeles City School Dist. (1966) 244 Cal. App. 2d 696, 708.)  Thereafter another tribunal, although it might originally have taken jurisdiction, may be restrained by prohibition if it attempts to proceed.  (Id.)  This rule avoids unseemly conflict between Courts that might arise if they were free to make contradictory decisions or awards at the same time or relating to the same controversy.  (Id.)  Further, it protects litigants from the expense and harassment of multiple litigation.  (Id.)  

The complaint in the Riverside Action is alleged by Andrew Mekhail against Paul Baskaron and St. Paul Trading, LLC for: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) breach of fiduciary duty; (4) intentional misrepresentation; (5) conversion; (6) intentional interference with contractual relationships; (7) negligent misrepresentation; (8) unjust enrichment; (9) accounting; and (10) declaratory and injunctive relief.  In the Riverside Action, Andrew Mekhail (in pro per) alleges that he is involved in the cannabis dispensary business and formed Calibliss.  (Riverside Action Compl., ¶7.)  He alleges that he and his partner John Mikhael pursued financing, real estate, and dispensary opportunities in the course of their partnership.  (Id.)  Andrew Mekhail alleges that Paul Baskaron and St. Paul Trading, LLC were impressed by Calibliss and proposed forming a partnership to purchase a commercial real estate property and equally divide costs of a dispensary.  (Id., ¶8.)  Andrew Mekhail alleges that he moved toward the acquisition of property suitable for the needs of the partnership/business such that the parties agreed on December 11, 2019 to purchase 560-562 S Indian Canyon Drive in Palm Springs, which was held in the title of St. Paul Trading, LLC, but collectively owned by the 3 partners. (Id., ¶9.)  Andrew Mekhail alleges that he and John Mikhael agreed to grant Paul Baskaron 100% of the tax benefit from the purchase of the property, but things changed when Andrew Mekhail and John Mikhael found out that Paul Baskaron was actively planning on and pursuing collateralization of the subject property without notice or authorization.  (Id., ¶11.)  Andrew Mekhail alleges that Paul Baskaron refuses to correct the title.  (Id., ¶12.) 

In the cross-complaint filed in this action, Andrew Mekhail alleges causes of action for: (1) tortious interference; (2) fraud and misrepresentation; (3) declaratory relief; (4) breach of fiduciary duty; (5) breach of contract; (6) negligent interference with prospective economic advantages; and (7) declaratory and injunctive relief.  He alleges that the parties agreed to designate 560 S Indian Canyon Drive in Palm Springs as the business premises and they agreed to designate St. Paul Trading, LLC as the titleholder for tax purposes but with the intention to reassign the title to Andrew Mikhael after completing the purchase.  (XC, ¶¶9, 11.)  Andrew Mekhail alleges that Paul Baskaron and St. Paul Trading, LLC defaulted on this commitment and that they were engaged in negotiations to utilize equity in the property for a separate gas station business venture.  (Id., ¶13.) 

            The allegations of the Riverside Action complaint and the cross-complaint in this action are based on essentially the same set of facts and include the same parties.  The Riverside Action complaint by Andrew Mekhail was filed on April 30, 2021.  The cross-complaint in this action was filed by Andrew Mekhail on January 22, 2024.  Judgment in the Riverside Action (the earlier filed pleading) would have a res judicata effect on the cross-complaint in this action. 

            In opposition, Andrew Mekhail argues that the Riverside Action involves real property while his cross-complaint in this action address the adverse effects of Paul Baskaron and St. Paul Trading, LLC’s actions on his business.  (He also argues that discovery in the Riverside Action is now closed and has been since August 15, 2023, and that pre-trial exhibits have been exchanged.)  However, the allegations of the cross-complaint in this action are based on the same set of facts and circumstances as the complaint in the Riverside Action.  In addition, Andrew Mekhail is able to allege his cross-claims in the Riverside Action complaint.  As such, the demurrer on this ground is sustained. 

            Cross-Defendants also argue that a third partner “John Doe” is alleged in the cross-complaint, but not identified even though all parties know that this third party is John Mikhael.  Cross-Defendants this is another ground to sustain the demurrer as he is an indispensable party to the cross-complaint.  However, as discussed above, there is already a sufficient ground to sustain the demurrer based on the plea in abatement doctrine. 

DISCUSSION RE MOTION TO STRIKE

Cross-Defendants move to strike the cross-complaint in its entirety, arguing that the allegations in the cross-complaint are identical to the facts alleged in another action pending in Riverside County, which Plaintiff/Cross-Defendants have recently marked as related. 

            In light of the ruling on the demurrer, the motion to strike is taken off-calendar as moot.

CONCLUSION AND ORDER

Cross-Defendants Paul Baskaron and St. Paul Trading, LLC’s demurrer to Andrew Mekhail’s cross-complaint is sustained without leave to amend. The cross-complaint is hereby dismissed with prejudice.

Cross-Defendants Paul Baskaron and St. Paul Trading, LLC’s motion to strike is taken off-calendar as moot.

Cross-Defendants shall provide notice of this order.

DATED: March 15, 2024                                                       ___________________________

                                                                                          John Kralik

                                                                                          Judge of the Superior Court