Judge: Joseph Lipner, Case: 23STCV17767, Date: 2025-06-12 Tentative Ruling

Case Number: 23STCV17767    Hearing Date: June 12, 2025    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendants and Cross-Complainants Jack Rubin & Sons, Inc. (“JRS”); Bruce Rubin (“Bruce”); Francile Rubin (“Francile”); Robert Maxwell Turner (“Max”); and Keith Turner (“Keith”) (collectively, Moving Parties”) move for an order bifurcating this case and ordering trial of the issue of the enforceability of the written settlement agreement between the parties (the “Settlement”) prior to allowing discovery and trial on the issues of the underlying claims which the Settlement purports to have released. Moving Parties seek a temporary stay of portions of the case, including discovery, that are not relevant to the enforceability of the Settlement. (The Court uses the parties’ first names for clarity only, and means no disrespect.)

The Court GRANTS the motion for bifurcation.

Background

This is a case between Plaintiffs and Cross-Defendants Michael Rubin, Individually and as Trustee of the Michael J. Rubin and Staci M. Rubin Family Trust (“Michael”); Staci Rubin, Individually and as Trustee of the Michael J. Rubin and Staci M. Rubin Family Trust (“Staci”) (collectively, “Plaintiffs”); and Defendants and Cross-Complainants Jack Rubin & Sons, Inc. (“JRS”); Bruce Rubin, Individually and as Trustee of the Bruce and Francile Rubin Family Trust and as Trustor of the Bruce and Francile Rubin Irrevocable Trust (“Bruce”); Francile Rubin, Individually and as Trustee of the Bruce and Francile Rubin Family Trust and as Trustor of the Bruce and Francile Rubin Irrevocable Trust (“Francile”); Michelle Turner, Individually and as Trustee of the Bruce and Francile Rubin Irrevocable Trust (“Michelle”); Robert Maxwell Turner (“Max”); and Keith Turner (“Keith”) (collectively, “Defendants”).

This case relates to the disposition of the family business, JRS. Bruce is the CEO of JRS. In 2016, Bruce retired from actively managing JRS’s day-to-day affairs, leaving his son, Michael, to run JRS. At the time, Bruce and his wife, Francile, owned 61.6 percent of JRS stock and Michael owned the remaining 38.4 percent. The present ownership shares are an issue in dispute in this litigation.

In July 2022, Max, the eldest grandson of Bruce and Francile, began working at JRS. Defendants contend that Max, who has an accounting degree, discovered that millions of dollars could not be accounted for. Defendants contend that, in 2020, Michael had fraudulently signed a series of documents in order to take over JRS. These documents include corporate minutes and stock certificates to provide Michael additional shares, as well as an allegedly forged gift tax return. Defendants contend that Michael also used corporate funds to pay for personal expenses without Bruce’s permission.

The parties mediated their disagreements with Judge Roy L. Paul (Ret.), resulting in a written and signed settlement agreement on March 9, 2023. As part of the Settlement, the parties agreed that Michael had a 38.36 percent interest in JRS and that JRS would buy out Michael’s interest. The Settlement also included a mutual release of all claims known or unknown, including an express waiver of Civil Code, section 1542.

Plaintiffs contend that the Settlement agreement was procured by fraud. Michael contends that the parties reached the 38.36 percent figure based on Defendants’ representations that Bruce had not gifted Michael any shares. Plaintiffs contend that they subsequently discovered that Bruce had filed a gift tax return indicating that he had gifted Michael additional shares.

Plaintiffs filed this action against Defendants on July 27, 2023, raising claims for (1) breach of contract (the Settlement) (against JRS, Bruce, and Francile); (2) breach of fiduciary duty (against JRS, Bruce, and Robert); (3) promissory fraud (against JRS, Bruce, Francile, and Robert); and (4) conspiracy.

On January 30, 2025, Defendants filed the Cross-Complaint against Plaintiffs. The Cross-Complaint raises claims for (1) breach of contract (the Settlement); (2) declaratory relief; (3) fraud (on behalf of JRS, Bruce, and Francile only); and (4) financial elder abuse (on behalf of Bruce and Francile only).

On May 15, 2025, Moving Parties filed this motion. Plaintiffs filed an opposition and Moving Parties filed a reply.

Legal Standard

“The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any cause of action … or of any separate issue or of any number of causes of action or issues[.]” (Code Civ. Proc. § 1048, subd. (b).)

“The court may, when the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby … make an order … that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case, except for special defenses which may be tried first pursuant to Sections 597 and 597.5.” (Code Civ. Proc. § 598.)

Discussion

Moving Parties seek bifurcation in order to first determine whether the Settlement is enforceable before proceeding to resolve the remaining issues in the case.

Plaintiffs contend that this motion is an effort to avoid disclosure of JRS’s financial information, which Plaintiffs contend is a condition precedent to the Settlement that Defendants failed to perform. But if those facts are relevant to the enforceability of the Settlement, then they will necessarily be discoverable in the initial phase.

Although Plaintiffs seek to invalidate the Settlement, both Plaintiffs and Cross-Complainants have filed claims for breach of the Settlement as well. The claims in this case involve extensive corporate records spanning years. The documents provided to the appraisers alone total over 8,000 pages.

The benefits of bifurcation to judicial economy are clear in this case. This case either exists in a world where the Settlement is enforceable, or a world where it is not. If the Settlement is enforceable, then the purportedly released claims can be quickly disposed of, and the parties’ claims for breach of the Settlement can go forward. If the Settlement is not enforceable, then the reverse is true. Given the factual intensity of the claims involved in this case, there is no need to litigate as if both worlds exist at the same time, when the threshold question of enforceability can collapse this litigation down into one shared reality and cut off the litigation of unnecessary claims.

The Court therefore grants the motion for bifurcation.