Judge Peter A. Hernandez, Case Number: 20STCV46551, Date: 2024-09-05 Tentative Ruling

Judge: Peter A. Hernandez, Case: 20STCV46551, Date: 2024-09-05 Tentative Ruling

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Case Number: 20STCV46551 Hearing Date: September 5, 2024 Dept: 34

Spaciot, LLC, et al. v. Duc Pham, et al. (20STCV46551)

The Motion to be Relieved as Counsel brought by Hatch Law PC, counsel for Defendant Duc Pham, Vincent Pham, Verona Street Holdings, LLC, is DENIED without prejudice. The court will inquire at the hearing whether there are additional facts in support of the Motion. If the court is satisfied, the Motion will be granted, effective upon the filing of a proof of service showing service of the signed order via email upon Clients.

Background

Plaintiff Spaciot, LLC and Alessandro Paciotti ( “Spaciot,” “Paciotti” and collectively as “Plaintiffs”) allege as follows:

In or about November 2018, Plaintiffs entered a verbal agreement with Defendant Daniel Hinman (“Hinman”). Pursuant to that verbal agreement, Defendant Hinman was to identify a suitable (in terms of location, amenities, space, etc.) existing restaurant venue for sale, for Plaintiffs to purchase, and for which Defendant Hinman would be paid a fee of at least $5,000 (The Consulting Fee). Plaintiffs paid Defendant Hinman Defendant paid at least that amount in three checks, on 11/20/2018, 03/15/2019, and 03/20/2019. In addition to the Consulting Fee, Plaintiffs also promised that Plaintiff would, (and eventually) did, hire Defendant Hinman to renovate whatever space Plaintiffs acquired to Plaintiffs’ design, and would be paid a separate fee therefore.

Pursuant to the terms of the verbal agreement, in November 2018, Defendant Hinman identified a property located at 4019 West Sunset Boulevard, Los Angeles, California 90029 (the “Property”), where there was an existing restaurant business for sale. Defendant Hinman identified the Property after seeing advertisements from Defendants Duc Pham (“D. Pham”), Vincent Pham (“V. Pham”), Atlas Real Estate Group (“Atlas”), Ali Mourad (“Mourad”), and Roger Merians (“Merians” and collectively “Broker and Seller Defendants”).

Prior to November 13, 2018, Broker and Seller Defendants provided Plaintiff Paciotti, who was not experienced in real estate or hospitality, and is of foreign origins, with a marketing brochure, which was the basis for the Lease for the Property, that advertised the Property available for purchase as a two-level restaurant space available for purchase (“Marketing Materials”).

Prior, and leading up, to November 13, 2018, Defendants Atlas, Mourad and Merians negotiated the sale and purchase of Defendants D. Pham and V. Pham’s business, Defendant Barry Mason’s (“Mason”) Lease, and the use of the Property (“Purchase”), on behalf of BOTH Plaintiffs and Defendants D. Pham and V. Pham, at a price about Three (3) times the actual value for the Property, of approximately Three Hundred Thousand dollars ($300,000) (“Sale Price”)(“Purchase Agreement”).

At no time did Defendants Atlas, Mourad and Merians have Plaintiff Paciotti sign a waiver of dual representation as is customary in the industry and often required by law, when representing BOTH Plaintiffs and Defendants D. Pham and V. Pham, and either did not do any diligence to confirm if the Property was fully permitted for use as a “two-story restaurant space”, as represented in the Marketing Materials, and/or trusted the representations of Defendants D. Pham, V. Pham and Mason when they made and utilized the Marketing Materials which Plaintiffs relied on, including the Lease drafted solely by Defendant Mason, when making the Purchase.

At all times prior to November 13, 2018, and at all times prior and after, all Defendants knew, or should have known, that the Property was not permitted as a restaurant space for the “lower level restaurant space,” as it had never been permitted to allow restaurant service in the lower level space. All Defendants, despite knowing that the lower level space was not permitted for a “restaurant space”, actively misrepresented to Plaintiffs in writing, in the Lease, and Marketing Materials, as well as orally in all discussions relating to the Property and Lease, that the entirety of the Property, of which One-Third (1/3) of the Property is upstairs, and Two-Thirds (2/3) of the Property is downstairs, was usable for restaurant purposes, when the lower level space was never permitted or usable as a “restaurant space.”

On October 23, 2023, Plaintiffs filed a Third Amended Complaint, asserting causes of action against Defendants D. Pham, V. Pham, Verona Street Holdings, LLC, Barry Mason Enterprises, LP, Atlas, Mourad, Merians, Hinman, Eddie Navarrette and Does 1-25 for:

1. Breach of Contract;

2. Negligent Misrepresentation;

3. Intentional Misrepresentation; and,

4. Breach of Fiduciary Duty.

A Final Status Conference is scheduled for November 22, 2024 and Trial is scheduled for December 9, 2024.

Discussion

Hatch Law PC (“Firm”) seeks to be relieved as counsel of record Defendants D. Pham, V. Pham and Verona Street Holdings, LLC (“Clients”).

The court has discretion to allow an attorney to withdraw, and such a motion should be granted provided that there is no prejudice to the client and it does not disrupt the orderly process of

justice. (See Ramirez v. Sturdevant (1994) 21 Cal.App.4th 904, 915; People v. Prince (1968) 268 Cal.App.2d 398.)

California Rules of Court (“CRC”) Rule 3.1362 requires (1) a notice of motion and motion directed to the client (made on the Notice of Motion and Motion to Be Relieved as Counsel—Civil form (MC-051)); (2) a declaration stating in general terms and without compromising the confidentiality of the attorney-client relationship why a motion under Code of Civil Procedure § 284(2) is brought instead of filing a consent under section 284(1) (made on the Declaration in Support of Attorney's Motion to Be Relieved as Counsel—Civil form (MC-052)); (3) service of the notice of motion and motion, the declaration, and the proposed order on the client and on all other parties who have appeared in the case; and (4) a proposed order relieving counsel (prepared on the Order Granting Attorney's Motion to Be Relieved as Counsel—Civil form (MC-053)). The court may delay the effective date of the order relieving counsel until proof of service of a copy of the signed order on the client has been filed with the court.

Attorney Ryan Hatch (“Hatch”) represents the following:

I am an attorney of record for Duc Pham, Vincent Pham and Verona Street Holdings, LLC (the "Pham Defendants"). On or around 5/I/24, I notified Duc Pham that I was unable to continue to represent him and Verona Street Holdings, LLC, and identified new counsel who was willing to substitute as their attorney. On 5/9, a call was held between myself, new counsel, and Duc Pham to discuss the transition. On 5/20, I emailed Vincent Pham notifying him that new counsel had been identified and that new counsel would like authorization to represent him as well. I held a call with Vincent Pham on or around the same time to discuss the transition to new counsel and notified him that I was not able to continue to represent him in this action. New counsel then sent the Pham Defendants a proposed engagement agreement, but to date, they have not executed it.

The court determines that the requirements of Rules of Court Rule 3.1362 enumerated above have not been sufficiently met. There is no information that any breakdown in communications exists between the Firm and Clients. To the extent it has, those facts should be disclosed at the time of hearing.

Accordingly, the motion is Denied without prejudice subject to additional information being considered by the court.