TENTATIVE RUING

 

Calendar:    5

Date:          10/28/2022 

Case No: 21 GDCV00547 Trial Date: None Set 

Case Name: Jung, et al. v. Yusuf, et al.

MOTION TO COMPEL ACCOUNTING

Moving Party:            Plaintiffs and cross-defendants John B. Jung and Ellen L. Jung, Trustees    

Responding Party: Defendant and cross-complainant Michael Yusuf (No Opposition)      

RELIEF REQUESTED:

Order compelling defendant and cross-complainant Michael Yusuf, Successor Trustee, to prepare an accounting detailing and documenting all income and expenses covering January 1, 2015 through current

SUMMARY OF FACTS:

Plaintiffs John B. Jung and Ellen L. Jung, as trustees of a family trust, allege that plaintiffs and defendant Michael Yusuf, trustee of the Yusuf trust, are co-owners of real property and improvements located on East Orange Grove in Glendale.   The complaint alleges that in September of 2015, all interested parties executed a grant deed transferring the subject property to Frank Yusuf, as trustee of his trust, an undivided 50% interest, and to plaintiffs John Jung and Ellen Jung, trustees of their family trust, an undivided 50% interest as tenants in common.   Plaintiffs allege that Frank Yusuf died on December 5, 2018, that a petition for probate was filed, wherein Michael Yusuf was appointed executor, but that the title to the property still reflects Frank Yusuf as co-owner.  Plaintiff are informed and believe that Michael Yusuf is the successor trustee of the trust.   

The complaint alleges that plaintiffs and Frank Yusuf, as trustee, had entered into an agreement to share profits and expenses, pursuant to which they shared a property manager who has been and continues to be the property manager for the subject property. Now that Frank Yusuf has passed away, defendant Michael Yusuf no longer wants to honor that agreement. Defendant Michael Yusuf proposed a realtor working with the attorneys for defendant to determine the value of the property and to sell it. In response to defendant’s request, plaintiffs requested that the realtor advise on the value of the property, which the realtor did. Plaintiffs allege that they offered to buy out 100% of defendant Michael Yusuf’s interest in the property for 50% of the stated value, but defendant has refused, insisting that the property be sold by the proposed realtor working with counsel for defendant.  Plaintiffs allege that given the conflict of interest between the goals of the co-owners, the use of the realtor proposed by defendant to market and sell the property would be problematic, and that only a true neutral could properly represent the interest of both parties. Accordingly, plaintiffs seek a partition to either buy out defendant’s interest in the property in furtherance of the parties’ historical agreement to use the property as an investment property, or in the alternative, to sell the property without the conflict of interest between the parties as to how to sell and market the property.  The complaint also indicates that to the extent that there are any profits obtained or expenses incurred by defendants related to the property, plaintiffs request an accounting.

The complaint alleges causes of action for partition by appraisal of real property, partition by sale, and accounting.  On March 30, 2022, plaintiffs filed a Request for Dismissal without prejudice of the cause of action for partition by appraisal of real property, which dismissal was entered as requested the same date.  

Defendant Michael Yusuf, as successor trustee, has filed a cross-complaint against John Jung and Ellen Jung, trustees, as cross-defendants, alleging that cross-complainant and cross-defendants are co-owners of the subject property, holding title as tenants in common, with each side owning a 50% interest in the property. Cross-complainant seeks partition by sale of the subject property, alleging that partition by sale is in the best interests of the parties and is more equitable than division in kind as the property cannot be partitioned without great prejudice and loss to the parties because the property is a single parcel of real property consisting of a 34-unit multi-family residential apartment building, and so division in kind would be impractical and would reduce the utilized value of the property to the detriment of the owners. 

The cross-complaint alleges a cause of action for partition by sale of real property. 

On August 11, 2022, the court granted defendant’s ex parte application to appoint a referee to oversee the sale of the subject real property, and appointed Matthew Taylor, Esq. to serve as referee pursuant to CCP section 873.010.

ANALYSIS:

Plaintiffs seek an order of the court that defendant prepare an accounting detailing and documenting all income and expenses in connection with the subject property, covering January 1, 2015 through current.

It is not clear that this relief is necessary now that a referee has been appointed. The court is inclined to consider the motion moot. 

In any case, plaintiffs seek relief under CCP section 872.140, which provides, in connection with partition of real and personal property: 

“The court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.” 

This statute does not appear to give rise to a pre-trial procedure by which one party may obtain an order requiring another party to provide an accounting.   The case cited in the moving papers, Wallace v. Daley (1990) 220 Cal.App.3d 1028, involved a challenge to the trial court’s allocation of reimbursement for improvements in the real property in that case, which had been determined by the court after the case had been tried to the court, submitted upon the filing of posttrial briefs, and was the subject of a statement of decision by the trial court.  Wallace, at 1034.   

In this case, likewise, any accounting will be conducted at trial, and not pursuant to this pretrial request.   The request for an order that defendant provide an accounting is accordingly not procedurally authorized, and, in any case, premature.  The court anticipates that throughout the sale process the referee will be able to determine if there are any liens against the property, the sale price, and any remaining proceeds, and at that point the court will conduct a trial on the issues raised by the parties in their complaint and cross-complaint concerning the equitable division of any remaining proceeds.  

If plaintiffs are having difficulty obtaining the information they need through the available discovery devices, their remedy is not to request an order that defendant prepare an accounting, but to seek this court’s assistance in enforcing discovery obligations, after appropriately meeting and conferring with the responding party.  

This motion for an accounting accordingly is denied.  

RULING:

Motion to Compel Successor Trustee Michael Yusuf to account is DENIED.

The court notes that since the preparation of the tentative ruling, defendant has filed and served an untimely opposition, which was filed and served five court days late, filed after business hours only four court days prior to the hearing, after the date upon which any reply to such an opposition would have been required to filed and served.  The court in its discretion has not considered the opposition, at it is clearly untimely, with no advance permission obtained based on good cause to file untimely papers, and the filing and service did not afford the moving party a full opportunity to prepare reply papers, to moving party’s prejudice.  See CCP § 1005(b) (“All papers opposing a motion…shall be filed with the court and a copy served on each party at least nine court days…before the hearing.”)  CRC Rule 3.1300(d) (“If the court, in its discretion refuses to consider a late filed paper, the minutes or order must so indicate.”)

GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangement in advance if you wish to appear via LACourtConnect/Microsoft Teams by visiting www.lacourt.org to schedule a remote appearance.  Please note that LACourtConnect/Microsoft Teams offers free audio and video appearance. Counsel and parties (including self-represented litigants) are encouraged not to personally appear.  With respect to the wearing of face masks, Department D recognizes that currently, the Los Angeles Department of Public Health strongly recommends masks indoors, especially when interacting with individuals whose vaccination status is unknown; for individuals who have a health condition that puts them at higher risk for severe illness; individuals who live with someone who is at higher risk; and for individuals who are around children who are not yet eligible for vaccines.  In accordance with this guidance, it is strongly recommended that anyone personally appearing in Department D wear a face mask.  The Department D Judge and court staff will continue to wear face masks.  If no appearance is set up through LACourtConnect/Microsoft Teams, or otherwise, then the Court will assume the parties are submitting on the tentative.