Judge: Stephen P. Pfahler, Case: 22STCV29636, Date: 2025-05-14 Tentative Ruling

Case Number: 22STCV29636    Hearing Date: May 14, 2025    Dept: 68

Dept. 68

Date: 5-14-25

Case Number: 22STCV29636 consolidated with 22STCV30079

Trial Date: 10-13-25 c/f 2-24-25 c/f 11-4-24 c/f 4-8-24

SEAL RECORDS

MOVING PARTY:                Plaintiffs, Flyer Next, LLC, et al.

RESPONDING PARTY:       Unopposed/Defendant, Marvin Engineering Co., Inc., et al.

RELIEF REQUESTED

Motion to Seal Records

SUMMARY OF ACTION

Oded Nechushtan And Amit Nechushtan founded the Flyer entities, which includes Flyer Defense LLC, an entity wholly owned by Flyer Next, LLC, and Flyer Technologies, LLC, a separate entity 50% owned by Flyer Technologies. In 2000, Flyer Technologies entered into a joint venture agreement with Marvin Engineering Co., Inc. for a project involving the developments and sale of lightweight tactical all-terrain vehicles to the United States Marine Corps. Flyer agreed to license its intellectual property to Marvin Engineering, and transferred its subsidiary, Flyer Defense, LLC. Flyer Technologies retained a right to a 50-50 split of royalties and equal board voting power.

In 2018, following the retirement/discontinued involvement of former “head” of Marvin Engineering, Jerry Friedman, the parties entered in a new agreement, whereby Flyer Defense was transferred to a new entity identified as Flyer Next, LLC, with joint ownership between Flyer Technologies and Marvin Engineering. Oded Nechushtan was also designated with the title of Manager, granting “sole power to manage the business, property, and affairs of Flyer Next and ... Flyer Defense.” Flyer Technologies also agreed to an $18,000,000 “priority return” to Marvin Engineering “upon the occurrence of specified liquidity events.”

Plaintiffs allege Defendants provided misrepresentative information, which led to now determined unsupported terms for the revised agreement. Plaintiffs allege a multitude of allegations, including improper money withdrawals to pay other debts, concealment of certain debts, nonpayment of outstanding balances due to Flyer Defense, and destruction of data. David Gussman and Howard Gussman serve as president and chief operating officer, and chief executive officer and director of Marvin Engineering, and conducted the negotiations.

On September 12, 2022, Plaintiffs Flyer Defense LLC, Flyer Technologies, LLC and Flyer Next, LLC (Flyer) filed their complaint against Marvin Engineering Co., Inc. for Declaratory Relief, Accounting, Breach of Contract (contribution and assignment agreement), Money Had and Received, Breach of Fiduciary Duty, and Breach of Contract (22STCV29636). On September 14, 2022, Marvin Engineering Co., Inc. filed a complaint for (1) Breach of Fiduciary Duty; (2) (Derivative) Breach of Fiduciary Duty; (3) Breach of Contract; (Operating Agreement) (4) Breach of Contract (Services Agreement); (5) Breach of the Obligation of Good Faith And Fair Dealing; (6) Breach of the Obligation of Good Faith and Fair Dealing; (7) Theft Pursuant To Cal. Penal Code § 496; (8) Aiding and Abetting Breach of Fiduciary Duty; (9) (Derivative) Aiding And Abetting Breach Of Fiduciary Duty; (10) Demand for Accounting; and (11) Declaratory Relief against the Flyer plaintiffs and Oded Nechushtan And Amit Nechushtan (22STCV30079).

On October 5, 2022, the court deemed the cases related, with 22STCV29636 deemed the lead case.

On October 7, 2022, the Flyer plaintiffs filed their first amended complaint against Marvin Engineering Co., Inc. for Breach of Contract, Conversion, Declaratory Relief, Accounting, Breach of Contract (contribution and assignment agreement), Money Had and Received, Breach of Fiduciary Duty, Breach of Contract (services agreement), and Breach of Contract (Line of Credit Agreement). on October 28, 2022, the Flyer Defense LLC, Flyer Technologies, LLC and Flyer Next, LLC defendants answered the Marvin Engineering Co., Inc. Oded Nechushtan and Amit Nechushtan separately answered the Marvin Engineering Co., Inc. complaint on the same date as well.

On November 14, 2022, Marvin Engineering Co., Inc. answered the Flyer plaintiffs first amended complaint. On the same date, Marvin Engineering Co., Inc. filed a cross-complaint against Flyer Defense LLC, Flyer Technologies, LLC, Flyer Next, LLC,  Oded Nechushtan and Amit Nechushtan for (1) Breach of Fiduciary Duty; (2) (Derivative) Breach of Fiduciary Duty; (3) Breach of Contract; (Operating Agreement) (4) Breach of Contract (Services Agreement); (5) Breach of the Obligation of Good Faith And Fair Dealing; (6) Breach of the Obligation of Good Faith and Fair Dealing; (7) Theft Pursuant To Cal. Penal Code § 496; (8) Aiding and Abetting Breach of Fiduciary Duty; (9) (Derivative) Aiding And Abetting Breach Of Fiduciary Duty; (10) Demand for Accounting; and (11) Declaratory Relief. On December 22, 2022, the court entered the Marvin Engineering Co., Inc. request for dismissal of the cross-complaint without prejudice.

On May 16, 2023, the court entered the parties’ stipulation for leave to file a second amended complaint by the Flyer plaintiffs. On May 17, 2023, Plaintiffs filed their second amended complaint for Breach of Contract, Conversion, Declaratory Relief, Accounting, Breach of Contract (contribution and assignment agreement), Money Had and Received, Breach of Fiduciary Duty, Breach of Contract (services agreement), Breach of Contract (Line of Credit Agreement), Fraudulent Concealment, Fraudulent Misrepresentation, Trespass to Chattels, Conversion, and Unauthorized Access to Computers. The second amended complaint added in new defendants David Gussman and Howard Gussman as well.

On May 25, 2022, the court ordered the cases consolidated. On June 21, 2023, the Gussman parties and Marvin Engineering Co., Inc. answered the second amended complaint.

On July 5, 2023, the writs and receivers court denied the motion of Marvin Engineering for a writ of attachment against Flyer Defense, LLC and Flyer Next, LLC.

On April 28, 2025, the court entered the request for dismissal filed by the Flyer Plaintiffs as to the tenth cause of action for Fraudulent Concealment.

RULING: Granted.

Plaintiffs Flyer Next, LLC, Flyer Defense, LLC, Oded Nechushtan and Amit Nechushtan, move to seal the unredacted versions of Exhibits A, B, C, F, I, K, U, V to the Declaration of Courtney Elgart and the unredacted Declaration of Oded Nechushtan, both submitted in support of the motion for summary judgment/summary adjudication scheduled for May 20, 2025.

A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing. (Cal. Rules of Court, rule 2.551(b)(1).) Unless confidentiality is required by law, court records are presumed to be open. (Id. at 2.550(c).) To grant an order sealing records, the court must expressly find that Defendant has presented facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest. Id. at 2.550(d). To establish that an overriding interest is sufficient, plaintiff must clearly identify the interest and demonstrate “a substantial probability that it will be prejudiced absent sealing or closure.” (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283.)

Moving parties represent the records as containing privacy protected financial and employment information, board of director and other confidential business discussions, and business documents and contracts. The latter categories are represented as propriety and/or trade secret protected information. The subject documents were only previously disclosed under the guise of the parties’ Protective Order, whereby the records were deemed confidential. Moving Parties represent the request is narrowly tailored, and no less restrictive means exist.

The court accepts the subject records remain integral to the adjudication motion(s). The confidentiality imposed as a matter of law justifies the application to seal the identified records. (Cal. Rules of Court, rule 2.551(c).) The court additionally finds the records specific and narrowly tailored with no less restrictive means available for protection.

The unopposed motion is GRANTED.

Moving Parties to give notice.