Judge: Teresa A. Beaudet, Case: 22STCP04239, Date: 2023-05-18 Tentative Ruling

Case Number: 22STCP04239    Hearing Date: May 18, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Petitioners Andrew B. Clapkin, Trustee of the Andy Clapkin and Manuel Castillo Revocable Trust; Dina Marshall, Trustee of the Guy and Dina Marshall Revocable Trust; and Marci Weiser Clapkin, Trustee of the Marci Clapkin Weiser Revocable Trust (collectively, “Petitioners”) filed this action on November 30, 2022 against Respondent Shana Levin (“Respondent”).

In their Petition for Judicial Supervision of Voluntary Winding Up of Joslevin Realty Corp. of L.A., A California Corporation, Including Appointment of Stephen J. Donell as Receiver to Conduct Winding Up (herein, the “Petition”), Petitioners allege that they are each holders of record of 55.56 shares of Joslevin Realty Corp. of L.A. (“Joslevin”). (Petition, ¶¶ 4-6.) Respondent also “claims to hold 55.56 shares of Joslevin.” (Petition, ¶ 10.) The Petition alleges that “[b]efore electing to voluntarily dissolve, Joslevin was in the business of investing in industrial real properties which the company then leased to generate rental income for itself.” (Petition, ¶ 2.)

In the Petition, Petitioners request, inter alia, that the Court “[i]ssue an order…directing Joslevin, its shareholders, and any other such persons as this Court may determine proper, to appear before the Court, at the date, time and place appointed in such order, to show cause why the Court should not take jurisdiction over, and make orders and adjudge as to any and all matters concerning, the winding up of the affairs of Joslevin and such corporation’s dissolution,” and issue “an order appointing Stephen J. Donell as Receiver to conduct the winding up of the affairs of Joslevin under the Court’s supervision…” (Petition, Prayer, ¶¶ 1, 4(a).)

Petitioners now move for leave to amend the Petition. No opposition to the motion was filed.

Discussion

Pursuant to Code of Civil Procedure section 473, subdivision (a)(1), “[t]he court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading.”  Amendment may be allowed at any time before or after commencement of trial. (Code Civ. Proc., § 576.) “[T]he court’s discretion will usually be exercised liberally to permit amendment of the pleadings. The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified.” (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428 [internal citations omitted].) “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend….”  (Morgan v. Sup. Ct. (1959) 172 Cal.App.2d 527, 530.) Prejudice includes “delay in trial, loss of critical evidence, or added costs of preparation.” (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal.App.4th 1435, 1448.)

A motion to amend a pleading before trial must include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments. (Cal. Rules of Court, rule 3.1324, subd. (a).) The motion must also state what allegations are proposed to be deleted or added, by page, paragraph, and line number.  (Cal. Rules of Court, rule 3.1324, subd. (a).) Finally, “[a] separate declaration must accompany the motion and must specify: (1) The effect of the amendment; (2) Why the amendment is necessary and proper; (3) When the facts giving rise to the amended allegations were discovered; and (4) The reasons why the request for amendment was not made earlier.” (Cal. Rules of Court, Rule 3.1324, subd. (b).) 

The Court finds that Petitioners have complied with the procedural requirements for amending pleadings. Petitioners submit a declaration from their counsel that attaches a copy of the proposed First Amended Petition, as well as a redlined version of the proposed First Amended Petition, reflecting the proposed changes to the original Petition. (Godsil Decl., ¶¶ 2-3, Exs. A-B.) 

            Petitioners seek to amend the original Petition to include, inter alia, a request for a “Judicial Determination of Identity of Directors for Winding Up, Including Right of Shana Levin to Hold Director Office...” (Godsil Decl., ¶ 3, Ex. B, ¶ 1.) Petitioners also seek to add the allegation that “Shana wrongfully asserts that, on or about February 14, 2023, she and other shareholders sympathetic to her, by purported majority shareholder and/or other control of Joslevin, voted in a new Joslevin Board, comprised solely of three Levin faction directors, when neither Shana nor her sympathizers in fact have any such majority ownership or control, or other lawful ability to change the Board after voluntary dissolution occurred.” (Godsil Decl., ¶ 3, Ex. B, ¶ 10.)

            Petitioners also seek to add allegations requesting determinations that: “(a) A majority of Joslevin shareholders duly elected to voluntarily dissolve, and that Joslevin must accordingly wind up its affairs as a matter of law; and (b) Neither Shana nor any other Levin-aligned shareholders acquired any of the Clapkin faction’s shares and/or right to vote those shares as of the date the shareholders elected to voluntarily dissolve, or at any other time…” (Godsil Decl.,   ¶ 3, Ex. B, Prayer, ¶ 3.) In the proposed First Amended Petition, Petitioners also seek orders that “[p]ursuant to Corporations Code § 2003,” the Court “declare that neither Shana nor any other Levin-aligned shareholders have held a valid Board election and/or obtained a majority vote to elect the Board on February 14, 2023, and that Dina, Marci and Shana presently comprise the Board,” and that “[p]ursuant to Corporations Code § 2003 and/or other authority,” the Court “order Shana removed from the Board and be barred from reelection thereto until Joslevin has completely wound up its affairs, with either the Joslevin shareholders or Court filling said vacancy.” (Godsil Decl., ¶ 3, Ex. B, Prayer, ¶¶ 6-7.)

            As to the effect of the proposed amendments, Petitioners’ counsel states that “[t]he initial Petition alleges that, at all relevant times: (A) the Clapkin faction held the majority of shareholder votes and that shareholder majority duly and validly elected to voluntarily dissolve Joslevin; and (B) Dina, Marci and Shana were the three directors elected by Joslevin’s shareholders to Joslevin’s three-person Board as of the date the shareholders voted to voluntarily dissolve. The effect of the proposed First Amended Petition will be to allow Petitioners to seek additional relief under Corporations Code § 2003, namely the Court’s determination of the identify [sic] of Joslevin’s directors, including whether the majority of Joslevin shareholders could elect a new Board at the February 22, 2023 annual shareholder meeting while Joslevin was in dissolution or, if such vote could be taken, did duly elect a new Levin-aligned Board as Shana now claims.” (Godsil Decl., ¶ 6.)[1]

            Petitioners contend that “[t]he necessity for the amendments and additional relief requested arise from Shana’s own improper conduct after the initial Petition was filed, of which

she already should be fully aware.” (Godsil Decl., ¶ 8(i).) Petitioners assert that their “requested Corporations Code § 2003 relief should be heard in this one action rather than in a new separately filed action…which is in the interest of judicial economy and preserves the parties’ resources.” (Godsil Decl., ¶ 8(ii).) 

            As to when the facts giving rise to the proposed amended allegations were discovered, Petitioners’ counsel states that “[o]n or about February 14, 2023, after the Joslevin annual shareholder meeting, I learned that Shana claimed to have unilaterally held a shareholder vote to elect directors to Joslevin’s Board. Thereafter, I discovered Petitioners’ need to seek additional relief under Corporations Code § 2003.” (Godsil Decl., ¶ 5.) As to the reasons the request for amendment was not made earlier, Petitioners’ counsel states that “I caused this motion to be prepared at the earliest opportunity, after performing the necessary and proper research, and further given the large workload in this case caused by Shana’s multiple lawsuits and ex parte applications…” (Godsil Decl., ¶ 7.)

In light of the foregoing, as well as the lack of any opposition, the Court finds that Petitioners have demonstrated good cause to file the proposed First Amended Petition.  

Conclusion

Based on the foregoing, Petitioners’ motion is granted.

The Court orders Petitioners to file and serve their First Amended Petition within three days of the date of this order.

Petitioners are ordered to give notice of this order.

DATED:  May 18, 2023                                 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court