Judge: Upinder S. Kalra, Case: 21STCV16630, Date: 2023-08-17 Tentative Ruling

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Case Number: 21STCV16630    Hearing Date: August 17, 2023    Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE:   August 17, 2023                                             

CASE NAME:           Jay R. De Miranda, Turstee of the De Miranda Family Trust Dated December 12, 2000 v. Assisted Living America V, LLC, et al.

CASE NO.:                21STCV16630

MOTION TO BE RELIEVED AS COUNSEL

MOVING PARTY: Counsel for Defendant Craig Webb

RESPONDING PARTY(S): None as of August 14, 2023

REQUESTED RELIEF:

1.      An order granting attorney’s Motion to be Relieved as Counsel for Defendant.

TENTATIVE RULING:

1.      Motion to be Relieved as Counsel is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On May 3, 2021, Plaintiff Jay R. De Miranda, Trustee of the De Miranda Family Trust Dated December 12, 2000 (“Plaintiff”) against Defendants Assisted Living America V, LLC, (ALAV) and Assisted Living America LLC (ALA) (“Defendants.”) The complaint was for one cause of action for Breach of Written Promissory Note. ALA has a 40% interest in two entities, BE La Cienega LLC and BE 1022 La Cienega LLC (collectively, “BE”), which owns real property commonly known as 1022, 1026, 1032, and 1042-54 South La Cienega Blvd., Los Angeles, California (the “Property”). ALAV and DIDM Development Corporation (“DIDM”) are allegedly the only members of ALA. De Miranda alleges that ALA/ALAV spent over fifteen years attempting to develop the Property into assisted living and skilled nursing facilities. He also alleges that he is an unsecured lender to ALA/ALAV and is its largest creditor. His loans to ALA/ALAV total approximately $6,641,356 in principal. Each loan has also accrued interest at a rate of 10%, totaling approximately $4,921,340.06 to date. The loans are in default. De Miranda alleges that BE is in escrow for the sale of the Property for a price between $32 million and $35 million and that ALA/ALAV does not intend to repay plaintiff at all using any proceeds of the sale. Instead, plaintiff alleges that ALA/ALAV intends to divert those funds to its own members.

On August 13, 2021, plaintiff filed a voluntary dismissal of the complaint without prejudice, which was entered by the clerk.

2. The Tauber Action (21STCV25825)

On July 14, 2021, plaintiff Jacob Tauber filed an action against ALAV, alleging causes of action for (1) Breach of Contract, (2) Fraud and Deceit, (3) Declaratory Relief. Tauber alleges that in 2008, he entered into an agreement with ALAV, in which ALAV borrowed money from Tauber. Pursuant to the terms for the agreement, ALAV agreed to pay plaintiff $1,004,169.99 on or before July 14, 2017. Tauber alleges that ALAV breached that agreement and has failed to repay Tauber.

3. The Judicial Dissolution Action (21STCV30834)

On August 19, 2021, plaintiff 1022 S. La Cienega Manager, LLC (“La Cienega”) filed a complaint for judicial dissolution of ALAV. La Cienega is an affiliate of a turnaround, receivership and workout group that was recently brought in to manage ALAV by its investors to address significant issues with DIDM, ALAV’s prior manager, to monetize the assets of ALAV, to distribute money, to wind up the affairs of, and to dissolve ALAV. This action seeks judicial dissolution of ALAV pursuant to California Corporations Code section 17707.03, including seeking an order effectuating a claims procedure, approving recommendations and payment of claims, authorizing distributions pursuant to the operating agreement and contracts with various creditors/investors, and an order dissolving ALAV and releasing/discharging plaintiff. The action names approximately 80 defendants who all claim any legal or equitable right, title, estate, lien, or interest in any assets of ALAV—e.g., members, investors, creditors, etc.

On January 7, 2022, defendant and cross-complainant Craig Webb filed a cross-complaint against ALAV, La Cienega, and David Stapleton, alleging causes of action for: (1) Breach of Contract, (2) Accounting, (3) Money Had and Received, (4) Negligence, (5) Negligent Misrepresentation, (6) Concealment, (7) Unjust Enrichment. Webb alleges that on January 17, 2007, ALAV’s predecessor-in-interest executed a promissory note for a loan in the amount of $319,000 from Webb. The loan was amended multiple times from 2009 through 2015. On September 1, 2015, Webb added a fourth amendment to the note, granting an extension through October 31, 2020 and removing a deed of trust against the property to allow the financing of the existing first and second deeds on the Property to avoid an impeding foreclosure. The Property was sold on July 15, 2021, but was intentionally concealed from Webb. Webb was never repaid.

4. The Schlaifer Small Claims Action (21STSC03587)

On September 27, 2021, plaintiff Jack Schlaifer filed a claim in small claims court against ALA for $10,000. Schlaifer alleges that in 2013, he invested $100,000 in ALA and became a joint venture partner in BE to develop an assisted living facility. The venture failed and the property was sold. La Cienega stated that equity in ALA has been reduced to 8-15% of the money invested. He is suing for his portion of his equity in ALA and BE.

On June 14, 2023, Defendant Craig Webb’s counsel filed a Motion to be Relieved as Counsel. As of August 14, 2023, no Opposition has been filed.

LEGAL STANDARD:

The court may order that an attorney be changed or substituted at any time before or after judgment or final determination upon request by either client or attorney and after notice from one to the other.   (Code of Civ. Proc., § 284, subd. (b).)  An attorney is permitted to withdraw where conflicts between the attorney and client make it unreasonable to continue the representation.  (See Cal. Rules of Prof. Conduct 3-700(C)(1).)  “The determination whether to grant or deny a motion to withdraw as counsel lies within the sound discretion of the trial court.” (Manfredi & Levine v. Superior Court (1998) 66 Cal.App.4th 1128, 1133.)   

An application to be relieved as counsel must be made on Judicial Counsel Form MC-051 (Notice of Motion and Motion) (Cal. Rules of Court 3.1362(a)), MC-052 (Declaration) (Cal. Rules of Court 3.1362(c)), and MC-053 (Proposed Order) (Cal. Rules of Court 3.1362(e)).   

Further, the requisite forms must be served on the client and all other parties who have appeared in the case.  (Cal. Rules of Court 3.1362(d).)  The court may delay 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.  (Cal. Rules of Court 3.1362(e).) 

ANALYSIS:

Defendant’s counsel Doron F. Eghbali moves to be relieved as counsel for Defendant Craig Webb.

In the Declaration in Support of Attorney’s Motion to be Relieved as Counsel, counsel indicates that there are irreconcilable differences between client and attorney.

Additionally, in the attached declaration, counsel indicates that the client was served via mail at the address which attorney confirmed via a government issued Driver’s License.

Counsel has provided all the required documents under California Rules of Court Rule 3.1362. The Proof of Service filed on July 18, 2023, indicates that both Plaintiff and Defendants’ counsel have been served, via email and overnight courier.

            Motion to be Relieved as Counsel is GRANTED.

Conclusion:

            For the foregoing reasons, the Court decides the pending motion as follows:

Motion to be Relieved as Counsel is GRANTED effective upon filing proof of service of this order on Defendant. 

Moving party is to give notice.

IT IS SO ORDERED.

Dated:             August 17, 2023                      ________________________________                                                                                                                    Upinder S. Kalra

                                                                                    Judge of the Superior Court