Judge: Upinder S. Kalra, Case: 21STCV40129, Date: 2024-04-02 Tentative Ruling

Case Number: 21STCV40129    Hearing Date: April 2, 2024    Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE:   April 2, 2024                                      

CASE NAME:           Jackie Subeck v. Lemonade Holdings, LLC

CASE NO.:                21STCV40129

MOTION FOR ORDER GRANTING LEAVE TO SERVE SUMMONS AND CROSS-COMPLAINT UPON HEY JACKPOT, LLC THROUGH THE CALIFORNIA SECRETARY OF STATE

MOVING PARTY:  Defendant/Cross-Complainant Lemonade Holdings, LLC

RESPONDING PARTY(S): None as of March 27, 2024

REQUESTED RELIEF:

1.      An Order Granting leave to serve the Summons and Cross-Complaint upon Hey Jackpot LLC by serving the California Secretary of State.

TENTATIVE RULING:

1.      Motion for an Order Granting leave to serve the Summons and Cross-Complaint upon Hey Jackpot LLC by serving the California Secretary of State is DENIED without prejudice or continued.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On November 1, 2021, Plaintiff Jackie Subeck (Plaintiff) filed a Complaint against Defendants Lemonade Holdings, LLC; Door Number Six, LLC; Sholom Goodman; Freddy Braidi; and Kerim Ortanca (Defendants) with two causes of action for: (1) Breach of Contract, and (2) Promissory Estoppel.

According to the Complaint, Plaintiff and Defendants entered an agreement for purchase of sale of 80% of the entity DN6. Plaintiff alleges the agreement included a fee schedule for consulting payments. Plaintiff alleges she has only received two payments.

On December 9, 2022, Defendant Lemonade Holdings LLC (Lemonade) moved for leave to file a Cross-Complaint against Jackie Subeck; Hey Jackpot, LLC; LZ Holdings, LLC; and Lund Strategic Alliance LLC, which the court granted on June 1, 2023.

On October 24, 2023, Lemonade filed a First Amended Cross-Complaint (FACC) with three causes of action for: (1) Declaratory Relief; (2) Material Breach of Written Agreement; and (3) Deceit in Inducement of Purchase Agreement.

According to the FACC, Lemonade paid the purchase price for DN6 and fully performed under the Purchase Agreement. Lemonade alleges that the parties agreed to amend DN6’s operating agreement. Lemonade alleges that Cross-Defendant Subeck refuses to execute the Revised Operating Agreement thereby repudiating the Consulting Agreement and the other Cross-Defendants are aiding and abetting Subeck.

On December 18, 2023. Lemonade filed the instant motion.

On December 26, 2023, Plaintiff/Cross-Defendant Jackie Subeck filed a demurrer with motion to strike as to the FACC.

On January 17, 2024, the court held a hearing on Lemonade’s motion for order granting leave to serve Cross-Defendant Hey Jackpot, LLC through the California Secretary of State. The court granted leave for Lemonade to file a Second Amended Cross-Complaint and continued the hearing on the instant motion to April 2, 2024.

On March 11, 2024, Lemonade filed a Second Amended Cross-Complaint.

LEGAL STANDARD:

Request for Judicial Notice

Lemonade’s request for judicial notice is GRANTED as to Exhibits 1 and 2. (Evid. Code § 452(c), (h); see Kalnoki v. First American Trustee Servicing Solutions, LLC (2017) 8 Cal.App.5th 23,37.) However, the court only takes judicial notice of the foregoing documents only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.)

Service of LLC via California Secretary of State

California Corporations Code § 17701.16 provides for service of limited liability companies (LLC). An LLC may be personally served. (Cal. Corps. Code § 17701.16(b).) “If an agent for service of process . . . cannot with reasonable diligence be found at the address designated for personal delivery of the process, and it is shown by affidavit to the satisfaction of the court that process . . . cannot be served with reasonable diligence upon the designated agent by hand . . . the court may make an order that the service shall be made upon a domestic limited liability company . . . by delivering by hand to the Secretary of State, or to any person employed in the Secretary of State’s office in the capacity of assistant or deputy . . . .” (Cal. Corps. Code § 17701.16(c).) Process in this manner contemplates inability to serve by hand pursuant to Cal. Code of Civil Procedure (CCP) sections 415.10(a) [personal delivery], 415.20 [substitute service], or 415.30(a) [service by mail with a notice and acknowledgment of receipt]. (Ibid.)

ANALYSIS:

Lemonade contends that it has diligently attempted personal service on Hey Jackpot, LLC but has been unable to personally serve the registered agent, Jackie Subeck, at the address provided on Jackpot’s Statement of Information. Lemonade has not filed any updated briefing indicating service attempts of the Second Amended Cross-Complaint. There is no opposition as of March 27, 2024.

Here, Lemonade has not demonstrated reasonable diligence warranting service on the California Secretary of State. While Lemonade has demonstrated reasonable diligence with inability to personally serve and likely to effect substituted service, as indicated in the Proof of Non Service by Mr. Rafiquzzaman, Lemonade has not indicated it attempted service by mail with notice and acknowledgement of receipt pursuant to CCP § 415.30(a). Lemonade began service attempts on September 21, 2023. (Exhibit 2.) There were five total attempts spanning a three week period. (Ibid.) Lemonade filed this declaration of diligence on November 3, 2023. (Sofris Decl. ¶ 9.) Lemonade subsequently filed the instant motion 45 days later. Therefore, the court is not persuaded that Lemonade is unable to effect service by mail with a notice and acknowledgment of receipt.

Accordingly, the court DENIES Lemonade’s motion for an order granting leave to serve Hey Jackpot, LLC via the California Secretary of State without prejudice.

CONCLUSION:

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

1.      Motion for an Order Granting leave to serve the Summons and Cross-Complaint upon Hey Jackpot LLC by serving the California Secretary of State is DENIED without prejudice or continued to April 25, 2024 at 9:00 am.

Moving party is to give notice.

IT IS SO ORDERED.

Dated:             April 2, 2024                           __________________________________                                                                                                                Upinder S. Kalra

                                                                                    Judge of the Superior Court