Judge: Virginia Keeny, Case: 25STCV03390, Date: 2025-05-05 Tentative Ruling
Case Number: 25STCV03390 Hearing Date: May 5, 2025 Dept: 45
MICHAEL J. SEIBERT VS ERVIN COHEN & JESSUP LLP, ET AL.
motion to stay or dismiss, or in the alternative,
petition to compel arbitration and stay
Date of Hearing: May 5
2025 Trial
Date: N/A
Department: 45 Case
No.: 25STCV03390
Moving
Party: Defendant Ervin, Cohen
& Jessup LLP
Responding
Party: Plaintiff
Michael Seibert as Trustee of the Lenoard Cohen Family Trust
BACKGROUND
On February 6, 2025, Plaintiff Michael J. Seibert as Trustee of
the Lenoard Cohen Family Trust filed a complaint against Defendant Ervin Cohen
& Jessup LLP and Reeve Chudd for breach of fiduciary duty, legal
malpractice and violation of Business and Professions Code §17200 et seq.
Plaintiff alleges ECJ helped Robert Kory pilfer hundreds of thousands of
dollars from the trust of Leonard Cohen.
[Tentative] Ruling
Defendant Ervin, Cohen & Jessup LLP’s Motion to Stay or
Dismiss, or in the alternative, Petition to Compel Arbitration and Stay is GRANTED,
in part.
EVIDENTIARY OBJECTION
Plaintiff submits objections to the Lieb
Declaration and portions of the Reply Brief. The court OVERRULES the
objections.
DISCUSSION
The instant motion was filed in the related case, Brodsky v. Ervin
Cohen & Jessup (23STCV03810) but the opposition and reply were filed in
Seibert v. Ervin Cohen & Jessup (25STCV03390). Brodsky is currently on
appeal (See FN 1 of the Motion). The
court will treat the motion as having been filed in the Seibert action, to
which it is obviously directed.
Defendant Ervin, Cohen & Jessup, LLP (“ECJ”) move the court
for an order staying the instant action pending the determination of Robert
Kory’s Petition for Approval of Accounting and Ratification of Trustee’s Acts
(“Kory’s Petition”) in In re: The Leonard Cohen Family Trust under agreement
dated October 2, 1998, as amended and restated, Los Angeles Superior Court
Probate Case No. 22STPB09349 (“Probate Action”). The basis for the motion is that
one of the most significant issues in this case (whether Plaintiff has suffered
the damages alleged herein, or any damages at all as the result of Defendants’
alleged conduct) is actually being determined in the Probate Action. In the
alternative, ECJ petitions the court to compel arbitration of this matter and
stay these proceedings while arbitration is pending. Defendant Reeve E. Chudd
filed a Joinder in support of ECJ’s motion.
Trial courts generally have the inherent power to stay proceedings
in the interests of justice and to promote judicial efficiency.” (Freiberg
v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.) Trial judges
have inherent powers to manage and fashion procedures to control litigation to
insure the orderly administration of justice. (Cottle v. Superior Court
(1992) 3 Cal.App.4th 1367, 1376-79. See also CCP §§ 128(a)(3) and
(a)(5).)
ECJ argues the instant action should be stayed because Plaintiff
is also a party to the Probate Action and seeks the same relief there as he
seeks here – to be made whole for assets of the LCFT allegedly looted by Kory,
the former Trustee of the Leonard Cohen Family Trust (“LCFT”). ECJ cites Landis
v. North American Co. (1936) 299 U.S. 248. In Landis, the court held
“[i]f there is even a fair possibility that the stay ... will work damage to
someone else,” the party seeking the stay “must make out a clear case of
hardship or inequity.” (Landis, 299 U.S. at 255.) ECJ maintains if the
court were to not stay the action, the proceedings would be duplicate of the
Probate Action and is the proper court for reviewing and evaluating the actions
of Trustees. For these reasons, ECJ asks the court to issue an order staying
the instant action pending the adjudication of the Kory Petition.
The court notes ECJ objects to Plaintiff’s opposition on the
grounds it was untimely and intentionally mislabeled. ECJ maintains the
“errata” filed did not just correct a mistake but reframed his arguments. The
court agrees the “errata” and “supplemental errata” do more than correct errors
in their original opposition. The court will only address arguments in the originally
filed opposition.
In opposition, Plaintiff argues ECJ has waived any right to a stay.
Moreover, a stay would prejudice the Trust and its beneficiaries by delaying
resolution, multiplying costs, creating the risk of inconsistent outcomes, and
risking evidentiary degradation without offsetting benefits to efficiency or
justice. Moreover, the Probate Action is not against ECJ and does not include
malpractice claims against them. Instead, the Probate Action involves
trust-administration issues such as removing a trustee, accounting for a
trustee’s self-dealing transactions, and enforcing a settlement.
The court finds ECJ’s motion well taken. In deciding whether to
grant a Landis stay, courts must weigh the competing interests of the
parties, considering in particular: “[(1)] the possible damage which may result
from the granting of a stay, [(2)] the hardship or inequity which a party may
suffer in being required to go forward, and [(3)] the orderly course of justice
measured in terms of the simplifying or complicating of issues, proof, and
questions of law which could be expected to result from a stay.” (Lockyear
v. Mirant Corp. (2005) 398 F.3d 1098, 1110.) The court finds no damage
would come to Plaintiff out of a temporary stay pending the Kory Petition and
the outcome of the Kory Petition would have a direct impact on the litigation
in this action. The complaint alleges ECJ, while counsel to LCFT, allowed
Kory’s self-dealing and covered up its own wrongdoing. Accordingly, many of the
allegations would be addressed by the decision made in the Probate Action.
Moreover, the stay is not indefinite in nature.
As for ECJ’s request for arbitration in the alternative, ECJ
argues Plaintiff, who has voluntarily stepped into Kory’s shoes and who has
affirmatively used that position to obtain ECJ’s files, is bound to the same
extent as Kory by the terms of the retainer agreement. (Moeller v. Superior
Court (Sanwa Bank) (1997) 16 Cal.4th 1124.)
In opposition, Plaintiff argues ECJ waived their right to
arbitration and moreover, no authorized agent of LCFT signed ECJ’s engagement
agreement. First, Plaintiffs argue ECJ neither moved to stay Brodsky nor to
compel arbitration. Instead, ECJ chose to litigate in this court and now two
years later, seeks to arbitrate the action. Moreover, Plaintiff argues ECJ
cannot meet its burden of proving an agreement to arbitrate through unsworn
assertions in its brief.
Based on the court’s decision to stay the proceedings, the court
denies the motion to compel arbitration without prejudice to it being renewed
at a later time. However, the court notes Plaintiff has not established waiver
under Quach v. Cal. Comm. Club, Inc. (2024) 16 Cal.5th 562. Moreover,
“[t]he powers of a trustee are not personal to any particular trustee but,
rather, are inherent in the office of trustee. It has been the law in
California for over a century that a new trustee ‘succeed[s] to all the rights,
duties, and responsibilities of his predecessors.’ [Citation.]” (Moeller v.
Superior Court (1997) 16 Cal.4th 1124, 1131.)
Defendant Ervin, Cohen & Jessup LLP’s Motion to Stay or
Dismiss, or in the alternative, Petition to Compel Arbitration and Stay is
GRANTED, in part.