One of the most important rights owned by LLC members is the right to inspect the LLC’s books and records. For an overview of LLC books and records requests, see the prior LLC Jungle post: Why LLC Managers Should Take Member...more
Under California Civil Code section 2924(d), a trustee’s communications and actions that are necessary to conduct a nonjudicial foreclosure sale pursuant to a deed of trust are privileged under Civil Code section 47. The...more
The California Court of Appeal recently clarified how courts should value a Performance Deed of Trust (PDOT) in foreclosure, and affirmed that the performance obligations included in the deed of trust survive beyond...more
3/31/2025
/ Appeals ,
Breach of Contract ,
California ,
Commercial Real Estate Market ,
Contract Disputes ,
Damages ,
Deed of Trust ,
Foreclosure ,
Homeowners Association (HOA) ,
Real Estate Transactions ,
Restrictive Covenants
A prior post — Statutory LLC Buyouts – “Fair Value” vs. “Fair Market Value” — covered an unpublished opinion filed in 2021 addressing the difference between the statutory buyout processes governing California corporations and...more
Corporate directors have long relied on the “business judgment rule,” under which their decisions are presumed to have been made “on an informed basis, in good faith, and in the honest belief that the action taken was in the...more
While many Californians consider the legality of cannabis to be settled law, the ongoing conflict between California and federal laws on the subject continue to give rise to unexpected outcomes when it comes to real property...more
The “right to alienate” (transfer) property is an important part of the legal “bundle of rights” regarding property ownership. But those rights, like most others, can be altered by court orders....more
Actions taken within business entities are sometimes deemed invalid due to procedural defects. For corporations, section 119 of the Corporations Code establishes a clear procedure by which defective actions can be ratified...more
In 2022, The LLC Jungle covered the opinion Friend of Camden, Inc. v. Brandt in a post titled LLC Dissolution Vote Defeats Statutory Buyout. In the Friend of Camden case, the Court of Appeal held that an LLC membership vote...more
California’s anti-SLAPP statute (Code of Civil Procedure section 425.16) aims to protect defendants from meritless lawsuits designed to chill “protected activity” — i.e., the exercise of rights of petition (litigation) or...more
A foreclosure sale purchaser attempting to evict a tenant on the property can encounter pitfalls, as made clear in a series of court cases in recent years. Here is a summary, capped by an update on a recently filed...more
The distinction between direct and derivative claims is a recurring theme on The LLC Jungle.
In a nutshell, under California law, an LLC (just like a corporation) is treated as a legal entity separate and distinct from...more
A recorded lis pendens notifies prospective purchasers, encumbrancers, and transferees that there is litigation pending that affects the property. To curb abuses of the lis pendens process, the Legislature enacted amendments...more
In the recent case Romero v. Shih, the California Supreme Court clarified that under California law, parties to a real estate transaction may create an implied easement that effectively grants the dominant tenement exclusive...more
Asserting claims derivatively on behalf of an LLC, as opposed to directly on behalf of an LLC member, can be tricky business for even experienced litigators. The requirements for derivative claims have been explored in...more
Two important principles governing corporate entities are: (1) the entity is legally distinct from its owners; and (2) the entity’s property and assets belong to the entity, not its owners.
These themes are...more
Obligations reduced to a promissory note are often accompanied by a written guaranty. The law treats the guaranty as an independent obligation.
A case recently decided by California’s First District Court of Appeal —...more
12/28/2023
/ Appeals ,
Cal Code of Civil Procedure ,
Deed of Trust ,
Foreclosure ,
Guarantors ,
Guaranty Claims ,
Investors ,
Lenders ,
Liability ,
Loan Servicing ,
Promissory Notes ,
Reversal ,
Settlement
Alter ego liability is again the flavor of the day...
As previously covered, the alter ego doctrine allows a court to disregard a corporate entity (including LLCs) and hold the individual owners liable for claims against...more
8/23/2023
/ Alter Ego ,
Appeals ,
Attorney Malpractice ,
Bad Faith ,
Business Ownership ,
Corporate Entities ,
Employment Litigation ,
Insolvency ,
Labor Commissioners ,
Liability ,
Limited Liability Company (LLC) ,
Motion to Amend ,
Proof of Ownership ,
Retaliation ,
Unpaid Wages
California’s common law “business judgment rule,” as described by the courts, protects from court intervention “those management decisions which are made by directors in good faith in what the directors believe is the...more
7/31/2023
/ Appeals ,
Bad Faith ,
Board of Directors ,
Business Disputes ,
Business Judgment Rule ,
California ,
CC&Rs ,
Corporate Entities ,
Corporate Executive Boards ,
Demurrers ,
Failure to Investigate ,
Fraud ,
Good Faith ,
Homeowners Association (HOA) ,
Injunctions ,
Maintenance Fees ,
Shareholders
California’s Subdivision Map Act (“SMA”) governs the legal subdivision of property in California. The SMA’s approval process is familiar to most developers. The statute’s purpose is to ensure orderly and coordinated...more
In the world of LLCs, buyouts — where one member sells his/her membership interest to another member or the LLC itself — are commonplace. Buyouts generally fall into one of two categories:
contractual — where the...more
6/26/2023
/ Appeals ,
Breach of Duty ,
Buyouts ,
California Consumer Privacy Act (CCPA) ,
Corporations Code ,
Damages ,
Dissolution ,
Equity ,
Fiduciary Duty ,
Fraud ,
Limited Liability Company (LLC) ,
Operating Agreements
One of the questions in real estate law arising out of the pandemic is what impact the pandemic and related closure orders would have on commercial leases, and in particular a tenant’s obligation to pay rent. Many, if not...more
Alter ego liability is a frequent topic covered in The LLC Jungle — see here for a list of all prior “alter ego” related posts.
The alter ego doctrine allows a court to disregard a corporate entity (including LLCs) and...more
5/23/2023
/ Alter Ego ,
Appeals ,
Arbitration ,
Arbitration Awards ,
Breach of Contract ,
Business Ownership ,
California ,
Corporate Entities ,
Liability ,
Limited Liability Company (LLC) ,
Loans ,
Marketing ,
Reversal
Under California law, a homeowners association (HOA) is considered a “quasi-government entity” similar to a municipal government. And, as courts have noted, “with power, of course, comes the potential for abuse.”...more
“Standing” is the legal term used to describe the requirement that a lawsuit be brought by the person(s) or entity(ies) having a right to bring the claim, generally referred to as the “real party in interest.” Lawsuits fail,...more