Members of an LLC are required to pitch in equally for the LLC’s expenses and debts, right?
Generally, no....more
...Normally, a court will treat a business entity and its liabilities as separate and distinct from its owners. The alter ego doctrine allows the corporate veil to be pierced, and results in holding the owners liable for the...more
2/27/2023
/ Alter Ego ,
Appeals ,
Business Entities ,
Contamination ,
Corporate Veil ,
Government Entities ,
Infrastructure ,
Land Developers ,
Landfills ,
Liability ,
Limited Liability Company (LLC) ,
Partnerships ,
Piercing the Corporate Veil ,
Remediation ,
Site Remediation
In business litigation, a plaintiff will sometimes assert a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal statute at 18 U.S.C. §1961 et seq. RICO provides that it is “unlawful for any...more
In California, several classes of persons are entitled to some form of immunity protecting them from liability for activities performed in connection with judicial proceedings.
For example, “judicial immunity” bars civil...more
1/30/2023
/ Appeals ,
Breach of Contract ,
Breach of Duty ,
Brokers ,
California ,
Fiduciary Duty ,
Immunity ,
Judicial Proceedings ,
Liability ,
Motion for Summary Judgment ,
Negligence ,
Partitions ,
Quasi-Judicial Process ,
Real Estate Brokers
It is not uncommon for loan agreements to provide for fees, penalties, and default interest in the event of the borrower’s late payment. However, a case recently published by California’s First Appellate District — Honchariw...more
12/29/2022
/ Appeals ,
Arbitration ,
California ,
Civil Code ,
Default ,
Fees ,
Interest Rates ,
Late Payments ,
Liquidated Damages ,
Loan Agreements ,
Penalties ,
Reversal ,
Unenforceable Contract Terms
Under California’s easement “merger” (merger of title) doctrine set forth in Civil Code sections 811 and 805, an easement (or servitude) is “extinguished” by “the vesting of the right of the servitude and the right to the...more
LLC operating agreements frequently provide for indemnity to the LLC’s manager. This is consistent with the statutory default rule embodied by California Corporations Code section 17704.08(a), which provides for indemnity...more
11/21/2022
/ Appeals ,
Arbitration ,
Attorney's Fees ,
Breach of Duty ,
Capital Contributions ,
Fiduciary Duty ,
Indemnity ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Private Equity ,
Reconciliation
Commercial leases sometimes contain an option allowing the tenant to purchase the property. If the option is properly exercised, an enforceable purchase and sale obligation is created, which can be enforced by the courts...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 or free speech on...more
10/17/2022
/ Anti-SLAPP ,
Appeals ,
Breach of Duty ,
Cal Code of Civil Procedure ,
California ,
Cross-Complaints ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Motion To Strike ,
Operating Agreements ,
Protected Activity ,
Real Estate Investments ,
Reversal
A commercial lease co-tenancy clause conditions a retail tenant’s opening for business or continuing operations at the designated property upon another tenant opening for business or continuing operations at the same...more
Most forms of California business entities have statutory buyout procedures allowing the company or its owners to avoid claims by a disgruntled owner for judicial dissolution by purchasing the disgruntled owner’s interest....more
One of the tools available in the real estate litigation attorney’s toolbox is a lis pendens, also known as a notice of pending action. A lis pendens is a document recorded at the County Recorder’s Office providing...more
Several prior LLC Jungle posts have explored the statutory buyout procedures established by California Corporations Code section 17703.03 and related statutes:
a botched buyout -
“fair value” vs. “fair market value”...more
In a prior post from 2020, Money and Dirt covered an opinion from California’s Fourth Appellate District holding that an Assessor’s Parcel Number (APN), by itself, “does not necessarily demonstrate the actual, physical...more
In a long-awaited opinion — Siry Investment, L.P. v. Farkhondehpour — the California Supreme Court held that California Penal Code section 496 can apply to a business dispute. The opinion resolves a split of authority among...more
7/27/2022
/ Appeals ,
Attorney's Fees ,
Business Disputes ,
CA Supreme Court ,
Compensatory Damages ,
Criminal Prosecution ,
Damages ,
Extortion ,
Fraud ,
Misappropriation ,
Operating Agreements ,
Penal Code ,
Receiving Stolen Property ,
Split of Authority ,
Theft ,
Treble Damages
Owners of real property generally understand that their property rights can be impacted by litigation in which they are a party. However, what’s less clear, but perhaps equally important to understand and guard against, is...more
6/27/2022
/ Action to Quiet Title ,
Appeals ,
Asset Purchaser ,
Criminal Prosecution ,
Due Process ,
Foreclosure ,
Fraudulent Transfers ,
Grant Deed ,
Non-Parties ,
Property Ownership ,
Purchase Agreement ,
Real Estate Transfers ,
Reverse Mortgages ,
Void Contracts
As a litigator, whenever I am presented with a new contract dispute, one of the first things that I do is check whether the contract contains an arbitration clause or attorney fee clause. More consistently than any others,...more
Under California law, LLCs can either be managed by all of the members (member-managed) or by a designated manager (manager-managed). Manager-managed LLCs are more common for complex, multi-party ventures. The basic idea is...more
Commercial leases often contain attorney fee provisions allowing a party who prevails in litigation to recover attorney fees from the losing party.
Can those attorney fee provisions apply to third parties — outsiders to...more
Claims for quieting title to real property can be governed by different statutes of limitations periods. But a common issue in quiet title cases is when the statute of limitations period starts running....more
When any real estate investment deal goes badly and ends in litigation, there are many reasons why a potential plaintiff may prefer one forum versus another, including the location of witnesses and documents, location of...more
9/25/2020
/ Appeals ,
Choice-of-Law ,
Contract Terms ,
Conversion ,
Deed of Trust ,
Dismissals ,
Forum Selection ,
Investors ,
Joint Venture ,
Motions to Quash ,
Passive Investments ,
Personal Jurisdiction ,
Purposeful Availment Test ,
Reaffirmation ,
Real Estate Development ,
Real Estate Investments
After a foreclosure sale by a senior creditor, California’s Civil Code section 2924k governs how the sale proceeds are applied in the following order of priority...more
Can a California real property owner challenge a lender’s authority to foreclose before a foreclosure sale has occurred? It’s looking less likely with each new appellate opinion....more
7/31/2020
/ Appeals ,
Assignments ,
Borrowers ,
Deed of Trust ,
Foreclosure ,
Lack of Authority ,
Lenders ,
Preemptive Challenges ,
Property Owners ,
Residential Property Owners ,
Split of Authority ,
Standing
Flashback: Five years ago, Money and Dirt covered the Salazar v. Thomas opinion from California’s Fifth District Court of Appeal holding that a Notice of Default does not “disturb possession” sufficiently to start the...more
6/29/2020
/ Action to Quiet Title ,
Appeals ,
Borrowers ,
Deed of Trust ,
Foreclosure ,
Foreclosure Sales ,
Home Equity Line of Credit ,
Lenders ,
Notice of Default ,
Notice Requirements ,
Property Owners ,
Real Estate Transactions ,
Reversal ,
Statute of Limitations ,
Time-Barred Claims ,
Trustee Sales ,
Trustees
The statutory scheme governing nonjudicial foreclosure — found in California Civil Code sections 2924 through 2924k — aims for speed, efficiency, and finality.
For example, a bid at a trustee’s sale is deemed to be an...more