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
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
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
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
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
An LLC Jungle post from last year addressed the issue of whether derivative claims can be pursued for a dissolved LLC. See: Can Derivative Claims be Pursued for a Dissolved or Cancelled LLC? The short answer is “yes.”...more
8/23/2021
/ Attorney's Fees ,
Breach of Contract ,
Business Litigation ,
Contract Terms ,
Corporate Dissolution ,
Derivative Suit ,
Disclosure ,
Fee Awards ,
Limited Liability Company (LLC) ,
Prevailing Party ,
Purchase Agreement ,
Real Estate Development ,
Real Estate Transactions
One of the essential purposes of forming an entity and conducting business through that entity is to limit the owners’ personal liability. California law generally views the entity and its owners as separate and legally...more
LLC members often hold their membership interests in a family trust. The benefits of trusts are well known — they generally allow assets to be easily transferred after death without the time, hassle, and expense of court...more
Can the sledgehammer remedies of California Penal Code section 496 — treble (triple) damages and attorney fees — apply for misappropriation of an LLC’s property?
The California Supreme Court is set to answer that question...more
8/20/2020
/ Attorney's Fees ,
Breach of Duty ,
CA Supreme Court ,
Fraud ,
Limited Liability Company (LLC) ,
Litigation Fees & Costs ,
Managing Members ,
Members ,
Misappropriation ,
Penal Code ,
Receiving Stolen Property ,
Remedies ,
Split of Authority ,
Theft ,
Treble Damages
Almost one year ago, in Switzer v. Wood, California’s Fifth Appellate District held that an LLC manager or member participating in the theft of the LLC’s property could face liability under Penal Code section 496 — a statute...more
4/20/2020
/ Appeals ,
Attorney's Fees ,
Breach of Duty ,
Fraud ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Misappropriation ,
Misrepresentation ,
Penal Code ,
Punitive Damages ,
Receiving Stolen Property ,
Split of Authority ,
Theft ,
Treble Damages
In the LLC Jungle, allegations of “misappropriation” are common. LLC members and managers sometimes improperly divert the LLC’s funds and property for their own personal use. That bad behavior usually leads to claims of...more
12/16/2019
/ Appeals ,
Attorney's Fees ,
Breach of Duty ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Misappropriation ,
Penal Code ,
Receiving Stolen Property ,
Remedies ,
Stolen Goods ,
Theft ,
Treble Damages
Under California’s Revised Limited Liability Company Act (“RULLCA”), LLC participants have substantial freedom to structure their relationship in a customized manner under their governing operating agreement. But one of the...more
5/16/2019
/ Attorney's Fees ,
Books & Records ,
Breach of Duty ,
Fiduciary Duty ,
Good Cause ,
Inspection Rights ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Operating Agreements ,
Prevailing Party ,
RULLCA
Lenders who prevail on claims arising from a deed of trust can always recover their attorney fees from the losing party as long as the deed of trust says something about fee recovery, right?
It’s not that simple....more
11/30/2018
/ American Rule ,
Anti-Deficiency Provisions ,
Appeals ,
Attorney's Fees ,
Borrowers ,
Contract Terms ,
Debt ,
Deed of Trust ,
Demurrers ,
Fee Agreements ,
Foreclosure ,
Lenders ,
Mortgage Lenders ,
Mortgages ,
Non-Signatories ,
Prevailing Party ,
Summary Judgment
Under California’s State Housing Law (Health and Safety Code sections 17910-17998.3), if an apartment building owner fails to comply with a notice to repair or abate building standard violations issued by an enforcement...more
8/17/2018
/ Abatement ,
Apartments ,
Appeals ,
Attorney's Fees ,
Building Codes ,
Duty To Repair ,
Equitable Lien ,
Intervenors ,
Lenders ,
Public Housing Authorities ,
Receivership ,
Residential Property Owners ,
Reversal ,
Safety Violations ,
State Agencies ,
State Law Claims ,
Written Notice