Preview
FELE OCT 2 2‘12018
OWOOVQUIADJN—
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
SURJEET SOHAL, direcly and derivatively on Case No. 115-CV-284698
behalf of Rosewater Hall, LLC
TENTATIVE DECISION ON BIFURCATED
Plaintiffs, CAUSES OF ACTION FOR COURT
DETERMINATION
vs.
BHUPINDAR DHILLON, individually, SATINDAR
SINGH DHILLON, THE DHILLON FAMILY TRUST,
dated January 4, 1995, and ROSEWATER HALL,
'
LLC,
NNNNNNNNN~—~__._.__._._l
Defendants.
ROSEWATER
_oo\:oxmAwN-—oxooo_\loxm4>wN—-
HALL, LLC
Cross-Complainant,
vs.
TEST—O-PAC INDUSTRIES, INC., a California
Corporation,
Cross-Defendant.
This action came on for trial on September 11, 2018, in Department 16, of the above-
entitled court with the Honorable Drew Takaichi presiding. PlaintiffSURJEET ”Sam”. SOHAL
(hereinafter ”Plaintiff”) and Cross—Defendant TEST-O-PAC INDUSTRIES, |NC., (hereinafter ”Cross-
Defendant”), were both represented by Heather E.Gibson, Esq. Defendants BHUPINDAR S.
"Bob”
\OwNQUi-AWM—
DHILLON, individually, SATINDAR SINGH DHILLON, THE BHUPINDAR S. and RAJINDER K.
DHILLON FAMILY TRUST, dated January 4, 1995, and ROSEWATER HALL, LLC (hereinafter
collectively referred to as "Defendants”), and Cross-Complainant ROSEWATER HALL, LLC
(hereinafter "Cross-Complainant”) were represented by D. Brad Jones, Esq.
The causes of action of Plaintiff’s fourth amended complaint for trial were the feurth
cause of action for breach of contract, fifth cause of action for breach of fiduciary duties, sixth
cause of action for conversion, eleventh cause of action for dissolution of Rosewater, LLC and
twelfth cause of action for accounting. Pursuant to stipulation of the parties and order, the
fourth, fifth and sixth causes of action were determined byjury trial,and the eleventh and
twelfth causes of action were bifurcated for further argument of counsel and determination by
the Court. Evidence for all eauses of action was presented in the jury trial.
A jury of twelye persons and two alternates was duly impaneled and'sworn, opening
statements by counsel for Plaintiffand Cross-Defendant and Defendants and Cross-
Complainant were
NNNNNMNNN—a—n—‘H—fl—n—fl.‘
provided, and witnesses were sworn and gave testimony. The jury, after
WN®M¢WM~OOO¢NQM$WNHO
having been duly instructed by the court, heard closing arguments by counsel on‘September 21,
2018, and the case was then submitted to the jury. The jury deliberated, and thereafter
returned to court on September 24, 2018, with itsverdict.
After verdict and discharge of the jury, the matter was subsequently set for argument of
counsel on Plaintiff's eleventh and twelfth causes of action. The matter came for hearing on
October 11, 2018, in Department 16, Plaintiff Sam Sohal and Defendant Bob Dhillon appearing
personally and with their respective attorneys.
Hearing is set on December 14, 2018 at 9:00 A.M. in Department 16 for Plaintiff and
Defendants’ respective motions for attorney's fees and costs and to strike or tax costs of the
other party.
After consideration of the evidence, oral and documentary, argument of counsel and
application of law, THE COURT ISSUES THE FOLLOWING TENTATIVE DECISION:
Eleventh cause of action for dissolution of Rosewater, LLC
Plaintiff is a member of the limited liability company Rosewater, LLC (”Rosewater” or
preponderance of evidence, the Court finds that:
OWOOVQM$UJN—n
the ”LLC“). Pursuant to the
(a) it isnot reasonably practicable to carry on the business in conformity with the
operating agreement;
(b) that dissolution is reasonably necessary for the protection of the rights or interests
of the Plaintiff — complaining member;
(c) that the business of Rosewater has been abandoned;
(d) that the management of Rosewater issubject to internal dissension; and
(e) that the verdict of the jury found Defendant Bob Dhillon breached fiduciary duties as
a member of Rosewater, a form of abuse of authority.
The parties indicate, and the verdict of the jury and evidence consistent with the
_is
conclusion, that no additional sums are owed to or from Plaintiff, Defendants, Cross-
Complainant or Cross-Defendant to any other party concerning the profits, losses, capital
contributions, capital
MNNNNNNNN——t——._—._‘_‘_.—n
accounts, disbursements, reimbursements, loans or other financial
matters in connection with or related to the operation, winding—up or dissolution of Rosewater.
The exceptions are the verdict of the jury on the cross-complaint of Rosewater,
mfimewN—OOMNQMfiWN—
and
determination of the Court on the bifurcated causes of action.
The other members of Rosewater, Defendants Bob Dhiilon and Satinder Dhillon, concur
with and consent to a judicial dissolution of Rosewater, and have not indicated an intention to
avoid the dissolution pursuant to Corporations Code section 17707.03 subdivision (c)(l).
Accordingly, a decree ofdissolution of Rosewater will be entered by the Court.
Twelfth cause of action for accounting
The parties agree that rights to information and related remedies set forth in
Corporations Code section 17704.10 subdivision (b)(l) and (b)(2) are not required at this time
following verdict of the jury.
Except as provided inthe verdict of the jury, the Court finds that neither Plaintiff nor
Defendants have proved by preponderance of the evidence that any other amount isdue, owed
or payable to the other party or parties pertaining or related to capital or capital accounts in
Rosewater or for any sums allegedly loaned by and between any of the parties.
OOONQUIAL'JN—
The remaining claim under the twelfth cause of action isPlaintiff’s request for an award
of expenses incurred, including attorney’s fees, in bringing this action.
Corporations Code section 17704.10 subdivision (a) requires that ueon request of a
member for purposes reasonably related to the interest of the member in a member-managed
LLC, the member in possession of the information shall promptly deliver a copy of the
information required to be maintained in paragraphs (1), (2), and (4) of subdivision (d) of
section 17701.13, and inthe operating agreement of the LLC.
The preponderance of evidence established that Plaintiff requested frbm Defendant Bob
Dhillon financial information about the LLC and its profits, that Rosewater was a member-
managed LLC, and that Defendant Bob Dhillon was the member in possession and/or control of
the information. The requested information was required under the operating agreement to
be maintained by the LLC at itsprincipal business address. This included books of account of
the LLC's financial transactions, tax returns for the preceding three tax years, statements
NNNNNNNNN—I—_.—_.—_.—p—n—-
relating to cash and
OONQmAwNv—‘OOOONQUI-bUJNP‘O
capital of the LLC and members, and rights of members to receive
distributions. The preponderance of evidence indicated that only a portion ofthe requested
information was furnished to Plaintiff, and not necessarily timely. A significant portion of the
requested information was thrown away by Defendant Bob Dhillon, including a||computers
with digitally stored information. The evidence is inconclusive whether or not the disposal of
financial records of the LLC was intended to deprive Plaintiff of information relevant to his
claims. This is consistent with the jury’s verdict that Defendant breached the operating
agreement and his fiduciary duties, but in doing so, did not act with malice or oppression.
However, that said, whether the conduct rises to malice or oppression under CivilCode
section 3294 isan analysis that is different from whether the conduct is without justification
under Corporations Code section 17704.10 subdivision (g). Considering evidence of the
4
education and extensive experience and knowledge of Defendant Bob Dhillon in commercial
real estate and financing, the Defendant’s testimony that he threw away the financial records
and computers of the LLC in the normal course of business, without back up of the information,
lacks credibility and justification under the facts. Italso violates the duties of the member, who
OOOVQKII-RWM—I
was in possession of the information, under the operating agreement and law as a fiduciary.
This isconsistent with and supports the jury‘s findings that Defendant breached the operating
agreement and his fiduciary duties.
Therefore, Rosewater, through the conduct of its member, Defendant Bob Dhillon,
failed to comply with the requirements of Corporations Code section 17704.10 and that failure
was without justification.
Corporations Code section 17704.10 subdivision (g) provides that: "(g) Inany action
under this section or under Section 17713.07, ifthe court finds the failure of the limited liability
company to comply with the requirements of this section iswithout justification, the court may
award an amount sufficient to reimburse the person bringing the action for reasonable
expenses incurred by that person, including attorney’s fees, in connection with the action or
proceeding.
Plaintiff is entitled to reimbursement of his reasonable expenses incurred, including
NNNNNNNNN—————-—.——.—.p—
attorney’s fees, under Corporations Code section 17704.10 subdivision (g).
Plaintiff requests
OONO‘UIbbJN—IOOOONQUIAWN—‘O
reimbursement of the expense of his expert, Monica Ip,Certified
Public Accountant. Ms. Ip testified and offered opinions of Rosewater’s profits from operations
based on available information. She further opined about Plaintiff’s percentage share of
Rosewater’s profits, including future sums discounted to present value. The accountant's
expert services were reasonably necessary for Plaintiff to determine his share of profits,
particularly considering the deficient nature of the information received from Rosewater
through its member, Defendant Bob Dhillon. The fees of Ms. lp in the case is a reasonable
expense'incurred by Plaintiff inconnection with the cause of action for accounting and
Corporations Codes section 17704.10. Plaintiff incurred $10,950 for 30 hours of Ms. lp’s
services at her hourly rate of $365 per hour. Based on Ms. lp's testimony of her education,
training and experience, and services rendered, the hourly r_ate charged and hours incurred are
reasonable, and $10,950 is a reasonable fee. Plaintiff shall receive reimbursement from
Rosewater in the amount of $10,950.
THE COURT THEREFORE ISSUES ITS TENTATIVE DECISION THAT:
1. Judgment be entered infavor of Plaintiff and against Defendants on Plaintiff’s
OCOONmm-AWNH
eleventh cause of action for dissolution of Rosewater. _A single, final judgment shall
be entered for the verdict of the jury and ruling of the Court. The judgment shall
I
include a decree of dissolution of Defendant, Rosewater, LLC.
2. Judgment be entered infavor of Plaintiff Sam Sohal against Defendant Rosewater,
LLC on Plaintiff's twelfth cause of action for violation of Corporations Code section
17704.10 subdivision (a); and
3. Plaintiff Sam Sohal is entitled to reimbursement of expenses from Defendant
Rosewater, LLC pursuant to Corporations Code section 17704.10 subdivision (g),
including fees of Monica lpin the amount of $10,950 and attorney’s fees as
determined at the hearing set December 14, 2018.
Dated: OctoberflZOls
akaichi
NNNNNNNNN—.—#—H-.—.—~
mflomthflowwuam-bwwv—
Judge of the Superior Court
SUPERI’OR-COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
DOWNTOWN COURTHOUSE
191 NORTH FIRerTREEr
SAN JOSE, CALIFORNIA 95113 a L E
CIVIL DIVISION E "2018
OCT 2 2
RE: s. Sohal vs B. Dhillon, et al
Case Number: 2015-1-CV-284698
PROOF 0F SERVICE
TENTATIVE DECISION 0N BIFURCATED CAUSES 0F ACTION FOR COURT DETERMINATION was
delivered to the parties listed below the above entitled case as set forth in the sworn declaration below.
Ifyou. a partyrepresented by you.or a witness tobe calledon need
behalf of ihat party an accommodation under the American with
Act,
Disabilities please contactthe Court Administratofsoffice at (408)882-2700, or use the Court'sTDD line (408)882-2690 or the
Voicen‘DD California Relay Service (800) 735-2922.
DECLARATION 0F SERVICE BY MAIL: declare that
I | addressed
a true copy in a sealed envelope
served this notice by enclosing to
each person whose name is shown below and by depositing the envelope with postage fully prepaid. in the United States Mail at San Jose.
CA on October 22 2018. CLERK OF THE COURT. by Julie Lara Deputy.
D. Brad Jones Esq.
Law Offices of D. Brad Jones
12660 Easton Dr.
Saratoga, CA. 95070
Heather E. Gibson Esq.
1871 Martin Ave., 2nd Fl
Santa Clara, CA. 95050-2501
CW-9027 REV 12I08/16 PROOF OF SERVICE
Preview
FELE OCT 2 2‘12018 OWOOVQUIADJN— SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA SURJEET SOHAL, direcly and derivatively on Case No. 115-CV-284698 behalf of Rosewater Hall, LLC TENTATIVE DECISION ON BIFURCATED Plaintiffs, CAUSES OF ACTION FOR COURT DETERMINATION vs. BHUPINDAR DHILLON, individually, SATINDAR SINGH DHILLON, THE DHILLON FAMILY TRUST, dated January 4, 1995, and ROSEWATER HALL, ' LLC, NNNNNNNNN~—~__._.__._._l Defendants. ROSEWATER _oo\:oxmAwN-—oxooo_\loxm4>wN—- HALL, LLC Cross-Complainant, vs. TEST—O-PAC INDUSTRIES, INC., a California Corporation, Cross-Defendant. This action came on for trial on September 11, 2018, in Department 16, of the above- entitled court with the Honorable Drew Takaichi presiding. PlaintiffSURJEET ”Sam”. SOHAL (hereinafter ”Plaintiff”) and Cross—Defendant TEST-O-PAC INDUSTRIES, |NC., (hereinafter ”Cross- Defendant”), were both represented by Heather E.Gibson, Esq. Defendants BHUPINDAR S. "Bob” \OwNQUi-AWM— DHILLON, individually, SATINDAR SINGH DHILLON, THE BHUPINDAR S. and RAJINDER K. DHILLON FAMILY TRUST, dated January 4, 1995, and ROSEWATER HALL, LLC (hereinafter collectively referred to as "Defendants”), and Cross-Complainant ROSEWATER HALL, LLC (hereinafter "Cross-Complainant”) were represented by D. Brad Jones, Esq. The causes of action of Plaintiff’s fourth amended complaint for trial were the feurth cause of action for breach of contract, fifth cause of action for breach of fiduciary duties, sixth cause of action for conversion, eleventh cause of action for dissolution of Rosewater, LLC and twelfth cause of action for accounting. Pursuant to stipulation of the parties and order, the fourth, fifth and sixth causes of action were determined byjury trial,and the eleventh and twelfth causes of action were bifurcated for further argument of counsel and determination by the Court. Evidence for all eauses of action was presented in the jury trial. A jury of twelye persons and two alternates was duly impaneled and'sworn, opening statements by counsel for Plaintiffand Cross-Defendant and Defendants and Cross- Complainant were NNNNNMNNN—a—n—‘H—fl—n—fl.‘ provided, and witnesses were sworn and gave testimony. The jury, after WN®M¢WM~OOO¢NQM$WNHO having been duly instructed by the court, heard closing arguments by counsel on‘September 21, 2018, and the case was then submitted to the jury. The jury deliberated, and thereafter returned to court on September 24, 2018, with itsverdict. After verdict and discharge of the jury, the matter was subsequently set for argument of counsel on Plaintiff's eleventh and twelfth causes of action. The matter came for hearing on October 11, 2018, in Department 16, Plaintiff Sam Sohal and Defendant Bob Dhillon appearing personally and with their respective attorneys. Hearing is set on December 14, 2018 at 9:00 A.M. in Department 16 for Plaintiff and Defendants’ respective motions for attorney's fees and costs and to strike or tax costs of the other party. After consideration of the evidence, oral and documentary, argument of counsel and application of law, THE COURT ISSUES THE FOLLOWING TENTATIVE DECISION: Eleventh cause of action for dissolution of Rosewater, LLC Plaintiff is a member of the limited liability company Rosewater, LLC (”Rosewater” or preponderance of evidence, the Court finds that: OWOOVQM$UJN—n the ”LLC“). Pursuant to the (a) it isnot reasonably practicable to carry on the business in conformity with the operating agreement; (b) that dissolution is reasonably necessary for the protection of the rights or interests of the Plaintiff — complaining member; (c) that the business of Rosewater has been abandoned; (d) that the management of Rosewater issubject to internal dissension; and (e) that the verdict of the jury found Defendant Bob Dhillon breached fiduciary duties as a member of Rosewater, a form of abuse of authority. The parties indicate, and the verdict of the jury and evidence consistent with the _is conclusion, that no additional sums are owed to or from Plaintiff, Defendants, Cross- Complainant or Cross-Defendant to any other party concerning the profits, losses, capital contributions, capital MNNNNNNNN——t——._—._‘_‘_.—n accounts, disbursements, reimbursements, loans or other financial matters in connection with or related to the operation, winding—up or dissolution of Rosewater. The exceptions are the verdict of the jury on the cross-complaint of Rosewater, mfimewN—OOMNQMfiWN— and determination of the Court on the bifurcated causes of action. The other members of Rosewater, Defendants Bob Dhiilon and Satinder Dhillon, concur with and consent to a judicial dissolution of Rosewater, and have not indicated an intention to avoid the dissolution pursuant to Corporations Code section 17707.03 subdivision (c)(l). Accordingly, a decree ofdissolution of Rosewater will be entered by the Court. Twelfth cause of action for accounting The parties agree that rights to information and related remedies set forth in Corporations Code section 17704.10 subdivision (b)(l) and (b)(2) are not required at this time following verdict of the jury. Except as provided inthe verdict of the jury, the Court finds that neither Plaintiff nor Defendants have proved by preponderance of the evidence that any other amount isdue, owed or payable to the other party or parties pertaining or related to capital or capital accounts in Rosewater or for any sums allegedly loaned by and between any of the parties. OOONQUIAL'JN— The remaining claim under the twelfth cause of action isPlaintiff’s request for an award of expenses incurred, including attorney’s fees, in bringing this action. Corporations Code section 17704.10 subdivision (a) requires that ueon request of a member for purposes reasonably related to the interest of the member in a member-managed LLC, the member in possession of the information shall promptly deliver a copy of the information required to be maintained in paragraphs (1), (2), and (4) of subdivision (d) of section 17701.13, and inthe operating agreement of the LLC. The preponderance of evidence established that Plaintiff requested frbm Defendant Bob Dhillon financial information about the LLC and its profits, that Rosewater was a member- managed LLC, and that Defendant Bob Dhillon was the member in possession and/or control of the information. The requested information was required under the operating agreement to be maintained by the LLC at itsprincipal business address. This included books of account of the LLC's financial transactions, tax returns for the preceding three tax years, statements NNNNNNNNN—I—_.—_.—_.—p—n—- relating to cash and OONQmAwNv—‘OOOONQUI-bUJNP‘O capital of the LLC and members, and rights of members to receive distributions. The preponderance of evidence indicated that only a portion ofthe requested information was furnished to Plaintiff, and not necessarily timely. A significant portion of the requested information was thrown away by Defendant Bob Dhillon, including a||computers with digitally stored information. The evidence is inconclusive whether or not the disposal of financial records of the LLC was intended to deprive Plaintiff of information relevant to his claims. This is consistent with the jury’s verdict that Defendant breached the operating agreement and his fiduciary duties, but in doing so, did not act with malice or oppression. However, that said, whether the conduct rises to malice or oppression under CivilCode section 3294 isan analysis that is different from whether the conduct is without justification under Corporations Code section 17704.10 subdivision (g). Considering evidence of the 4 education and extensive experience and knowledge of Defendant Bob Dhillon in commercial real estate and financing, the Defendant’s testimony that he threw away the financial records and computers of the LLC in the normal course of business, without back up of the information, lacks credibility and justification under the facts. Italso violates the duties of the member, who OOOVQKII-RWM—I was in possession of the information, under the operating agreement and law as a fiduciary. This isconsistent with and supports the jury‘s findings that Defendant breached the operating agreement and his fiduciary duties. Therefore, Rosewater, through the conduct of its member, Defendant Bob Dhillon, failed to comply with the requirements of Corporations Code section 17704.10 and that failure was without justification. Corporations Code section 17704.10 subdivision (g) provides that: "(g) Inany action under this section or under Section 17713.07, ifthe court finds the failure of the limited liability company to comply with the requirements of this section iswithout justification, the court may award an amount sufficient to reimburse the person bringing the action for reasonable expenses incurred by that person, including attorney’s fees, in connection with the action or proceeding. Plaintiff is entitled to reimbursement of his reasonable expenses incurred, including NNNNNNNNN—————-—.——.—.p— attorney’s fees, under Corporations Code section 17704.10 subdivision (g). Plaintiff requests OONO‘UIbbJN—IOOOONQUIAWN—‘O reimbursement of the expense of his expert, Monica Ip,Certified Public Accountant. Ms. Ip testified and offered opinions of Rosewater’s profits from operations based on available information. She further opined about Plaintiff’s percentage share of Rosewater’s profits, including future sums discounted to present value. The accountant's expert services were reasonably necessary for Plaintiff to determine his share of profits, particularly considering the deficient nature of the information received from Rosewater through its member, Defendant Bob Dhillon. The fees of Ms. lp in the case is a reasonable expense'incurred by Plaintiff inconnection with the cause of action for accounting and Corporations Codes section 17704.10. Plaintiff incurred $10,950 for 30 hours of Ms. lp’s services at her hourly rate of $365 per hour. Based on Ms. lp's testimony of her education, training and experience, and services rendered, the hourly r_ate charged and hours incurred are reasonable, and $10,950 is a reasonable fee. Plaintiff shall receive reimbursement from Rosewater in the amount of $10,950. THE COURT THEREFORE ISSUES ITS TENTATIVE DECISION THAT: 1. Judgment be entered infavor of Plaintiff and against Defendants on Plaintiff’s OCOONmm-AWNH eleventh cause of action for dissolution of Rosewater. _A single, final judgment shall be entered for the verdict of the jury and ruling of the Court. The judgment shall I include a decree of dissolution of Defendant, Rosewater, LLC. 2. Judgment be entered infavor of Plaintiff Sam Sohal against Defendant Rosewater, LLC on Plaintiff's twelfth cause of action for violation of Corporations Code section 17704.10 subdivision (a); and 3. Plaintiff Sam Sohal is entitled to reimbursement of expenses from Defendant Rosewater, LLC pursuant to Corporations Code section 17704.10 subdivision (g), including fees of Monica lpin the amount of $10,950 and attorney’s fees as determined at the hearing set December 14, 2018. Dated: OctoberflZOls akaichi NNNNNNNNN—.—#—H-.—.—~ mflomthflowwuam-bwwv— Judge of the Superior Court SUPERI’OR-COURT OF CALIFORNIA COUNTY OF SANTA CLARA DOWNTOWN COURTHOUSE 191 NORTH FIRerTREEr SAN JOSE, CALIFORNIA 95113 a L E CIVIL DIVISION E "2018 OCT 2 2 RE: s. Sohal vs B. Dhillon, et al Case Number: 2015-1-CV-284698 PROOF 0F SERVICE TENTATIVE DECISION 0N BIFURCATED CAUSES 0F ACTION FOR COURT DETERMINATION was delivered to the parties listed below the above entitled case as set forth in the sworn declaration below. Ifyou. a partyrepresented by you.or a witness tobe calledon need behalf of ihat party an accommodation under the American with Act, Disabilities please contactthe Court Administratofsoffice at (408)882-2700, or use the Court'sTDD line (408)882-2690 or the Voicen‘DD California Relay Service (800) 735-2922. DECLARATION 0F SERVICE BY MAIL: declare that I | addressed a true copy in a sealed envelope served this notice by enclosing to each person whose name is shown below and by depositing the envelope with postage fully prepaid. in the United States Mail at San Jose. CA on October 22 2018. CLERK OF THE COURT. by Julie Lara Deputy. D. Brad Jones Esq. Law Offices of D. Brad Jones 12660 Easton Dr. Saratoga, CA. 95070 Heather E. Gibson Esq. 1871 Martin Ave., 2nd Fl Santa Clara, CA. 95050-2501 CW-9027 REV 12I08/16 PROOF OF SERVICE