Case Number: GC046849 Hearing Date: May 23, 2014 Dept: B

Trial Setting Conference

Motion to Substitute Successor

This case arises from the Plaintiff’s claim that the Defendants breached a settlement agreement. The Plaintiff, Lily Wong, was a general partner in Defendant, Park Center Partnership. The partnership owns commercial real property at 221 East Walnut St., Pasadena, CA. The Defendant, Forefront, Inc. is also a general partner in Park Center Partnership and it rents a portion of the commercial real property at 221 East Walnut St. Defendant, Larry Sue, is the Chief Financial Officer of California Forefront, Inc.

The parties agreed to settle claims in a settlement agreement on November 4, 2004. Under the agreement, the parties set the rent due from California Forefront, Inc., and made agreements regarding reports, and payments for extraordinary expenses. The Plaintiff claims that the Defendants breached this agreement by failing to pay the rent due and by mismanaging the parking spaces in the building. Further, the Plaintiff claims that the Defendants have unlawfully invested partnership funds and have refused to permit the Plaintiff to act as general partner. The Plaintiff brought this action to seek an accounting and to obtain damages.

The Defendant, California Forefront, LLC, filed a Cross-Complaint to plead that the Plaintiff breached her fiduciary duties by failing to pay an initial capital contribution.

Trial is set for June 16, 2014.

The Plaintiff, Lily Wong, passed away on November 7, 2013. This hearing concerns a second motion to substitute a successor-in-interest in place of Lily Wong. The first motion was denied on April 11, 2014 because it sought to substitute a trust, the John W. Wong and Lily Y. Wong Family Trust, in place of Lily Wong without sufficient evidence that the trust was a successor in interest. This second motion seeks to substitute Lily Wong’s husband, John Wong, as her successor in interest.

The procedures for bringing claims held by a decedent are enacted in CCP sections 377.30 et seq. CCP section 377.30 states that a cause of action that survives the death of the person entitled to commence the claim is passed to the person’s successor in interest. The section states that the action may be commenced by the decedent’s personal representative or, if none, by the decedent’s successor in interest.

Further, CCP section 377.31 provides that after the death of the person who commenced an action, on motion, the Court shall allow a pending action that does not abate to be continued by the decedent’s personal representative or, if none, by the decedent’s successor in interest. CCP section 377.32 identifies the procedures that must be followed by a successor in interest that seeks to continue the case.

Under CCP section 377.32 the person seeking to commence an action based on the claims of Lily Wong must execute an affidavit or declaration under penalty of penalty stating the following:

1) the decedent’s name;
2) the date and place of the decedent’s death;
3) that no proceeding is pending in California for administration of the decedent’s estate;
4) if the estate was administered, a copy of the final order must be included showing the distribution of the decedent’s cause of action to the successor in interest;
5) a statement that the declarant is the decedent’s successor in interest or authorized to act on the successor in interest’s behalf; and
6) that no other person has a superior right to commence the action or proceeding or to be substituted for the decedent in the pending action or proceeding.

CCP section 377.32(a) (5) requires that the declarant provide facts in support of the statement that the declarant is the successor in interest.

CCP section 377.11 defines “decedent’s successor in interest” to mean the beneficiary of the decedent’s estate or other successor in interest who succeeds to a cause of action or to a particular item of the property that is the subject of a cause of action.

At the April 11, 2014 hearing, the Court noted that it appeared that John Wong, as the surviving husband, would be the successor in interest to Lily Wong. This was not a finding (italics added for emphasis). Instead, John Wong was required to file a declaration that includes supporting facts to establish that he is the successor in interest. The following analysis of John Wong’s declaration reveals that his declaration fails to include the factual support required by CCP section 377.32(a)(5) to support his statement that he is the successor in interest.

In his declaration, John Wong identifies the date of Lily Wong’s death and states that there is no proceeding for the administration of Lily Wong’s estate and that no other person or entity has a superior right to commence the action or be substituted in place of Lily Wong. Also, he states that no other person has a superior right to commence the action or to be substituted for Lily Wong in the pending action.

Mr. Wong stated in paragraph 6 that he is Lily Wong’s successor in interest and authorized to act in Lily Wong’s interests. This repeats the language of the statute. However, Mr. Wong offers no facts to support this statement, as required by CCP section 32(a) (5). Mr. Wong merely offers a conclusion, unsupported by the required facts.

Further, Mr. Wong’s statement in this declaration contradicts his statements in the declaration he filed in support of the first motion. In support of the prior motion, Mr. Wong stated in the declaration accompanying the moving papers that the John W. Wong and Lily Y. Wong Family Trust (“Trust”) should be substituted in place of Lily Wong. Mr. Wong argued in the prior motion that the Trust is the successor-in-interest because Lily Wong “moved” her partnership interest into the Trust.

Mr. Wong offered no facts to clarify this contradiction. Instead, it appears that he submitted a declaration that merely repeated the language from CCP section 377.32 without making a meaningful attempt to satisfy its requirements. Since Mr. Wong did not submit a declaration that complies with CCP section 377.32, he has not established that he should be substituted in place of Lily Wong.

Therefore, the Court will continue the motion seeking to substitute John Wong in place of Lily Wong because the motion of John Wong does not provide sufficient facts to demonstrate that John Wong is Lily Wong’s successor-in-interest.