Case Number: BC675633    Hearing Date: October 04, 2018    Dept: 47

Jane Doe v. Talaat Captan, et al.

MOTION FOR LEAVE TO AMEND COMPLAINT; REQUEST FOR SANCTIONS

MOVING PARTY:   Plaintiff Jane Doe

RESPONDING PARTY(S): Defendants Talaat Captan and Air Hollywood, Inc.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:           

            Plaintiff alleges a pervasive environment of sexual harassment at Defendants’ place of employment.  Plaintiff also alleges wage theft (failure to pay overtime) and meal and rest break violations by her employer.  Plaintiff alleges that she was constructively terminated.

            Plaintiff moves for leave to amend to re-name Pan Am Experience as a Defendant, and requests sanctions against Defendant Talaat Captain.

TENTATIVE RULING:

            Plaintiff Jane Doe’s motion for leave to amend to re-add the Pan Am Experience as a Defendant is GRANTED.  Because the allegations in the Original Complaint were never stricken out as to Pan Am Experience, the Court orders the allegations in the Complaint to be reinstated against The Pan Am Experience.  Although it is named as a corporation in the Complaint, those allegations shall be deemed to be amended to allege a partnership.

            Plaintiff’s request for sanctions against Defendant is DENIED.  Plaintiff cites no statutory authority for awarding sanctions on a motion for leave to amend.

DISCUSSION:

Motion For Leave To Amend Complaint

            Plaintiff cites the deposition testimony of Defendant Captan referring to the operation with Anthony Toth of the Pan Am Experience as a partnership.

            “A partnership is an entity distinct from its partners.”  Corp. Code, § 16201.

(a) Except as otherwise provided in subdivision (b), the association of two or more persons to carry on as coowners a business for profit forms a partnership, whether or not the persons intend to form a partnership.

(b) An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this chapter.

(c) In determining whether a partnership is formed, the following rules apply:

(1) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the coowners share profits made by the use of the property.

(2) The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.

(3) A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received for any of the following reasons:

(A) In payment of a debt by installments or otherwise.

(B) In payment for services as an independent contractor or of wages or other compensation to an employee.

(C) In payment of rent.

(D) In payment of an annuity or other retirement benefit to a beneficiary, representative, or designee of a deceased or retired partner.

(E) In payment of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral.

(F) In payment for the sale of the goodwill of a business or other property by installments or otherwise.Corp. Code, § 16202 (bold emphasis added).

(a) A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with authority of the partnership.

. . .Corp. Code, § 16305(b).

(a) A partnership may sue and be sued in the name of the partnership.

(b) Except as otherwise provided in subdivision (g) of Section 16306, an action may be brought against the partnership and any or all of the partners in the same action or in separate actions.

(c) A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner’s assets unless there is also a judgment against the partner.

. . .

Corp. Code, § 16307.

“Whether a partnership or joint venture exists is primarily a factual question to be determined by the trier of fact from the evidence and inferences to be drawn therefrom. (Bank of California v. Connolly (1973) 36 Cal. App. 3d 350, 365 [111 Cal. Rptr. 468].)”  Filippo Industries, Inc. v. Sun Ins. Co. (1999) 74 Cal.App.4th 1429, 1444.

            Plaintiff is entitled to conduct further discovery to obtain evidence of the formation of a partnership, and an intent to carry on a business for profit aside from Air Hollywood, Inc., under a partnership known as The Pan Am Experience:n17 Constans and Kersch rely on Black v. Brundige, supra, 125 Cal. App.. 641 and Martin v. Sharp & Fellows C. Co. (1917) 34 Cal. App.. 584 [168 P. 373], the latter being a pre-UPA case. Both of those cases contain language to the effect that jointly carrying on a business, and not profit sharing, is the true test of partnership. When the authorities underlying the cases cited by appellant are analyzed, they often can be traced back to the pre-UPA cases, in which profit sharing was specified in the statute as part of the definition of a partnership. Even in some of those cases, courts recognized that profit sharing is only one indicia of the existence of a partnership. (34 Cal. App.. 584, and cases cited therein.)

The trial court in this case refused to add additional elements to the statutory definition and properly instructed the jury in the language of former section 15006. We agree with the trial court’s interpretation of the law. The actual sharing of profits (with exceptions which do not apply here) is prima facie evidence, which is to be considered, in light of any other evidence, when determining if a partnership exists. (Former § 15007, subd. (4).) In this case, there were no profits to share at the time Holmes was expelled from the business, so the evidentiary provision of former section 15007, subdivision (4) is not applicable. According to former section 15006, parties who expressly agree to associate as co-owners with the intent to carry on a business for profit, have established a partnership. Once the elements of that definition are established, other provisions of the UPA and the conduct of the parties supply the details of the agreement. n18 Certainly implicit in the Holmes-Lerner agreement to operate Urban Decay together was an understanding to share in profits and losses as any business owners would. The evidence supported the jury’s implicit finding that Holmes birthed an idea which was incubated jointly by Lerner and Holmes, from which they intended to profit once it was fully matured in their company.

Holmes v. Lerner (1999) 74 Cal.App.4th 442, 456-57.

            Accordingly, the motion for leave to amend to re-add the Pan Am Experience as a Defendant is GRANTED.  Because the allegations in the Original Complaint were never stricken out as to Pan Am Experience, the Court orders the allegations in the Complaint to be reinstated against The Pan Am Experience.  Although it is named as a corporation in the Complaint, those allegations shall be deemed to be amended to allege a partnership.

            Plaintiff’s request for sanctions against Defendant is DENIED.  Plaintiff cites no statutory authority for awarding sanctions on a motion for leave to amend.

            Moving Party to give notice, unless waived.

IT IS SO ORDERED.

Dated:   October 4, 2018                                            ___________________________________

                                                                                    Randolph M. Hammock

                                                                                    Judge of the Superior Court

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