Hammett v. Sherman

CourtDistrict Court, S.D. California
DecidedOctober 6, 2021
Docket3:19-cv-00605
StatusUnknown

This text of Hammett v. Sherman (Hammett v. Sherman) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hammett v. Sherman, (S.D. Cal. 2021).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LAURA LYNN HAMMETT, Case No.: 19-CV-605 TWR (LL)

12 Plaintiff, ORDER DENYING PLAINTIFF’S 13 v. MOTION TO BIFURCATE AND TRANSFER VENUE 14 MARY E. SHERMAN, et al.,

15 Defendants. (ECF No. 223) 16 17 Plaintiff Laura Hammett has filed a Motion to Bifurcate and Transfer Venue. (“Mot. 18 to Bifurcate,” ECF No. 223.) Defendants oppose. (“Opp’n,” ECF No. 225), and Plaintiff 19 has replied. (“Reply,” ECF No. 233.) For the reasons set forth below, the Court DENIES 20 the motion. 21 BACKGROUND 22 This case stems from personal and professional conflicts among the shareholders of 23 Silver Strand Plaza, LLC (“SSP”), a family-owned, California-based corporation. (Second 24 Am. Compl., (“SAC,” ECF No. 145) ¶ 3.) Plaintiff’s parents, Norman and “Sandi” 25 Kramer, established SSP in order to distribute their wealth among their children. (SAC 26 ¶ 37.) Plaintiff and several Defendants, including Sherman, Dennis, and Kramer, are 27 siblings, (id. ¶ 17), each of whom was given an equal stake in SSP. (See id. ¶ 64.) Sherman 28 1 was the manager of the corporation. (Id. ¶¶ 34–35.) SSP owned as its primary asset a 2 shopping center in Imperial Beach, California. (Id. ¶ 131.) 3 Plaintiff and her siblings did not get along. According to Plaintiff, Sherman and the 4 other stockholders were mismanaging the corporation in order to “strip” her of “her fair 5 share.” (Id. ¶ 77.) Specifically, Sherman was paying herself a managerial fee that was 6 “almost three times” what Plaintiff felt was reasonable. (Id. ¶ 102.) Further, Sherman had 7 been leasing properties in the shopping center at rates far below market value. (Id. ¶ 104.) 8 Lastly, Plaintiff felt that the other members of SSP were trying to conceal the 9 underperformance of the shopping center and the overpayment of management fees. (Id. 10 ¶¶ 102–03, 113.) In 2014, Plaintiff sought an accounting of the corporation’s finances, but 11 that request was denied. (Id. ¶¶ 128, 183.) When Plaintiff suggested that she might sell 12 her portion of SSP to the other members, SSP’s lawyer rebuffed her with a low offer. (Id. 13 ¶ 116.) Plaintiff believes that the members were acting with the aim of “pay[ing] Hammett 14 less than her fair share of the distributions.” (Id. ¶ 124.) 15 In 2016, the members agreed to sell the shopping center. Though the property sold 16 for $10.2 million, (id. ¶ 131), Plaintiff felt that the members had maliciously attempted to 17 undervalue the property, initially asking her to agree on a “bottom sales price of $7.9 18 million.” (Id. ¶ 130.) Once the deal was completed, however, Sherman withheld $50,000 19 of Plaintiff’s portion as a “defense fund,” which she eventually released fourteen days later. 20 (Id. ¶ 273.) Additionally, Plaintiff argues that Sherman was required to dissolve SSP and 21 distribute its remaining assets once the shopping center had been sold. (See id. ¶ 196.) But 22 the corporation was never dissolved, and Plaintiff never received her distribution. (Id.) 23 Believing that the other members wanted to defraud her and were predominately “driven 24 by… animus,” (id. ¶ 141), Plaintiff turned to the courts. 25 Plaintiff sued in May 2019 based on Defendants’ mismanagement of SSP and certain 26 offensive statements made by her sibling, Dennis. In her first cause of action, Plaintiff 27 alleged that Sherman breached her fiduciary duties, primarily by withholding Plaintiff’s 28 share of the proceeds from the sale of the shopping center. (First Am. Compl. (“FAC,” 1 ECF No. 5) ¶¶ 202–13.) Plaintiff also claimed that the other members aided and abetted 2 this breach of fiduciary duty. (Id. ¶¶ 214–41.) In her third cause of action, Plaintiff claimed 3 that Dennis had defamed her, (id. ¶¶ 242–56), by making statements suggesting that 4 Plaintiff possessed “illegally obtained porn,” (id. ¶ 244), and was running a “‘porn 5 business.’” (Id. ¶ 245.) In the fourth cause of action, Plaintiff claimed that Sherman 6 conspired with Dennis in her defamation. (Id. ¶¶ 257–63.) Plaintiff also alleged that 7 Sherman and the other members had unlawfully converted her shares in the corporation 8 and used these funds to hire SSP’s lawyer, also a Defendant in the First Amended 9 Complaint, to represent them when Plaintiff offered to sell her shares. (Id. ¶¶ 264–83.) 10 Finally, Plaintiff claimed that Sherman used company funds to pay for personal legal 11 representation between 2014 and 2018. (Id. ¶ 271.) 12 In response, the Defendants moved to dismiss Plaintiff’s complaint, (ECF Nos. 18, 13 19, 37, 40, 41, 49, 54, 56, 60), and the Court granted their motions. In doing so, Judge 14 Sammartino made several legal determinations, including that Arkansas law applied to 15 Plaintiff’s invasion of privacy and defamation claims against Defendants Dennis and 16 Sherman. (ECF No. 111 at 21, 39.) Plaintiff was granted leave to amend. (Id. at 54.) 17 Shortly afterward, Plaintiff filed her Second Amended Complaint, where she 18 reasserted multiple causes of action from the original complaint, including breach of 19 fiduciary duty and the defamation claim against Defendant Dennis. (SAC ¶¶ 284, 301, 20 409.) Plaintiff also brought new causes of action, such as the breach of an implied covenant 21 of good faith and unjust enrichment. (Id. ¶¶ 326, 452.) Further, Plaintiff brought a claim 22 of invasion of privacy against Dennis for statements posted on a Facebook Group for 23 members of Plaintiff’s Arkansas community. (Id. ¶ 431.) Lastly, she asserted defamation 24 and invasion of privacy claims against Defendant Sherman for statements made to other 25 Defendants by email. (Id. ¶¶ 358, 390.) 26 The Defendants have again filed motions to dismiss, all of which are pending before 27 the Court. (ECF Nos. 162, 164, 166, 167.) Plaintiff has also moved to disqualify Judge 28 Sammartino. (ECF No. 153 at 2–3.) When the action was transferred to this Court in 1 September 2020, (ECF No. 173), the motion to disqualify was denied as moot. (ECF No. 2 174.) Still, Plaintiff has expressed a desire to file a claim against the District. (Mot. to 3 Bifurcate at 3.) 4 In February 2021, Plaintiff moved to bifurcate her complaint into two separate 5 actions and transfer them to two different districts. (See Mot. to Bifurcate.) Plaintiff wants 6 to separate the claims against Defendant Dennis, which include defamation and invasion 7 of privacy claims, and transfer those to the Eastern District of Arkansas. (Id. at 2, 6.) 8 Plaintiff then seeks to transfer the remainder of her claims to the Central District of 9 California. (Id. at 2.) As for the transfer to Arkansas, Plaintiff suggests that certain 10 witnesses live there and would be inconvenienced by travel to California. (Id. at 9–10.) 11 As for transferring the remaining claims to the Central District, Plaintiff suggests that the 12 COVID-19 pandemic has made it hard to reach possible witnesses in San Diego and that 13 she faces bias due to her prospective suit against Judge Sammartino and the Southern 14 District. (Id. at 3, 4.) 15 Defendants oppose. (See Opp’n.) They argue that a transfer is not warranted, mainly 16 because Plaintiff has not shown a change of circumstances. Further, they disagree with 17 Plaintiff that the Southern District has become an inconvenient forum and suggest that the 18 Central District would not be more convenient for the relevant parties and witnesses. (Id. 19 at 2–5.) Finally, Defendants argue that Plaintiff has not provided enough information on 20 the potential witnesses in Arkansas, or their testimony, to justify a transfer on that basis. 21 (Id.) 22 LEGAL STANDARD 23 To begin, Plaintiff appears to have confused a motion to bifurcate with a motion to 24 sever. “Bifurcation” creates two or more separate trials within one action and is done under 25 Fed. R. Civ. P. 42

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Hammett v. Sherman, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hammett-v-sherman-casd-2021.