Panakosta Partners v. Hammer Lane Management

199 Cal. App. 4th 612, 131 Cal. Rptr. 3d 835, 2011 Cal. App. LEXIS 1229
CourtCalifornia Court of Appeal
DecidedSeptember 27, 2011
DocketNo. C065812
StatusPublished
Cited by21 cases

This text of 199 Cal. App. 4th 612 (Panakosta Partners v. Hammer Lane Management) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Panakosta Partners v. Hammer Lane Management, 199 Cal. App. 4th 612, 131 Cal. Rptr. 3d 835, 2011 Cal. App. LEXIS 1229 (Cal. Ct. App. 2011).

Opinion

Opinion

HOCH, J.

Hammer Lane R.V. and Mini-Storage is a limited partnership that owns and operates a storage facility in Stockton, California. After disagreeing about whether to sell the facility, appellants Panakosta Partners, LP, and other limited partners1 sought to wrest control from respondents Hammer Lane Management, LLC, and other limited partners who collectively held a majority interest in the partnership.2 Management filed an action seeking judicial dissolution of the partnership as well as declaratory and injunctive relief. Panakosta sought to avoid dissolution and petitioned to buy out Management’s share of the business in a “special proceeding” pursuant to Corporations Code section 15908.02.3 Management dismissed with prejudice [619]*619its cause of action for judicial dissolution and filed an “anti-SLAPP”4 motion under Code of Civil Procedure section 425.16. The trial court granted the anti-SLAPP motion and denied Panakosta’s petition for buyout.

On appeal, Panakosta contends the trial court erred by (1) disallowing it to buy out Management’s interest under section 15908.02, and (2) granting the anti-SLAPP motion and awarding fees and costs to Management. Management counters that Panakosta cannot appeal from the order denying the petition for buyout.

We conclude that Panakosta has properly appealed from the denial of its petition for buyout under section 15908.02. We affirm the order denying the petition for buyout, but conclude that the trial court erroneously granted the anti-SLAPP motion. Accordingly, we reverse the award of attorney fees and costs to Management under Code of Civil Procedure section 425.16.

[620]*620FACTUAL AND PROCEDURAL HISTORY

Complaint and Cross-complaint

In September 2008, Management filed a complaint alleging that the partnership had operated the storage facility for years with a consistently negative cashflow. Management eventually decided to sell the facility on the open market. Panakosta disagreed with the decision to sell and attempted to assume control of the partnership from Management. In an effort to remove Management as general partner, Panakosta held a meeting with other limited partners who collectively held only a minority interest in the partnership. Panakosta then filed a purported amendment to the certificate of limited partnership with California’s Secretary of State. The amendment listed HLMS, LLC, as the new general partner. HLMS, LLC, began receiving funds from operations of the partnership in a new bank account.

Based on these events, Management concluded that it was “not reasonably practicable for the partnership to continue” and sought judicial dissolution under the terms of the partnership agreement and pursuant to former section 15636, subdivision (f)(1)(A).5 Management also sought declaratory relief confirming that Panakosta had acted wrongfully in attempting to usurp control over the partnership. Additionally, Management requested that Panakosta be enjoined from exercising any further control over the partnership.

In June 2009, Panakosta filed a cross-complaint asserting that Management had breached the partnership agreement and its fiduciary duties, and engaged in conversion and fraud. The cross-complaint also stated a cause of action for “determination of partner’s buyout price” under terms of the partnership agreement. In support, Panakosta alleged that “[b]y refusing to submit to the provisions of the buy-out section contained in Section 9 of the Partnership Agreement, [Management] acted in breach of the Partnership Agreement, violated [its] fiduciary duty, and duty of loyalty. [Panakosta] respectfully requests] that this Court stay the dissolution of the Partnership and order the Cross-Defendants to participate in the buy-out provisions of Section 9 of the Partnership Agreement.”

[621]*621 “Special Proceeding” Under Section 15908.02

On April 14, 2010, Panakosta filed a “special proceeding to elect to purchase partnership interests” under a new case number in order to buy out Management’s partnership interests under section 15908.02.6 Concurrently with the petition, Panakosta filed a motion for appointment of appraisers to value the partnership and for a stay of the related dissolution proceeding.

On April 20, 2010, Management dismissed with prejudice its cause of action for judicial dissolution. Three days later, Panakosta dismissed its cross-complaint. On April 27, 2010, Management filed an opposition to the petition for buyout. In the opposition, Management pointed out that no cause of action for judicial dissolution remained pending.

Also on April 27, 2010, Management filed an anti-SLAPP motion directed at the petition for buyout. Panakosta opposed the motion.

In May 2010, the trial court granted Panakosta’s motion for appointment of appraisers and a stay of the related case.

Ruling on Petition for Buyout (§ 15908.02)

In June 2010, after initially granting Panakosta’s petition for buyout, the trial court sua sponte issued an order denying the petition. In pertinent part, the court explained:

“[Panakosta’s] Motion for an Order Appointing Appraisers and Stay of Dissolution Proceedings is denied[.] [][]... [f]
“No Judicial Dissolution Proceeding is Pending
“The basis for this petition was the pending cause of action in the related civil action for Judicial Decree of Dissolution^] That cause of action has been dismissed by [Management.] Therefore no request for judicial dissolution of the limited partnership remains as the condition precedent for the ‘buy out.’ [fi . . . HD
“No voluntary dissolution is currently proceeding under the facts before the Court.
[622]*622“The related civil action is the proper forum for any request to buy-out shares. This Petition violates the one action rule or primary rights doctrine, which seeks to avoid splitting causes of action to enforce a single right. The cases have invoked the rule against splitting a cause of action in order to abate a later suit or bar it on res judicata grounds when that suit alleged a different theory of recovery for the same injury[.] Grisham v. Philip Morris (2007) 40 Cal.4th 623, 642 [54 Cal.Rptr.3d 735, 151 P.3d 1151],
“No legitimate reason exists to have filed this separate special proceeding, it should have been filed as part of the related civil action[.]
“Agreement of the Parties
“As an alternate sufficient basis for the denial of this motion, ... sec 15901.10(a) provides ‘[e]xcept as otherwise provided in subdivision (b), the partnership agreement governs relations among the partners and between the partners and the partnerships] To the extent the partnership agreement does not otherwise provide, this chapter governs relations among the partners and between the partners and the partnerships]

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Cite This Page — Counsel Stack

Bluebook (online)
199 Cal. App. 4th 612, 131 Cal. Rptr. 3d 835, 2011 Cal. App. LEXIS 1229, Counsel Stack Legal Research, https://law.counselstack.com/opinion/panakosta-partners-v-hammer-lane-management-calctapp-2011.