2d Civil No. B198536related appeal 2d Civil No. B198812

IN THE COURT OF APPEALOF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT, DIVISION SEVEN

JOSEPH A. MARASCO, SUZANNE CAPLAN,JACQUELINE MORGEN, and JAMES H. RING,Trustees of the Ellis Ring Trust, and JOSEPHMARASCO, Trustee of the Francis Ring Trust

Petitioners,

vs.

SUPERIOR COURT OF THE STATE OFCALIFORNIA, FOR THE COUNTY OF LOSANGELES,

Respondent.

DOUGLAS R. RING, INC. and DOUGLAS RINGand CYNTHIA MISCIKOWSKI, Co-Trustees of theRing-Miscikowski Trust, dated August 2, 1995

Real Parties in Interest.

Case No. BC341333

Honorable Ronald M. SohigianDepartment 41Telephone: (213) 974-5657

TRAVERSE SUPPORTINGPETITION FOR WRIT OF MANDATE

______________________________________

LOEB & LOEB LLPAlan Wilken (SBN 063790)Jed Lowenthal (SBN241775)

10100 Santa Monica Boulevard, Suite 2200Los Angeles, California 90067

Telephone: (310) 282-2000Facsimile: (310) 282-2200

GREINES, MARTIN, STEIN & RICHLAND LLPRobin Meadow (SBN 051126)Robert A. Olson (SBN 109374)Kent J. Bullard (SBN 176194)

5700 Wilshire Boulevard, Suite 375Los Angeles, California 90036

Telephone: (310) 859-7811Facsimile: (310) 276-5261

Attorneys for PetitionersJOSEPH MARASCO, SUZANNE CAPLAN, JACQUELINE MORGEN, and

JAMES H. RING, Trustees of the Ellis Ring Trust, andJOSEPH MARASCO, Trustee of the Francis Ring Trust

i

TABLE OF CONTENTS

Page

INTRODUCTION 1

TRAVERSE 3

VERIFICATION 4

MEMORANDUM OF POINTS AND AUTHORITIES 5

I. THE DEBATE OVER THE NUMBER OF GROUNDS FORDISSOLUTION IS AN UNNECESSARY DISTRACTION. 5

A. Regardless Of Their Source, The Relevant DissolutionGrounds Reduce To Two Principles: InevitableUnprofitability, And Conduct Obstructing ThePartnership. 5

B. The Governing Former Corporations Code Section15032 Reflects These Principles. 6

C. The Uniform Partnership Act of 1994 Is InapplicableOn Its Face. 7

D. In Any Event, The Grounds In Corporations CodeSection 16801 Mirror The Principles In FormerCorporations Code Section 15032 And Are Redundant. 8

II. PLAINTIFFS’ UNILATERAL DESIRE TO SELLIMMEDIATELY PROVIDES NO BASIS FOR ORDERINGAN IMMEDIATE PARTNERSHIP DISSOLUTION ANDFIRE SALE OF ITS ASSETS, GIVEN THEPARTNERSHIP’S ADMITTED PROFITABILITY. 10

A. There Is No Evidence That Mariners Village Has BeenOperating At A Loss, Or Necessarily Will Do So InThe Near Term. 10

B. Plaintiffs’ Attempted Evidentiary Showing IsFundamentally Flawed, Comparing DisparateValuation Measures. 12

ii

TABLE OF CONTENTS(Continued)

Page

C. In Any Event, An Ultimately Declining Asset Value IsAn Inherent Aspect Of This Partnership’s InvestmentAnd, Therefore, Cannot Be A Basis For InvoluntaryDissolution. 13

D. A Dispute Over The Best Future Circumstances AndTime For Sale Of Mariners Village Is Not AnAppropriate Basis For Dissolution. 14

III. DEFENDANTS HAVE NOT INTERFERED WITH THEINTENDED FUNCTIONING OF THE PARTNERSHIP. 15

A. Plaintiffs’ Claims Of “Deadlock” And An AgreementTo Sell As A Basis For Dissolving The PartnershipIgnore The Partnership Agreement’s Status QuoProvision And The Conditions That Attached To TheLetter Of Intent Between The Partners. 17

1. Deadlock is no basis for dissolution. 17

2. The partnership’s status quo provision controls. 17

3. The December 2003 letter does not commit thepartners to immediately sell Mariners Villageregardless of circumstances. 19

B. That Defendants Hold A Different View As To TheBest Path For The Partnership Is Neither A Breach ofFiduciary Duty Nor A Basis For Dissolving ThePartnership. 21

1. It is not the trial court’s role to second-guessdefendants’ business judgments. 21

2. Defendants did not breach any fiduciary duty. 25

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TABLE OF CONTENTS(Continued)

Page

3. Defendants understandably could not continueto pursue negotiations with the County with thislitigation pending. 26

4. Differences of opinion about a profitablebusiness’s direction – in particular about whento end a profitable partnership – are no basis fordissolution. 27

C. Plaintiffs’ Claim That Defendants Were Attempting ToBuy Out Their Interests Affords No Basis ForDissolution. 28

IV. NO CASE SUPPORTS PLAINTIFFS’ ATTEMPT TOEVADE THE TERMS OF THE PARTNERSHIPAGREEMENT AND TO UNILATERALLY ANDPREMATURELY END THE PARTNERSHIP. 31

CONCLUSION 34

CERTIFICATION 36

iv

TABLE OF AUTHORITIES

Cases: Page

Cummins, Inc. v. Superior Court(2005) 36 Cal.4th 478 7

English v. City of Long Beach(1952) 114 Cal.App.2d 311 3, 15

Gorman v. Russell(1860) 14 Cal. 531 24

Lindsay v. Lewandowski(2006) 139 Cal.App.4th 1618 20

Mieuli v. DeBartolo(N.D. Cal. 2001) 2001 WL 777091 8

Owen v. Cohen(1941) 19 Cal.2d 147 31, 32

San Diego Metropolitan Transit Development Bd. v. Cushman(1997) 53 Cal.App.4th 918 12

Schafer v. RMS Realty(2000) 138 Ohio App.3d 244, 741 N.E.2d 155 30

Wallace v. Sinclair(1952) 114 Cal.App.2d 220 14, 30-33

West Pico Furniture Co. v. Pacific Finance Loans(1970) 2 Cal.3d 594 7

v

TABLE OF AUTHORITIES(Continued)

Statutes: Page

Civil Code, § 1580 20

Civil Code, § 3390 20

Code of Civil Procedure, § 2033.410 15

Corporations Code, § 15501 7

Corporations Code, § 16101 7

Corporations Code, § 16801 7, 9

Corporations Code, §§ 16800 - 16962 7

Evidence Code, § 822 12

former Corporations Code, § 15032 6, 9

Other Authorities:

3 Kent, Commentaries on American Law (5th ed.) 24

8 Witkin, California Procedure, Extraordinary Writs 3

Legislative Counsel’s Digest of Stats. 1983, c. 1223 6

Miracle on 42nd Streetwww.script-o-rama.com/movie_scripts/m/miracle-on-34th-street-script.html 24

West Anno. Corp. Code, Title 2, Ch. 2 6

Westlaw, Uniform Laws Annotated,Uniform Partnership Act (1997) Refs & Annos 8

West’s U. Laws Ann. (2001 Supp.) U. Partnership Act (1997) 9

1

INTRODUCTION

Plaintiffs’ return is long on sound, fury, and accusations, but short on

attention to the fundamental issue:

What is the court’s proper role in addressing partners’

disagreement as to the best future course for a profitable

partnership?

Plaintiffs attempt to drag this Court, and the debate, into a dispute

over what is the best business approach and who is the best business

partner. They claim to reference “substantial evidence,” but that evidence

answers the wrong questions. The issue is not who is a better business

person or who is better at business analysis. Those are not criteria for

partnership dissolution. The only issue is whether the narrow statutory

grounds for dissolution – grounds that properly limit a court’s role in

interfering with partnership dynamics and relations – have been satisfied.

The answer to that question – the only question before this Court – is

clearly “no.”

Regardless of how one counts the grounds for dissolution, they come

down to just two: Either (a) the partnership presently is and will continue to

be unprofitable or (b) a partner has engaged in conduct so inimical to the

functioning of the partnership that the partnership cannot continue.

Plaintiffs’ attempt to engineer a judicial dissolution of the functioning,

profitable partnership here fails on both counts. There is no evidence that

2

the partnership is presently losing money or value or that it will do so in the

near future. The admitted evidentiary record is to the contrary.

Nor is there any evidence that defendants have interfered with the

continuing functioning of the partnership as conceived. The partnership

was created to operate a leasehold of a definite, extended term. There are

15 years left on that leasehold. Plaintiffs’ complaint is not about how the

partnership operates, but how and when it will end. The dispute – fomented

entirely by one general partner’s unilateral decision that it wants to end the

partnership – is over the best time and way to sell the leasehold and

terminate the partnership early. The partnership agreement provides for

maintaining the status quo in the event of such a disagreement.

Disagreement about whether to terminate a profitable partnership early

cannot be a ground upon which to dissolve the partnership.

Nor is plaintiffs’ claim well-founded that the partnership should be

dissolved because plaintiffs (and arguably the trial court) disagree with the

bases for defendants’ opinion. Defendants have prior experience in

successful negotiations with the County. Defendants’ approach has not

resulted in any loss to the partnership. The trial court has no right to

second-guess the defendants’ process or methods.

The trial court went beyond its powers and role in intervening in the

strategic debate between the partners here. It should have abstained. Its

judgment siding with one group of partners in what is essentially a debate

about business vision should be set aside.

3

TRAVERSE

Petitioners allege as follows:

1. California law does not require an “answer to the answer.”

(8 Witkin, Cal. Procedure, Extraordinary Writs, § 197, p. 988.) The Return

does not allege any affirmative defense to the writ petition, so there is no

new claim that needs to be traversed.

2. Nonetheless, to the extent the Return alleges any material new

matter in paragraphs 1 through 43, as well as regarding the argument

contained in those paragraphs, petitioners deny such new material matter

and argument.

3. To the extent necessary (as discussed below, petitioners

believe that they have already more than adequately raised the issue),

petitioners allege that the trial court erred in refusing to apply plaintiffs’

judicial admission that “[d]isagreement about whether to sell the

partnership’s property is the only act or failure to act by any defendant that

is a basis for dissolution.” (1 Exh. 10 [148], emphasis added; 6 Exh. 48

[1233-1246] [issue raised before and ruling by trial court]; see English v.

City of Long Beach (1952) 114 Cal.App.2d 311, 315 [party “entitled to have

the allegations contained (in ‘traverse’) considered with like effect as if

originally set forth in (its) petition”].)

4. This Court should grant the relief prayed for in the petition.

4

VERIFICATION

I, Alan Wilken, declare:

I am an attorney duly licensed to practice law in California. I am a

partner with Loeb & Loeb LLP, attorneys for petitioners Joseph Marasco,

Suzanne Caplan, Jacqueline Morgen, and James R. Ring, Trustees of the

Ellis Ring Trust, and Joseph Marasco, Trustee of the Francis Ring Trust, in

this proceeding. I make this declaration because I am more familiar with

the particular facts, i.e., the state of the record, than are my clients. The

allegations in this traverse are true and correct.

I declare under penalty of perjury that the foregoing is true and

correct and that this verification is executed on August __, 2007, at

Los Angeles, California.

Alan Wilken

5

MEMORANDUM OF POINTS AND AUTHORITIES

I.

THE DEBATE OVER THE NUMBER OF GROUNDS

FOR DISSOLUTION IS AN UNNECESSARY

DISTRACTION.

A. Regardless Of Their Source, The Relevant Dissolution

Grounds Reduce To Two Principles: Inevitable

Unprofitability, And Conduct Obstructing The

Partnership.

It is common ground that the trial court’s power to dissolve a

partnership is circumscribed by the relevant statutory provisions. Plaintiffs

contend that there are seven relevant statutory grounds; defendants submit

that there are only four.

The debate is academic and beside the point. The various grounds

overlap and all reduce to two basic principles. A court can order a private

partnership dissolved involuntarily if (a) the partnership is inevitably

destined to lose money or (b) a partner engages in conduct that materially

obstructs the partnership’s functioning as contemplated in the governing

partnership agreement. Those are the principles that apply no matter what

statutory scheme is considered.

1 See West Anno. Corp. Code, Title 2, Ch. 2, Editorial Comm.[citing Legislative Counsel’s Digest of Stats. 1983, c. 1223, noting thatformer law continues to govern existing limited partnerships not opting tobe governed by revised law].

6

B. The Governing Former Corporations Code Section 15032

Reflects These Principles.

All agree that former Corporations Code section 15032 applies.1 In

relevant part, its grounds for dissolution are (1) “[t]he business of the

partnership can only be carried on at a loss,” (2) a partner is “guilty of such

conduct as tends to affect prejudicially the carrying on of the business,”

(3) a partner “so conducts himself in matters relating to the partnership

business that it is not reasonably practicable to carry on the business in

partnership with him,” and (4) “[o]ther circumstances render a dissolution

equitable.” (Former Corp. Code, § 15032, subd. (1)(c)-(f).)

The first ground – “can only be carried on at a loss” – is self-

explanatory and clearly limited. The second and third provisions really are

two sides of the same coin. They can be effectively paraphrased as

describing a partner’s conduct that materially obstructs the partnership’s

functioning as contemplated in the governing partnership agreement.

It is not clear what “other equitable circumstances” might mean, but

it is clear, as shown in the Petition, that it cannot be some generic grant of

power to the trial court to act in whatever it believes to be the partnership’s

best economic interests. (See Petition [“Petn.”] at 34-37.) That provision’s

deletion (as redundant) from the grounds available in the later statutory

scheme (as discussed below) strongly suggests that it was never intended to

have separate substance beyond the enumerated principles. (See Cummins,

7

Inc. v. Superior Court (2005) 36 Cal.4th 478, 492 [expression of legislative

intent in later enactment is a factor for courts to consider in construing

statute]; West Pico Furniture Co. v. Pacific Finance Loans (1970) 2 Cal.3d

594, 610 [same].)

C. The Uniform Partnership Act of 1994 Is Inapplicable On

Its Face.

The three supposedly additional statutory grounds that plaintiffs

advance come from Corporations Code section 16801. That section is part

of the Uniform Partnership Act of 1994 (UPA 1994), enacted in California

in 1996. (Corp. Code, §§ 16800-16962) Plaintiffs cite a number of pre-

1996 cases to argue that three grounds in the post-1996 UPA 1994 (Corp.

Code, § 16801) should apply. Those cases do not apply to the later enacted

statute, however.

The relevant portion of the UPA 1994 (Corporations Code section

16101, subdivision (9) [a statute plaintiffs do not address]) specifically

excludes from its scope partnerships formed under the Corporations Code

chapter commencing with section 15501. The partnership here was formed

under that chapter. (6 Exh. 53 [1457] [Partnership formed pursuant to

Uniform Limited Partnership Act; Corp. Code § 15501 et seq. [Uniform

Limited Partnership Act].) On its face, therefore, the UPA 1994 statutory

scheme (Corporations Code sections 16800 through 16962) does not apply.

The Prefatory Note to the Revised Uniform Partnership Act (from

which the UPA 1994 was adopted), again not addressed by plaintiffs,

8

agrees: “Partnership law no longer governs limited partnerships pursuant to

the provisions of [the Revised Uniform Partnership Act] itself.” (Westlaw,

U. Laws Anno., Uniform Partnership Act (1997) Refs & Annos at p. 8

[prefatory note to 1994 Uniform Partnership Act].) The only case

addressing the UPA 1994’s application to limited partnerships, Mieuli v.

DeBartolo (N.D. Cal. 2001) 2001 WL 777091, at *7-*10, holds that it does

not apply to California limited partnerships as at issue here. (See ibid.

[quoting Prefatory Note just cited].)

D. In Any Event, The Grounds In Corporations Code Section

16801 Mirror The Principles In Former Corporations

Code Section 15032 And Are Redundant.

Even if Corporations Code section 16801 applied, the three

“additional” grounds set out there do not add anything to the analysis. The

ground that “[t]he economic purpose of the partnership is likely to be

unreasonably frustrated” mirrors the “can only be operated at a loss”

ground. Although its language might seem a bit broader, that’s not the

statute’s intent. The comments to the 1994 revision of the Uniform

Partnership Act itself make clear that the intended change was to narrow

the basis for dissolution, in recognition that some partnerships are supposed

to lose money under certain circumstances – they may contemplate initial

losses, or have as their purpose tax sheltering of income through certain

accounting losses (i.e., operating at a loss may be consistent with the

9

partnership’s economic purposes). (West’s U. Laws Ann. (2001 Supp.) U.

Partnership Act (1997) com. § 801, ¶ 8.)

The grounds that a “partner has engaged in conduct relating to the

partnership business that makes it not reasonably practicable to carry on the

business in partnership with that partner” or that “[i]t is not otherwise

reasonably practicable to carry on the partnership business in conformity

with the partnership agreement” mirror section 15032’s grounds and again

reduce to the concept that a partner has engaged in conduct (or perhaps –

not relevant here – some external circumstance exists) that materially

obstructs the partnership’s functioning as contemplated in the governing

partnership agreement.

Section 16801 also drops “equitable factors” as redundant of the

other grounds; no change was intended. (West’s U. Laws Ann. (2001

Supp.) U. Partnership Act (1997) com. § 801, ¶ 8.) Thus, in enacting

section 16801, the Legislature made clear that it had never intended former

section 15032, subdivision (f), to afford a court carte blanche to dissolve a

partnership just because it believed that it or one group of partners could

run the business better or could make better business decisions.

Plaintiffs’ continued reference to seven independent grounds is

simply an attempt at obfuscation. The only applicable statute is former

Corporations Code section 15032. The principles embodied in former

15032 (as well as in the inapplicable section 16801) limit the relevant

grounds for an involuntary judicial dissolution to: (1) the partnership is

inevitably destined to continue to lose money, or (2) a partner engages in

2 The application of these principles is especially limited here wherethe most recent partnership agreement amendment limits dissolution to onecircumstance: bankruptcy of the last general partner. (10 Exh. 119 [2327§ 19.5.1].)

10

conduct that materially obstructs the partnership’s functioning as

contemplated in the governing partnership agreement. As we now

demonstrate, neither principle applies here.2

II.

PLAINTIFFS’ UNILATERAL DESIRE TO SELL

IMMEDIATELY PROVIDES NO BASIS FOR

ORDERING AN IMMEDIATE PARTNERSHIP

DISSOLUTION AND FIRE SALE OF ITS ASSETS,

GIVEN THE PARTNERSHIP’S ADMITTED

PROFITABILITY.

A. There Is No Evidence That Mariners Village Has Been

Operating At A Loss, Or Necessarily Will Do So In The

Near Term.

“Operating at a loss” was plaintiffs’ primary theme at trial. In

responding to the writ petition, they virtually abandon any such argument.

No wonder. There is simply no basis for it. Plaintiffs, properly, do

not dispute the strict limitations on courts’ surrogate economic decision

making for partners, in considering a dissolution. (See Petn. at 34-37.)

They admit (Return [“Rtrn.”] at 10) that the petition accurately states the

partnership’s financial returns (see Petn. at 9) – although, remarkably, they

11

deny that these numbers show consistent profitability (Rtrn. at 10). But the

numbers speak for themselves. They show profits in the millions of dollars

every year for the most recent eight years (2000 through 2007) under two

measures, as well as profits for six out of those eight years, including the

most recent four years, under the third, most conservative measure (a

measure which includes deductions for depreciation, which is not a cash

expense). (Petn. at 9.)

Plaintiffs assert that this misses the point that, at some future time,

Mariners Village’s asset value is going to start to drop. (Rtrn. at 43.) They

repeatedly argue that 15 years from now it might lose $200 million in value.

But plaintiffs’ own evidence was that, through trial, their own proffered

measures of value continued to rise. (See Petn. at 38-39; (Compare 8 Exh.

75 [valuing property at $89 million in the Spring 2005] and 4 Exh. 30 [851-

852] [valuing property at same time at $194 million] with 4 Exh. 30 [849]

[same $194 million value for October 2006]; 12 Exh. 146 [2793, 2802-

2803] [valuing property at $210 million].) Plaintiffs’ long-run fear brings

to mind economist John Maynard Keynes’s quip: “Long run is a

misleading guide to current affairs. In the long run, we’re all dead.” A lot

can happen over the next 15 years. Such long-run predictions provide no

basis to dissolve a partnership now.

B. Plaintiffs’ Attempted Evidentiary Showing Is

Fundamentally Flawed, Comparing Disparate Valuation

Measures.

3 Plaintiffs present no argument that the admission of inadmissiblevaluation evidence was not prejudicial. Nor could they. That evidence wasthe core of their theory and presentation to the trial court.

12

Plaintiffs’ attempt to justify their smoke-and-mirrors evidentiary

approach likewise falls far short. The fact is that they applied one method

to value the property if held for a later sale, and another to value it for

immediate sale. And, it is indisputable that their “value” evidence involved

the sort of speculative market prediction that the Evidence Code forbids.

(See Petn. at 18-20, 26-28, 57-62.) Contrary to their assertion, Evidence

Code section 814 cannot be read as negating the sections that follow it.

(See San Diego Metropolitan Transit Development Bd. v. Cushman (1997)

53 Cal.App.4th 918, 929-931 [rejecting expert’s use of method that did not

comport with Evidence Code section 822].)

The defects in plaintiffs’ evidentiary approach are fundamental. It

compares apples with oranges. It uses valuations based on income flows of

a property with different improvements to value the property in its present

condition. It relies on non-binding offers and it uses cap rates from an

amalgam of dissimilar properties. There is no showing that any legitimate

expert would reasonably rely on such speculative and dissimilar measures

to value a property.3

C. In Any Event, An Ultimately Declining Asset Value Is An

Inherent Aspect Of This Partnership’s Investment And,

Therefore, Cannot Be A Basis For Involuntary

Dissolution.

13

Equally important, the partnership investment here necessarily

always was a limited-time asset. The asset, by its nature, throws off a

stream of income while the underlying asset, the leasehold, ultimately will

decline in value. Everyone understands this. The partners understood this

when they signed the partnership agreement. It may be that, at some point

in time, the partners may decide that it is advantageous to sell the leasehold

(for example, after they have obtained the terms for a lease extension), but

they should not be compelled to do so.

Allowing the leasehold to run its course – an undoubtedly profitable

approach – comports with the nature of the partnership investment

understood by all at the outset. There may be individual considerations

(e.g., tax and estate planning) making such an approach preferable to some

partners just as there may be individual considerations (e.g., a need for cash

to finance other endeavors) behind other partners’ desire for a quick sale.

The fact is, though, that all the partners agreed to maintain the status quo,

that is to keep ownership of Mariners Village until mutually agreed

otherwise.

D. A Dispute Over The Best Future Circumstances And Time

For Sale Of Mariners Village Is Not An Appropriate Basis

For Dissolution.

Even assuming that the best route is to sell the partnership’s only

asset at some point during the next 15 years, before the leasehold expires

and under some circumstances, it does not follow that one partner – or one

14

partner in conjunction with a trial court – gets to choose when the time and

circumstances are right. That is a partnership decision. Plaintiffs’ position

is not just that Mariners Village needs to be sold sometime in the next 15

years, before its leasehold is up. It is that Mariners Village must be sold

now, before potentially more valuable circumstances (e.g., a lease

extension) can obtain. Defendants are not opposed to a sale before the

leasehold is up, but they first want to do more to obtain the County’s

agreement to a leasehold extension.

Nothing in the statutory scheme empowers trial courts to determine

when to “time” the market for sales of partnership properties. It would be a

dangerous and unfounded precedent to make courts the arbiters of market

timing disagreements between partners. Plaintiffs claim that Wallace v.

Sinclair (1952) 114 Cal.App.2d 220, 228, supports such a result. It does

not. There, the evidence established that the business consistently lost

money and that its net assets had declined 23 percent in the preceding five

years. (Id. at p. 225.) There’s no such evidence here. Nor did Wallace

involve a property that all of the partners going in understood would be a

limited-term leasehold.

As Justice Perluss phrased it at the hearing on July 6, 2007, the

debate here is comparable to one about whether to fix up a house before

selling it. Who is right is not a call for the trial court to make, and certainly

not one for it to make on this record.

4 Desperate to avoid this clearly limiting admission, plaintiffs assertthat defendants somehow waived relying on it or failed to challenge the trialcourt’s refusal to apply it. (Rtrn. at 16, 43) Not so. Defendants pleaded theadmission in their writ petition (Petn. at 17) citing to the exact place wherethe issue was raised before the trial court (6 Exh. 48 [1233-1234]). Theyspecifically argued that the admission was controlling and that noappropriate ground for relief from the admission had ever been tendered. (Petn. at 53-54.) To the extent necessary, they have reiterated the point inthe Traverse, above. (See English v. City of Long Beach, supra, 114Cal.App.2d at p. 315.)

Nor was there anything ambiguous about the admission. It“conclusively established” that the dispute here was limited to oneregarding whether to sell Mariners Village and, thereby, to terminate thepartnership early. (Code Civ. Proc., § 2033.410, subd. (a), emphasisadded.)

Plaintiffs also argue that their admission was prefaced withboilerplate objections. (Rtrn. at 42.) The objections were expresslyconsidered by the trial court and overruled. (6 Exh. 48 [1234].) Plaintiffsdo not challenge the trial court’s discretion in so ruling. Plaintiffs’ judicialadmission undeniably limits the scope of their basis for dissolution to adisagreement about whether to sell the partnership’s property.

15

III.

DEFENDANTS HAVE NOT INTERFERED WITH THE

INTENDED FUNCTIONING OF THE PARTNERSHIP.

The heart of plaintiffs’ claim now is that defendants have materially

obstructed the partnership’s functioning.

But how? According to plaintiffs’ own judicial admission,

“[d]isagreement about whether to sell the partnership’s property is the only

act or failure to act by any defendant that is a basis for dissolution.” (1 Exh.

10 [148], emphasis added; 6 Exh. 48 [1233-1234].)4

But that disagreement between partners, especially in light of the

partnership agreement’s “status quo” provision, cannot be a basis for

dissolution. Defendants have done nothing to interfere with the running of

16

the partnership’s business, Mariners Village. In fact, profits are up. The

sole claim is that defendants have not agreed to sell the Mariners Village

leasehold immediately and without conditions and thereby to terminate the

partnership. According to plaintiffs, the trial court properly intervened to

dissolve the partnership and to order the property sold based on the fact that

defendants would not agree to sell the property and to dissolve the

partnership. That approach assumes the answer, an answer that, in fact, is a

fundamental business judgment (that the property should be sold, now,

without further improvements to its condition [e.g., a lease extension]). The

issue here is simply whether a court has the right to usurp defendants’ own

judgment as to when, and under what circumstances, it is best to end a

profitable partnership.

As we now discuss, there is no basis to conclude that defendants

have obstructed the functioning of the partnership in any way.

A. Plaintiffs’ Claims Of “Deadlock” And An Agreement To

Sell As A Basis For Dissolving The Partnership Ignore

The Partnership Agreement’s Status Quo Provision And

The Conditions That Attached To The Letter Of Intent

Between The Partners.

1. Deadlock is no basis for dissolution.

Plaintiffs repeatedly assert that the trial court properly ordered the

partnership dissolved because equal partners are in “deadlock” as to

5 Plaintiffs repeat the clearly wrong argument that the “status quo”provision does not apply to the limited partners. (Rtrn. at 24; see 19 Exh.209 [4411 ¶6.15.2(iii)].) The provision is part of the partnership agreementthat the limited partners signed. (6 Exh. 53 [1481-1482].) It is part of thearticle assigning management responsibility to the general partners. (Id.

(continued...)

17

whether to sell Mariners Village and dissolve the partnership. (Rtrn. 7, 41,

44.) This reasoning rewards the equal partner who insists on dissolving a

partnership by always allowing him to do so, transforming any equally

divided partnership into a partnership at will. But “deadlock” is not a

statutory ground for dissolution. If it were, virtually every partnership

dispute would have the potential to turn into a judicial dissolution action.

Courts, not partners, would run partnerships. And, in this instance, the idea

of deadlock as a dissolution ground is at odds with an express partnership

agreement provision here which directs what the partners must do in the

event of “deadlock.”

2. The partnership’s status quo provision controls.

Plaintiffs studiously side-step the partnership agreement’s express

direction that “in the event of any disagreement between the General

Partners as to any particular action . . . the General Partners shall take (or

omit to take) any and all such actions . . . as shall be necessary or (in the

judgment of any General Partner) appropriate to preserve the status quo.”

(6 Exh. 53 [1468 § 8.1], emphasis added.) The fact is that the partnership

agreement here contemplates disagreements – potential “deadlocks” – and

provides an explicit solution: preserve the status quo. All of the partners

knew this when they signed the revised partnership agreement.5

5 (...continued)[1467-1468].) It undeniably binds the limited partners.

18

“Deadlock” is not a statutory basis for dissolving a partnership in general,

and certainly is not a basis where the partnership agreement expressly states

what must happen – maintain the status quo in this instance – when there is

a “deadlock.”

Plaintiffs also assert that the status quo is selling the property to

maintain its current value. (Rtrn. at 24.) But the property’s value has not

stopped rising or declined. And, only in Orwell’s 1984 world of double-

speak would selling the property and terminating the partnership qualify as

“maintaining the status quo.” Plaintiffs also assert that the status quo

provision should not prevent terminating the partnership if other grounds

exist. Perhaps not, but under the partnership agreement a desire to maintain

the status quo cannot itself be a ground for terminating the partnership. Yet

that, in effect, is exactly what plaintiffs urge.

3. The December 2003 letter does not commit the

partners to immediately sell Mariners Village

regardless of circumstances.

Plaintiffs also assert that the partners are not in disagreement, but

agreed to sell Mariners Village according to plaintiffs’ wishes. (Rtrn. at 25-

27.) Again, the argument is disingenuous and does not come to terms with

the express language of the document in question. In 2003, at Doug Ring’s

urging, the partners entered into a letter memorializing their intent. The

letter confirmed the partners’ mutual agreement that obtaining definitive

6 Thus, whether the partnership intended to meet the conditions forthe terms for an extension – e.g., provide further investment in the property– is irrelevant. Once the parameters of any required investment are known,the property can be marketed.

19

lease extension terms was the preferred approach before attempting to

market the property. The letter says that if and when the partnership has

obtained the County’s statement of its bottom-line terms for a lease

extension, the partnership will market the property for sale: “We will

commence marketing our leasehold either when a Letter of Intent for a

Lease Extension is issued to us by the County of Los Angeles or when an

actual offer to provide a Lease Extension is issued to us by the County.” (6

Exh. 49 [1300].)6 Neither event has happened. The parties agreed that

“once [they] ha[d] commenced the process of seeking a Lease Extension,

[they would] pursue the process until its completion, unless [they] mutually

determine[d] that doing so would not be in the best interest of the

Partnership.” (Id., [1301], emphasis added.)

Defendants think that there is more process to pursue; plaintiffs

assert that the process is complete and unsuccessful. (Rtrn. at 28-32.) But

neither scenario triggers an obligation to sell the property under the letter of

intent. That is not a result contemplated by the letter of intent. The letter

shows no intent to sell Mariners Village without a lease extension. The

scenario plaintiffs proffer means simply that the partners need to go back to

the drawing board and to maintain the status quo until they can agree

among themselves on a mutually determined course of action. It does not

mean that just because one partner has changed its mind from the intent

20

memorialized in the letter it is now entitled to dictate the course, or demise,

of the partnership.

Nor is the letter of intent a binding contract. There’s no mutual

consideration and, in any event, the partners could not contract away their

partnership obligations. Even more so, there was no definite agreement to

market the property, but rather, the letter specified that any such decision

was “part of an evolving process.” (6 Exh. 49 [1300]; see e.g., Civ. Code,

§§ 1580, 3390, subd. 5 [requiring certainty of obligations for contract];

Lindsay v. Lewandowski (2006) 139 Cal.App.4th 1618, 1623 [agreement to

“binding mediation” too uncertain to be enforceable].) The letter did not

unconditionally commit defendants to sell Mariners Village precipitously or

under any circumstances.

In sum, plaintiffs’ frustration at their inability to unilaterally dictate

what the partnership should do is no basis for judicially imposing an

unwanted partnership dissolution.

B. That Defendants Hold A Different View As To The Best

Path For The Partnership Is Neither A Breach of

Fiduciary Duty Nor A Basis For Dissolving The

Partnership.

Next, plaintiffs complain that the partnership should be dissolved

because plaintiffs, in essence, believe that they are better businesspeople

than defendants and, they assert, defendants have failed to do sufficient

homework to justify their continuing to enjoy the benefits, current and

21

future, of their partnership investment. (Rtrn. at 32-36.) Even if there were

a basis for this arrogant and condescending position, it would not support

the trial court’s order.

1. It is not the trial court’s role to second-guess

defendants’ business judgments.

Plaintiffs’ argument is essentially that no one in their right mind

could think that Mariners Village should not have been sold a long time

ago. But that simply is not true.

• Plaintiffs claim that defendants failed to investigate the true value

of the property. This argument misses the point. The absolute

value of Mariners Village is not the issue; neither is whether any

of the partner owners had a better guess about its value than other

partners. The issue is whether it makes any sense to continue to

seek the terms of a lease extension from the County, i.e., might it

be more valuable to sell the lease when the terms for its extension

are known?

• The only evidence is that defendants’ business decision to hold

rather than to prematurely sell Mariners Village has been borne

out. In June 2005, the Regan Report valued the property at under

$100 million. (8 Exh. 75.) At trial, a year and a half later,

plaintiffs claimed it was worth between $194 million and $220

22

million. (4 Exh. 33 [890]; 12 Exh. 146 [2783].) The multiple

recent bids have been substantially upwards of $250 million.

• As plaintiffs’ principal admitted, determining a property’s value

and the right time to sell is not a science, it is more art: “These

things are not epiphanies. They are a watching of the

marketplace and making what, by definition, is a guess as to

which way things are flowing.” (11 Exh. 137 [2575].) That

investor/partners rely more on experience and instinct than expert

evaluations cannot mean that they don’t deserve to determine the

fate of their own investment.

• Expert’s valuations are not necessarily better guides to superior

business strategy than partners’ experience. The last valuation

that the partnership obtained was the June 2005 Regan report.

That expert valuation indicated a partnership value of less than

a of the values plaintiffs sought to establish at trial, a year and a

half later. Contrary to the Regan report, defendants’ business

judgment was that the property held far greater value potential.

Events proved defendants’ judgment correct and the expert’s

judgment wrong.

• Defendants’ experience was that favorable terms might be

obtained from the County if negotiations were pushed hard

7 Plaintiffs argue that there was something improper or inadequate inthe response of one defendant that, with regard to determining what shouldhappen with the leasehold, “we’re going to know something after thelawsuit.” (Rtrn. at 4.) That observation, though, is simply a practical viewof reality. This litigation – litigation commenced by plaintiffs – necessarilyfroze the partnership’s ability to negotiate with the County or to otherwisepursue any option other than what plaintiffs demanded. The one

(continued...)

23

enough, but that, having pulled the plug on negotiations with the

County, one could not tell: “I know from dealing with Marina

Harbor [the adjoining apartment complex for on which

defendants had obtained a favorable lease extension] that you

really don’t know before you start what you’re going to be

required at the end of the negotiations. So [the County] may

have something written down [as to what it will require]. That

does not mean that’s what it’s going to be.” (6 Exh. 48 [1276].)

Defendants do not know, cannot know, whether terms the County

might ultimately offer will make economic sense because they do

not yet know what those terms will be.

• Plaintiffs argue that the Marina Harbor experience is

distinguishable and not a good precedent (a “red herring” in

plaintiffs’ terminology), and that substantial evidence supports a

conclusion that the County will not ultimately offer economically

feasible terms. (Rtrn. at 11-13.) But that isn’t a question for a

court. It’s a business judgment – a judgment that no court, no

matter if its conclusion is supported by evidence or not – should

be making.7

7 (...continued)defendant’s response was no different in character from that of KrisKringle, in the movie Miracle on 42nd Street, when asked at hiscompetency hearing where he resided and he responded: “That’s what thishearing will decide.” (See www.script-o-rama.com/movie_scripts/m/miracle-on-34th-street-script.html.)

24

“[T]he Court will require a strong case to be made out, before it will

dissolve a partnership, and decree a sale of the whole concern.” (Gorman v.

Russell (1860) 14 Cal. 531, 538, citing 3 Kent, Commentaries on American

Law (5th ed.) 60.) It is not the court’s function to choose sides in a business

debate. The court does not get to sit as a surrogate business executive to

decide the “best interests” of the partnership. This is not a receivership

action. The court’s role is limited to determining whether the partnership

can continue only as a losing enterprise, or whether a partner’s conduct has

completely undermined the contemplated functioning of the partnership.

2. Defendants did not breach any fiduciary duty.

Plaintiffs speak in terms of fiduciary duty. (Rtrn. at 6, 32.) The trial

court made no findings as to any such claim and none was pled. In any

event, fiduciary obligations do not require that business judgments be made

in any particular way (or even that they be proven correct). Defendants

can’t even make a judgment on the merits of a lease extension because they

haven’t heard the County’s best terms. Plaintiffs think that the County has

shown all of its cards. Defendants, on the basis of their experience

negotiating with the County, disagree. Potential bidders agree with

defendants – by offering amounts exceeding the values discussed at trial by

8 And a breach of fiduciary duty claim requires a showing of someresulting loss or detriment. As discussed above, there’s no such showinghere.

25

nearly $50 million, potential buyers clearly think that a lease extension from

the County will be available on economically viable terms. Their high bids

are premised on that assumption. Who is right is not a call for a court to

make.

The trial court did find that defendants disavowed investigating the

County’s negotiating position or the value of the property with or without

an extension and that, if this were true (the court made no finding),

defendants would have violated some duty to exercise reasonable care as to

the conduct of the partnership. (19 Exh. 209 [4410].) But the conclusion

does not follow from the premise. The question isn’t whether defendants

knew some exact pricing or had a definitive view of what the County might

or might not do. The question is whether it is antithetical to the functioning

of the partnership for the defendants to believe that they should make

further efforts to obtain the best possible terms from the County before

making such a critical decision as deciding to sell a property worth

hundreds of millions of dollars.8

More to the point, the question is whether it is within a court’s

competence and power to make that call.

26

3. Defendants understandably could not continue to

pursue negotiations with the County with this

litigation pending.

Likewise, defendants’ explanation of why they did not independently

negotiate with the County after Doug Ring abandoned his efforts and filed

suit is not something that a court should be second-guessing. As defendants

explained: “We can’t do this unilaterally. . . . We can’t do this alone. It

takes two of us [i.e., both general partners] to sign any agreement that we

might have . . . . I don’t think [that] when you have been presented with a

lawsuit [seeking dissolution] that is the time to go to the County to start

asking for terms for a lease extension.” (6 Exh. 48 [1280, 1281].) It is a

simple reality that the partnership can’t expect success with the County if

one set of partners is proposing an extension but the other is suing for

dissolution.

4. Differences of opinion about a profitable business’s

direction – in particular about when to end a

profitable partnership – are no basis for dissolution.

The question here is whether the defendants have conducted

themselves in a manner that has materially obstructed the contemplated

functioning of the partnership. They have not. The partnership operates a

high-end apartment complex. There is no suggestion that defendants have

in any way compromised those operations. They haven’t. Plaintiffs

judicially admitted that the issue is whether to sell the property and

27

terminate the partnership, not how the partnership is presently operated. It

is simply not a basis for dissolving a functioning, profitable partnership that

a court agrees with one partner that the partnership would be more

profitable dissolved than were it to continue to function.

Plaintiffs have sought by incessant ad hominem attacks on

defendants to transform a policy dispute about the direction of the

partnership – a dispute which the partnership agreement foresaw and for

which it provided a solution, maintaining the status quo – into a reason why

their policy preference, to sell the property and terminate the partnership at

this time, should prevail. That’s not the purpose of the dissolution statute.

Disagreeing about whether or not to terminate the partnership is not conduct

that undermines the functioning of a profitable partnership. The dispute

here – expressly limited to a “ [d]isagreement about whether to sell the

partnership’s property” (1 Exh. 10 [148]) – is the sort of business judgment

issue in which courts have no occasion to intervene.

C. Plaintiffs’ Claim That Defendants Were Attempting To

Buy Out Their Interests Affords No Basis For Dissolution.

Faced with the reality that a dispute over whether to sell the property

and thereby terminate the partnership cannot fairly be labeled conduct

obstructing the functioning of the partnership, plaintiffs advance another

theory: that the partnership should be dissolved because defendants

supposedly were attempting to buy out plaintiffs at a bargain-basement

price. That theory is clearly beyond the scope of what plaintiffs judicially

9 AIMCO’s offer was intended as a first bid to elicit a counteroffer(10 Exh. 127 [2419].)

28

admitted this case was limited to: “[d]isagreement about whether to sell the

partnership’s property.” (1 Exh. 10 [143].) But even were it not, it affords

no basis to jettison the partnership.

First of all, the idea that defendants were trying to force plaintiffs out

of the partnership is unsupported by the record. The first offer came in

2003 after plaintiffs volunteered that they wanted to sell the property, that

is, that they wanted out of the partnership. (See 8 Exh. 68 [1718, 1717-

1721].) It was made by a third-party, AIMCO. (8 Exhs. 68 [1723-1725],

83; 10 Exh. 127 [2414-2415].) Plaintiffs claim that the offer was solicited

by defendants. But there is no evidence that defendants had any ownership

or other interest in AIMCO. If the bid had been successful, AIMCO, not

defendants, would have ended up as the owner of plaintiffs’ interests. The

first offer does not support plaintiffs’ premise that defendants were seeking

to buy them out cheaply. If the offer represented a windfall, it was a

windfall to AIMCO, not to defendants.9

The second offer – the one from the defendants – came after Doug

Ring had “pulled the plug” on a lease extension (11 Exh. 137 [2563]) and

was made specifically in response to the threat by plaintiffs’ principal,

Doug Ring, to seek dissolution. (6 Exh. 55 [1489] [offer states that it is in

response to Ring’s threat to seek dissolution]; 11 Exh. 137 [2595, 2597]

[Doug Ring admits that he communicated to defendants that he would seek

dissolution or, in his words, “partition,” before receiving the second offer].)

The offer wasn’t made to force plaintiffs out of the partnership. Plaintiffs

29

already wanted out of the partnership – and expressly said so – before the

offer was made.

Plaintiffs undoubtedly found the amount of the offers insufficient.

That’s no surprise. Why would anyone start a negotiation bidding

anywhere but below their target price? And plaintiffs could have

counteroffered. They did not. In neither instance was there any indication

that the offer was the offering parties’ final bid or was a take-it-or-leave-it

proposal. Plaintiffs just thought they had a better course in each instance to

fulfill their desire to get out of the partnership: either by an agreed-upon

marketing of the partnership upon the fulfillment of certain conditions (in

response to the first offer), or by judicial assistance in obtaining an

involuntary dissolution (plaintiffs’ admitted response to the second offer).

But even if the record could support the idea that defendants were

trying to force plaintiffs to sell their interests to defendants (it does not), and

even if that fairly were within the scope of what plaintiffs had judicially

admitted was the issue in this action (it is not), there still would be no basis

for dissolution. The fact is that plaintiffs have not been forced to sell. They

were not harmed in any way by the offers. Defendants’ insistence on not

selling precipitously has resulted, if anything, in an increase in value.

The only comparable case that either side has found is Schafer v.

RMS Realty (2000) 138 Ohio App.3d 244, 303-305 [741 N.E.2d 155, 197-

199]. Schafer held that even a partially successful attempt to “squeeze out”

a partner, resulting in a reduction in that partners’ interest (which has not

10 Plaintiffs suggest that Wallace v. Sinclair, supra, 114 Cal.App.2dat pp. 231-232, stands for the proposition that a bad faith offer to purchaseanother partner’s share suffices to justify dissolution. (See Rtrn. at 40.) Itdoes not. The central facts in Wallace were that the partnership there hadlost both profits and value and that all of the partners had given mutualnotices of dissolution.

30

happened here) did not justify dissolution. Why not? Because the

partnership could and did continue to function profitably.10

Indeed, it would be ironic if plaintiffs could use what they claim to

be an unsuccessful attempt to force them to sell their interest in the

partnership as a basis to involuntarily force defendants to sell their interest

in the partnership to some third party bidder for the property as a whole.

Neither plaintiffs nor defendants should be forced to dispose of their

interests involuntarily. Rather, they should retain their interests (as they

have) and abide by the partnership agreement, an agreement that calls for

mutual consent before sale of the partnership property.

IV.

NO CASE SUPPORTS PLAINTIFFS’ ATTEMPT TO

EVADE THE TERMS OF THE PARTNERSHIP

AGREEMENT AND TO UNILATERALLY AND

PREMATURELY END THE PARTNERSHIP.

Plaintiffs’ return cites only two cases as supporting the one-sided

result that they wish to achieve, a result that would anoint them as the

arbiters of the partnership’s fate and the instrument of its early demise.

Those two cases, Owen v. Cohen (1941) 19 Cal.2d 147, and Wallace v.

Sinclair, supra, 114 Cal.App.2d 220, are specifically discussed in the

31

petition. (Petn. at 51-53.) Neither presents a circumstance anywhere near

the present case.

In Owen v. Cohen, supra, 19 Cal.2d at pp. 151-152, antagonism

between the partners caused declining profits, with the defendant partner

refusing to do his fair share of the manual labor necessary to run the

business and misappropriating partnership funds. The partners’

disagreement was not over whether or how best to discontinue the

partnership, as here, but over running the partnership itself. (Ibid.) There is

no evidence that running this partnership has been in any way impaired.

Profits are up. There is no claim that anyone is misappropriating

partnership funds. There is no claim that defendants are not contributing

their share of required labor, which, in any case, is the responsibility of a

third-party management company. The disagreement here is purely over

whether the property should be sold and the partnership terminated. And,

of course, here the partnership agreement provides that in the event of such

disagreements, the partnership is to maintain the status quo; there’s no hint

of such a provision in Owen.

Plaintiffs argue that Owen stands for the proposition that conduct

“provocative of dissension and disagreement between the partners” suffices

to direct dissolution of a partnership. (Rtrn. at 41.) Fairly read, Owen

stands for no such principle. In Owen, the disputes interfered with the day-

to-day functioning of the partnership – one partner was not doing his share

of what the partners had jointly committed to. And, in Owen, there was no

partnership agreement provision to maintain the status quo in the event of a

11 Wallace, likewise, did not consider a partnership owning alimited-time asset as here where the partners contemplated from thebeginning that asset value would eventually be converted into income.

32

disagreement among the partners. Owen does not stand for the proposition

that any partner can transform a partnership into one at will by disagreeing

about what its future course should be.

Wallace v. Sinclair, supra, 114 Cal.App.2d at p. 228, is no more on

point. There, the business was consistently losing money and its net assets

had declined 23 percent in the preceding five years. (Id. at p. 225.) The

partners mutually sent dissolution notices to each other. The defendant

partner had also notified others, including the State, of the dissolution of the

partnership. And, he refused to disclose the partnership’s finances. (Ibid.)

That’s not this case, not close.

Plaintiffs assert that Wallace stands for the proposition that a partner

need not “sit supinely by” while a business continues to lose value or accept

another’s partner’s pie-in-the-sky plans to recover losses. (Rtrn. at 40.) But

the premise in Wallace was evidence that the partnership was losing money.

Wallace makes clear that dissolution is available “when business can be

continued only at a loss.” (Id. at p. 231.) In Wallace, “it was evident that a

rare type of ingenuity would be essential to the restoration of prosperity to

the house of Sinclair and it did not appear to be available.” (Ibid., emphasis

added.) That’s not this case. The business here is increasingly profitable.

There’s no evidence that the value of the partnership has fallen. There is no

need to restore the prosperity of the house of Mariners Village – it is a

uniquely prosperous and desired business.11

33

Nor is this a case of partners with no plan. The partners had a plan –

obtain bottom-line lease extension terms from the County. They were

frustrated in their plan by plaintiffs. According to Doug Ring, in his words,

“[i]t is correct that we pulled the plug on the lease extension process . . . .”

(11 Exh. 137 [2563].) Once Doug Ring “pulled the plug,” the other

partners were preparing to restart the process, but this lawsuit intervened.

(6 Exh. 48 [1281-1282] [“I was pursuing (restarting negotiations with the

County) at that point (before the lawsuit) . . . (but it) didn’t go too far”

before the lawsuit].) Wallace does not stand for the proposition that a court

may dissolve a profitable partnership just because it believes that one

partner’s vision of greater profit from early termination is better than other

partners’ views.

Defendants have searched, both in California and across the country,

for precedent in circumstances comparable to those here – where one

partner desires to terminate a profitable enterprise and another partner does

not – and have found none. By all indications, plaintiffs have found none

either. The fact is that no precedent supports the trial court’s result.

CONCLUSION

Disagreements about the best steps for the future of a profitable

partnership business are properly left to the business partners, especially

where their agreement specifies a solution for such disagreements, e.g.,

maintaining the status quo.

34

Plaintiffs’ ad hominem attacks on defendants’ business acumen are

unjustified. Defendants have had success – notably in negotiating with the

County on an extension of the lease for the large apartment complex

immediately next to Mariners Village, but also in insisting on not selling

Mariners Village prematurely, which has resulted in markedly higher offers.

The partnership continues to operate profitably. The partners’ roles of

business decision-makers should be reaffirmed, not usurped by the court.

For all the above reasons as well as those in the Petition for Writ of

Mandate, this Court should forthwith issue a peremptory writ of mandate

directing the trial court to vacate its February 28, 2007, judgment and to

enter a new and different judgment denying the complaint to dissolve the

partnership.

Dated: August 23, 2007

Respectfully submitted,

LOEB & LOEB Alan Wilken Jed Lowenthal

GREINES, MARTIN, STEIN & RICHLAND LLP Robin Meadow Robert A. Olson Kent J. Bullard

By Robert A. Olson

35

CERTIFICATION

Pursuant to California Rules of Court, Rule 8.204(c), I certify that

this TRAVERSE SUPPORTING PETITION FOR WRIT OF

MANDATE, PROHIBITION OR OTHER WRIT; MEMORANDUM

OF POINTS AND AUTHORITIES contains 7,959 words, not including

the tables of contents and authorities, the caption page, and this

Certification page.

Dated: August 23, 2007Robert A. Olson

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

On August 23, 2007, I served the foregoing document described as: TRAVERSESUPPORTING PETITION FOR WRIT OF MANDATE, PROHIBITION OROTHER WRIT; MEMORANDUM OF POINTS AND AUTHORITIES on the partiesin this action by placing a true copy thereof enclosed in sealed envelope(s) addressed asfollows:

Eric V. RowenGreenberg Traurig, LLP2450 Colorado Avenue, Suite 400ESanta Monica, California 90404[Attorneys for Real Parties in InterestDouglas R. Ring, Inc. and Douglas Ringand Cynthia Miscikowski, Co-Trusteesof the Ring-Miscikowski Trust, DatedAugust 2, 1995]

(X) BY PERSONAL SERVICE I delivered such envelope by hand to the offices ofthe addressee.

I declare under penalty of perjury under the laws of the State of California that theforegoing is true and correct.

Executed on August 23, 2007, at Los Angeles, California.

(X) (State) I declare under penalty of perjury under the laws of the State of Californiathat the foregoing is true and correct.

Thinakorn Bongkawong

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

On August 23, 2007, I served the foregoing document described as: TRAVERSESUPPORTING PETITION FOR WRIT OF MANDATE, PROHIBITION OROTHER WRIT; MEMORANDUM OF POINTS AND AUTHORITIES on the partiesin this action by placing a true copy thereof enclosed in sealed envelope(s) addressed asfollows:

Frederick BennettLos Angeles County Superior Court111 North Hill Street, Room 546Los Angeles, California 90012[Attorney for Respondent Court]

Clerk to theHon. Ronald M. SohigianLos Angeles County Superior Court111 North Hill Street, Department 41Los Angeles, California 90012[LASC Case No. BC341333]

(X) BY PERSONAL SERVICE I delivered such envelope by hand to the offices ofthe addressee.

I declare under penalty of perjury under the laws of the State of California that theforegoing is true and correct.

Executed on August 23, 2007, at Los Angeles, California.

(X) (State) I declare under penalty of perjury under the laws of the State of Californiathat the foregoing is true and correct.

James Frost