Kylae Jordan vs. Jeffrey Landon Long

34-2021-00298009-CU-FR-GDS: Kylae Jordan vs. Jeffrey Landon Long 04/21/2025 Hearing on Motion for Order to Enter Judgment Against All Defendants Except Linda Long Due to Bankruptcy in Department 53

reporter from the Court’s Approved Official Reporter Pro Tempore list. Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

Plaintiff Kylae Jordan’s (“Plaintiff”) motion for entry of judgment against all Defendants except Linda Long due to bankruptcy is unopposed and ruled upon as follows.

Background

Plaintiff’s complaint against Defendants asserts a variety of causes of action including fraud, violations of the Corporations Code, breach of fiduciary duty, breach of contract, and accounting arising out of Plaintiff's alleged investment into Defendants' cannabis manufacturing business in exchange for shares of preferred stock. Plaintiff alleges that misrepresentations were made to induce him to make his investment by Defendant Landon Long, Icon's CEO and the managing member of Infusion.

On July 28, 2021, Defendants Jeffrey Landon Long, Linda Long, Daniel Long, Marie Csech, Icon Holdings, Inc, Infusion Factory, LLC (“Defendants”) filed a stipulation to stay the action pending arbitration. Subsequently, the parties engaged in arbitration before Hon. David Brown (retired) on November 27, 2023, December 1, 2023, and February 5, 2024. The arbitrator issued a final award on November 19, 2024, requiring Defendants, jointly and severally, to pay Plaintiff the following amounts:

a. $500,000 return of investment; b. $224,588.33 in accrued interest at 7% through October 24, 2024; c. $255,642.50 in attorney's fees; d. $115,716.90 in costs. Defendants Landon Long and ICON Holdings, Inc. were further required to pay Plaintiff the amount of $25,000 in punitive damages.

Plaintiff petitioned the Court to affirm the arbitration award. The Court issued a tentative ruling granting the petition and indicated it would enter judgment according to the award. At hearing, counsel for Defendants appeared and informed the Court that a related bankruptcy proceeding had been filed in the Sacramento Eastern District Court.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00298009-CU-FR-GDS: Kylae Jordan vs. Jeffrey Landon Long 04/21/2025 Hearing on Motion for Order to Enter Judgment Against All Defendants Except Linda Long Due to Bankruptcy in Department 53

The Court noted no notice of bankruptcy had been filed, affirmed its tentative ruling, and directed Plaintiff to prepare a judgment for the Court’s signature.

On January 10, 2025, Defendants filed a notice of automatic stay as to Linda Long due to pending bankruptcy proceedings.

On February 26, 2025, Plaintiff filed an ex parte application seeking modification of the Court’s January 7, 2025 order entering judgment against all named Defendants other than Long, due to the bankruptcy stay. The Court denied the application on the basis that Plaintiff was required to seek relief by noticed motion.

On March 10, 2025, Plaintiff filed the instant motion seeking an order entering judgment in conformance with the arbitration award, except as to Linda Long. Plaintiff moves pursuant to Code of Civil Procedure sections 578 and 579. The motion is unopposed.

Discussion

“[I]n an action against several defendants, the Court may, in its discretion, render judgment against one or more of them, leaving the action to proceed against the others, whenever a several judgment is proper.” (Code Civ. Proc. § 579.) “[T]he trial court, in its discretion, may enter judgment in favor of one or more defendants when all issues between those defendants and the plaintiff have been adjudicated, even though the action remains pending against those defendants who have not obtained adjudication of all issues.” (Heritage Marketing & Ins. Services, Inc. v. Chrustawka (2008) 160 Cal.App.4th 754, 764.)

The bankruptcy stay set forth in 11 U.S.C. section 362(a) applies only to actions against the debtor. Generally, “unless the assets of the bankrupt estate are at stake, the automatic stay does not extend to actions against parties other than the debtor, such as codebtors and sureties.” (United States v. Dos Cabezas Corp. (9th Cir. 1993) 995 F.2d 1486, 1491 [citing 2 Collier on Bankruptcy ¶ 362.02, at 362–31 to 362–32 (Lawrence P. King, ed., 15th ed. 1992)].) Courts have held that this is true even where other parties are in a similar legal or factual nexus to the debtor. (See also Seiko Epson Corp. v.

Nu– Kote International, Inc. (Fed. Cir. 1999) 190 F.3d 1360, 1364 [“It is clearly established that the automatic stay does not apply to non-bankrupt co-defendants of a debtor ‘even if they are in a similar legal or factual nexus with the debtor.’ ”]; Teachers Ins. & Annuity Ass’n v. Butler (2d Cir. 1986) 803 F.2d 61, 65 [“It is well-established that stays pursuant to § 362(a) are limited to debtors and do not encompass non-bankrupt co-defendants.”]; Marcus, Stowell & Beye Government Securities, Inc. v.

Jefferson Investment Corp. (5th

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00298009-CU-FR-GDS: Kylae Jordan vs. Jeffrey Landon Long 04/21/2025 Hearing on Motion for Order to Enter Judgment Against All Defendants Except Linda Long Due to Bankruptcy in Department 53

Cir.1986) 797 F.2d 227, 230 n. 4 [“The well established rule is that an automatic stay of judicial proceedings against one defendant does not apply to proceedings against codefendants.”].)

Based on this authority, the Court finds entering judgment against all Defendants in accordance with the arbitration award, with the exception of Linda Long, is in the interest of justice given the bankruptcy stay in place. In this case, there is no indication that confirmation of the arbitration award against the other Defendants would put the assets of the bankrupt estate at risk, as the award is for money damages and Defendants are jointly and severally liable. Punitive damages were not awarded against Defendant Linda Long. Moreover, Defendants have failed to oppose the motion which the Court construes as a concession on the merits. (See D.I. Chadbourne, Inc. v. Superior Court (1964) 60 Cal.2d 723, 728, n.4.)

The Court hereby amends its January 7, 2025 order accordingly.

Plaintiff shall submit a proposed judgment for the Court’s signature in accordance with this Order.