Barrons vs. Smith Linden & Basso, LLP

• Basso Declaration (ROA #2049): o Objections #1-18 are SUSTAINED to the extent the declaration seeks to use testimony to prove the contents of a writing. (Evid. Code, § 1523, subd. (a).)

As the Court did not consider, in ruling on this motion, the other evidence objected to by the parties, the Court does not rule on those objections.

2. Procedural Issue re Plaintiffs’ Status As an initial matter, the Basso Defendants contend that there is no party who has standing to defend this motion because (1) James G. Barrons died on 3/29/2017 and (2) there has been no “formal order allowing a legally qualified personal representative of Linda Barrons” despite her “legal incapacity.” (ROA #2042 [Mot. P&A], pp. 1-2.) Accordingly, the Basso Defendants contend that the motion should be granted on this basis alone. (Id. at p. 1.)

The Basso Defendants are correct that James G. Barrons died on 3/29/2017. This fact is alleged in the operative Fifth Amended Complaint (“5AC”) at ¶ 1 (ROA #1150), and Plaintiffs do not dispute this fact in their Response to Separate Statement of Undisputed Facts relating to the instant motion (ROA #2149).

Under California law, “a cause of action for or against a person is not lost by reason of the person’s death but survives subject to the application limitations period.” (Code Civ. Proc. [CCP], § 377.20, subd. (a).) “A pending action or proceeding does not abate by the death of a party if the cause of action survives.” (CCP, § 377.21) “On motion after the death of a person who commenced an action or proceeding, the court shall allow a pending action or proceeding that does not abate to be continued by the decedent’s personal representative or, if none, by the decedent’s successor in interest.” (CCP, § 377.31.)

Here, no such motion to substitute has been filed following James G. Barrons’s death. This is a “procedural irregularity” that should be addressed, but the Court still has jurisdiction over the case. (Sellery v. Cressye (1996) 48 Cal.App.4th 538, 541, fn. 2.) Accordingly the Court ORDERS Plaintiffs’ counsel to forthwith file a motion to substitute a proper plaintiff in place of James G. Barrons.

As for Linda M. Barrons, the Basso Defendants are simply incorrect that the Court has not entered a formal order appointing a guardian ad litem for her, as this order was entered on 9/3/2025. (See ROA #2012.) This is at least the second time that counsel for the Basso Defendants has made arguments that are unavailing because of a failure to carefully review the record in this case. (See ROA #2034 [Court’s 12/18/2025 minute order denying Defendant Allen A. Basso’s motion to dismiss for lack of prosecution for failure to serve within three years, finding that moving

defendant had made three filings that constituted moving defendant’s general appearance in the action years prior].) The Court therefore ADMONISHES the Basso Defendants’ counsel to more carefully review the record in this case before making arguments about previous filings.

3. Merits a. General Legal Standard for Summary Judgment “The purpose of a summary judgment proceeding is to permit a party to show that material factual claims arising from the pleadings need not be tried because they are not in dispute.” (Cal. Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 630, internal quotes, citations, & ellipses omitted; see also CCP, § 437c, subd. (c).)

The party moving for summary judgment “bears the burden of persuasion that there is no triable issue of material fact and that the moving party is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; see also CCP, § 437c, subd. (c).)

Summary judgment for a defendant is proper if the defendant can present evidence to negate the plaintiff’s claim by demonstrating that the plaintiff cannot prove an element of the claim or that the defendant has a complete defense. (CCP § 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850- 851.) “If the moving defendant argues that it has a complete defense to the plaintiff’s cause of action, the defendant has the initial burden to show that undisputed facts support each element of the affirmative defense. Once it does so, the burden shifts to plaintiff to show an issue of fact concerning at least one element of the defense.” (Bacon v. Southern Cal. Edison Co. (1997) 53 Cal.App.4th 854, 858.)

Importantly, however, “[i]f, in anticipation of an affirmative defense, the complaint alleges facts to refute it, the pleadings themselves create a material issue which defendant would have to refute in order to obtain summary judgment.” (Id., internal quotes & brackets omitted, quoting Westlye v. Look Sports, Inc. (1993) 17 Cal.App.4th 1715, 1739-1740.)

The initial burden of production is to make a prima facie showing, which is “one that is sufficient to support the position of the party in question. No more is called for.” (Aguilar, supra, 25 Cal.4th at p. 851 [internal citation omitted].)

If the defendant fails to meet this initial burden, the plaintiff need not oppose the motion, and the motion must be denied. (Binder v. Aetna Life Insurance Co. (1999) 75 Cal.App.4th 832, 840.) But if the defendant meets this initial burden, the burden shifts to the plaintiff to produce evidence demonstrating the existence of a triable issue of material fact. (CCP § 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851.)

The moving party’s evidence is to be strictly construed, while the opposing party’s evidence is to be liberally construed. (Johnson v. Super. Ct. (2006) 143 Cal.App.4th 297, 308.)

The trial court may not weigh the evidence or evaluate credibility. (Binder, supra, 75 Cal.App.4th at p. 840.) “The court must consider not only the bare evidence, but also the reasonable inferences deducible from the evidence, and determine whether the evidence is sufficient to support a potential judgment in favor of the opposing party.” (Id., internal citations omitted.)

b. Application The Basso Defendants move for summary judgment on the sole ground that the applicable statutes of limitations bar all of Plaintiffs’ claims. (ROA #2205 [Not. of Mot. & Mot.], p. 2.)

In anticipation of this exact defense, Plaintiffs’ 5AC includes an entire section on “Delayed Discovery and Estoppel Against Defendants to Assert Statute of Limitations Defenses,” in which Plaintiffs alleged that Defendants’ misrepresentations, made in 2006 at the time Plaintiffs made the subject investments, tolled the statutes of limitations until Plaintiff discovered Defendants’ deceit in March 2013. (5AC at ¶¶ 152-169.)

“Generally speaking, a cause of action accrues at the time when the cause of action is complete with all of its elements.” (Fox v. Ethicon (2005) 35 Cal.4th 797, 806, internal quotes omitted.)

“An important exception to the general rule of accrual is the ‘discovery rule,’ which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” (Id. at p. 807.) “A plaintiff has reason to discover a cause of action when he or she has reason at least to suspect a factual basis for its elements.” (Id., internal quotes omitted.)

Thus, “[u]nder the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110.) “[T]he limitations period begins once the plaintiff has notice or information of circumstances to put a reasonable person on inquiry.” (Id. at pp. 1110-1111, internal quotes omitted, emphasis original.) “A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery.

Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” (Id. at p. 1111.)

In order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff bears the burden of alleging in the complaint, as well as proving at trial, “(1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.” (Fox, supra, at p. 807 [elements]; see also William L. Lyon & Associates (2012) 204 Cal.App.4th 1294, 1310, internal quotes omitted [burden of proof at trial].)

However, here, on the Basso Defendants’ motion for summary judgment, since Plaintiffs anticipated the Basso Defendants’ statute of limitations defense and alleged facts in the operative complaint to refute it, Plaintiffs’ complaint sufficiently creates a material issue on delayed discovery which the Basso Defendants must refute in order to obtain summary judgment. (Bacon, supra, 53 Cal.App.4th at p. 858, quoting Westlye, supra, 17 Cal.App.4th at pp. 1739-1740.)

The parties do not dispute that unless the discovery rule applies, Plaintiffs’ claims in this action are barred by the applicable statutes of limitations. (See Mot. P&A at pp. 11-12; ROA #2145 [Opp.], pp. 6-9.) Instead, the parties disagree as to whether the investment materials Plaintiffs received in 2006 were sufficient to put Plaintiffs on inquiry notice of their injury.

The crux of Plaintiffs’ claims is that Defendants misrepresented the value of Plaintiffs’ investments and Plaintiff’s upfront costs for the Eaton and Aero Vault tenant-in-common (“TIC”) investments by initially negotiating a “true” purchase price with each property seller and then increasing or “grossing up” the “final” purchase price to include a “markup” that constituted a “syndication fee” paid to Asset Management Consultants, Inc. (“AMC”), while disguising this markup as a “commission” paid by the seller. (See Opp. at pp. 2-3.)

Plaintiffs contend that had they known their true upfront costs for the investment, including the hidden “syndication fee” that they ultimately paid because the sellers did not actually pay this amount as a “commission,” Plaintiffs would not have invested. (Id. at p. 3.) Plaintiffs contend that they did not discover Defendants’ misconduct until March 2013. (Id.)

The Basso Defendants contend that the confidential private placement memoranda (“PPMs”) for the Eaton and Aero Vault TIC investments (ROA #2046, Exhs. 1-2), which Plaintiffs received in 2006, sufficiently put Plaintiffs on inquiry notice of this markup/syndication fee. (Mot. P&A at pp. 8-10.) Notably, these are the only investment materials presented by the Basso Defendants in their separate statement in support of this motion. (See ROA #2044, [SSUMF], ¶¶ 10-30; see also Roger H. Proulx & Co. v.

Crest- Liners (2002) 98 Cal.App.4th 182, 198 [“only those facts set forth in the separate statement are relevant when determining whether summary judgment should be granted”]; United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 336, internal quotes omitted, emphases original [“all material facts must be set forth in the separate statement. This is the Golden Rule of Summary Adjudication: if it is not set forth in the separate statement, it does not exist. Both the court and the opposing party are entitled to have all the facts upon which the moving party bases its motion plainly set forth in the separate statement”].)

In support of the Basso Defendants’ argument about the Eaton and Aero Vault TIC investment materials, the Basso Defendants rely on two published Court of Appeal cases that involved similar investments and claims: (1) WA Southwest 2, LLC v. First American (2015) 240 Cal.App.4th 148; and (2) Stella v. Asset Management Consultants (2017) 8 Cal.App.5th 181. (Mot. P&A at pp. 13-15.)

The Basso Defendants repeatedly contend that these cases are “binding precedent” because the PPMs at issue in this case contain the “same” or “identical language” as the relevant language of the investment materials in Stella and “nearly identical” language as the relevant language in WA Southwest, which those courts found “dispositive” in holding, as a matter of law, that plaintiffs were put on inquiry notice of the markup/syndication fees when plaintiffs first received the investment materials. (Id. at pp. 5, 7, 9, 14- 15; see also SSUMF at #20-21; ROA #2185 [Reply], p. 4-5.)

But the Basso Defendants are flat out wrong that the relevant language of the investment materials in Stella is the “same” as or “identical” to the language use in the PPMs here.

In Stella:

The Risk Factors section of the private placement memorandum contained the following caution in its listing of “operating risks”: “Market Value of Property. The purchase price of the Property has been negotiated to include a commission to be paid to Manager of the General Partner of the General Partner’s Manager by the Seller (see ‘General Partner's Compensation and Fees’) in addition to other brokerage commissions owed by the Seller. Accordingly, the Seller would have sold the Property for a lower Purchase Price if it were not obligated to pay such commission. Although the General Partner believes that the Purchase Price fairly corresponds to the market value of the Property, and it is expected that the Property will be appraised for that amount by the lender financing the acquisition, there is no assurance that the Partnership will be able to sell the Property for such amount.”

(Stella, supra, 8 Cal.App.5th at p. 186, underlining original, bolding & italics added.)

Here, in contrast, the “Risk Factors” section of the PPMs states:

Market Value of Property. The purchase price of the Property being acquired by the Co-Owners includes a commission to be paid to AMC by the Seller (see “Manager's Compensation and Fees”). Accordingly, the Seller would have sold the Property for a lower Purchase Price if it were not obligated to pay such commission. Although the Manager believes that the Purchase Price fairly corresponds to the market value of the Property, and it is expected that the Property will be appraised for that amount by the lender financing the acquisition, there is no assurance that the Co-Owners will be able to sell the Property for such amount. Additionally, the purchase price paid by the Co-Owners includes an acquisition premium to be paid to Manager.

(ROA #2046, Exh. 1 at p. 24 of PDF, Exh. 2 at p. 27 of PDF, underlining original, bolding & italics added.) 2

The bolded and italicized language above in both Stella and this case demonstrate the important differences that render Stella’s holding inapplicable here.

Although the Court acknowledges that Ahern v. Chicago Title Co. (Cal. Ct. App., May 20, 2021, No. B304119) 2021 WL 2008170—cited by both the Basso Defendants at Mot. P&A at pp. 15-16 and by Plaintiffs at Opp. at pp. 10-11—is an unpublished opinion and therefore may not be relied upon by the parties or this Court for any binding or persuasive value, the Court nevertheless notes that Ahern explicitly found that the language in Stella differs materially from the language at issue here:

This disclosure to the prospective tenancy-in-common investors has two significant differences from the limited partnership disclosure [analyzed in Stella]. First, rather than specifically stating the purchase price for the property “has been negotiated to include a commission” to be paid to AMC by the seller, it simply states the purchase price includes a commission to be paid by the seller. Second, the final sentence of the tenancy-incommon disclosure, which expressly states the investors are funding an acquisition premium to be paid to AMC that is included in the price of their interests, is not included in the Stella disclosure.

. . .

As Ahern alleges in the operative pleading, AMC acted as the investors’ real estate broker in the Amlap and Aerovault transactions and, as such, was responsible for negotiating the best purchase price available to the investors. In a conventional real estate transaction the seller pays the commissions of both the seller’s broker and the buyer’s broker from the proceeds of the sale. The payment of commissions, therefore, reduces the seller’s net proceeds from the sale.

In this traditional scenario a willing seller relieved of the obligation to pay commissions should be amenable to selling the property at a lower price. The net proceeds will be the same in both situations. But the extent of the seller’s obligations to pay commissions should be irrelevant to the buyer, who is interested in what it needs to pay, not how much the seller nets, unless the seller’s commission obligation has been shifted to the buyer. In that circumstance, however, the willing buyer who assumes the unconventional obligation to pay a

2 The Court also notes that the Basso Defendants misquoted this language from the PPMs at issue in this case both in their moving memorandum of points and authorities at p. 10 and in their separate statement at ¶ 27. Even though Plaintiffs pointed this out in their opposition at p. 12 and in their response to the separate statement at ¶ 27, the Basso Defendants do not even acknowledge this point in their reply. The Court ADMONISHES the Basso Defendants for misrepresenting to this Court what the PPMs at issue in this case actually state.

commission to its broker should be prepared to offer the seller less, not more, to buy the property or be willing for the cost of the acquisition to increase above fair market value.

Against this background, the risk factor disclosure in Stella and the case at bar that the seller would have sold the property for a lower purchase price if not obligated to pay a commission to AMC, without more, was tautological. What gave that statement significance and provided notice of the fraud in Stella was the additional disclosure that the purchase price actually had been negotiated to include the commission. (Stella, supra, 8 Cal.App.5th at p. 193.) In a conventional transaction the purchase price always includes a commission to be paid the buyer’s broker by the seller, the anodyne statement in the tenancy-in-common offering materials.

To actually negotiate the sale price to include a buyer’s commission, however, is highly unusual and therefore should have warned the sophisticated investors in Stella that further investigation was necessary. (Ibid.) Indeed, our holding in Stella repeatedly referred in the plural to the “disclosures” and “statements” as providing notice, not just to the single, essentially economically meaningless statement relied upon by Chicago Title that the seller would have sold the property for a lower price without the commission to AMC. (Ibid.)

The misleading nature of the commission disclosure to the tenancyin-common investors was exacerbated by the negative pregnant of the final sentence in this paragraph of the risk factor disclosures. By expressly stating an acquisition premium to be paid to AMC was included in the price of the tenant-in-common interests being paid by each investor, but not explaining the purchase price of the property itself has been grossed-up to make the investors also responsible for paying the commission to AMC, the paragraph implied the opposite was true and that, as would be typical, the buyer’s broker’s commission reduced the actual purchase price received by the seller.

(Ahern, supra, 2021 WL 2008170, at *8-9, italics original, bolding added.)

As the Basso Defendants cited Ahern in their moving memorandum of points and authorities, they should have re-reviewed the relevant language at issue here and more carefully compared it to the relevant language at issue in Stella before claiming in their papers that the relevant language is the “same” or “identical.” Accordingly, the Court ADMONISHES counsel for the Basso Defendants for misrepresenting to this Court that the relevant language considered in Stella is the “same” as or “identical” to the relevant language in this case.

To be sure, nor is the relevant language of the investment materials in WA Southwest remotely similar, much less “nearly identical” as the Basso Defendants claim, to the relevant language at issue here:

The first page of the private placement memorandum set forth the highlights of the investment offering. Acquisitions expected to

purchase the Property from its prior owners for “$11,600,000, plus closing costs, financing costs, and related transactional costs.” Acquisitions offered investors the opportunity to purchase tenancy in common ownership interests in the Property. A 1 percent interest consisted of $50,500 of equity (i.e., cash), paired with an $81,200 share of debt. The maximum offering amount was $5.05 million of equity and $8.12 million of debt (in the form of a nonrecourse loan to be obtained by Acquisitions).

Obviously, the “Investment Cost” ($13.17 million — $5.05 million equity plus $8.12 million debt) to be collected by defendants exceeded the purchase price of the Property ($11.6 million). The first page of the summary of offering terms in the private placement memorandum stated, “The Investment Cost consists of the purchase price of $11,600,000 payable to the seller plus the costs described herein, including: (i) the Acquisition Fee of $505,000 payable to Acquisitions for identifying and analyzing the Property, negotiating the contract to purchase the Property and assigning the purchase contract to the Purchasers; (ii) selling commissions and due diligence allowances; (iii) organizational and offering expenses; (iv) loan costs and fees payable to the Lender; (v) closing costs ...; (vi) working capital reserves ...; and (vii) $300,000 in reserves which Acquisitions expects the Lender will withhold from Loan proceeds.”

The private placement memorandum also included a detailed chart setting forth the estimated use of investment proceeds, including a scenario in which the full $5.05 million of “equity” was raised (as happened here). In this scenario: $3.78 million (74.9 percent) would be used as a down payment on the Property; $505,000 (10 percent) would be used to pay an acquisition fee to Acquisitions; $353,500 (7 percent) would be used to pay selling commissions; $138,800 (2.75 percent) would be held in reserve; $126,250 (2.5 percent) would be used to pay loan fees, loan costs, and closing costs; $95,950 (1.9 percent) would be used for organization and offering expenses; and $50,500 (1 percent) would be allocated for marketing and due diligence expenses.

The chart did not, however, classify all of the expenses the same way. Three categories of expenses (amounting to 9.9 percent) were subtracted from the gross offering proceeds of $5.05 million, resulting in a line item (labeled “Available for Investment”) of $4,550,050. Below this line, the remaining fees and expenses were accounted for, including the down payment on the Property and the $505,000 fee paid to Acquisitions. A footnote to the chart, emphasized by plaintiffs at oral argument, stated: “Acquisitions will receive an Acquisition Fee of $505,000 (based on the Maximum Offering Amount) for identifying and analyzing the Property, negotiating the contract to purchase the Property, and assigning the contract to the Purchasers .... Acquisitions will defer any unpaid portion of the Acquisition Fee if the Maximum Offering Amount is not raised. Therefore, the value of the Property

and the related proceeds to be raised in this offering should be considered increased by this additional cost.” (Italics added.)

In the section of the private placement memorandum discussing risk factors, the following disclosure was made: “Acquisitions intends to purchase the Property for $11,600,000, plus closing costs, financing costs, and related transactional and offering costs .... The purchase price for the [investments] is determined unilaterally by Acquisitions and [a related company]. The purchase price likely does not reflect the current market value of the Property and is not based on an arms length negotiation with the [investors] or supported by an appraisal of the Property.

In fact, the total purchase price for the [investments] will be significantly higher than the price to be paid by Acquisitions in its acquisition of the Property from the Seller. Based on the foregoing, the [investors] should not, therefore, anticipate or expect that the price paid for their investment is reflective of the fair market value of the Property on a stand-alone basis. The [investors] are, however, acquiring their [investments] based on the existence of the financing and the Management Agreement and the management expertise provided thereunder by the Property Manager.

Nevertheless, there is no evidence that such additional rights support the increase in the purchase price.”

(WA Southwest, supra, 240 Cal.App.4th at pp. 153-155, italics original, bolding added.)

Therefore, the Court also ADMONISHES counsel for the Basso Defendants for misrepresenting to this Court that the relevant language considered in WA Southwest is “nearly identical” to the relevant language in this case.

At bottom, although the words used in the PPMs in this case are undisputed, the Court cannot find, as a matter of law, that those words were sufficient to put Plaintiffs on inquiry notice of their injury in 2006.

The Basso Defendants contend that the Eaton PPM at issue here “disclosed in detail that the purchase price of $52,150,000 includes a $1,750,000 real estate commission ‘to be paid by the seller to AMC’” (Mot. P&A at p. 16, citing SSUMF at #29) and that the Aero Vault PPM at issue here “disclosed in detail that the purchase price of $27,885,000 includes a $1,250,000 real estate commission ‘to be paid by the seller to AMC’” (id., citing SSUMF #30). The referenced pages in the PPMs describe these amounts as “real estate commission to be paid by Seller to AMC at Closing for representing the Co-Owners.” (ROA #2046, Exh. 1 at p. 22, Exh. 2 at p. 22.)

Given that in a typical real estate transaction, it is common for sellers to pay a buyer’s representative commissions, but it is not common for a buyer to then go back the seller, after negotiating an initial purchase price for the property, to inform the seller that the buyer will then be “‘gross[ing] up’” the initially agreed-upon purchase price to cover certain TIC and startup costs” that the buyer also acknowledges the “Buyer will cover . . . as a result of this procedure” (see 5AC, ¶ 84.i.), the PPMs’ language did not sufficiently, as a matter of law, put Plaintiffs on inquiry notice that Plaintiffs should have

suspected these amounts were anything other than normal buyer’srepresentative commissions that sellers pay out of the initially agreed-upon purchase price for the property.

The Basso Defendants also rely on the PPMs’ statement that “the Seller would have sold the Property for a lower Purchase Price if it were not obligated to pay such a commission.” (Mot. P&A at p. 17, citing SSUMF at #27.) But, as noted above, that sentence, which also begins with “Accordingly,” appears right after a sentence that simply states, “The purchase price of the Property being acquired by the Co-Owners includes a commission to be paid to AMC by the Seller (see ‘Manager’s Compensation and Fees’).” (ROA #2046, Exh. 1 at p. 24, Exh. 2 at p. 27.)

Again, describing the “grossed-up” amount as merely “a commission to be paid to AMC by the seller” does not sufficiently, as a matter of law, put Plaintiffs on inquiry notice that Plaintiffs should have suspected these amounts were anything other than normal buyer’s-representative commissions that sellers pay out of the initially agreed-upon purchase price for the property. Moreover, the “Manager’s Compensation and Fees” section referenced in the first sentence also does not put Plaintiffs on such inquiry notice as a matter of law, as that section merely repeats that “[t]he seller of the Property will pay to AMC, through escrow, a $1,750,000 [or $1,250,000] real estate commission at closing of the acquisition in connection with the Co- Tenancy’s purchase of the Property.” (Id. at Exh. 1 at p. 32, Exh. 2 at p. 35.)

The Basso Defendants also contend that the Eaton PPM disclosed the “Total Capitalization” as $53,224,700 and the Aero Vault PPM disclosed the “Total Capitalization” as $28,668,700, which are “amounts exceed[ing] the underlying contract price[s] that w[ere] disclosed.” (Mot. P&A at p. 16, citing SSUMF at #28.) However, $53,224,700 minus the purchase price of $52,150,000 is $1,074,700, which is not the same as $1,750,000; and $28,668,700 minus the purchase price of $27,885,000 is $783,700, which is not the same as $1,250,000.

Therefore, the “Total Capitalization” amounts also do not, as a matter of law, put Plaintiffs on sufficient inquiry notice that Plaintiffs should have suspected the $1,750,000 and $1,250,000 “real estate commission[s] to be paid to AMC by the Seller at closing for representing the Co-Owners” was actually an upfront cost Plaintiffs had to bear as part of their “Total Capitalization.”

The Basso Defendants further contend that “[t]he materials warned that TIC interests were speculative and investors must rely on their own evaluation.” (Mot. P&A at p. 17, citing SSUMF at #22, 26.) However, these generic warnings are also insufficient, as a matter of law, to put Plaintiffs on inquiry notice of Defendants’ “grossing up” the purchase price to include a markup/syndication fee.

Finally, the Basso Defendants also contend that “the offering packages prohibited reliance on oral representations.” (Id. at p. 17, citing SSUMF at #21-30.) But it does not matter what oral representations were made, as the offering packages themselves are insufficient, as a matter of law, to put Plaintiffs on inquiry notice.

Therefore, the Basso Defendants have failed to satisfy their initial burden of proof as well as their ultimate burden of persuasion that they are entitled to summary judgment based on the applicable statutes of limitations.

Plaintiffs to give notice of this ruling. 114 Kornievsky vs. Smith Linden & Basso, LLP

2013-00635667

1. Motion for Summary Judgment and/or Adjudication (ROA 2290)- Davies DEF [MOOT BASED ON NOS AND NOTICE OF WITHDRAWL] 2. Motion for Summary Judgment and/or Adjudication (ROA 2247)- Basso DEF 3. Trial Readiness Conference Defendants Smith, Linden, & Basso LLP; Allen L. Basso; and Allen A. Basso’s (collectively, the “Basso Defendants”) motion for summary judgment is DENIED.

The Court does so for the same reasons as stated in the Court’s ruling on the Basso Defendants’ substantially similar motion in the related case Barrons v. Smith Linden & Basso, LLP, Case No. 2013-00648240. Accordingly, the Court incorporates that ruling by reference here.

The Court rules as follows on Plaintiffs’ Evidentiary Objections (ROA #2342):

• Basso Declaration (ROA #2245): o Objections #2-9 are OVERRULED. The Court also notes that Plaintiffs submitted these same pages as part of Plaintiffs’ more complete versions of the exhibits. o Objections #10, 12-33 are SUSTAINED to the extent the declaration seeks to use testimony to prove the contents of a writing. (Evid. Code, § 1523, subd. (a).)

As with the Basso Defendants’ moving papers in the related Barrons case, the Basso Defendants’ moving papers here repeatedly and incorrectly contend that “Private Placement Memorandums of each of the investments in this case . . . contain . . . the exact same disclosure language found dispositive in Stella [v. Asset Management Consultants, Inc. (2017) 8 Cal.App.5th 181],” describing the two as “identical.” (ROA #2239, Mot. P&A at p. 3 [also describing the relevant language in this case as containing “identical language found as dispositive in . . . WA Southwest [2, LLC v.