Lundin vs. Goldman

Accordingly, on issue #1, the Court CONDITIONALLY DENIES the motion for summary adjudication AS MOOT on the condition that Goldman properly files a request for dismissal of the 1st cause of action of the TACC within 3 court days of this ruling.

Issue #2: TACC’s 27th Cause of Action

Per Cross-Defendants’ notice of motion and motion, issue #2 is framed as “Summary Judgement Is Warranted On The Twenty-Sixth Cause Of Action For Reformation Because The Claim Is Time-Barred.” (ROA #1471, Not. of Mot. & Mot., p. 2.)

The TACC’s 26th cause of action alleges that Cross-Defendants and Goldman formed LBG REC with the intent that their rights and duties as Members and Managers of the LLC would be governed by Delaware law, but due to a scrivener’s error, the operating agreement states that it would be governed by California law. (ROA #1421, ¶¶ 508-512.)

The parties agree that the applicable statute of limitations for the reformation claim is the three-year limit found in CCP section 338, subdivision (d), which provides that the cause of action “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” It is well-settled under California law that “actual knowledge is not necessary,” as “courts interpret discovery in this context to mean not when the plaintiff became aware of the specific wrong alleged, but when the plaintiff suspected or should have suspected that an injury was caused by wrongdoing. The statute of limitations begins to run when the plaintiff has information which would put a reasonable person on inquiry.” (Vera v. REL-BC, LLC (2021) 66 Cal.App.5th 57, 69, internal quotes omitted, emphasis originally to Vera.)

A “plaintiff must affirmatively excuse his failure to discover the fraud [or mistake] within three years after it took place, by establishing facts showing that he was not negligent in failing to make the discovery sooner and that he had no actual or presumptive knowledge of facts sufficient to put him on inquiry.” (Id., internal quotes omitted, italics original to Vera.)

“It is the well-established rule that in the absence of a confidential relationship between the parties, reasonable prudence requires one to read or to have read to him a documents, which he proposes to execute.” (Daily Telegram Co. of Long Beach v. Long Beach Press Publishing Co. (1933) 133 Cal.App. 140, 144.) Accordingly, a person may be charged with presumptive knowledge of the contents of a document received even if the person did not actually read it. (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1389-1390, internal citation omitted [“a purchaser who receives and reads a preliminary title report revealing the existence of a deed restriction has actual notice of its existence and is on inquiry notice of the nature of that

restriction,” and “[i]n the absence of a claim that defendants somehow prevented [plaintiffs] from reading the preliminary title reports or misled them about their contents, plaintiffs cannot blame defendants for their own neglect in reading the reports”]; see also Jefferson v. Cal. Dept. of Youth Authority (2002) 28 Cal.4th 299, 303 [“The general rule is that when a person with the capacity of reading and understanding an instrument signs it, he is, in the absence of fraud and imposition, bound by its contents, and is estopped from saying that its provisions are contrary to his intentions or understanding”].)

“While resolution of the statute of limitations issue is normally a question of fact, where the uncontradicted facts established through discovery are susceptible of only one legitimate inference, summary judgment is proper.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112.)

Here, it is undisputed that Goldman received and signed the LBG REC operating agreement on 9/5/2013, yet Goldman did not bring his crossclaim for reformation until 2/20/2026 when he submitted the TACC in a stipulation for leave to file the TACC. (ROA #1618 [Resp. to SSUMF], ¶¶ 1, 15.)

Yet Goldman has not put forth any evidence affirmatively excusing his failure to discover the alleged mistake. Goldman has not presented any evidence to explain why he was not negligent either in failing to read the agreement before signing it or in reading the document but nevertheless failing to discover any of the mistakes that he now describes as “obvious” and “clear” in his opposition. (See, e.g., Opp. at p. 7 [describing as “obvious” and “clear” mistakes the statement that “LBG REC was formed under California’s LLC Act by filing documents with California’s Secretary of State” when “[i]n fact, LBG REC was formed in Delaware by filing articles of organization with Delaware’s Secretary of State”].) Goldman’s own declaration submitted in opposition to the motion attests:

At some point after Ms. Lundin and Mr. Beiswenger sued me, I reviewed the operating agreement for LBG REC again and I noticed obvious errors that I never noticed before. I understood that LBG REC had been formed in Delaware, which is where Ms. Lundin, Mr. Beiswenger and I formed all LLCs through which we did business – except for LBG Claremont, which is a California LLC. The cover page for the Operating Agreement correctly noted that LBG REC was a Delaware LLC, but inside, the title above the recitals referred to LBG Realty and there are references throughout California law – but no references to Delaware law – and there is a provision that states the Operating Agreement is governed by California law.

It was always my understanding that we formed the Delaware LLCs to take advantage of Delaware law and it was my understanding that all of the Delaware LLCs were governed by Delaware law. All of the other Delaware LLCs formed for LBG related transactions have express provisions in their operating agreements stating that they are governed by Delaware law.

(ROA #1616 [Goldman Decl.], ¶ 15.) If the references to California law are so “obvious,” then why didn’t Goldman notice it when he initially received and signed the agreement? Goldman has not presented any evidence to explain this. Certainly, not reading the agreement is no excuse under the law.

Moreover, even if the challenged provision on governing law was not “obvious” because it appears at ¶ 14.7 toward the end of the agreement (see ROA #2, Compl. at Exh. A], the statement that LBG REC was formed under California law was “obvious,” as Goldman himself admits, since it appears in the recitals immediately under the title at the start of the document. This provision, which also contains a mistake explicitly about California law, should have put Goldman on inquiry notice that the agreement may have used an incorrect California form as the starting point for drafting and/or contains other incorrect references to California law— including the challenged provision on California being the governing law.

At most, Goldman has produced evidence explaining why the challenged mistake was made in the first place (i.e., the use of an incorrect California form as the starting point). But that evidence does not address why Goldman was not negligent in failing to make the discovery sooner or why he had no presumptive knowledge of facts sufficient to put him on inquiry even though he received and signed the agreement.

Therefore, there is only one legitimate inference to be drawn from the undisputed material facts presented by the parties on this motion—i.e., the applicable statute of limitations on Goldman’s reformation claim expired in 2016, three years after he received and signed the agreement.

Goldman contends that under the relation-back doctrine codified in CCP sections 473(a) and 474, his cross-claim for reformation relates back to the original complaint because a claim to reform a contract arises from the same transaction as a breach of contract cause of action concerning the same contract. (Opp. at pp. 11-12.) That may be so, but this relation back does not save his claim from being time-barred. This is because the original complaint was filed in November 2022—i.e., after the expiration of the applicable statute of limitations in 2016.

As Goldman himself acknowledges (id. at p. 11), only “when the original complaint was filed before the statute of limitations on the cross-complaint had elapsed” does the relation-back doctrine suspend or toll the statute of limitations on the cross-complaint. (Sidney v. Super. Ct. (1988) 198 Cal.App.3d 710, 714, internal quotes omitted, emphasis added, citing Liberty Mutual Insurance Co. v. Fales (1973) 8 Cal.3d 712, 715, fn. 4.) “The courts have fashioned a rule that a statute of limitations is suspended or tolled as to a defendant’s then unbarred cause of action against the plaintiff against the plaintiff arising out of the same transaction by the filing of the plaintiff’s complaint.” (Id., original emphasis omitted, italics added.)

When the statute of limitations has already run, as it did here in 2016, there is no statute of limitations to toll or suspend.

Accordingly, on issue #2, the Court GRANTS summary adjudication as to the 27th cause of action in the TACC in favor of Cross-Defendants and against Goldman.

2. Motion for Leave to File Fourth Amended Cross-Complaint

Defendants/Cross-Complainants David Goldman, Melanie Goldman and Elevate Retail Group’s motion for leave to file a fourth amended crosscomplaint (“4ACC”) is GRANTED.

On 7/31/2026, Plaintiffs/Cross-Defendants Leslie Lundin and Douglas Beiswenger filed an “opposition,” stating that “based on the informal tentative ruling of the Court at the 7/21/2026, hearing on the ex parte application of [the Goldman Defendants] to advance the hearing on [this motion], including the Court’s comments that should the parties need additional time to prepare for trial[,] the Court would be inclined to continue the trial, Plaintiffs will not oppose the Motion.” (ROA #1711.) Plaintiffs also stated that “Counsel for Plaintiffs and Defendants have communicated and will be discussing a revised trial schedule early next week.” (Id.) The Court therefore construes Cross-Defendants’ filing as indicating a non-opposition to the motion.

As noted above in connection with the MSA ruling, on 8/6/2026, Defendants/Cross-Complainants filed a reply noting that after this motion was filed, they had “voluntarily dismissed the first cause of action in the Third Amended Cross-Complaint for violation of the Federal Stored Communications Act without prejudice.” (ROA #1805.) Although no such request for dismissal has yet been filed by Defendants/Cross- Complainants, “Defendants request leave to file the Fourth Amended Cross Complaint as proposed, but without the first cause of action.” (Id.)

Accordingly, the Court GRANTS the motion for leave to file the 4ACC without the 1st cause of action. Defendants/Cross-Complainants are ORDERED to separately file the proposed 4ACC without the 1st cause of action with the Court within 5 court days and serve all parties within 30 days. The 4ACC should be filed and served after proper dismissal of the 1st cause of action from the TACC as ordered in the above ruling on the MSA.

3. Motion to Compel Production of Information Withheld on Claim of Privilege

Defendants David Goldman, Melanie Goldman and Elevate Retail Group’s Motion to Compel Production of Information Withheld on Claim of Privilege is DENIED WITHOUT PREJUDICE to Defendants bringing the same motion again after the conclusion of the Phase One trial.

On 7/31/2026, Plaintiffs filed a “Notice-Only” “Opposition,” informing the Court that at the 7/21/2026 ex parte hearing, the Goldman Defendants’ counsel had represented to Plaintiffs’ counsel that they will withdraw the motion without prejudice. But “[t]o the extent Defendants have not filed a

formal notice of withdrawal in advance of the hearing, Plaintiffs would request the hearing on the motion be reset so an opposition brief may be filed” on a later date. (ROA #1715.)

On 8/6/2026, Defendants filed a reply reminding the Court that at the 7/21/2026 ex parte hearing, the Court “provided the parties with its view that the Court could decide the cross claims challenging Plaintiffs’ selfdealing transactions with the Medford LLCs through which Plaintiffs indemnified their personal attorneys’ fees without considering the allegedly privileged amounts of the payments.” (ROA #1803.) Defendants then stated that they “agree that the issues presented in Phase One can be decided without consideration of the amounts and therefore agreed that the Court may defer ruling on the MTC until a determination of Phase One issues arising from the disputed transactions without prejudice to Defendants ability to raise the issue at that time.” (Id.)

So as to avoid continuing the motion without a date certain, the Court DENIES the motion without prejudice to Defendants bringing the same motion again after conclusion of the Phase One trial.

Cross-Defendants shall give notice of all of the above.