Park Capital Management, LLC v. Orchard Yield Funds, LLC

SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA Department 12 Honorable Nahal Iravani-Sani, Presiding Courtroom Clerk, Ryan Nguyen 191 North First Street, San Jose, CA 95113 Telephone: (408) 882-2230

DATE: 08/19/2026 TIME: 9:00 A.M. and 9:01 A.M.

LINE 9 25CV480131 Lumenis Be Inc. PETITION TO CONFIRM THE ARBITRATION AWARD v. Iyad Radwan Please Ctrl Click (or scroll down to) Line 9

LINE 10 26CV485647 Park Capital MOTION: APPLICATION TO EXPEL Management, LLC V. Orchard Yield Funds, Please Ctrl Click (or scroll down to) Line 10 LLC LINE 11 25CV477676 Linda Johnson, et al. COMPROMISE OF MINOR’S CLAIM & v. SEALING ORDER LINE 12 Hanford Hotels, Inc. Please Ctrl Click (or scroll down to) Line 11-12

9:01 24CV430838 Eli Garten et al. MOTION TO WITHDRAW AS ATTORNEY V Line 1 Shaw Industries Group, Inc. et al Defense counsel Bruce E. Zuchowski moves to be Relieved as Counsel for Chris Haltom Floors, Inc. pursuant to Code of Civil Procedure Section 284(2), with his client’s support.

This matter is scheduled for jury trial October 5, 2026. Prior motion to continue trial by other defendants was denied.

Corporate defendants may not appear in propria persona through an officer, director, or shareholder. Failure to timely obtain substitute counsel may result in the striking of its pleadings, entry of default, dismissal of its claims, or such other sanctions as are authorized by law. Motion to withdraw as attorney is DENIED without prejudice, to matter being STAYED pending bankruptcy proceedings as to this defendant, or substitute counsel appearing and indicating readiness to proceed to trial.

Parties on both sides ordered to appear at hearing.

Calendar line 10 Case Name: Orchard Yield Funds, LLC v. Park Capital Management, LLC Case No.: 26-CV-485647

Verified Application to Expel Respondent Park Capital Management, LLC from Petitioner Orchard Yield Funds, LLC Pursuant to California Corporations Code Section 17706.02

Requests for Judicial Notice

The requests for judicial notice are DENIED as these materials are not relevant to the outcome of the application for reasons articulated below. (See Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301[information subject to judicial notice must be relevant to the issue at hand]; see also Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6 [a court need not take judicial notice of a matter unless it “is necessary, helpful, or relevant”].)

Discussion

The instant application to expel respondent Park Capital Management, LLC (“Park Capital”) is brought under Corporations Code section 17706.02, subdivision (e) which provides:

“(e) On application by the limited liability company, the person is expelled as a member by judicial order because the person has done any of the following:

(1) Engaged, or is engaging, in wrongful conduct that has adversely and materially affected, or will adversely and materially affect, the limited liability company’s activities. (2) Willfully or persistently committed, or is willfully and persistently committing, a material breach of the operating agreement or the person’s duties or obligations under Section 17704.09. (3) Engaged, or is engaging, in conduct relating to the limited liability company’s activities that makes it not reasonably practicable to carry on the activities with the person as a member.” (Corp. Code, § 17706.02, subd. (e).)

But, as respondent Park Capital explains in its opposition papers, the application to expel does not appear to be properly before the court.

“Judicial remedies are divided into two classes: actions and special proceedings. (Code Civ. Proc., § 21.) ‘An action is an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.’ (Code Civ. Proc., § 22.) ‘Every other remedy is a special proceeding.’ (Code Civ. Proc., § 23.) ‘Every other remedy is a special proceeding.’ (Code Civ. Proc., § 23.) As a general rule, a special proceeding is statutory in origin and does not proceed according to common law. [Citation.]” (Bagration v. Super. Ct. (2003) 110 Cal.App.4th 1677, 1684-1685 (Bagration).)

“In the trial courts, civil actions (such as lawsuits or damages or equitable relief) and special proceedings (such as writ petitions) are commenced when the plaintiff’s complaint or petition is filed with the court.” (Garcia v. Lacey (2014) 231 Cal.App.4th 402, 411; see Code Civ.

Proc., § 411.10 [“A civil action is commenced by filing a complaint with the court.”]; Code Civ. Proc., § 350 [“An action is commenced, within the meaning of this title, when the complaint is filed.”]; see also Allen v. Humboldt County Board of Supervisors (1963) 220 Cal.App.2d 877, 884-885 [writ of mandate petition subject to same rules regarding commencement of civil actions].) “The pleadings allowed in civil actions are complaints, demurrers, answers, and cross-complaints.” (Code Civ. Proc., § 422.10.)

A complaint or cross-complaint shall contain both of the following: (1) a statement of facts constituting the cause of action, in ordinary and concise language; and (2) a demand for judgment for the relief to which the pleader claims to be entitled. (Code Civ. Proc., § 425.10.) “A cause of action is simply the obligation sought to be enforced against the defendant.” (Turner v. Milstein (1951) 103 Cal.App.2d 651, 657.) Stated another way, “a ‘cause of action’ is comprised of a ‘primary right’ of the plaintiff, a corresponding ‘primary duty’ of the defendant, and a wrongful act by the defendant constituting a breach of that duty.” (Crowley v. Katleman (1994) 8 Cal.4th 666, 681.)

“Special proceedings of a civil nature, located in part 3 of the Code of Civil Procedure, include extraordinary writs of mandate and prohibition, summary proceedings (such as unlawful detainer), contempt, eminent domain and arbitration. In other codes, special proceedings include probate, guardianship, adoption, conservatorship, juvenile dependency, commitment of dangerous individuals (including sexually violent predators), persons disabled by mental illness, developmental disability, narcotics and alcohol addiction.” (People v. Cole (2008) 165 Cal.App.4th Supp. 1, 13; Bagration, supra, 110 Cal.App.4th at pp. 1684-1685, fn. 7.)

Furthermore, “[a] summons is the process by which a court acquires personal jurisdiction over a defendant in a civil action.” (Mjs Enters. v. Super. Ct. (1984) 153 Cal.App.3d 555, 557.) “ ‘A summons in an action or proceeding is issued by the clerk of the court, to be served on the defendant in a manner authorized by law. It is the usual means by which the court gives jurisdictional notice to the defendant, directs the defendant’s appearance, and thus acquires jurisdiction of the defendant’s person. [Citations.]

A summons may be had at the simple request of the plaintiff and may be served either by a court officer or a private individual.’ [Citation.]” (Torrey Hills Community Coalition v. City of San Diego (2010) 186 Cal.App.4th 429, 435.) Compliance with statutory procedures for service of process is essential to establish personal jurisdiction. (American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 387.)

Here, the verified application to expel respondent Park Management as a member does not constitute a “pleading” or complaint alleging causes of action as contemplated by the Code of Civil Procedure. Nor does the application qualify as a “special proceeding” as that term is used in the Code of Civil Procedure. And, as it is neither a pleading nor a matter subject to a special proceeding, there has not been compliance with the statutory procedures for service of process which is essential for establishing personal jurisdiction. Thus, the verified application, for these reasons, does not appear to be properly before the court for resolution.

In reply, petitioner Orchard Yield Funds, LLC (“OYF”) attempts to characterize the verified application as a special proceeding. But, there is no legal authority holding that such an application constitutes a special proceeding. Nor does the Code of Civil Procedure recognize the instant application as a special proceeding. And it is the job of the legislature, not the court’s, to amend the statute to indicate it as such. (See People v. Weir (2019) 33 Cal.App.5th

868, 881 [“The Legislature clearly can amend either statute if it disagrees with our interpretation, but as an intermediate Court of Appeal, we refuse to usurp the role of the Legislature by rewriting statutes.”].)

But, as the court sees it, the real problem here is that petitioner OYF is seeking dispositive relief by way of this verified application absent compliance with the Code of Civil Procedure and specifically the rules which would normally accompany a motion for summary judgment under Code of Civil Procedure section 437c. In essence, the court, in granting such “fast track” relief, would be denying respondent Park Capital the opportunity to file an answer (or other responsive pleading), conduct civil discovery, submit admissible evidence raising a triable issue of material fact to defeat any motion for summary judgment, or dispute the application at trial.

It is for that reason that courts require such strict compliance when it comes to motions for summary judgment. (See Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 [“The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”]; see also Sierra Craft, Inc. v. Magnum Enterprises, Inc. (1998) 64 Cal.App.4th 1252, 1256 [“Summary judgment, although a very useful tool in litigation, is also a drastic remedy.

Because of this, it is important that all of the procedural requirements for the granting of such a motion be satisfied before the trial court grants the remedy.”].)

This is not to say that the verified application fails on its merits. Instead, as proposed by respondent Park Capital, petitioner OYF could simply re-file its application as part of a civil complaint for declaratory relief (or another cause of action) in order to seek the requested remedy. The court however will defer to petitioner counsel’s expertise as to the appropriate causes of action to be incorporated in any civil complaint. In doing so, the newly filed civil action addressing the verified application can be properly heard on its merits by the court in accordance with the Code of Civil Procedure.

Based on the foregoing, the verified application to expel Park Management from OYF under Corporations Code section 17706.02 is DENIED. This ruling is WITHOUT PREJUDICE to petitioner OYF re-filing its verified application as part of a civil action or other proceeding recognized by the Code of Civil Procedure. The court’s ruling also makes no determination on the merits of the verified application.

The court will prepare the Order.

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