Parker vs. Harris

For example, Counsel has not filed or served an amended declaration or a proposed order.

In addition, there is no evidence that Counsel served a notice of ruling from the July 20, 2026 hearing upon his client.

In its July 20, 2026, decision, the court stated that “[t]he court may deny the motion if Counsel fails to supplement the motion papers as required.” (ROA #84 at p. 3.)

Accordingly, the court will deny the motion without prejudice.

The court clerk shall give notice of this ruling.

2 Parker vs. Harris Motion to Approve Settlement

The Joint Motion for Approval of Settlement 30-2024-01375596 Agreement and Dismissal of Derivative Claims is GRANTED.

This entire action, including the Complaint and the Second Amended Cross-Complaint, is DISMISSED without prejudice.

The court shall retain jurisdiction pursuant to Civil Procedure Code section 664.6.

Pending Motion

Plaintiff and Cross-Defendant Matthew Parker (Parker); Defendant and Cross-Complainant Nathan Harris (Harris); Nominal Defendant and Nominal Cross-Defendant Album Creative Studios, Inc. (Agency); and Cross-Defendants Album Surfboards, LLC (Album Surfboards); Kathryn Parker; Larissa Clark; S & S Intellectual Resources, LLC; Uncommon Senses, LLC; Michael Townsend; Surf & Sing, Inc. (Surf & Sing); and XO Coco, LLC jointly move for an order approving the Settlement, Forbearance, and Release Agreement.

The parties also move for the court to find that the settlement is fair, reasonable, adequate, and in the best interests of Agency; to approve the dismissal of the derivative claims asserted on Agency’s behalf; to dismiss the action without prejudice; and

to retain jurisdiction pursuant to Civil Procedure Code section 664.6.

Standard for Approval of Derivative Action Settlement

“California courts have found that shareholder derivative plaintiffs may be considered as trustees or guardians ad litem to the corporation's right of action.” (Gaillard v. Natomas Co. (1985) 173 Cal.App.3d 410, 419, disapproved on other grounds, Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1119, fn. 16.)

Accordingly, “[s]uch plaintiffs have no power to settle or compromise the corporation's action absent court approval.” (Id. at p. 419.)

Rather, “[a] shareholder plaintiff in a derivative action must obtain court approval before settling and dismissing the corporation's cause of action.” (Norman v. Strateman (2025) 112 Cal.App.5th 92, 102.)

The process of obtaining court approval of derivative action settlements is similar to that in class actions. (Ibid.)

In other words, “courts must ensure that derivative settlements are fair and reasonable to the corporation and its shareholders, and the settlements are not a product of fraud, overreaching, or collusion by the settling parties.” (Id. at p. 102.)

“In so doing, court approval serves to protect the interests of those who are not directly represented in the settlement negotiations.” (Id. at p. 103.)

At the same time, the trial court should give “’[d]ue regard . . . to what is otherwise a private consensual agreement between the parties.’” (Ibid., quoting Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801.)

“[T]he trial court needs to operate under an initial presumption of fairness where the settlement is the result of arm's-length negotiation, the investigation and discovery are sufficient to permit counsel and the court to act intelligently, the counsel are experienced in similar litigation, and the percentage of objectors is small.” (Norman v. Strateman, supra, 112 Cal.App.5th at p. 103.)

“’Ultimately, the [trial] court's determination is nothing more than “an amalgam of delicate balancing, gross approximations and rough justice.” ‘” (Ibid., quoting Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801.)

Terms of Settlement Agreement

The record shows that the parties vigorously litigated this action for nearly 2 1⁄2 years, including engaging in significant discovery and motions practice.

Then, in May of 2026, the parties participated in mediation before the Honorable Marc Marmaro (Ret.). (See Decl. of Nathan Harris in Supp. of Joint Mot. for Approval of Settlement Agreement and Dismissal of Derivative Claims (Harris Decl.), ¶ 3; Decl. of Matthew Parker in Supp. of Joint Mot. for Approval of Settlement Agreement and Dismissal of Derivative Claims (Parker Decl.), ¶ 3.)

Although the parties did not settle the matter at mediation, they continued negotiations and reached a settlement on June 17, 2026. (See Harris Decl., ¶ 3; Parker Decl., ¶ 3.)

The parties entered into the Settlement, Forbearance, and Release Agreement (Settlement Agreement), which included, among other things, the following terms:

• Parker shall relinquish his entire ownership interest in Agency to Harris, thereby making Harris the 100% owner of Agency;

• Harris shall transfer Agency’s ownership interest in Album Surfboards to Parker, thereby divesting Agency of its ownership interest in Album Surfboards;

• Parker shall pay Harris the total sum of $75,000, with said sum to be paid via sixty (60) equal monthly installments beginning on August 1, 2026;

• Parker’s payment obligations shall be secured by a stipulation for entry of judgment for the total amount of $75,000 less credit for any payments received;

• Harris shall relinquish all ownership rights, if any, that he possesses in Surf & Sing;

• Harris agrees to indemnify Parker for all demands, liability, losses, suits, claims, or actions arising out of Agency’s PPP loans;

• Parker agrees to indemnify Harris for all demands, liability, losses, suits, claims, or actions arising out of Album Surfboard’s PPP and SBA loans;

• The parties shall dismiss all claims asserted in the Complaint and Second Amended Cross-Complaint;

• The parties shall execute full releases; and

• The court shall retains jurisdiction to enforce the terms of the settlement pursuant to Civil Procedure Code section 664.6.

(Harris Decl., ¶ 3, Exh. A; Parker Decl., ¶ 3, Exh. A.)

The Settlement Agreement has been executed by the all of the parties in this action, including Harris and Parker, who represent 100% of the ownership interest in Agency, on whose behalf the derivative claims are asserted. (See ibid.; see also Harris Decl., ¶ 2; Parker Decl., ¶ 2.)

The court has reviewed the Settlement Agreement and its terms, the declarations attached to the motion, and all pleadings and papers filed in this action, and finds that the settlement is fair and reasonable, and is not a product of fraud, overreaching, or collusion by the settling parties.

Here, the settlement was a result of an arm’s length negotiation, obtained through mediation and discussion, and that the parties were represented by competent and experienced counsel.

In addition, there was sufficient investigation and discovery by the parties with respect to the

merits of the competing claims to allow the parties to act in an intelligent and knowledgeable manner.

Further, it does not appear that there are any objectors to the settlement.

Therefore, the court will grant the motion.

Defendant shall give notice of this ruling.

3 Tonkinson vs. 24 Hour Motion for Summary Judgment and/or Summary Fitness USA, LLC Adjudication

There is no written tentative ruling on this matter 30-2024-01400352 at this time. The court will hear from the parties or their counsel. However, the court may give some guidance orally regarding its preliminary thoughts on the issues presented by the motion.