Madrid v. Kolbisen CA1/1

Filed 12/31/15 Madrid v. Kolbisen CA1/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

IRENE MADRID, Plaintiff and Appellant, A144805

v. (San Mateo County JOHN KOLBISEN et al., Super. Ct. No. CIV 531191) Defendants and Respondents.

Plaintiff Irene Madrid and defendant John Kolbisen were divorced in 2011. In their marital settlement agreement (MSA), each elected to continue to hold a half-interest in the family business. The MSA also vested continuing jurisdiction in the family court to monitor management of jointly owned property and to “divide or order the sale” of such property. In 2014, after conflicts arose in the operation of the business, Kolbisen filed a request for order in the family court seeking forced sale to him of Madrid’s half- ownership in the business. In response, Madrid filed this action contending the parties’ dispute was governed by a shareholder agreement, rather than the MSA. The trial court granted Kolbisen’s special demurrer without leave to amend, concluding the family court had exclusive jurisdiction over the dispute. We affirm. I. BACKGROUND Madrid and Kolbisen divorced in 2011, after a long marriage. Following the divorce, the pair continued their ownership and operation of a series of swim schools (the business) that they founded in 1979. The business is operated through two corporations and a limited liability company. While the division of duties and assets among these

entities is not entirely clear from the record, it appears that one corporation, La Petite Baleen, Inc. (Baleen), owns the intellectual property of the business and employs certain management personnel, while the two other entities operate schools in different locations. Madrid and Kolbisen are equal and sole owners of Baleen and the limited liability company, known as LPB Partners, LLC, while ownership of the second corporation is divided among eight family members, including Madrid and Kolbisen. Kolbisen is the chief executive officer of the three entities. In April 2014, Kolbisen filed a request for order (request) in the family court, asking the court to determine the value of Madrid’s share of the business and order the forced sale of that interest to him. In a declaration submitted with the request, Kolbisen stated he is actively involved in running the business on a daily basis. Although Madrid had been only sporadically involved for the prior 16 years and held no official position in the business, she increased her activity in 2013. During that year, there was conflict among Madrid, Kolbisen, and other family members about ownership and operation of the business. At the time of the divorce, Kolbisen stated, he was hopeful the couple could continue to own and operate the business together, but he had been persuaded by the subsequent conflicts that continued successful operation of the business requires the exclusion of Madrid. Accordingly, he sought a valuation of her interest and its forced sale to him. Kolbisen’s invocation of family court jurisdiction was premised on the terms of the MSA, executed in August 2011. The MSA, which divides the parties’ assets and liabilities, provides that the family court retains jurisdiction to enforce the MSA and “to monitor the management of and/or to divide or order the sale of all property which the parties own jointly after the effective date of this Agreement.” As to the business, the MSA states, “The parties agree to continue to jointly own their businesses, commonly known as La Petite Baleen, Inc. and LPB Partners, LLC as set forth more fully in their Shareholder Agreement,” a copy of which was attached to the MSA. In addition, the two lists attached to the MSA dividing the marital property both state Madrid and Kolbisen retain “50% ownership with [the other person] in the parties’ business known as La Petite