legal news

Register | Forgot Password

Jango Capital v. Ritcheson

Jango Capital v. Ritcheson

Jango Capital v. Ritcheson

Filed 7/14/08 Jango Capital v. Ritcheson CA2/8


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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.





Plaintiff and Respondent,



Defendants and Respondents,


Intervener and Appellant.


(Los Angeles County

Super. Ct. No. PC 37474)

APPEAL from an order of the Superior Court of Los Angeles County, John P. Farrell, Judge. Affirmed.

Law Offices of Cyrus & Cyrus, Roger Y. Muse and John R. Matheny for Intervener and Appellant.

Knopfler & Pazos, George Knopfler and James Pazos for Plaintiff and Respondent.

Greenberg Glusker Fields Claman & Machtinger and Heidi M. Binford for Defendants and Respondents.

* * * * * *

David A. Weisman appeals from an order denying his ex parte application for leave to file a complaint in intervention in this action brought by respondent Jango Capital, LLC, a Texas limited liability company (Jango), against respondents Steven W. and Renata G. Ritcheson. We affirm, finding no abuse of discretion.


Jango commenced this action against the Ritchesons on September 16, 2005. Jangos second amended complaint asserted claims for fraud, quiet title to real property, breach of fiduciary duty, rescission for fraud, constructive trust and unjust enrichment.

Michael Blank is Jangos sole member and manager. Weisman was a business acquaintance of Blank. At Weismans recommendation, Blank retained Mr. Ritcheson (Ritcheson) and his then law firm, Morrison & Foerster, to form Jango and to render it legal services. Weisman had no affiliation with Jango. Prior to 2004, Weisman agreed to provide financing for a new law firm to be formed by Ritcheson, and Weisman and Ritcheson agreed to split the profits of the firm.

In the spring of 2004, Weisman proposed to Ritcheson and Blank that Jango invest in some residential property in Chatsworth, California. The property was located in the same residential development where Weisman lived. Weisman proposed that Jango purchase the property for approximately $1.7 million and that the Ritchesons live on the property. In exchange, the Ritchesons would execute a promissory note in Jangos favor in the amount of $2.2 million. The note would bear interest of 6 percent per annum, and the Ritchesons would make interest only payments for two years to Jango and a balloon payment of $2.2 million at the end of two years. Upon full payment, the Ritchesons would obtain full title to the property.

In May 2004, Jango entered into a contract to purchase a residence from the developer and owner, Toll Brothers CA IV, L.P. (Toll Brothers) for $1.7 million in cash. On Jangos behalf, Blank entered into an agreement with the Ritchesons under the terms above stated.

Prior to the close of escrow in October 2004, two problems arose as to this transaction.

First, Blank discovered Jango, as an out-of-state company, would be obliged to deposit over $60,000 into an escrow account for an advance payment of taxes. Jango sought Ritchesons advice on this matter. The Ritchesons and Blank exchanged a series of e-mails in which the Ritchesons suggested that Jango simply have title to the property recorded in the Ritchesons name. They allegedly assured Jango it would still own the property. The Ritchesons agreed in the e-mails to execute a promissory note secured by a deed of trust to evidence Jangos ownership of the property.

Second, Jangos contract with Toll Brothers precluded Jango from transferring the property for a certain period. The Ritchesons allegedly represented to Jango in e-mails that Toll Brothers understands our relationship and is willing to do a concurrent recording and that we have approval from [T]oll [B]rothers to do the concurrent filings. In October 2004, relying on the Ritchesons assurances, Blank executed an assignment and assumption of purchase agreement that allowed the Ritchesons to take title to the property, and Jango provided the cash to fund the property purchase.

The Ritchesons told Blank they would record a promissory note with a deed of trust on the property in Jangos favor. Ritcheson assured Blank that he would draft, execute and record the deed of trust in Jangos favor. Blank agreed on Jangos behalf that there would be no prepayment penalty on the note. In e-mails, the Ritchesons represented to Jango they understood and agreed that Jango would be the owner of the property until the Ritchesons had made all interest payments and had paid the full balloon payment of $2.2 million on the note. After escrow closed in October 2004, Ritcheson further assured Jango that Ritcheson had successfully drafted and executed the note and deed of trust. When Jango repeatedly asked for a copy of the note and deed of trust, Ritcheson kept promising to deliver a copy, but he never did so.

In August 2005, Jango discovered the Ritchesons had never drafted or executed the note or deed of trust as promised, nor had they recorded any note or deed of trust for the property. Jango learned from title company documents that, contrary to the Ritchesons agreement, a grant deed had been issued and notarized with no lien holder. Jango demanded that the Ritchesons create and record a deed of trust showing Jango as the property owner, but they refused and claimed the property was a gift from Jango to them. The Ritchesons claimed they owned the property outright.

Jango alleged that Ritcheson violated the Rules of Professional Rules of Conduct by practicing law in Texas and Colorado, where he is not licensed, and by disclosing to third parties confidential communications entrusted to him by Jango.

The record before the trial court showed that Jango and Weisman retained William J. Briggs II, of the law firm of Lavely & Singer, P.C., to pursue an action against the Ritchesons in September 2005. The present lawsuit was brought in September 2005 against the Ritchesons on behalf of Jango alone.[2]

Thereafter, between May and November 2006, Jango and the Ritchesons unsuccessfully attempted to mediate or settle their lawsuit. In November 2006, pursuant to an agreement between the parties, the court ordered the parties to arbitration.

In January 2007, Weisman, represented by different counsel, filed an ex parte application for leave to file a complaint in intervention in the action.

The proposed complaint in intervention alleged that (1) Weisman is the owner of the choses in action which are the subject of this action and (2) adjudication of the parties claims in his absence would impair or impede his ability to protect the value of that ownership interest. Weisman alleged that, on or about January 5, 2004, Blank, on Jangos behalf, signed an acknowledgement stating, all assets of Jango . . . are the sole and exclusive property of Tenacore Holdings [(Tenacore)].[3] Weisman further alleged that, on or about August 18, 2006, Tenacore assigned to Weisman all of its interest in any and all causes of action, choses in action or claims of any type against Jango or any of its principals.

The Ritchesons opposed the ex parte application. They argued that Weismans January 2007 application was patently untimely because he had knowledge of the lawsuit since its filing in September 2005. Further, Weisman had failed to demonstrate an interest in the subject property or transaction, i.e., Jangos loan to the Ritchesons in October 2004 or the home they purchased with the loan.

The Ritchesons contended the document Blank signed in January 2004 only acknowledged that Tenacore owned whatever assets Jango had at that time, which was eight months before Jangos loan to the Ritchesons and 20 months before Jango filed the instant lawsuit. They pointed to the lack of any showing tying the assets Jango owned in January 2004 or which Tenacore assigned to Weisman in August 2006 to the claims Jango asserted in September 2005. Moreover, the Ritchesons argued, the August 2006 assignment did not purport to assign Tenacores alleged ownership in Jangos assets to Weisman ‑‑ it purported only to assign any causes of action Tenacore might have against Jango arising upon, or by reason of, occurrences and transactions occurring on or before the date of the assignment. On its face, the assignment clearly did not assign Weisman any of Jangos claims against the Ritchesons. Therefore, they argued, Weisman had shown no interest in the property or transaction involved in this action.

Finally, the Ritchesons contended that even if Weisman had demonstrated an interest in the property or transaction involved in this litigation, he would not be entitled to intervene because he had not established his interest could not adequately be represented by Jango. Although Weisman argued that Jangos counsel had asked to be relieved as counsel in the action, there was no showing Jango could not and would not engage new California counsel to represent it in the event counsels motion was granted.[4]

The trial court denied, without prejudice to applying to join the ongoing arbitration, Weismans application for leave to file the complaint in intervention. The court found (1) there was undue and prejudicial delay from knowledge of the lawsuit, and (2) there was no direct claim asserted in the complaint in intervention regarding a quiet title or similar claim making intervention mandatory for a just resolution. Weisman timely appealed from the order.


Code of Civil Procedure section 387 (section 387) governs intervention in an action or proceeding. Subdivision (a) of section 387 allows for permissive intervention, providing that [u]pon timely application, a person who has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both, may intervene in an action or proceeding. Mandatory intervention is covered in subdivision (b) of section 387, which provides that the court must allow intervention upon timely application if any provision of law bestows an unconditional right to intervene or if the person seeking intervention claims an interest relating to the property or transaction which is the subject of the action and that person is so situated that the disposition of the action may as a practical matter impair or impede that persons ability to protect that interest, unless that persons interest is adequately represented by existing parties.

Whether discretionary intervention is sought pursuant to subdivision (a) of section 387 or intervention by right is sought pursuant to subdivision (b) of section 387, the application for intervention must be timely made. (Lohnes v. Astron Computer Products, Inc. (2001) 94 Cal.App.4th 1150, 1153.) In either case, the determination of timeliness is within the discretion of the court. (Ibid.) A courts decision to deny leave to intervene is reviewed under the deferential abuse of discretion standard. (Noya v. A.W. Coulter Trucking (2006) 143 Cal.App.4th 838, 842.) Under such standard, the courts order or judgment is presumed correct, and we indulge in all intendments and presumptions to support the order or judgment as to which the record is silent. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)

 Discretion is abused whenever, in its exercise, the court exceeds the bounds of reason, all of the circumstances before it being considered. The burden is on the party complaining to establish an abuse of discretion, and unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power. [Citations.] (Denham v. Superior Court, supra, 2 Cal.3d at p. 566.)

We find the court did not abuse its discretion in denying Weismans application for leave to intervene in this action.

1. The Trial Court Properly Exercised Its Discretion in Denying the Application on the Ground Weisman Did Not Show a Direct Interest in the Action

Weisman asserts the trial court erred in denying his motion to intervene on the ground he had no direct claim as to quiet title or similar claim making intervention mandatory for a just resolution. Weisman claims that he asserted an interest in the subject matter of the lawsuit sufficient to give rise to a right to intervene, that the court abused its discretion to the extent it found the proposed complaint defective and that the court improperly sustained the Ritchesons de facto demurrer. We disagree.

The question whether the petitioner has an interest in the matter in litigation is a question of fact which must be determined by the court before leave to file is granted. (In re Yokohama Specie Bank (1948) 86 Cal.App.2d 545, 555.)

In his proposed complaint in intervention, Weisman alleged he had the right to intervene under section 387, subdivision (b) because (1) he owned the choses in action that are the subject of this action and (2) adjudication of the parties claims in his absence would impair or impede his ability to protect the value of that ownership interest. He alleged that Jango was threatening to compromise and settle the choses in action on terms unknown to Weisman and therefore his interests would not be adequately represented by Jango.

Although the proposed complaint in intervention purported to be joining in Jangos complaint against the Ritchesons, it asserted causes of action against Jango only. Among other things, Weisman requested an injunction directing immediate delivery of the choses in action at issue, damages for converted assets and punitive damages: all against Jango. Weisman made no attempt to connect his alleged claims against Jango to any claims Jango had against the Ritchesons, and he asserted no claims against the Ritchesons directly. Thus, Weisman failed to meet an essential element for mandatory intervention.

This case is unlike Hodge v. Kirkpatrick Development, Inc. (2005) 130 Cal.App.4th 540, upon which Weisman relies. In Hodge, an insurance company paid money to its insureds under a homeowners insurance policy for damage to their house caused by third parties. The court held that the insurance company was subrogated to the insureds rights against the third party, had stepped into the insureds shoes to the extent of the amount paid, and had an interest in the insureds construction defect lawsuit against the tortfeasors to support intervention as a matter of right. (Id. at pp. 548, 550.) In the present case, Jango paid a third party money to purchase a house obtained by the Ritchesons and seeks either return of the money or ownership of the house. Weisman claims to be the assignee of all choses of action formerly owned by Tenacore against Jango, but there is no showing Weisman is a subrogee entitled to bring suit directly against the Ritchesons. For mandatory intervention, the intervener must have a direct interest in the actual property or transaction that is the subject of the action.

The instant action is more like California Physicians Service v. Superior Court (1980) 102 Cal.App.3d 91, a case in which the court denied the motion of a health insurer to intervene in its insureds medical malpractice action against third party tortfeasors. In California Physicians Service, the court observed that the insurer had a claim for reimbursement against the insureds, and it had no independent claim against the tortfeasors in the action. Its goal, the court stated, simply is to preserve its ability to recoup from any sums recovered by the [insureds]. (Id. at p. 95.) Such an interest must be more direct and immediate than that of a simple creditor of one of the parties for mandatory intervention. (Id. at pp. 95-96.) Even assuming Weismans allegations in its complaint for intervention are true, his status with respect to the underlying litigation is similarly that of a mere creditor whose interest does not give rise to mandatory intervention. Such an interest is consequential and thus insufficient for intervention since the underlying action does not directly affect Weisman although the results of the action may indirectly benefit or harm [him]. (Continental Vinyl Products Corp. v. Mead Corp. (1972) 27 Cal.App.3d 543, 550 [shareholder in bankrupt corporation has consequential but not direct interest in outcome of litigation prosecuted on corporations behalf by trustee in bankruptcy]; Olson v. Hopkins (1969) 269 Cal.App.2d 638, 643-644 [creditor of party to litigation has only an attenuated and hence indirect interest in the result because the possibility of benefit or harm from the judgment could become a reality only if rights and duties not involved in the particular litigation nor in privity with it were determined in a separate action].)

Weisman also failed to meet another requisite element under section 387, subdivision (b). There was no evidence that adjudication of the parties claims in his absence would impair or impede his ability to protect the value of his ownership interest, if any. (See California Physicians Service v. Superior Court, supra, 102 Cal.App.3d at p. 96.) Weisman retains the right to bring suit in a separate action against Jango to enforce his rights. Nothing in the record presented indicates a resolution of the controversy between Jango and the Ritchesons would jeopardize Weismans ability to assert whatever claims he has against Jango or foreclose Weismans exercise of his rights. Weismans position would be no better or worse than any other creditor of Jango.

2. The Court Did Not Abuse Its Discretion in Denying the Application for Intervention on the Ground It Was Untimely

On appeal, Weisman contends the trial court erred in denying his application for leave to intervene on the ground it was untimely. He argues there is no evidence of an undue delay from the time the facts justifying intervention arose and the filing of his application. We disagree.

Timeliness is . . . one of the prerequisites for granting an application to intervene. (Northern Cal. Psychiatric Society v. City of Berkeley (1986) 178 Cal.App.3d 90, 109; see also Allen v. California Water & Tel. Co. (1947) 31 Cal.2d 104, 108.) Any unreasonable delay in seeking leave to intervene is a sufficient ground for a denial of the petition. (Northern Cal. Psychiatric Society v. City of Berkeley, supra, at p. 109.)

We find substantial evidence supports the trial courts finding that the application for leave to intervene was untimely. The trial court had before it the proposed complaint in intervention, including the acknowledgment and assignment at issue, various letters between counsel regarding the proposed pleading and Attorney Briggss declaration filed in support of a motion to be relieved as Jangos counsel. Among other things, Briggss declaration recounted the history of his retention as counsel for both Jango and Weisman, and the declaration attached a copy of the agreement under which he was retained. The trial court also had before it the declaration of Weismans present attorney, Roger Y. Muse, in support of Weismans ex parte application for leave to file the complaint in intervention. Muse declared he had personal knowledge of the facts set forth in his declaration, and he could competently testify thereto. In that declaration, Muse informed the trial court that Weisman is the owner of Tenacore Holdings, which in turn owns all assets of Jango . . . . Based on counsels sworn declaration, there was substantial evidence for the trial court to conclude that Tenacore was wholly owned by Weisman and Weisman thus had control over when and if any assignment of its claims against Jango could occur.

Weisman admits in his opening brief that he has been aware of Jangos lawsuit against the Ritchesons since its filing in September 2005. Briggs, Weismans former counsel, stated that disputes arose between Jango and Weisman as early as June 2006. According to Briggs, the issues between Weisman and Blank, Jangos principal, were of such substantial nature that Briggs understood Blank had retained an attorney in Texas to deal with those issues.[5]

Weisman contends there was no prejudice suffered by the parties between the occurrence of the conditions giving rise to Weismans right of intervention and his application to the court. As Weisman concedes, however, the prejudice to which the trial court referred in its order could consist of any or all of the events that occurred in the litigation since its inception. Even if Weisman did not obtain his assignment until sometime after litigation had commenced, Weisman was the sole owner of Tenacore and presumably had complete control over the timing of the assignment. It is reasonable to assume the court found the parties would be prejudiced by the grant of leave to intervene. Although Jango and the Ritchesons had an agreement to arbitrate, that agreement apparently did not extend to Weisman. Had intervention been granted, the parties would be prejudiced because a portion of the matters at issue could not be arbitrated, leading to piecemeal, and potentially conflicting, results.

The cases upon which Weisman relies are not helpful to him. In Estate of Davis (1990) 219 Cal.App.3d 663, the appellate court held that the surety of a probate administrator was entitled to participate as an interested person under a specific statute, Probate Code section 48, in a proceeding seeking to surcharge the suretys principal. (Estate of Davis, at p. 668.) This is not such a proceeding. In Lindelli v. Town of San Anselmo (2006) 139 Cal.App.4th 1499, the appellate court addressed the issue whether attorneys had a sufficient direct interest to intervene on their own behalf to seek attorney fees under the private attorney general statute when the client declines to move for a fee award. (Id. at p. 1501.) The case presented a question of statutory interpretation subject to de novo review. (Id. at pp. 1505, 1512.) Here, the issue is whether the trial court abused its discretion in denying intervention under the circumstances of this case.

In his reply brief, Weisman relies on a case decided by our colleagues in Division Four. (Truck Ins. Exchange v. Superior Court (1997) 60 Cal.App.4th 342.) In Truck Ins. Exchange, the court found Truck had a direct interest and independent standing to intervene in the action because it had a potential right to equitable contribution from alleged co-insurers. (Id. at p. 350.) If Truck was not allowed to intervene, the court noted, Trucks potential claim for equitable contribution might be barred by collateral estoppel, since the insured had defaulted in the action and, in any case, was a suspended corporation without capacity to defend. (Id. at p. 346.) This is materially different from the case at hand. Unlike in Truck Ins. Exchange, the parties here have actively litigated the case, and the court has ordered the action to arbitration at the stipulation of both parties. Weisman is not bound by that stipulation and, if his application were granted, part of the case would have been subject to arbitration and other parts left to the judicial process with the potential for inconsistent and contradictory results.[6]


The order is affirmed. Respondents are to recover costs on appeal.



We concur:

RUBIN, Acting P. J. EGERTON, J.*

Publication courtesy of California pro bono lawyer directory.

Analysis and review provided by Chula Vista Property line attorney.

San Diego Case Information provided by

[1] The facts are taken from the second amended complaint.

[2] The record does not reflect why Weisman retained counsel as well as Jango or why Weisman did not bring suit at the same time to protect his interests, if any.

[3] The record indicates, as related post, that Weisman admittedly is the owner of Tenacore.

[4] Indeed, counsels motion to be relieved was subsequently granted, and successor counsel has appeared for Jango in the action and on this appeal.

[5] Jango has requested that this court take judicial notice of a final judgment entered on November 5, 2007, in the District Court of Galveston County, Texas, cause No. 06CV1176, entitled Jango Capital, L.L.C. et al. v. Weisman et al., in favor of Jango and Blank against defendants including Weisman and Tenacore. The judgment purports to order and declare, among other things, that none of the defendants has any interest in Jango and the only legitimate interest in the company is owned by Blank. The judgment further recites that none of the defendants maintain[s] any valid claim, lien or interest against Jango or its assets or Blank. A certified copy of the final judgment having been presented and no objection having been made by Weisman, we take judicial notice of such judgment in the Texas action. (Evid. Code, 459.) We deny Jangos further request that we take judicial notice of an order denying a motion for new trial in the Texas action, as Jango failed to provide a certified copy of such order.

[6] We note the trial court denied Weismans application for leave to intervene without prejudice to his applying to join the ongoing arbitration. Thus, Weisman is not wholly without recourse.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

Description David A. Weisman appeals from an order denying his ex parte application for leave to file a complaint in intervention in this action brought by respondent Jango Capital, LLC, a Texas limited liability company (Jango), against respondents Steven W. and Renata G. Ritcheson. Court affirm, finding no abuse of discretion.

0/5 based on 0 votes.

    Home | About Us | Privacy | Subscribe
    © 2019 The california lawyer directory

  Copyright © 2019 Result Oriented Marketing, Inc.