Filed 2/27/15 Baeyens v. Westside Nutrition CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication 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

FOURTH APPELLATE DISTRICT

DIVISION THREE

ROBERT BAEYENS et al.,

Plaintiffs, Cross-Defendants and 

Respondents,

v.

WESTSIDE NUTRITION, LLC, et al.,

Defendants, Cross-Complainants, and 

Appellants.

 G049323

 (Super. Ct. No. 30-2012-00607428)

 O P I N I O N 

Appeal from a judgment of the Superior Court of Orange County, Thierry 

Patrick Colaw, Judge. Affirmed in part and reversed in part.

Wheatley Bingham & Baker and William G. Wheatley, Jr., for Defendants, 

Cross-Complainants and Appellants.

Burkhalter Kessler Clement & George, Alton G. Burkhalter and Eric 

Hardeman for Plaintiffs, Cross-Defendants and Respondents.

* * *
2

Westside Nutrition, LLC, Health Eternal, LLC, Health and Beauty Pros, 

L.P., and Body Superior, L.P.,

1 appeal from the judgment entered after the trial court 

granted Robert Baeyens and Paul Baeyens2 judgment on the pleadings as to the Limited 

Partnerships’ answer to the Baeyenses’ first amended complaint, the LLCs’ answer to the 

same complaint, and the LLCs’ cross-complaint against the Baeyenses. The trial court 

concluded the Businesses lacked standing to contest claims that were brought 

derivatively on their behalf or that were brought against parties other than the Businesses. 

Similarly, the court concluded the LLCs’ could not restate their impermissible defenses 

as claims for relief in the cross-complaint.

The trial court primarily relied on our previous decision in Patrick v. Alacer 

Corp. (2008) 167 Cal.App.4th 995 (Patrick). There, we concluded a corporation may not 

defend against the merits of a derivative cause of action alleging breach of fiduciary duty 

or other misconduct by its directors or majority shareholders because a derivative claim is 

brought on the corporation’s behalf and benefits the corporation, even though the 

corporation is named as a nominal defendant. We explained that allowing the nominal 

corporate defendant to defend on the merits would allow the controlling directors or 

shareholders to shift the cost of defending the derivative claims to the corporation against 

which the directors or shareholders allegedly committed the tortious conduct. (Id. at 

pp. 1005-1007.)

 

1 We refer to Westside Nutrition, LLC, and Health Eternal, LLC, collectively 

as the LLCs; Health and Beauty Pros, L.P., and Body Superior, L.P., collectively as the 

Limited Partnerships; and the LLCs and the Limited Partnerships collectively as the 

Businesses.

2 We refer to Robert Baeyens as Robert and Paul Baeyens as Paul. 

Collectively, we will identify them as the Baeyenses. We refer to them by their first 

names to avoid confusion and intend no disrespect. (See In re Marriage of Balcof (2006) 

141 Cal.App.4th 1509, 1513, fn. 2.)
3

We affirm in part and reverse in part. We affirm the judgment on the 

Limited Partnerships’ answer because the Limited Partnerships violated Patrick by 

defending derivative claims brought on their own behalf, and also improperly attempted 

to defend additional claims the first amended complaint alleges against other parties. We 

reverse the trial court’s judgment on the LLCs’ answer because the first amended 

complaint alleges two causes of action directly against the LLCs. Patrick only applies to 

derivative claims, and specifically allowed a corporation to defend a direct claim alleged 

against it even though the corporation could not defend derivative claims alleged on its 

behalf in the same action. Finally, we affirm the judgment on the LLCs’ cross-complaint 

because the LLCs failed to allege an actual controversy existed between the LLCs and the 

Baeyenses, alleging only a controversy between the Baeyenses and Robert Wheatley, the 

other member of the LLCs.

I

FACTS AND PROCEDURAL HISTORY

In 2011, Paul and his father Robert created a business plan to develop an 

independent brand of health and nutritional supplements and also to sell other companies’ 

supplements through online retailers, such as Amazon.com. Shortly after the Baeyenses

started their business, Wheatley approached them and offered to invest. The three men 

agreed Wheatley would provide capital and “‘rent free’” office space while the 

Baeyenses would contribute their business plan and manage the business day to day. 

Although the Baeyenses were not required to contribute any capital, they were promised 

a guaranteed monthly salary. 

Under their agreement, the Baeyenses and Wheatley formed two limited 

partnerships: Body Superior, L.P., to develop an independent brand of supplements, and 

Health and Beauty Pros, L.P., to sell supplements manufactured by other companies. The 

Baeyenses and Wheatley are the only limited partners in the Limited Partnerships, and 
4

Wheatley holds a 59 percent ownership interest in each partnership, while the Baeyenses

hold a 40 percent interest. The Baeyenses and Wheatley also formed two limited liability

companies: Westside Nutrition, LLC, to hold the remaining 1 percent interest in Body 

Superior, L.P., and to serve as its general partner, and Health Eternal, LLC, to hold the 

remaining 1 percent interest in Health and Beauty Pros, L.P., and to serve as its general 

partner. The Baeyenses and Wheatley are the only members in the LLCs, and Wheatley 

holds a 98 percent ownership interest in each of the LLCs, while the Baeyenses hold the 

remaining 2 percent interest. 

The agreements forming the Limited Partnerships designated the general 

partners—i.e., the LLCs—as the managing partners with responsibility “for managing 

and conducting the ordinary and usual business and affairs of the Partnership.” 

Accordingly, whoever controlled the LLCs also controlled the Limited Partnerships. The 

operating agreements for the LLCs designated Wheatley and Robert as the comanagers,

although Wheatley had no role in the daily operations. 

The Baeyenses claim the Businesses were initially prosperous under their 

management, but Wheatley soon derailed their success by breaching his contractual and 

fiduciary duties. For example, the Baeyenses allege Wheatley failed to make all his 

required capital contributions, demanded the Baeyenses make capital contributions not 

required under the agreements, demanded a salary when he provided no services, and 

charged the Businesses excessive rent despite his commitment to provide rent-free office 

space. When the Baeyenses told Wheatley they would resign if he did not stop this 

behavior, Wheatley demanded the Baeyenses execute a noncompete agreement because 

the parties’ other agreements failed to include a prohibition on competing with the 

Businesses. The Baeyenses refused, claiming Wheatley’s demand for a noncompete 

agreement was unconscionable. 

In September 2012, Wheatley changed the locks on the offices and blocked

the Baeyenses access to the Businesses’ computers and records. As the majority member 
5

in each of the LLCs, Wheatley announced he was unilaterally removing Robert as 

comanager of the LLCs and both of the Baeyenses from their positions in the four 

Businesses. Wheatley explained he took these actions because the Baeyenses had 

established a competing business. After seizing control of the Businesses, the Baeyenses

contend Wheatley mismanaged and otherwise ran the Businesses into the ground, and 

also used their assets for his own gain. 

In October 2012, the Baeyenses filed this action, claiming Wheatley lacked 

authority to remove Robert as comanager or take any of the actions affecting their 

participation because the LLCs’ operating agreements required the unanimous vote of all 

members to remove a manager. The first amended complaint alleges 15 causes of action 

and names Wheatley and the four Businesses as defendants. The Baeyenses allege the 

first three causes of action against Wheatley in their own name for breach of the LLCs’ 

operating agreements and an oral agreement concerning the formation and operation of 

the Businesses. The Baeyenses also individually allege the fourth cause of action for 

fraud against Wheatley. The fifth through eighth causes of action allege Wheatley 

breached his fiduciary duties. The Baeyenses allege these claims individually and as 

derivative claims on behalf of each of the four Businesses. The Baeyenses in their 

individual capacity allege the ninth cause of action for defamation per se against 

Wheatley.3 The 10th and 11th causes of action for unjust enrichment and accounting are 

alleged against Wheatley by the Baeyenses individually and as derivative claims on 

behalf of the four Businesses. The 12th and 13th causes of action seek to dissociate the 

LLCs as the general partners of the Limited Partnerships. The Baeyenses allege these 

causes of action individually and as derivative claims on behalf of the Limited 

Partnerships. Finally, the 14th and 15th causes of action seek to dissociate Wheatley 

 

3 Lori Wheatley, Wheatley’s sister, also is named as a defendant on the 

defamation cause of action, but she is not a party to this appeal.
6

from the Limited Partnerships. The Baeyenses allege these causes of action individually 

and as derivative claims on behalf of the Limited Partnerships. 

The Limited Partnerships and the LLCs filed separate answers generally 

denying the first amended complaint’s allegations and asserting several affirmative 

defenses, including a right of recoupment and set off based on the Baeyenses converting 

certain of the Businesses’ funds to their own use, and reformation of the LLCs’ operating 

agreements because the agreements failed to reflect the parties’ true intent. The 

Businesses allege the LLCs’ operating agreements mistakenly include two definitions of 

the phrase “Majority Vote,” one defining it as a vote by more than half of the outstanding 

membership interests, and a second defining the phrase as a unanimous vote by all 

members. According to the LLCs, the parties intended to allow a simple majority of the 

membership interests to make final decisions. In addition to their answer, the LLCs 

joined with Wheatley in filing a cross-complaint against the Baeyenses asserting claims

to reform the LLCs’ operating agreements and for declaratory relief regarding the parties’ 

rights under those agreements. The cross-complaint echoes the reformation allegations in 

the Businesses’ answers.

The Baeyenses moved for judgment on the pleadings, separately 

challenging the Limited Partnerships’ answer, the LLCs’ answer, and the LLCs’ 

cross-complaint in their entirety. The motion did not challenge any specific defense or 

cause of action. Citing our decision in Patrick, the Baeyenses argued the four Businesses 

lacked standing to defend the action because the claims were derivative claims alleged on 

the Businesses’ behalf, not claims directed against them. Similarly, the Baeyenses

argued the LLCs lacked standing to allege the cross-complaint’s reformation and 

declaratory relief claims because those claims simply restated some of the affirmative 

defenses alleged in the answers. 

The trial court agreed the claims involving the four Businesses were 

“derivative in nature” and that Patrick required the Businesses to remain neutral in this 
7

action. The court therefore granted the motion and entered judgment for the Baeyenses

as to the Limited Partnerships’ answer, the LLCs’ answer, and the LLCs’ 

cross-complaint. The judgment stated, “This judgment does not adjudicate, in whole or 

in part, the derivative claims asserted against Defendant Robert Wheatley on the 

[Businesses’] behalf in [the Baeyenses’] First Amended Complaint.” This appeal 

followed. 

II

DISCUSSION

A. Governing Legal Principles on Derivative Actions and the Benefitted Entity’s 

Right to Participate 

“A derivative suit is a suit brought on behalf of a corporation for injury to 

the corporation, often for breach of fiduciary duty, mismanagement or other wrongdoing 

by corporate officers or directors, or for wrongs against the corporation by third parties.” 

(Vega v. Jones, Day, Reavis & Pogue (2004) 121 Cal.App.4th 282, 297.) Because a 

corporation has a separate legal existence from its shareholders, the shareholders have no 

direct cause of action or right of recovery against anyone who has harmed the 

corporation. Instead, the shareholders must bring a derivative action to enforce the 

corporation’s rights and redress its injuries if the board of directors fails or refuses to do 

so. (Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1108 (Grosset).) Limited partnerships 

and limited liability companies similarly have legal existences separate from their 

partners and members, and therefore the principles governing shareholder derivative 

actions apply equally to actions brought by limited partners and members on behalf of 

their limited partnerships or limited liability companies. (Everest Investors 8 v. McNeil 

Partners (2003) 114 Cal.App.4th 411, 425 [derivative action by limited partner]; PacLink 

Communications Internat., Inc. v. Superior Court (2001) 90 Cal.App.4th 958, 963-964 

[derivative action by limited liability company member].)
8

“An action is deemed derivative ‘“if the gravamen of the complaint is 

injury to the corporation, or to the whole body of its stock and property without any 

severance or distribution among individual holders, or it seeks to recover assets for the 

corporation or to prevent the dissipation of its assets.”’ [Citation.] When a derivative 

action is successful, the corporation is the only party that benefits from any recovery; the 

shareholders derive no benefit ‘“except the indirect benefit resulting from a realization 

upon the corporation’s assets.”’ [Citation.]” (Grosset, supra, 42 Cal.4th at p. 1108, 

fn. omitted.) “A personal claim, in contrast, asserts a right against the corporation which 

the shareholder possesses as an individual apart from the corporate entity: ‘If the injury 

is not incidental to an injury to the corporation, an individual cause of action exists.’ 

[Citation.]” (Denevi v. LGCC, LLC (2004) 121 Cal.App.4th 1211, 1222.)

“‘[T]he particular stockholder who brings [a derivative] suit is merely a 

nominal party plaintiff.’ [Citation.] It is the corporation that ‘is the ultimate beneficiary 

of such a derivative suit.’ [Citation.] Thus, ‘[t]he corporation [is] the real party plaintiff 

in the action.’ [Citation.] [¶] Though the corporation is essentially the plaintiff in a 

derivative action, ‘[w]hen a derivative suit is brought to litigate the rights of the 

corporation, the corporation . . . must be joined as a nominal defendant.’ [Citation.] The 

corporation must be joined because ‘its rights, not those of the nominal plaintiff, are to be 

litigated’ [citation], and to offer the real defendants res judicata protection from later 

suits. [Citation.] Naming the corporation a defendant, not a plaintiff, follows from the 

joinder rules: ‘If the consent of any one who should have been joined as plaintiff cannot 

be obtained, he may be made a defendant. . . .’ [Citation.] So ‘although the corporation 

is made a defendant in a derivative suit, the corporation nevertheless is the real 

plaintiff. . . .’ [Citation.] [¶] . . . The only reason the corporation is named a nominal 

defendant [in a derivative action] is its refusal to join the action as a plaintiff. . . . In a 

real sense, the only claim a shareholder plaintiff asserts against the nominal defendant 
9

corporation in a derivative action is the claim the corporation has failed to pursue the 

litigation.” (Patrick, supra, 167 Cal.App.4th at pp. 1003-1004, fn. omitted.)

“‘[T]he general rule for corporate participation in a derivative action is that 

“[u]nless the derivative action threatens rather than advances corporate interests, [the 

corporation] cannot participate in the defense on the merits.”’ [Citation.] ‘Because the 

claims asserted and the relief sought in [the derivative] complaint would, if proven, 

advance rather than threaten the interests of the nominal defendants, the nominal 

defendants must remain neutral in [the] action.’ [Citation.]” (Patrick, supra, 

167 Cal.App.4th at p. 1007.) One of the practical and ethical reasons for this rule is that 

“‘[a]llowing the nominal [corporate] defendants to defend on the merits in effect would 

allow [the individual defendant] to shift the cost of his defense of the derivative suit to 

the corporations against which he has allegedly committed tortious conduct. . . . [The 

individual defendant’s] using his control of the nominal defendants to get them to defend 

on the merits would shift the cost of his defense to the corporations even if [the 

shareholder plaintiff’s] claims are proven.’ [Citation.]” (Ibid.)

Despite this rule, a corporation may assert defenses that do not challenge 

the merits of the derivative claims but rather the shareholder plaintiff’s right or decision 

to bring those claims. For example, the corporation may challenge the plaintiff’s 

standing to bring a derivative action or assert the “‘special litigation committee’” defense, 

which allows the corporation to appoint a committee of independent directors to 

investigate the asserted claims and dismiss the action if they decide it is not in the 

corporation’s best interest and the court determines they acted reasonably and in good 

faith. (Patrick, supra, 167 Cal.App.4th at p. 1005.)

In Patrick, a shareholder sued a corporation and its directors for fraud, 

breach of fiduciary duty, constructive trust, injunctive relief, unfair business practices, 

and declaratory relief. The trial court sustained the corporation’s demurrer to the 

shareholder’s entire complaint and the shareholder appealed. (Patrick, supra, 
10

167 Cal.App.4th at pp. 1000-1002.) Applying the foregoing rules, we concluded the trial 

court erred in sustaining the corporation’s demurrer to the breach of fiduciary duty, 

constructive trust, injunctive relief, and unfair business practices claims because they 

were derivative claims the shareholder brought against the directors on the corporation’s 

behalf. As such, the corporation could not defend against the merits of those claims, and 

instead was required to remain neutral. (Id. at p. 1008.) But we also concluded the 

corporation properly could demur to the fraud and declaratory relief causes of action 

because the plaintiff brought those claims on her own behalf directly against the 

corporation; they were not derivative claims she brought on the corporation’s behalf. (Id. 

at pp. 1015-1017; see Sobba v. Elmen (E.D.Ark. 2006) 462 F.Supp.2d 944, 946-947 

[striking corporate defendant’s answer to derivative complaint because corporation must 

remain neutral and may not defend on merits].)

B. The Judgment is Appealable 

The Baeyenses contend the trial court’s judgment on the Businesses’ 

answers and the LLCs’ cross-complaint is not an appealable judgment because it did not 

dispose of the entire action. According to the Baeyenses, the Businesses are still nominal 

defendants on the derivative claims alleged in the first amended complaint and the one

final judgment rule therefore bars this appeal as premature. We disagree and therefore 

deny the Baeyenses’ motion to dismiss because the trial court’s judgment disposed of all 

causes of action between the Baeyenses and the Businesses.

“The one final judgment rule, codified in Code of Civil Procedure 

section 904.1, subdivision (a)(1), states that an appeal in a civil case ‘may be taken from 

. . . [¶] . . . a judgment, except . . . an interlocutory judgment,” . . . . ‘Judgments that 

leave nothing to be decided between one or more parties and their adversaries, or that can 

be amended to encompass all controverted issues, have the finality required by [Code of 

Civil Procedure] section 904.1, subdivision (a). A judgment that disposes of fewer than 
11

all of the causes of action framed by the pleadings, however, is necessarily 

“interlocutory” [citation], and not yet final, as to any parties between whom another 

cause of action remains pending.’ [Citation.] ‘[A]n appeal cannot be taken from a 

judgment that fails to complete the disposition of all the causes of action between the 

parties . . . .’ [Citation.]” (Abatti v. Imperial Irrigation Dist. (2012) 205 Cal.App.4th 

650, 662, original italics; see First Security Bank of Cal. v. Paquet (2002) 98 Cal.App.4th 

468, 473 (Paquet).)

A judgment need not dispose of the entire action to be final and appealable. 

Rather, the one final judgment rule simply requires the judgment dispose of all the claims 

between the parties to the appeal. (Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 437.) 

For example, a judgment that disposes of all causes of action between a plaintiff and one 

of two defendants is an appealable judgment even though the action remains pending in 

the trial court on the claims between the plaintiff and the other defendant. (Millsap v. 

Federal Express Corp. (1991) 227 Cal.App.3d 425, 430.) Similarly, a judgment that 

resolves all the claims alleged in a cross-complaint, but not all the claims alleged in the 

complaint, is a final appealable judgment if the remaining claims are not between the 

parties to the appeal on the cross-complaint. (Paquet, supra, 98 Cal.App.4th at p. 473.)

Moreover, the one final judgment rule applies separately to each capacity in 

which a party brings an action or is named as a defendant. For example, in a personal 

injury and wrongful death action, a judgment disposing of the surviving spouse’s claims 

in her capacity as executor of the decedent’s estate is final, even though the spouse’s 

claims in her individual capacity and as guardian ad litem for the decedent’s minor 

children are still pending. The surviving spouse in her capacity as executor “was a 

separate party as to whom there was no issue left to be determined.” (Dominguez v. City 

of Alhambra (1981) 118 Cal.App.3d 237, 241; see Paquet, supra, 98 Cal.App.4th at 

p. 474.)
12

The Paquet court applied these principles in the context of a shareholder 

derivative action and cross-complaint. In Paquet, minority shareholders brought a 

derivative action on behalf of a corporation. The minority shareholders named the 

majority shareholders and directors, the corporation, and a bank involved in the 

challenged transactions as defendants, but the minority shareholders did not allege 

individual claims on their own behalf. The bank filed a cross-complaint against the 

minority shareholders, the majority shareholders and directors, and the corporation. The 

bank sought relief against the minority shareholders on the theory the corporation was 

their alter ego. The trial court sustained the minority shareholders’ demurrer and entered 

a judgment dismissing the bank’s cross-complaint against the minority shareholders. 

(Paquet, supra, 98 Cal.App.4th at pp. 471-472.)

On the bank’s appeal, the Paquet court concluded the judgment dismissing 

the cross-complaint was a final appealable order because it disposed of all the claims 

between the bank and the minority shareholders in their individual capacity. (Paquet, 

supra, 98 Cal.App.4th at pp. 472-473.) Although the minority shareholders continued to 

prosecute the derivative claims alleged in their complaint against the bank, the judgment 

on the cross-complaint was a final appealable judgment because the minority 

shareholders alleged those claims in a representative capacity on the corporation’s behalf, 

not in their individual capacity. (Id. at pp. 474-475.) As explained above, a shareholder 

bringing a derivative action is acting as a representative of the corporation and therefore 

is a plaintiff in name only because the action enforces the corporation’s rights, not the 

individual shareholder’s. The corporation is the real party plaintiff in the action. 

(Patrick, supra, 167 Cal.App.4th at pp. 1003-1004; Paquet, at pp. 474-475.)

Here, the judgment is a final appealable judgment because it disposes of all 

adversarial claims between the Baeyenses in their individual capacities and the 

Businesses. The only claims between the Baeyenses individually and the Businesses 

were the reformation and declaratory relief causes of action alleged in the 
13

cross-complaint, and the judgment disposes of those claims. In the first amended 

complaint, the Baeyenses alleged individual claims against Wheatley on their own behalf 

and derivative claims against Wheatley on behalf of the Businesses, but the Baeyenses

did not allege any claims in their individual capacities against the Businesses. Although 

the Businesses remain nominal defendants on the derivative claims, they are not 

adversaries of the Baeyenses in their individual capacity. To the contrary, the Baeyenses 

and the Businesses are aligned against Wheatley on the derivative claims. The continued 

pendency of the derivative claims therefore does not prevent the judgment from being a 

final appealable judgment. (Paquet, supra, 98 Cal.App.4th at pp. 474-475.)

The only claims in the first amended complaint that could potentially 

prevent the judgment from being a final appealable judgment are the 12th and 13th

causes of action. The Baeyenses purport to allege these two causes of action individually 

and on behalf of the Limited Partnerships against Wheatley. Under Corporations Code 

section 15906.03, subdivision (e), these claims seek to dissociate the LLCs as the general 

partners of the Limited Partnerships based on Wheatley’s alleged misconduct. On their 

face, the claims potentially qualify as claims between the Baeyenses individually and the 

LLCs. Corporation Code section 15906.03, subdivision (e), however, only authorizes 

expulsion of a general partner from a limited partnership “on application by the limited 

partnership.” (Corp. Code, § 15906.03, subd. (e).) The statute does not allow a limited 

partner to individually assert a claim to expel a general partner. The Baeyenses therefore 

lack standing to pursue the 12th and 13th causes of action individually, and the claims 

may only be pursued derivatively on the Limited Partnerships’ behalf. Accordingly, 

these causes of action are not adversarial claims between the Baeyenses individually and 

any of the Businesses, and they do not prevent the judgment from being a final 

appealable judgment.
14

C. The Trial Court Properly Granted Judgment on the Pleadings on the Limited 

Partnerships’ Answer and the LLCs’ Cross-Complaint, But Not the LLCs’ Answer

The Baeyenses’ motion sought judgment on the pleadings on three separate 

pleadings—the Limited Partnerships’ answer, the LLCs’ answer, and the LLCs’ 

cross-complaint. After addressing the governing standard for judgment on the pleadings 

motion, we separately address the Baeyenses’ challenges to each of these pleadings.

1. Governing Judgment on the Pleading Standards

A motion for judgment on the pleadings functions as a general demurrer, 

challenging whether a complaint or cross-complaint states facts sufficient to constitute a 

cause of action, or whether an answer states facts sufficient to constitute a defense. 

(Code Civ. Proc., § 438, subd. (c); County of Orange v. Association of Orange County 

Deputy Sheriffs (2011) 192 Cal.App.4th 21, 32 (County of Orange).) The court must 

accept the challenged pleading’s factual allegations as true and disregard the controverted 

allegations of any opposing pleadings. (County of Orange, at p. 32; Sebago, Inc. v. City 

of Alameda (1989) 211 Cal.App.3d 1372, 1379-1380.) For example, on a motion for 

judgment on the pleadings challenging an answer, the court must accept as true the 

answer’s factual allegations and disregard the controverted allegations in the complaint. 

(Sebago, at pp. 1379-1380.)

The court, however, “do[es] not accept as true ‘any contentions, deductions 

or conclusions of fact or law contained [in the challenged pleading].’ [Citation.]” 

(County of Orange, supra, 192 Cal.App.4th at p. 32.) Similarly, facts appearing in 

exhibits attached to or referenced in the pleading are given precedence over inconsistent 

allegations in the pleading. (Sarale v. Pacific Gas & Electric Co. (2010) 

189 Cal.App.4th 225, 245.)

A motion for judgment on the pleadings may be made as to an entire 

pleading, or as to any cause of action or affirmative defense separately alleged in the 

challenged pleading. (Code Civ. Proc., § 438, subd. (c)(2).) If the motion challenges an 
15

entire pleading without separately challenging individual causes of action or affirmative 

defenses, the motion must be denied if the pleading adequately alleges any cause of 

action or affirmative defense even though other causes of action or affirmative defenses 

are deficient. (Warren v. Atchison, T. & S. F. Ry. Co. (1971) 19 Cal.App.3d 24, 36

(Warren); South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 734 (South 

Shore) [“if one of the defenses or counterclaims is free from the objections urged by 

demurrer, then a demurrer to the entire answer must be overruled”]; see County of 

Orange, supra, 192 Cal.App.4th at p. 32 [“In reviewing the trial court’s grant of the 

motions for judgment on the pleadings under Code of Civil Procedure section 438, 

subdivision (b)(1), we apply the same rules governing the review of an order sustaining a 

general demurrer”].)

“We review de novo, and ‘“are required to render our independent 

judgment on whether a cause of action has been stated”’ [citation], without regard for the 

trial court’s reasons for granting the motion. [Citation.]” (County of Orange, supra, 

192 Cal.App.4th at p. 32.)

2. The Limited Partnerships’ Answer

The Limited Partnerships contend the trial court erred in granting the 

motion for judgment on the pleadings as to their answer because the first amended 

complaint’s first, second, 12th, and 13th causes of action threatened rather than advanced 

their interests. We do not agree with the Limited Partnerships’ characterization of these 

four causes of action, and conclude the trial court properly granted the motion for 

judgment on the pleadings on the Limited Partnerships’ answer.

On their own behalf, the Baeyenses allege the first and second causes of 

action against Wheatley for breach of the LLCs’ operating agreements. These causes of 

action are not alleged as derivative claims and neither the Limited Partnerships nor the 

LLCs are named as actual or nominal defendants. The Baeyenses allege that Wheatley—
16

and Wheatley only—breached the LLCs’ operating agreements when he unilaterally 

removed Robert as a manager, prevented the Baeyenses from participating in the 

Businesses’ operation and management, and grossly mismanaged the Businesses. The 

Limited Partnerships cite no authority allowing a party to defend against a claim that is 

not alleged against that party. To the contrary, a party who asserts an interest in a claim 

that is not alleged against that party generally must make a motion to intervene and 

defend on behalf of the named party. (See Code Civ. Proc., § 387.) Without an order 

granting it leave to intervene, an unnamed party has no right to defend against a claim.

Citing Patrick, the Limited Partnerships nonetheless contend they are 

entitled to defend against these breach of contract claims because they will be adversely 

affected if the Baeyenses prevail. (See Patrick, supra, 167 Cal.App.4th at p. 1007 [“‘the 

general rule for corporate participation in a derivative action is that “[u]nless the 

derivative action threatens rather than advances corporation interests, [the corporation] 

cannot participate in the defense on the merits”’”].) The Limited Partnerships contend

these two causes of action require the court to decide the central issue in this litigation, 

i.e., whether the LLCs’ operating agreements required a simple majority vote of all 

membership interests (as Wheatley contends) or a unanimous vote of all members (as the 

Baeyenses contend) to remove Robert as one of the LLCs’ two managers. According to 

the Limited Partnerships, if the Baeyenses prevail on this issue Robert essentially would 

become a lifetime manager and never could be removed, gridlock would ensue on all 

issues on which Robert did not agree with Wheatley, and Robert would be able to 

manage the LLCs while also running a competing business he started with Paul. The 

Limited Partnerships contend that result would adversely affect them because the LLCs 

are the Limited Partnerships’ general partner. This contention fails for two reasons.

First, Patrick applies only to derivative causes of action. These are not 

derivative causes of action and do not even name the Limited Partnerships as a party. 

Nothing in Patrick allows a party to defend against a claim that is not alleged against it.
17

Second, assuming Patrick applies, the Limited Partnerships’ parade of 

horribles ignores the adverse affects both the Limited Partnerships and LLCs could suffer 

if Wheatley prevails on this issue—Wheatley would continue to mismanage the LLCs 

and the Limited Partnership and threaten their viability. At its core, this dispute is over 

what the members of the LLCs intended when they formed the LLCs. Both Wheatley 

and the Baeyenses accuse each other of wrongdoing that caused and continues to cause 

injury to the LLCs (and the Limited Partnerships). Although they have a separate legal 

existence from their members and manager, the LLCs only may act through those 

individuals. In this case, the Limited Partnerships contend the Baeyenses’ causes of 

action are adverse to the Limited Partnerships’ and the LLCs’ interest only because 

Wheatley controls the four Businesses. If the Baeyenses were in control, it is likely the 

Limited Partnerships would claim Wheatley’s actions are contrary to the Limited 

Partnerships’ interest. These contrary positions demonstrate why the Limited 

Partnerships may not be permitted to take a side in this dispute. (See Patrick, supra, 

167 Cal.App.4th at pp. 1007-1008.)

The Baeyenses allege the 12th and 13th causes of action on their own 

behalf and as derivative claims on the Limited Partnerships’ behalf to expel the LLCs as 

the general partners. As explained above, the Baeyenses lack standing to bring these 

claims in their own name because the statutory provision authorizing the expulsion of a 

general partner only allows the limited partnership to seek such relief. (Corp. Code, 

§ 15906.03, subd. (e).) Accordingly, these causes of action are properly viewed only as 

derivative claims brought on the Limited Partnerships’ behalf and therefore Patrick

prevents the Limited Partnerships from defending against these claims. (Patrick, supra, 

167 Cal.App.4th at p. 1008.)

The Limited Partnerships contend they have a right to defend these claims 

because the claims seek relief well beyond the governing statute. The Limited 

Partnerships point to the first amended complaint’s prayers for relief on these causes of 
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action, which request a court order that the Baeyenses “are authorized to select a new 

general partner for [the Limited Partnerships].” Although we agree the first amended 

complaint requests relief not authorized under Corporations Code section 15906.03, 

subdivision (e), that request does not confer upon the Limited Partnerships a right to 

defend claims they may not otherwise defend. The request for relief beyond what the 

statute authorizes does not mean these claims threaten rather than advance the Limited 

Partnerships’ interests. The claims still seek to remove a general partner who allegedly 

threatens the financial viability of the Limited Partnerships through mismanagement. 

Moreover, the Limited Partnerships assume the trial court will grant relief 

not authorized by the governing statute simply because the first amended complaint 

requests it. We assume the trial court will follow the dictates of the Corporations Code, 

which provides guidance when a general partner is dissociated or expelled. (Corp. Code, 

§ 15908.01 [dissociating a general partner dissolves a limited partnership unless (1) at 

least one remaining general partner continues the business, or (2) where there is no 

remaining general partner, consent to continue the limited partnership and admit at least 

one general partner is given within 90 days by limited partners owning a majority of the 

rights to receive distributions]; see Friedman et al., Cal. Practice Guide: Corporations 

(The Rutter Group 2014) ¶ 2:35, p. 2-13.)

3. The LLCs’ Answer

The LLCs also contend the trial court erred in granting the motion for 

judgment on the pleadings as to their answers because the first amended complaint’s first, 

second, 12th, and 13th causes of action threatened rather than advanced their interests. In 

addition, the LLCs contend they may defend against the 12th and 13th causes of action 

because those are direct claims against the LLCs seeking to expel them as the Limited 

Partnerships’ general partners. We agree with this latter contention.
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As explained above, the Baeyenses allege the 12th and 13th causes of 

action individually and derivatively on the Limited Partnerships’ behalf to expel the 

LLCs as the general partners, but the Baeyenses lack standing to bring these claims in 

their own name because only the limited partnership may seek to expel a general partner. 

(Corp. Code, § 15906.03, subd. (e).) The Baeyenses allege these claims against 

Wheatley because they seek to expel the LLCs based on Wheatley’s conduct, but it is the 

LLCs, not Wheatley, that are the general partners subject to expulsion. Accordingly, 

although these two causes of action are derivative claims brought on the Limited 

Partnerships’ behalf, they are not derivate claims brought on the LLCs’ behalf. To the 

contrary, they are direct claims against the LLCs. 

As legal entities distinct from their members, the LLCs have the legal right 

to defend claims against them in their own name. (Corp. Code, § 17701.05, subd. (b).) 

In Patrick, the corporation could not defend the derivative claims brought on its behalf, 

but it could defend the direct fraud claim because that claim sought relief not on behalf of 

the corporation, but against it. (Patrick, supra, 167 Cal.App.4th at p. 1016.) Similarly, 

the 12th and 13th causes of action in this case seek direct relief against the LLCs—to 

expel them as general partners—and therefore the LLCs may defend against these claims 

even though this action includes other causes of action that are brought derivatively on 

the LLCs’ behalf. That the 12th and 13th causes of action are derivative claims brought 

on the Limited Partnerships’ behalf does not change that result. The claims must be 

separately analyzed as to each party.

The Baeyenses contend the LLCs should not be allowed to defend these 

claims because they are based on the same conduct by Wheatley as the derivative breach 

of fiduciary duty claims brought on the LLCs’ behalf. But that does not change that these 

are direct claims against the LLCs, and Patrick only applies to derivative claims brought 

on behalf of the LLCs. The Baeyenses cite no authority to justify extending Patrick to 
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apply to direct claims, and therefore we conclude the trial court erred in granting the 

Baeyenses judgment on the pleading as to the 12th and 13th causes of action. 

This conclusion eliminates the need to separately address whether the LLCs 

may properly defend against the first and second causes of action for breach of the LLCs’ 

operating agreements. Although the foregoing analysis denying the Limited Partnerships

the right to defend against the first and second causes of action would apply equally to 

the LLCs, the LLCs’ right to defend against the 12th and 13th causes of action required 

the trial court to deny the Baeyenses’ motion as to the LLCs’ entire answer. The 

Baeyenses sought judgment on the pleadings as to the LLCs’ entire answer only, and 

therefore the LLCs’ right to defend the 12th and 13th causes of action requires a denial of 

the entire motion. (Warren, supra, 19 Cal.App.3d at p. 36; South Shore, supra, 

226 Cal.App.2d at p. 734; see County of Orange, supra, 192 Cal.App.4th at p. 32.)

4. The LLCs’ Cross-Complaint

The LLCs contend the trial court erred in granting the Baeyenses judgment 

on the pleadings as to the cross-complaint because the LLCs alleged sufficient facts to 

state a declaratory relief cause of action by alleging an actual controversy between the

LLCs and the Baeyenses over the proper definition of the phrase “Majority Vote” in the 

LLCs’ operating agreements. We disagree. 

Code of Civil Procedure section 1060 authorizes “[a]ny person interested 

. . . under a contract, or who desires a declaration of his or her rights or duties with 

respect to another . . . in cases of actual controversy relating to the legal rights and duties 

of the respective parties, [to] bring an original action or cross-complaint . . . for a 

declaration of his or her rights and duties . . . .” (Code Civ. Proc., § 1060.) The 

fundamental basis for a declaratory relief claim is the existence of an actual, present 

controversy relating to the legal rights and duties of the parties. (Market Lofts 

Community Assn. v. 9th Street Market Lofts, LLC (2014) 222 Cal.App.4th 924, 931; 
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Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 513.) “In order for 

a party to pursue an action for declaratory relief, the ‘“actual, present controversy must be 

pleaded specifically . . . .”’ [Citation.] Thus, a claim must provide specific facts, as 

opposed to conclusions of law, which show a ‘“controversy of concrete actuality.”’ 

[Citation.]” (Jenkins, at pp. 513-514, original italics.) The party asserting the claim must 

be a party interested in the alleged controversy. (Market Lofts, at p. 931.) Declaratory 

relief may be refused where the court’s declaration or determination is not necessary or 

proper at the time under all the circumstances. (Code Civ. Proc., §1061; DeLaura v 

Beckett (2006) 137 Cal.App.4th 542, 545.)

Here, the LLCs’ cross-complaint states, “[t]his is an action for declaratory 

relief . . . to reform the [LLCs’] respective Operating Agreements and thereby correct a 

scrivener’s error therein.” The LLCs specifically allege the Baeyenses and Wheatley 

entered into the operating agreements to form the LLCs “to control, manage, and operate 

all aspects of the Limited Partnerships.” The LLCs further allege the operating 

agreements fail to accurately reflect the Baeyenses’ and Wheatley’s true intent when they 

entered into the agreements because the agreements mistakenly include two definitions of 

the phrase “‘Majority Vote,’” as described above. According to the LLCs, the parties 

intended the phrase to require a majority vote of all outstanding membership interests to 

remove a manager, and the operating agreements should be reformed to reflect that 

intent. The cross-complaint requests a judicial declaration to that effect.

The cross-complaint therefore specifically alleges an actual, present 

controversy between the Baeyenses and Wheatley as the parties who entered into the 

operating agreements. The copies of the operating agreements incorporated into the 

cross-complaint by reference confirm the LLCs are not parties to those agreements. The 
22

LLCs do not allege how or why they are interested parties with standing to assert the 

cross-complaint’s declaratory relief claim.4 

As explained above, the Baeyenses and Wheatley dispute who controls and 

has the right to manage the LLCs. Both sides contend they are advancing the LLCs’ 

interests. Wheatley merely is the member who has seized control of the LLCs and 

therefore has the ability to control their actions, such as directing the LLCs to join him in 

bringing the cross-complaint and to claim his position is in the LLCs’ best interest. 

Wheatley’s control over the LLCs, however, does not make the LLCs parties interested in 

the dispute between the Baeyenses and Wheatley. Accordingly, we agree with the trial 

court’s conclusion the LLCs failed to allege a claim against the Baeyenses. 

III

DISPOSITION

The judgment is affirmed in part and reversed in part. The judgment in the 

Baeyenses’ favor on the Limited Partnerships’ answer and the LLCs’ cross-complaint is 

affirmed. The judgment the Baeyenses’ favor on the LLCs’ answer is reversed. In the 

interest of justice, the parties shall bear their own costs on appeal. 

ARONSON, J.

WE CONCUR:

O’LEARY, P. J.

FYBEL, J.

 

4 The LLCs do not address the cross-complaint’s separate reformation claim.