Filed 8/2/22

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

FRIEND OF CAMDEN, INC., et 

al.,

Plaintiffs and Appellants,

v.

BARBARA BRANDT, as Trustee, 

etc., et al.,

Defendants and Respondents.

B309746

Los Angeles County

Super. Ct. No. 19STCP04706

 

APPEAL from an order of the Superior Court of Los Angeles 

County, Maureen Duffy-Lewis, Judge. Reversed and remanded 

with directions.

Gutman Law, Alan S. Gutman, John Juenger; Greines, 

Martin, Stein & Richland, Robin Meadow, Geoffrey B. Kehlmann

and Jeffrey Gurrola for Plaintiffs and Appellants.

Klapach & Klapach, Joseph S. Klapach; Hamburg, Karic, 

Edwards & Martin, Gregg A. Martin and Ann S. Lee for 

Defendants and Respondents.

____________________________________
2

SUMMARY

A plaintiff owning a 1 percent interest in a limited liability 

company (LLC) filed a lawsuit seeking judicial dissolution of the 

LLC under Corporations Code section 17707.03. (All statutory 

references are to the Corporations Code.) Defendants, other 

members of the LLC who together held 50 percent of the 

membership interests, filed a motion to avoid the dissolution by 

purchasing the plaintiff’s 1 percent interest. (§ 17707.03, 

subd. (c).) Then the plaintiff, together with other members owning 

49 percent of the membership interests in the LLC—for a total of 

50 percent—voted to dissolve the LLC. (§ 17707.01, subd. (b).) 

The issue in this appeal is whether the vote to dissolve the LLC 

extinguished the right defendants otherwise would have had to 

purchase plaintiff’s 1 percent interest and avoid dissolution of the 

LLC.

We conclude, in accordance with the plain language of 

section 17707.01, that the answer is “yes,” and the vote of 

50 percent of the LLC membership interests to dissolve the LLC

must be given effect. Consequently, the trial court erred when it 

issued an order appointing appraisers to determine the price 

defendants must pay to purchase plaintiff’s 1 percent membership 

interest. The trial court must dismiss the buyout proceeding as 

moot and direct the parties to wind up the activities of the LLC.

FACTUAL AND LEGAL BACKGROUND

1. The Parties

The parties are members of an LLC, Ventura-Petit East, 

LLC (VPE), that owns a commercial office building. Plaintiff 

Friend of Camden, Inc., is the manager of VPE and owns 1 percent 

of the membership interests in VPE. The two other members who 

voted with Friend of Camden to dissolve the LLC are Avondale 
3

Investment Partners, L.P., which owns 39.415 percent of the 

membership interests, and an irrevocable trust that owns 9.585

percent of the membership interests, the trustees of which are 

Ralph and Shirley Shapiro. (Mr. Shapiro is also chairman of 

Friend of Camden and chairman of the general partner in 

Avondale Investment Partners.) Together, these three entities 

own 50 percent of the membership interests. We will refer to them 

as plaintiffs or the Shapiro parties.

Defendants, as trustees of various trusts, own the other 

50 percent of the membership interests in VPE. They include

Barbara Brandt, Shirley Wilson, James Bristol, Jamy Kahn and 

Fiduciary Trust International of California. We will refer to them 

as defendants or the Brandt parties.

Plaintiffs and defendants have disagreed since 2017 about 

whether to sell the building VPE owns and manages, which is 

VPE’s primary income-producing asset. Plaintiffs sought to 

market the building for sale, but they could not obtain the 

approval of more than 50 percent of the membership interests as

required under the LLC’s operating agreement.

2. The Legal Background

Under section 17707.01, an LLC is dissolved in one of four 

different ways, only two of which are relevant to our discussion: 

(1) 50 percent or more of the members vote to dissolve the LLC 

(id., subd. (b)); or (2) a court decrees judicial dissolution under 

section 17707.03 (§ 17707.01, subd. (d)). An LLC “is dissolved . . .

upon the happening of the first to occur” of those events. 

(§ 17707.01.) A court may decree the dissolution of an LLC on the 

occurrence of several events, including that “[t]he management of 

the limited liability company is deadlocked or subject to internal 

dissension.” (§ 17707.03, subd. (b)(4).)
4

In a suit for judicial dissolution by a manager or member of 

an LLC, “the other members may avoid the dissolution of the 

limited liability company by purchasing for cash the membership 

interests owned by the members so initiating the proceeding, the 

‘moving parties,’ at their fair market value.” (§ 17707.03, 

subd. (c)(1).) If the purchasing parties are unable to agree with the 

moving parties on the fair market value, and provide a bond as 

described in the statute, “the court, upon application of the 

purchasing parties, either in the pending action or in a proceeding 

initiated in the superior court of the proper county by the 

purchasing parties, shall stay the winding up and dissolution 

proceeding and shall proceed to ascertain and fix the fair market 

value of the membership interests owned by the moving parties.” 

(Id., subd. (c)(2).)

The statute describes how the court shall fix the fair market 

value of the moving parties’ membership interests and the decree 

to be entered. It provides in part: “The court shall appoint three 

disinterested appraisers to appraise the fair market value of the 

membership interests owned by the moving parties, and shall 

make an order referring the matter to the appraisers so appointed 

for the purpose of ascertaining that value. The order shall 

prescribe the time and manner of producing evidence, if evidence is 

required. The award of the appraisers or a majority of them, when 

confirmed by the court, shall be final and conclusive upon all 

parties. The court shall enter a decree that shall provide in the 

alternative for winding up and dissolution of the limited liability 

company, unless payment is made for the membership interests 

within the time specified by the decree. . . . Any member aggrieved 

by the action of the court may appeal therefrom.” (§ 17707.03, 

subd. (c)(3).)
5

The statute also provides that “[a] dismissal of any suit for 

judicial dissolution by a manager, member or members shall not 

affect the other members’ rights to avoid dissolution pursuant to 

this section.” (§ 17707.03, subd. (c)(6).) “The upshot of 

section 17707.03, subdivision (c)(6)” is that “ ‘[o]nce the buyout 

procedure is commenced, the moving party cannot, by dismissing 

the judicial dissolution action, prevent the buyout procedure from 

going forward. The purchasing party has the right to pursue the 

buyout procedure by compelling a sale (if the valuation is 

favorable) or walking away (if it is not).’ ” (Kennedy v. Kennedy

(2015) 235 Cal.App.4th 1474, 1487.) One question we must resolve

in this appeal is whether section 17707.03, subdivision (c)(6), 

supports defendants’ contention that plaintiffs cannot prevent a 

buyout, even though plaintiffs never dismissed this dissolution 

action, and the buyout procedure did not commence before 

plaintiffs voted to dissolve the LLC. As explained below, we reject 

that contention.

3. The Lawsuit 

Friend of Camden, manager and 1 percent owner of VPE, 

filed this lawsuit in October 2019, seeking a decree of judicial 

dissolution of the LLC. The complaint cited the irreconcilable 

deadlock between the Brandt parties and the Shapiro parties, 

“whose interests are split 50-50, over what to do with VPE’s sole

income-producing asset.” 

These were the pertinent ensuing events.

On December 17, 2019, defendants filed an answer and a 

cross-complaint alleging several causes of action against Friend of 

Camden (and the LLC as a nominal defendant), including breach 

of fiduciary duty and breach of contract. On the same day, they 

filed a “motion to stay proceedings in order to ascertain value of 
6

and purchase [Friend of Camden’s] membership interest.” The 

motion stated, among other things, that defendants were prepared 

to post the necessary bond and that the court was “required to 

order stay of all proceedings and appoint appraisers to appraise 

the value of [Friend of Camden’s] membership interest in VPE.” 

On January 2, 2020, Friend of Camden and the other 

Shapiro parties, together holding 50 percent of the membership 

interests, voted “for dissolution pursuant to and in accordance with 

California Corporations Code § 17707.01(b).” 

On January 10, 2020, Friend of Camden and the other 

Shapiro parties as prospective plaintiffs moved for leave to file a 

first amended complaint for judicial dissolution. The proposed 

amended complaint added the other Shapiro parties as plaintiffs 

seeking dissolution of VPE; added VPE as a nominal defendant; 

and added “a second cause of action for dissolution pursuant to 

Corporations Code § 17707.01(b), as 50% of the voting interests 

have voted for dissolution.” The motion stated among other things 

that new counsel for Friend of Camden substituted into the case on 

December 16, 2019, and that there was “no statutory prohibition 

regarding amendment for additional members to be included 

amongst the ‘moving parties’ seeking dissolution.” 

On January 13, 2020, Friend of Camden filed its opposition 

to defendants’ motion to stay the proceedings, arguing the motion 

should be denied without prejudice or continued until after a 

ruling on Friend of Camden’s motion for leave to amend. 

On January 17, 2020, defendants filed a reply, arguing their 

right to a stay in order to purchase Friend of Camden’s 

membership interest was mandatory, and Friend of Camden lost 

any right to prosecute its dissolution action once defendants 
7

elected to purchase Friend of Camden’s interest, including any 

right to amend its complaint. 

On February 10, 2020, the trial court issued a ruling 

granting defendants’ motion for stay of proceedings “per 

Corporations Code 17707.03(c) and $100,000.00 bond must be 

posted.” Defendants posted the bond on February 26, 2020.

Although the court had stayed the dissolution proceeding, on 

March 16, 2020, the court granted Friend of Camden’s motion for 

leave to amend the complaint for judicial dissolution. Plaintiffs

filed the first amended complaint on March 20, 2020. Defendants 

responded with a demurrer and a motion to strike the first 

amended complaint. 

On July 10, 2020, defendants filed a motion to appoint 

appraisers.

On September 10, 2020, the court held a hearing on 

defendants’ demurrer and motion to strike the first amended 

complaint. The court stated its understanding that defendants 

were demurring “because the case is stayed and the buyout is in 

progress,” and defense counsel confirmed that understanding.

(Plaintiffs’ counsel said, among other things, that defendants were 

trying “to take an advantage of a technical mistake that was made 

[by] prior counsel in filing this action on behalf of Friend of 

Camden.”) The trial court found “the bond was previously posted, 

the case is stayed.” The court’s minute order similarly stated: 

“The case is stayed. Defendant[s] [are] in the process of buying 

out.” Having found the case was stayed, the court did not rule on 

defendants’ demurrer or motion to strike the first amended 

complaint.

On October 27, 2020, plaintiffs filed their opposition to 

defendants’ motion to appoint appraisers. They argued the court 
8

lacked jurisdiction to grant the motion for several reasons, 

including that VPE had already been dissolved by the January 2, 

2020 vote of 50 percent of the voting interests in accordance with 

section 17707.01, subdivision (b). Plaintiffs asked the court to lift 

the February 10, 2020 stay order and issue a new stay “of the 

entire action except for Plaintiffs’ second cause of action for an 

order confirming VPE’s dissolution pursuant to [section] 

17707.01(b).” 

After a hearing on November 9, 2020, the court granted 

defendants’ motion to appoint appraisers. 

On January 5, 2021, plaintiffs filed a notice of appeal from 

the order granting defendants’ motion for appointment of 

appraisers. The next day, plaintiffs filed a petition for writ of 

supersedeas in this court, requesting a stay of the appraisal order 

pending appeal. After receiving opposition from defendants and 

plaintiffs’ reply, we granted the writ of supersedeas and stayed any 

further buyout proceedings. 

DISCUSSION

We note two preliminary matters.

First, plaintiffs request judicial notice of the petition for writ 

of mandate they filed on January 6, 2021. We grant the request.

Second, defendants argue we lack jurisdiction because the 

appraisal order is not appealable, and further contend we should 

not exercise our discretion to treat an improper appeal as a 

petition for writ of mandate. Even if the order were not appealable, 

we would exercise our discretion to treat the appeal as a writ. In 

our view, the necessary “extraordinary circumstances” are present 

to warrant writ review. (See H. D. Arnaiz, Ltd. v. County of San 

Joaquin (2002) 96 Cal.App.4th 1357, 1366-1367.) Accordingly, we 

do not decide the appealability issue, and proceed to the merits of 
9

the legal issue presented: whether plaintiffs’ January 2, 2020 vote 

to dissolve the LLC under section 17707.01, subdivision (b), 

extinguished defendants’ right under section 17707.03, subdivision 

(c), to purchase Friend of Camden’s 1 percent interest in VPE.

1

1. The Law

We have already described the statutory scheme for 

dissolution of an LLC. As relevant here, there are two ways: by a 

vote of 50 percent of the membership interests, or by entry of a

decree of judicial dissolution. Friend of Camden first sought a 

decree of judicial dissolution, resulting in the apparently 

unanticipated prospect of a buyout that would give the Brandt 

parties control of the LLC. Friend of Camden and the other 

Shapiro parties then took the second route, voting to dissolve the 

LLC. We see no legal basis for preventing them from doing just 

that.

The statute states unequivocally that an LLC “is dissolved, 

and its activities shall be wound up, upon the happening of the 

first to occur” of the events listed, one of which is a vote to dissolve. 

Before that vote, defendants filed their buyout motion in the 

judicial dissolution proceeding, but we see nothing in the statute or 

other law to suggest that the mere filing of the buyout motion 

somehow operated to prevent members from voting to dissolve the 

1 Our resolution of this issue makes it unnecessary to decide 

numerous other issues raised by the parties, including plaintiffs’ 

contentions the buyout cannot go forward because the complaint 

for dissolution was superseded by the first amended complaint; the 

trial court was required to grant leave to amend the complaint 

because the added plaintiffs were indispensable parties; and that a 

buyout, if permitted, must include the entirety of the Shapiro 

parties’ 50 percent interest.
10

LLC. The buyout procedure did not begin until the court ordered 

the stay of the dissolution proceeding 39 days after the vote to 

dissolve. Under the statute, the LLC was dissolved in accordance 

with that vote, and its activities are now required to be wound up.

2. Defendants’ Contentions

Defendants proffer several reasons why, they say, the 

January 2020 vote “was not effective, immediately or otherwise, to 

dissolve VPE.” Most of the asserted reasons take as their premise 

the notion that plaintiffs cannot vote to dissolve after a judicial 

dissolution action is filed and after defendants have filed a motion 

to stay that action to seek a buyout. Defendants describe the

timing of the vote to dissolve as “circumvent[ing] the statutory 

buy-out procedure.” 

We agree the vote to dissolve effectively circumvented the 

buyout procedure. Section 17707.01 expressly permits a vote to 

dissolve, and such a vote effectively moots a judicial dissolution 

proceeding and any ensuing buyout proceeding. Defendants 

present no authority to support their assertions that such a vote is 

in any way improper.2 There is none.

Defendants briefly acknowledge the statutory “first to occur” 

language, but say “this language means only that the four methods 

are alternative methods of dissolution,” implying that the first 

“method” to occur was the buyout proceeding. That is not what 

section 17707.01 provides. Section 17707.01 says an LLC is 

2 The parties argue about whether the original complaint for 

dissolution was filed only by Friend of Camden and not the other 

Shapiro parties by mistake or as a deliberate strategy. We find 

immaterial the circumstances that led to the vote to dissolve, as 

the statute does not require an explanation or justification.
11

dissolved by the “happening of the first to occur,” either “the vote of 

50 percent” or “[e]ntry of a decree” of judicial dissolution.

Defendants say this construction of the statutory language 

“would frustrate the purpose of section 17707.03’s buy-out 

procedure and the Legislature’s clearly expressed intent.” For this 

they cite Mart v. Severson (2002) 95 Cal.App.4th 521, 524, where 

the court stated that the buyout procedure for corporations

(§ 2000) “reflects the Legislature’s ‘interest [in] preserving the 

corporate enterprise as a going concern if desired by the majority 

or by the other 50 owners’ and is intended to be a ‘meaningful 

alternative to termination of the enterprise.’ ”

But the law applicable to corporations is different from the 

law applicable to LLC’s. Section 2000, the statute construed in 

Mart v. Severson, provides a buyout procedure for corporations 

that applies in both a suit for involuntary dissolution and in a 

proceeding for voluntary dissolution. Under section 2000, if 

shareholders representing only 50 percent of the voting power of 

the corporation vote to dissolve, holders of the other 50 percent

have the right to avoid dissolution by buying them out. (§ 2000, 

subd. (a).) That is not the case under the law governing LLCs: 

When 50 percent vote to dissolve under section 17707.01, the LLC 

is dissolved, and the other 50 percent have no buyout right. In 

short, the Legislature intended to treat the dissolution of 

corporations differently than the dissolution of LLC’s.

Next, defendants refer us to one of the provisions on judicial 

dissolution in the law governing LLC’s. That provision, 

section 17707.03, subdivision (c)(6) (already described at p. 5, 

ante), says a dismissal of a suit for judicial dissolution “shall not 

affect the other members’ rights to avoid dissolution pursuant to 

this section.” (§ 17707.03, subd. (c)(6).) Defendants say that if
12

Friend of Camden “had formally dismissed its dissolution action

and then purported to vote to dissolve the LLC,” it “could not have 

prevented [defendants] from repurchasing its interest.” Indeed, 

section 17707.03, subdivision (c)(6) says a plaintiff cannot dismiss 

a judicial dissolution action after the buyout procedure begins.

But plaintiffs did not dismiss the dissolution proceeding. 

Instead, they voted to dissolve the LLC as authorized by 

section 17707.01, subdivision (b). That statutorily authorized vote 

was not a “dismissal” of the action for judicial dissolution, and we 

cannot treat it as one. Defendants’ rights to avoid judicial

dissolution under section 17707.03 have nothing to do with the 

entirely separate right of 50 percent of the membership interests to 

vote to dissolve the LLC. Moreover, the vote to dissolve the LLC on 

January 2, 2020, occurred well before the court ordered the stay of 

the dissolution proceeding on February 10, 2020, the first event 

that allowed the buyout procedure to begin.

Next, defendants contend that when they moved for the 

buyout on December 17, 2019, before the vote to dissolve, they 

became “the equitable and beneficial owners” of Friend of 

Camden’s 1 percent interest. They refer to what they describe as

the “closely analogous context of contractual stock options,” citing 

chancery courts in Delaware that have held “once an option to buy 

stock is exercised the holder of the stock loses the right to vote that 

stock even before the closing of the sale.” (See Len v. Fuller (Del. 

Ch., May 30, 1997, Civ. A. No. 15352) 1997 Del. Ch. Lexis 78, 

pp. *8–9.)

This argument fails, too. For one thing, this is California, 

not Delaware. Defendants cite no California authority to support 

their contention, which lacks both legal and logical support. The 

exercise of a contractual stock option is not “closely analogous” to 
13

the rights to dissolve or buy out interests in an LLC. LLC 

members who want to buy out the interests of other members who 

sued for judicial dissolution cannot be construed as “equitable and 

beneficial owners” of the interests of the members seeking 

dissolution because the buyout procedure does not require them to 

purchase the interests. They can simply walk away from the 

transaction if they do not like the purchase price. Even Len v. 

Fuller, which defendants find “instructive,” explains that it is the 

“binding nature” and “specific enforceability” of the contract that 

allows a court of equity, “under certain circumstances,” to require a 

corporation “to treat the equitable holder as a registered holder for 

purposes of counting votes in an election contest . . . .” (Len v. 

Fuller, supra, 1997 Del. Ch. Lexis 78, p. *10.) There is no analogy 

to the circumstances here, much less a persuasive one.

Defendants’ next contention is the January 2020 vote to 

dissolve was not “in and of itself, legally sufficient to terminate the 

LLC.” They point out that neither a vote to dissolve nor a decree of

judicial dissolution automatically terminates an LLC’s existence. 

The managers of the LLC have to file a certificate of dissolution, 

specifying the event causing dissolution (e.g., a vote to dissolve or 

entry of a decree of judicial dissolution) (§ 17707.08, subd. (a)), and 

a certificate of cancellation when the winding up is completed (id.,

subd. (b)). Only upon filing the certificate of cancellation do the 

LLC’s powers, rights and privileges cease. (Id., subd. (c).) And, 

after a certificate of dissolution has been filed, a majority of 

members may file a certificate of continuation (if there is a 

unanimous vote of the remaining members, or each member who 

consented to dissolution revokes his vote, or the LLC “was not, in 

fact, dissolved” (§ 17707.09, subd. (a))).
14

All of that is correct, and there is no evidence plaintiffs have 

filed a certificate of dissolution. But the statute does not specify a 

deadline within which plaintiffs must file the certificate of 

dissolution after a vote to dissolve. Defendants make no coherent 

argument about why the winding up processes that necessarily 

occur after a vote to dissolve (or a decree of judicial dissolution) are 

relevant to the legal effectiveness of the vote to dissolve. 

Defendants simply return, again and again, to their assertion that 

plaintiffs cannot vote to dissolve the LLC when Friend of Camden’s 

1 percent interest “was already subject to [defendants’] buy-out 

rights”—an assertion we have found is without legal support.

Finally, defendants argue plaintiffs are judicially estopped 

from claiming VPE was dissolved by the January 2020 vote. They 

say plaintiffs did not propose to amend the complaint to allege

“that VPE was already dissolved or that the January 2020 vote 

divested the trial court of the power to enter a decree of 

dissolution.” Instead, plaintiffs told the court the purpose of the 

proposed second cause of action was “to enable the court to enter a 

decree of judicial dissolution based on Corporations Code 

§ 17707.01(b),” the provision under which the LLC is dissolved by a 

50 percent vote. 

Defendants have shown no reason why the doctrine of 

judicial estoppel should bar plaintiffs’ dissolution of the LLC. 

Judicial estoppel requires, among other things, two “totally 

inconsistent” positions, and its purpose is “to protect against fraud 

on the courts.” (Blix Street Records, Inc. v. Cassidy (2010) 

191 Cal.App.4th 39, 47.) We see nothing inconsistent—and

certainly no “fraud on the courts”—in plaintiffs’ two positions: 

seeking a decree of judicial dissolution, and seeking such a decree 

based on the vote to voluntarily dissolve.
15

To recap: Under the plain language of section 17707.01, an 

LLC “is dissolved, and its activities shall be wound up, upon the 

happening” of “the vote of 50 percent or more of the voting 

interests of the members” (id., subd. (b)). Fifty percent of the 

voting interests of VPE voted to dissolve the LLC on January 2, 

2020. As a result, VPE “is dissolved, and its activities shall be 

wound up . . . .” (§ 17707.01.)

DISPOSITION

The order appointing appraisers is reversed. The cause is 

remanded to the trial court with directions to vacate its order and 

to enter a new order denying the appraisal motion, dismissing any 

further buyout proceedings as moot, and directing that VPE’s 

activities be wound up in accordance with statutory requirements.

GRIMES, Acting P. J.

WE CONCUR:

WILEY, J. 

HARUTUNIAN, J.*

*

 

 Judge of the San Diego Superior Court, assigned by the 

Chief Justice pursuant to article VI, section 6 of the California 

Constitution.