Filed 9/22/20 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN BEHNAM HESHEJIN et al., B297037 Plaintiffs and Appellants, (Los Angeles County Super. Ct. No. BC693226) v. RAMI ROSTAMI et al., Defendants and Respondents. APPEAL from a judgment of the Superior Court of Los Angeles County, Patricia G. Nieto, Judge. Affirmed. Gutierrez, Preciado & House and Calvin House for Plaintiffs and Appellants. Novian & Novian, Farhad Novian and Andrew B. Goodman for Defendants and Respondents. __________________________ Behnam Heshejin, Eric Anvari, the Hestfam Family Trust, and trustee David A. Enzmann (plaintiffs) appeal from an order of dismissal entered as to American Investment Group, LLC (AIG), Avalon Cold Storage, LLC (Avalon), and AIG’s director and managing member Rami Rostami (collectively, AIG defendants) after the trial court sustained without leave to amend the AIG defendants’ demurrer to plaintiffs’ second amended complaint. The second amended complaint asserted derivative causes of action on behalf of American Logistics International, LLC (ALI) against AIG for conspiracy to commit fraud, fraud by concealment, breach of fiduciary duty, declaratory relief, conversion, and accounting. The trial court held plaintiffs lacked standing to assert double derivative claims1 on behalf of ALI based on their minority ownership interest in ALI’s parent company and sole owner, Mazkat Ventures, LP (Mazkat); plaintiffs failed to assert the claims on behalf of ALI in a compulsory cross-complaint (Code Civ. Proc., § 426.30, subd. (a))2 in American Investment Group, LLC et al. v. Alireza Mahdavi et al. (Super. Ct. L.A. 1 “A ‘double derivative’ suit has been defined as an action brought by a shareholder of a holding or parent company, on behalf of that corporation, to enforce a cause of action in favor of the subsidiary company. The shareholder is, in effect, maintaining a derivative action on behalf of the subsidiary, since the holding or parent company has derivative rights to the cause of action possessed by the subsidiary.” (Gaillard v. Natomas Co. (1985) 173 Cal.App.3d 410, 419, fn. 7, disapproved on another ground by Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1119, fn. 16.) 2 All further undesignated statutory references are to the Code of Civil Procedure. 2 County, 2020, No. BC662347) (AIG v. Mahdavi); and plaintiffs failed to state facts sufficient to constitute causes of action against the AIG defendants. Because ALI (or plaintiffs on behalf of ALI) failed to file a compulsory cross-complaint in the AIG v. Mahdavi action, we affirm.3 FACTUAL AND PROCEDURAL BACKGROUND A. Plaintiffs’ Second Amended Complaint Plaintiffs initiated this action against the AIG defendants and others on February 7, 2018. After the trial court sustained the AIG defendants’ demurrer to the first amended complaint with leave to amend, plaintiffs filed the operative second amended complaint on November 1, 2018. The second amended complaint alleged 12 causes of action, six of which were asserted as derivative causes of action on behalf of ALI against AIG for conspiracy to commit fraud (first cause of action); fraud by concealment (second cause of action); ...
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