Jeremy S. Johnson

Johnson served as trial counsel in a complex case that led to a novel examination of California's community property rightsand resulted in a published decision.

The case involved allegations of breach of contract and fiduciary duties against a national supplement company, Alacer Corp., the maker of Emergen-C vitamin drink mix.

James Patrick, now deceased, was the original owner of the company. He later married Ymelda T. Patrick, the plaintiff in the case. Patrick v. Alacer Corp., 201 Cal.App.4th 1326 (2011).

"He's dead, and she wanted to be treated as the owner of the business and, in fact, claimed she was an owner," said Johnson, who represented Alacer.

Further complicating the case, he added, was that the couple had a pending petition for divorce at the time of Patrick's death.

"The derivative claims required plaintiff to have standing as a shareholder," Johnson said, "and were based on the plaintiff's claims of ownership in the company by way of California's community property laws."

As it happened, she didn't own any stock, Johnson added, but her late husband did, having acquired his shares prior to the marriage.

"We thought it to be a fairly simple issue, but it wasn't," Johnson said. "There was not a lot of precedent for it."

In a bifurcated trial, the court ruled against the plaintiff in her claims of standing to sue derivatively, and granted his client's motion for judgment as to the remaining aspects of her case.

The decision was appealed and, in November 2011, the result was upheld in a published decision.

"With the Patrick case, I don't know if I'll see another one like that," Johnson said.

But he said he has noticed tempers flaring - particularly involving family business disputes - when the economy goes south.

"People tend to argue over things," he said. "I've seen an increase in my practice with these types of claims."

He added, "I wonder, when you have a successful company, why do you want to go blow it up and get involved in litigation? I try to be upfront with my clients that it's time-consuming and emotional, in addition to being expensive. You've got to have the bedside manner to handle that kind of stuff. It's good business."

- PAT BRODERICK