Ruby's Laguna Assocs. v. Ruby's Diner CA4/3

FACTS

In May 1989, Ruby‘s Diner and Laguna Associates entered into a limited partnership agreement (Ruby‘s Diner Laguna Beach Partnership Agreement) pursuant to which they formed Ruby‘s Diner Laguna Beach, a California limited partnership (Ruby‘s Diner Laguna Beach Partnership). Ruby‘s Diner was the general partner and Laguna Associates was the limited partner. The partnership was formed for the purpose of operating a diner in Laguna Beach. Ruby‘s Diner made an initial capital contribution of $100,000 and Laguna Associates made an initial capital contribution of $700,000.

2 Section 10.14 of the Ruby‘s Diner Laguna Beach Partnership Agreement stated in pertinent part: ―The Limited Partner retains the first right of refusal to participate in future Orange County and San Diego Ruby‘s projects where Ruby‘s Diner, Inc. chooses to finance the project via a limited partnership.‖ DeCinces was the general partner of Laguna Associates. He also held an ownership interest in Laguna Associates.1 In June 2009, after a falling out, DeCinces, Laguna Associates, and a number of other entities, commenced litigation against Ruby‘s Diner and a variety of other defendants. In the second cause of…