| Welcome to our Winter 2025 Newsletter where we share a little about what we have been up to as well as articles on issues and topics we think our community would be interested in. |
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Welcome to the Salisian | Lee LLP Newsletter
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Welcome to our Winter 2025 Newsletter where we share a little about what we have been up to as well as articles on issues and topics we think our community would be interested in. We hope this dispatch finds you in the midst of a strong start to the new year. As always, we look forward to your feedback and to any suggestions you might have on how we can improve our efforts in this regard. Happy reading!
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Firm News
- Salisian Lee’s arbitration team of attorneys Tyler Sanchez, partner; Jennifer Goldstein, senior associate; supported by Patty Chen, associate, and paralegals Christina Cyrulik, Jessica Fox, and Aleksandra Mircevska; recently obtained a favorable settlement in a complex business dispute, after the Arbitration hearing had already commenced. Salisian Lee represented two individuals and their corporation in an effort to extricate their photo licensing division from a prior merger. The case required Salisian Lee to prove the enforceability and beneficial interpretation of a short form settlement agreement, reached by the Parties after mediation in a prior dispute; defend against numerous causes of action for business torts (such as breach of fiduciary duty, interference with contractual and prospective relations, unfair business practices, and conversion), trade secret misappropriation, and breach of contract; and prosecute its own affirmative cross-claims for similar business torts, false promise, and breach of contract. Salisian Lee successfully compelled arbitration; defeated an early motion for preliminary injunction in state court; synthesized hundreds of thousands of documents in discovery; engaged in targeted, advantageous motion practice; and presented a compelling case to the Arbitrator. As a result of Salisian Lee’s tireless efforts, Salisian Lee’s clients reached a settlement before the Arbitration concluded that, among other things, resulted in the separation of their business from their prior business partner and limited liability company.
- We have been quite busy hiring in recent months, as our need for top talent continues to grow. As part of this ongoing expansion, we have brought on Associates Gabriela Perez and Patty Chen, Paralegals Aleksandra Mircevska and Sabrina Gill, and Legal Secretary Alexis Quinones. We are also still looking to bring on ambitious and talented attorneys and staff. If you are interested, please send a resume and cover letter to info@salisianlee.com.
- On a happy personal front, Associate Marius Mateescu got married in August 2024 in a beautiful ceremony and reception attended by several members of our team. We are thrilled for him and his new bride, Jasmine Sadeghani.
- We are pleased to announce that Jennifer Goldstein has been promoted to Senior Associate - a well deserved advancement for a skilled and dedicated attorney.
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In the Spotlight: Patty Chen, Associate
 As the firm continues to grow, we are fortunate enough to be able to hire interesting, talented and ambitious attorneys to join our team. Recently, we welcomed one such attorney – Patty Chen – and we thought this presented the perfect opportunity to share a little more about someone many of our clients will be working with more closely moving forward.
Welcome to the firm, Patty. Let's start at the beginning - what made you want to be an attorney?
I first became interested in law when there was a national debate over Proposition 8, which defined marriage as between a man and a woman. Watching the public conversation unfold, I saw for the first time how deeply laws can affect people's lives and the discussions happening in their homes. That realization fueled my desire to make a difference. As I became more involved in community outreach, I was inspired to pursue a legal career, knowing that I could use my legal education to help others and create meaningful change.
And what drew you to Salisian Lee LLP at this stage in your career?
I was drawn to Salisian Lee's strong reputation for handling complex litigation matters. What stood out to me was the firm's commitment to providing personalized, client-focused legal services—something I value deeply as an attorney. I'm also excited by the firm's emphasis on innovation and creative problem-solving, which mirrors my own approach. Additionally, the collaborative culture here really resonated with me. It's clear that the experienced attorneys at Salisian Lee mentor and support each other, working together to deliver the best outcomes for clients.
What do you love most about the practice of law? What do you find the most challenging?
I really enjoy taking seemingly unrelated pieces of information and weaving a clear, cohesive and persuasive narrative. I love advocating for my clients and helping them navigate the legal system while finding creative solutions to tough legal questions. Every year brings new challenges in litigation, but the biggest one for me so far has been how slowly the legal field has adapted to the rapid technological advancements happening in society. For example, remote hearings didn't become prevalent until the pandemic.
What advice have you received in your career that made the most meaningful impact?
The way to get started is to quit talking and begin doing.
Who are your role models?
My role models are Maya Angelou, Franklin D. Roosevelt, Neil deGrasse Tyson and my friends and family.
What do you like to do in your free time?
I'm checking out the latest pop-up event, trying to eat my way through LA or planning my next trip.
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In the News
Below please find some insights into some of the latest issues and/or current events Salisian Lee LLP attorneys have been watching and exploring further in the hopes that their findings are helpful to you all. Enjoy!
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Understanding CA's One Action Rule in Foreclosure When Even Courts Still Grapple
By Jennifer Goldstein, Senior Associate
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In California, settling lawsuits concerning debts secured by real property incorrectly can result in the creditor losing its interest in the security.
California has a complex and strict set of rules concerning foreclosure on debts secured by real property. The One Action Rule, in particular, requires creditors to foreclose on all collateral securing a debt in a single "action." See Civ. Proc. Code § 726(a). Moreover, the One Action Rule requires creditors with debts secured by real property to foreclose on the property first, or face sanctions (most typically losing the security). See, e.g., Security Pacific National Bank v. Wozab, 51 Cal. 3d 991, 1004 (1990).
Thus, under the One Action Rule, if a creditor does not want to lose its interest in real property securing a debt, the creditor must first pursue foreclosure on all properties securing the debt in the same action. Put differently, if the creditor brings an action other than foreclosure of the real property securing a debt, multiple actions regarding a real property securing a debt, or an action as to only one of multiple properties securing a debt, the creditor risks losing the security.
An "action is an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense." Shin v. Sup. Ct., 26 Cal. App. 4th 542, 546 (1994) (citing Civ. Proc. Code § 22). While commencement of a lawsuit, in and of itself, does not constitute an action for the purposes of the One Action Rule, a judgment clearly amounts to an action under the Rule. See id.
California courts continue to evaluate whether intervening efforts between filing a lawsuit and reaching a judgment amount to an "action" under the Rule. In Shin, a creditor obtained a pre-judgment writ of attachment in South Korea against a debtor's property located there. See id. at 548. When the creditor filed a lawsuit against the debtor in California and sought judicial foreclosure of the debtor's California property securing the debt, the Court determined that the creditor violated the One Action Rule because the attachment was an "action." See id. By attaching the debtor's unsecured property in South Korea before pursuing foreclosure on the secured property in California, the creditor violated the Rule and became subject to sanctions. See id. at 549 & 552. Consequently, the Court issued a writ of mandate directing the trial court to reverse its order granting the creditor's motion for summary judgment for judicial foreclosure on the California property. See id. at 554.
Considering a vast majority of lawsuits resolve prior to trial, creditors should consider the One Action Rule when proposing a settlement of an action over a debt secured by real property. Specifically, settlement agreements involving debts often contain a provision obligating the debtor to sign a stipulated money judgment as part of the settlement. Under these agreements, the debtor agrees on the terms of a judgment that the Court will enter against the debtor if the debtor breaches the settlement agreement. Typically, the stipulated judgments identify a monetary amount owed under the judgment. These stipulated money judgments, however, would run afoul of the One Action Rule because the creditor would be seeking a money judgment in lieu of foreclosure. See id. at 547.
Therefore, when a creditor files a lawsuit seeking judicial foreclosure of a real property securing a debt, resolution of the dispute should center on foreclosure of the property. Creditors should consult counsel about potentially preparing a conditional settlement agreement or, under the correct circumstances, a stipulated judgment for judicial foreclosure and order for sale.
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SB 1103 Extends Tenant Protections to Small Businesses in 2025
By Brian Zhang, Associate
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California law has been widely known to favor tenants in residential leases, granting tenants many rights and imposing upon their landlords some of the most stringent restrictions in the country. In contrast, commercial tenants historically have not enjoyed nearly the same level of protection. A new law has arrived to change that – at least as to small businesses.
Beginning on January 1, 2025, Senate Bill ("SB") 1103, also known as the Commercial Tenant Protection Act, grants new rights and protections, which are similar to existing rights and protections for residential tenants, to "qualified commercial tenants." That includes:
- Microenterprises, which are defined under the existing Business and Professions Code as small businesses with five or fewer full time or part time employees that generally lack access to capital;
- Restaurants with fewer than 10 employees; and
- Nonprofits with fewer than 20 employees.
To trigger the protections, qualified commercial tenants need to provide landlords written notice of their qualified status and a "self-attestation" of their number of employees. The notice and self-attestation must be given prior to execution of the lease and annually after that, unless the tenancy period is a month or shorter, in which case notice and self-attestation given anytime within the last 12 months will suffice.
Landlords are required to give qualified commercial tenants 30-day notice for rent increases of 10% or less, and 90-day notice for rent increases greater than 10%. To terminate a month-to-month lease, a landlord must give 60-day notice to a qualified commercial tenant who has occupied the property for 12 months or longer, or 30-day notice if the tenant has occupied the property for less than a year. These longer notice requirements also apply to preexisting leases.
When a commercial landlord negotiates a lease with a qualified commercial tenant primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, the landlord is required to provide a translation of the lease agreement into the respective language prior to execution. As well, the landlord must provide notice of the translation requirement.
Notably, this translation requirement applies even if the tenant uses its own interpreter during the negotiation, unlike other situations or contracts having a similar requirement but with exemptions. If the translation and notice are not provided, the tenant has the powerful right to rescind the lease agreement. The original English version of the lease agreement takes legal precedence, but the translation is admissible in court to show that no contract was entered into because of a substantial difference in material terms between the original and the translation.
Finally, building operating costs (incurred for operation, maintenance, or repair, including property taxes) can be charged through to qualified commercial tenants but only if landlords satisfy stringent requirements. "Supporting documentation," which must be dated and itemized, is the core of these requirements.
The landlord must provide supporting documentation explaining how the costs are calculated before any are charged to the tenant. In addition, the tenant has the right to request and inspect supporting documentation before and during the lease. The costs must be allocated proportionately per tenant, either by square footage or by another substantiated method. The landlord may not change the method or formula used to allocate the costs in a way that increases the tenant’s share unless written notice and supporting documentation for the change are provided to the tenant.
These building operating cost requirements apply retroactively to preexisting leases that do not contain a provision addressing such costs. Qualified commercial tenants can raise the landlord's noncompliance as a defense to a legal action based on failure to pay these costs.
SB 1103 has seen its share of controversy, passing despite the objections of prominent industry groups. Although the new law is intended to protect small commercial tenants who may not have the bargaining power that larger businesses have in negotiating with their landlords, opponents have argued that SB 1103 harms the very class it aims to protect. Whether these concerns will materialize as real-world consequences remains to be seen. One thing is certain: small commercial tenants and their landlords should be aware of substantial changes to the way they navigate leases.
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Mitigating Risk on Tariffs in light of the Presidential Election Outcome
By Gabriella Perez, Associate
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As of early February, the United States has implemented tariffs of 25% on imports from Canada and Mexico, and a 10% tariff on imports from China.1 In turn, Canada imposed retaliatory 25% tariffs on United States imports.2
But what exactly are tariffs, how they can impact business owners, and what can be done to mitigate risks associated with tariffs?
Tariffs are a taxation on a good imported from a foreign country. Tariffs can either be implemented through Congressional action or through Presidential authority. Article I, Section 8 of the United States Constitution grants Congress the authority to impose tariffs and regulate commerce with foreign nations. See U.S. Const. art. I, § 8, cl. 3. The most recent tariffs issued by the United States are issued by executive order through the International Emergency Economic Powers Act, rather than being ordered by Congress.3
In the period of 2016-2020, the United States imposed nearly $80 billion dollars in tariffs.1 Throughout 2020-2024, the United States kept most of the previous tariffs and announced an additional $18 billion in tariffs.
Mitigating Risks
Business carries innate risk. The commercial markets are not within any laypersons control, which is especially true when engaging in trade abroad. By identifying risk and analyzing the probability of each risk occurring, businesses can work to mitigate the risk of certain investments.
1. Considering Domestic and International Political and Economic Landscape
Consider the politics and economy of the origin country of the supplier you have ongoing business relationships with, i.e. will they enter a presidential election soon, have their leaders taken a stance on tariffs with the United States, etc.
2. Evaluate Existing Contracts with Suppliers
Ensure that existing contracts include clauses that account for price adjustments and hikes in tariffs, such as force majeure or assignment of risk provisions.
3. Consider Contracts with Alternate Suppliers
Although Canada, Mexico, and China have been heavily hit with tariffs, there are various countries you can source materials from that may not be affected by tariffs yet.
4. Insurance on International Trade
Insurance can protect your goods during transportation, covering loss, damage and theft. When dealing with tariffs, export credit insurance can protect businesses against the risk of non-payment from foreign buyers.2
Legal Alternatives to Dispute Resolution
Although business owners are encouraged to mitigate risks whenever possible, there is a final and most risky step that can be taken in litigation.
While general litigation can take years, litigation against the federal government is a different beast. Filings are time sensitive, and there are multiple hurdles to jump through including legal battles over whether the issue might be exempt from judicial review before even reaching the question of whether a violation has occurred. In some cases, going to trial is not an option. For example, under the USMCA, seeking redress against Mexico, would have to go through an arbitration process.3
Even if a litigator is successful in trial against the U.S. Court of International Trade, there are years of appellate processes that may follow a ruling.
Litigation that commenced as early as 2020, has still not been fully decided and is currently in the appellate process. HMTX Industries LLC, along with Halstead New England Corporation, Metroflor Corporation, and Jasco Products Company LLC, initiated the first of approximately 3,600 cases known as the "Section 301 Cases." In the Section 301 cases, plaintiffs argue that the government exceeded its statutory authority and violated the Trade Act of 1974.
As Section 301 litigation remains ongoing, businesses should carefully consider how current and future tariffs instituted by both Congress and the Executive Branch may impact their own supply chains and take steps to mitigate risks in the unpredictable next four years.
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Legal Disclaimer: The information contained in this newsletter is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this newsletter, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the state of California.
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