Case Number: 22STCV21941    Hearing Date: March 30, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

MOVING PARTY:              Defendants Marjan Ravanbakhsh and Premier CPA Consultants, Inc.

OPPOSITION:                      [Untimely, filed 3/27/23]

Background

On July 7, 2022, Plaintiff Farzan Alamirad (“Mr. Alamirad”) and Farzan Alamirad, D.D.S., Inc. (“Alamirad Dentistry”) (collectively, the “Alamirad Plaintiffs”) brought this action to sue Defendants Marjan Ravanbakhsh (an accountant), Premier CPA Consultants, Inc. (the accounting firm under which Ravanbakhsh worked at all relevant times), and Does 1 to 20 pursuant to a Complaint alleging claims of (1) Breach of Contract, (2) Breach of the Duty of Good Faith and Fair Dealing, (3) Professional Negligence (Accountant), and (4) Unfair Business Practices. The claims were based on allegations that, after the Alamirad Plaintiffs hired the Defendants in 2020 to perform accounting services for Alamirad Dentistry, the Defendants, inter alia, used their position of confidence and access to the Plaintiffs’ financial information to file fraudulent PPP and EIDL loans and erroneous tax returns on behalf of the Plaintiffs, otherwise failed to make quarterly payments to the IRS, EDD, and FTB, and released Mr. Alamirad’s confidential financial information to his estranged wife, from whom Mr. Alamirad was divorcing, and with whom Defendant Ravanbakhsh maintained and continues to maintain a close friendship.

On August 22, 2022, Defendants Ravanbakhsh and Premier CPA demurred to the Complaint’s four causes of action. Among other things, the demurrer argued that res judicata grounds prevent the Alamirad Plaintiffs from bringing their July 7, 2022 Complaint in this action. The res judicata argument centered on Defendant Ravanbakhsh previously suing Mr. Alamirad in LASC Action No. 21STCV11318 (the “Underlying Action”), based on facts similar to those advanced in this lawsuit, and where, prior to the Underlying Action being dismissed with prejudice by Ravanbakhsh on March 15, 2022, Mr. Alamirad failed to bring a compulsory cross-complaint against Ravanbakhsh alleging the same claims made in this action, for which reason, pursuant to Code of Civil Procedure section 426.30, subdivision (a), Plaintiffs waived their ability to bring the claims advanced in this Complaint against Ravanbakhsh and Premier CPA.

The August 22nd demurrer was set for hearing on December 8, 2022.

However, on December 7, 2022, the Alamirad Plaintiffs filed a First Amended Complaint (“FAC”). A review of the FAC shows that it is nearly identical to the July 7, 2022 Complaint, alleging the same four causes of action against Defendants Ravanbakhsh and Premier CPA pursuant to the same factual allegations as the original Complaint and requesting the same relief. The only apparent differences between the pleadings include a change to the ending of paragraph 13 in both the Complaint and the FAC, and the addition of paragraph 21 to the FAC.

On December 8, 2022, the Court heard the demurrer to the original Complaint and, after considering the parties’ arguments, ruled that the August 22nd demurrer was taken off calendar.

On December 19, 2022, Defendants Ravanbakhsh and Premier CPA filed a demurrer to the FAC almost identical in language to that of the August 22nd demurrer, again centering the thrust of their argument on res judicata grounds.

The Alamirad Plaintiffs filed an untimely opposition on March 27, 2023.

Request for Judicial Notice

The Court TAKES Judicial Notice of (A) Defendant Ravanbakhsh’s March 24, 2021 Verified Complaint in the Underlying Action, (B) Mr. Alamirad’s September 10, 2021 Answer to the Verified Complaint in the Underlying Action, (C) Defendant Ravanbakhsh’s March 15, 2022 Request for Dismissal with Prejudice of the Underlying Action, (D) Mr. Alamirad and Alamirad Dentistry’s July 7, 2022 Complaint in this action, and (E) Mr. Alamirad and Alamirad Dentistry’s December 7, 2022 First Amended Complaint in this action. (Demurrer, RJN; see Demurrer, Exs. A-E; Evid. Code, § 452, subd. (d).)

Demurrer: SUSTAINED, Without Leave to Amend.

Meet and Confer: SATISFIED.

The Court is satisfied that counsel for Defendants Ravanbakhsh and Premier CPA attempted to meet and confer with the Alamirad Plaintiffs’ counsel, but that Plaintiffs’ counsel failed to respond to these good faith efforts, thus satisfying the requirements of Code of Civil Procedure section 430.41, subdivision (a)(3)(B). (Demurrer, Frank Decl., ¶¶ 1-5.)

First Amended Complaint, Res Judicata, Claim Preclusion: SUSTAINED, Without Leave to Amend.

In relevant part, Defendants Ravanbakhsh and Premier CPA argue that this lawsuit is barred by litigation in LASC Action No. 21STCV11318, an action brought by Defendant Ravanbakhsh against Mr. Alamirad, which was dismissed with prejudice by the clerk at Ravanbakhsh’s request on March 15, 2022, and which alleged (1) Negligence, (2) IIED, (3) NIED, (4) Defamation Per Se, (5) Defamation Per Quod, and (6) Trade Libel against Mr. Alamirad based on allegations that Mr. Alamirad had defamed Defendant Ravanbakhsh by communicating to Ravanbakhsh, her clients, the Persian community, colleagues, mutual friends, business associates, and others that Ravanbakhsh is a liar, unethical, violates the ethical code of accounting, holds data and documents hostage to extort money, and operates illegally and unprofessionally, including allegations relating to improper PPP loans and failure to make quarterly payments to the IRS, EDD, and FTB. (See Demurrer, 9:1-11:22; Demurrer, Ex. A, Underlying Action Complaint, ¶¶ 13 [IRS, EDD, and FTB payments], 14 [PPP loans].)

The Alamirad Plaintiffs filed an untimely opposition to this demurrer on March 27, 2023, just three days before the hearing instead of the required nine. (Code Civ. Proc. § 1005 subd. (b).)  Plaintiffs made no attempt to seek leave to file their opposition late, and made no showing in their papers to demonstrate good cause for having filed their opposition late.  The Court has discretion to accept or reject late-filed papers.  (Cal. Rules of Court, rule 3.1300 subd. (d).)  This late-filed opposition effectively prevented the moving party from filing any reply, and has not given this Court adequate time to consider its arguments in time for oral argument on March 30, 2023.  Accordingly, the Court does not consider the Opposition for purposes of this Tentative, but will consider at oral argument whether there is any reasonable basis for continuing the hearing on this motion, such that Defendants’ counsel and the Court can fully consider the Opposition before a final ruling.

The doctrine of res judicata has two aspects: claim preclusion and issue preclusion. (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824; Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797.) Claim preclusion arises if a second suit involves (1) the same cause of action (2) between the same parties [or those in privity with them] (3) after a final judgment on the merits in the first suit. [Citations.] If claim preclusion is established, it operates to bar relitigation of the claim altogether.” (DKN Holdings LLC v. Faerber, supra, 61 Cal.4th at p. 824.) “Upon satisfaction of these conditions, claim preclusion bars ‘not only issues that were actually litigated but also issues that could have been litigated.’” (Planning and Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 226 [quoting Federation of Hillside & Canyon Associations v. City of Los Angeles (2004) 126 Cal.App.4th 1180, 1202]; Villacres v. ABM Industries Inc. (2010) 189 Cal.App.4th 562, 576.)

A general demurrer lies where claim preclusion applies. (See Boeken v. Philip Morris USA, Inc., supra, 48 Cal.4th at p. 792 [plaintiff’s wrongful death action barred by her prior voluntary dismissal of loss of consortium action against same defendant]; Shine v. Williams-Sonoma, Inc. (2018) 23 Cal.App.5th 1070, 1076-77 [court properly took judicial notice of “pleading, settlement agreement, and stipulated judgment of dismissal” in earlier class action to sustain demurrer on res judicata grounds in new class action].)

Here, there was clearly a prior action between the parties or those in privity with them, with Alamirad Dentistry in privity with Mr. Alamirad and Defendant Premier CPA in privity with Defendant Ravanbakhsh. (Compare Demurrer, Ex. A, Underlying Action Complaint, 1:10-14, with FAC, 1:13-20 [captions showing these parties].)

Further, Defendant Ravanbakhsh’s March 15, 2022 dismissal with prejudice of the Underlying Action was a judgment on the merits for claim preclusion purposes. (See Demurrer, Ex. C [Request for Dismissal in Underlying Action]; see also Kim v. Reins Int’l Cal., Inc. (2020) 9 Cal.5th 73, 91 [“A dismissal with prejudice is considered a judgment on the merits preventing subsequent litigation between the parties on the dismissed claim”].)

The primary question before the Court is thus whether the two actions involved the same causes of action or claims that could have been but were not brought in the Underlying Action pursuant to a compulsory cross-complaint. (Code Civ. Proc., § 426.30, subd. (a) [A defendant must file a cross-complaint against the plaintiff asserting any related causes of action existing when the defendant serves its answer to avoid waiver of those claims].)

Defendants Ravanbakhsh and Premier CPA argue that the Alamirad Plaintiffs’ claims in this lawsuit are barred because they could have been brought in the Underlying Action, as shown by (1) the Sixth Affirmative Defense raised by Mr. Alamirad in his September 10, 2021 Answer in the Underlying Action, claiming “Offset” of damages against Defendant Ravanbakhsh’s Defamation and Libel claims on the grounds that Defendant Ravanbakhsh’s “damages, if any, must be offset by any damages or other injury sustained by Answering Defendant,” Mr. Alamirad, and (2) Mr. Alamirad’s failure to file a compulsory cross-complaint in the Underlying Action elaborating on his damages and injuries. (Demurrer, 10:1-3, 11:1-3, 11:12-18.)

The Court agrees with Defendants Ravanbakhsh and Premier CPA.

The Underlying Action is based on Mr. Alamirad badmouthing Defendant Ravanbakhsh based on allegations similar to those in this lawsuit. (Compare Demurrer, Ex. A, Underlying Action Complaint, ¶¶ 13 [IRS, EDD, and FTB payments], 14 [PPP loans], with FAC, ¶ 13 [IRS, EDD, and FTB payments, PPP loans, inter alia].) Based on such alleged conduct, Defendant Ravanbakhsh sued Mr. Alamirad pursuant to claims of (1) Negligence, (2) IIED, (3) NIED, (4) Defamation Per Se, (5) Defamation Per Quod, and (6) Trade Libel. (See Demurrer, Ex. A, Underlying Action Complaint.)

Mr. Alamirad filed an Answer in the Underlying Action on September 10, 2021, including the Offset affirmative defense, which claimed that damages to Defendant Ravanbakhsh should be offset by damages and injuries to Mr. Alamirad. (See Demurrer, Ex. B, Alamirad Answer in Underlying Action.)

These circumstances show Mr. Alamirad could have brought the claims advanced in this lawsuit in a compulsory cross-complaint against Defendant Ravanbakhsh in the Underlying Action. Indeed, the FAC in this action is explicit in providing that, as of October 2021, the Alamirad Plaintiffs had learned about Defendant Ravanbakhsh’s alleged filing of fraudulent loan applications and tax returns and the non-filing of EDD, IRS, and FTB payments. (FAC, ¶ 13 [“None of these issues were known to Alamirad until he started receiving bills from the IRS, EDD and FTB commencing in October 2021”].) Yet, despite this knowledge, Mr. Alamirad did not file a compulsory cross-complaint against Defendant Ravanbakhsh raising the causes of action alleged in this lawsuit.

Such inaction is grounds for waiver of compulsory cross-complaint claims because the claims raised by the Alamirad Plaintiffs in this action relate to the causes of action in the Underlying Action insofar as they arise from the same transaction or occurrences, i.e., Defendants Ravanbakhsh and Premier CPA’s quality of work in relation to services provided to Mr. Alamirad and Alamirad Dentistry, Plaintiffs’ damages arising therefrom, Mr. Alamirad’s response to Defendant Ravanbakhsh’s conduct, and Ravanbakhsh’s damages arising therefrom. (Code Civ. Proc., § 428.10, subd. (b) [defendant may bring cross-complaint to allege “[a]ny cause of action […] (1) aris[ing] out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) assert[ing] a claim, right, or interest in the property or controversy which is the subject of the cause brought against him”]; see Code Civ. Proc., § 426.30, subd. (a) [A defendant must file a cross-complaint against the plaintiff asserting any related causes of action existing when the defendant serves its answer to avoid waiver of those claims].)

The Court also briefly notes that because the Underlying Action was not dismissed by Defendant Ravanbakhsh until March 15, 2022, there is no prima facie reason why, between September/October 2021 and March 15, 2022, Mr. Alamirad did not raise the claims pleaded in this lawsuit in a cross-complaint against Defendants Ravanbakhsh and/or Premier CPA in the Underlying Action, either at the same time as Mr. Alamirad filed his September 10, 2021 Answer or at some future time.

For these reasons, the Court finds that claim preclusion applies to the claims advanced by the Alamirad Plaintiffs in this action and SUSTAINS Defendant Ravanbakhsh and Premier CPA’s demurrer, Without Leave to Amend.

Conclusion

Defendant Marjan Ravanbakhsh and Premier CPA Consultants, Inc.’s Demurrer to First Amended Complaint is SUSTAINED, Without Leave to Amend, as to the entire First Amended Complaint in this action because the claims advanced herein involve claims or defenses that could have been but were not brought in a prior action between the parties and those in privity with them, where the Underlying Action has resulted in a final judgment. 

The Court will consider at oral argument whether, in the alternative, to continue the hearing on this matter, to allow consideration of the untimely opposition and of any reply brief.