Judge Ashfaq G. Chowdhury, Case Number: EC067612, Date: 2024-12-04 Tentative Ruling

Judge: Ashfaq G. Chowdhury, Case: EC067612, Date: 2024-12-04 Tentative Ruling

Case Number: EC067612 Hearing Date: December 4, 2024 Dept: E

Case No: EC067612
Hearing Date: 12/04/2024 – 8:30am

Trial Date: UNSET

Case Name: RAKESH KOTHARI v. GOVIND R. VAGHASHIA, et al.

PROCEDURAL
Moving Party: Defendants, Govind and Sonal Vaghashia

Responding Party: Attorneys appointed for Govind Parties

Moving Papers: Motion; Hari S. Lal Declaration; Govind Vaghashia Declaration

Opposing Papers: Opposition; Zheng Liu Declaration

Reply Papers: Reply

Proof of Service Timely Filed (CRC Rule 3.1300(c)): Ok
16/21 Court Days Lapsed (CCP § 1005(b)): Ok
Correct Address (CCP § 1013, § 1013a, § 1013b): Ok

RELIEF REQUESTED
“Defendants GOVIND AND SONAL Vaghashia and the entities `The Govind Parties or Govind' hereby move this court to Compel the Prashant Party ‘Prashant or the Prashant parties’ as Indemnitor appointed counsel, Mr. Andy Liu to provide Legal Services Retainer Agreement and other disclosures including Legal Malpractice etc. to Indemnitee. This motion is made pursuant to B&P Section 6148 which states that (a) In any case not coming within Section 6147 in which it is reasonably foreseeable that total expense to Govind hereinafter ‘client’, including attorney fees, will exceed one thousand dollars ($1,000), the contract for services in the case shall be in writing. in the indemnitor- indemnitee situation as relevant in this case, the Govind parties are the clients of Mr. Andy Liu and NOT the Prashant parties and the retainer agreement under Section B&P 6148 has to be between the Govind parties and the Indemnitor appointed counsel, Mr. Andy Liu.

This motion is also made pursuant to Business and Professional Code Section 6068 which states that a lawyer must abide by a client's decisions about the objectives of representation, including whether to settle a matter and Sections 6210 and 6221 which facilitate the provision of free legal services to underserved client groups. The Govind parties Object to the appointment of Mr. Zheng Liu by the Prashant parties as Counsel for the Vaghashia parties in the above referenced matter.”

(Def. Mot. p. i-ii.)

ANALYSIS
Just like several other motions/papers that Movants’ counsel (Hari S. Lal) has previously submitted before this Court, the vast majority of the instant motion is indecipherable.

Movants draft their motion in the following manner.

On some occasions, Movants cite to legal authority and then Movants arrive at a conclusion where it is entirely unclear to the Court how the conclusion is supported by the cited legal authority.

On other occasions, Movants will reach conclusions that are not supported by any legal authority, or at least do not cite to legal authority.

On other occasions, Movants fail to recognize how the Court already granted Mita and Prashant Vaghashia’s motion to enforce the settlement agreement.

Overall, Movants’ motion appears to be an attempt to undo this Court’s prior ruling on April 26, 2024, wherein Mita Vaghashia and Prashant Vaghashia’s motion to enforce settlement was already granted.

B&P § 6148
As an example of how Movants’ arguments are indecipherable, the Court cites to Movants’ argument on page 1 of the motion:

The Govind parties file this motion to compel the Prashant parties (Indemnitor) appointed counsel Mr. Andy Liu to provide Legal Services Retainer Fee Agreement and Legal Malpractice Disclosure including any conflict disclosure and Substituion [sic] of Attorney to the Govind parties. This motion is also made pursuant to B&P Section 6148 which states that (a) In any case not coming within Section 6147 in which it is reasonably foreseeable that total expense to Govind hereinafter ‘client’, including attorney fees, will exceed one thousand dollars ($1,000) [sic]. As pointed out earlier, the Govind parties are the clients of Mr. Liu and NOT Prashant as the Indemnitor. The Prashant parties are NOT the clients of Mr. Liu and Mr. Liu erroneously presumes that the Prashant parties are his clients. Mr Liu erroneously contends that he is ‘appointed by the court’ wherein the court merely approves or disapproves of Mr Liu’s appointment by Prashant.

(Def. Mot. p.1.)

As a preliminary matter, the Court is entirely unclear what specific subsections of B&P § 6148(a) Movants are arguing that the Prashant parties did not comply with. Under B&P § 6148(a):

(a) In any case not coming within Section 6147 in which it is reasonably foreseeable that total expense to a client, including attorney fees, will exceed one thousand dollars ($1,000), the contract for services in the case shall be in writing. At the time the contract is entered into, the attorney shall provide a duplicate copy of the contract signed by both the attorney and the client, or the client’s guardian or representative, to the client or to the client’s guardian or representative. The written contract shall contain all of the following:

(1) Any basis of compensation including, but not limited to, hourly rates, statutory fees or flat fees, and other standard rates, fees, and charges applicable to the case.

(2) The general nature of the legal services to be provided to the client.

(3) The respective responsibilities of the attorney and the client as to the performance of the contract.

(B&P § 6148(a)(1)-(3).)

Movants’ counsel, Hari S. Lal, appears to be attacking the document that he submitted as Exhibit 2 in his own declaration.

Exhibit 2 is a Legal Service Agreement that appears to be signed by the Prashant parties wherein the Prashant parties hired legal counsel for the Govind Defendants.

To the extent that Movants here are arguing that the Movants did not sign this Legal Service Agreement, Movants fail to contextualize the fact that the Court already granted the motion to enforce settlement by the Prashant Defendants.

As cited by the Opposition, the Settlement Agreement provided:

11. Kothari Case Indemnification. The Prashant Parties agree that they will indemnify, defend, pay the attorneys’ fees and costs for, and hold harmless Govind R. Vaghashia, Sonal Vaghashia, and Vaghashia Family Limited Partnership from and against any and all claims, debts, liabilities, demands, damages or obligations of every nature whatsoever, in law or in equity, that are based upon or arise out of the Kothari Case. To the extent the cooperation of any of the Govind Parties is needed for the defense of the Kothari Case, the Govind Parties shall reasonably cooperate, including providing documents and/or their availability to testify and/or execute settlement documents. The Prashant Parties will choose counsel for the Govind Parties.

(Oppo. p. 6.)

Movants’ argument that the Legal Service Agreement is invalid because Govind Parties did not sign the Legal Service Agreement seems to be unavailing in light of the context that the settlement agreement provided that Prashant Parties will choose counsel for the Govind Parties.

Further, Movants ignore that the Legal Service Agreement at Exhibit 2 in the Lal Declaration states that Aptum (Andy Liu) will be representing Govind and Sonal Vaghashia and the Vaghashia Family Partnership Limited.

Further, Movants fail to cite to the portion of B&P § 6148(a) with respect to how a client’s guardian or representative can sign the agreement. Presumably here, Prashant Parties signed the Legal Service Agreement because they were to appoint counsel for the Govind parties as per the Settlement Agreement.

Further, to the extent Movants are arguing that Andy Liu failed to provide a Legal Services Retainer Fee Agreement, the Court fails to understand Movants’ argument. Hari S. Lal, submitted the Legal Service Agreement in his own declaration in the moving papers.

With respect to arguing that Liu did not provide Legal Malpractice Disclosure, the Legal Service Agreement at Exhibit 2 states in relevant part:

The California Business and Professions Code requires us to inform you whether we maintain errors and omissions insurance coverage applicable to the services to be rendered to you. We hereby confirm that the firm does not maintain such insurance coverage. We are, however, open to obtain such coverage at your expense, if you desire.

(Lal Decl., Ex. 2.)

Therefore, arguing that the Legal Service Agreement does not provide malpractice disclosure is unavailing. The Legal Service Agreement states that Andy Liu/Aptum does not have errors and omissions insurance.

To the extent that Movants are arguing that there is no conflict disclosure, this argument is also unavailing. In the Legal Service Agreement, it states:

Our records show no existing representation of another client on a matter that is adverse to you. Also, our records show no existing representation in another matter of another client which is an adverse party to you in this matter. We will not undertake any adverse representation in the future that is substantially related to this representation without you prior consent. We will also no undertake any substantially related adverse representation with respect to any other matter we may undertake on your behalf in the future.

(Lal Decl. Ex. 2.)

Court Order dated September 17, 2024
As another example of how Movants’ motion is confusing and at times nonsensical, the Court points to Movants’ motion at pages 3-4:

On September 17th, 2024 this court ordered that Mr. Liu provide the disclosures of conflicts, liability insurance and copy [sic] of any retainer agreement to counsel for Govind Vaghashia within 15 days. See Lal Decl. Ex 2. On or about October 4^th, 2024 Mr. Liu only [sic] provided the Legal Services Agreement between Prashant and himself and failed to provide any legal services agreement between Govind and himself. Mr. Liu failed to comply with the court Order and did not provide any copies of his liability insurance under the New Rule 1.4.2 which was former Rule 3-410 (Disclosure of Professional Liability Insurance) of the Rules of Professional Conduct of the State Bar of California. In addition, disclosure is required regardless of the nature of the lawyer-client fee agreement and thus includes flat fee and contingency fee arrangements as well as hourly fee arrangements. However, in Mr. Liu’s Legal Services Agreement with Prashant, Mr. Liu admits that he does not have ‘Errors and Omissions Insurance Coverage’ applicable to the services to be rendered to Govind or Prashant. See Lal Decl; Ex 2. Pp3-3. Mr. Liu admits and disclosures as follows;

‘The California Business and Professions Code requires us to inform you whether we maintain errors and omissions insurance coverage applicable to the services to be rendered to you. We hereby confirm that the firm does not maintain such insurance coverage’. Ex 2. Pp 3-3

(Def. Mot. p. 3-4.)

The Court also cites to the relevant portion of the 9/17/2024 Minute Order which states, “The Court orders Mr. Liu to provide the disclosures of conflicts, liability insurance and copy of any retainer agreement to counsel for Govind Vaghashia within 15 days.” (Min. Order, 9/17/2024.)

Again, the Court fails to find Movants’ arguments persuasive.

Movant argues Mr. Liu didn’t provide a copy of his liability insurance; however, Movants fail to acknowledge that the Legal Service Agreement stated that Liu did not maintain errors and omissions insurance coverage. Therefore, Liu appears to be complying with disclosing the fact that he does not maintain errors and omissions insurance coverage.

Movants Argue They Have an Absolute Right to Refusal of Appointed Counsel
Movants argue that they have an absolute right to refuse Mr. Liu as appointed counsel since he does not carry any errors and omissions coverage.

The Court also finds this argument unavailing.

Movants failed to acknowledge the fact that they agreed to the settlement agreement wherein Prashant parties would choose counsel for Govind parties.

Further, Movants argue that “California case [sic] to address the above question is Hance v. Super Store Industries (2020) 44 Cal.App.5th 676, in which the Fifth Appellate District concluded that the failure to provide notice of no liability insurance in the initial fee agreement rendered the agreement void and unenforceable.” (Def. Mot. p. 6.)

This argument and citation to Hance appears to hurt Movants’ argument as Liu’s agreement does provide notice of no errors and omissions insurance coverage.

B&P § 6210, 6221, 6036, 6068, 6148
On page 7 line 4, to page 9 line 3, Movants make arguments that are indecipherable and cite to statutes such as B&P §§ 6068, 6210, 6036, 6221 and 6148.

It is unclear why several of these statutes are even relevant, and even if they were relevant, the Court would have no idea how they are relevant because the arguments presented are indecipherable.

Civil Code § 2778
Movants’ argument with respect to Civil Code § 2778 is also indecipherable.

Movants appear to be arguing that under § 2778 Govind parties have the right to defend their case.

The Court fails to understand Movants’ argument in light of the fact that they signed a settlement agreement wherein Prashant Parties would appoint counsel for Govind parties.

Reply
In Reply, Movants assert a borderline incomprehensible argument with respect to Quality Inn Burbank and Travel Lodge Burbank.

Reply argues that Quality Inn Burbank and Travel Lodge Burbank are not parties to the June 10, 2022 settlement agreement between the Govind parties and Prashant parties therefore this Court has no jurisdiction over them to approve any counsel appointed by Prashant.

Movants then cite to a portion of the settlement agreement that allegedly defines the parties as follows:

Govind R. Vaghashia, individually and doing business as American Financial Services; Sonal G. Vaghashia, Sundeep G. Vaghashia, Vbanks Management, Inc., a California corporation; G&S Investments, LLC, a California limited liability company; The Vaghashia Family Limited Partnership, a Nevada limited partnership; Atmaswaroop Investments, LLC, a California limited liability company; Sherman Oaks First Plaza, LLC, a California limited liability company; Five Stars Hospitality, LLC, a California limited liability company; Bellflower First Plaza, LLC, a California limited liability company; Oak Park First Plaza, LLC, a California limited liability company; Graphic RSCH Properties, LLC, a California limited liability company(f/k/a Graphic Research, LLC, a California limited liability company); Pramukh Hospitality Services, Inc., a California corporation; and Govind R. Vaghashia and Sonal G. Vaghashia, as trustees of the Vaghashia Living Trust as amended on February 24, 2015, all collectively “Govind Parties”;

Prashant Vaghashia, Mita Vaghashia; Graphic Research, Inc., a California corporation; and Empire Hospitality Inc., an Arkansas corporation dba Econo Inn Ontario, all collectively the “Prashant Parties.”

(Reply, p. 5.)

The Court does not understand Movants’ argument.

To the extent that Quality Inn Burbank and Travel Lodge Burbank do not appear in the listed parties in the settlement agreement, Movants appear to be correct.

However, this argument is nonsensical and appears to be irrelevant as Movants then admit on page 6, lines 14-18 of the Reply that Quality Inn Burbank and Travel Lodge Burbank were not named as parties in the complaint or cross-complaint, nor were they served with summons.

Therefore, if Movants’ are admitting that Quality Inn Burbank and Travel Lodge Burbank are not named parties in this action, the Court fails to understand what that has to do with Movants here, Sonal and Govind, who were in fact parties to the settlement agreement.

Movants are arguing that Prashant parties cannot appoint counsel for Quality Inn Burbank and Travel Lodge Burbank, but to the Court’s understanding Prashant parties are not even trying to appoint counsel for Quality Inn Burbank and Travel Lodge Burbank. The Court is assuming that this is likely the case, because as Movants admit, Quality Inn Burbank and Travel Lodge Burbank are not parties in this action.

Overall
Overall, Movants’ papers are largely indecipherable and appear to be an attempt to undo the fact that this Court already granted the Prashant defendants’ motion to enforce settlement on 4/26/2024.

TENTATIVE RULING
Defendant, Govind and Sonal Vaghashia’s, motion to disapprove Prashant appointed counsel (Mr. Liu) is DENIED.

Movants’ motion also sought Hari S. Lal be appointed as Govind parties’ counsel. The Court notes that even if Movants’ had demonstrated a basis to reject Mr. Liu as counsel, which they did not, the Court notes that the Prashant parties would still have the power to appoint the Govind parties’ counsel under the settlement agreement. To phrase it differently, even though Mr. Lal wants to be appointed counsel for Govind parties, per the settlement agreement, the Prashant parties would have to appoint Mr. Lal as counsel, and there appears to be no indication that the Prashant parties intend to appoint Mr. Lal as counsel.