Judge: Curtis A. Kin, Case: 22STCV39168, Date: 2023-10-26 Tentative Ruling

Case Number: 22STCV39168    Hearing Date: October 26, 2023    Dept: 82

Plaintiffs Morad Ben Neman and Lancaster Eagle, LLC move for right to attach orders against defendants (1) Payam Bahari; (2) 114 Grand Cypress, LLC; (3) Cavalini, Inc.; and (4) Caster Modelo, LLC in the amount of $1,740,312.50.

I.       Factual Background

            Plaintiff Morad Ben Neman and defendants Payam Bahari, Freydoon “Fred” Bahari, Haim Bahari, and Tal Bahari (collectively “Bahari Defendants”) allegedly agreed to enter into a joint venture whereby the joint venture would purchase undervalued real properties and split the profits from the sale of the properties. (FAC ¶¶ 18, 19.) Under the terms of the alleged joint venture, the Bahari Defendants agreed that plaintiffs – Neman and Lancaster Eagle, LLC, through which Neman conducted business – would identify opportunities for investment. (FAC ¶¶ 17, 19.) Defendants allegedly agreed to provide the capital needed to purchase the properties and to not pursue any opportunities presented by plaintiffs without paying plaintiffs their share of profits. (FAC ¶¶ 17, 19.) The Bahari Defendants also allegedly agreed that plaintiffs would have a 50% interest in ownership and profits of all properties purchased pursuant to the joint venture. (FAC ¶¶ 17(A), 19.)

            Plaintiffs purportedly disclosed to the Bahari Defendants the availability of real property located at 114 Grand Cypress Avenue in Palmdale (“Grand Cypress Property”). (FAC ¶ 20.) Plaintiffs supposedly explained to the Bahari Defendants that they intended to purchase the real property and the business located at the property but were waiting until the owner to return from Texas before presenting a proposal to acquire both the property and the business. (FAC ¶ 21.)

It is undisputed no written contract between the Bahari Defendants and plaintiffs exists with respect to the Grand Cypress Property (See FAC ¶ 21.)  Instead, plaintiffs claim that, before plaintiffs could obtain a written contract entitling them to purchase the Grand Cypress Property and the business located thereon, defendants purchased the Grand Cypress Property to the exclusion of plaintiffs. (FAC ¶¶ 20-22.) The Bahari Defendants purchased the Grand Cypress Property through defendant 114 Grand Cypress, LLC (“114 Grand Cypress”), using the resources of defendants Cavalini, Inc. (“Cavalini”) and/or Caster Modelo, LLC (“Caster Modelo”). (FAC ¶¶ 7, 24.) The Bahari Defendants are members, officers, and/or alter egos of 114 Grand Cypress, Cavalini, and/or Caster Modelo. (FAC ¶¶ 3-6, 8, 9.)

Plaintiffs thus claim, among other things, that defendants breached the alleged joint venture agreement by “surreptitiously” purchasing the Grand Cypress Property and thereafter re-selling it for a profit “while excluding plaintiffs as partners” and causing plaintiffs “tens of millions of dollars in damages.”  (FAC ¶ 29.)

II.      Applicable Law

            “Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this article for a right to attach order and a writ of attachment by filing an application for the order and writ with the court in which the action is brought.” (CCP § 484.010.)

The application shall be executed under oath and must include: (1) a statement showing that the attachment is sought to secure the recovery on a claim upon which an attachment may be issued; (2) a statement of the amount to be secured by the attachment; (3) a statement that the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based; (4) a statement that the applicant has no information or belief that the claim is discharged or that the prosecution of the action is stayed in a proceeding under the Bankruptcy Act (11 U.S.C. section 101 et seq.); and (5) a description of the property to be attached under the writ of attachment and a statement that the plaintiff is informed and believes that such property is subject to attachment. (CCP § 484.020.)

            The application for a writ of attachment must be supported “by an affidavit showing that the plaintiff on the facts presented would be entitled to a judgment on the claim upon which the attachment is based.” (CCP § 484.030.)

The Court shall consider the showing made by the parties, as well as the pleadings and other papers in the record. (CCP § 484.090(a), (d).) The Court shall issue a right to attach order if it finds all of the following:

(1) The claim upon which the attachment is based is one upon which an attachment may be issued.

(2) The plaintiff has established the probable validity of the claim upon which the attachment is based.

(3) The attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based.

(4) The amount to be secured by the attachment is greater than zero.

(CCP § 484.090(a)(1-4).)

            At the times prescribed by CCP § 1005(b), the defendant must be served with a copy of the summons and complaint, notice of application and hearing, and a copy of the application and supporting affidavits. (CCP § 484.040.)

“The Attachment Law statutes are subject to strict construction….” (Epstein v. Abrams (1997) 57 Cal.App.4th 1159, 1168.)

III.     Analysis

Of the several requirements for issuance of a right to attach order set forth above, the only real dispute is as to the probable validity of plaintiffs’ breach of contract claim.  “A claim has ‘probable validity’ where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim.” (CCP § 81.190.) “If the defendant opposes the application, ‘the court must then consider the relative merits of the positions of the respective parties and make a determination of the probable outcome of the litigation.’ [Citations.]” (Pech v. Morgan (2021) 61 Cal.App.5th 841, 855.)  Here, in view of the competing evidence and declarations submitted in connection with the instant matter, the Court does not find it more likely than not that plaintiffs will obtain judgment in their favor on their claim that an oral joint venture agreement was breached.

             Plaintiff Neman avers that Payam Bahari represented to him that “he, his family members and their respective entities, Cavalini and Caster Modelo…had funds available to invest in real estate with me and that he was authorized to speak and negotiate on behalf of [defendants] and he agreed that any properties disclosed to him could only be purchased by our joint venture, not by [defendants] alone.” (Neman Decl. ¶ 2.) Neman also avers: “As part of our joint venture, [defendants] agreed to provide all of the capital. Investment required to acquire properties identified by [him] for acquisition while agreeing to split the profits from all such ventures, 50/50.” (Ibid.)

            Defendants dispute the existence of such a joint venture agreement. Payam Bahari avers that he, Neman, and Neman’s associate toured the Grand Cypress Property as a property comparable to a property located at 42933 Business Center Parkway in Lancaster, which Neman was interested in purchasing. (Bahari Decl. ¶¶ 4, 5.) Neman purportedly told Payam Bahari that the Grand Cypress Property was not a good deal. (Id. ¶ 6.) According to Payam Bahari, neither Neman nor anyone affiliated with Neman “ever mentioned or discussed purchasing the [Grand Cypress] Property together, at this time or any other time.” (Ibid.; see also Bahari Decl. ¶ 8.) Payam Bahari also never had any discussion about a joint venture, generally or with respect to the Grand Cypress Property, with Neman or anyone affiliated with Neman. (Bahari Decl. ¶ 8.) Payam Bahari later caused a non-party to purchase the Grand Cypress Property when the property reduced in price. (Id. ¶ 9.) The sales broker never mentioned Neman or any other potential buyer or suggested that Payam Bahari sign a joint brokerage agreement with plaintiffs. (Ibid.)

            The Court does not find it more likely than not that Nemen’s version of what happened will necessarily carry the day.  Equally, if not more, plausible is Bahari’s recitation of events refuting the existence of any oral joint venture agreement.  Indeed, it strains credulity to believe that as an “active real estate investor for over forty (40) years” (Neman Decl. ¶ 2), Neman would not have reduced the terms of a potentially multi-million-dollar joint venture to a writing to govern the purchase and sale of properties acquired pursuant to the joint venture.  Further, the existence of the written agreement between entities related to plaintiffs and defendants concerning an agreement to jointly purchase a property at 42933 Business Center Parkway in Lancaster (the “Lancaster Property”) strongly suggests that an agreement between Nemen and the Bahari defendants for a real estate joint venture of the type alleged here would likewise have been reduced to writing.  (Cf. Bahari Decl. ¶¶ 11-12 & Ex. 10 [Tenancy in Common Agreement].)  Moreover, the terms of that agreement also suggest there was no joint venture agreement as claimed by plaintiffs.  The “Tenancy in Common Agreement” concerning the Lancaster Property states that Caster Modelo and Lancaster Eagle, the “Co-Tenants” under the agreement, “expressly disclaim[] any intention to create a partnership, corporation, joint venture, or other business entity with the other Co-Tenant or between the Co-Tenant with any other person.” (Bahari Decl. Ex. 10 at ¶ 2(a).) Caster Modelo and Lancaster Eagle also agreed that “there are no prior or contemporaneous

written or oral agreements, undertakings, promises, covenants, or warranties not contained” in their agreement. (Id. at ¶ 12(a).)

Accordingly, plaintiffs fails to demonstrate the probable validity of their claim for a share of the profits from the sale of the Grand Cypress Property pursuant to the alleged oral joint venture agreement.

IV.     Conclusion

            The application is DENIED.

            Defendants request an order that the $1,740,312.50 in encumbered funds of Castor Modelo, LLC shall be immediately released by escrow to Caster Modelo, LLC.  It is not clear this Court has the power to order a non-party escrow agent to release funds, but it is clear that the temporary protective order that encumbered said funds expires per its explicit terms on October 26, 2023 (the date of the instant hearing) and therefore presents no obstacle to the release of funds from escrow going forward.

Defendants also request an order that plaintiffs pay the interest that has accrued on the funds encumbered by the September 13 temporary protective order, as well as the fees and costs incurred in defeating the attachment. (See CCP § 90.020(a).) It is premature to determine whether defendants are entitled to such recovery. A wrongful attachment, for which plaintiffs may be liable, is defined to include the “service of a temporary protective order in an action in which the plaintiff does not recover judgment.” (CCP § 490.010(b).) Whether plaintiff is unable to recover judgment still remains to be seen.