Judge: Curtis A. Kin, Case: 24STCV04506, Date: 2025-03-11 Tentative Ruling

Case Number: 24STCV04506    Hearing Date: March 11, 2025    Dept: 86

Plaintiff Hossein Fatemi moves for a right to attach order against defendants (1) Hamidreza Pousti, (2) House of Legends, Inc., and (3) Emperor Entertainment, Inc. in the amount of $676,079.65.  For the reasons that follow, the applications are DENIED.

I.       Background

            Defendants House of Legends, Inc. (“House of Legends”) and Emperor Entertainment, Inc. (“Emperor Entertainment”) produce concerts featuring Persian music and singers in California. (Pousti Decls. ¶ 2; Fatemi Decls. ¶ 9.) Defendant Hamidreza Pousti is the Chief Executive Officer for both companies. (Pousti Decls. ¶ 1; Fatemi Decls. ¶¶ 5, 7.) Pousti is also the CEO of non-party Emperor Concerts, Inc. (“Emperor Concerts”), which produces concerts featuring Persian music and singers in Las Vegas, Nevada. (Pousti Decls. ¶ 2.)

            According to plaintiff Fatemi, in March 2022, defendant Pousti approached him with a business proposal to fund music concerts that would be planned, managed, and conducted by Pousti and his corporations. (Fatemi Decl. ¶ 10.)  On March 16, 2022, Fatemi and Pousti entered into a written agreement, entitled “Promissory Note,” pursuant to which Fatemi would loan Pousti $470,398.02 and be repaid $510,398.02 by no later than July 7, 2022. (Fatemi Decl. ¶¶ 12-14 & Ex. A.) Fatemi claims he paid Pousti the initial amount of $470,398.02. (Fatemi Decl. ¶ 15.)  Fatemi also claims that he paid an additional $365,7000 to Pousti in several installments from April to December 2022 for the purpose of providing additional funds to complete and plan a concert that was originally scheduled for July 4, 2022, but postponed until December 2022.  (Fatemi Decl. ¶¶ 16-18.)  Fatemi contends that he made these additional payments because he was induced by Pousti’s false representations, concealment, and fraud, alleging that the defendants did not use the monies for investment purposes but instead converted and embezzled the funds for personal gain. (Fatemi Decl. ¶¶ 17-18, 22.)  Fatemi has provided copies of checks and wire transfer receipts evidencing the payment of the additional funds. (Fatemi Decl. ¶ 18 & Exs. B-L.)  Fatemi acknowledges that Pousti repaid him $267,300 in various installments between April 2022 and March 2023, but he contends he is owed $676,079.65, consisting of the total funds from his “investment” that have not been repaid ($568,798.02), plus interest ($156,779.91) and $40,000 in minimum estimated profits he is due for concerts that did not occur. (Fatemi Decl. ¶¶ 19.)

            In his First Amended Complaint, Fatemi asserts claims against Pousti, House of Legends, Emperor Entertainment, and Ahmad Massoud[1] for: (1) Fraud; (2) Conversion; (3) Breach of Contract; (4) Unjust Enrichment; (5) Abuse of Elderly Person, in violation of Welfare and Institutions Code section 15600; and (6) Injunctive Relief and Imposition of Constructive Trust.

            As may be relevant here, Pousti acknowledges that Fatemi periodically loaned money to House of Legends and Emperor Entertainment. (Pousti Decl. ¶ 3.)  According to Pousti, in early 2022, Fatemi approached him about investing in an upcoming Las Vegas concert and orally agreed in March 2022 to invest $228,574.10 with Emperor Concerts to produce the event in exchange for 50% of the profits. (Pousti Decl. ¶ 4.)  Pousti concedes that, on March 16, 2022, a Promissory Note for $470,398.02 was executed between them. (Pousti Decl. ¶¶ 5-6; compare Pousti Decl. Ex. A (Promissory Note Pousti admits executing) with Fatemi Decl. Ex. A [identical Promissory Note].)  Pousti contends that Fatemi never paid him the sum of $470,398.02, as indicated in the Promissory Note. (Pousti Decl. ¶ 6.)  Pousti, however, admits that he did receive $228,574.10 from plaintiff on March 24, 2022, but characterizes that payment as being made pursuant to their prior oral agreement to fund the Las Vegas concert in exchange for 50% of the profits. (Pousti Decl. ¶ 7.)  According to Pousti, he returned the $228,574.10 to Fatemi in April 2022, which Pousti claims was made to repay Fatemi’s investment after the Las Vegas concert failed to go forward. (Pousti Decl. ¶ 9.)

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).)

            With respect to the basis for attachment, “an attachment may be issued only in an action on a claim or claims for money, each of which is based upon a contract, express or implied, where the total amount of the claim or claims is a fixed or readily ascertainable amount not less than five hundred dollars ($500) exclusive of costs, interest, and attorney’s fees.” (CCP § 483.010(a).)

Concerning “probable validity of the 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 § 481.190.) “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.)

III.     Analysis

1.            The Promissory Note

The parties agree that both plaintiff Fatemi and defendant Pousti signed a written Promissory Note. (Fatemi Decls. ¶ 12 & Ex. A; Pousti Decls. ¶ 5 & Ex. A.) The Note provided that, in exchange for Fatemi loaning $470,398.02, Pousti would pay the entire principal loan amount, plus interest, by July 7, 2022. (Note ¶¶ 1-3.) Fatemi thus demonstrates that an attachment may be issued with respect to his contract claims made pursuant to the Note.

Defendants argue that Fatemi has no standing to seek attachment under the Promissory Note, because paragraph three of the note states that “Borrower agrees to make weekly payments to [HAMIDREZA POUSTI].” (Fatemi Ex. A. at ¶ 3.)  The Promissory Note identifies Pousti as the “Borrower” who would make payments per paragraph three. (Fatemi Ex. A at 1 [introductory paragraph].)  While it may be true that a non-party to a contract has no standing to enforce the contact (see Hatchwell v. Blue Shield of California (1988) 198 Cal.App.3d 1027, 1034), here, it is clear when reading the Promissory Note as a whole that the parties intended for Fatemi, not Pousti, to receive payments under the Note. (See Civ. Code § 1636 [mutual intention of parties given effect in interpretation of contract]; Civ. Code § 1641 [whole of contract to be taken together].) Indeed, the purpose of a promissory note is to memorialize the promise from the maker of the note to make payments to the bearer of the note. (See Saks v. Charity Mission Baptist Church (2001) 90 Cal.App.4th 1116, 1132 [promissory note is “negotiable instrument”]; Comm. Code § 3104(a)(1) [negotiable interest is payable to bearer].) Fatemi must be the bearer of the Note, as it would make no sense for Fatemi to loan money and sign the Note if he would not be owed payments under the Note. (See Note ¶ 1 [Borrower promised to pay loan amount “in consideration for receiving a loan from Lender”].)  Thus, the Court interprets paragraph 3 of the Note to require payments from Pousti to Fatemi (see Lemoge Elec. v. San Mateo County (1956) 46 Cal.2d 659, 663 [contract may be revised based on mutual mistake of parties]), meaning that a contract may exist between them which may provide the basis for the attachment orders Fatemi seeks.

Nonetheless, no attachment orders shall issue based on the Promissory Note.  To begin with, defendants House of Legends and Emperor Entertainment are separate corporate entities. (See Pousti Decl. ¶ 1)—neither of which are party to the Promissory Note.  (Cf. Fatemi Ex. A at 1 [identifying only Pousti as “Borrower” and Fatemi as “Lender”].)  While plaintiff alleges the corporate defendants are alter egos of Pousti (see Am Compl. ¶ 10), plaintiff provides no evidence to meet his burden to demonstrate any unity of interest between these parties such that the separate existence of the corporate entities should be disregarded. (See Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1285.)  Accordingly, there is no contact claim based on the Promissory Note upon which attachment against the corporate defendants may be based.

As for the claim against Pousti, Fatemi fails to show on this record that he is likely to prevail on his breach of contract claim based on the Promissory Note.  Simply put, Fatemi claims he paid Pousti $470,398.02 per that agreement. (Fatemi Decl. ¶ 15.)  Pousti claims “Fatemi never paid the sum of $470,398.02 to me, House of Legends, or Emperor Entertainment.” (Pousti Decl. ¶ 7.)  Neither party provides any corroboration for their competing statements.  The Court thus has no meaningful basis by which to evaluate the credibility of their respective claims.  Accordingly, plaintiff fails to establish the probable validity of his contract claim based on the Promissory Note.   

2.    Other Bases for Attachment

In addition to the amounts due under the Promissory Note, plaintiff seeks to attach $365,700 for payments made after execution of the Note, plus $40,000 in profits purportedly due from his investment in defendants’ concerts. (Fatemi Decls. ¶¶ 18, 20.)  These amounts are not attachable.[2]

With respect to the $365,700, any claim for such monies does not arise from a contract, as is required by CCP § 483.010(a). Fatemi made such payments after the Promissory Notes was executed, and the note makes no reference to any obligation for Fatemi to make those payments.  Insofar as Fatemi claims that he made such payments pursuant to “false representations” by Pousti (see Fatemi Decl. ¶¶ 17-18), Fatemi fails to provide any meaningful evidence that such representations created an oral or implied agreement, let alone established enforceable terms of any such agreement.

With respect to the share of the profits, even assuming Pousti made some representation that Fatemi was promised in exchange for his investment “a Ten (10%) interest in the investment plus his share of the profits form the concerts” (Fatermi ¶ 10(3)), the terms of any such oral agreement are unclear.  Furthermore, Fatemi does not state how he calculated the estimated $40,000 in profits he claims are due. (Fatemi Decls. ¶ 20.) Fatemi thus does not demonstrate that the profits he claim are due under his purported agreement with Pousti were fixed or readily ascertainable, as is required by CCP § 483.010(a).

IV.     Conclusion

For the foregoing reasons, the applications for right to attach orders as to defendants (1) Hamidreza Pousti, (2) House of Legends, Inc., and (3) Emperor Entertainment, Inc. are hereby DENIED.