Judge: Curtis A. Kin, Case: 25STCV04617, Date: 2025-03-20 Tentative Ruling
Case Number: 25STCV04617 Hearing Date: March 20, 2025 Dept: 86
ORDER TO SHOW CAUSE
RE: PRELIMINARY INJUNCTION
Date: 3/20/25
(1:30 PM)
Case: Classic Petroleum, Inc. v.
Yousef Zarrabian (25STCV04617)
TENTATIVE RULING:
On February 26, 2025, the Court (Hon. Stephen I. Goorvitch, presiding)
granted plaintiff’s ex parte application for an order to show cause re:
preliminary injunction and temporary restraining order as to defendant Yousef
Zarrabian, enjoining defendant from “(1) Entering any party of the premises located
at 2600 North Figueroa Street in Los Angeles, California (the ‘Premises’) which
is a gas station; (2) Accessing, in any way, the payment collection systems
used by Plaintiff in the operation of the Gas Station and Food Mart located on
the Premises.” (2/26/25 Order at 2, 3.)
The Court set the hearing on the Order to Show Cause for
March 20, 2025, and ordered a briefing schedule. Plaintiff did not file any supplemental
papers. On March 13, 2025, defendant
filed an Opposition with accompanying declarations in support thereof. On March 17, 2025, plaintiff filed a Reply
with accompanying declarations.
As a preliminary matter, the Court notes that, on March 17,
2025, plaintiff submitted a Proposed Order for the Order to Show Cause re
Preliminary Injunction, which includes an additional provision stating: “Any
obligation by Plaintiff to pay a monthly fee to Defendant of $3,000 is hereby
terminated during the pendency of this Preliminary Injunction.” (3/17/25
Proposed Order at 2.) The Court notes
that the Court’s 2/26/25 Order to Show Cause contained no notice that an
injunction may issue with that provision.
This is hardly surprising, as in connection with its 2/26/25 ex parte
application seeking injunctive relief, plaintiff stated: “Plaintiff does not
seek, in connection with the request for a TRO, to alter, in any manner
[defendant’s] compensation. [Plaintiff]
does not seek, by the TRO, to alter any compensation to which [defendant] is
entitled as owner of the company. Nor
does the TRO seek to cut-off the $3000 which [plaintiff] makes to [defendant]
monthly.” (Pl. Mem. in Support to Ex
Parte App. at 7-8.) The failure to
provide defendant with even minimal notice and reasonable opportunity to be
heard regarding the $3,000 monthly compensation at risk would seem reason
enough not to entertain plaintiff’s additional proposed injunctive relief. In any event, plaintiff has made no
argument—and offered no evidence—in support of this new request for injunctive
relief. Indeed, for the first time in
passing, plaintiff in its Reply merely includes the following statement in its
conclusion: “In addition, Plaintiff requests that the monthly fee paid to
defendant of $3,000 be terminated along with the issuance of a preliminary
injunction.” Accordingly, the Court declines
to consider plaintiff’s request for such relief.
For the reasons that follow, the Court will GRANT
plaintiff’s request for a preliminary injunction in accordance with the Court’s
Order to Show Cause.
I.
THE COMPLAINT
On February 18, 2025, plaintiff Classic Petroleum Inc. (“Classic”)
filed a Complaint against defendant Yousef Zarrabian. The Complaint alleges
four causes of action: (1) Embezzlement; (2) Conversion; (3) Breach of
Contract; and (4) Breach of Fiduciary Duty.
Pouya Zarrabian (“Pouya”) and defendant – who are nephew and
uncle, respectively – each own a fifty percent share of Classic. (Compl. ¶ 9.)
Classic owns a gas station located at 2600 N. Figueroa Street, Los Angeles,
California (hereinafter “Gas Station”). Since 2016, defendant managed the
day-to-day operations of the Gas Station in exchange for compensation of $3,000
per month. (Compl. ¶ 10.)
In the latter half of 2024, an employee reported to Pouya
that defendant was stealing money and showed Pouya footage of the alleged
theft. (Compl. ¶ 13.) Pouya then began reviewing footage of the Gas Station’s
security cameras and confirmed that defendant was deploying methods to steal
monies and avoid detection, primarily by taking small amounts from customers or
the cash register each day. (Compl ¶ 14.) Plaintiff then filed suit.
II.
APPLICABLE LAW
“[A] court will deny a preliminary injunction unless there
is a reasonable probability that the plaintiff will be successful on the
merits, but the granting of a preliminary injunction does not amount to an
adjudication of the merits.” (Beehan
v. Lido Isle Community Assn. (1977) 70 Cal.App.3d 858, 866.) “The function of a preliminary injunction is
the preservation of the status quo until a final determination of the
merits.” (Ibid.)
“Trial courts traditionally consider and weigh two factors
in determining whether to issue a preliminary injunction. They are (1) how
likely it is that the moving party will prevail on the merits, and (2) the
relative harm the parties will suffer in the interim due to the issuance or
nonissuance of the injunction.” (Dodge,
Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th
1414, 1420.) “[T]he greater the ...
showing on one, the less must be shown on the other to support an
injunction.” (Ibid. [quoting Butt
v. State of California, (1992) 4 Cal.4th 668, 678].) The burden of proof is on the plaintiff as
the moving party “to show all elements necessary to support issuance of a
preliminary injunction.” (O'Connell
v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)
III.
ANALYSIS
A.
Likelihood
of Success
Plaintiff alleges four causes of action and contends the
likelihood of success on the merits is high due to their evidence of embezzlement
and conversion. The Court agrees.
The elements of embezzlement are: (1) an owner entrusted
his/her property to the defendant; (2) the owner did so because he/she trusted
the defendant; (3) the defendant fraudulently converted that property for
his/her own benefit; and (4) when the defendant converted the property, he/she
intended to deprive the owner of its use. (People v. Salivanov (2016) 5
Cal.App.5th 726, 764. Also see Pen. Code §503.) “Conversion is the wrongful
exercise of dominion over the property of another. The elements of a conversion
claim are: (1) the plaintiff’s ownership or right to possession of the
property; (2) the defendant’s conversion by a wrongful act or disposition of
property rights; and (3) damages.” (Lee
v. Hanley (2015) 61 Cal.4th 1225, 1240.)
As for embezzlement and conversion, plaintiff has adduced
substantial and persuasive evidence, including photos, that monies from
customers were entrusted to defendant in his position as a cashier with
responsibility for managing the day-to-day operations of the Gas Station and
that defendant fraudulently converted the property for his own benefit by
pocketing the money for himself instead of placing the customers’ money in the
cash register. (Pouya Zarrabian Decl. ¶¶ 11-29.) Defendant has done so by
several methods: by failing to scan a purchase and keeping the customer’s money
(Pouya Zarrabian Decl. ¶¶ 11-15; Pouya Zarrabian Reply Decl. ¶¶ 13-18); by
voiding a valid transaction and keeping the money from the voided transaction (Pouya
Zarrabian Decl. ¶¶ 16-26; Pouya Zarrabian Reply Decl. ¶¶ 8-12); or by
stealing money from Lotto purchases (Pouya Zarrabian Decl. ¶¶ 23-26.) Although defendant appears to deny it (Yousef
Zarrabian Decl. ¶ 15 [“At no time did Pouya Zarrabian question me as to why I
was leaving money on the case register during the shifts that I worked]), Pouya
Zarrabian declares unequivocally that “[w]hen I confronted Yousef about the
thefts, he admitted to me that he has been stealing money in the ways described
in the Complaint and in my original declaration.” (Pouya Zarrabian Supp. Decl ¶
5; see also Pouya Zarrabian Reply Decl. ¶ 2 [“Yousef has previously admitted
in his declaration and verbally that he has been stealing money in the ways
described in the Complaint and in my prior declarations”].) Even if defendant were to unequivocally deny
stealing from the Gas Station, the Court cannot ignore the nearly frame-by-frame
video still evidence of defendant stealing $100 dollars while in the back
office of the Gas Station on January 1, 2025 (Pouya Zarrabian Second Supp. Decl.
¶¶ 2-10), which makes defendants denial of ongoing theft from plaintiff difficult
to credit.
As for defendant’s evidence in opposition, the Court
likewise finds it difficult to credit such evidence as meaningfully undermining
plaintiff’s evidence of defendant’s embezzlement and conversion. The unsigned declaration by Neusha Zarrabian
stating that Neusha will sometimes leave money on the cash register does little
to undercut the showing that, when defendant (who is Neusha’s father) leaves
money on the cash register, he steals it. (See Neusha Zarravian Unsigned
Decl. ¶¶ 3-5.) As for defendant’s
self-serving denials of theft (see Yousef Zarrabian Decl. ¶¶ 8-12, 19),
they are belied by the above-described evidence of his theft, which includes
corroborating photos of defendant in action.
Further, defendant’s uncorroborated accusations regarding Pouya
Zarrabian’s purported “acts of malfeasance” are irrelevant as to whether
defendant stole from the Gas Station. (See Yousef Zarrabian Decl. ¶¶ 4-6.) Lastly, perhaps because it has been
undeniably caught on camera, it is noteworthy that defendant admits that “I
have taken money from the till”—though defendant provides the self-serving
explanation that such takings were “to buy candy, toiletries, and other
inventory for the gas station’s convenience store and Cosco and other stores.”
(Yousef Zarrabian Decl. ¶ 8 & Ex. B.)
That innocent explanation for taking money from the till falls flat when
viewed against the actual “specific procedure by which funds can be taken from
the Gas Station’s register to be ‘paid out’ to vendors and for purchases at
Costco and other stores.” (Pouya Zarrabian Reply Decl. ¶¶ 3-5; Pouya Zarrabian
Second Supp. Decl. ¶¶ 11-12 & Exs. A, B.)
The Court thus finds it is reasonably probable plaintiff
will prevail on its claims of embezzlement and conversion against defendant
Yousef Zarrabian.
Similarly, with respect to the breach of contract and breach
of fiduciary duty claims, those causes of action hinge on the alleged theft. By
demonstrating a likelihood of success as to the theft, plaintiff has also shown
a likelihood of success as to breach of contract and breach of fiduciary duty
claims, as the theft alone is a breach of the contractual relationship of
employment and ownership of Classic.
B.
Balance of
Harms
In deciding whether the balance of harms favors issuing the
preliminary injunction, the Court evaluates the harm the plaintiff is likely to
sustain if the preliminary injunction is denied as compared to the harm the
defendant is likely to suffer if the injunction issued. (IT Corp. v. County
of Imperial (1983) 35 Cal.3d 63, 69-70.)
Plaintiff seeks to preserve the status quo by enjoining
defendant from entering the Gas Station or accessing the Gas Station’s payment
collection systems so as to prevent further theft of monies from the Gas
Station. The injunction does not affect
defendant’s 50% ownership of the company or his entitlement to receive his $3,000
monthly earnings. There appears to be
little or no harm to defendant arising from the requested injunction.
By contrast, permitting defendant to have continued access
to the Gas Station and its payment collection systems subjects plaintiff to the
serious risk of unabated loss of monies that it has thus far been unable to
guard against while defendant has had unfettered access to plaintiff’s property
at the Gas Station.
IV.
CONCLUSION
For the foregoing reasons,
the Court will grant plaintiff’s request for a preliminary injunction pursuant
to the Court’s 2/26/25 Order to Show Cause.
In accordance with CCP 529(a), the Court orders a nominal undertaking of
a $5,000 preliminary injunction bond, as it appears little or no pecuniary loss
would have befallen defendant if it were later determined the injunction had
issued in error.