Judge Daniel M. Crowley, Case Number: 23STCV29944, Date: 2024-06-04 Tentative Ruling

Moving Defendant Robert M. Hindin, Esq.’s demurrer to Plaintiffs Abraham Ghorbanian DDS MS’s and Ghorbanian, Saifee DDS, Inc.’s complaint is sustained with leave to amend as to the 2nd and 6th causes of action.

Moving Defendant Robert M. Hindin, Esq.’s motion to strike is denied as moot.

Plaintiffs’ request for reasonable fees on the motion for sanctions is denied.

Defendant Robert M. Hindin, Esq. (“Hindin”) (“Moving Defendant”) demurs to the 2nd and 6th causes of action in Plaintiffs Abraham Ghorbanian DDS MS’s (“Ghorbanian”) and Ghorbanian, Saifee DDS, Inc.’s (“GS Corp”) (collectively, “Plaintiffs”) complaint (“Complaint”) on the grounds that (1) the allegations in Plaintiffs’ Complaint fails to state any cause of action for “damages for fraudulent transfer” (aka civil conspiracy) and accounting; and (2) Plaintiffs’ Complaint is uncertain. (Notice of Demurrer, pg. 1; C.C.P. §§430.10(e), (f).) Moving Defendant also moves to strike portions of the Complaint. (Notice of MTS, pg. 1; C.C.P. §§431.10, 436.)

Moving Defendant moves for an order imposing monetary and non-monetary sanctions against Plaintiffs and their attorney of record, Kenneth J. Catanzarite, Esq. (“Catanzarite”) to: (1) strike the Complaint and dismiss the action with prejudice; (2) impose monetary sanctions for reasonable attorneys’ fees and costs in the amount of $31,418.91 against Plaintiffs and Catanzarite, jointly and severally; and (3) imposing such other monetary and/or non-monetary sanctions as the Court finds just and reasonable. (Notice Motion Sanctions, pg. 2; C.C.P. §128.7(c).)

Plaintiffs filed their operative Complaint on December 7, 2023, against Moving Defendant and Non-Moving Defendants Namazikhah DMD, Inc. (“PC2”); M.S. Namazikhah D.M.D. (“PC1”); and Essential Endodontics, Inc. (“GC3”) (collectively, “Defendants”), alleging six causes of action: (1) to set aside fraudulent transfer of property; (2) damages for fraudulent transfer; (3) declaratory relief; (4) judicial foreclosure; (5) appointment of a receiver; and (6) accounting.

This action arises out of Plaintiffs’ previous action, LASC Case No. BC516805, against PC1 and Non-party M. Sadegh Namazikhah, E.M.D., M.S., Ed. (“Namazikhah”), from which Plaintiffs did not recover. (Complaint ¶¶15-17.) LASC Case No. BC516805 concerned the Agreement of Purchase and Sale of Business and Assets (“Dental Practice Sale”) dated November 30, 2012, for the sale of PC1’s dental practice assets including goodwill, to Ghorbanian PC controlled by Ghorbanian, for $600,000. (Complaint ¶16.) Plaintiffs allege that after the sale closed, PC1 wrongfully retained business assets that were to be transferred, primarily interfering with the patient-doctor relationship thereby taking the goodwill asset of the dental practice causing damage to Plaintiffs. (Complaint ¶16.)

Moving Defendant filed the instant demurrer and accompanying motion to strike on February 15, 2024. Plaintiffs filed their oppositions on May 21, 2024. Moving Defendant filed a reply in support of the demurrer on May 28, 2024. As of the date of this hearing, no reply in support of the motion to strike has been filed.

Moving Defendant filed the instant motion for sanctions on February 13, 2024. Plaintiffs filed their opposition on May 21, 2024. Moving Defendant filed his reply on May 28, 2024.

Moving Defendant demurs to Plaintiffs’ 2nd and 6th causes of action. Moving Defendant demurs on the basis that Plaintiffs’ Complaint fails to state facts sufficient to constitute a cause of action for damages for fraudulent transfer (aka civil conspiracy), or any other claim. (Demurrer, pg. 1; C.C.P. §430.10(e).) Moving Defendant demurs on the basis that Plaintiff’s Complaint fails to state facts sufficient to constitute a cause of action for accounting, or any other claim. (Demurrer, pgs. 1; C.C.P. §430.10(e).) Moving Defendant demurs on the basis Complaint is uncertain and ambiguous because it fails to state sufficient facts to establish any claim against Hindin. (Demurrer, pg. 1; C.C.P. §430.10(f).)

Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. (C.C.P. §430.41(a).) A declaration must be filed with a demurrer regarding the results of the meet and confer process. (C.C.P. §430.41(a)(3), emphasis added.)

Moving Defendant’s counsel failed to submit a meet and confer declaration in violation of C.C.P. §430.41(a)(3). Instead, Moving Defendant’s counsel notes in its notice of motion that on February 3, 2024, they telephonically met and conferred with Plaintiffs’ attorney, Catanzarite, and were unable to reach an agreement. (Notice Demurrer, pgs. 1-2.) The Court notes Moving Defendants’ counsel’s procedurally improper meet and confer statement substantively fulfills the requirement of C.C.P. §430.41(a)(3) but, aside from other procedural defects, is not signed under penalty of perjury. However, the failure to sufficiently meet and confer is not grounds to overrule or sustain a demurrer. (C.C.P. §430.41(a)(4); Dumas v. Los Angeles County Board of Supervisors (2020) 45 Cal.App.5th 348, 355; Olson v. Hornbrook Community Services District (2019) 33 Cal.App.5th 502, 515.) Accordingly, the Court will consider the instant demurrer.

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

“To support a conspiracy claim, a plaintiff must allege the following elements: ‘(1) the formation and operation of the conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3) damages arising from the wrongful conduct.’” (AREI II Cases (2013) 216 Cal.App.4th 1004, 1022.)

“Conspiracy is not a separate tort, but a form of vicarious liability by which one defendant can be held liable for the acts of another. . . . A conspiracy requires evidence ‘that each member of the conspiracy acted in concert and came to a mutual understanding to accomplish a common and unlawful plan, and that one or more of them committed an overt act to further it.’ Thus, conspiracy provides a remedial measure for affixing liability to all who have ‘agreed to a common design to commit a wrong’ when damage to the plaintiff results. The defendant in a conspiracy claim must be capable of committing the target tort.” (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 652, internal citations omitted.)

Plaintiffs allege that faced with a Recorded Judgment by non-party Kosmas Pappas a copy of which is attached is attached to the Complaint as Exhibit “A” (“Pappas Judgment”) which was recorded on July 6, 2017 by filing with the Secretary of State against PC1, a copy of which is attached to the Complaint as Exhibit “B” (“Pappas Judgment Lien”) as well as Plaintiffs’ LASC Case No. BC516805 Action, Namizakhah and Moving Defendant hatched the plan and scheme to transfer PC1 assets without fair and adequate consideration to GC3, all in an effort to avoid the Pappas’ Judgment lien and Plaintiffs’ claims. (Complaint ¶25.)

Plaintiffs allege Moving Defendant had actual knowledge of the Pappas Judgment and BC516805 Action including defending against claims related to the value of the assets PC1 was to have conveyed to Plaintiffs and continued pursuit of collection thereon and advised Namizakhah to pursue the fraudulent strategy of a bogus transfer of PC1 assets to a new corporation that he would form for that purpose. (Complaint ¶26.)

Plaintiffs allege that on September 15, 2017, Moving Defendant formed GC3 as Secretary of State C4065440 by use of standard form Articles of Incorporation using Namizakhah’s residence address of 661 Lachman Lane, Pacific Palisades as a business address, yet signed by Moving Defendant. (Complaint ¶28, Exh. C.) Plaintiffs allege the ARTS-GS Section of the Articles of Incorporation states, “The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.” (Complaint ¶28.)

Plaintiffs allege as a part of this plan and scheme to defraud Plaintiffs, on November 17, 2017, Namizakhah caused to be filed a Chapter 11 Bankruptcy petition for PC1 as case number 1:17-bk-13094-MB for PCl. (Complaint ¶29.)

Plaintiffs allege On June 5, 2018, the Chapter 7 Trustee for PC1, Amy Goldman, filed a motion to approve a sale of all of PC1’s assets to GC3 for $7,500 and attached an Asset Purchase Agreement signed by Namizakhah for GC3. (Complaint ¶31.)

Plaintiffs allege on June 13, 2018, Pappas filed his opposition to the proposed sale of PC1 assets to GC3 taking the position that the sale was at less than fair and adequate consideration designed to cheat PC1 creditors including Plaintiffs. (Complaint ¶32.) Plaintiffs allege on June 21, 2018, the Chapter 7 Trustee withdrew her motion to approve the sale. (Complaint ¶33.) Plaintiffs allege thereafter on August 31, 2020, the PC1 bankruptcy case closed without a discharge, meaning pending claims and liens would continue against PC1. (Complaint ¶34.)

Plaintiffs allege at the Pappas judgment debtor exam held pursuant to stipulation on May 21, 2021, Namizakhah falsely testified supported by Moving Defendant’s speaking objections that he had sold all of the assets of PC1 to GC3 at a price agreed upon with the Chapter 7 trustee of $7,500 and was practicing dentistry through GC3. (Complaint ¶35.) Plaintiffs allege this was the first date on which Pappas learned that the assets of PC1 had been conveyed to GC3 in an effort to defeat his judgment lien. (Complaint ¶35.)

Plaintiffs allege as learned for the first time on May 21, 2021, by Pappas, having failed in an attempt to insulate the PC1 transfer of assets to GC3, Namizakhah and Moving Defendant, undeterred, made the transfer anyway without court approval and without fair and adequate consideration paid by GC3 to PC1 and transferred the going concern value of the Namizakhah dental practice assets, goodwill, contracts, receivables and work in progress to GC3 all with the specific purpose to hinder, delay and defraud both Pappas and Plaintiffs. (Complaint ¶36.)

Plaintiffs allege they did not learn of the transfer of PC1’s assets to GC3 without fair and adequate consideration until May 21, 2021, when contacted by counsel for Pappas with questions about the BC516805 Action. (Complaint ¶37.)

Plaintiffs allege PC1, PC2, GC3, and Moving Defendant agreed and knowingly and willfully conspired between and among themselves to purport to convert the otherwise available assets and equity in the PC1 which was available to satisfy the Pappas Judgment and the claims in the BCS1680S Action to an interest held by GC3 and Does 1-20 exclusively with the actual intent to hinder and/or delay Plaintiffs, and/or to defraud Plaintiffs. (Complaint ¶47.)

Plaintiffs allege on information and belief that Moving Defendant had specific knowledge of the Pappas Judgment and as defense counsel in the BCS1680S Action claims and efforts to collect same against PC1 including specifically that Moving Defendant knew about the objection to the Namizakhah individual Chapter 11 plan followed by the PC1 bankruptcy and efforts to sell PC1 assets to GC3 which he formed for the express purpose of the fraudulent transfer. (Complaint ¶48.)

Plaintiffs allege Moving Defendant Plaintiffs an independent duty not to assist the fraudulent transfer of PC1’s assets to GC3, thereby meeting the exception to Civil Code §1714.10. (Complaint ¶50.)

Plaintiffs’ cause of action for civil conspiracy fails because Plaintiffs do not allege an underlying cause of action against Moving Defendant, namely, the first cause of action for fraudulent transfer. (IIG Wireless, Inc., 22 Cal.App.5th at pg. 652 [“Conspiracy is not a separate tort, but a form of vicarious liability by which one defendant can be held liable for the acts of another.”].)

Accordingly, Defendants’ demurrer to Plaintiffs’ 2nd cause of action is sustained with 20 days leave to amend.

Accounting is an independent cause of action in equity. (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 180.) A cause of action seeking an accounting may be maintained when (1) a relationship exists between a plaintiff and defendant that requires an accounting, and (2) some balance is due to the plaintiff that can only be ascertained by an accounting. (Id., at pg. 179.) No fiduciary relationship is required. (Id.) But “[a]n action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation.” (Id.)

Plaintiffs allege by virtue of the fraudulent conveyances herein described and the obvious efforts with respect to the PC1 to GC3 transfer of assets, PC1, PC2, GC3, and Moving Defendant have engaged in various transactions with the intent to hinder, delay and defraud Plaintiffs from recovering on the Pappas Judgment and Plaintiffs on the BC5l6805 Action claims. (Complaint ¶63.)

Plaintiffs allege a judicial determination is requested for the accounting of all the PC1, PC2, GC3, and Moving Defendant transactions related to the Namizakhah assets including without limitation the dental practice as of the date of the filing of this Complaint given the diversion of funds from payments due to Plaintiffs, and from the PC1, PC2, GC3, and Moving Defendant when the PC1 to GC3 transfer was first purportedly entered. (Complaint ¶64.)

Plaintiffs allege a judicial determination is requested that PCl, PC2, GC3, and Moving Defendant account for all transactions from May 2, 2013, and any funds related to fraudulent transfers be adjudged and determined to be held constructively as trustees for Plaintiffs. (Complaint ¶65.)

Moving Defendant has no relationship with Plaintiffs that requires him to provide an accounting of transactions of corporate entities. Plaintiffs do not allege Moving Defendant is an officer, director, or shareholder of PC1 or GC3. Plaintiffs only allege Hindin represented Namazikhah and PC1 as attorney of record in the BC516805 Action. (Complaint ¶48). This allegation is insufficient to create a relationship between Moving Defendant and Plaintiffs.

Further, an accounting is used to determine how much is owed. Plaintiffs attached the Stipulated Judgment to the Complaint, which clearly states the amount owed by PC1. Additionally, the fraudulent transfer alleged by Plaintiff is $7,500.00 worth of assets, which is a sum certain. (Complaint ¶31.) The underlying contract in the BC516805 Action is valued at $600,000.00. (Complaint ¶16.) Plaintiffs allege $400,000.00 of “equity” belongs to PC1 to satisfy a “substantial portion of liability in the BC516805 Action.” (Complaint ¶41.) Based on these allegations, an accounting is unnecessary.

Accordingly, Defendants’ demurrer to Plaintiffs’ 6th cause of action is sustained with 20 days leave to amend.

A demurrer for uncertainty will be sustained only where the complaint is so bad that defendant cannot reasonably respond—i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

If the complaint contains enough facts to apprise defendant of the issues it is being asked to meet, failure to label each cause of action is not ground for demurrer: “Although inconvenient, annoying and inconsiderate, the lack of labels . . . does not substantially impair [defendant’s] ability to understand the complaint.” (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 n.2.)

Plaintiffs’ causes of action are not so uncertain that Moving Defendant cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury, 14 Cal.App.4th at pg. 616.)

Accordingly, Moving Defendant’s demurrer on the basis of uncertainty is overruled.

Moving Defendant’s demurrer to Plaintiffs’ Complaint is sustained with 20 days leave to amend as to the 2nd and 6th causes of action.

In light of the Court’s ruling on the demurrer, Moving Defendant’s motion to strike is denied as moot.

Every pleading, petition, written notice of motion, or other similar paper shall be signed by at least one attorney of record in the attorney’s individual name, or, if the party is not represented by an attorney, shall be signed by the party. Each paper shall state the signer’s address and telephone number, if any. Except when otherwise provided by law, pleadings need not be verified or accompanied by affidavit. An unsigned paper shall be stricken unless omission of the signature is corrected promptly after being called to the attention of the attorney or party.

A C.C.P. §128.7 motion involves a two-step process. The moving party first serves the sanctions motion on the offending party without filing it. The opposing party then has 21 days to withdraw the improper pleading and avoid sanctions (the so-called “safe harbor” waiting period). At the end of the waiting period, if the pleading is not withdrawn, the moving party may then file the motion. (C.C.P. §128.7(c)(1); Primo Hospitality Group, Inc. v. Haney (2019) 37 Cal.App.5th 165, 173-174; Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698-699.)

As a preliminary matter, Moving Defendant filed the instant motion on Plaintiffs on January 22, 2024. (Supp.-Decl. of Park ¶4.) Therefore, Plaintiffs’ 21-day “safe harbor” period expired on February 12, 2024. Moving Defendant filed the instant motion on February 13, 2024. Therefore, Moving Defendant’s motion is proper.

Sanctionable conduct under C.C.P. §128.7 is limited to “presenting” a “pleading, petition, written notice of motion, or other similar paper” to the court. (C.C.P. §128.7(b).)

Whether the certificate is violated is tested objectively—i.e., whether the paper filed is frivolous, legally unreasonable or without factual foundation. “The actual belief standard . . . requires a well-founded belief. We measure the truth-finding inquiry’s reasonableness under an objective standard, and apply this standard both to attorneys and to their clients.” (Bockrath v. Aldrich Chemical Co., Inc. (1999) 21 Cal.4th 71, 82; Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 135 n.6; Peake v. Underwood (2014) 227 Cal.App.4th 428, 440 [“A claim is objectively unreasonable if any reasonable attorney would agree that [it] is totally and completely without merit.”].)

The Court declines to award sanctions against Plaintiffs. Moving Defendant failed to meet his burden that the claims asserted in the instant action are barred by res judicata and to a reasonable attorney are totally and completely without merit.

Hon. Daniel M. Crowley

Judge of the Superior Court