Judge Daniel M. Crowley, Case Number: 23STCV29944, Date: 2024-11-19 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 20 days leave to amend as to the 6th cause of action and overruled as to the 1st and 2nd causes of action.

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

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

Plaintiffs’ 11/5/24 evidentiary objections to the Declaration of Mary Parks (“Parks”) are sustained as to Nos. 1, 2, and 3.

Plaintiffs filed their initial 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”).

On June 4, 2024, this Court sustained Moving Defendants’ demurrer to Plaintiff’s Complaint as to the 2nd and 6th causes of action with 20 days leave to amend. (6/4/24 Minute Order.)

On June 24, 2024, Plaintiffs filed the operative FAC against 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. (FAC ¶¶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. (FAC ¶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. (FAC ¶16.)

Moving Defendant filed instant demurrer and accompanying motion to strike on July 30, 2024. Plaintiffs filed their oppositions on November 5, 2024. As of the date of this hearing no reply has been filed.

Moving Defendant demurs to Plaintiffs’ 1st, 2nd, and 6th causes of action. Moving Defendant demurs on the basis that Plaintiffs’ FAC fails to state facts sufficient to constitute a cause of action for fraudulent transfer, damages for fraudulent transfer (aka civil conspiracy), or accounting. (Demurrer, pg. 1; C.C.P. §430.10(e).) Moving Defendant demurs on the basis FAC 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), emphasis added.) A declaration must be filed with a demurrer regarding the results of the meet and confer process. (C.C.P. §430.41(a)(3).)

Moving Defendant’s counsel declares that on July 23, 2024, she telephonically met and conferred with Plaintiffs’ attorney, Kenneth J. Catanzarite. (Decl. of Park ¶4.) Moving Defendant’s counsel declares that on July 24, 2024, she received an email from Plaintiffs’ counsel stating that “the parties had exhausted [their] meet and confer.” (Decl. of Park ¶8, Exh. E.) Moving Defendant’s counsel’s declaration substantially complies with C.C.P. §430.41(a)(3). 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.)

Under the Uniform Voidable Transactions Act (“UVTA”) (formerly the Uniform Fraudulent Transfer Act (“UFTA”)), a transfer made, or obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation with actual intent to hinder, delay, or defraud a creditor. (Civ. Code §3439.04(a)(1).)

“Under the UFTA, ‘a transfer of assets made by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer, if the debtor made the transfer (1) with an actual intent to hinder, delay or defraud any creditor, or (2) without receiving reasonably equivalent value in return, and either (a) was engaged in or about to engage in a business or transaction for which the debtor’s assets were unreasonably small, or (b) intended to, or reasonably believed, or reasonably should have believed, that he or she would incur debts beyond his or her ability to pay as they became due.’” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 121-122, internal citations omitted.)

Under Civil Code §3439.05 (constructive fraud), a transfer is fraudulent as to a creditor’s claim arising before the transfer if the debtor made the transfer without receiving a reasonably equivalent value in exchange for transfer and the debtor was insolvent at the time. (Civ. Code §3439.05.)

Plaintiffs allege that faced with a Recorded Judgment by non-party Kosmas Pappas a copy of which is attached 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 as Exhibit “B” (“Pappas Judgment Lien”) as well as Plaintiffs’ LASC Case No. BC516805 Action, Namizakhah and Moving Defendant hatch 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. (FAC ¶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. (FAC ¶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. (FAC ¶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.” (FAC ¶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. (FAC ¶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. (FAC ¶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. (FAC ¶32.) Plaintiffs allege on June 21, 2018, the Chapter 7 Trustee withdrew her motion to approve the sale. (FAC ¶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. (FAC ¶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. (FAC ¶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. (FAC ¶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. (FAC ¶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. (FAC ¶37.)

Plaintiffs allege on information and belief that the transfer of the assets including the going concern of PC1 to GC3 and Hindin discovered by Pappas and Plaintiffs in May 21, 2021, was entered into by PC1 to GC3 for the purpose of avoiding liability to Plaintiffs and to hinder or delay Plaintiffs from executing on said property, and to hinder, delay and make it impossible for Plaintiffs to access said property as a source of payment on the Pappas Judgment, to avoid the related lien, to avoid liability in the BC516805 Action, and to defraud Plaintiffs. (FAC ¶39.)

Plaintiffs allege on information and belief that the decision to make the transfers from PC1 to GC3 and Hindin was the result of discussion and agreement between Namizakhah as a shareholder, director, and officer of both corporations in conjunction with Hindin who was simultaneously counsel for Namizakhah, PC1, and GC3, and the transfer was secretly effected without documentation after the Pappas opposition to Trustee Goldman’s motion to sell caused the motion to be withdrawn, all with the secret intention that no public disclosure be made of the actual transfer. (FAC ¶40.) Plaintiffs allege that as a result, Plaintiffs did not discover until May 21, 2021, that the transfer had occurred if such a transfer was at all effective given the prohibition that GC3 as a general business corporation could not practice a profession. (FAC ¶40.)

Plaintiffs allege that at the time Namizakhah and Hindin caused to be transferred the going concern assets of PC1 to GC3 and Hindin, the fair market value of same was in excess of Five Hundred Thousand Dollars ($500,000) while the secured debts were not greater than One Hundred Thousand ($100,000) leaving Four Hundred Thousand ($400,000) of equity plus the cash transferred to Hindin to satisfy the Pappas Judgment and a substantial portion of the liability in the BC516805 Action. (FAC ¶41.)

Plaintiffs allege that by virtue of the fraudulent transfer of the assets of PC1 to GC3 and Hindin, Plaintiffs are entitled to an injunction against the PC1, GC3, Hindin, enjoining and restraining any further transfer of the assets and an injunction against PC1, PC2, GC3, and Hindin, enjoining any further encumbrance of the assets and equity value thereof. (FAC ¶42.)

Plaintiffs allege that by virtue of the fraudulent transfer of the PC1 assets to GC3 and Hindin, Plaintiffs are also entitled to the imposition of a constructive trust against the GC3 and Hindin’s assets such that PC1, PC2, GC3, and Hindin hold the same in trust for the benefit of Plaintiffs as requested in this complaint and an imposition of a constructive trust against the proceeds of any sale or transfer thereof until all damages adjudged due Plaintiffs in this action are paid in full. (FAC ¶43.)

Plaintiffs allege as a proximate consequence of the fraudulent transfer, Plaintiffs have also been injured and damaged in an amount at presently unknown, but subject to proof at trial. (FAC ¶44.)

Plaintiffs allege a cause of action under UVTA. Plaintiffs sufficiently allege actual intent (FAC ¶26) and that PC1 transferred assets to GC3 and Hindin without fair consideration (FAC ¶37). Plaintiffs further to allege that “the PC1 bankruptcy filing listed gross revenue for 2016 of $486,000 which in context of ¶21 above that Namizakhah himself under oath reported that PC 1 would pay him ‘ . . . $25,000.00 to $35,000.00 per month . . .’ meant that PC1’s assets and income earning capability from practicing dentistry was more than sufficient to allow PC1 to pay Plaintiffs in full,” and that “[o]n 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.” (FAC ¶¶30-31, emphasis added; C.C.P. §3439.04(a).)

Accordingly, Moving Defendant’s demurrer to the 1st cause of action is overruled.

“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.)

A cause of action for conspiracy to commit common law fraudulent transfer or violate the codified UVTA may be alleged. (See Monastra v. Konica Business Machines, U.S.A., Inc. (1996) 43 Cal.App.4th 1628, 1645; see also Berger v. Varum (2019) 35 Cal.App.5th 1013, 1026.)

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 Hindin exclusively with the actual intent to hinder and/or delay Plaintiffs, and/or to defraud Plaintiffs. (FAC ¶47.)

Plaintiffs allege on information and belief that Moving Defendant had specific and actual 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 fraudulent transfers. (FAC ¶48.)

Plaintiffs allege Moving Defendant owed 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. (FAC ¶50.)

Plaintiffs allege as a result, they have suffered damages equal to the amounts they have been unable to collect and will be unable to collect from PC1 and PC2 without yet a further judgment against GC3 and Moving Defendant, including for attorney’s fees, costs and other damages, in an amount according to proof, but not less than $400,000, plus interest at the legal rate. (FAC ¶51.)

Plaintiffs allege GC3 and moving Defendant had actual knowledge of PC1’s wrongful conduct, as described above, to convert the otherwise available assets and equity in PC1, which was available to satisfy both the Pappas Judgment and the claims in the BC516805 Action to an interest held by GC3 and Moving Defendant exclusively with the actual intent to hinder and/or delay Plaintiffs, and/or to defraud Plaintiffs. (FAC ¶52.)

Plaintiffs allege Moving Defendant had specific and actual knowledge of course as defense counsel in the BC516805 Action claims efforts to collect same against PC1, including specifically that Moving Defendant had actual knowledge about the objection to the Namizakhah individual Chapter 11 plan followed by the PC1 bankruptcy and efforts to sell PCl assets to GC3 which Moving Defendant aided and abetted PC1, PC2, and GC3 by providing substantial assistance including forming GC3 for the express purpose of the fraudulent transfer including PC1’s monies transferred to Moving Defendant. (FAC ¶53.)

Plaintiffs allege due to GC3’s and Moving Defendant’s substantial assistance, as described, Plaintiffs have suffered harm in the form of damages equal to the amounts they have been unable to collect and will be unable to collect from PC1 and PC2 without yet a further judgment against GC3 and Moving Defendant, including for attorney’s fees, costs and other damages, in an amount according to proof, but not less than $400,000, plus interest at the legal rate. (FAC ¶54.)

Plaintiffs sufficiently allege a cause of action for civil conspiracy. Plaintiffs allege an underlying cause of action for UVTA. Plaintiffs sufficiently allege the first element of conspiracy, the formation and operation of the conspiracy: Moving Defendant knowingly and willfully formed and agreed with non-party Namazikhah and his co-defendants PC1 and GC3 to convert the otherwise available assets and equity in PC1 which was available to satisfy the BC516805 Action to an interest held by GC3 with the actual intent to hinder and/or delay Plaintiffs in the collection, and advised Namazikhah to pursue the fraudulent strategy of a bogus transfer of PC1’s assets to the new corporation, GC3, that Moving Defendant formed for the purpose of Moving Defendant’s own financial gain. (FAC ¶¶15-16, 26-30, 37-41,46-48, 51-53, Exhs. A, B, C.) Plaintiffs sufficiently allege the second element of conspiracy, wrongful conduct in furtherance of the conspiracy: Plaintiffs allege that, consistent with their plan and scheme, Moving Defendant formed GC3 on September 15, 2017, after which Namazikhah filed for Bankruptcy for PC1, attempting to shield the assets by inducing the Bankruptcy Trustee into an asset sale. (See FAC ¶¶28-31.) Plaintiffs allege this resulted in the Bankruptcy Trustee filing a motion seeking approval of the sale on June 5, 2018, which was withdrawn after Pappas opposed the sale. (See FAC ¶¶31-33.) Plaintiffs allege that, later, Namazikhah and PC1 transferred PC1’s “going concern” assets to GC3 and monetary assets to Moving Defendant without court approval and without fair and adequate consideration in an effort to defeat the Judgment Lien and the BC516805 Action Claims. (See FAC ¶¶36-37.) Finally, Plaintiffs sufficiently allege the third element of conspiracy, damages: Plaintiffs allege they suffered damages as a result of Moving Defendant’s malfeasance including an inability to satisfy Plaintiffs’ BC516805 Action claims in an amount not less than $400,000. (See FAC ¶¶46-48, 51-53.)

Accordingly, Moving Defendant’s demurrer to Plaintiffs’ 2nd cause of action is overruled.

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. (FAC ¶66.)

Plaintiffs allege a judicial determination is requested for the accounting of all the PC1, PC2, and GC3 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 PC1 when the PC1 to Moving Defendant transfer was first purportedly entered. (FAC ¶68.)

Plaintiffs allege a judicial determination is requested that PC1, 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. (FAC ¶69.)

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. (See FAC ¶¶7, 26, 39, 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. (FAC ¶25, Exh. A.) Additionally, the fraudulent transfer alleged by Plaintiff is $7,500.00 worth of assets, which is a sum certain. (FAC ¶31.) The underlying contract in the BC516805 Action is valued at $600,000.00. (FAC ¶16.) Plaintiffs allege $400,000.00 of “equity” belongs to PC1 to satisfy a “substantial portion of liability in the BC516805 Action.” (FAC ¶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 6th cause of action and overruled as to the 1st and 2nd causes of action.

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

Hon. Daniel M. Crowley

Judge of the Superior Court