Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

 

  This case arises from a dispute among shareholders of a closely held corporation called Wholesale Direct Metals (“WDM”).  Damon Geller formed WDM.  Defendant Niloofar Maashfegh Geller (“Lili”) is Damon’s wife.  WDM sells precious metals in coins and bullion form to the public.  It advertises its offerings primarily on the Internet.  WDM’s orders are typically paid for with wire transfers, checks or other form of payments by the customers, after which WDM either dropships metals from a distributor directly to the customer or takes possession of gold and silver from customers at the office.   

In March 2018, Plaintiff Edwin Solorzano invested $100,000 in exchange for 125 shares of WDM becoming a minority shareholder.  Plaintiff became a director of WDM and the President.  He continues to hold these positions today.   

Plaintiff (and other WDM shareholders) had a history of disputes with Mr. Geller about his alleged mismanagement of WDM, including the setting and payment of Mr. Geller’s compensation.   On April 24, 2018, Plaintiff and WDM entered into a Redemption Agreement whereby: (1) Mr. Geller sold all of his shares back to WDM, (2) Mr. Geller paid WDM $170,000 to resolve the disputes regarding his management of WDM and in exchange for the releases granted to him by WDM, and (3) Plaintiff and WDM broadly and fully released Mr. Geller, Mrs. Geller, and their heirs, beneficiaries and assigns (the “Geller Releasors”) from any and all claims, whether or not concealed or hidden, from the beginning of time through April 2018.  The Redemption Agreement included a waiver under Code Civ. Proc. § 1542.   

Less than a year after the Redemption Agreement was signed, in March 2019, Plaintiff filed a complaint against Mrs. Geller and others, alleging they embezzled at least $9.65 million.  Plaintiff alleges they did so by buying metals for non-existent customers, billing the cost of those metals to the company as “promotional” and then physically stealing the metal.  Plaintiff also alleges the theft included the payment of unauthorized salaries, unauthorized sham “loans”, payment of personal expenses with company funds, and other payments to defendants for no ascertainable reason.   

Based on the allegations in the Complaint, Plaintiff sought and received a writ of possession, allowing him to enter Mrs. Geller’s home and seize gold from her safe.  Plaintiff seized 60 one-ounce Canadian Maple Leaf gold coins.   

The Court ultimately granted a motion to compel arbitration pursuant to an arbitration clause in the Redemption Agreement.  After the motion was granted, Mrs. Geller filed a Motion to Quash the Ex Parte Writ of Possession which was granted in part and denied it part.  It was denied because the case was stayed pending the completion of the arbitration proceedings, and the Court no longer had jurisdiction to consider the merits as would be required in ruling on a motion to quash.  It was granted in that Plaintiff was required to post a bond.  (Ex. E to Wade Decl.)  That bond, however, was never posted because Plaintiff claimed WDM did not have sufficient funds to cover it.  (Ex. F to Wade Decl.)              

An arbitration proceeding was held over eight days.  At the conclusion of the hearing, the arbitrator found the Redemption Agreement is a valid, binding and enforceable contract, and on this basis, ruled in favor of Mrs. Geller on all claims asserted against her.  (Ex. C to Wade Decl.)   

The arbitrator awarded fees and costs incurred in the arbitration to Mrs. Geller as the prevailing party; however, the arbitrator declined to award attorneys’ fees and costs in connection with Mrs. Geller’s efforts to quash the Writ of Possession because “[t]he remedy of a writ of possession is not within the jurisdiction of an arbitration proceeding and was pursued in Superior Court.”  (Ex. H to Wade Decl.)  The arbitrator noted that “the application of the entirety of the fees related to the writ of possession and related matters should be pursued in the Superior Court.”  (Id.)  The Court confirmed the arbitration award.      

This hearing is on Mrs. Geller’s motion for release and redelivery of her gold coins, for damages and for attorneys’ fees and costs.  Mrs. Geller argues she is entitled to a release and redelivery and for damages sustained as a result of the seizure because Plaintiff did not recover a judgment against her.  Moreover, Mrs. Geller seeks to recover attorneys’ fees and costs associated with this motion and her prior motion to quash the writ of possession pursuant to the attorneys’ fees provision in the Redemption Agreement and Cal. Civ. Code § 1717.    

EVIDENTIARY OBJECTIONS 

 

The Court overrules Objection Nos. 2-16 and sustains Objection No. 1 to the Declaration of Gillian Wade.  The Court overrules Objection Nos. 17, 18 and sustains Objection Nos. 19-30 to the Declaration of Keith Wileman.  The Court overrules Objection Nos. 31-42 to the Declaration of Niloofar Geller. 

MOTION FOR RELEASE, REDELIVERY AND DAMAGES 

 

¿Code Civ. Proc. §512.120 provides: “If the plaintiff fails to recover a judgment in the action, he shall redeliver the property to the defendant and be liable for all damages sustained by the defendant which are proximately caused by operation of the temporary restraining order and preliminary injunction, if any, the levy of the writ of possession and the loss of possession of the property pursuant to levy of the writ of possession or in compliance with an order issued under Section 512.070.”   

Since Plaintiff did not recover a judgment in this action, he is required to release and redeliver the gold coins to Mrs. Geller.  Plaintiff argues that release and redelivery should be denied because Mrs. Geller does not own the gold coins and therefore, lacks standing.  The evidence he cites, however, does not support his position.  Mrs. Geller did not testify that she doesn’t own the gold.  She only testified she did not have a secret stash of gold, not that she didn’t own the gold that was seized. 

Plaintiff next argues that release and redelivery should be denied because the arbitrator denied the request to return the gold.  Geller requested return of the gold in her arbitration briefs.  (Ex. 1-2 to Hagemann Decl.)  The arbitrator did not address her request, and the arbitrator stated that “any arguments raised at the hearing or in their briefs that were not directly addressed in the Interim Award were thereby rejected.”  (Plaintiff’s Ex. 21.)  But the arbitrator also stated “[t]he remedy of a writ of possession is not within the jurisdiction of an arbitration proceeding and was pursued in Superior Court.”  (Ex. H to Wade Decl.)  Accordingly, it is clear the arbitrator was not deciding the issue of release and redelivery, and her award cannot be a basis to deny relief.   

Plaintiff also argues that the Complaint has not been dismissed, and therefore, there is no judgment.  But the Court concluded the action was subject to arbitration; the arbitrator concluded the claims against Mrs. Geller were arbitrable, and the Court confirmed the arbitration award.  Thus, there is nothing left to decide on Plaintiff’s Complaint.   

However, the Court concludes Plaintiff is not entitled to an award of damages sustained as a result of the loss of possession of her gold coins.  Gold is an investment, and the gold here has appreciated in value while in the possession of the sheriff.  Any additional award of interest or lost investment opportunity would be duplicative.  In any event, the evidence submitted in support of Plaintiff’s claim for interest and lost profits is based on inadmissible hearsay, and on this additional basis, the Court denies the request for damages.         

MOTION FOR ATTORNEYS’ FEES AND COSTS 

   Mrs. Geller argues she is entitled to attorneys’ fees and costs in connection with this motion and her motion to quash the writ of possession pursuant to the parties’ contract.  The Court agrees. 

   The Redemption Agreement provides that “[i]n the event any arbitration is initiated to enforce this Agreement, the prevailing party in any such arbitration shall be entitled to recover his or its reasonable attorney’s fees and costs incurred.”  (Ex. B to Wade Decl., ¶11.)  This clause does not limit the attorneys’ fees and costs to only those incurred during the arbitration.  Mrs. Geller is the prevailing party in the arbitration as she was successful in enforcing the Redemption Agreement.  As such, she is entitled to recover all her reasonable attorney’s fees and costs, including the fees for the instant motion and her motion to quash the writ of possession.   

Plaintiff argues that Mrs. Geller’s request for attorneys’ fees should be denied because the arbitrator disallowed them.  But the arbitrator did not disallow the fees; instead, she declined to consider the request and noted that “the application of the entirety of the fees related to the writ of possession and related matters should be pursued in the Superior Court.”  (Ex. H to Wade Decl. (emphasis added).)   

In determining the proper amount of attorneys’ fees to award, the Court starts with the lodestar which is the number of hours reasonably expended multiplied by the reasonable hourly rate.  (PLCM Group Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)  Mrs. Geller’s counsel has 20 years experience.  While she normally charges at the hourly rate of $795, her rate in this case has been discounted to $560.  Her hourly rates have been approved by state and federal courts across the country.  (Wade Decl. ¶18.)  The Court concludes this hourly rate is reasonable. 

As to hours expended, Mrs. Geller’s counsel claims she spent 58.5 hours on the motion to quash and related proceedings in the Superior Court.  She also claims she expects to spend 20 hours for preparing this motion, reviewing any opposition, preparing the reply and attending the hearing on this motion.  As counsel has not provided a breakdown of tasks associated with the 58.5 hours, the Court will only award a total of 50 hours for time spent on the motion to quash as well as this motion.   

Mrs. Geller also seeks costs in the amount of $602.56.  These costs include filing fees and reserve hearing fees.  The Court concludes these costs are also reasonable.         

 

CONCLUSION 

  For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Defendant Niloofar Moshfegh Geller’s motion for release and redelivery, for damages, and for attorneys’ fees and costs.  The Court awards attorneys’ fees and costs in the amount of $28,602.56.     

          

DATED:  November 3, 2023            ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court