Judge: Edward B. Moreton, Jr., Case: 24SMCV00639, Date: 2024-06-12 Tentative Ruling

Case Number: 24SMCV00639    Hearing Date: June 12, 2024    Dept: 205

 

 

 

Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

CLOVER PRIVATE CREDIT OPPORTUNITIES (LEVERED) II, LP,  

 

Plaintiff, 

v. 

 

IBRAHIM HUSSEINI, et al.,  

 

Defendants. 

 

  Case No.:  24SMCV00639 

  

  Hearing Date:  June 12, 2024 

  [TENTATIVE] ORDER RE: 

  DEFENDANT FAISAD ALHUSSEINI’S  

  MOTION TO QUASH SERVICE OF  

  SUMMONS 

 

 

BACKGROUND 

 

This is a breach of contract casePlaintiff Clover Private Credit Opportunities Origination (Levered) II LP (“Clover”) entered into a put option contract with Defendant Ibrahim AlHusseini (“Ibrahim”), The Husseini Group Inc. and The Husseini Group LLC (collectively the Husseini Entities”).  (Compl. 6.)  Under the put contract, Ibrahim and the Husseini Entities were obligated to pay Clover $75 million in exchange for 10,302,837 shares (the “Shares”) of Aspiration Partners, Inc. (the “Put Option”)(Id.The put contract was signed contemporaneously with a loan agreement (“Loan”) pursuant to which the Shares were pledged as security.  (Id.)   

There was a default on the Loan on October 31, 2022 (id. 7), and unbeknownst to Clover, Ibrahim allegedly took steps to move his assets out of the country(Id. 8.)  In March 2023, he loaned a Saudi Arabian corporation $300 million (the “Saudi Loan”)In addition, Ibrahim sold Los Angeles real estate worth $5.1 million in December 2022.  (Id.) 

On June 27, 2023, Clover sent Ibrahim a “Notice of Exercise” formally notifying him that “an acceleration has occurred under the Loan Agreement,” and that Clover was, therefore,exercis[ing] its [Put] Option” with a settlement date of July 12, 2023 (the “Settlement Date”)Ibrahim, however, failed to make the $75 million payment due under the Put Option on the Settlement Date, despite Clover’s tender of the Shares.  (Id. 9.) 

Following Ibrahim’s failure to honor his obligations under the Put Option, Clover filed a motion for summary judgment in lieu of complaint in New York State Court on July 14, 2023 (the “New York Action”)(Id. 10.)  The New York court ruled in Clover’s favor (the “New York Decision”)The New York Decision, along with a subsequent New York court order awarding Clover interests and attorneys’ fees, was converted into a judgment that was issued on November 1, 2023 (the “New York Judgment”) (Id.)  

Shortly before entry of the New York Judgment, Ibrahim purportedly took further steps to render himself judgment proofSpecifically, in or about October 2023, he transferred ownership of real estate at 810 Amoroso Place, Venice, California 90290 reportedly worth $3.7 million to his brother Faisal AlHusseini (the “Venice Transfer”).  (Id. 11.) 

Both the Saudi Loan and the Venice Transfer were allegedly concealed and not disclosed until December 2023 when Ibrahim was obligated to respond to an information subpoena issued by Clover to enforce the New York Judgment(Id. 12.)  The Saudi Loan and Venice Transfer made Ibrahim insolvent and unable to pay the New York Judgment(Id.) 

On December 5, 2023, the California Superior Court issued a judgment based on the New York Judgment in favor of Clover against Ibrahim and the Husseini Entities in the amount of $75,120,000 plus interest in the amount of $3,682.191.72 (the “California Judgment”).  

This action ensuedThe operative complaint alleges two claims for fraudulent transfer related to the Saudi Loan and the Venice Transfer.   

A proof of service of the summons and complaint was filed with the Court which states Faisal AlHusseni (“Moving Defendant”) was served by substitute service on April 3, 2024The service was effective 10 days after mailing, or by April 13, 2024.   

This hearing is on Moving Defendant’s motion to quash service of summons.  Moving Defendant argues that contrary to the proof of service, he was not properly served.  The proof of service shows Faisal was served by substituted service at an address in Venice, California (the “Venice Property”) that is the subject of the present actionBut Faisal claims he does not live at that address, and he is a resident of the Kingdom of Saudi ArabiaAccordingly, substitute service on him at the Venice address is improper under Code Civ. Proc. § 415.20(b).  

DISCUSSION 

“Service of process, under longstanding tradition in our system of justice, is fundamental to any procedural imposition on a named defendant.”¿ (AO Alfa-Bank v. Yakovlev (2018) 21¿Cal.App.5th 189, 202.)¿ “To establish personal jurisdiction, compliance with statutory procedures for service of process is essential.”¿ (Kremerman v. White (2021). 71 Cal.App.5th 358, 371.)¿  

But the statutory requirements are to be liberally construed to uphold jurisdiction, rather than defeat it(Pasadena Medi-Center Assocs. v. Sup.Ct. (Houts)¿(1973) 9 Cal.3d 773, 778 (“The provisions of this chapter should be liberally construed to effectuate service and uphold the jurisdiction of the court if actual notice has been received by the defendant,¿and in the last analysis the question of service should be resolved by considering each situation from a practical standpoint.”)  

Defendant’s knowledge of the action does not dispense with statutory requirements for service of summons.¿ (Kappel v. Bartlett (1988) 200 Cal.App.3d 1457, 1466.)  However, as long as the defendant receives actual notice of the lawsuit,¿substantial compliance¿with the Code provisions governing service of summons will generally be held sufficient(Summers v. McClanahan¿(2006) 140 Cal.App.4th 403, 410-411 (“It is well settled that strict compliance with statutes governing service of process is not requiredRather, in deciding whether service was valid, the statutory provisions regarding service of¿process should be liberally construed to effectuate service and uphold the jurisdiction of the court if actual notice has been received by the defendant.”).) 

“A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow” may move “to quash service of summons on the ground of lack of jurisdiction of the court over him or her” that results from lack of proper service.¿ (Code of Civ. Proc. §418.10(a)(1).¿ A defendant has 30 days after the service of the summons to file a responsive pleading.¿ (Code Civ. Proc., §412.20(a)(3).)¿¿ 

“When a defendant challenges the court’s personal jurisdiction on the ground of improper service of process, ‘the burden is on the plaintiff to prove the existence of jurisdiction by proving, inter alia, the facts requisite to an effective service.’” (Summers, 140 Cal.App.4th at 413.)¿      

 

 

DISCUSSION 

Moving Defendant’s motion to quash service of summons is untimelyMoving Defendant was required to file the motion within 30 days after service of the summons and complaint, unless time is extended by stipulation or by a judge's order for good cause. (Code Civ. Proc. §§ 418.10(a)(1), 412.20(a)(3).)¿¿Plaintiff served the summons and complaint by substitute service on April 3, 2024, which was effective 10 days after mailing or by April 13, 2024(Code Civ. Proc. § 415.20(a).)  Accordingly, the motion to quash was due by May 13, 2024Defendant did not file the motion until May 14, 2024There is no evidence the parties agreed to extend the deadlineAnd while the Court may allow an untimely motion where there is good cause, Defendant has not shown any good causeIndeed, his motion is entirely silent on the fact that it is untimely.   

CONCLUSION 

For the foregoing reasons, the Court DENIES Defendant Faisal AlHusseini’s motion to quash service of summons.     

 

DATED:  June 12, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court