Judge Elaine W. Mandel, Case 21SMCP00018 2022-10-20 Tentative Ruling

Judge: Elaine W. Mandel, Case: 21SMCP00018, Date: 2022-10-20 Tentative Ruling

Case Number: 21SMCP00018 Hearing Date: October 20, 2022 Dept: P

Tentative Ruling
Rafalian v. Elyaszadeh et al., Case No. 21SMCP00018
Hearing date October 20, 2022
Defendant’s Motion for Judgment on the Pleadings

In this collections case, assignee plaintiff Rafalian seeks to recover three judgments entered against defendant Elyaszadeh, alleging Elyaszadeh wrongfully transferred assets to other defendants to avoid paying the underlying judgments.

A party may move for judgment on the pleadings at any point prior to trial. Cal. Code of Civ. Proc. § 438. Judgment may be granted based on grounds that appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. Id.

The defendants reference an order by Judge Young in Kashani v. Elyaszadeh, LASC Case No. SC118525, on September 24, 2021, granting defendant’s application that upon transfer of an agreed-to amount, the three judgments at issue in this case would be satisfied in full. Request for Judicial Notice Exhibit 3 (GRANTED). On October 27, 2021 Judge Young held the three judgments against Elyaszadeh had been satisfied in full on September 24, 2021. RJN Exhibit 5; RJN Exhibit 6 (GRANTED).

Defendants file this MJOP, arguing all causes of action fail.

First Cause of Action: UVTA Claim (CC 3439)

Defendant asserts plaintiff cannot make a claim under the UVTA because plaintiff is no longer a judgment creditor; as all judgements are satisfied, plaintiff lacks standing to assert this claim.

As before, plaintiff agrees judgments are satisfied, but argues defendants are still liable for post-judgment damages caused by their alleged fraudulent conduct. Under Berger, satisfaction of an underlying judgment does not automatically defeat a common law fraudulent transfer claim, since a plaintiff in such action can recover consequential and/or punitive damages.

Plaintiff makes no argument, however, that the UVTA claim– which is not a common-law fraudulent transfer claim as in Berger -- survives satisfaction of the underlying judgments. Plaintiff Berger was explicitly not making a claim under the UVTA. Berger v. Varum, 35 Calp.App.5th 1013, 1019. Rafalian is no longer a creditor of Elyaszadeh. There is no standing, and plaintiff alleged no additional facts via the FAC that create standing to sue under this statute. GRANTED.

Common Law Fraudulent Conveyance/Transfer

Defendants argue plaintiff’s damages are conclusory and involve categories impermissible as a matter of law, as Rafalian has not alleged any recoverable consequential damages. They allege plaintiff cannot recover emotional distress or punitive damages because he is not the original judgment creditor, and these damages are not assignable. Murphy v. Allstate Ins. Co. (1976) 17 Cal.3d 937, 942. Additionally, they allege attorney’s fees and costs cannot be recovered because plaintiff failed to seek them prior to satisfaction of the judgments. Cal. Code Civ. Proc. § 685.080(a).

The FAC alleges consequential damages due to defendant’s alleged fraudulent transfer. FAC ¶ 79. These specific damages were not alleged in the original complaint.

The common law fraudulent transfer fails because plaintiff has not alleged recoverable consequential damages. The alleged fraudulent transfer occurred in 2016. FAC ¶ 22. Plaintiff acquired the already-existing judgments in September and October of 2020. FAC ¶¶ 7, 11, 15. The emotional distress or punitive damages alleged belong to the loan holder at the time of the fraudulent transfer and cannot then be assigned to a subsequent loan holder. See Murphy v. Allstate Ins. Co. (1976) 17 Cal.3d 937, 942.

Any fraud cause of action must be alleged with specificity of all elements, including both the injury or damage suffered and its causal connection with plaintiff’s reliance on defendant’s representations. Service By Medallion Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1818. Courts however have upheld fraud claims without a specific dollar amount alleged. See Furia v. Helm (2003) 111 Cal.App.4th 945, 956-957; Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 776.

Plaintiff states "his common law fraudulent conveyance cause of action in this lawsuit is based upon the fact defendant Elyaszadeh’s fraudulent conveyance to his to his wife, Yona Samih, of his 12% ownership interest in GACC’s corporate stock (the "12% Transfer") did not occur until on or about March of 2016 FAC 51. But when alleging this cause of action, he admits all damages would not have occurred "but for defendants’ tortious and fraudulent post-judgment conduct." FAC 79. Plaintiff can state no damages connected to the fraudulent transfer alleged.

Plaintiff makes only general conclusions alleging a right to damages. There was no specificity pled. Attorney’s fees and costs are not recoverable, as Rafalian did not seek them prior to satisfaction of the judgments. Absent any recoverable damages, this cause of action fails. GRANTED.

Constructive Trust and Equitable Liens

Defendants argue plaintiff cannot assert a claim for constructive trust and equitable liens because the underlying judgments have been satisfied. Further, plaintiff is asserting an unliquidated tort claim for damages, so these remedies are barred by the statute of limitations.

Plaintiff does not respond to these arguments in the opposition. Creating a constructive trust requires satisfying three elements: the existence of a res (property or some interest in the property); plaintiff’s right to that res; and defendant’s acquisition of the res by fraud, accident, mistake, undue influence, the violation of a trust or other wrongful act. Optional Capital, Inc. v. DAS Corp. (2014) 222 Cal.App.4th 1388, 1401. An equitable lien is similar, and plaintiff must show that they have a right to property that is not in plaintiff’s possession, as payment of a debt as a charge against that property and based upon contract, estoppel, unjust enrichment, or other equitable considerations of justice. Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 453.

Because the underlying judgments have been satisfied, plaintiff cannot show defendants retain title to plaintiff’s property. Further, plaintiff is alleging remedies, not independent causes of action. Plaintiff does not allege the elements required for a constructive trust or equitable lien. GRANTED.

Civil Harassment, Stalking, Threats of Violence

Defendants argue that the fourth cause of action was not authorized because it was not alleged in the original complaint, and the court granted leave to amend with respect to statute of limitations and consequential damages issues only. “Following an order sustaining a demurrer or a motion for judgment on the pleadings with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court’s order. [citation] A plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.” Harris v. Wachovia Mtge., FSB (2010) 185 Cal.App.4th 1018, 1023.

This cause of action is not within the scope of the court’s order, and plaintiff did not seek leave to add this new cause of action. This cause of action was not authorized. GRANTED.