Judge Elaine W. Mandel, Case SC128455 2022-10-10 Tentative Ruling

Judge: Elaine W. Mandel, Case: SC128455, Date: 2022-10-10 Tentative Ruling

Case Number: SC128455 Hearing Date: October 10, 2022 Dept: P

Tentative Ruling
Javaherian v. Moradi, et al. Case No. SC128455
Hearing date October 11, 2022
Plaintiff’s Renewed Motion for a New Trial

Plaintiff Javaherian sued defendants Moradi, alleging breach of contract. Defendant Farid Moradi was an owner and principal of Pacific Bancorp, Inc. (“PBI”), the general partner of PBI Arizona Mint, LP (“Mint”) and PBI Arizona Gold Rush, LP (“Gold Rush”) (Mint and Gold Rush are collectively referred to as “the LP’s”). Plaintiff initially invested $987,500 into the LP’s.

In December of 2010, after plaintiff’s initial LP investment, defendant and PBI needed another $150,000 to continue the operations. FAC, ¶ 6. At defendant’s request, plaintiff lent defendant the funds on condition defendants Moradi execute a personal written guaranty, agreeing to personally guaranty repayment. FAC, ¶ 6. In addition to the $150,000, the guaranty agreement gave defendant the right to issue a capital call for $300,000 from all LP investors, including plaintiff, if certain conditions are met. FAC, Exh. 1, ¶ A. Plaintiff did not make a $300,000 capital call payment. In November of 2017, defendants acknowledged the Guaranty Agreement and made a partial payment of $120,000. FAC, ¶ 18. No other payment has been made to plaintiff.

On October 16, 2019, the court granted summary adjudication for plaintiff’s cause of action for breach of contract. The court found the only condition precedent to the Guaranty Agreement was the immediate $150,000 payment. Plaintiff’s failure to provide the additional $300,000 after a capital call did not excuse defendants from repaying the LP investment.

On December 3, 2019, defendants moved for a new trial on the grounds that plaintiff did not raise the argument that the $300,000 capital call was not a condition precedent in his moving papers. On January 14, 2020, the court granted defendants’ motion, finding plaintiff addressed the $300,000 capital call issue only in his reply. The court continued the hearing to allow the parties to file supplemental briefs, only on the issue of whether the capital call funding was a condition precedent to defendants’ obligations under the guaranty agreement.

On January 31, 2020, defendant appealed the court’s ruling. Plaintiff subsequently cross-appealed. On March 23, 2022, the Court of Appeal granted plaintiff’s motion to dismiss defendants’ appeal, holding: (1) in its January 14, 2020, ruling, this court impliedly denied defendants’ motion for a new trial and exercised its discretion under Code of Civil Procedure section 662 to reopen the matter for further proceedings; and (2) this party may ask the court to reset the briefings and hearing schedule.

On September 15, 2022, defendants filed a renewed motion for new trial. Defendant brings this renewed motion for new trial, but this is contrary to the Court of Appeal’s ruling. The Court of Appeal found this court impliedly denied defendant’s original motion for a new trial and exercised its authority under Code of Civil Procedure section 662 to vacate summary judgment and accept additional evidence.

In addition to ruling this court had exercised its authority under section 662, the Court of Appeal found “the court ‘clearly intended’ to vacate the underlying judgment”—specifically, summary judgment in favor of plaintiff. Appeal Remittitur, 3/23/22, p. 14. “[C]onstruing the trial court’s ruling as an order reopening the matter under section 662 is consistent with the court’s apparent objective of revisiting its summary judgment decision after considering the parties’ forthcoming supplemental briefing on the capital call issue.” Id. p. 15 [emphasis added]. “In sum, we conclude the trial court’s January 14, 2020, ruling had the effect of denying the Moradis’ new trial motion, granting the Moradis alternative relief under section 662, and vacating the judgment entered in favor of Javaherian.” Id. p. 16.

Code of Civil Procedure section 660(c) states “the power of the court to rule on a motion for a new trial shall expire 75 days after the mailing of notice of entry of judgment by the clerk of the court pursuant to Section 664.5 or 75 days after service on the moving party by any party of written notice of entry of judgment, whichever is earlier, or if that notice has not been given, 75 days after the filing of the first notice of intention to move for a new trial…”

Defendant first filed their motion for a new trial on December 13, 2019—and the 75-day time limit expired on February 26, 2020. As explained by the Court of Appeal, this court lacks the authority to rule on a motion for a new trial. However, because the Court of Appeal found summary judgment in favor of plaintiff was impliedly vacated, the court must reevaluate the plaintiff’s summary judgment motion. Accordingly, defendants need to show a triable issue of fact regarding whether the $300,000 capital call was a condition precedent to the guaranty agreement.

At this time, the court lacks the authority to rule on a new trial motion. The court, however, has the authority to rule on plaintiff’s original summary judgment motion. Pursuant to the Court of Appeal’s direction, this court’s objective is to revisit its October 16, 2019, summary judgment decision after considering the parties’ supplemental briefings on the capital call issue. See Appeal Remittitur, 3/23/22, pgs. 14-15.

The parties effectively make supplemental summary judgment arguments in their briefs on this new trial motion. The parties may stipulate that these papers may be treated as the supplemental briefing papers for plaintiff’s summary judgment motion. If so, the court will set a hearing date. Should the parties not so stipulate, the parties may file supplemental summary judgment briefings on the capital call issue, not to exceed seven pages.