Judge: Gail Killefer, Case: BC597238, Date: 2022-08-05 Tentative Ruling
Case Number: BC597238 Hearing Date: August 5, 2022 Dept: 37
HEARING DATE: August 5, 2022
CASE NUMBER: BC597238
CASE NAME: Anait Akopyan, et al. v. Hovanes Yesayan, et al.
MOVING PARTY: Cross-Defendants, Konstantine
Kabilafkas and K-Astron Ventures, Inc. dba Konstant Closings
OPPOSING PARTY: Cross-Complainant, Novastar, LLC
TRIAL DATE: Vacated
PROOF OF SERVICE: OK
MOTION: Cross-Defendants’ Motion for Relief
from orders
OPPOSITION: July 1, 2022
REPLY: None filed.
TENTATIVE: Accordingly,
Cross-Defendants’ motion is denied. Novastar is to give notice.
Background
This action arises in connection with property located at
4628 Kingswell Avenue, Los Angeles, California, 90027. (the “Property”)
Plaintiffs, Anait Akopyan and Vartan Akopyan (“Plaintiffs”) bring this action
seeking to redress “fraudulent and wrongfully recorded deeds of trust” and
other documents on the Property. Plaintiffs allege that they purchased the
Property by way of interfamily transfer on March 14, 2003. On March 29, 2012,
Defendant Lending West Inc. allegedly purchased the Property via foreclosure
even though the Property was never foreclosed. On September 20, 2021, defendant
Capital Securities also allegedly committed slander of title by wrongfully
recording a notice of foreclosure. Other defendants then similarly recorded
wrongful foreclosures notices on the Property, including moving Defendant
Novastar LLC on July 1, 2015. Plaintiffs allege that as a result of all
defendants’ actions, Plaintiff may now lose the Property, entitling them to
damages.
Plaintiffs’ Complaint alleges the following causes of
action: (1) declaratory relief, (2) set aside recorded instruments, (3) quiet
title, (4) negligence, (5) fraud against defendants Karapet Emboyan, Epraksi
Gevorkian and Hovanes Yesayan.
On April 5, 2017, Novastar filed a
cross-complaint in this action. Novastar’s Cross-Complaint named Konstantine
Kabilafkas and K-Astron Ventures, Inc. (“Cross-Defendants”) as Cross-Defendants.
Novastar's Cross-Complaint named Konstantine Kabilafkas
(“Kabilafkas”) and K-Astron Ventures Inc, dba Konstant Closings (“K-Astron”),
as cross-defendants. The Cross-Complaint alleges the following causes of
action: (1) quiet title, (2) fraud, (3) conversion, (4) breach of escrow
contract, (5) escrow negligence, (6) breach of escrow fiduciary duty, (7)
breach of broker contract, (8) broker negligence, (9) breach of broker
fiduciary duty, and (10) negligence of notary public.
The Cross-Complaint
alleges the following. As part of their alleged fraudulent foreclosures, the
cross-defendants conspired to defraud Cross-Complainant Novastar into loaning
millions of dollars to a “synthetic person” named Epraski Kevorkian. The
conspiracy ring consisted of several cross-defendants, including Tamara Dadyan,
her husband, Arthur Avazyan, Konstantine Kabilafkas (“Kabilafkas”), and
Kabilafkas’ companies, including but not limited to K-Astron Ventures, Inc. dba
Konstant Closings (“K-Astron”). Ultimately, the loan immediately went into default
and all of the cross-defendants absconded with the loan proceeds. Now, Novastar
seeks to recover its money.
On August 3, 2017, Cross-Defendants answered the
Cross-Complaint.
On June 5, 2019, Novastar’s Ex Parte for Re-issuance of
Bench Warrant and for Order Compelling Cias to be Deposed at Courthouse was
granted in part. Cias was ordered to appear for deposition in Department 48 on
July 8, 2019.
On July 8, 2019, Cias was found to be in contempt of the
court’s June 5, 2019 order. Cias was ordered to pay Novastar $9,000 in
attorney’s fees and costs pursuant to Code of Civil Procedure section 1218(a).
Judgment of contempt was entered against Cias on July 16, 2019.
On March 25, 2022, Novastar’s Motions to Compel Special
Interrogatories and Requests for Production, Set One against Cross-Defendants were
granted. Cross-Defendants were also ordered to pay sanctions of $1,160.00 and
$1,710.00 to Novastar no later than April 25, 2022. Cross-Defendants have
failed to obey this court’s Order.
With regards to the Final Status Conference set for April 5,
2022, Cross-Defendants failed to comply with this court’s pre-trial rules
regarding joint trial preparations and documents.
On April 5, 2022, Cross-Defendant K-Astron failed to appear,
and the court continued the FSC to April 12, 2022, and ordered sanctions
against all parties who failed to appear in the amount of $1,500.00.
On April 12, 2022, Cross-Defendant K-Astron again failed to
appear during the continued FSC and OSC. The court ordered sanctions in the
amount of $500.00 against Cross-Defendants, with payment to be made by May 11,
2022. This court also precluded Cross-Defendants K-Astron, Tamara Dadyan and
Arthur Ayvazyan from presenting evidence and/or witnesses at Trial. The court
also ordered this matter proceed as a Court Trial.
The court also continued Trial in this matter from April 12,
2022 to May 17, 2022. Novastar filed and served all parties with Notice of the
ruling.
On April 11, 2022, Cross-Defendants filed a Motion to
Dismiss, and were heard Ex Parte on May 12, 2022.
On May 17, 2022, Trial was scheduled to proceed, but counsel
for Cross-Defendants failed to appear. The court set a briefing schedule for the
Motion to Strike Answers and Terminating Sanctions, and set the hearing to
proceed on June 20, 2022.
On June 20, 2022, the court granted Novastar’s motion to
strike the Answers and for terminating sanctions against Cross-Defendants.
Cross-Defendants again failed to appear the hearing, and did not oppose the
motion.
Now, K-Astron and Kabilafkas (“K Defendants”) move for
relief from the court’s orders. Novastar opposes the motion.
Discussion
Courts generally view default
judgments with disfavor. (Nicholson v. Rose (1980) 106
Cal.App.3d 457, 462-463.) “It is also well established that it is the
policy of the law to bring about a trial on the merits whenever possible, so
that any doubts which may exist should be resolved in favor of the application,
to the end of securing to a litigant his day in court and a trial upon the
merits.” (Frank E. Beckett Co. v. Bobbitt (1960) 180
Cal.App.2d Supp. 921, 928.) Pursuant to CCP § 473(b), a motion to set
aside/vacate cannot be brought more than six months after the entry of default
and must be made within a “reasonable time.”
The six-month time limit is jurisdictional. (Rutan v. Summit Sports, Inc. (1985) 173
Cal.App.3d 965, 970.)
However, the order against the K Defendants
is not a default judgment—it is an order striking their Answers to Novastar’s
complaint where K Defendants failed to appear on several occasions, failed to
comply with several discovery orders, and failed to pay several sanctions order. They contend they mis-calendared the trial
and final status conference, and that it was the attorney’s fault for failure
to appear.
CCP § 473(b) provides for two
distinct types of relief—commonly differentiated as “discretionary” and
“mandatory”—from certain prior actions or proceedings in the trial court.
(Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1124 (Luri).) “Under
the discretionary relief provision, on a showing of ‘mistake, inadvertence,
surprise, or excusable neglect,’ the court has discretion to allow relief
from a ‘judgment, dismissal, order, or other proceeding taken against’ a
party or his or her attorney. Under the mandatory relief provision,
on the other hand, upon a showing by attorney declaration of ‘mistake,
inadvertence, surprise, or neglect,’ the court shall vacate any ‘resulting
default judgment or default dismissal entered.’ ” (Ibid.,
internal citations and quotation marks omitted, quoting CCP § 473(b).) “Applications
seeking relief under the mandatory provision of section 473 must be ‘accompanied
by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence,
surprise, or neglect.’ (CCP § 473(b).) The mandatory
provision further adds that ‘whenever relief is granted based on an
attorney’s affidavit of fault [the court shall] direct the attorney to pay
reasonable compensatory legal fees and costs to opposing counsel or
parties.’ [Citations.]” (Luri, ibid.)
K Defendants appear to contradict
themselves by first explaining that that “up until early May of this year,” K
Defendants “were represented by counsel other than Nicholas D’Amico. ... the
other counsel(s) managed to only answer the complaint and take no other
action... counsel inadvertently neglected to assert the matters before the
court and did not file its cross-complaint prior to the Court setting a date
for trial in this matter. Working with incompetent counsel for such an extended
period of time meant [K Defendants] could not file a motion for leave to file a
Cross-Complaint till [sic] February 25, 2022, which for all intents and
purposes, was too late. The motion for leave to file the Cross-Complaint was
ultimately denied.” (Motion, 4.) Then, K Defendants go on to explain how their
counsel failed to appear at the April 5 and April 12, 2022 hearings, when they
were supposedly still represented by prior counsel. (Id.) Counsel for K
Defendants, Nicholas D’Amico (“D’Amico”), further submitted a declaration
explaining that he missed the April 5 and April 12, 2022 hearings due to a
“calendaring error” and “feeling ill due to an adverse reaction to medication.”
(D’Amico Decl. ¶¶3-5.) However, counsel seeks to provide an explanation for
dates when his clients contend he did not represent them.
Further, the court notes that
February 25, 2022, was not too late to file their Cross-Complaint, but rather
their motion was denied due to faulty reasoning. D’Amico then goes on to
request “relief should be granted in the form of setting aside the orders against
[K Defendants] and leave should be granted allowing them to submit their trial
exhibits and witness lists to the Court in defense to the NOVASTAR LLC
Cross-Complaint so that the outcome of the Case can be determined on the merits
alone.” (D’Amico Decl. ¶7.) The court finds counsel’s bold requests
unconvincing. The court further notes that Cross-Defendants were denied from
submitting trial exhibits and witness lists because, as described above, trial
hearings were moved on six different occasions because of Cross-Defendants’
failure to appear, and because of Cross-Defendants’ repeated failures to comply
with this court’s several orders regarding discovery, sanctions, and pretrial
papers. Further, the court notes that the D’Amico declaration makes no mention
of the several occasions after April 2022 when K Defendants have failed to
comply with this court’s orders and have failed to appear before this court.
As Novastar points
out in opposition:
“(1) Cross-Defendants failed to comply
with discovery requests and the Court’s Discovery Orders in violation of CCP §§
2023.010(d), 2030.300(e), 2031.320(e), and 2031.310(i);
(2) Cross-Defendants failed to comply
with the Court’s Pre-Trial Orders in violation of CCP § 575.1, Los Angeles
Superior Court's Local Rule 3.25(f) and this Court’s Final Status Conference
and Pre-Trial Order;
(3) Cross-Defendants failed to attend
the Final Status Conference (“FSC”) on April 5, 2022, in violation of Los
Angeles Superior Court Rule 325(f) and this Court’s Order;
(4) Cross-Defendants violated this
Court’s Order to Pay Sanctions as ordered by this Court for Failure to appear
at the Final Status Conference (CCP §§ 325(f), 177.5);
(5) Cross-Defendants failed to appear
for the Continued Final Status Conference and trial set for April 12, 2022 as
Ordered by this Court (CCP §§ 325(f), 177.5);
(6) Cross-Defendants failed to comply
with the Notices To Appear at Trial in lieu of Subpoenas for the production of
documents on April 12, 2022 under CCP § 1987; and,
(7) Cross-Defendants failed to appear
at Trial on May 17, 2022 and in violation of the Notices To Appear At Trial in
lieu of Subpoenas under CCP § 1987.”
(Opposition, 1-5.) Further,
Novastar notes that Cross-Defendants still fail to comply with this court’s
orders regarding discovery responses and sanctions. (Opposition, 6-7.) Novastar
argues “based on the repeated failures to comply with Court Orders
by the Cross-Defendants and the Court’s prior attempts to gain the compliance
of the Cross-Defendants by issuing monetary sanctions, the Court was well
within its authority to issue an order precluding the Cross-Defendants from
presenting evidence at trial. Based upon these Cross-Defendants’ failure to
comply with the Court’s Orders, LASC LR 325(f), CCP section 1987, multiple
discovery orders, and given the escalating sanctions that were imposed but
ignored, it is evident that the only appropriate remedy in this matter was for
the Court to issue an Order precluding the Cross-Defendants from presenting
evidence at trial, as all other methods employed by the Court to urge
compliance with the Court’s prior Orders, were simply ignored by
Cross-Defendants.” (Opposition, 9-10.) This court agrees.
The court finds that
there is no affidavit of fault on the part of counsel, especially with regards
to the several noncompliant actions of K Defendants. Further, it does not
support relief in any event as it is not a default judgment. At best, there is
an attempt here to show an egregious inability to maintain an accurate
calendar. As such, K Defendants seek relief for which they are not entitled, at
a time they are not entitled to receive it.
Conclusion
Accordingly, Cross-Defendants’ motion is denied.
Novastar is to give notice.