Judge Holly J. Fujie, Case Number: 21STCV42481, Date: 2025-02-04 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Defendants Brian Paya aka Brian Bahram Paya aka Bahram Paya, as an individual and trustee of The Paya Family 2003 Revocable Trust; Bita Paya as an individual and trustee of The Paya Family 2013 Revocable Trust; and The Paya Family 2013 Revocable Trust, an entity form unknown (collectively, the “Paya Defendants”)

RESPONDING PARTY: Plaintiffs Dr. Payam Vahedifar and Shadi Vahedifar (“Plaintiffs”) and cross-defendant Charles Krebs dba LA Stone Restoration (“Kreb”)

This action arises from alleged wrongful actions concerning a property located at 3033 Beverly Glen Circle, Los Angeles, CA 90077 (the “Property”). On November 18, 2021, Plaintiffs filed a complaint (the “Complaint”) alleging causes of action for: (1) violation of California Civil Code, Section 1950.5; (2) statutory fraud or deceit; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) fraudulent concealment; (6) negligence; (7) negligence per se; (8) conversion; (9) breach of fiduciary duty; (10) breach of contract; (11) breach of the implied covenant of good faith and fair dealing; (12) violation of California Business and Professions Code, Section 17200, et seq.; (13) intentional infliction of emotional distress; (14) negligent infliction of emotional distress; (15) unjust enrichment and restitution; (16) intentional interference with contractual relations; and (17) conspiracy to breach contract and to interfere with contractual relations.

On February 7, 2022, the Paya Defendants filed a cross-complaint (the “Cross-Complaint”) against Plaintiffs and ROES 1-10, alleging causes of action for:¿(1) negligence, (2) conversion; and (3) violations of California contracting license laws.

On January 13, 2025, Paya Defendants filed the instant motion to reclassify and transfer (the “Motion’). On January 22, 2025, Plaintiffs filed an opposition (the “Opposition”). On January 23, 2025, Krebs filed an opposition (the “Krebs Opposition”). On January 27, 2025, Plaintiffs filed a reply (the “Reply”).

Initially, the Court finds that this Motion is procedurally defective as the parties were not given the required statutory notice for the hearing. All noticed motions must give at least sixteen court days notice, plus two days for service by electronic mail. (Code of Civil Procedure, Section 1005(b).) Only fifteen Court days have elapsed since filing, and service was effected by electronic mail. (Opp. pp. 3:9-5:4; Krebs Opp. p. 3:11-23.) There is therefore a valid ground to deny the Motion on this basis alone.

As the Court finds that there is cause to deny the Motion on its merits, however, the following also sets forth the substantive basis for denying the Motion.

Code of Civil Procedure (“CCP”) section 403.040 allows a defendant to file a motion for reclassification of an action within the time allowed for that party to respond to the initial pleading. (CCP § 403.040, subd. (a).) If the motion is made after the time for the defendant to respond to the pleading, the motion may only be granted if (1) the case is incorrectly classified; and (2) the moving party shows good cause for not seeking reclassification earlier. (CCP § 403.040, subd. (b).) Nevertheless, the court may reclassify the case at any time. (CCP § 403.040, subd. (a).)

In Walker v. Superior Court, the California Supreme Court held that a matter may be reclassified from unlimited to limited only if it appears to a legal certainty that the plaintiff's damages will necessarily be less than the jurisdictional limits for a court of unlimited jurisdiction. (Walker v. Superior Court (1991) 53 Cal.3d 257, 262.) If there is a possibility that the damages will exceed that amount, the case cannot be transferred to limited. (Id.) This high standard is appropriate in light of “the circumscribed procedures and recovery available in the limited civil courts.” (Ytuarte v. Superior Court (2005) 129 Cal.App.4th 266, 278.)

In Ytuarte, the Court of Appeals examined the principles it set forth in Walker and held that “the court should reject the plaintiff's effort to reclassify the action as unlimited only when the lack of jurisdiction as an “unlimited” case is certain and clear.” (Id. at 279.) Nevertheless, the plaintiff must present evidence to demonstrate a possibility that the damages will exceed the jurisdictional limit and the trial court must review the record to determine “whether a judgment in excess of [that amount] is obtainable.” (Id.)

Paya Defendants argue that the case should be reclassified because Plaintiffs have already recovered $81,000.00 from the settling defendants in this matter which leaves the current amount in controversy at no more than $9,000.00 (Mot. p. 8:15-20.) In the Opposition, Plaintiffs argue that the Paya Defendants Cross-Complaint asserts damages of $295,500.00 (Opp., p. 6:4-11) Plaintiffs also argue that Paya Defendants do not account for the amount of the withheld security deposit, additional recoverable damages including interest and attorneys’ fees, statutory bad faith damages, or punitive and emotional distress damages. (Opp. pp. 7:2-7:26.) Krebs also highlights that Paya Defendants are seeking to recover $295,500.00 in the Cross-Complaint. (Krebs Opp., p. 3:27.) In the Reply, Paya Defendants argue that Plaintiffs do not have sufficient basis or sufficient evidence to establish the damages listed above. (Reply pp. 2:24-6:13.)

The amount in controversy includes the amount of the demand or recovery sought in the action, whether in the complaint, a cross-complaint, or otherwise. (CCP § 85) Accordingly, the amount in a cross-complaint is included when calculating the total amount in controversy to determine whether a case should be filed in a court of limited or unlimited jurisdiction. (CCP § 403.030; Ytuarte v. Superior Court (2005) 129 Cal.App.4th 266; Leonard v. Superior Court (2015) 237 Cal.App.4th 34.) The total amount in controversy here, including the recovery sought in the Cross-Complaint, exceeds $35,000.00 and thus this action must proceed as an unlimited civil case.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court