Judge: Holly J. Fujie, Case: 22STCV04190, Date: 2022-08-26 Tentative Ruling

Case Number: 22STCV04190    Hearing Date: August 26, 2022    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: Defendant Ramin Kohanim (“Moving Defendant”)

RESPONDING PARTIES: Plaintiffs Daniel Sharaby (“Daniel”)[1], Ralph Sharaby (“Ralph”), Tal Zilker (“Zilker”), Dani Gergel (“Gergel”) and Mission Hills Properties Ventures LLC (“Mission Hills LLC”) (collectively, “Plaintiffs”)

            The Court has considered the moving, opposition and reply papers.

BACKGROUND

            This action arises out of a series of loans and investments Plaintiffs allege that they made to Moving Defendant for the purpose of a real estate development project in connection with two properties: (1) a property located on Robinson Street in Los Angeles (the “Robinson Street Property”); and (2) a property located in Mission Hills (the “Mission Hills Property”) (collectively, the “Properties”).  Plaintiffs’ complaint (the “Complaint”) alleges: (1) breach of contract; (2) breach of contract; (3) breach of contract; (4) restitution based on quasi-contract and unjust enrichment; (5) restitution based on quasi-contract and unjust enrichment; (6) rescission; (7) rescission; (8) breach of contract; (9) breach of implied duty of good faith and fair dealing; (10) breach of fiduciary duty; (11) demand under Corporations Code section 17704.10 to obtain tax returns and to inspect records under Corporations Code section 17701.13; (12) breach of contract; (13) restitution based on quasi-contract and unjust enrichment; (14) rescission; (15) breach of implied duty of good faith and fair dealing; (16) breach of fiduciary duty; (17) breach of fiduciary duty; (18) demand under Corporations Code section 17704.10 to obtain tax returns and to inspect records under Corporations Code section 17701.13; (19) fraud; (20) accounting; and (21) account stated.

The 21 causes of action alleged in the Complaint generally arise out of four contractual agreements (collectively, the “Agreements”): (1) an agreement concerning the Robinson Street Property entitled the Robinson Street Ventures LLC Limited Liability Company Agreement entered into by Moving Defendant and Daniel (the “Robinson Street Agreement”); (2) an agreement memorializing Moving Defendant’s obligation to repay loans from Daniel and Ralph signed by Moving Defendant (the “Loan Pay Back Agreement”); (3) a document concerning the Mission Hills Property entitled the Iska Kulo Pekadon (the “Iska”) entered into by Moving Defendant and Ralph; and (4) an agreement concerning the Mission Hills Property entitled the Mission Hills Properties Ventures LLC Limited Liability Agreement (the “Mission Hills Agreement”) entered into by Moving Defendant, Zilker and Gergel.[2]

On April 25, 2022, Plaintiffs jointly filed lis pendens on the Robinson and Mission Hills Properties, which were recorded on April 28, 2022.  (See RJN, Exhibits 1-2.) 

            Moving Defendant filed five motions to expunge the lis pendens, which are directed to the validity of the lis pendens recorded by each Plaintiff: ((1) the “Daniel Motion:”); (2) the “Ralph Motion”; (3) the “Zilker Motion); (4) the “Gergel Motion”); and (5) the “Mission Hills Motion”)) (collectively, the “Motions”).  Moving Defendant brings the Motions on the grounds that: (1) Plaintiffs have not stated real property claims; and (2) even if Plaintiffs have sufficiently alleged real property claims, Plaintiffs cannot show their probable validity.

REQUEST FOR JUDICIAL NOTICE

            Moving Defendant’s Request for Judicial Notice is GRANTED.

DISCUSSION

Under California Code of Civil Procedure (“CCP”) section 405.20, a party to an action who asserts a real property claim may record a notice of pendency of action (lis pendens)[3] in which that real property claim is alleged.  (CCP § 405.20.)  In proceedings seeking to expunge a notice of pendency of action, the court shall order the notice expunged if it finds that the pleading on which the notice is based does not contain a real property claim or the claimant has not established the probable validity of the real property claim by a preponderance of the evidence.  (CCP §§ 405.31, 405.32.)  The claimant opposing a motion to expunge a notice of pendency bears the burden of showing that the notice of pendency is based on a real property claim and that the claimant has a probability of prevailing on that real property claim.  (CCP § 405.30.)

In determining whether a real property claim is being asserted, the court must engage in a demurrer-like analysis.  (Park 100 Investment Group II, LLC v. Ryan (2009) 180 Cal.App.4th 795, 808.)  Rather than analyzing whether the pleading states any claim at all, as on a general demurrer, the court must undertake the more limited analysis of whether the pleading states a real property claim.  (Id.)  Probable validity, with respect to a real property claim, means that it is more likely than not that the claimant will obtain a judgment against the defendant on the claim.  (CCP § 405.3.)  The burden is on the party opposing the motion to expunge—i.e., the claimant-plaintiff—to establish the probable validity of the underlying claim.  (Howard S. Wright Construction Co. v. Superior Court (2003) 106 Cal.App.4th 314, 319.)  The claimant-plaintiff must establish the probable validity of the claim by a preponderance of the evidence.  (Id.)  Only admissible or verified evidence is permitted on the motion.  (See Burger v. Superior Court (1984) 151 Cal.App.3d 1013, 1019.)

Existence of Real Property Claims

A real property claim is one in which the cause or causes of action in a pleading would, if meritorious, affect: (1) title to, or the right to possession of, specific real property; or (2) the use of an easement identified in the pleading, other than an easement obtained pursuant to statute by any regulated public utility.  (CCP§ 405.4.)  The statute provides no further definition of “affect ... title to, or the right to possession of” specific real property, nor has caselaw provided any abstract definition.  (BGJ Associates, LLC v. Superior Court (1999) 75 Cal.App.4th 952, 967.)  Caselaw has determined that certain types of actions clearly do, or clearly do not, affect title or possession.  (Id.)  At one extreme, a buyer's action for specific performance of a real property purchase and sale agreement is a classic example of an action in which a lis pendens is both appropriate and necessary.  (Id.)  At the other extreme, an action solely seeking money damages, even if it relates in some way to specific real property, will not support a lis pendens.  (Id.) 

California courts have held that claims that seek an interest in real property “for the purpose of securing a claim for money damages” do not affect title or possession of real property and do not support the recording of a lis pendens.  (See Urez Corp. v. Superior Court (1987) 190 Cal.App.3d 1141, 1149; Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 912, 916.)  Allegations of equitable remedies, even if colorable, will not support a lis pendens if, ultimately, those allegations act only as a collateral means to collect money damages.  (Urez Corp., supra, 190 Cal.App.3d at 1149.)  The test is whether the action seeks to establish an interest in real property for the purpose of securing payment of the money judgment ultimately sought by the action.  (Campbell, supra, 132 Cal.App.4th at 919.)

Moving Defendant argues that the Complaint does not state any real property claims because none of the Agreements which form the bases for Plaintiffs’ causes of action relate to the right of possession or title to either of the Properties.  Moving Defendant further argues that Plaintiffs’ claims do not support a lis pendens because they are seeking monetary damages for the alleged breaches of contract (or, alternatively rescission of the relevant Agreement and restitution of each Plaintiff’s alleged monetary contributions).

The Robinson Street Agreement and Mission Hills Agreement both contain the following provision:

“Company assets shall be deemed to be owned by the Company as an entity, and no Member, individually, or collectively, shall have any ownership interest in such Company assets or any portion thereof.  Legal title to any or all Company assets shall be held in the name of the Company, and al company assets shall be recorded as the property of the Company on its books and records.”  (See Complaint, Exhibit C at p. 18; Exhibit J at 19 at p. 19.)[4]

The deeds attached as exhibits to the Complaint provide that Robinson Street LLC holds title to the Robinson Street Property and Mission Hills LLC holds title to the Mission Hills Property.  (See Complaint, Exhibits A, H.) 

The Iska provides that Moving Defendant agreed to assign Ralph a share (in the value of the monies received) in all investments, businesses, and real estate that he owns.  (See Complaint, Exhibit G.)  The Loan Pay Back Agreement lists sums of money that Moving Defendant promised to repay to Ralph and Daniel.  (See Complaint, Exhibit F.) 

             The Court finds that the Complaint does not state any real property claims.  Plaintiffs’ claims generally seek money damages for Moving Defendant’s alleged breaches of the Agreements and the misrepresentations he made in order to induce Plaintiffs’ investments and loans.  The restitution and recission claims are alleged in the alternative to the breach of contract claims.  (See Complaint ¶¶ 98, 107, 115, 121, 156, 165.)  Furthermore, the Complaint does not allege that this action affects Plaintiffs’ rights to title of the Properties; rather, the Complaint alleges that Plaintiffs made investments in the entities that own the Properties and that Plaintiffs have not been adequately remunerated for their investments in the entities.  Plaintiffs’ arguments that they have alleged real property claims because the Court has the discretion to impose a constructive trust are unpersuasive, as the Complaint does not allege or pray for a constructive trust or equitable relief as a remedy for any of the 21 causes of action alleged therein.  (See, e.g., Complaint at p. 25.)  Plaintiffs’ argument that rescission of the Mission Hills Agreement could result in the dissolution of Mission Hills LLC, which could then affect title to the Mission Hills Property is also unpersuasive because the Complaint does not seek dissolution of Mission Hills LLC.  Further, this argument is speculative and contingent on numerous facts not alleged in the Complaint.  Mission Hill LLC’s breach of fiduciary duty cause of action is based on Moving Defendant’s alleged failure to discharge his duties under the Mission Hills Operating Agreement and his misrepresentations to Zilker and Gergel.  (Complaint ¶ 185.)  The cause of action seeks costs and prejudgment interest as a remedy, rather than any relief concerning title to the Mission Hills Property.  (See Complaint ¶ 187.)

            The Court therefore finds that Plaintiffs have not stated real property claims.  Furthermore, assuming arguendo that Plaintiffs had stated real property claims, the Court notes that Plaintiffs solely cite to their unverified Complaint to support their arguments about the probable validity of their claims.  Plaintiffs have therefore not presented any admissible evidence to demonstrate the probable validity of their claims as is required to defeat the Motions.  (See CCP § 405.32; See Burger v. Superior Court (1984) 151 Cal.App.3d 1013, 1019.) 

            The Court therefore GRANTS the Motions.

Attorney’s Fees

            Moving Defendant seeks attorney’s fees in connection to the Motions in an amount that will be specified during a subsequent hearing.  The Court is therefore unable to presently rule on Moving Defendant’s request for attorney’s fees.

Moving party is ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person.  The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.  This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

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.

              Dated this 26th day of August 2022