Judge Holly J. Fujie, Case Number: 23STCV14422, Date: 2025-01-15 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 Callanan, Rogers & Dzida, LLP and Joseph S. Dzida (the “Dzida Defendants”)

RESPONDING PARTY: Defendants Cochran, Davis & Associates, PC, Jeffrey Thomas Bolson, Joan E. Cochran (collectively, the “Cochran Defendants”), and Plaintiffs Saeed Farkhondehpour (“Farkhondehpour”) and Illusion Holdings, LLC (collectively “Plaintiffs”)

On June 21, 2023, Plaintiffs filed the operative complaint (“Complaint”) against Dzida Defendants, Cochran Defendants and Does 1 through 50, alleging legal malpractice. The legal malpractice claim arises from Cochran Defendants and Dzida Defendants’ joint representation of Plaintiffs as defendants in the matter of Ocean Blue Investments, LLC v. Saeed Farkhodehpour, et al., LASC Case No. BC709417 (the “Underlying Lawsuit”).

On July 8, 2024, Dzida Defendants filed the instant motion for summary judgment (the “Motion” or “MSJ”). On December 4, 2024, Cochran Defendants and Plaintiffs filed separate oppositions to the Motion (respectively, the “Cochran Opposition” and the “Plaintiff Opposition”). On December 13, 2024, Dzida Defendants filed a joint reply (the “Reply”).

In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. (Code Civil Procedure, § 437c, subd. (q).)

Per Dzida Defendants’ request, the Court takes judicial notice of: (1) the deed of trust in favor of First Credit Bank recorded/filed with the Los Angeles County recorder's office as document 20150365498; (2) the certificate of compliance for lot-line adjustment recorded/filed with the Los Angeles County recorder's office as document 20150555714; (3) the grant deed recorded/filed with the Los Angeles County recorder's office as document 20150555712; (4) the grant deed recorded/filed with the Los Angeles County recorder's office as document 20150555713; and (5) the declaration of Jeffrey T. Bolson dated December 2, 2022, submitted in support of the Reply in Support of Defendants' Motion for Correction and/or Relief Under CCP 473(b) Respecting the Partial Final Award as Clarified submitted in the Underlying Lawsuit. (Dzida Request for Judicial Notice (“RJN”); Borneman Decl., Exs. 5, 7, 9-10; Bucknell Decl., Ex. 2; Evidence Code (“Evid. Code”) §§ 452 subds. (c), (d) and (h).)

Per Plaintiffs’ request, the Court takes judicial notice of: (1) Notice of Joinders in Underlying Lawsuit; (2) Complaint in the Underlying Lawsuit; (3) 9/19/2018 Order to Compel Arbitration; (4) 3/1/2021 Partial Arbitration Award; (5) 2/17/2022 Court Order in the Underlying Lawsuit; (6) Order Appointing Receiver in the Underlying Lawsuit; (7) 3/25/2022 Receiver’s Report in Underlying Lawsuit; (8) 5/9/2022 Order in the Underlying Lawsuit; (9) 5/17/2022 Motion to Vacate Arbitration Award in the Underlying Lawsuit; (10) 6/16/2022 Order in the Underlying Lawsuit; (11) 7/5/2022 Arbitration Order of Clarification; (12) 8/15/2022 Arbitration Order No. 82; (13) 8/26/2022 Motion for Relief Pursuant to CCP §§ 1286.6 and 473(b) in the Underlying Lawsuit; (14) Reply Declaration of Jeffrey Bolson to Motion for Relief in the Underlying Lawsuit; (15) 12/9/2022 Court Order in the Underlying Lawsuit; (16) 4/29/2022 Dzida Substitution of Attorney in the Underlying Lawsuit. (Plaintiffs RJN, Exs. 1-22; Evid. Code §§ subds. (c) and (d).)

The Court takes judicial notice to the extent of the documents’ existence. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885 [documents are only judicially noticeable to show their existence and what orders were made such that the truth of the facts and findings within the documents are not judicially noticeable].)

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact for trial or that the moving party is entitled to a judgment as a matter of law. (CCP, § 437c, subd. (c).)

The moving party bears the initial burden of production to make a prima facie showing that no triable issue of material fact exists. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) To meet this burden, a defendant must show not only “that the plaintiff does not possess needed evidence” but also that “the plaintiff cannot reasonably obtain needed evidence.”¿(Aguilar, supra, 25 Cal.4th at p. 854.)¿It is insufficient for the defendant to merely point out the absence of evidence.¿(Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.)¿The defendant “must also produce evidence that the plaintiff cannot reasonably obtain evidence to support his or her claim.”¿(Id.)¿The supporting evidence can be in the form of affidavits, declarations, admissions, depositions, answers to interrogatories, and matters of which judicial notice may be taken.¿(Aguilar, supra, 25 Cal.4th at p. 855.)

“Once the defendant … has met that burden, the burden shifts to the plaintiff … to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).) The plaintiff may not merely rely on allegations or denials of its pleadings to show that a triable issue of material fact exists, but instead, “shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action.”¿(Ibid.)¿“If the plaintiff cannot do so, summary judgment should be granted.”¿(Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)

“On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence.¿While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues.¿[Citation.]¿Only when the inferences are indisputable may the court decide the issues as a matter of law.¿ If the evidence is in conflict, the factual issues must be resolved by trial.”¿(Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839.)¿Further, “the trial court may not weigh the evidence in the manner of a factfinder to determine whose version is more likely true.¿[Citation.]¿Nor may the trial court grant summary judgment based on the court’s evaluation of credibility. [Citation.]” (Id. at p. 840; see also Weiss v. People ex rel. Department of Transportation (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)

“To state a cause of action for legal malpractice, a plaintiff must plead (1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney’s negligence.” (Kumaraperu v. Feldsted (2015) 237 Cal.App.4th 60, 66, quotation marks omitted.)

“The extent of an attorney's duty to act necessarily depends on the scope of the attorney-client relationship [citation], and the scope of this relationship may be limited by the agreement between the attorney and the client [citation]. But an attorney who undertakes one matter on behalf of a client owes that client the duty to at least consider and advise the client if there are apparent related matters that the client is overlooking and that should be pursued to avoid prejudicing the client's interests. [E]ven when a retention is expressly limited, the attorney may still have a duty to alert the client to legal problems which are reasonably apparent, even though they fall outside the scope of the retention.” (Janik v. Rudy, Exelrod & Zieff (2004) 119 Cal.App.4th 930, 940.) (internal citations and quotation marks omitted).

Dzida Defendants argue that Plaintiffs’ claims against them fail because they did not have a duty to alert Plaintiffs to potential issues that were outside of the scope of the Dzida Defendants’ limited representation, and that regardless, they did alert Plaintiffs to the issue with the partial legal description for the Medallion Property and alerted Plaintiffs that causation was going to be an issue during Phase III. (MSJ, pp. 11:2-13:14.) This malpractice action arises from a three-phase arbitration between Farkhondehpour and his former business partner. (UMF 1, 5-9) Dzida Defendants assert that the alleged malpractice occurred after Phase II of the arbitration and that Plaintiffs had instructed them in writing that their input was “not required after Phase 2” and that they should “not be present or do any work unless it was requested or confirmed in writing.” (UMF 14, 16-17; Dzida Decl. ¶¶ 28-34, Exs. 9-12.) Dzida Defendants assert that, per Plaintiffs’ order, they were not involved in the subsequent trial in Phase III and only appeared once to testify about their fees. (UMF 18; Bucknell Decl., Ex. 1 [Farkhondehpour Depo., pp. 77:11-79:2].) Dzida Defendants thus argue that because Plaintiffs gave them instructions limiting the scope of their work after Phase II of the arbitration, Plaintiffs cannot now hold them accountable for alleged malpractice that occurred for responsibilities explicitly outside the scope of the agreed limited representation. Dzida Defendants further argue that, if a duty was owed to Plaintiff, they fulfilled that duty because Dzida Defendants warned Plaintiffs that the legal description appeared to be incomplete, and that it should be checked with a title company, and that stronger proof as to causation was needed for the trial. (UMF 23-27, 38; Dzida Decl. ¶¶ 41-47.)

As far as whether during their limited representation the Dzida Defendants fulfilled their duty of care by alerting Plaintiffs about the legal description and causation issues, the Court notes that this goes to breach of duty rather than existence of duty. While existence of duty is generally a question of law, the “degree of care and skill required to fulfill a professional duty ordinarily is a question of fact and may require testimony by professionals in the field….” (Grossman v. Wakeman (2024) 104 Cal.App.5th 1012, 1021.) A legal malpractice defendant moving for summary judgment or adjudication has the burden of producing expert evidence negating the plaintiff’s claim that there was a breach of the duty. (Crouse v. Brobeck, Phleger & Harrison (1998) 67 Cal.App.4th 1509, 1534-1535.) Dzida Defendants have not provided expert testimony as to whether they performed within the standard of care and thus have not met their burden of production to show that they did not breach the duty of care owed in a limited representation.

Notwithstanding, Dzida Defendants have met their prima facie burden of production to show that their duty to Plaintiffs did not extend to the alleged acts of malpractice at issue in the Complaint because the actions occurred during legal representation in which Dzida Defendants were told not to participate. The burden thus shifts to Plaintiffs to show that a triable issue of material fact exists.

In opposition, Plaintiffs and Cochran Defendants assert that the incorrect legal description for the Medallion Property was admitted into evidence in January 2020, during Phase I of the arbitration (Disputed Fact No. 14; Bolson Decl., Ex 4; Plaintiffs Sep. Statement No. 14.) Plaintiffs and Cochran Defendants further assert that Plaintiffs asked Dzida Defendants to review the proposed interim award in the arbitration, which included the incorrect legal description, and Dzida Defendants did so. (Addtl Disputed Fact No 6.)

Accordingly, Plaintiffs and Cochran Defendants have presented triable issues of fact as to whether the malpractice occurred during Phase I of the arbitration, prior to Plaintiffs’ limiting the scope of the Dzida Defendants’ representation.

To prevail in a legal malpractice action, “[s]imply showing the attorney erred is not enough.” (Orrick Herrington & Sutcliffe v. Superior Court (2003) 107 Cal.App.4th 1052, 1057.) The plaintiff must also establish that, but for the alleged malpractice “the plaintiff would have obtained a more favorable judgment or settlement in the action in which the malpractice allegedly occurred. The purpose of this requirement, which has been in use for more than 120 years, is to safeguard against speculative and conjectural claims. [Citation.] It serves the essential purpose of ensuring that damages awarded for the attorney's malpractice actually have been caused by the malpractice.” (Viner v. Sweet (2003) 30 Cal.4th 1232, 1241.)

Dzida Defendants argue that Plaintiffs’ claims fail because the damages as to Count 1 are fatally uncertain and speculative. (MSJ pp. 13:15-16:16.) Dzida Defendants assert that Plaintiffs cannot show that the arbitrator in the underlying arbitration would have ruled differently had he been provided with the ‘correct’ legal description because the arbitrator confirmed his ruling when asked to clarify and declined to rehear the issue. (UMF 33; Dzida Decl., Ex. 20.) Upon review of the clarification, the arbitrator merely confirmed that he meant to define the property in conformity with the legal description that was provided to him. (Dzida Decl., Ex 20.) In addition, the arbitrator declined to rehear the issue on procedural, not substantive, grounds. (RJN No, 15.) It is hardly speculative to accept that the arbitrator would have defined the property in accordance with whatever legal description with which he was provided. The ‘correct’ legal description assigns 30,000 additional square feet to the portion of the property ultimately awarded to Plaintiffs. (Farkhondehpour Decl., ¶ 8.)

Thus, the fact of damages is not impermissibly speculative and Dzida Defendants have failed to meet their initial burden of production to make a prima facie showing that no triable issue of material fact exists on this issue.

Count 2 - Loan and Expenses Due to Former Business Partner’s Criminal Indictment/Conviction

As stated above, Dzida Defendants assert that the scope of their representation was explicitly limited during Phase III of the arbitration. Specifically, Dzida Defendants would “not be involved in putting the case on for damages for failure to pay increased loan and interest costs for the Medallion and other properties.” (Dzida Decl., Ex. 9) Farkhondehpour further confirmed that in Phase III, Dzida Defendants “will prepare a declaration re my fees, and I will otherwise participate only if the two of you request it.” (Dzida Decl., Ex. 10) Thus, the scope of the Dzida Defendants representation in Phase III clearly did not include presenting the claim for damages. Thus, Dzida Defendants have met their initial burden to show that there are no triable issues of material fact as to their duty as to Count 2 in the Complaint. The burden thus shifts to Plaintiffs to show that triable issues exist.

In Plaintiffs’ Opposition, Plaintiffs state that Count 2 relates to “a separate claim for failure to present causation evidence to prove that damages to the partnership were caused by an increased interest rate on large loans due to Plaintiffs partners’ criminal indictment and later conviction for money laundering and income tax evasion.” (Plaintiffs Opp., p. 5:21-24.) The Complaint is also clear that Count 2 pertains to the presentation of damages during Phase III of the arbitration. (Compl., ¶ 50.) Indeed, Plaintiffs assert that the “partial ‘stand down’ request only pertained to the Phase III damages portion of the remaining arbitration. [SS]” (Plaintiffs Opp., p. 8:5-6; Sep. Statement 17.) In his sworn declaration, Farkhondehpour states that his “‘stand down’ comment only pertained to those matters going forward as to Phase III, namely damages. It did not refer to the resolution of any past issues of Phase I and Phase II nor did I relieve Dzida as counsel. I merely understood through my comment that Dzida would not handle the certain monetary damages issues in Phase III.” (Farkhondehpour Decl. ¶ 6.) Thus, it is clear that both Plaintiffs and Dzida Defendants understood that Dzida Defendants were not to be involved in presenting the damages claim during Phase III. Thus, Plaintiffs have failed to show that a triable issue of material fact exists as to Dzida Defendants’ duty under Count 2.

The Motion for Summary Adjudication is DENIED as to Count 1 in the Complaint and GRANTED as to Count 2 in the Complaint.

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