Judge: Jon R. Takasugi, Case: 21STCV11674, Date: 2022-08-31 Tentative Ruling

Case Number: 21STCV11674    Hearing Date: August 31, 2022    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ motion to require Plaintiff to deposit an undertaking is DENIED.

On 3/26/2021, Plaintiff Adonis Kish (Plaintiff) filed a second suit against Antiaging Institute of California, Inc. and Shoreh Ershadi alleging: (1) fraudulent transfer; and (2) constructive fraudulent transfer.

            Now, Defendants moves for a deposit of undertaking.

Discussion

Defendants argue that Plaintiff is required to post security for attorney fees and costs, pursuant to CCP section 1030.

            CCP section 1030 provides:

(a) When the plaintiff in an action or special proceeding resides out of the state, or is a foreign corporation, the defendant may at any time apply to the court by noticed motion for an order requiring the plaintiff to file an undertaking to secure an award of costs and attorney’s fees which may be awarded in the action or special proceeding. For the purposes of this section, “attorney’s fees” means reasonable attorney’s fees a party may be authorized to recover by a statute apart from this section or by contract.

(b) The motion shall be made on the grounds that the plaintiff resides out of the state or is a foreign corporation and that there is a reasonable possibility that the moving defendant will obtain judgment in the action or special proceeding. The motion shall be accompanied by an affidavit in support of the grounds for the motion and by a memorandum of points and authorities. The affidavit shall set forth the nature and amount of the costs and attorney’s fees the defendant has incurred and expects to incur by the conclusion of the action or special proceeding.

(c) If the court, after hearing, determines that the grounds for the motion have been established, the court shall order that the plaintiff file the undertaking in an amount specified in the court’s order as security for costs and attorney’s fees.

            For the reasons set forth below, the Court concludes Defendants have not satisfied the conditions of CCP section 1030. 

            As a preliminary matter, no facts have been alleged which could show an entitlement to attorney fees by either party here. CCP section 1033.5, subdivision 10 provides that attorney fees are only recoverable when authorized by contract, statute, or law. In the previous action, Plaintiff was apparently awarded attorney fees by Judge Rico based on a finding of frivolousness:

In its February 5, 2018 Fee Ruling, this Court made the findings that (1) the SACC’s Lanham Act and non-Lanham Act claims were inextricably intertwined, and (2) the action in the Cross-Complaint was frivolous, meriting an award of attorney fees. The Court reasoned: 

The basis for each claim was that Cross-Defendants infringed on Cross-complainant’s . . . trademarks for “LiquidCalcium,” “CoQ10 Red,” and “Omega 3-6-9.” The fact that Cross-complainants were ultimately unable to establish protectable trademarks does not mean that this was not a trademark infringement case. Indeed, Cross-complainant’s inability to do so speaks to the frivolousness of this action.” (Fee Ruling, p. 1.) 

The very same reasoning applies to the instant motion. Kish is entitled to the other half of the attorney fees that the Court awarded Khoei on February 5, 2018. 

The motion is granted. Kish is awarded attorney fees in the amount of $82,775. 

            (See 6/7/2019 Ruling.)

            Here, there has been no determination of frivolity. Moreover, Plaintiff has not alleged any contractual provision entitling it to attorney fees, nor has Plaintiff set forth any statutory authority showing entitlement to fees for fraudulent transfer causes of action.  Indeed, even Defendants do not attempt to argue that they are, in fact, entitled to attorney fees. Rather, they argue that Plaintiff is not entitled attorney fees but “[t]o the extent [Plaintiff] is claiming a right to recovery of attorney’s fees in this action, defendants should also be entitled to recovery of attorney fees if defendants prevail.” (Motion, 4: 18-20.) This argument is not well taken, and improper requests for attorney fees are properly challenged through a motion to strike.

            Given that neither party has set forth a basis for recovering attorney fees, the Court cannot compel Plaintiff to post an undertaking for the estimated cost of attorney fees. CCP section 1030, subdivision (a) expressly states that its reference to attorney fees refers only to those “reasonable attorney’s fees a party may be authorized to recover by a statute apart from this section or by contract.”

The question then becomes whether or not Plaintiff should be required to post an undertaking totaling $20,000 to cover costs as argued by Defendants.

            CCP section 1030, subdivision (b) provides that “[t]he motion shall be accompanied by an affidavit in support of the grounds for the motion and by a memorandum of points and authorities. The affidavit shall set forth the nature and amount of the costs and attorney’s fees the defendant has incurred and expects to incur by the conclusion of the action or special proceeding.”

Here, Defendant did not set forth the nature and amount of any costs incurred, and the only support for its contention that costs will total over $20,000 is a single sentence that “Based on the costs in the underlying action, the need for interpreters for depositions, and the potential that defendants will be forced to take discovery in Iran, it is reasonable to expect that costs will exceed $20,000.” (Butler Decl., ¶ 8.) This is insufficient to satisfy subdivision (b).

            Moreover, even setting aside this issue, Defendants have not met their burden to show a reasonable probability of prevailing on the merits. Defendant’s motion contains no real substantive analysis with respect to Plaintiff’s claims. Indeed, it does not cite even the elements of a fraudulent transfer cause of action, nor does it cite a single case. Rather, Defendants argue:

Defendant AntiAging submitted requests for admissions to Adonis Kish along with for interrogatory 17.1, asking the factual bases for denials of the requests for admissions. Adonis Kish did not identify a single document to show there were any sales of products for which AntiAging should have been paid that were sold by others. That lack of evidence is fatal to the claims of Adonis Kish. Adonis Kish claims there were fraudulent transfers of potential sales of AntiAging made by others and that the funds from those sales should have been paid to Adonis Kish. If there were no sales, then there was nothing that should have been paid to AntiAging.

The purported transfers were not to Ershadi. The only basis for any claim against Ershadi is that she and alter ego of AntiAging. Adonis Kish did not prevail on this claim in the underlying action nor in a post-judgment motion. There is a reasonable possibility that both AntiAging and Ershadi will prevail. There is already a judgment against AntiAging so what Adonis Kish is really seeking is relief against Ershadi. Based on the prior failures of Adonis Kish to impose alter ego liability against Ershadi there is a reasonable possibility that Ershadi will prevail.

            (Motion, 4: 23-5:8.)

However, as already noted by this Court, Plaintiff’s claim against Ershadi was dismissed based on a failure to prosecute, not on a determination of alter-ego liability. As such, the argument that Plaintiff’s “prior failure” to impose alter-ego liability is not evidence that it will fail here. Moreover, none of these claims are supported by a declaration, and it is well established that “matters set forth in points and authorities are not evidence.” (Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 590.) Moreover, in opposition, Plaintiff set forth extensive evidence to support its claim of alter-ego liability. As such, Defendants have not met their burden to show that “there is a reasonable possibility that the moving defendant will obtain judgment in the action or special proceeding.” (CCP § 1030, subd. (b).)

            Based on the foregoing, Defendants’ motion to require Plaintiff to deposit an undertaking is denied.

It is so ordered.

Dated:  August    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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