Judge: Kevin C. Brazile, Case: 21STCV32408, Date: 2025-05-23 Tentative Ruling

Hearing Date: May 23, 2025

Case Name: Travelers Commercial Insurance Company, et al. v. Final Touch Collision 

Center, Inc., et al.

Case No.: 20STCV30935 

Matter: Motion for Summary Adjudication

Moving Party: Plaintiffs Travelers Commercial Insurance Company and Consumers 

County Mutual Insurance Company

Responding Party: Defendants WEHO Collision Center, Arsen Kazanchian, Hovhannes

Keshishian, Onnik Kazanchian, Rodolfo Hernandez, and Lavrentiy Kazaryan

Notice: OK

Ruling: The Motion for Summary Adjudication is granted.

Moving party to give notice.

The Court encourages all parties to appear remotely via LA CourtConnect.  If submitting on the Court's tentative ruling, please follow the instructions provided above.

This is an action in which Plaintiffs Travelers Commercial Insurance Company and Consumers County Mutual Insurance Company allege that “Defendant West Hollywood Collision Center (‘WHCC’) (and, by extension, the other defendants, who Travelers alleges are alter egos and successor corporations of one another) had engaged in improper conduct with one of Travelers’ insured’s (Kirill Zagalsky) vehicles, by charging excessive and fraudulent fees, and then holding the vehicle hostage until it received a lump-sum cash payment.” 

Plaintiffs assert causes of action for (1) money had and received, (2) conversion, (3) unjust enrichment, (4) intentional interference with contract, (5) extortion, and (6) violations of the UCL.

Plaintiffs now seek summary adjudication as to five issues.

The law of summary judgment provides courts “a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)  In reviewing a motion for summary judgment or adjudication, courts employ a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)  The moving party bears the initial burden of production to make a prima facie showing of the nonexistence of any triable issue, in which case the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue.  (Code Civ. Proc. § 437c(p)(2).)  To show a triable issue of material fact exists, the opposing party may not rely on the mere allegations or denials of the pleadings, but instead must set forth the specific facts showing that a triable issue exists as to that cause of action or a defense thereto.  (Aguilar, at p. 849.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

The first issue is undisputed as the Court has already ruled that WEHO, WHCC, and Final Touch (collectively, the “body Shop”) are successor corporations.  

The second issue is whether Arsen Kazanchian, Hovhannes Keshishian, Onnik Kazanchian, Rodolfo Hernandez, and David Pastor are alter egos of the Body Shop.

The alter ego doctrine is a rationale for disregarding a corporation’s separate legal existence.  The general formulation consists of two components—a unity of interest and ownership between the corporation and individual such that the corporation’s separate personality no longer exists, and an inequitable result if the individual were not held liable.  “Before a corporation’s obligations can be recognized as those of a particular person, the requisite unity of interest and inequitable result must be shown.”  (Leek v. Cooper (2011) 194 Cal.App.4th 399, 411.)  To analyze alter ego liability, courts consider a number of factors, including the commingling of funds and other assets, the holding out by one entity that it is liable for the debts of the other, identical equitable ownership, use of the same offices and employees, use of one as a mere shell or conduit for the affairs of the other, inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers.  (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538-539.)

Based on all of the evidence, the Court finds that Arsen Kazanchian, Hovhannes Keshishian, Onnik Kazanchian, Rodolfo Hernandez, and David Pastor are alter egos of the Body Shop.

These individuals have received large lump sum payments from the Body Shop without explanation; some of these individuals seem to have no role at the Body Shop or provide conflicting statements; funds have been used for questionable purposes, such as purchasing Coachella tickets, Bellagio room service, car payments, and grocery bills; there seem to be no formalities or policies at the Body Shop; the Body Shop continues to engage in the same misconduct and scheme that was the subject of the Court’s prior judgment; the Body shop merely changes its name to avoid paying the judgment against it, with the individual Defendants making it financially insolvent and using it as their personal piggy-bank.

Indeed, there is evidence as follows:

• Onnik. WEHO sent Onnik transfers of lump sums ranging from $1k to $10K multiple times a month. In addition, WEHO regularly gave Onnik massive lump sums, including: $155,000 on 7/7/2020, $43,500 on 3/9/2021, $14,600 on 3/1/2021, $15,000 on 1/28/2022, $29,000 on 2/23/22, $10,000 on 2022, $17,000 on 3/26/2021, etc.

• Arsen. Despite testifying he never worked at WEHO, Arsen received regular transfers of a few thousand dollars from WEHO. Arsen also received several large lump sums in excess of $10,000 from WEHO, including, for example, a $32,000 wire on 2/12/2020. 

• Hovhannes. Hovhannes also testified he never worked for WEHO but, inexplicably, regularly received large lump sum transfers from WEHO. For example, he received: $3,000 on 1/26/2021, $2,000 on 3/26/2021, $9,000 on 4/20/2021, $5,000 on 5/14/2021, $2,000 on 6/11/2021, $2,000 on 8/18/2021, $5,000 on 10/22/2021, $4,000 on 10/23/2021, and the list goes on.

• Rodolfo. Rodolfo, who was at most a painter for WEHO, was similarly consistently given sums ranging from $1,724 to $7,500 from WEHO’s account.

• Pastor. Pastor regularly wrote himself checks from WEHO’s account or made lump sum cash withdrawals without any apparent reason, including, for example: $3,850 on 11/5/2020, $13,000 on 1/2/20221, $1,000 on 4/28/2021, $2,150 on 5/17/2021, $2,000 on 6/23/2021, $8,000 on 10/23/2021, $2,000 on 10/27/2021, $6,000 on 12/30/2021, etc.

Also, WEHO regularly sent thousands of dollars to someone called “wifey,” and transferred $25,000 to Olympia Megrikyan (Onnik’s ex-wife) on 4/1/2020.  WEHO regularly transferred lump sums to Mary Kazanchian (Arsen’s and Onnik’s sister), even though she did not work there.

The Court further notes that Defendant Pastor failed to file any opposition, including a separate statement of undisputed fact, such that the entire Motion will be granted against him.  (See Code Civ. Proc. § 473c).

The other individual Defendants failed to file any evidence whatsoever.  Thus, they cannot raise a triable issue of fact—they can only contest that Plaintiffs met their burden.  These Defendants merely argue that Plaintiffs failed to show that the above payments were received without consideration.  

Plaintiffs, however, did meet their burden.  Among other evidence:

• Rodolfo admits he “withdrew funds from WHCC and WEHO for personal use.”  (SSUF No. 8.)

• Onnik admits he received massive transfers from Final Touch, including checks for $125,000 and $195,000 at a time he did not work there.  (SSUF No. 12.)  Rodolfo admits he was the sole owner of Final Touch at that time.  (SSUF No. 8.)

• Arsen admits he received a $125,000 check from Final Touch at a time he did not work there.  (SSUF No. 13.)  Rodolfo admits he was the sole owner of Final Touch at that time.  (SSUF No. 8.) 

• Hovhannes admits he received numerous lump sum transfers from Final Touch even though he had no relationship whatsoever to Final Touch.  (SSUF Nos. 6 and 14.)

Plaintiffs’ issues 3-5 seek summary adjudication as to their conversion, unjust enrichment, and UCL claims.

The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages.  (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066.)  

“Unjust enrichment is not a cause of action, however, or even a remedy, but rather a general principle, underlying various legal doctrines and remedies .... [Citation.] It is synonymous with restitution. [Citation.] (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793, 131 Cal.Rptr.2d 347.) Unjust enrichment has also been characterized as describing the result of a failure to make restitution.... (Dunkin, supra, 82 Cal.App.4th at p. 198, fn. 15, 98 Cal.Rptr.2d 44, quoting Lauriedale Associates, Ltd. v. Wilson (1992) 7 Cal.App.4th 1439, 1448, 9 Cal.Rptr.2d 774 (Lauriedale ).)  [¶] There are several potential bases for a cause of action seeking restitution. For example, restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason. (See generally 3 Witkin, Cal. Procedure (4th ed. 1996) Actions, §§ 148–150, pp. 218–220; 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, §§ 112, 118, pp. 137–138, 142–144.) Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as waiving the tort and suing in assumpsit).”  (McBride v. Boughton  (2004) 123 Cal.App.4th 379, 387–89 (internal quotes omitted).)

The evidence is as follows.

Zagalsky’s vehicle: Zagalsky’s BMW sustained minor damage in a collision and was towed to the body shop. While this car would have easily been repaired for a few thousand dollars in a matter of days at a normal body shop, there was nothing normal going on at this shop. Seeing an opportunity to gouge another Travelers’ policyholder, the body shop demanded that Travelers pay it $42,018 to release the vehicle despite the fact that the body shop hadn’t done any repairs to the vehicle and the repairs needed were minimal. After the shop held the car for months, Travelers was forced to make the extortionist payment to get the car released, while also having to pay its policyholder for a new car.

Budnick’s vehicle: Budnick’s Audi A5’s front bumper was damaged by some debris on the roadway. A typical body shop would have fixed this minor damage for a nominal amount. But this shop wanted a big payout, so it decided to create work for itself by, for example, breaking a window, unnecessarily removing interior seats, etc. Despite this abusive conduct, Travelers paid more than $20,000 (despite the shop completing zero repairs), and demanded the vehicle be released. But the shop refused to release the vehicle unless Travelers paid it $93,989.16 – i.e., more than three times what the car was even worth. Travelers was forced to abandon the vehicle (and its $9,574 salvage value) and instead pay Budnick $34,387.80 for a new car. 

D’Arco’s vehicle: Ten days after D’Arco’s Jeep was towed to the shop, Travelers determined the vehicle was a total loss and requested that it be released. But, once again, the shop refused unless Travelers paid it thousands of dollars for nothing more than briefly storing the vehicle. Ultimately, Travelers paid $3,571 under protest (even though the shop did no repairs) to get the vehicle released. 

Kalfayan’s vehicle: Soon after Kalfayan’s vehicle arrived at the shop, Travelers determined the vehicle was a total loss and requested the shop release it. Per usual, the shop refused unless Travelers paid it $10,200, even though absolutely no work had been done. Once again, Travelers was forced to abandon the vehicle (and its $16,747 salvage value) and pay its insured Kalfayan $41,005.63 for a new vehicle to timely resolve his claim. 

Plaintiffs carried their burden to show conversion, unjust enrichment, and the continuation of unlawful practices that violate the injunction this Court already entered.  Plaintiffs have also shown a right to damages and restitution as set forth in their briefing and proposed order, and as supported by the declaration of Thomas Amarante.  

For all these reasons, the Motion for Summary Adjudication is granted.  The objections are overruled.

Moving party to give notice.