Judge: Malcolm Mackey, Case: 19STCV29553, Date: 2023-03-07 Tentative Ruling
Case Number: 19STCV29553 Hearing Date: March 7, 2023 Dept: 55
HOPE
AND TRUST TRADING, INC. v. SANATH, INC. 19STCV29553
Hearing Date: 3/7/23,
Dept. 55
#7: MOTION FOR SANCTIONS AGAINST SEYEDJALIL FIROOZABADI,
HOPE AND TRADING TRUST, INC. AND THEIR COUNSEL OF RECORD F. BARI NEJADPOUR AND
LA LAW, INC.
Notice: Okay
Opposition
MP:
Third-party Michael G. Spector, Esq., former
Bankruptcy attorney for Judgment Debtors SAMMY CILING and ANKE CILING.
RP:
Judgment Creditors SEYEDJALIL
FIROOZABADI AND HOPE and TRUST TRADING, INC.
Summary
On 8/20/19, Plaintiffs filed a Complaint alleging that,
shortly after Plaintiffs’ purchase of the majority shares of Defendant
California Medical Imaging, Inc. (CMI), Defendants foreclosed Plaintiff from
all control and access to Defendant CMI’s and associated Defendant Sanaths'
operations, along with all other aspects of the business, and Defendants refuse
to acknowledge Plaintiffs’ majority shareholder status, and ousted Plaintiffs.
The causes of action are:
1) BREACH OF CONTRACT -
WRITTEN
2) BREACH OF CONTRACT -
ORAL
3) BREACH OF FIDUCIARY
DUTY
4) FRAUD IN THE
INDUCEMENT
5) FRAUD IN THE FACTUM
6) BREACH OF DUTY OF
UNDIVIDED LOYALTY
7) OUSTER OF MAJORITY
SHAREHOLDER
8) EMBEZZLEMENT
9) IDENTITY THEFT.
The Judgment was filed 4/13/21, for Plaintiffs,
awarding $1,600,000.00 damages, $201,000 attorney’s fees and $800,000 punitive damages.
MP
Positions
Moving third-party requests an order imposing $16,605
in sanctions against opposing parties, on grounds including the following:
·
Sanctions are
sought pursuant to Code of Civil Procedure sections 1285 and 128.7.
·
Opposing
parties’ prior, denied “Motion for An Order Requiring Third-Person Michael
Specter, Esq. to Turn Over All Monies Belonging to Judgment Debtors Sammy
Ciling and Anke Ciling In Mr. Spector's Possession, Custody or Control to
Judgment Creditors Seyedjaiil Firoozabadi and Hope and Trust Trading, Inc….,”
heard February 14, 2023, was made in bad faith, frivolous, not warranted by
existing law and made for the improper purpose of harassment.
·
The law and
facts clearly establish that Judgment Creditors have no rights to the Former
Retainer.
·
Movant had a
right to pay its bill from the Former Retainer.
·
Hunter Ciling had
a right to have the balance of the Former Retainer that he paid returned to him.
·
The Judgment
Debtors had no legal interest in the Former Retainer.
·
Judgment
Creditors had no interest in the Former Retainer until they obtained a court
order allowing them to levy and said levy was effectuated.
RP
Positions
Opposing parties advocate
denying, for reasons including the following:
·
A reasonable
attorney would conclude that the Bankruptcy Court authorized the payment of
attorney's fees to Spector and the transfer to Hunter Ciling, under false
pretenses, because Spector concealed facts from the Bankruptcy Court and
deceived this Court; that Judgment Creditors needed no court order to levy the
funds under section $701.040(a), as Nejadpour told Spector Judgment Creditors
were prepared to do; and, in light of both their superior liens and the writ of
execution, Judgment Creditors were the only parties who had a legitimate and
legally enforceable interest in the $25,024.50.
·
Judgment
Creditors had lien rights in the $25,024.50 having recorded both a Judgment Lien
(attached to the opposition as Exhibit 9 to the Nejadpour Declaration) and an
Abstract of Judgment (attached as Exhibit 10 to the Nejadpour Declaration).
·
Spector's
representation that Judgment Debtors had no interest in the $25,024.50 begs the
question whether Spector lied to the Bankruptcy Court or this one.
·
Spector did not
have superior lien rights because his attorney's lien was purportedly first in
time, inasmuch as his attorney's lien was created when Judgment Debtors entered
into Spector's Retainer Agreement whereas Judgment Creditors' Judgment Lien was
recorded 10 months before Judgment Debtors entered into Spector's Retainer
Agreement, and Judgment Creditors Abstract of Judgment was recorded more than a
year before.
·
Spector was not
within his rights to use the $25,024.50 to pay his bill where the authorization
by the Bankruptcy Court may have been obtained with perjured testimony.
·
Spector was not
obligated to return the any of the $25,024.50 to Hunter Ciling if Spector told
the Bankruptcy Court truthfully, under oath, that Hunter Ciling had no interest
in the money because he had gifted it to Judgment Debtors.
Tentative
Ruling
The motion is denied.
Both sides failed to adequately brief the issue of
Bankruptcy Court jurisdiction, as to the underlying motion, such that it was
reasonable for the judgment creditors to argue the motion in this California
court.
In ruling on 2/14/23, the Court cited additional authorities
applicable to a Bankruptcy Court already ruling, which here was approval
disbursements of the subject funds. Presently,
the opposition to the sanctions motion essentially reargues the Bankruptcy
Court ruling, and alleges attorney misconduct in the Bankruptcy Court, which
are issues for Bankruptcy Court under authorized procedures within applicable time
limits.
Complete silence in an opposition to a motion, as to an
issue, results in a waiver the
right to argue the matter in trial court and on appeal. Assad v. Southern Pacific Transportation
Co. (1996) 42 Cal.App.4th 1609, 1615.
However, judges are not required to ignore controlling law merely
because parties do not cite it. Dey
v. Continental Central Credit (2008) 170 Cal. App. 4th 721, 730.
“[S]tate court jurisdiction would not be proper to
accomplish ‘the adjustment of rights and duties within the bankruptcy process
itself,’ which should be uniquely and exclusively federal (e.g., debtors'
petitions, creditors' claims, disputes over reorganization plans, disputes over
discharge, and such other
proceedings).” Satten v. Webb
(2002) 99 Cal. App. 4th 365, 384.
Bankruptcy courts, and not state courts, have jurisdiction over all
claims of willful violations. Hicks
v. E. T. Legg & Assocs. (2001) 89 Cal. App. 4th 496, 513. Parties are not permitted to avail themselves
of state court remedies, to circumvent federal remedies for their opponents'
alleged misuse of the bankruptcy process.”
Saks v. Parilla (1998) 67 Cal. App. 4th 565, 573-74.
“Any sanctions imposed pursuant to this section shall be
imposed consistently with the standards, conditions, and procedures set forth
in subdivisions (c), (d), and (h) of Section 128.7.” CCP §128.5(f).
Code of Civil Procedure “section 128.7 applies solely to
attorney misconduct in the filing or advocacy of groundless claims made in
signed pleadings and other papers.” Clark
v. Optical Coating Lab. (2008) 165 Cal.App.4th 150, 164. A violation of any of the conditions of Section
128.7(b) (which includes (1) improper purpose,
(2) frivolous claims, defenses or contentions, (3) lack of evidentiary
support or likely support and (4) lack of evidentiary support or reasonable
bases on lack of information as to denials), may support an award of
sanctions. Eichenbaum v. Alon
(2003) 106 Cal. App. 4th 967, 976.
Whether a claim, defense or contention is frivolous is measured
objectively. Bockrath v. Aldrich
Chem. Co. (1999) 21 Cal.4th 71, 82. Code of Civil Procedure Section 128.7 requires
bad faith conduct by the person to be sanctioned. Interstate Specialty Marketing, Inc. v.
ICRA Sapphire, Inc. (2013) 217 Cal.App.4th 708, 710 (“attaching the wrong draft of a contract …
to a … complaint does not appear to be, under the particular circumstances of
this case …, sanctionable at all…. Only lamentable inattention was shown ….”).
“Section 128.7, subdivision (c) does not require the
imposition of monetary sanctions upon the finding of a violation of section
128.7, subdivision (b); rather, it gives the trial court discretion to impose
sanctions based on such a finding.” Kojababian
v. Genuine Home Loans, Inc. (2009) 174 Cal. App. 4th 408, 422. Courts have discretion as to whether to
impose sanctions under Code of Civil Procedure Section 128.7, and will not be
reversed absent arbitrariness or a manifest miscarriage of justice. Kojababian v. Genuine Home Loans, Inc.
(2009) 174 Cal.App.4th 408, 422; Martorana
v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698 (appellate courts “generally review orders
for monetary sanctions under the deferential abuse of discretion
standard.”); Guillemin v. Stein (2002) 104 Cal.App.4th 156, 167.
*IF BOTH PARTIES WOULD LIKE TO SUBMIT ON THE COURT’S
TENTATIVE RULING, PLEASE NOTIFY THE COURTROOM 213-633-0655*