Judge: Martha K. Gooding, Case: 22-0191818, Date: 2023-08-14 Tentative Ruling
1) Demurrer to Complaint
2) Motion to Dismiss
3) Case Management Conference
Before the Court are two motions.
The first is a Demurrer by Defendants Nasir Khatami and Mina Gheyssari (collectively, “Defendants”) to the Complaint filed by Plaintiff Victoria Bastani (“Plaintiff”). It is OVERRULED.
The second is a Motion by Defendants to dismiss or stay this action on grounds of forum non conveniens. It is DENIED.
(1)DEMURRER
Defendants’ Demurrer to Plaintiff’s Complaint is OVERRULED. Defendants shall file and serve their Answer to the Complaint within 15 days.
Requests for Judicial Notice
Defendants’ requests for judicial notice filed with the moving papers and the reply are both denied.
Defendants base their requests on Evidence Code section 452 subsection (f) (law of foreign nations) and subsection (h) (facts not reasonably subject to dispute).
The documents are Iranian government publications, not actual Iranian laws. Furthermore, Defendants have not shown that these are facts not reasonably subject to dispute. Also, Defendants submit these documents to show that Plaintiff was provided with part ownership of the companies in 2006. This is inadmissible hearsay; the Court cannot accept as true the matters stated within documents subject to judicial notice. (See Richtek USA, Inc. v. uPI Semiconductor Corp. (2015) 242 Cal.App.4th 651, 659-660 ]trial court properly took judicial notice of Taiwanese complaints but should not have used them to resolve factual dispute regarding whether the action was time-barred]; Day v. Sharp (1975) 50 Cal.App.3d 904, 914 [court cannot accept as true the contents of pleadings or exhibits in the other action just because they are part of the court record or file].)
The Law Governing Demurrers
A demurrer presents an issue of law regarding the sufficiency of the allegations set forth in the complaint. (Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1126.) The challenge is limited to the “four corners” of the pleading (which includes exhibits attached and incorporated therein) or from matters outside the pleading which are judicially noticeable under Evidence Code §§ 451 or 452. Although California courts take a liberal view of inartfully drawn complaints, it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought. (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413.)
On demurrer, a complaint must be liberally construed. (CCP § 452; Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) All material facts properly pleaded, and reasonable inferences therefrom, must be accepted as true. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.)
Discussion
Defendants argue that the Complaint, filed on 11/14/22, fails as a matter of law because all of Plaintiff’s claims are barred by the applicable statutes of limitations.
Defendants assert that each of Plaintiff’s causes of action must be brought within three or four years of the alleged harm. (See e.g. Code Civ. Proc. § 338(d) [three year statute of limitations for causes of action arising out of fraud]; American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1478-1479 [three year statute of limitation for breach of fiduciary duty arising out of fraud]; Cal. Welfare & Institutions Code § 15657.7 [statute of limitations for financial elder abuse is four years]; see Holtzendorff v. Housing Authority of City of Los Angeles (1967) 250 Cal.App.2d 596, 634- 635 [gravamen of money had and received was an action for mistake, so cause of action subject to three year statute of limitations under CCP section 338(d)]; Federal Deposit Inc. Corp. v. Dintino (2008) 167 Cal.App.4th 333 [an unjust enrichment or quasi-contract action in the form of a common count to recover money or other benefit obtained by mistake is governed by the three-year statute for actions based on fraud or mistake.]; Manok v. Fishman (1973) 31 Cal.App.3d 208, 213, 107 [four year limit for accounting].)
Defendants initially contend that each of Plaintiff’s claims accrued on 12/5/06, when she purportedly acquired an interest in the Iranian Companies. There is nothing in the Complaint suggesting Plaintiff was aware of her ownership in 2006. Moreover, the actual alleged fraud, breaches of fiduciary duties, etc. did not necessarily occur starting in 2006 per the allegations of the Complaint. Thus, the Court cannot conclude that Plaintiff’s claims actually accrued back in 2006.
Defendants alternatively argue that the statute of limitations started to run in November 2017, when Plaintiff and her son, Ali, met with Defendant Nasir, which was five years prior to the filing of the Complaint. The Court finds that this argument also lacks merit.
Relevant to this argument, Plaintiff alleges in the Complaint:
26. In or around November of 2017, a mutual acquaintance asked Victoria to meet with Nasir and his sister in Newport Beach to discuss the Companies. At that meeting, it was suggested that an ownership interest in the Companies may have been returned to Cyrus by the Islamic Republic at some point in time. During the meeting, Victoria and her son, Ali Bastani (“Ali”), asked Nasir questions about Victoria’s interest in the Companies and requested the Companies’ financial statements. Nasir evaded the questions or refused to provide straightforward answers about Victoria’s ownership interest or the financial state of the Companies. Ali followed up with an email after the meeting reiterating his mother’s request for financial statements. Nasir never responded to the request.
27. Instead, in the months and years following the November 2017 meeting, Nasir actively tried to cast doubt on whether Victoria owned any interest in the Companies at all. Specifically, Nasir made statements suggesting that Cyrus had sold his interests in the Companies at some point prior to his passing. Nasir also continued to withhold all information about the Iranian Assets from Victoria, notwithstanding her request for the Companies’ financial statements.
28. By concealing and misleading the Bastani family about Victoria’s true ownership interest in the Companies and the financial state of the Companies, Nasir was able to operate the Companies without oversight from the Companies’ largest shareholder and to misappropriate Victoria’s share of the Companies’ profits for more than fifteen years.
In paragraph 27, Plaintiff alleged fraudulent concealment on the part of Defendant Nasir that would support the tolling of the statute of limitations. (See Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1192 [“doctrine of fraudulent concealment tolls the statute of limitations where a defendant, through deceptive conduct, has caused a claim to grow stale”].)
Plaintiff’s allegations also support application of the continuing violation doctrine. (See id. [this doctrine “aggregates a series of wrongs or injuries for purposes of the statute of limitations, treating the limitations period as accruing for all of them upon commission or sufferance of the last of them.”]; see also Willis v. City of Carlsbad (2020) 48 Cal.App.5th 1104, 1124.)
Plaintiff’s Complaint alleges that in 2021 and 2022 her representatives requested financial and other basic information about the Companies, and Nasir consistently refused to provide it in violation of his fiduciary duties. (Complaint, ¶¶ 32-38.) And, in May or June of 2021, Nasir instructed his relative, Vahid Khatami, to provide inaccurate financial information to Plaintiff’s attorneys in order to mislead Victoria regarding the financial state of the Companies. (Id. ¶¶ 34, 66.) Finally, Plaintiff alleges that, in 2021 and 2022, she requested that Nasir correct title to the Headquarter Buildings, which was still in his name after a contemplated sale that never materialized. (Id. ¶¶ 30, 32, 37.) But Nasir has failed and refused to do so. (Id. ¶¶ 36, 38.)
As a result, the Court finds the Complaint is not, on its face, barred by the statute of limitations.
1st cause of action for breach of fiduciary duty (against Nasir)
The elements of breach of fiduciary duty are (1) existence of a fiduciary duty, (2) breach of that duty, and (3) damages. (Twomey v. Mitchum, Jones & Templeton Inc. (1968) 262 Cal. App. 2d 690.)
In Paragraph 44 of the Complaint, Plaintiff sufficiently alleges that Defendant breached his fiduciary dues owed to Plaintiff by (a) secretly engaging in self-dealing and embezzlement; (b) secretly misappropriating profits that should have been paid to Plaintiff; (c) actively concealing Plaintiff’s ownership interest in the Companies and Headquarter Buildings; (d) failing to provide complete and accurate information regarding the Companies; (e) operating the Companies in violation of law; (f) refusing to correct title to the Headquarter Buildings; and (g) otherwise abusing his complete control over the assets for his personal gain and to Plaintiff’s detriment.
This, along with Plaintiff’s allegations in Paragraphs 43 and 45-47 are sufficient to state a claim for breach of fiduciary duty.
2nd cause of action for aiding and abetting breach of fiduciary duty (against Mina)
The four elements of a claim for aiding and abetting breach of fiduciary duty are: (1) a third party’s breach of fiduciary duties owed to plaintiff; (2) defendant’s actual knowledge of that breach of fiduciary duties; (3) substantial assistance or encouragement by defendant to the third party’s breach; and (4) defendant’s conduct was a substantial factor in causing harm to plaintiff. (See Nasrawi v. Buck Consultants LLC (2014) 231 Cal.App.4th 328, 343.
Among other things, Plaintiff alleges Mina was aware of the fiduciary relationship between Nasir and Plaintiff and also aware that Nasir was breaching his fiduciary duties to Plaintiff. (Complaint, ¶ 50.) Furthermore, Plaintiff alleges that “Mina provided substantial assistance and encouragement to Nasir by accepting funds (or assets acquired using those funds) that should have been paid to Plaintiff, by encouraging Nasir to transfer the funds and assets into her name, and by encouraging Nasir not to pay Plaintiff the funds that are due to her…. in order to help Nasir conceal his self-dealing and embezzlement from Plaintiff and governmental agencies in the United States and abroad.” (Complaint, ¶ 51.)
These allegations, along with those in Paragraphs 49 and 52-54, are adequate to state a claim for aiding and abetting breach of fiduciary duties.
4th cause of action for Fraud, and 5th cause of action for Constructive Fraud
The elements of fraud are “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)
Causes of action for fraud are subject to stricter pleading standards; fraud must be plead with specificity. (Committee on Children’s Television v. General Foods Corp. (1983) 35 Cal. 3d 197, 216-227.) Facts must be plead to “show how, when, where, to whom, and by what means the representations were tendered.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.)
The elements of constructive fraud are “(1) a fiduciary relationship, (2) nondisclosure, (3) intent to deceive, and (4) reliance and resulting injury. Constructive fraud is any breach of duty that, without fraudulent intent, gains an advantage to the person at fault by misleading another to his prejudice.” (Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1249–1250.)
In this cause of action, Plaintiff alleges that “Nasir actively concealed material facts from Plaintiff, including, among other things: (a) the fact that Plaintiff had inherited a 47 percent interest in each of the Companies and a 50 percent interest in the Headquarter Buildings; (b) the fact that Nasir currently (and wrongly) holds sole title to the Headquarter Buildings; (c) the fact that Nasir was misappropriating money that should be paid to Plaintiff as the Companies’ largest shareholder; and (d) other material information about the Companies and their operations, including information about their financial performance.” (Complaint, ¶ 65.)
Plaintiff further alleges that Nasir “made false or misleading statements, including making statements after a November 2017 meeting with Plaintiff, that Cyrus may have sold his interests in the Iranian Assets—thereby suggesting that Plaintiff did not inherit any interest in the Iranian Assets. Additionally, in or around May of 2021, Nasir directed a board member of the Companies to provide Plaintiff with inaccurate financial information in order to mislead Plaintiff regarding the financial state of the Companies.” (Complaint, ¶ 66.)
In the general allegations of the Complaint, Plaintiff alleges that Defendant instructed Vahid Khatami to provide to Plaintiff’s legal counsel in June 2021, “only limited financial statements that do not accurately reflect the economic performance of the Companies, but rather are documents prepared with inaccurate financial information to reduce the Companies’ tax liabilities in Iran.” (Complaint, ¶ 34.)
In Paragraph 68, Plaintiff alleges that Defendant’s conduct was intentional.
The Court finds these claims are pled with sufficient specificity and that Plaintiff has alleged adequate facts to support the fraud allegations.
Defendant does not make any other arguments specific to the other causes of action. “Every brief should contain a legal argument with citation to authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.” (People v. Stanley (1995) 10 Cal.4th 764, 793).
Based on the foregoing, the demurrer is overruled in its entirety.
(2)MOTION TO DISMISS
Defendants’ motion to dismiss or stay the case based on the doctrine of forum non conveniens is DENIED.
Plaintiff’s objections to the declarations of Mesiam Doust Mohammed and Nassir Khatami are overruled as to Nos. 1, 10, 12 and sustained as to Nos. 2-9, 11, and 13-16.
Defendants’ objections to the declaration of Ali Bastani are overruled as to No. 3 and sustained as to Nos. 1, 2, 4-6.
Defendants’ objections to the declaration of Shahram Koldi are all overruled.
Forum non conveniens is an equitable doctrine invoking the court’s discretionary power and seeking a determination that the action may more appropriately and justly be tried elsewhere. (See Stangvik v. Shiley, Inc. (1991) 54 Cal.3d 744, 751, and Rutter, Civil Procedure Before Trial, Section 3:408.) Even if a court has subject matter and personal jurisdiction, it may stay or dismiss an action on the ground of inconvenient forum. (See Code Civ. Proc., § 418.10(a).)
Defendant bears the burden of proof of establishing that: (1) a suitable alternative forum is available, and (2) the balance of public and private interests make it just that the litigation proceed in the alternative forum. (See Stangvik, at 751, and Rutter, Civil Procedure Before Trial, Section 3:419.) The inquiry is not whether some other state or country provides a better forum than does California, but whether California is a seriously inconvenient forum. (See Ford Motor Co. v. Insurance Co. of North America (1995) 35 Cal.App.4th 604, 611.) In Ford Motor Co., the court explained that: “Unless the balance is strongly in favor of defendant, the plaintiff’s choice of forum should rarely be disturbed.” (Id., at 610 to 611, and Morris v. Agfa Corp. (2006) 144 Cal.App.4th 1452, 1465.)
The Court finds that Iran is not a superior forum, as Defendants argue.
In Aghaian v. Minassian (2015) 234 Cal.App.4th 427, an action brought by Iranian citizens against Iranian citizens, involving a dispute over real properties located in Iran, the court held that when the proposed forum is a foreign country, the motion must be denied if that country “lacks an independent judiciary or fails to provide basic due process rights to one or more litigants.” (Id. at 429-431.) The court specifically found that Iran was not a suitable alternative forum. (Id. at 429; see also Bank Melli Iran v. Pahlavi (9th Cir. 1995) 58 F.3d 1406, 1407, 1411-13 [refusing to enforce judgments obtained in Iranian courts because Iran lacks an independent judiciary and did not afford the defendant due process]; Guimei v. Gen. Electric Co. (2009) 172 Cal.App.4th 689, 697 [citing Iran as an example of a forum that was not suitable because the courts were administered by Iranian mullahs]; Chong v. Superior Court (1997) 58 Cal.App.4th 1032, 1037.)
In a subsequent matter involving the same parties (Aghaian v. Minassian (2021) 64 Cal.App.5th 603, 613, the court found that the renewed forum non conveniens motion was properly denied as “the key facts in Aghaian I that led us to conclude Iran is not a suitable forum have not changed.” (Id. at 613)
Plaintiff submits a declaration from Dr. Shahram Kholdi, an expert on Iranian law. The court finds that Dr. Kholdi is qualified to render the opinions therein, as he has a Ph.D. in Middle Eastern Studies/Modern Iranian History and is a researcher, consultant, and lecturer on various related subjects. (Kholdi Decl., Ex. A.)
Dr. Kholdi confirms that the situation in Iran has not improved since the Court of Appeal’s opinions in Aghaian. (Kholdi Decl. ¶ 24 [“Unfortunately, the state of the legal system in Iran has not materially changed in the past decade. If anything, the inequality and corruption inherent in the system has only become worse.”]). The testimony of a woman, like [Plaintiff], is still worth only half of a man’s testimony. (Id. ¶¶ 21, 33-36, 52.) And the judiciary is still not independent; rather, “[t]he entire judiciary, including all clerks and officers of the court, serves at the pleasure of the Supreme Leader.” (Id. ¶ 54; see id. ¶¶ 18, 49-54.)
Although Defendants submit a competing declaration from Mesiam Doust Mohammadi, an attorney licensed in Iran, who is part of the Iran Central Bar Association, Mr. Mohammadi has not been shown to have the expert qualifications that Dr. Kholdi has. Moreover, Mr. Mohammadi is an active member of the Iranian Bar Association. The Iranian Bar Association adopted rules in 2021 forbidding its members “from any propaganda or mak[ing] any statement or comment against ‘the fundamental doctrines’ of the Islamic Republic” or committing any act “in contravention of the Islamic Shari’a or the law.” (Kholdi Decl., ¶ 59.) “[A]ny criticism of the judicial system is grounds for the loss of an attorney’s license” regardless of where it is made. (Ibid.) So, if Mr. Mohammadi “had made statement in his declaration that were critical of the judicial system in Iran,” he would “risk losing his license or becoming the subject of prosecution.” (Id. ¶ 23.) As a result, the Court accords far more weight to the declaration of Dr. Kholdi.
Based on both the applicable case law and Dr. Kholdi’s declaration, the Court finds Iran is not a suitable alternate forum. (See Investors Equity Life Holding Co. v. Schmidt (2015) 233 Cal.App.4th 1363, 1368 [“The lynchpin of any order granting a motion based on forum non conveniens is a determination that a suitable alternative forum exists. It is only after the trial court reaches that conclusion that it would even consider whether the benefits of the proposed alternative forum outweigh the reasons for keeping the litigation in California.”].)
The Motion is DENIED.
Plaintiff is ordered to give notice of the rulings on both motions.