Judge Mitchell L. Beckloff, Case 21STCP00295 2023-03-24 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 21STCP00295, Date: 2023-03-24 Tentative Ruling

On February 14, 2023, this court appointed Blake Alsbrook as receiver in this matter “for the sole and limited purpose of refinancing . . . the approximately $1.5 Million in loans on the property at 350 S. Los Angeles St., Los Angeles, California and the $2.2 Million in loans encumbering the property located at 416-424 S. Wall Street, Los Angeles, California . . . .” At the request of cross-complainants, Morad Neman, Simon Neman, Brian Neman and Jessica Kilburn (collectively, the Neman Parties), the court set this hearing to address the Neman Parties’ request the Receiver’s duties be expanded to the role of “an all-purpose receiver . . . .” (Opposition to Ex Parte Application, filed 2-14-23, p. 2.)

The parties have fully briefed the issue. The Neman Parties filed their motion and evidence (the Declaration of Paul Marks with certain attachments, including the Declaration of Morad Neman) on March 7, 2023. Defendants, Saeed Farkhondehpour, individually and as trustee of the Farkhondehpour Family Trust, 350 South Los Angeles St. Partnership L.P., Downtown Acquisition Group, Inc. and Investment Consultants LLC, filed their opposition, the Declaration of Jeffrey T. Bolson with certain attachments, a request for judicial notice and evidentiary objections on March 16, 2023. The Neman Parties filed their reply on March 20, 2023.

Defendants’ six evidentiary objections are sustained. (As to the sixth objection, the court notes it did not receive the report of the former receiver, David Pasternak, as evidence in this action. The court also notes Mr. Pasternak is deceased and not available for cross-examination.)

Defendants’ request for judicial notice is granted. The court takes judicial notice of the existence of the documents and the fact of their filing. The court cannot, however, take judicial notice of the facts contained within the documents. “While the courts take judicial notice of public records, they do not take notice of the truth of matters stated therein.” (People v. Long (1970) 7 Cal.App.3d 586, 591.)

The Neman Parties request the receiver’s authority in this matter be expanded “to take over all aspects of control over the subject properties.” (Motion 6:22-23.) They argue the property at 350 S. Los Angeles Street is “at risk of being lost and/or further materially injured because of a continue pattern of conduct by defendants . . . which conduct is harmful both to the property itself and to the interests of the moving parties, thus necessitating an expansion of the receiver’s powers.” (Motion 6:14-18.) The Neman Parties rely on Code of Civil Procedure section 564, subdivisions (b)(1) and (9) as authority to support their position.

The Neman Parties submit the following admissible evidence to support their request: (1) the court’s prior orders appointing the receiver for the limited purpose of refinancing loans “currently in default on both properties”; (2) Defendant’s motion to quash a subpoena duces tecum (and supporting papers) issued to a certified public accountant who formerly served as the accountant for 350 South Los Angeles Partnership, L.P. and certain of its members; and

The Declaration of Moran Neman describes an insurance claim and money paid on the claim based on damages to the building at 350 S. Los Angeles Street from a fire. (Neman Decl., ¶ 2.) Mr. Neman explains Mr. Farkhondehpour “has indicated that the amount of the insurance settlement was between $600,000 and $650,000.” (Neman Decl., ¶ 2.) Mr. Neman reports he does not “know for certain what has happened to those insurance monies, except that a portion was finally paid to the note-holder to pay down the loan.” (Neman Decl., ¶ 2.) Mr. Neman does not provide the details (perhaps because he does not have them) concerning any pay down of the loan.

Mr. Neman also attests he knows “that the repairs have not been completed . . . .” (Neman Decl., ¶ 3.) Defendants rejected Mr. Neman’s request to “survey the premises with a licensed contractor.” (Neman Decl., ¶ 6.)

Finally, Mr. Neman reports he has not received any distributions from the partnership for a period of years. (Neman Decl., ¶ 7.) He does admit, however, he has received distributions “very recently.” (Neman Decl., ¶ 7.)

Without even considering Defendants’ opposition, the court notes the Neman Parties have not presented any facts not previously considered in connection with the noticed motion of Siry Investments L.P., Mohammed Siry, and Siry Brothers Partnership for the appointment of a receiver for the property at 350 S. Los Angeles Street. In an eight-page order, the court denied the request on January 6, 2023.

On the evidence then before the court, the court found: “Plaintiffs’ evidence fails to expressly identify Defendants’ mismanagement of the Partnership based on the loan default. . . . The evidence of Defendants’ alleged mismanagement as it relates to the failure to refinance the Property is murky at best.” (Order filed 1-6-23 p. 5-6.) The court also rejected allegations repairs at the property had not been made.[1] (Order filed 1-6-23 p. 6.)

The evidence before the court today is less than that previously submitted. Expanding the receiver’s authority on less evidence than that submitted for consideration on January 6, 2023 is therefore unwarranted.

Defendants’ position—this renewed attempt to appoint a full purpose receiver “adds nothing new to the discussion and, in fact, fails to address the legal and factual defects which led the Court, on January 6, 2023, to deny their most recent motion, albeit one brought by the Siry Parties”—rings true. (Opposition 2:4-6.)[2]

Given the lack of new and/or additional evidence and the court’s fulsome consideration of the issue on January 6, 2023, less than 90 days ago, the motion to expand the receiver’s authority in this matter is denied—if the court did not appoint a full purpose receiver then, why would it do so today? Additionally, the court notes the failure to provide “new or different facts, circumstances, or law” renders the court without jurisdiction to grant the renewed motion. (Code Civ. Proc., § 1008, subds. (b) and (e).)

[1] Despite the court having specifically addressed this issue in its January 6, 2023 order, the Neman Parties remarkedly repeat their claim here with no new and/or additional evidence:

“. . . had a third-party management company been appointed over the partnership property, the fire that occurred at the 350 South Los Angeles property in January of 2022 could have been avoided, or at least the repairs by now would have been completed. Mr. Farkhondehpour’s failure to use the $600,000 insurance proceeds to [rehabilitate] the property in the last year has substantially damaged the partnership because no rent and therefore no income has been generated by the partnership.” (Reply 3:6-12.) The Neman Parties make the argument despite the court having found on January 6, 2023: “Plaintiffs speculate the Property is not receiving ‘full rental income from the tenants’ because Defendants have not made repairs after a fire at the Property. [Citation.] Defendants submit evidence to the contrary supporting their claim the City of Los Angeles has signed off on the fir repair work by a licensed contractor. [Citation.] It appears the required repair work has been undertaken, completed and approved by the city.” (Order filed 1-6-23 p. 6.)

[2] Like the court, Defendants characterize the Neman Parties’ request as made “with less evidence.” (Opposition 4:8.)