Judge Mitchell L. Beckloff, Case BC709417 2023-04-05 Tentative Ruling

Plaintiffs, Ocean Blue Investments, LLC, Morad Behrooz Neman, Sion Neman and Hersel Neman, move for an order requesting the court authorize the receiver, Blake Alsbrook, “to take any and all necessary steps, including having the Court execute a grant deed as an elisor, to have Medallion Lot 29 transferred to” them. (Application 1:24-25.) Plaintiffs originally made their request as an ex parte application on January 13, 2023. The court set the matter for a noticed hearing—on well more than statutory time—as requested by Defendants Saeed Farkhondehpour and others.

Plaintiffs advised the court on February 27, 2023 (through a Reply Brief) that they had not been served with any opposition. In addition, Plaintiffs reported the California Supreme Court had denied Defendants’ petition for review and for an immediate stay of these proceedings.

On February 28, 2023, the day before the scheduled hearing on Plaintiff’s motion, Defendants filed their Defendants’ Supplemental to Plaintiffs’ Motion for Court Order Authorizing Execution and Recordation of Grant Deed Transferring “Lot 29” to Plaintiffs.

After hearing from the parties on March 1, 2023, the court briefly continued the hearing for one week. (Defendants’ counsel represented the need for a continuance for resolution of a confidential issue.)

On March 8, 2023, the day scheduled for the hearing, Defendants filed an ex parte application requesting the court consider their February 28, 2023 late filed opposition. After hearing from the parties, the court agreed to consider Defendants’ late filed opposition and continued the hearing.

To be clear, the court has considered Plantiffs’ original ex parte application, Defendants’ opposition to the ex parte application, Defendants’ opposition filed February 28, 2023, Defendants’ written response to the court’s question (posed at the March 1, 2023 hearing), Plaintiffs’ oral response to the court’s question and Plaintiffs’ Reply Brief Re Motion for Court Order Authorizing Execution and Recordation of Grant Deed Transferring “Lot 29” to Plaintiffs filed March 29, 2023.

Plaintiffs argue they are entitled to the relief requested. Having appointed the receiver in this matter over three years ago, the court is familiar with the underlying facts.

The Honorable Charles W. McCoy (Retired) served as an arbitrator in this matter and issue a final partial arbitration award approving the parties’ “Spreadsheet Agreement.” The agreement awarded the “building” side of the Medallion property to Plaintiffs and the “land” side of the Medallion property to Defendants. More specifically, the arbitrator specified the “Medallion Land” be transferred to Defendant Farkhondehpour, and the “Medallion Building” be transferred to Plaintiff Behrooz Neman. The arbitrator defined the Medallion Land and the Medallion Building as “set forth in the legal description contained in the loan documents and trust deeds held by First Credit Bank.”[1] (Bolson Decl., Ex. 6, p. 4-5.)

This court (Honorable Michelle Williams Court) entered Judgment in accordance with the final partial arbitration award on February 17, 2022.

Subsequently a dispute arose between the parties related to whether the arbitrator intended that Lot 29 be awarded to the “building” side of the Medallion property or the “land” side. This court returned the matter to the arbitrator to clarify his award (and the Judgment incorporating the award). Ultimately, the arbitrator explained he intended that Lot 29 be included as part of the “building” side of the Medallion property. To wit:

“The Court has sought clarification of the Partial Final Award, indicating that it is not clear whether Lot 29 is included with the Medallion Building or the Medallion Land.

The intent and meaning of the Partial Final Award and its footnote 3 was to define the terms ‘Medallion Land’ and ‘Medallion Building’ in direct conformity with the legal descriptions contained in the loan documents and trust deeds held by First Credit Bank, and to award Respondent Saeed Farkhondehpour all right, title and interest in Medallion Land and to award Claimant Morad Behrooz Neman all right, title and interest in Medallion Building as so described. The operative term ‘Medallion Building’ includes Lot 29, and ‘Medallion Land’ does not include Lot 29.”

Defendants moved to set aside the arbitrator’s clarification. The court (Hon. Michelle Williams Court) denied Defendants’ motion on December 9, 2022.

Defendants sought extraordinary writ relief from the Court of Appeal and requested an immediate stay on December 29, 2022. The Court of Appeal denied Defendants’ request and granted Defendants no relief on January 5, 2023.

Defendants then sought review and an immediate stay from the Supreme Court. The Supreme Court ultimately denied review on February 15, 2023.

As “Lot 29,” is the only remaining real property to be distributed to the parties pursuant to the agreement, final partial arbitration award and judgment, Plaintiffs contend the court should appoint an elisor if Defendants continue to refuse to execute the deed awarding “Lot 29” to Plaintiffs.

As a preliminary matter, Defendants’ objection to the court proceeding by way of ex parte application is now moot, the matter having been set as a fully noticed motion.

On the merits, Defendants offer two grounds to defeat Plaintiffs’ motion. First, Defendants contend the final partial arbitration award and its clarification are not enforceable because they are vague and ambiguous. That is, “the terms ‘Medallion Building’ and ‘Medallion Land’ are not defined to describe the lots ordered transferred.” (Supp. Opposition 3:5-6.) The arbitrator’s clarification order, according to Defendants, “also fails to define or describe what property comprises ‘Lot 29’ leaving it impossible to execute a conveyance of an unidentified lot.” (Supp. Opposition 3:7-8.) Finally, Defendants argue “assuming Lot 29 means the Domitila Lot pre-Lot Line Adjustment . . ., then a deed conveying the Domitila Lot ignoring the lot line adjustment would violate the Subdivision Map Act, Government Code section 66410 et seq. (SMA) by creating a new lot without proper subdivision approval.” (Supp. Opposition 3:9-12.)

Defendants contend the arbitrator’s clarification did nothing to clarify the ambiguity. Defendants argue:

“The arbitrator issued the Clarification Order which essentially repeated footnote 3 in the Partial Final Award by referring to the First Credit Trust Deed but still not specifying the lots to be awarded to [each party]. ¶ The Clarification Order did however provide that ‘Lot 29’ should be included with the Medallion Building lots. But Lot 29 is not defined or described in the Clarification Order or the Partial Final Award. Nor is there a ‘Lot 29’ in the First Credit Deed of Trust legal descriptions. So again, the Clarification Order it too uncertain to enforce.” (Supp. Opposition 6:10-16.)

Defendants also argue “Lot 29” is not defined in the partial final arbitration award, the clarification order or defined in the First Credit Bank deed of trust. (Supp. Opposition 7:17-23.) Defendants suggest “if Lot 29 is supposed to mean APN 5148-001-029 (APN 29), that too is ambiguous primarily because nowhere does the Clarification Order define Lot 29 as APN 29 – it is pure speculation.”[2] (Supp. Opposition 7:21-23.) Defendants raise a number of questions related to “APN 29,” including “at what point in time APN 29 applied” and “did Lot 29 reference the remainder portion of Domitila Lot after the [lot line adjustment] which is assigned APN 29?” (Supp. Opposition 8:13-15.)

Finally, Defendants argue any transfer of the undeveloped parcel (the Domitila Cohn Panorama Property) must be consistent with the lot line adjustment made on May 8, 2015—after the parties executed the First Credit Bank deed of trust. To do otherwise, according to Defendants, would be to violate the Subdivision Map Act. (Supp. Opposition 8:22-9:16.)

Plaintiffs refute Defendants’ position the partial final arbitration award as clarified remains ambiguous. Plaintiffs report:

“The First Credit Bank legal descriptions were specifically created to separate the building and land portion of the Medallion property. This is precisely the reason that, in the Bank’s legal description, Tract 1 contains all the legal descriptions of the Medallion Building (which includes Parcel 29 on the ‘building’ side). On the other hand, Tract 2 contains all of the parcels of the ‘Medallion Land.’ While all of the Medallion parcels were collateral for the lending bank, the bank legal description differentiates between the lot-tied parcels for building purposes as one ‘tract,’ and the untied vacant land as another ‘tract.’ ” (Reply 2:18-25.)

Plaintiffs’ characterization is borne out by the legal description of the two tracts in the March 30, 2015 deed of trust in favor of First Credit Bank. Tract one consists of the Medallion building and the Domitila Cohen Panorama Property, Parcels 1 through 5A. Tract two consists of the Medallion land, the C.E. Thom properties.

Plaintiffs also point out Defendants argued to the arbitrator in their brief related to clarification that the properties should be allocated based on the May 8, 2015 lot line adjustment. Defendants argued an award of the Domitila Cohen Panorama Property to Plaintiffs would result in Plaintiffs “receiv[ing] approximately one-third more of the entire parcel” than Defendants. (Reply, Ex. A 4:15.) Defendants advised the arbitrator “from a common sense point of view, the parties intended that the two parcels have roughly equivalent square footage.” (Reply, Ex. A 5:1-2.) Defendants noted “putting Parcel 29 with the ‘building’ alters the equation by 29,000 square feet – meaning that [Plaintiffs] would receive more than 130,000 square feet while [Defendants] would receive less than 70,000.” (Reply, Ex. A 5:5-7 [emphasis added].)

Defendants’ brief before the arbitrator for clarification makes clear the arbitrator knew “putting Parcel 29 with the ‘building’ ” would result in an uneven allocation. (Reply, Ex. A 5:5.) Defendants requested the arbitrator instead allocate the properties pursuant to the lot line adjustment. (Reply, Ex. A 16:21-25.)[3]

Finally, as to Defendants’ argument about the Subdivision Map Act, as recognized by them in their clarification brief before the arbitrator, it appears the parties will be required to complete a second lot line adjustment based on the partial final arbitration award. (Reply, Ex. A 16:5-6.)

[1] Defendants also note: “Presumably, the arbitrator meant the 2015 First Credit Deed of Trust, Recorder No. 20150365498 . . . but that is not clear either.” (Supp. Opposition 5:27-6:1.) The parties have not suggested whether there are other deeds of trust in favor of First Credit Bank.

[2] The assessor’s map for the County of Los Angeles at map book 5148, page 1 labels the Domitila Cohn Panorama Property as parcel number 29. (Bolson Decl., Ex. 3.)

[3] Plaintiffs persuasively argue: “Unless Defendants are willing to argue that Judge McCoy did not read Defendants’ opening brief, it is crystal clear that Judge McCoy rules with his eyes wide open, unequivocally determining that Parcel 29 belonged to the building side, despite the uneven result (in terms of square footage awarded).” (Reply 3:18-21.)