Judge: Shirley K. Watkins, Case: LC106776, Date: 2022-08-18 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

Case Number: LC106776    Hearing Date: August 18, 2022    Dept: T

            [TENTATIVE] ORDER:  Cross-Defendant Hakop Jack Erzrumyan’s Motion for Summary Judgment against Cross-Complainant Allen Hershberg and Generation TS FBO Allen Hershberg IRA 2750’s First Amended Cross-Complaint is DENIED.

Cross-Defendant Hakop Jack Erzrumyan’s Motion for Summary Adjudication against Cross-Complainant Allen Hershberg and Generation TS FBO Allen Hershberg IRA 2750’s First Amended Cross-Complaint is GRANTED in Part and DENIED in Part.  The Motion is GRANTED as to the second cause of action for declaratory relief and DENIED as to the first cause of action for unjust enrichment.

Cross-Defendant Hakop Jack Erzrumyan’s Request for Judicial Notice is DENIED as to Exhibit D and GRANTED as to the remaining exhibits A-C, E-G, but not as to any hearsay or facts in dispute contained within those documents.

Evidentiary rulings are separately filed.

Introduction

Cross-Defendant Hakop Jack Erzrumyan (Erzrumyan) moves for summary judgment (MSJ) and alternatively for summary adjudication (MSA) against Cross-Complainant Allen Hershberg and Generation TS FBO Allen Hershberg IRA 2750’s (collectively “Hershberg”) First Amended Cross-Complaint (FAXC.)  The MSA places into issue the first cause of action (COA) for restitution to avoid unjust enrichment and the second COA for declaratory relief. 

            Discussion 

            Erzrumyan argues that there is no triable issue of material fact as to their three-year statute of limitations (SOL) defense (Code Civ. Proc. sec. 338(d).)  There is no dispute between the parties that the three year SOL for fraud applies to the instant claims.  Erzrumyan argues that  the “wrongful act” (i.e., disbursement of Hershberg’s funds from CE Escrow to Erzrumyan) occurred, at the latest, “shortly after” July 2, 2016, making the SOL expire “shortly after” July 2, 2019.  (MSJ/MSA pg. 5:16-25 and Erzrumyan’s Separate Statement Fact (ESSF) 5.)  Erzrumyan’s first argument that the SOL accrued “shortly after” July 2, 2016, is unpersuasive because it relies solely upon the general rule of accrual.[1] 

            Hershberg argues in opposition that the completion of the last element of the fraud was his damages which he argues occurred on January 24, 2018 when Plaintiff Alepyans filed the underlying Complaint to deny the loan.  However, Hershberg’s claim for unjust enrichment and declaratory relief is grounded on the allegation that Hershberg’s funds from the escrow that were to be disbursed to the Alepyans actually went to Erzrumyan.  (FAXC pars. 15-16, 20.)  These allegations show that Hershberg claims to be damaged because CE Escrow did not fulfill their obligation to disburse the funds to the Alepyans, albeit based upon an alleged fraudulent escrow. 

            As to the delayed discovery rule, Erzrumyan argues that Hershberg knew of his claims as early as October 2016 and at the latest by February 2017 because the Alepyans denied the loan as a forgery.  Erzrumyan argues that on October 7, 2016, Hershberg along with Morris Clement (Clement) reached out to the Alepyans to confirm receipt of the funds and the Alepyans denied the loan as forgeries once they saw the loan documents. (ESSF 12-14.)  Erzrumyan argues that it was in February 2017 that the first Notice of Default (First NOD) was received by Plaintiff Alepyans and Plaintiff Alepyans reached out to Rosie Gomez of County Records Research, Inc. (CRR – the foreclosing trustee) to deny the loan.  (ESSF 19 – 21.)  The above facts could show actual or inquiry notice of Hershberg’s claims since the Alepyans’ denied the loan as a forgery.  However, Hershberg presents additional facts to vitiate the alleged denial.  Hershberg provides that he received payments on the loan from Isabel Alepyan (Isabel.)  (Hershberg Separate Statement of Fact (HSSF) 46) and provides that Isabel made assurances that the loan would be repaid (HSSF 48.)  Hershberg further provides facts showing that the Alepyans referred Hershberg to Isabel to deal with the loan issues.  (HSSF 47.)  These facts show a contradiction between the Alepyans’ claim at that time that the loan documents were forged and the loan being valid.  Claims of invalidity of the loan would not have a history of payments on the loan and/or assurances of repayment by the contact person for the Alepyans (i.e., Isabel.)  These disputed facts show that a triable issue of material fact exists regarding Hershberg’s actual or constructive notice to have the SOL accrue.  Because there are triable issues of fact as to Hershberg’s notice, the MSJ/MSA grounded on the SOL defense is DENIED.

            As to Erzrumyan’s arguments regarding the relation back doctrine, the arguments presume a violation of the SOL.  However, as analyzed above, there are triable issues of fact as to when the SOL accrued.  Without definitive facts as to the expiration of the SOL, analysis of the relation back doctrine is premature and not considered at this time.

            Erzrumyan argues that the funds paid to him are fungible and the funds distributed to him cannot be said to have been the funds deposited by Hershberg.  Erzrumyan asserts that there are no facts to show receipt of Hershberg’s funds.  However, Hershberg presents evidence showing that the check tendered to Erzrumyan identified Hershberg’s escrow number.  (HSSF 55.)  Because the check disbursed to Erzrumyan identifies Hershberg’s escrow number, there is a triable issue as to whether or not the funds used to pay Erzrumyan were the same funds deposited by Hershberg.  Erzrumyan’s argument as to lack of evidence showing receipt of funds is unpersuasive.

            Erzrumyan then argues that there is no triable issue of fact as to the declaratory relief COA because there is no evidence of a prospective and actual controversy and the COA is duplicative of the unjust enrichment COA.  “(D)eclaratory procedure operates prospectively, and not merely for the redress of past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.” (Babb v. Superior Court (1971) 3 Cal.3d 841, 848.)  Despite Hershberg’s arguments otherwise, the controversy at issue is a past wrong.  Hershberg made demands for payment and Erzrumyan refused.  (FAXC par. 31.)  With these allegations, the refusal to pay the allegedly wrongfully obtained funds is a past wrong.  The fact that Erzrumyan maintained that the funds belonged to him does not make the controversy prospective.  The MSA as to the declaratory relief COA shows that there is no triable issue as to a prospective controversy. 

            The MSA as to declaratory relief is GRANTED. 

            IT IS SO ORDERED, CLERK TO GIVE NOTICE.