Judge: Teresa A. Beaudet, Case: 19STCV41048, Date: 2022-08-09 Tentative Ruling

Case Number: 19STCV41048    Hearing Date: August 9, 2022    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On November 13, 2019, Plaintiffs Gerald Friedman (“Friedman”) and Jennifer Lechter, as trustee of the Gerald M. Friedman Trust Dated 4/24/08 (“Lechter”)[1] (jointly, “Plaintiffs”) filed this action against various defendants. The operative First Amended Complaint (“FAC”) was filed on November 22, 2019.

On June 13, 2022, Lechter, solely in her capacity as trustee of the Gerald M. Friedman Trust Dated 4/24/08, and defendants Yossi Dina (“Dina”) and Ben Jewelry, Inc., doing business as South Beverly-Wilshire Jewelry & Loan and doing business as The Dina Collection (“Ben Jewelry”) entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”). (Conway Decl., ¶ 2, Ex. A.) The Settlement Agreement provides, in part, that “Defendants shall execute a Stipulation for Entry of Judgment…providing for the entry of a judgment…in the sum of $650,000.00 and acknowledging Plaintiff’s sole ownership of, and right to all profits associated with, the disputed 20% interest [in] the Blue Diamond....The Parties agree that the Stipulation and Judgment shall be promptly filed by Plaintiff on an ex parte basis....” (Conway Decl., ¶ 2, Ex. A, Section 2(c).) Lechter, Dina, and Ben Jewelry thus entered into a “Stipulation for Entry of Judgment Against Defendants Yossi Dina and Ben Jewelry, Inc.” (the “Stipulation”). (Conway Decl., ¶ 3, Ex. A.)

Lechter now moves for entry of judgment pursuant to the Settlement Agreement and Stipulation.[2] Dina and Ben Jewelry join in the motion. Defendant DBS Diamonds, Inc. (“DBS”) opposes the motion. 

Discussion

Lechter requests that the Court enter judgment against Dina and Ben Jewelry pursuant to the terms of the subject Settlement Agreement and Stipulation. Lechter notes that a stipulation is “binding on the court where…the stipulation is not contrary to law, court rule or policy.” ((Greatorex v. Board of Administration (1979) 91 Cal.App.3d 54, 58.)

In its opposition, DBS notes that the proposed judgment provides in part that “Defendants do not hold, and never have held, any ownership interest in the Blue Diamond.” (Conway Decl., ¶ 3, Ex. A, Proposed Judgment, Section 2(d).) “Defendants” are defined in the proposed judgment as Dina and Ben Jewelry. (Proposed Judgment, Section 1.) DBS asserts that throughout this litigation and contrary to the foregoing statement in the proposed judgment, Freidman and Dina claimed that they owned a 20% interest in the diamond in equal shares. DBS asserts that the subject provision is thus a fraudulent attempt to extinguish DBS’s lien interest against Dina’s interest in the Blue Diamond. DBS states that it “does not object to the (Proposed) Stipulated Judgment if the phrase ‘and have never held’ is deleted from page 2, line 3.” (Opp’n at p. 2:26-27.)

The Court notes that in the FAC, Plaintiffs allege that “[o]n or about February 21, 2018, Dina convinced Friedman to make a short-term loan to him for $6,000,000 as part of an alleged ‘investment’ in a 50.03 carat blue diamond (‘Blue Diamond’).” (FAC, ¶ 41.) “As part of the terms of Loan #15, Dina agreed in writing that in exchange for the Trust loaning Dina $6,000,000.00 secured by Dina’s Malibu Property, Dina would also share a 20% interest in an approximate 50 carat blue diamond (the ‘Blue Diamond’) that Dina was investing in at the time.” (FAC, ¶ 234.) “The written agreement also reflects that the parties would equally split the profits from that 20% interest 50/50.” (FAC, ¶ 234.)

DBS also provides evidence of a March 15, 2018 agreement entitled, “Yossi Dina and Jerry Friedman Agreement” which provides in part that “I, Yossi Dina, and Jerry Friedman share a 20% interest in the 50ct blue diamond that we have invested in. I acknowledge that Friedman put up $6,000,000 for the purchase of the diamond and that we will equally split the profits of our 20% interest 50/50.” (Belhassen Decl., ¶ 5, Ex. 3.)

As to DBS’s asserted lien, DBS submits the declaration of its President, who indicates that “the Dina Defendants owed DBS and me the sum of $593,950.00 USD.” (Belhassen Decl.,  ¶ 7.) DBS provides evidence of a promissory note that provides, “Yossi Dina and The Dina Collection/Ben Jewelry owe DBS Diamonds and Shay Belhassen $360,000.00 + $233,950.00 =  $593,950.00 USD as of 02/13/19.” (Belhassen Decl., ¶ 7, Ex. 5.) The note further provides, “[t]his amount is secured by a partnership stake in the 50.03 carat Fancy Blue Diamond that Dina holds a 20% stake in. This amount will incur 1.5% interest per month, starting today 02/13/19 and will have a maturity date of no later than 05/01/19. After this date, unless paid in full, the stake value will be liquidated.” (Belhassen Decl., ¶ 7, Ex. 5.)

In the reply, Lechter first asserts that DBS does not have standing to oppose the instant motion because it was “dismissed/removed from this action when it successfully obtained entry of summary judgment.…” (Reply at p. 2:17-18.) Lechter notes that “[a] person who was a party, but by dismissal ceased to be, is without legal standing as a litigant or as an appellant.” ((Bates v. John Deere Co. (1983) 148 Cal.App.3d 40, 53.) On July 8, 2021, the Court issued an order granting DBS’s motion for summary judgment in its entirety, and on October 1, 2021, the Court issued another Order providing in part that, “judgment is entered in favor of Defendant, DBS Diamonds, Inc. and against Plaintiff Jennifer Lechter solely in her capacity as trustee of the Gerald M. Friedman Trust Dated 4/24/08.” Thus, judgment was entered in favor of DBS, not a dismissal. Lechter has not cited to authority indicating that the entry of judgment in favor of a party means that the party is without standing to participate further in the proceedings.

            Lechter also asserts that DBS’s argument that the judgment is a “sham” lacks merit. Lechter notes that the FAC’s nineteenth cause of action for declaratory relief alleges, “a dispute now exists as between Friedman and/or the Trust, on the one hand, and Dina and DBS Diamonds, on the other hand, as to the existence, value, ownership, amount of ownership interests, and right to possession of the Blue Diamond.” (FAC, ¶ 234.) Lecter asserted that the proposed judgment thus adjudicates this cause of action.

 Lechter also asserts that DBS’s asserted security interest is unperfected. As set forth above, the subject promissory note provides in part, “[t]his amount is secured by a partnership stake in the 50.03 carat Fancy Blue Diamond that Dina holds a 20% stake in. This amount…will have a maturity date of no later than 05/01/19. After this date, unless paid in full, the stake value will be liquidated.” (Belhassen Decl., ¶ 7, Ex. 5, emphasis added.) DBS does not address this provision in its opposition.

In any event, as set forth above, Plaintiffs themselves allege that “…Dina agreed in writing that in exchange for the Trust loaning Dina $6,000,000.00 secured by Dina’s Malibu Property, Dina would also share a 20% interest in an approximate 50 carat blue diamond (the ‘Blue Diamond’) that Dina was investing in at the time.” (FAC, ¶ 234, emphasis.) “The written agreement also reflects that the parties would equally split the profits from that 20% interest 50/50.” (FAC, ¶ 234, emphasis added.) Thus, the statement in the proposed judgment that Defendants “…never have held, any ownership interest in the Blue Diamond” is contrary to Plaintiff’s allegations in the FAC. It is also contrary to the evidence presented in connection with DBS’s opposition. As Lechter notes, “[u]nder the sham pleading doctrine, a pleader cannot circumvent prior admissions by the easy device of amending a pleading without explanation.” ((Womack v. Lovell (2015) 237 Cal.App.4th 772, 787 [emphasis omitted].)

In light of the foregoing, the Court finds that DBS has demonstrated good cause to strike the language “and never have held” from Section 2(d) of the proposed judgment. DBS notes that pursuant to Code of Civil Procedure section 128, subdivision (a)(8), “[e]very court shall have the power…[t]o amend and control its process and orders so as to make them conform to law and justice.”

Conclusion

Based on the foregoing, Lechter’s motion is granted in part. If the language “and never have held” is stricken from Section 2(d) of the proposed judgment, the Court will sign it.

Lechter is ordered to give notice of this ruling.

DATED:  August 9, 2022                               ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court