Judge Upinder S. Kalra, Case Number: BC630004, Date: 2023-08-21 Tentative Ruling

Judge: Upinder S. Kalra, Case: BC630004, Date: 2023-08-21 Tentative Ruling

Case Number: BC630004 Hearing Date: August 21, 2023 Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE: August 21, 2023

CASE NAME: Arturo Rubinstein v. Paris P. Fakheri

CASE NO.: BC630004

MOTION TO VACATE STAY OF ENFORCEMENT, OR ALTERNATIVELY TO INCREASE BOND AMOUNT

MOVING PARTY: Plaintiff Arturo Rubinstein

RESPONDING PARTY(S): Defendant Paris P. Fakheri.

REQUESTED RELIEF:

1. An order vacating the stay of enforcement issued in September 2020.

2. Alternatively, an order increasing the bond amount.

TENTATIVE RULING:

1. Motion to Vacate Stay of Enforcement is DENIED.

2. Request for an Increase Bond Amount is GRANTED, by a total of $100,000.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Oh August 9, 2016, Plaintiff Arturo Rubinstein (“Plaintiff”) filed a complaint against Defendant Paris P. Fakheri. The complaint asserted one cause of action for money lent. The complaint alleges that between November 2013 and August 2014, Rubinstein loaned Fakheri $923,830.09 to renovate a home in Encino.¿¿Fakheri promised that he would repay Rubinstein from the proceeds from the sale of the home.¿¿In December 2014, the home was sold, but Fakheri failed to repay the loan.¿

A court trial was held on March 7-8, 2018. The Court entered judgment in favor of plaintiff on June 25, 2018.

On November 24, 2021, the Court denied Plaintiff’s Motion to Vacate Order Staying Enforcement of Judgment.

On June 29, 2023, Plaintiff filed a Motion to Vacate Stay of Enforcement of Judgment, or in the Alternative, Increase Bond Amount. Defendant filed an Opposition on August 8, 2023. Plaintiff’s Reply was filed on August 14, 2023.

LEGAL STANDARD:

“The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect… [The application] shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” CCP § 473(b).

Although a trial court has discretion to vacate the entry of a default or subsequent judgment, this discretion may be exercised only after the party seeking relief has shown that there is a proper ground for relief, and that the party has raised that ground in a procedurally proper manner, within any applicable time limits.” Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495. “The defendant must … demonstrate a satisfactory excuse for not responding to the original action in a timely manner.” Id. at 504. Moving parties have the initial burden to prove excusable neglect by a preponderance of competent evidence. Kendall v. Barker (1988) 197 Cal.App.3d 619, 624.

CCP § 473(d) provides in relevant part that “[t]he court may, upon motion of the injured party…set aside any void judgment or order.” CCP § 473(d)

CCP section 473.5 permits the Court to set aside a default and default judgment when the service of a summons has not resulted in actual notice to a party in time to defend the action. ¿CCP section 473.5 requires the motion to be accompanied by an affidavit showing under oath that the party's lack of actual notice in time to defend the action was not caused by the party's avoidance of service or inexcusable neglect. ¿The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of the following:

1) two years after entry of a default judgment against him or her; or

2) 180 days after service on him or her of a written notice that the default or default judgment has been entered. ¿

ANALYSIS:

Plaintiff moves to vacate the stay order from September 2020. Specifically, Plaintiff argues the stay should be lifted because the accounting action will not yield an offsetting judgment. In CCP § 918.5, the second criteria for granting a stay of enforcement is “the amount of the judgment compared to the amount of probable recovery of the judgment debtor in the action on the disputed claim.” Here, Plaintiff argues that the Fakheri Judgment has increased by $300,000 dollars, the Fee Claim has been offset in full, and Plaintiff’s Oceanside Judgment is worth approximately $2.8 million, and the accounting is not worth anywhere near $3,062,000. Moreover, Plaintiff argues that this motion is not a motion for reconsideration and is not redundant of other motions because the facts in this motion are not based on the facts in the previous motions.

Defendant argues that the motion should be denied for four main reasons. First, CCP § 918.5 does not grant the court authority to vacate a previous court order. Second, Defendant asserts that this motion is a motion for reconsideration. However, under CCP § 1008, a motion for reconsideration has a ten-day deadline, and thus is untimely. Even if the Court could use it’s own inherent authority to correct an order, it must be done so when the order is erroneous. Plaintiff is not arguing that the motion was erroneous, but rather that new evidence allegedly exists. Third, the stay should not be vacated based upon CCP § 473(b). Under that statute, the motion to be relieved of a judgment must be made within six months after judgment. Fourth, the accounting action is worth between $3,000,000 and $5,000,000. These numbers are based on prejudgment interest totaling $1,124,135 and potential $2,000,000 in punitive damages.

The Court finds that Plaintiff has failed to establish good cause to vacate the stay from September 2020. First and foremost, Defendant is correct in that CCP § 918.5, which is the basis for Plaintiff’s motion, does not grant the Court authority to vacate a previous order. Moreover, neither CCP § 1008 or CCP § 473 are proper to vacate the stay. Previously, on November 24, 2021, this Court denied a similar attempt by Plaintiff to vacate the stay. This Court indicated there was no basis under either of those statutes, and the sole basis was “the court’s inherent power.” Again, the current motion is brought pursuant to CCP § 918.5.

CCP § 918.5 states the following:

(a) The trial court may, in its discretion, stay the enforcement of a judgment or order if the judgment debtor has another action pending on a disputed claim against the judgment creditor.

(b) In exercising its discretion under this section, the court shall consider all of the following:

(1) The likelihood of the judgment debtor prevailing in the other action.

(2) The amount of the judgment of the judgment creditor as compared to the amount of the probable recovery of the judgment debtor in the action on the disputed claim.

(3) The financial ability of the judgment creditor to satisfy the judgment if a judgment is rendered against the judgment creditor in the action on the disputed claim.

Nowhere in this statute does it state the Court has the discretion to vacate a stay of enforcement. Additionally, Plaintiff has failed to establish how either CCP §§ 1008 and 473 are applicable. First, a motion for reconsideration under CCP § 1008 has a 10-day deadline. The stay was issued in September 2020, well past that date. Similarly, under CCP § 473, a party may move for relief of judgment. However, this also carries a deadline – six months – which has long been surpassed. Additionally, Plaintiff does not provide any argument as to how under CCP § 473 relief is warranted due to neglect, mistake, inadvertence or surprise. Lastly, while the Court does have inherent powers, it will not exercise them at this time as Plaintiff has failed to establish how this alleged new evidence requires such a motion.

Motion to Vacate Stay of Enforcement is DENIED.

As both parties acknowledge, the bond can be increased. Currently, the bond is for $1,320,000, with a daily interest of $241.08. Plaintiff requests the bond figure to be $1.6 million, which represents approximately three more years of interest. Defendant asserts that the bond should be $30,000, which would cover the time period until the Accounting Action is tried in October 2023. The Court finds that Plaintiff’s request to increase the bond by $300,000, which is for another three years slightly unreasonable. However, Defendant’s request for $30,000 is somewhat inadequate. While the Accounting Action is set for October 2023, delays do occur. Thus, the Court will increase the bond by $100,000, which allows for a delay in the trial, but does not go for another three years, as this case is already years old.

Request to Increase Bond Amount is GRANTED, by a total of $100,000.

Conclusion:

For the foregoing reasons, the Court decides the pending motion as follows:

Motion to Vacate Stay of Enforcement is DENIED. Request to Increase Bond Amount is GRANTED, by a total of $100,000, subject to questioning by court.

Moving party is to give notice.

IT IS SO ORDERED.

Dated: August 21, 2023 _________________________________ Upinder S. Kalra

Judge of the Superior Court