On 08/16/2016 EDWIN MINASSIAN filed a Contract - Other Contract lawsuit against MICHAEL PANOSIAN. This case was filed in Los Angeles County Superior Courts, Burbank Courthouse located in Los Angeles, California. The Judges overseeing this case are LAURA A. MATZ, CURTIS A. KIN and SAMANTHA JESSNER. The case status is Disposed - Judgment Entered.
Disposed - Judgment Entered
Los Angeles County Superior Courts
Los Angeles, California
LAURA A. MATZ
CURTIS A. KIN
MKM & GROUP ASSOCIATES INC. A
TOUGHBUILT INDUSTRIES INC.
L.A. DEPOSITIONS INC.
MYERS PAMELA L.
O'TOOLE EILEEN K.
LEVIK YARIAN ESQ
LEVIK YARIAN LAW OFFICES OF
ESQ LEVIK YARIAN
STRADLING YOCCA CARLSON & RAUTH
LLOYD DOUGLAS DIX
BEAUDIN KAITLYN LEE
Court documents are not available for this case.
Hearing06/07/2021 at 09:00 AM in Department E at 600 East Broadway, Glendale, CA 91206; Jury TrialRead MoreRead Less
Hearing05/27/2021 at 10:00 AM in Department E at 600 East Broadway, Glendale, CA 91206; Final Status ConferenceRead MoreRead Less
Hearing01/29/2021 at 08:30 AM in Department E at 600 East Broadway, Glendale, CA 91206; Hearing on Application for Order for Appearance and ExaminationRead MoreRead Less
Hearing01/29/2021 at 08:30 AM in Department E at 600 East Broadway, Glendale, CA 91206; Hearing on Motion for an Order to Show Cause Re: Contempt (CCP 1209)Read MoreRead Less
Hearing01/15/2021 at 14:00 PM in Department E at 600 East Broadway, Glendale, CA 91206; Hearing on Application for Order for Appearance and ExaminationRead MoreRead Less
Hearing01/15/2021 at 14:00 PM in Department E at 600 East Broadway, Glendale, CA 91206; Hearing on Motion to Quash 3rd party subpoena of ShabaniRead MoreRead Less
DocketStipulation and Order (Granting Defendants? Attorney?s Fees Related To The Judgment Debtor?s Examination); Filed by MICHAEL PANOSIAN (Defendant); TOUGHBUILT INDUSTRIES, INC. (Defendant)Read MoreRead Less
Docketat 08:30 AM in Department E, Curtis A. Kin, Presiding; Hearing on Motion for Attorney Fees - Not Held - Rescheduled by CourtRead MoreRead Less
Docketat 08:30 AM in Department E, Curtis A. Kin, Presiding; Hearing on Application for Order for Appearance and Examination (of Edwin Minassian) - Held - ContinuedRead MoreRead Less
DocketOrder Appointing Court Approved Reporter as Official Reporter Pro Tempore (Toni Fenimore, CSR 6661); Filed by MICHAEL PANOSIAN (Defendant); TOUGHBUILT INDUSTRIES, INC. (Defendant)Read MoreRead Less
DocketProof-Service/Summons; Filed by EDWIN MINASSIAN (Plaintiff)Read MoreRead Less
DocketProof-Service/Summons; Filed by EDWIN MINASSIAN (Plaintiff)Read MoreRead Less
DocketNotice of Case Management ConferenceRead MoreRead Less
DocketSummons; Filed by nullRead MoreRead Less
DocketComplaint filed-Summons Issued; Filed by nullRead MoreRead Less
DocketSummons FiledRead MoreRead Less
DocketComplaint filed-Summons IssuedRead MoreRead Less
DocketNotice (of osc)Read MoreRead Less
DocketNotice of Case Assignment - Unlimited Civil CaseRead MoreRead Less
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Case Number: EC065533 Hearing Date: November 20, 2020 Dept: E
(1) MOTION TO STAY JUDGMENT DEBTOR EXAMINATION
(2) MOTION FOR ATTORNEY FEES FOR PLAINTIFF’S FAILURE TO APPEAR AT JUDGMENT DEBTOR EXAMINATION
Case: Edwin Minassian v. Michael Panosian et al. (EC065533)
Plaintiff Edwin Minassian’s Motion to Stay Judgment Debtor Examination is DENIED. Defendants Michael Panosian and Toughbuilt Industries, Inc.’s Motion for Attorney Fees for Plaintiff’s Failure to Attend Judgment Debtor Examination is GRANTED.
I. MOTION TO STAY JUDGMENT DEBTOR EXAMINATION
On April 12, 2018, default judgment was entered against defendants Michael Panosian and Toughbuilt Industries, Inc., awarding plaintiff Edwin Minassian $235,541.58 and a 7% ownership interest in Toughbuilt. On September 13, 2018, defendants satisfied the judgment by paying plaintiff $252,949 (which included 10% interest on the judgment) and by providing 376,367 shares of common stock of Toughbuilt. (See 6/22/20 Minute Order.)
On June 22, 2020, pursuant to defendants’ Motion for Order for Restitution of Funds Paid to Satisfy a Reversed Default Judgment, the Court found that, due to the reversal of the default judgment by the Court of Appeal, defendants were entitled to $226,869 restitution pursuant to CCP § 908. The Court also ordered plaintiff to return to defendants the 7% interest in Toughbuilt Industries, Inc., namely, the 376,367 shares of common stock. The Court ordered such restitution to be made within 15 days.
On July 24, 2020, pursuant to defendants’ application, the Court issued an order for plaintiff to appear for a judgment debtor examination on September 11, 2020. On September 9, 2020, plaintiff filed this motion to stay judgment debtor examination pursuant to CCP § 918.5.
The Court finds that CCP § 918.5 does not apply here. The language of the statute states that the judgment debtor (i.e., plaintiff) must have “another action pending on a disputed claim against the judgment creditor.” (CCP § 918.5(a).) In considering whether to stay execution of the restitution order, the Court must consider the “likelihood of the judgment debtor prevailing in the other action.” (CCP § 918.5(b)(1).) On the face of CCP § 918.5, a separate action is required for plaintiff to seek a stay of the judgment debtor examination. (Torres v. Parkhouse Tire Service, Inc. (2001) 26 Cal.4th 995, 1003 [“In interpreting a statute where the language is clear, courts must follow its plain meaning”].) Here, plaintiff has no other action against defendants where the recovery would offset the judgment for restitution issued in this action. The judgment for restitution and collection thereon arise from this same action. Accordingly, the motion is DENIED.
II. MOTION FOR ATTORNEY FEES FOR PLAINTIFF’S FAILURE TO ATTEND JUDGMENT DEBTOR EXAMINATION
CCP § 708.170(a)(2) states, “If an order requiring a person to appear for an examination was served by a sheriff, marshal, a person specially appointed by the court in the order, or a registered process server, and the person fails to appear: [¶] (2) If the person’s failure to appear is without good cause, the judgment creditor shall be awarded reasonable attorney’s fees incurred in the examination proceeding. Attorney’s fees awarded against the judgment debtor shall be added to and become part of the principal amount of the judgment.”
On July 24, 2020, the Court issued an order for plaintiff Edwin Minassian to appear for a judgment debtor examination on September 11, 2020 at 8:30 a.m. in Department E. (Beaudin Decl. ¶ 4 & Ex. B.) On August 21, 2020, a registered process server served the order to appear on plaintiff. (Beaudin Decl. ¶ 7 & Ex. D.) While plaintiff’s counsel for the limited scope of the judgment debtor examination specially appeared, plaintiff Minassian himself failed to appear for the judgment debtor examination. (Beaudin Decl. ¶ 12.)
With respect to the instant motion, plaintiff has filed a conditional opposition, conceding that defendants are entitled to an award of fees but contesting the amount of such award. Accordingly, pursuant to CCP § 708.170(a)(2), defendants, as the judgment creditors, are entitled to an award of reasonable attorney’s fees.
Plaintiff argues that the $4,711.45 charged for service of process is excessive. (Beaudin Decl. ¶ 16 & Ex. J.) The process server charged for surveillance, but plaintiff maintains that defendants did not provide any evidence that plaintiff evaded service. However, before plaintiff was personally served on August 21, 2020, after defendants’ initial attempts to personally serve plaintiff were unsuccessful, defendants twice attempted to obtain plaintiff’s notice and acknowledgement of receipt to avoid the need for a stake out. (Beaudin Decl. ¶¶ 5, 6.) Defendants received no response from plaintiff. (Beaudin Decl. ¶ 6.) Accordingly, given defendants’ difficulties in personally serving plaintiff, surveillance was a reasonable cost.
Plaintiff also disputes the defense counsel’s hourly rate of $470. Given counsel’s four years of experience in business litigation, the Court finds that $470 is a reasonable hourly rate. (Beaudin Decl. ¶ 4.)
Accordingly, the motion is GRANTED. Pursuant to CCP § 708.170(a)(2), plaintiff Edwin Minassian is ordered to pay $12,546.45, comprised of $7,285 in fees and $5,261.45 in costs, to defendants’ counsel within 30 days hereof. (Beaudin Decl. ¶¶ 15, 16 & Exs. H & J.)
Case Number: EC065533 Hearing Date: June 22, 2020 Dept: E
(1) MOTION FOR LEAVE TO WITHDRAW ADMISSIONS
(2) MOTION FOR RESTITUTION OF FUNDS PAID TO SATISFY A DEFAULT JUDGMENT
Date: 6/22/20 (3:30 PM)
Case: Edwin Minassian v. Michael Panosian et al. (EC065533)
I. BACKGROUND AND PRELIMINARY MATTERS
On February 7, 2017, pursuant to plaintiff Edwin Minassian’s motion, the Court ordered Requests for Admission admitted against defendants Michael Panosian and Toughbuilt Industries, Inc. (Anderson Decl. ¶ 5 & Ex. A.) Based on defendants’ failure to respond to discovery, including the Requests for Admission, the Court subsequently granted plaintiff’s motion for terminating sanctions and struck the answer filed by defendants. (See 5/4/17 minute order.) Ultimately, plaintiff obtained a default judgment against defendants for $235,541.58 and a 7% interest in Toughbuilt. (Anderson Decl. ¶ 14 & Ex. N.) The Court of Appeal reversed the judgment in a decision issued November 1, 2019, and ordered that the trial court grant defendants’ CCP § 473(b) motion for relief from default and permit them to file an Answer. (Anderson Decl. ¶ 18 & Ex R.) The remittitur issued December 3, 2019. (Anderson Decl. Ex. S.)
Pursuant to the Court of Appeal’s direction, the Court hereby vacates the entry of default against both defendants nunc pro tunc as of December 3, 2019. Accordingly, defendants’ unsigned Answer, filed February 4, 2020, shall be deemed filed as of that date upon their filing a signed Answer with the Court within 10 days hereof. The Court also deems defendants’ filings in this Court subsequent to issuance of the remittitur to have been filed on the dates they were submitted to the Court.
II. DEFENDANTS’ MOTION FOR LEAVE TO WITHDRAW ADMISSIONS
Defendants Michael Panosian and Toughbuilt Industries, Inc.’s Motion for Leave to Withdraw Admissions is GRANTED.
As an initial matter, the Court rejects plaintiff’s argument that the instant motion is untimely because it was filed on February 3, 2020, approximately three years from February 7, 2017, the date on which the Requests for Admission were deemed admitted. CCP § 2033.300 does not set forth any time limit to file a motion for leave to withdraw admissions. Moreover, because defendants have been in default for essentially the entire period after the requests for admissions were deemed admitted, defendants have been prevented from appearing in the action to request withdrawal of the admissions. (See Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385-86 [“A defendant against whom a default has been entered is out of court
and is not entitled to take any further steps in the cause affecting plaintiff's right of action.”].) Defendants’ only remedy was to move to set aside the default and terminating sanctions leading to the default, which they did. Within two months of the Court of Appeals issuance of the remittitur, defendants brought the instant motion, which this Court finds to be timely.
On the merits, the Court notes that, in the affidavit of fault submitted in support of defendants’ § 473(b) motion to set aside default, defendants’ former counsel Lloyd Douglas Dix avers that, while representing defendants, his wife experienced severe seizures beginning in June 2016, after which he delegated work to other attorneys who then failed to handle the representation of defendants. (Anderson Decl. ¶ 9 & Ex. I [11/15/17 Dix Decl. ¶¶ 5, 8, 9].) Former counsel believed that defendants were being adequately represented, but later discovered through plaintiff’s meet and confer efforts that the attorneys to whom he delegated representation of defendants failed to answer discovery. (Dix Decl. ¶ 12, 13.) Neither former counsel nor anyone acting on his behalf informed defendants that they failed to respond to discovery responses or that the Court had deemed admitted the Requests for Admission. (Dix Decl. ¶¶ 13, 15, 16.) Former counsel further averred that the failure to respond to discovery was solely his fault. (Dix. Decl. ¶ 20.)
The policy behind allowing withdrawal of admissions is to prevent “undeserved windfalls” and favor “resolution of lawsuits on the merits.” (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 983.) Even though former counsel admits to stipulating to the order deeming the Requests for Admissions admitted, former counsel’s declaration explains that his preoccupation with his wife’s illness resulted in his complete failure to adequately supervise the attorneys charged with representing defendants and ultimate failure to oppose—indeed, his stipulation to accept—the Court’s decision deeming the Requests for Admissions admitted. Significantly, former counsel explains that defendants neither participated in nor were even aware of counsel’s failure to meet discovery obligations which led to the requests for admissions being deemed admitted. While the Court finds former counsel’s conduct (or lack of conduct, to be precise) shocking and worthy of reprove, the Court also finds that, under the circumstances, former counsel’s neglect in failing to respond to the Requests for Admission was excusable, or, at the very least, not clearly inexcusable. (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1420–21 [“Because the law strongly favors trial and disposition on the merits, any doubts in applying section 2033.300 must be resolved in favor of the party seeking relief. Accordingly, the court's discretion to deny a motion under the statute is limited to circumstances where it is clear that the mistake, inadvertence, or neglect was inexcusable . . . .”].)
While it is also true that the Court of Appeal’s order reversing the default judgment does not discuss this Court’s order deeming the Requests for Admission admitted, it is clear that deeming requests for admission admitted here would effectively operate as a terminating sanction. For example, Requests for Admission Nos. 7-12 if deemed admitted would establish conclusively plaintiff’s claims that defendants agreed to provide plaintiff a 7% interest in Toughbuilt, a position in Toughbuilt, and a salary and commissions in exchange for plaintiff’s assistance in developing a cell phone for Toughbuilt. (Compare Motion, Exs. 1, 2 with Compl. ¶¶ 67-70.) The Court of Appeal has found that, based on the same attorney affidavit of fault, defendants are entitled to relief both from default and from the order granting terminating sanctions. (See Anderson Decl. Ex. S at pp. 11-13.) Where, as here, the order deeming requests for admission
admitted amounts to a terminating sanction and resulted from the same attorney fault that led to the order for terminating sanctions and entry of default, it would be an empty gesture for defendants to prevail on appeal with respect to the order for terminating sanctions and entry of default if the order deeming Requests for Admissions admitted were permitted to stand. (Matera v. McLeod (2006) 145 Cal.App.4th 44, 62 [“To vacate the defaults without reinstating defendants' answer would be an empty gesture.”].)
The Court also finds plaintiff would not be prejudiced by the withdrawal of admissions, because there is no showing that plaintiff could not otherwise proceed with discovery and prove the elements of his case.
For the foregoing reasons, the motion is GRANTED. Defendants Michael Panosian and Toughbuilt Industries, Inc.’s admissions to plaintiff Edwin Minassian’s Requests for Admissions, Set One are withdrawn. Defendants’ responses to the Requests for Admissions attached to the motion as Exhibits 1 and 2 are deemed the operative responses.
In the exercise of its discretion under CCP § 2033.300, the Court denies plaintiff’s request for reimbursement of costs. In this regard, the Court notes, as detailed below, that, in connection with the motion for terminating sanctions and other motions to compel discovery, the trial court imposed monetary sanctions, which were incorporated into the default judgment and paid by defendants.
III. DEFENDANTS’ MOTION FOR RESTITUTION OF FUNDS
Defendants Michael Panosian and Toughbuilt Industries, Inc.’s Motion for Restitution of Funds Paid to Satisfy a Reversed Default Judgment is GRANTED IN PART.
As discussed above, on April 12, 2018, default judgment was entered against defendants Michael Panosian and Toughbuilt Industries, Inc., awarding plaintiff Minassian $235,541.58 and a 7% ownership interest in Toughbuilt. On September 13, 2018, to avoid the time and expense of a judgment debtor examination, defendants satisfied the judgment by paying plaintiff $252,949 (which included 10% interest on the judgment) and by providing 376,367 shares of common stock of Toughbuilt. (Anderson Decl. ¶¶ 17, 18 & Exs. Q, S.)
Because the default judgment was reversed by the Court of Appeal, defendants are entitled to restitution under CCP § 908, which this Court is authorized to award. (Gunderson v. Wall (2011) 196 Cal.App.4th 1060, 1065 [recognizing a court whose order or judgment has been reversed has the “inherent power” to provide restitution under section 908].) In doing so, “[t]he fundamental rule guiding the court in [such] proceeding[s] [i]s, so far as possible, to place the parties in as favorable a position as they could have been in had the judgments not been enforced pending appeal.” (Ibid.)
The Court takes judicial notice of the declarations plaintiff Minassian and his counsel Trevor R. Hiddin submitted in support of the default judgment entered by the Court. Those declarations make clear that the $235,541.58 requested of and entered by the Court in its default judgment contained unpaid amounts awarded by the Court for fees and sanctions independent of plaintiff’s
claim for damages in the complaint. (See Minassian Decl. ¶¶ 38(a), (d) & (e) [filed 4/2/18]; Hindin Decl. ¶¶ 8, 11, 18 [filed 4/2/18].) Specifically, the default judgment encompasses: (1) $3,960 in monetary sanctions for defendants’ discovery violations, payable within 30 days of a 2/3/17 hearing (see 2/7/17 Order); (2) $860 in monetary sanctions for discovery violations, payable within 30 days of a 4/14/17 hearing (see 4/14/17 Minute Order); and (3) $21,040 and $220 in mandatory attorneys’ fees and costs under CCP § 425.16 to Minassian as the prevailing party on his special motion to strike the cross-complaint (see 4/21/17 Notice of Ruling). The orders imposing these fees and costs (totaling $26,080) were not appealed from and remain valid.
Accordingly, the Court finds that defendants are entitled to restitution in the amount of $226,869, which is based on the $252,949 defendants paid in satisfaction of the judgment on September 13, 2018 (Anderson Decl. ¶ 17 & Exs.Q, R, S), minus the aforementioned $26,080 in fees and costs to which plaintiff is still entitled. In addition, with respect to the $226,869 in restitution, the Court also finds that defendants are entitled to 10% interest from the September 13, 2018 date of satisfaction. The Court finds the 10% interest rate to fairly place the parties in the position they would have been had the judgment not been paid. Indeed, the Court notes in this regard that, if plaintiffs had instead prevailed on appeal and the judgment remained unsatisfied, plaintiff would have been entitled to the statutory post-judgment interest rate of 10% per annum on the unpaid award.
The Court additionally orders that, pursuant to CCP § 908, plaintiff return to defendants the 7% interest in Toughbuilt Industries, Inc., namely, the 376,367 shares of common stock.
For the foregoing reasons, the defendants’ Motion for Restitution is GRANTED IN PART. Plaintiff shall make such restitution as ordered herein within 15 days hereof.