FERESHTEH NASSEH VS. ROSS REGHABI, ESQ., ET AL.

Tentative Rulings

Case Number: ****7770    Hearing Date: August 11, 2020    Dept: F49

Dept. F-49

Calendar # 5

Date: 8-11-20 c/f 7-16-20 c/f 5-15-20

Case #****7770

APPLICATION FOR DISBURSEMENT OF DEPOSIT

MOVING PARTY: Defendants/Cross-Complainants, Akbar Ghovanlo, et al.

RESPONDING PARTY: Unopposed, Plaintiff/Cross-Defendant, Fereshteh Nasseh

RELIEF REQUESTED

Application for Disbursement of Cash Deposit

SUMMARY OF ACTION

In 2002, Plaintiff Nasseh came into contact with Defendant Akbar “Alex” Ghovanlo, an “experienced investment advisor who would help her with [Plaintiff] with her retirement planning, and handle her finances when she was deployed in the Navy overseas.” In 2007, on the advice of Ghovanlo, Plaintiff agreed to purchase a certain condominium unit in Calabasas for a price of $550,000. According to Plaintiff, the condominium unit was in fact owned by Govanlo, and therefore the purchase was part of a scheme to sell the property at an inflated value.

Plaintiff purchased the property with help in part through the execution of a $55,000 deed of trust executed to Ghovanlo.

A default was declared on January 23, 2017 and a foreclosure sale was set for May 26, 2017.

On May 23, 2017, Plaintiff filed a complaint for fraud, violation of Civil Code section 2923.57, cancellation of written instrument, breach of fiduciary duty, accounting, declaratory relief and injunctive relief. On November 17, 2017, the court granted the ex parte application enjoining the foreclosure sale. On November 27, 2017, Ghovanlo answered the complaint, and filed a verified cross-complaint for judicial foreclosure.

On December 27, 2017, the court granted the motion for preliminary injunction, and ordered Plaintiff to post a bond of $25,000. Plaintiff deposited $25,000 in cash with the court on March 8, 2018.

On March 1, 2018 Plaintiff dismissed T.D. Foreclosure Services, Inc.

On January 30, 2019 and March 15, 2019, the court granted the discovery motions of Defendants/Cross-Complainants Akbar Ghovanloo to compel responses to request for production of documents (set one), special interrogatories, and deem admissions admitted. On June 24, 2019, the Court granted the motion for terminating sanctions. The Court also granted terminating sanctions to Ross Reghabhi and The Ghonvalo Family Trust based on the failure to comply with prior discovery orders. The trial date was vacated and answer to the cross-complaint struck as well. The Court entered judgment in favor of Defendants on July 31, 2019, including damages and attorneys fees of $157,632.35 and $55,577.66.

RULING: Granted.

Defendants Akbar Ghovanloo, et al. move for the disbursement of the $25,000 cash deposit. Defendants seek the deposit pursuant to Code of Civil Procedure section 995.750. et seq. The sections provide in relevant part:

(a) The principal shall pay the amount of the liability on the deposit within 30 days after the date on which the judgment of liability becomes final.

Code Civ. Proc., ; 995.750

(a) If the principal does not pay the amount of the liability on the deposit within the time prescribed in Section 995.750, the deposit shall be collected, sold, or otherwise applied to the liability upon order of the court that entered the judgment of liability, made upon five days' notice to the parties.

…

(c) The deposit shall be distributed in the following order:

(1) First, to pay the cost of collection, sale, or other application of the deposit.

(2) Second, to pay the judgment of liability of the principal on the deposit.

(3) Third, the remainder, if any, shall be returned to the principal.

Code Civ. Proc., ; 995.760

A deposit given pursuant to this article shall be returned to the principal at the earliest of the following times:

(a) Upon substitution of a sufficient bond for the deposit. The bond shall be in full force and effect for all liabilities incurred, and for acts, omissions, or causes existing or which arose, during the period the deposit was in effect.

(b) The time provided by Section 995.360 for return of a bond.

(c) The time provided by statute for return of the deposit.

Code Civ. Proc., ; 995.770

The funds were deposited by Plaintiff as a condition of the preliminary injunction. (Code Civ. Proc., ; 529, subd. (a).) The purpose of the bond requirement is to protect a party against a protected interest of the enjoined party. (Hummell v. Republic Fed. Savings & Loan Assn. (1982) 133 Cal.App.3d 49, 51–52.) The admitted dissolving of the injunction and entry of judgment in favor of defendants removed any need for further protection of any enjoined interest.

At the July 16, 2020 hearing on the motion, the court ordered supplemental briefs on the issue of liability against Plaintiff for purposes of collecting on the cash deposited with the court. Defendants supplemental brief contends that the dismissal of the action and dissolution of the preliminary injunction establishes a basis of liability against the bond. (Wilshire Mortg. Corp. v. O.A. Graybeal Co. (1940) 41 Cal.App.2d 1, 6; Adams v. National Auto. Ins. Co. (1943) 56 Cal.App.2d 905, 910-911.)

The court agrees with moving defendants. The injunction enjoining the foreclosure sale was fundamental to the action. Defendants/Cross-Complainants sustained damages as a result of the injunction. The dismissal of the action, including the dissolution of the injunction, rendered the bond subject to liability.

The Court entered judgment in favor of Defendants on July 31, 2019, which included damages of $157,632.35. The amount awarded exceeds the amount of the deposit. Disbursement is ordered pursuant to the guidelines of Code of Civil Procedure section 995.760, subdivision (c)(1-2). The declaration of counsel states costs of $3,772.50 associated with collection, thereby leaving a balance of $21,227.50 for payment on the judgment. [Ruiz Decl.]

Moving parties to give notice.

Case Number: ****7770    Hearing Date: July 16, 2020    Dept: F49

Dept. F-49

Calendar # 5

Date: 7-16-20 c/f 5-15-20

Case #****7770

APPLICATION FOR DISBURSEMENT OF DEPOSIT

MOVING PARTY: Defendants/Cross-Complainants, Akbar Ghovanlo, et al.

RESPONDING PARTY: Plaintiff/Cross-Defendant, Fereshteh Nasseh

RELIEF REQUESTED

Application for Disbursement of Cash Deposit

SUMMARY OF ACTION

In 2002, Plaintiff Nasseh came into contact with Defendant Akbar “Alex” Ghovanlo, an “experienced investment advisor who would help her with [Plaintiff] with her retirement planning, and handle her finances when she was deployed in the Navy overseas.” In 2007, on the advice of Ghovanlo, Plaintiff agreed to purchase a certain condominium unit in Calabasas for a price of $550,000. According to Plaintiff, the condominium unit was in fact owned by Govanlo, and therefore the purchase was part of a scheme to sell the property at an inflated value.

Plaintiff purchased the property with help in part through the execution of a $55,000 deed of trust executed to Ghovanlo.

A default was declared on January 23, 2017 and a foreclosure sale was set for May 26, 2017.

On May 23, 2017, Plaintiff filed a complaint for fraud, violation of Civil Code section 2923.57, cancellation of written instrument, breach of fiduciary duty, accounting, declaratory relief and injunctive relief. On November 17, 2017, the court granted the ex parte application enjoining the foreclosure sale. On November 27, 2017, Ghovanlo answered the complaint, and filed a verified cross-complaint for judicial foreclosure.

On December 27, 2017, the court granted the motion for preliminary injunction, and ordered Plaintiff to post a bond of $25,000. Plaintiff deposited $25,000 in cash with the court on March 8, 2018.

On March 1, 2018 Plaintiff dismissed T.D. Foreclosure Services, Inc.

On January 30, 2019 and March 15, 2019, the court granted the discovery motions of Defendants/Cross-Complainants Akbar Ghovanloo to compel responses to request for production of documents (set one), special interrogatories, and deem admissions admitted. On June 24, 2019, the Court granted the motion for terminating sanctions. The Court also granted terminating sanctions to Ross Reghabhi and The Ghonvalo Family Trust based on the failure to comply with prior discovery orders. The trial date was vacated and answer to the cross-complaint struck as well. The Court entered judgment in favor of Defendants on July 31, 2019, including damages and attorneys fees of $157,632.35 and $55,577.66.

RULING: Denied

Defendants Akbar Ghovanloo, et al. move for the disbursement of the $25,000 cash deposit. Defendants seek the deposit pursuant to Code of Civil Procedure section 995.750. et seq. The sections provide in relevant part:

(a) The principal shall pay the amount of the liability on the deposit within 30 days after the date on which the judgment of liability becomes final.

Code Civ. Proc., ; 995.750

(a) If the principal does not pay the amount of the liability on the deposit within the time prescribed in Section 995.750, the deposit shall be collected, sold, or otherwise applied to the liability upon order of the court that entered the judgment of liability, made upon five days' notice to the parties.

…

(c) The deposit shall be distributed in the following order:

(1) First, to pay the cost of collection, sale, or other application of the deposit.

(2) Second, to pay the judgment of liability of the principal on the deposit.

(3) Third, the remainder, if any, shall be returned to the principal.

Code Civ. Proc., ; 995.760

A deposit given pursuant to this article shall be returned to the principal at the earliest of the following times:

(a) Upon substitution of a sufficient bond for the deposit. The bond shall be in full force and effect for all liabilities incurred, and for acts, omissions, or causes existing or which arose, during the period the deposit was in effect.

(b) The time provided by Section 995.360 for return of a bond.

(c) The time provided by statute for return of the deposit.

Code Civ. Proc., ; 995.770

The court only required the deposit of funds or a bond as a condition of the preliminary injunction. (Code Civ. Proc., ; 529, subd. (a).) The purpose of the bond requirement is to protect a party against a protected interest of the enjoined party. (Hummell v. Republic Fed. Savings & Loan Assn. (1982) 133 Cal.App.3d 49, 51–52.) The admitted dissolving of the injunction and entry of judgment in favor of defendants removed any need for further protection of any enjoined interest.

Even assuming the deposit were subject to collection by Defendants, nothing in the motion establishes the applicability of section 995.760. Defendants present no evidence of any responsibility by a principal for the payment of any liability, and a basis of entitlement for said funds, even if a principal owed funds.

Defendants therefore fail to establish any basis for the recovery of said deposit. The motion is denied.

Moving parties to give notice.