This case was last updated from Los Angeles County Superior Courts on 05/24/2019 at 05:01:58 (UTC).

YORAM YEHUDA ET AL VS ARTURO RUBINSTEIN ET AL

Case Summary

On 04/27/2017 YORAM YEHUDA filed a Contract - Business lawsuit against ARTURO RUBINSTEIN. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are RICHARD FRUIN and RANDOLPH M. HAMMOCK. The case status is Other.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****9534

  • Filing Date:

    04/27/2017

  • Case Status:

    Other

  • Case Type:

    Contract - Business

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

RICHARD FRUIN

RANDOLPH M. HAMMOCK

 

Party Details

Plaintiffs, Petitioners and Respondents

YEHUDA YORAM

MALIBU DEVELOPMENT AND CONSTRUCTION

Defendants, Respondents and Appellants

FAB ROCK INVESTMENTS LLC

RUBINSTEIN ARTURO

DOES 1 TO 50

YEHUDA YORAM

MALIBU DEVELOPMENT AND CONSTRUCTION

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

LEBEDEV MICHAEL & HELMI A P.L.C.

HELMI-KABIR SAM

LEBEDEV GENNADY LEONID

Defendant Attorneys

BURRILL BETHANY RENEE

GROSSMAN BRIAN MATTHEW ESQ.

 

Court Documents

EX PARTE APPLICATION TO ADVANCE HEARING DATE ON DEFENDANTS' MOTION TO STAY ALL PROCEEDINGS; DECLARATION OF BETHANY R. BURRILL IN SUPPORT THEREOF

9/28/2018: EX PARTE APPLICATION TO ADVANCE HEARING DATE ON DEFENDANTS' MOTION TO STAY ALL PROCEEDINGS; DECLARATION OF BETHANY R. BURRILL IN SUPPORT THEREOF

Reply

10/25/2018: Reply

Stipulation and Order to use Certified Shorthand Reporter

11/1/2018: Stipulation and Order to use Certified Shorthand Reporter

Stipulation and Order to use Certified Shorthand Reporter

11/26/2018: Stipulation and Order to use Certified Shorthand Reporter

Minute Order

12/4/2018: Minute Order

Notice of Lien

12/5/2018: Notice of Lien

Notice

1/15/2019: Notice

Motion for Order

1/17/2019: Motion for Order

Unknown

1/22/2019: Unknown

Reply

2/6/2019: Reply

Minute Order

2/14/2019: Minute Order

Notice of Lodging

2/14/2019: Notice of Lodging

Unknown

5/8/2019: Unknown

Proof of Service by Mail

5/14/2019: Proof of Service by Mail

COMPLAINT FOR: 1. BREACH OF FIDUCIARY DUTY; ETC

4/27/2017: COMPLAINT FOR: 1. BREACH OF FIDUCIARY DUTY; ETC

AFFIDAVIT OF PREJUDICE PEREMPTORY CHALLENGE TO JUDICIAL OFFICER

5/8/2017: AFFIDAVIT OF PREJUDICE PEREMPTORY CHALLENGE TO JUDICIAL OFFICER

Unknown

8/21/2017: Unknown

NOTICE OF JUDGMENT LIEN (CCP 708.410)

8/30/2017: NOTICE OF JUDGMENT LIEN (CCP 708.410)

79 More Documents Available

 

Docket Entries

  • 05/14/2019
  • Appeal - Ntc Designating Record of Appeal APP-003/010/103; Filed by Arturo Rubinstein (Defendant); Fab Rock Investments LLC (Defendant)

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  • 05/14/2019
  • Proof of Service by Mail; Filed by Arturo Rubinstein (Defendant); Fab Rock Investments LLC (Defendant)

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  • 05/08/2019
  • Appeal - Notice of Filing of Notice of Appeal (for Notice of Appeal, filed 5/2/19); Filed by Clerk

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  • 05/02/2019
  • Appeal - Notice of Appeal/Cross Appeal Filed; Filed by Fab Rock Investments LLC (Appellant); Arturo Rubinstein (Appellant)

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  • 04/02/2019
  • Motion to Tax Costs; Filed by Arturo Rubinstein (Defendant); Fab Rock Investments LLC (Defendant)

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  • 03/19/2019
  • Memorandum of Costs (Summary); Filed by Yoram Yehuda (Plaintiff); Malibu Development and Construction (Plaintiff)

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  • 03/19/2019
  • Motion for Attorney Fees; Filed by Yoram Yehuda (Plaintiff); Malibu Development and Construction (Plaintiff)

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  • 03/15/2019
  • Notice (of Entry of Judgment); Filed by Yoram Yehuda (Plaintiff)

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  • 03/14/2019
  • Abstract of Judgment - Civil and Small Claims; Filed by Yoram Yehuda (Plaintiff); Malibu Development and Construction (Plaintiff)

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  • 03/11/2019
  • Judgment; Filed by Yoram Yehuda (Plaintiff); Malibu Development and Construction (Plaintiff)

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119 More Docket Entries
  • 05/12/2017
  • Proof of Service (not Summons and Complaint); Filed by Plaintiff/Petitioner

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  • 05/12/2017
  • PROOF OF SERVICE SUMMONS

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  • 05/09/2017
  • at 00:00 AM in Department 15; Unknown Event Type - Held - Motion Granted

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  • 05/09/2017
  • Minute Order

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  • 05/09/2017
  • Minute order entered: 2017-05-09 00:00:00; Filed by Clerk

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  • 05/08/2017
  • AFFIDAVIT OF PREJUDICE PEREMPTORY CHALLENGE TO JUDICIAL OFFICER

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  • 04/27/2017
  • Complaint; Filed by Yoram Yehuda (Plaintiff); Malibu Development and Construction (Plaintiff)

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  • 04/27/2017
  • SUMMONS

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  • 04/27/2017
  • COMPLAINT FOR: 1. BREACH OF FIDUCIARY DUTY; ETC

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  • 04/27/2017
  • NOTICE OF RELATED CASE

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Tentative Rulings

Case Number: BC659534    Hearing Date: March 11, 2020    Dept: 47

Yoram Yehuda dba Malibu Development and Construction v. Arturo Rubinstein, et al.

 

(1) MOTION TO OFFSET JUDGMENT; (2) THIRD-PARTY PARVIZ FAKHERI aka PARIS FAKHERI’S MOTION TO OFFSET JUDGMENT

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff alleged that he was entitled to reimbursement of his capital contributions pursuant to an oral joint venture agreement by Defendants pertaining to the flipping of real property after the property had been sold for a profit.

Defendants Arturo Rubenstein and Fab Rock Investments move to offset the judgment. Additionally, Third-Party Parviz Fakheri also moves to offset the judgment.

TENTATIVE RULING:

Defendants Arturo Rubenstein and Fab Rock Investments, LLC’s motion to offset judgment is GRANTED. The entire judgment of $1,193,735.68 as of the date of this Order is offset by Defendants’ larger judgment against Plaintiff in the Florida district court action. Accordingly, Defendants are entitled to have the entire judgment in this action deemed “satisfied in full,” in exchange for a reduction of $1,193,735.68 from the judgment Defendants maintain against Plaintiff.

Third-Party Parviz Fakheri aka Paris Fakheri’s motion to offset judgment is DENIED.

Pursuant to CCP § 724.050(d), the Court orders the clerk of the court to enter full satisfaction of judgment in this action.

DISCUSSION:

  1. Motion To Offset Judgment: Arturo Rubinstein and Fab Rock Investments, LLC

Requests for Judicial Notice

Defendants request judicial notice of (A) the judgment in this action, entered March 11, 2019; (B) a minute order entered in this action on July 1, 2019; (C) a stipulation and order re: costs entered in this action on July 12, 2019; (D) the final judgment entered in Rubenstein v. The Keshet Inter Vivos Trust, et al., United States District Court for the Southern District of Florida, Case No. 0:17-cv-61019-KMW on August 27, 2019; and (E) the ruling on motion to stay enforcement of judgment entered in this action on February 14, 2019.

These requests for judicial notice are GRANTED per Evidence Code § 452(d) (court records).

Plaintiff requests judicial notice of (1) Defendants Yoram Yehuda, Sharona Yehuda and the Keshet Inter Vivos Trust’s Motion to Alter or Amend the Judgment and Renewed Motion for Judgment as a Matter of Law, filed on September 24, 2019, in Rubenstein v. The Keshet Inter Vivos Trust, et al., United States District Court for the Southern District of Florida, Case No. 0:17-cv-61019-KMW; and (2) the same Defendants’ Reply in Further Support of their Motion to Alter or Amend the Judgment, filed on December 9, 2019, in the same case.

These requests are GRANTED per Evidence Code § 452(d) (court records).

Analysis

“Where cross-demands for money have existed between persons at any point in time . . . , and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other . . . .” (CCP § 431.70.) Here, Defendants Arturo Rubinstein and Fab Rock Investments, LLC asserted the defense of offset in their answer to Plaintiff’s complaint: their fourteenth affirmative defense alleges that “[a]ny damages which Defendant may owe to Plaintiff are offset by damages owed by Plaintiff to Defendants.” (Answer, at p. 5 ¶ 14.)

On August 27, 2019, in Rubenstein v. The Keshet Inter Vivos Trust, et al., United States District Court for the Southern District of Florida, Case No. 0:17-cv-61019-KMW, Defendants Arturo Rubenstein and Fab Rock Investments obtained a judgment against Plaintiff Yoram Yehuda and others in the amount of $3,500,000, not including interest pursuant to 28 U.S.C. § 1961. (Defendants’ RJN, Exh. D.)

In this case, on March 11, 2019, Plaintiff obtained a judgment against Defendants in the amount of $1,112,652.36, including costs and attorneys’ fees, not including interest accruing at 10%. (Defendants’ RJN, Exhs. A-C.) Although Defendants have not submitted any actual interest calculations, they assert that the amount of the judgment, with interest, will be $1,200,446.28 as of the scheduled hearing date for this motion (December 24, 2019). (Motion, at p. 3.)

Accordingly, Defendants now seek to offset the judgment obtained by Plaintiff in this action, in its entirety, against the larger judgment of $3.5 million plus interest obtained by Defendants against Plaintiff in a Florida federal district court.

The doctrine of equitable offset provides “a means by which a debtor may satisfy in whole or in part a judgment or claim held against him out of a judgment or claim which he has subsequently acquired against his judgment creditor.” (Salaman v. Bolt (1977) 74 Cal.App.3d 907, 918.) This right “exists independently of statute and rests upon the inherent power of the court to do justice to the parties before it.” (Ibid.) An offset is “founded on the equitable principle that ‘either party to a transaction involving mutual debts and credits can strike a balance, holding himself owing or entitled to the net difference.’ ” (Granberry v. Islay Investments (1995) 9 Cal.4th 738, 744.)

Offsets are routinely allowed in actions to enforce a money judgment. (Brienza v. Tepper (1995) 35 Cal.App.4th 1839, 1847; Salaman, supra, 74 Cal.App.3d at 918; Margott v. Gem Properties, Inc. (1973) 34 Cal.App.3d 849, 854.) Indeed, the offset of judgment against judgment is “a matter of right absent the existence of facts establishing competing equities or an equitable defense precluding the offset.” (Keith G. v. Suzanne H. (1998) 62 Cal.App.4th 853, 859.)

Plaintiff argues that the federal judgment cannot be used to offset the judgment in this case because the parties have filed post-trial motions in the federal case and therefore there is “uncertainty surrounding the Florida judgment,” which could still be altered. (Plaintiff’s RJN, Exhs. 1, 2; Oppo., at p. 5.) Plaintiff also argues that the judgment in that case has not been registered in California and therefore cannot be enforced in California.

As to the potential for the federal judgment to be altered in light of post-trial motions, perhaps William Shakespeare said it best: “Until I know this sure uncertainty, I’ll entertain the offered fallacy.”[1] As Defendants note, even the judgment in this case is “uncertain” in the sense that Defendants have appealed it. It is nevertheless final and would be enforceable had Defendants not successfully sought to stay enforcement of the judgment in light of the Florida federal action. (Defendants’ RJN, Exh. E.) Similarly, the judgment in the Florida federal action is final. Under Federal Rule of Civil Procedure 62, enforcement of a judgment is automatically stayed for 30 days after its entry, “unless the court orders otherwise.” (FRCP 62(a).) That thirty-day period has already expired, however, and absent any order to the contrary, that judgment is final. (Hyan v. Hummer (9th Cir. 2016) 825 F.3d 1043, 1046 [“A decision is final when it ‘ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.’”].)

As to Plaintiff’s argument that the Florida federal judgment has not been registered in California and therefore cannot be enforced here, Defendants are not seeking to enforce that judgment in California. Rather, Defendants are asking this Court to recognize that Plaintiff owes them a money judgment that offsets the amount they owe Plaintiff based on this Court’s judgment. If this Court could not offset the judgment in this manner, it would not have made sense to stay enforcement of this judgment until the Florida federal matter was resolved, as this Court did. (Defendants’ RJN, Exh. E.) Indeed, in deciding to stay enforcement, this Court noted that Plaintiff “is a practitioner of making himself judgment-proof against judgment creditors” and that “[e]quity is served by waiting to see who comes out ahead once the above litigation . . . concludes.” (Id. at p. 7.) Having come out ahead, Defendants are entitled to an offset of this judgment. Should the Florida court or this Court, or an appellate court, conclude in the future that either judgment must be modified, the amount of this offset will necessarily be taken into account.

At the original hearing of this motion, the Court ordered Defendants’ counsel to file a supplemental declaration regarding how they are being harmed by the judgment in the case, given that the enforcement of this judgment has been stayed. Defendant Arturo Rubinstein declares that he is being harmed because post-judgment interest is accruing on this judgment at $304 per day, while post-judgment interest on the Florida judgment is only accruing at about $167 per day. (Declaration of Arturo Rubinstein ¶ 2.) Rubinstein also notes that Plaintiff has recorded abstracts of judgment against several of his properties, affecting his ability to refinance loans on one of those properties. (Id. ¶ 3.) Posting an appeal bond would not remedy these harms, as an appeal bond would also affect his ability to refinance and it might also result in Plaintiff being paid by the bonding company even though the Florida judgment exceeds this judgment. (Id. ¶¶ 4-5.) Rubinstein also notes that Plaintiff had filed a Notice of Lien in the Florida action, effectively attempting to obtain the same type of relief that Defendants seek here. (Id. ¶ 6.)

Plaintiff Yoram Yehuda and third-party judgment assignee Parviz Fakheri argue that Defendants have not shown any undue hardship or urgency and that there is no need to disturb the status quo based on Rubinstein’s Declaration. This conflates the burden of proof on a motion for offset, however. In general, offset is a matter of right, in the absence of facts establishing competing equities or an equitable defense precluding the offset. (Brienza v. Tepper (1995) 35 Cal.App.4th 1839, 1847-1848.) No such competing equities have been shown here.

At the hearing, Plaintiff also had argued that this motion was now moot because Plaintiff assigned his judgment to third-party Parviz Fakheri. The Court is unaware of any authority that would allow a party to circumvent another party’s right to offset, after a motion to offset has been filed, by assigning the judgment to another individual. Nor is the Court aware of any authority that would then permit the third-party assignee to seek offset in this case, in which the third-party assignee himself never obtained a judgment. That separate motion is discussed below. Here, it is sufficient to state that Plaintiff has not convinced the Court that an eleventh-hour assignment of the judgment to circumvent an offset is permissible or shifts the equities away from Defendants’ right to offset.

As to the amount of the offset, the Court’s calculations do not correspond to those of Defendants. Having not provided the Court with any actual interest calculations, the Court has reverse-engineered Defendants’ proposed amount and determined that they reached it by adding together the principal amount of the judgment ($866,171), the pre-judgment interest as of the date of the judgment ($162,081.10), the attorneys’ fees ($75,000), and the costs awarded ($9400.26), treated that total as the principal amount of the judgment, and calculated interest on that amount from the date of the judgment (March 11, 2019) to the date of this hearing (December 24, 2019). That is not how the Court’s Civil Judgment Interest Calculator works, however. Having entered the principal amount of the judgment including prejudgment interest ($1,028,252.10) and the attorney’s fees and costs into the Civil Judgment Interest Calculator, the Court arrives at a total judgment of $1,193,735.68. If either party believes that this calculation is in error, it may argue the specifics of its proposed calculation at the hearing. In the absence of any basis to reach any other calculation, the Court uses the amount generated by the Court’s calculator.

Accordingly, Defendants’ motion for offset is GRANTED. The Court concludes Defendants are entitled to have the entire judgment in this action extinguished, in exchange for a reduction of $1,193,735.68 from the judgment Defendants maintain against Plaintiff.

Pursuant to CCP § 724.050(d), the Court orders the clerk of the court to enter satisfaction of judgment in this action.

  1. Motion To Offset Judgment: Third-Party Parviz Fakheri

Request for Judicial Notice

Third-Party Parviz Fakheri requests judicial notice of (1) Plaintiff’s acknowledgment of assignment of judgment filed in this case, (2) the judgment entered in Case No. BC630004, Arturo Rubenstein v. Paris P. Fakheri, (3) the memorandum of costs (summary) filed in Case No. BC630004, (4) a minute order granting a motion to tax costs in Case No. BC630004, (5) the motion to offset judgment filed by Arturo Rubinstein in this case; (6) the motion to alter or amend the judgment and renewed motion for judgment as a matter of law filed in Rubenstein v. The Keshet Inter Vivos Trust, et al., United States District Court for the Southern District of Florida, Case No. 0:17-cv-61019-KMW on September 24, 2019, (7) the verdict following trial in Case No. BC630004, (8) Plaintiff Arturo Rubinstein’s closing argument in Case No. BC630004, (9) the Statement of Decision in this case, (10) Plaintiff’s Cross-Defendant’s Closing Brief in this case, and (11) the reporter’s transcript of the hearing on Defendant’s motion to offset judgment in this case.

These requests for judicial notice are GRANTED per Evidence Code § 452(d) (court records).

Analysis

Having been assigned the judgment in this case after the motion discussed above was filed, Third-Party Parviz Fakheri now argues that he is entitled to offset this judgment in favor of Plaintiff Yoram Yehuda with a judgment Fakheri obtained in another LASC case, Rubinstein v. Fakheri, BC630004.

“Where cross-demands for money have existed between persons at any point in time . . . , and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other . . . .” (CCP § 431.70 (bold emphasis added).) Fakheri was not a defendant in this action and therefore never asserted such a defense. In other words, Fakheri never alleged – and never had – any right to offset in this case. The fact that Fakheri is a third party to this action means that he never “obtained” a judgment in this case – it was assigned to him. There is a difference.

As an assignee, Fakheri “would normally be subject to any defenses, including set-off,” that Defendants had against Plaintiff, the assignor. (Koffman v. Modern-Imperial Co. (1966) 239 Cal.App.2d 135, 136.) In other words, the “assignee’s rights are no greater than the assignor.” (Casiopea Bovet, LLC v. Chiang (2017) 12 Cal.App.5th 656, 663.) Fakheri acquired Plaintiff’s judgment subject to the same defenses that could be asserted against Plaintiff, including offset.

In addition, as discussed in connection with Defendants’ motion, the doctrine of offset is equitable in nature. “[C]ompeting equities or an equitable defense” can preclude a party from seeking offset. (Keith G. v. Suzanne H. (1998) 62 Cal.App.4th 853, 859.) Here, the equities favor Defendants’ right to obtain the offset they sought before this judgment was assigned, given that the Court has already found that there are no competing equities that preclude Defendants’ offset. Fakheri has essentially repeated Plaintiff’s arguments in opposition to that motion in arguing that this motion should be granted, but those arguments were already rejected in the context of Defendants’ motion.

Accordingly, Third-Party Parviz Fakheri’s motion for offset is DENIED.

Moving parties to give notice, unless waived.

IT IS SO ORDERED.

Dated: March 11, 2020 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing.  All interested parties must be copied on the email.  It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.


[1] William Shakespeare, The Comedy of Errors: Third Series, at p. 192 (Bloomsbury Publishing).

Case Number: BC659534    Hearing Date: December 24, 2019    Dept: 47

Yoram Yehuda dba Malibu Development and Construction v. Arturo Rubinstein, et al.

 

MOTION TO OFFSET JUDGMENT

MOVING PARTY: Defendants Arturo Rubinstein and Fab Rock Investments, LLC

RESPONDING PARTY(S): Plaintiff Yoram Yehuda dba Malibu Development and Construction

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff alleged that he was entitled to reimbursement of his capital contributions pursuant to an oral joint venture agreement by Defendants pertaining to the flipping of real property after the property had been sold for a profit. Plaintiff obtained a judgment at trial against the Defendant for approximately $1.2 Million.

Defendants now move to offset the judgment.

TENTATIVE RULING:

Defendants Arturo Rubenstein and Fab Rock Investments, LLC’s motion to offset judgment is GRANTED. The entire judgment of $1,193,735.68 as of the date of this Order is offset by Defendants’ larger judgment against Plaintiff in the Florida district court action. Accordingly, Defendants are entitled to have the entire judgment in this action extinguished, in exchange for a reduction of $1,193,735.68 from the judgment Defendants maintain against Plaintiff.

Pursuant to CCP § 724.050(d), the Court orders the clerk of the court to enter full satisfaction of judgment in this action.

DISCUSSION:

Motion To Offset Judgment

Requests for Judicial Notice

Defendants request judicial notice of (A) the judgment in this action, entered March 11, 2019; (B) a minute order entered in this action on July 1, 2019; (C) a stipulation and order re: costs entered in this action on July 12, 2019; (D) the final judgment entered in Rubenstein v. The Keshet Inter Vivos Trust, et al., United States District Court for the Southern District of Florida, Case No. 0:17-cv-61019-KMW on August 27, 2019; and (E) the ruling on motion to stay enforcement of judgment entered in this action on February 14, 2019.

These requests for judicial notice are GRANTED per Evidence Code § 452(d) (court records).

Plaintiff requests judicial notice of (1) Defendants Yoram Yehuda, Sharona Yehuda and the Keshet Inter Vivos Trust’s Motion to Alter or Amend the Judgment and Renewed Motion for Judgment as a Matter of Law, filed on September 24, 2019, in Rubenstein v. The Keshet Inter Vivos Trust, et al., United States District Court for the Southern District of Florida, Case No. 0:17-cv-61019-KMW; and (2) the same Defendants’ Reply in Further Support of their Motion to Alter or Amend the Judgment, filed on December 9, 2019, in the same case.

These requests are GRANTED per Evidence Code § 452(d) (court records).

Analysis

“Where cross-demands for money have existed between persons at any point in time . . . , and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other . . . .” (CCP § 431.70.) Here, Defendants Arturo Rubinstein and Fab Rock Investments, LLC asserted the defense of offset in their answer to Plaintiff’s complaint: their fourteenth affirmative defense alleges that “[a]ny damages which Defendant may owe to Plaintiff are offset by damages owed by Plaintiff to Defendants.” (Answer, at p. 5 ¶ 14.)

On August 27, 2019, in Rubenstein v. The Keshet Inter Vivos Trust, et al., United States District Court for the Southern District of Florida, Case No. 0:17-cv-61019-KMW, Defendants Arturo Rubenstein and Fab Rock Investments obtained a judgment against Plaintiff Yoram Yehuda and others in the amount of $3,500,000, not including interest pursuant to 28 U.S.C. § 1961. (Defendants’ RJN, Exh. D.)

In this case, on March 11, 2019, Plaintiff obtained a judgment against Defendants in the amount of $1,112,652.36, including costs and attorneys’ fees, not including interest accruing at 10%. (Defendants’ RJN, Exhs. A-C.) Although Defendants have not submitted any actual interest calculations, they assert that the amount of the judgment, with interest, will be $1,200,446.28 as of the scheduled hearing date for this motion (December 24, 2019). (Motion, at p. 3.)

Accordingly, Defendants now seek to offset the judgment obtained by Plaintiff in this action, in its entirety, against the larger judgment of $3.5 million plus interest obtained by Defendants against Plaintiff in a Florida federal district court.

The doctrine of equitable offset provides “a means by which a debtor may satisfy in whole or in part a judgment or claim held against him out of a judgment or claim which he has subsequently acquired against his judgment creditor.” (Salaman v. Bolt (1977) 74 Cal.App.3d 907, 918.) This right “exists independently of statute and rests upon the inherent power of the court to do justice to the parties before it.” (Ibid.) An offset is “founded on the equitable principle that ‘either party to a transaction involving mutual debts and credits can strike a balance, holding himself owing or entitled to the net difference.’ ” (Granberry v. Islay Investments (1995) 9 Cal.4th 738, 744.)

Offsets are routinely allowed in actions to enforce a money judgment. (Brienza v. Tepper (1995) 35 Cal.App.4th 1839, 1847; Salaman, supra, 74 Cal.App.3d at 918; Margott v. Gem Properties, Inc. (1973) 34 Cal.App.3d 849, 854.) Indeed, the offset of judgment against judgment is “a matter of right absent the existence of facts establishing competing equities or an equitable defense precluding the offset.” (Keith G. v. Suzanne H. (1998) 62 Cal.App.4th 853, 859.)

Plaintiff argues that the federal judgment cannot be used to offset the judgment in this case because the parties have filed post-trial motions in the federal case and therefore there is “uncertainty surrounding the Florida judgment,” which could still be altered. (Plaintiff’s RJN, Exhs. 1, 2; Oppo., at p. 5.) Plaintiff also argues that the judgment in that case has not been registered in California and therefore cannot be enforced in California.

As to the potential for the federal judgment to be altered in light of post-trial motions, perhaps William Shakespeare said it best: “Until I know this sure uncertainty, I’ll entertain the offered fallacy.”[1] As Defendants note, even the judgment in this case is “uncertain” in the sense that Defendants have appealed it. It is nevertheless final and would be enforceable had Defendants not successfully sought to stay enforcement of the judgment in light of the Florida federal action. (Defendants’ RJN, Exh. E.) Similarly, the judgment in the Florida federal action is final. Under Federal Rule of Civil Procedure 62, enforcement of a judgment is automatically stayed for 30 days after its entry, “unless the court orders otherwise.” (FRCP 62(a).) That thirty-day period has already expired, however, and absent any order to the contrary, that judgment is final. (Hyan v. Hummer (9th Cir. 2016) 825 F.3d 1043, 1046 [“A decision is final when it ‘ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.’”].)

As to Plaintiff’s argument that the Florida federal judgment has not been registered in California and therefore cannot be enforced here, Defendants are not seeking to enforce that judgment in California. Rather, Defendants are asking this Court to recognize that Plaintiff owes them a money judgment that offsets the amount they owe Plaintiff based on this Court’s judgment. If this Court could not offset the judgment in this manner, it would not have made sense to stay enforcement of this judgment until the Florida federal matter was resolved, as this Court did. (Defendants’ RJN, Exh. E.) Indeed, in deciding to stay enforcement, this Court noted that Plaintiff “is a practitioner of making himself judgment-proof against judgment creditors” and that “[e]quity is served by waiting to see who comes out ahead once the above litigation . . . concludes.” (Id. at p. 7.) Having come out ahead, Defendants are entitled to an offset of this judgment. Should the Florida court or this Court, or an appellate court, conclude in the future that either judgment must be modified, the amount of this offset will necessarily be taken into account.

As to the amount of the offset, the Court’s calculations do not correspond to those of Defendants. Having not provided the Court with any actual interest calculations, the Court has reverse-engineered Defendants’ proposed amount and determined that they reached it by adding together the principal amount of the judgment ($866,171), the pre-judgment interest as of the date of the judgment ($162,081.10), the attorneys’ fees ($75,000), and the costs awarded ($9,400.26), treated that total as the principal amount of the judgment, and calculated interest on that amount from the date of the judgment (March 11, 2019) to the date of this hearing (December 24, 2019). That is not how the Court’s Civil Judgment Interest Calculator works, however. Having entered the principal amount of the judgment including prejudgment interest ($1,028,252.10) and the attorney’s fees and costs into the Civil Judgment Interest Calculator, the Court arrives at a total judgment of $1,193,735.68. If either party believes that this calculation is in error, it may argue the specifics of its proposed calculation at the hearing. In the absence of any basis to reach any other calculation, the Court uses the amount generated by the Court’s calculator.[2]

Accordingly, Defendants’ motion for offset is GRANTED. The Court concludes Defendants are entitled to have the entire judgment in this action extinguished, in exchange for a reduction of $1,193,735.68 from the judgment Defendants maintain against Plaintiff.

Pursuant to CCP § 724.050(d), the Court orders the clerk of the court to enter satisfaction of judgment in this action.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: December 24, 2019 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing.  All interested parties must be copied on the email.  It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.


[1] William Shakespeare, The Comedy of Errors: Third Series, at p. 192 (Bloomsbury Publishing).

[2] Of course, it is up to the Florida district court to determine, if needed, the exact amount of said reduction to its judgment.