Case Number: TC029184 Hearing Date: February 05, 2019 Dept: A

# 11. David Azizi v. Behnam Rafalian, et al.

Case No.: TC029184

Matter on calendar for: demurrer to cross-complaint

Tentative ruling:

I. Background

Plaintiff David Azizi, as an independent trustee for the Shamsam Irrevocable Trust, brought this action against defendants Behnam Rafalian, Carson Town Center L.P. (“Carson LP”), 500 Carson Town Center LLC (“Carson LLC”), and Western Alliance Bank, for alleged violations of Rafalian’s duties as a constructive trustee.

On April 29, 2005, Rafalian and Ray Haeim commenced a civil suit (SC085372) against Shahram Elyaszadeh (“Ely”). The suit concerned the property at 500 Carson Town Center, Carson, California 90745-1446. Ely filed a cross-complaint. On November 6, 2006, judgment was entered in favor of Ely and a constructive trust was imposed on Rafalian to safeguard Ely’s 50% ownership in the property.

On February 29, 2012, Ely assigned his interest to Azizi, as trustee. On November 30, 2017, Rafalian conveyed the property to Carson LP without Azizi’s knowledge. Rafalian is a partner in Carson LP and owns a 79.20% interest. The general partner in Carson LP is Carson LLC. Rafalian has an 80% membership interest in Carson LLC. Rafalian then granted a Deed of Trust to Western in the amount of $21,575,000.

The complaint alleges the following causes of action:

(1) Breach of fiduciary duty;

(2) Accounting;

(3) Conversion

(4) Declaratory relief;

(5) Fraudulent transfer; and

(6) Quiet title

On June 29, 2018, Azizi dismissed the sixth cause of action for quiet title and all defendants except Rafalian and Does, without prejudice. On October 26, 2018, Rafalian filed a cross-complaint alleging fraudulent conveyance and transfer of property.

Azizi demurs to the cross-complaint. Rafalian filed an untimely opposition, which the Court considered. The Court notes that the opposition was not filed with enough time for Azizi to respond.

For the reasons set forth below, the Court overrules the demurrer.

II. Standard

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; 2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.App.3d 311, 318.) The Court may not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.) Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show that the complaint alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (C.C.P. § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.)

Sufficient facts are the essential facts of the case “with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) “Whether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer.” (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.)

Under Code Civil Procedure § 430.10(f), a demurrer may also be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

III. Analysis

The Court takes judicial notice of the court record in Ray Haeim, et al. v. Sean Ely, et al. (SC085372).

The cross-complaint at issue here alleges that Ely became indebted to Rafalian in 2007–2012. Although Ely was awarded the 50% interest in the judgment, his subsequent 2012 assignment was a fraudulent effort to avoid creditors. The statute of limitations for a fraudulent transfer is 4 years or, under the delayed discovery rule, one year after the claimant could have reasonably discovered the transfer. (Civ. Code, § 3439.09(a).) The assignment of judgment was filed in the underlying case (SC085372) on March 6, 2012. “[W]hen a plaintiff has notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to [their] investigation (such as public records or corporation books), the statute commences to run.” (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1374 (citing authority omitted).) Rafalian was a party to that action and should have learned of the transfer at that time. More than four years have passed since the assignment. The cross-complaint is barred by the statute of limitations contained in Civil Code § 3439.09.

In opposition, Rafalian argues that he is asserting a common law action, rather than an action under the statute. Rafalian is correct that the common law statute of limitations, governed by Civil Code § 338(d), starts to run three years “after a judgment is obtained against the underlying debtor.” (Macedo v. Bosio (2001) 86 Cal.App.4th 1044, 1051.) A claim under the Uniform Voidable Transactions Act is a right to payment, whether or not it has been reduced to a judgment. (Civ. Code, § 3439.01(b).) The maximum statute of limitations to set aside a fraudulent conveyance is seven years. (PGA West Residential Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156, 183.) Because Rafalian can still assert a common law claim as a creditor, judicial economy is best served by addressing these allegations concerning the same property in this action. (C.C.P., § 428(b).)

IV. Ruling

The demurrer is overruled.