30-2012-00610972
Companion Motions by Defendants Yaghoubi and Khatirian for Orders Quashing Subpoenas D.T. for the production of Records from Coast to Coast Escrow Services Inc.:

1. Defendants, Yaghoubi and Khatirian’s motions to quash plaintiff’s subpoenas duces tecum to Coast To Coast Escrow Services are denied.

(a) The escrow files sought are relevant to plaintiff’s claims and are discoverable because the information may lead to admissible evidence at the time of trial for plaintiff to prove its agreement with defendants of becoming a 50% owner in defendant entities, House of Luxuries and Ashraaf.

(b) Defendants’ description of this action being solely about the selling of cars is exceptionally narrow and incorrect. The lawsuit regards a series of transactions between the parties in acquiring different interests in portions of the defendant entities as part of a broader agreement to provide and sell high end automobiles.

One of the transactions involved the two defendants Yaghoubi and Khatirian. Yaghoubi was to purchase Khatirian’s interest in Highline Specialist Corp. dba House of Luxuries and Ashraaf, LLC. This transaction was handled through the 3rd party subpoenaed, Coast to Coast Escrow. After this transaction was completed, a subsequent transaction involved plaintiff Allstar Tire & Wheel, Inc. dba AutoHaus West, Inc. becoming a 50% owner in HOL and Ashraaf by taking over the shares previously held by Khatirian.

Plaintiff has requested documents regarding the initial transaction between defendants but to date, they have not produced signed documents and cannot state which documents form the operative agreements. The parties also dispute the terms of the agreements. Because of this, plaintiff is now attempting to go directly to the source and subpoena the documents directly from the escrow company who handled the transaction. This is reasonable and standard operating procedure for discovery in a case such as this.

(c) The escrow files concern the underlying transaction between defendants, Yaghoubi and Khatirian wherein Yaghoubi was to purchase Khatirian’s 50% interest in House of Luxuries and Ashraaf for a total of $550,000. This transaction was to be carried out through Coast To Coast Escrow Services. Then, in a second transaction, plaintiff AutoHaus was to reimburse Yaghoubi the $550,000 he paid to Khatirian in the initial transaction for a 50% partnership in House of Luxuries and Ashraaf. The file is reasonably expected to contain the agreements and escrow instructions on the transaction between Khatirian and Yaghoubi. These documents are relevant for plaintiff establishing the existence of its transaction with defendants, and plaintiff’s ownership rights, and resulting claims and are reasonably calculated to lead to other admissible evidence.

(d) Privacy:
The effect of disclosure on defendants’ privacy is de minimus because the nature of the preliminary transaction has been placed at issue by defendants’ denial that plaintiff has a 50% stake in House of Luxuries and/or Ashraaf. Defendants gave the information to third party Coast and can have only a minimal expectation of privacy at most which is overcome by the discovery requirements of this litigation. The information in the escrow files can be used only for the purposes of this litigation. Defendants have not established the information in the escrow files even contains any private financial information, other than cancelled drafts regarding the purchase price for the shares/interest in the defendant entities between Khatirian and Yaghoubi. The purchase price is relevant in any regard to establishment of the terms the agreement. Defendants have not established that the documents can be produced from other sources or by less intrusive means.

2. The court orders third party Coast To Coast to comply with the subpoenas as served within 15 days of being served with the court’s order.

3. Plaintiff to give notice of ruling and prepare an Order for the court’s signature.