Court Opinion

ID: 2766002
Source: CourtListenerOpinion
Date Created: 2014-12-31 20:02:08.520359+00
Date Added: 2024-06-11T11:27:26.041160
License: Public Domain

Filed 12/31/14 Azordegan v. Agadjanian CA2/2
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION TWO

SHAHRAM AZORDEGAN,                                                   B253979

         Plaintiff and Respondent,                                   (Los Angeles County
                                                                     Super. Ct. No. BC365798)
         v.

ALBERT AGADJANIAN,

         Defendant and Appellant.

         APPEAL from a judgment of the Superior Court of Los Angeles County.
Ronald M. Sohigian, Judge. Affirmed.

         Perry Roshan-Zamir for Defendant and Appellant.

         Der-Parseghian Law Group, Mary Der-Parseghian for Plaintiff and Respondent.

                  ___________________________________________________
       Defendant and appellant Albert Agadjanian appeals from the denial and partial
denial of several postjudgment motions by which he sought to avoid paying in full a
judgment entered against him.
       Agadjanian contends that the trial court, in ruling on two of the motions, exceeded
its jurisdiction by deciding issues outside the scope of remand of an earlier appeal.
Agadjanian also asserts that the trial court erred by denying him an offset against the
judgment. We affirm.
                 FACTUAL AND PROCEDURAL BACKGROUND
       Agadjanian owns a parcel of commercial real property in the City of La Puente
where he operated a car wash. In 2006, plaintiff and respondent Shahram Marc
Azordegan leased the property from Agadjanian. The lease agreement called for a lease
term of 30 years for $12,000 per month, with 3 percent increases every three years. A
company Azordegan owned, 1 Source Global Tech, Inc. (1 Source), simultaneously
purchased the car wash business from Agadjanian’s corporation, Carloops, Inc.
(Carloops). On behalf of 1 Source, Azordegan signed a 30-year promissory note in the
amount of $1.4 million and a personal guarantee. Azordegan and 1 Source sued
Agadjanian and Carloops in 2007, alleging various breaches in connection with the lease
and purchase, including a failure to disclose that major road construction work would
divert traffic away from the car wash. Following a jury trial in 2010, judgment was
entered in favor of 1 Source and against Carloops in the amount of $950,000, and in favor
of Azordegan and against Agadjanian in the amount of $360,000. In an unpublished
opinion, Shahram Marc Azordegan et al. v. Albert Agadjanian et al., case No. B226978
(filed May 2, 2012), we affirmed the judgment and related orders.
       In an unpublished opinion deciding a second appeal filed by Agadjanian, Shahram
Marc Azordegan v. Albert Agadjanian, case No. B237427 (filed Aug. 22, 2013), we
found that the trial court properly denied two postjudgment motions seeking to compel
acknowledgment of satisfaction of judgment. In the opinion, we noted that the trial court
made a postjudgment order requiring Adgadjanian to assign to Azordegan funds accruing

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from the property, and ordered Adgajanian to refrain from otherwise assigning rights to
rent and other property-related receivables. In remanding the matter, we ordered that
Azordegan comply with the trial court’s orders to file partial satisfactions of judgment to
account for collections going toward payoff of the judgment.
       Meanwhile, while this matter was on appeal for the second time, Agadjanian
prevailed in a separate unlawful detainer action against Azordegan for breach of the lease
agreement. Judgment was entered in that action in July 2012, calling for restitution of the
premises to Agadjanian and forfeiture of the lease agreement. Azordegan vacated the
property in July 2012 and surrendered possession.
       In this matter, following remand of the second appeal, in November 2013,
Agadjanian filed a “motion to compel compliance with court’s existing orders after
remand, to set off cross-obligation actions and for acknowledgment of satisfaction of
judgment.”1 Agadjanian contended that, based on setoff of unpaid amounts due under
the promissory note, the judgment against him was satisfied.
       After hearing extensive argument on the motion, the trial court issued an 18-page
ruling on December 12, 2013. The court noted that Agadjanian’s motion “injected into
this case an entirely new issue that was not the subject of the pleadings or previous
argument”—the interpretation of the promissory note and guarantee. The promissory
note was stated as being non-recourse, and Azordegan relinquished the promissory note’s
collateral upon judgment in the unlawful detainer action. Interpretation of the promissory
note and guarantee, however, was the subject of yet another pending lawsuit in another
courtroom, case No. BC451305.2 Due to concerns of interfering with that court’s

1      Around this time, Azordegan filed a document entitled “notice of compliance with
Court of Appeal order,” in which he stated that prior partial satisfactions of judgment
reflected all amounts received by Agadjanian, and there were no further partial
satisfactions of judgment to file.
2       The majority of the instant case was heard by Judge Ronald Sohigian. Following
his retirement, this action was transferred to Judge Rafael Ongkeko in March 2014.
Meanwhile, beginning in 2010, a number of related cases (including the unlawful
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jurisdiction, the trial court here declined to rule on Agadjanian’s motion. Nevertheless,
the trial court’s order stated that, if it had proper jurisdiction, it would grant the motion in
part and deny it in part; i.e., order the judgment against Agadjanian satisfied to the extent
of note payments and accruals guaranteed by Azordegan that should have been made
before July 16, 2012 (the date of judgment in the unlawful detainer action), leaving an
unsatisfied amount of $164,918.58 as of July 16, 2012. The court further found that it
was not obligated by the doctrine of law of the case to grant Agadjanian’s motion in full.
       Four days later, Agadjanian dismissed case No. BC451305 and subsequently filed
a motion for reconsideration of the December 12, 2013 order, on the basis that dismissal
of case No. BC451305 constituted a new fact and circumstance justifying
reconsideration. The same day, Agadjanian filed a “motion for order setting off cross
obligations (based on the lease between the individual parties) and acknowledging
satisfaction of judgment.” In this second motion, Agadjanian argued that after
Azordegan surrendered the premises, Agadjanian mitigated his damages by leasing the
property to another individual, who agreed to pay a fair market value, but whose monthly
lease payments were substantially lower than Azordegan’s. Agadjanian argued that his
damages from Azordegan’s breach of the lease were greater than the amount of the
remaining judgment against him; by setting off the damages against the judgment, the
judgment would be satisfied.
       On January 23, 2014, the trial court granted the motion for reconsideration. It
found that the judgment was satisfied except for $164,918.58 remaining as of July 16,
2012, for the reasons stated in the December 12, 2013 ruling. Agadjanian’s motions were
otherwise denied.
       In March 2014, Agadjanian filed another “motion to compel acknowledgement of
full satisfaction of judgment.” This motion was essentially identical to his prior motion

eviction action and BC451305) were filed, but due to either the filing of affidavits of
prejudice, or the parties’ failure to file notices of related cases, these other cases were not
assigned to Judge Sohigian.

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“for order setting off cross obligations” based on the lease agreement. The trial court
denied the motion on May 2, 2014.
                                      DISCUSSION
       Agadjanian appeals from the orders of December 12, 2013, January 23, 2014, and
May 2, 2014.3 These orders are appealable pursuant to Code of Civil Procedure section
904.1, subdivision (a)(2).
I. The Trial Court Did Not Exceed Its Jurisdiction
       Code of Civil Procedure section 724.110, subdivision (a) provides, in pertinent
part, that a judgment debtor may serve on the judgment creditor “a demand in writing that
the judgment creditor execute, acknowledge, and deliver an acknowledgment of partial
satisfaction of judgment to the person who made the demand.” On appeal, we review the
trial court’s decision on a motion for satisfaction of judgment for substantial evidence.
(Jhaveri v. Teitelbaum (2009) 176 Cal.App.4th 740, 748.) “We will presume the
existence of every fact the finder of fact could reasonably deduce from the evidence in
support of the judgment or order. [Citation.] Moreover, the constitutional doctrine of
reversible error requires that ‘[a] judgment or order of the lower court [be] presumed
correct.’ [Citation.] Therefore, all intendments and presumptions must be indulged to
support the judgment or order on matters as to which the record is silent, and error must
be affirmatively shown. [Citation.] The appellant has the burden to demonstrate there is
no substantial evidence to support the findings under attack.” (Id. at pp. 748-749.)
       Agadjanian contends that the trial court “erred in expanding the issues and
reaching out of the scope of the remittitur” in its December 12, 2013 and related
January 23, 2014 orders. Agadjanian bases this argument on the dispositional language
in the prior appeal (B237427), where we ordered that Azordegan comply with the trial
court’s September and November 2011 orders to file partial satisfactions of judgment to

3     Agadjanian filed multiple, timely notices of appeal of these orders. The appeals
were consolidated in this Court.

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account for collections going toward payoff of the judgment. Apparently, Agadjanian
believes that this language prohibited the trial court from making any different order
upon remand, no matter the scope of the motion before it.
       As the trial court correctly recognized, following remand, Agadjanian sought an
order declaring that the judgment against him had been fully satisfied based on
obligations arising under the promissory note and guarantee. This was an argument that
had not been raised before, including in the prior appeal. Essentially, Agadjanian asked
the trial court to rule on the effect of the promissory note, and now, unsatisfied with the
result, he complains that the trial court lacked jurisdiction to rule. This argument is
frivolous. Our prior disposition only pertained to the orders then on appeal, and we did
not restrain the trial court from ruling on new matters presented following remittitur.
       Furthermore, substantial evidence supports the trial court’s findings that the
promissory note and guarantee were non-recourse, and Azordegan satisfied his obligation
by surrendering the premises and relinquishing the collateral on the promissory note.4 As
the trial court found in its December 12, 2013 ruling, the issue of whether the promissory
note was satisfied by relinquishing the collateral was one potentially subject to dispute,
and could involve presentation of evidence relevant to contractual interpretation, such as
the parties’ conduct. Agadjanian, however, elected to dismiss case No. BC451305, in
which the effect of the promissory note and guarantee was to be litigated, and chose to
submit the matter to the trial court here for a decision on whether any remaining
obligations under the promissory note should offset the judgment. Based on the language
of the agreement and minimal evidence tending to show the parties’ conduct (including a

4       The promissory note stated, in pertinent part: “This Note is secured by the
Collateral [the ‘personal property’ located at the subject property] . . . . Despite anything
to the contrary in this Note, and without in any manner affecting its validity, in the event
of any default under the terms of this Note, Holder’s sole recourse shall be to the security
for this Note described herein.” The trial court found that Agadjanian was properly
assigned the promissory note and guarantee by Carloops, but that it had “all the rights of
the payee—but no more.”

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bankruptcy petition filed by Azordegan listing the promissory note as a “disputed” debt),
the trial court found that there was no amount remaining owing on the promissory note
(following the July 16, 2012 unlawful detainer judgment) that could offset the judgment
in this case.
       As he did below, Agadjanian argues that his position is supported by Security
Pacific National Bank v. Wozab (1990) 51 Cal.3d 991. The trial court properly found
Wozab to be inapplicable. Wozab examined the effect of Code of Civil Procedure section
726, pertaining to a debt secured by a deed of trust on real property. (Wozab, at p. 996.)
The instant case does not involve a debt secured by a deed of trust. Moreover, Wozab’s
holding that a “bank cannot unilaterally waive its security interest by taking an improper
setoff and then proceeding directly on the underlying debt” (id. at p. 1006) has no
application to this case.
       Therefore, the trial court’s denials and partial denials of Agadjanian’s motions
were proper, and the court did not err in finding that the judgment against Agadjanian
was satisfied except for $164,918.58 remaining as of July 16, 2012.
II. The Trial Court Properly Denied the Motions for Setoff Based on the Lease
       Agadjanian separately argues that the trial court erred by denying his initial
motion for setoff based on the terms of the lease agreement, and by denying his second,
effectively identical motion. In connection with the motions, Agadjanian submitted a
declaration stating that, after Azordegan vacated the premises following the unlawful
detainer judgment, Agadjanian re-leased the property for 24 years to a third party for a
monthly amount less than half of what was charged to Azordegan. Agadjanian contends
that, pursuant to Civil Code section 1951.2, he suffered damages in the amount of
$1,804,963.28, which should offset the judgment.
       “The right of offset rests upon the inherent power of the court to do justice to
parties appearing before it.” (Jhaveri v. Teitelbaum, supra, 176 Cal.App.4th 740, 753.)
The trial court’s decision on whether to allow offset is an equitable one and will not be
reversed absent an abuse of discretion. (Wm. R. Clarke Corp. v. Safeco Ins. Co. of

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America (2000) 78 Cal.App.4th 355, 359.) An abuse of discretion occurs only when the
court’s ruling exceeds the bounds of reason and results in a manifest miscarriage of
justice. (Ibid.; Jhaveri v. Teitelbaum, supra, 176 Cal.App.4th at p. 753.)
       The trial court’s ruling on the first motion for setoff based on the lease agreement
simply stated that it was denied. At the hearing on the matter, the trial court stated that it
denied the motion because it was “unmeritorious.” In reviewing this ruling for an abuse
of discretion, we indulge all intendments and presumptions in the ruling’s favor on
matters as to which it is silent. (Williams v. Russ (2008) 167 Cal.App.4th 1215, 1224.)
       In arguing that the trial court erred, Agadjanian relies on Salaman v. Bolt (1977)
74 Cal.App.3d 907 (Salaman) and Erlich v. Superior Court (1965) 63 Cal.2d 551
(Erlich). In Salaman, the court concluded that “the offset of judgment against judgment
is a matter of right absent the existence of some facts establishing an equitable principle
precluding it.” (Salaman, at p. 919.) In Erlich, in deciding whether the trial court should
have enjoined collection of judgment proceedings pending a decision on the validity of a
disputed claim in another court, our Supreme Court wrote, “a judgment debtor who by
assignment or otherwise becomes the owner of a claim against his judgment creditor in
equity may have his claim set off against the judgment, and the fact that the claim has not
itself been reduced to judgment is not an obstacle. Nor must the claim of the judgment
debtor be liquidated [citation]; it being sufficient that the claim though unliquidated has
matured.” (Erlich, at p. 555.) Nevertheless, the Supreme Court recognized: “The mere
fact that a judgment debtor asserts a claim against the creditor, however, does not of itself
mean that he is entitled to enjoin collection of the judgment, and the trial court has broad
discretion in determining whether to grant the stay or enjoin collection of the judgment.
[Citation.] If the rule were otherwise, the judgment debtor could delay and harass his
creditor by the filing of merely frivolous claims.” (Id. at p. 556.)
       Neither Salaman nor Erlich stands for the proposition that the trial court is
required to offset a claim that has not been proven in court, merely based on the
declaration of the person purporting to have the claim. In fact, the rule is otherwise. (See

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Brienza v. Tepper (1995) 35 Cal.App.4th 1839, 1848 [declining to accord the same
equitable weight to a judgment purchased by the judgment debtor as to “a true equitable
offset between the parties where judgment is obtained by filing suit, expending time and
incurring fees and costs”].)
          In opposing Agadjanian’s first motion, Azordegan argued that by claiming
damages for breach of the lease agreement, Agadjanian was essentially seeking to reopen
this case on the facts, to allow for the filing of amended or supplemental pleadings, or to
retry the case. Indeed, damages for breach of a lease agreement are not sought by a
summary proceeding, but rather pursuant to an ordinary civil action. (Vasey v. California
Dance Co. (1977) 70 Cal.App.3d 742, 747; Friedman, Garcia & Hagarty, Cal. Practice
Guide: Landlord-Tenant (The Rutter Group 2013) ¶ 7:472). Furthermore, the question
of whether a plaintiff can recover unpaid rent for the balance of a lease term is subject to
various considerations, including whether, in re-leasing the property, the plaintiff acted
reasonably and in a good faith effort to mitigate damages. (Civ. Code, § 1951.2, subd.
(c)(2).) The trial court here did not abuse its discretion, therefore, by denying the first
motion. Substantial evidence supports the inference that Agadjanian’s claim for lease-
related damages—which was not reduced to judgment, but was rather based solely on his
own declaration of a purported agreement to re-lease the property for a “fair market” rent
of less than half of what was charged to Azordegan—was too uncertain to support an
offset.
          Nor do we find that the trial court abused its discretion in denying Agadjanian’s
second motion for setoff based on the lease agreement. “‘The burden is on the party
complaining to establish an abuse of discretion . . . .’” (Brawley v. J.C. Interiors, Inc.
(2008) 161 Cal.App.4th 1126, 1138.) The trial court denied the second motion “on all
grounds raised in the opposition.” Azordegan’s opposition argued that the motion
represented an improper motion for reconsideration of the order denying the first motion,
and that Agadjanian’s earlier filing of a notice of appeal divested the trial court of
jurisdiction to decide the second motion. On appeal, Agadjanian does not attempt to

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explain how either of these points was incorrect and thus has not met his burden of
showing error.5
                                    DISPOSITION
      The appealed orders (December 12, 2013, January 23, 2014, and May 2, 2014) are
affirmed.
      Respondent shall recover his costs on appeal.
      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                                         BOREN, P.J.
We concur:

      ASHMANN-GERST, J.

      HOFFSTADT, J.

5       Azordegan requests that this Court make factual findings and terminate the
litigation. We deny this request because, among other things, Azordegan did not file a
notice of appeal.

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