Court Opinion

ID: 4680242
Source: CourtListenerOpinion
Date Created: 2021-04-22 20:02:58.055518+00
Date Added: 2024-06-11T08:03:53.498192
License: Public Domain

Filed 4/22/21 Stonehaven, LLC v. Aslanian CA2/3
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not
been certified for publication or ordered published for purposes of rule 8.1115.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 THREE

 STONEHAVEN, LLC,                                                 B294817

      Cross-complainant and                                       (Los Angeles County
 Respondent,                                                      Super. Ct. No. BC656986)

           v.

 ARTHUR ASLANIAN,

      Cross-defendant and
 Appellant.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Randolph M. Hammock, Judge. Affirmed.
     Law Offices of Geoffrey G. Melkonian and Geoffrey G.
Melkonian for Cross-defendant and Appellant.
     Michael H. Weiss, Esq., Michael H. Weiss; The Leichter Firm,
Kevin J. Leichter, Andrew E. Hewitt; Manatt, Phelps & Phillips
and Benjamin G. Shatz for Cross-complainant and Respondent.
                       ——————————
      This matter arises from a loan agreement 4402 Mammoth
Investors, LLC (Mammoth) entered to purchase a residential
property; a personal guaranty of the loan executed by Arthur
Aslanian, Mammoth’s principal; and an alleged breach of the
agreements. Following a bench trial, the trial court entered
judgment in favor of the original lender’s assignee, Stonehaven,
LLC (Stonehaven), and against Aslanian. On appeal, Aslanian
argues that he was improperly denied his right to a jury trial, and
that this court should modify the judgment amount based on
postjudgment proceedings in Mammoth’s bankruptcy case. We
affirm the judgment.
                         BACKGROUND
      Mammoth borrowed $1,500,000 from a lender to purchase a
residential property (the property). The loan was secured by a deed
of trust on the property and a promissory note. Under the loan
agreement, Mammoth was required to make monthly interest
payments and then pay the principal balance at the end of the
loan’s term. Aslanian signed a guaranty for Mammoth’s debt. After
making several interest payments, Mammoth defaulted on the loan
and failed to pay the principal balance. The lender assigned its
rights under the loan agreement and guaranty to Stonehaven.
      In April 2017, Mammoth sued Stonehaven and several other
defendants for failure to timely furnish a payoff demand statement
pursuant to Civil Code section 2943. Stonehaven demurred to
Mammoth’s complaint and cross-complained against Aslanian for
breach of contract based on the personal guaranty. The trial court
sustained Stonehaven’s demurrer without leave to amend. The
parties litigated Stonehaven’s cross-complaint over the next year.
      A jury trial was scheduled for September 2018. One week
before trial, Aslanian moved to continue the matter on the ground

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that a separate trial in 26 Malibu, LLV v. 126 Valencia, LLC
(Super. Ct. L.A. County, 2019, No. SC124734), involving a dispute
over title to the property (the quiet title action), should proceed
first. The trial court denied the motion. On September 27, 2018,
the parties selected a jury and gave opening statements. At the end
of the day, Aslanian’s counsel informed the court he intended to
assert an unclean hands defense. The court indicated it would first
require an offer of proof and asked counsel to brief the issue before
trial resumed the next day. Aslanian’s counsel also told the court
he was having trouble securing the appearance of witness Sharham
Elyaszadeh, Stonehaven’s investor. Counsel said he had served a
subpoena on Elyaszadeh, but he had not appeared for trial; while
the court suggested it could issue a body attachment, counsel did
not have proof of proper service at that time.
       The next day, Aslanian filed a trial brief claiming members of
Stonehaven conspired to prevent him from taking possession of the
property. He alleged that after Mammoth purchased the property,
Elyaszadeh filed the quiet title action to cloud Mammoth’s title,
thus preventing Mammoth and Aslanian from selling or refinancing
the property. Further, Elyaszadeh’s parents remained tenants on
the property and, as a result of the quiet title action, Mammoth was
unable to evict them. Aslanian asserted that Elyaszadeh and
Stonehaven rebuffed Mammoth’s attempt to obtain a payoff
demand.
       After an unreported chambers conference, the court found
Aslanian’s brief provided a sufficient offer of proof for the unclean
hands defense. Counsel for both parties agreed with the trial court
that the unclean hands theory was an equitable defense that the
trial court would hear and determine. However, the court
expressed concern that evidence of Stonehaven’s unclean hands

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could confuse the jury if heard concurrently with evidence of
Aslanian’s liability under the guaranty. While the court said it
would be possible to craft a way to avoid potential confusion, it also
suggested that a jury might be “superfluous.” The court noted
Stonehaven appeared to have established its prima facie case
against Aslanian, and, if so, the only remaining issue would be
Aslanian’s equitable defense of unclean hands. Still, the court
acknowledged Aslanian had a right to a jury trial on the legal
claims and stated it would not deny him that right.
       The court then presented Aslanian with the option of waiving
his right to a jury. The court explained that a bench trial on all
issues would eliminate any logistical problems with limiting
evidence, and would make it possible for Aslanian to have more
time to subpoena witnesses.1 The court told Aslanian, “[I]f you are
voluntarily willing to waive your right to a jury—‘cause, really,
what it comes down to is what I think about the unclean hands
defense. Doesn’t matter what they think. It’s what I think. I can
hear all your evidence. We can take our time. [¶] Maybe, you—
you’re not able to present evidence today. Maybe, you can present it
next week or in a couple of weeks. . . . I don’t know. There’s
more—there’s less pressure, on me, to move the trial. Right?
Within reason, within reason. [¶] And, as long as you demonstrate
to me that you’ve made due diligent attempts to . . . subpoena
people, you know, you did them in a . . . reasonable manner . . . I
may be inclined to continue it to . . . effectuate service.” However,

      1 At that point, Aslanian had still not subpoenaed Elyaszadeh
to appear for trial; his testimony was critical to Aslanian’s unclean
hands defense.

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the trial court stated that if Aslanian chose to proceed with the jury,
the trial would resume that day, with the seated jury.
       Aslanian indicated he wanted to waive his right to a jury
trial. The court told Aslanian, “You do have a right to jury trial. I
don’t [want to] pressure you into waiving your right. You—
considering everything I’ve said and what your counsel has said,
you now are voluntarily waiving your right to a jury. Correct?”
Aslanian responded, “That’s correct.” The trial court stated it
would discharge the jury, hear motions, and determine how to move
forward. The court then further inquired of Aslanian:
       “The court: We’ve now taken all the pressure off, in terms of
this jury being waiting—waiting out there; correct?
       “[Aslanian]: Yes, Judge.
       “The court: So, I [want to be] clear. No one has coerced you
and forced you to waive your right to [a] jury; correct?
       “[Aslanian]: Correct.
       “The court: You’re doing this freely and voluntarily, after
considering all the . . . advantages and disadvantages of a jury;
correct?
       “[Aslanian]: Correct.
       “The court: Right.
       “And you do waive your right to a jury, at this point?
       “[Aslanian]: Yes.”
       The court then dismissed the jury.
       After a bench trial, the court found in favor of Stonehaven
and rejected Aslanian’s unclean hands defense. The court
determined that Aslanian owed Stonehaven $1,500,000 for the
principal amount of the loan plus $1,325,200.97 in prejudgment
interest, totaling $2,825,200.97. Aslanian timely appealed.

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                          DISCUSSION
       As an initial matter, Aslanian has requested that this court
take judicial notice of three court documents: (1) a statement of
decision from the quiet title action; (2) the judgment in Mammoth’s
favor in the quiet title action; and (3) a declaration from Mammoth’s
counsel filed in In re 4402 Mammoth Investors, LLC (Bankr.
C.D.Cal. 2019, No. 2:18-bk-12055-WB), stating that the bankruptcy
court made an oral ruling that certain interest charges and late fees
under the loan agreement were unenforceable against Mammoth.
The declaration further states that Stonehaven’s counsel calculated
the total amount owed under the loan agreement to be
$2,574,691.67, as of December 5, 2019.
       We have discretion to take judicial notice of any court record
in the United States, including orders, findings of facts and
conclusions of law, and judgments within court records. (Evid.
Code, § 452; Lockley v. Law Office of Cantrell, Green, Pekich, Cruz
& McCort (2001) 91 Cal.App.4th 875, 882.) However, “any matter
to be judicially noticed must be relevant to a material issue.”
(People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415,
422, fn. 2.)
       We deny the request as to the first two documents. Findings
and the judgment from the quiet title action are not relevant to the
two issues before us: whether the trial court improperly denied
Aslanian his right to a jury trial, and whether the amount of the
judgment must be modified. (Jay v. Mahaffey (2013) 218
Cal.App.4th 1522, 1529, fn. 7.) We grant the request for judicial
notice of the document filed in the bankruptcy proceedings as a
court record under Evidence Code section 452. We note that while
we take judicial notice of the existence of court records, we do not
take judicial notice of the truth of the matter asserted in such

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documents. (Barri v. Workers’ Comp. Appeals Bd. (2018)
28 Cal.App.5th 428, 437; Guarantee Forklift, Inc. v. Capacity of
Texas Inc. (2017) 11 Cal.App.5th 1066, 1075; see Schifando v. City
of Los Angeles (2003) 31 Cal.4th 1074, 1089 [court may take judicial
notice but disregard the material as not applicable].)
I.    Aslanian was not denied his right to a jury trial.
       Aslanian argues the trial court coerced him into waiving his
right to a jury trial and improperly prevented him from presenting
his unclean hands defense to a jury. We disagree.
       The California Constitution guarantees a civil litigant the
right to a jury trial and denial of that right is reversible error. (Cal.
Const., art. I, § 16; Cohill v. Nationwide Auto Service (1993)
16 Cal.App.4th 696, 700.) However, a litigant may properly waive
his or her right to a jury trial by “oral consent, in open court,
entered in the minutes.” (Code Civ. Proc., § 631, subd. (f)(3).) We
resolve any doubts in the validity of the waiver in favor of
preserving the litigant’s right to a jury trial. (Byram v. Superior
Court (1977) 74 Cal.App.3d 648, 654.)
       As we understand his argument, Aslanian first contends the
trial court erred in determining the unclean hands defense should
be tried to the court rather than to a jury. This contention lacks
merit. In Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th
612, 621, for example, the court explained that it is an “indisputable
proposition” that equitable claims such as the defense of unclean
hands are generally tried to a court. (Raedeke v. Gibraltar Savings
& Loan Ass’n (1974) 10 Cal.3d 665, 671 [where action has both legal
and equitable claims, equitable claims are tried to the court].)
Contrary to Aslanian’s assertion on appeal, Unilogic does not
support the proposition that he was entitled to a jury trial on the
unclean hands defense. The Unilogic court concluded that, in an

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appropriate case, the trial court has the discretion to submit an
unclean hands defense to a jury. (Id. at pp. 622–623.) The court
did not conclude an assertion of the defense creates an entitlement
to a jury, and other authorities have affirmatively held there is no
such entitlement. (See A-C Co. v. Security Pacific Nat. Bank (1985)
173 Cal.App.3d 462, 473–474 [trial court erred in submitting
equitable defense of unclean hands to the jury]; Fincher v. Fincher
(1981) 119 Cal.App.3d 343, 351 [defendant not entitled to jury trial
on equitable defenses to plaintiff’s legal claims].)
       Indeed, the parties here all agreed that the unclean hands
defense was equitable in nature and would be tried to the trial
court. That Aslanian proposed a jury instruction for the unclean
hands defense in his trial brief does not establish that he was
objecting to the court’s determination that the issue would be tried
to the court. Although Aslanian argues he made a proper objection
during a chambers conference, there is no record of the conference
beyond the trial court’s summary that the parties agreed the
unclean hands defense was equitable in nature and would not be
decided by the jury. To the extent Aslanian could have sought a
jury’s determination on the unclean hands defense, or disagreed
with a bench trial on the defense, he forfeited the issue on appeal by
failing to object in the trial court. (San Ramon Valley Fire
Protection Dist. v. Contra Costa County Employees’ Retirement Assn.
(2004) 125 Cal.App.4th 343, 351 [failure to object in the trial court
generally constitutes waiver of the issue for appeal].)
       We also reject Aslanian’s second contention that the trial
court erred by forcing him to waive his right to a jury trial on the
legal issues. The record before us leaves no doubt that Aslanian’s
waiver was voluntary. Before the court took Aslanian’s waiver, the
parties had already selected a jury and made their opening

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statements. The trial court gave Aslanian the option of proceeding
with the jury that day or electing a bench trial on all issues. When
the trial court presented this option, it made clear to Aslanian that
it could fashion a way for him to present his unclean hands defense
without confusing the jury with respect to Stonehaven’s breach of
contract cause of action. However, since trial had begun and the
jury was waiting, the trial court reasonably told Aslanian that if he
chose to proceed with the jury, trial would resume that day. A
review of all the proceedings shows that, at the time the trial court
presented Aslanian with this choice, Aslanian had just made his
offer of proof and still had not secured Elyaszadeh’s appearance for
trial. The trial court’s proposal to Aslanian offered him a way to
move forward with the case while also affording him additional time
to marshal the evidence for his defense. The court repeatedly
informed Aslanian he had a right to a jury trial on the legal claims.
Further, the court did not suggest Aslanian could not present his
unclean hands defense if he chose to try the legal claims to a jury.
In this context, Aslanian expressly waived his right to a jury trial,
on the record, in open court, while represented by counsel. He
cannot now complain on appeal that he was denied a jury trial.
II.   Aslanian has not demonstrated error in the judgment
      amount.
      Aslanian does not contend the trial court erred in determining
the amount of the judgment. Instead, he argues this court should
reduce the judgment against him to reflect the lesser amount he
anticipates the bankruptcy court will conclude Mammoth owes
under the loan agreement.2 Aslanian relies on Civil Code section

      2 Aslanianacknowledges that the bankruptcy court has not
determined the actual amount due, but points to findings the court

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2809, which states: “The obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that
of the principal; and if in its terms it exceeds it, it is reducible in
proportion to the principal obligation.” In other words, as
Mammoth’s surety, Aslanian cannot owe more than the amount the
bankruptcy court determines Mammoth owes. Aslanian did not
raise this argument, or any similar argument, in the trial court.
       Three fundamental rules of appellate review and procedure
are fatal to Aslanian’s argument. First, an appellate court “will
consider only matters which were part of the record at the time the
judgment was entered. [Citation.] This rule preserves an orderly
system of appellate procedure by preventing litigants from
circumventing the normal sequence of litigation.” (Reserve Ins. v.
Pisciotta (1982) 30 Cal.3d 800, 813.) The bankruptcy court orders
Aslanian relies upon to attack the trial court judgment were made
in October 2019, well after the November 2018 judgment rendered
in this case. Aslanian does not contend there are circumstances
that would warrant our departure from the general rule that a
reviewing court does not consider postjudgment matters. (See
AREI II Cases (2013) 216 Cal.App.4th 1004, 1021 [only narrow
exceptions permit consideration of extra-record evidence].)
       Second, theories not raised in the trial court cannot be raised
for the first time on appeal. “ ‘The policy behind the rule is
fairness.’ [Citation.] ‘Appellate courts are loath to reverse a
judgment on grounds that the opposing party did not have an

made disallowing certain compounding default interest features
and other late charges. At oral argument, Stonehaven’s counsel
represented to this court that the bankruptcy proceeding has been
dismissed; Aslanian’s counsel appeared to concede that this was an
accurate statement.

                                  10
opportunity to argue and the trial court did not have an opportunity
to consider. [Citation.] In our adversarial system, each party has
the obligation to raise any issue or infirmity that might subject the
ensuing judgment to attack.’ ” (Findleton v. Coyote Valley Band of
Pomo Indians (2018) 27 Cal.App.5th 565, 569.)
       Third, and most importantly, “a trial court judgment is
ordinarily presumed to be correct and the burden is on an appellant
to demonstrate, on the basis of the record presented to the appellate
court, that the trial court committed an error that justifies reversal
of the judgment. [Citations.] ‘This is not only a general principle of
appellate practice but an ingredient of the constitutional doctrine of
reversible error.’ ” (Jameson v. Desta (2018) 5 Cal.5th 594, 609.)
       As noted above, Aslanian does not argue the trial court erred
in determining the amount of the judgment. Instead, he asserts
that when the bankruptcy court, in a separate proceeding, makes a
future order setting the amount of Mammoth’s indebtedness, this
court should modify the trial court’s judgment against Aslanian to
comport with the bankruptcy court finding. This assertion does not
satisfy Aslanian’s burden to demonstrate the trial court committed
an error that justifies reversal of the judgment in this case.
       Aslanian has offered no legal authorities or analysis to
explain why this court should, in the first instance, adopt the
postjudgment, interim findings of another court to modify a
judgment he does not assert was the result of trial court error. The
mere recitation of the general principles set forth in Civil Code
section 2809 is not sufficient. “ ‘It is not our place to construct
theories or arguments to undermine the judgment and defeat the
presumption of correctness.’ ” (Flores v. Department of Corrections
& Rehabilitation (2014) 224 Cal.App.4th 199, 204.)

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                           DISPOSITION
      The judgment is affirmed. Stonehaven, LLC is awarded its
costs on appeal.
      NOT TO BE PUBLISHED.

                                       ADAMS, J.*

We concur:

             EDMON, P. J.

             EGERTON, J.

      * Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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