Preview
1 ERIC C. MCALLISTER, ESQ., SBN 252567
ecm@millermorton.com
2 MARK S. SANDBERG, ESQ., SBN 207556
mss@millermorton.com
3 MILLER, MORTON, CAILLAT & NEVIS, LLP
2001 Gateway Place, Suite 220W
4 San Jose, California 95110
Telephone: (408) 292-1765
5 Facsimile: (408) 436-8272
6 Attorneys for Plaintiff
Nemat Maleksalehi
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8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 FOR THE COUNTY OF SANTA CRUZ
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11 NEMAT MALEKSALEHI, Case No.: 18CV02004
12 Plaintiff, REPLY TO SHAHRAM TABATABAI’S
OPPOSITION TO NEMAT
13 vs. MALEKSALEHI’S MOTION TO ENTER
JUDGMENT AGAINST SHAHRAM
14 SHAHRAM TABATABAI, an individual; TABATABAI PURSUANT TO CODE OF
JEANNE TURNER TABATABAI, an CIVIL PROCEDURE SECTION 664.6
15 individual; and DOES 1 through 10, inclusive
Date: December 19, 2022
16 Defendants. Time: 8:30 a.m.
Dept.: 5
17 Before: Hon. Timothy Volkmann
AND RELATED CROSS-ACTION.
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MILLER, MORTON, CAILLAT & NEVIS, LLP
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2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
San Jose, CA 95110
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1
2 INTRODUCTION
3 On March 1, 2022, former Plaintiff Nemat Maleksalehi (hereinafter “Malek”) and Cross-
4 Claimant Shahram (and former Defendant) Tabatabai (hereinafter “Tabatabai”) entered into a
5 written Settlement Agreement following months of arms-length negotiations between their
6 respective counsel (the “Settlement Agreement”). Under the terms of the Settlement Agreement,
7 Tabatabai was given six months to pay Malek the sum of $1.25 million in exchange for Malek’s
8 agreement to: (i) dismiss Tabatabai from the action, (ii) release Tabatabai from a $1.5 million
9 debt that Tabatabai has never disputed; (iii) assign his remaining claims in the Action to
10 Tabatabai, and (iii) dismiss a separate lawsuit that Malek had filed in Santa Clara County against
11 Tabatabai’s software company - Enabledware.
12 Now that his payment deadline has passed, and Malek has fully performed his obligations
13 (including dismissing the actions against Tabatabai and Enabledware), Tabatabai is improperly
14 requesting this Court to rescind the Settlement Agreement based upon unsupported and disputed
15 parole evidence that the parties entered into the Settlement Agreement under the mutually
16 mistaken belief that: (i) Tabatabai would be able to raise the settlement funds through a “business
17 deal” that is never mentioned in the settlement agreement, and (ii) that the settlement agreement
18 would be found to have been made in good faith and could be prosecuted in civil court. Contrary
19 to Tabatabai’s assertions, the Settlement Agreement was not conditioned on whether or how
20 Tabatabai would raise the settlement funds, it was not conditioned upon the Court finding that it
21 had been made in good faith, and it was not conditioned upon Tabatabai being able to proceed
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 with the assigned claims in any particular forum.
2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
San Jose, CA 95110
23 Because the Action is still pending before this Court, it has both personal and subject
24 matter jurisdiction to hear this Motion, and there is no basis to rescind the Settlement Agreement.
25 It was negotiated at arms-length by the parties’ counsel of record, it contains none of the
26 conditions or assumptions Tabatabai argues for (all of which are ordinary risks assumed by parties
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27 to a settlement agreement), and Malek has fully performed his obligations under the Agreement.
28 //
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
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2 ARGUMENT
3 A. This Court Has Jurisdiction to Rule on This Motion
4 As a preliminary matter, Tabatabai challenges the jurisdiction of this Court to rule on the
5 motion, arguing that the Court lost jurisdiction when Malek dismissed his claims in the Action.
6 While this argument may have had merit if Malek had dismissed the entire Action, the opposite
7 is true where, as here, only part of the case was dismissed.
8 Tabatabai’s jurisdictional argument relies primarily on cases in which the plaintiff had
9 dismissed its entire action with prejudice, and without expressly preserving its rights under CCP
10 section 664.6. Ironically, Tabatabai’s motion cites to a case that holds the exact opposite when
11 only a portion of a case is dismissed - Wackeen v. Malis (2002) 97 Cal.App.4th 429. In Wackeen,
12 the court affirmed the premise that voluntary dismissal of “an entire action” divests the court of
13 jurisdiction, but dismissal of only some of the parties does not:
14 When a court has jurisdiction over the parties and subject matter of
a suit, its jurisdiction continues until a final judgment is entered.
15 (Riley v. Superior Court (1957) 49 Cal.2d 305, 309 [316 P.2d 956].)
When there is a voluntary dismissal of an entire action, the court's
16 jurisdiction over the parties and the subject matter terminates. (Casa
de Valley View Owner's Assn. v. Stevenson, supra, 167 Cal.App.3d
17 at p. 1192.) In contrast, a dismissal by only some of the plaintiffs
means the court is not divested of subject matter jurisdiction and the
18 suit continues. (Ibid.) Wackeen v. Malis (2002) 97 Cal.App.4th 429
at 437.
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20 Malek did not dismiss the entire action in this case – he didn’t even dismiss all of his
21 claims. He only dismissed Tabatabai, and only because it was required under the very Settlement
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 Agreement that Tabatabai now seeks to rescind. The underlying Action, to which Tabatabai
2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
San Jose, CA 95110
23 remains an active party, is still properly pending before this Court. Thus, the only potential party
24 involved in this motion that the Court would not otherwise have jurisdiction over is Malek, who
25 has since voluntarily submitted to the jurisdiction of the Court by way of the filing of this motion.
26 Thus, the Court has personal jurisdiction over Malek for purposes of this motion, and continues
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27 to have personal and subject matter jurisdiction over Tabatabai in the Action. With both subject
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 matter and personal jurisdiction, there is no obstacle to the Court enforcing the written and
2 integrated Settlement Agreement, pursuant to CCP section 664.6.
3 B. There Has Been No Mutual Mistake of Fact
4 Tabatabai argues that the Settlement Agreement should be rescinded because the parties
5 executed it under the mutually mistaken belief that it would be funded by a “business deal” that
6 Tabatabai had arranged with the third party “buyer”. Tabatabai’s position is neither legally nor
7 factually valid.
8 For starters, Tabatabai’s brief correctly points out, and then completely ignores, that in
9 order to constitute a “mutual mistake” of fact under the law, the mistaken fact must have existed
10 at the time the settlement agreement was executed, it cannot be an event that occurs after the
11 Settlement Agreement has been signed: “[a] mistake of fact within the meaning of Civ. Code §
12 1577 must concern a present or past fact, not something that occurs after execution of the
13 contract.” (Mosher v. Mayacamas Corp. (1989) 215 Cal.App.3d 1, 4–5). Despite citing this clear
14 requirement, Tabatabai argues that the “mutual mistake of fact” justifying his request for
15 rescission is that the business deal from which he intended to fund the settlement agreement did
16 not close six months after the Settlement Agreement. There is no argument (nor could there be)
17 that Tabatabai’s business deal could never have closed on time when the settlement agreement
18 was executed (as any such contention would be tantamount to an admission of fraud). Thus, on
19 its face, the alleged “mistake” – the failure of his “business deal” to close - was an event that
20 occurred six months after the agreement was executed, and is therefore insufficient to constitute
21 a mutual mistake of fact under California law.
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 Moreover, and more importantly, the contention that Malek’s agreement to the Settlement
2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
premised upon the fact that Tabatabai’s “business
San Jose, CA 95110
23 Agreement was ever expressly or impliedly
24 deal” was going to close prior to the payment deadline is unsupportable and directly contradicted
25 by the parties’ integrated Settlement Agreement.
26 The Settlement Agreement was negotiated at arms-length, through the parties’ respective
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27 counsel of record, and is fully integrated – superseding all prior negotiations, agreements, or
28 representations, whether oral or written, with respect to such subject matter. Specifically,
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 Paragraph 10(a)1 of the Settlement Agreement states:
2 a. Voluntary Releases. The Parties have executed this Agreement
after having full opportunity to consult with legal counsel of their
3 choosing before affixing their signatures hereto. The Parties are
aware of the alternative rights and remedies available to them and
4 have satisfied themselves that the releases contained in this
Agreement are in their respective best interests.
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Similarly, Paragraph 10(c) states:
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c. Integration. This Agreement contains the entire understanding
7 between the Parties in connection with the subject matter, and it
supersedes and replaces all prior negotiations, agreements, or
8 representations, whether oral or written, with respect to such subject
matter. Each Party acknowledges that no other Party, or any agent
9 or attorney of any Party, has made any promise, representation, or
warranty whatsoever, expressed or implied, not contained herein,
10 concerning the subject matter hereof, to induce the Party making
such acknowledgment to execute this document, and each Party
11 acknowledges that such Party has not executed this document in
reliance on any such promise, representation, or warranty not
12 contained herein.
13 Paragraph 2(i) of the Settlement Agreement unambiguously, and without condition,
14 requires Tabatabai to pay Malek the first installment of settlement monies (Settlement Payment
15 1) within 180 days.
16 i. ‘Settlement Payment 1’: Tabatabai agrees to pay to Malek the sum
of one million two hundred fifty thousand dollars ($1,250,000.00)
17 within 180 days of the execution of this Agreement, subject to a one-
time extension of not more than ninety (90) days ifrequired and
18 requested by Tabatabai to secure funding of Settlement Payment 1.
Nothing in this Agreement shall be read or construed to prevent
19 Tabatabai from seeking reimbursement of Settlement Payment 1
from Jeanne Turner or Robert Lindow.
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21 There is no language even referencing, much less conditioning the enforceability of the Settlement
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 closing a “business deal”
2001 Gateway Place, Suite 220W
Agreement, on Tabatabai in order to fund his payment - nor would
Telephone: (408) 292-1765
San Jose, CA 95110
23 Malek have agreed to such a [non-existent] condition.
24 To the contrary, Malek specifically limited the number of extensions Tabatabai could even
25 request in order “to secure funding of Settlement Payment” to “a one-time extension of not more
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28 There is a numbering error in the Agreement such that Paragraph 10 “Miscellaneous Terms of Agreement” is
erroneously identified as Paragraph 2.
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 than ninety (90) days”. If the Settlement Agreement was intended to be contingent upon the
2 closing of Tabatabai’s “business deal”, where is the reference to it, and why would he only be
3 entitled to a “one-time” extension if funding was not secured?
4 Further, an expressly included and material condition to Malek’s consent to the Settlement
5 Agreement was that Tabatabai’s settlement payment be secured by a deed of trust in case
6 Tabatabai was unable to secure funding. Specifically, Paragraph 3 states:
7 3. Security for Settlement Payment 1. Tabatabai and Jeanie Turner
are currently the title owners of the real property located at 331
8 Soquel A venue in Santa Cruz, California (the “Commercial
Property"), and co-borrowers under an existing mortgage on the
9 Commercial Property. As required under their divorce decree,
Tabatabai is in the process of refinancing the Commercial Property
10 in a principal amount of not more of $1.67 Million, independent of
closing costs (the "Refinance"), in order to pay off the existing
11 mortgage, and take title in his own name. Tabatabai agrees to secure
Settlement Payment 1 with a deed of trust substantially in the form
12 attached hereto as Exhibit "A" which shall be filled-in and executed
by Tabatabai ( or such related entity that Tabatabai choses to take
13 title to the Commercial property under) in front of a licensed notary
14 and thereafter delivered to Malek within ten (10) days of the
execution of this Agreement. Malek agrees to hold said deed in trust
15 until the Refinance closes, at which time Malek shall be authorized
to record the deed of trust.
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17 Again, if the Settlement Agreement were conditioned upon Tabatabai’s “business deal” closing,
18 there would be no need for a deed of trust to secure the payment.
19 The contention that Malek knew that Tabatabai intended to use the business deal to fund
20 his settlement payment does make the deal a mutual mistake of fact. Malek had no control over,
21 or interest in, where the settlement funds came from. He did not enter into the Settlement
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 Agreement on the condition or belief that Tabatabai’s alleged “business deal” would close, and
2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
San Jose, CA 95110
23 certainly never agreed to condition the deal on the closing. Instead, he gave Tabatabai a reasonable
24 time to secure funding, and required that Tabatabai secure the payment with an alternative source
25 of funding – the deed of trust.
26 If a settling party could rescind a settlement agreement whenever his/her intended source
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27 of funding fell through, no settlement agreement could ever be deemed to have been breached.
28 //
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 C. There Has Been No Mutual Mistake of Law
2 Tabatabai also argues that the parties entered into the Settlement Agreement under the
3 mistaken belief that: (i) the Court would grant a Good Faith Motion; (ii) the case would remain
4 in civil court, rather than being assigned to family court. Neither contention is supported by the
5 law, the facts or the terms of the integrated Settlement Agreement.
6 Tabatabai correctly states that a mistake of law constitutes a mistake justifying relief only
7 when it arises from the following: A misapprehension of the law by all parties, all supposing that
8 they knew and understood it, and all making substantially the same mistake as to the law [Civ.
9 Code § 1578(1)]; or a misapprehension of the law by one party, of which the others are aware at
10 the time of contracting, but which they do not rectify [Civ. Code § 1578(2)]. However, nothing
11 in Tabatabai’s brief establishes these elements as to the Settlement Agreement.
12 For starters, when a Settlement Agreement is intended to be conditioned upon a court
13 finding of Good Faith, the requirement is commonly included in the settlement agreement, and
14 the duties and responsibilities of the parties are conditioned upon the finding. No such provision
15 exists in the Settlement Agreement between Malek and Tabatabai – and the lack of such a
16 provision was no accident. The Settlement Agreement was intended to take effect immediately
17 upon execution and without condition, and Malek fulfilled his obligations accordingly –
18 dismissing both actions and assigning his claims to Tabatabai.
19 Moreover, prior to executing the Settlement Agreement, Malek served all parties with a
20 Notice of Settlement, and both Malek and Tabatabai were advised in writing that Turner intended
21 to (i) object to the good faith of the settlement, and (ii) move the Court to re-assign Malek’s claims
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 against her to the Family Court if they were assigned to Tabatabai. Malek made no representations
2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
San Jose, CA 95110
23 or assumptions on how the motions would be resolved, and they were not material to his
24 agreement to the settlement. To the contrary, the Settlement Agreement shifted all of the risks of
25 the remaining claims exclusively to Tabatabai, stating:
26 4. Assignment and Indemnity. In exchange for the Settlement
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Amount, Malek hereby irrevocably assigns to Tabatabai all of
27 Malek' s rights, remedies, judgments, claims and causes of action
(including his claims in the Action) against Enabledware, Jeanne
28 Turner and Robert Lindow, excluding only the attorney's fee awards
Malek has already obtained against Jeanne Turner and Robert
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 Lindow for prevailing on Malek's Anti-SLAPP motions against the
same (collectively, the "Assigned Claims"). Tabatabai agrees to
2 defend and indemnify Malek from and against all claims asserted
by, or losses, liabilities, damages, costs and expenses awarded in
3 favor of, Jeanne Turner and/or Robert Lindow in the Action against
Malek and/or Malek's spouse, Maryam Maleksalehi.
4 Notwithstanding the foregoing, Tabatabai shall not be obligated to
indemnify Malek from any third-party claims to the extent arising
5 from a violation of law by Malek, if any, including but not limited
to any claims, complaints, liabilities, losses, damages, costs or
6 expenses related to usury laws or lending money without proper
license/s.
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8 Malek never presumed to know what the outcome of Turner’s motions would be. He never
9 had a misapprehension of the law, and never supposed he knew or understood it. If Tababtabai
10 made incorrect assumptions, then that is the culpability of Tabatabai and/or his counsel. As
11 Tabatabai’s own brief points out: “[w]here parties are aware at the time the contract is entered
12 into that a doubt exists in regard to a certain matter and contract on that assumption, the risk of
13 the existence of the doubtful matter is assumed as an element of the bargain.” (Guthrie v. Times-
14 Mirror Co. (1975) 51 Cal.App.3d 879, 885).
15 Finally, as Tabatabai’s brief makes clear, “whether of fact or of law, the mistake must
16 affect the execution and material elements of the contract (and not merely some collateral matter),
17 or it will not provide adequate ground for rescission.” (Brayton Purcell LLP v. Recordon &
18 Recordon (N.D. Cal. 2006) 2006 U.S. Dist. LEXIS 82145, at *10–*11). As Tabatabai
19 acknowledges at the end of his brief, he never even wanted the assigned claims, stating:
20 Tabatabai did not want the assignment of rights…. Tabatabai does
not want to unnecessarily spend his resources to prosecute the
21 assigned claims, nor does he have to per the Agreement.
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 Tabatabai cannot simultaneously claim that the “unforeseen issues relating to the assigned claims
2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
San Jose, CA 95110
23 impact a material element of the Settlement Agreement, and simultaneously argue that it never
24 wanted them in the first place.
25 D. Rescission Is Not an Appropriate Remedy
26 Under clearly established California law, in order to effect a rescission a party to the
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27 contract must, promptly upon discovering the facts which entitle him to rescind: (a) give notice
28 of rescission to the party as to whom he rescinds; and (b) restore to the other party everything of
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 value which he has received from him under the contract or offer to restore the same upon
2 condition that the other party do likewise, unless the latter is unable or positively refuses to do so.
3 (See e.g. Resure, Inc. v. Superior Court (1996) 42 Cal.App.4th 156).
4 Here, not only has Tabatabai failed to timely notice of an intent to rescind, but he is
5 incapable of restoring Malek to the position he was in prior the Settlement Agreement – as Malek
6 has dismissed two cases against Tabatabai with prejudice, and his assigned claims have been
7 removed to a court in which Malek has no standing to pursue them. Furthermore, Tabatabai cannot
8 rescind a settlement agreement where Tabatabai is the breaching party.
9 Thus, even if there were a mutual mistake of fact or mutual mistake of law (which there
10 is not), recission would not be an appropriate remedy under California Law.
11
12 CONCLUSION
13 Written and fully integrated settlements would be fraught with problems if they could be
14 rescinded or “unwound” because of a “mistake” (by a single party) about being able to raise the
15 funds promised to be paid, or what the ultimate [unknown] resolution of an assigned claim would
16 be. The essence and risks in settlements are by nature, undetermined. Parties negotiated through
17 counsel the written settlement knowing they were taking some “calculated” risks.
18 Tabatabai should “immediately” pay Malek the $1,250,000 plus interest from August 28,
19 2022 at ten percent (10%) annually. Furthermore, Tabatabai is to deliver an executed deed of trust
20 as prescribed by the Settlement Agreement and executed in front of a notary, and delivered within
21 ten (10) days to Malek. The breakdown of the monetary portion from Settlement Payment 1 of
MILLER, MORTON, CAILLAT & NEVIS, LLP
22 the requested judgment is as follows:
2001 Gateway Place, Suite 220W
Telephone: (408) 292-1765
San Jose, CA 95110
23 Unpaid Balance $1,250,000.00
Interest August 28, 2022 – November 26, 2022 $22,259.90
24 Interest Nov. 27, 2022 – Dec. 19, 2022 $7,534.12
_________$1,288,355.52
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26 It should be further ordered that interest shall accrue at the legal rate of ten percent (10%)
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27 annually after the Judgment.
28 //
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 Respectfully submitted,
2 Dated: December 12, 2022 MILLER, MORTON, CAILLAT & NEVIS, LLP
3
By:______________________________
4 ERIC C. MCALLISTER
MARK S. SANDBERG
5 Attorneys for Plaintiff
Nemat Maleksalehi
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REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 664.6
1 PROOF OF SERVICE
2 STATE OF CALIFORNIA, COUNTY OF SANTA CLARA
3 I, the undersigned, declare: I am now and at all times herein mentioned have been over the
age of eighteen years, a citizen of the United States, employed in Santa Clara County, California,
4 and not a party to the within action or cause; my business address is 2001 Gateway Place, Suite
220W, San Jose, California 95110. On the date set forth below, I served the below-stated person(s)
5 the following:
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• REPLY TO SHAHRAM TABATABAI’S OPPOSITION TO NEMAT
7 MALEKSALEHI’S MOTION TO ENTER JUDGMENT AGAINST SHAHRAM
TABATABAI PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6;
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• PROOF OF SERVICE
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10 BY ELECTRONIC TRANSMISSION Only by emailing the document(s) to the persons at
the e-mail address(es) listed below. No electronic message or other indication that the
11 transmission was unsuccessful was received within a reasonable time after the transmission.
12 (STATE) I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
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SEE ATTACHED SERVICE LIST
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Executed on December 12, 2022, at San Jose, California.
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Sarah Zahrani
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PROOF OF SERVICE
1 SERVICE LIST
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3 Lesley Harris Attorney(s) for Defendant and Cross-
Law Office of Lesley Harris Complainant Jeanne Turner Tabatabai
4 55 River Street, Suite 100
Santa Cruz, CA 95060 Telephone (831) 458-0502
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Email lesleyharrisesq@gmail.com
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7 Tanzeel Hak Attorney for Defendant Sean Tabatabai
By The Law, APLC
8 481 N. Santa Cruz Ave. #233 Tel: (510) 362-6791
Los Gatos, CA 95030
9 Email Tanzeel@bythelaw.co
10 Robert Lindow Cross-Defendant/Cross-Complainant
P.O. Box 2107 In Pro Per
11 Aptos, CA 95001
Telephone (831) 818-5512
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Email lindow1@gmail.com
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PROOF OF SERVICE
Preview
1 ERIC C. MCALLISTER, ESQ., SBN 252567 ecm@millermorton.com 2 MARK S. SANDBERG, ESQ., SBN 207556 mss@millermorton.com 3 MILLER, MORTON, CAILLAT & NEVIS, LLP 2001 Gateway Place, Suite 220W 4 San Jose, California 95110 Telephone: (408) 292-1765 5 Facsimile: (408) 436-8272 6 Attorneys for Plaintiff Nemat Maleksalehi 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF SANTA CRUZ 10 11 NEMAT MALEKSALEHI, Case No.: 18CV02004 12 Plaintiff, REPLY TO SHAHRAM TABATABAI’S OPPOSITION TO NEMAT 13 vs. MALEKSALEHI’S MOTION TO ENTER JUDGMENT AGAINST SHAHRAM 14 SHAHRAM TABATABAI, an individual; TABATABAI PURSUANT TO CODE OF JEANNE TURNER TABATABAI, an CIVIL PROCEDURE SECTION 664.6 15 individual; and DOES 1 through 10, inclusive Date: December 19, 2022 16 Defendants. Time: 8:30 a.m. Dept.: 5 17 Before: Hon. Timothy Volkmann AND RELATED CROSS-ACTION. 18 19 20 21 MILLER, MORTON, CAILLAT & NEVIS, LLP 22 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 24 25 26 50 West 27 28 1 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 2 INTRODUCTION 3 On March 1, 2022, former Plaintiff Nemat Maleksalehi (hereinafter “Malek”) and Cross- 4 Claimant Shahram (and former Defendant) Tabatabai (hereinafter “Tabatabai”) entered into a 5 written Settlement Agreement following months of arms-length negotiations between their 6 respective counsel (the “Settlement Agreement”). Under the terms of the Settlement Agreement, 7 Tabatabai was given six months to pay Malek the sum of $1.25 million in exchange for Malek’s 8 agreement to: (i) dismiss Tabatabai from the action, (ii) release Tabatabai from a $1.5 million 9 debt that Tabatabai has never disputed; (iii) assign his remaining claims in the Action to 10 Tabatabai, and (iii) dismiss a separate lawsuit that Malek had filed in Santa Clara County against 11 Tabatabai’s software company - Enabledware. 12 Now that his payment deadline has passed, and Malek has fully performed his obligations 13 (including dismissing the actions against Tabatabai and Enabledware), Tabatabai is improperly 14 requesting this Court to rescind the Settlement Agreement based upon unsupported and disputed 15 parole evidence that the parties entered into the Settlement Agreement under the mutually 16 mistaken belief that: (i) Tabatabai would be able to raise the settlement funds through a “business 17 deal” that is never mentioned in the settlement agreement, and (ii) that the settlement agreement 18 would be found to have been made in good faith and could be prosecuted in civil court. Contrary 19 to Tabatabai’s assertions, the Settlement Agreement was not conditioned on whether or how 20 Tabatabai would raise the settlement funds, it was not conditioned upon the Court finding that it 21 had been made in good faith, and it was not conditioned upon Tabatabai being able to proceed MILLER, MORTON, CAILLAT & NEVIS, LLP 22 with the assigned claims in any particular forum. 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 Because the Action is still pending before this Court, it has both personal and subject 24 matter jurisdiction to hear this Motion, and there is no basis to rescind the Settlement Agreement. 25 It was negotiated at arms-length by the parties’ counsel of record, it contains none of the 26 conditions or assumptions Tabatabai argues for (all of which are ordinary risks assumed by parties 50 West 27 to a settlement agreement), and Malek has fully performed his obligations under the Agreement. 28 // 2 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 2 ARGUMENT 3 A. This Court Has Jurisdiction to Rule on This Motion 4 As a preliminary matter, Tabatabai challenges the jurisdiction of this Court to rule on the 5 motion, arguing that the Court lost jurisdiction when Malek dismissed his claims in the Action. 6 While this argument may have had merit if Malek had dismissed the entire Action, the opposite 7 is true where, as here, only part of the case was dismissed. 8 Tabatabai’s jurisdictional argument relies primarily on cases in which the plaintiff had 9 dismissed its entire action with prejudice, and without expressly preserving its rights under CCP 10 section 664.6. Ironically, Tabatabai’s motion cites to a case that holds the exact opposite when 11 only a portion of a case is dismissed - Wackeen v. Malis (2002) 97 Cal.App.4th 429. In Wackeen, 12 the court affirmed the premise that voluntary dismissal of “an entire action” divests the court of 13 jurisdiction, but dismissal of only some of the parties does not: 14 When a court has jurisdiction over the parties and subject matter of a suit, its jurisdiction continues until a final judgment is entered. 15 (Riley v. Superior Court (1957) 49 Cal.2d 305, 309 [316 P.2d 956].) When there is a voluntary dismissal of an entire action, the court's 16 jurisdiction over the parties and the subject matter terminates. (Casa de Valley View Owner's Assn. v. Stevenson, supra, 167 Cal.App.3d 17 at p. 1192.) In contrast, a dismissal by only some of the plaintiffs means the court is not divested of subject matter jurisdiction and the 18 suit continues. (Ibid.) Wackeen v. Malis (2002) 97 Cal.App.4th 429 at 437. 19 20 Malek did not dismiss the entire action in this case – he didn’t even dismiss all of his 21 claims. He only dismissed Tabatabai, and only because it was required under the very Settlement MILLER, MORTON, CAILLAT & NEVIS, LLP 22 Agreement that Tabatabai now seeks to rescind. The underlying Action, to which Tabatabai 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 remains an active party, is still properly pending before this Court. Thus, the only potential party 24 involved in this motion that the Court would not otherwise have jurisdiction over is Malek, who 25 has since voluntarily submitted to the jurisdiction of the Court by way of the filing of this motion. 26 Thus, the Court has personal jurisdiction over Malek for purposes of this motion, and continues 50 West 27 to have personal and subject matter jurisdiction over Tabatabai in the Action. With both subject 28 3 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 matter and personal jurisdiction, there is no obstacle to the Court enforcing the written and 2 integrated Settlement Agreement, pursuant to CCP section 664.6. 3 B. There Has Been No Mutual Mistake of Fact 4 Tabatabai argues that the Settlement Agreement should be rescinded because the parties 5 executed it under the mutually mistaken belief that it would be funded by a “business deal” that 6 Tabatabai had arranged with the third party “buyer”. Tabatabai’s position is neither legally nor 7 factually valid. 8 For starters, Tabatabai’s brief correctly points out, and then completely ignores, that in 9 order to constitute a “mutual mistake” of fact under the law, the mistaken fact must have existed 10 at the time the settlement agreement was executed, it cannot be an event that occurs after the 11 Settlement Agreement has been signed: “[a] mistake of fact within the meaning of Civ. Code § 12 1577 must concern a present or past fact, not something that occurs after execution of the 13 contract.” (Mosher v. Mayacamas Corp. (1989) 215 Cal.App.3d 1, 4–5). Despite citing this clear 14 requirement, Tabatabai argues that the “mutual mistake of fact” justifying his request for 15 rescission is that the business deal from which he intended to fund the settlement agreement did 16 not close six months after the Settlement Agreement. There is no argument (nor could there be) 17 that Tabatabai’s business deal could never have closed on time when the settlement agreement 18 was executed (as any such contention would be tantamount to an admission of fraud). Thus, on 19 its face, the alleged “mistake” – the failure of his “business deal” to close - was an event that 20 occurred six months after the agreement was executed, and is therefore insufficient to constitute 21 a mutual mistake of fact under California law. MILLER, MORTON, CAILLAT & NEVIS, LLP 22 Moreover, and more importantly, the contention that Malek’s agreement to the Settlement 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 premised upon the fact that Tabatabai’s “business San Jose, CA 95110 23 Agreement was ever expressly or impliedly 24 deal” was going to close prior to the payment deadline is unsupportable and directly contradicted 25 by the parties’ integrated Settlement Agreement. 26 The Settlement Agreement was negotiated at arms-length, through the parties’ respective 50 West 27 counsel of record, and is fully integrated – superseding all prior negotiations, agreements, or 28 representations, whether oral or written, with respect to such subject matter. Specifically, 4 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 Paragraph 10(a)1 of the Settlement Agreement states: 2 a. Voluntary Releases. The Parties have executed this Agreement after having full opportunity to consult with legal counsel of their 3 choosing before affixing their signatures hereto. The Parties are aware of the alternative rights and remedies available to them and 4 have satisfied themselves that the releases contained in this Agreement are in their respective best interests. 5 Similarly, Paragraph 10(c) states: 6 c. Integration. This Agreement contains the entire understanding 7 between the Parties in connection with the subject matter, and it supersedes and replaces all prior negotiations, agreements, or 8 representations, whether oral or written, with respect to such subject matter. Each Party acknowledges that no other Party, or any agent 9 or attorney of any Party, has made any promise, representation, or warranty whatsoever, expressed or implied, not contained herein, 10 concerning the subject matter hereof, to induce the Party making such acknowledgment to execute this document, and each Party 11 acknowledges that such Party has not executed this document in reliance on any such promise, representation, or warranty not 12 contained herein. 13 Paragraph 2(i) of the Settlement Agreement unambiguously, and without condition, 14 requires Tabatabai to pay Malek the first installment of settlement monies (Settlement Payment 15 1) within 180 days. 16 i. ‘Settlement Payment 1’: Tabatabai agrees to pay to Malek the sum of one million two hundred fifty thousand dollars ($1,250,000.00) 17 within 180 days of the execution of this Agreement, subject to a one- time extension of not more than ninety (90) days ifrequired and 18 requested by Tabatabai to secure funding of Settlement Payment 1. Nothing in this Agreement shall be read or construed to prevent 19 Tabatabai from seeking reimbursement of Settlement Payment 1 from Jeanne Turner or Robert Lindow. 20 21 There is no language even referencing, much less conditioning the enforceability of the Settlement MILLER, MORTON, CAILLAT & NEVIS, LLP 22 closing a “business deal” 2001 Gateway Place, Suite 220W Agreement, on Tabatabai in order to fund his payment - nor would Telephone: (408) 292-1765 San Jose, CA 95110 23 Malek have agreed to such a [non-existent] condition. 24 To the contrary, Malek specifically limited the number of extensions Tabatabai could even 25 request in order “to secure funding of Settlement Payment” to “a one-time extension of not more 26 50 West 27 1 28 There is a numbering error in the Agreement such that Paragraph 10 “Miscellaneous Terms of Agreement” is erroneously identified as Paragraph 2. 5 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 than ninety (90) days”. If the Settlement Agreement was intended to be contingent upon the 2 closing of Tabatabai’s “business deal”, where is the reference to it, and why would he only be 3 entitled to a “one-time” extension if funding was not secured? 4 Further, an expressly included and material condition to Malek’s consent to the Settlement 5 Agreement was that Tabatabai’s settlement payment be secured by a deed of trust in case 6 Tabatabai was unable to secure funding. Specifically, Paragraph 3 states: 7 3. Security for Settlement Payment 1. Tabatabai and Jeanie Turner are currently the title owners of the real property located at 331 8 Soquel A venue in Santa Cruz, California (the “Commercial Property"), and co-borrowers under an existing mortgage on the 9 Commercial Property. As required under their divorce decree, Tabatabai is in the process of refinancing the Commercial Property 10 in a principal amount of not more of $1.67 Million, independent of closing costs (the "Refinance"), in order to pay off the existing 11 mortgage, and take title in his own name. Tabatabai agrees to secure Settlement Payment 1 with a deed of trust substantially in the form 12 attached hereto as Exhibit "A" which shall be filled-in and executed by Tabatabai ( or such related entity that Tabatabai choses to take 13 title to the Commercial property under) in front of a licensed notary 14 and thereafter delivered to Malek within ten (10) days of the execution of this Agreement. Malek agrees to hold said deed in trust 15 until the Refinance closes, at which time Malek shall be authorized to record the deed of trust. 16 17 Again, if the Settlement Agreement were conditioned upon Tabatabai’s “business deal” closing, 18 there would be no need for a deed of trust to secure the payment. 19 The contention that Malek knew that Tabatabai intended to use the business deal to fund 20 his settlement payment does make the deal a mutual mistake of fact. Malek had no control over, 21 or interest in, where the settlement funds came from. He did not enter into the Settlement MILLER, MORTON, CAILLAT & NEVIS, LLP 22 Agreement on the condition or belief that Tabatabai’s alleged “business deal” would close, and 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 certainly never agreed to condition the deal on the closing. Instead, he gave Tabatabai a reasonable 24 time to secure funding, and required that Tabatabai secure the payment with an alternative source 25 of funding – the deed of trust. 26 If a settling party could rescind a settlement agreement whenever his/her intended source 50 West 27 of funding fell through, no settlement agreement could ever be deemed to have been breached. 28 // 6 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 C. There Has Been No Mutual Mistake of Law 2 Tabatabai also argues that the parties entered into the Settlement Agreement under the 3 mistaken belief that: (i) the Court would grant a Good Faith Motion; (ii) the case would remain 4 in civil court, rather than being assigned to family court. Neither contention is supported by the 5 law, the facts or the terms of the integrated Settlement Agreement. 6 Tabatabai correctly states that a mistake of law constitutes a mistake justifying relief only 7 when it arises from the following: A misapprehension of the law by all parties, all supposing that 8 they knew and understood it, and all making substantially the same mistake as to the law [Civ. 9 Code § 1578(1)]; or a misapprehension of the law by one party, of which the others are aware at 10 the time of contracting, but which they do not rectify [Civ. Code § 1578(2)]. However, nothing 11 in Tabatabai’s brief establishes these elements as to the Settlement Agreement. 12 For starters, when a Settlement Agreement is intended to be conditioned upon a court 13 finding of Good Faith, the requirement is commonly included in the settlement agreement, and 14 the duties and responsibilities of the parties are conditioned upon the finding. No such provision 15 exists in the Settlement Agreement between Malek and Tabatabai – and the lack of such a 16 provision was no accident. The Settlement Agreement was intended to take effect immediately 17 upon execution and without condition, and Malek fulfilled his obligations accordingly – 18 dismissing both actions and assigning his claims to Tabatabai. 19 Moreover, prior to executing the Settlement Agreement, Malek served all parties with a 20 Notice of Settlement, and both Malek and Tabatabai were advised in writing that Turner intended 21 to (i) object to the good faith of the settlement, and (ii) move the Court to re-assign Malek’s claims MILLER, MORTON, CAILLAT & NEVIS, LLP 22 against her to the Family Court if they were assigned to Tabatabai. Malek made no representations 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 or assumptions on how the motions would be resolved, and they were not material to his 24 agreement to the settlement. To the contrary, the Settlement Agreement shifted all of the risks of 25 the remaining claims exclusively to Tabatabai, stating: 26 4. Assignment and Indemnity. In exchange for the Settlement 50 West Amount, Malek hereby irrevocably assigns to Tabatabai all of 27 Malek' s rights, remedies, judgments, claims and causes of action (including his claims in the Action) against Enabledware, Jeanne 28 Turner and Robert Lindow, excluding only the attorney's fee awards Malek has already obtained against Jeanne Turner and Robert 7 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 Lindow for prevailing on Malek's Anti-SLAPP motions against the same (collectively, the "Assigned Claims"). Tabatabai agrees to 2 defend and indemnify Malek from and against all claims asserted by, or losses, liabilities, damages, costs and expenses awarded in 3 favor of, Jeanne Turner and/or Robert Lindow in the Action against Malek and/or Malek's spouse, Maryam Maleksalehi. 4 Notwithstanding the foregoing, Tabatabai shall not be obligated to indemnify Malek from any third-party claims to the extent arising 5 from a violation of law by Malek, if any, including but not limited to any claims, complaints, liabilities, losses, damages, costs or 6 expenses related to usury laws or lending money without proper license/s. 7 8 Malek never presumed to know what the outcome of Turner’s motions would be. He never 9 had a misapprehension of the law, and never supposed he knew or understood it. If Tababtabai 10 made incorrect assumptions, then that is the culpability of Tabatabai and/or his counsel. As 11 Tabatabai’s own brief points out: “[w]here parties are aware at the time the contract is entered 12 into that a doubt exists in regard to a certain matter and contract on that assumption, the risk of 13 the existence of the doubtful matter is assumed as an element of the bargain.” (Guthrie v. Times- 14 Mirror Co. (1975) 51 Cal.App.3d 879, 885). 15 Finally, as Tabatabai’s brief makes clear, “whether of fact or of law, the mistake must 16 affect the execution and material elements of the contract (and not merely some collateral matter), 17 or it will not provide adequate ground for rescission.” (Brayton Purcell LLP v. Recordon & 18 Recordon (N.D. Cal. 2006) 2006 U.S. Dist. LEXIS 82145, at *10–*11). As Tabatabai 19 acknowledges at the end of his brief, he never even wanted the assigned claims, stating: 20 Tabatabai did not want the assignment of rights…. Tabatabai does not want to unnecessarily spend his resources to prosecute the 21 assigned claims, nor does he have to per the Agreement. MILLER, MORTON, CAILLAT & NEVIS, LLP 22 Tabatabai cannot simultaneously claim that the “unforeseen issues relating to the assigned claims 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 impact a material element of the Settlement Agreement, and simultaneously argue that it never 24 wanted them in the first place. 25 D. Rescission Is Not an Appropriate Remedy 26 Under clearly established California law, in order to effect a rescission a party to the 50 West 27 contract must, promptly upon discovering the facts which entitle him to rescind: (a) give notice 28 of rescission to the party as to whom he rescinds; and (b) restore to the other party everything of 8 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 value which he has received from him under the contract or offer to restore the same upon 2 condition that the other party do likewise, unless the latter is unable or positively refuses to do so. 3 (See e.g. Resure, Inc. v. Superior Court (1996) 42 Cal.App.4th 156). 4 Here, not only has Tabatabai failed to timely notice of an intent to rescind, but he is 5 incapable of restoring Malek to the position he was in prior the Settlement Agreement – as Malek 6 has dismissed two cases against Tabatabai with prejudice, and his assigned claims have been 7 removed to a court in which Malek has no standing to pursue them. Furthermore, Tabatabai cannot 8 rescind a settlement agreement where Tabatabai is the breaching party. 9 Thus, even if there were a mutual mistake of fact or mutual mistake of law (which there 10 is not), recission would not be an appropriate remedy under California Law. 11 12 CONCLUSION 13 Written and fully integrated settlements would be fraught with problems if they could be 14 rescinded or “unwound” because of a “mistake” (by a single party) about being able to raise the 15 funds promised to be paid, or what the ultimate [unknown] resolution of an assigned claim would 16 be. The essence and risks in settlements are by nature, undetermined. Parties negotiated through 17 counsel the written settlement knowing they were taking some “calculated” risks. 18 Tabatabai should “immediately” pay Malek the $1,250,000 plus interest from August 28, 19 2022 at ten percent (10%) annually. Furthermore, Tabatabai is to deliver an executed deed of trust 20 as prescribed by the Settlement Agreement and executed in front of a notary, and delivered within 21 ten (10) days to Malek. The breakdown of the monetary portion from Settlement Payment 1 of MILLER, MORTON, CAILLAT & NEVIS, LLP 22 the requested judgment is as follows: 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 Unpaid Balance $1,250,000.00 Interest August 28, 2022 – November 26, 2022 $22,259.90 24 Interest Nov. 27, 2022 – Dec. 19, 2022 $7,534.12 _________$1,288,355.52 25 26 It should be further ordered that interest shall accrue at the legal rate of ten percent (10%) 50 West 27 annually after the Judgment. 28 // 9 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 Respectfully submitted, 2 Dated: December 12, 2022 MILLER, MORTON, CAILLAT & NEVIS, LLP 3 By:______________________________ 4 ERIC C. MCALLISTER MARK S. SANDBERG 5 Attorneys for Plaintiff Nemat Maleksalehi 6 917108_1 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 MILLER, MORTON, CAILLAT & NEVIS, LLP 22 2001 Gateway Place, Suite 220W Telephone: (408) 292-1765 San Jose, CA 95110 23 24 25 26 50 West 27 28 10 REPLY TO OPPOSITION TO MOTION TO ENTER JUDGMENT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6 1 PROOF OF SERVICE 2 STATE OF CALIFORNIA, COUNTY OF SANTA CLARA 3 I, the undersigned, declare: I am now and at all times herein mentioned have been over the age of eighteen years, a citizen of the United States, employed in Santa Clara County, California, 4 and not a party to the within action or cause; my business address is 2001 Gateway Place, Suite 220W, San Jose, California 95110. On the date set forth below, I served the below-stated person(s) 5 the following: 6 • REPLY TO SHAHRAM TABATABAI’S OPPOSITION TO NEMAT 7 MALEKSALEHI’S MOTION TO ENTER JUDGMENT AGAINST SHAHRAM TABATABAI PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 664.6; 8 • PROOF OF SERVICE 9 10 BY ELECTRONIC TRANSMISSION Only by emailing the document(s) to the persons at the e-mail address(es) listed below. No electronic message or other indication that the 11 transmission was unsuccessful was received within a reasonable time after the transmission. 12 (STATE) I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 13 SEE ATTACHED SERVICE LIST 14 Executed on December 12, 2022, at San Jose, California. 15 16 Sarah Zahrani 17 18 19 20 21 22 MILLER, MORTON, CAILLAT & NEVIS, LLP 2001 Gateway Place, Suite 220W 23 Telephone: (408) 292-1765 San Jose, CA 95110 24 25 26 27 50 West 28 2 PROOF OF SERVICE 1 SERVICE LIST 2 3 Lesley Harris Attorney(s) for Defendant and Cross- Law Office of Lesley Harris Complainant Jeanne Turner Tabatabai 4 55 River Street, Suite 100 Santa Cruz, CA 95060 Telephone (831) 458-0502 5 Email lesleyharrisesq@gmail.com 6 7 Tanzeel Hak Attorney for Defendant Sean Tabatabai By The Law, APLC 8 481 N. Santa Cruz Ave. #233 Tel: (510) 362-6791 Los Gatos, CA 95030 9 Email Tanzeel@bythelaw.co 10 Robert Lindow Cross-Defendant/Cross-Complainant P.O. Box 2107 In Pro Per 11 Aptos, CA 95001 Telephone (831) 818-5512 12 Email lindow1@gmail.com 13 14 723897_1 15 16 17 18 19 20 21 22 MILLER, MORTON, CAILLAT & NEVIS, LLP 2001 Gateway Place, Suite 220W 23 Telephone: (408) 292-1765 San Jose, CA 95110 24 25 26 27 50 West 28 3 PROOF OF SERVICE