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David S. Henshaw SBN 271226
HENSHAW LAW OFFICE
155 E. Campbell Avenue
Suite 131
Campbell, CA 95008
(408) 599-1305
(855) 650-0757 Fax
Attomey for Defendant
MARTHA ESPINOSA
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
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11 UNLIMITED JURISDICTION
12
13 BIJAN HAGHIGHI, et al., Case No. 23CV415279
14 Plaintiffs, DECLARATION OF DAVID S.
15 HENSHAW IN SUPPORT OF
v. DEMURRER TO FIRST AMENDED
16 COMPLAINT FOR FRAUD AND
THE PERFECT FINISH, INC, et al. RELATED CLAIMS
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18 Defendants. Date: May 9, 2024
Time: 9:00 a.m.
19 Place: 191 N. First Street, Department 6
San Jose, CA 95113
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Judge: Honorable Evette D. Pennypacker
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Date Complaint Filed: May 3, 2023
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23 Trial Date: None Set
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DECLARATION OF Davip S. HENSHAW IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT FOR FRAUD AND
RELATED CLAIMS
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I, David S. Henshaw, hereby declare as follows:
1 I am the attorney for Defendant MARTHA ESPINOSA (“Defendant”) in this
2 I have personal knowledge of the facts contained in this Declaration. If called to
do so, I could testify as to the truthfulness of the statement made herein.
3 After the Court’s order on Defendant’s demurrer to Plaintiffs’ original Complaint,
and receipt of Plaintiffs’ First Amended Complaint, I reached out to Plaintiffs by email through
BIJAN HAGHIGHI on March 1, 2024.
10 4 In my email, | detailed the issues I had with Plaintiffs’ First Amended Complaint.
i 5 In response to my email, BIIAN HAGHIGHI stated that he believed that
12 Plaintiffs’ First Amended Complaint was pled sufficiently. A true and correct copy of the
13 communications between BIJAN HAGHIGHI and me are attached hereto as Exhibit “A.”
14 I declare under the penalty of perjury under the laws of the State of California that the
15 foregoing is true and correct.
16 Executed this 13'" day of March, 2024, at Campbell, California.
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David S. Henshaw
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DECLARATION OF Davi S. HENSHAW IN SUPPORT OF DEMURRER TO FiRSt AMENDED COMPLAINT FOR FRAUD AND
RELATED CLAIMS
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Exhibit “A”
info henshawlaw.com
a,
From: Bijan Haghighi
Sent: Sunday, March 3, 2024 9:01 PM
To: info henshawlaw.com
Subject: Re: Meet and Confer re: Amended Complaint
Thank you for your email concerning the First Amended Complaint and | appreciate the time and effort you have taken
to outline your concerns. | have reviewed your comments and believe that the FAC addresses the issues raised by the
court in its ruling. While | understand the points you have raised, | feel that the FAC speaks for itself in addressing these
matters.
It appears that the objections raised in your email mirror those previously made in your demurrer, which have already
been considered and addressed by the court. As such, | am confident in the legal sufficiency of the FAC as it stands. |
look forward to addressing these matters further in court and am open to any constructive dialogue that may facilitate a
resolution to this dispute.
Regards,
Bijan
On Fri, Mar 1, 2024 at 11:40 AM info henshawlaw.com wrote:
| Dear Mr. Haghighi,
We are writing this email in an attempt to meet and confer regarding the deficiencies of the “First
Amended Complaint for Fraud and Related Claims” (the “EAC”) that you filed on February 21, 2024, in
Santa Clara County Case No. 23CV415279. As you know, we represent Defendant Martha Espinosa
(“Espinosa”).
We are writing in an attempt to meet and confer pursuant to Code of Civil Procedure section 430.41. As
we previously informed you, this section requires that we discuss with you in person or by phone to
determine whether we can come to an agreement that would resolve our objections that we would raise
in a demurrer.
Below are the issues that we have with the FAC, most of which have already been explained to you with
regard to the original Complaint. Basically, your FAC still suffers from most of the same defects as your
original Complaint.
Factual Background
Like you did in the original Complaint, you continue to allege that on July 18, 2018, you and your wife
entered into a contract with The Perfect Finish for the construction and installation of cabinets. You
sued Emil Eshagh in a previous case in 2019 and received a default judgment against him in the amount
of $50,733.28.
All Causes of Action
Duplicate Actions
Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit
between the same parties or parties in privity with them. (Mycogen Corp. v. Monsanto Co. (2002) 28
Cal.4th 888, 896.)
You have already sued and received a judgment against The Perfect Finish, Inc. and Emil Eshagh. You
sued for breach of contract, negligence, fraud, negligent misrepresentation, intentional infliction of
emotional distress, and negligent infliction of emotional distress. This lawsuit was based on the same
factual background (i.e., the cabinet contract). You have already received a judgment for this case.
Thus, there is no basis for this case and the FAC will be dismissed by the Court.
Second Cause of Action for Fraudulent Conveyance
Failure to Plead Fraudulent Conveyance Correctly
The FAC does not adequately allege a claim for fraudulent conveyance.
In order to establish a fraudulent conveyance, three things or elements must be pleaded and proved:
First, there must be a conveyance or the creation of an obligation. Second, the transferor must be, at
the time of the conveyance, insolvent or the conveyance must render him insolvent. Third, the
conveyance must have been made, or the obligation incurred, without a fair consideration. (Tokarv.
Redman (1956) 138 Cal.App.2d 350, 353-354.)
In the FAC, you allege that Defendant Emil Eshagh, purporting to act on behalf of All Perfect Finish,
entered into a contract with you and your wife for cabinets. (FAC, | 28.) Then you vaguely allege that
“there was no disclosure of the involvement” of Espinosa. (FAC, 4] 29.) Next, you allege that Espinosa,
“in her capacity as CEO” was “directly responsible for the operations and management decisions of the
corporation, including the conduct alleged herein as fraudulent conveyance.” (FAC, 9132.) You claim
that the alleged actions of Espinosa, “in utilizing suspended corporations without valid licenses to
engage in business transactions with Plaintiffs and subsequently attempting to divert liability to a
separate entity, Earthlime Inc., constitute a fraudulent conveyance.” (FAC, 4] 33.)
The problem with this claim, like in the original Complaint, is that it still does not allege the insolvency of
who or what transferred assets. You also still fail to allege what was conveyed and what the
consideration was for the transfer. It still looks as though you are fishing for a claim, rather than having
any facts showing an actual conveyance.
Further, as pointed out by the Court in its Order Sustaining the Demurrer as to the original Complaint
(the “Order”), a transfer can be invalid either because of actual fraud, (Civ. Code § 3439.04(a)), or
constructive fraud (Civ. Code § 3439.04(b), 3439.05). “[I]n California, fraud must be pled specifically;
general and conclusory allegations do not suffice. [Citations.] Thus, the policy of liberal construction of
the pleadings ... will not ordinarily be invoked to sustain a pleading defective in any material respect.
(Citation.] This particularity requirement necessitates pleading facts which ‘show how, when, where, to
whom, and by what means the representations were tendered. (Citation omitted.).” (Robinson
Helicopter Co., inc. v. Dana Corp. (2004) 34 Cal.4th 979, 993.)
The FAC suffers from the same problems as the original Complaint. The FAC does not allege any facts
with particularity regarding an alleged fraudulent conveyance by any Defendant, especially not
Espinosa. The FAC only pleads general and conclusory allegations against all Defendants. There is no
specificity, for example, as to who engaged in the acts, what their actions were, what was conveyed and
to whom, or when the actions took place. The general and conclusory allegations do not sufficiently
support a claim for fraudulent conveyance.
Third Cause of Action for Conspiracy to Commit Fraud
As you know from the Court’s Order Sustaining the Demurrer as to the original Complaint, civil
conspiracy is a legal doctrine that imposes liability on persons who did not actually commit a tort but
acted in concert with another tortfeasor. To support this claim, Plaintiffs must allege "(1) the formation
and operation of the conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3) damages
arising from the wrongful conduct." (ARE! I! Cases (2013) 216 Cal.App.4th 1004, 1022.) A conspiracy
“must be activated by the commission of an actual tort." (Applied Equipment Corp. v. Litton Saudi
Arabia Ltd. (1994) 7 Cal.4th 503, 511.) Where fraud is alleged to be the object of the conspiracy, the
claim must be pleaded with particularity." (Favila v. Katten Muchin Rosennzan LLP (2010) 188
Cal.App.4th 189, 211.)
Although you followed the Court’s directive and have this time alleged that certain Defendants formed
and operated a conspiracy, you have still failed to plead the claim with particularity. Again, there is no
specificity, for example, as to who engaged in the acts, what their actions were, what was conveyed and
to whom, or when the actions took place.
Fourth Cause of Action for Piercing the Corporate Veil
Eailure toPlead a Cause
of Action for Piercing
the Corporate Veil
As | pointed out to you previously, a claim against a defendant, based on an alter ego theory, is not itself
a claim for substantive relief. (Wennessey’s Tavern, Inc. v. American Air Filter Co. (1988) 204 Cal.App.3d
1351, 1358-1359.)
Nevertheless, you continue to allege “piercing the corporate veil” as a separate cause of action. But this
time, you essentially recite back verbatim conclusory language — unsupported by facts — that was
included in the Court’s Order. This will not suffice.
Even if “piercing the corporate veil” was a cognizable cause of action, your allegations are still deficient.
The FAC continues to vaguely and conclusively allege that Defendants used the corporate entities as a
shield to avoid personal liability, and that that use was a sham and abuse of corporate form.
As for your vague allegations that recited back portions of the Order, we would like to remind you that
when filing a complaint, the pleader is certifying to the Court that there is evidentiary support for the
allegations and other factual contentions made in the complaint or, if specifically so identified, that the
allegations and other factual contentions are likely to have evidentiary support after a reasonable
opportunity for further investigation or discovery. (Code Civ. Proc., § 128.7(b)(3); see Code Civ. Proc.,
§128.7(i).)
Conclusion
In light of the foregoing, we urge you to reconsider this lawsuit. Please get back to me on or before
March
15, 2024 to let me know whether you will be dismissing this case.
David Henshaw
408-599-1305
Preview
David S. Henshaw SBN 271226 HENSHAW LAW OFFICE 155 E. Campbell Avenue Suite 131 Campbell, CA 95008 (408) 599-1305 (855) 650-0757 Fax Attomey for Defendant MARTHA ESPINOSA SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA 10 11 UNLIMITED JURISDICTION 12 13 BIJAN HAGHIGHI, et al., Case No. 23CV415279 14 Plaintiffs, DECLARATION OF DAVID S. 15 HENSHAW IN SUPPORT OF v. DEMURRER TO FIRST AMENDED 16 COMPLAINT FOR FRAUD AND THE PERFECT FINISH, INC, et al. RELATED CLAIMS 17 18 Defendants. Date: May 9, 2024 Time: 9:00 a.m. 19 Place: 191 N. First Street, Department 6 San Jose, CA 95113 20 Judge: Honorable Evette D. Pennypacker 21 Date Complaint Filed: May 3, 2023 22 23 Trial Date: None Set 24 25 26 27 28 DECLARATION OF Davip S. HENSHAW IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT FOR FRAUD AND RELATED CLAIMS 1 I, David S. Henshaw, hereby declare as follows: 1 I am the attorney for Defendant MARTHA ESPINOSA (“Defendant”) in this 2 I have personal knowledge of the facts contained in this Declaration. If called to do so, I could testify as to the truthfulness of the statement made herein. 3 After the Court’s order on Defendant’s demurrer to Plaintiffs’ original Complaint, and receipt of Plaintiffs’ First Amended Complaint, I reached out to Plaintiffs by email through BIJAN HAGHIGHI on March 1, 2024. 10 4 In my email, | detailed the issues I had with Plaintiffs’ First Amended Complaint. i 5 In response to my email, BIIAN HAGHIGHI stated that he believed that 12 Plaintiffs’ First Amended Complaint was pled sufficiently. A true and correct copy of the 13 communications between BIJAN HAGHIGHI and me are attached hereto as Exhibit “A.” 14 I declare under the penalty of perjury under the laws of the State of California that the 15 foregoing is true and correct. 16 Executed this 13'" day of March, 2024, at Campbell, California. 17 18 19 David S. Henshaw 20 21 22 23 24 25 26 27 28 DECLARATION OF Davi S. HENSHAW IN SUPPORT OF DEMURRER TO FiRSt AMENDED COMPLAINT FOR FRAUD AND RELATED CLAIMS 2 Exhibit “A” info henshawlaw.com a, From: Bijan Haghighi Sent: Sunday, March 3, 2024 9:01 PM To: info henshawlaw.com Subject: Re: Meet and Confer re: Amended Complaint Thank you for your email concerning the First Amended Complaint and | appreciate the time and effort you have taken to outline your concerns. | have reviewed your comments and believe that the FAC addresses the issues raised by the court in its ruling. While | understand the points you have raised, | feel that the FAC speaks for itself in addressing these matters. It appears that the objections raised in your email mirror those previously made in your demurrer, which have already been considered and addressed by the court. As such, | am confident in the legal sufficiency of the FAC as it stands. | look forward to addressing these matters further in court and am open to any constructive dialogue that may facilitate a resolution to this dispute. Regards, Bijan On Fri, Mar 1, 2024 at 11:40 AM info henshawlaw.com wrote: | Dear Mr. Haghighi, We are writing this email in an attempt to meet and confer regarding the deficiencies of the “First Amended Complaint for Fraud and Related Claims” (the “EAC”) that you filed on February 21, 2024, in Santa Clara County Case No. 23CV415279. As you know, we represent Defendant Martha Espinosa (“Espinosa”). We are writing in an attempt to meet and confer pursuant to Code of Civil Procedure section 430.41. As we previously informed you, this section requires that we discuss with you in person or by phone to determine whether we can come to an agreement that would resolve our objections that we would raise in a demurrer. Below are the issues that we have with the FAC, most of which have already been explained to you with regard to the original Complaint. Basically, your FAC still suffers from most of the same defects as your original Complaint. Factual Background Like you did in the original Complaint, you continue to allege that on July 18, 2018, you and your wife entered into a contract with The Perfect Finish for the construction and installation of cabinets. You sued Emil Eshagh in a previous case in 2019 and received a default judgment against him in the amount of $50,733.28. All Causes of Action Duplicate Actions Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.) You have already sued and received a judgment against The Perfect Finish, Inc. and Emil Eshagh. You sued for breach of contract, negligence, fraud, negligent misrepresentation, intentional infliction of emotional distress, and negligent infliction of emotional distress. This lawsuit was based on the same factual background (i.e., the cabinet contract). You have already received a judgment for this case. Thus, there is no basis for this case and the FAC will be dismissed by the Court. Second Cause of Action for Fraudulent Conveyance Failure to Plead Fraudulent Conveyance Correctly The FAC does not adequately allege a claim for fraudulent conveyance. In order to establish a fraudulent conveyance, three things or elements must be pleaded and proved: First, there must be a conveyance or the creation of an obligation. Second, the transferor must be, at the time of the conveyance, insolvent or the conveyance must render him insolvent. Third, the conveyance must have been made, or the obligation incurred, without a fair consideration. (Tokarv. Redman (1956) 138 Cal.App.2d 350, 353-354.) In the FAC, you allege that Defendant Emil Eshagh, purporting to act on behalf of All Perfect Finish, entered into a contract with you and your wife for cabinets. (FAC, | 28.) Then you vaguely allege that “there was no disclosure of the involvement” of Espinosa. (FAC, 4] 29.) Next, you allege that Espinosa, “in her capacity as CEO” was “directly responsible for the operations and management decisions of the corporation, including the conduct alleged herein as fraudulent conveyance.” (FAC, 9132.) You claim that the alleged actions of Espinosa, “in utilizing suspended corporations without valid licenses to engage in business transactions with Plaintiffs and subsequently attempting to divert liability to a separate entity, Earthlime Inc., constitute a fraudulent conveyance.” (FAC, 4] 33.) The problem with this claim, like in the original Complaint, is that it still does not allege the insolvency of who or what transferred assets. You also still fail to allege what was conveyed and what the consideration was for the transfer. It still looks as though you are fishing for a claim, rather than having any facts showing an actual conveyance. Further, as pointed out by the Court in its Order Sustaining the Demurrer as to the original Complaint (the “Order”), a transfer can be invalid either because of actual fraud, (Civ. Code § 3439.04(a)), or constructive fraud (Civ. Code § 3439.04(b), 3439.05). “[I]n California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] Thus, the policy of liberal construction of the pleadings ... will not ordinarily be invoked to sustain a pleading defective in any material respect. (Citation.] This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered. (Citation omitted.).” (Robinson Helicopter Co., inc. v. Dana Corp. (2004) 34 Cal.4th 979, 993.) The FAC suffers from the same problems as the original Complaint. The FAC does not allege any facts with particularity regarding an alleged fraudulent conveyance by any Defendant, especially not Espinosa. The FAC only pleads general and conclusory allegations against all Defendants. There is no specificity, for example, as to who engaged in the acts, what their actions were, what was conveyed and to whom, or when the actions took place. The general and conclusory allegations do not sufficiently support a claim for fraudulent conveyance. Third Cause of Action for Conspiracy to Commit Fraud As you know from the Court’s Order Sustaining the Demurrer as to the original Complaint, civil conspiracy is a legal doctrine that imposes liability on persons who did not actually commit a tort but acted in concert with another tortfeasor. To support this claim, Plaintiffs must allege "(1) the formation and operation of the conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3) damages arising from the wrongful conduct." (ARE! I! Cases (2013) 216 Cal.App.4th 1004, 1022.) A conspiracy “must be activated by the commission of an actual tort." (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) Where fraud is alleged to be the object of the conspiracy, the claim must be pleaded with particularity." (Favila v. Katten Muchin Rosennzan LLP (2010) 188 Cal.App.4th 189, 211.) Although you followed the Court’s directive and have this time alleged that certain Defendants formed and operated a conspiracy, you have still failed to plead the claim with particularity. Again, there is no specificity, for example, as to who engaged in the acts, what their actions were, what was conveyed and to whom, or when the actions took place. Fourth Cause of Action for Piercing the Corporate Veil Eailure toPlead a Cause of Action for Piercing the Corporate Veil As | pointed out to you previously, a claim against a defendant, based on an alter ego theory, is not itself a claim for substantive relief. (Wennessey’s Tavern, Inc. v. American Air Filter Co. (1988) 204 Cal.App.3d 1351, 1358-1359.) Nevertheless, you continue to allege “piercing the corporate veil” as a separate cause of action. But this time, you essentially recite back verbatim conclusory language — unsupported by facts — that was included in the Court’s Order. This will not suffice. Even if “piercing the corporate veil” was a cognizable cause of action, your allegations are still deficient. The FAC continues to vaguely and conclusively allege that Defendants used the corporate entities as a shield to avoid personal liability, and that that use was a sham and abuse of corporate form. As for your vague allegations that recited back portions of the Order, we would like to remind you that when filing a complaint, the pleader is certifying to the Court that there is evidentiary support for the allegations and other factual contentions made in the complaint or, if specifically so identified, that the allegations and other factual contentions are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. (Code Civ. Proc., § 128.7(b)(3); see Code Civ. Proc., §128.7(i).) Conclusion In light of the foregoing, we urge you to reconsider this lawsuit. Please get back to me on or before March 15, 2024 to let me know whether you will be dismissing this case. David Henshaw 408-599-1305