Preview
ELECTRONICALLY FILED
superior Court of California,
TRAINOR FAIRBROOK County of Placer
JOHN D. FAIRBROOK (SBN 105115) 11/12/2020
jfairbrook@trainorfairbrook.com By: Laurel Sanders, Deputy Clerk
980 Fulton Avenue
Sacramento, California 95825
Telephone: (916) 929-7000
Facsimile: (916) 929-7111
jdf:6742.001.2241313.1
Attorneys for Defendant
FARID DIBACHI
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF PLACER
10
1] CLARK’S CORNER INVESTMENTS, LLC Case No. SCV0044290
95825
d/b/a CLARK’S CORNER INVESTMENTS,
929-7000
929-7111
FAIRBROOK
12 FARID DIBACHI'S SUPPLEMENTAL
AVENUE
CALIFORNIA
Plaintiffs, BRIEF IN SUPPORT OF MOTION FOR
Law
13 RECONSIDERATION REGARDING
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at
(916)
FULTON
Attorneys
Vv. THE RECENT DECISION OF THE
TRAINOR
Telephone:
14
SACRAMENTO,
NEW YORK COURT
Facsimile:
JLM FINANCIAL, INC., d/b/a JLM
980
15 FINANCIAL and FARID DIBACHI, Date: November 19, 2020
Time: 8:30 am
16 Defendants. Dept: 42
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SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
REGARDING THE RECENT DECISION IN THE NEW YORK COURT
I.
INTRODUCTION
This brief will address the effect of the recent decision by the New York Court which denied
Farid Dibachi's ("DIBACHI") motion to vacate the New York judgment ("Judgment").
Specifically, on October 26, 2020, the New York Court issued itsdecision on the pending Order to
Show Cause why the New York confession of judgment should not be vacated. The court denied
DIBACHI's Motion finding that "...aplenary action is the required means to test a judgment entered
on a COJ." As the court has previously been advised, DIBACHI has a separate plenary action
which is currently pending in New York which attacks the validity of the Judgment. (DIBACHI'S
10 Request for Judicial Notice ("DIBACHI'S RJN"), Exh H.)
ll The decision by the New York court does not fully address the matters before this court on
95825
12
929-7000
929-7111
FAIRBROOK
DIBACHI's motion to vacate the judgment. This is true even if you assume that the Judgment
AVENUE
CALIFORNIA
Law
13 issued against DIBACHI is valid. First, the evidence establishes that there has been a partial
(916)
at
(916)
FULTON
Attorneys
14
TRAINOR
Telephone:
satisfaction of the underlying Judgment in the amount of One Hundred and Fifty Five Thousand
SACRAMENTO,
Facsimile:
980
15 Dollars ($155,000.00), the amount paid by Clark's Corner Investments, LLC ("CLARK'S
16 CORNER") in settlement. Second, even if one assumes a valid assignment of the Judgment by
17 Yellowstone Capital West, LLC ("YELLOWSTONE") to CLARK'S CORNER, the Judgment only
18 may be enforced as security for CLARK'S CORNER's right to seek contribution against DIBACHI.
19 Il.
20 THE NEW YORK COURT DENIED THE ORDER TO SHOW CAUSE ON
21 PROCEDURAL GROUNDS,
22 In support of his application to vacate the judgment in New York, DIBACHI argued that
23 the underlying debt was illegal and unenforceable and further argued that the Judgment against
24 DIBACHI had been obtained by improper means. The court ruled that DIBACHI's application to
25 vacate the judgment in the original New York action was procedurally improper and that a separate
26 "plenary" action was required. Specifically, the New York court indicated that "... all of Dibachi's
27 arguments must be pursued in a different forum." (See Supplemental Declaration of R. Shane
28 Quigley filed on October 26, 2020, Exhibit A -New York Decision, p. 5.)
SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION -1-
REGARDING THE RECENT DECISION IN THE NEW YORK COURT
Significantly, the New York court's ruling denying the order to show cause is not res
judicata or collateral estoppel on any issue. (Burrell v.McMann (1966) 273 N.Y.S.2d 9, 10; Town
of East Hampton v. Omabuild USA No. 1, Inc. (1995) 627 N.Y.S.2d 723, 750.) Although the New
York court did comment on a number, albeit not all, of DIBACHI's arguments in support of his
motion, these matters were not "necessarily decided" by the New York court in denying the Order
to Show Cause. Since the court's comments on the various arguments in support of the motion
constitute dicta, res judicata and collateral estoppel are inapplicable. (Lucido v. Superior Court
(1990) 51 Cal.3d 335, 341.) The question of the validity of the Judgment will be decided in the
currently pending plenary action in New York.
10 It is respectfully submitted that the court should confirm itstentative ruling and stay the
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11 enforcement of the judgment pending the conclusion of the currently pending plenary action in the
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12 New York courts. The circumstances of this case justify a stay of the Judgment in the interests of
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13 justice. (Code Civ. Proc., 1710.50(4).)
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16 SATISFACTION OF THE JUDGMENT BY CLARK'S CORNER.
17 The evidence presented in support of DIBACHI's motion to vacate and motion for
18 reconsideration establishes that CLARK'S CORNER, one of the original judgment debtors, settled
19 the Judgment for the payment of One Hundred and Fifty Five Thousand Dollars ($155,000.00).
20 (DIBACHI'S RJN, Exh H(E).) In return, CLARK'S CORNER received a release of all claims by
21 YELLOWSTONE on the Judgment, and further obtained the release of Kraig Alan Clark and
22 EScreenLogic, Inc. (DIBACHI'S RJN, Exh H(E).) As part of the settlement, CLARK'S CORNER
23 received an assignment of the Judgment that was previously entered against Kraig Alan Clark,
24 Clark's Corner Investments, LLC, EScreenLogic, Inc., JLM Energy, Inc. and JLM Financial, Inc.
25 (DIBACHI'S RJN, Exh H(F).) After the assignment of the Judgment to CLARK'S CORNER, the
26 Judgment was amended to include Farid Dibachi as ajudgment debtor.
27 Hil
28 Mil
SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION -2-
REGARDING THE RECENT DECISION IN THE NEW YORK COURT
Even if one assumes that the assignment of the judgment from YELLOWSTONE to
CLARK'S CORNER isa valid assignment, a credit for the partial satisfaction of the Judgment by
virtue of the settlement payment must be applied. CLARK'S CORNER could only acquire through
an assignment the rights possessed by YELLOWSTONE. "As a general rule, the assignee of a
chose in action stands in the shoes of his assignor, taking his rights and remedies subject to any
right to offset or other defenses existing against the assignor prior to actual notice of the assignment.
(Civ. Code §1459; Code Civ. Proc., §368)" (Salaman v. Bolt (1977) 74 Cal.App.3rd 907, 919.)
Having received a payment of One Hundred and Fifty Five Thousand Dollars ($155,000.00) from
CLARK'S CORNER, YELLOWSTONE no longer had the right to enforce the full amount of the
10 Judgment. When YELLOWSTONE assigned the Judgment to CLARK'S CORNER, the Judgment
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11 had already been partially satisfied.
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12 A settlement by one co-obligor reduces the amount of the outstanding obligation by law.
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13 This is confirmed in Code of Civil Procedure section 877 which provides in relevant part (emphasis
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Preview
ELECTRONICALLY FILED superior Court of California, TRAINOR FAIRBROOK County of Placer JOHN D. FAIRBROOK (SBN 105115) 11/12/2020 jfairbrook@trainorfairbrook.com By: Laurel Sanders, Deputy Clerk 980 Fulton Avenue Sacramento, California 95825 Telephone: (916) 929-7000 Facsimile: (916) 929-7111 jdf:6742.001.2241313.1 Attorneys for Defendant FARID DIBACHI SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF PLACER 10 1] CLARK’S CORNER INVESTMENTS, LLC Case No. SCV0044290 95825 d/b/a CLARK’S CORNER INVESTMENTS, 929-7000 929-7111 FAIRBROOK 12 FARID DIBACHI'S SUPPLEMENTAL AVENUE CALIFORNIA Plaintiffs, BRIEF IN SUPPORT OF MOTION FOR Law 13 RECONSIDERATION REGARDING (916) at (916) FULTON Attorneys Vv. THE RECENT DECISION OF THE TRAINOR Telephone: 14 SACRAMENTO, NEW YORK COURT Facsimile: JLM FINANCIAL, INC., d/b/a JLM 980 15 FINANCIAL and FARID DIBACHI, Date: November 19, 2020 Time: 8:30 am 16 Defendants. Dept: 42 17 18 19 20 21 22 23 24 25 26 27 28 SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION REGARDING THE RECENT DECISION IN THE NEW YORK COURT I. INTRODUCTION This brief will address the effect of the recent decision by the New York Court which denied Farid Dibachi's ("DIBACHI") motion to vacate the New York judgment ("Judgment"). Specifically, on October 26, 2020, the New York Court issued itsdecision on the pending Order to Show Cause why the New York confession of judgment should not be vacated. The court denied DIBACHI's Motion finding that "...aplenary action is the required means to test a judgment entered on a COJ." As the court has previously been advised, DIBACHI has a separate plenary action which is currently pending in New York which attacks the validity of the Judgment. (DIBACHI'S 10 Request for Judicial Notice ("DIBACHI'S RJN"), Exh H.) ll The decision by the New York court does not fully address the matters before this court on 95825 12 929-7000 929-7111 FAIRBROOK DIBACHI's motion to vacate the judgment. This is true even if you assume that the Judgment AVENUE CALIFORNIA Law 13 issued against DIBACHI is valid. First, the evidence establishes that there has been a partial (916) at (916) FULTON Attorneys 14 TRAINOR Telephone: satisfaction of the underlying Judgment in the amount of One Hundred and Fifty Five Thousand SACRAMENTO, Facsimile: 980 15 Dollars ($155,000.00), the amount paid by Clark's Corner Investments, LLC ("CLARK'S 16 CORNER") in settlement. Second, even if one assumes a valid assignment of the Judgment by 17 Yellowstone Capital West, LLC ("YELLOWSTONE") to CLARK'S CORNER, the Judgment only 18 may be enforced as security for CLARK'S CORNER's right to seek contribution against DIBACHI. 19 Il. 20 THE NEW YORK COURT DENIED THE ORDER TO SHOW CAUSE ON 21 PROCEDURAL GROUNDS, 22 In support of his application to vacate the judgment in New York, DIBACHI argued that 23 the underlying debt was illegal and unenforceable and further argued that the Judgment against 24 DIBACHI had been obtained by improper means. The court ruled that DIBACHI's application to 25 vacate the judgment in the original New York action was procedurally improper and that a separate 26 "plenary" action was required. Specifically, the New York court indicated that "... all of Dibachi's 27 arguments must be pursued in a different forum." (See Supplemental Declaration of R. Shane 28 Quigley filed on October 26, 2020, Exhibit A -New York Decision, p. 5.) SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION -1- REGARDING THE RECENT DECISION IN THE NEW YORK COURT Significantly, the New York court's ruling denying the order to show cause is not res judicata or collateral estoppel on any issue. (Burrell v.McMann (1966) 273 N.Y.S.2d 9, 10; Town of East Hampton v. Omabuild USA No. 1, Inc. (1995) 627 N.Y.S.2d 723, 750.) Although the New York court did comment on a number, albeit not all, of DIBACHI's arguments in support of his motion, these matters were not "necessarily decided" by the New York court in denying the Order to Show Cause. Since the court's comments on the various arguments in support of the motion constitute dicta, res judicata and collateral estoppel are inapplicable. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341.) The question of the validity of the Judgment will be decided in the currently pending plenary action in New York. 10 It is respectfully submitted that the court should confirm itstentative ruling and stay the wD N re 11 enforcement of the judgment pending the conclusion of the currently pending plenary action in the x 8s OQoOwsee BZa% Ysgjeag 12 New York courts. The circumstances of this case justify a stay of the Judgment in the interests of Of50%o e.ttos teZgnc LWzOGle 13 justice. (Code Civ. Proc., 1710.50(4).) wes. O £50824 Ziuboe = ZeeE 14 Il. = Swan eo e290 15 a toa er oO DIBACHLIS ENTITLED TO A CREDIT AS A RESULT OF THE PARTIAL < a 16 SATISFACTION OF THE JUDGMENT BY CLARK'S CORNER. 17 The evidence presented in support of DIBACHI's motion to vacate and motion for 18 reconsideration establishes that CLARK'S CORNER, one of the original judgment debtors, settled 19 the Judgment for the payment of One Hundred and Fifty Five Thousand Dollars ($155,000.00). 20 (DIBACHI'S RJN, Exh H(E).) In return, CLARK'S CORNER received a release of all claims by 21 YELLOWSTONE on the Judgment, and further obtained the release of Kraig Alan Clark and 22 EScreenLogic, Inc. (DIBACHI'S RJN, Exh H(E).) As part of the settlement, CLARK'S CORNER 23 received an assignment of the Judgment that was previously entered against Kraig Alan Clark, 24 Clark's Corner Investments, LLC, EScreenLogic, Inc., JLM Energy, Inc. and JLM Financial, Inc. 25 (DIBACHI'S RJN, Exh H(F).) After the assignment of the Judgment to CLARK'S CORNER, the 26 Judgment was amended to include Farid Dibachi as ajudgment debtor. 27 Hil 28 Mil SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION -2- REGARDING THE RECENT DECISION IN THE NEW YORK COURT Even if one assumes that the assignment of the judgment from YELLOWSTONE to CLARK'S CORNER isa valid assignment, a credit for the partial satisfaction of the Judgment by virtue of the settlement payment must be applied. CLARK'S CORNER could only acquire through an assignment the rights possessed by YELLOWSTONE. "As a general rule, the assignee of a chose in action stands in the shoes of his assignor, taking his rights and remedies subject to any right to offset or other defenses existing against the assignor prior to actual notice of the assignment. (Civ. Code §1459; Code Civ. Proc., §368)" (Salaman v. Bolt (1977) 74 Cal.App.3rd 907, 919.) Having received a payment of One Hundred and Fifty Five Thousand Dollars ($155,000.00) from CLARK'S CORNER, YELLOWSTONE no longer had the right to enforce the full amount of the 10 Judgment. When YELLOWSTONE assigned the Judgment to CLARK'S CORNER, the Judgment Ww N 6ose 11 had already been partially satisfied. ¥ ° Oo wee Bern eeGxrne 12 A settlement by one co-obligor reduces the amount of the outstanding obligation by law. Qi>o%e eextse €wzOS2a 22255 rb 13 This is confirmed in Code of Civil Procedure section 877 which provides in relevant part (emphasis wen. o2502e Z0°%o pet