Nader & Sons v. Namvar

• Decision Date: 23 March 2022
• Docket Number: B314150
• Court: California Court of Appeals Court of Appeals
• Parties: NADER & SONS et al., Plaintiffs and Respondents, v. HOMAYOUN NAMVAR, Defendant and Appellant.

NADER & SONS et al., Plaintiffs and Respondents, v. HOMAYOUN NAMVAR, Defendant and Appellant.

B314150

California Court of Appeals, Second District, Fourth Division

March 23, 2022

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County No.SS018783 Harry Jay Ford III, Judge. Affirmed.

Law Offices of Bruce Altschuld and Bruce Altschuld for Defendant and Appellant.

Hill Farrer & Burrill, Daniel J. McCarthy, Clayton J. Hix for Plaintiffs and Respondents.

COLLINS, J.

Appellant Homayoun "Tony" Namvar challenges the denial of his motions to vacate the renewal of a New York judgment against him that respondents Nader & Sons, LLC and Sisko Enterprises, LLC originally domesticated in California in 2009. He contends the judgment has been satisfied, because a settlement agreement in a related bankruptcy case entitles him to dollar-for-dollar credit for payments made to respondents by another individual. Appellant also contends that a recent New York judgment rejecting this argument was incorrectly decided and should not be given binding effect here. We conclude the trial court did not abuse its discretion and affirm.

BACKGROUND

Loans and Guaranties

In June 2008, respondent Nader & Sons loaned $7.5 million to Namco Capital Group, Inc. (Namco). Namco, along with pledgors N.Y. 18, LLC and Beshmada, LLC and guarantors appellant and Ezri Namvar (Ezri), ^[1] entered into a "Loan, Pledge and Security Agreement" in favor of Nader & Sons to secure the loan. Pursuant to the Loan, Pledge and Security Agreement, N.Y. 18 and Beshmada pledged as collateral their respective membership interests in 127 West 25th, LLC and 241 Fifth Ave. Hotel, LLC. The pledged interests included an unrelated personal guaranty previously made in Beshmada's favor by Dan Shavolian (the Shavolian Guaranty). (See Nader & Sons LLC v. Shavolian (Dec. 3, 2018 G055458) [nonpub. opn.].)^[2] In a separately executed personal guaranty, appellant guaranteed the full and timely repayment of the loan. The guaranty stated that it "shall in all respects be a continuing absolute, unconditional and irrevocable guaranty of payment and shall remain in full force and effect until the entire Agreed Sum has been paid to [Nader & Sons]." It further stated that appellant's liability "shall be absolute, unconditional and irrevocable irrespective of . . . any modification, alteration, increase or reduction, limitation, impairment, extension or termination, in whole or in part, of the obligations of [N.Y. 18 and Beshmada], [appellant] or any other guarantor or surety for any reason, including any claim of waiver, release, surrender, alteration, reduction or compromise, and shall not be subject to (and the Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, non-genuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, the obligations of [N.Y. 18 and Beshmada], [appellant], or any other guarantor or surety; or [¶] any other circumstance or event which might otherwise constitute a defense available to, or a legal or equitable discharge of, [NY 18 and Beshmada], [appellant], or any other guarantor or entity."^[3] In July 2008, the "Loan, Pledge and Security Agreement" was amended to increase the total loan amount to $12.5 million, and to add respondent Sisko Enterprises as an additional lender. The amended loan was secured by the Loan, Pledge and Security Agreement in addition to other collateral not relevant here. Appellant amended his personal guaranty to guarantee the increased loan amount of $12.5 million and add respondent Sisko Enterprises as an additional beneficiary. The provisions quoted above remained unchanged.

Default and Bankruptcies

Namco repaid only $6.7 million of the loan before entering bankruptcy in December 2008. Ezri also entered bankruptcy in December 2008, and Beshmada entered bankruptcy in 2009. N.Y. 18 did not file for bankruptcy, but Ezri surrendered control of the company to another individual for the purpose of winding up its affairs.

Judgment Against Appellant

While the bankruptcies were pending, respondents filed suit against appellant in New York to recover the outstanding loan balance of $5.8 million, plus interest. The New York trial court entered judgment in favor of respondents and against appellant in the amount of $6, 521, 742.46 on October 21, 2009. Respondents domesticated the judgment in California on November 2, 2009 and began collection efforts shortly thereafter. To date, appellant has made two payments toward satisfaction of the judgment: a payment of $740, 359.55, credited as $925, 449.44 pursuant to the terms of a confidential agreement; and a payment of $1, 738.

Partial Settlement Agreement

On January 18, 2010, respondents entered into a "Partial Settlement Agreement" with Namco's bankruptcy trustee, Ezri's bankruptcy trustee, N.Y. 18, and Beshmada. Appellant was not a party to the Partial Settlement Agreement, though one of its recitals identified him as a party to and guarantor of the Loan, Pledge and Security Agreement.

The Partial Settlement Agreement acknowledged the existence of a $2.6 million promissory note dated August 7, 2008, made by Dan Shavolian and payable to N.Y. 18 (the Shavolian Note). The Partial Settlement Agreement also noted then-pending New York litigation concerning whether the Shavolian Note was included as part of the collateral for the $12.5 million loan to Namco. Despite the then-pending litigation, N.Y. 18 acknowledged that the collateral included its rights in the Shavolian Note, as well as all N.Y. 18's rights and remedies against Shavolian. The Partial Settlement Agreement provided that N.Y. 18 "hereby assign[s], transfer[s] and convey[s]" to respondents "any and all right, title and interest. . . in and to the Collateral. . . ." It also stated that N.Y. 18 had and delivered the Shavolian Note to respondents and would endorse it at their direction.

Section 6.2 of the Partial Settlement Agreement gave respondents the exclusive right to collect or realize upon the collateral. It also provided that as respondents "receive[d] proceeds in good faith with respect to the Collateral, including the . . . Shavolian Note," respondents were to return 50 percent of those proceeds, up to $250, 000, to N.Y. 18 and Beshmada. When the bankruptcy court approved the Partial Settlement Agreement in July 2010, it removed the latter portion of section 6.2: "the provision in the Agreement stating that [respondents] will pay Beshmada and NY 18 50% of the net proceeds [they] collect[ ] as a result of the collateral is removed, in exchange for a single immediate cash payment by [respondents] to Beshmada and NY 18, in the amount of $250, 000."^[4]

The above revision to section 6.2 was the only change the bankruptcy court made when it approved the Partial Settlement Agreement. It thus left intact section 7, "Effect of Partial Settlement Agreement on Claims," which we include here in full; the portion we have underlined forms the basis of appellant's lead argument:

"No party is giving or receiving a release pursuant to this Agreement, and this Agreement represents a resolution of only the matters provided with respect to the Collateral. Nothing in this Agreement shall be construed as an admission by any of the parties herein of the merits of [respondents'] claims against the [Ezri] Namvar, Namco, or Beshmada estates, or of these estates' defenses to such claims. Moreover, nothing in this Agreement shall give rise to any claims by [respondents] against the [Ezri] Namvar, Namco, and/or Beshmada estates, including either prepetition claims or postpetition administrative claims.

"However, in determining any remaining claim by [respondents] against the bankruptcy estates in the Namco Bankruptcy Case, the Beshmada Bankruptcy Case and the [Ezri] Namvar Bankruptcy Case, there shall be credited on a dollar for dollar basis the full amount of all proceeds received in good funds with respect to the Collateral, whether received by [respondents] for [their] own account or as Retained Proceeds. For the avoidance of doubt, the parties acknowledge and agree that [respondents are] entitled to various costs and expenses pursuant to the Pledge Agreement and other Loan Documents and that [their] rights to such costs and expenses, including as against the bankruptcy estates in the Namco Bankruptcy Case, the Beshmada Bankruptcy Case and the [Ezri] Namvar Bankruptcy Case, are not limited by the $200, 000 limitation provided in Section 6.2.3, which limitation applies only with regard to the determination of the Retained Proceeds. Further, and notwithstanding the credit to the bankruptcy estates in the Namco Bankruptcy Case, the Beshmada Bankruptcy Case and the [Ezri] Namvar Bankruptcy Case, it is the intention of the parties that the retention of the Retained Proceeds as part of this partial settlement is an exclusion to the recoveries of [respondents] and shall not be counted for the benefit of any person liable to [respondents] other than the bankruptcy estates in the Namco Bankruptcy Case, the Beshmada Bankruptcy Case and the [Ezri] Namvar Bankruptcy Case."^[5]

Shavolian Judgments and Payments

After they acquired the Shavolian Note, respondents filed suit against Shavolian in New York to recover thereon. The New York trial court entered judgment against Shavolian in the amount of $3, 382, 530.67, plus interest, on December 14 2012; the judgment was affirmed on appeal. Contrary to appellant's assertions that no payments were made prior to April 2015, the appellate record shows that Shavolian made a $2 million payment toward the judgment on ...