Case Name: Derar Hawari v. Michael Prozan, et al.
Case No.: 18CV323479
(1) Motion of Defendant Afou Shadafni for a Special Motion to Strike the Complaint Pursuant to CCP §425.16
(2) Demurrer of Defendants Sharon Ajlouni and Karen Ajlouni to Complaint
Defendant Afou Shadafni (“Shadafni”) filed a lawsuit against plaintiff Derar Hawari (“Hawari”) and others, including Erik Searles (“Searles”) and SCI Apparel, Ltd. (“SCI”), in Santa Clara County Superior Court, case number 1-12-CV-222582 (“Shadafni Action”). (Complaint, ¶¶6 – 8.)
In a matter related to the Shadafni Action, defendants Sharon Ajlouni and Karen Ajlouni (collectively, “Ajlounis”) filed a lawsuit against Hawari, Searles and SCI in Santa Clara County Superior Court, case number 1-13-CV-242018 (“Ajlouni Action”). (Complaint, ¶¶6 – 8.)
Defendant Michael Prozan (“Prozan”), a California licensed attorney, represented Shadafni and the Ajlounis in their respective actions against Hawari and others. (Complaint, ¶¶5 and 7.)
On or about September 30, 2017, mediation of the Shadafni Action and Ajlouni action occurred, resulting in a settlement agreement and mutual release (“Settlement Agreement”) drafted by Prozan. (Complaint, ¶8.) Under the terms of the Settlement Agreement, SCI agreed to pay Shadafni and the Ajlounis an amount totaling $305,000. (Complaint, ¶8 and Exh. A.) According to Hawari, neither he nor Searles agreed to be responsible for the settlement payments. (Id.) According to Hawari, only SCI was responsible for settlement payments. (Id.)
Subsequent to the execution of the settlement agreement, Prozan alleged a default under the terms of the Settlement Agreement. (Complaint, ¶9.) Thereafter, Prozan obtained two judgments against Hawari, Searles and SCI and in favor of Shadafni and the Ajlounis. (Complaint, ¶10.) These judgments include attorney fees, costs, and interest. (Id.)
Hawari contends the two judgments obtained are void and now seeks to set aside the judgments against him. (Complaint, ¶11.) Hawari demanded Prozan and his clients (Shadafni and the Ajlounis) acknowledge the judgments are void and that all efforts to collect on the judgments cease. (Complaint, ¶12.)
On February 14, 2018, Hawari filed a complaint against Prozan, Shadafni, and the Ajlounis asserting causes of action for:
(1) Declaratory Relief
(2) Damages/ Imposition of Constructive Trust
(3) Injunctive Relief
On April 27, 2018, defendant Prozan filed a special motion to strike Hawari’s complaint pursuant to Code of Civil Procedure section 425.16. On July 27, 2018, the court issued an order granting defendant Prozan’s special motion to strike plaintiff Hawari’s complaint.
On August 15, 2018, defendant Ajlouinis filed a special motion to strike Hawari’s complaint pursuant to Code of Civil Procedure section 425.16. On October 16, 2018, the court issued an order denying defendant Ajlounis’ special motion to strike plaintiff Hawari’s complaint on the basis that the special motion to strike was untimely.
On October 18, 2018, defendant Shadafni filed the first of two motions now before the court, a special motion to strike Hawari’s complaint pursuant to Code of Civil Procedure section 425.16.
On December 31, 2018, defendant Ajlounis filed the second motion now before the court, a demurrer to Hawari’s complaint.
I. Defendant Shadafni’s special motion to strike plaintiff Hawari’s complaint pursuant to Code of Civil Procedure section 425.16 is DENIED.
A. Defendant Shadafni’s request for judicial notice is GRANTED.
In support of the special motion to strike, defendant Shadafni requests judicial notice of various court records. Evidence Code section 452, subdivision (d) states that the court may take judicial notice of “[r]ecords of any court of this state.” This section of the statute has been interpreted to mean that the trial court may take judicial notice of the existence of the court’s own records. Evidence Code section 452 and 453 permit the trial court to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455.) Accordingly, the request for judicial notice in support of defendant Shadafni’s special motion to strike is GRANTED. The court takes judicial notice of the existence of the court records, not necessarily the truth of any matters asserted therein.
B. The two-step procedure for anti-SLAPP motions.
Code of Civil Procedure section 425.16 requires a court to engage in a two-step process when determining whether a defendant’s anti-SLAPP motion should be granted. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one “arising from” protected activity. The moving defendant’s burden is to demonstrate that the act or acts of which the plaintiff complains were taken in furtherance of the defendant’s right of petition or free speech under the United States or California Constitution in connection with a public issue. If the court finds such a showing has been made, it then must consider whether the plaintiff has demonstrated a probability of prevailing on the claim. In making these determinations, the trial court considers the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)
C. Step one – Threshold showing that the challenged cause(s) of action arise from protected activity.
“A defendant meets the burden of showing that a plaintiff’s action arises from a protected activity by showing that the acts underlying the plaintiff’s cause of action fall within one of the four categories of conduct described in section 425.16, subdivision (e). [Citation.] Those four categories are: ‘(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.’” (Siam v. Kizilbash (2005) 130 Cal.App.4th 1563, 1569.)
Here, defendant Shadafni contends the complaint against him arises from his alleged act of obtaining and enforcing a judgment against plaintiff Hawari. Plaintiff Hawari’s complaint “seeks to set aside the judgments as against Hawari in the … Shadafni matter[].” (Complaint, ¶11.) “The judgment[] in the … Shadafni action[ was] obtained by way of a stipulation that misrepresented facts to the court and was, therefore, not a legally binding agreement … on which a judgment could be based.” (Complaint, ¶11(C).) “In addition to this court ordering that the judgments in the Ajlouni and Shadafni matters be determined to be void, relief is also requested by way of an order imposing a constructive trust on the money paid to Defendants and to order the return of all money improperly taken based upon the void judgments.” (Complaint, ¶17; emphasis added.) “Defendants have received money on void judgments and they are not entitled to any of the money that they have received.” (Complaint, ¶20.) “Defendants continue to maintain collection actions against Plaintiff. … Defendants continue to maintain a judgment lien on Plaintiff’s residence and to threaten to take other collection actions which may include seizure of bank accounts, interception of money obtained through operation of Plaintiff’s business or seizure of assets.” (Complaint, ¶25.)
Defendant Shadafni contends the alleged conduct is protected activity because it falls within the category of “any written or oral statements or writing made before a … judicial proceeding” or “any written or oral statement or writing made in connection with an issue under consideration or review by a … judicial body.” (See Code Civ. Proc., §425.16, subd. (e)(1) – (2).)
In opposition, Hawari contends the gravamen of his claim seeks declaratory relief and concerns whether the underlying judgments are void. Hawari’s own authority undercuts his argument.
An anti-SLAPP motion lies against a complaint for declaratory relief, among other types of causes of action. [Citation.] “The anti-SLAPP statute’s definitional focus is not the form of the plaintiff’s cause of action but, rather, the defendant’s activity that gives rise to his or her asserted liability–and whether that activity constitutes protected speech or petitioning.” [Citation.]
(Gotterba v. Travolta (2014) 228 Cal.App.4th 35, 40–41; italics original.)
In reviewing the complaint, the court has identified, above, all the relevant allegations concerning Shadafni’s conduct. In this court’s opinion, Shadafni’s alleged conduct involves protected activity, i.e., obtaining a judgment in the Shadafni Action and thereafter enforcing the judgment through judicial processes.
This opinion is reinforced by Hawari’s own opposition wherein Hawari argues, “the current lawsuit arises out of a party obtaining a judgment that is void as being beyond the terms of a settlement agreement and based upon a fraud instituted on the court.” Hawari contends Shadafni is liable in this action because he “obtained” a judgment by way of a stipulation which Hawari contends was misleading and/or fraudulent. Thus, Shadafni’s liability is premised on written statements or writings before a judicial proceeding or in connection with an issue under consideration or review by a judicial body. This conduct constitutes protected activity and forms the factual basis for Hawari’s claims against Shadafni.
D. Step two – Probability of prevailing.
“[I]f a court ruling on an anti-SLAPP motion concludes the challenged cause of action arises from protected petitioning, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. To satisfy this prong, the plaintiff must state and substantiate a legally sufficient claim. Put another way, the plaintiff must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 741; internal citations and punctuation omitted.)
“The burden is on plaintiff to produce evidence that would be admissible at trial—i.e., to proffer a prima facie showing of facts supporting a judgment in plaintiff’s favor.” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2016) ¶7:1005, p. 7(II)-55 citing Chavez v. Mendoza (2001) 94 Cal.App.4th 1083, 1087; italics original.) “The ‘probability of prevailing’ is tested by the same standard governing a motion for summary judgment, i.e., in opposing a SLAPP motion, it is plaintiff’s burden to make a prima facie showing of facts that would support a judgment in plaintiff’s favor.” (Id. at ¶7:1008, p. 7(II)-56 citing Taus v. Loftus (2007) 40 Cal.4th 683, 714.) “The court does not weigh credibility or comparative strength of the evidence. The court considers defendant’s evidence only to determine if it defeats plaintiff’s showing as a matter of law.” (Id. citing Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291.)
1. Declaratory Relief.
“[A]n anti-SLAPP motion may lie against a complaint for declaratory relief [citation]….” (South Sutter, LLC v. LJ Sutter Partners, L.P. (2011) 193 Cal.App.4th 634, 665–666, 123 Cal.Rptr.3d 301.) Moreover, “the mere existence of a controversy is insufficient to overcome an anti-SLAPP motion against a claim for declaratory relief. [¶] To defeat an anti-SLAPP motion, the plaintiff must also make a prima facie evidentiary showing to sustain a judgment in the plaintiff’s favor. [Citation.] In other words, for a declaratory relief action to survive an anti-SLAPP motion, the plaintiff must introduce substantial evidence that would support a judgment of relief made in the plaintiff’s favor.” (Id. at p. 670, 123 Cal.Rptr.3d 301; see CKE Restaurants, Inc. v. Moore (2008) 159 Cal.App.4th 262, 272, 70 Cal.Rptr.3d 921 [plaintiff’s evidence failed to show probability of prevailing on its declaratory relief claim].)
(Mission Springs Water District v. Verjil (2013) 218 Cal.App.4th 892, 909.)
“A judgment void on its face … is subject to collateral attack at any time.” (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1239.) Here, it is Hawari’s assertion that he is not a party to the Settlement Agreement and, consequently, the subsequent judgment entered thereon in enforcement of the Settlement Agreement is void.
As material, Code of Civil Procedure section 664.6 provides: “If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court … for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.” (Italics added.) “Because of its summary nature, strict compliance with the requirements of [Code of Civil Procedure] section 664.6 is prerequisite to invoking the power of the court to impose a settlement agreement.” (Sully–Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37, [126 Cal.Rptr.2d 400] (Sully–Miller).) Settlement of a lawsuit implicates a substantial right of the litigants; therefore, the Supreme Court has concluded that “parties” in Code of Civil Procedure section 664.6 means the litigants personally and does not include their attorneys of record (Levy v. Superior Court (1995) 10 Cal.4th 578, 584, 586, [41 Cal.Rptr.2d 878, 896 P.2d 171]), even if the parties expressly authorized the agent to enter into a settlement on their behalf (see Gauss v. GAF Corp. (2002) 103 Cal.App.4th 1110, 1162–1164, 127 Cal.Rptr.2d 370). “The litigants’ direct participation tends to ensure that the settlement is the result of their mature reflection and deliberate assent.” (Levy, at p. 585, 41 Cal.Rptr.2d 878, 896 P.2d 171.) Thus, the statute “require[s] the signatures of the parties seeking to enforce the agreement under [Code of Civil Procedure] section 664.6 and against whom the agreement is sought to be enforced.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 305, 87 Cal.Rptr.2d 822.)
(J.B.B. Investment Partners, Ltd. v. Fair (2014) 232 Cal.App.4th 974, 984–985 (J.B.B.).)
“Although a judge hearing a [Code of Civil Procedure] section 664.6 motion may receive evidence, determine disputed facts, and enter the terms of a settlement agreement as a judgment [citations], nothing in section 664.6 authorizes a judge to create the material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon.” (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810, [71 Cal.Rptr.2d 265], italics omitted.)
(J.B.B., supra, 232 Cal.App.4th at pp. 983–984.)
Here, Hawari contends it was improper for the court in the Shadafni Action to enter judgment against him because the Settlement Agreement was not a party responsible for payment. Hawari’s argument is premised on the absence of his name in the opening paragraph of the Settlement Agreement which states:
This Settlement Agreement and mutual release is into [sic] at San Jose, CA, California as of September 30, 2013 among Afou Shadafni, Karen Ajlouni, and Sharon Ajlouni (“Plaintiffs”) and SCI Apparel Ltd (the “Defendant”) and, collectively with the Plaintiff the “Parties.”) and is as follows:
Although not identified in this opening paragraph, Hawari is listed as one of the defendants to which notice shall be given (see page 6 of the Settlement Agreement) and identified as one of the defendants on the signature page. Hawari admits signing the Settlement Agreement. Hawari’s name and signature also appears as one of the defendants in the stipulated judgment. Even if SCI Apparel Ltd is identified and defined as the sole “Defendant” in the opening paragraph of the Settlement Agreement, the Settlement Agreement thereafter refers to “Defendants,” plurally. Since Hawari is identified as one of the multiple “Defendants” in the notice section and the signature page, it is clear from the face of the Settlement Agreement that the terms are binding upon him.
Hawari argues additionally that the stipulated judgment was obtained by fraud because Hawari executed the stipulated judgment on or about October 24, 2013, but the stipulated judgment sets forth facts which occurred thereafter up to and including December 9, 2014 and the stipulated judgment was not filed until February 23, 2015. Hawari does not present any admissible evidence of the falsity of any of the events set forth in the stipulated judgment. Hawari contends he could not have agreed to a stipulated judgment in advance, yet the Settlement Agreement, at section three, specifically states, “Within ten (10) days of the date hereof, Defendants shall issue a Stipulated Judgment in such form as the parties my reasonable agree to be held by Counsel for the Plaintiffs which he is authorized to filed upon the occurrence of the Default.” Plaintiff Hawari’s own evidence establishes his agreement to executed a stipulated judgment in advance of default.
Hawari has not demonstrated the judgment against him in the Shadafni Action is void and thus has not demonstrated a probability of prevailing on his claim for declaratory relief.
2. Damages/ Imposition of a Constructive Trust.
“A constructive trust is a remedy used by a court of equity to compel a person who has property to which he is not justly entitled to transfer it to the person entitled thereto.” (11 Witkin, Summary of California Law (9th ed. 1990) Trusts, §305, p. 1138.) A constructive trust can be imposed against “one who wrongfully detains a thing.” (Civ. Code, §2223.) A constructive trust can also be imposed against “one who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act … unless he or she has some other and better right thereto.” (Civ. Code, §2224.)
“A cause of action for constructive trust is not based on the establishment of a trust, but consists of fraud, breach of fiduciary duty or other act which entitles the plaintiff to some relief. Relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff. [Citation.] Pleading requirements are: (1) facts constituting the underlying cause of action, and (2) specific identifiable property to which defendant has title.” (Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093, 1114; emphasis added.)
In the complaint, Hawari alleges he paid to defendants “a sum in excess of $160,000.” However, in opposition to the special motion to strike, Hawari offers no admissible evidence of any monies paid to the defendants. Hawari has not demonstrated a probability of prevailing on his claim for imposition of a constructive trust.
3. Injunctive Relief.
“Injunctive relief is a remedy, not a cause of action.” (City of South Pasadena v. Dept. of Transportation (1994) 29 Cal.App.4th 1280, 1293.) “To qualify for a permanent injunction, the plaintiff must prove (1) the elements of a cause of action involving the wrongful act sought to be enjoined and (2) the grounds for equitable relief, such as, inadequacy of the remedy at law.” (Id. at p. 1293; see also 5 Witkin, California Procedure (4th ed. 1997) Pleading, §779, p. 236.)
In the complaint, Hawari seeks to enjoin defendants from “continuing all collection actions” and “to enjoin any efforts to collect on any such judgments or settlements.” (Complaint, ¶27.) However, in opposition to the special motion to strike, Hawari has not presented any admissible evidence that defendants have made or taken any collection efforts against him. Moreover, as discussed above, Hawari has not sustained his claim that the judgment obtained against him in the Shadafni action is void. Thus, Hawari has not demonstrated a probability of prevailing on his claim for injunctive relief.
Accordingly, defendant Shadafni’s special motion to strike plaintiff Hawari’s complaint pursuant to Code of Civil Procedure section 425.16 is GRANTED.
II. Defendant Ajlounis’ demurrer to the complaint is OVERRULED.
A. Defendant Ajlounis’ request for judicial notice is GRANTED.
In support of their demurrer, defendant Ajlounis request judicial notice of various court records. Evidence Code section 452, subdivision (d) states that the court may take judicial notice of “[r]ecords of any court of this state.” This section of the statute has been interpreted to mean that the trial court may take judicial notice of the existence of the court’s own records. Evidence Code section 452 and 453 permit the trial court to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455.) Accordingly, the request for judicial notice in support of defendant Ajlounis’ demurrer is GRANTED. The court takes judicial notice of the existence of the court records, not necessarily the truth of any matters asserted therein.
B. Collateral estoppel.
Defendant Ajlounis argue first that Hawari’s complaint is barred by the doctrine of collateral estoppel. “[A] general demurrer lies where the facts alleged in the complaint or matters judicially noticed show that plaintiff is seeking relief from the same defendant on the same cause of action as in a prior action, or is asserting an issue decided against plaintiff in the prior action.” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2018) ¶7:60.9, p. 7(I)-35 citing Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 792, et al.)
“Collateral estoppel is a doctrine which prevents relitigation of issues previously argued and resolved in a prior proceeding. [Citation.] In order to apply this principle: (1) the issue must be identical to that decided in the prior proceeding; (2) the issue must have been actually litigated in the prior proceeding; (3) the issue must have been necessarily decided in the prior proceeding; (4) the decision must have been final and on the merits; and (5) preclusion must be sought against a person who was a party or in privity with a party to the prior proceeding. [Citation.]” (Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223, 1233 (Alvarez).) “In deciding whether to apply collateral estoppel, the court must balance the rights of the party to be estopped against the need for applying collateral estoppel in the particular case, in order to promote judicial economy by minimizing repetitive litigation, to prevent inconsistent judgments which undermine the integrity of the judicial system, or to protect against vexatious litigation.” (Alvarez, supra, 143 Cal.App.4th at p. 1233.)
Defendant Ajlounis cite Gates v. Superior Court (1986) 178 Cal.App.3d 301 (Gates) for the proposition that a stipulated judgment bars subsequent litigation of all issues which were or could have been raised in the original suit.
When an issue has been litigated, all inquiry respecting the same matter is foreclosed, not only as to matters heard but also to matters that could have been heard in support of or in opposition thereto. This rule has been aptly stated as follows: “”’It is important to note in this connection, however, that even though the causes of action be different, if the second action involves a right, title or issue as to which the judgment in the first action is a conclusive adjudication, the estoppel so far as that right, title or issue is concerned must likewise extend to every matter which was or might have been urged to sustain or defeat the determination actually made.“”’ (Smith v. City of Los Angeles, supra., at pp. 127-128.)
(Gates, supra, 178 Cal.App.3d at p. 308.)
Gates, however, is distinguishable on its facts. In Gates, a series of taxpayer suits for claimed violations of various constitutional and common law rights by the Los Angeles Police Department’s Public Disorder Intelligence Division were brought pursuant to Code of Civil Procedure section 526a. The lawsuits were consolidated and then settled with the parties executing a settlement agreement and stipulated consent decree and judgment. Subsequently, another taxpayer lawsuit was brought pursuant to section 526a. The court held this subsequent suit was barred because it could have been brought in the earlier litigation. “Although the accounting action now advanced may raise a different issue, it is clearly an action which might have been raised in CAPA. The defendants in this action from whom real parties seek an accounting were all defendants in CAPA. Having settled that case, taxpayer plaintiffs cannot now seek an accounting from the same defendants for the same allegedly improper behavior.” (Id. at p. 309.) “[T]he cause of action for accounting arising out of Code of Civil Procedure section 526a is barred since it merely seeks another remedy from the same cause of action and it is further litigation on the same subject matter.” (Id. at p. 311.)
Here, Hawari is making a collateral attack on a judgment that Hawari claims to be void. The recitals of the Settlement Agreement indicate the Shadafni action concerned securities fraud. Hawari now attacks the interpretation and enforceability of the Settlement Agreement. It does not appear affirmatively from the complaint that the present matter is barred by collateral estoppel.
C. Affirmative Defense – Reliance of Counsel
“A general demurrer will lie where the complaint ‘has included allegations that clearly disclose some defense or bar to recovery.’ [Citation.]” (Cryolife, Inc. v. Superior Court (2003) 110 Cal.App.4th 1145, 1152, italics original.) Defendant Ajlounis next demur to Hawari’s complaint by arguing that “reliance of counsel” is an affirmative defense citing Pond v. Insurance Co. of North America (1984) 151 Cal.App.3d 280 (Pond).
The elements of a cause of action for malicious prosecution are (1) a favorable verdict for the plaintiff who was a defendant in the underlying proceeding, (2) lack of probable cause for the suit in the underlying case, and (3) malice. Malice may be inferred from lack of probable cause. [Citations omitted.] Reliance upon the advice of counsel, in good faith and after full disclosure of the facts, customarily establishes probable cause. [Citations omitted.]
(Pond, supra, 151 Cal.App.3d at p. 288.)
According to defendant Ajlounis, Hawari’s complaint alleges attorney Prozan engaged in all the wrongful conduct (drafting settlement agreement, alleging default, obtaining judgments) so the inference is to be drawn is that the Ajlounis relied on their counsel and, thus, cannot be liable. Initially, in order for an affirmative defense to apply on demurrer, it must be clearly disclosed by the allegations. That is not the case here since it requires the court to draw inferences from the allegations. Secondly, the “reliance of counsel” defense applies to a claim for malicious prosecution which is not one of the claims being asserted here. None of the claims asserted in Hawari’s complaint require the lack of probable cause as an element.
D. Declaratory Relief.
1. Restorative versus preventative relief.
The court in Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1403 wrote, “declaratory relief operates prospectively, and not merely for the redress of past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.” “A complaint for declaratory relief should show the following: (a) A proper subject of declaratory relief within the scope of C.C.P. 1060; (b) An actual controversy involving justiciable questions relating to the rights or obligations of a party.” (5 Witkin, California Procedure (4th ed. 1997) §809, pp. 264 – 265; emphasis omitted.)
Defendant Ajlounis contend there is no actual controversy here requiring the court to issue a declaration of the parties’ prospective rights. Instead, Hawari has already paid money and seeks to restore that money.
Whether a case is founded upon an “actual controversy” centers on whether the controversy is justiciable. “The principle that courts will not entertain an action which is not founded on an actual controversy is a tenet of common law jurisprudence, the precise content of which is difficult to define and hard to apply. The concept of justiciability involves the intertwined criteria of ripeness and standing. A controversy is ‘ripe’ when it has reached, but has not passed, the point that the facts have sufficiently congealed to permit an intelligent and useful decision to be made.”
(Stonehouse Homes v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 540.)
Although Hawari has allegedly paid money, a controversy remains because, as alleged, defendants continue to pursue collection of the judgment against Hawari. Thus, an actual controversy remains.
2. Adequate relief.
“The availability of another form of relief that is adequate will usually justify refusal to grant declaratory relief.” (C.J.L. Construction, Inc. v. Universal Plumbing (1993) 18 Cal.App.4th 376, 390.) Defendant Ajlounis contend plaintiff has another form of adequate relief and has exercised it. Hawari filed a malpractice action against his former attorneys. The Ajlounis have asserted a lien to any recovery by Hawari in his malpractice action. Shadafni brought a motion for accounting and disbursement of the settlement proceeds. Hawari has collaterally attacked the Shadafni judgment in his opposition to Shadafni’s motion. The court does not view Hawari’s opposition to Shadafni’s motion seeking to recover on its lien to be another remedy or form of relief which would justify refusal to grant declaratory relief. In Filarsky v. Superior Court (2002) 28 Cal.4th 419, 433, the court wrote, “[t]he mere circumstance that another remedy is available is an insufficient ground for refusing declaratory relief, and doubts regarding the propriety of an action for declaratory relief pursuant to Code of Civil Procedure Section 1060 generally are resolved in favor of granting relief.”
3. Specificity for misrepresentations.
One of the alleged bases to find the judgment in the Ajlouni Action void is Hawari’s assertion that the judgment was “obtained by way of a stipulation that misrepresented facts to the court and was, therefore, not a legally binding agreement of the current facts on which a judgment could be based.” (Complaint, ¶11(C).)
Defendant Ajlounis demur to the declaratory relief cause of action by arguing that fraud is not alleged with the requisite specificity. However, this addresses only one of several bases alleged by Hawari to be the basis for finding the judgment void. A defendant cannot demur to a portion of a cause of action. (See Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778—“[A] defendant cannot demur generally to part of a cause of action;” see also PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682—“A demurrer does not lie to a portion of a cause of action;” Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 274—“ A demurrer challenges a cause of action and cannot be used to attack a portion of a cause of action.”)
4. Other obstacles.
Defendant Ajlounis raise several other arguments in demurring to the first cause of action for declaratory relief. Defendant Ajlounis contend the claim is based on the Settlement Agreement and is, therefore, governed by the four year statute of limitations under Code of Civil Procedure section 337 applicable to “an action upon any contract, obligation or liability founded upon an instrument in writing.” Defendant Ajlounis contend the Settlement Agreement is dated September 30, 2013 and so the statute of limitations expired on September 29, 2017. Plaintiff did not bring this action until February 14, 2018. “The running of the statute must appear ‘clearly and affirmatively’ from the dates alleged. It is not sufficient that the complaint might be barred. [Citation.] If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer. The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment . . . .’ [Citation.]” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324 – 325.) Here, it does not appear clearly and affirmatively from the pleading that the statute of limitations has run. Moreover, the action appears to be a collateral attack on a purportedly void judgment. As indicated above, “A judgment void on its face … is subject to collateral attack at any time.” (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1239.)
Alternatively, defendant Ajlounis demur on the basis that the Settlement Agreement, attached as an exhibit to the complaint, is binding and enforceable against Hawari. “A complaint for declaratory relief should show the following: (a) A proper subject of declaratory relief within the scope of C.C.P. 1060; (b) An actual controversy involving justiciable questions relating to the rights or obligations of a party.” (5 Witkin, California Procedure (4th ed. 1997) §809, pp. 264 – 265; emphasis omitted.) Code of Civil Procedure section 1060 states:
Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.
Unlike a special motion to strike in which an opposing plaintiff must demonstrate a probability of prevailing (after defendant has shown that the cause of action arises from protected activity), Hawari needs only set forth a valid cause of action for declaratory relief which he has done. “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213 – 214.)
Accordingly, defendant Ajlounis’ demurrer to the first cause of action in plaintiff Hawari’s complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for declaratory relief is OVERRULED.
E. Constructive Trust.
“A constructive trust is a remedy used by a court of equity to compel a person who has property to which he is not justly entitled to transfer it to the person entitled thereto.” (11 Witkin, Summary of California Law (9th ed. 1990) Trusts, §305, p. 1138.) A constructive trust can be imposed against “one who wrongfully detains a thing.” (Civ. Code, §2223.) A constructive trust can also be imposed against “one who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act … unless he or she has some other and better right thereto.” (Civ. Code, §2224.)
“A cause of action for constructive trust is not based on the establishment of a trust, but consists of fraud, breach of fiduciary duty or other act which entitles the plaintiff to some relief. Relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff. [Citation.] Pleading requirements are: (1) facts constituting the underlying cause of action, and (2) specific identifiable property to which defendant has title.” (Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093, 1114; emphasis added.)
In demurring, defendant Ajlounis contend Hawari has not pleaded that any funds were those tendered by Hawari. Paragraph 18 of the complaint, however, alleges, “Hawari has paid to … Ajlouni a sum in excess of $160,000.” The defendant Ajlounis argue further that Hawari has not alleged that these funds were acquired by any wrongful act and that all payments appear to have been voluntary. Such an argument overlooks the entire gravamen of the complaint or the specific allegation at paragraph 20 which states, “The money that has been received by Defendants has been done so under circumstances that they are not entitled to such money. Defendants have received money on void judgments and they are not entitled to any of the money they have received.” This allegation is from the second cause of action which incorporates the allegations of the first cause of action for declaratory relief. A cause of action for imposition of constructive trust has been sufficiently stated.
Accordingly, defendant Ajlounis’ demurrer to the second cause of action in plaintiff Hawari’s complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for imposition of constructive trust is OVERRULED.
F. Injunctive Relief.
Defendant Ajlounis essentially incorporate all their preceding arguments to argue that, “Because Plaintiff cannot establish that he is entitled to declaratory relief … and has not stated any other causes of action for which he might be entitled to any relief …, he is not entitled to an injunctive remedy.” (See p. 13, lines 12 – 15 to the Points and Authorities in Support of Demurrer of Sharon Ajlouni and Karen Ajlouni, etc.) In light of the rulings above, defendant Ajlounis’ demurrer to the third cause of action in plaintiff Hawari’s complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for injunctive relief is OVERRULED.