Naeim Zamani Mahfroujaki, individually, and as a derivative action vs. Zoom, Inc., a California corporation

34-2023-00333705-CU-BC-GDS: Naeim Zamani Mahfroujaki, individually, and as a derivative action vs. Zoom, Inc., a California corporation 05/09/2024 Hearing on Motion - Other for Determination of Amount of Undertaking Pursuant to CCP 917.4 in Department 53

Tentative Ruling

NOTICE:

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

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34-2023-00333705-CU-BC-GDS: Naeim Zamani Mahfroujaki, individually, and as a derivative action vs. Zoom, Inc., a California corporation 05/09/2024 Hearing on Motion - Other for Determination of Amount of Undertaking Pursuant to CCP 917.4 in Department 53

a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING:

Plaintiff and Cross-Defendant Naeim Zamani Mahfroujaki’s (“Zamani”) motion for an order setting an undertaking pursuant to Code of Civil Procedure section 917.4 is GRANTED as follows:

Defendant and Cross-Complainant Seyedmohammad Caranizadeh’s (“Caranizadeh”) request for judicial notice is granted. The Court only takes judicial notice of the existence of the documents and not the truth of their contents. (See Professional Engineers v. Dept. of Transportation (1997) 15 Cal.4th 543, 590; Searles Valley Minerals Operations, Inc. v. State Board of Equalization (2008) 160 Cal.App.4th 514, 519.)

This is a real property dispute. Zamani and Caranizadeh each own an undivided 50 percent interest in the real property known as 2303 Fulton Avenue, Sacramento, California (“Property”). On October 31, 2023, this Court granted Caranizadeh’s motion for summary adjudication for interlocutory judgment of partition. On December 14, 2023, the Court denied Zamani’s motion for reconsideration. On April 4, 2024, Zamani filed a notice of appeal of the Court’s October 31, 2023 interlocutory judgment. On April 4, 2024, Zamani filed an ex parte application to set an undertaking and stay the partition pending appeal. The Court denied the ex parte application, but specially reserved May 9, 2024 as a hearing date to allow Zamani time to file a properly noticed motion.

Through this motion, Zamani requests the Court to set an amount of undertaking and stay the order directing the partition by sale of the Property pending the outcome of Zamani’s appeal pursuant to Code of Civil Procedure section 917.4. Zamani requests the Court set the undertaking in the amount of $12,449.24. This amount accounts only for one-half of the mortgage obligation due on the Property during the anticipated 18.9- month appeal process, which is the average duration for appeals in the State of California.

Caranizadeh argues the motion should be denied on the ground that it is untimely. Caranizadeh does not argue the motion should be denied on any other grounds.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2023-00333705-CU-BC-GDS: Naeim Zamani Mahfroujaki, individually, and as a derivative action vs. Zoom, Inc., a California corporation 05/09/2024 Hearing on Motion - Other for Determination of Amount of Undertaking Pursuant to CCP 917.4 in Department 53

Caranizadeh contends, in the event the Court does not deny the motion as untimely served, the undertaking should be set at $272,217.94, which includes $211,555.50 for potential waste on the Property, $40,700 for the value of use and occupancy of the Property during the appeal, and $19,892.44 for the potential mortgage deficiency during appeal. Caranizadeh contends the duration of an appeal in the Third District Court of Appeal is 905 days (30.2 months), and therefore 30.2 months should be used to calculate the use and occupancy value and possible mortgage deficiency that could accrue on the Property during the appeal.

On April 26, 2024, Defendant and Cross-Complainant Armani Financial Group, Inc., dba Armani Motors filed a “Notice of Joinder” to Caranizadeh’s opposition. Local Rule 2.09 states, “[i]f a party desires to receive the same relief as another party and files papers ‘joining’ another party's motion, the court will not consider the papers to be a separate motion and will not grant relief to the party joining the motion unless that party has complied with all procedural requirements for the filing of motions, including payment of filing fees, proper notice, format of motion and method of service.” While Local Rule 2.09 allows for joining a “motion,” it does not allow for joining an opposition. Therefore, the Court will not consider Armani’s “joinder.”

Timeliness

Zamani filed and electronically served the instant motion on April 17, 2024, with a hearing date of May 9, 2024. In order for service to be timely pursuant to Code of Civil Procedure sections 1005, subdivision (b), and 1010.6, Zamani should have served the motion by April 15, 2024. Although Zamani failed to timely serve the motion and comply with the Court’s ex parte order, Caranizadeh substantively opposes the motion on the merits and does not argue that he has been prejudiced by the untimely service. As a result, Caranizadeh has waived the defect in the notice. (Carlton v. Quint (2000) 77 Cal. App. 4th 690; Reedy v. Bussell (2007) 148 Cal.App.4th 1272, 1288.)

Discussion

Code of Civil Procedure section 917.4 states:

The perfecting of an appeal shall not stay enforcement of the judgment or order in the trial court if the judgment or order appealed from directs the sale, conveyance or delivery of possession of real property which is in the possession or control of the appellant or the party ordered to sell, convey or deliver

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2023-00333705-CU-BC-GDS: Naeim Zamani Mahfroujaki, individually, and as a derivative action vs. Zoom, Inc., a California corporation 05/09/2024 Hearing on Motion - Other for Determination of Amount of Undertaking Pursuant to CCP 917.4 in Department 53

possession of the property, unless an undertaking in a sum fixed by the trial court is given that the appellant or party ordered to sell, convey or deliver possession of the property will not commit or suffer to be committed any waste thereon and that if the judgment or order appealed from is affirmed, or the appeal is withdrawn or dismissed, the appellant shall pay the damage suffered by the waste and the value of the use and occupancy of the property, or the part of it as to which the judgment or order is affirmed, from the time of the taking of the appeal until the delivery of the possession of the property. If the judgment or order directs the sale of mortgaged real property and the payment of any deficiency, the undertaking shall also provide for the payment of any deficiency.

The statute “requires an undertaking to ensure that ‘the appellant or the party ordered to sell, convey or deliver possession of such property’ will not commit waste.” (Estate of Murphy (1971) 16 Cal.App.3d 564, 568 [italics omitted].) The undertaking must be sufficient to cover (1) “the damage suffered by the waste and the value of the use and occupancy of the property,” or (2) “the part of it as to which the judgment or order is affirmed, from the time of the taking of the appeal until the delivery of the possession of the property;” and (3) if the judgment directs a sale of the property subject to a mortgage “and the payment of any deficiency, the undertaking shall also provide for the payment of any deficiency.” (§ 917.4.)

Here, the parties only disagree about the amount the Court should set for the undertaking. Zamani claims the Court need not account for potential waste, because Zamani currently resides on the Property and has expressed a desire to purchase it. However, he provides no legal authority showing that the Court may disregard the potential for waste when setting the amount of the undertaking. Instead, Code of Civil Procedure section 917.4 provides that the trial court shall set an amount sufficient to cover damage from waste, the value of use and occupancy of the property, and, since there is a mortgage here, an amount that will cover any mortgage deficiency with respect to Caranizadeh’s one-half interest in the Property.

Zamani has provided an appraisal of the Property showing that it is valued at $480,000. (Declaration of Naeim Zamani Mahfroujaki, (“Zamani Decl.”), ¶3, Exhibit A.) Conversely, Caranizadeh provides information from the County Assessor’s office showing the Property has a net assessed value of $284,452, which consists of $56,889 for land value and $227,563 for improvement value. (Request for Judicial Notice, Exhibit C.) Caranizadeh concedes that the land value is unlikely to diminish regardless of any action taken by Zamani. In its discretion, the Court will use the Assessor’s values for the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2023-00333705-CU-BC-GDS: Naeim Zamani Mahfroujaki, individually, and as a derivative action vs. Zoom, Inc., a California corporation 05/09/2024 Hearing on Motion - Other for Determination of Amount of Undertaking Pursuant to CCP 917.4 in Department 53

Property to determine the amount of undertaking. Excluding the land value, which will not diminish, and using only the Property’s improvement value of $227,563, the Court concludes the undertaking should be set at $113,826.50 to account for waste that could occur to Caranizadeh’s one-half interest in the improvements on the Property.

With respect to rent, Zamani’s appraisal of the Property indicates that fair market rent would be approximately $2,700 per month. (Zamani Decl., ¶3, Exhibit A.) Caranizadeh claims that he does not have access to the Property, and it is under Zamani’s exclusive control. (Declaration of Seyedmohammad Caranizadeh, ¶¶4-10.) Therefore, Caranizadeh argues the undertaking must include the value of rent that could be collected on the Property during the duration of the appeal. However, Zamani disputes that he has sole possession of the Property and argues Caranizadeh could access the Property if he chose to.

Therefore, Zamani contends that rent should not be factored into the amount of the undertaking since the Property has never been rented. However, Code of Civil Procedure section 917.4 states the undertaking should be sufficient to cover the value of use and occupancy of the Property. It does not consider who is in possession of the Property during the appeal. As a result, the undertaking will account for the value and use of the Property by using the fair market rent rate provided by the appraisal.

Although the parties dispute how long the appeal might remain pending in the Third District Court of Appeal, the Court concludes 20 months is a sufficient duration for purposes of setting the undertaking. Accordingly, the undertaking will include $27,000.00 to account for the value of the use and occupancy of the Property for Caranizadeh’s interest during the appeal.

Finally, the mortgage payment on the Property is approximately $1,317.38 per month. (Zamani Decl., ¶4, Exhibit B.) Zamani argues he has made and continues to make these payments without any contribution from Caranizadeh. However, Caranizadeh is still potentially liable for any mortgage deficiency that accrues on the Property. Therefore, the undertaking should include $13,173.80 to account for half of the possible mortgage deficiency that would accrue during the pendency of the appeal.

Disposition

Accordingly, and with adjustment to the nearest dollar, the Court sets the undertaking in a total amount of $154,000.00. Zamani shall post the undertaking by no later than May 23, 2024. Provided Zamani posts the undertaking, enforcement of the interlocutory judgment is STAYED upon such posting.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2023-00333705-CU-BC-GDS: Naeim Zamani Mahfroujaki, individually, and as a derivative action vs. Zoom, Inc., a California corporation 05/09/2024 Hearing on Motion - Other for Determination of Amount of Undertaking Pursuant to CCP 917.4 in Department 53

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; Cal. Rules Court, rule 3.1312.)