Albert Enayati v. Hertsel Enayati et al.

(Stanley Mosk Courthouse: Dept. 134) September 1, 2026 DEPARTMENT 134 LAW AND MOTION RULINGS

The following tentative ruling is issued pursuant to Rule of Court 3.1308 at DATE \@ "h:mm am/pm" 2:26 PM on DATE \@ "MMMM d, yyyy" August 31, 2026. Rule of Court 3.1308(a)(1) provides that a "tentative ruling will become the ruling of the court if the court has not directed oral argument by its tentative ruling and notice of intent to appear has not been given." The Court does not desire oral argument on the motion addressed herein. Notice of intent to appear is REQUIRED pursuant to California Rule of Court 3.1308(a)(1).

No later than 4:00 p.m. on DATE \@ "MMMM d, yyyy" August 31, 2026, the moving and opposing parties must provide notice to ALL OTHER PARTIES and the staff of Department 734 whether the party intends to (1) appear and argue the motion, or (2) submit to the tentative ruling. Notice to Department 734 should be sent by email to [email protected], with opposing parties copied on the email. The high volume of telephone calls to Department 734 may delay the Court's receipt of notice, so telephonic notice to 213-830-0776 should be reserved for situations where parties are unable to give notice by email.

Brothers Plaintiff Albert and Defendant Hertsel formed a partnership, Plaintiff Albert and Hertsel, LLC ("A&H LLC"), to purchase property to set up a ceramic tile business and wholesale electric supply business. Plaintiffs allege that Defendant has acted in a manner which has caused damage to Plaintiffs and embezzled from Plaintiffs. Cross-Complainant Hertsel alleges that Plaintiff/Cross-Defendant Albert breached his fiduciary duties and failed to repay loans. Cross-Complainant Shiva and Hertsel claim loss of consortium. Defendant and Cross-Complainant Hertsel Enayati and Cross Complainant Shiva Nazarian move for an order enforcing the surviving, severable provisions of the parties' Stipulation for Entry of Order Regarding Settlement of Entire Action executed January 19, 2024.

TENTATIVE RULING

Defendant and Cross-Complainant Hertsel Enayati and Cross Complainant Shiva Nazarian's motion to enforce settlement and for attorney's fees is DENIED.

ANALYSIS: Motion To Enforce Settlement Agreement

Opposition

Evidentiary Objections

Declaration of Mahrad Enayati

No. 1: OVERRULED. Permissible legal characterization by counsel. No. 2: OVERRULED. Permissible legal characterization by counsel. No. 3: SUSTAINED. Lack of foundation. No 4: OVERRULED. Secretary of State record has legal effect, although facts recited therein may be disputed. No. 5: OVERRULED. Notice of default has legal effect, although facts recited therein may be disputed. No. 6: OVERRULED. Permissible legal argument by counsel. No. 7: OVERRULED. Permissible legal characterization by counsel based upon opposing counsel's representations as to legal effect of failure to cooperate.

No. 8: SUSTAINED. Lack of foundation. No. 9: OVERRULED. Grant deeds are attached. No. 10: SUSTAINED. Lack of foundation; Exhibit H was not attached. No. 11: OVERRULED. Permissible legal characterization by counsel. No. 12: OVERRULED. Permissible legal argument by counsel. No. 13: SUSTAINED. Lack of foundation; payment record was not attached to Hertsel Enayati Declaration. No. 14: SUSTAINED. Lack of foundation. No. 15: SUSTAINED. Lack of foundation. No. 16: OVERRULED. Sufficient foundation; permissible legal characterization by counsel.

No. 17: OVERRULED. Sufficient foundation; permissible legal characterization by counsel. No. 18: OVERRULED. Sufficient foundation; permissible legal argument by counsel. No. 19: OVERRULED. Permissible legal argument by counsel. No. 20: OVERRULED. Permissible legal argument by counsel.

Discussion

Defendant and Cross-Complainant Hertsel Enayati and Cross Complainant Shiva Nazarian move for an order enforcing the surviving, severable provisions of the parties' Stipulation for Entry of Order Regarding Settlement of Entire Action executed January 19, 2024, pursuant to Code Civ. Proc. Sec. 664.6 and P.P. 11, 21, and 23 of the Settlement Agreement. Moving Parties respectfully request that the Court: 1. Find that the Settlement Agreement is a valid, written stipulation by the parties under Code of Civil Procedure section 664.6, that the Court retained jurisdiction to enforce it, and that -- except for the partition-by-sale mechanism set forth in Paragraph 9, which this Court already held unenforceable on August 19, 2025 -- every remaining provision of the Settlement Agreement is valid, severable, and binding; 2.

Enforce Paragraphs 12, 13, and 14 of the Settlement Agreement, including the Mutual Release and California Civil Code section 1542 waiver, and adjudge that the Released Parties are released and forever discharged from all claims arising out of the facts alleged in the Complaint and the First Amended Cross-Complaint; 3. Dismiss with prejudice the Second (Accounting and Appointment of Receiver), Third (Breach of Fiduciary Duty), and Fourth (Fraud) causes of action of the Complaint, which were released in their entirety by the Settlement Agreement, and bar Plaintiff Albert Enayati from prosecuting those causes of action in this or any subsequent proceeding; 4.

Confirm the Court's continuing retention of jurisdiction under Code of Civil Procedure section 664.6 to enforce the surviving, severable provisions of the Settlement Agreement, including any claims for damages, restitution, or other remedies arising from Plaintiff's breach of those provisions; 5. Award Moving Parties their reasonable attorneys' fees and costs incurred in bringing this Motion as the prevailing party pursuant to Paragraph 23 of the Settlement Agreement, by noticed motion to follow; A copy of the Settlement Agreement is attached to the Declaration of Mahrad Enayati as Exhibit A.

In the Opposition, Plaintiff/Cross Defendant, Albert Enayati ("Albert") represents that he never would have entered a Settlement with Defendants/Cross complainants, Hertsel Enayati et al ("Hertsel") that contained an unenforceable provision for a partition. Both sides negotiated believing partition was a valid part of the agreement and this was a mutual mistake of material fact. In its May 28, 2025 minute order, the Court indicated that it likely lacked authority to order the remedy of partition by sale as called for in the settlement agreement because the property was owned by the LLC, not the settling parties, and if the subject properties are not "owned by several persons concurrently or in successive estates," a partition proceeding cannot be brought. (May 28, 2025 minute order, Pages 1-2.)

While Albert characterizes the mutual mistake as one of fact, it is actually a mutual mistake of law, which is a sufficient ground for rescission. Albert seeks rescission of the agreement. (Opposition, Pages 3:13, 3:22, 7:4-5, 8:15-9:19.) When contracting parties have entered into a contract under a material mistake of law or fact, the parties are entitled to be relieved by reason of their mutual mistake. (Citation omitted.) (Merced County Mut. Fire Ins. Co. v. Cal. (1991) 233 Cal.App.3d 765, 771.)

Further, rescission is available if there is a material failure of consideration--here, the remedy of partition by sale was the sole consideration recited in the settlement agreement in exchange for mutual releases. (b) A party to a contract may rescind the contract in the following cases: (1) If the consent of the party rescinding, or of any party jointly contracting with him, was given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to whom he rescinds, or of any other party to the contract jointly interested with such party. ... (4) If the consideration for the obligation of the rescinding party, before it is rendered to him, fails in a material respect from any cause. (Civ. Code Sec. 1689(b)(4).)

Case law has uniformly held that a failure of [*404] consideration must be "material," or go to the "essence" of the contract before rescission is appropriate. (Citations omitted.) (Wyler v. Feuer (1978) 85 Cal.App.3d 392, 403-04.) "A settlement agreement is a contract, and the legal principles which apply to contracts generally apply to settlement contracts. (Citation omitted.)" (Canaan Taiwanese Christian Church v. All World Mission Ministrie s (2012) 211 Cal.App.4th 1115, 1123-24.)

The Court will give Albert an opportunity to present the appropriate mechanism for seeking rescission by way of a noticed motion, supplemental complaint or separate lawsuit. For purposes of this motion, the Court finds that the rescission issue cannot be resolved pursuant to Code Civ. Proc. Sec. 664.6: "'Although a judge hearing a 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.'" (Citations omitted.)

As such, "[t]he power of the trial court under Code of Civil Procedure section 664.6 ... is extremely limited. [P.] ... The court is powerless to impose on the parties more restrictive or less restrictive or different terms than those contained in their settlement agreement." (Citation omitted.) (Machado v. Myers (2019) 39 Cal.App.5th 779, 790.)

Moving parties represent that Albert unilaterally dissolved Albert and Hertsel, LLC -- the very entity whose orderly winding up was reserved to a joint, post-sale process under Paragraph 10 -- and that unilateral conduct caused the LLC's loan to fall into default. Subsequently, the Properties were ultimately retitled out of A&H LLC and distributed to Albert (individually) and HE Olympic LLC, a newly formed entity solely owned by Hertsel, as co borrowers under a higher-interest replacement loan with Lantern Financial; the Grant Deeds reflecting the change in title were recorded on or about December 12, 2025.

This sounds like something that needs to be addressed by a supplemental complaint or a separate lawsuit, as it is conduct that arose after the commencement of this action. "[B]ecause the procedure to enforce a settlement under section 664.6 was not exclusive, the parties could pursue other avenues of relief, such as a motion for summary judgment, a separate suit in equity, or an amendment of the pleadings." (Levy v. Superior Court (1995) 10 Cal.4th 578, 581, superseded by statute on other grounds as stated in Greisman v. FCA US, LLC (2024) 103 Cal.App.5th 1310, 1325-26.)

To the extent moving parties wish to assert the releases as affirmative defenses to specific claims by way of an appropriate motion, nothing prevents them from doing so unless Albert successfully effectuates rescission. The severance provision in P. 21 of the Settlement Agreement does not mandate otherwise. As such, the motion to enforce settlement and for attorney's fees is DENIED.

Case Number: 22STCP03824 Hearing Date: September 1, 2026 Dept: 134

The following tentative ruling is issued pursuant to Rule of Court 3.1308 at 2:26 PM on August 31, 2026. Rule of Court 3.1308(a)(1) provides that a "tentative ruling will become the ruling of the court if the court has not directed oral argument by its tentative ruling and notice of intent to appear has not been given." The Court does not desire oral argument on the motion addressed herein. Notice of intent to appear is REQUIRED pursuant to California Rule of Court 3.1308(a)(1). No later than 4:00 p.m. on DATE \@ "MMMM d, yyyy" August 31, 2026, the moving and opposing parties must provide notice to ALL OTHER PARTIES and the staff of Department 734 whether the party intends to (1) appear and argue the motion, or (2) submit to the tentative ruling.

Notice to Department 734 should be sent by email to [email protected], with opposing parties copied on the email. The high volume of telephone calls to Department 734 may delay the Court's receipt of notice, so telephonic notice to 213-830-0776 should be reserved for situations where parties are unable to give notice by email.

This is a dispute between cousins over valuation of shares of a family-owned business. Plaintiff Abbie Gougerchian moves for leave to amend the operative First Amended Complaint to conform to proof at trial.

TENTATIVE RULING

Plaintiff Abbie Gougerchian's motion for leave to amend the operative First Amended Complaint to conform to proof at trial is DENIED. The Second Amended Complaint filed on August 5, 2026 without leave of court is ordered STRICKEN pursuant to Code Civ. Proc. Sec. 436(b).

ANALYSIS

Motion For Leave To Amend Complaint To Conform To Proof At Trial