Elyaszadeh v. RREF WB Acquisitions CA2/5

Filed 12/6/13 Elyaszadeh v. RREF WB Acquisitions CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

SHAHRAM ELYASZADEH et al., B243477

Cross-complainants and Appellants, (Los Angeles County Super. Ct. No. BC468648) v.

RREF WB ACQUISITIONS, LLC,

Cross-defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, Richard E. Rico, Judge. Reversed and remanded. Kaplan, Kanegos & Kadin, David Scott Kadin and Leslie McAfee for Cross- complainants and Appellants. Greenberg Traurig LLP, Howard J. Steinberg and Nicholas A. Insogna for Cross- defendant and Respondent.

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Cross-complainants and appellants Shahram Elyaszadeh, Elko Mall, LLC, and Malibu Ocean View Villas, LLC, appeal from a judgment of dismissal following an order sustaining a demurrer without leave to amend in favor of cross-defendant and respondent RREF WB Acquisitions, LLC, in this action arising out of loan guarantees. Appellants contend their amended cross-complaint states a cause of action for fraud, based on the Supreme Court’s recent decision in Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169 (Riverisland). We conclude the principles expressed in Riverisland apply retroactively. Therefore, we reverse and remand for further proceedings.

FACTS1

Elyaszadeh owns property in Van Nuys, California. He is also the managing member of Elko LLC, which owns real property in Elko, Nevada, and of Malibu LLC, which owns real property in Malibu, California. On August 22, 2007, Wilshire State Bank agreed to loan $4.3 million to Malibu LLC for the development of four ocean view homes. The loan was secured by a deed of trust on the Malibu property. Elyaszadeh also executed a guaranty. In June 2009, prior to the date that the loan was due, Elyaszadeh negotiated an extension and construction financing with the Bank’s chief financial officer, Joanne Kim. Kim, as well as Dan Young, a construction loan department representative, and other loan officers and loan processors, told Elyaszadeh that the Bank would extend the due date and provide construction financing of at least $4.6 million in exchange for additional collateral. In reliance on the Bank’s representations that it would provide construction financing, Elyaszadeh provided a second deed of trust on the Elko property for $4.3 million, a deed of trust on the property in Van Nuys, and another guaranty.