Case Number: 21STCV39105 Hearing Date: June 25, 2025 Dept: 207
TENTATIVE RULING
| DEPARTMENT | 207 |
| HEARING DATE | June 25, 2025 |
| CASE NUMBER | 21STCV39105 |
| MOTIONS | Motion to Set Aside and Vacate the Judgment and Motion for a New Trial |
| MOVING PARTY | Plaintiff United Clinical Research, Inc. |
| OPPOSING PARTIES | Defendants Michael Landver and California Clinical Research, Inc. |
BACKGROUND
The Arbitration
In or around June 15, 2020, Michael Landver (“Landver” or “Petitioner”) demanded arbitration on his own behalf and derivatively on behalf of nominal defendant, United Clinical Research, Inc. (“United”) against Peyman Banooni (“Banooni”); Stan Gershovich (“Gershovich”); Fred Shaham (“Shaham”) (Banooni, Gershovich, and Shaham shall collectively be referred to as the “Individual Defendants” or “Respondents”); and Matrix Clinical Research, Inc. (“Matrix.”)
Landver alleges he and the Individual Defendants previously formed United, a company that conducts clinical trials for drug development, in which Landver claims a 25% ownership interest. Landver alleges the Individual Defendants later stopped working with Landver and secretly formed their own company, Matrix, to conduct such clinical trials. In so doing, Landver alleges the Individual Defendants violated their fiduciary duties to Landver and misappropriated United’s business, employees, revenue, contracts, and trade secrets which they used to start Matrix so they would no longer have to share profits with Landver.
The arbitration was demanded pursuant to the United Shareholder Agreement, entered into by Landver and the Individual Defendants. (Ex. 1 to Feb. 10, 2025 Behjatnia Decl. iso Opp. to MSJ at Ex. A.)
Matrix was subsequently dismissed from the arbitration proceedings on the grounds that it was not a party to the United Shareholder Agreement. (Feb. 10, 2025 Behjatnia Decl. at ¶ 4; Dec. 3, 2024 Baranov Decl. at ¶ 9.)
On July 6, 2020, the Individual Defendants filed counterclaims against Landver and California Clinical Research (“CCR”) alleging breach of contract; breach of fiduciary duty and misappropriation of trade secrets, to which Landver answered on July 20, 2020. (Dec. 3, 2024 Baranov Decl. iso MSJ at ¶¶ 4-5.)
On or about August 16, 2021, the arbitrator dismissed the Individual Defendants’ counterclaims against CCR for lack of jurisdiction and issued sanctions against the Individual Defendants for their refusal to participate in discovery. (Dec. 3, 2024 Baranov Decl. at ¶¶ 8-9; see also July 13, 2022 Baranov Decl. at ¶ 14 and Exs. E-G attached thereto.)
According to the July 13, 2022 Baranov declaration filed in opposition to the Order to Show Cause why this case should not be stayed (“July 13, 2022 Baranov Decl.”), the arbitrator subsequently vacated all proceedings in the arbitration and stayed the arbitration pending the resolution of the civil actions. (July 13, 2022 Baranov Decl. ¶ 16.)
Based on documents Landver received in discovery in the civil actions from Matrix’s accountant, David Gadoshian, CPA, Landver submitted a prove-up packet in the arbitration, with notice to the Individual Defendants, and on August 4, 2024, the arbitrator issued a ruling in Landver’s favor, awarding a sum of $2.6M against the Individual Defendants. (Dec. 3, 2024 Baranov Decl. ¶¶ 21-22 and Ex. D.)
The Declaratory Relief Action
On August 11, 2021, United, Banooni, Gershovich, and Shaham filed a complaint in case number 21SMCV01358 against Landver and Thomas P. Hanrahan, an arbitrator for the American Arbitration Association, seeking a declaration that the arbitration proceedings were invalid because the terms of the arbitration provision had not been complied with and injunctive relief enjoining the arbitration proceedings (“The Declaratory Relief Action”). That case was voluntarily dismissed in its entirety without prejudice on March 13, 2023.1
The Landver Action
On October 22, 2021, Landver filed a complaint in his individual capacity and derivatively on behalf of United against Matrix and the Individual Defendants in case number 21STCV39105 (“The Landver Action”) alleging eleven causes of action as follows:
- Concealment
- Misappropriation of Trade Secrets
- Inducement of Breach of Contract
- Intentional Interference in Economic Relations
- Negligent Interference in Economic Relations
- Unfair Competition
- Violation of the Computer Fraud and Abuse Act
- Conversion
- Civil Conspiracy
- Aiding and Abetting Breach of Fiduciary Duties
- Declaratory Relief
The parties, allegations, and causes of action in the 9105 action are substantially similar to those filed in the arbitration proceedings.
On August 6, 2024, Landver requested voluntary dismissal of the Individual Defendants without prejudice, which the Court entered on August 7, 2024. On August 7, 2024, Landver requested voluntary dismissal without prejudice of Matrix, which the Court entered on August 8, 2024.
Further, on March 25, 2025, Landver dismissed the Doe Defendants 1-100. (See March 25, 2025 Minute Order.) Following the dismissal of the Doe Defendants, The Landver Action was fully disposed.
The UCR Action
On November 29, 2021, United, Banooni, Gershovich, and Shaham filed a complaint against Landver and CCR in case number 21STCV43580 (“The UCR Action”) for allegedly sabotaging United. The parties and causes of action are substantially similar to the counterclaims filed in the arbitration proceedings.
On or about August 3, 2022, the Individual Defendants Banooni, Gershovich, and Shaham subsequently dismissed their claims, leaving only United as a plaintiff. Subsequently, United dismissed the Doe Defendants 1-100 on March 25, 2025. (See March 25, 2025 Minute Order.)
In the operative First Amended Complaint (“FAC”), filed on September 21, 2023, United alleges nine causes of action as follows:
- Breach of Fiduciary Duty
- Intentional Interference with Prospective Economic Advantage
- Trade Libel
- Trade Secret Misappropriation
- Breach of Confidence
- Comprehensive Computer Data Access and Fraud Act
- Conversion of Trade Secrets, Non-Trade Secret Materials
- Imposition of Constructive Trust
- Accounting
On March 21, 2022, Landver moved to compel arbitration in the UCR action, which the Court granted on June 24, 2022. In granting the motion to compel arbitration, the Court rejected United’s arguments that (1) the shareholder agreement containing the arbitration provision was void because in entering it, the Individual Defendants somehow compromised their own rights as shareholders; (2) mediation was a condition precedent to compelling arbitration; (3) United itself did not sign the agreement; (4) the arbitration provision does not cover the dispute; and (5) United was inactive status at the time. The Court noted that United was estopped from disclaiming the arbitration due to its active participation, and it was estopped from denying the arbitration provision in a shareholder agreement under which it brought its own claims in Court, implicitly acknowledging its validity. The Court also held that the Individual Defendants could not benefit from allowing United’s corporate status to lapse.
On September 28, 2022, Landver filed a notice of withdrawal of motion to compel arbitration and request to lift the stay. The Court granted the request and lifted the stay on October 4, 2022.
Subsequently, the Court consolidated for all purposes the Landver and UCR actions on October 11, 2023, designating the Landver action as the lead case. (See October 11, 2023 Minute Order.)2
Following a bench trial on The UCR Action, the Court entered a Judgment in favor of Landver and CCR on April 28, 2025.
MOTIONS
United now moves to vacate and set aside the judgment and for a new trial, pursuant to Code of Civil Procedure sections 663 and 657, respectively, on the grounds that the Court erred in finding (1) the American Arbitration Association final award was res judicata and collateral estoppel; and (2) attorney Russell F. Behjatnia (“Behjatnia”), counsel for United, abandoned the arbitration without preservation of issues for judicial review.
Landver and CCR oppose both motions and United replies.
LEGAL STANDARDS
- MOTION FOR A NEW TRIAL
Code of Civil Procedure section 657 provides:
The verdict may be vacated and any other decision may be modified or vacated, in whole or in part, and a new or further trial granted on all or part of the issues, on the application of the party aggrieved, for any of the following causes, materially affecting the substantial rights of such party:
- Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.
- Misconduct of the jury; and whenever any one or more of the jurors have been induced to assent to any general or special verdict, or to a finding on any question submitted to them by the court, by a resort to the determination of chance, such misconduct may be proved by the affidavit of any one of the jurors
- Accident or surprise, which ordinary prudence could not have guarded against.
- Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial.
- Excessive or inadequate damages.
- Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law.
- Error in law, occurring at the trial and excepted to by the party making the application.
Code of Civil Procedure section 658 provides: “When the application is made for a cause mentioned in the first, second, third and fourth subdivisions of Section 657, it must be made upon affidavits; otherwise it must be made on the minutes of the court.” (Code Civ. Proc., § 658.)
- MOTION TO VACATE AND SET ASIDE JUDGMENT
A judgment or decree, when based upon a decision by the court, or the special verdict of a jury, may, upon motion of the party aggrieved, be set aside and vacated by the same court, and another and different judgment entered, for either of the following causes, materially affecting the substantial rights of the party and entitling the party to a different judgment:
- Incorrect or erroneous legal basis for the decision, not consistent with or not supported by the facts; and in such case when the judgment is set aside, the statement of decision shall be amended and corrected.
- A judgment or decree not consistent with or not supported by the special verdict.
(Code Civ. Proc., § 663.)
PROCEDURAL ISSUES
Motions to Set Aside and Vacate the Judgment and Motions for New Trials are governed by the same statutory time limits. (See Code Civ. Proc., §§ 663a, subd. (b) [set aside]; 659 [new trial].)
The notice of motion must be filed and served within 15 days of the clerk’s notice of entry of judgment. (Code Civ. Proc., §§ 659, subd. (a)(2) [new trial]; 663a, subd. (a)(2) [set aside].) Here, the notice of entry of judgment was served by mail on April 29, 2025. Fifteen days later is Wednesday, May 14. Here, the Court finds that United filed the intent notices on May 14.
Further, 10 days after filing the notices, the moving party (United) must file and serve the motion(s) and supporting papers. (Code Civ. Proc., §§ 659a [new trial]; 663a, subd. (d) [set aside].) Here, 10 days after May 14 is Saturday, May 24.
By operation of Code of Civil Procedure section 12a, subdivision (b), which expressly applies to the deadlines of Sections 659 and 663, United’s deadline to file and serve the motions was extended to the next court day. The Court notes that Monday, May 26 is Memorial Day, a court holiday. As such, Plaintiff’s deadline is extended to Tuesday, May 27. Thus, United’s May 27 filings are timely.
The opposing parties have 10 days thereafter to file oppositions, making the oppositions due Friday, June 6, and the moving party has 5 days thereafter to file replies. (Code Civ. Proc., § 659a.) These deadlines may be extended by up to 10 days for good cause shown by affidavit or by stipulation.
Landver and CCR untimely opposed the motions on June 11. However, the oppositions are accompanied by the declaration of Michael M. Baranov (“Baranov”), counsel for Landver and CCR, indicating that he never received electronic service of the Notices of Intent to Move for New Trial and to Set Aside and Vacate the Judgment. (Baranov Decl. ¶ 5.)
On March 24, 2025, Baranov filed a Notice of Association of Kenneth J. Sargoy (“Sargoy”), as co-counsel because Baranov was unavailable for two months starting mid-May 2025, due to the birth of his child. (Baranov Decl. ¶¶ 6, 8.) Indeed, Baranov and his wife checked into the hospital on May 14, and their child was born on May 15. (Baranov Decl. ¶ 9.) On May 27, the moving papers were served on Baranov, but not Sargoy. (Baranov Decl. ¶ 7.)
Thus, at a minimum, Landver and CCR have demonstrated, by affidavit, good cause for the Court to extend the opposition deadline by five days, to June 11, when the oppositions were filed.
The oppositions raise a more fundamental issue about the timeliness of United’s motions, however. The Code requires that the Notices of Intent to Move be filed and served “upon each adverse party” within 15 days of the date of service of the notice of entry of judgment by the clerk. (Code Civ. Proc., §§ 659, subd. (a)(2); 663a, subd. (a)(2).) Here, Landver and CCR have rebutted the presumption of proper service in the proofs of service, by affidavit, that the Notices were not served within these time limits.
In relevant part, Baranov attests: “I was never served with (a) Notice of Intent to Move for New Trial and (b) Notice of Intent to Move to Set Aside and Vacate Judgment and Have New Judgment Entered, filed by plaintiff on May 14, 2025. I obtained copies of these documents from the court’s website, which I attach hereto as Exhibits “C” and “D”, as part of my drafting of this opposition. These documents contain proofs of service that show that I was electronically served at my e-mail address mbaranov@mbgwlaw.com on May 14, 2025. This is not correct. I never received either of these Notices either electronically, via US mail or by personal services. I have reviewed my e-mail mailbox for May 14, 2025, and searched for all e-mails I received from Mr. Behjatnia. I did not find any e-mail from Mr. Behjatnia or from anyone containing these notices on May 14, 2025 or on any other date.” (See Baranov Decls. iso Oppositions to Motions for new Trial and Vacate Judgment, ¶ 5.) Further, Sargoy also states that he was not served with the Notices of Intent to Move for New Trial, or to Set Aside or Vacate Judgment. (See Sargoy Decls. iso Oppositions to Motions for New Trial or Vacate Judgment, ¶ 4.)
A motion for a new trial is a new statutory proceeding, collateral to the original proceeding and constitutes a new action brought to set aside the judgment. Both the right to move for a new trial and the court’s jurisdiction to hear it are creatures of statute. A trial court gains jurisdiction to hear such a motion only after a party files a timely notice of intent and judgment has been entered. Thus, a trial court does not have the jurisdiction to make an order granting a new trial on its own motion. Nor is it within the power of the litigants to invest the court with jurisdiction to hear and determine the motion for a new trial by consent, waiver, agreement or acquiescence.
(Kabran v. Sharp Memorial Hosp. (2017) 2 Cal.5th 330, 336 [cleaned up]; see also Mercer v. Perez (1968) 68 Cal.2d 104, 118 [“As the motion for a new trial finds both its source and its limitations in the statutes . . . , the procedural steps prescribed by law are mandatory and must be strictly followed”]; Tabor v. Superior Court of Los Angeles County (1946) 28 Cal.2d 505, 507-508 [the notice of intention to move for new trial is “essential to the court’s jurisdiction and cannot be waived but its timely filing is likewise required”]; Reyes v. Kruger (2020) 55 Cal.App.5th 58, 73 [“a ‘valid’ motion for new trial . . . is defined in part by the jurisdictional requirements for timely filing of the notice of intent under section 659”].)
United had five days after service of the oppositions to file and serve its reply. Five days after June 11 is Monday, June 16, yet the Replies were not filed and served until June 18. Unlike the Oppositions, the Reply briefs are not accompanied by an affidavit demonstrating good cause for the delay. As such, the Court cannot consider the Reply briefs.
But, even if the Court were to consider the Reply briefs, United fails to address the procedural issues raised by Landver and CCR that the Notices of Intent were not properly served.
Because United’s Notices of Intent were not properly served, the Court’s consideration of United’s motions would result in a significant departure from the procedural requirements set forth in Sections 659 and 663a. In short, due to the fatal procedural defects, the Court is without authority to hear or rule on United’s motion for new trial, or motion to set aside or vacate judgment. (See, e.g., Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892; Telefilm, Inc. v. Superior Court (1949) 33 Cal.2d 289.) Consequently, the Court denies United’s motions.
SUBSTANTIVE ISSUES
Even if United had demonstrated that the Notices were timely served, which it has not, the motions are not meritorious.
Regarding United’s first argument that the arbitration proceeding was not res judicata, the issue was fully briefed by Behjatnia in connection with Gershovich’s motion for attorneys’ fees, where the Court found that The Landver Action was duplicative of the arbitration proceedings, where Landver prevailed after obtaining substantial evidentiary sanctions, due to the defendants’ outright refusal to participate in discovery therein. Accordingly, this Court expressly held: “the Court agrees that the arbitration award is res judicata as to the substance of the claims in this case[.]” (Minute Order, May 28, 2025 at p. 11.)
Further, the fact that Landver and United used the discovery from The Landver Action to file the prove-up packet in the arbitration proceedings, demonstrates that the factual findings are the same for both cases.
United contends that had this Court permitted it to go to trial, it would have introduced evidence that Behjatnia was justified in refusing to participate in the arbitration because (1) the shareholder agreement was void; (2) United provided notice of its refusal to participate in Arbitration; and (3) conditions precedent to arbitration were not satisfied.
However, the arbitrability of the claims was already decided in connection with The UCR action, where the Court considered and rejected the same or similar arguments that (1) the shareholder agreement is void because United was suspended at the time and the individual plaintiffs, as signatories to the agreement, somehow interfered with their own rights as shareholders; (2) the mediation provision was an unsatisfied condition precedent to compelling arbitration; and (3) Landver waived his right to arbitration by filing The Landver Action. (See Final Ruling, June 24, 2022.)
Regarding United’s second argument that it preserved additional judicial review of these issues by providing notice to the arbitrator, such argument is more properly raised in connection with a petition to confirm/correct/vacate the arbitration award or other direct review of the underlying arbitration award. United has provided no authority standing for the proposition that the Court may independently review an arbitration award on a motion for a new trial or a motion to vacate and set aside a court judgment in a separate (but duplicative) case.
CONCLUSION AND ORDER
For the foregoing reasons, the Court denies United’s motion to vacate and set aside the judgment and denies United’s motion for a new trial on both procedural and substantive grounds. Procedurally, Landver and CCR have rebutted the presumption that notices of the motions were properly served and United has not demonstrated otherwise in reply.
Substantively, United’s arbitrability arguments were already raised, considered, and rejected in connection with the order compelling arbitration in the UCR Action and United has provided no authority granting this Court the authority to independently review the underlying arbitration award on a motion to vacate and set aside judgment or motion for new trial in this entirely separate (but duplicative) case.
United shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith.
1. “[A]s a general rule, a voluntary dismissal of an action deprives the court of both subject matter and personal jurisdiction in that case. Based on this general rule, most orders entered after the dismissal are void and have no effect.” (See Manhan v. Gallagher (2021) 62 Cal.App.5th 504, 509 [cleaned up]; see also Paniagua v. Orange County Fire Authority (2007) 149 Cal.App.4th 83, 89 [“it is a well-settled proposition of law that where the plaintiff has filed a voluntary dismissal of an action . . ., the court is without jurisdiction to act further [citations], and any subsequent orders of the court are simply void”].)
2. “[T]here are thus two types of consolidation: a consolidation for purposes of trial only, where the two actions remain otherwise separate; and a complete consolidation or consolidation for all purposes, where the two actions are merged into a single proceeding under one case number and result in only one verdict or set of findings and one judgment.” (Hamilton v. Asbestos Corp., Ltd. (2000) 22 Cal.4th 1127, 1147.)