Vaghashia v. Vaghashia ( 2024 )

Filed 10/28/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
GOVIND VAGHASHIA et al., B331073
Plaintiffs, Cross-defendants Los Angeles County
and Appellants, Super. Ct. No. BC696133
v.
PRASHANT VAGHASHIA et al.,
Defendants, Cross-complainants
and Respondents.
APPEAL from orders of the Superior Court of Los Angeles
County. Jon R. Takasugi, Judge. Affirmed.
Willkie Farr & Gallagher, Eric J. Bakewell, Benita S. Yu;
Lal Harris & Edwards Law Group and Hari S. Lal for Plaintiffs,
Cross-defendants and Appellants.
M. Cris Armenta P.C., M. Cris Armenta; Shah Attorney
Group and Earth Shah for Defendants, Cross-complainants and
Respondents.
___________________________________________
Govind Vaghashia and the other plaintiffs, cross-
defendants, and appellants 1 appeal an order of the trial court
denying their motion to vacate a settlement agreement between
the Govind Parties, on the one hand, and defendants, cross-
complainants and respondents Prashant and Mita Vaghashia, on
the other.
We deny Prashant and Mita’s motion to dismiss this appeal
based on the disentitlement doctrine. The record citations in
their motion are inadequate to fully substantiate their
allegations.
Turning to the appeal, we find no abuse of discretion in the
trial court’s conclusion that the Govind Parties are estopped from
seeking to vacate a settlement agreement that they previously
moved to enforce and that the trial court did, in fact, enforce.
The trial court did not enforce the agreement the way the Govind
Parties wanted, but the trial court accepted the Govind Parties’
position that the agreement was enforceable. Their present
position that the agreement is unenforceable is totally
inconsistent with their previous position in their motion to
enforce the agreement. We therefore affirm.
1 The other plaintiffs, cross-defendants, and appellants are:
(1) Sonal G. Vaghashia; (2) American Financial Services; (3) The
Vaghashia Family Limited Partnership; (4) Atmaswaroop
Investments, LLC; (5) Sherman Oaks First Plaza, LLC;
(6) Five Stars Hospitality, LLC; (7) Bellflower First Plaza, LLC;
(8) Oak First Plaza, LLC; and (9) Graphic Rsch Properties, LLC,
formerly known as, Graphic Research, LLC. We refer to these
entities and individuals, together with Govind Vaghashia, as the
“Govind Parties.”
2
BACKGROUND
As a preliminary matter, the settlement agreement has
been filed under seal in this court at the Govind Parties’ request.
However, the “redacted – public version” of the Govind Parties’
opening brief contains extensive descriptions of its terms,
including, in some places, dollar amounts. Prashant and Mita
did not redact any information in their respondents’ brief; nor did
the Govind Parties in their reply brief. Each revealed still more
detail about the settlement agreement. These papers are all
accessible to the public.
We limit our recitation of the facts to those relevant to our
resolution of the appeal and which are disclosed both in the
portion of the record which was not sealed and the parties’ public
briefs.
Prashant and Govind are brothers. After years of
collaborating in real estate and other business ventures, their
relationship soured. Prashant and his wife Mita sued Govind, his
wife Sonal, and certain other Govind Parties and affiliated
entities, asserting a 50 percent interest in the business portfolio
Prashant and Mita alleged they built together.
Govind then sued Prashant and an entity he and Prashant
co-owned based on Prashant’s alleged mismanagement.
Prashant and Mita cross-complained to again assert their claim
to a 50 percent interest in the business portfolio.
A bench trial on Govind’s complaint and Prashant and
Mita’s cross-complaint commenced in March 2022. The trial
court suspended the trial to permit the parties to work towards a
consensual resolution. In June 2022, the parties entered into a
settlement agreement. In broad terms, the agreement provided
for the Govind Parties and certain other affiliates to pay
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Prashant and Mita $35 million in several installments. The
parties agreed to characterize a portion of this sum as a gift and
the rest as compensation for physical and emotional injuries
suffered by Prashant and Mita.
The Govind Parties agreed to collateralize their payment
obligations through deeds of trust on real property having an
equity value of at least $26 million. Rather than identify the
properties to serve as collateral at the time of settlement, the
parties agreed the Govind Parties would propose a list and
Prashant would not unreasonably withhold his consent to the
list.
The settlement agreement also called for Govind and Sonal
to execute a quitclaim deed of their 70 percent interest in
Prashant and Mita’s personal residence in Burbank (the Burbank
Home).
The parties also agreed the trial court would retain
jurisdiction to enforce the settlement agreement pursuant to
section 664.6 of the Code of Civil Procedure.
Before long, disputes over the interpretation of the
settlement agreement arose. The Govind Parties paid the first
installment late (after making a series of complaints about the
proposed wire instructions) and then refused to pay interest that
Prashant and Mita claimed was due under the agreement.
Prashant withheld consent to Govind’s list of properties to serve
as collateral for the remaining obligations, noting the values
Govind used were highly inflated relative to values he had
ascribed to the same properties less than three weeks earlier.
Govind responded that Prashant and Mita bore the burden of
obtaining appraisals for the properties to justify withholding
consent, which Prashant and Mita disputed. And, the parties
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were unable to agree on a form of quitclaim deed to convey
Govind and Sonal’s interest in the Burbank Home to Prashant
and Mita. Govind and Sonal insisted on inserting a consideration
term that was not contemplated by the settlement agreement.
With Prashant and Mita continuing to demand interest,
withholding consent to the collateral security list, and rejecting
Govind and Sonal’s proposed form of deeds for the Burbank
Home, Govind and Sonal filed a motion to enforce the terms of
the settlement agreement on October 18, 2022. Prashant and
Mita filed a counter motion to enforce on October 24, 2022.
The trial court heard the competing motions on
December 8, 2022. After taking the matter under submission,
the court recognized it was “empowered to enforce [the]
provisions of the settlement agreement” and proceeded to do so—
largely in the manner requested by Prashant and Mita. The
court’s minute order adopts none of the interpretations of the
settlement agreement proffered by the Govind Parties.
At some point prior to the hearing on their motion to
enforce, the Govind Parties began to question whether they
wished to be bound by the settlement agreement at all. While
the exact date their concerns arose is not disclosed, we know their
counsel “retained attorney and tax expert Stuart Hurwitz to
evaluate the gift and personal injury allocations from the
[settlement agreement]” sometime “after [it] was executed”; and
by letter dated November 3, 2022, Mr. Hurwitz opined (as
paraphrased by Govind) “that the allocations were illegal because
the [s]ettlement payment[s] cannot be properly labeled as a gift
or damages for personal injury” and “are tax deductible and must
be reported precisely in accordance with tax law.” As a result, in
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Govind’s telling, the settlement agreement had adverse tax
implications to him and Sonal that they “did not anticipate.”
On January 3, 2023, the Govind Parties filed a motion to
vacate the settlement agreement on various grounds, including
“mutual and unilateral mistakes relating to the parties’
erroneous belief that the allocations of the [s]ettlement payments
as a ‘gift’ and personal injury damages were proper and legal”
and that Prashant and Mita’s former counsel made
misrepresentations to induce these mistakes on which the Govind
Parties relied.
The trial court denied the Govind Parties’ motion. It
rejected each of their arguments on substantive grounds. It
further found the Govind Parties were judicially estopped from
challenging the settlement agreement, having previously moved
to enforce it.
The Govind Parties appealed. 2
MOTION TO DISMISS
Prashant and Mita request dismissal of this appeal under
the disentitlement doctrine. “Under the disentitlement doctrine,
a reviewing court has inherent power to dismiss an appeal when
2 The Govind Parties’ notice of appeal refers to multiple
orders of the trial court not addressed in their briefing. In
addition to the order denying their motion to vacate the
settlement, which they do address, they identify these other
orders: “April 25, 2023 Order[] granting Motion to Enforce
Settlement”; “May 8, 2023 Order (Payment) and Order (Elisor)
and related orders.” Any challenge to these other orders is
forfeited due to the absence of any attempt to show error. (See
Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 685
[challenge to order deemed abandoned for failure to address in
opening brief].)
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the appealing party has refused to comply with the orders of the
trial court.” (Ironridge Global IV, Ltd. v. ScripsAmerica, Inc.
(2015) 238 Cal.App.4th 259, 265.) The doctrine “ ‘is a
discretionary tool that may be used . . . when the balance of the
equitable concerns makes dismissal an appropriate sanction.
[Citation.] The rationale underlying the doctrine is that a party
to an action cannot seek the aid and assistance of an appellate
court while standing in an attitude of contempt to the legal
orders and processes of the courts of this state.’ ” (Menezes v.
McDaniel (2019) 44 Cal.App.5th 340, 346.)
Prashant and Mita identify two failures on the part of the
Govind Parties they contend violate one or more trial court
orders. First, the Govind Parties refused to execute (and
potentially never executed) a proper quitclaim deed to the
Burbank Home, despite having been ordered to do so on
December 12, 2022. They show the Govind Parties’ actions
around preparing the deed, including attempting to retain a life
estate in the Burbank Home through their proposed form, were
wholly disingenuous and constituted “willful non-compliance with
the [trial] [c]ourt’s directive [to execute a quitclaim deed].”
However, the issue was apparently resolved following the trial
court’s order that an elisor be appointed to sign the deed for them
if Govind and Sonal remained noncompliant. Because Prashant
and Mita do not contend otherwise, we infer Govind and Sonal’s
interest in the Burbank Home has been disclaimed one way or
another. Weighing the equities, we do not think disentitlement is
warranted under the circumstances.
Second, Prashant and Mita allege the Govind Parties have
still not complied with their obligation to provide a list of
properties to secure their obligations under the settlement
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agreement after having been ordered to do so–“[t]o date, none of
the lists provided by [the Govind Parties] have satisfied the
requirements of the [s]ettlement [a]greement, and thus, violate
the trial court’s [December 12, 2022] order to provide such a list.”
After questioning whether “Govind ha[d] complied with his
obligation to select properties with ‘at least a total of [$26 million]
of equity,’ ” the court ordered Govind “to provide the collateral
security list within 30 days.” To show Govind failed to comply,
Prashant and Mita cite multiple instances in the record of the
same pre-order list and one list provided post-order. A
comparison of these lists does not support Prashant and Mita’s
contention that the Govind Parties have only “used [the] same
rehashed [property] values” the trial court said Prashant
rightfully rejected. The only post-order list cited is materially
different than the initial list, including a property not among
those on the initial list with a purported equity value of nearly
$12 million. While we have no basis to conclude this list is
compliant, nor can we surmise from Prashant and Mita’s
citations that it is noncompliant—it is certainly not the “same”
list the court found noncompliant. Prashant and Mita also note
the later list did not propose an allocation of deeds of trust across
the proposed properties. This aspect of the settlement agreement
was not addressed in the trial court’s December 12, 2022 order.
Prashant and Mita’s motion to dismiss is denied.
DISCUSSION
Because we affirm on the basis of judicial estoppel alone,
we limit our discussion accordingly.
1. Law and Standard of Review
“ ‘ “Judicial estoppel precludes a party from gaining an
advantage by taking one position, and then seeking a second
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advantage by taking an incompatible position. . . . The doctrine’s
dual goals are to maintain the integrity of the judicial system and
to protect parties from opponents’ unfair strategies. [Citation.]
Application of the doctrine is discretionary.” ’ [Citation.] The
doctrine applies when ‘(1) the same party has taken two
positions; (2) the positions were taken in judicial or quasi-judicial
administrative proceedings; (3) the party was successful in
asserting the first position (i.e., the tribunal adopted the position
or accepted it as true); (4) the two positions are totally
inconsistent; and (5) the first position was not taken as a result of
ignorance, fraud, or mistake.’ ” (Aguilar v. Lerner (2004)
32 Cal.4th 974, 986-987 (Aguilar).)
“The determination of whether judicial estoppel can apply
to the facts is a question of law reviewed de novo, i.e.,
independently. [Citations.] [B]ut the findings of fact upon which
the application of judicial estoppel is based are reviewed under
the substantial evidence standard of review.” (Blix Street
Records, Inc. v. Cassidy (2010) 191 Cal.App.4th 39, 46 (Blix
Street).) “Even if the necessary elements of judicial estoppel are
found, because judicial estoppel is an equitable doctrine
[citations], whether it should be applied is a matter within the
discretion of the trial court [citations]. The exercise of discretion
for an equitable determination is reviewed under an abuse of
discretion standard.” (Id. at p. 47.)
2. Analysis
Among other grounds, the Govind Parties tell us in their
opening brief that the trial court denied their motion to vacate
based on the doctrine of judicial estoppel. The court found, “[t]he
doctrine of judicial estoppel precludes a party who has moved to
enforce it from then moving to vacate it.” (Citing Blix Street,
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supra, 191 Cal.App.4th at p. 51.) The court found judicial
estoppel applied here because, among other things, “[a]fter trial
was stopped, . . . Govind sought dismissal [and] enforcement of
the agreement . . . .”
The Govind Parties argue judicial estoppel cannot apply
because two of its elements are unsatisfied. They say they did
not take two “totally inconsistent” positions in moving to enforce
the settlement agreement and then moving to vacate it; and, in
any event, they were not successful in taking any position in
their enforcement motion because it was denied. We disagree.
Totally Inconsistent Positions. In their enforcement
motion, the Govind Parties recited that “[a] motion to enforce or
confirm a settlement agreement . . . requires the trial court to
determine ‘in the first instance whether the parties have entered
into an enforceable settlement.’ (Osumi v. Sutton (2007) 151
Cal.App.4th 1355, 1360 . . . .)” They then asked the court to
enforce the agreement. By doing so, the Govind Parties’ position
was necessarily that there was an enforceable settlement. This is
totally inconsistent with their position in their motion to vacate
that the settlement agreement is “unenforceable.” (See Blix
Street, supra, 191 Cal.App.4th at p. 51 [finding “totally
inconsistent” the original position “that there was an enforceable
settlement agreement” and the later position “that the settlement
agreement was not enforceable”].)
Success in asserting the position. The Govind Parties were
successful, because the trial court accepted their position that the
settlement agreement was enforceable. (See Aguilar, supra,
32 Cal.4th at p. 986.) The court considered their motion and
enforced the settlement agreement. It expressly found it was
“empowered to enforce [the] provisions of the settlement
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agreement.” By the Govind Parties’ own authority, such
enforcement was necessarily predicated on the trial court’s
determination “in the first instance [that] the parties ha[d]
entered into an enforceable settlement.” (Osumi v. Sutton, supra,151 Cal.App.4th at p. 1360.) At oral argument, counsel for the
Govind Parties called the enforceability of the settlement
agreement a mere “implicit predicate” to their motion to enforce
the settlement under Code of Civil Procedure section 664.6. It is
not. It is an express predicate. (Osumi v. Sutton, at p. 1360.)
This is so even though the court did not interpret the
settlement agreement the way the Govind Parties wanted it to.
Contrary to their arguments, judicial estoppel’s success prong
may be satisfied even where the court has not granted a party
relief. This is illustrated in Blix Street, supra, 191 Cal.App.4th
39. There, the court concluded a party was judicially estopped
from challenging the enforceability of a settlement agreement
because the same party had previously acknowledged the
agreement was enforceable. This acknowledgment came not in a
motion for relief but in a statement to the court that the court
accepted as true, evidenced only by its dismissal of the jury and
termination of the trial. (Ibid.)
Finally, though the Govind Parties forfeited the issue by
failing to raise it in their briefs, we note the other judicial
estoppel prongs are satisfied. There is no dispute that the
Govind Parties took both positions in the trial court. (Aguilar,
supra, 32 Cal.4th at p. 986.) And, there is no indication the
Govind Parties took their initial position as a result of ignorance,
fraud, or mistake. (Id. at pp. 986-987.)
We give special attention to the last prong, which counsel
for the Govind Parties belatedly raised for the first time at oral
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argument. (Kinney v. Vaccari (1980) 27 Cal.3d 348, 356, fn. 6
[“ ‘An appellate court is not required to consider any point made
for the first time at oral argument, and it will be deemed
waived.’ ”].)
Even if the issue had not been forfeited, all facts on which
the Govind Parties predicated their motion to vacate were known
to them at least prior to the December 8, 2022 hearing on their
motion to enforce, at which they appeared through counsel who
continued to advocate for their position. They necessarily knew
before signing the settlement agreement the extent of their
participation in the mediation, who they relied on in deciding to
sign the agreement, and what its terms were. They knew before
filing their enforcement motion to “clarif[y]” the agreement’s
terms that they disagreed (or at least feigned disagreement) with
Prashant and Mita’s interpretation of the same. And, because of
Mr. Hurwitz’s letter, they knew not later than November 3,
2022—more than a month before the hearing at which they
continued to press the enforcement motion—about the issues
with the tax characterization provisions that they raised in the
motion to vacate.
At oral argument, counsel for the Govind Parties suggested
the new fact which justified the change in their position between
October 2022 and January 2023 was that the trial court
interpreted the settlement agreement in a way that was different
than the Govind Parties wanted it to. This is incorrect. First, we
cannot countenance a rule that dissatisfaction with a judicial
determination of contractual obligations is a permissible basis on
which to escape them.
Second, there was only one issue common to the Govind
Parties’ motion to enforce and their motion to vacate: the
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mechanism by which the parties would value the properties to
serve as collateral for the Govind Parties’ settlement payment
obligations. In the enforcement motion, the Govind Parties said
Prashant was obligated to obtain appraisals to dispute Govind’s
valuation. The trial court rejected this and directed the Govind
Parties to provide a list with credible values. In the motion to
vacate, the Govind Parties said the absence of an agreed
valuation method rendered the agreement an unenforceable
agreement to agree. This contention is frivolous and therefore
could not possibly justify the Govind Parties’ changing positions
before the trial court.
The settlement agreement calls for the Govind Parties to
pledge properties with equity value of $26 million and defines
“[e]quity” as “the value of the property less any secured debt.”
“The ordinary and commonly understood meaning of ‘value’ is fair
market value.” (Manhattan Sepulveda, Ltd. v. City of Manhattan
Beach (1994) 22 Cal.App.4th 865, 870.) “ ‘ “The term [value]
cannot be given a limited or special meaning as distinguished
from its usual definition, unless an intention to so use it
appears.” ’ ” (Ibid.) No intention to use a value other than fair
market value appears in the settlement agreement. Applying the
general rule that a contract that does not specify price does not
render the contract unenforceable so long as “a practicable mode
is provided for the court to determine price without any new
expression by the parties themselves,” the court in Goodwest
Rubber Corp. v. Munoz (1985) 170 Cal.App.3d 919, 921, enforced
an option contract that was for “fair market value” because
“ ‘[f]air market value’ is a well-established means of property
valuation and is a common task performed by courts on a daily
basis” (ibid). In view of these authorities, the “value” term of the
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settlement agreement does not render, and never has rendered,
the settlement agreement unenforceable.
There is undisputed, substantial evidence that supports the
findings on which the trial court predicated its determination
that judicial estoppel applied. We agree with the trial court that
these facts permit application of the doctrine as a matter of law.
And, we find no abuse of the trial court’s decision to apply it here.
DISPOSITION
We affirm the trial court’s order denying the Govind
Parties’ motion to vacate and all other orders subject to the
Govind Parties’ notice of appeal dated June 20, 2023, described
therein as “April 25, 2023 Order[] granting Motion to Enforce
Settlement”; “May 8, 2023 Order (Payment) and Order (Elisor)
and related orders.” Costs are awarded to Prashant and Mita.
GRIMES, J.
WE CONCUR:
STRATTON, P. J.
VIRAMONTES, J.
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