Filed 8/27/26 Shayan v. Shakib CA2/1 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE
PEIMAN SHAYAN, B337559, B339376
(Los Angeles County
Plaintiff and Appellant, Super. Ct. Nos. 23STCV03714, 23STCV03719, 23STCV03849, v. 23STCV03893, 23STCV03901)
EBBY SHAKIB,
Defendant and Respondent.
APPEALS from judgment and orders of the Superior Court of Los Angeles County, William Fahey, Judge. Affirmed in part and reversed and vacated in part (case No. B337559). Reversed (case No. B339376).
Ross LLP, Peter W. Ross, Ira Bibbero; Farivar Law Firm and Fahim Farivar for Plaintiff and Appellant.
Murphy Rosen, David E. Rosen and Anujan Jeevaprakash for Defendant and Respondent.
The trial court entered a judgment of dismissal in appellant Peiman Shayan’s consolidated lawsuits against, inter alia, respondent Ebby Shakib. Through the instant appeals, he challenges (1) the orders denying him leave to amend after the court sustained Shakib’s demurrers to the breach of guaranty causes of action, (2) an order vacating, as to those causes of action, Shayan’s voluntary dismissal of the lawsuits after the demurrer ruling, (3) the judgment of dismissal, and (4) a postjudgment order awarding Shakib attorney fees.
Shayan has failed to identify reversible error in the court’s demurrer ruling and related denial of reconsideration. We agree with Shayan, however, that the court erred by not permitting him to voluntarily dismiss his operative complaints in full under Code of Civil Procedure section 581, subdivision (b)(1),1 the demurrer rulings notwithstanding. We further agree with Shayan that the court lacked authority to deem Shakib the prevailing party and award him attorney fees under Civil Code section 1717.
FACTUAL AND PROCEDURAL BACKGROUND A. Initial Complaints, First Amended Complaints, and Demurrers Thereto
In 2023, Shayan filed five complaints against Shakib, Jamshid Goltche, and several entities with which Shakib is affiliated,2 based on five similarly structured loan transactions. Each complaint alleges Shayan and his wife lent money to one
1 Unless otherwise specified, all further statutory references are to the Code of Civil Procedure.
2 Neither Goltche nor any of these entities is a party to the instant appeals.
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of these entities. The loan amounts range from $80,000 to $200,000. Each complaint alleges the Shayans secured the loan with both a deed of trust and a personal guaranty, and that the parties subsequently modified the loan, extending the term and lowering the interest rate. Each complaint alleges breach of contract (promissory note), breach of guaranty, conversion, and requests declaratory relief against all defendants.
Shakib filed a separate demurrer to each complaint.
Prior to the hearings thereon, Shayan filed five first amended complaints (the FACs).
Shakib then demurred to the breach of guaranty causes of action in the FACs. The trial court sustained the demurrers with leave to amend within 14 days.
B. Second Amended Complaints Shayan timely filed five second amended complaints (the SACs).
Like both the original complaints and the FACs, each SAC attaches the applicable note, deed of trust, guaranty, and modification agreement. Each note and deed of trust bears Shakib’s signature on behalf of the borrower entity. Each guaranty identifies Shakib and Goltche as the personal guarantors of the loan “evidenced by the [corresponding promissory] note” and bears Shakib’s and Goltche’s signatures in their respective personal capacities. Although the Shayans made the five loans at different times between 2007 and 2008, all modifications bear a December 27, 2019 date and all guaranties bear a January 9, 2020 date.
Also like both the original complaints and the FACs, the SACs recite broad definitions that describe Shakib and Goltche as individual borrowers, but later in the complaint
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allege they are guarantors. Specifically, each SAC defines the term “defendants and/or borrowers” as Shakib, Goltche, and the applicable entity defendant and alleges: “All defendants and/or borrowers are sued collectively herein insofar as . . . the loan was made to the defendants and/or borrowers with, insofar as plaintiff was informed and believed, identical ownership by defendants and/or borrowers, and were controlled by and through defendants and/or borrowers.” (Capitalization omitted & italics added.)
The SACs include new allegations about the circumstances leading to the loan modifications and guaranties. They allege the entity borrowers defaulted on the notes, but “[f]ollowing the initial maturity of [each] note, the parties, either implicitly or explicitly, consented to . . . yearly renewals. As a result, while each annual renewal retained the foundational terms of the original note, it was treated as a distinct loan agreement for each respective year.” (Capitalization omitted.) The SACs allege the December 27, 2019 date reflected on each attached modification was the result of a “merely clerical” “oversight,” and “[each] modification and [the corresponding] guaranty [was] intended to be, and [was] in fact, signed concurrently on or about January 9, 2020” (capitalization omitted), the date reflected on the face of each guaranty. They further allege that, “[w]ithout the assurances provided by [each] guaranty, [the Shayans] would not have consented to renew the [corresponding] note” via the modification agreements. (Capitalization omitted.)
C. Shakib’s Demurrers to the SACs Shakib again demurred to each of the SACs, arguing (1) each guaranty lacked consideration, (2) the SACs’ “effort to plead around the face of [each] guaranty [was] a sham” (boldface
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& capitalization omitted), (3) under the newly alleged yearly renewal arrangement, the original notes the guaranties professed to secure had been repaid, (4) the notes are usurious, and (5) Shakib’s personal guaranties are unenforceable because Shakib is an obligor on each loan and thus legally incapable of guaranteeing his own debt.
At the beginning of the hearing on the demurrers the court announced it was “inclined . . . to sustain these demurrers for the reasons set forth in [Shakib’s briefing], not [the] least of which [was] the second amended complaint seems to be a sham pleading.” The court heard argument from both parties and issued an oral ruling sustaining Shakib’s demurrers to the guaranty causes of action in the SACs without leave to amend. The court explained that Shayan “[could] not . . . proceed against” Shakib as both an obligor and guarantor, as the SACs allege him to be, “[a]nd so putting aside all of the other arguments in the demurrer, which I think are largely well-taken as well, I think as I said, [it’s] dispositive.”
D. Shayan’s Motion for Reconsideration Shayan filed a consolidated motion under sections 1008 and 473, subdivision (b) asking the court to reconsider its demurrer ruling and permit him to amend the guaranty claims in the SACs. Shayan argued his counsel had inadvertently failed to revise the broad definitions in the SACs that describe all defendants, including Shakib, as borrowers. Counsel attributed this to human error, understaffing, and the court’s two-week deadline for submitting the SACs falling on the Jewish high holiday of Yom Kippur. Shayan further argued that the FACs and SACs do not contradict each other in a manner triggering the sham pleading doctrine, and that the loan documents
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attached to all iterations of the complaints plainly reflect the entity defendants, not Shakib personally, are the only borrowers.
Shayan’s motion referred to and relied on several documents not attached to the motion as filed. Shayan filed these documents the next day, after the deadline for filing the motion, attached to “notices of errata.” The documents included (1) redline and clean versions of proposed third amended complaints (the proposed TACs) that delete the broad description of “defendants” and assert the breach of promissory note causes of action against the entity defendants only; (2) a declaration of Shayan’s counsel attributing the defects in the SACs to the rushed circumstances of their drafting around the Jewish high holidays; and (3) deposition testimony of Shakib, which Shayan contended had not been not available at the demurrer hearing, in which Shakib disavowed any role as a borrower or obligor.
At the hearing, the court articulated several concerns about the motion. The court noted, inter alia, that the exhibits to the motion were not timely filed, that failure to make legal argument is not a basis for relief under section 473, subdivision (b), and that the TACs “delete material allegations” included in earlier complaints and thus “lead to the inevitable conclusion [they] [are] . . . sham pleading[s].” In response to Shayan’s arguments that his revised allegations were consistent with the loan documents he had attached to all iterations of the complaint, the court stressed Shayan “had those when [he] brought these cases, and yet [his] theory of those cases continues to morph in response to various demurrers. And at a certain point, it really begs the question of whether this is a sham pleading or not.”
The court also noted all changes in the proposed TACs—
and all arguments in the motion for reconsideration—addressed
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the obligor/guarantor issue, although the court had “sustained the demurrer[s] [to the guaranty claim in the SACs] for the reasons in the moving papers,” several of which were unrelated to that issue. Shayan presented no arguments, written or oral, as to how he could amend to address the other deficiencies referred to by the court.
The court denied the motion orally at the hearing, which ruling is memorialized in a January 5, 2024 minute order. The other causes of action in the SACs remained pending.
E. Settlement with Other Defendants and Voluntary Dismissal of the SACs On February 13, 2024, Shayan and Goltche entered into a settlement agreement. That same day, Shayan filed requests that all the SACs be dismissed in full and without prejudice as against all defendants. The clerk immediately entered the dismissals as requested.
Shakib prepared a proposed judgment that described resolution of the SACs as follows: “(1) The second cause of action for breach of written guaranty is dismissed with prejudice as to defendant, Ebby Shakib pursuant to the court’s order dated November 9, 2023 sustaining Shakib’s demurrer to the second cause of action for breach of written guaranty without leave to amend. [¶] (2) The remainder of the second amended complaint is dismissed as to all parties and all causes of action without prejudice pursuant to Shayan’s request for dismissal filed February 13, 2024.” (Capitalization omitted.)
Shayan objected to the proposed judgment, arguing the clerk had dismissed all claims in the SACs pursuant to his voluntary dismissal request. The court heard argument
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on Shayan’s objection at a February 29, 2024 hearing and took the matter under submission.
F. Judgment After Court Partially Vacates Clerk’s Entry of Dismissal
In a March 4, 2024 order, the court stated that, “[t]o the extent that the clerk purported to dismiss the second cause of action in the five cases . . . , those dismissals were improper and are vacated.” (Capitalization omitted.) “Shakib [was] entitled to judgment in his favor on the second cause of action in each of [the] five cases[,] [and his proposed] judgment accurately recites the procedural posture.” (Capitalization omitted.)
The court signed and entered Shakib’s proposed judgment.
G. Attorney Fees Award Shakib moved for prevailing-party attorney fees under Civil Code section 1717. Shayan opposed the motion. The court granted the motion as reflected in a May 31, 2024 minute order.
H. Appeals Shayan filed two appeals, which we consolidated for all purposes. In appeal No. B337559, Shayan challenges the court’s order sustaining the demurrers to the SACs and denying his motion for reconsideration, the order partially vacating the clerk’s entry of dismissal, and the judgment of dismissal. In appeal No. B339376, he challenges the postjudgment order awarding fees.
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DISCUSSION
A. Demurrer and Motion for Reconsideration Rulings
Shayan argues the court abused its discretion in denying him leave to amend the guaranty causes of action in the SACs, and in denying his motion for reconsideration of that ruling. (See New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212 [abuse of discretion review for reconsideration motion ruling]; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 970–971 (Aubry) [denial of leave to amend reviewed for an abuse of discretion].) According to Shayan, he could have amended the SACs to remove the allegations identifying Shakib as an obligor on the loans, and such amendment would merely correct an honest error in drafting, not constitute a sham.
Even assuming Shayan can establish a “reasonable possibility” he could amend the SACs to correct the obligor/guarantor issue (Aubry, supra, 2 Cal.4th at pp. 970–971), this would not render the court’s denial of leave to amend reversible error. The court sustained the demurrers to the guaranty claims on all the bases set forth in Shakib’s moving papers, many of which are unrelated to the obligor/guarantor issue. Shayan does not argue or make any showing that he could have remedied those defects through amendment, all of which the court concluded also warranted sustaining the demurrer. Accordingly, Shayan’s argument cannot demonstrate reversible error in the court’s denial of leave to amend.
“It is the appellant’s burden to demonstrate the existence of reversible error.” (Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 766.) In the absence of a showing on appeal to the contrary, we presume a challenged ruling is correct. (See
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Bullock v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 685.) We are neither obligated nor inclined to scour the law and record unassisted to assess whether the court erred in concluding that other errors justified the sustaining of the demurrers. (See Bank of New York Mellon v. Preciado (2013) 224 Cal.App.4th Supp. 1, 6 [“[i]n civil appeals, the appellate courts are not required to perform an unassisted study of the record or a review of the law relevant to a party’s contentions on appeal” (italics omitted)].) We therefore affirm the court’s order denying leave to amend and its subsequent denial of Shayan’s request for reconsideration of that denial.
B. Order Partially Vacating Entry of Dismissal Shayan argues that the court lacked jurisdiction to partially vacate the clerk’s entry of dismissal. According to Shayan, the “legal effect” of that entry of dismissal “was to terminate the court’s jurisdiction over the SACs . . . rendering any subsequent court orders void.” We agree.
“[S]ection 581 allows a plaintiff to voluntarily dismiss, with or without prejudice, all or any part of an action before the ‘actual commencement of trial.’ (§ 581, subds. (b)(1), (c).)” (Gogri v. Jack in the Box Inc. (2008) 166 Cal.App.4th 255, 261 (Gogri), fn. omitted.) “Upon the proper exercise of that right, a trial court . . . thereafter lack[s] jurisdiction to enter further orders in the dismissed action.” (Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 784 (Wells).) Because the trial court’s application of section 581 to undisputed facts is a question of law, we review this issue de novo. (See Zapanta v. Universal Care, Inc. (2003) 107 Cal.App.4th 1167, 1171; accord, Gogri, supra, at p. 262.)
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“ ‘[C]ommencement of trial’ under section 581 is not restricted to only jury or court trials on the merits, but also includes pretrial procedures that effectively dispose of the case.” (Gogri, supra, 166 Cal.App.4th at p. 262, italics added & omitted, citing Mary Morgan, Inc. v. Melzark (1996) 49 Cal.App.4th 765, 769.) “However, a determination on only some, but not all, of the causes of action alleged in a complaint does not effectively dispose of the entire case for purposes of section 581 voluntary dismissals.” (Gogri, supra, at p. 269; see Cal-Vada Aircraft, Inc. v. Superior Court (1986) 179 Cal.App.3d 435, 447, 445 (Cal-Vada) [“trial does not commence with the summary adjudication” of issues because a “partial summary adjudication . . . does not resolve all the issues in the case” and thus does not “bring[ ] the action to the stage where final disposition can be made” (italics omitted)]; see also Franklin Capital Corp. v. Wilson (2007) 148 Cal.App.4th 187, 200 [section 581 dismissal timely if entered before “a public and formal indication by the trial court of the legal merits of the case” (italics added)].)
Shakib cites Wells, supra, for the proposition that, for purposes of section 581, subdivision (b), trial includes an order sustaining a demurrer. (See Wells, supra, 29 Cal.3d at p. 789.) But Wells involved a demurrer to the entire action (see id. at p. 783), and that thus “effectively dispose[d] of the [entire] case.” (Gogri, supra, 166 Cal.App.4th at p. 262, italics omitted.) Not so here.3 Gogri is far more on point. In that case, the Court of Appeal concluded a plaintiff could voluntarily dismiss
3 Nor do we view Goldtree v. Spreckels (1902) 135 Cal. 666, 667 as requiring a different result, for the reasons set forth in Gogri. (See Gogri, supra, 166 Cal.App.4th at pp. 269–270.)
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his complaint even after the court had sustained demurrers to some of the causes of action without leave to amend, and after the defendant had moved for summary judgment. (Gogri, supra, 166 Cal.App.4th at pp. 269–270.) The court had not yet ruled on the summary judgment motion, and the demurrers did not dispose of all of the causes of action. (Id. at p. 263.) Accordingly, the court reinstated the dismissal without prejudice that the plaintiff had requested under section 581, subdivision (b). (Gogri, supra, at p. 275.) Similarly, in Cal–Vada, the Court of Appeal held a cross-complainant had a right to voluntarily dismiss his cross-complaint without prejudice, notwithstanding that the court had summarily adjudicated some causes of action alleged therein. (See Cal-Vada, supra, 179 Cal.App.3d at pp. 447–448.)
Like the appellants in Gogri and Cal-Vada, Shayan had a statutory right to dismiss the SACs despite the court’s order adjudicating one of the causes of action therein, because that adjudication did not resolve the entire action. The clerk’s correct entry of this dismissal deprived the trial court of further jurisdiction to act. (See Wells, supra, 29 Cal.3d at p. 784; Cal-Vada, supra, 179 Cal.App.3d at p. 448.) We therefore reverse the order partially vacating the clerk’s entry of Shayan’s requested dismissal of the SACs. We likewise vacate the court’s judgment of dismissal, which relied on the now vacated March 4, 2024 order, and instruct the trial court following remand to enter a new judgment reflecting that Shayan voluntarily dismissed the SACs in their entirety without prejudice.
C. Attorney Fees and Costs Award Shayan challenges the court’s award of prevailing party attorney fees under Civil Code section 1717, arguing, inter alia,
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that Shakib was not the “prevailing party” under that section. (Civ. Code, § 1717, subd. (a).) We agree.
The promissory notes underlying all SACs provided for attorney fees. Under Civil Code section 1717, “[i]n any action on a contract, where the contract specifically provides that attorney fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract . . . shall be entitled to reasonable attorney fees in addition to other costs.” (Civ. Code, § 1717, subd. (a).) But “[w]here an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of . . . [Civil Code] section [1717].” (Id., subd. (b)(2).) Thus, where, as here, “a plaintiff files a complaint containing causes of action within the scope of [Civil Code] section 1717 . . . and the plaintiff thereafter voluntarily dismisses the action, [that] section . . . bars the defendant from recovering attorney fees incurred in defending those causes of action, even though the contract on its own terms authorizes recovery of those fees.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 617, italics omitted.)
The “statutory bar” in Civil Code section 1717, subdivision (b)(1) applies and “deprive[d] the trial court of further jurisdiction” to make a prevailing party fee award under section 1717. (Gogri, supra, 166 Cal.App.4th at pp. 273–274 [reversing prevailing party fee award in action voluntarily dismissed after court sustained demurrer to some causes of action]; accord, Rosen v. Robert P. Warmington Co. (1988) 201 Cal.App.3d 939, 941–944 [following plaintiff ’s section 581 voluntary dismissal with prejudice of entire action, defendant
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was not entitled to award of Civil Code section 1717 attorney fees as prevailing party].) Shakib argues to the contrary by suggesting we must interpret the word “action” in Civil Code section 1717, subdivision (b)(1) to mean “cause of action” or “claim.” He cites no authority for this interpretation, which would require us to disagree with the precedent we set forth above. We decline to do so. Accordingly, we reverse the court’s order granting Shakib’s motion for attorney fees.
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DISPOSITION
The November 9, 2023 order sustaining the demurrers to the SACs without leave to amend is affirmed.
The January 5, 2024 order denying Shayan’s motion for reconsideration is affirmed.
The March 4, 2024 order partially vacating the clerk’s entry of dismissal of the SACs, as well as the March 4, 2024 judgment of dismissal, are vacated. Following remand, the court shall issue a new judgment reflecting that Shayan voluntarily dismissed the SACs without prejudice.
The court’s May 31, 2024 order awarding Shakib attorney fees and costs is reversed.
The parties shall bear their own costs on appeal. NOT TO BE PUBLISHED.
ROTHSCHILD, P. J.
We concur:
BENDIX, J.
WEINGART, J.