64 Cal.App.5th 603
Cal. Ct. App.2021Background
- In 1996 Gagik Galstian gave family friend Shahen Minassian powers of attorney to reclaim and sell real property in Iran; Gagik and his wife died in 2012.
- Plaintiffs (their daughters) sued Minassian in California in January 2013 for unjust enrichment and money had and received, alleging he took title to and kept proceeds from many family properties.
- Minassian initially moved to dismiss on inconvenient forum grounds; this court reversed (Aghaian I), holding Iranian courts unsuitable because they discriminate against women and non‑Muslims.
- On remand Minassian renewed the forum motion after Plaintiffs filed a separate suit in Iran; the trial court denied the renewed motion, relying on law of the case and the unchanged factual basis.
- At a 2017 bench trial the court found Minassian unjustly enriched, imposed discovery sanctions for willful noncompliance, and entered judgment for Plaintiffs for $34,506,989 plus interest.
- On appeal Minassian challenged: denial of the renewed forum motion, statute‑of‑limitations/standing (Cal. Gov. Code §377.32 declarations), discovery sanctions, and asserted the underlying contract violated U.S. Iran sanctions and was therefore unenforceable.
Issues
| Issue | Plaintiffs' Argument | Defendant's Argument | Held |
|---|---|---|---|
| Renewed inconvenient‑forum motion | Aghaian I established Iran is unsuitable; law of the case bars relitigation | Iran is now suitable because Plaintiffs filed suit in Iran and thus waived the unsuitability argument | Denial affirmed — law of the case controls; Iran remains unsuitable and filing in Iran did not retroactively make it suitable |
| Statute of limitations / standing (§ 377.32) | Original complaint was timely; §377.32 affidavit is not a prerequisite to commence or continue an action | Plaintiffs lacked authority to sue until June 2015 §377.32 declarations, so earlier pleadings are null and claims time‑barred | Rejected — original complaint filed within limitations; §377.32 is not a condition precedent and claims are not barred |
| Discovery sanctions | Sanctions were appropriate for willful failure to comply and justified evidentiary assumptions | He produced what he had; sanctions were excessive, lacked an express willfulness finding, and relieved Plaintiffs of proof | Sanctions affirmed — court found willful, noncompliant discovery; sanctions limited to permitting inferences for damages and did not relieve Plaintiffs of proving liability |
| Illegality of underlying contract (Iran sanctions) | If contract illegal, equitable restitution/unjust enrichment is available; OFAC general license later issued | Contract violated Executive Order/ITSR and is unenforceable; relief barred and awarding restitution would aid Iran | Contract held illegal but equitable relief permitted under Norwood factors; unjust enrichment award affirmed (no giving of benefit to Iran) |
Key Cases Cited
- Aghaian v. Minassian, 234 Cal.App.4th 427 (Cal. Ct. App. 2015) (Iran held an unsuitable alternative forum due to discrimination)
- Stangvik v. Shiley Inc., 54 Cal.3d 744 (Cal. 1991) (forum‑non‑conveniens analytical framework)
- Parsons v. Tickner, 31 Cal.App.4th 1513 (Cal. Ct. App. 1995) (§377.32 affidavit not a prerequisite to commence or continue a survival action)
- Bourhis v. Lord, 56 Cal.4th 320 (Cal. 2013) (statute‑of‑limitations principles; distinguishable statutory context)
- Kashani v. Tsann Kuen China Enterprise Co., 118 Cal.App.4th 531 (Cal. Ct. App. 2004) (trade‑sanctions contract unenforceable; court examines equitable exceptions)
- Bassidji v. Goe, 413 F.3d 928 (9th Cir. 2005) (equitable relief may be barred where enforcement would transfer funds to Iran)