California Supreme Court Watch

#20-167 Siry Investment v. Farkhondehpour, S262081. (B27750, B279009, B285904; 45 Cal.App.5th 1098; Los Angeles County Superior Court; BC372362.) Petition for review after the Court of Appeal affirmed the judgment in a civil action. This case presents the following issues: (1) May a party in default file a motion for new trial raising legal error, including the inapplicability of certain remedies under the allegations as pleaded? (2) May a trial court may award treble damages and attorney fees under Penal Code section 496, subdivision (c), in a case involving the fraudulent diversion of business funds rather than trafficking in stolen goods?

Review granted: 7/08/2020

Case fully briefed: 5/12/2021

Cause argued and submitted: 5/03/2022

Opinion filed: Affirmed in part, reversed in part: 7/21/2022

See the California Court of Appeal Opinion.

See the Petition for Review.

See the Oral Argument.

See the California Supreme Court Opinion.  (Siry Investment, L.P. v. Farkhondehpour et al. (2022) 13 Cal.5th 333.)

“We granted review to address apparent conflicts in the Courts of Appeal concerning (1) whether a party in default has standing to file a motion for a ‘new trial’ asserting legal error relating to calculation of damages and (2) whether a trial court may award treble damages and attorney’s fees under Penal Code section 496, subdivision (c) in a case involving, not trafficking of stolen goods, but instead, fraudulent diversion of a partnership’s cash distributions. The Court of Appeal below answered ‘yes,’ and ‘no,’ respectively.

We answer yes to both questions — and hence affirm the appellate court’s judgment in the first respect, and reverse it in the second. As we will explain, the standing conclusion is supported by the statutory scheme as construed by well-reasoned prior appellate decisions and considerations of judicial economy. Likewise, the second conclusion — that treble damages and attorney’s fees are available under section 496(c) when, as here, property ‘has been obtained in any manner constituting theft’ — is compelled by the statute’s unambiguous words and our obligation to honor them. If, as the Court of Appeal below determined, such remedies are problematic as a matter of policy, the Legislature can be expected to amend the statute accordingly.”

Chief Justice Cantil-Sakauye authored the opinion of the Court, in which Justices Corrigan, Liu, Kruger, Groban, Jenkins, and Guerrero concurred.

Justice Groban filed a concurring opinion, in which Justice Kruger concurred.