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{ Converted to html. The PDF contains the Exhibits and is the controlling document. JM }

WRIGHT, FINLAY & ZAK, LLP

Dana Jonathon Nitz, Esq.

Nevada Bar No. 0050

Edgar C. Smith, Esq.

Nevada Bar No. 5506

Yanxiong Li, Esq.

Nevada Bar No. 12807

7785 W. Sahara Ave., Suite 200

Las Vegas, NV 89117

(702) 475-7964; Fax: (702) 946-1345

yli@wrightlegal.net

Attorneys for Plaintiffs, Fred Sadri, individually and as Trustee for The Star Living Trust, dated April 14, 1997; Ray Koroghli, individually; Ray Koroghli and Sathsowi T. Koroghli, as Managing Trustees for Koroghli Management Trust

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEVADA

Case No.: 16-50644-btb

Chapter 15

Adversary No.: 17-05016-btb

REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ON PLAINTIFFS’ QUIET TITLE/DECLARATORY RELIEF CAUSE OF ACTION

Hearing Date: June 13, 2018

Hearing Time: 2:00 p.m.

In re: JAZI GHOLAMREZA ZANDIAN,

Debtor

PATRICK CANET,

Foreign Representative

FRED SADRI, AS TRUSTEE FOR THE STAR LIVING TRUST, DATED APRIL 14, 1997; RAY KOROGHLI AND SATHSOWI T. KOROGHLI, AS MANAGING TRUSTEES FOR KOROGHLI MANAGEMENT TRUST,

Plaintiffs,

vs.

JED MARGOLIN; JAZI GHOLAMREZA ZANDIAN; and all other parties claiming an interest in real properties described in this action.

Defendants

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PATRICK CANET,

Counterclaimant,

vs.

FRED SADRI, INDIVIDUALLY AND AS TRUSTEE FOR THE STAR LIVING TRUST, DATED APRIL 14, 1997; RAY KOROGHLI, INDIVIDUALLY; RAY KOROGHLI AND SATHSOWI T. KOROGHLI, AS MANAGING TRUSTEES FOR KOROGHLI MANAGEMENT TRUST,

Counter-defendants

PATRICK CANET,

Crossclaimant,

vs.

JED MARGOLIN,

Cross-defendant

COMES NOW Plaintiffs FRED SADRI, AS TRUSTEE FOR THE STAR LIVING TRUST, DATED APRIL 14, 1997 (“SL Trust”) and RAY KOROGHLI and SATHSOWI T. KOROGHLI, AS MANAGING TRUSTEES FOR KOROGHLI MANAGEMENT TRUST (“KM Trust”) (hereinafter “Plaintiffs”), by and through their attorneys of record, the law firm of Wright, Finlay & Zak, LLP, hereby submits this Reply in support of Plaintiffs’ Motion for Summary Judgment as to their First Cause of Action for Quiet Title/Declaratory Relief in the Adversary Complaint.

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This Reply is based on the attached Memorandum of Points and Authorities, the papers and pleadings on file in this Adversary Proceeding and underlying Chapter 15 Bankruptcy Case, such matters as may be judicially noticed, and on such other and further evidence as may be presented at the hearing on this Motion.

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

Margolin’s proposed construction of NRS 17.140(2) and (4) should be rejected. While paying lip-service to the need to construe parts of a statute harmoniously to avoid absurd results, Margolin’s proposed interpretation actually nullifies the introductory paragraph under NRS 17.150(4), which requires the prospective judgment lienor to record the information enumerated under Subsection (4) for the purpose of creating a lien. If, as Margolin suggests, that a judgment lien can be created simply by recording a document without the information enumerated under Subsection (4), then this introductory paragraph is essentially rendered a nullity and surplusage. As detailed herein, there is an easy way to construe subsections (2) and (4) harmonious, and the phrase “[i]n addition to” leading off the introductory paragraph provides a significant clue as to the Legislature’s intent for subsection (4) as a supplemental requirement to the content that would ordinarily be expected to appear in a Default Judgment. As Margolin does not dispute that he failed to record the information required under NRS 17.150(4) as part of the Default Judgment underlying his execution sales, and subsection (4) is clear and unambiguous that this is a prerequisite to creating a judgment lien, it follows that Margolin did not hold a valid judgment lien, and his execution sales are void as they are based on his invalid judgment lien. Accordingly, judgment should be entered declaring Margolin’s judgment lien and related execution sales void, and title restored to parties at the time of the execution sales, including 2/3rd undivided interest in the Property vested in Plaintiffs.

Alternatively, if the execution sales are valid, Margolin concedes that they did not affect the interest of Plaintiffs in the Property. Accordingly, judgment should be entered confirming that Plaintiffs hold an undivided 2/3rd interest in the Property even if the execution sales are valid.

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II. ARGUMENT

A. MARGOLIN’S EXECUTION SALES WERE NOT BASED ON A VALID JUDGMENT LIEN, AND ARE THUS, VOID AB INITIO.

Margolin’s Opposition ignores the obvious harmonious way of reading NRS 17.150(2) and (4) under the plain language of the statute – i.e. the former prescribes the form of the document used to create the lien, whereas the latter details the content of that document. While Plaintiffs’ recognize that Subsection (2) contains the proviso that “…and when so recorded it becomes a lien upon all the real property of the judgment debtor…,” there is no information as to what the document (i.e. certified judgment/decree) or documents (i.e. certified judgment/decree plus affidavit) creating the lien must state as its/their content. While Plaintiffs agree that recording a separate affidavit is not required, provided that, the judgment/decree itself contains the requisite information under NRS 17.150(4), Margolin’s Default Judgment itself does not contain the sufficient information to create a valid judgment lien. See Motion at p.10:23-26 (citing Alcove Inv., Inc. v. Conceicao (In re Conceicao), 331 B.R. 885, 894 (B.A.P. 9th Cir. 2005) (judgment lien was invalid where judgment creditor failed to include debtor’s social security number or indicate that it is unknown in the judgment itself). To the contrary, if the content requirements in Subsection (4) need not be satisfied in order to create a valid judgment lien, as Margolin proposes, Subsection (4)’s mandatory directive (i.e. In addition to recording the information described in subsection 2, a judgment creditor who records a judgment or decree for the purpose of creating a lien upon the real property of the judgment debtor pursuant to subsection 2 shall record at that time an affidavit of judgment stating…). TRW Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001) (quoting Duncan v. Walker, 533 U.S. 167, 174, 121 S.Ct. 2120, 150 L.Ed.2d 251 (2001)) (“[A] statute ought ... to be so construed that ... no clause, sentence, or word shall be superfluous, void, or insignificant”). Because only Plaintiffs’ proposed construction harmonizes Subsections (2) and (4) of NRS 17.150 applicable at the time of Margolin’s recordation of the Default Judgment, this construction should be adopted in lieu of Margolin’s construction of the statute.

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Margolin’s reliance on Leven is misplaced as that decision analyzed a prior version of NRS 17.140 that did not contain the relevant language under Subsection (4) at issue here. See generally, Leven v. Frey, 123 Nev. 399 (2007). The content requirement under Subsection (4) was added by the Nevada Legislature’s passage of SB 186 in 2011. Further, Leven Court was concerned with interpreting statutory requirements for renewing a judgment lien rather than creating a judgment lien under NRS 17.214. Id. at 402-07. In fact, if Leven applies, it does so to the detriment of Margolin’s position because it suggests that “strict compliance” with the statutory requirements for maintaining a judgment lien is required, where the statute sets forth specific requirements (e.g. name and address of the judgment debtor, last four digits of the judgment debtor’s driver’s license number or identification card number and the state of issuance, last four digits of the judgment debtor’s social security number, etc.), does not specify any “built-in grace period or safety valve provision,” and substantial compliance could create situations in which a title search would indicate that a judgment lien encumbers non-debtors’ co-ownership interest in the property. Id. at 407-09. Margolin’s Default Judgment does not even substantially comply with requirements under Subsection (4), let alone meet a standard of strict compliance. Because the Default Judgment does not comply with NRS 17.150, Margolin did not hold a valid judgment lien at the time of the judgment execution sales, and the sales based thereon are void. Accordingly, any effect that Margolin’s execution sales had on Plaintiffs’ 2/3rd undivided interest in the Property are similarly nullified and void.

B. ALTERNATIVELY, MARGOLIN’S EXECUTION SALES TRANSFERRED ONLY ZANDIAN’S 1/3RD INTEREST AT THE TIME OF THE EXECUTION SALES.

Despite contesting Plaintiffs’ interest as fraudulent in state court and in the underlying Chapter 15 Bankruptcy Case (see Bk. Dkt. 13 at 5 and Exh. B)1, and praying for declaratory judgment in this Adversary Proceeding that Margolin is the sole title owner of the Property in question (see Adv. No. 42 at 3 and Exh. B), Margolin’s Opposition essentially gives up

________________

[1] Copy of the Objection to Petition for Recognition and Chapter 15 Relief is attached to this Reply as Exhibit A.

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contesting Plaintiffs’ interest in the Property under the excuse or justification that the Stipulated Judgment was not recorded until after Margolin filed his Answer in this Adversary Proceeding.

While Plaintiffs appreciate the long overdue candor and concession, it must be noted that Plaintiffs’ interest are evidenced by the instruments of conveyance (not by the Stipulated Judgment) which were recorded years before Margolin recorded his Default Judgment. See Adv. No. 42-1 at 3; 8-14 – Grant Bargain and Sale Deed; 42-1 at 3; 16-21 – Quitclaim Deed. Further, Margolin’s counsel was made aware of the Stipulated Judgment prior to commencing this Adversary Proceeding as early as February 2017.2 Nor does Margolin’s Opposition dispute that his interest obtained at the judgment execution sales, if any, is subject to rights and equities of Plaintiffs pursuant to the Stipulated Judgment even absent notice under the doctrine of caveat emptor. See Adv. No. 39 at 8:16-9:6. Margolin’s purported lack of notice as to the Stipulated Judgment, thus, does not excuse his assertion or maintenance of an unreasonable, frivolous defense to Plaintiffs’ ownership interest in the Property.

[2] Copy of the Demand Letter to Margolin’s counsel attached to this Reply as Exhibit B.

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CONCLUSION

Based on the foregoing, Plaintiffs request that the Court grant their Motion for Summary Judgment and enter judgment declaring that the Property is vested in SLT and KMT as to an undivided 2/3rd interest free and clear of any claim by Margolin.

DATED this 6th day of June, 2018.

WRIGHT, FINLAY & ZAK, LLP

/s/ Yanxiong Li, Esq.

Dana Jonathon Nitz, Esq.

Nevada Bar No. 0050

Edgar C. Smith, Esq.

Nevada Bar No. 5506

Yanxiong Li, Esq.

Nevada Bar No. 12807

7785 W. Sahara Ave., Suite 200

Las Vegas, NV 89117Tel: (702) 475-7964Fax: (702) 946-1345

Attorneys for Plaintiffs, Fred Sadri, as Trustee for The Star Living Trust, dated April 14, 1997; Ray Koroghli and Sathsowi T.Koroghli, as Managing Trustees for KoroghliManagement Trust

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CERTIFICATE OF SERVICE

I, Kelli Wightman, am an employee of Wright, Finlay & Zak, LLP and I certify under penalty of perjury that the foregoing statement is true and correct:

1. On June 6, 2018, I served the following document(s):

REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ON PLAINTIFFS’ QUIET TITLE/DECLARATORY RELIEF CAUSE OF ACTION

2. I served the above-named document(s) by the following means to the persons as listed below:

(Check all that apply)

a. ECF System (You must attach the “Notice of Electronic Filing”, or list all persons and address and attach additional paper if necessary)

MATTHEW D. FRANCIS on behalf of Cross Defendant JED MARGOLIN

mfrancis@bhfs.com; nlindsley@bhfs.com , rnofederal@bhfs.com

MATTHEW D. FRANCIS on behalf of Defendant JED MARGOLIN

mfrancis@bhfs.com; nlindsley@bhfs.com , rnofederal@bhfs.com

JEFFREY L HARTMAN on behalf of Cross-Claimant PATRICK CANET

notices@bankruptcyreno.com , sji@bankruptcyreno.com

YANXIONG LI on behalf of Counter-Defendant FRED SADRI