Mr. Ali Shahrestani Successfully Defends Client in Business Investment Fraud Trial: Santa Cruz Superior Court Judge Issues Tentative Judgment for Defense in Business Fraud Lawsuit

Yesterday, after 6 days of trial, Judge Volkmann of the Santa Cruz County Superior Court of California – a judge appointed in 2008 to the bench by Governor Arnold Schwarzenegger – issued a tentative judgment entirely in favor of the defense in a business fraud, conspiracy, securities, breach of contract, and negligence lawsuit involving several wealthy individual plaintiffs against financially challenged individual and corporate defendants. Mr. Ali Shahrestani, Esq. represented the individual defendant, K.V., in the lawsuit, which was filed about 4 years ago. After being represented by various prior attorneys, K.V. approached me a couple of months ago and hired me to represent her in the lawsuit with a looming January 10, 2011 trial date.

Prior attorneys and the self-represented defendant had conducted little to no discovery in the suit and had filed few pleadings, and the nearly bankrupt defendant had little funds to hire an attorney. Mr. Shahrestani worked with K.V.’s budget and provided her with aggressive and intelligent limited scope representation for a couple of months, substituting into the case as attorney-of-record at the commencement of trial just over a week ago. Conversely, the opposing parties were armed with over a thousand pages of exhibits, strong witnesses, motions in limine, scores of pleadings, and a very experienced attorney and partner at a major Santa Cruz law firm – an attorney who had formerly served as a judge and Chief Deputy District Attorney in Santa Cruz County.

The First Amended Complaint against the defendants included several claims, including breach of contract, fraud, conspiracy, intentional misrepresentation, intentional nondisclosure, California securities violations, and negligence, and sought a few million dollars in monetary and punitive damages against K.V. and the other defendants.

K.V. had started a software company several years before based out of her Los Gatos, California home, which was purchased by one of the corporate defendants, a cutting-edge internet multimedia software company headquartered in Morgan Hill, California and later in Scotts Valley, California and headed by J.F.. At the time of said purchase, K.V. began to work for the purchasing corporation as an employee. The purchasing corporation received millions of dollars in money from lenders and investors during the years of its operation. The Plaintiffs here were lenders or investors who made the above-noted claims against both the purchasing company and the purchased company, in addition to its CEO, J.F., and K.V.. The Plaintiffs alleged that K.V. was a principal, director, co-founder, owner, and/or executive of the company, that she conspired with J.F. to wrong the Plaintiffs by way of breaches of contract, securities violations, and various modes of fraud.

The Plaintiffs took 5 of the 6 total days of trial to put on their case, and the judge gave the Defense less than one day to put on its entire case in chief. At the end of trial, the Judge issued a tentative ruling entirely in favor of the Defense, commending both attorneys for excellently and zealously representing their clients. Further, although Mr. Shahrestani was not defending the purchased company defendant, who was wholly unrepresented in the case (as was the purchasing company defendant and J.F.), Mr. Shahrestani’s defense efforts at trial on behalf of K.V. convinced the Judge that the purchased company defendant was also not liable for any of the alleged wrongs to the Plaintiffs.

K.V. is set to issue soon a Bill of Costs to the Plaintiffs, seeking full reimbursement of her litigation costs and expenses. Needless to say, K.V. was extremely grateful to me for my outstanding representation and for thus safeguarding her from the spectre of owing the Plaintiffs millions of dollars in damages.


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