Evidence walkthrough.
The facsimiles are reading aids. The PDF links open the underlying documents that should control.
Theme 9 · Fraud on the Court
Telling the court half the truth
The filed theory is that counsel relied on the arbitration award and Davis's "manager" status while omitting the California-law and governance points that challenge that foundation. Each step below identifies the source and the consequence the briefing draws from it.
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Bottom lineThe authority-chain challenge is directed at what counsel placed before the courts. The courts were entitled to an accurate account of the governing rule, the member-vote requirement, and the disputed source of Davis's manager status.
1
The framework the briefing says was omitted: dissolution is court-reserved
Under California law, judicial dissolution of an LLC is reserved to the Superior Court, and an operating agreement cannot hand that power to a private arbitrator. This is the "threshold framework" the sanctions motion says counsel repeatedly omitted.
The controlling framework (as argued)
Cal. Corp. Code §17707.03court's power to decree dissolution
Cal. Corp. Code §17701.10(c)(7)operating agreement can't vary it
Cal. Code Civ. Proc. §1283.4award must resolve a proper question
Kaiser Found. Health Plan v. Sup. Ct.13 Cal.App.5th 1125 (2017)
Dissolution is the court's jobAn arbitrator can't decree it — the omitted framework
Authorities cited in the sanctions motion & Rule 59(e) briefing · §§ V.A–V.B
Note on authorityThe strongest single fact (next step) is that the very court that later confirmed the award had earlier ruled dissolution is court-reserved — but that earlier ruling (Chappellet) is a Superior Court order, not binding precedent. Cited as such.
2
The same court had already said so
Before it confirmed the arbitration award, the San Diego Superior Court itself ruled — in Chappellet — that §17701.10(c)(7) bars an operating agreement from varying "the power of a court to decree dissolution," and that a dissolution action "will be tried without a jury."
SAN DIEGO SUPERIOR COURT · Chappellet v. 4614 Hawley Blvd. LLC No. 37-2021-00015925-CU-MC-CTL · Aug. 25, 2021 (trial-court order)
—Held that Cal. Corp. Code §17701.10(c)(7) bars an operating agreement from varying "the power of a court to decree dissolution" under §17707.03, and that a dissolution action "will be tried without a jury."
The briefing contrasts this earlier trial-court ruling with the later confirmation of an arbitration award that it says accomplished a contrary dissolution result. (Rule 59(e) Reply §III.)
The later record rests on a contrary premiseEarlier order: dissolution is court-reserved; later judgment: arbitration award confirmed
Authority · Chappellet (S.D. Super. Ct. 2021) — cited as a Superior Court order, not precedent
3
Davis's own attorneys admitted it — in writing — before pursuing arbitration
In a 2021 email, Davis's counsel acknowledged in writing that dissolution under §17707.03 is "within the exclusive jurisdiction of the Superior Court." The complaint states they pursued arbitration of that very claim anyway, to avoid judicial oversight.
From: Scott R. Carpenter (counsel for Davis) To: Scalia, Davis (Rajaee's counsel copied) Date: February 5, 2021 (per RICO complaint ¶252; the sanctions motion cites a Feb. 27, 2021 admission) Re: Dissolution jurisdiction
"We contend that the Complaint for Dissolution of the LLC and the concomitant procedures and remedies under Corporation Code §§ 17707.03, et seq. for the dissolution and winding-up of the LLC, are within the exclusive jurisdiction of the Superior Court."
They knew — and said so in writingThen maintained the arbitration anyway (Complaint ¶253)
View the sanctions motion →Source: 9th Cir. No. 25-8172, Motion for Sanctions (Finlayson & Hays). The admission is also quoted in the RICO complaint (¶252).
4
There was no member vote to remove Rajaee as manager
Removing the manager is an internal-affairs act California reserves to a member vote — and the operating agreement (§5.3) required one. The sanctions motion points to counsel's own October 2021 admission that Davis could not obtain that vote. The "removal" instead came from the arbitrator.
THE MANAGER-REMOVAL POINT Operating Agreement §5.3 · Cal. Corp. Code §17704.07(c)(5), (d)
—"No arbitral award or judgment can itself effectuate a manager's removal, an internal-affairs act California reserves to the members." (Rule 59(e) Reply §VII.)
!Counsel's own October 2021 admission, per the sanctions motion: "The Manager can only be removed by a majority of Members. Effectively, Davis cannot obtain a vote."
Yet Davis's later declarations swore: "After Order No. 4 was issued on January 6, 2022, I became the managing member of TopDevz." (Sanctions motion §IV.D.) The removal came from the arbitrator — not the members.
No vote — everCounsel admitted Davis could never get one; the arbitrator did it instead
Finlayson's flip-flop: not-for-truth in one court, for-truth in the next
The cleanest half-truth. In San Diego Superior Court, the Trustee's counsel objected to noticing the arbitration findings for their truth — and won that limitation. Then, the sanctions motion states, he used those very findings as truth in the bankruptcy to prove Davis owned 95%+ and had authority.
Two opposite positions, same lawyer
San Diego Sup. Ct. (37-2023-00011085)objected: findings NOT for their truth
Resultcourt limited notice to "existence," not truth
Then, in bankruptcyused the same findings AS truth
Opposite positions, whichever helped the clientThe motion calls this proof of "actual knowledge"
Sanctions motion §§IV.E, V.B (quoting the San Diego notice ruling)
Why it's a half-truth, in the motion's words
"He cannot tell one court that the arbitral findings cannot be noticed for their truth and then defend federal orders that used those same findings for their truth while telling this Court the underlying issue is frivolous." (Sanctions motion §V.B.)
6
Hays's recast: turning a court case into a "stall tactic"
Hays carried the void foundation into the bankruptcy. The sanctions motion states he described the Sacramento statutory buyout/dissolution case to the bankruptcy court as merely "another action seeking to stay the Arbitration" — omitting that Sacramento was the court-reserved dissolution forum, seized first.
U.S. BANKRUPTCY COURT, S.D. CALIFORNIA · Conversion Motion · ECF 19 filed for Davis & TopDevz (D. Edward Hays, Marshack Hays)
—Described Rajaee's March 2022 Sacramento filing as merely "another action seeking to stay the Arbitration." (ECF 19.)
!That description, the motion states, "omitted that the March 2022 Sacramento filing was the statutory buyout case, omitted that Sacramento had already been seized of the dissolution matter first … It converted a court-centered California statutory proceeding into the false appearance of yet another obstruction tactic."
Paired with Hays's April 2024 declarations advancing Davis's "managing member" status (ECF 19, 28) — see the Bankruptcy Maneuvers theme.
A court case, recast as a "stall"Omitting it was the real dissolution proceeding
The motion describes a self-reinforcing engine: present an incomplete proposition → a court order adopts it → cite that order as if it independently decided the issue → tell the next court the argument was "already rejected." The legal hook is the duty of candor.
The omission machine294 Hays / 245 Finlayson statements, per the motion
Sanctions motion §IV.F
The rule (the legal anchor)
"The court cannot and will not tolerate members of the bar employing the use of known falsehoods to further their objectives, no matter how appealing the underlying cause of their clients may be." — In re Girardi, 611 F.3d 1027, 1067 (9th Cir. 2010); see also Cal. Bus. & Prof. Code §6068(d) (duty of candor).