Filed 8/14/26 Glamlite v. Zaghian CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
GLAMLITE, INC. et al., B344964, B348333
Plaintiffs, Cross-defendants (Los Angeles County
and Respondents, Super. Ct. No. 22STCV11383)
v.
KHALIL BRIAN ZAGHIAN,
Defendant, Cross-complainant
and Appellant.
APPEAL from orders of the Superior Court of Los Angeles
County, Holly J. Fujie, Judge. Reversed and remanded with
directions.
Stiller Law Firm, Ari J. Stiller; Rosenberg & Koffman and
Gregory S. Koffman for Defendant, Cross-complainant and
Appellant.
Ryu & Yun and Thomas J. Ryu for Plaintiffs, Cross-
defendants and Respondents.
‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗
Appellant Khalil Brian Zaghian and respondent Awilda
Gisselle Hernandez were 50 percent owners of respondent
Glamlite, Inc. (Glamlite). After Hernandez and Zaghian filed
complaints against one another alleging corporate misconduct,
the parties entered into a settlement agreement. Pursuant to
that agreement, Zaghian agreed to relinquish his shares in
Glamlite in exchange for a payment from Glamlite of $1.3 million
plus “all funds distributed to, paid to, withdrawn by, or otherwise
obtained by, or on behalf of, Hernandez during the calendar year
of 2022 as a fifty percent (50%) shareholder and/or officer of
Glamlite while Hernandez had sole control of Glamlite’s
cashflow.” The agreement defined these funds as distributions.
The agreement also provided that any monies on deposit in
Hernandez’s personal account held on behalf of Glamlite and not
transferred into a corporate account by the close of business on
October 26, 2022 were deemed distributions.
Zaghian moved to enforce the settlement agreement after
Glamlite failed to pay him distributions pursuant to the
agreement. The trial court agreed with respondents that the
balance of Hernandez’s personal account as of October 26, 2022,
was the sole amount due to Zaghian. Because that amount was
less than the distributions Zaghian had already received in 2022,
the court found that Zaghian was entitled to no further payment.
The court awarded respondents attorney fees pursuant to a
provision of the settlement agreement.
Zaghian appealed both orders. We reverse and remand.
2
FACTUAL AND PROCEDURAL BACKGROUND
The Underlying Dispute
In 2016, Hernandez and Zaghian incorporated Glamlite, an
e-commerce cosmetics business. They were in a personal
relationship at the time and had a child together. Hernandez
and Zaghian were each 50 percent owners of Glamlite. At the
time of incorporation, Zaghian was chief financial officer (CFO)
and chief executive officer (CEO), and Hernandez was secretary.
In 2020, Hernandez became the CEO. Zaghian remained CFO.
In 2022, Hernandez and Glamlite (collectively respondents)
filed a complaint against Zaghian. The complaint alleged that
Zaghian had misappropriated approximately $1.7 million from
Glamlite for personal use, and had been delinquent in fulfilling
orders, responding to customer inquiries, and completing
payments for services and products.
Zaghian filed a cross-complaint, in which he alleged that
Hernandez had illegally ousted him from Glamlite and deprived
him of his investment in the company after learning he was in a
relationship with someone else. Zaghian further alleged that
Hernandez’s misappropriation claims were false. He asserted
that Hernandez had improperly transferred all the money in a
corporate bank account to a personal account for her sole use.
Zaghian also moved for the appointment of a provisional
director pursuant to Corporations Code section 308. Zaghian
asserted that he and Hernandez were deadlocked and his
ownership interest was at stake. Hernandez did not oppose the
request. The court appointed Matthew Taylor as neutral third
party director. The parties stipulated to a stay of proceedings to
mediate their dispute.
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Settlement Agreement
In December 2022, the parties entered into a settlement
agreement. In paragraph 1, the parties agreed that Glamlite
would pay Zaghian $1.3 million “PLUS an amount equal to any
and all funds distributed to, paid to, withdrawn by, or otherwise
obtained by, or on behalf of, Hernandez during the calendar year
of 2022 as a fifty percent (50%) shareholder and/or officer of
Glamlite while Hernandez had sole control of Glamlite’s cashflow
(hereinafter referred to as ‘Distributions’). Distributions shall
not include (1) any salaries paid to Hernandez not to exceed
$210,000.00 and (2) the repayment of personal loans and
interests paid to Hernandez not to exceed $514,000.00.” The
agreement acknowledged that Zaghian had received $63,259 in
distributions in 2022, which “shall be credited toward the
Distributions payment contemplated herein.” Zaghian would not
be entitled to any Distributions payment if the Distributions
amount was $63,259 or less, but he would not be required to
repay the difference.1
With respect to the $1.3 million due to Zaghian, the
agreement provided that Glamlite would make an initial
1 Specifically, the settlement agreement stated: “In the event
that Hernandez’s distribution for the year 2022 is less than or
equal to $63,259.00, the Distribution to Zaghian shall be $0.00,
but Zaghian will not be responsible for the repayment of the
difference. In the event that Hernandez’s distribution for the
year 2022 is greater than $63,259.00, the Distribution to Zaghian
shall be equal to Hernandez’s distribution less $63,259.00.”
Although “distribution” was not consistently capitalized in these
sentences, neither party has argued that the term had an
intended meaning other than Distributions. The preceding
4
payment of $260,000 and pay the remaining $1,040,000 in
installments.
Paragraph 3(c) of the agreement provided that Glamlite
would also pay Distributions in installments. It further stated:
“Distributions are to be determined by
Spreadsheet A attached covering the period of April
2022 through October 2022 and from review and
analysis of financial records by Matthew Taylor
and/or a mutually-agreeable neutral third party
accounting professional for the remaining period of
calendar year 2022. Any monies on deposit in Bank
of America account number ending in 0612 (‘Personal
0612’) held on behalf of Glamlite and not transferred
into Bank of America account number ending in 8474
(‘Corporate 8474’) by the close of business on October
26, 2022 are deemed Distributions to Hernandez for
purposes of determining the amount of Distributions
that Hernandez took in year 2022 so that Zaghian is
paid an equal amount as stated in provision 1
hereinabove. The intent is to prevent Hernandez
from transferring corporate funds on deposit in
Personal 0612 to Corporate 8474 after execution of
this Agreement and claim that Distributions were not
made to Hernandez.”2
The attached spreadsheet showed that approximately
$4.08 million had been deposited in Hernandez’s Personal
sentence’s direction that the $63,259 was to be credited toward
the Distributions payment further indicates that these sentences
also referred to the defined term.
2 We refer to Personal 0612 as Hernandez’s Personal Account
or the Personal Account, and Corporate 8474 as the Corporate
Account.
5
Account and approximately $4.03 million had been deducted from
that account between April 8 and October 27, 2022.
The agreement provided that Glamlite’s accountant,
Jennifer Bohorquez, would determine the Distributions amount
within 120 days of the execution of the settlement agreement,
with Hernandez’s good faith cooperation. If Bohorquez was
unable to complete the accounting within 120 days, the parties
agreed to hire a mutually agreeable third party accountant to
determine Distributions.
Zaghian agreed to endorse his shares in Glamlite to the
company after receiving the initial $260,000 payment. The
shares would be held in trust until all payments were made
pursuant to the settlement agreement.
The settlement agreement included a general release of all
the parties’ claims against one another relating to the complaint
and cross-complaint, and provided that the parties would dismiss
their complaints against one another after Zaghian received the
initial payment. However, the trial court would retain
jurisdiction to enforce the terms of the settlement agreement
pursuant to Code of Civil Procedure section 664.6.3
3 Code of Civil Procedure section 664.6, subdivision (a),
provides: “If parties to pending litigation stipulate, in a writing
signed by the parties outside of the presence of the court or orally
before the court, for settlement of the case, or part thereof, the
court, upon motion, may enter judgment pursuant to the terms of
the settlement. If the parties to the settlement agreement or
their counsel stipulate in writing or orally before the court, the
court may dismiss the case as to the settling parties without
prejudice and retain jurisdiction over the parties to enforce the
settlement until performance in full of the terms of the
settlement.”
6
The settlement agreement further provided that “the
substantially prevailing party or parties shall be entitled to
recover reasonable attorneys’ fees, costs and expenses actually
incurred in connection” with any litigation arising out of or
relating to the agreement.
Pursuant to the settlement agreement, respondents
dismissed the complaint and Zaghian dismissed the cross-
complaint.
Motion to Enforce the Settlement Agreement
In October 2024, Zaghian filed a motion to enforce the
settlement agreement pursuant to Code of Civil Procedure
section 664.6. He contended Glamlite had failed to pay the
Distributions due to him. Zaghian argued that Bohorquez had
completed the required accounting for 2022 and the parties had
“agreed on the general ledger data Ms. Bohorquez supplied.”
However, Bohorquez refused to calculate the Distributions
amount based on the reports she generated. Zaghian’s
declaration in support of the motion attached an email thread
between himself and Bohorquez in which Zaghian requested that
Bohorquez calculate: 1) the total of all deposits entering
Hernandez’s Personal Account that were not transferred to the
Corporate Account by close of business on October 26, 2022; and
2) the total of all deposits entering the Personal Account.
Bohorquez replied: “I have completed the job I was hired to
complete. [¶] I have provided all parties with detailed financial
reports. [¶] It was not in my scope of work to complete any
analysis of these reports.”
Zaghian retained accountant Anna Leh to make the
calculations using the financial data Bohorquez had provided.
Leh concluded that the Distributions amount due to Zaghian was
7
$2,792,773. Leh submitted a declaration and report reflecting
her calculations of Distributions.
Respondents opposed the motion. They argued that the
parties had agreed under the settlement agreement that the
Distributions amount would be any funds held on behalf of
Glamlite in Hernandez’s Personal Account as of the close of
business on October 26, 2022, and nothing else. They asserted
this “was not the true and accurate distribution taken by
[Hernandez] for the year of 2022, but [was] an arbitrary number
that was selected on December 23, 2022 at the time of
settlement.” Bohorquez determined this amount to be
$57,703.81, which was less than the $63,259 Zaghian had already
taken in distributions in 2022. Accordingly, respondents asserted
that Zaghian was not entitled to any Distributions payment
under the settlement agreement.
Respondents argued that Glamlite’s year-end financial
statements showed that Hernandez had only taken $4,833.13 in
distributions. Respondents similarly asserted it would have been
impossible for Hernandez to take a distribution of $2,792,773,
since Glamlite’s gross profits, as reported in its corporate tax
return, were less than that amount. Relevant financial
documents were attached to Hernandez’s declaration in support
of the opposition, including a year-end financial statement for
Glamlite and the company’s 2022 corporate tax return.
In his reply, Zaghian argued that respondents attempted to
impose the meaning of distribution for income tax purposes on
the settlement agreement, contrary to its express terms. He
asserted it was not impossible for Hernandez to have received
Distributions of $2,792,773 under the settlement agreement’s
definition of that term. Zaghian also objected to the exhibits to
8
Hernandez’s declaration on the ground that they lacked
foundation and were irrelevant because they were not referenced
in the settlement agreement as sources from which the
Distributions amount was to be derived.
The trial court denied Zaghian’s motion. It found that
Zaghian was not entitled to any further payment under the
settlement agreement. The court quoted paragraph 3(c) and the
portion of paragraph 1 that provided that Zaghian would not
receive a Distributions payment if the Distributions amount was
less than the $63,259 he had already received. The court
concluded that the parties had agreed Bohorquez would
determine Distributions; that Bohorquez had calculated
Distributions as $57,703.81; and that “[t]he Settlement
Agreement does not provide for the Defendant to seek an
alternative accounting if he is dissatisfied with the results of the
accounting performed by the agreed-upon professionals.” The
court ordered Zaghian to transfer his shares to Glamlite. It did
not rule on Zaghian’s evidentiary objections, which he renewed at
the hearing on the motion.
Zaghian timely appealed.
Motion for Attorney Fees
Respondents subsequently moved for an award of $12,610
in attorney fees pursuant to the settlement agreement. Zaghian
opposed the motion on the grounds that many of the submitted
billing entries were vague, the request was excessive, and certain
entries appeared unrelated to the motion to enforce the
settlement agreement.
The trial court awarded respondents $11,310 in attorney
fees.
Zaghian timely appealed.
9
DISCUSSION
Zaghian argues the trial court misinterpreted the
settlement agreement by concluding that the sole Distributions
amount was the balance of Hernandez’s Personal Account on
October 26, 2022. He contends this court should adopt Leh’s
analysis or, alternatively, remand with directions that the trial
court oversee an accounting process performed by a neutral third
party accounting expert chosen by the parties. Zaghian further
contends that the fee award should also be reversed.
I. The Trial Court Erred In Denying Zaghian’s Motion
To Enforce The Settlement Agreement
A. Standard of review and principles of contract
interpretation
“The power of the trial court under Code of Civil Procedure
section 664.6 . . . is extremely limited. ‘Although a judge hearing
a section 664.6 motion may receive evidence, determine disputed
facts, and enter the terms of a settlement agreement as a
judgment [citations], nothing in section 664.6 authorizes a judge
to create the material terms of a settlement, as opposed to
deciding what terms the parties themselves have previously
agreed upon.’ [Citation.]” (Hernandez v. Board of Education
(2004) 126 Cal.App.4th 1161, 1176, italics omitted (Hernandez).)
In an appeal from an order on a motion to enforce a settlement
agreement, we review legal questions de novo. (Greisman v. FCA
US, LLC (2024) 103 Cal.App.5th 1310, 1322.)
“A settlement agreement is simply a contract.”
(Hernandez, supra, 126 Cal.App.4th at p. 1176.) “ ‘It is solely a
judicial function to interpret a written contract . . . , even when
conflicting inferences may be drawn from uncontroverted
evidence.’ [Citation.]” (Hess v. Ford Motor Co. (2002) 27 Cal.4th
10
516, 527.) We are not bound by the trial court’s interpretation of
the contract and decide issues of interpretation de novo. (Benach
v. County of Los Angeles (2007) 149 Cal.App.4th 836, 847.)
“When considering a question of contractual interpretation,
we apply the following rules. ‘A contract must be so interpreted
as to give effect to the mutual intention of the parties as it
existed at the time of contracting, so far as the same is
ascertainable and lawful.’ (Civ. Code, § 1636.) ‘The language of a
contract is to govern its interpretation, if the language is clear
and explicit, and does not involve an absurdity.’ (Civ. Code,
§ 1638.) ‘When a contract is reduced to writing, the intention of
the parties is to be ascertained from the writing alone, if possible
. . . .’ (Civ. Code, § 1639.)” (WYDA Associates v. Merner (1996) 42
Cal.App.4th 1702, 1709.)
Further, “[o]ur interpretation of the agreement is guided by
the basic principle that ‘[a]ny contract must be construed as a
whole, with the various individual provisions interpreted
together so as to give effect to all, if reasonably possible or
practicable.’ [Citations.] Courts must interpret the contractual
language to give force and effect to every provision and avoid an
interpretation that ‘renders some clauses nugatory, inoperative
or meaningless.’ [Citation.]” (People v. Doolin (2009) 45 Cal.4th
390, 413, fn. 17; Civ. Code, § 1641.)
B. Respondents’ interpretation failed to give effect
to all terms of the settlement agreement
The trial court accepted respondents’ argument that, under
the terms of the settlement agreement, the sole Distributions
amount was the balance of Hernandez’s Personal Account at close
of business on October 26, 2022, as reflected in Bohorquez’s
financial report. This interpretation did not give effect to all of
11
the agreement’s provisions concerning Distributions, including
the definition of the term itself.
Paragraph 1 of the settlement agreement defined
Distributions as “an amount equal to any and all funds
distributed to, paid to, withdrawn by, or otherwise obtained by, or
on behalf of, Hernandez during the calendar year of 2022 as a
fifty percent (50%) shareholder and/or officer of Glamlite while
Hernandez had sole control of Glamlite’s cashflow.” “The phrase
‘[a]ny and all’ undoubtedly is usually and ordinarily understood
to be expansive and all-encompassing.” (Bunker Hill Park Ltd. v.
U.S. Bank National Assn. (2014) 231 Cal.App.4th 1315, 1327.)
The only exceptions were salaries paid to Hernandez and the
repayment of personal loans and interest, which are capped at
$210,000 and $514,000, respectively. Thus, under the plain
language of paragraph 1, all other corporate funds “distributed
to, paid to, withdrawn by, or otherwise obtained by, or on behalf
of, Hernandez . . . as a fifty percent shareholder and/or officer of
Glamlite,” while she had sole control of Glamlite’s cashflow in
2022, constituted Distributions.
Contracting parties are free to define the terms they use in
an agreement, including in a manner that differs from a term’s
usual meaning. Courts must enforce the parties’ definition of a
term if it is free from ambiguity. (Morrison v. Wilson (1866) 30
Cal. 344, 347–348.) The settlement agreement assigned a special
and specific meaning to Distributions that is not limited by
reference to other financial contexts, or to Glamlite’s balance
sheet and tax returns.4
4 Zaghian preserved and renewed on appeal his objections to
Glamlite’s 2022 year-end balance sheet and 2022 tax return.
12
The settlement agreement subsequently provided that
“[a]ny monies on deposit in [Hernandez’s Personal Account] held
on behalf of Glamlite and not transferred into [the Corporate
Account] by the close of business on October 26, 2022 are deemed
Distributions to Hernandez for purposes of determining the
amount of Distributions that Hernandez took in year 2022 so that
Zaghian is paid an equal amount as stated in provision 1
hereinabove” (the deemed Distributions clause). Read together
with paragraph 1, which it expressly referenced (Civ. Code,
§ 1641), the deemed Distributions clause indicated that any
corporate funds deposited in Hernandez’s Personal Account in
2022 that Hernandez did not transfer to the Corporate Account
by the close of business October 26, 2022 are deemed
Distributions. “Distributions” were not simply the balance of
Hernandez’s Personal Account on October 26, 2022.
Construing “Distributions” to mean Hernandez’s Personal
Account balance on October 26, 2022, does not give effect to the
parties’ express intent that Zaghian should receive an amount
equal to the funds Hernandez received as a fifty percent
shareholder or officer of Glamlite for the entire 2022 calendar
year while she had sole control of the company’s cashflow,
exclusive of her salary and loan repayments. Further, the
settlement agreement made express the parties’ intent that the
deemed Distributions clause “prevent Hernandez from
transferring corporate funds on deposit in [Hernandez’s Personal
Account] to [the Corporate Account] after execution of this
(See Reid v. Google, Inc. (2010) 50 Cal.4th 512, 534.) However,
we need not address the objections. Even assuming the balance
sheet and tax return are properly before us, they are irrelevant to
our interpretation of the settlement agreement.
13
Agreement and claim that Distributions were not made to
Hernandez.” The purpose of the clause was to prevent
Hernandez from subverting the definition of Distributions, not to
limit that definition to Zaghian’s detriment.
The trial court’s narrow interpretation of Distributions also
renders other provisions of the settlement agreement extraneous.
There would be no reason to provide for Taylor or a mutually-
agreeable neutral third party accounting professional to review
and analyze financial records “for the remaining period of
calendar year 2022”—i.e., from October to end of year 2022—if
that period had no bearing on the determination of Distributions.
In sum, the trial court failed to enforce the terms of the
settlement agreement by concluding that Zaghian was not
entitled to any Distributions payment because Bohorquez
determined that the balance of Hernandez’s Personal Account on
October 26, 2022 was less than the distributions Zaghian had
already received in 2022. Bohorquez’s financial report did not
calculate Distributions consistent with the settlement agreement
definition, nor did it purport to do so. The settlement agreement
provided that Distributions were any and all funds Hernandez
received during the calendar year of 2022 as a fifty percent
shareholder and/or officer of Glamlite while she had sole control
of Glamlite’s cashflow, which included any corporate funds
deposited in Hernandez’s Personal Account in 2022 that were not
transferred to the Corporate Account by the close of business on
October 26, 2022. That amount must then be reduced by
Hernandez’s salary and loan repayments, as capped by the
agreement, and by the $63,259 Zaghian already received.
We recognize that, according to Bohorquez’s financial
report, many of the payments made from Hernandez’s Personal
14
Account between April and October 2022 were for “Costs of goods
sold,” “General business expenses,” and “Customer Refunds.” In
other words, they were ostensibly payments of business expenses
made on behalf of Glamlite. Respondents likewise suggest that
documents showing Glamlite’s expenses in 2022 undermine any
interpretation of the settlement agreement that would potentially
identify Glamlite’s gross profits as distributions to Hernandez.
We disagree. When the parties entered into the settlement
agreement, Hernandez had “sole control of Glamlite’s cashflow”
for over eight months. Consistent with Zaghian’s allegations,
Bohorquez’s report showed that millions of dollars of Glamlite
funds were deposited directly into Hernandez’s Personal Account.
Defining Distributions as all funds Hernandez received by virtue
of being a 50 percent owner and officer with sole control of
Glamlite’s cash flow, less her salary, loan repayments, and the
funds she transferred to the Corporate Account before October
26, 2022, recognized the exclusive control Hernandez exercised
over those funds and the potential for abuse of that control.
Under these circumstances, we are unable to conclude that such
an interpretation, which gives effect to the language of the
Distributions provisions and the agreement as a whole, leads to
impossible results the parties could not have intended.
C. On remand, the trial court shall instruct the
parties to select a neutral third party
accountant to determine distributions
Zaghian contends the accounting process provided for in
the settlement agreement broke down when Bohorquez refused to
perform the analysis required to determine the Distributions. He
argues that we therefore should adopt Leh’s unchallenged
determination of the Distributions amount. Alternatively,
15
Zaghian argues we should remand for the trial court to oversee
an accounting process consistent with paragraph 3(c) of the
settlement agreement. We conclude that paragraph 3(c) required
that the parties select a third party accountant to determine
Distributions. We remand for the trial court to order the parties
to engage in that process.
Paragraph 3(c) provided: “The amount of Distributions is to
be determined within 120 days from the date of execution of this
Agreement and Glamlite will be responsible for full payment of
such accounting. Hernandez must cooperate in good faith to have
the accounting completed within 120 days. In the event the
current accountant, Jennifer Bohorquez, is unable to complete
the accounting within the 120 days period, the Parties agree to
hire a mutually selected neutral third party accountant.”
Zaghian argues that Bohorquez’s refusal to complete the
accounting does not mean she was “unable” to do so, and that the
parties are therefore in a situation not contemplated by the
settlement agreement. We agree that Bohorquez’s refusal to
perform the required accounting did not mean that she was
incapable of doing so at the time. However, the settlement
agreement set a deadline of 120 days from the date of execution
for the determination of Distributions. As a practical matter,
once that period lapsed in April 2023, Bohorquez was no longer
able to complete the accounting “within the 120 days period.”
(Italics added.) Accordingly, under the terms of the settlement
agreement, the parties must choose a neutral third-party
accountant to determine Distributions. The trial court shall
instruct them to do so upon remand.
We recognize that respondents did not object to Leh’s
qualifications or her analysis. However, Leh stated in her
16
declaration that Zaghian retained her accounting firm. She was
evidently not “a mutually selected neutral third party
accountant,” as the settlement agreement required. Our task is
to enforce the terms of the parties’ agreement as written. (See
Hernandez, supra, 126 Cal.App.4th at p. 1176.)
II. We Reverse The Order Awarding Respondents
Attorney Fees
The settlement agreement provided for an award of
attorney fees to the substantially prevailing party in litigation
arising out of or related to the settlement agreement. Because
we reverse the trial court’s order enforcing the settlement
agreement, respondents are no longer the substantially
prevailing parties. We therefore reverse the order awarding
them attorney fees.
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DISPOSITION
The trial court’s orders enforcing the settlement agreement
and awarding attorney fees to Glamlite and Hernandez are
reversed. We remand with instructions for the trial court to
order the parties to select a neutral third party accountant to
perform the accounting necessary to determine Distributions in a
manner consistent with this opinion.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
ADAMS, Acting P. J.
We concur:
HANASONO, J.
OCHOA, J.*
* Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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