Asgharneya v. Hadavi

• Decision Date: 02 July 2009
• Docket Number: No. A09A0740.,A09A0740.
• Citation: 298 Ga. App. 693,680 S.E.2d 866
• Parties: ASGHARNEYA et al. v. HADAVI et al.
• Court: Georgia Court of Appeals

680 S.E.2d 866

298 Ga. App. 693

ASGHARNEYA et al. v.HADAVI et al.

No. A09A0740.

Court of Appeals of Georgia.

July 2, 2009.

Hernan, Taylor & Lee, Christopher C. Taylor, Brennan T. Bair, Norcross, Erik J. Meder, Fred L. Cavalli, Decatur, for appellants.

Susan B. Shaw, Jeffrey L. Shaw, for appellees.

BERNES, Judge.

This case involves a dispute between appellantAsghar Asgharneya and appelleeJavad Hadavi following the demise of their joint business.After a bench trial, the trial court entered a judgment in favor of Hadavi for breach of contract and civil conspiracy and awarded him lost profit damages and attorney fees.On appeal, Asgharneya argues that the trial court misconstrued the nature of the parties' business relationship and the obligations that each owed to the other pursuant to their oral agreement.He further argues that the evidence was insufficient to support the trial court's finding of civil conspiracy and that the award of attorney fees was unwarranted.We find no error and affirm.

While we apply a de novo standard of review to any questions of law decided by the trial court, factual findings made after a bench trial shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.OCGA § 9-11-52(a).Because the clearly erroneous test is in effect the same standard as the any evidence rule, appellate courts will not disturb fact findings of a trial court if there is any evidence to sustain them.

(Citations and punctuation omitted.)Lifestyle Home Rentals v. Rahman,290 Ga.App. 585, 660 S.E.2d 409(2008).

The evidence presented during the bench trial showed that in 2001, Asgharneya and Hadavi, who had been long-time family friends, decided to open a check cashing business together.They jointly formed a corporation for the business, which they named El Exito Cambio De Cheques("El Exito"), and leased a small space within a convenience store owned by Wilson and Diana Quiceno, in which they constructed a small check cashing booth.They began operating their business in September 2001.

They each invested equal capital contributions to get the business running.They also agreed from the outset that all profits and expenses of the business would be split 50/50.No written documents evidenced their agreements; their business dealings were based solely upon the verbal communications of the two men.

Although both parties worked at El Exito, it became clear after several months that Asgharneya was able to spend more time at the store than Hadavi.Consequently, the parties agreed that Asgharneya would receive a salary of $500 per week, to be paid prior to the split of the profits between the parties.The business grew and gradually generated profits averaging $100,000 per year.In accordance with their agreement, Asgharneya and Hadavi split the profits equally.

Beginning in May 2004, mostly for scheduling reasons, Asgharneya and Hadavi decided to change the way that they did business.It is undisputed that the men agreed that they would alternate the months that each ran and operated the business, with each man paying all expenses and keeping all profits in their respective months.In other words, during Asgharneya's month to operate the business, he alone would work the check cashing booth, pay all of the expenses, and keep all of the profits obtained during that month.Likewise, in the alternating month, Hadavi would operate the booth, pay the expenses, and keep the profits during his assigned month.

In order to effectuate this modified agreement, the parties set up their own corporations and opened separate bank accounts for each to use during his respective month operating the business.They further agreed to close out the joint bank account that they had previously used and to distribute equally the remaining balance.The men also met and explained their new arrangement with the landlord, Mr. Quiceno.Although their lease had expired in December 2003, Mr. Quiceno agreed to continue the lease agreement indefinitely on a month-to-month basis.He stated no objection to the new scheduling arrangement.

Pursuant to their agreement, Asgharneya was to operate the business during the month of May.And, although the agreement called for alternating single months, the parties arranged for Asgharneya to also work during the month of June, since Hadavi had to be traveling at that time.In exchange, Hadavi was going to operate the business during the months of July and August.

As planned, Asgharneya operated El Exito exclusively during the months of May and June 2004.But when Hadavi arrived to run the business in July, he learned that Mr. Quiceno, in concert with Asgharneya, had boarded up the check cashing booth, blocked its access with merchandise racks, and hung signs indicating that the business was closed for remodeling, even though no remodeling was actually taking place.Mr. Quiceno further refused to accept Hadavi's rent check and instituted eviction procedures against him.Finally, Mr. Quiceno presented Hadavi a letter that Asgharneya had secured from an attorney stating that Asgharneya's and Hadavi's business partnership had terminated.

Hadavi nonetheless went to El Exito on a daily basis during the month of July 2004 in an attempt to run his check cashing business.In violation of their agreement, however, Asgharneya, with the help and support of Mr. Quiceno, began occupying a space near Mr. Quiceno's cash register and actively soliciting the check cashing customers away from Hadavi.Asgharneya continued to run his rival business in the store throughout the month of July, at which time Mr. Quiceno's eviction proceedings forced Hadavi to leave the premises.Asgharneya then continued to operate the business out of Mr. Quiceno's store on a full-time basis, without ever compensating Hadavi in any way.

In January 2006, Hadavi filed the instant lawsuit against Asgharneya and El Exito, asserting breach of contract, unjust enrichment, civil conspiracy, and attorney fees.¹

Following a bench trial, the court held that the parties had agreed to modify their original agreement to operate the check cashing business on an alternating month-to-month basis, and not to terminate their business relationship as had been argued by Asgharneya.The trial court expressly rejected Asgharneya's argument that the closing of the parties' joint bank account and distribution of those funds evidenced a termination of their business relationship, as opposed to a reimbursement of their original investment amount consistent with their new business arrangement.Finally, the trial court concluded that Asgharneya breached his modified agreement with Hadavi when, in July 2004, he began operating a rival business within the Quicenos' store and continued to operate the check cashing business from that location to the exclusion of Hadavi; was unjustly enriched when he obtained and kept the profits of El Exito during the months that Hadavi was supposed to be operating the business; and committed civil conspiracy when, in concert with Mr. Quicenos, he prevented Hadavi from operating the check cashing business and interfered with his ability to do so.The trial court awarded Hadavi lost profit damages and attorney fees.

1.Asgharneya contends that the trial court erred by failing to conclude that the parties agreed to terminate their business relationship and to operate separate and independent businesses when they modified their arrangement in May 2004.He argues specifically that the modified agreement was a novation of the original agreement which had the effect of extinguishing in its entirety their business partnership and replacing it with a new arrangement in which they agreed only to share the use of the leased space.We disagree.

We note at the outset that Asgharneya's assertion that this issue is solely a question of law to which we owe no deference to the trial court's ruling lacks merit, as illustrated by the analysis that we must undertake in order to address his novation argument."A novation is a complete contract within itself, and has four essential requisites: (1) a previous valid obligation, (2) the agreement of all the parties to the new contract, (3) the extinguishment of the old contract, (4) the validity of the new one."(Citation and punctuation omitted.)Farris v. Pazol,166 Ga.App. 760, 762(1), 305 S.E.2d 472(1983).As with any contract, a meeting of the minds is an essential element of a valid and binding novation.Georgialina Enterprises v. Frakes,250 Ga.App. 250, 253, 551 S.E.2d 95(2001).And significantly, the question of whether the parties mutually intended a novation is ordinarily a question reserved for the trier of fact.Id. at 254, 551 S.E.2d 95;Mayer v. Turner,142 Ga.App. 63, 63-64(1), 234 S.E.2d 853(1977).

Since all of the dealings between the parties here were verbal, and since the parties strongly dispute the intent behind and the effect of their modified business agreement, the resolution of that issue lay exclusively with the trial court as the trier of fact.Georgialina Enterprises,250 Ga.App. at 253, 551 S.E.2d 95;Mayer,142 Ga.App. at 63-64(1), 234...