Palandjian v. Pahlavi
| Decision Date | 16 August 1985 |
| Docket Number | Civ. A. No. 83-2199-Y. |
| Citation | 614 F. Supp. 1569 |
| Parties | Petros A. PALANDJIAN, Plaintiff, v. Ashraf PAHLAVI, Defendant. |
| Court | U.S. District Court — District of Massachusetts |
COPYRIGHT MATERIAL OMITTED
M. Frederick Pritzker, Elizabeth A. Ritvo, Brown, Rudnick, Freed & Gesmer, Boston, Mass., for plaintiff.
Harvey Weiner, Peabody & Arnold, Boston, Mass., for defendant.
The plaintiff in this action, Petros A. Palandjian ("Palandjian"), seeks damages in excess of $30 million on his claims of breach of contract, conversion, unjust enrichment, quantum meruit, and breach of fiduciary duty. The defendant, Ashraf Pahlavi ("Pahlavi"), moves for summary judgment on all counts, claiming that the action is barred both by the statute of limitations and by the statute of frauds. For the reasons that follow, Pahlavi's motion is denied.
Palandjian is a dual national Iranian-American citizen who has been a resident of the United States since 1963. The defendant Pahlavi is the twin sister of the late Shah of Iran and currently is living in exile. Palandjian alleges the following facts and this court, expressing no opinion thereon, assumes them to be true for purposes of this motion only.
In 1966, Palandjian resided in Massachusetts and was the president of a construction company located in Watertown, Massachusetts. In June of 1966 he first met Pahlavi through his brother Leon Palandjian ("Leon"), who worked for Pahlavi in Iran. During the course of several meetings over a weeklong period in various locations in Massachusetts, Pahlavi and Palandjian entered into an oral contract whereby they agreed to develop a holiday resort, named "Kazar Shahr," on the Caspian Sea in Iran. By this agreement, Pahlavi would purchase the necessary real estate, Palandjian would provide up to $2 million as an initial investment, and he and his brother Leon would form a new company to develop and construct the project, all profits being divided equally between Pahlavi and Palandjian. Palandjian agreed to oversee the development of the project from his office in Massachusetts and to visit the site in Iran as necessary.
During the June 1966 meetings in Massachusetts, Pahlavi and Palandjian also discussed the need and demand for aviation development in Iran. They agreed to contact Cessna Aircraft to seek the exclusive distributorship for Iran; if successful, Palandjian was to have an 85% interest and Pahlavi a 15% interest. Neither this agreement nor the agreement to develop Kazar Shahr were put in writing — Palandjian did not ask Pahlavi to sign a written contract for fear of insulting her.
Pursuant to these agreements, Palandjian and his brother Leon formed a company, called Abadani Jazayer, to develop the Kazar Shahr project. Because he was a resident of Iran, Leon was named president of the company. The shares of Abadani Jazayer stock were given to the plaintiff's father, Grigor Palandjian, to hold in his safe in Tehran on the basis of 50% for the benefit of Palandjian and 50% for the benefit of Pahlavi.
Palandjian also obtained the exclusive distributorship in Iran for Cessna Aircraft. Palandjian and his brother formed a company named Hooraseman to sell aircraft and parts, and each of the brothers was named individually as a Cessna representative. Leon was named president of Hooraseman and the company shares were held by the plaintiff's father in Tehran.
From 1966 through July 1969, Palandjian supervised the development of the Kazar Shahr project from his Watertown, Massachusetts, office and from periodic site visits. During this period he was in frequent telephone contact from his Massachusetts home and office with Pahlavi regarding the project. In July 1969, Leon died, and Palandjian moved to Iran to assume his brother's responsibilities as president of both the Abadani Jazayer and the Hooraseman companies. From July 1969 through December 1970 Palandjian resided in Tehran except for several brief trips to Massachusetts to visit his family.
Following extensive site development, the Kazar Shahr project was ready for marketing in 1970. In December 1970, Palandjian had a dispute with Pahlavi concerning the amount of time he was spending in Iran. Palandjian proposed that they sell the Abadani Jazayer and Hooraseman companies, a suggestion which angered Pahlavi. While discussing this matter in France, Pahlavi sent the following written message to Palandjian:
Fearing for his safety, Palandjian did not return to Iran. He moved back to his home in Massachusetts and, from there, continued to supervise the activities of Abadani Jazayer and Hooraseman.
In 1971, Pahlavi moved to wrest control of the two companies from Palandjian. Early that year a representative of Pahlavi went to the Abadani Jayazer offices in Tehran and announced that he was taking over the company and that all documents and models should be turned over to him. The staff reluctantly complied with those demands. At approximately the same time Pahlavi's top assistant, Izadi, visited the plaintiff's father Grigor and demanded the shares of Abadani Jazayer and Hooraseman held by Grigor. According to Grigor's deposition testimony, Izadi stated: "We will have you killed," and "If you and your son and family want to live here without any danger give me the stocks."
Grigor contacted Palandjian about the threats from Izadi, and Palandjian spoke with Pahlavi at least twice about her intent to obtain possession of the shares. Pahlavi replied that she would hold Palandjian's shares for his benefit. Fearing for Grigor's safety and relying on Pahlavi's statement that she would hold the Abadani Jazayer and Hooraseman shares for his benefit, Palandjian advised his father to release the stock of both companies to Izadi, which his father did.
Shortly thereafter, in 1971, Palandjian was visited in Massachusetts by Pahlavi's cousin, Dadsetan. Dadsetan told Palandjian that he either had to return to Iran at Pahlavi's request or he had to relinquish his rights to the Cessna distributorship. Still fearing Pahlavi's previous threats, Palandjian was unwilling to return to Iran. Dadsetan became more belligerant, stating Dadsetan further stated, Palandjian called Pahlavi about Dadsetan's threats and was told that Dadsetan was her representative and that Palandjian was to do as he was told. Pahlavi added, In response to a request for payment, Pahlavi stated, Fearing the possible consequences to him and his family, Palandjian signed papers which relinquished his rights to the Cessna distributorship.
From 1971 through 1982 Palandjian remained in contact with Pahlavi, speaking with her by phone and periodically meeting with her in Geneva or New York. During these conversations, Palandjian repeatedly raised the issue of monies Pahlavi owed him from Hooraseman and Abadani Jazayer. According to Palandjian, Pahlavi acknowledged her debts and told him that he would be paid. Palandjian summarized the circumstances of one meeting: In 1972 he met Pahlavi in Geneva and again asked her for payment. Pahlavi stated that she had instructed her assistant to pay Palandjian $1.7 million for the unpaid construction work he had performed for the Kazar Shahr development; she also told him that Kazar Shahr had already made $25 million and would make in excess of $50 million, and that he would be paid his share of the profits. In response, Palandjian informed her that he had not received any payment whatsoever.
The Shah of Iran was deposed in 1978 and died in 1980. For some time after 1978 Palandjian believed that the Pahlavi family would return to power eventually and that "the royal family through its agents would exercise power and control while out of power ... outside of Iran." In 1983 Palandjian came to believe that the Pahlavi family would not return to power in Iran and that he could safely litigate his claims against Pahlavi. Palandjian commenced this suit on July 27, 1983.
When a defense of statute of limitations is properly raised, the burden is on the plaintiff to prove that he has complied with the relevant statutes. Holtzman v. Proctor, Cook & Co., Inc., 528 F.Supp. 9, 14 (D.Mass.1981). The Massachusetts statute of limitations applies in this diversity case. Molinar v. Western Electric Co., 525 F.2d 521, 531 (1st Cir.1975), cert. denied, 424 U.S. 978, 96 S.Ct. 1485, 47 L.Ed.2d 748 (1976). The statute of limitations for contract actions provides that such actions shall be commenced within six years after the cause of action accrues. Mass.Gen.Laws ch. 260, § 2. For claims arising in tort, the Massachusetts statute provides a two-year limitations period for claims arising before January 1, 1974, and a three-year limitations period for claims arising on or after that date. Mass.Gen. Laws ch. 260, § 2A; Baldassari v. Public Finance Trust, 369 Mass. 33, 43, 337 N.E.2d 701 (1975).
A cause of action for breach of contract accrues at the time of the breach. Campanella & Cardi Construction Co. v. Commonwealth, 351 Mass. 184, 185, 217 N.E.2d 925 (1966). Palandjian alleges in Count I that Pahlavi breached their oral contract by "her failure to pay the plaintiff for his profits in the Kazar Shahr development and for the construction work performed on said project, and by preventing the plaintiff from returning to Iran to complete the project." Amended...
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