Saghian v. Shemuelian

• Decision Date: 19 March 2020
• Docket Number: Case No. CIV-15-00701-PRW
• Parties: MASSOUD SAGHIAN, Plaintiff, v. AVRAHAM SHEMUELIAN; E&E CAPITAL, INC.; and STRYKER BUILDING, L.L.C, f/k/a LAWYER'S TITLE BUILDING, L.L.C., Defendants.
• Court: U.S. District Court — Western District of Oklahoma

MASSOUD SAGHIAN, Plaintiff, v. AVRAHAM SHEMUELIAN; E&E CAPITAL, INC.;and STRYKER BUILDING, L.L.C, f/k/a LAWYER'S TITLE BUILDING, L.L.C., Defendants.

Case No. CIV-15-00701-PRW

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

March 19, 2020

MEMORANDUM OPINION AND ORDER

Plaintiff, Massoud Saghian, filed a Motion for Summary Judgment (Dkt. 112) on November 29, 2018, pursuant to Rule 56(a) of the Federal Rules of Civil Procedure. Defendants Avraham Shemuelian, E&E Capital, Inc., and Stryker Building, L.L.C. jointly filed a Response (Dkt. 117) on December 20, 2018. Plaintiff's Reply (Dkt. 118) was filed December 27, 2018. Upon review of the parties' filings, the Court GRANTS Plaintiff's Motion for Summary Judgment (Dkt. 112) as set forth more fully below.

Burden of Proof

Rule 56(a) provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." In deciding whether summary judgment is proper, the court does not weigh the evidence and determine the truth of the matter asserted, but determines only whether there is a genuine dispute for trial before the fact-finder.¹ The movant bears the initial burden of demonstrating the absence of a genuine, material dispute and an entitlement to judgment.² A fact is "material" if, under the substantive law, it is essential to the proper disposition of the claim.³ A dispute is "genuine" if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.⁴

If the movant carries the initial burden, the nonmovant must then assert that a material fact is genuinely disputed and must support the assertion by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials"; by "showing that the materials cited [in the movant's motion] do not establish the absence . . . of a genuine dispute"; or by "showing . . . that an adverse party [i.e., the movant] cannot produce admissible evidence to support the fact."⁵ The nonmovant does not meet its burden by "simply show[ing] there is some metaphysical doubt as to the material facts,"⁶ or bytheorizing a "plausible scenario" in support of its claims.⁷ "Rather, 'the relevant inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'"⁸ If there is a genuine dispute as to some material fact, the district court must consider the evidence and all reasonable inferences from the evidence in the light most favorable to the nonmoving party.⁹

Factual Background

This case arises out of a business deal between family members. Back in 2006, Defendant Avraham Shemuelian (hereinafter "Avi") had identified several parcels of real property in Oklahoma City that he wished to acquire. One property was the old Baptist General Convention of Oklahoma Building located at 1141 N. Robinson Avenue, which because of some of its more recent tenants has also been called either The Lawyer's Title Building or The Stryker Building.¹⁰ Another property was the old First Church of Christ - Scientist Building located at 1200 N. Robinson Avenue.¹¹ Avi needed to raisecapital for a down-payment on these buildings and to conduct renovations. So Avi approached his aunt in California, Parvaneh Saghian (hereinafter "Parvaneh"), and his uncle in Israel, Plaintiff Massoud Saghian (hereinafter "Nissan"), about an investment opportunity.¹²

Sometime in August or early September of 2006, Avi, Parvaneh, and Nissan entered into an oral agreement.¹³ Per the terms of that oral agreement, the parties would form a new company, Lawyers Title Building, L.L.C. (hereinafter "LTB"), to purchase and manage the real property. Nissan would invest an initial amount of $215,000 in exchange for a 25% share of the LTB's membership units.¹⁴ Parvaneh would also invest $215,000 for her own 25% share, and Avi would donate his time to manage LTB's business affairs free of compensation in exchange for the remaining 50% share.¹⁵ There was only one problem for Nissan: as an Israeli citizen who lives in Israel, he is prevented from acquiring title to or owning land in Oklahoma by virtue of article XXII, section 1 of the Oklahoma Constitution.¹⁶ So the parties orally agreed that Nissan's 25% share would be heldnominally by Avi.¹⁷ Nissan's 25% share would entitle him to 25% of LTB's net profits or, in the event LTB sold the real property, to 25% of the net sales proceeds.¹⁸

Soon after the oral agreement was made, Avi brought his long-time business partner, Dan Weingarten, into the joint venture to assist in management of LTB in exchange for half of Avi's 50%-share (i.e., a 25% share of LTB's membership units).¹⁹ LTB was formed under the laws of the State of Oklahoma on August 15, 2006.²⁰ Although the document contains the typewritten date of August 15, 2006, it appears the parties executed the Operating Agreement for LTB on September 18, 2006.²¹ The Operating Agreement states that Avi's company, Defendant E&E Capital Inc., owns half of LTB's membership units; that Parvaneh's company, Magic Investments, L.L.C., owns a quarter of LTB'smembership units; and that Mr. Weingarten's company, D & Z BH, Inc., holds the remaining quarter of LTB's membership units.²² The Operating Agreement does not acknowledge Nissan's involvement at all, which demonstrates the significance of the behind-the-scenes oral agreement between Avi and Nissan.

After the initial capital contribution, Avi asked both Parvaneh and Nissan for additional contributions. The parties seemingly dispute the amount of the additional contributions, with Nissan asserting that he contributed an additional $160,000 that would bring his overall contribution up to $375,000 and with Avi asserting that Nissan loaned him only $302,255.²³ As will be discussed later, however, it does not appear this factual dispute is genuine, entitling the Court to proceed on the assumption that the parties do not dispute that Nissan's overall contribution was $375,000.²⁴

Something transpired thereafter that prompted Nissan and Avi to meet in Oklahoma City and to reduce their oral agreement to writing with some modifications.²⁵ On or about June 17, 2010, Nissan and Avi met with Skip Cunningham, an attorney Avi had previouslyhired on behalf of LTB.²⁶ They asked Mr. Cunningham to prepare documents evidencing the oral agreement with some modified terms.²⁷ After waiving any potential conflict of interest that would arise from having Mr. Cunningham represent both of them, Nissan and Avi executed a Loan Agreement (Dkt. 1-3), a Convertible Promissory Note Due on Demand (Dkt. 1-2), and a Security Agreement (Dkt. 1-4) all drafted by Mr. Cunningham.²⁸

The nine-page Loan Agreement (Dkt. 1-3) appears to memorialize the bulk of the agreement between Nissan and Avi, as it discusses the creation of a Convertible Promissory Note and the execution of a Security Agreement.²⁹ Moreover, its "Miscellaneous" provisions state that it is an integrated agreement that overrides the terms of the oral agreement:

9.4 Integrated Agreement. This Loan Agreement, all of the Loan Documents executed pursuant hereto or in connection herewith constitute the entire agreement between the parties hereto, and supercede [sic] and replace all prior negotiations and written and oral agreements between the Borrower, the Company, and the Lender or any party on their behalf, and there are no agreements, understandings, warranties or representations between the partiesregarding the interim financing of the Project other than those set forth in such documents.³⁰

Section 1 of the Loan Agreement concerns the loan:

1.1 Loan. Lender agrees to lend the Borrower, and the Borrower agrees to borrow from Lender the sum of THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($375,000.00), without interest thereon, for the purpose of financing the purchase and operation by the Company of the real property described at Exhibit "a" hereto . . . . The unpaid principal balance of funds advanced under the Convertible Promissory Note (as hereafter defined will be due and payable on demand in accordance with the terms and conditions hereof (the "Loan Maturity Date").³¹

Section 2 of the Loan Agreement concerns the separate Convertible Promissory Note that the parties would be executing:

2.1 Convertible Promissory Note. The Convertible Promissory Note shall be evidenced by a Convertible Promissory Note of even date herewith in the principal face amount of THREE HUNDRED THOUSAND SEVENTY FIVE THOUSAND DOLLARS ($375,000.00), in form and substance and payable on terms approved by the Lender (the "Convertible Promissory Note"). The Convertible Promissory Note shall be non-interest bearing. The entire unpaid principal balance shall be due and payable on the Loan Maturity Date by conversion into Units of the Company as provided therein. . . .

2.2 Convertible Promissory Note Payment. The Convertible Promissory Note shall be a Convertible Promissory Note providing for the conversion of the Note, in full upon demand, into such number of Units of the Company such that after the conversion, Lender shallbe the owner and holder of fifty percent (50%) of the outstanding Units of the Company.³²

Section 4 of the Loan Agreement concerns the collateral for the loan and the separate Security Agreement the parties would be executing:

4. COLLATERAL SECURITY. The performance of all covenants and agreements contained in this Loan Agreement and in the other documents executed or delivered as a part of this transaction and the payment of the Note . . . shall be secured by the following:

4.1 Security Agreement. Borrower shall execute and deliver to Lender a Security Agreement granting a first

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