Siry Inv., L.P. v. Farkhondehpour
| Decision Date | 12 December 2012 |
| Docket Number | B223100 |
| Court | California Court of Appeals Court of Appeals |
| Parties | SIRY INVESTMENT, L.P., Plaintiff and Appellant, v. SAEED FARKHONDEHPOUR, Individually and as Trustee, et al., Defendants and Appellants. |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County
APPEAL from a judgment of the Superior Court of Los Angeles County. Ricardo A. Torres and Susan Bryant-Deason, Judges. Reversed and remanded for further proceedings.
Zakariaie & Zakariaie, Jack M. Zakariaie, Nilou A. Zakariaie; Greines, Martin, Stein & Richland, Robert A. Olson, Sheila A. Wirkus; Law Office of Philip A. Metson, Philip A. Metson for Defendants and Appellants.
Law Office of Philip A. Metson, Philip A. Metson; Law Office of Mohammad A. Fakhreddine, Mohammad A. Fakhreddine; Greines, Martin, Stein & Richland, Robert A. Olson and Sheila A. Wirkus for Defendant and Appellant Saeed Farkhondehpour, individually and as trustee of the 1993 Farkhondehpour Family Trust.
Wilson, Elser, Moskowitz, Edelman & Dicker, Gregory D. Hagen, and Robert Cooper for Plaintiff and Appellant.
This case involves two consolidated appeals: one from a special verdict and judgment entered thereon, and one from the subsequent order approving the final accounting report prepared by the referee. Saeed Farkhondehpour (Farkhondehpour), individually and as trustee of the 1993 Farkhondehpour Family Trust, Morad Neman (Neman), individually and as trustee of both the Neman Family Revocable Trust and the Yedidia Investment Defined Benefit Plan, 416 South Wall Street, Inc., and 241 E. 5th St. Partnership, L.P. (defendants) argue that reversal is compelled because the special verdict and judgment in favor of Siry Investment, L.P. (Siry) are "fatally indefinite in imposing liability." We agree. Siry's arguments notwithstanding, the judgment and special verdict are hopelessly ambiguous because the jury made disjunctive findings—it found Farkhondehpour, either individually or in his capacity as trustee, liable, and it similarly found Neman, either individually or in his capacity as trustee, liable. Thus, the judgment is too uncertain to be enforced and must be reversed.
Moreover, because the trial court expressly relied upon the jury's ambiguous findings in approving the referee's final report, the order approving the final report must be reversed as well.
The matter is remanded to the trial court for a new trial.
FACTUAL AND PROCEDURAL BACKGROUND
The Parties
Siry was a limited partner in 241 E. 5th St. Partnership, L.P. According to the partnership agreement, the general partner was 416 South Wall Street, Inc., and the other limited partners were the 1993 Farkhondehpour Family Trust, the Neman Family Irrevocable Trust, and the Yedidia Investment Defined Benefit Plan. Farkhondehpour is the trustee of the 1993 Farkhondehpour Family Trust and Neman is the trustee of the Neman Family Irrevocable Trust and the Yedidia Investment Defined Benefit Plan.
The Second Amended Complaint
In June 2007, Siry filed the instant action against defendants. The second amended complaint, the operative pleading, alleges, inter alia, claims for dissolution andwinding up of limited partnership; accounting, breach of contract; and breach of fiduciary duty.
The Jury Instructions
The case proceeded to a jury trial. Although the second amended complaint alleged alter ego liability, the jury was never instructed on this issue.
The Verdict and Judgment
Siry and the trial court prepared the special verdict form. Defendants objected to the form on the grounds that it improperly "refer[red] to the defendants en masse."
Following deliberation, the jury returned a verdict in favor of Siry. Specifically, the jury answered "Yes" to the following questions: (1) "Did the defendant individually or as trustees of the various trusts, breach any fiduciary duties that they owed to [Siry]?" (2) "Did [Siry] and the Defendants, individually or as trustee of the various trust entities, enter into a contract?" (3) "Did Defendants, individually or as trustees of the various trust entities, fail to do something that the contract required them to do? (4) "Do you find by clear and convincing evidence on the cause of action for breach of fiduciary duty that Defendant Saeed Farkhondehpour, individually or as trustee of the 1993 Farkhondehpour Family Trust, acted with malice, oppression or fraud?" (5) "Do you find by clear and convincing evidence on the cause of action for breach of fiduciary duty that defendant Mourad Neeman [sic], individually or as trustee of The Neman Family Irrevocable Trust, and the Yedidia Investments Defined Benefit Plan, acted with malice, oppression or fraud?"
In addition to compensatory damages, the jury awarded punitive damages against "Farkhondehpour, individually or as trustee of the 1993 Farkhondehpour Family Trust" and against "Neman, individually or as trustee of The Neman Family Irrevocable Trust and the Yedidia Investments Defined Benefit Plan."
Judgment was entered in favor of Siry and against defendants. Notably, the proposed preprinted judgment form identified defendants as "SAEED FARKHONDEHPOUR, an individual and Trustee of the 1993 Farkhondehpour Family Trust; MORAD NEMAN, an individual, and Trustee of The Neman Family IrrevocableTrust, and the Yedidia Investments Defined Benefit Plan." However, the trial court crossed out the conjunctions "and" and replaced them with "or," leaving the judgment against defendants as follows: Siry "is entitled to judgment against Defendants SAEED FARKHONDEHPOUR, an individual OR Trustee of the 1993 Farkhondehpour Family Trust; MORAD NEMAN, an individual, OR Trustee of The Neman Family Irrevocable Trust, OR the Yedidia Investments Defined Benefit Plan."
Siry was awarded compensatory damages from "Defendants SAEED FARKHONDEHPOUR, as an individual or as Trustee of the 1993 Farkhondehpour Family Trust; MORAD NEMAN, as an individual, or as Trustee of The Neman Family Irrevocable Trust, or as Trustee the Yedidia Investments Defined Benefit Plan." Siry was also awarded punitive damages from "Defendant SAEED FARKHONDEHPOUR, as an individual or as Trustee of the 1993 Farkhondehpour Family Trust" and from "Defendant MORAD NEMAN, as an individual, or as Trustee of The Neman Family Irrevocable Trust, or as Trustee of the Yedidia Investments Defined Benefit Plan."
Costs too were awarded in favor of Siry and against "Defendants SAEED FARKHONDEHPOUR, as an individual or as trustee of the 1993 Farkhondehpour Family Trust and MORAD NEMAN, as an individual or as trustee of the Neman Family Irrevocable Trust or as Trustee the Yedidia Investments Defined Benefit Plan."
The trial court further ordered that the partnership be dissolved. And, as to the second cause of action for an accounting, the trial court found in favor of Siry and ordered a reference pursuant to Code of Civil Procedure section 639, subdivision (a).
Posttrial Motions
Defendants then filed a notice of motion for judgment notwithstanding the verdict (JNOV) and to vacate the judgment. Contemporaneously, defendants filed notice of intent to move for new trial. In support of the two posttrial motions, defendants filed a combined points and authorities. As is relevant to the issues raised in this appeal, defendants argued that the special verdict and judgment were fatally uncertain because they did not indicate whether Farkhondehpour and Neman were liable to Siryindividually or as trustees. Consequently, according to defendants, "[a] new trial [was] required."
Both motions were denied, although the punitive damage awards against "Farkhondehpour, as an individual, or as Trustee of 1993 Farkhondehpour Family Trust" and "Neman, as an individual, or as Trustee of The Neman Family Irrevocable Trust, or as Trustee of the Yedidia Investments Defined Benefit Plan" were reduced.
Defendants' Appeal and Siry's Cross-Appeal
Defendants' appeal from the judgment ensued. Siry timely filed a notice of cross-appeal.
Accounting
While the appeal was pending, in accordance with the trial court's judgment, the matter was sent to a referee, David Frankel (certified public accountant) for an accounting. The referee then submitted his final report to the trial court. On May 26, 2011, the trial court approved and adopted the referee's March 17, 2011, final report. In rejecting Farkhondehpour's challenge to the referee's report, the trial court noted that "[t]he jury ha[d] spoken" with respect to the question of whether Farkhondehpour had misappropriated partnership funds.
Next, the trial court summarized the accountant's findings. In particular, the trial court indicated that certain cash receipts were "understated in 2007-2009 by a total of $42,612 due to misappropriation by Farkhondehpour," prompting the referee to recommend a decrease of Farkhondehpour's capital account. Concerning commercial spaces, the trial court noted that the referee believed that the discrepancy may have been because tenants did not pay rent "or may be due to amounts misappropriated by Farkhondehpour and/or his employees." Capital accounts were adjusted accordingly.
The trial court then addressed defendants' objections to the referee's report. Regarding documents that were belatedly submitted to the referee, the trial court noted: ...
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