Filed 12/7/21 Kyundibekyan v. Reese CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

KARAPET KYUNDIBEKYAN et 

al.,

Plaintiffs and Appellants,

v.

ROSHANN REESE et al.,

Defendants and 

Respondents.

B302665

(Los Angeles County

Super. Ct. No. BC633974)

APPEAL from a judgment of the Superior Court of Los 

Angeles County, Steven Kleifield, Judge. Affirmed.

Anderson & Associates, Michael D. Anderson and Andrei V. 

Serpik for Plaintiffs and Appellants.

Law Office of Stewart J. Neuville and Stewart J. Neuville 

for Defendants and Respondents.

______________________
2

This case arises from a failed sale of the assets of Advanced 

Business Conglomerate, Inc. (ABC) to brothers Karapet and 

Vardan Kyundibekyan (appellants). ABC is a small corporation 

which provided home health care services under the name 

Benevolent Home Care. After signing a purchase agreement, 

making a down payment, and attempting to run the business for 

the month of August 2016, appellants gave notice of rescission 

and demanded their down payment be returned. Roshann Reese, 

the sole shareholder of ABC, declined to return the down 

payment. Appellants sued ABC, Reese, and her son Shawn 

Phillips (respondents) for negligent and fraudulent 

misrepresentation and breach of oral and written contract. ABC 

and Reese filed a cross-complaint alleging breach of contract, 

negligence, fraud and deceit, and slander.

Both actions were tried by the court, which explained in its 

statement of decision that the sale/purchase agreement was void 

for indefiniteness. Relying on equitable principles of restitution, 

the court found appellants were not entitled to the return of the 

down payment. The court found appellants were entitled to “the 

$12,705.12 that was billed for the month of August” to 

Medicare/Medical on appellants’ behalf. The court stated: 

“Defendants are unjustly enriched by retaining those funds, 

which should be paid to Plaintiffs” and found “against the 

Defendants for failure to turn over monies received for billing for 

services rendered by Plaintiffs in the sum of $12,705.12.” In the 

final judgment, however, the court only found against ABC for 

the $12,705.12.

Appellants appeal, contending the trial court abused its 

discretion in failing to order the return of the down payment and 

failing to find Reese and Phillips personally liable for the 
3

payment of the billed funds. Respondents contend the record is 

inadequate to permit meaningful appellate review, and the 

appeal should be denied on that ground alone. We find the record 

adequate to address appellants’ claim about the return of the 

down payment, but find no abuse of discretion or error in the trial 

court’s decision to deny return. We find no error on the face of 

the record concerning the trial court’s decision to hold only ABC 

liable for the $12,705.12 in billed services for August. 

Accordingly, we affirm the judgment.

BACKGROUND

Following a five-day court trial, the court issued its written 

statement of decision in this matter. The trial court’s statement 

contains a summary of the evidence offered at trial; it is the only 

record of much of that evidence. Although the court trial of this 

matter involved 10 witnesses, appellants provided a reporter’s 

transcript of the testimony of Reese and Phillips only, a clerk’s 

transcript, and a joint appendix of recreated trial exhibits. We 

rely on the trial court’s statement for much of the background 

details of this appeal.

As the trial court in this case aptly summarized in its 

written statement of decision: “This case boils down to an 

attempted sale of a marginally profitable business by a seller who 

was eager to sell, to an unsophisticated buyer who did not 

exercise due diligence; and a failure to agree on a material term 

of the agreement, i.e. the extent of the cooperation and assistance 

by the seller that would be contractually required to transition 

ownership.”
4

This case has its origins in early 2016, when appellants 

learned that Reese wanted to sell ABC. She planned to attend 

medical school. Reese’s son Phillips ran the finances for the 

company.

In June 2016, appellants made a $5,000 down payment and 

were shown some financial documents for ABC. Thereafter, on 

July 29, 2016, the parties signed a written agreement pursuant 

to which appellants would purchase ABC by making a series of 

payments totaling $330,000. As structured in the agreement, 

appellants would make a down payment of $50,000 upon signing 

the agreement, and would pay $8,000 a month beginning in 

September 2016. In February 2017, assuming certain conditions 

were met, appellants would make a second $50,000 payment and 

the sale would “close.” Appellants would receive financial 

control of ABC. Although the parties initially discussed a sale of 

ABC’s shares to appellants, ultimately the transaction was the 

sale of ABC’s “two provider numbers that allowed one to provide 

home health care and bill Medicare and Medi-Cal for their 

services.” Appellants were also purchasing the right to use the 

name “Benevolent Home Care.”

Appellants received operational control of ABC on August 

1, 2016, and attempted to run the business for the month of 

August. At the end of the month, they gave notice they were 

rescinding the contract due to respondents’ “fraudulent 

misrepresentation of the potential liabilities and financial status” 

of ABC. ~(CT 205, 599)~

Appellants subsequently contended they were not informed 

of fraudulent billing practices, non-compliance with Medicare and 

Medicaid rules and labor law, and pre-existing tax liabilities. 

They also claimed respondents had not cooperated in assisting 
5

appellants’ transition into ownership. Respondents crosscomplained for breach of contract.

The trial court held a five-day court trial involving 10 

witnesses. The court found that “the contract was extremely 

poorly written, especially with respect to the seller’s obligations. 

While the buyers’ obligations are fairly well spelled out, the 

seller’s obligations are not. This omission was the primary 

reason [appellants] gave notice of rescission after only one month 

of attempting to run the business.”

The court found: “As illustrated by the facts in this case, a 

transition period is necessary to acclimate the buyers to the 

business, so they can run it profitably. The parties would need to 

work together cooperatively to obtain the transfer of the provider 

numbers.” The court also found that “the Seller’s obligations 

were only vaguely, and inadequately defined.” Appellants also 

“entered into oral agreements only with Reese and Phillips for 

assistance; the duties were never entirely clear.” Phillips, 

however, had moved to Arkansas in June for another opportunity 

and was “largely unavailable.” Reese was “largely unavailable as 

well; she was in the process of leaving the country for medical 

school.”

When appellants had contact with ABC’s employees, they 

encountered a litany of complaints: bounced checks, unpaid 

overtime, a shortage of nurses, and a lack of training. “These 

were all things for which [appellants] needed assistance; 

however, the assistance was rarely there. The transition was a 

disaster.”

The court concluded the contract was “not ‘sufficiently 

definite” to be enforceable. Cooperation and assistance by the 

seller was an indispensable material term that was not 
6

adequately addressed in the written contract. “It is not possible 

to ‘fill in the gaps’ in this contract to determine whether either 

side committed a breach.”

The court did not place the blame for this solely on either 

party. The court found appellants fell short in their “due 

diligence” in purchasing a business: “The evidence showed that 

consultants are available for hire to assist in valuing home health 

care businesses, and assisting in making decisions regarding 

whether and on what terms to purchase a home health care 

business. Indeed, Plaintiffs hired such a consultant . . . after they 

became concerned about what they had just purchased, as 

opposed to before they made the purchase. . . . Plaintiffs were 

surprised about many aspects of the business which they would 

have known had they hired a consultant.”

The court expressly rejected appellants’ claim that 

respondents committed fraud. The court specifically addressed 

appellants’ claim that they were defrauded by not being made

aware of approximately $170,000 in tax liabilities. The court 

found their claim “rings hollow.” The court also found “not 

convincing” appellants’ claim that they were confused by 

references to payments to the IRS for a trust fund penalty.

After reiterating that the contract was not “sufficiently 

definite” to be enforceable and so “neither side has any 

obligations to the other under the contract,” the court turned to 

the question of the $50,000 down payment. The court stated: 

“The Court is of the view that at the time the parties entered into 

the contract, all parties believed that they would ultimately 

succeed. It was only after the first month that it became clear 

that they would not. Due to their lack of due diligence, Plaintiffs 

decided to take over the operations of the business without 
7

knowing exactly what they were getting into, and assumed the 

risk of failure.”

Responding to a request by appellants after the tentative 

ruling, the court addressed $12,705.12 billed for the month of 

August on appellants’ behalf, and determined that appellants 

were entitled to the monies. “Defendants are unjustly enriched 

by retaining those funds, which should be paid to Plaintiffs.”

The court found no breach of contract by any party, and 

awarded no damages for breach of contract.

Respondents objected to the statement of decision, 

contending that they had used the $12,705.12 to pay expenses 

incurred by ABC during the time appellants had operational 

control, and so were not unjustly enriched. Appellants replied 

that respondents were relying on evidence which was not 

presented at trial and so should not be considered by the court. 

The court agreed. Reese and Phillips then objected that they 

should not be liable for payment of the $12,705.12 to appellants, 

as they did not receive or retain any of the funds and so were not 

enriched. The trial court apparently agreed with this claim, as 

the final judgment is against ABC only.

DISCUSSION

A. The Record Is Adequate to Permit Review of Appellants’

Down Payment Claim But Not Their Claim Concerning 

Billing Payments

Respondents contend the appeal should fail because 

appellant has not provided an adequate record. There was no 

court reporter for, and hence no reporter’s transcript of, the 

testimony of appellants or six other witnesses. The reporter’s 

transcripts cover the testimony of Reese and Phillips only.
8

“The party challenging a lower court judgment has the 

affirmative obligation to provide an adequate record. In the 

absence of such a record, the judgment must be affirmed.”

(Hersey v. Vopava (2019) 38 Cal.App.5th 792, 798.) “We cannot 

presume the trial court has erred. . . . ‘ “A judgment or order of 

the lower court is presumed correct. All intendments and 

presumptions are indulged to support it on matters as to which 

the record is silent. . . .” [Citation.]’ ” (Vo v. Las Virgenes

Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447.)

Appellants acknowledge the record does not contain 

reporter’s transcripts of most of the trial testimony, including 

their own testimony. They contend this appeal “presents 

questions which all rest on the undisputed facts found by the 

Trial Court. Appellants do not assert that the Trial Court should 

have found different facts.” They further claim that the “findings 

of facts . . . are not being challenged.” Thus, they claim a 

complete record of the trial proceedings are not necessary. (See 

Chodos v. Cole (2012) 210 Cal.App.4th 692.)

We agree the record is adequate to permit a review of the 

trial court’s decision to deny appellants’ request for the return of 

the first down payment, that is, to review the trial court’s 

application of the law to the undisputed facts. We note, however, 

that appellants’ claim that they are not “challenging” the findings 

of facts is somewhat disingenuous. They frequently avoid 

“challenging” the court’s findings by mischaracterizing or 

ignoring them. While we do not correct every instance of 

mischaracterization or avoidance, we note that appellants’

repeated descriptions of respondents’ “bad faith” are completely 

inconsistent with the trial court’s statement of decision, as are 

their descriptions of themselves as victims. Appellants made 
9

numerous claims of wrongdoing by respondents, and all were 

rejected by the trial court. The court found respondents “had an 

incentive to see that [appellants] were successful” and “had little 

interest in deceiving.” The court found appellants “were not 

entirely blameless” in the failure of the transaction because they 

did not adequately investigate what assistance they would need 

to transition to successful ownership. The court also found 

appellants untruthful, a finding it did not make about 

respondents.

The trial court did not make any findings of fact concerning 

its decision to hold only ABC responsible for turning over the

$12,705.12 in billing payments. Appellants contend Reese and 

Phillips will be unjustly enriched if they are not held responsible 

for turning over the money, which presents a factual question.

Appellants contend that error appears on the face of the 

record, and so we must presume the record includes all matters 

necessary to decide the appeal. We find an alternate phrasing 

more useful: Unless an error appears on the face of the record, 

an appellant’s “ ‘[f]ailure to provide an adequate record on an 

issue requires that the issue be resolved against [appellant].’ ” 

(Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 

181, 187.) We apply this standard to the court’s decision to hold 

only ABC liable for the turnover of the $12,705.12 billing 

proceeds.

B. It Is Not Unjust to Permit Respondents to Retain the First 

Down Payment

The trial court found appellants were not entitled to a 

return of their down payment because “[d]ue to their lack of due 

diligence, [they] decided to take over the operations of the 
10

business without knowing exactly what they were getting into, 

and assumed the risk of failure.”

Appellants contend the trial court abused its discretion in 

denying the return of the down payment because respondents 

would be unjustly enriched by its retention. Appellants further 

contend the trial court erred in finding they had assumed the risk 

of failure.

Appellants contend that when “consideration . . . has failed” 

the law implies a promise on the part of the payee to return 

money paid as a consideration. (Green v. Antoine (1955) 

133 Cal.App.2d 269, 274.) This is a principle that applies when a 

valid contract exists, but one or both parties do not perform 

under the contract. It is generally applicable when a contract is 

rescinded or a party seeks rescission.

This is not a rescission case. The court’s finding that no 

contract existed precludes rescission. “Only a valid and binding 

contract may be rescinded. ‘Loosely the term “rescission” has 

been employed in a wide and generic sense. But it is not properly 

applicable to the undoing of anything except that which has been 

the subject of mutual agreement. . . . Again, before there can be 

any “rescission,” properly so called, there must be a contract

completely formed and in force, or at least provisionally binding 

on the parties.’ [Citation.] If the facts establish the nonexistence 

of the alleged contract sought to be rescinded, in that there was 

no meeting of minds, there can, of course, be no rescission.” 

(Charles Brown & Sons v. White Lunch Co. (1928) 92 Cal.App. 

457, 461–462.)

General principles of restitution apply in the absence of a 

valid contract. (See McBride v. Boughton (2004) 123 Cal.App.4th 

379, 388.) “Under the law of restitution, ‘[a]n individual is 
11

required to make restitution if he or she is unjustly enriched at 

the expense of another. [Citations.] A person is enriched if the 

person receives a benefit at another’s expense. [Citation.]’ 

[Citation.] However, ‘[t]he fact that one person benefits [from]

another is not, by itself, sufficient to require restitution. The 

person receiving the benefit is required to make restitution only 

if the circumstances are such that, as between the two 

individuals, it is unjust for the person to retain it. [Citation.]’

[Citations.]” (Id. at p. 389.)

We review a trial court’s decision to grant or deny an 

equitable award based on unjust enrichment principles for an 

abuse of discretion. “ ‘ “[O]ne of the essential attributes of abuse 

of discretion is that it must clearly appear to effect injustice.” ’ ” 

(Dorman v. DWLC Corp. (1995) 35 Cal.App.4th 1808, 1815.)

“ ‘ “The burden is on the party complaining to establish an abuse 

of discretion.” ’ ” (Ibid.) “Abuse of discretion is a deferential 

standard of review. [Citation.] Under this standard, a trial 

court’s ruling ‘will be sustained on review unless it falls outside 

the bounds of reason.’ [Citation.] We could therefore disagree 

with the trial court’s conclusion, but if the trial court’s conclusion 

was a reasonable exercise of its discretion, we are not free to 

substitute our discretion for that of the trial court.” (Avant! Corp.

v. Superior Court (2000) 79 Cal.App.4th 876, 881–882.)

Here, the evidence establishes that a home health care 

business is a complex business with a myriad of regulatory 

requirements, and that appellants were aware of this. As the 

trial court noted: “It seems clear that Plaintiffs were purchasing 

the two Provider numbers that allowed one to provide home 

health care and bill Medicare and Medi-Cal for their services.” 
12

“An application process was necessary to obtain permission from 

the agencies to transfer the provider numbers to Plaintiffs.”

Although appellants were unsophisticated buyers, it is 

undisputed they did not avail themselves of a consultant before 

taking over the operations of a business about which they knew 

little. As the court concluded: “Plaintiffs were surprised about 

many aspects of the business which they would have known had 

they hired a consultant.” Further, according to one such 

consultant who assist buyers, “the extent of the assistance to be 

required of the sellers is typically spelled out in a contract.” 

While these specific comments by the court are related to the lack 

of detail in the written agreement, they are equally applicable to 

appellants’ failure to investigate what skills or knowledge they 

needed to run the business before they took over control of it from 

Reese in August.

When Reese received about $50,000 from appellants, she 

turned over the day-to-day operation of her business to

appellants in exchange for that payment. The trial court 

described the period during which appellants had control of the 

business as “a disaster” due to appellants’ inability to run the 

business without assistance. Reese testified that when she 

received operational control of the business back from appellants, 

she decided to end the business because she had “no idea what 

they did during the 30 days that they had possession of the 

business.” In the absence of a valid sale contract, Reese retained 
13

responsibility to Medicare and Medi-Cal for the business.1

Further, as the court noted in its statement of decision, Reese 

wanted a quick sale of the business as she was planning to start 

medical school in the Caribbean in the fall of 2016. The ship had 

sailed on that goal.

We see no abuse of discretion in the trial court’s decision 

that, as between the two parties, it was not unjust to permit 

Reese to keep the down payment. The court, as required, 

“consider[ed] the material facts affecting the equities between the 

parties.” (See Dickson, Carlson & Campillo v. Pole (2000) 

83 Cal.App.4th 436, 447.) Although appellants were not 

sophisticated in the home health care business, they elected not 

to hire a consultant who could have helped them evaluate Reese’s 

business and determine what would be involved in running it 

themselves. Appellants quickly located a consultant after they 

took control of operations, indicating that they had the ability to 

find and hire such a consultant before the turn-over, but 

apparently chose not to do so. The trial court found Reese was 

largely unavailable to help appellants because “she was in the 

process of leaving the country for medical school (which explains 

why she was in a hurry to sell the company).” Reese’s position 

was altered by appellant’s inability to run the business: she 

1 To be clear, the trial court did not find that appellants 

destroyed or materially damaged Reese’s business during the 

month of August. At the same time, the trial court’s description 

of the transition period as a “disaster” makes it clear that the 

business was, at a minimum, disrupted during this period. 

Similarly, Reese’s statement that she decided to close the 

business shows that there were significant obstacles to her 

resuming control of the business.
14

faced difficulties and uncertainties if she resumed operating the 

business and she had lost valuable time if she decided to try to 

find another buyer.

In addition to considering the relative circumstances of the 

parties, “[d]etermining whether it is unjust for a person to retain 

a benefit may involve policy considerations. For example, if a 

person receives a benefit because of another’s mistake, policy may 

dictate that the person making the mistake assume the risk of 

the error.” (First Nationwide Savings v. Perry (1992) 

11 Cal.App.4th 1657, 1663.) For example, when a payment has 

been made based upon a mistake of fact by the payor, the payor 

generally is not entitled to restitution if “the payee has, in 

reliance on the payment, materially changed its position.” (City

of Hope Nat. Medical Center v. Superior Court (1992) 

8 Cal.App.4th 633, 636–637.) This is particularly the case if “ ‘it 

is impossible or impractical to restore [the payee] to his original 

position.’ ” (First Nationwide, at p. 1663.)

Although we would not characterize appellants’ failure to 

investigate the business as a mistake of fact, the mistake 

example provides a useful analogy. Appellants made a down 

payment to Reese in order to take over the operations of a 

complicated business which they had not made sufficient efforts 

to understand. In effect, they mistakenly believed they could run 

the business. Reese altered her position in reliance on the down 

payment by giving appellants operational control of her business 

and ceasing her attempts to sell it. Appellants’ attempt to run 

the business was a disaster, and Reese could not be restored to 

her original position. Thus, it is sound policy to place the risk of 

loss of the down payment on appellants, or, in other words, to 

require them to assume the risk of loss.
15

Appellants object to the trial court’s focus on their failure to 

hire a consultant, contending that “relief related to rescission” is 

not precluded on the grounds of negligence of the rescinding 

party unless it rises to the level of neglect of a legal duty. 

Appellants then speculate that it “appears” the court believed 

appellants “breached a duty to insure that the Agreement was 

properly drafted, which included a duty to hire an expert.” They 

contend there is no evidence to support placing the risk of a 

defective contract on them, particularly because the trial court 

found that Reese drafted the contract.

Again, discussions of legal principles related to rescission 

are not helpful, as rescission is premised on the existence of a 

valid and binding contract. Equally importantly, appellants’

argument ignores the plain language the court used in its 

statement of decision. The trial court used the phrase “take over 

operations of the business” and that phrase has a clear meaning. 

It does not mean to draft a written agreement. The court found 

that appellants took over operations of the business “without 

knowing what they were getting into.” In this context of the 

statement of decision, this phrase means without understanding 

what was involved in operating the business. It does not mean 

defectively drafting an agreement.

C. There Is No Error on the Face of the Record as to the Trial 

Court’s Decision to Hold Only ABC Responsible for Turning 

Over the $12,705.12 in Billing Payments.

Respondents objected to the trial court’s finding that they 

were unjustly enriched by retaining the $12,705.12. After the 

trial court ruled it would not consider evidence of payments made 

on behalf of ABC which were not in evidence at trial, respondents 

offered to show no funds were retained and filed an additional 
16

objection focusing on the personal liability of Reese and Phillips. 

Following that filing, the court changed its decision to award 

damages against ABC only. We see no error on the face of the 

record in that ruling.

As respondents pointed out in their objections, there is no 

evidence in the record that Phillips or Reese personally received 

or retained any funds from ABC after August 1, 2016, and so no 

evidence that they were personally enriched. Thus, there was no 

error in the trial court’s decision not to hold them responsible for 

turning over the monies.

Appellants implicitly acknowledge there is no such direct 

evidence, but contend that we must infer that Phillips and Reese 

took the money from ABC’s bank account because they “willfully” 

refused to produce bank records. As appellants acknowledge, 

Reese offered innocent explanations for the lack of

documentation, including losing printed copies and no longer 

having access to the electronic bank records of ABC. Appellants 

have not provided any record citation to show the trial court was 

asked to or did find that respondents “willfully” refused to 

produce documents or “suppressed” evidence. Accordingly, they 

have forfeited this claim. (United Grand Corp. v. Malibu

Hillbillies, LLC (2019) 36 Cal.App.5th 142, 156 [when a party 

fails to support an argument with the necessary citations to the 

record, the argument is deemed waived.].)

Appellants contend another reason supports holding Reese 

responsible: the assumption of liability she made in connection 

with the dissolution of ABC. We see no error on the face of the 

record in the trial court’s implied finding that appellants had 

failed to show that Reese’s assumption of liability applied to the 

$12,705.12 award.
17

Corporations Code section 1905 requires that a certificate 

of dissolution shall state that the corporation’s “known debts and 

liabilities have been actually paid, or adequately provided for, or 

paid or adequately provided for as far as its assets permitted, or 

that it has incurred no known debts or liabilities, as the case may 

be.” (Corp. Code, § 1905, subd. (a)(2), italics added.)2 “[A] claim 

that has not yet arisen is not a known debt or obligation for 

which the officers of a corporation undergoing dissolution must 

provide.” (Peñasquitos, Inc. v. Superior Court (1991) 53 Cal.3d 

1180, 1191, superseded by Corp. Code, § 2011 on another 

ground.)

The certificate of dissolution for ABC was an exhibit at 

trial. The face of the documents shows Reese checked a preprinted box stating: “The corporation’s known debts and 

liabilities have been adequately provided for by their assumption, 

and the name and address of the assumer is ___.” Reese listed 

herself as the assumer.

2 The remainder of the subdivision provides: “If there are 

known debts or liabilities for payment of which adequate 

provision has been made, the certificate shall state what 

provision has been made, setting forth the name and address of 

the corporation, person or governmental agency that has 

assumed or guaranteed the payment, or the name and address of 

the depositary with which deposit has been made or any other 

information that may be necessary to enable the creditor or other 

person to whom payment is to be made to appear and claim 

payment of the debt or liability.” (Corp. Code, § 1905, 

subd. (a)(2), italics added.)
18

The record shows appellants served their notice of 

rescission and demand letter on September 1, 2016. Reese signed 

and mailed the certificate of dissolution on September 9, 2016. 

Appellants filed their complaint in this action on September 15, 

2016.

The notice of rescission demanded the “return of 

[appellants’] advance payment and expenses” in the amount of 

$60,000. Appellants did not explain how they had arrived at this 

amount, and on appeal they simply refer to the letter as 

demanding a return of their down payment.3 The record shows 

appellants were aware when they sent their rescission notice that 

Phillips had billed Medicare for services on their behalf in 

August, but that letter contains no demand that such monies be 

turned over to appellants when received by ABC. Appellants did 

make such claim two weeks later in their complaint, alleging that 

they were entitled to the return of “the $55,570 they paid for the 

Business and billing services, as well as the monies received for 

home care services after August 01, 2016.” Thus, on the record 

before us, the turnover of $12,705.12 in billed payments was not 

a known liability when Reese completed the certificate of 

dissolution.

3 The down payment itself totaled $50,000, and appellants 

have identified an additional $4,070 in payments to Reese and 

Phillips for rent, IRS liabilities, consulting services, and billing 

services for a total of $54, 070. Although appellants use the 

$54,070 amount on appeal they allege in their complaint that the 

amount they paid to respondents was $55,570.
19

Appellants further contend Reese had “an obligation to 

discover and provide for potential liabilities even if unknown or 

contingent,” prior to filing the Certificate of Dissolution. The 

issue whether Reese failed to satisfy her obligations when 

dissolving ABC and whether such a failure rendered her 

personally liable for any unknown liabilities of ABC is far beyond 

the scope of the trial of this matter, and we do not consider it on 

appeal.4

4 We recognize appellants contend the trial court removed 

Reese from the judgment without giving them an opportunity to 

respond to the removal, but appellants were clearly aware before 

the trial court issued its tentative ruling that Reese would not 

ordinarily be liable for ABC’s liabilities. They noted in their 

closing trial brief that Reese had assumed “all of ABC, Inc’s 

liabilities” in the certificate of dissolution. This was inaccurate, 

and served to obscure the very issue which appellants now 

belatedly wish to have decided: whether the billing payments 

represented a “known” liability for ABC.
20

DISPOSITION

The judgement is affirmed. Respondents are awarded 

costs.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

STRATTON, Acting P. J.

We concur:

WILEY. J.

OHTA, J.*

* Judge of the Los Angeles Superior Court, assigned by the 

Chief Justice pursuant to article VI, section 6 of the California 

Constitution.