Court Opinion

ID: 3174882
Source: CourtListenerOpinion
Date Created: 2016-02-05 09:53:16.83908+00
Date Added: 2024-06-11T09:37:00.928088
License: Public Domain

Filed 2/2/16 Park v. Nazari CA2/3
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 THREE

CHOP WON PARK et al.,                                                B253685

         Plaintiffs and Respondents,                                 (Los Angeles County
                                                                     Super. Ct. No. BC422025)
         v.

KELLY NAZARI et al.,

         Defendants and Appellants.

         APPEAL from a judgment of the Superior Court of Los Angeles County,
Malcolm Mackey, Judge. Affirmed in part; reversed in part.
         Law Offices of Carpenter, Rothans & Dumont and David G. Torres-Siegrist for
Defendants and Appellants.
         Olson Law Firm, Shawn M. Olson and Kevin A. Spainhour for Plaintiffs and
Respondents.
                                ___________________________________
                                   INTRODUCTION
       Plaintiffs and respondents Chop Won Park and True World, LLC bought a truck
stop business. When the business failed, plaintiffs sued defendants and appellants Crystal
Sand, Inc., Shawn Nazari, Shahrokh Nazari, and Kelly Nazari (collectively, the Nazari
defendants) for, among other things, breach of contract and for fraud. A jury found in
plaintiffs’ favor on the fraud causes of action. The Nazari defendants appeal. We reverse
an award of prejudgment interest to plaintiffs but otherwise affirm the judgment.
                                    BACKGROUND1
I.     Plaintiffs buy the truck stop business.
       According to the operative pleading, Kelly Nazari owned land located on State
Highway 58 in Mojave. Crystal Sand, which was controlled by Kelly’s son Shahrokh
Nazari, owned the truck stop business (Truck Stop), located on the land. In 2008, Chop
Won Park, Bonnie Nguyen, Barnabas Shin, and Ho K. (Joseph) Suh formed True World,
LLC, to buy and to manage the Truck Stop. Apparently pursuant to two “commercial
property purchase” agreements, the business and land were sold to True World for $2.6
million. The buyer was True World. It is unclear who were the sellers.2 Park, Nguyen,
and Shin executed a $500,000 promissory note in favor of Shahrokh Nazari. Park,
Nguyen, Shin, and Suh executed a $1 million promissory note in favor of Kelly Nazari.
Park, Nguyen, Shin, and Suh personally guaranteed payments under the purchase
agreements. The purchase agreements and notes in the clerk’s transcript contain attorney
fees provisions.

1
       The usual rules on appeal from a judgment rendered after a trial require us to view
and to state the facts in the light most favorable to the judgment. (Blanks v. Seyfarth
Shaw LLP (2009) 171 Cal.App.4th 336, 346, fn. 2.) We are hindered in giving such a
statement by appellant’s designation of 20 volumes of clerk’s transcripts but just three
reporter’s transcripts, containing primarily the testimony of Shawn Nazari, from an
almost two-week trial.
2
        One agreement in the clerk’s transcript is signed by Kelly Nazari and the other
identifies “Zahra Gavidale” as the seller, but Shawn Nazari testified at trial that the
“seller was the family, my wife.”
                                             2
II.    The lawsuits.
       In September 2009, Park and True World filed a complaint in Los Angeles
Superior Court. In 2011, they filed a third amended complaint against Man Wong Won,
Shahrokh Nazari, Crystal Sand, Suh, Shin, Kelly Nazari, and Remax Pro, alleging 24
causes of action for, among others, fraud/intentional misrepresentation, fraud/active
concealment, negligent misrepresentation, and breach of contract. Plaintiffs alleged that
Park, a Korean American immigrant who spoke little or no English, heard about the
Truck Stop from his acquaintance, Suh. Suh, along with Shin, “conned” Park into
investing in the Truck Stop. The sellers also engaged in a fraudulent scheme against
plaintiffs: the sellers required $1.5 million up front, extended $1.5 million in mortgages
to be held by Kelly and Shawn Nazari, and required personal guarantees. When the
buyers became unable to meet their monthly mortgage payments, the sellers forced a
foreclosure. In furtherance of this scheme, sellers concealed from plaintiffs that the
business was foundering and misrepresented that the business generated $60,000 per
month in net profits.
       In January 2010, Shawn Nazari (Kelly Nazari’s husband and Shahrokh Nazari’s
father) filed a complaint for damages in Kern County against Sunshine Truck World
Corp.,3 Park, Nguyen, Shin, and Suh, based on the $500,000 promissory note and
personal guaranty. Shawn Nazari alleged that the $500,000 promissory note executed in
favor of Shahrokh Nazari was assigned to him (Shawn Nazari), and that the note was in
default. This Kern County case was transferred to and consolidated with Park’s and True
World’s action in Los Angeles County.
       Cross-complaints were filed in the action. Shin, Man Wong Won, and Suh cross-
complained for indemnity against Crystal Sand, Shahrokh Nazari, and Park. Kelly
Nazari cross complained for waste and for indemnification against Park, Nguyen, Shin,
Suh, and True World. Kelly Nazari alleged that cross-defendants willfully mismanaged

3
       It appears that the buyers created two entities: Sunshine Truck World Corp. to
buy the business and Truck World, LLC to buy the land.

                                             3
the Truck Stop business, allowing it to deteriorate and jeopardizing the security for the
promissory note. She further alleged that under the purchase agreement, cross-
defendants agreed to indemnify and hold her harmless from all losses, claims, expenses
and liability.
III.   The settlement of Man Wong Won, Shin and Shuh.
       Before trial, Man Wong Won, Suh, and Shin entered into a settlement agreement,
agreeing to pay $425,000 to Park and True World. Over the Nazari defendants’
objection, the trial court granted the settling defendants’ application for good faith
settlement.
IV.    The trial and the jury’s special verdict.
       The matter proceeded to a jury trial on August 26, 2013. The jury rendered a
special verdict on September 11, 2013. The jury first found that the Nazari defendants
were “co-owners of the business for profit,” were acting within the scope of their
authority when the business was sold; combined their property, skill or knowledge to run
the business; had an ownership interest in and joint control over the business; and agreed
to share business profits.
       The jury found in plaintiffs’ favor on intentional misrepresentation and
concealment causes of action. As to both, the jury found that defendants engaged in “the
conduct with malice, oppression, or fraud.” On both the intentional misrepresentation
and concealment causes of action, the jury found that True World suffered $558,626.07
in out of pocket damages and that Park suffered $661,714 in damages.
       There were two “Breach of contract” headings. Under the first, the jury found that
plaintiffs did not enter into a contract with Shahrokh Nazari but that they did enter into a
contract with Crystal Sand, Shawn Nazari, and Kelly Nazari. Plaintiffs, however, failed
to do all or substantially all of the significant things the contract required and their
performance was not excused. Under the second breach of contract heading, the jury
found that Park and Shawn Nazari entered into a contract—presumably the personal

                                               4
guaranty—but that Shawn Nazari did not do all or substantially all of the significant
things the contract required and his performance was not excused.
       Under the heading “Apportionment,” the jury assigned “responsibility for
plaintiffs’ harm” to the parties. As to plaintiff Park, the jury assigned: 0 percent to
Crystal Sand, Ly Vu, Suh, Nguyen and to plaintiff Park; 5 percent each to Shahrokh
Nazari and Kelly Nazari; 10 percent to Shin; 50 percent to Shawn Nazari; and 30 percent
to plaintiff True World. As to plaintiff True World, the jury assigned: 0 percent to
Crystal Sand, Park, Ly Vu, Shin, Suh, and Nguyen; 5 percent each to Shahrokh Nazari
and Kelly Nazari; 50 percent to Shawn Nazari; and 40 percent to plaintiff True World.
       On September 12, 2013, the second phase of trial began on punitive damages. The
jury awarded $100,000 in punitive damages to Park against Shawn Nazari.
       After the verdict, the Nazari defendants asked the trial court to set off the amount
paid by the settling defendants against the judgment. The court found that the Nazari
defendants were entitled to a $410,000 setoff.4
       The trial court entered judgment on November 1, 2013. The judgment in favor of
Park was $661,714 plus prejudgment interest in the amount of $367,837.41, less the
$410,000 setoff, plus $100,000 in punitive damages. The judgment in favor of True
World was $558,626.07 plus $310,538.45 in prejudgment interest. Pursuant to a directed
verdict entered September 6, 2013, judgment was entered against Kelly Nazari on her
cross-complaint and in favor of Park, True World and Nguyen. The court awarded
attorney fees to plaintiffs in the amount of $487,329 plus costs.
                                     CONTENTIONS
       The Nazari defendants contend I. the trial court failed to “apply apportionment”
as reflected in the special verdict; II. the court erred by awarding prejudgment interest;

4
        The record references September 26, 2013 orders about set off, prejudgment
interest, and valuing waiver of costs and attorney fees for the settling defendants. Neither
those orders nor the reporter’s transcript from any hearing on the set off and related
issues is in the record.

                                              5
III. the court abused its discretion by awarding attorney fees; and IV. the court failed to
apply a setoff valuation to the “waiver of attorney fees and costs.”5
                                       DISCUSSION
I.     Apportionment.
       The jury apportioned “responsibility for plaintiffs’ harm” among the parties,
including to plaintiff True World. The Nazari defendants contend that the judgment must
be reversed because the trial court failed to apply this apportionment. We disagree.
       Apportionment under comparative fault principles to a plaintiff is improper where,
as here, defendants were found liable for intentional torts. (See Heiner v. Kmart Corp.
(2000) 84 Cal.App.4th 335; Thomas v. Duggins Construction Co., Inc. (2006) 139
Cal.App.4th 1105, 1112-1113; Allen v. Sundean (1982) 137 Cal.App.3d 216, 226-227 [no
authority supports extending comparative fault principles to intentional torts].) In
Heiner, defendant Kmart argued that the jury should have been instructed on plaintiff
Heiner’s alleged contributory negligence to a battery. (Heiner, at p. 348.) Heiner, in
dicta, found that apportionment of fault for injuries inflicted in the course of an

5
        The Nazari defendants at oral argument contended that the jury’s fraud findings in
favor of plaintiffs were inconsistent with the jury’s finding against plaintiffs on the
breach of contract cause of action. Because this issue was not raised in appellants’
opening brief and was raised only at oral argument, we reject it. (Estate of McDaniel
(2008) 161 Cal.App.4th 458, 463 [“ ‘It is a clearly understood principle of appellate
review, so well established as to need no citation to authority, that contentions raised for
the first time at oral argument are disfavored and may be rejected solely on the ground of
their untimeliness’ ”].) In any event, no inconsistency in the verdict is apparent on this
limited record. Without, for example, the complete reporter’s transcript, jury
instructions, and closing argument, we cannot determine, as appellants’ counsel asserted
at oral argument, whether the “operative facts” underlying the fraud claims were identical
to the ones underlying the contract claim, or even ascertain which of the multiple
contracts in the record were at issue in the special verdict. (See generally Estrada v.
Ramirez (1999) 71 Cal.App.4th 618, 620, fn. 1 [appellant has a duty to provide an
adequate record to demonstrate error]; Rossiter v. Benoit (1979) 88 Cal.App.3d 706, 712,
overruled on another ground by Wilson v. Garcia (1985) 471 U.S. 261.) To the extent the
record here precludes adequate review, we make all reasonable inferences in favor of the
judgment. (Rossiter, at p. 712.)

                                              6
intentional tort was improper. (Id. at p. 349.) Rather, there is an “unbroken line of
authority barring apportionment where, as here, the defendant has committed an
intentional tort and the injured plaintiff was merely negligent.” (Id. at p. 350.) This
“unbroken line of authority” includes cases declining to apply comparative negligence
principles in business litigation. (Carroll v. Gava (1979) 98 Cal.App.3d 892, 896-897;
accord, Godfrey v. Steinpress (1982) 128 Cal.App.3d 154, 176 [contributory negligence
has no application to fraud by concealment].)
       We agree that comparative fault principles have no application to a case such as
this, where the jury found defendants liable for intentional torts. Such principles have no
application for the additional reason that the jury made no clear finding that plaintiffs
were negligent. The jury apportioned 30 percent of “responsibility for [Park’s] harm” to
plaintiff True World and 10 percent to codefendant Shin. The jury apportioned 40
percent of “responsibility for [True World’s] harm” to True World. What this means is
unclear. There were no findings of fact regarding True World’s “responsibility for the
harm.” Instead, as to intentional misrepresentation, the jury found that the Nazari
defendants knowingly or recklessly made a false representation to plaintiffs and that
plaintiffs reasonably relied on that representation. The jury similarly found, as to
concealment, that the Nazari defendants intentionally failed to disclose an important fact
that plaintiffs did not know and could not have reasonably discovered and that plaintiffs
reasonably relied on the deception. Given these express findings, the jury’s
apportionment of partial responsibility for “plaintiffs’ harm” to plaintiff True World is
ambiguous.
       The Nazari defendants, however, failed to provide a record on appeal that might
explain the ambiguity. Although there were approximately 13 days of trial, defendants
designated partial transcript excerpts from six days, none of which include, for example,
the jury instructions or any explanation of the verdict form. In the absence of a record
explaining the verdict, we reject the Nazari defendants’ argument. (Estrada v. Ramirez,

                                              7
supra, 71 Cal.App.4th at p. 620, fn. 1; Rossiter v. Benoit, supra, 88 Cal.App.3d at
p. 712.)
II.    Prejudgment interest.
       Although the jury was not asked whether plaintiffs were entitled to prejudgment
interest on the intentional misrepresentation and concealment causes of action, the trial
court awarded prejudgment interest to plaintiffs: $367,837.41 to Park and $310,538.45 to
True World. This was error. “In an action for the breach of an obligation not arising
from contract, and in every case of oppression, fraud, or malice, interest may be given, in
the discretion of the jury.” (Civ. Code, § 3288, italics added.) This language has been
construed to mean that the trier of fact, whether jury or court, appropriately decides the
issue of prejudgment interest under this section. (Michelson v. Hamada (1994) 29
Cal.App.4th 1566, 1586-1587; Bullis v. Security Pac. Nat. Bank (1978) 21 Cal.3d 801,
814; Stein v. Southern Cal. Edison Co. (1992) 7 Cal.App.4th 565, 572.)
       The Nazari defendants were found liable on only the intentional tort causes of
action. In connection with those causes of action, the jury found that the Nazari
defendants engaged “in the conduct with malice, oppression, or fraud.” The special
verdict form, however, did not ask the jury to award prejudgment interest. Instead, the
trial court awarded prejudgment interest after the verdict was rendered. Because the trier
of fact, the jury, did not decide the issue, the award of prejudgment interest must be
stricken from the judgment. (Barry v. Raskov (1991) 232 Cal.App.3d 447, 457-458.)
III.   Attorney fees.
       The Nazari defendants argue that any attorney fee provision at issue limits
attorney fees to the party who prevailed on the contract cause of action, irrespective of
whether that party prevailed on other causes of action. (See generally Civ. Code, § 1717,
subd. (a);6 Maynard v. BTI Group, Inc. (2013) 216 Cal.App.4th 984, 992 (Maynard).)

6
       Civil Code section 1717 provides: “(a) In any action on a contract, where the
contract specifically provides that attorney’s fees and costs, which are incurred to enforce
that contract, shall be awarded either to one of the parties or to the prevailing party, then
the party who is determined to be the party prevailing on the contract, whether he or she
                                              8
Because plaintiffs did not prevail on their breach of contract cause of action, even though
they prevailed on their tort ones, they are not entitled to attorney fees, the Nazari
defendants argue. We disagree.
       The problem with this argument is that the Nazari defendants fail to quote in their
opening brief any attorney fee provision and make any specific argument regarding it,
although, it appears there were multiple agreements at issue; for example, two purchase
agreements, promissory notes secured by a deed of trust, and a personal guaranty. The
fee provision in the purchase agreements, for example, provided: “In any action,
proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the
prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the
non-prevailing Buyer or Seller, except” in the case of mediation. (Italics added.) Even if
we assumed that this fee provision applies, the Nazari defendants make no specific
argument why plaintiffs cannot recover attorney fees under it. (See generally Code of
Civ. Proc., § 1021; Santisas v. Goodin (1998) 17 Cal.4th 599, 608; Maynard, supra,
216 Cal.App.4th at p. 992 [“If the attorney fee provision does encompass noncontractual
claims, the prevailing party entitled to recover fees normally will be the party whose net
recovery is greater . . . whether or not that party prevailed on a contract cause of action”];
Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1340-1341 [fees
recoverable on tort claims where contract provided prevailing party was entitled to fees in
a “ ‘lawsuit or other legal proceeding’ ” to which “ ‘this Agreement gives rise’ ”];
Gonzales v. Personal Storage, Inc. (1997) 56 Cal.App.4th 464, 480.)
       Also, to the extent the record is unclear on issues such as, for example, who were
the parties to the purchase agreements and such issues are relevant to any attorney fee
issue, the absence of a complete reporter’s transcript or settled statement of the trial
and/or the hearing on the attorney fees motion hinders our ability to meaningfully assess
attorney fees issues. Given appellants’ failure to make any specific argument about any

is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees
in addition to other costs.”

                                               9
applicable attorney fee provision and to provide an adequate record for review, the issue
is deemed waived or abandoned. (Landry v. Berryessa Union School Dist. (1995)
39 Cal.App.4th 691, 699-700 [we may deem an issue abandoned when appellant cites
only general principles but fails to apply those principles to the circumstances before the
court]; Dills v. Redwoods Associates, Ltd. (1994) 28 Cal.App.4th 888, 890, fn. 1 [we do
not develop appellants’ arguments for them]; In re Marriage of Schroeder (1987)
192 Cal.App.3d 1154, 1164.)
       Similarly problematic is the Nazari defendants’ contention that an award of
attorney fees to Bonnie Nguyen must be reversed because she lacked “standing.” Kelly
Nazari cross-complained for waste and indemnification against Nguyen. A directed
verdict was entered on September 6, 2013 against Kelly Nazari and in favor of Nguyen. 7
Nguyen therefore was a party to the action. Also, to the extent the Nazari defendants
further contend that Nguyen may not recover her attorney fees because the cross-
complaint sounded only in tort and was not an action “on a contract,” the second cause of
action for indemnification appears to have been brought under the purchase agreement.8
       On this record, we also reject any argument that plaintiffs were not the “prevailing
party.” The prevailing party is the party who obtained a net recovery in the action.
(Maynard, supra, 216 Cal.App.4th at pp. 992, 994 [plaintiff who prevailed on her

7
       The reporter’s transcript contains a portion of the September 6, 2013 trial
proceedings but not the portion regarding the directed verdict. To the extent that
transcript is necessary to evaluate the Nazari defendants’ argument, the record is
inadequate.
8
        The cross-complaint also relied on the $1 million promissory note Nguyen
executed in favor of Kelly Nazari. That note provided: “If action be instituted on this
note, I/we promise to pay such sum as the Court may affix as attorney’s fees.” The deed
of trust to the note further states: “To Protect the Security of This Deed of Trust, Trustor
Agrees: [¶] . . . [¶] 3. To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all
costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable
sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and
in any suit brought by Beneficiary to foreclose this Deed.”

                                             10
negligence cause of action but not on her contract one could recover attorney fees]; see
also Santisas v. Goodin, supra, 17 Cal.4th at p. 622.) One should not confuse “prevailing
in the lawsuit” with “prevailing on the contract.” (Maynard, at p. 993.) Who is the
prevailing party for the purposes of determining attorney fees is a matter left to the trial
court’s discretion. (Hsu v. Abbara (1995) 9 Cal.4th 863, 871.)
       Other than the bare fact that plaintiffs did not prevail on their breach of contract
cause of action, the Nazari defendants offer no reason why the trial court abused its
discretion. None is apparent on this record. Plaintiffs prevailed on their intentional
misrepresentation and concealment causes of action. Park was awarded $661,714 in
damages (pre-setoff) plus $100,000 in punitive damages. True World was awarded
$558,626.07 in damages. In contrast, Shawn Nazari and Kelly Nazari lost on their cross-
complaints. Thus, plaintiffs, not the Nazari defendants, accomplished their litigation
objectives. (Maynard, supra, 216 Cal.App.4th at p. 992.)
       Finally, the Nazari defendants argue, for the first time in their reply, that the
attorney fees award was “excessive, abusive and not in compliance with the laws and
statutes.”9 Arguments raised for the first time in an appellant’s reply brief are waived.
(See, e.g., Habitat & Watershed Caretakers v. City of Santa Cruz (2013) 213 Cal.App.4th
1277, 1292, fn. 6.) Moreover, other than broadly asserting that the fee award was
“excessive,” the Nazari defendants fail to specify in what way the award was excessive.
(Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [when an appellant fails
to support a point with reasoned argument and citations to authority, we treat it as
waived].)
IV.    Failure to “offset waiver of costs and attorney fees.”
       The Nazari defendants do not challenge the finding that the settlement between
plaintiffs and Shin, Suh and Man Wong Won was in good faith. Rather, they claim that

9
      Plaintiffs requested $600,375.74 in attorney fees but the trial court awarded
$487,329.50.

                                              11
the $410,000 offset was inadequate because the “trial court did not provide any offset for
the waiver of costs and attorney’s fees.” The claim is meritless.
       After the jury rendered its verdict, the parties briefed the offset issue. The Nazari
defendants asked for a “set off in the full amount of $410,000 in addition to a valuation of
a waiver of costs and attorney fees contained in the settlement agreement.” The Nazari
defendants did not, however, submit a “valuation” of any such waiver. Indeed, it is
unclear what “waiver” the Nazari defendants are referring to. The settlement agreement
between defendants Man Wong Won, Shu and Shin and plaintiffs Park and True World
was for $425,000 and included, among other things, all claims, damages, costs, and
attorney fees.
       Moreover, the record shows that the trial court considered the issue. The
judgment states the total amount of the judgment “minus the set off of $410,000, as
reflected in the Court’s Order on September 26, 2013 . . . .” (Italics added.) Neither that
minute order nor any record of the hearing on the offset issue is in the record on appeal.
As the appellants, the Nazari defendants had the burden of demonstrating an abuse of
discretion. (See generally Wade v. Schrader (2008) 168 Cal.App.4th 1039, 1044 [ruling
granting or denying a Code Civ. Proc., § 877 settlement credit is reviewed under the
deferential abuse of discretion standard, except to the extent we must decide whether the
ruling was consistent with statutory requirements, in which case we apply the
independent standard of review].) This record is inadequate to make such a showing.
(Ballard v. Uribe (1986) 41 Cal.3d 564, 574-575 [we cannot evaluate contentions absent
transcript or settled statement; party challenging judgment has burden to show reversible
error].)

                                             12
                                    DISPOSITION
      The judgment is affirmed in part and reversed in part. The awards of prejudgment
interest to plaintiffs Chop Won Park and True World, Inc. are reversed. The judgment is
otherwise affirmed. The parties are to bear their own costs on appeal.

      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                                ALDRICH, J.

We concur:

             EDMON, P. J.

             JONES, J.


        Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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