Court Opinion

ID: 6112003
Source: CourtListenerOpinion
Date Created: 2022-01-24 20:01:52.766951+00
Date Added: 2024-06-11T08:54:21.675375
License: Public Domain

Filed 1/24/22 Universe v. Harel CA2/5
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

 UNIVERSE, INC.,                                                B303091

           Plaintiff and Appellant,                             (Los Angeles County Super.
                                                                 Ct. No. LC107063)
           v.

 ASHER HAREL,

           Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of Los
Angeles County, Huey P. Cotton, Jr., Judge. Affirmed.
         Richard P. Towne for Appellant.
         Krishel Law Firm and Daniel L. Krishel for Respondent.

                              __________________________
       This appeal presents a rather unspectacular question: Is
there a legal difference between the execution of an assignment
and its effect on the rights of third parties. The answer is an
unsurprising, “Plenty,” and that drives the resolution of the
appeal.
       Plaintiff Universe, Inc. appeals from a judgment in favor of
defendant Asher Harel following a bench trial on Universe’s
complaint for breach of written contract. Universe had brought
suit as the assignee of a contract that Harel had entered into
with Universe’s assignor, Shaoul Amar. The trial court found
that, subsequent to the assignment, but prior to Harel receiving
notice of the assignment, Amar accepted payment in full
satisfaction of Harel’s obligations under the contract. Universe
now contends the trial court erred, because Harel had conceded
the validity of the assignment. That may have been true, but
Harel did not concede timely notice of the assignment to him
before payment. Nor was there substantial evidence of notice.
Accordingly, the assignment was ineffective as to Harel, whose
payment to Amar, the assignor, negated Universe’s claim. We
affirm the judgment.
       FACTUAL AND PROCEDURAL BACKGROUND
1.     Underlying Facts
       The dispute arose in the course of a real estate transaction.
Specifically, the parties had agreed to purchase a distressed
property, resell it, and split the profits.
       Universe is a corporation owned by Amar’s sister. The
record does not establish the precise nature of the business
relationship among Universe, Amar and his sister, but what is
clear is that Amar was acting on behalf of his sister and Universe
in the transaction with Harel. Universe and/or Amar identified

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the property; Harel was the investor who funded the transaction.
On June 23, 2014, Harel purchased, for $1,654,744.96, the
outstanding loans encumbering the property.1
      The agreement on which Universe brought suit was signed
by Amar and Harel on July 24, 2014. It provides, in its entirety:
“Upon close of the sale escrow [of the property] the total proceeds
shall be distributed as follows: [¶] The sum of $1,654,744.96
with interest on that sum from 6/23/2014 at the rate of 6% per
annum shall be paid to Asher Harel. [¶] If not previously
disbursed the sum of $100,000.00 shall be paid to Universe Inc
from funds due Asher Harel. [¶] All costs and charges for Seller
on the sale of [the property] shall be reimbursed to Asher Harel.
[¶] All remaining funds shall be divivided [sic] equally between
Asher Harel and or assignee and Sh[a]oul Amar and or assignee.”
The parties refer to this as the partnership agreement.
      After Harel purchased the debt, Universe obtained title to
the property from its owner, for an amount exceeding $133,000.2
Harel then paid Universe the $133,000 to purchase the title;
Harel took title in the name of an entity he owned. Universe
agreed that this payment satisfied Harel’s obligation to pay the
$100,000 under the partnership agreement.

1    The lenders do not appear to be related to Harel, Amar or
Universe.

2      Harel testified that he was surprised to discover that
Universe had actually acquired an interest in the property. He
had intended to obtain title from the prior owner by a deed in lieu
of foreclosure or foreclosure itself.

                                 3
       In September 2014, Harel foreclosed and obtained title with
a full credit bid at the trustee’s sale.3
       Harel then attempted to sell the property, as contemplated
by the partnership agreement. He received only one offer. The
prospective buyer agreed to a price of $1,850,000, but cancelled
the sale after discovering a problem with the foundation of the
house. Harel calculated that, if that sale had gone through, after
reimbursing himself for his $1,654,744.96 investment, his six
percent interest, real estate commission, and costs, there would
have been no profit on the sale to split with Amar under the
partnership agreement. But there was no sale.
       At this point, Harel decided to keep the property and
offered to buy Amar out for $36,000; Amar agreed. This
agreement was reflected in a November 17, 2014 document,
signed by Amar and Harel, stating, “As per our agreement, upon
receiving the wire transfer in the amount of $36,000 – I Shaoul
Amar will be paid in full for the 50 percent partnership interest
in [the property].” Wiring instructions followed.4 In December
2014, Harel and his wife moved into the house; they were still
living there at the time of trial.
       At trial, Amar agreed that Harel paid him the $36,000 as
he had directed. However, he took the position that the $36,000
was his “referral” or “consulting fee” for “the merger of the deal”

3    Harel, through an entity, owned the property but he
personally held the debt on it. Harel testified that he foreclosed
because he wanted clear title.

4    Amar handwrote “Mazal Tove” on the bottom, indicating
“Good luck.”

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and did not constitute his share of the profits under the
partnership agreement.5
       In fact, Amar and Universe took the position that the
$36,000 payment to Amar in November 2014 could not have
bought out Amar’s right to 50 percent of the profits because, in
June 2014, he had assigned that right to Universe, pursuant to a
written assignment.6 As the trial court found, there was no
dispute that Amar had assigned his rights. However, Harel
testified at trial that he had not known about the assignment
when he paid Amar $36,000 in satisfaction of Amar’s partnership
share.
2.     Pretrial Proceedings
       We limit our discussion of the pretrial proceedings to their
relevance to the sole issue on appeal: the assignment and Harel’s
knowledge of it.
       A.     Operative Complaint
       The operative pleading is Universe’s first amended
complaint, filed May 16, 2018. Universe alleged that Harel held
the trustee’s sale without giving notice to Universe, and claimed
that the trustee’s sale illegally deprived it of its interest in the
property and the partnership agreement.7 It alleged causes of

5    At trial, Amar admitted that neither “referral fee,” nor
“merging of the deal,” is found anywhere on the document.

6       Although the written assignment agreement, Exhibit C at
trial, is the key document on which Universe’s appeal hangs,
Universe has not made it part of the record on appeal.

7     Universe’s complaint alleged that it was the grantee of the
grant deed from the prior owner. Universe omitted the fact that

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action for breach of the partnership agreement and an
accounting.
       B.     Answer
       Harel answered, alleging a number of affirmative defenses,
including, “consent, waiver and/or release” and that Universe
lacked standing as it was not the real party in interest.
       C.     Summary Judgment Denial
       Harel then unsuccessfully moved for summary judgment.
The moving and opposing papers, and court’s ruling are not part
of the record on appeal. Universe relies on the court’s tentative.
The record does not indicate that the trial court adopted its
tentative, but both parties rely on the tentative on appeal. In
part, the court’s tentative ruling states, “There is no dispute that
Amar assigned his rights to plaintiff Universe the [day after the
partnership agreement].” The court denied summary judgment,
stating the $36,000 paid to Amar was “not relevant since long
before the payment Amar assigned his rights to Universe.” The
court’s tentative did not discuss whether Harel had had notice of
the assignment from Amar to Universe.
       D.     Trial Briefs
       Harel’s trial brief discussed the terms of the partnership
agreement, including the 50/50 profit split. As to the assignment,
the brief stated, “(As admitted by Amar, he assigned this ‘right’ to
profits to Universe.)”. In the itemization of “Facts/Issues
Established in Discovery,” Harel wrote, “Shaoul Amar assigned
his ‘rights’ to the ‘split of profit’ proceeds to Plaintiff Universe.”
It cited to Amar’s deposition testimony for this point. The brief

it had subsequently deeded the property to a Harel entity in
exchange for over $133,000.

                                  6
then argued that the $36,000 payment “was sent at Amar’s
direction and represented the ‘split of profits’ portion of the
agreement.”
       Universe’s amended trial brief stated that on or about the
same date as the partnership agreement, “Amar assigned his
rights in the Partnership Agreement to Plaintiff [Universe]. The
Assignment Agreement is Plaintiff’s Exhibit C. The fact of this
Assignment is also not in dispute.” 8
3.     Trial Testimony
       The only witnesses at trial were Amar and Harel. Among
other things, Amar testified to the existence of the assignment
agreement – Exhibit C. In cross-examination, Harel’s counsel
suggested the assignment document was created on the eve of
trial, and that Amar even had mistakenly dated it June 24, 2014,
rather than July 24, 2014 – thereby predating the partnership
agreement it was purportedly assigning. Amar disagreed.
       Harel testified that, when he paid Amar the $36,000 in
satisfaction of the partnership agreement, he had no knowledge
of Exhibit C or any assignment of Amar’s rights to Universe. He

8      Upon receiving the amended trial brief, Harel’s counsel
sent Universe’s counsel an email reading, “Your amended trial
brief incorrectly states or implies there is a stipulation
concerning the Assignment document (plaintiff exhibit C). There
is no stipulation as to that specific document; indeed it was never
produced until last week – long after the proposed stipulation
was requested.” In connection with briefing on Universe’s
subsequent new trial motion, Harel’s counsel submitted a
declaration stating that the written assignment agreement was
not produced in discovery and was only disclosed after the final
status conference before trial.

                                 7
testified that he did not know about the assignment prior to the
start of trial. Universe’s counsel attempted to impeach Harel.
But counsel’s tack was to show Harel was aware of the
assignment prior to trial. Thus, counsel’s questioning drew
attention to Harel’s purported admission of the existence of the
assignment in his 2019 motion for summary judgment; his
admission of its existence in his September 2019 trial brief, and
his supposed awareness of Amar’s September 2018 deposition
testimony regarding the assignment. Counsel made no effort to
show Harel was aware of the assignment prior to his $36,000
buyout of Amar on November 17, 2014. The tone of the cross
examination was more consistent with a discovery squabble
about whether the assignment document, Exhibit C, had been
produced prior to trial, not whether Harel had knowledge of the
assignment before the $36,000 payment.9
4.     Trial Court’s Statement of Decision and Judgment
       The trial court issued its ruling from the bench at the close
of trial, stating, “The one good thing is we all agree that there
was an assignment. The problem with the assignment, which is
fatal to the plaintiff’s case, is that there was no notice to the
defendant of the assignment prior to the payments that were
made on – made to Mr. Amar on November 17, 2014. And as
noted in [the] settlement – the $36,000 payment was in
settlement of the 50 percent partnership agreement. [¶] As the
assignor of the assignment, and as the recipient of the $36,000,

9     Again, we emphasize that the $36,000 payment was made
to Amar in November 2014; all of the litigation conduct on which
Universe relies (any admissions in summary judgment, Amar’s
deposition testimony, and the trial itself) all occurred years later,
in 2018 and 2019.

                                  8
Mr. Amar is charged with having received that money on behalf
of Universe. Universe may have a claim against Mr. Amar, but
not against Mr. Harel. [¶] Judgment for the defense.”
       At the court’s direction, Harel submitted a proposed
statement of decision. Universe submitted objections, stating
that the proposed statement of decision “does not address the
conflict between the multiple pretrial and trial assertions,
stipulations and findings in this action that Plaintiff’s Exhibit C
– the assignment from Shaoul Amar to [Universe] that is the
basis of this action – was known and disclosed to the parties, . . .
and is valid and enforceable.” Universe again pointed to evidence
that Harel had known of the assignment prior to trial. It did not
argue that Harel had notice of the assignment before he bought
out Amar.10 The court signed the proposed statement of decision.
Judgment in Harel’s favor was entered on November 14, 2019.
5.     Motion for New Trial
       On December 31, 2019, Universe filed a notice of intent to
move for a new trial, on the grounds of accident or surprise and
error of law. In Universe’s points and authorities, it asserted
Harel’s testimony that he had not known of the assignment “was
false and a surprise because Harel had stipulated on the record
multiple times, through his counsel, and the court had
determined, in its decision denying Harel’s motion for Summary

10     Universe argued, “The issue is simple. Up until the end of
trial and the Court’s announcement of its proposed decision in
Harel’s favor, the parties and the Court had agreed to the fact
and effect of the assignment. Accordingly, the [proposed
statement of decision] must now be corrected or clarified to
explain how the Court’s posttrial decision that Harel had never
heard of the assignment before trial can be reconciled with the
facts, evidence and prior findings.”

                                 9
Judgment, that the assignment existed, that he was aware of it,
and that it was effective. Universe relied on all of these up to and
during trial. Further, but for the elimination of this issue by
stipulation, the testimony would have been rebutted . . . .”
Universe submitted declarations of two additional witnesses –
Amar’s sister and an escrow officer – to the effect that they had,
in fact, informed Harel of the assignment in July 2014. There
was no suggestion that this evidence was newly discovered;
counsel simply represented that it had not offered the evidence
because it had believed it unnecessary.
       Harel opposed the motion for new trial as untimely, in that
the notice of intention to move for new trial was filed more than
15 days after the notice of entry of judgment. (Code Civ. Proc.,
§ 659, subd. (a)(2).) On the merits, he argued that there was no
stipulation that he had notice of the purported assignment prior
to making the buyout payment to Amar.
       The court denied the motion as untimely, holding it had no
jurisdiction to hear it. Specifically, Universe had relied on a
December 16, 2019 notice of entry of judgment in order to argue
that its December 31, 2019, notice of intention to move for new
trial was timely. But the court stated that a previous notice of
entry had been mailed to the parties by the clerk on
November 15, 2019, and that the December 16 notice (served “as
a courtesy” when Universe’s counsel had requested a new one)
did not restart the time within which a notice of intent could be
filed. The court added that the motion was not well taken, in
that Universe provided no evidence “of any stipulation or
agreement that Mr. Harel knew about the assignment when he
paid Amar or ever. The summary judgment ruling simply
observes that there was no dispute that the assignment was

                                10
made, not that it was established that Harel was aware of the
assignment or had been shown the written assignment.”
                           DISCUSSION
1.     Insufficiency of the Record
       Preliminarily, we address Universe’s failure to comply with
applicable court rules, as well as its failure to provide an
adequate record on appeal.
       First, Universe did not include in its appendix the notice of
appeal in violation of the rules of court. (Cal. Rules of Court,
rules 8.122(b)(1)(A), 8.124(b)(1)(A).) It also failed to include in its
appendix the notice of entry of judgment, also required by court
rules.11 (Id., rule 8.122(b)(1)(B).) An appellant’s appendix should
also include any filings or exhibits necessary for proper
consideration of the issues, including “any item that the
appellant should reasonably assume the respondent will rely on.”
(Cal. Rules of Court, rules 8.124(b)(1)(B), 8.122(b)(3).) Yet, as
noted above, the appellant’s appendix filed by Universe fails to
include Exhibit C – the relevant assignment – as well as the
briefing on the motion for summary judgment and Harel’s
opposition to the new trial motion.12 Despite the inadequacies of

11    This latter omission is particularly significant, because the
timeliness of Universe’s notice of intent to move for new trial
turns on the service date of the notice of entry of judgment.

12    Universe’s entire appellant’s appendix was less than 100
pages long and included none of the trial exhibits. Among other
absent documents, Universe failed to include the November 17,
2014 agreement, by which Amar agreed to accept $36,000 to be
“paid in full for the 50% partnership” on the property. While
Harel provided the document in his respondent’s appendix, this

                                  11
the record provided by Universe, we exercise our discretion to
consider the appeal. (Neville v. Chudacoff (2008) 160 Cal.App.4th
1255, 1261, fn. 5.)
       Nonetheless, it is the appellant’s burden to provide an
adequate record on appeal, sufficient to demonstrate error.
(Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1200-1201.) To
the extent the record fails to include the necessary documents, we
presume in favor of the judgment. (Id. at p. 1201.)
2.     Sufficiency of the Evidence at Trial
       On appeal, Universe argues that the trial court erred by
ruling in Harel’s favor “based upon [Harel’s] assertion for the
first time at trial that he had no notice or knowledge of the
assignment at the time of the sale, in contradiction to his prior
assertions, stipulation and the trial court’s findings that the
assignment was valid and enforceable.” Universe does not argue
for the application of any particular standard of review – not
suggesting, for example, that the trial court’s ruling was
unsupported by substantial evidence. Universe appears to take
the position that the court erred as a matter of law in not
concluding Harel was bound by his pretrial representations and
arguments that Amar’s interest in the partnership agreement
had been assigned to Universe. At bottom, it appears to us that
Amar is really arguing that substantial evidence did not support
the trial court’s finding that Harel did not have notice of the
assignment. We apply the substantial evidence standard of
review. (Lewis v. Ukran (2019) 36 Cal.App.5th 886, 891.)
       The argument fails for the simple reason that substantial
evidence does support the trial court’s finding that Harel did not

critical exhibit should have been included as part of the record
provided by Universe.

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have notice of the assignment prior to paying Amar the $36,000.
An assignee, of course, stands in the shoes of the assignor, taking
the assignor’s rights and remedies, subject to any defenses the
obligor has against the assignor prior to notice of the assignment.
(Casiopea Bovet, LLC v. Chiang (2017) 12 Cal.App.5th 656, 663.)
Here, Harel pursued the defense of release – he had paid Amar
$36,000 “in full for the 50% partnership interest in [the
property]” prior to receiving notice of the assignment. That Harel
might have conceded, for trial and pretrial motions, that Amar
had assigned his rights to Universe does not carry with it a
concession that he had notice of that assignment when he settled
the obligation with Amar.13
3.    Universe Does Not Properly Challenge the Denial of
      New Trial
      The only evidence Universe proffered in the trial court to
the effect that Harel knew about the assignment before the
$36,000 payment was not at trial but came in the form of the two
declarations Universe submitted in connection with its motion for
new trial. On appeal from the judgment, an appellant may raise

13     In any event, Universe’s appellate showing is insufficient to
demonstrate the concessions it claims. For example, Universe
relies on a statement in the court’s tentative ruling on the motion
for summary judgment, that, “[t]here is no dispute that Amar
assigned his rights to plaintiff Universe the next day [after the
partnership agreement].” But, (1) this is an excerpt from a
tentative ruling, not the court’s order; (2) even if it were an order,
it indicates only that Harel did not dispute the issue on summary
judgment, not that Harel conceded the issue for all purposes; and
(3) Harel’s moving papers would have indisputably addressed the
scope and limits of any such concession, but Universe failed to
include those papers in its appellant’s appendix.

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errors in connection with a ruling on a motion for new trial.
(Code of Civ. Proc., § 906.)
       The motion for new trial was denied because it was
untimely. At the same time the trial court suggested it was
substantively deficient as well. Universe acknowledged as much
in its opening brief, but only in its reply brief did it argue that the
trial court erred in concluding that the motion for new trial was
untimely. Points raised for the first time in a reply brief will not
be considered. (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754,
764.) Universe therefore cannot be heard to contest the denial of
the new trial motion.
                           DISPOSITION
       The judgment is affirmed. Universe is to pay Harel’s costs
on appeal.
       Having considered Harel’s motion for sanctions, Universe’s
opposition and the arguments made by counsel during oral
argument, the court denies the motion for sanctions.

                                             RUBIN, P. J.
WE CONCUR:

                         BAKER, J.

                         MOOR, J.

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