Solganick v. SG Capital Holdings
Filed 4/3/08 Solganick v. SG Capital Holdings CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE
AARON SOLGANICK, Plaintiff and Respondent, v. SG CAPITAL HOLDINGS, LLC, Defendant and Appellant. | B198889 (Super. Ct. No. BC 331045) |
APPEAL from a judgment of the Superior Court of Los Angeles County. Ernest G. Williams, Judge. Affirmed.
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Robert Efthimos for Defendant and Appellant.
Law Offices of Joseph M. Lovretovich, Joseph M. Lovretovich and D. Aaron Brock for Plaintiff and Respondent.
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Aaron Solganick sued SG Capital Holdings, LLC (SG) for breach of contract, alleging that SG refused to pay him for services rendered. After a one-day bench trial, the court found in favor of Solganick. SG appeals, arguing that Solganick cannot recover because he performed services that required a brokers license, which he concededly did not possess. We conclude that the record does not support SGs argument, and we therefore affirm.
BACKGROUND
In December 2002, SG hired Solganick as a vice-president. His sole duties were to market the firm, promote the firm, and identify clients which the firm could then sign up as clients to be sold in merger and acquisition transactions. As compensation for Solganicks services, SG was to pay him 20 percent of any fees SG received from clients that he recruited.
At some point after he started working for SG, Solganick identified Zamba Corporation as a potential client for SG. In or around October 2003, when Zamba became a client and paid SG $5,000 to sell Zamba, SG paid Solganick 20 percent of the $5,000 fee.
In August 2004, SG succeeded in arranging for Technology Solutions Corporation to purchase Zamba, but the sale did not close until after Solganick left SG to accept a position with KPMG. When the sale closed, Zamba paid SG a fee of $450,000 in connection with the sale. SG, however, never paid Solganick any portion of that fee.
The record contains evidence that, in addition to identifying Zamba as a client for SG, Solganick performed certain services in connection with SGs efforts to sell Zamba to some potential buyers. The record contains no evidence, however, that Solganick either identified Technology Solutions as a potential buyer or performed any services in connection with Technology Solutions actual purchase of Zamba (apart from having identified Zamba as a client for SG in the first place).
Solganick sued SG for breach of contract and related claims. He sought to recover 20 percent of the $450,000 fee.
The case was tried to the court, which found in favor of Solganick and awarded him $90,000 in damages, plus attorneys fees and costs.[1] SG timely appealed.
STANDARD OF REVIEW
We review the trial courts conclusions of law de novo, and we review its findings of fact under the substantial evidence standard. (Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881, 888.)
DISCUSSION
SGs sole argument on appeal is that Solganick cannot maintain his action to recover 20 percent of the Zamba fee because he provided services in connection with the Zamba sale that require a brokers license, but he did not have a brokers license at that time. We disagree because (1) Solganicks contract did not call for him to perform broker services, and (2) the record contains no evidence that Solganick performed any broker services in connection with the sale of Zamba to Technology Solutions.
An individual who negotiates the sale of a business opportunity must possess a brokers license. (See All Points Traders, Inc. v. Barrington Associates (1989) 211 Cal.App.3d 723, 728-729.) Under the finders exception, however, one who merely finds and introduces the prospective buyer but does not negotiate the sale need not be licensed. (Zappas v. King Williams Press, Inc. (1970) 10 Cal.App.3d 768, 772-773.)
In principle, there are two ways the licensing requirement could bar Solganicks claims in this case. First, if Solganick contracted with SG to perform broker services without a license, then the contract would be illegal and unenforceable. Second, even if the contract itself did not call for Solganick to perform broker services, if he did perform such unlicensed services in connection with the sale of Zamba to Technology Solutions, the licensing requirement would bar his recovery in this case. (Cf. Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal.4th 974, 990-994.)
The first theory fails in this case because SG does not argue that Solganicks contract called for him to perform broker services. Indeed, SGs own managing director testified that Solganicks only duties under the contract were to market the firm and identify clients. Because the contract did not call for Solganick to perform unlicensed broker services, the contract was not illegal.
The second theory fails as well because the record before us contains no evidence that Solganick performed any unlawful services in connection with the sale of Zamba to Technology Solutions. The record does contain evidence that Solganick performed certain services in connection with some other potential buyers.[2] None of those potential buyers actually bought Zamba, however, and Solganick is not seeking compensation for those services. Rather, he is seeking compensation for the sale of Zamba to Technology Solutions. SG cites no evidence that Solganick performed any services whatsoever in connection with that sale (apart from having identified Zamba as a client for SG in the first place), and our review of the reporters transcript has revealed none. Indeed, the testimony of SGs managing director indicates that Technology Solutions was identified as a prospective buyer not by Solganick but rather through SGs own research.
Because Solganicks contract did not call for him to perform broker services, and because the record contains no evidence that he performed any broker services in connection with the sale of Zamba to Technology Solutions, his failure to possess a brokers license does not bar his recovery in this case. We therefore affirm the judgment in his favor.
DISPOSITION
The judgment is affirmed. Respondent shall recover his costs of appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, J.
We concur:
MALLANO, Acting P. J.
JACKSON, J.*
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[1] The award of attorneys fees was based on Labor Code section 218.5. SG does not challenge the award on appeal.
[2] SGs managing director testified that he was aware of only two instances in which Solganick performed such services, one relating to the Revere Group and one relating to another potential buyer called Burnt Sand.
* (Judge of the L. A. Sup. Ct. assigned by the Chief Justice pursuant to art. VI, 6 of the Cal. Const.)
