Bermudo v. Tahmassebi

 

 

 

 

 

 

 

 

 

Filed 10/7/13  Bermudo v. Tahmassebi 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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  This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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

 

 
>

ISMAEL BERMUDO, JR.,               Plaintiff and Respondent,               v.   FARHAD TAHMASSEBI et al.,               Defendants and Appellants.

B240892         (Los Angeles County       Super. Ct. No. YC059960)

 

            APPEAL from
a judgment of the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County.  William G.
Willett, Judge.  Affirmed.

 

            John
Schlanger, for Defendants and Appellants Farhad Tahmassebi and Euro American
Auto Co., Inc.

 

            Law Offices
of Philip Landsman and Philip Landsman, for Plaintiff and Respondent Ismael
Bermudo.

 

____________________________________

           

Ismael
Bermudo filed suit against Farhad Tahmassebi and Euro American Auto Co., Inc.
(Euro; collectively defendants) for damages arising out of Bermudo’s purchase
of an automobile.  In brief, although
defendants were obligated to pay off the balance of a loan used to finance
Bermudo’s trade-in vehicle, they did not pay off the loan.  As a result, Bermudo was subject to
collections efforts by the bank holding the loan, his credit score declined,
and he was forced to file suit against the bank and defendants.  Following a bench trial, the court entered
judgment in Bermudo’s favor and awarded him $31,760 in damages.  On appeal, defendants argue insufficient
evidence supported the court’s liability findings on claims for href="http://www.fearnotlaw.com/">fraud and unlawful business practices,
and the damages award was not supported by substantial evidence.  We affirm the trial court judgment.

FACTUAL AND PROCEDURAL BACKGROUND

            In February
2008, Bermudo decided to purchase a used Mercedes Benz SL500 (SL500) from
Euro.  He arranged with Euro to trade in
his old vehicle, a Mercedes Benz 430CLK (430CLK).  Bermudo had financed the purchase of 430CLK and
still owed Capital One Bank $31,760 on the loan (Capital One loan).  To facilitate the purchase of the SL500, Euro
drew up a contract providing Bermudo would finance over $64,000.  Euro told Bermudo that of the over $64,000
“purchase price,” $31,760 was to pay off the loan on the 430CLK.  Bermudo agreed, understanding that he would
no longer be responsible for the loan on the 430CLK.  He gave Euro the keys to the 430CLK, and took
the keys for the SL500.  Tahmassebi was
then President of Euro.  He was involved
in arranging the financing for Bermudo’s transaction.

            Despite the
arranged financing, and Euro’s agreement to pay off the outstanding loan
balance on the 430CLK, Euro did not pay off the Capital One loan.  Euro paid approximately $8,000 on the loan
balance.  In June 2008, Capital One sent
Bermudo a letter indicating he owed money on the 430CLK loan.  Bermudo called Capital One to inform the bank
he had traded in the car.  Bermudo also
called Euro and spoke to Tahmassebi. 
Tahmassebi said he would take care of the problem.  In August 2008, Euro sent Capital One a check
for the remaining loan balance, but the check was rejected due to insufficient
funds.  At some point, despite the
outstanding loan balance, Capital One sent Euro the title for the 430CLK.  In or around September 2008, Euro resold the
car to a third party.

            Meanwhile,
in September 2008, Bermudo began receiving monthly account summaries from
Capital One demanding that he make payments. 
The Capital One collections department began handling the matter.  Bermudo repeatedly attempted to clear up the
situation.  By February 2009, Bermudo was
receiving regular written correspondence and telephone calls from Capital One,
demanding payment.  Bermudo tried calling
Tahmassebi, but was unable to reach him. 
Tahmassebi did not respond to Bermudo’s calls.  Bermudo sent letters to Euro, but received no
response.  In January 2009, Capital One
turned the file over to NCO Financial Systems, Inc., a collections agency.  The delinquent account was reported to the
credit reporting agencies.  Bermudo’s
credit score dropped over 100 points. 

            Finally,
Bermudo hired counsel and filed suit against Capital One and defendants.  He reached a resolution with Capital One in
or around November 2009.  As part of the
settlement, Capital One paid him $3,000 and deleted the “negative remarks” from
his credit history.  Bermudo paid the
$3,000 to his attorneys.  As of February
2011, Bermudo’s credit score had returned to its pre-incident level. 

            By early
January 2012, Bermudo had paid over $23,029 in legal fees, and still owed an
additional $3,852.  He was unable to pay href="http://www.mcmillanlaw.com/">counsel to represent him at the one-day
bench trial.  At trial, defendants did
not deny they failed to pay off the loan for the 430CLK, as they had
agreed.  Tahmassebi testified Euro did
not complete the payoff because of “financial difficulty,” but claimed it
intended to make the payment when it entered into the contract with
Bermudo.  Defendants’ counsel argued there
was no evidence of fraud, and Bermudo had not established he sustained any
recoverable damages or proved their amount.

            Neither
party requested a statement of decision. 
In a brief written ruling, the trial court found Euro liable for damages
on all causes of action pled in the complaint.href="#_ftn1" name="_ftnref1" title="">^[1]  The court found Tahmassebi liable for fraud
and unlawful business practices under Business and Professions Code section
17200.  The court explained that under
“Vehicle Code section 11711, [subdivision] (a) . . . a person
shall have a right of action against a dealer, his salesman, and the surety upon the dealer’s bond for any fraud
practiced on him or fraudulent representation made to him by a licensed dealer
or one of such dealer’s salesmen acting for the dealer, for failure to pay for
a vehicle.  Damages shall not exceed the
value of the vehicle sold to the dealer.” 
The court concluded Tahmassebi acted as a “salesman.” 

The court found defendants’ actions
caused a decrease in Bermudo’s credit score, and caused him emotional distress
and inconvenience.  The court further
found Bermudo proved damages of $31,760, and was entitled to attorney fees and
costs.  Defendants timely appealed from the
judgment.

DISCUSSION

>I.          Substantial Evidence Supported the
Findings of Fraud and Violation of Business and Professions Code section 17200

            On appeal,
defendants contend that while the evidence may have demonstrated Euro breached
the contract with Bermudo, there was no evidence of fraud.  This contention is meritless.  “We review a challenge to the trial court’s
factual findings under the substantial
evidence test.  [Citations.]  We presume the record contains evidence
sufficient to support the judgment, consider the evidence in the light most
favorable to the judgment, and resolve all conflicts in favor of the judgment.name=Document1zzF00112014486783> 
[Citation.]”  (>County of San Bernardino v. Walsh (2007)
158 Cal.App.4th 533, 540, fn. omitted.)

Here, the evidence established
defendants agreed Euro would pay off the balance of the loan outstanding on the
430CLK as part of the transaction in which Bermudo purchased the SL500.  The evidence was undisputed that despite this
agreement, defendants did not immediately pay off the Capital One loan after
the contract was entered, and they received the financed amount of over
$64,000.  The court could reasonably
infer from this evidence that defendants never intended to pay off the Capital
One loan, as agreed.  The court was free
to find not credible Tahmassebi’s testimony to the contrary.  It was also undisputed that defendants sent
Capital One a bad check.  There was no
evidence offered suggesting this was due to mistake or ignorance.  There was also evidence that defendants
resold the 430CLK, but still did not pay off the Capital One loan.  There was uncontradicted evidence that
Tahmassebi deliberately avoided Bermudo’s communications about the Capital One
loan.  Bermudo eventually had no choice
but to sue Capital One and defendants, thus incurring significant legal
fees.  Indeed, the evidence was
overwhelming that defendants misrepresented that they would pay off the Capital
One loan after receiving the funds Bermudo borrowed as part of the SL500
transaction; they knew they had no intention of doing so; they intended to induce
Bermudo to rely on that misrepresentation to enter the contract for the SL500;
Bermudo justifiably relied on the misrepresentation; and he was damaged
thereby.  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) 

Similarly, there was substantial
evidence of defendants’ liability for unlawful, unfair, or fraudulent business
practices or acts under Business and Professions Code section 17200.  The evidence identified above was sufficient
to establish defendants’ actions were a “business act or practice.”  (Klein
v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 968.)  Moreover, as the trial court concluded,
Vehicle Code section 11711, subdivision (a) creates a private right of action
for any person suffering loss or damage by reason of any fraud or fraudulent
representation made by a licensed dealer or dealer’s salesman, when there is a
contract furnished by the dealer and containing terms the dealer has
violated.  Liability under Business and
Professions Code section 17200 could be premised on this Vehicle Code
provision.  (Farmer Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 383; >People v. James (1981) 122 Cal.App.3d
25, 35.)  On appeal, defendants
argue the only evidence of an unlawful business practice offered at trial
concerned the value of the SL500, and there was no evidence that the stated
price of $59,000 was inaccurate.  This
argument fails.  Irrespective of the
value of the SL500, the evidence established that, pursuant to the parties’
agreement, defendants were required to pay off the Capital One loan on the
430CLK, the over $64,000 would have more than covered the outstanding loan
balance, defendants did not use the money to pay off the loan, leaving Bermudo
responsible for an obligation defendants had contracted to assume.  We reject the contention that this was not an
unlawful, unfair, or fraudulent business act.

II.        Substantial
Evidence Supported the Damages Award

The trial court awarded Bermudo
$31,760, exclusive of attorney fees and costs. 
Defendants contend the damages award was not supported by substantial
evidence.  We disagree.

Bermudo’s operative complaint
sought “general, special, and actual damages”; “incidental and consequential
damages”; restitution of monies expended; rescission of the purchase contract;
injunctive relief; “punitive and statutory damages”; and reasonable attorney
fees and costs.  At trial, Bermudo
confirmed he was seeking damages for mental suffering and damage to his
reputation.  In its ruling, the court
noted defendants’ actions caused a decrease in Bermudo’s credit scores “as well
as emotional distress and inconvenience to Plaintiff.”  The court concluded Bermudo proved damages in
the sum of $31,760.

On appeal, defendants argue no
substantial evidence supported the amount of the damage award.  However, we conclude there was sufficient
evidence to support an award of damages for emotional distress.

“In order to recover damages for
emotional distress, the injury suffered must be severe, i.e., substantial or
enduring as distinguished from trivial or transitory.  [Citation.] 
Such injury may include ‘ “all highly unpleasant mental reactions, such
as fright, horror, grief, shame, humiliation, embarrassment, anger, chagrin,
disappointment, worry and nausea.” 
[Citation.]’  [Citation.]”  (Young
v. Bank of America (1983) 141 Cal.App.3d 108, 114 (Young).)  The factfinder—in
this case, the trial court—is allowed significant discretion in awarding
emotional distress damages.  We must
uphold an award of damages whenever possible. 
(Westphal v. Wal-Mart Stores, Inc.
(1998) 68 Cal.App.4th 1071, 1078.)  “
‘The evidence is insufficient to support a damage award only when no reasonable
interpretation of the record supports the figure.’  [Citation.]” 
(Rony v. Costa (2012) 210
Cal.App.4th 746, 754 (Rony).)  Even where there is little direct evidence of
emotional distress, the circumstances of the defendant’s unlawful actions may
support inferences as to the nature and extent of the emotional distress. 

Thus, as Bermudo points out on
appeal, in Green v. Rancho Santa Margarita
Mortgage Co. (1994) 28 Cal.App.4th 686, the husband plaintiff in a housing
discrimination case testified he was angered by the discriminatory acts, he may
have taken a Tylenol, and his wife drank “ ‘Maalox by the bottle.’ ”  (Id.
at p. 699.)  The appellate court
determined this testimony, when considered in the context of the case, was
sufficient for the jury to find emotional distress.  The plaintiffs, a married couple, were
attempting to move to a safer neighborhood and had spent years working and saving
to find a secure place to live.  The
court thus concluded: “There was no legal requirement that the jury limit its
consideration of emotional distress to just [plaintiff’s] immediate reaction
and a few bottles of Maalox.  The jury
could have considered the importance of the home purchase for the [plaintiffs]
in the context of the long hours and years of hard work that had gone into
being able to make the leap from Compton to Coto de Caza. Given such evidence,
the jury would have been amply justified to base the entirety of its award on
emotional distress alone.”  (>Id. at p. 700.)

Here, the record established
Bermudo expended significant time and energy attempting to remedy the effects
of defendants’ fraudulent conduct.  He
detailed his numerous attempts to contact defendants, and their refusal to
respond.  He also described the constant
demands for payment from Capital One and its collection agency, and the
significant decline in his credit rating, which he was apparently
monitoring.  The ordeal lasted months,
leading Bermudo to eventually retain counsel. 
A settlement with Capital One was not reached until well over a year
after Bermudo received the first letter from Capital One indicating he still
owed the bank money.  The trial court
could justifiably interpret Bermudo’s conduct in response to defendants’
actions as an indication of his humiliation, frustration, worry, and eventual
desperation.  The court could reasonably
find Bermudo suffered significant emotional distress, as would any reasonable
person under such circumstances.  (See >Young, supra, 141 Cal.App.3d at p. 115; >Rony, supra, 210 Cal.App.4th at p.
756.)  And, as in Green, given the evidence, the trial court could properly base the
entire damages award on emotional distress. 
Thus, we need not consider defendants’ remaining arguments regarding the
damages award. 

DISPOSITION

            The
judgment is affirmed.  Respondent shall
recover his costs on appeal.

 

 

                                                                                                BIGELOW,
P. J.

We concur:

 

 

                        RUBIN,
J.                              

 

 

GRIMES, J.