Judge: Daniel S. Murphy, Case: 21STCV36602, Date: 2025-05-19 Tentative Ruling

Case Number: 21STCV36602    Hearing Date: May 19, 2025    Dept: 32

BACKGROUND

            On October 5, 2021, Varouj Shekerdemian (Shekerdemian) filed this action against Desai Holdings USA, LLC dba R Bar (R Bar) and Rakesh David Desai (Desai). The operative First Amended Complaint, filed May 27, 2022, alleges the following causes of action: (1) failure to provide accurate wage records; (2) unfair business practices; (3) constructive discharge; (4) discrimination; (5) harassment; (6) violation of Civil Code section 51.7; (7) violation of the Bane Act; (8) intentional infliction of emotional distress; and (9) negligent infliction of emotional distress.

            Shekerdemian alleges that Desai hired him as the general manager at R Bar. Desai did not classify or pay Shekerdemian as an employee but rather as an independent contractor. Desai initially ignored Shekerdemian’s requests to be properly classified but eventually put Shekerdemian on the payroll as a traditional exempt employee. During Shekerdemian’s employment, Desai was allegedly abusive and racist towards Shekerdemian and R Bar’s employees and patrons. This resulted in multiple altercations, causing Shekerdemian to fear for his safety. Shekerdemian eventually resigned due to the hostile work environment. After Shekerdemian quit, Desai allegedly continued harassing Shekerdemian through racist and vulgar text messages and also visited Shekerdemian’s new place of employment.

            On June 13, 2023, R Bar and Desai filed a complaint against Shekerdemian (23LBCV01084). The complaint asserts (1) breach of fiduciary duty, (2) intentional interference with business relations, (3) contractual interference, (4) conversion, and (5) unfair competition. The complaint alleges that Shekerdemian appointed himself as head of R Bar, harassed customers, stole restaurant property, and tried to poach R Bar employees to Shekerdemian’s own business. The two cases have been deemed related, with this case (21STCV36602) as the lead case.

            On March 6, 2025, pursuant to the parties’ stipulation, the Court issued a decision on Shekerdemian’s first and second causes of action, as well as R Bar’s fifth cause of action. The Court found in favor of R Bar and Desai on Shekerdemian’s first and second causes of action. The Court found in favor of Shekerdemian on R Bar’s fifth cause of action.   

            The matter came on for trial beginning February 10, 2025. On February 20, 2025, the jury returned a special verdict, finding R Bar and Desai liable to Shekerdemian for discrimination and intentional infliction of emotional distress. The jury awarded Shekerdemian $48,000 in economic damages and $300,000 in non-economic damages, for a total of $348,000. The jury also awarded punitive damages in the amount of $150,000. The jury found for Shekerdemian on the cross-complaint, awarding nothing to R Bar. The Court entered judgment accordingly on March 17, 2025, awarding Shekerdemian $498,000 against R Bar and Desai, jointly and severally.

             On April 8, 2025, Defendants R Bar and Desai filed the instant motion for new trial, challenging the verdict in favor of Plaintiff Shekerdemian on the complaint. Plaintiff filed his opposition on April 11, 2025.  

LEGAL STANDARD

A verdict may be vacated, and a new trial granted, on the following grounds to the extent they materially affect the substantial rights of a party: (1) irregularity in the proceedings; (2) misconduct of the jury; (3) accident or surprise; (4) newly discovered evidence; (5) excessive or inadequate damages; (6) insufficiency of the evidence; or (7) error in law. (Code Civ. Proc., § 657.)

DISCUSSION

I. Sufficiency of the Evidence

a. Legal Standard

“A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, nor upon the ground of excessive or inadequate damages, unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should have reached a different verdict or decision.” (Code Civ. Proc., § 657.)

A trial court has “no power to act as a super juror and substitute its personal opinion for that of the jurors.” (Huy Fong Foods, Inc. v. Underwood Ranches, LP (2021) 66 Cal.App.5th 1112, 1126.) “The purpose of Code of Civil Procedure section 657 . . . is to allow the trial court to grant a new trial on those rare occasions when the jury's verdict is so at odds with any reasonable view of the evidence that judicial intervention is required to avoid a manifest miscarriage of justice.” (Ibid.)

b. Discrimination

Government Code section 12940, subdivision (a) prohibits an employer from discriminating against an employee based on a protected characteristic. In order to establish a claim of discrimination, Plaintiffs must prove: (1) they are in a protected class; (2) an adverse employment action was taken against them; (3) at the time of the adverse action they were satisfactorily performing their jobs; and (4) some other circumstance suggesting discriminatory motive. (Guz v. Bechtel (2000) 24 Cal. 4th 317, 355.)

Defendants argue that the verdict on discrimination is unsupported by the evidence because Plaintiff’s evidence was weak, and Plaintiff perjured himself.

            1. Evidence of Discrimination

However, there was ample evidence at trial supporting Desai’s racial animus. Plaintiff presented texts in which Desai repeatedly insulted Plaintiff’s Armenian ethnicity: “You are fooling your own Armenia ego;” “Ill fuck you over, armenia;” “We cheered to your armenian mojizmo;” “You stupid armenian machismo dickhead;” “Ok. Armenia. Try us;” “poor Armenian bitch;” “I told him you are Armenian. Bullshit mojusmo for poor people;” “we got rid of the racist Armenian nut job.” (Tokar Decl., Ex. D at 1-055 to 1-060.)

Even if these texts were sent after Plaintiff left his employment at R Bar, the jury was entitled to credit the evidence as proof of Desai’s racial animus. Moreover, Plaintiff testified that Desai insulted his Armenian heritage during his employment, such as denying the Armenian Genocide and calling Plaintiff an “Armenian nut job.” (Tokar Decl., Ex. A at 32:22-34:25.) The jury was entitled to take all of the evidence into account and conclude that Desai harbored racial animus and engaged in discrimination. The fact that Defendants presented contrary testimony at trial is not dispositive. The jury’s very purpose was to resolve such factual disputes, and the jury was entitled to credit Plaintiff’s evidence over that of Defendants.

            2. Perjury

Defendants also argue that Plaintiff perjured himself at trial through his testimony regarding an $8,000 check and a physical altercation. Defendants characterize the quoted testimony regarding the check as a “baldfaced lie” without explanation. (See Mtn. 4:7-22.) Defendants cite no evidence contradicting Plaintiff’s statement about the check. Defendants argue that Plaintiff “lied” about the physical altercation, again without citing evidence. (Mtn. 4:22-25.) Neither of these issues negates discrimination on the part of Defendants. As stated above, the jury was entitled to credit Plaintiff’s evidence of racial animus and find Defendants liable for discrimination. It is the role of the jury to resolve credibility issues. The jury was entitled to find Plaintiff credible despite Defendants’ attempts to prove otherwise. 

In sum, the record does not support a finding that the “jury clearly should have reached a different verdict or decision” on discrimination. (See Code Civ. Proc., § 657.)

c. Intentional Infliction of Emotional Distress

To state a cause of action for intentional infliction of emotional distress, a plaintiff must establish: (1) outrageous conduct by the defendant; (2) the defendant’s intention of causing, or reckless disregard of the probability of causing, emotional distress; (3) the plaintiff’s suffering severe or extreme emotional distress; and (4) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct. (Vasquez v. Franklin Management Real Estate Fund, Inc. (2013) 222 Cal.App.4th 819, 832.)  

Defendants argue Plaintiff failed to establish that the conduct was outrageous, that Defendants intended to cause emotional distress, or that the distress was severe.

            1. Outrageous Conduct

Defendants argue that the claim hinges entirely on a series of text messages and that Plaintiff had no “strong” evidence of outrageous conduct. (Mtn. 5:26-6:1.) However, the texts reveal vulgar and targeted attacks against Plaintiff, his personal trauma, and his relationships. For example, Desai sent the following messages to Plaintiff: “You fucked my family with a drunk bitch;” “This is why your dad and brother are dead;” “I told my family you are married, screwed you wife, living with a dying girl and mom in your mom is in a homeless shelter;” “Perhaps your moms homeless shelter will know you are feeding her rat poison;” “Enjoy Michelle. She still talks to her finance;” “Michelle fucked everything. While you slept;” “She fucked a polio guy over you;” “it was that dying bitch michrlle;” “I hope you drop dead like your dad brother and mom and Michelle to come soon.” (Tokar Decl., Ex. D at 1-054 to 1-058.)

The texts from Desai were also rife with threats: “Wish you luck at harbor I’ll be talking to ownership;” “Watch your words. I’ll go heavy on you on your theft and drunk attack wife that you you protect from your mom and wife;” “we’ve spoken to 7 gals that want a sexual harassment suit towards you;” “Push me. Ill fuck you over, armenia;” “Come in dickhead, broke ass bitch. Lets go. Your money your dying bitch money vs myself, my family and teris hospital, u fucking used;” “I will fuck up any job you go to;” “Try us. I’ve recruited a small army against you;” “I will have you and Ricky arrested for embellishment and breaking and entry;” “My dad is giving me $600k to fuck your bullshit life over. Be scared you unfratefull piece if shit;” “I’ll be talking to your bosses with sworn affidavits;” “Let’s play, you broke asshole Get $1MM ready;” “I must speak to your bosses soon. And have you removed;” “I will fuck you over for life.” (Tokar Decl., Ex. D at 1-054 to 1-060.) 

The jury was entitled to find that these messages represented persistent, targeted harassment which was outrageous and intended to cause emotional distress. Desai specifically attacked Plaintiff’s personal trauma and relationships, and threatened to ruin Plaintiff’s life. Defendants cite no authority to suggest that this cannot be considered outrageous conduct. The jury was not required to accept Defendants’ theory that Plaintiff was responsible for Desai’s conduct because Plaintiff intentionally provoked Desai. Overall, the record supports the jury’s finding that Defendants’ conduct was outrageous and intended to cause emotional distress.  

            2. Severe Emotional Distress

Lastly, Defendants argue that only Plaintiff testified to his emotional distress through leading questions and did not present corroborating evidence such as medical reports or witness testimony. However, “the testimony of a single person, including the plaintiff, may be sufficient to support an award of emotional distress damages.” (Crouch v. Trinity Christian Center of Santa Ana, Inc. (2019) 39 Cal.App.5th 995, 1014.) Defendants do not cite any improper leading questions that were presented to Plaintiff.

In sum, Defendants have failed to show that the “jury clearly should have reached a different verdict or decision” on the IIED claim. (See Code Civ. Proc., § 657.) 

II. Excessive Damages

            a. Legal Standard

            The standard for a new trial based on excessive or inadequate damages is the same as that for a new trial based on insufficiency of the evidence. That is, the verdict will not be disturbed unless the record shows that “the court or jury clearly should have reached a different verdict or decision.” (Code Civ. Proc., § 657.)

            b. Compensatory Damages

            Defendants simply conclude without citation to the record that the $348,000 compensatory damages award was excessive. (See Mtn. 7:5-13.) This perfunctory analysis is insufficient to demonstrate that the “jury clearly should have reached a different verdict or decision” on damages. (See Code Civ. Proc., § 657.) The evidence produced at trial was sufficient to support the compensatory damages award.   

            c. Punitive Damages

            “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).)

                        1. Evidence of Malice, Oppression, or Fraud

            Defendants argue that there was no evidence of malice, oppression, or fraud because “all such evidence came from the unreliable testimony of Plaintiff and was not substantiated by any witness.” (Mtn. 6:20-22.) Again, the jury determines credibility, and the jury was entitled to find Plaintiff’s testimony credible. Defendants unsurprisingly doubt Plaintiff’s veracity, but that alone is not a basis for a new trial. The jury was entitled to find Plaintiff’s testimony, combined with the other evidence discussed above, sufficiently clear and convincing for an award of punitive damages.

                        2. Reasonableness of the Amount

            Defendants also argue that the amount of $150,000 is excessive and unconstitutional. “The Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor.” (State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 416.) “[C]ourts reviewing punitive damages . . . consider three guideposts: (1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.” (Id. at p. 418.)

            On the first factor, the reprehensibility of the conduct has been sufficiently demonstrated by the evidence discussed above. On the second factor, the punitive damage award represents 43% of the compensatory damage award. This is not excessive, considering courts have sustained punitive damage awards up to four times greater than the compensatory damages. (See State Farm, supra, 538 U.S. at p. 425.) On the third factor, the $150,000 award here is in line with punitive damage awards in analogous cases. (See Mathews v. Happy Valley Conference Center, Inc. (2019) 43 Cal.App.5th 236, 268 [affirming punitive award of $500,000 for violation of whistleblower statute]; Roberts v. Ford Aero. & Communications Corp. (1990) 224 Cal.App.3d 793, 802-04 [affirming punitive award of $750,000 for wrongful termination].) Thus, the amount is reasonable according to the three guideposts.   

                        3. Defendants’ Financial Condition

            Defendants also argue that they cannot afford to pay the $150,000 award. “[A]n award of punitive damages cannot be sustained on appeal unless the trial record contains meaningful evidence of the defendant's financial condition.” (Adams v. Murakami (1991) 54 Cal.3d 105, 109.) A defendant’s inability to pay can be an independent basis for overturning an award of punitive damages. (Id. at pp. 111-12.)

However, where the trial court has ordered a defendant to produce records pertaining to his financial condition, and the defendant fails to do so, the defendant waives the right to complain about the absence of evidence on his financial condition. (Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, 608.) “[F]or purposes of requiring attendance and the production of documents at trial, a subpoena is equivalent to a court order.” (Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, 1338.) Thus, a defendant who fails to comply with a subpoena to produce records at trial “is estopped from challenging the punitive damage awards based on lack of evidence of his financial condition or insufficiency of the evidence to establish his ability to pay the amount awarded.” (Ibid.)  

            Here, Plaintiff served Defendants with a demand for production of financial documents at trial. (Tokar Decl., Ex. E.) Defendants represented to the Court that they had responsive documents ready. However, at Phase II of the trial, Defendants presented no evidence of their financial condition. Because Defendants failed to comply with a subpoena for the production of their financial records, Defendants have waived a challenge to the punitive damages award based on their financial condition.

            In sum, Defendants have failed to show that the “jury clearly should have reached a different verdict or decision” on punitive damages. (See Code Civ. Proc., § 657.) 

III. Irregularity in the Proceedings

            A motion for new trial based on irregularity in the proceedings “must be made upon affidavits; otherwise it must be made on the minutes of the court.” (Code Civ. Proc., § 658.)

Here, Defendants’ argument on irregularity in the proceedings is entirely unsupported by affidavits or the minutes of the court, or any citation to the record at all. (See Mtn. 8:14-10:10.) Therefore, Defendants have failed to show that there was irregularity in the proceedings.      

CONCLUSION

            The motion for new trial filed by Defendants/Cross-Complainants Desai Holdings USA, LLC and Rakesh David Desai is DENIED.