Judge: Teresa A. Beaudet, Case: 18STCV01622, Date: 2023-01-23 Tentative Ruling
Case Number: 18STCV01622 Hearing Date: January 23, 2023 Dept: 50
|
AMYN
NASSER, Plaintiff, v. DONALD
GORDON WALKER, et al,
Defendant(s). |
Case No.: 18STCV01622 [TENTATIVE AND PROPOSED] STATEMENT OF DECISION BY THE COURT AFTER TRIAL ON THE COMPLAINT |
[TENTATIVE
AND PROPOSED] STATEMENT OF DECISION BY
THE COURT AFTER TRIAL ON THE COMPLAINT
This
matter came on for trial on August 24-26, 2022 in Department 50 of the
above-entitled Court before the Hon. Teresa A. Beaudet, sitting without a jury.
The Court, having considered the evidence and read the arguments of counsel,
issues this tentative and proposed Statement of Decision. This tentative and
proposed Statement of Decision will become the Statement of Decision unless,
within 15 days hereafter, a party serves and files objections to the proposed
Statement of Decision.
I.
STIPULATIONS
Prior to the start of trial, the Plaintiff
Amyn Nasser (“Nasser”) and Defendant Donald Gordon Walker (“Walker”) stipulated
to the following facts:
1. Nasser
is an international fashion, celebrity and fine arts photographer.
2. Nasser
was living in the United States under a Visa in 2012.
3. Nasser’s
visa was set to expire in December 2012.
4. Walker
is a licensed attorney in California.
5. Walker
legally represented Nasser from at least 2005.
6. Walker
obtained numerous visas for Nasser as his legal representative.
7. Walker
was the Agent for Service of Process for Graffcor Tele Services LLC
(“Graffcor”).
8. Walker
was the Agent for Service of Process of Home Health Marketing Enterprises Inc.
(“Home Health”).
9. Walker
is the biological father of Clinton Graham Walker (“Clinton Walker”).
10. Clinton
Walker was the Managing Member of Graffcor.
11. Clinton
Walker was the President and CEO of Home Health.
12. Walker
introduced the company Graffcor to Nasser in 2012.
13. Nasser
deposited $30,000.00 into Walker’s Client Trust Account between July 5, 2012 through
August 3, 2012.
14. Walker
drafted the “June 29, 2012” $30,000.00 Promissory Note.
15. Walker
witnessed the “June 29, 2012” $30,000.00 Promissory Note.
16. Walker
drafted the “June 29, 2012” $30,000.00 Purchase Agreement Promissory Note.
17. Walker
drafted the Graffcor “June 28, 2012” Operating Agreement Promissory Note.
18. Walker
met with Nasser and Connie Pretula in February 2013 in Sonoma, California.
19. On
or about October 23, 2016, Walker deposited $6,000.00 into Nasser’s Chase bank
account.
20. Nasser
has only been paid back a total of $6,000.00.
II.
THE CAUSES OF ACTION ALLEGED IN THE
FIRST AMENDED COMPLAINT (“FAC”)
In
the FAC, Nasser alleges causes of action for breach of contract, intentional
misrepresentation and
negligent misrepresentation against Walker, Clinton Walker, Graffcor and Home
Health. Default on the FAC was entered against Clinton Walker and Home Health
on September 30, 2020 and against Graffcor on March 8, 2021.
III.
DID NASSER PROVE BREACH OF CONTRACT
BY WALKER? IF SO, IS THE CAUSE OF ACTION BARRED BY THE STATUTE OF LIMITATIONS?
a.
Did Nasser Prove Breach of Contract
by Walker?
The
allegations in the FAC as to a contract between Nasser and Walker are somewhat sketchy. Nasser alleges that “in or about 2012,”
Nasser contacted Walker to renew his visa (¶12), and Walker, an immigration
attorney, advised him that his only option was to invest $30,000 in his son
Clinton Walker’s Home Health company and thereby qualify for an investor’s visa.
(¶13.) Nasser next alleges that Walker and Clinton Walker “further promised”
that his $30,000 investment would be repaid, and he would receive an additional
$30,000 bonus. (Ibid.) Nasser then wired the money to Walker’s trust
account. (¶14.) On or about June 28, 2012, Clinton Walker, Graffcor and Home
Health (but not Walker) “executed an ‘Operating Agreement,’ whereby (a)
[Nasser] became a member of [Graffcor], (b) [Clinton Walker] became a manager
of [Graffcor], and (c) Graffcor became the party employed by [Home Health] to
perform certain advertising services on its behalf.” (Ibid.)
Nasser
next alleges that “on or about June 29, 2012, [Nasser] and Defendants
executed two additional documents,” and that “[t]he first document was a
‘Promissory Note’ between [Nasser] and Defendants pursuant to
which [Clinton Walker] and Graffcor [not Walker] agreed to re-pay
[Nasser’s] $30,000 investment in equal quarterly installment payments. (Emphasis
added; ¶15.) Nasser similarly alleges that “[t]he second document was a
‘Purchase Agreement’ between [Nasser] and Defendants, pursuant to
which [Nasser] would receive his $30,000 bonus by agreeing to transfer his
membership interest in [Graffcor] to [Clinton Walker], in exchange for [Clinton
Walker] and [Graffcor’s] [not Walker’s] agreement to pay [Nasser
$30,000 by on or before June 29, 2013. (Ibid.) In paragraph 22 of the
FAC, Nasser alleges that the terms of the agreement with Walker are evidenced,
in part, by the Operating Agreement Nasser signed on June 28, 2012, and the
Promissory Note and Purchase Agreement he signed on June 29, 2012. There is no
allegation in the FAC that Walker signed any notes or agreements.
Finally,
Nasser alleges that “[o]n or about October 24, 2016, [he] received $6,000 from
Defendants as a partial repayment to [him] under the previously signed
agreements” (¶17), but he did not receive any other payments from the
Defendants and Walker never obtained his investor visa. (¶18.)
From
the above allegations, the Court concludes that Nasser alleges an oral
agreement with Walker in 2012 to the effect that if Nasser would wire $30,000
to Walker’s trust account, Nasser would qualify for an investor’s visa which
Walker would obtain for him, and his $30,000 investment would be repaid plus an
additional $30,000 “bonus” as set forth in the Promissory Note and Purchase
Agreement.
Nasser
presented evidence at the trial of the oral agreement with Walker described
above;
Nasser did not proffer
any evidence during the trial of a written agreement by Walker. Exhibit 5 was admitted at trial and it
included three documents: (1) The June 29, 2012 Promissory Note whereby
Graffcor and Clinton Walker agreed to pay Nasser $30,000 in equal installments
commencing September 29, 2012. The Promissory Note is signed by Graffcor and
Clinton Walker and only witnessed by Walker. (2) The “Operating Agreement
Between Amyn Nasser, Graffcor Tele Services, Home Health Marketing Enterprises
Inc. and Clinton Walker” entered into as of June 28, 2012. This document was
signed only by Graffcor and Home Health, and it addresses operating issues of
Graffcor, such as signing authority, payroll expenses, etc. (3) The Purchase
Agreement Promissory Note dated June 29, 2012 and signed by Graffcor and Walker
which provides that “[i]n consideration of [Nasser] transferring all his
interest in [Graffcor] to Clinton Walker on June 19, 2013, [Graffcor] and
[Clinton Walker] promise to pay to the order of [Nasser] the sum of $30,000 on
June 29, 2013.” This agreement is signed only by Graffcor and Clinton Walker.
At trial, Exhibit 7 also was admitted. Exhibit 7 is entitled “Operating
Agreement for Graffcor Tele Services LLC” and it was entered into as of June
19, 2012. This agreement was signed by Nasser only.
The
undisputed evidence presented by Nasser at trial either by stipulation or
testimony established that (1) Nasser deposited $30,000.00 into Walker’s Client
Trust Account between July 5, 2012 through August 3, 2012; (2) the first
installment of $7,500 under the Promissory Note was due on September 29, 2012
and was not paid; (3) the remaining three quarterly installments due under the
Promissory Note were not paid; (4) Nasser’s $30,000 investment was not returned
to him on June 29, 2013 (or on any date thereafter) as provided in the Purchase
Agreement Promissory Note; and (5) no visa was obtained by Walker for
Nasser. The Court finds that the
evidence supports Nasser’s assertion that Walker breached the oral agreement he
made with Nasser.
b.
Is the Cause of Action Barred by the
Statute of Limitations?
In
his Written Closing Argument at page 2, lines 7-11, Walker argues that either the
statute
of limitations on an oral
contract set forth in Cal. Code Civ. Proc. §339 or the statute of limitations
on a written contract set forth in Cal. Code Civ. Proc. §337 bars Nasser’s
breach of contract action, and that the bar of the statute of limitations was
included in his answer as his Second Affirmative Defense.
In
response, Nasser first asserts that even though the final payment to him was
due in 2013, Walker’s purported continual reassurance that Nasser would be
repaid excuses any untimeliness. Nasser does not cite to any evidence in the
record as to such continual reassurances nor does he cite to any legal
authority to support his legal contention. Nasser next asserts that because he
is suing on the two notes, Cal. Code Civ. Proc. §360 applies, and Walker
renewed the statute of limitations when he deposited the $6,000 into Nasser’s
bank account on October 23, 2016. (Written Rebuttal Argument p. 4, lines 7-17.)
Section 360 of Cal. Code Civ. Proc. provides as follows:
[A]ny payment on
account of principal or interest due on a promissory note made by the party to
be charged shall be deemed a sufficient acknowledgement or promise of a
continuing contract to stop, from time to time as any such payment is made, the
running of the time within which an action may be commenced upon the principal
sum or upon any installment of principal or interest due on such note, and to
start the running of a new period of time, but no such payment of itself shall
revive a cause of action once barred.
The
Court finds that section 360 does not apply in this instance because Walker was
not a signatory to either the Promissory Note or the Purchase Agreement
Promissory Note. At best, the oral agreement with Walker provided that Clinton
Walker and Graffcor would sign the notes, not Walker. Consequently, either Cal.
Code Civ. Proc. §339 (two years on an oral contract) or §337 (four years on a
written contract or arguably a contract that is written in part) is the applicable
statute of limitation. In either case, the statute of limitations bars the
breach of contract claim against Walker because the first installment of the
repayment of the $30,000 under the Promissory Note was due September 29, 2012,
and the remaining installments were due in 2013; similarly, the “bonus” payment
of $30,000 due under the Purchase Agreement Promissory Note was due on June 29,
2013. And the new visa was to be provided to Nasser prior to the December 2012 expiration
of his then-existing visa (see Stipulated Fact 3, above). The evidence
at trial was undisputed that by the end of June, 2013, Nasser knew that none of
the installment payments due under the Promissory Note had been paid, that the
$30,000 had not been repaid, and his visa had expired without a replacement
visa. Because the complaint in this action was not filed until October of 2018,
the breach of contract cause of action is barred by either the two-year or the
four-year statute of limitations.
IV.
DID NASSER PROVE FRAUDULENT
MISREPRESENTATION BY WALKER? IF SO, IS THE CAUSE OF ACTION BARRED BY THE
STATUTE OF LIMITATIONS?
a.
Did Nasser Prove Fraudulent
Misrepresentation by Walker?
The
FAC includes a cause of action for intentional misrepresentation. In support of that
cause of action, Nasser
incorporates all of the allegations from the breach of contract cause of action
discussed above. (¶25.) Nasser further alleges that within the last three
years, he discovered that “Defendants made numerous, intentional false and fraudulent
representations to [him]. . . includ[ing] without limitation: (a) that
[Nasser’s] $30,000 investment would be repaid; (b) that [Nasser] would receive
a $30,000 bonus; and (c) that [Nasser] would receive an investor’s visa.”
(¶26.) Nasser alleges that these representations “were, in reality, false, as
evidenced by the fact that [Nasser] never received repayment of his investment,
payment of the bonus, or his investor’s visa.” (¶27.) Nasser alleges Walker
knew the representations to Nasser were false when made, and they were made
“with the intent to defraud and deceive” him and with the intent to induce him
to make the $30,000 investment (¶¶ 28-29); Nasser alleges that he was unaware
that the representations were false and believed them to be true (¶30); in
reliance on the representations, he was induced into making the $30,000
investment (¶31); and as a result of the intentional misrepresentations, Nasser
has suffered damages totaling $60,000, plus interest (¶32).
The evidence presented at trial supports a finding that Walker
intentionally misrepresented to Nasser that he could obtain an investor’s visa by
the end of December by investing the $30,000 in Graffcor, Walker’s son’s
company, when he knew that was not possible. Walker admitted at trial that “to
get one of those visas, you had to have an existing company that had employees [and]
show an income statement;” he admitted that he “didn’t have that with Graffcor.”
(Trial Transcript (“TT”), Day 2, 2:27-3:9.) He unequivocally admitted that “it
wasn’t’ possible to get that E-visa within that six-month period from June to
December; correct? That’s correct.” (Id. at 3:18-21.)
Walker also induced Nasser to make the $30,000 investment
by sending him what he described as a “spread sheet to show the revenue
generated” by Graffcor. (Ex. 3.) However, the spread sheet was not evidence of
“revenue generated;” instead, as Walker admitted at trial, the spreadsheet was only
“projections.” (TT Day 1, 27:21-28:6.)
The evidence at trial was undisputed that (a) Nasser was
unaware of the falsity of the representations made by Walker; (b) Nasser relied
upon Walker’s misrepresentations in investing the $30,000; (c) that because
Walker had acted as Nasser’s attorney in helping him obtain visas in the past, Nasser’s
reliance upon Walker’s misrepresentations was justified; and (d) as a result of
Walker’s intentional misrepresentations, Nasser suffered actual damages in the
form of the $30,000 he invested, plus interest thereon. Walker does not offer
any argument against the substance of the misrepresentation cause of action in
his Written Closing Argument. The Court finds that the evidence supports
Nasser’s cause of action for intentional misrepresentations by Walker.
b.
Is the Cause of Action Barred by the
Statute of Limitations?
As
he did with regard to the breach of contract cause of action, Walker asserts in
his
Written Closing Argument
at page 3, lines 26-28, that the second cause of action is barred by the three-year
statute of limitations for fraud set forth in Cal. Code Civ. Proc. §338(d)
because Nasser discovered the facts supporting the cause of action in 2013 or
2014 at the latest. Walker points to the
fact that Nasser knew by the end of 2012 that he had not received the investor
visa and in 2013, he did not receive the quarterly payments on the Promissory
Note, nor did he receive the repayment of the $30,000. Additionally, Walker points to a conversation
that occurred between Nasser and Clinton Walker in 2013 or possibly 2014
wherein he was “told that the business failed and he would not get his money or
visa” (Written Closing Argument, p. 3, 12-15; TT Day 2, 70:12-71:4):
Nasser: I would have contacted Don and I did have
some messaging going on with Clinton up to about April I think it was. 2013 that would be.
Counsel: Were you paid or did you get the visa after
your meeting with Clinton in Petaluma and Don [W]alker in northern California?
Nasser: No I was not paid and I did not get the
E-visa.
Counsel: What was the next thing you did to try and
get paid or get your visa?
Nasser: I contacted Don Walker I would say regularly
and tried to reach out. It was – I was
in a frantic situation in 2013 that would take me towards the end of 2013. At some point I cannot recall the exact date
but in and around the end of 2013 or maybe the early part of 2014 I did get a
phone call from Clinton [W]alker saying that I should forget about the
investment and I shouldin [sic] vest some more money if I want to –if I want to
get a visa or something like that. I’m trying to recollect.
Counsel: What did you say?
Nasser: I couldn’t speak with him I was distract
[sic] I was extremely confused of course emotionally I was very hurt. . .
In Nasser’s Written Rebuttal Argument at page 8, lines 15-19,
he contends that “delay [in discovering the intentional misrepresentation cause
of action] is ‘particularly appropriate’ where the relationship of the parties
is one of a special trust, such as that involving a fiduciary. . .” He points
to Walker’s efforts through 2016 to obtain an entirely different visa, an
O-visa, but does not explain how this prevented Nasser from discovering that
Walker had not obtained the investor’s visa by the end of 2012, or that he had
not received the installment payments on the Promissory Note or the return of
his $30,000 investment by the end of 2013. Being “hopeful that he would be
repaid” until Walker sent Nasser a proposal to sign a release in exchange for
$25,000 (Written Rebuttal Argument, p. 9:1-2), does not constitute delayed
discovery of the underlying facts of his intentional misrepresentation cause of
action.
Nasser
cites to the case of E-Fab, Inc. v Accountants, Inc. Services (2007)
153, Cal. App. 4th 1308, 1318.
In that case, the Court made clear that the delayed discovery rule
protects the
plaintiff, whose cause of action is preserved when, despite diligent investigation,
he is blamelessly ignorant of the cause of his injuries. The discovery rule is
based on the notion that statutes of limitations are intended to run against
those who fail to exercise reasonable care in the protection and enforcement of
their rights; therefore, those statutes should not be interpreted so as to bar
a victim of wrongful conduct from asserting a cause of action before he could
reasonably be expected to discover its existence. Thus, in actions where
the rule applies, the limitations period does not accrue until the aggrieved
party has notice of the facts constituting the injury.
(Internal citations
omitted.)
In this case, the delayed
discovery rule does not apply because Nasser had notice of all of the facts
constituting his injury in 2013 or 2014 at the latest. Because Nasser knew
those facts in 2013 or 2014 at the latest, the statute of limitations on the
fraud cause of action ran in 2016 or 2017.
Because the complaint herein was not filed until 2018, the intentional
misrepresentation cause of action is barred by the statute of limitations.
V.
THE NEGLIGENT MISREPRESENTATION CAUSE
OF ACTION
Walker asserts in his Written Closing Argument
at page 4, lines 1-19, that for the same reasons as discussed above, the
negligent misrepresentation cause of action is barred by the two-year statute
of limitations set forth in Cal. Code Civ. Proc. §339. Nasser’s only response to this assertion is
that he did not discover the “loss or damage” suffered until late summer 2017
when Walker sent the proposed release. For the same reasons as discussed above,
Nasser’s negligent misrepresentation cause of action is barred by the two- year
statute of limitations because the complaint herein was not filed until 2018.
CONCLUSION
For the reasons discussed above, the Court finds in favor
of Walker on all three causes of action.
Within
ten days after this Statement of Decision becomes final, Walker is ordered to
file and serve a proposed judgment in accordance herewith.
DATED: January 23, 2023
___________________________
Honorable
Teresa A. Beaudet
Judge,
Los Angeles Superior Court