Hakim v. Beshay CA2/7

California Court of Appeal Jan 13, 2014 No. B240527Unpublished

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Holding. The court held that an alleged oral buyout agreement between two shareholders was unenforceable because the parties intended for a written agreement to be executed and failed to reach a meeting of the minds on its terms. Consequently, the court reversed the judgment for breach of contract and the associated attorney fee award, while affirming the denial of punitive damages on the cross-complaint and the interest calculation regarding the conversion claim.

Issues

Whether an oral agreement to buy out a corporate shareholder is enforceable when the parties contemplated a written contract that was never signed.
Whether the trial court erred in granting a directed verdict against the corporation on its claim for punitive damages.
Whether the trial court correctly calculated interest on converted funds where the defendant's tender of payment was insufficient to cover the full amount owed.

Disposition. Affirmed in part, reversed in part and remanded.

Quotations verified verbatim against the opinion

“given Hakim’s admission that the negotiation of the parties did not yield a writing to which they both agreed, we find the determination that Hakim and Beshay had entered into an enforceable contract is not supported by substantial evidence.”

“It also follows that Hakim was not entitled to attorney fees based on a writing to which the parties never agreed.”

“Civil Code section 1504 only stops the accrual of interest when the full amount of principal and interest due at the time of tender is offered.”

Filed 1/13/14 Hakim v. Beshay CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 SEVEN

SUZAN HAKIM, B240527

Plaintiff, Cross-Defendant and (Los Angeles County Appellant, Super. Ct. No. BC419205)

MAGED BESHAY et al.,

Defendants, Cross-Complainants and Appellants.

APPEAL from judgments and an order of the Superior Court of Los Angeles County, Yvette M. Palazuelos, Judge. Affirmed in part, reversed in part and remanded with directions.

James S. Link for Plaintiff, Cross-Defendant and Appellant.

Law Offices of Michael A. Brewer, Michael A. Brewer and Beverly J. Bickel for Defendants, Cross-Complainants and Appellants. ___________________________

INTRODUCTION Two pharmacists formed a corporation to operate a pharmacy together. Soon after the pharmacy opened, however, the two equal shareholders discussed having one shareholder pharmacist buy out the other for $60,000--the amount she had contributed to the corporation. The two also agreed their lawyer would draw up a written agreement for the transaction. Each proposed changes to which the other objected, and the agreement was never signed. The buyer locked the seller out of the pharmacy and denied the seller access to all computer records, email and files, but also refused to pay her, relying on the absence of an executed buyout agreement. The seller pharmacist who claimed the two had reached an agreement for the buyer to pay her for her interest filed a complaint seeking to enforce the alleged oral contract. Through the buyer pharmacist, the corporation cross- complained against the seller for conversion of several Medi-Cal checks the seller pharmacist admitted she had held and later deposited to a separate account without the buyer’s knowledge, after the buyer refused to pay her (and sought to repay the funds prior to trial). The corporation sought punitive damages from the seller. In the first trial on the complaint, the jury agreed the parties had formed a contract which the buyer had breached and awarded the seller $60,000 plus attorney fees and costs. The trial court entered judgment and granted the seller’s motion for attorney fees. After the trial court found no basis for presenting the question of punitive damages to the jury, in a subsequent trial on the cross-complaint, a second jury reached a verdict against the seller and in the corporation’s favor. The buyer appeals from the judgment and order for attorney fees, claiming (1) the judgment is not supported by substantial evidence, and the trial court committed prejudicial error (2) in awarding the seller her attorney fees on the complaint and (3) in ruling punitive damages could not be awarded on the corporation’s cross-complaint. In her cross-appeal, the seller pharmacist says the trial court miscalculated the amount of interest she owed on the conversion claim. We reverse the judgment on the complaint for

Hakim v. Beshay CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

SUZAN HAKIM, B240527

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