Opinion
G044593
12-02-2011
SHOHREH BAHRI, Plaintiff and Respondent, v. DEAN R. KITANO et al., Defendants and Appellants.
Dean R. Kitano, in pro. per.; Gerald Kitano for Defendants and Appellants. Maleki & Associates and Joseph A. Maleki for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 30-2008-00109812)
OPINION
Appeal from a judgment of the Superior Court of Orange County, Richard W. Luesebrink, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed in part and reversed in part.
Dean R. Kitano, in pro. per.; Gerald Kitano for Defendants and Appellants.
Maleki & Associates and Joseph A. Maleki for Plaintiff and Respondent.
Dean Kitano and his company, ING Radiology Medical Center, Inc. (ING), appeal from a judgment in favor of respondent Shohreh Bahri on her complaint for breach of fiduciary duty and various species of fraud. Appellants contend there is insufficient evidence to support the judgment, but we disagree. Other than to reverse the trial court's finding on the breach of fiduciary duty claim, we affirm the judgment in all respects.
FACTS
Mir Hossein Akhorli was in the business of establishing magnetic resonance imaging (MRI) facilities. He created Anational MRI Center, Inc. (Anational) to manage the facilities. Kitano, a business attorney and part-time law professor, was Akhorli's lawyer. He also acquired a personal interest in Akhorli's business ventures. In fact, in August 2007, Kitano created ING solely for that purpose. Just as Anational was solely owned and controlled by Akhorli, ING was solely owned and controlled by Kitano.
On August 15, 2007, Akhorli and ING, through Kitano, entered into a partnership agreement to establish and operate an MRI facility in Long Beach (the business). Under the agreement, Akhorli and ING were 50-50 partners; ING was required to contribute $550,000 to the venture, and Akhorli was obligated to contribute his special skill and experience in the MRI services industry to make the business profitable.
In October 2007, Bahri met Akhorli through a mutual acquaintance. Akhorli told her he was a doctor and had successfully established several MRI facilities in Southern California. He also told her about the MRI facility he was establishing in Long Beach, i.e., the business. However, he did not tell her about his prior agreement with ING/Kitano. Notwithstanding that agreement, Akhorli invited Bahri to become his partner in the business. Bahri trusted Akhorli and accepted the offer.
Their business relationship was memorialized in a partnership agreement dated December 1, 2007. Akhorli told Bahri his attorney drafted the agreement, but at trial Kitano denied this; he claimed he did not learn about the agreement until several weeks later, toward the end of December. On paper, the agreement was between Bahri and Anational, but Akhorli was central to the deal. In exchange for Bahri's contribution of $300,000, Akhorli was required to contribute his skill, knowledge and patient base to the partnership, and he was obliged to acquire a new MRI machine for the business. The agreement purported to make Anational/Akhorli and Bahri partners in the business, and Bahri had no reason to believe otherwise. She did not know about the prior agreement between Akhorli and ING/Kitano, which purportedly gave ING/Kitano a 50 percent interest in the business.
By mid-December 2007, the business was up and running. Bahri had given Akhorli $300,000 with the expectation they would be working together as partners to make the business profitable. However, she soon discovered Akhorli had little interest in contributing to the business. He did acquire an MRI machine, as required under their agreement, but it was a refurbished machine, not a new one. And although Bahri repeatedly asked Akhorli for financial information about the business, he did his best to avoid her inquiries and keep her in the dark. Without her knowledge, he also hired Anational to manage the business. Bahri was against paying someone to manage the business, thinking that was something Akhorli should be doing. Nevertheless, at Akhorli's insistence, she put another $5,000 into the business to help pay for Anational's services.
In light of the foregoing, it didn't take long before Bahri began to have serious concerns about Akhorli's commitment to the business and its prospects for success. In fact, by January 2008, she was beginning to suspect she had made a big mistake by investing in the business. But then she received a letter from Kitano that assuaged her fears in that regard.
Dated January 30, 2008, the letter was written by Kitano on behalf of his client Akhorli. It informed Bahri that Akhorli intended to sell his interest in the business to ING for $550,000 cash. It also stated Bahri had the right to purchase Akhorli's interest for the same price within 30 days, otherwise Akhorli intended to go through with the sale to ING.
Because Bahri had paid only $300,000 to acquire her share of the business less than two months earlier, she was pleased to learn that someone was willing to purchase Akhorli's share for $550,000. However, she never received any information ING had in fact proceeded to buy out Akhorli's interest. Nor did she know that Akhorli had already sold a 50 percent interest in the business to ING or that ING was solely owned and controlled by Kitano. Kitano divulged none of that information in the letter, or by any other means. Consequently, Bahri stayed on in the partnership, thinking Akhorli was still her partner.
Over the next couple of months, though, her relationship with Akhorli continued to deteriorate. She contacted a broker about selling her share of the business, but the broker told her that, rather than trying to sell her interest separately, it would be better if he could list the entire business for sale. Therefore, in April 2008, they had a meeting with Akhorli to see if he would be willing to sell his share of the business. Akhorli was against the idea, insisting the business had good potential. Consequently, Bahri persevered in the business as best she could. Although the business was not making any money, she wanted to believe Akhorli's claim that it would be a good investment in the long run.
While Akhorli was trying to put a good face on the business for Bahri, he was under siege from another investor in one of his other MRI facilities. Dr. Don Kim had sued Akhorli in Los Angeles Superior Court for fraud in connection with the establishment of that facility. Kitano defended Akhorli in that case, but in May 2008, Kim obtained a multimillion-dollar judgment in his favor. The court also appointed a receiver to seize Akhorli's assets.
In July 2008, the receiver seized the business Bahri and Akhorli had established and shut it down. Kitano then filed a declaration in the Kim case in an attempt to show the seizure was unjustified because Bahri did not actually have an ownership interest in the business. To that end, Kitano declared that on or about September 2007, ING and Bahri became co-owners of the business. In addition, Kitano asserted ING and Bahri had purchased an MRI machine from Anational for approximately $650,000.
As a result of Kitano's declaration, the receivership was expunged and the business reopened briefly. However, it wasn't long before Bahri caught wind of Kim's case and discovered Kitano's declaration. Once she learned Kitano was claiming ING, and not Akhorli, was her partner, she filed suit to get her investment back. As to Akhorli and Anational, she alleged breach of contract and various theories of fraud. Rather than defend the suit, Akhorli filed for bankruptcy. He was dismissed from the case without prejudice, and Anational defaulted. Neither he nor Anational are a party to this appeal.
Bahri's lawsuit also included the following causes of action against Kitano and ING: 1) Breach of fiduciary duty; 2) fraud by concealment; 3) fraud by intentional misrepresentation; 4) fraud by negligent misrepresentation; 5) violation of the Uniform Fraudulent Transfer Act; and a request for declaratory relief. Bahri alleged Kitano and Akhorli conspired to defraud her out of her $300,000 investment and keep her from discovering their fraudulent scheme for several months thereafter. She also claimed Kitano was ING's alter ego and deliberately misled her regarding who actually owned the business. At no time, Bahri alleged, did Kitano tell her that ING was her partner or that he was ING's sole shareholder.
In response to Bahri's complaint, ING/Kitano filed a general denial, as well as a cross-complaint against Bahri. Their cross-complaint alleged 1) ING and Bahri became partners after Bahri acquired her 50 percent interest in the business from Akhorli on December 1, 2007, and 2) because of this partnership, ING/Kitano were entitled to reimbursement from Bahri for expenses they paid into the business after that date.
The case was tried by way of a bench trial that lasted seven days. Kitano testified he did nothing fraudulent, and like Bahri, he too was a victim of Akhorli's unscrupulous behavior. Although he was Akhorli's attorney, Kitano claimed he did not draft the December 1, 2007 partnership agreement between Anational and Bahri. Nor did he even know about the agreement until the end of that month.
As for ING's agreement with Akhorli in August 2007, Kitano testified he gave Akhorli about $200,000 per the terms of the agreement. However, their agreement had a due diligence clause that Kitano believed gave him the right to opt out of the agreement until January 30, 2008. Thus, when he wrote the right of first refusal letter to Bahri on that date, he did not intend to mislead her by stating Akhorli intended to sell his interest in the business to ING. Rather, he was working on the assumption Akhorli still had a stake in the business, because if he did decide to opt of the agreement, his share of the business would belong to Akhorli.
The agreement called for ING to pay Akhorli $200,000 up front and the remaining $350,000 by the end of 2008.
Regarding his declaration in the Kim case, Kitano testified it was not intended to be deceptive. Explaining why he stated ING and Bahri became partners in the business on or about September 2007, when Bahri did not actually acquire her interest until three months later, Kitano testified it was an innocent failure to recollect the true timing of events. He said he was under a lot of pressure at the time he made the declaration and was simply trying to show the judge in the Kim case that Akhorli did not have an ownership interest in the business.
Bahri testified that once she gave Akhorli her money, he effectively turned his back on her and left her to get the business going by herself. She was not aware of the August 2007 deal between ING and Akhorli, nor was she aware Kitano owned and controlled ING. Thus, when Kitano represented to her in the January 30, 2008 letter that Akhorli owned half the business, and his half share was worth $550,000, she believed him. She did not find out the true state of affairs until August 2008, and by that time, the business had already been seized and shut down. Worst of all, she never received any income from the business and ended up losing her entire investment.
Summing up the evidence, the trial court described the facts of the case as being very messy. However, it gave Bahri a clean-sweep victory on all of her causes of action. In its statement of decision, the court stated it "did not find Kitano to be a credible witness and, in fact, the court found him not to be believed as to much of his testimony. On the other hand, the court found Bahri to be a credible witness worthy of belief."
With respect to Bahri's fraud claims, the court found Akhorli and Kitano made false representations and concealed material facts with the intent to both induce Bahri to buy into the business and prevent her from discovering their plot to defraud her. Whereas Akhorli's false promises were key to getting Bahri to fork over her money in the first place, the court found Kitano was instrumental in terms of stringing Bahri along and keeping her from finding out Akhorli was not really her partner. Specifically, the court found the information contained in Kitano's letter dated January 30, 2008 "was false and known by Kitano to be false. [] Kitano made the false representations to Bahri in an effort to continue the fraud perpetrated by Akhorli and prevent or delay Bahri's discovery of the fraud."
In addition, the court found the very agreement by which Kitano acquired his interest in the business, i.e., the August 2007 agreement between ING and Akhorli, was fraudulent, in that it was designed to prevent Bahri from being able to get at Akhorli's assets in the event she ever discovered that Akhorli was out to defraud her.
That's not all. The court also found Kitano committed perjury in his declaration in the Kim case by representing that ING and Bahri became 50-50 partners in the business around September 2007. Although Bahri acquired a half interest in the business from Akhorli by virtue of their December 1, 2007 agreement, the court found, "There is no credible evidence that a partnership was created between ING [] and Bahri with respect to" the business.
Describing Akhorli and Kitano's conduct as "malicious" and "oppressive," the court found they "engaged in a systematic pattern of deceptive and fraudulent practices" to bilk Bahri out of her money. Therefore, they were liable for each other's actions as coconspirators in the case. The court also found Kitano was ING's alter ego, and he "specifically used his credentials, special knowledge and experience as a licensed attorney . . . [to] participate in and aid and abet the commission or furtherance of a fraud upon Bahri."
By way of relief, the court rescinded the December 1, 2007 agreement between Bahri and Anational and awarded Bahri damages of $305,000, representing her initial $300,000 investment, plus the $5,000 she paid toward the business's operating expenses. The court also found Bahri was entitled to recover punitive damages in an amount to be determined in a subsequent hearing, and it ruled in Bahri's favor on ING's cross-complaint.
The court's statement of decision was signed and filed on October 28, 2010, and judgment was entered on November 3. According to the parties' briefs on appeal, a hearing was subsequently held during which the court ordered ING to pay Bahri $25,000 in punitive damages, and a first amended judgment reflecting such was entered on April 7, 2011. However, the appellate record does not contain any information pertaining to that aspect of the case. ING and Kitano's appeal was taken solely from the judgment entered on November 3, 2010.
I
While Kitano was represented by counsel at trial, he proceeded in propria persona on appeal (except for oral argument), on behalf of both himself and ING. As a preliminary matter, he argues the court's statement of decision is unclear and lacking factual support. He also notes his attorney objected to the statement of decision on these grounds below. It is Kitano's position that "[g]iven these objections and the lack of clarity in the [s]tatement of [d]ecision, this [c]ourt can examine the evidence without any presumptions regarding the weight of the evidence as favoring [Bahri]." He is incorrect.
Following the trial court's tentative ruling, Kitano's attorney requested a statement of decision, and Bahri's counsel promptly submitted a proposed one to the court. Kitano's attorney did file objections to the proposed statement of decision, but she waited over a month to do so. Thus, they were untimely. (Cal. Rules of Court, rule 3.1590(g) [requiring such objections to be filed within 15 days].) Moreover, she failed to renew her objections after the court issued its final statement of decision. Under these circumstances, Kitano has waived any defects in the statement of decision, and the usual presumptions apply. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130 [appealing party cannot challenge alleged deficiencies in the statement of decision absent a proper objection in the trial court].)
"A judgment . . . is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness. [Citations.]" (In re Marriage of Arceneaux, supra, 51 Cal.3d at p. 1133.) When, as here, the judgment is being attacked on the basis it is not supported by sufficient evidence, "we do not reweigh the evidence, but rather determine whether, after resolving all conflicts favorably to the prevailing party, and according the prevailing party the benefit of all reasonable inferences, there is substantial evidence to support the judgment." (Scott v. Pacific Gas & Electric Co. (1995) 11 Cal.4th 454, 465, disapproved on another point in Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 352, fn. 17.) So long as there is "any substantial evidence, contradicted or uncontradicted," to support the conclusion reached by the trier of fact, we must affirm the judgment. (Shapiro v. San Diego City Council (2002) 96 Cal.App.4th 904, 912.) With that in mind, we now turn to Kitano's substantive arguments.
II
Kitano claims there is insufficient evidence to support the trial court's finding in favor of Bahri on her claim for breach of fiduciary duty. The claim is well taken.
The judgment states, "[T]o the extent a partnership relation was created between ING [] and Bahri with respect to [the business], ING [], through its sole officer, director and shareholder, Kitano, was a fiduciary to Bahri by virtue of their special business relationship. . . . ING [] failed to use due care in its dealings with Bahri and breached its fiduciary duties which resulted in damage to Bahri." (Italics added.)
However, in its statement of decision, the court found, "There is no credible evidence that a partnership was created as between ING [] and Bahri with respect to [the business]." We agree. While ING and Bahri each acquired half of the business from Akhorli, they never agreed to become partners or run the business together. Granted, Kitano foreclosed this possibility by failing to tell Bahri he owned an interest in the business. Nevertheless, because he and Bahri never had a meeting of the minds to operate the business together as partners, it cannot be said they had a fiduciary relationship.
Bahri argues she and ING/Kitano should be considered partners, and thus fiduciaries, because Kitano testified he believed they became partners when Bahri acquired her interest in the business from Akhorli. Indeed, ING/Kitano's cross-complaint to recover expenses they had paid into the business was predicated on the theory they were partners in the business. However, Bahri and ING/Kitano can't be deemed partners simply because Kitano thought or alleged they were. Bahri cites no authority in support of her position in that regard. The truth is, she never even knew ING/Kitano owned half the business, and she always looked to Akhorli as her partner. Under these circumstances, the trial court was correct when it found no credible evidence of a partnership between ING/Kitano and Bahri. Therefore, we reverse the court's finding that ING/Kitano breached a fiduciary duty to Bahri.
The reversal is a hollow victory for appellants, however. It has no bearing on Bahri's remaining causes of action, which, as we explain below, are supported by substantial evidence and fully justify the trial court's award of damages in her favor.
III
In addition to finding Kitano breached a fiduciary duty to Bahri, the trial court found Kitano and Akhorli committed fraud by "actively conceal[ing] material facts from Bahri which should have otherwise been disclosed to her." The primary basis for this finding was that Kitano and Akhorli failed to disclose their prior partnership agreement to Bahri when she acquired her interest in the business from Akhorli on December 1, 2007. Kitano claims that while Akhorli clearly concealed the prior partnership agreement from Bahri at that time, there is no evidence that he did. In fact, he insists he did not even know about the December 1, 2007 agreement between Akhorli and Bahri until the end of that month.
Of course, that's exactly what Kitano said at trial when he took the stand. However, the court found he was not a credible witness. Bahri, on the other hand, was found to be a credible witness by the court. And she testified Akhorli told her his attorney, i.e., Kitano, drafted the December 1, 2007 agreement she and Akhorli signed. While there was some evidence Akhorli directed his office manager to fill in some of the preliminary information in the agreement, such as names and dates, that does not foreclose the possibility Kitano had a hand in preparing, or at least knew about, the agreement, which is what Bahri indicated in her testimony. Although not uncontradicted, Bahri's testimony on this point constitutes substantial evidence Kitano was aware of the December 1, 2007 agreement and concealed his interest in the business from Bahri at that time.
Besides failing to tell Bahri of his interest in the business in December 2007, Kitano also concealed that information from Bahri for several months thereafter. For example, in his January 30, 2008 letter to Bahri, Kitano failed to disclose that ING, and not Akhorli, owned the other half of the business she was acquiring and that he owned ING. Had Kitano disclosed these facts to Bahri at that time, she could have confronted Akhorli and possibly obtained redress from him before he filed for bankruptcy. We can think of no reason why Kitano failed to inform Bahri of his interest in the business, other than to assist Akhorli in a scheme to defraud Bahri and prevent her from knowing who actually owned the business. As such, we affirm the trial court's finding Kitano committed fraud by concealing material facts from Bahri.
IV
Next, Kitano maintains there is insufficient evidence he conspired with Akhorli to defraud Bahri. Kitano contends he not only lacked the intent to conspire, but also committed no acts in furtherance of the alleged conspiracy. The record provides reasons for the trial court to conclude otherwise.
As explained in the previous section, there is substantial evidence to support the inference Kitano was in on the scheme to defraud Bahri. Although Akhorli is the one who initially convinced Bahri to invest in the business, Kitano played a key role in terms of preventing Bahri from discovering who actually owned the business. In fact, according to Bahri's testimony, Kitano is the one who drafted the December 1, 2007 agreement that set forth the terms of her investment. That document represented Akhorli was Bahri's partner, when actually, Akhorli had already sold half of the business to Kitano. So when Akhorli sold the other half to Bahri, he was out of the business altogether.
However, Kitano did not inform Bahri of this then, or any time thereafter. Instead, he perpetuated the false and misleading notion that Bahri and Akhorli were partners. That is, he did until he submitted his perjurous declaration in the Kim case. In that document, Kitano represented to the court that ING and Bahri became co-owners in the business on or about September 27, 2007. Although Bahri did not acquire her interest until December 2007, Kitano attributed this discrepancy to faulty memory. However, what he could not explain in his testimony was the patent contradiction between his declaration and what he told Bahri. While he said in his declaration that Akhorli was out of the business on or about September 2007, he represented in his January 30, 2008 letter to Bahri that Akhorli still owned half of the business at that time. Considering the record as a whole, there is substantial evidence to support the trial court's conclusion Kitano conspired with Akhorli to defraud Bahri.
V
In his next two arguments, Kitano claims there is insufficient evidence he committed fraud by intentionally or negligently misrepresenting material facts to Bahri. The premise of Kitano's argument is that Bahri "was not induced to invest based on anything [he] said or did since they were never in communication with each other." This premise is faulty for two reasons.
First, as explained above, the evidence indicates Kitano had a hand in drafting, or at least knew about, the December 1, 2007 agreement which misled Bahri into thinking Akhorli was her partner. Since the agreement was the vehicle by which Bahri acquired her interest in the business, Kitano played an important part in terms of both inducing her to invest and concealing the true nature of her ownership interest.
Second, the court's finding on the fraud causes of action was not limited to fraud in the inducement. Rather, the court found more broadly that Kitano made intentional and negligent misrepresentations to Bahri "in order to induce her reliance thereon." Notwithstanding Kitano's role in drafting the December 1, 2007 agreement, there is substantial evidence Bahri detrimentally relied on false representations Kitano made to her after that date, including those contained in his letter to her of January 30, 2008. As a result of the letter, the trial court could justifiably find Bahri was tricked into believing she had acquired an interest in a lucrative business and convinced not to question the terms of her agreement. Indeed, the evidence supports Bahri's claim the misrepresentations in the letter delayed her discovery of the fraud for several months and thus gave Akhorli "sufficient time to disappear." Accordingly, we uphold the trial court's findings in favor of Bahri on her causes of action for intentional and negligent misrepresentation.
VI
That brings us to Kitano's challenge to the trial court's finding on Bahri's claim for violation of the Uniform Fraudulent Transfer Act (UFTA). As to that cause of action, the trial court found that through their August 2007 partnership agreement, "Anational [], through Akhorli, knowingly and fraudulently transferred a 50 [percent] partnership interest [in the business] to ING [], through Kitano." The court also found Akhorli and Kitano engaged in a conspiracy to defraud Bahri, and Kitano was ING's alter ego.
Under the UFTA, "(a) A transfer made . . . by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer . . . as follows: [¶] (1) With actual intent to hinder, delay, or defraud any creditor of the debtor. [¶] (2) Without receiving a reasonably equivalent value in exchange for the transfer . . ., and the debtor either: [¶] (A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction. [¶] (B) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due." (Civ. Code, § 3439.04.)
Relying on the fact the UFTA applies to fraudulent transfers, Kitano asserts the statute does not apply to him, because while he received an interest in the business from Akhorli, he did not transfer anything to anyone. Kitano's argument overlooks the trial court's express finding that he and Akhorli were "engaged in a continuing conspiracy" to defraud Bahri. The law is clear that by participating in a civil conspiracy, "a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy. [Citation.] In this way, a coconspirator incurs tort liability co-equal with the immediate tortfeasors." (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) Thus, it doesn't matter that Kitano was on the receiving end of the conveyance between Akhorli and ING. Because the conveyance was part of Kitano and Akhorli's conspiratorial plan to defraud Bahri, the trial court properly found Kitano liable under the UFTA.
VII
As noted, the trial court also found Kitano was acting as ING's alter ego in perpetuating the fraud against Bahri. Kitano asserts that finding fails for lack of substantial evidentiary support, but once again, we disagree.
Explaining the basis and parameters of the alter ego theory, the court in Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980 stated: "Ordinarily, a corporation is regarded as a legal entity separate and distinct from its stockholders, officers and directors. Under the alter ego doctrine, however, where a corporation is used by an individual . . . to perpetrate fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, a court may disregard the corporate entity and treat the corporation's acts as if they were done by the persons actually controlling the corporation. [Citations.] [¶] In general, the two requirements for applying the alter ego doctrine are that (1) there is such a unity of interest and ownership between the corporation and the individual or organization controlling it that their separate personalities no longer exist, and (2) failure to disregard the corporate entity would sanction a fraud or promote injustice. [Citations.] The doctrine is applicable where some innocent party attacks the corporate form as an injury to that party's interests." (Id. at pp. 993-994.)
Here, it is readily apparent that application of the alter ego theory was fully justified. Even though ING was a party to the agreement with Akhorli in August 2007, Kitano did not formally incorporate ING until two weeks after the agreement was signed. Furthermore, he capitalized ING with only $2,000, an amount that even he admitted was insufficient to run the business. Thus, Kitano had to take out a personal loan to acquire the money to pay Akhorli for ING's share in the business. And when he did, he used his own bank account, not ING's. When asked if ING's undercapitalization meant he would have to personally obtain and guarantee the funding needed for the business, Kitano said yes. He conceded that, from a financial perspective, there was no distinction between him and ING and they were really "one and the same."
Not only that, it is clear Kitano used ING to prevent Bahri from learning about his interest in the business. In his January 30, 2008 letter to Bahri, Kitano failed to disclose that he owned and controlled ING and that ING owned half of the business at that time. Thus, Bahri was left with the false impression Akhorli was still her partner and that Kitano was simply writing her as Akhorli's attorney, as opposed to someone who had a direct financial stake in the business.
Kitano also failed to disclose his relationship with ING in his declaration in the Kim case. Had the court in that case known that Kitano had a personal stake in ING, it might have examined his declaration more closely before expunging the receivership and allowing the business to reopen. Considering the depths of Kitano's deception, it comes as no surprise that the trial court found Kitano's declaration to be perjurious and his actions toward Bahri to be fraudulent, malicious and oppressive. Because the evidence reveals Kitano used ING to perpetuate his fraudulent scheme with Akhorli, we uphold the trial court's finding he was ING's alter ego.
VIII
Lastly, Kitano challenges the trial court's ruling requiring ING to pay Bahri $25,000 in punitive damages. He contends the award was improper because, during the punitive damages phase of the trial, there was no evidence showing ING had any money or assets. However, Kitano did not include the record of that phase of the trial in the record on appeal. His failure to do so precludes adequate review of the issue and mandates an affirmance of the trial court's ruling. (Estrada v. Ramirez (1999) 71 Cal.App.4th 618, 620, fn. 1; Mountain Lion Coalition v. Fish & Game Com. (1989) 214 Cal.App.3d 1043, 1051, fn. 9.)
DISPOSITION
The trial court's finding Kitano breached a fiduciary duty to Bahri is reversed. In all other respects, the judgment is affirmed. Costs on appeal are awarded to Bahri.
BEDSWORTH, J. WE CONCUR: RYLAARSDAM, ACTING P. J. ARONSON, J.