Opinion
B225338
11-17-2011
SARKIS GUMRIKYAN et al., Plaintiffs, Cross-defendants and Appellants, v. KHACHIK KESHESHYAN et al., Defendants, Cross-complainants and Appellants.
Neil C. Evans for Plaintiffs, Cross-Defendants and Appellants. Michael P. Rubin & Associates and Michael P. Rubin for Defendants, Cross-Complainants and Appellants.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. EC036378)
APPEALS from a judgment of the Superior Court of Los Angeles County, David Milton, Judge. Affirmed.
Neil C. Evans for Plaintiffs, Cross-Defendants and Appellants.
Michael P. Rubin & Associates and Michael P. Rubin for Defendants, Cross-Complainants and Appellants.
Plaintiffs, cross-defendants and appellants Sarkis Gumrikyan, Sedrak Gumrikyan and Stepan Gumrikyan (collectively, plaintiffs or the Gumrikyans) appeal a judgment on remand following a partial reversal by this court on the previous appeal, Gumrikyan v. Kesheshyan (July 17, 2008, B196783) [nonpub. opn.] (Gumrikyan I).
Defendants, cross-complainants and appellants Khachik Kesheshyan, Hamlet Derhovanessian, Sedrak Kesheshyan and Khachik Tumanyan (collectively, defendants or the Kesheshyans) cross-appeal from the judgment.
The essential issue presented on appeal is the sufficiency of the evidence to support the trial court's determination the Gumrikyans owed the Kesheshyans $728,271.52, representing the Kesheshyans' share of partnership profits. We conclude the record supports the trial court's factual finding in that regard. In addition, we perceive no abuse of discretion in the trial court's discretionary rulings. The judgment is affirmed.
FACTUAL AND PROCEDURAL BACKGROUND
1. Pleadings.
a. The Gumrikyans' complaint.
On May 27, 2003, the three plaintiffs, the Gumrikyans, filed the operative first amended unverified complaint against the four defendants. Plaintiffs alleged the existence of an oral partnership agreement and that the four defendants had breached the agreement by failing to contribute their respective one-seventh shares to purchase and improve the business property, a banquet hall. The complaint further alleged title to the property was taken solely in the name of Sarkis Gumrikyan because defendants had bad credit. Of the total of $1,873,304 of costs incurred in the development of the banquet hall, plaintiffs paid or incurred over 83 percent of that sum. Defendants, despite plaintiffs' requests, refused to come up with their share of the costs and expenses. After completion of the remodel, defendants seized complete control of the business and refused to pay plaintiffs their share of the profits.
Based on these allegations, plaintiffs sought, inter alia, an accounting and an order compelling defendants to produce all financial records, as well as rescission and damages.
b. Kesheshyans' cross-complaint.
The Kesheshyan filed a cross-complaint against the Gumrikyans. The operative second amended cross-complaint set forth, inter alia, causes of action for fraud, conversion and breach of fiduciary duty. In addition to damages, the cross-complaint sought declaratory relief and an accounting.
2. Proceedings - the first trial.
The matter was tried to the court sitting without a jury. On July 16, 2004, the trial court issued a statement of decision, ruling as follows:
On the threshold issue of the existence of a partnership, the trial court found there was a contract among the seven parties, namely, the three Gumrikyans and the four defendants. "The terms of the contract were that these individuals would form a partnership for the operation of a banquet hall and that the parties would share the assets, profits and losses equally. The evidence shows that the asset was title to a banquet hall, Caesar's, and the profits or losses derived from the operation of Caesar's." The trial court also observed the inclusion by plaintiffs of a cause of action for dissolution of partnership "implies the existence of a partnership between the parties."
With respect to plaintiffs' complaint, the trial court ruled plaintiffs had met their burden of proof solely with respect to the causes of action for an accounting and for dissolution of partnership. As for plaintiffs' remaining claims, the trial court found plaintiffs failed to show any grounds for rescission of contract, failed to show that defendants were indebted to plaintiffs for a certain amount of money (money lent), and failed to establish that defendants knowingly interfered with plaintiffs' expectancy of economic relationships.
On the cross-complaint, the trial court found the cross-complainants had met their burden solely with respect to the causes of action for declaratory relief, quiet title and an accounting.
With respect to the rights of the parties, the trial court found "under the partnership agreement, each party had the right to collect equal shares of the profits and to bear equally the losses from the operation of the Caesar's banquet hall. In addition, the Court finds that under the partnership agreement, each party had a right to own an equal share of the real property, i.e., the title to the banquet hall."
On the quiet title claim, the trial court ruled that title to the banquet hall, held exclusively by Sarkis Gumrikyan, must be amended to add the other two Gumrikyans, as well as the four defendants. "The title shall be amended to show that each owner has an undivided one-seventh interest as tenants in common."
The trial court ruled that it was necessary to appoint an independent accountant to conduct an accounting of the profits and losses and to determine the profit or loss to be distributed to each member of the partnership. The trial court selected July 26, 2002, as the appropriate date to begin the accounting because it was the date of the first event in the banquet hall.
3. Appointment of referee and receiver.
The trial court appointed Susan Bleecker (Bleecker) pursuant to Code of Civil Procedure section 639 as the referee accountant.
The trial court also appointed David Pasternak as receiver in this matter.
4. Sale of receivership business and real property.
On January 26, 2006, the trial court ordered the partition and sale of the receivership business and real property. On June 2, 2006, the trial court ordered the sale of the receivership business and real property to the four defendants for $6.3 million and ordered that defendants receive an immediate credit of $3.6 million for their 4/7th share of the $6.3 million sale price. Shortly thereafter, escrow closed for the sale of the receivership business, liquor license and receivership real property.
On October 23, 2006, the trial court granted the receiver's motion for an order for final distribution of the sale proceeds and remaining assets of the partnership. After payment of compensation and various costs, there remained a balance of $993,973. Of that sum, $637,389 was to be distributed jointly to the Gumrikyans and their attorney, David Drexler, and $26,892 to Michael Rubin, counsel for defendants. After those distributions, the remaining $329,629 was to be distributed in the 4/7ths and 3/7ths ratios.
Judgment was entered December 4, 2006. The Gumrikyans appealed and defendants cross-appealed.
5. The first appeal: Gumrikyan I.
The essential issue presented in Gumrikyan I on the main appeal was the sufficiency of the evidence to support the trial court's finding of an oral partnership agreement. The issues on the cross-appeal related to the trial court's approval of certain items in the receiver's final account.
We upheld the trial court's decision insofar as it found the existence of a partnership and ordered an accounting. However, with respect to the subsequent phase of the proceedings, we determined the trial court abused its discretion in approving certain aspects of the receiver's final account.
a. Controversy as to whether the four Kesheshyan defendants actually received $728,217 in net profits to which they were entitled, during the time the Gumrikyans ran the business.
The primary issue on the cross-appeal related to the defendants' recovery of their 4/7th share of the net profits of the business.
The record reflected that Bleecker analyzed the amount each partner should receive from the net profits she was able to calculate from the period of time from July 26, 2002 to July 31, 2005. Bleecker determined the amount of net profits due the four defendants totaled $728,217. However, there was a dispute as to whether said net profits were actually distributed to the four Kesheshyan defendants or whether they were still owed those monies.
With respect to whether the four defendants received their proportionate share of the net profits, the evidence at trial showed that in May 2003, the Gumrikyans forcibly took control of the business, changed the locks and excluded defendants from the business.
This circumstance was pointed out by defendants in their opposition to the receiver's final accounting. The declaration of Khachik Kesheshyan stated in relevant part: "Between July 2002 and May 2003, there were no 'net profits' because all of the revenue the business generated was put back into the business . . . . [¶] 3. In Susan Bleecker's Summary of Share of Profits . . . she calculated the net profits from July 2002 (when this court ordered the accounting to start) and July 31, 2005 (the day the Receiver took over). . . . All net profits were kept by the Plaintiffs. Neither I nor any of the co-defendants received any distribution at any time of any net profits as reflected in Susan Bleecker's report. . . ."
In other words, Khachik Kesheshyan asserted (1) no net profits were generated before defendants were locked out of the business, and (2) after the defendants were locked out, the Gumrikyans ran the business and retained all the profits.
Defendants' opposition to the receiver's motion for approval of the final accounting was also supported by the declaration of Michael Rubin, counsel for the defendants. The Rubin declaration stated: "In speaking with Ms. Bleecker, I asked her why the accounting does not provide for payment to the Defendants of $728,217.52. She stated that her accounting only calculated the amount of the net profits, not where they went. She stated that she made no determination of whether the Defendants received any distribution of the net profits."(Italics added.)
In reply, the receiver's papers stated "[t]he allocation of profits does not impact the distribution of receivership funds because all such profit (if any) was distributed to partners and/or used for the operation of the business before the commencement of the receivership."
b. Trial court implicitly found the Kesheshyan defendants received their $728,217 proportionate share of the net profits after they were excluded from the business.
At the October 23, 2006 hearing on the receiver's motion for approval of the final accounting, the trial court declined to make an express finding as to whether defendants already had received the $728,217 in net profits to which they were entitled. However, the trial court overruled defendants' objections and approved the accounting. Therefore, the trial court implicitly, but necessarily, found the $728,217 in net profits to which defendants were entitled already had been distributed to them.
c. Trial court's ruling was abuse of discretion.
In Gumrikyan I, we concluded the trial court abused its discretion in approving the final accounting because the evidence did not support the trial court's implied finding that the Kesheshyan defendants received their $728,217 proportionate share of the net profits. The evidence at trial established the defendants were locked out by the Gumrikyans in May 2003. Between May 2003 and July 31, 2005, when the receiver took over, the Gumrikyans exercised sole control of the business.
Thus, in Gumrikyan I, we held: "There is no substantial evidence to support a finding that the Gumrikyans distributed $728,217 in net profits, or anything approaching that sum, to the defendants after having excluded them from the business." Although the receiver took the position that the $728,217 did "not impact the distribution of receivership funds because all such profit (if any) was distributed to partners and/or used for the operation of the business," Bleecker, the accountant, had determined the $728,217 were "[n]et proceeds available" to the four defendants. We found "the only reasonable inference to be drawn from the fact that defendants were locked out of the business in May 2003 is that they did not share in any cash proceeds after that date. No evidence is cited to show that the Gumrikyans, after having locked out the defendants, distributed to defendants their proportionate share of the net profits." (Italics added.) We concluded that on the record presented, the trial court abused its discretion in impliedly finding that notwithstanding the exclusion of defendants from the business in May 2003, the defendants obtained distribution of the entire $728,217.52 in net profits to which they were entitled, pursuant to Bleecker's determination.
We reversed the trial court's order approving the final accounting, insofar as the trial court overruled defendants' objection that they had never received their 4/7th share of the net profits. We ruled "[the]he issue of the distribution of said profits must be redetermined on remand, in accordance with the views expressed herein." (Italics added.)
d. Attorney fees awarded to attorney Drexler for unrelated litigation.
Another issue on the cross-appeal in Gumrikyan I was the trial court's order requiring the four Kesheshyan defendants to bear 4/7ths of the attorney fees billed by attorney Drexler in other litigation.
(1) Pertinent factual and procedural history.
By way of background, at some point, Sarkis Gumrikyan, the owner of record, entered into an agreement with Kazar Akopyan (Akopyan) to sell him the property and business for $2.1 million. Akopyan sued Sarkis Gumrikyan for specific performance of that contract. In early 2004, the matter was arbitrated before a retired judge, who ruled in favor of Sarkis Gumrikyan. On July 28, 2004, the trial court entered an order confirming the arbitration award and decreeing that Sarkis Gumrikyan recover from Akopyan his attorney fees in the sum of $170,187.50 plus costs, for a total of $187,146.50.
The arbitrator also awarded Sarkis Gumrikyan an escrow deposit of $20,000 by Akopyan as liquidated damages and allowed Sarkis Gumrikyan to retain $100,000 paid by Akopyan outside escrow.
Akopyan apparently was judgment proof, rendering Sarkis Gumrikyan unable to collect the award of attorney fees and costs from him.
Therefore, in response to the receiver's final report and motion, the Gumrikyans requested the trial court to order the receiver to pay them and Drexler the amount ordered by the trial court in its earlier order confirming the arbitration award in the Akopyan matter. The Gumrikyans' theory was that but for the successful efforts of Drexler, there would have been no property for the receiver to sell and no money to be distributed to anyone.
The receiver did not take any position on this issue.
Defendants, however, objected on the ground they did not retain Drexler nor did they ever agree to pay him attorney fees and costs incurred in connection with the Akopyan matter.
The trial court overruled the objection and ordered the receiver to pay Drexler $173,543.50 from the receivership estate.
(2) Gumrikyan I held trial court abused its discretion in requiring defendants to bear 4/7ths of Drexler's fees in the Akopyan action.
We held the trial court erred in requiring defendants to pay 4/7ths of Drexler's attorney fees in the Akopyan action.
We reasoned the partnership was not a party to the Akopyan action. The sole parties to that action were Akopyan, as plaintiff/buyer and Sarkis Gumrikyan, as defendant/seller. The record further reflected that neither the partnership nor any of the defendants was a party to the superior court proceeding confirming the arbitration award. The sole parties to the superior court proceeding were Akopyan and Sarkis Gumrikyan.
Further, the award of attorney fees was only against Akopyan. Pursuant to the order confirming the arbitration award, Sarkis Gumrikyan was to look to Akopyan for recovery of his attorney fees and costs.
"There was no showing that defendants ever agreed to retain Drexler as their counsel in the Akopyan action. Merely because Sarkis Gumrikyan was unable to recover his attorney fees in the Akopyan action from Akopyan does not entitle the Gumrikyans to recover said fees, or more precisely, 4/7ths of said fees, from defendants in the instant action."
We also "made the observation that at the same time Drexler was representing Sarkis Gumrikyan (and allegedly all seven partners) in the Akopyan litigation, Drexler was representing the Gumrikyans in the instant action against defendants. It is self evident that Drexler could not act as counsel for the four [Kesheshyan] defendants in the Akopyan action at the same time that he was representing the Gumrikyans in the instant action against the four [Kesheshyan] defendants."
For these reasons, we held the trial court erred in requiring defendants to pay 4/7ths of Drexler's attorney fees in the Akopyan action.
Therefore, we directed the trial court on remand to reverse its order charging defendants with 4/7ths of the $173,543.50 in attorney fees awarded to Drexler for the Akopyan litigation.
The remittitur issued on November 10, 2008.
6. Proceedings on remand.
a. The Kesheshyans' motion for entry of amended judgment.
On December 12, 2008, the Kesheshyans filed a motion in the superior court for entry of judgment to conform to this court's decision in Gumrikyan I. The Kesheshyans contended the trial court was capable of entering an amended judgment without the need for any further proceedings.
With respect to the Kesheshyans' share of the partnership profits, the motion asserted the Kesheshyans "should be awarded $728,217.52 from [the Gumrikyans] representing the partnership net profits, as determined by Susan Bleecker, CPA, and that were never distributed by [Gumrikyan] to [Kesheshyan]." The motion also requested interest thereon, commencing July 31, 2005, the last day Gumrikyan exclusively operated the business before the receiver took over.
The Kesheshyans' motion for entry of an amended judgment also sought restitution of their share of the attorney fees paid to Drexler in the Akopyan litigation. As indicated, the original judgment charged the Kesheshyans with 4/7ths of the $173,543 (amounting to $99,167) which had been paid to Drexler in the Akopyan litigation. The Kesheshyans' motion requested restitution of the $99,167 plus interest thereon, directly from Drexler.
On February 24, 2009, Sarkis Gumrikyan filed for bankruptcy.
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b. Trial court's ruling on the motion for entry of an amended judgment.
On March 27, 2009, the trial court ruled on the Kesheshyans' motion as follows:
With respect to their request the trial court summarily enter an order awarding them $728,217 for partnership net profits, the trial court "denie[d] this request because the Court of Appeal did not order that this amount be distributed to [Kesheshyan]. Instead, the Court of Appeal remanded the issue of whether $728,217.52 [actually] was distributed to [the Kesheshyans] to be re-determined by the trial court. A hearing will be necessary to determine this issue." (Italics added.)
As for the Kesheshyans' request the trial court change its order charging them with 4/7ths of the $173,543 paid to Drexler for attorney fees in the Akopyan litigation (amounting to $99,167), the trial court "grant[ed] this request pursuant to the Court of Appeals opinion." However, the trial court denied the Kesheshyans' request it order the Gumrikyans' former attorney, Drexler, to reimburse them for the $99,167. The trial court denied this request on the ground Drexler "is entitled to be paid the full amount of the attorney's fees" for the services he rendered in the Akopyan litigation. Instead, the trial court ordered the Gumrikyans to make restitution to the Kesheshyan for the $99,167.
c. Proceedings on remand to determine whether the Gumrikyans actually had distributed $728,217 in profits to the Kesheshyans.
The factual issue on remand was tried over a period of days. At the outset, on December 11, 2009, the trial court framed the issue as follows: "I'm looking at the Court of Appeal opinion and what it says. The Court of Appeal says that there is no substantial evidence to support a finding that the Gumrikyans distributed $728,217; and the receiver made no attempt to show the $728,217, in fact, had been distributed. That's the sole fact we are here." The "figure of $728,217.52 is not in dispute. It's just whether or not this amount was distributed."
Bleecker, the court appointed accountant, testified the $728,217 was credited to the four Kesheshyan defendants as a reduction in the amount they paid the three Gumrikyans to complete the sale of the property. (As indicated, in June 2006, the trial court ordered the sale of the receivership business and real property to the four Kesheshyan defendants for $6.3 million and ordered the Kesheshyans receive an immediate credit of $3.6 million for their 4/7th share of the $6.3 million sale price.)
Dominic Lobuglio, CPA, an auditor with over 30 years accounting experience, was called as a witness by the Kesheshyans. Lobuglio had been hired by the receiver, Pasternak, to prepare the tax returns, as well as to review Bleecker's schedules "to ensure that the receivership liabilities would be covered by proceeds that would be distributed to him to the receivership estate out of escrow."
Lobuglio testified: The business was valued at $6.3 million ($900,000 for each of seven partners). The Kesheshyans had to pay $2.7 million into escrow, which represented the 3/7th ownership interest of the Gumrikyans. The Kesheshyans also had to deposit an additional $652,000 into escrow to cover their share of the partnership's liabilities. According to Bleecker's schedules, the Kesheshyans were due $728,217 in net profits. However, the Kesheshyans did not receive a credit of $728,217 in the accounting done in connection with the buy-out. The Kesheshyans deposited into escrow $2.7 million and an additional $652,000 which was then remitted to the receiver to close the escrow. The Kesheshyans were not given a credit for the $728,217 that they were owed.
Bleecker was recalled as a witness and then testified on further redirect examination as follows:
"Q Ms. Bleecker, you just heard the testimony of Dominic Lobuglio; correct?
"A Yes.
"Q Do you disagree in any material respect with his testimony?
"A No. We may have a different prospective [sic] what we are referring to as credits, but I understand what he is saying.
"Q Do you still believe that the Kesheshyans were given a credit of $728,217.52?
"A Yes.
Bleecker then attempted to explain how the $728,217 credit was applied.
On further recross examination, Bleecker again stated, "I don't disagree with what [Lobuglio] said. Clearly we are using . . . different definitions or prospectives [sic] when we are determining a credit."
Bleecker acknowledged that at the time she compiled the accounting, she was unaware the Gumrikyans exclusively had been operating the business.
On February 19, 2010, the parties returned to court to argue the matter. At that juncture, the trial court inquired whether the escrow documents reflected the $728,217 credit the Kesheshyans allegedly received toward the purchase price. The Gumrikyans' counsel conceded the escrow documents did not contain that analysis, stating "the flow of sale proceeds is the only document that shows the analysis of how and where the money came from." According to the Gumrikyans' counsel, "the escrow documents were not designed to show these calculations."
On March 19, 2010, the parties returned to court for further proceedings. After hearing further arguments by counsel, the trial court began by noting it had "give[n] each side ample time to argue." The trial court summarized the evidence on remand, particularly the testimony of Bleecker and Lobuglio. The trial court credited Lobuglio's testimony and found the "Kesheshyans did not receive the $728,000. . . . They did not get a credit for $728,000 that they were owed." "That's the evidence before the court; and then the court produced this demonstrative sheet to assist the parties for argument and discussion directly from . . . the escrow sheet -- two escrow sheets; and it is the court's belief that the Kesheshyans did not receive the $728,000 [to which they were entitled]. So in compliance with the Court of Appeal's order, that's the court's ruling."
d. Judgment on remand and the instant appeals.
On July 19, 2010, the trial court entered a final judgment on remand, as directed by Gumrikyan I. It awarded the Kesheshyans a total of $1,260,120.70, which included the $728,217.52 in undistributed partnership profits, as well as $99,167 for the Kesheshyans' share of the attorney fees paid to Drexler (as determined in the March 27, 2009 order), plus interest thereon.
On June 23, 2010, Gumrikyan filed a premature notice of appeal from the July 19, 2010 judgment. On September 1, 2010, Kesheshyan filed notice of cross-appeal.
CONTENTIONS
The Gumrikyans contend: issuance of a judgment against co-partners for equal amounts of undistributed profit was not consistent with the evidence; the trial court erred in giving the Kesheshyans a full credit of $3.6 million in escrow without making certain necessary deductions; if the trial court accepted Lobuglio's testimony, the Gumrikyans should receive a credit of $148,000 against the $728,217.52; each partner has the same amount of undistributed profit and therefore no judgment should be entered; Gumrikyan I does not mandate a judgment against the Gumrikyans and the matter should be referred to the court-appointed accountant for a recommendation as to how to address the accounting issue; and interest should not be award retroactively.
On cross-appeal, the Kesheshyan contends the trial court abused its discretion when, after unconditional reversal of the judgment, it failed to order reimbursement of attorney fees and costs directly from Drexler, former counsel for the Gumrikyans.
DISCUSSION
1. Substantial evidence supports trial court's finding the Kesheshyans had not received the $728,217.52 they were owed in partnership profits by way of a credit toward the purchase price.
As the trial court recognized, the sole factual issue on remand was whether the Kesheshyans' share of the net partnership profits, amounting to $728,217.52, actually had been distributed to them, or whether they were still owed that sum, or some portion thereof.
The testimony of Lobuglio, credited by the trial court, was that the Kesheshyans did not receive a credit of $728,217 in connection with the buy-out. Lobuglio testified the Kesheshyans deposited into escrow $2.7 million and an additional $652,000 which was then remitted to the receiver to close the escrow. However, the Kesheshyans were not given an escrow credit for the $728,217, representing the withheld partnership profits.
This testimony by the Kesheshyans' accounting expert constitutes substantial evidence to support the trial court's factual finding "that the amount of $728,217.52 collected by [Gumrikyan] had not been distributed to [Kesheshyan]."
The escrow documents provide further support for the trial court's conclusion the Kesheshyans were not compensated by the Gumrikyans for $728,217 in partnership profits. As the trial court noted, the escrow documents did not indicate the Kesheshyans were given a $728,217 credit toward the purchase price.
In essence, the Gumrikyans seek reversal on the ground the trial court erred in crediting the analysis of Lobuglio rather than Bleecker. However, it is not the role of this court to reweigh the evidence but merely to determine whether substantial evidence supports the decision of the trial court. Further, "the weight to be accorded to conflicting expert testimony is primarily a question for the trier of fact." (Darling v. Caterpillar Tractor Co. (1959) 171 Cal.Appp.2d 713, 721.) The Gumrikyans have failed to show the trial court committed reversible error in crediting the testimony of Lobuglio rather than Bleecker.
2. No abuse of discretion in award of prejudgment interest.
The Gumrikyans contend that even if an accounting error occurred, the trial court erred in awarding interest on the partnership profits retroactively, to July 31, 2005. The Gumrikyans argue the Kesheshyans are not entitled to prejudgment interest because their claim was uncertain and unliquidated. The contention is unavailing.
Civil Code section 3287 states at subdivision (b): "Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed." Under said subdivision, the trial court "has discretion to decide whether prejudgment interest should be awarded on an unliquidated contractual claim. It is up to the judge to determine the date from which interest runs, but in no event may the court fix a date earlier than the filing of the action. [Citations.]" (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 829, italics added.)
Here, the Kesheshyans' claim for $728,217 is for net partnership profits due them under the partnership agreement. Because their claim for undistributed profits arose from the partnership agreement, the trial court acted within its discretion in awarding prejudgment interest thereon.
3. The cross-appeal.
As indicated, in accordance with Gumrikyan I, the trial court on remand ordered the Gumrikyans to repay the Kesheshyans the sum of $99,167 which had been charged to the Kesheshyans as their share of the attorney fees paid to Drexler in the Akopyan litigation.
On the Kesheshyans' cross-appeal, they contend they trial court abused its discretion in failing to order reimbursement of the $99,167 in attorney fees directly from Drexler, jointly and severally with the Gumrikyans.
Our review of the trial court's ruling is deferential. "Whether a party is entitled to restitution following reversal 'present[s] a question calling for judicial discretion in determining what equity required.' [Citation.] The court's ruling will not be disturbed 'in the absence of a showing of manifest abuse of . . . discretion.' [Citations.] It is appellants' burden to demonstrate that the court's 'discretion was so abused that it resulted in a manifest miscarriage of justice.' " (Gunderson v. Wall (2011) 196 Cal.App.4th 1060, 1065.)
Here, the trial court denied the Kesheshyans' request that Drexler be ordered to make restitution to them. The trial court reasoned Drexler "is entitled to be paid the full amount of the attorney's fees" for the services he rendered in the Akopyan litigation. Consequently, the trial court required the Kesheshyans to look to the Gumrikyans for recovery of the $99,167.
In view of the fact Drexler was entitled to be paid in full for his services in the Akopyan litigation, coupled with the fact that Drexler was merely counsel for the Gumrikyans rather than a party to this litigation, the trial court properly refused the Kesheshyans' request that Drexler be ordered to pay them the $99,167. The trial court acted within its discretion in awarding the Kesheshyans restitution of the $99,167 solely from the Gumrikyans.
DISPOSITION
The July 19, 2010 judgment is affirmed. The parties shall bear their respective costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KLEIN, P. J. We concur:
KITCHING, J.
ALDRICH, J