Opinion
A114082 A114762
12-14-2006
SHAUL HAROSH, Plaintiff and Appellant, v. EFRAIM SHOUA et al., Defendants and Respondents.
Plaintiff Shaul Harosh appeals from the trial court judgment granting defendants motion to dismiss and awarding attorney fees as sanctions. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Haroshs opening brief violates California Rules of Court, Rule 14, subdivision (a), because none of the factual assertions in his Statement of the Case are supported by citations to the record. It appears that many, if not most, of the facts included in Haroshs opening brief are not in the record and we disregard them.
Appellant Shaul Harosh filed a first amended complaint against Farinelli Fine Antiques Corp., its owners Efraim Shoua and Dorian Lisbona, and salespersons Morris Schwecky and Mordehay Mardo (collectively, Farinelli). Harosh alleged that he was denied a $650,000 commission on a sale of merchandise totaling over five million dollars. Farinelli filed a general denial to the complaint and a cross-complaint seeking return of money paid to Harosh under duress. Harosh filed a general denial to the cross-complaint and alleged the affirmative defense of unclean hands.
Defendants deposed Harosh. Harosh testified that his duties were to bring customers from the street into the store and to introduce them to one of the salespeople; he was entitled to a commission on any resulting sale. He claimed he was denied his rightful commission on a $5.5 million sale by salespeople Schwecky and Mardo to a customer named John OQuinn. Harosh also testified that the Farinelli salespeople lied to the customers regarding the quality of the merchandise and that the items sold to OQuinn were largely fakes.
Following the deposition, Farinelli moved to dismiss the complaint as seeking a commission for the sale of merchandise which Harosh testified was misrepresented to the customer. Farinelli also sought sanctions under Code of Civil Procedure section 128.7 because Harosh refused to dismiss the complaint. The trial court dismissed the complaint based on its conclusion that Harosh made binding admissions that the conduct for which he sought compensation was illegal. The trial judge granted Farinellis motion for sanctions because Harosh failed to dismiss the complaint when given an opportunity to do so. The court ordered Harosh to pay Farinellis attorney fees in the sum of $61,995.00 and Farinellis costs in the sum of $ 8,947.03.
Harosh has not challenged the propriety of Farinellis nonstatutory "motion to dismiss" or otherwise objected to consideration of Haroshs deposition testimony. (See Weil et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2006) ¶ 7:370, p. 7-125.)
DISCUSSION
On appeal, Harosh challenges the trial court conclusion that he made binding admissions regarding the legality of the sales to OQuinn. He also challenges the award of attorney fees and costs.
I. The Legality of the OQuinn Transaction
An illegal contract may not serve as the foundation of any action and the courts will not lend their assistance to a party who seeks compensation for an illegal act. (Kashani v. Tsann Kuen China Enterprise Co. (2004) 118 Cal.App.4th 531, 541-542; Waisbren v. Peppercorn Productions, Inc. (1995) 41 Cal.App.4th 246, 262.) The trial court dismissed Haroshs complaint because he seeks to recover a commission on an admittedly illegal transaction, Farinellis sale of merchandise that was misrepresented to OQuinn. Dismissal of the complaint on this ground is akin to a grant of summary judgment and we review the record de novo to determine whether there is a material issue of fact which must be submitted to a jury. (See Heater v. Southwood Psychiatric Center (1996) 42 Cal.App.4th 1068, 1078 [dismissal of a complaint due to defendants immunity from suit].)
The trial court treated as a binding judicial admission Haroshs unclean hands affirmative defense allegation that "the conduct engaged in by [Farinelli] is illegal." It is well established that parties are bound by admissions in their pleadings. (Heater v. Southwood Psychiatric Center, supra, 42 Cal.App.4th at pp. 1079-1080, fn. 10.) However, Haroshs bare allegation that Farinelli was involved in unspecified "illegal" conduct is not an admission that the specific transaction for which Harosh seeks compensation was fraudulent and illegal. We do not treat the affirmative defense allegation as a judicial admission. Because we do not rely on the purported judicial admission, we do not consider Haroshs contentions that the court erred because the pleading was unverified and because he was entitled to plead inconsistent defenses.
The record does support the trial court finding that Harosh admitted in his deposition that the transaction for which he seeks a commission was illegal. Harosh testified that the Farinelli salespeople lied to the customers, in particular by misrepresenting the nature and quality of the merchandise. He reviewed the invoice of the sale to OQuinn during the deposition and testified that the items sold to OQuinn were largely fakes. He stated that "most of the stuff in the store are fake." He specifically testified that 99 percent of the jade in the store was serpentine, that items sold to OQuinn as ivory were cow or camel bone, and that porcelain sold to OQuinn was fake. Harosh also testified that he knew that Schwecky and Mardo were lying to the customers when he was working for Farinelli and introducing customers to the salespeople. Harosh contends that he did not testify during his deposition that he had personal knowledge of the specific representations made to OQuinn. However, it is enough that Harosh admitted he knew that Farinellis salespeople made material misrepresentations; the specific content of the misrepresentations is not critical to the issue before us.
Haroshs admission is treated as having "a very high credibility value," especially because the admission was elicited during Haroshs deposition. (DAmico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 22.) As the trial court concluded, Harosh admitted to participating in a civil conspiracy with Farinelli to defraud Farinellis customers. (See Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) Harosh questions in passing whether his subjective belief that the sales were fraudulent should be determinative. As there is no evidence in the record that the sales at issue were in fact legal, we do not decide this issue. Haroshs admission governs. The trial court properly treated Haroshs complaint as an action seeking compensation for an illegal transaction.
Harosh makes three other arguments on appeal, but there is no indication in the record that the arguments were presented to the trial court. First, Harosh contends that the trial court erred in concluding that he participated in a civil conspiracy to commit fraud because there is no evidence that OQuinn claimed damages from the conspiracy. Second, Harosh argues that his claim for commissions is enforceable because he does not "require[] the aid of the illegal contract to establish his case." (CAL/NEVA Lodge, Inc. v. Marx (1960) 178 Cal.App.2d 186, 189.) Finally, and most extensively, Harosh argues that exceptions to the rule prohibiting actions to enforce illegal contracts are applicable. (See, e.g., Kashani v. Tsann Kuen China Enterprise Co., supra, 118 Cal.App.4th at pp. 541-542.) These contentions have all been forfeited because there is nothing in the record showing that Harosh made these arguments to the trial court. (Newton v. Clemons (2003) 110 Cal.App.4th 1, 11; see also Ballard v. Uribe (1986) 41 Cal.3d 564, 574 ["a party challenging a judgment has the burden of showing reversible error by an adequate record"].)
In fact, it appears that OQuinn has claimed damages. We grant Farinellis October 2, 2006 request for judicial notice of the summons and complaint filed by OQuinn. The complaint alleges fraud and unfair business practices resulting in damages in excess of $3 million. The complaint states that the items purchased by OQuinn from Farinelli were represented to be originals but were in fact reproductions. We deny Farinellis August 4, 2006 request for judicial notice of the fact that Raymond Burke is an attorney and member of the State Bar of California. We also deny Haroshs July 5, 2006 request for judicial notice of a California Supreme Court depublication order and Farinelli invoices. The material is irrelevant to the matters addressed in this decision.
Harosh has failed to show that the trial court erred in dismissing his action because it seeks to enforce an illegal contract.
II. Attorney Fees and Costs
Harosh also challenges the award of attorney fees and costs to Farinelli. The trial court awarded the fees and costs requested by Farinelli because there was no opposition filed and no one appeared at the March 30, 2006 hearing on Farinellis motion. Harosh contends that the trial court erred because on March 28 he filed a notice of unavailability indicating that he would be out of the country starting on March 29. However, the March 30 hearing had been scheduled by a motion filed on February 24, more than a month earlier. Harosh was mailed notice of the hearing. Nothing in the record demonstrates that Harosh was unaware that the hearing had been scheduled or that he made a motion to change the scheduled hearing date. Filing of the notice of unavailability did not permit Harosh to disregard the hearing which had been scheduled for a month. Harosh fails to demonstrate error.
Harosh asserts that the total attorney fees awarded is $86,625.00 because the trial court had awarded $24,630.00 in fees on February 14, 2006. This is not accurate. The amended judgment supersedes the earlier judgment; the total fee award is $61,995.00.
DISPOSITION
The judgment is affirmed.
We concur.
JONES, P.J.
SIMONS, J.