Opinion
B224962
08-31-2011
R & S GOLD EXCHANGE, INC., Plaintiff and Appellant, v. GOLD TOWN JEWELRY, INC., Defendant and Respondent.
Law Office of Timothy Krantz and Timothy Krantz for Plaintiff and Appellant. Edward J. Horowitz for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC396688)
APPEAL from a judgment of the Superior Court of Los Angeles County, Victor E. Chavez, Judge. Affirmed.
Law Office of Timothy Krantz and Timothy Krantz for Plaintiff and Appellant.
Edward J. Horowitz for Defendant and Respondent.
R & S Gold Exchange, Inc. (R & S) appeals from a judgment in favor of defendant Gold Town Jewelry, Inc. (Gold Town), after a two-day court trial in R & S's breach of contract action. We conclude that substantial evidence supported the judgment, and we affirm.
BACKGROUND
R & S filed a second amended complaint (complaint) on May 8, 2008, alleging that R & S entered into seven written agreements with Gold Town whereby R & S sold Gold Town 17 kilograms of gold, which Gold Town purchased in an "open position" or "open price." Gold Town had closed the price on and paid for five of the 12 kilograms, but had failed to pay for the remaining 12 kilograms, leaving a balance due of $170,335.89. The complaint alleged causes of action for breach of contract, account stated, reasonable value of goods sold, and unjust enrichment. The complaint requested damages of $170,335.89 plus prejudgment interest, costs, and attorney fees. R & S later filed a notice of erratum replacing some of the invoices attached as exhibits.
At a court trial on March 8 and 9, 2010, R & S called as a witness Saeed Elyahzadeh, R & S's secretary, among whose duties were buying and selling gold. Elyahzadeh testified that there were two ways of buying gold. The first way was ordering, buying, and paying for the gold all at once. The second way was ordering and buying the gold but paying the current price plus a small premium without fixing the price, and keeping the sale as an open account until the buyer decided when to close it. At that point, the buyer "would pay the difference of the gold value, up or down, at the time of the [¶] . . . [¶] [f]ixing [of] the gold price" plus a commission. A buyer of gold could keep the price open for a long time, even 10 years. If the price went up substantially, the seller could require the buyer to make a "margin" payment. The exhibits showed agreements in the second half of 2003 and early 2004 by Gold Town to buy the 17 kilograms of gold, with payment on account to keep an open position, as well as margin payments, totaling $263,837. R&S delivered the gold to Gold Town.
Elyahzadeh testified that the gold related to the first four agreements was delivered. The court asked him whether the testimony was the same as to the remaining three agreements, and he said yes. Gold Town does not contend that any part of the 17 kilograms was not delivered.
In November 2005, with the price of gold at $462.80 an ounce, Gold Town closed the price on only five of the 17 kilograms; the remaining 12 kilograms remained open. From January to December 2006, the price of gold continued to go up. Three or four times, Elyahzadeh asked Joseph Tabaroki, the president of Gold Town, to pay a margin and to close on the remaining 12 kilograms. Tabaroki said he did not want to close the deal because the price of gold might go down. As the seller R & S had the right to close the transaction, and after 12 years as a gold broker Elyahzadeh knew that the industry custom would be to close the transaction if a customer did not make a margin payment. R & S did not do so because Elyahzadeh was a distant relation of Tabaroki's (his uncle's wife's brother-in-law) and both were from Iran. R & S demanded payment in July 2008, when gold was at $928.30 an ounce. The balance due was $170,385.89. Gold Town did not respond.
On cross-examination, Elyahzadeh denied that about a week after closing the five kilograms, R & S closed the deal on the remaining 12 kilograms. On redirect, Elyahzadeh further explained that when the price eventually closed and additional monies were owed, the general practice was to write the unit price and the final amount due to or owed by R & S on the original invoice (of which the purchaser had a copy), and to write "'paid'" on the original and on the purchaser's copy.
R&S called Sam Mahgerefteh, who had a jewelry business and had known both Elyahzadeh and Tabaroki for over ten years. Mahgerefteh testified that, one and a half to two years earlier, he was in Elyahzadeh's office trying to sell him some gold when he saw that Elyahzadeh was doing paperwork for the lawsuit. Mahgerefteh called Tabaroki "to resolve their problem." Mahgerefteh then went to Tabaroki's office and, with Tabaroki, went to Elyahzadeh's office "to fix the problem." The court excluded as a settlement discussion any testimony about what occurred between the three men in Elyahzadeh's office.
An expert witness, Simon Simonian, testified that he had worked in the same business, buying and selling gold, for 16 years. Simonian explained that if a buyer bought gold from a dealer without placing a price on it, the buyer bought it on an open market to be priced later in time, depositing the current value of the gold "plus a certain percentage for market movement." When the buyer was ready to price the gold, the price was the current value, and any amount owed over the deposit amount was settled at that time. The seller could also request a margin payment when the price of gold exceeded the amount (value plus percentage for market movement) the buyer initially paid. There was no requirement that an agreement to sell in an open position be in writing. Such an agreement could be verbal, or put on the invoice itself. Generally, if the buyer did not pay the margin, the seller would close the open position and the gold would be priced at that time, although there were exceptions to that rule, for example when a buyer with a long relationship with the seller could convince the seller not to close the position. When asked how long a seller might hold an account open, Simonian responded that nine months was possible, but "[t]hree years sounds excessive."
In its defense, Gold Town called as an expert witness Saeed Najidi, who had been in the business of buying and selling gold since 1986 and had done business with both parties. Najidi testified that the purpose of a margin payment was so that if the price of gold went up, the seller could take the increase from the margin payment, while if the price decreased, the seller could pay the buyer back from the margin payment. If the price of gold went up the seller could make a call for an extra margin payment; if the buyer did not pay the margin call, the custom and practice was that the parties would automatically close the gold price as of the day of the margin call. To keep the price open, the buyer would have to pay. Najidi had never heard of an instance in which an account was open for two, three, or four years without a margin payment. Deals were formally documented with memos and invoices, not handshakes.
The defense also called David H. Williams as an expert witness. Williams owned a company that purchased and refined scrap golds and had worked as executive vice president for another company for 16 years. Williams had done business with Elyahzadeh, who would pay a margin within 24 hours of when it was due. Williams sometimes gave Elyahzadeh a 24-hour extension, but never as much as three months. Williams had never heard of a seller waiting, with no margin, without closing the account while the price of gold soared.
Tabaroki testified that he paid 100 percent of the price of the 17 kilograms of gold. He had been in the gold business since 1981 and had never failed to pay a margin call. Tabaroki had only a business relationship with Elyahzadeh. On November 2, 2005, he called Elyahzedeh and closed the sale on five kilograms. When Elyahzadeh asked him about the other 12 kilograms, Tabaroki told Elyahzadeh that he would close the sale in the next week if the price of gold went up. Tabaroki gave all the original papers to Elyahzadeh, because the custom was that the seller would hold the original paper until the transaction was complete. Tabaroki did not remember seeing the agreements in exhibit 1 and stated that they were not related to the 17 kilograms in issue.
The next week, with the price of gold rising, Tabaroki called Elyahzadeh and asked him to come to his office and bring the original papers, including the document reflecting the payment on the first five kilograms. The two men made calculations which Tabaroki wrote on the original document reflecting the earlier payment. Tabaroki paid in cash what was due on the remaining 12 kilograms, and Elyahzadeh gave him the original invoices. The amount Tabaroki paid was $182,251. After a few months, Tabaroki destroyed the original papers. The price of gold continued to rise. Elyahzadeh told Tabaroki that the bank had frozen his accounts because of fraud allegations, and asked Tabaroki to write checks not to him, but to another company, which Tabaroki did. Elyahzadeh later called Tabaroki on several occasions, saying that the gold was still open and asking him to pay, and Tabaroki told him he had already paid. After March 2006, Tabaroki stopped doing business with Elyahzadeh.
In closing, R & S argued that the question was whether Gold Town closed the account and paid for the gold. "[T]he court has to decide who's telling the truth because both sides are at polar opposites on that," and the case came down to the credibility of Elyahzadeh and Tabaroki. This case was the exception to the rule that an account automatically closed when the buyer did not pay the margin, requiring immediate payment. Gold Town argued that Tabaroki's testimony was consistent with the expert testimony regarding the practice in the gold business, and R & S had not proven the date of the alleged breach or the amount of damages.
A judgment filed April 9, 2010 found in favor of Gold Town, awarding Gold Town $22,166.25 in attorney fees and costs. There was no statement of decision. R & S filed this timely appeal.
DISCUSSION
I. The trial court did not abuse its discretion in ruling on evidentiary objections.
R & S argues that the trial court erred in several rulings on evidentiary objections. We review the trial court's ruling on evidentiary issues for an abuse of discretion. (See Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1078; Evid. Code, § 352.) R & S, as the appellant, has the burden of demonstrating error. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.) Absent prejudice, trial court error is not grounds for reversal. (Taylor v. Varga (1995) 37 Cal.App.4th 750, 759, fn. 9.)
First, R & S argues that the trial court erred in striking Elyahzadeh's testimony that Tabaroki told a third party, Masoud Mori, that Tabaroki owed Elahazadeh money. The record does not reflect, however, that the judge struck the testimony. Elyahzadeh testified that Tabaroki told Masoud that Tabaroki owed money. The court then told the parties "[t]his is just getting into . . . a soap opera," told the parties to move on, and then stated: "Objection of the court is sustained." The court ended the line of questioning, but did not strike Elyahzadeh's response.
Second, R & S argues that the trial court improperly excluded portions of Mahgerefteh's testimony. R & S assigns as error the court's sustaining of its own objection to R & S's counsel's question regarding what Elyhazadeh told Mahgerefteh about his problem with Tabaroki. The court did not make its own objection: Gold Town's counsel objected to the question as hearsay and the court sustained counsel's objection. When the court asked what the exception was to the hearsay rule R & S's counsel responded that he did not know. In addition, when R & S's counsel asked "what did you do next," Mahgerefteh answered "I find out [Elyahzadeh] did sell some gold to Mr. Tabaroki. And look like the gold still is open." Gold Town's counsel objected that the answer was hearsay, and the court excluded it as nonresponsive. This was not an abuse of discretion. The question was "what did you do next," not a request to repeat what Elyahzadeh told Mahgerefteh. As explained above, the court had just sustained a hearsay objection to any such statement by Elyahzadeh.
Third, R & S argues that the court abused its discretion in excluding as hearsay Mahgerefteh's testimony regarding what he said in a telephone call to Tabaroki before he went to get Tabaroki in his office. This ignores that R & S's counsel later acknowledged that there had been no conversation between Mahgarefteh and Tabaroki before Mahgarefteh went to Tabaroki's office, so there could have been no testimony regarding such a call.
Fourth, R & S argues that the court abused its discretion in not allowing Mahgarefteh to testify about the meeting between him, Tabaroki, and Elyahzadeh in Elyahzadeh's office when the three discussed the matter. The court determined that the meeting and a subsequent meeting between Mahgarefteh and Tabaroki constituted settlement negotiations. R & S's counsel agreed. Evidence of settlement discussions is generally inadmissible to prove liability. (Evid. Code, § 1152, subd. (a).) R & S argues that the trial court did not allow it to cross-examine Mahgarefteh regarding whether the meeting was a settlement discussion. After Gold Town's counsel completed his examination of Mahgarefteh on that issue, R & S's counsel did not ask for cross-examination on the meeting's substance, but stated he was only interested in whether there had been any conversations before the visit to Elyahzadeh's office. When Mahgarefteh responded that he had not had any conversations about the gold before going to Elyahzadeh's office, R & S's counsel declined to examine Mahgarefteh further. In addition, although R & S contends that settlement discussions are admissible when a party admits a fact, R & S made no offer of proof at trial as to what fact Mahgarefteh would testify Tabaroki admitted. There was no abuse of discretion.
Fifth, R & S argues that the trial court erred in excluding from evidence (on the basis of best evidence, hearsay, and lack of foundation) printouts from the internet showing the daily price of gold to corroborate prices at different times. R & S refers to 16 trial exhibits, none of which appears in the record on appeal. The record is therefore inadequate. (County of Riverside v. Loma Linda University (1981) 118 Cal.App.3d 300, 321.) Further, Elyahzadeh testified, without objection, to the price of gold at the time when Tabaroki paid for the five kilograms in 2005 and at the time relevant to his damage claim when Elyahzadeh demanded payment in July 2008. The internet printout was merely cumulative to the undisputed testimony regarding the price of gold at the relevant times. (Ibid.) In addition, the trial court found against R & S, so no calculation of damages was required. Even if we were to conclude that the trial court abused its discretion in excluding the printout, no prejudice resulted from the trial court's exclusion of the printout. (Ibid.)
II. Substantial evidence supported the judgment.
R & S argues that the trial court's judgment was not supported by substantial evidence. Where, as here, there is no statement of decision, we assume the trial court found every fact necessary to support the judgment. (Noguchi v. Civil Service Com. (1986) 187 Cal.App.3d 1521, 1536.) We examine the record only to determine whether the judgment is supported by substantial evidence. (Ibid.) "'All intendments and presumptions are indulged to support [the judgment] on matters to which the record is silent, and error must be affirmatively shown.'" (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) We defer to the trial judge's resolution of factual issues involving the credibility of witnesses. (Beck Development Co. v. Southern Pacific Transportation Co. (1996) 44 Cal.App.4th 1160, 1204.) "The ultimate determination is whether a reasonable trier of fact could have found for the respondent based on the whole record." (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633.)
R & S admits that it waived a statement of decision, but argues that it did so only because the court effectively refused to prepare it. The record does not support this contention. Counsel for R & S and Gold Town both initially requested a statement of decision. The court responded that because it was leaving the country for a month in less than a week, the parties would face a considerable delay if a statement of decision was requested, whereas the court "can make a decision tomorrow." After the parties received the ruling, the prevailing party would prepare a statement, submit it to the other party for comments and objections, and then the court would review both parties' submissions before preparing the statement of decision. The alternative was a simple decision indicating the prevailing party and the amount of damages, if any. The court gave counsel five minutes to consult with the parties, and after a recess, both parties withdrew the request for a statement of decision. "[T]he superior court has no obligation to prepare a statement of decision unless a party requests one." (Agri-Systems, Inc. v. Foster Poultry Farms (2008) 168 Cal.App.4th 1128, 1134; Code Civ. Proc., § 632.) The parties withdrew their request, and the court did not refuse to prepare a statement of decision.
The court first stated that the losing party would prepare the initial statement of decision, and then that the prevailing party would prepare the initial statement. There is no issue regarding which party would prepare the initial statement, and "[a]fter a party has requested the statement, any party may make proposals as to the content of the statement of decision." (Code Civ. Proc., § 632.)
In examining the trial record for sufficient evidence, "[e]very substantial conflict in the testimony is, under the rule which has always prevailed in this court, to be resolved in favor of the finding." (Bancroft-Whitney Co. v. McHugh (1913) 166 Cal. 140, 142.) "All that is required is to point out testimony which, if given credence by the trial court, would logically lead to the conclusion" that there was no breach of contract by Gold Town; "[t]hat much of this testimony was contradicted is, in this inquiry, an entirely unimportant consideration." (Ibid.)
Ample testimony supports the judgment. Elyahzadeh and Tabaroki both testified that they closed the price on five of the 17 kilograms on November 2, 2005. Tabaroki further testified that he closed the price on the remaining 12 kilograms the following week and paid Elyahzadeh in cash. It is of no moment that Elyahzadeh testified that Tabaroki never closed the price and paid him for the gold. The trial court's finding in favor of Gold Town indicates that it believed Tabaroki's testimony, and we defer to this factual determination based on the credibility of witnesses. We also note that all the expert witnesses testified that it would be highly unusual for an account to remain open for years, as R & S alleged.
Tabaroki testified that he could not remember whether he had seen the documents that Elyahzadeh claimed were the seven agreements regarding the sale of the 17 kilograms, and answered "[n]o" when asked whether those documents were related to the sale. R & S argues that as a result, Gold Town did not present any evidence regarding the 17 kilograms, and so no evidence supports the judgment. At trial, however, R & S conceded that the parties agreed there was a contract for the 17 kilograms, although there was some dispute over which contracts applied, "but we know that [the contract] exists." R & S argued that Gold Town did not produce any other contracts, and so "what this comes down to is the credibility of each side." In response, Gold Town argued that R & S had not proven that there were seven contracts, and as to such alleged contracts, when a breach occurred or what damages were caused. The court apparently found plausible that when the transaction was completed, Tabaroki got his original back, was finished with it, and disposed of it. We must resolve any conflict in the evidence in support of the judgment, and we assume the trial court believed Tabaroki's testimony that some time after the transaction was complete, he destroyed the original documents.
Substantial evidence supported the judgment.
DISPOSITION
The judgment is affirmed. Respondent is to recover its costs on appeal.
NOT TO BE PUBLISHED.
JOHNSON, J. We concur:
ROTHSCHILD, Acting P. J.
CHANEY, J.