Opinion
20-P-1398
12-16-2021
SHIGERU UEDA, individually and as trustee, [1] & another[2] v. AYOUB MEHDIZADEH & another.[3]
Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass.App.Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass.App.Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass.App.Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Shigeru Ueda (Shigeru) and Mahin Mehdizadeh (Mahin) met when they were both anesthesiologist residents at Johns Hopkins Hospital. The subject of this dispute involves a jointly owned commercial strip mall in Peabody that generated a stream of rental income. For many years, this income was retained solely by the Mehdizadehs. The Uedas claimed that they allowed the Mehdizadehs to retain their share of the rental income as a loan that would be repaid upon the sale of the property. The Mehdizadehs claimed that the rental income was a gift. A judge of the Land Court conducted a trial and found an oral agreement existed between the parties and that the Uedas' share of rental income was a loan to be collected upon the sale of the property. The judge also found the Mehdizadehs in contempt of court for failing to abide by specific instructions regarding documentation and retention of rental income. The defendants appeal, claiming that the judge abused his discretion in finding the existence of an oral contract and in finding them in contempt of court. They also quarrel with the calculation of damages. We affirm.
Shigeru Ueda and his wife Hisako will be referred to individually by their first names and collectively as the "Uedas" or the "plaintiffs," and Mahin Mehdizadeh and her husband Ayoub will be referred to individually by their first names and collectively as the "Mehdizadehs" or the "defendants."
Shigeru and Mahin and their spouses became friendly with one another, and together, the two families began to invest in properties.
Background.
The trial judge found the following facts. In 1996, the plaintiffs and the defendants purchased a commercial property located at 150-152 Main Street in Peabody generating rental income. Shigeru owned fifty percent and the Mehdizadehs jointly owned the other fifty percent. They purchased the property without a mortgage from proceeds of the sale of another property they jointly owned in El Paso, Texas.
Shigeru later transferred his fifty percent ownership into equal shares to himself and his wife Hisako, each as trustees of the Shigeru Ueda Revocable Living Trust and the Hisako Ueda Revocable Living Trust.
Prior to purchasing the property, the Mehdizadehs asked Shigeru if they could retain all of the rental property income as they were experiencing some financial difficulties. Shigeru agreed, considering this a loan which would be repaid when they eventually sold the property.
In 2010, Shigeru told Mahin that due to a change in their financial situation, the Uedas would need to start taking 50% of the rental income. Mahin asked Shigeru if they could continue to retain the Uedas' share, as their financial situation was still compromised, and Shigeru acquiesced. Later in 2011, Shigeru again approached Mahin and told her that he would agree that they could continue to receive the Uedas' 50% share of the rental payments, as a loan with four percent interest, payable at the time of the sale. The judge found that the Mehdizadehs agreed to these terms despite the fact that there was no written agreement.
Sometime between December 2011 and January 2012, a schedule was prepared showing rents beginning in October 2010, which included the four percent interest calculation. There was some confusion and disputed testimony as to the author of this schedule, but the judge ultimately credited the testimony of Hisako that the schedule was prepared by Mahin and mailed to the Uedas.
The judge credited the testimony of the Hisako that the Mehdizadehs authored this schedule, noting that the schedule of payments "was prepared on and printed out in black and red ink from a computer, which Shigeru does not use." The original schedule was marked as an exhibit, and is folded as to fit in an envelope, confirming that it was mailed to Shigeru.
The judge found further evidence of a loan agreement in the fact that the Uedas paid state and federal taxes on their share of rental income even though they never received the income. The judge also credited the Uedas' testimony that the total amount of money retained by the Mehdizadehs was "far too large a sum to be a gift."
In the spring of 2015, the parties discussed the sale of the property. Hisako sent Mahin a loan schedule in 2015, and in 2016, an attorney conducting the sale of the property sent Mahin information about the property sale, which included a description of the terms of the loan. The judge discredited Mahin's testimony that she never received these emails. The judge found it noteworthy that the defendants never responded to the email to dispute the representations made about the loan. Ultimately, the judge concluded that as of 2010, the defendants agreed that they would borrow the Uedas' 50% share of the rental income at an interest rate of four percent, which would be repaid upon the sale of the property. The judge calculated the amount and awarded it to the Uedas, to be taken from the proceeds of the sale.
The Mehdizadehs refused to cooperate with the sale of the property.
In June 2017, the judge allowed the plaintiffs' motion for a receiver. The judge's order required the defendants to produce certain documentation and to hold onto July rental payments and not distribute any amounts except for expenses relating to the management of the property. The defendants did not comply with this order. In May of 2020, the judge found that the plaintiffs had shown by clear and convincing evidence that the defendants were in contempt of court by improperly transferring $31,500 of the July rental income: they transferred $24,000 to themselves and $7,500 to a family member who served as the property manager. The judge also found that the defendants did not produce the required documentation about operating expenses to the court or to the plaintiffs. The judge ordered damages and attorney's fees in the amount of $7,817.50.
The order in relevant part provided:
"Pending the appointment of a commissioner, the Mehdizadehs are hereby ORDERED to produce to the court and the Uedas documentation of their monthly operating expenses for the [p]roperty. The Mehdizadehs are further ORDERED to hold all July rental payments and not distribute any amounts from such rental payments except for expenses related to the management of the [p]roperty, including making continuing payments on the property taxes and insurance."
Discussion.
1. Existence of an oral contract.
When reviewing a determination about the existence of a contract, we accept the trial judge's findings of fact unless they are clearly erroneous. See Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 465 (1991). "A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Williams v. Resolution GGF Oy, 417 Mass. 377, 382 (1994), quoting J.A. Sullivan Corp. v. Commonwealth, 397 Mass. 789, 792 (1986).
Here, the judge's factual findings are supported by the record. The judge made credibility determinations from the witnesses' testimony, evaluated the evidence and the reasonable inferences drawn from it, and concluded that the parties entered a contract where the defendants would retain all the proceeds of the rental income and repay the plaintiffs the full amount with four percent interest to be collected upon the sale of the property. Contrary to defendants' claim, the trial judge did not solely or improperly rely upon the loan spreadsheet that he found was created by Mahin to support the existence of the loan agreement. The judge found the Uedas' testimony credible and discredited the testimony of Mahin. The judge did not stop there. The judge also considered the fact that the defendants failed to deny the existence of the loan when Hisako represented the substance of the agreement to third parties; that the Uedas acted consistently with the existence of a loan by paying state and federal taxes on their portion of the income generated from the property despite not receiving their share of rental income; and that the amount of the rental income was far too much (over $400,000 before interest) to reasonably be considered a gift. The judge's findings will not be disturbed.
2. Contempt of court.
Next, the defendants claim that the trial judge's finding of contempt was improper because their awareness of the order was not established. This claim must also fail. First, the defendants did not timely raise the issue of lack of notice during the litigation and as such it is waived. See Royal Indem. Co. v. Blakely, 372 Mass. 86, 88 (1977) (appellate courts need not consider nonjurisdictional issues not raised at trial level). Second, a close inspection of the trial testimony reveals that Mahin knew of the order yet did not follow it. At trial, Mahin testified that she was aware of the order, but that she was not represented by counsel and "unfortunately, I removed the money because I really needed to pay my rent and my other obligations." Third, in a statement of uncontested facts submitted by the parties for the pretrial hearing, the defendants admitted that they violated the order when they distributed funds in July 2017. We need not go any further, as the judge properly found them in contempt.
The Ueda's request for reasonable attorney's fees and double costs is denied. While the argument presented by the appellants was thin, it falls short of being described as frivolous. See Avery v. Steele, 414 Mass. 450, 455 (1993).
3. Calculation of damages.
At trial, the damages calculations were not challenged by the defendants. The judge relied upon Hisako's calculations and Mahin testified "I accept her [Hisako's] calculation."
After the trial, the defendants filed a motion with the trial judge relating to the assessment of damages in two transactions that they claim had been repaid to the operating account but were not credited to them. The trial judge declined to amend the distribution of funds noting that if the issues were raised at trial, they were decided and accounted for. If the issues were not raised, the judge found that it was too late, and that the defendant failed to provide any evidence to support the payments. The trial judge was correct in his conclusion that these issues were raised too late and are therefore waived. See Royal Indem. Co., 372 Mass. at 88.
There was no error.
Judgment affirmed.
The panelists are listed in order of seniority.