Case Number: EC058994    Hearing Date: July 25, 2014    Dept: NCD

TENTATIVE RULING (7-25-14)
#4
EC 058994
MESERKHANI v. HACOPIAN

Defendant Edwin Hacopian’s Motion for Summary Judgment

TENTATIVE:
Plaintiff’s Objections to Declaration of Edwin Hacopian are OVERRULED.

Motion for summary judgment is DENIED. The opposition raises triable issues of material fact which raise a reasonable inference that Edwin Hacopian may be responsible pursuant to one or more of the causes of action pending against him. [See Responses to UMF Nos. 7, 8, 9, and evidence cited; Vahik Meserkhani Decl., para. 6; Seroj Merkhani Decl., Exs. 3, 4, 5, 7, 9, 10; Ex. 16, E. Hacopian Depo, pp. 102, 116, 151, ].

Causes of Action from Second Amended Complaint
1) Breach of Fiduciary Duty v. A. Hacopian, Palad
2) Conversion of Corporate Funds v. All Defendants
3) Recoupment of Illegal Dividends v. All Defendants
4) Conversion, Imposition of Constructive Trust v. A. Hacopian
5) Involuntary Dissolution of Palad v. A. Hacopian, Palad
6) Conversion v. A. Hacopian
7) Breach of Contract v. A. Hacopian
8) Breach of Fiduciary Duties v. A. Hacopian
9) Intentional Misrepresentation v. A. Hacopian
10) Constructive Fraud v. A. Hacopian
11) Conspiracy to Commit Fraud v. A. Hacopian, S. Hacopian, E. Akoubians
12) Involuntary Dissolution of Corporation v. A. Hacopian, 1219 Glenoaks

SUMMARY OF COMPLAINT:
Plaintiff Vahik Meserkhani brings this action alleging that defendants Armen Hacopian, Silva Hacopian and Edwin Hacopian are diverting monies from two companies, Palad, Inc. and 1219 Glenoaks Investment, in which plaintiff owns 50% of the common stock.

GROUNDS FOR SJ:
As to the second cause of action for conversion/embezzlement, and eleventh cause of action for conspiracy to commit fraud, the Declaration of E. Hacopian shows that he was not a shareholder, director, officer or employee of Palad, had nothing to do with the books and records of the corporation, and only became a signatory on the Palad business account for the purpose of paying vendors while plaintiff and defendant Armen and their wives were on vacations to Las Vegas and only with express authorization from A. Hacopian. Plaintiff’s allegations that E. Hacopian used Palad credit cards for personal use, used Palad funds to open a competing store, and received cash from Palad to pay personal expenses are without merit.

The third cause of action for recoupment of illegal dividends fails because E. Hacopian was never a shareholder of Palad.

GROUNDS FOR OPPOSITION:
Three are triable issues or material fact, as the declaration relied upon by E. Hacopian is contradicted by deposition testimony in this matter which shows that E. Hacopian managed and operated company business, including handling communication with vendors, paying employees, signing checks, and using Palad’s cash to pay for his and his family’s expenses such as lunches, gas purchases, taxi fares, and airline tickets. E. Hacopian was aware of all aspects of the business operations and the double booking system his father set up for cash and non-cash transactions, of which plaintiff was unaware.

ANALYSIS:
Here, summary judgment is sought of all three causes of action asserted against Edwin Hacopian.

Here, the moving papers rely on a declaration of Edwin Hacopian, in which he states that he has never received any cash from Palad for any reasons, has never used any funds belonging to Palad for his personal use or benefit, never used money from Palad to pay his personal expenses, and never took any money belonging to Palad. [UMF Nos. 7-10, E. Hacopian Decl., paras. 7-11]. Edwin Hacopian also testifies that he did not help his father Armen Hacopian create two sets of books and records for Palad. [UMF No. 22, E. Hacopian Decl. para. 22].

The opposition submits a declaration from plaintiff stating that he was never informed and never consented or authorized Edwin Hacopian to have access to Palad’s cash, sign checks, be able to use business credit cards or Palad’s gas credit cards to purchase gas for his personal cars, have Palad pay his personal health insurance premiums, have Palad pay his personal cellphone charges, or create and maintain two sets of records for Palad. [Meserkhani Decl., para. 6]. There is also evidence submitted showing that an invoice for Anthem Blue Cross insurance for Edvin Akoubians was paid for by a Palad check, and a check from Blue Cross which was deposited into E. Hacopian’s personal account, when it should have been deposited into Palad’s account as the premium payer. [See Seroj Merkhani Decl., Ex. 3, Ex. 10]. This is sufficient to establish instances of alleged conversion of assets belonging to Palad, and the motion is therefore denied.

There is also evidence indicating that Palace Furniture paid gasoline invoices which included purchases for other than Diesel gasoline, which is the only gasoline used by the business vehicle, raising a reasonable inference that E. Hacopian was using the company credit card to pay for gasoline for his own personal use. [See Exhibit 4, Exhibit 16, E. Hacopian Depo. 151:1-19]. Plaintiff has also submitted deposition testimony in which E. Hacopian confirms his cell phone number is 818 232 2618, and bills and checks showing that the bills for this number were paid by Palad. [Ex. 16, E. Hacopian Decl., 116:13-18; Exs. 7, 8].

Plaintiff also submits deposition testimony by E. Hacopian in which he handled the Palad books for cash transactions, raising an inference that he had some involvement in the second set of books allegedly maintained to conceal transactions from plaintiff. [Ex. 16, E. Hacopian Depo. 102:8-16]. Plaintiff also submits cash book pages which show cash taken by E. Hacopian for “taxi” and “flight,” and his deposition testimony in which he does not recall what these items were for, also raising an inference of converting funds to his own use. [Response to UMF No. 7, and evidence cited]. All of the evidence requires a weighing of relative credibility and inferences, and the motion is therefore denied.