Regent Alliance v. Rabizadeh CA2/1

Filed 5/14/14 Regent Alliance v. Rabizadeh CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
REGENT ALLIANCE LTD., B244652
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC429863)
v.
ROUHOLLAH RABIZADEH et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles, Daniel J.
Buckley, Judge. Affirmed.
Daar & Newman, Jeffery J. Daar and Michael R. Newman for Plaintiff and
Appellant.
Law Office of Mohammad A. Fakhreddine and Mohammad A. Fakhreddine for
Defendants and Respondents.
_________________________
Regent Alliance Ltd. (Regent) sued three purchasers of children’s clothing for
conversion, alleging that the purchasers bought, from other defendants, clothing
belonging to Regent that those other defendants had converted. The trial court granted
the purchasers’ motions for summary judgment, and Regent appeals. We affirm.
Regent, a Hong Kong corporation that manufactures children’s clothing, filed a
first amended complaint in 2010 against multiple defendants, including Rouhollah
Rabizadeh, Bahram Dahi, and his wife Farahnaz Dahi1 (the purchasers), all three doing
business as B&R Clothing and Kids Street. The complaint alleged in its 13th, 14th, and
15th causes of action that Rabizadeh, Bahram, and Farahnaz purchased and resold
converted property, children’s clothing (the clothing) from other defendants (the
warehouse defendants) including YHK Transportation, Inc., against which the complaint
also alleged conversion. YHK had agreed with Regent to store the clothing in YHK’s
warehouse facility in Carson, California, but after the clothing was delivered to the
warehouse and YHK took possession, YHK transferred the clothing without Regent’s
knowledge to another defendant’s warehouse in Commerce. The warehouse defendants,
who “had previously converted the Children’s Clothing,” then sold it to the purchasers,
who subsequently sold the clothing to others.
In May 2012, Rabizadeh, Bahram, and Farahnaz filed separate motions for
summary judgment. The three motions are virtually identical, except that Farahnaz’s
motion stated that she had no involvement in her husband’s business or in the purchase of
the clothing. Regent filed oppositions.
The trial court granted summary judgment in favor of Rabizadeh, Bahram, and
Farahnaz after a hearing on July 25, 2012, adopting its tentative ruling. The court
concluded that the evidence and declarations from the purchasers “meets the initial
burden to show that they purchased the clothing under circumstances that did not indicate
to a prudent person that the clothing had been stolen,” negating an essential element of
1 For ease of reference, we refer to the Dahis as Bahram and Farahnaz, intending
no disrespect.
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Regent’s case. Nothing Regent had presented in opposition was material or reasonably
created a different inference, and so there was no disputed question of material fact.
Regent timely appealed from the judgment.
We review de novo the trial court’s grant of summary judgment by identifying the
issues raised by the pleadings, determining whether the purchasers showed that Regent
could not prevail on its claim of conversion, and considering whether Regent’s
opposition raised triable issues of fact. (Barber v. Chang (2007) 151 Cal. App. 4th 1456,
1462–1463.)
Regent argues that the trial court did not properly apply the law of conversion,
insisting that it is “completely irrelevant” whether the purchasers had actual or
constructive notice that the warehouse defendants did not have the right to sell the
clothing. Regent is wrong; the trial court properly applied the law.
“Conversion is the wrongful exercise of dominion over the property of another.
The elements of a conversion are the plaintiff’s ownership or right to possession of the
property at the time of the conversion; the defendant’s conversion by a wrongful act or
disposition of property rights; and damages. It is not necessary that there be a manual
taking of the property; it is only necessary to show an assumption of control or ownership
over the property, or that the alleged converter has applied the property to his own use.
[Citations.]” (Oakdale Village Group v. Fong (1996) 43 Cal. App. 4th 539, 543–544.)
Conversion is generally a strict liability tort in which “questions of good faith, lack of
knowledge and motive are ordinarily immaterial.” (Id. at p. 544.) Nevertheless, where
an individual receives funds already converted by another, he or she is not automatically
liable for conversion. (Id. at p. 546.) “‘Thus, it is a general rule that an innocent
purchaser for value and without notice, actual or constructive, that his vendor had secured
the goods by a fraudulent purchase, is not liable for conversion. [¶] A different result
has been reached, however, where the goods are taken from the fraudulent possessor with
knowledge of the fraud, or with knowledge of such facts and circumstances as would
have put cautious and prudent men on inquiry . . . .’” (Ibid.) Where the defendant was
not a purchaser for value, and where he had constructive knowledge of the rights of
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another, he is not an innocent purchaser and “‘is in no better possession than the
fraudulent vendee, and the defrauded party has the same remedies against him that he had
against such fraudulent vendee.’ [Citation.]” (Id. at p. 549.) Therefore, “[i]n cases
where the property changes possession more than once, a plaintiff has a cause of action
for conversion if the defendant who is sued for conversion took the property from another
converter, and took it with actual or constructive notice that the prior conversion took
place. [Citation.]” (Irving Nelkin & Co. v. South Beverly Hills Wilshire Jewelry & Loan
(2005) 129 Cal. App. 4th 692, 699, italics added.) “Under these rules, a purchaser of
stolen property with actual or constructive notice of the true owner’s interests in that
property cannot prevail against that owner. [Citations.]” (DVD Copy Control Assn. v.
Bunner (2003) 31 Cal. 4th 864, 882.)
Here, the purchasers took the goods from another converter, the warehouse
defendants, who Regent alleged had already converted the clothing. The trial judge was
therefore correct to consider whether Rabizadeh, Bahram, and Farahnaz were bona fide
purchasers, without actual or constructive knowledge that the prior conversion by the
warehouse defendants took place. The trial court was right on the law.
Regent also argues that there were triable issues of fact regarding whether the
purchasers had constructive notice that the warehouse defendants had themselves
converted the clothing and therefore had no right to sell it. According to Regent, the
purchasers “should have been suspicious” that the transaction was “shady” because the
purchasers paid primarily cash, some of it in bags, and continued to pay after they did not
receive all the clothing they ordered. The evidence as to the purchasers’ payment
method, however, does not reasonably raise a triable issue of fact as to whether the
purchasers knew the warehouse defendants had converted the clothing. It was undisputed
that the purchasers received invoices for their purchases and that an agent acknowledged
in writing receipt of their advance payments. Regent does not identify any evidence that
the use of cash alone was unusual or raised an issue whether the purchasers believed the
warehouse defendants had the right to sell the clothing, and there was deposition
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testimony that the use of cash in the closeout business was common. Further, continuing
to pay before the order was complete indicates trust, rather than distrust, of the sellers.
Regent points to Rabizadeh’s deposition testimony as evidence that he did not
trust Mansour Haghighi, who with Behrooz Dadbin was one of the two agents involved
in the sales. Rabizadeh, however, stated only that he did not know Haghighi, and so gave
the cash to Dadbin, whom he and Bahram trusted. Bahram testified that he thought an
employee of the warehouse defendants was untrustworthy because of the way he treated
people. This is not evidence that raises an issue whether the warehouse defendants had
the right to make the sale. And although Regent emphasizes that Haghighi likened the
same warehouse employee to “Al Capone,” the deposition testimony Regent cites shows
that Haghighi stated that at the time of the transactions he did trust the employee
(“otherwise, why would I give him the money?”) and his mistrust arose only after Regent
filed the lawsuit. In any event, any distrust on the part of the agent, Haghighi, cannot
establish the purchasers’ knowledge of a prior conversion.
The trial court did not err in granting summary judgment.
DISPOSITION
The judgment is affirmed. Costs are awarded to respondents.
NOT TO BE PUBLISHED.
JOHNSON, J.
We concur:
ROTHSCHILD, Acting P. J.
CHANEY, J.
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