Howard Abselet v. Hudson Labor Solutions, Inc. ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 4 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
HOWARD L. ABSELET, an individual and No. 18-56027
derivatively on behalf of ROOSEVELT
LOFTS, INC., D.C. No. 2:16-cv-06263-JFW-JEM
Plaintiff - Appellee,
MEMORANDUM*
v.
HUDSON LABOR SOLUTIONS, INC., a
California corporation; et al.,
Defendants - Appellants.
Appeal from the United States District Court
for the Central District of California
John F. Walter, District Judge, Presiding
Argued and Submitted January 9, 2020
Pasadena, California
Before: WATFORD, BENNETT, and LEE, Circuit Judges.
Hudson Labor Solutions, Inc. and its owners, brothers Raymond and Rodney
Yashouafar (“Raymond Y.” and “Rodney Y.”), appeal the district court’s grant of
summary judgment in favor of Howard Abselet on his claim for intentional
interference with contractual relations. We have jurisdiction under 28 U.S.C.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
§ 1291, and we review the district court’s ruling de novo. See Bravo v. City of Santa
Maria, 665 F.3d 1076, 1083 (9th Cir. 2011). We reverse and remand.
In 2008, Abselet loaned six million dollars from a medical malpractice
settlement to a group that included Solyman Yashouafar and Massoud Yashouafar
(together, the “Judgment Debtors”), who are the father and uncle, respectively, of
Raymond Y. and Rodney Y. When the Judgment Debtors defaulted on the loan,
Abselet sued for recovery of his principal. The February 10, 2012 settlement of that
lawsuit is the contract at issue here. The Judgment Debtors agreed to repay Abselet
by, among other things, conveying their interest in up to $1.125 million from a
bankruptcy class action reserve.
Abselet subsequently executed writs of attachment against the Judgment
Debtors and undertook various efforts to recover the amounts owed. Unfortunately,
these efforts have been repeatedly frustrated by fraudulent conveyances of assets
from the Judgment Debtors to family members.
The intentional interference claim here involves a transaction that Abselet
alleges was fraudulently made to circumvent the $1.125 million owed from the class
action reserve under the settlement agreement. In March 2012, the Judgment
Debtors authorized a $300,000 payment to Hudson — an apparent shell company
owned by Raymond Y. and Rodney Y. — from the class action reserve. Over the
next two years, Hudson paid $267,000 in “wages” to the Judgment Debtors and their
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spouses, which appears to be an improper pass-through of most of the $300,000
payment.
1. Despite strong evidence of egregious misconduct by the appellants and
the Judgment Debtors, we are unable to affirm the district court’s summary judgment
ruling because, viewing the record in a light most favorable to the appellants, there
is a genuine issue of material fact as to whether Abselet’s intentional interference
claim was timely filed. See Bravo, 665 F.3d at 1083. An intentional interference
claim typically accrues for statute of limitations purposes “at the date of the wrongful
act,” or no later “than the actual breach of the contract.” See Trembath v. Digardi,
118 Cal. Rptr. 124, 125 (Cal. Ct. App. 1974). Here, the allegedly induced breach
occurred on or about March 20, 2012, while this action was not filed until August
22, 2016 — after either the two or three-year limitations period that applies to
intentional interference claims. See id. (normal limitations period is two years);
Romano v. Wilbur Ellis & Co., 186 P.2d 1012, 1015 (Cal. Ct. App. 1947) (three-year
limitations period where fraudulent inducement is alleged).
The delayed discovery rule can extend a statute of limitations, such that it
“begins to run when the plaintiff has reason to suspect an injury and some wrongful
cause, unless the plaintiff pleads and proves that a reasonable investigation at that
time would not have revealed a factual basis for that particular cause of action.” Fox
v. Ethicon Endo-Surgery, Inc., 110 P.3d 914, 917 (Cal. 2005). The district court
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relied on this rule to find that the earliest Abselet could have discovered the factual
predicate for his claim was during the August 27, 2015 deposition of Raymond Y.
in a different case. But on March 29, 2013, Abselet’s attorney sent a demand letter
that accused the $300,000 payment to Hudson of being an improper distribution to
the Judgment Debtors “through a variety of entities and third-party obligors.”
Because we must accord all inferences in the appellants’ favor at this stage, we
conclude that the letter raises a genuine issue of material fact as to whether, under
the delayed discovery rule, the March 29, 2013 letter triggered the statute of
limitations for the intentional interference claim.
Abselet alternatively argues that the district court’s ruling should be affirmed
on the basis of equitable tolling. A statute of limitations may be tolled “when an
injured person has several legal remedies and, reasonably and in good faith, pursues
one.” McDonald v. Antelope Valley Cmty. Coll. Dist., 194 P.3d 1026, 1031 (Cal.
2008). Three elements are required: (i) timely notice; (ii) lack of prejudice to the
defendant; and (iii) reasonable and good faith conduct by the plaintiff. See id. at
1033.
While Abselet identifies two events that he contends tolled the statute of
limitations, genuine issues of material fact exist as to whether either event provided
the appellants with timely notice of a potential intentional interference claim. First,
Abselet filed a July 9, 2013 bankruptcy motion challenging certain distributions
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from the class action reserve. The motion, however, did not discuss the $300,000
payment to Hudson, but instead identified seven other distributions it deemed
improper. And second, Raymond Y. filed a third-party motion in a different action
related to the transfer of stock in two companies. But neither the third-party motion
nor the action in which it was brought had any connection to the $300,000 payment.
Accordingly, there remain genuine disputes of material fact, and so we are unable to
hold that Abselet is entitled to equitable tolling as a matter of law.
2. Intentional interference with contractual relations requires: (i) a valid
contract; (ii) defendant’s knowledge of the contract; (iii) intentional acts designed to
induce a breach of the contract; (iv) actual breach; and (v) damages. Pac. Gas &
Elec. Co. v. Bear Stearns & Co., 791 P.2d 587, 589-90 (Cal. 1990). The record
reflects genuine issues of material fact as to whether the settlement agreement had
taken effect when Hudson received the $300,000 payment, whether the appellants
knew about the settlement agreement at that time, and whether the appellants
induced a breach of the settlement agreement. The district court therefore also erred
in granting summary judgment with respect to these elements of the intentional
interference claim.
REVERSED AND REMANDED.
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