Golden Fish v. FAA Beverly Hills BMW CA2/5 ( 2023 )

Filed 5/1/23 Golden Fish v. FAA Beverly Hills BMW CA2/5
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
GOLDEN FISH, LLC et al., B314929
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 20STCV12065)
v.
FAA BEVERLY HILLS BMW et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Holly J. Fujie, Judge. Affirmed.
Law Offices of Pavel Y. Kouprine and Pavel Y. Kouprine for
Plaintiff and Appellant.
Manning, Leaver, Bruder & Berberich, Kimberly L. Phan
and Timothy D. Robinett for Defendants and Respondents.
___________________________
Plaintiffs Kirill Kiryanov and Golden Fish LLC
(collectively, Kiryanov) purchased a BMW X7 from defendants
FAA Beverly Hills, Inc. dba Beverly Hills BMW and BMW of
North America LLC (collectively, Dealer) in June 2019. The
parties encountered some difficulty in getting the vehicle titled,
because Kiryanov wanted it delivered to Nevada, but did not wish
to register the vehicle in that, or any, state. Eventually, at the
end of September 2019, Dealer obtained a certificate of title
(without registration) from California, and forwarded it to
Kiryanov. Although Kiryanov was satisfied with this document,
he brought suit against Dealer, seeking statutory penalties and
damages for the delay. The matter proceeded to arbitration,
where the arbitrator found that Kiryanov entirely lacked
credibility, and he was wholly responsible for any delays in
Dealer’s attempts to title the vehicle. The trial court confirmed
the award and entered judgment in favor of Dealer. On
Kiryanov’s appeal, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On appeal, we must view the record in the light most
favorable to the judgment, so we set out the facts established at
the arbitration. (Siegel v. Prudential Ins. Co. (1998)
67 Cal.App.4th 1270, 1273.)
1. The Purchase and Title Dispute
In early June 2019, Kiryanov purchased the car from
Dealer via telephone, e-mail, and FedEx; nothing was done in
person. It was a cash transaction. Kiryanov claimed to be
located in Nevada while Dealer was in California. Initially,
Dealer sent Kiryanov a draft purchase agreement containing
California sales tax and registration fees. Kiraynov rejected this,
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stating that he wanted the vehicle titled in Nevada and therefore
would not have to pay California taxes.
Dealer retained an agent in Nevada for the purpose of
getting the car titled there. In the meantime, Kiryanov obtained
a cashier’s check for the vehicle, tendered it to Dealer, and
arranged an auto transport service to pick up the car and bring it
to Nevada. Kiryanov placed the delivered car in a storage
facility.
Kiryanov had wanted a “title only” purchase with the
vehicle titled in Nevada. Dealer’s agent in Nevada quickly found
this to be impossible. Before a vehicle can be titled in Nevada, it
must be registered with the Nevada Department of Motor
Vehicles, and all taxes and fees paid. But registering the car in
Nevada was something Kiryanov could not, and did not wish to,
accomplish.1
Kiryanov’s emails to Dealer became more strident, as he
demanded Dealer provide him with title to the vehicle. He
sought reimbursement for over $25,000 in daily rental charges
for a comparable car.
“In an apparent effort to put the matter to rest, in early
September 2019, and despite [Kiryanov’s] desire for Nevada
ownership, [Dealer] finally arranged for a ‘Title Only’ California
1 Kiryanov asserted that he twice walked into the Las Vegas
DMV to have the car registered but was turned away, because
the documents he had been provided from Dealer were
“incomplete, inaccurate, and improper.” Kiryanov did not live in
Nevada, but in Copenhagen, Denmark. The arbitrator found
Kiryanov to “lack any credibility.” He specifically found that
Kiryanov “did not personally visit the Nevada DMV office to
receive the guidance needed to complete the transaction.”
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DMV document to be issued. The California title was delivered
to [Kiryanov] in late September.”2
Around September 2019, Kiryanov sold the vehicle to a
purported third party; at the arbitration, he could testify to no
knowledge about the buyer other than that it was known as
“Elite.” He did not know the vehicle’s final destination.
2. The Action
On March 25, 2020, Kiryanov filed this action against
Dealer, alleging causes of action for (1) breach of implied
warranty of title;3 (2) failure to deliver title in violation of Vehicle
Code section 5753; (3) fraud; and (4) intentional infliction of
emotional distress. The complaint alleged Kiryanov had made
several demands for title but Dealer never intended to deliver
title, and delayed doing so until he complained to the California
DMV.4
2 Vehicle Code section 4452 provides for issuance of a
certificate of title without registration under limited
circumstances, including when a certificate of nonoperation has
been filed, indicating that the vehicle will not be operated in
California without first surrendering the certificate of ownership,
applying for registration and paying all fees. (Veh. Code,
§§ 4452, subd. (b), 4604.)
3 This cause of action cited to the federal Magnuson-Moss
Warranty—Federal Trade Commission Improvement Act.
(15 U.S.C. §§ 2301 et seq.)
4. Kiryanov also alleged that he timely cancelled a
maintenance contract on the vehicle, but Dealer did not give him
a refund. Dealer took the position that an email cancellation was
not sufficiently “in writing,” as required by the terms of the
4
On July 10, 2020, Dealer moved to compel arbitration, on
the basis of an arbitration clause in the purchase agreement
requiring “[a]ny claim or dispute, whether in contract, tort,
statute or otherwise . . . which arises out of or relates to
[Kiryanov’s] . . . purchase or condition of this vehicle, this
contract, or any resulting transaction or relationship” to be
submitted to binding arbitration pursuant to the Federal
Arbitration Act (9 U.S.C. §§ 1 et seq., FAA).
On September 4, 2020, the court granted the motion and
stayed the action pending completion of the arbitration.
3. The Arbitrator’s Decision
The only cause of action at issue in the current appeal is
Kiryanov’s claim for violation of Vehicle Code section 5753, which
imposes obligations on various parties regarding delivery of a
vehicle’s certificate of ownership. We therefore limit our
discussion of the arbitrator’s decision to that cause of action.
Before we turn to the statute, however, it is necessary to
address how completely the arbitrator rejected the facts as
Kiryanov presented them. In multiple respects, the arbitrator
found Kiryanov to lack credibility. The arbitrator observed that
on cross-examination his “testimony consistently led to a dead
end from which he could find no way out. In many
circumstances, his oral testimony was counter to the
agreement. Kiryanov eventually prevailed on this claim at the
arbitration, receiving an award in the amount of $840, plus
prejudgment interest. Dealer immediately paid. This portion of
the arbitration award is not at issue on appeal.
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documentary evidence.”5 The arbitrator inferred that after
Kiryanov had requested all communication with Dealer to be
conducted by email, none of the emails purportedly sent by
Kiryanov had originated with him. The arbitrator concluded that
Kiryanov was a straw man purchaser for another entity who
never intended to title or register the vehicle in the United
States.6 The arbitrator found “that if a fraud was perpetrated by
5 To take but a single example out of many, there was
testimony concerning Kiryanov’s “wife.” When exchanging
emails prior to the purchase, Dealer had asked for a copy of
Kiryanov’s driver’s license and insurance ID card; Kiryanov
responded with an email transmitting, “ID’s for Kirill and wife,
she is on the insurance (if needed).” Kiryanov’s supposed wife
was Renata Koncsag. Dealer wrote back, “Since he does not have
a lic[ense] then please add that Renata is the driver since I guess
she’ll be driving the car.” Kiryanov responded with an email
saying, “You are the best!!!” and attaching a form identifying
himself and Renata – both with the same address – as 50 percent
users of the car. At the arbitration hearing, it was revealed that
the address they both claimed was a “non-governmental mailbox
location, without any associated residence.” Kiryanov testified
that Konscag was merely “a friend” and he did not know where
she lived.
6. The vehicle was not to be exported. Dealer could not sell
cars outside its exclusive sales territory of North America, and
there would be financial penalties if it did so. Dealer therefore
required Kiryanov to sign, as part of the purchase agreement, a
document representing, “The vehicle is leased or purchased for
me for my own use within North America. I do not intend to
export the vehicle outside North America or transfer the vehicle
to any other party.” The agreement also provided for $15,000 in
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anyone in this case, [Kiryanov], or [his] principal, was the
perpetrator.”
We now turn to the statutory cause of action. Vehicle Code
section 5753 provides, in pertinent part, as follows:
“(a) It is unlawful for any person to fail or neglect properly
to endorse, date, and deliver the certificate of ownership and,
when having possession, to deliver the registration card to a
transferee who is lawfully entitled to a transfer of registration.
“(b) Except when the certificate of ownership is demanded
in writing by a purchaser, a vehicle dealer licensed under this
code shall satisfy the delivery requirement of this section by
submitting appropriate documents and fees to the department for
transfer of registration in accordance with [applicable law].
“(c) (1) Within 15 business days after receiving payment in
full for the satisfaction of a security interest and a written
instrument signed by the grantor of the security interest
designating the transferee and authorizing release of the legal
owner’s interest, the legal owner shall release its security
interest and mail, transmit, or deliver the vehicle’s certificate of
ownership to the transferee who, due to satisfaction of the
security interest, is lawfully entitled to the transfer of legal
ownership.”7
Subdivision (d) contains further details regarding the
certificate of ownership required by subdivision (c). Subdivision
liquidated damages if the car were to be exported outside of
North America within 12 months of purchase.
7 Subdivision (c)(2) deals with leases. Kiryanov agrees that
it has no application to this case.
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(e) then provides for a daily statutory penalty for owners who fail
to comply with subdivisions (c) and (d).
Alleged violation of subdivision (c) is at the heart of
Kiryanov’s case, because he sought the statutory penalties that
arise from violation of the 15-day time limit associated with this
subdivision, as well as other damages he purportedly suffered
due to the delay.
The arbitrator concluded subdivision (a) provided no relief,
as the section required provision only of documents in Dealer’s
possession, and Dealer had no such documents.8 The arbitrator
further found that Dealer “did provide all of the evidence of
ownership of the vehicle to [Kiryanov] well within the time
required, so the Claim under this subsection fails.”
As to subdivision (b), the arbitrator concluded it did not
apply. If Kiryanov had wanted the vehicle titled in California,
Dealer could have satisfied its statutory obligations by
submitting the required materials to the California DMV. While
Kiryanov disagrees with the arbitrator’s resolution of the factual
issue that he demanded Nevada title, he agrees that he has no
viable claim under subdivision (b).
Subdivision (c), by its terms, relates to the transfer of title
on satisfaction of a security interest. The arbitrator found it did
not apply, stating: “This section relates to lienholder’s’ rights.
Since [Kiryanov] represented this transaction to be all cash and
no lien has ever been recorded or asserted, this section does not
apply. If, arguendo, the language is tortured to mean that once
8 The arbitrator may have misinterpreted subdivision (a),
but subdivision (a) does not apply to this case in any event.
Because Kiryanov was not entitled to a transfer of registration,
subdivision (a) is of no help to him.
8
the dealer is paid for the vehicle, ownership documents must be
transmitted to the payor, the evidence is clear that [Dealer]
transmitted every document and/or copies thereof in its
possession to [Kiryanov] within the time required. By making
specific demands regarding where the vehicle was to be titled,
[Kiryanov] relieved [Dealer] of any obligation to arrange for
California Title (aka ‘ownership documents’). Nevertheless,
knowing that the transaction was becoming stale and not
wanting the record ownership of the vehicle to remain in the
purgatory of the process, [Dealer] later ordered a California title.
This begs the question as to whether it wouldn’t have been
simpler for [Dealer] just to have done so to make sure it had
complied with applicable law? In retrospect, I believe the answer
is ‘Yes.’ However, as a consumer service business, it was
reasonable for [Dealer] to try to satisfy its customer’s desires,
even though the efforts on both sides were poorly executed.
Subsection c does not apply and, consequently, [Kirynov’s] prayer
under this statute is DENIED.”
4. Confirmation Proceedings
Kiryanov moved to vacate the award; Dealer moved to
confirm it. After briefing and a hearing, the trial court confirmed
the award.
Specifically, the court applied the FAA standard, rather
than the California Arbitration Act (Code Civ. Proc., §§ 1280 et
seq., CAA). Under the FAA standard, an arbitration may be
vacated where the arbitrator acts in “manifest disregard” of the
law. “ ‘The manifest disregard standard requires a party seeking
vacatur to prove that the arbitrator “was fully aware of the
existence of a clearly defined governing legal principle but
refused to apply it, in effect, ignoring it.” ’ ” (JP-Richardson, LLC
9
v. Pacific Oak SOR Richardson JV, LLC (2021) 65 Cal.App.5th
1177, 1188 (JP Richardson).)
Pursuant to that standard, the trial court found no
manifest disregard. Kiryanov had also suggested the arbitrator
exceeded the scope of the arbitration by addressing the issue of
registering the vehicle, as the arbitration should have been
limited to Dealer’s failure to obtain title. The trial court
disagreed, holding that, since the car could not be titled in
Nevada without registration, registration “was an essential part
of the title question.” The trial court therefore confirmed the
award.
Kiryanov filed a timely notice of appeal.
DISCUSSION
1. Standard of Review
We review de novo a trial court judgment confirming an
arbitration award. (Mave Enters. v. Travelers Indem. Co. (2013)
219 Cal.App.4th 1408, 1422 (Mave).)
The parties agree that the FAA “manifest disregard”
standard of arbitral review applies to this case. We accept the
concession without reaching the issue.9 To establish manifest
9 The “manifest disregard” standard is a procedural, rather
than substantive, part of the FAA. (Mave, supra,
219 Cal.App.4th at p. 1423, fn. 5.) In accordance with choice of
law principles, we would apply the procedural provisions of the
CAA in the absence of an agreement otherwise. However, if the
parties, in their agreement, expressly agreed to incorporate the
FAA’s procedural provisions, we would accept that limitation.
(Victrola 89, LLC v. Jaman Properties 8 LLC (2020)
46 Cal.App.5th 337, 345-346.) Here, the parties’ arbitration
clause provided, “Any award by the arbitrator shall be in writing
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disregard, “ ‘the evidence must establish “that the arbitrator
(1) knew of the relevant legal principle, (2) appreciated that this
principle controlled the outcome of the disputed issue, and
(3) nonetheless willfully flouted the governing law by refusing to
apply it.” ’ ” (JP Richardson, supra, 65 Cal.App.5th at p. 1188.)
An award under the FAA is not reviewable for factual errors.
(Martinique Prop., LLC v. Certain Underwriters at Lloyd’s (9th
Cir. 2023) 60 F.4th 1206, 1208.)
2. The Arbitrator Did Not Manifestly Disregard the Law
Kiryanov argues the arbitrator manifestly disregarded the
law – specifically, Vehicle Code section 5753, subdivision (c).
Taking the language of the arbitrator’s decision entirely out of
context, Kiryanov argues the arbitrator recognized that
subdivision (c) applied and required Dealer to deliver the
California certificate of title within 15 days. That the arbitrator
nonetheless excused the Dealer from compliance is, according to
Kiryanov, a manifest disregard of the law.
We have quoted the arbitrator’s decision regarding
subdivision (c) above. The arbitrator first held that subdivision
“does not apply,” as it relates only to lienholders. Second, the
arbitrator stated, “If, arguendo, the language is tortured to mean
that once the dealer is paid for the vehicle, ownership documents
must be transmitted to the payor, the evidence is clear that
[Dealer] transmitted every document and/or copies thereof in its
possession to [Kiryanov] within the time required.” Third, the
and will be final and binding on all parties, subject to any limited
right to appeal under the Federal Arbitration Act.” Whether this
language is sufficient to adopt the FAA’s procedural provisions
governing vacating and confirming arbitration awards is a
question on which we express no opinion.
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arbitrator held that the Dealer was “relieved of any obligation to
arrange for California Title” because Kiryanov had demanded
Nevada title. Fourth and finally, the arbitrator observed that the
Dealer nevertheless obtained California title to remove the
vehicle from “the purgatory of the process,” and that, in
retrospect, “it would have been simpler” for it to have done so
from the start.
On appeal, Kiryanov brushes aside the arbitrator’s first
holding as mere “clerical error,” which he argues should be
“ignored.” He then focusses on the second statement, wherein the
arbitrator began, “If, arguendo, the language is tortured to mean
that once the dealer is paid for the vehicle, ownership documents
must be transmitted to the payor, . . .” Kiryanov turns this
farfetched hypothetical on its head, and states, “The award
accepts the meaning [of the statute] as ‘to mean that once the
dealer is paid for the vehicle, ownership documents must be
transmitted to the payor . . . .” The arbitrator’s award did no
such thing. The arbitrator held that the subdivision did not
apply, because, by its terms, it pertained only to the release of
secured interests, and the language would have to be “tortured”
to have the meaning Kiryanov assigns to it.
Utilizing the manifest disregard test, Kiryanov argues the
arbitrator “appreciated” that Vehicle Code section 5753,
subdivision (c) applied to the case, but “nonetheless willfully
flouted” it. The plain reading of the award is that the arbitrator
recognized that subdivision (c), by its terms, did not apply. There
was no manifest disregard.
Kiryanov’s remaining arguments on appeal request us to
reject the arbitrator’s evaluation of the evidence in favor of his
interpretation, despite providing no legal basis for such a review
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and a record insufficient for us to do so. He also reasserts the
argument that the issue of registration was outside the scope of
the arbitration. We reject this argument on the same basis as did
the trial court; the vehicle could not be titled in Nevada without
registration, so the issues were intertwined.
DISPOSITION
The judgment confirming the arbitration award is affirmed.
Kiryanov shall pay Dealer’s costs on appeal.
RUBIN, P. J.
WE CONCUR:
BAKER, J.
KIM, J.
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