LOS ANGELES--(BUSINESS WIRE)--Winget Spadafora & Schwartzberg LLP’s trial team led by its California Office’s Managing Partner, Brandon S. Reif, obtained a judgment for the financial lender plaintiffs in the amount of $1,807,559.00. The judgment reflects an unpaid commercial loan of $500,000 plus $1,307,559 in pre-judgment interest (16% annualized) and late fees against defendant Shahram Elyaszadeh, a California licensed real estate broker. (Kayvan Setareh, an individual, as trustee of the Pacific Capital Trust and executor of the estate of Rabi and Jalalat Setareh, Los Angeles Superior Court, Case No. BC598172 (8/1/2017).
Mr. Reif, Richard Tricker and Rachel Dardashti substituted in as trial counsel for plaintiffs shortly before trial, which commenced on February 14, 2017 and ended on March 17, 2017. The parties filed post-trial briefs and closing arguments were heard on May 4, 2017.
Plaintiff Setareh’s late father, Rabi Setareh (Rabi), was a hard money lender. In 2001, Rabi met defendant Elyaszadeh, who was also a hard money lender individually and through his company, E&E Mortgage Bankers Corporation (E&E). Elyaszadeh and E&E are both California licensed real estate brokers. Elyaszadeh began borrowing money from Rabi. Elyaszadeh would then lend money to his own clients, who would pay a higher interest rate than Rabi charged him. Elyaszadeh profited based on the interest rate spread. In 2006, Elyaszadeh borrowed $600,000 from Rabi and signed a written promissory note. In 2007, Elyaszadeh borrowed an additional $500,000 under the same terms as the promissory note. Elyaszadeh eventually paid off the $600,000 but did not repay the $500,000 loan. Elyaszadeh blamed his financial misfortune on the 2008 real estate market crash and the December 2008 involuntary bankruptcy of NAMCO Capital Group, Inc., whose founder, Ezri Namvar, was sentenced in May 2011 to seven years in prison and to repay $21 million in restitution for stealing from the clients. (United States of America v. Ezri Namvar, U.S.D.C., C.D. Cal. 2:2010-cr-01055) (In re Namco Capital Group, Inc., U.S. Bankr. Ct., C.D. Cal. 2:08-bk-32333).
Elyaszadeh admitted he did not repay the $500,000 loan arguing: it was not a loan; it was time-barred under the statute of limitations; and violated the statute of frauds because it was not in writing and signed by Elyaszdeh. The court rejected his defenses. It found that the 2007 transaction was a loan as evidenced by Rabi’s check which stated “loan” in the memo line, which Elyaszdeh deposited into his bank account. The court also found that Rabi and Elyaszadeh agreed that the $500,000 loan applied the same terms of the promissory note. The court held that “… the parties orally agreed to modify [the promissory note] solely with respect to the additional amount of the loan. This was new consideration, and the oral modification of [the promissory note] complied with Civil Code 1698c.” The court’s finding meant that plaintiffs filed a timely lawsuit under the four year statute of limitations. The court also held that plaintiffs are entitled to recovery for a common counts for account stated because Elyaszadeh “…admitted his debt of $500,000 on multiple occasions, both orally and by providing to Rabi and plaintiff NSF [Non-sufficient funds] checks in the amount of $500,000.”
Mr. Reif commented that “the judgment recognizes California’s strong public policy of protecting bona fide creditors from unscrupulous debtors.” Mr. Reif added that “the defendant’s conduct throughout the business relationship proved his indebtedness and his attempt to disregard his debt after Rabi’s death was rejected. The Setareh family received a deserved win.”
Public records show that Elyaszadeh is facing other creditor lawsuits for allegedly failing to repay commercial debts.
Plaintiffs will be filing a memorandum of costs and a motion for attorneys’ fees, which are recoverable under the promissory note.
Plaintiffs were represented by the Los Angeles Office of Winget Spadafora & Schwartzberg LLP: Manager Partner Brandon S. Reif, Richard Tricker and Rachel Dardashti. Co-counsel was Attorney Sima Salek, Culver City, CA.
Winget Spadafora & Schwartzberg LLP is a nationwide law firm with offices in California, Colorado, Connecticut, Florida, Illinois, New York, New Jersey, Pennsylvania and Texas with an expertise in trial law and litigation for business and corporate disputes, securities, insurance, financial services, cyber law and data breach, employment and real estate law. (www.wssllp.com)
