Facts

Plaintiff and cross-defendant Jay Dharmasuriya was a licensed real estate salesperson. Over the years, defendant Nalan Samarawickrema and Dharmasuriya engaged in a series of real property transactions, in which Samarawickrema purchased real properties in his own name and in partnership with Dharmasuriya.

At some point in their dealings, Dharmasuriya presented Samarawickrema with a check for 211,188 British pounds (more than $400,000) as Samarawickrema's profits from the sale of a London property. Samarawickrema contended that, subsequently, Dharmasuriya refused to verify his signature on the check, with the result that the bank on which it was drawn refused to pay Samarawickrema. Samarawickrema alleged that he then examined other past transactions and discovered irregularities in Dharmasuriya's actions.

Dharmasuriya sued a number of defendants to quiet title to an interest in real property. Samarawickrema claimed no interest in the real property and did not participate in the separate trial and settlement as to interests in the real property.

Samarawickrema filed a cross-complaint against Dharmasuriya for breach of fiduciary duty and fraud, among other claims.

PLAINTIFF/CROSS-DEFENDANT'S CONTENTIONS:
Dharmasuriya contended that the properties were bought with Dharmisuriya's money and that he had the right to the profits from the sale of those properties; and Dharmasuriya had acted properly as to Samarawickrema in all of their transactions.

DEFENDANT/CROSS-COMPLAINANT'S CONTENTIONS:
Samarawickrema contended that Dharmasuriya defrauded him and breached his fiduciary duty to Samarawickrema by, among other things, failing to pay to Samarawickrema his share of the proceeds from the London property and by diverting to Dharmasuriya's own benefit $278,000 in proceeds from the sale of one of Samarawickrema's properties.

Other Information

The court determined that Dharmasuriya committed fraud and breach of fiduciary duty against Samarawickrema. On July 22, 2009, after the court issued its written tentative decision and one day before punitive damages phase was scheduled to begin, Dharmasuriya filed a bankruptcy petition. Samarawickrema obtained a remand order to permit the conclusion of the compensatory damages trial. The bankruptcy court, however, refused to remand the punitive damages phase of the trial, retaining jurisdiction to conduct the punitive damages trial. On remand, the court entered judgment against Dharmasuriya and another cross-defendant for $1,824,406 and imposed a constructive trust on more than 30 real properties. FILING DATE: June 25, 2007.