Facts

Bahram Tabatabai sued Reid Breitman and Christopher Miller, and several others alleging, among other causes of action, fraud, deceit and/or conversion. Miller defaulted to the complaint and the trial court entered a default judgment against him. The case against Breitman proceeded to trial. The lawsuit arose from the sale of Tabatabai's home on Rexford Drive in Beverly Hills. In early 2005, the home was valued at approximately $2.1 million, and was encumbered by a $1.5 million loan.

PLAINTIFF'S CONTENTIONS:
Plaintiff contends in June 2005, he met with Miller and Breitman at his home. Plaintiff testified that Miller, a felon he met in prison, was his friend and partner who worked with him on some real estate deals. Miller purportedly connected Plaintiff with Breitman who was an experienced real estate investor and attorney. Plaintiff claimed that he, Miller and Breitman entered into a joint venture agreement at that meeting where Breitman would form a corporation that would hold title to the property and all 3 would be the shareholders; Plaintiff would deed the property to the entity; Breitman would loan the entity $200,000 to remodel and add a second story; the remodeled property would then be sold for $3.8 million; from the proceeds, Plaintiff would recoup the value of the property that he valued at $2.5 million, Breitman would recoup his $200,000, and the partners would split the balance. Plaintiff subsequently secured a "second" on his home for $170,000, but was arrested and the check was seized. After his arrest, Plaintiff entrusted all of his financial affairs to Miller. Miller forged a "power of attorney" form which empowered Miller to handle all of Plaintiff's financial affairs. Miller claimed that Plaintiff instructed him to do so. Since Plaintiff was still in custody, he later decided to accept the Miller/Breitman proposal whereby Plaintiff transferred the subject property by grant deed to Hyperion Fund, an entity allegedly formed by Breitman. The sale price for Rexford was $1.7 million, and the net proceeds of the sale, $14,954, went to Miller. The property was later sold by Hyperion in May of 2006 for $2.15 million, with Hyperion receiving a check from escrow for $456,756. Breitman testified that he never met with the Plaintiff and Miller and had no knowledge of the fraud being committed by Miller.

Damages

Tabatabai sought to be recompensed for the alleged conversion of his property, which was sold for less than its worth ($1.7 mil versus market value of $2.1 mil), and the alleged fraud committed by Miller and Breitman.

Result

The trial court noted that although Tabatabai appeared to have been defrauded in the sale of the subject property, it ultimately found in favor of Breitman because Tabatabai failed to carry his burden of proving that Breitman knowingly participated in the fraudulent enterprise initiated by Miller.

Other Information

FILING DATE: March 11, 2008.