Djb Rentals Inc v. Najim Almaliky

CourtMichigan Court of Appeals
DecidedMarch 21, 2017
Docket329562
StatusUnpublished

This text of Djb Rentals Inc v. Najim Almaliky (Djb Rentals Inc v. Najim Almaliky) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Djb Rentals Inc v. Najim Almaliky, (Mich. Ct. App. 2017).

Opinion

STATE OF MICHIGAN

COURT OF APPEALS

DJB RENTALS, INC, and DAVID BROWN, UNPUBLISHED d/b/a GRAND RIVER AUTO and STAY DRY March 21, 2017 BASEMENT WATER PROOFING, INC

Plaintiffs/Counter Defendants- Appellants, V No. 329562 & 330768 Ingham Circuit Court NAJIM ALMALIKY, LC No. 14-000102-CB

Defendant/Counter Plaintiff- Appellee.

Before: BECKERING, P.J., and O’CONNELL and BORRELLO, JJ.

PER CURIAM.

In these consolidated cases, in Docket No. 329562, plaintiffs appeal by right the trial court’s September 15, 2015, order entered following a bench trial wherein the trial court found plaintiffs liable to defendant/counter-plaintiff Najim Almaliky (defendant) for misappropriation of funds and for payments associated with the termination of a business partnership. In Docket No. 330768, plaintiffs appeal by right a November 30, 2015, trial court order reducing the purchase price that defendant was ordered to reimburse plaintiffs for real estate jointly owned by defendant and plaintiff DJB Rentals, Inc. For the reasons set forth in this opinion, we affirm the trial court’s orders in both appeals.

A. FACTUAL BACKGROUND

Plaintiff David Brown desired to create a used car dealership with defendant at a site adjacent to Brown’s existing business, plaintiff Stay Dry Basement Water Proofing. Defendant and an entity controlled by Brown, plaintiff DJB Rentals, Inc., purchased a building for the new endeavor and held it jointly. In January 2013, Brown acquired a dealership license for the endeavor, plaintiff Grand River Auto, and Brown and defendant sold used cars under that moniker. Defendant was in charge of Grand River Auto’s day-to-day operations and possessed one of two ATM cards providing access to Grand River Auto’s bank account. After several months, Brown became aware of numerous charges and overdraft fees on Grand River Auto’s account that he attributed to defendant. Brown confronted defendant and decided to end their

-1- business partnership. Brown alleged that the business records showed that thousands of dollars were missing and that defendant was the culprit.

Plaintiffs filed suit alleging misappropriation, embezzlement, fraud, and breach of fiduciary duty, and also requesting partition of the real estate jointly owned by defendant and DJB Rentals. Defendant filed a counter-complaint alleging that Brown misappropriated funds for his personal use and for the use of his company, Stay Dry. The counter-complaint additionally alleged fraud, conversion, and statutory conversion in connection with Brown’s alleged financial misdeeds, while also requesting an accounting and the sale of the jointly held real estate.

Before the court held a bench trial, defendant filed a motion in limine requesting dismissal of Stay Dry as a plaintiff on grounds that the complaint stated no claim on Stay Dry’s behalf. Plaintiffs opposed the motion on the grounds that that Grand River Auto operated out of Stay Dry’s offices and Stay Dry provided space and office equipment. After hearing the parties’ arguments, the court stated, “I don’t think I have to address that if it’s a nonjury trial today, right? Can’t I just hear the testimony and make a decision?” Defense counsel responded “that’s fine[,]” and the parties set the trial date.

On the first day of trial, defense counsel stated that he had a motion in limine, and the court inquired if it was a renewal of the previous one. Counsel affirmed that it was, and reminded the court that it had promised to consider it, which the court then did. Defendant reiterated that none of plaintiffs’ claims involved Stay Dry. The court queried plaintiffs’ counsel about the distinction between Brown, Grand River Auto, and Brown’s company, Stay Dry and concluded that it did not see “where Stay Dry has any independent claim.” The court granted the motion.

At the bench trial, Brown testified that he owned plaintiff Stay Dry, and became acquainted with defendant through a local vehicle auction. Brown and defendant desired to create an “auto mall” on the property adjacent to Stay Dry. According to Brown, he and defendant orally agreed to invest equally in the endeavor, and likewise share profits and losses. Brown stressed that they had an “equal amount” of money invested in vehicles to sell, and that they agreed to invest profits back into the business.

Brown continued that he acquired a dealership license for “Grand River Auto” around January of 2013, and Stay Dry provided office space and put all “Grand River Auto” employees on its payroll. Brown asserted that defendant was in charge of Grand River Auto’s day-to-day operations, and purchased auctioned vehicles for resale as a “licensed agent under Grand River Auto.” According to Brown, Grand River Auto maintained a business checking account with two debit cards. He added that “the office” of Grand River Auto had one debit card while defendant possessed the other.

Brown testified that he became aware of bank charges he attributed to defendant that totaled almost $5,000 from “overdrafts and going to the ATM.” According to Brown, defendant cried when confronted with the evidence and “knew what he did.” According to Brown, shortly after the confrontation he told defendant that they needed to “go through the books” to “figure out the numbers,” and that they were “done.” Brown testified that defendant removed some

-2- vehicles and their titles from the business at night and told Brown to keep the remaining vehicles because they were “done.” He further testified that one of his employees examined the business records and that “tens of thousands” were missing.

Juanita Patson testified that Stay Dry employed her as a human resources and database manager, adding that Brown tasked her with reconciling Grand River Auto’s bank accounts and transactions after Brown and defendant ended their business relationship. Patson described the records as “a mess” because there were several sales with partial or no paperwork. She “put the pieces . . . together” to the best of her ability but acknowledged that the records were not sufficiently complete to produce an entirely accurate accounting. Patson agreed that bank statements showed that a Grand River Auto debit card was used to make purchases at Meijer, Quality Dairy, and Tommy Bahama. She further reported that there were “unusual and repetitive” cash withdrawals that she was unable to account for. Patson attempted to reconcile bank deposits with the auto sales, but she testified that there was a shortfall of $32,856.89.

Defendant testified that he personally had “between 20-25 cars” when he went into business with Brown, and they agreed that for each of his own vehicles sold, he would give $300 to Brown and $100 to the salesperson. According to defendant, he never agreed with Brown that his cars would be given to Grand River Auto, and he kept the proceeds from the sale of those cars minus the cut given to Brown and the salesman. Defendant also testified that he invested about $60,000 of his own money in Grand River Auto by purchasing auctioned vehicles that he paid for in cash. He continued that Brown was aware of this and encouraged him, adding that Brown promised to “catch up” with his own investment in the dealership later. Defendant testified that when a car he purchased at auction was sold at Grand River Auto, he, Brown, or a salesperson would deposit the proceeds into the Grand River Auto bank account. According to defendant, he and Brown each invested about $28,000 to purchase a building for the business, and they each contributed about $5,000 for repairs and renovation.

Defendant testified that on September 20, 2013, Brown told him that their business relationship was over.

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