Farahani v. Bastanipour (In re Bastanipour)

553 B.R. 111
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedJune 7, 2016
DocketCase No. 13 B 35761; Adv. No. 13 A 1434
StatusPublished

This text of 553 B.R. 111 (Farahani v. Bastanipour (In re Bastanipour)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farahani v. Bastanipour (In re Bastanipour), 553 B.R. 111 (Ill. 2016).

Opinion

MEMORANDUM OPINION

PAMELA S. HOLLIS, United States Bankruptcy Judge

This matter comes before the court on the complaint filed by Plaintiff Ebrahim Farahani against Defendant Marzieh Bas-tanipour. Farahani seeks to exclude from discharge under 11 U.S.C. § 523(a)(4) any debt that Bastanipour owes to him as a result of a real estate transaction that closed on September 26, 2008.1 The court heard testimony from three witnesses, reviewed the admitted exhibits and read Bastanipour’s post-trial brief.2 For the reasons stated below, the court enters judgment for Defendant Marzieh Basta-nipour.

JURISDICTION

Under 28 U.S.C. § 1334, district courts have original and exclusive jurisdiction of all cases under Title 11. The underlying bankruptcy case was automatically referred to this court pursuant to Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois, as authorized by 28 U.S.C. § 157(a).

This adversary proceeding, filed within the bankruptcy case, seeks a finding of nondischargeability pursuant to 11 U.S.C. [114]*114§ 523(a)(4). It is a core proceeding under 28 U.S.C. § 157(b)(2)(I). Since a proceeding to determine dischargeability “stems from the bankruptcy itself,” Stern v. Marshall, 564 U.S. 462, 499, 131 S.Ct. 2594, 180 L.Ed,2d 475 (2011), this court has both the statutory and the constitutional authority to enter final judgment on the complaint.

FINDINGS OF FACT

Plaintiff Ebrahim Farahani is a resident and citizen of California. Amended Complaint and Answer ¶ 6. He immigrated to the United States around 1992, lived in the Chicago area for ten years, and then moved to California. Tr. at 64-65. At the time of trial, Farahani was 65 years old. Tr. at 62.

Defendant Marzieh Bastanipour is a resident of Chicago. Amended Complaint and Answer ¶ 7. She and Farahani are former in-laws — Farahani was married to Bastanipour’s sister, Stedie. He also served in the army with her brother, Michael. Tr. at 30-31,

While living in the Chicago area, Fara-hani owned a business with Michael for several years, Tr, at 68-70. The business was organized as a corporation in which both Farahani and Michael were officers. Tr. at 120. During this same time period, Farahani bought a home in Glenview, Illinois. When he bought the home, he signed a real estate contract and a mortgage, as well as an agreement with a broker and all required closing documents. He read none of these papers. Tr. at 97-98.

Farahani lived in the house in Glenview for three or four years with his wife Sted-ie, but eventually quitclaimed the home to her. Tr. at 77-78. They separated a few years later. Tr. at 79.

After moving to California, Farahani bought another business, a discount store, which he operated for about five years. Tr. at 71-72. He incorporated that business and read the associated documents. Tr. at 98-99. After the discount store, Farahani operated a pizza shop for three and a half years and a women’s clothing store for another year. Tr. at 74-75. For each of these businesses he signed a lease, which he read before signing. Tr. at 99.

At all times during the events recounted below, Bastanipour was a real estate agent licensed under Illinois law. Amended Complaint and Answer ¶ 9. Farahani knew she was a real estate agent, and believed she was acting-as his agent. Tr. at 30.

In 2007, Farahani visited Chicago. Bas-tanipour asked him to have lunch with her. Tr. at 18; Amended Complaint and Answer ¶ 8. She invited- him to see a condominium. Tr. at 18-19. He told her that he did not have any money to buy property, or any intention of doing so, “[a]nd she said, no, just go look.” Tr. at 19, line 3. So they looked at several apartments.

Sometime later, Bastanipour called Far-ahani “and she said, do you remember those condos I show you? I said, yeah, I remember that. So one of them was involved with the River Road. I remember that one because that was the nicest one I see ... [o]n top of the Chicago River.” Tr. at 24, lines 7-11 and 14. Bastanipour asked if he wanted to buy the apartment, and Farahani told her he had no interest in purchasing it, both because he didn’t have the money and because he had no plans to live in Chicago. She told him that no down payment was required, that she would rent it out for him, and that the mortgage would have a low interest rate. Tr. at 25-26. This apartment, located at 800 South Wells Street, Unit 720, in Chicago, would be an investment property for Farahani. Tr. at 26.

Bastanipour asked Farahani to mail checks to her in order to make the pur[115]*115chase. He first sent a check for $15,000. After three or four months, she told him she needed another check for $14,000. Neither of these checks were cashed. Tr. at 27-28.

Then Bastanipour told Farahani that despite her earlier promise that no down payment would be required, he would need to make one. He sent her a check for $ 19,500. Tr. at 28-29. “And after a while she calls and she said that’s'not enough. You got to send more. And then I sent one check for 7,000, and another one for ... 9,000.” Tr. at 29, lines 7-9 and at 30, line 3. These checks were all written on Farahani’s line of credit. Tr. at 30. Fara-hani eventually provided earnest money in the total amount of $46,000, Tr. at 38; Pl. Ex. 1.

Sometime after that, Bastanipour presented Farahani with two documents to sign. She folded them up in a manner that prevented him from seeing what the document was unless he took it and unfolded it. Tr. at 32-34. “First time I didn’t ask anything, but second time I want to — I said, what is that for? She get angry to me. There is no need to review. I don’t want to cheat you or something. I said, okay, i sign it. I sign the paper.” Tr. at 33, lines 1-5. PI. Ex. 2.

Q: So you didn’t unfold and read the document that you were signing—
A: No.
Q: —because you didn’t want your friend mad at you?
A: That’s right. Once I asked her, she get mad at me. I said, okay, I sign it.

Tr. at 101, lines 18-24.3 Farahani did not expect that Bastanipour would defraud him, since she was a member of his family. Tr. at 105. Indeed, he expected that she would ensure the price he was paying was. fair. Tr. at 107. He asked her whether the price was fair and she told him “yeah, everything. Trust me ...” Tr. at 107, line 9.

Farahani did not realize that he had signed a contract to purchase the property located at 800 South Wells. Tr. at 36. Line 1 of the contract identifies the seller as “Owner of Record.” Someone signed the contract as seller, although both the printed and signed names are illegible. PI. Ex. 2.

Farahani also signed a lease, as lessee, for that same apartment. The term of the lease ran from January 2008 to December 2010 at a monthly rent of $1,600. Def. Ex. A. Farahani testified that he signed the lease when she handed it to him. folded up, and that he didn’t read it.

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Cite This Page — Counsel Stack

Bluebook (online)
553 B.R. 111, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farahani-v-bastanipour-in-re-bastanipour-ilnb-2016.