Howard Abselet v. Hudson Labor Solutions, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 4, 2020
• Docket: 18-56027
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 4 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

HOWARD L. ABSELET, an individual and No. 18-56027 derivatively on behalf of ROOSEVELT LOFTS, INC., D.C. No. 2:16-cv-06263-JFW-JEM

Plaintiff - Appellee, MEMORANDUM* v.

HUDSON LABOR SOLUTIONS, INC., a California corporation; et al.,

Defendants - Appellants.

Appeal from the United States District Court for the Central District of California John F. Walter, District Judge, Presiding

Argued and Submitted January 9, 2020 Pasadena, California

Before: WATFORD, BENNETT, and LEE, Circuit Judges.

Hudson Labor Solutions, Inc. and its owners, brothers Raymond and Rodney

Yashouafar (“Raymond Y.” and “Rodney Y.”), appeal the district court’s grant of

summary judgment in favor of Howard Abselet on his claim for intentional

interference with contractual relations. We have jurisdiction under 28 U.S.C.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. § 1291, and we review the district court’s ruling de novo. See Bravo v. City of Santa

Maria, 665 F.3d 1076, 1083 (9th Cir. 2011). We reverse and remand.

In 2008, Abselet loaned six million dollars from a medical malpractice

settlement to a group that included Solyman Yashouafar and Massoud Yashouafar

(together, the “Judgment Debtors”), who are the father and uncle, respectively, of

Raymond Y. and Rodney Y. When the Judgment Debtors defaulted on the loan,

Abselet sued for recovery of his principal. The February 10, 2012 settlement of that

lawsuit is the contract at issue here. The Judgment Debtors agreed to repay Abselet

by, among other things, conveying their interest in up to $1.125 million from a

bankruptcy class action reserve.

Abselet subsequently executed writs of attachment against the Judgment

Debtors and undertook various efforts to recover the amounts owed. Unfortunately,

these efforts have been repeatedly frustrated by fraudulent conveyances of assets

from the Judgment Debtors to family members.

The intentional interference claim here involves a transaction that Abselet

alleges was fraudulently made to circumvent the $1.125 million owed from the class

action reserve under the settlement agreement. In March 2012, the Judgment

Debtors authorized a $300,000 payment to Hudson — an apparent shell company

owned by Raymond Y. and Rodney Y. — from the class action reserve. Over the

next two years, Hudson paid $267,000 in “wages” to the Judgment Debtors and their

2 spouses, which appears to be an improper pass-through of most of the $300,000

payment.

1. Despite strong evidence of egregious misconduct by the appellants and

the Judgment Debtors, we are unable to affirm the district court’s summary judgment

ruling because, viewing the record in a light most favorable to the appellants, there

is a genuine issue of material fact as to whether Abselet’s intentional interference

claim was timely filed. See Bravo, 665 F.3d at 1083. An intentional interference

claim typically accrues for statute of limitations purposes “at the date of the wrongful

act,” or no later “than the actual breach of the contract.” See Trembath v. Digardi,

118 Cal. Rptr. 124, 125 (Cal. Ct. App. 1974). Here, the allegedly induced breach

occurred on or about March 20, 2012, while this action was not filed until August

22, 2016 — after either the two or three-year limitations period that applies to

intentional interference claims. See id. (normal limitations period is two years);

Romano v. Wilbur Ellis & Co., 186 P.2d 1012, 1015 (Cal. Ct. App. 1947) (three-year

limitations period where fraudulent inducement is alleged).

The delayed discovery rule can extend a statute of limitations, such that it

“begins to run when the plaintiff has reason to suspect an injury and some wrongful

cause, unless the plaintiff pleads and proves that a reasonable investigation at that

time would not have revealed a factual basis for that particular cause of action.” Fox

v. Ethicon Endo-Surgery, Inc., 110 P.3d 914, 917 (Cal. 2005). The district court

3 relied on this rule to find that the earliest Abselet could have discovered the factual

predicate for his claim was during the August 27, 2015 deposition of Raymond Y.

in a different case. But on March 29, 2013, Abselet’s attorney sent a demand letter

that accused the $300,000 payment to Hudson of being an improper distribution to

the Judgment Debtors “through a variety of entities and third-party obligors.”

Because we must accord all inferences in the appellants’ favor at this stage, we

conclude that the letter raises a genuine issue of material fact as to whether, under

the delayed discovery rule, the March 29, 2013 letter triggered the statute of

limitations for the intentional interference claim.

Abselet alternatively argues that the district court’s ruling should be affirmed

on the basis of equitable tolling. A statute of limitations may be tolled “when an

injured person has several legal remedies and, reasonably and in good faith, pursues

one.” McDonald v. Antelope Valley Cmty. Coll. Dist., 194 P.3d 1026, 1031 (Cal.

2008). Three elements are required: (i) timely notice; (ii) lack of prejudice to the

defendant; and (iii) reasonable and good faith conduct by the plaintiff. See id. at

1033.

While Abselet identifies two events that he contends tolled the statute of

limitations, genuine issues of material fact exist as to whether either event provided

the appellants with timely notice of a potential intentional interference claim. First,

Abselet filed a July 9, 2013 bankruptcy motion challenging certain distributions

4 from the class action reserve. The motion, however, did not discuss the $300,000

payment to Hudson, but instead identified seven other distributions it deemed

improper. And second, Raymond Y. filed a third-party motion in a different action

related to the transfer of stock in two companies. But neither the third-party motion

nor the action in which it was brought had any connection to the $300,000 payment.

Accordingly, there remain genuine disputes of material fact, and so we are unable to

hold that Abselet is entitled to equitable tolling as a matter of law.

2. Intentional interference with contractual relations requires: (i) a valid

contract; (ii) defendant’s knowledge of the contract; (iii) intentional acts designed to

induce a breach of the contract; (iv) actual breach; and (v) damages. Pac. Gas &

Elec. Co. v. Bear Stearns & Co., 791 P.2d 587, 589-90 (Cal. 1990). The record

reflects genuine issues of material fact as to whether the settlement agreement had

taken effect when Hudson received the $300,000 payment, whether the appellants

knew about the settlement agreement at that time, and whether the appellants

induced a breach of the settlement agreement. The district court therefore also erred

in granting summary judgment with respect to these elements of the intentional

interference claim.

REVERSED AND REMANDED.