Najarian Holdings LLC v. Corevest American Finance Lend

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 15, 2023
• Docket: 22-15010
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION FEB 15 2023 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

NAJARIAN HOLDINGS LLC; No. 22-15010 NAJARIAN CAPITAL LLC, D.C. No. 4:20-cv-00799-PJH Plaintiffs-Appellants,

v. MEMORANDUM*

COREVEST AMERICAN FINANCE LENDER LLC,

Defendant-Appellee,

and

CAF LENDING, LLC,

Defendant.

Appeal from the United States District Court for the Northern District of California Phyllis J. Hamilton, District Judge, Presiding

Argued and Submitted January 25, 2023 San Francisco, California

Before: GOULD, RAWLINSON, and BRESS, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Najarian Holdings LLC and Najarian Capital LLC (Najarian), two

companies owned by Mr. Zareh Najarian, appeal the district court’s grant of

summary judgment in favor of CoreVest American Finance Lender LLC

(CoreVest) and the district court’s denial of appellants’ motion for partial summary

judgment.

We have jurisdiction under 28 U.S.C. § 1291. “We review a grant of

summary judgment de novo. Viewing the evidence in the light most favorable to

the nonmoving party, we must determine whether there are any genuine issues of

material fact and whether the district court correctly applied the relevant

substantive law.” Southwest Fair Housing Council, Inc. v. Maricopa Domestic

Water Improvement Dist., 17 F.4th 950, 959 (9th Cir. 2021) (citation omitted). “A

dispute about a material fact is genuine if there is sufficient evidence favoring the

nonmoving party for a jury to return a verdict for that party. . . .” Id. (citation

omitted). “The district court’s interpretation of state contract law is likewise

reviewed de novo.” Golden v. Cal. Emergency Physicians Medical Grp., 896 F.3d

1018, 1021 (9th Cir. 2018) (citation omitted).

1. There was no genuine issue of material fact raised regarding the

release of claims in the First Amendment to the agreement. See Southwest Fair

Housing Council, 17 F.4th at 959. Based upon the plain meaning of the language

2 in the First Amendment, Najarian released all claims against CoreVest. See City of

Oakland v. Department of Finance, 79 Cal.App.5th 431, 444 (2022), as modified.

Even if CAF, CoreVest’s predecessor, failed to sign the First Amendment,

Mr. Najarian’s signature on the document as guarantor and on behalf of Najarian

Holdings rendered the First Amendment enforceable against Mr. Najarian,

Najarian Holdings, and Najarian Capital because Najarian Holdings and Najarian

Capital were both controlled by Mr. Najarian. See C9 Ventures v. SVC-W., L.P.,

202 Cal.App.4th 1483, 1501 (2012) (“A provision on a form agreement signed by

the party against whom enforcement is sought is binding . . .”) (citation omitted)

(emphasis added); see also Apple, Inc. v. Franchise Tax Bd., 199 Cal.App.4th 1, 9

(2011) (explaining that corporations under common control are treated as one

entity). It was likewise immaterial that Najarian Capital did not sign the document

since Najarian Holdings and Mr. Najarian also released the claims of their

“affiliates.” The release is thus effective and enforceable. Nevertheless, even if

Najarian’s claims were not barred by the release, they lack merit for the reasons we

discuss next. And in any event, Najarian never argued before the district court that

the release was ineffective because it was not signed by CAF. See Armstrong v.

Brown, 768 F.3d 975, 981 (9th Cir. 2014) (“[A]n issue will generally be deemed

waived on appeal if the argument was not raised sufficiently for the trial court to

3 rule on it. . . .”) (citation omitted).

We do not address Najarian’s argument that the release was ineffective

under the Statute of Frauds because Najarian did not raise this argument before the

district court. See id.

2. The district court properly granted summary judgment in favor of

CoreVest on Najarian’s claim challenging the release fees. No genuine issue of

material fact existed regarding whether the $250 release fees were unauthorized.

See Southwest Fair Housing Council, Inc., 17 F.4th at 959. The agreement

between Najarian and CAF provided that Najarian was responsible for costs and

expenses in “connection with negotiation, preparation, execution, delivery,

administration, amendment, waiver, and enforcement of the Loan Documents.”

And another provision required Najarian to “pay to [CAF] all other fees as and

when required pursuant to the Loan Documents.” The $250 release fees were

expressly authorized by the agreement between Najarian and CAF, as the fees were

reasonably related to the costs associated with financing and releasing the loans,

and summary judgment in favor of CoreVest on this claim was warranted.

3. No material issue of fact was raised regarding whether the late fees

were unreasonable and illegal penalties under California law. See id. “[A]

provision in a contract liquidating the damages for the breach of the contract is

4 valid unless the party seeking to invalidate the provision establishes that the

provision was unreasonable under the circumstances existing at the time the

contract was made.” Gormley v. Gonzalez, 84 Cal.App.5th 72, 81 (2022). Because

Najarian was often delinquent on monthly interest payments, the late fees

compensated CAF for the decrease in value of the debt capital. The late fees were

not unreasonable because they bore a reasonable relationship to CAF’s anticipated

damages. See Krechuniak v. Noorzoy, 11 Cal.App.5th 713, 722 (2017).

AFFIRMED.