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Lavizadeh v. Moghadam

Court of Appeals of Texas, Fifth District, Dallas

December 13, 2019

ELYAHOU LAVIZADEH AND PARVANEH LAVIZADEH, TRUSTEES OF THE ELYAHOU AND PARVANEH LAVIZADEH TRUST 2004, Appellants
v.
ALI A. MOGHADAM, Appellee

          On Appeal from the 191st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-15-06627

          Before Chief Justice Burns, and Justices Richter and Rosenberg

          MEMORANDUM OPINION

          ROBERT D. BURNS, III CHIEF JUSTICE

         Appellants Elyahou Lavizadeh and Parvaneh Lavizadeh, Trustees of the Elyahou Lavizadeh and Parvaneh Lavizadeh Trust 2004 (collectively, the Trust) appeal a judgment rendered in favor of Ali A. Moghadam regarding Moghadam's alleged breach of a guaranty. In three issues, the Trust complains the trial court impermissibly denied its right to a jury trial, erred in construing the guaranty and finding no breach by Moghadam, and in granting Moghadam's motion for protection regarding the testimony of its attorney, sought by the Trust. Finding no error, we affirm.

         FACTUAL BACKGROUND

         Moghadam is the managing member of HP Texas Holdings, LLC f/k/a Highland Park Investments, LLC, (HP).[1] In 2006, HP sold an apartment complex to the Trust (the Property). The sale generated three lawsuits between and among these parties, a case filed in 2007[2] (the 2007 Lawsuit), a subsequent case filed in 2010 (the 2010 Lawsuit), as well as the instant case and this appeal.

         In the 2007 Lawsuit, HP obtained a judgment against the Trust in the principle amount of more than $1.9 million (the Judgment). Although HP reacquired the Property pursuant to a constable's auction, the Trust also appealed the Judgment. HP subsequently filed the 2010 Lawsuit alleging the Trust had made certain fraudulent transfers. While the Judgment was on appeal and the 2010 Lawsuit was pending, in a 2014 telephone call between certain counsel and the son of the trustees, the parties settled both lawsuits by agreeing to dismiss the 2007 Lawsuit appeal and the 2010 Lawsuit, resolve a related tax lawsuit, [3] and by executing several instruments. The Judgment however, was not discharged by the settlement.

         Rather than agreeing to offset or reduce the amount of the Judgment the Trust owed to HP, the parties executed (a) a promissory note by which HP agreed to pay $120, 000 to the Trust by a date certain (the Note); (b) a Deed of Trust on the Property securing the Note; and, (c) a personal guaranty executed by Moghadam, individually, in favor of the Trust (the Guaranty). The Guaranty prohibited "any claim of offset" as between the amount owed pursuant to the Note and the Guaranty, and the Judgment. It also included Moghadam's agreement not to execute on the Judgment, and his promise to indemnify the Trust for damages caused by such execution.

         The Trust did not pay the Judgment and HP did not pay the $120, 000 due under the Note. Five months after HP defaulted on the Note and pursuant to the still unsatisfied Judgment, HP obtained a turnover order by which the Note and Deed of Trust were turned over to a receiver for sale or collection. When the Trust's emergency motion to dissolve the turnover order and discharge the receiver was denied, it filed the instant lawsuit against Moghadam only, alleging Moghadam had breached the Guaranty-through HP's motion for turnover order and appointment of receiver-which the Trust asserted was an execution in violation of the Guaranty.

         In August 2017, the Trust sent a demand letter to Moghadam pursuant to the Guaranty, seeking payment of $191, 700 as indemnity, [4] $1, 000 in attorney's fees, "plus any post-judgment interest." On September 6, 2017, the receiver notified both parties he had received payment "in full and final satisfaction of the Note" in the amount of $191, 700 and would distribute that amount to HP, the judgment creditor.[5]

         On September 19, 2017, the parties appeared for trial and several pre-trial motions, including HP's motion for protective order arising from the Trust's designation of HP's counsel as a fact witness. The Trust asserted HP's counsel's testimony was relevant to the terms of the oral settlement and the parties' intent regarding the Guaranty's terms. During arguments before jury selection commenced, the parties disclosed that Moghadam had paid the principle amount owed under the Note plus interest. After further discussion with the parties and following their suggestions, the judge informed the parties that until the remaining legal issues were resolved, she saw no factual issues and no reason to present the case to a jury. The court admitted the Trust's exhibits, agreed to the parties' proposal regarding stipulated admission of Moghadam's exhibits (which were admitted on the same day although submitted to the court a few days later), gave each side a time-line for additional briefing regarding the legal issues, and stated she would conduct a further hearing and jury trial if necessary.

         Instead of filing a brief regarding the legal issues-whether payment on the Guaranty to the receiver operated as an offset prohibited by the Guaranty rather than payment on the Note as guaranteed-the Trust briefed its denial of the right to a jury trial. The trial court entered judgment in favor of Moghadam, and this appeal followed.

         DISCUSSION

         A. The Trust agreed to the court's determination of the legal issues premised on stipulated facts.

         In its first issue, the Trust complains the trial court infringed on its Constitutional right to a jury trial by "sua sponte dismissing the jury trial" and deciding the case solely upon documentary evidence. The Trust, however, not only failed to object to the proposal, it consented.

         During the hearing conducted prior to jury selection, the Trust's counsel initially stated "for the record that we're here on a jury trial setting" and he believed "factual issues [existed] that may need to be presented to the jury. . .", however, he subsequently agreed to Moghadam's counsel's proposal to stipulate all exhibits into evidence. More specifically, the Trust agreed, "it would be appropriate" to have a "summary trial by the Judge on those issues, and then if we need a jury on a fact issue . . ." the parties would return to court for further proceedings. Following this exchange and an off-the-record discussion, the Trust offered 18 exhibits into evidence, and the court admitted them. Moghadam's exhibits were likewise deemed admitted at the same time although submitted electronically a few days later. We conclude the Trust's agreement with this procedure waived any objection to the court's refusal to submit any issues to a jury. See Ortega-Carter v. Am. Int'l Adjustment Co., 834 S.W.2d 439, 441-42 (Tex. App.-Dallas 1992, writ denied) ("'[S]tipulation' is an agreement, admission, or concession made in a judicial proceeding by the parties or their attorneys respecting some matter incident thereto," which may not be withdrawn prior to entry of judgment if previously accepted); see also e.g., Kupersmith v. Weitz, 2006 WL 3407832, *4, (Tex. App.-Houston [14th Dist.] Nov. 28, 2006, no pet.) (court correctly gave effect to parties' stipulations).

         Even if we considered the Trust's brief, submitted almost three weeks after its stipulation as a sufficient objection to preserve entitlement to a jury or withdraw its consent for the court's disposition on stipulated facts, we would find no error. The right to a jury trial attaches only when controverted questions of fact exist. Sullivan v. Barnett, 471 S.W.2d 39, 44 (Tex. 1971); Wells Fargo Bank, N.A. v. Leath, 425 S.W.3d 525, 531 (Tex. App.-Dallas 2014, pet. denied). In neither this Court nor the trial court has the Trust identified any factual issue. As discussed below, construction of the Guaranty is a question of law. URI, Inc. v. Kleberg Cty., 543 S.W.3d 755, 763 (Tex. 2018) (Mere disagreement by the parties regarding contractual interpretation does not prove ambiguity). The existence of a breach, where the facts are undisputed, likewise presents only a question of law. Grohman v. Kahlig, 318 S.W.882, 887 (Tex. 2010) ("whether a party has breached a contract is a question of law for the court, not a question of fact for the jury, when the facts of the parties' conduct are undisputed or conclusively established."). Moreover, an abuse of discretion standard governs denial of a jury trial. Mercedes-Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666 (Tex. 1996). Several weeks after agreeing to a summary trial of the legal issues, the Trust filed a brief objecting to dismissal of the jury panel and argued a jury must decide questions of fact. It did not identify, however, any factual issues, but rather argued instead that the settlement was comprised of a series of documents, including the Guaranty. But the manner in which the settlement arose and the various documents evidencing the settlement do not create a fact issue, particularly with respect to the legal interpretation of the Guaranty. We overrule the Trust's first issue.

         B. The trial court correctly ...


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