Damavandi v. Michael J. Tisdale Construction CA2/7
B333672
Cal. Ct. App.Feb 14, 2025Background
- In 2015, Oliver Damavandi and his brother-in-law Jason Aryeh formed LLCs to develop high-end residential properties, with Aryeh funding the projects and Damavandi managing them.
- The operating agreements gave Damavandi minority equity interests, which would increase after Aryeh recouped his capital investment, and entitled Damavandi to removal only for “illegal or gross misconduct.”
- Following Aryeh's divorce from Damavandi's sister, Aryeh took actions to sever Damavandi’s roles and interests in the projects, hiring outside construction managers (George, Cardinal-West, Beer, Tisdale) and removing Damavandi, claiming gross misconduct.
- Damavandi alleged Aryeh and the construction parties conspired to create a false record against him as a pretext for his removal and asserted 11 causes of action against those third parties, including for conspiracy, aiding and abetting, interference, and statutory violations.
- The trial court sustained all demurrers (dismissed the claims) against George, Cardinal-West, Beer, and Tisdale without leave to amend, reasoning the allegations did not show these defendants intended to harm Damavandi or agreed to interfere with his rights.
- Damavandi appealed, arguing the trial court erred in sustaining the demurrers and by not granting leave to amend as to most claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Civil Conspiracy as Cause of Action | Sufficient facts pled, conspiracy to commit torts | Conspiracy isn't an independent tort, elements not met | Not an independent cause, but leave to amend allowed |
| Aiding & Abetting Breach of Fiduciary Duty | Defendants knowingly assisted Aryeh's breach | No actual knowledge, just "ignorant participants" | Sufficient facts pled; demurrer overruled |
| Aiding & Abetting Conversion | Helped Aryeh convert Damavandi's LLC interest | Damavandi only had future contingent rights, not property | LLC interests are property; demurrer overruled |
| Violation of Penal Code § 496 | Defendants aided withholding of stolen property | No knowledge property was stolen; actions predated removal | Sufficient facts for knowing assistance; overruled |
| Interference with Contractual/Economic Relations | Defendants interfered with LLC contracts/expectancies | Allegations based on conspiracy are insufficient | Sufficient facts pled; demurrer overruled |
| Unjust Enrichment | Defendants unjustly benefited from aiding Aryeh | Not a standalone cause; contractual remedies bar restitution | Not a cause of action but amendable as a remedy |
| Accounting and Unfair Competition | Sought remedies for damages and lost interests | No qualifying relationship for accounting; no restitution & no threat of repeat conduct under UCL | Demurrers sustained without leave to amend |
Key Cases Cited
- Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503 (Cal. 1994) (civil conspiracy not an independent cause of action)
- Voris v. Lampert, 7 Cal.5th 1141 (Cal. 2019) (conversion elements defined, personal property interests)
- Siry Investment, L.P. v. Farkhondehpour, 13 Cal.5th 333 (Cal. 2022) (Penal Code § 496 applies to certain civil theft/fraud cases)
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (Cal. 2003) (UCL: remedies are restitution and injunction only)