Kyundibekyan v. Reese CA2/8
B302665
| Cal. Ct. App. | Dec 7, 2021Background
- Plaintiffs Karapet and Vardan Kyundibekyan agreed to buy the assets/provider numbers and trade name of ABC (Benevolent Home Care); they paid an initial down payment and received operational control on August 1, 2016.
- Plaintiffs ran the business for August, encountered regulatory, payroll, and operational problems, and on August 31, 2016 gave notice of rescission and demanded return of the down payment.
- The written purchase agreement left the seller’s (Reese’s) post-sale cooperation obligations vague; buyers had not engaged a consultant before takeover.
- Trial court found the contract void for indefiniteness (material term—seller’s assistance—unspecified), rejected plaintiffs’ fraud claims, denied return of the down payment based on equitable restitution principles, and (initially) found plaintiffs entitled to $12,705.12 billed for August but the final judgment awarded that sum only against ABC (not Reese or Phillips).
- Appellants appealed asserting the court abused its discretion by denying return of the down payment and erred in failing to hold Reese and Phillips personally liable for the $12,705.12; respondents argued the appellate record was inadequate.
- The Court of Appeal affirmed: it found the record sufficient to review the down payment issue and found no abuse of discretion; it found no error on the face of the record in holding only ABC liable for the billed funds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contract enforceability (indefiniteness) | Agreement was a valid sale; plaintiffs sought contract enforcement or rescission | Agreement omitted an indispensable seller-duty (transition assistance), so not enforceable | Court: Agreement was not sufficiently definite; no enforceable contract existed |
| Return of down payment ($50,000) | Down payment must be returned because consideration failed / unjust enrichment; rescission principles support return | Buyers assumed the risk by taking operational control without due diligence; equitable restitution does not require return | Court: No abuse of discretion in denying return; plaintiffs assumed risk, policy and equities permit seller to keep payment |
| Personal liability of Reese/Phillips for $12,705.12 billing receipts | Reese and Phillips should be held personally responsible to turn over billed funds to plaintiffs | No evidence Reese or Phillips personally received/retained funds; only ABC had the funds | Court: No error on face of record in imposing turnover obligation on ABC only; insufficient record to infer personal enrichment |
| Adequacy of appellate record | Plaintiffs: issues present pure legal review based on undisputed facts; transcript not necessary | Defendants: missing reporter transcripts impede meaningful review; appellate affirmance if record inadequate | Court: Record adequate to review down payment ruling; insufficient to resolve factual dispute as to personal liability for billed funds (issue resolved against appellant absent facial error) |
Key Cases Cited
- Charles Brown & Sons v. White Lunch Co., 92 Cal.App. 457 (1928) (rescission requires a valid, existing contract)
- McBride v. Boughton, 123 Cal.App.4th 379 (2004) (restitution/unjust enrichment principles govern when no valid contract)
- Hersey v. Vopava, 38 Cal.App.5th 792 (2019) (appellant bears burden to provide adequate record; absent record, judgment presumed correct)
- Avant! Corp. v. Superior Court, 79 Cal.App.4th 876 (2000) (abuse of discretion standard for equitable remedies)
- Peñasquitos, Inc. v. Superior Court, 53 Cal.3d 1180 (1991) (what constitutes a "known" debt for dissolution purposes)
- First Nationwide Savings v. Perry, 11 Cal.App.4th 1657 (1992) (policy considerations and change-of-position defense in restitution contexts)