Erick Nathan v Jorge Mira
Mr. Horwitz represented Jorge Mira (“Mira”) in an action brought against him by a former friend and tenant, Erick Nathan (“Nathan”). Nathan alleged breach of an oral promise to acquire two commercial properties on behalf of their joint venture alleging six causes of action for: (1) breach of oral contract; (2) fraud; (3) breach of the implied covenant of good faith and fair dealing; (4) tortious breach of the implied covenant of good faith and fair dealing; (5) conversion; and (6) constructive trust.
In August 2012, Mira purchased two adjoining commercial properties (the properties) in Los Angeles for $700,000. Mira had prequalified for a $1,000,000 loan based on his company’s financial documentation and tax returns and had sufficient available cash for the $5,000 deposit and the $70,000 down payment. And, he paid all of the necessary costs for the loan, including the environmental assessment, appraisal, and escrow fees. The documents for the purchase money mortgage were in Mira’s name only, and, at the close of escrow, he took title to the property in his name alone. Mira maintained that he did not enter into a partnership with Nathan to purchase the properties. Instead, he leased a portion of the properties to Nathan.
According to Nathan, prior to the purchase of the properties, he and Mira entered into an oral agreement to acquire the properties and grant Nathan a 25 percent ownership interest. Nathan did not take title to the properties or participate in the escrow because he “had a federal tax lien against [his] name, and if [he would have been] on title, the IRS would have liened the propert[ies].”
Nathan claimed, within three months of moving into the properties, his ownership interest in the partnership changed after he discovered that he was “utilizing” only 13 percent of the properties. He therefore told Mira that his ownership interest, and corresponding responsibilities toward the partnership, would be reduced from 25 to 13 percent.
As evidence of his ownership interest in the properties, Nathan claimed that he made a $20,000 monetary contribution to the down payment on the properties in the form of a payment made by a third-party—LC 2121 LLC (LC 2121)—to Mira’s company—Altered Glass—on July 12, 2012. Nathan also paid the seller of the properties $5,000 above the selling price in order “to make the deal continue.” Nathan called Bar-Zemer, the owner of LC 2121, to corroborate his $20,000 contribution to the venture. Bar-Zemer testified that he hired both Nathan and Mira to work on a construction project and that, at Nathan’s request, he sent $20,000 that he owed to Nathan directly to Mira’s company, Altered Glass. But there was no documentation, such as invoices for work performed, IRS 1099 forms, or lien releases, to corroborate the nature and purpose of the transaction. Mira assumed the $20,000 check from Bar-Zemer was for work Altered Glass performed on behalf of LC 2121.
On July 9, 2020, the trial court issued its statement of decision. The court found that “[p]laintiff ha[d] failed to satisfy his burden of proof that he entered into a joint venture agreement because he ha[d] not proven by a preponderance of the evidence that there was a meeting of the minds with respect to the material terms of a contract.” (Emphasis omitted.) Alternatively, the court found that even if Nathan had established the existence of an oral agreement, he could not overcome the statute of frauds defense because he failed to show that he had fully performed under that alleged agreement.
Nathan appealed based on the trial court’s denial of his request to call a rebuttal witness and denial of his request to continue trial. On May 5, 2023, the Court of Appeal affirmed Judge Stuart A. Rice’s rulings, and awarded costs on appeal to Mr. Horwitz’s client.