Opinion
NO. 2014-CA-000454-MR NO. 2014-CA-000513-MR
01-20-2017
MAXIM FUZAILOV; ARIEL FUZAILOV; SHOLOM M. FUZAILOV; ZOYA NISANOV; ALBERT BABZHONOV; VYNAR NADIYA; AND L.T. MOTORS AUTO SALES, INC. APPELLANTS/CROSS-APPELLEES v. STATE REALTY CORPORATION; AND DANIEL PINKHASOV APPELLEES/CROSS-APPELLANTS
BRIEFS FOR APPELLANTS/CROSS-APPELLEES: Paul Croushore Cincinnati, Ohio BRIEFS APPELLEES/CROSS-APPELLANTS: Alan N. Linker Christopher A. Bates Paul Hershberg Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL AND CROSS-APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE A.C. MCKAY CHAUVIN, JUDGE
ACTION NO. 08-CI-005713 OPINION
AFFIRMING
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BEFORE: ACREE, NICKELL, AND TAYLOR, JUDGES. TAYLOR, JUDGE: Maxim Fuzailov, Ariel Fuzailov, Sholom M. Fuzailov, Zoya Nisanov, Albert Babzhonov, Vynar Nadiya, and L.T. Motors Auto Sales, Inc., bring Appeal No. 2014-CA-000454-MR and State Realty Corporation (State Realty) and Daniel Pinkhasov bring Cross-Appeal No. 2014-CA-000513-MR from a November 1, 2013, Judgment of the Jefferson Circuit Court entered upon a jury trial. We affirm both the direct appeal and cross-appeal.
In the early 1990's, Maxim Fuzailov and Daniel Pinkhasov were introduced by a mutual friend. Both Maxim and Daniel had previously immigrated to this country from Russia. Over the next several years, Maxim and Daniel were involved in various business ventures. Most often, their business transactions involved the buying and selling of used automobiles. Relevant to this appeal, Daniel contacted Maxim in June 2002 regarding the purchase of an apartment building known as Kentucky Towers in Louisville, Kentucky. Although the details of the agreement are disputed, it is agreed that Daniel or his real estate company, State Realty, intended to purchase Kentucky Towers at a forfeiture sale. Daniel approached Maxim seeking money toward the purchase of Kentucky Towers and Maxim agreed to provide some funding.
Maxim recruited family and friends to secure the additional funds necessary for Daniel to purchase Kentucky Towers. Maxim ultimately provided Daniel approximately $500,000 toward the purchase. Maxim claims that in exchange for those funds Daniel orally promised him a 50 percent partnership in Kentucky Towers or State Realty. Conversely, Daniel contends that the money constituted a loan carrying a 7 percent interest rate. Maxim and Daniel attended the foreclosure auction together, and, in July 2002, State Realty purchased Kentucky Towers for $5.1 million dollars. Maxim allegedly thereafter provided an additional $150,000 to Daniel or State Realty for asbestos removal from the apartments. Daniel never transferred any ownership interest in State Realty or Kentucky Towers to Maxim. In March 2005, State Realty sold Kentucky Towers for $7.65 million.
The parties dispute whether this was a loan or an investment in Daniel Pinkhasov's business.
On May 23, 2008, Maxim, along with Ariel Fuzailov, Sholom M. Fuzailov, Zoya Nisanov, Albert Babzhonov, Vynar Nadiya, and L.T. Motors Auto Sales, Inc., (collectively referred to as appellants) filed a complaint in Jefferson Circuit Court against Daniel Pinkhasov and State Realty (collectively referred to appellees). The complaint alleged appellants were entitled to 50 percent of the profits from the sale of Kentucky Towers which Daniel failed to remit after the sale in 2005. Appellants further alleged breach of contract, fraud, breach of constructive trust, breach of fiduciary duty, theft, and unjust enrichment in support of their claim.
The profit from the sale was approximately 2.5 million dollars.
The complaint did not assert an alternative claim for a loan of $650,000 plus interest. Additionally, there were no jury instructions tendered by appellants regarding the loan or a claim for quantum meruit as argued in appellants' brief. Appellants failed to raise the loan or quantum meruit claim in their Prehearing Statement as required by Kentucky Rules of Civil Procedure (CR) 76.03(4). Our review is thus limited to those issues set out in the Prehearing Statement. CR 76.03(8). Wright v. House of Imports, Inc., 381 S.W.3d 209 (Ky. 2012). Accordingly, this issue was not addressed by the trial court below nor do we reach this issue on appeal.
The case was eventually tried over a four-day period beginning on September 30, 2013. Following the close of appellants' evidence, appellees made a motion for directed verdict. Therein, appellees argued that the trial court should dismiss all of the parties except Maxim. In support thereof, appellees asserted that according to the testimony presented Maxim was the only appellant that had direct dealings with Daniel and was the only appellant potentially capable of having an agreement with Daniel. The other appellants had merely provided money to Maxim, that Maxim, in turn, gave to Daniel or State Realty. Thus, Maxim was the only appellant with potential claims against Daniel or State Realty. The trial court eventually directed a verdict dismissing the claims of all appellants except Maxim. The trial court also granted appellees' motion for directed verdict as to all of Maxim's claims except the claims for breach of contract and fraud. The trial court then submitted to the jury Maxim's claims for breach of contract and fraud. The jury ultimately returned a verdict in favor of appellees finding that there was no agreement between Maxim and Daniel or State Realty for Maxim to acquire a 50 percent ownership in Kentucky Towers and that no fraud was committed by Daniel. These appeals follow.
APPEAL NO. 2014-CA-000454-MR
Appellants initially contend that the trial court erred by directing a verdict dismissing all the claims of appellants other than Maxim during trial and dismissing Maxim's claims of constructive trust, unjust enrichment, and for an accounting. For the following reasons, we disagree.
A directed verdict is proper when drawing all inferences from the evidence in favor of the nonmoving party a reasonable juror could only find for the moving party. Kentucky Rules of Civil Procedure (CR) 50.01; Lee v. Tucker, 365 S.W.2d 849 (Ky. 1963). CR 50.01 provides:
A party who moves for a directed verdict at the close of the evidence offered by an opponent may offer evidence in the event that the motion is not granted, without having reserved the right so to do and to the same extent as if the motion had not been made. A motion for a directed verdict which is not granted is not a waiver of trial by jury even though all parties to the action have moved for directed verdicts. A motion for a directed verdict shall state the specific grounds therefor. The order of the court granting a motion for a directed verdict is effective without any assent of the jury.And, the Kentucky Supreme Court has established a strict standard for appellate courts to utilize when reviewing a trial court's decision upon a motion for directed verdict. Bierman v. Klapheke, 967 S.W.2d 16 (Ky. 1998). In Bierman, the Court stated:
When engaging in appellate review of a ruling on a motion for directed verdict, the reviewing court must ascribe to the evidence all reasonable inferences and deductions which support the claim of the prevailing party. Once the issue is squarely presented to the trial judge, who heard and considered the evidence, a reviewing court cannot substitute its judgment for that of the trial judge unless the trial judge is clearly erroneous.Id. at 18 (citations omitted).
In their brief, appellants complain that the circuit court erred by dismissing their various claims against appellees. However, appellants failed to set forth the legal requirements of each claim and failed to outline the evidence introduced to support each particular claim. We will not practice an appeal for a party, and our role is not to search the record in an effort to determine whether an issue is meritorious. Monroe v. Cloar, 439 S.W.2d 73 (Ky. 1969). To prevail on appeal, it was incumbent upon appellants to demonstrate to this Court that some evidence supported each dismissed claim upon which a reasonable juror could have found in their favor. Appellants have failed to do so. Thus, we are unable to conclude that the circuit court erred by rendering the directed verdicts.
Appellants next contend that the trial court abused its discretion by removing the only African-American juror from the jury. Specifically, appellants argue that the rule of randomness in selecting alternate jurors and the prohibition against racial discrimination as set forth in Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986) were violated by the trial court.
The holding of Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986) was applied to civil cases in Edmonson v. Leesville Concrete Co., Inc., 500 U.S. 614, 111 S. Ct. 2077, 114 L. Ed. 2d 660 (1991). --------
During trial, the only African-American juror submitted the following question to the trial court:
During Maxim's testimony yesterday, Mr. [Christopher A.] Bates displayed a document on the overhead; I do not remember what type of document; as Mr. Bates scrolled through pages of the documents I noticed a statement I believe that Mr. Pinkhasov had a history of insurance fraud. Your Honor instructed Mr. Bates to remove the document from the overhead because it contained information not yet presented during the trial. It was not introduced during the trial by Mr. [Charlton C. Hundley]. Was Mr. Pinkhasov guilty of insurance fraud? If so, can we use this information during deliberations; the information may give an indication of Mr. Pinkhasov's character. However I will understand if this information cannot be used for this trial.Appellants' Brief at 12-13. As the juror had inadvertently viewed inadmissible evidence, the trial court believed that the juror should be excused for cause and decided to exclude the juror as an alternate. The trial court also instructed the jury panel as follows:
One of the jurors had a question about something she thought she'd seen on a deposition that popped up earlier. And so we had to search for it find what it was that she thought she had seen. And I can tell you that, we think we found it, from the same spot. But what she thought she'd saw was some reference to Mr. Pinkasov [sic] or Mr. Fuzailov having been involved in a previous insurance fraud of some kind. And it, we all kind of struck, "What, what?" So we missed it, and we went back through there and there is no allegation that anybody ever having been involved in insurance fraud. There is certainly no conviction or prosecution or anything like that. What it was was a general conversation about sort of the hazards of doing business in New York, and when you read it on the fly I can see how you may have misinterpreted that. But it is not; there is no allegation of anyone being having been involved in insurance fraud of any kind, from the time the Earth was formed until now. And as, it is not something you should consider in any way shape or form in deciding this case. But thank you; you read that very closely; she's good at that, so we had to go back and find it.Appellants' Brief at 14.
It is within the trial court's discretion upon whether to remove a juror for cause who has already been seated in the jury. Lester v. Com., 132 S.W.3d 857 (Ky. 2004). An abuse of discretion occurs when the decision was "arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000) (citation omitted). And, it is well-settled that "a trial court may remove a juror for cause at the conclusion of the evidence as an alternate juror without violating the rule" of randomness under CR 47.02. Lester, 132 S.W.3d at 863 (citation omitted).
In this case, the juror inadvertently viewed information indicating that Daniel had committed insurance fraud in the past. Any evidence of insurance fraud was both inadmissible and prejudicial to Daniel based upon the facts and claims asserted in this action. As such, we cannot say that it was an abuse of discretion for the trial court to excuse the juror for cause; thus, the trial court did not violate the rule of randomness under CR 47.02 in removing the juror as an alternate. Lester, 132 S.W.3d 857.
Additionally, we do not believe the precepts of Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986) were violated by the trial court. As previously discussed, the trial court removed the juror for cause after the juror had been selected and did not abuse its discretion by so doing. Hence, no violation of the prohibition against racial discrimination in the jury selection process occurred as set forth in Batson v. Kentucky, 476 U.S. 79.
CROSS-APPEAL NO. 2014-CA-000513-MR
Considering our resolution of the direct appeal (Appeal No. 2014-CA-000454-MR), we consider the cross-appeal to be moot.
In sum, we affirm the trial court's November 1, 2013, Judgment of the Jefferson Circuit Court.
For the forgoing reasons, the Judgment of the Jefferson Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR
APPELLANTS/CROSS-
APPELLEES: Paul Croushore
Cincinnati, Ohio BRIEFS APPELLEES/CROSS-
APPELLANTS: Alan N. Linker
Christopher A. Bates
Paul Hershberg
Louisville, Kentucky