Bassaly v. Wasef

Filed 6/28/06 Bassaly v. Wasef CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from judgments of the Superior Court of Orange County, Dennis S. Choate, Judge. Affirmed.

Nick Migliaccio; Huron Law Group and Jeffrey Huron for Defendants and Appellants.

Steven H. Gentry and Berger Kahn for Plaintiff and Respondent.

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Hani and Vivian Wasef appeal from judgments which were based on two Canadian judgments against them. They do not dispute the validity of the Canadian judgments, but argue that the trial court made a number of evidentiary and procedural errors. We find no error and affirm.

I

FACTS

In 1997, Hani Wasef^[1] obtained a line of credit from the Bank of Nova Scotia (the Bank) through its branch office in Cairo, Egypt. He later defaulted on the loans, owing approximately $3 million in principal. In 2000, the Bank filed a statement of claim against Hani Wasef and his wife, Vivian Wasef, in Ontario, Canada where the Wasefs resided at the time (the Ontario actions). The Bank obtained separate judgments against them. The judgment against Hani Wasef was for $3,459,816.90, plus postjudgment interest and costs. The judgment against Vivian Wasef was for $3,708,395.30 plus postjudgment interest and costs.

In 2004, Onsy Bassaly paid the Bank $400,000 and obtained an assignment of judgments, making him the owner of the judgments in the Ontario actions. Prior to Bassaly obtaining the judgments from the Bank, the Wasefs had apparently hired Bassaly's brother, Magdy Bassaly, to assist them in settling the Ontario actions. They later claimed that Bassaly acted in breach of his fiduciary duties toward them by, among other things, purchasing the judgments.

In July 2004, Bassaly filed an initial complaint against the Wasefs asserting a single cause of action for entry of foreign judgment. He later filed a first amended complaint, adding a variety of claims that were later dismissed by the trial court. The first amended complaint (the complaint) was served on defendants on October 28, 2004,^[2] along with a notice for a November 30 case management conference.

On November 18, after the hearing on Bassaly's motion for an attachment order (which was denied), the court set the case for trial on February 22, 2005.^[3] The Wasefs' counsel agreed to the trial date. The Wasefs filed their answer to the complaint shortly thereafter.

On February 4, 2005, the Wasefs applied for an order shortening time to set an early hearing date on a motion to continue the trial, arguing they needed more time to conduct discovery and wished to file a cross-complaint against Magdy Bassaly for breach of fiduciary duty. On February 7, the court denied the motion to continue the trial date.

The bench trial began on February 22. During the trial, Bassaly did not call a witness representing the Bank to authenticate the assignment of judgments. In response to the Wasefs' objection that the assignment had not been authenticated, the court took judicial notice of the assignment.

On the last day of trial, the court ordered Bassaly to prepare two separate judgments, one against Hani Wasef and one against Vivian Wasef. The court indicated it would issue a statement of decision reflecting its comments from the bench that the judgments in the Ontario actions were enforceable. The Wasefs objected to the proposed judgments, arguing that both judgments arose from the same debt and that two separate judgments were inappropriate. The court overruled the objections.

The court issued a statement of decision on March 15, 2005, finding that both judgments were enforceable. The judgments were entered thereafter against each defendant, with accrued interest. The judgment against Hani Wasef was for $4,759,422, and the judgment against Vivian Wasef was for $4,126,839.08.

On April 14, 2005, the Wasefs filed a joint petition for chapter 11 bankruptcy.^[4] Thereafter, the parties stipulated that the most Bassaly could collect through the adversary proceeding was $4,800,057, plus accrued interest. The parties further agreed to create a trust for payment of this claim. The funds in the trust would be paid to the party that prevails upon final resolution of all appeals in the instant case, up to $4,800,057 plus accrued interest. Thus, if Bassaly is successful in this appeal, that amount shall be sufficient to satisfy his claim. The bankruptcy court approved this stipulation.

The Wasefs then filed a state court action against Bassaly and his brother Magdy Bassaly, alleging breach of contract, breach of fiduciary duty, and other claims. Bassaly removed this action to federal court, and the Wasefs did not object. The parties also stipulated to relief from the automatic bankruptcy stay, which permits this appeal to proceed.

On appeal, the Wasefs argue a number of errors, including the trial court's taking judicial notice of the assignment of judgments and other matters, that the court's decision to set the trial date in February 2005 and denial of their motion to continue constituted an abuse of discretion, and that the court erred by entering two judgments arising from the same debt.

II

DISCUSSION

Judicial Notice of the Assignment of Judgments

The Wasefs first object that the trial court erred by taking judicial notice of the assignment of judgments. This document assigned the right to collect the moneys the Wasefs owed the Bank to Bassaly for consideration of $400,000. The document was purportedly signed by Bassaly and a representative of the Bank, as witnessed by a notary public in Canada. After the Wasefs objected at trial that the assignment had not been sufficiently authenticated, the court stated it was taking judicial notice of the assignment.

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