A California court has upheld a default judgment against a defendant accused of breaching a partnership agreement and committing fraud. The complaint, filed by Shihadeh K. Kitami in Marin County on June 28, 2024, alleges that Waleed Sabrah engaged in multiple violations of their business arrangement, leading to significant financial losses for Kitami.
According to the court documents, Kitami and Sabrah entered into an oral partnership agreement in August 2018 to open a fast-food restaurant in San Rafael, California. The agreement included shared profits and losses and required both parties to invest capital for the business's development. However, as the remodeling process began, Kitami grew concerned about unauthorized changes made by Sabrah without necessary permits and unaccounted expenditures. Despite assurances from Sabrah that he would handle any code violations and release Kitami from liability until the business was operational, these promises were not kept.
On April 27, 2019, Sabrah presented Kitami with an "Agreement to Dissolve Partnership," claiming it would temporarily dissolve their partnership for 90 days while he completed necessary improvements. This period was intended to wind down Kitami’s obligations until Sabrah settled outstanding debts. However, after signing the dissolution agreement, Kitami discovered that Sabrah had filed articles of organization for the business under "Tender Tenders, LLC" without his knowledge or consent and was operating without a business license. Furthermore, Sabrah continued using Kitami’s credit cards for personal expenses and refused to provide access to financial records.
In July 2020, Kitami initiated legal action against Sabrah for declaratory relief, conversion, breach of contract, breach of fiduciary duty, unjust enrichment, fraud in the inducement, and an accounting. The first amended complaint (FAC), filed in September 2020, sought $300,000 in compensatory damages and $500,000 in punitive damages. Despite filing an answer on April 29, 2021, Sabrah repeatedly failed to comply with discovery orders and sanctions imposed by the court.
The trial court issued multiple orders compelling discovery responses from Sabrah and imposing monetary sanctions due to his non-compliance. Eventually frustrated by continuous discovery abuses and lack of cooperation from Sabrah—who often represented himself—the court struck his answer on August 9th and entered a default judgment against him on October 4th following a prove-up hearing.
At this hearing held on October 4th , the court awarded Kitami approximately $33,775 in damages based on evidence presented regarding unpaid credit card expenditures constituting conversion. Additionally ,the court found sufficient grounds for awarding $10 ,000 in punitive damages due to fraudulent misrepresentation by Sabrah . The total judgment included $18 ,976 in compensatory damages ,$4 ,798 .59 in prejudgment interest along with punitive damages bringing it up-to $33 ,774 .59 .
Despite attempts by Sabrah through post-judgment ex parte applications challenging procedural aspects such as timeliness or sufficiency of evidence supporting default judgments; these were struck down by courts citing procedural defects or lack thereof statutory basis required under California Rules Of Court Rule3 .1202 .
The attorneys involved include Desautels J., Stewart P.J., Richman J., who concurred with affirming this decision under Case ID A168394.