Court Dismisses Sarkissian Dairy Business Lawsuit
Table of Contents
Case Background
The Sarkissians were longtime friends of Antranik Baghdassarian and his family. They supported the family’s dairy business, Karoun Dairies, Inc. In September 1998, Antranik asked Sue Sarkissian for $350,000 to expand Karoun. Trusting their close relationship, Sue agreed. The Sarkissians provided the funds without a formal agreement, believing it would become an investment in Karoun.
Cause
In March 2000, the parties formalized their arrangement. Antranik formed Central Valley Cheese Co. (CVC) to own the production facilities. The Sarkissians received a 10% stake in CVC, while Antranik retained 90%. They accepted because they trusted him. CVC manufactured products exclusively for Karoun. The Sarkissians relied on the defendants to operate both companies in good faith. The defendants allegedly manipulated revenues and expenses between CVC and Karoun. This manipulation reduced the cheese price from CVC to Karoun, which lowered CVC’s profitability and the Sarkissians’ dividends.
Injury
The Sarkissians suffered financial harm from reduced profitability. They depended on dividends from their 10% interest in CVC. They later discovered the sale of both CVC and Karoun to Parmalat for $130 million. Ohan only informed Sue about the CVC sale. Karoun sold for $120 million, but the Sarkissians received about $1 million for their CVC stake.
Damages
The Sarkissians claimed the sale price allocation was unfair. They sought compensation for lost profits, undervalued equity, and reduced dividends. They also claimed harm from the defendants’ concealment of the Karoun sale, which deprived them of a fair share of proceeds.
Key Arguments and Proceedings
Legal Representation
Plaintiff(s): Sarkissian Jirair | Sarkissian Serpouhie
Counsel for Plaintiff: Robert Brownlie | Evelina Gentry
Defendant(s): Antranik Baghdassarian | Ohan Baghdassarian | Rostom Baghdassarian | Tsolak Khatcherian
Counsel for Defendants: Gregory Paul Barchie | Adam Harland Braun | Gerald Lawrence Sauer
Claims
The Sarkissians filed claims for breach of fiduciary duty, constructive fraud, and fraud. They also alleged conspiracy to breach fiduciary duty, aiding and abetting breach of fiduciary duty, conspiracy to commit constructive fraud, aiding and abetting constructive fraud, conspiracy to commit fraud, and aiding and abetting fraud. Additionally, they asserted contractual and tortious breach of the implied covenant of good faith and fair dealing against Antranik Baghdassarian.
Defense
The defendants—Antranik Baghdassarian, Ohan Baghdassarian, Rostom Baghdassarian, and Tsolak Khatcherian—generally denied all allegations in the plaintiffs’ second amended complaint, disputing that the plaintiffs suffered any injury or damage from their actions or omissions. They asserted that the complaint failed to state a valid cause of action and raised numerous affirmative defenses aimed at barring or limiting liability.
Their defenses included procedural and equitable arguments such as laches, estoppel, unclean hands, waiver, consent, statute of limitations, and failure to mitigate damages. They also alleged lack of causation, comparative fault, assumption of risk, and that any harm resulted from the plaintiffs’ own conduct or third parties. Additional defenses challenged the availability of certain remedies, including punitive damages and attorney’s fees, invoked contractual and statutory limitations, and claimed justification, good faith, privileged conduct, and substantial compliance.
Jury Verdict
The Los Angeles County Superior Court entered a judgment dismissing the action with prejudice in favor of defendants Antranik, Ohan, and Rostom Baghdassarian, and Tsolak Khatcherian. The court found the plaintiffs, Serpouhie and Jirair Sarkissian, lacked standing because their claims were derivative of Central Valley Cheese, Inc. and not individually distinct. It excluded the plaintiffs’ damages expert but allowed their industry expert to testify. The defendants were deemed prevailing parties, awarded $108,942.64 in costs, and Antranik Baghdassarian was granted $1,521,200 in attorney’s fees.
Court Documents
Court documents are available for purchase upon request at Jurimatic@exlitem.com