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March 17, 2026 Get Citation Alerts Download PDF Add Note

Rasooli v. K.A.R. Properties CA2/4

California Court of Appeal

• Citations: None known
• Docket Number: B330437

• Precedential Status: Non-Precedential

• Opinion

• Authorities (8)

• Cited By (0)

• Summaries (0)

• Similar Cases (15.7K)

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Combined Opinion

Filed 3/17/26 Rasooli v. K.A.R. Properties CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

MOKHIM RASOOLI B330437

Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 21VECV01213)
v.

K.A.R. PROPERTIES, INC.,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of
Los Angeles County, Virginia C. Keeny, Judge. Affirmed.
Melvin Betnun, for Plaintiff and Appellant.
Hitchcock, Bowman & Schachter, Robert Schachter, for
Defendant and Respondent.
K.A.R. Properties, Inc. DBPP (KAR) made two loans to
Mokhim Rasooli, both secured by deeds of trust on Rasooli’s real
property. After several modifications, the principal due on the
loans exceeded $1.6 million. Rasooli ultimately paid off the loans,
along with substantial interest and penalties incurred due to his
defaults.
Rasooli subsequently filed suit against KAR, asserting
causes of action for breach of contract, fraud, wrongful
foreclosure, declaratory relief, and injunctive relief; he sought
damages in excess of $500,000. After a bench trial, the court
issued a statement of decision finding that Rasooli failed to meet
his burden of proof and was not a credible witness. It
nevertheless entered a judgment of $4,200 in his favor, because it
found he overpaid that amount in interest.
Rasooli now contends that the matter should be remanded
to the trial court for further proceedings, including calculation
and refund of interest he paid and possible award of treble
damages because the loans were usurious, unconscionable, and
violated Civil Code section 1916.5. We affirm the judgment.
FACTUAL BACKGROUND
In or around 2016, Rasooli owned real property in Van
Nuys on which he planned to build four houses. While the first
house was under construction in 2016, nonparty Sam Modir
arranged a loan for Rasooli through KAR. Rasooli testified that
he borrowed the money “through” Modir, his “agent”; KAR
principal Richard Herrera testified that Modir was a “broker.” It
is undisputed that Modir received a brokerage fee, though on
appeal Rasooli “classifies this as a referral fee.”
That loan, Loan No. 1, had an initial principal amount of
$268,000 and an interest rate of 10 percent. Loan No. 1 was

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secured by a first deed of trust on Rasooli’s property. Rasooli
signed the loan documents and the deed of trust. Evidence at
trial showed that the deed of trust was for $450,000 rather than
$268,000; Herrera testified this was an error, and documents
showed it was later revised to the correct amount of $268,000 by
a signed agreement of the parties. Rasooli asserted the deed of
trust reflected a fraudulent loan, because he did not receive
$450,000. Rasooli received approximately $200,000 in proceeds
from Loan No. 1.
Rasooli obtained a second loan, Loan No. 2, from KAR in
July 2017. Herrera testified that a broker arranged the loan.
Loan No. 2 had an initial principal amount of $375,000, an
interest rate of 10.5 percent, and a default interest rate of 15.5
percent. Loan No. 2 was secured by a deed of trust on Rasooli’s
property. Rasooli signed all the required documentation for Loan
No. 2. He received approximately $270,000 in loan proceeds.
The parties modified the loans several times in 2017 and
2018. These modifications increased the principal amount of
Loan No. 1 to $1,097,020 and the principal amount of Loan No. 2
to $575,000. At some point in 2018, KAR mistakenly billed
Rasooli for, and he paid, an interest charge of $4,200. In
February 2019, Rasooli signed an agreement acknowledging a
total indebtedness of $1,672,020.
Rasooli subsequently defaulted on both loans, resulting in
the accrual of interest and additional fees. The amount of
interest due ranged from 20 to 22 percent, including the base
rates as well as late charges. At some point in 2020, KAR
attempted to foreclose on Rasooli’s property and he declared
bankruptcy. Two of the houses Rasooli constructed were sold

3
during the bankruptcy, and the proceeds of the sale were used to
pay off both loans. The loans were fully paid off in 2021.
PROCEDURAL HISTORY
Rasooli filed a complaint against KAR on September 9,
2021. In his first cause of action for breach of contract, Rasooli
alleged that KAR breached a written agreement to “provide
continued funding and construction services to complete projects
for sale as promised.” In his second cause of action for fraud,
Rasooli alleged that KAR “promised to modify property
construction loan documents to accurately state agreements and
finance charges and facilitate construction on Plaintiff’s
properties through completion and sale,” and that he justifiably
relied on these false promises “rather than making alternate
funding arrangements.” In his third cause of action for wrongful
foreclosure, Rasooli alleged that KAR wrongfully foreclosed on his
property because he “did not owe any or all the amounts claimed
to be in default.” In his fourth cause of action for declaratory
relief, Rasooli requested a judicial determination of the validity of
the foreclosure proceedings. In his fifth cause of action for
injunctive relief, he requested prevention of foreclosure. Rasooli
sought general and special damages in excess of $500,000, as well
as attorney fees and costs. KAR answered the complaint on
January 12, 2022.
The matter proceeded to bench trial on February 22 and
February 24, 2023. Rasooli represented himself at trial. He
testified on his own behalf, called several witnesses, and
introduced documentary exhibits. Neither Rasooli nor any of his
witnesses mentioned usury, unconscionability, or Civil Code
section 1916.5. The trial court denied KAR’s motion for judgment
pursuant to Code of Civil Procedure section 631.8, after which

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KAR called Herrera as a witness and introduced numerous
documentary exhibits. While Herrera was on the stand, the trial
court asked him if the loans were usurious under the California
Constitution. He and his counsel said the loans were exempt
from the usury provision because they were “broker-arranged.”
Usury was not mentioned again.
At the close of evidence, the trial court took the matter
under submission. It filed a tentative statement of decision on
March 29, 2023. The tentative statement of decision summarized
the evidence at length. It then concluded that Rasooli “failed to
meet his burden to establish any of the elements” of the claims
asserted in his complaint. The court found “Mr. Rasooli to not be
a credible witness,” and specifically found that he “testified
falsely on numerous issues,” including “not being able to read or
understand English.” It further found that Rasooli “agreed to
borrow various sums of money from defendant K.A.R. to complete
a large construction project of four homes. Despite agreeing to
the amounts advanced and the terms, as well as many
modifications, all in order to secure funds to complete the project,
when the loans came due, Mr. Rasooli elected to blame the delays
in construction on Mr. Herrera and K.A.R., or to try to disavow
the signed agreements. His witnesses, while each credible in
their own right, did not present evidence that supported plaintiff
in any material respect.” The court found Herrera “to be a
credible witness and that he accurately accounted for all moneys
loaned or advanced to third parties and repaid. The two
mistakes he made he readily admitted—the recordation of an
incorrect amount which was corrected in 2021 and overcharging
one month’s interest in his final accounting.”

5
The court additionally made the following relevant factual
findings: Rasooli agreed to borrow $268,000 and secured that
sum by a deed of trust; Rasooli agreed to borrow $375,000 and
secured that sum by a deed of trust; the loans were modified
several times, increasing the principal on Loan No. 1 to
$1,097,020 and the principal on Loan No. 2 to $575,000; in
February 2019 Rasooli signed an agreement acknowledging
indebtedness to KAR in the amount of $1,672,020; Rasooli
defaulted on both loans, but paid them in full in 2021; Herrera
admitted a calculation error entitling Rasooli to a refund of
$4,200; Rasooli failed to prove that Herrera or KAR “made any
misrepresentations about the loans, the loan modifications, or the
minor work that KAR did on the project”; Rasooli failed to prove
any breach of contract, “except for the miscalculation of $4200 in
interest charges”; and KAR’s foreclosure action was not
undertaken in a wrongful manner or for wrongful purposes.
Regarding usury, the court noted that Rasooli testified that
Modir “was a broker and arranged the loans,” while Herrera
testified that “these were ‘broker arranged loans,’ but provided no
details.” The court concluded it was “not entirely clear” from this
evidence whether the loans were arranged by a licensed broker
such that they were exempt from the usury law. It continued,
however, that “[b]ecause plaintiff bore the burden of proof that
the loans were usurious or fraudulent, the court finds that on this
record, plaintiff has failed to prove that Mr. Mohdi [sic] was not a
licensed real estate broker and that the loans were not exempt
from the anti-usury laws.”
Rasooli filed objections to the tentative statement of
decision. They did not mention usury, unconscionability, or Civil
Code section 1916.5. They also did not challenge the court’s

6
factual findings. Instead, they requested “monetary
compensation”; costs of suit, including reasonable attorney fees;
statutory damages; “the return of all payments to Plaintiff
permissible by law (e.g., Unlawful Business Practices in Violation
of BP § 17200 ET SEQ. CC§1942.4)”; and “accumulated
interests.”
The trial court adopted the tentative statement of decision
as its final order, overruling Rasooli’s objections “on the grounds
that they are not proper objections and the court has fully
explained its reasoning and findings.” It entered judgment in
favor of Rasooli and against KAR in the amount of $4,200, plus
costs of suit, on May 15, 2023.
Rasooli timely appealed.
DISCUSSION
Rasooli contends that the loans he obtained from KAR
“were usurious from the beginning,” and “the terms and
conditions of the modifications only made them more so. The
evidence at trial does not support Respondent’s claim that the
loans were exempt due to being ‘arranged’ by a real estate broker.
Even if an exemption were to apply, the terms and conditions of
the loans were unconscionable.” He further argues that KAR did
not comply with the requirements of Civil Code section 1916.5
when it increased the interest rates on the loans. He contends
that these “deficiencies in the loans prevent[ ] K.A.R. from
collecting or receiving interest on these loans,” and the “case
must be remanded so the trial court can determine how much of
the interest and other costs paid Respondent must be disgorged
to Plaintiff.”1

1 He also argues, for the first time in his reply brief, that the
trial court committed judicial misconduct by failing to properly

7
KAR responds that Rasooli forfeited these arguments by
failing to raise them below. We agree. “It is a fundamental
principle that an appellate court will generally not consider an
issue presented for the first time on appeal that could have been
but was not presented in the trial court.” (Miller v. Pacific Gas &
Electric Co. (2023) 97 Cal.App.5th 1161, 1170.) Here, Rasooli did
not assert a cause of action for usury in his complaint, which
frames the issues for trial. He did not mention usury,
unconscionability, or Civil Code section 1916.5 at any point
during the trial court proceedings. Even after the trial court sua
sponte raised the issue of usury during trial, Rasooli took no
steps to follow up on the issue, whether through witness
examination, his rebuttal case, argument, or a request for leave
to amend his complaint. Rasooli’s self-representation during trial
did not excuse him from his obligation to present relevant issues
to the trial court. (See, e.g., Kobayashi v. Superior Court (2009)
175 Cal.App.4th 536, 543 [“Pro. per. litigants are held to the
same standards as attorneys.”].) Even if the arguments were
preserved, however, we would conclude they lack merit.
Article XV, section 1 of the California Constitution
prohibits usury. “It limits the interest rate lenders can charge on
non-personal loans to the higher of 10 percent or five percent plus
the Federal Reserve Bank of San Francisco’s rate on the 25th day
of the month preceding the date the agreement was contracted.”
(Stoneridge Parkway Partners, LLC v. MW Housing Partners III,

examine his evidence and “ask necessary questions of the
defendant(s).” “[P]oints raised for the first time in a reply brief
will ordinarily not be considered” (Rubinstein v. Fakheri (2020)
49 Cal.App.5th 797, 809), and Rasooli has offered no good cause
to depart from that general rule here.

8
L.P. (2007) 153 Cal.App.4th 1373, 1379.) “However, the
limitation does not apply to, among others, ‘any loans, made or
arranged by any person licensed as a real estate broker by the
State of California and secured in whole or in part by liens on
real property. . . .’” (Ibid., quoting Cal. Const., art XV, § 1; see
also Civ. Code, § 1916.1.) Although Rasooli asserts that the
lender should bear the burden of proving that a loan is not
usurious, a “transaction is rebuttably presumed not to be
usurious.” (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 798,
italics in original.) “The borrower bears the burden of proving
the essential elements of a usurious transaction,” which are “(1)
The transaction must be a loan or forbearance; (2) the interest to
be paid must exceed the statutory maximum; (3) the loan and
interest must be absolutely repayable by the borrower; and (4)
the lender must have a willful intent to enter into a usurious
transaction.” (Id. at pp. 798-799.)
“[W]hether a transaction is usurious is generally a mixed
question of fact and law.” (Ghirardo v. Antonioli, supra, 8
Cal.4th at p. 800.) “‘There are three steps involved in deciding a
mixed fact/law question. The first step is the establishment of
basic, primary or historical facts. The second is the selection of
the applicable law. The third is the application of law to the
facts. All three trial court determinations are subject to appellate
review. Questions of fact are reviewed by giving deference to the
trial court’s decision. Questions of law are reviewed under a
nondeferential standard, affording plenary review. [Citation.]’”
(Ibid.) If the application of the law to the facts is essentially
factual, we review the trial court’s determination for substantial
evidence. But if the question requires consideration of legal
concepts, or the exercise of judgment about legal principles, then

9
the question is one of law and is reviewed de novo. (See id. at pp.
800-801.) On appeal, the trial court’s ruling is presumed correct,
and the appellant bears the burden of showing, “on the basis of
the record presented to the appellate court, that the trial court
committed an error that justifies reversal of the judgment.”
(Jameson v. Desta (2018) 5 Cal.5th 594, 609.)
The trial court found that Rasooli did not carry his burden
of showing that the loans were usurious or that Modir was not a
broker. Rasooli has not shown this conclusion was erroneous. To
the extent he attempts to do so, many of the citations in his brief
are to documents not included in the record he provided to this
court. The appellant has the burden of providing an adequate
record. (Jameson v. Desta, supra, 5 Cal.5th at p. 609.) “‘Failure
to provide an adequate record on an issue requires that the issue
be resolved against [the appellant].’” (Ibid.; see also Air Couriers
International v. Employment Development Department (2007) 150
Cal.App.4th 923, 928 [“We have no duty to search the record for
evidence and may disregard any factual contention not supported
by proper citations to the record.”], Cal. Rules of Court, rule
8.204(C).) Although he designated many of the trial exhibits for
inclusion in the clerk’s transcript (see Cal. Rules of Court, rule
8.122(a)(3)), the record does not reflect that Rasooli took the steps
required under California Rules of Court, rules 8.224(a)(1) and
(b)(2) to ensure the exhibits were transmitted to this court. It
also does not reflect filing of the “Appellant’s Opening Appendix”
he cites throughout his briefing.
On February 9, 2026, approximately two weeks before oral
argument, well outside the timeframe contemplated by California
Rules of Court, rule 8.224(a), and with no explanation for the
delay, KAR filed an application pursuant to California Rules of

10
Court, rule 8.224(c) to transmit 86 trial exhibits totaling
hundreds of pages to this court. After we denied the application,
KAR filed an amended application to transmit the exhibits on
February 13, 2026, attributing the delay to misplacement of the
exhibits in the trial court and various filing difficulties. The
Advisory Committee Comment to California Rules of Court, rule
8.224(c) indicates that the late transmittal mechanism is
intended to “address[ ] the case in which a party’s need to
designate a certain exhibit does not arise until after the period
specified in subdivision (a) has expired” and contemplates a
“showing of good cause.” Upon concluding those standards were
not satisfied, we denied the amended application on February 19,
2026. We reiterate that it is appellant’s burden, not
respondent’s, to ensure the record is adequate for our review and
to demonstrate error by the trial court.
The limited trial testimony that Rasooli cites does not
demonstrate error. That testimony shows that Modir “brought
the loan to” KAR. Herrera discussed one of the modifications to
Loan No. 1 with Rasooli and prepared the modification, and an
ambiguous “we” prepared a second modification of Loan No. 1.
This testimony touches on only some of the actions a broker may
take to arrange a loan. (See Gibbo v. Berger (2004) 123
Cal.App.4th 396, 402.) Thus, even if Herrera prepared
documentation, there are other tasks Modir could have performed
as a broker. As KAR points out, “a more fully developed record
could have been provided had the issue been controverted.” It
was not. The trial court had only testimony that Modir was a
broker, and did not err in concluding that was insufficient to
overcome the presumption that the loans were not usurious.

11
Rasooli’s argument regarding Civil Code section 1916.5
suffers similar infirmities. That statute limits the ability of “a
lender other than a supervised financial organization” to provide
certain construction loans with variable interest rates unless
certain requirements are met. (Civ. Code, § 1916.5, subds. (a),
(b)(1), (b)(2).) Those requirements include “[t]he rate of interest
shall not change more often than once during any semiannual
period, and at least six months shall elapse between any two
changes”; “[t]he rate of interest shall not change during the first
semiannual period”; and the borrower must be provided with a
notice in “at least 10-point boldface type” that “THIS
DOCUMENT CONTAINS PROVISIONS FOR A VARIABLE
INTEREST RATE.” (Id., subd. (a)(2), (4), (6).)
There was no evidence at trial that the loans were variable-
rate loans, only that they were subject to increased rates and
penalties upon default. Even if we assume Civil Code section
1916.5 applies, however, Rasooli’s argument that “[t]he loan
documents signed by Plaintiff do not contain the required
language and otherwise violate the provisions of Section 1916.5”
is not supported by proper citations to evidence in the record he
provided. Rasooli accordingly cannot show error.
As to unconscionability, Rasooli argues that the “total cost
of the loans Plaintiff obtained from Defendant” was
unconscionable, because KAR received “a total of $2,489,619.53 in
interest and principal payments on loans with principal amounts
of $1,097,000 (1st) and $700,000 (2nd).” Aside from citations to
Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 926, and a
statement made by KAR’s counsel during trial, this is the
entirety of the unconscionability argument; the discussion
abruptly ends midway through a sentence beginning, “These

12
were loans secure.” This underdeveloped argument does not
demonstrate that the interest rates were unconscionable.
Interest rates are unconscionable where, “in light of the
totality of a transaction’s bargaining context,” they “are so
‘unreasonably and unexpectedly harsh’ as to be ‘unduly
oppressive’ or ‘shock the conscience.’” (De La Torre v. CashCall,
Inc. (2018) 5 Cal.5th 966, 973.) “Unconscionability is a flexible
standard in which the court looks not only at the complained-of
term but also at the process by which the contractual parties
arrived at the agreement and the larger context surrounding the
contract, including its ‘commercial setting, purpose, and effect.’”
(Id. at p. 976; see also id. at pp. 982-984.) Rasooli’s truncated
argument addresses only the “total cost” of the loans, not the
broader context in which they were negotiated, made, and paid.
He has not pointed to evidence showing the requisite procedural
unconscionability of oppression or surprise (id. at p. 982), and he
cannot challenge the trial court’s findings that his testimony
about various aspects of the transactions was not credible. (See
Schmidt v. Superior Court (2020) 44 Cal.App.5th 570, 582 [“The
fact finder’s determination of the veracity of a witness is final.”].)
DISPOSITION
The judgment is affirmed. KAR is entitled to recover its
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COLLINS, ACTING P. J.

We concur:

MORI, J. TAMZARIAN, J.

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