Contract – $10,000 judgment survives appellate attack

Where a man who defaulted on a loan attacked the $10,000 judgment on multiple grounds, including lack of standing, failure of discovery and the merits, but each of these arguments were rejected, the verdict was affirmed. 

Background                              

Emad M. Al Baz challenges the circuit court‘s judgment awarding $10,000 to Raad Saleh for a loan on which Al Baz defaulted. Al Baz asserts that Saleh lacked standing to bring the claim because Nova Distro Inc., a company Saleh controls, issued the loan payment and is the proper party in interest. Al Baz also argues that the circuit court erroneously denied his motion to compel production of information relating to Saleh’s corporate interests.

 Standing

In his demurrer to the amended complaint, Al Baz neither asserted that Saleh lacked standing, nor that Saleh should have brought a derivative action on behalf of Nova. Al Baz stated only that the $10,000 check attached as an exhibit to the complaint was “a check from Nova Distro, Inc.” and “Nova Distro Inc. is not a Plaintiff in this matter.”

Al Baz made no attempt to connect logically these statements to any conclusion, nor did Al Baz cite any legal authority or otherwise mention or discuss the concept of standing. Thus, Al Baz failed to make the argument to the circuit court with sufficient specificity to give the court an opportunity to rule on it at the demurrer stage, and his argument that the court should have sustained the demurrer is waived under Rule 5A:18.

Discovery

Al Baz argues the circuit court erred by not granting his discovery requests, at least with respect to the companies involved in the case. But in his motion to compel, Al Baz asserted only that Saleh refused to provide discovery “in an effort to prejudice Al Baz’s case.” Al Baz did not include any argument about the relevance of the information he requested, nor how burdensome it might be for Saleh to produce the information. Nor did he make any alternative request that the circuit court grant discovery limited to the companies listed on the checks. The circuit court’s order does not explain what issues it considered in deciding the motion.

This court has no transcript or written statement of facts for the hearing on the motion, so it cannot know what arguments the parties presented to the circuit court at the hearing, nor if Al Baz preserved the arguments he makes on appeal. Nor does this court know what reasons, if any, the circuit court gave for its rulings. The court’s order does not provide this information. Thus, a transcript or written statement of facts for the hearing is “necessary to permit resolution” of the issues. Al Baz’s arguments relating to the motion to compel are waived.

Sufficiency

Al Baz’s sole argument is that Nova, not Saleh, gave him the loan, and therefore the claim is Nova’s, not Saleh’s, to bring. Thus, the question is whether Saleh demonstrated that the claim is his. He did.

Saleh and his business partner, Hnsar Al Mugari, testified that the $10,000 payment was made from funds belonging to Saleh. Although the evidence does not show exactly the source of the funds, both of the company’s two owners testified that the money was Saleh’s.

Moreover, there is no evidence that the payment was made for any separate corporate purpose other than paying Saleh funds belonging to him by providing the payment to Pohanka Lexus at his direction. Al Mugari—Nova’s manager—explicitly testified that Nova claims no debt from Al Baz. Thus, Nova has suffered no harm, and Saleh demonstrated that he “has ‘a personal stake’” in the case: he owns the outstanding debt.

Al Baz’s arguments that Saleh failed to meet the requirements of a derivative shareholder action are inapposite. “A derivative action is an equitable proceeding in which a shareholder asserts, on behalf of the corporation, a claim that belongs to the corporation rather than the shareholder.” The claim in this case was shown to belong to Saleh, not Nova, so Saleh did not need to bring a derivative action.

Affirmed.

Al Baz v. Saleh, Record No. 0458-25-4, March 31, 2026. CAV (unpublished opinion) (Bernhard). From the Circuit Court of Prince William County (Coleman). Alex Heidt (The Heidt Law Firm, PLLC, on briefs), for appellant. Warner F. Young III (David R. Mahdavi; Mahdavi, Bacon, Halfhill & Young, PLLC, on brief), for appellee. VLW 026-7-120. 10 pp.

Full-Text Opinion

VLW 026-7-120
Virginia Lawyers Weekly