Complaint Review: Kian Khalooghi Barcelona

On or about August of 2006, Kian Khalooghi represented himself as a contractor licensed in the State of California under no. B787602 to a homeowner, that he had a business named Barcelona, and that he had sufficient expertise and skill to competently perform the hardscape/landscape construction services that Homeowner sought at his residence in Newport Coast, California. These representations from Khalooghi were clearly false and were made to deceive Homeowner into entering a contract with him for the sum of $95,000 for landscape construction. The truth is that Khalooghi was not and is not a licensed contractor. Khalooghi was utilizing a contractor license number that belonged to Ardeshir Bahar (#B787602), with Bahar's permission, to deceive homeowners into contracting with him for landscape and hardscape which he was not licensed or skilled to do. Khalooghi's business card falsely states that he is a general contractor and refers the license no 787602. When Homeowner entered into the contracts with Khalooghi, he believed Khalooghi was a licensed contractor. All negotiations and executions of the contracts were solely between Homeowner and Khalooghi. Homeowner has never met nor spoken to Ardeshir Bahar, Ardeshir Bahar has never even set foot on Homeowner's residence.

Homeowner believes that Bahar is a retired contractor (he is in his 70's) who has agreed to permit Khalooghi the use of his contractor license number in exchange for a portion of proceeds collected in any construction contracts. However, Bahar is completely uninvolved in any of these contracts and construction, and has never met or spoken to any of these clients. Khalooghi and Bahar have set up a fictitious business under the name of Barcelona in order to legitimize their fraud and to extort over a million dollars from numerous clients in Orange County alone. It should be noted that Barcelona was not formed until after the contracts were executed between Khalooghi and Homeowner. Kian Khalooghi, Ardeshir Bahar, and Barcelona shall collectively be referred to as Defendants hereinafter.

In reliance on Khalooghi's fraudulent misrepresentation, Homeowner entered into a construction contract with him on August 7, 2006 in which Homeowner agreed to pay Khalooghi the contract sum of $95,000.00 in progress payment installments for landscaping/hardscaping construction at his residence (Contract). It should be noted that Khalooghi executed his personal signature as the contractor on the Contract.

Construction commenced on August 9, 2006. For the proceeding three months, Khalooghi ceased and recommenced work numerous times and several weeks would lapse without any work being done. Pursuant to the Contract, Khalooghi was to complete the Construction by November 9, 2006. By November 1, 2007, the construction was only 25% completed.

By November 1, 2007, the construction was far from complete, and as a result Homeowner and Khalooghi entered into a supplemental contract which encompassed more specific details of the construction project (Supplemental Contract). The Supplemental Contract contained a provision wherein the final payment of $10,000 would be withheld until after the final inspection is passed and completion of the construction to a quality that is acceptable to Homeowner. It should be noted again that Khalooghi personally initialed each page of the Supplemental Contract and executed his personal signature as the contractor.

For the proceeding four months, Khalooghi would continue to cease and recommence
work numerous times and days, if not weeks, would lapse without any work being done. By February of 2007, construction was still not nearly completed and numerous defects and defective materials were being discovered by Homeowner.

Homeowner notified Khalooghi of the presence of these defects, demanded that Khalooghi correct said defects and to obtain proper permits for fountains and fire pits in accordance with the terms of the contracts. Khalooghi failed to properly remediate its defective work and replace the defective material. Proper permits for the fire pits and fountains were never obtained from the city and association after numerous requests from Homeowner.

Most disturbingly, Khalooghi employed unskilled and undocumented employees, without any worker's compensation coverage, and then further failed to supervise these employees which resulted in defective work. Please note that Ardeshir Bahar's license is exempt from having workers compensation insurance because he certified that they have no employees. The wesbite from the California Contractors License Board website indicates that Barcelona is exempted from workers comp. Clearly it would have been impossible for Khalooghi and Bahar to do the construction themselves without any employees or subcontractors.

Furthermore, on two separate occasions, the Newport police appeared at Homeowner's residence to investigate whether the supplies used at the residence were stolen from nearby builders as Khalooghi had been caught stealing materials from other home builders in the community.

Homeowner discovered on or about February 1, 2007 that Khalooghi was not a licensed contractor as he first represented himself to be and that the license number he used did not belong to him, but actually registered to Ardeshir Bahar. Based on the shoddy and defective work Khalooghi performed, the defective materials supplied and the fraudulent misrepresentation, Homeowner immediately terminated his contracts with Khalooghi on February 8, 2007.

To date, Homeowner has paid a total sum of $85,763.55 to Kian Khalooghi and Barcelona for defective construction work which now requires Homeowner to expend additional monies to correct and to complete this defective construction. Homeowner has also incurred costs to investigate the nature and extent of the defects and develop a repair process to limit the damage.

Homeowner contends that the Construction is plagued with material defects in ways and to an extent not currently known. However, known defects include but are not limited to failure to install expansion joints around the pool; placement of pilasters in contravention to homeowners association rules; cracking and spalling of stone tiles; cracking and spalling of concrete; cement on doors, windows, walls and floors; failure to install proper stones on the fountains and barbeque island; failure to install patio beams; non-functioning lights; non-functioning irrigation system; drainage problems; water leakage from fountains; and failure to plant. The construction also failed to comply with rules and regulations with the City of Newport Beach, County of Orange, and the Homeowner's Association. In addition, Khalooghi failed to obtain proper permits from the city and association for the fountains and fire pits. Homeowner has obtained an estimate of $304,000 to correct and complete the landscape from a licensed and bonded contractor.

On or about February 20, 2007, Bahar issued to Homeowner a Notice of Claim Lien pertaining to his claim for statutory mechanic's lien in the amount of $68,000.00 (the Mechanic's Lien) against the Homeowner's property.

Homeowner contends such conduct from Bahar is exceptionally egregious because the total contract price was for $95,000, in which Homeowner has paid a total of $85,763.55, leaving a remaining balance of $9,236.45. The Mechanic's Lien is in the amount of $68,000, far in excess of the remaining balance. In addtition, said contracts were entered into with Khalooghi, not Bahar. Therefore, Bahar has no legal authority to place such lien.

Furthermore, Khalooghi has already been paid far in excess of the value of the work that he performed on Homeowner's property, and has received the vast majority of his promised payment despite the fact that he failed to perform some of the promised work, failed to perform competently other work that he promised, and fraudulently represented that he was a licensed by the State of California to perform contracting services when in fact he was not. The Mechanic's Lien is improper because the amount is unsubstantiated and includes sums that neither Bahar nor Khalooghi are entitled to recover under the Contracts.

Homeowner believes that Bahar is only furthering this fraud by assisting Khalooghi to extort additional sums from Homeowner for the shoddy and defective work that Khalooghi performed on Homeowner's property. Khalooghi, being that he is not a licensed contractor, cannot file such a lien and cannot maintain an action thereon.

On February 27, 2007, Homeowner filed a civil complaint against Kian Khalooghi, Ardeshir Bahar and Barcelona alleging the following: Breach of Contract, Breach of Express Warranty, Breach of Implied Warranty of Fitness, Negligence, Intentional Misrepresentation, Negligent Misrepresentation, Declaratory Relief-Wrongful Mechanic's Lien, Cancellation of Cloud on Title, Injunction and Violations of Business and Professions Code Section 7028.

Homeowner is informed that there are numerous other homeowners in Orange County, in similar circumstances, who have been victimized by both Khalooghi and Bahar. These clients and their projects total over more then $1,000,000 in revenue for Khalooghi and Bahar. These clients have already or shortly will be filing their own separate state contractors complaint and bringing a civil complaint against Defendants for damages to their properties.

Homeowner
Newport Coast, California
U.S.A.