A California court has upheld a jury's decision to award Jacob Michelson $634,000 in damages from his former business partner, Michael Ayzenberg, in a case centered around a failed partnership in the nutritional supplements industry. The ruling, issued by the California Court of Appeal on October 30, 2026, confirms that Michelson was entitled to compensation after a jury found Ayzenberg had breached their partnership agreement.

This case is significant for individuals and businesses involved in partnerships without formal contracts, as it underscores the importance of clear agreements and accountability in business dealings. The court's decision may also influence how similar disputes are handled in the future, particularly regarding claims of breach of fiduciary duty and the statute of limitations.

Background

The dispute began in 2014 when Jacob Michelson and Michael Ayzenberg formed a partnership to export nutritional supplements to Russia under the name Elixir. The two men had known each other for years and did not formalize their partnership with a written contract. However, Michelson claimed that Ayzenberg failed to pay him the full amount owed for their business dealings, leading to the dissolution of their partnership in January 2018.

In November 2020, Michelson filed a lawsuit against Ayzenberg in the Los Angeles County Superior Court, alleging breach of contract and breach of fiduciary duty, among other claims. The trial court initially allowed Michelson's case to proceed after overruling Ayzenberg's demurrer, which argued that Michelson's claims were time-barred. Ayzenberg later filed a motion for summary judgment, which was also denied.

The Ruling

The California Court of Appeal affirmed the jury's decision, stating that it found no prejudicial error in the trial court's rulings. The court noted that Ayzenberg had forfeited his statute of limitations defense by failing to present it during the trial. The opinion stated, "Ayzenberg elected not to litigate the issue of the statute of limitations after the denial of his pretrial motions. The failure to assert the statute of limitations as a defense at trial forfeits the issue."

Furthermore, the court ruled that the jury had sufficient evidence to support the damages awarded to Michelson. The opinion highlighted the expert testimony presented during the trial, which estimated Elixir's profits and determined the amount owed to Michelson. The jury ultimately awarded Michelson $634,000, which the court upheld, stating that the amount was reasonable given the evidence presented.

Impact

This ruling has significant implications for business partnerships, particularly those that lack formal contracts. It reinforces the idea that partners can be held accountable for their financial obligations, even in the absence of a written agreement. The court's decision may encourage individuals to formalize their business arrangements to avoid similar disputes in the future.

Moreover, the court's handling of the statute of limitations issue serves as a reminder for defendants to assert all relevant defenses during trial. Failure to do so may result in the forfeiture of those defenses, as seen in Ayzenberg's case.

What's Next

Ayzenberg has the option to appeal the ruling to a higher court, but it remains unclear whether he will pursue that route. No related cases are currently pending that would directly impact this ruling.