Hong v. Park



Filed 6/13/11 Hong v. Park CA2/5



NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

LINDA HONG et al., Plaintiffs, Cross-defendants and Respondents, v. JUNG HO PARK, Defendant, Cross-complainant and Appellant; ZOO ENTERTAINMENT, LLC, Cross-complainant and Appellant.

B222326 (Los Angeles County Super. Ct. No. BC386212)

APPEAL from a judgment of the Superior Court of Los Angeles County, Zaven V. Sinanian, Judge. Affirmed.
Moon & Yang, Seung Yang and Kane Moon for Defendant, Cross-complainants and Appellants.
Lurie & Park, Daniel E. Park and Lisa M. Lawrence for Plaintiffs, Cross‑defendants and Respondents.

_____________________________
This appeal arises out of a series of disputes concerning the operation and sale of a business, Le Prive Dinner Club, located in the Los Angeles neighborhood known as Koreatown. We summarize the nature of the parties and the underlying transactions in order to place the appellate claims in context.
Plaintiffs, cross-defendants, and respondents Linda Hong and Howard Kea originally built and ran Le Prive.^[1] Although divorced, the two lived and worked together. They formed Zoo Entertainment, LLC (Zoo) as a California limited liability company to own the club until it was eventually sold to a third party, 22 Wilshire Center Investment. In 2003, defendant, cross-complainant, and appellant Jung Ho Park purchased a 50 percent interest in Zoo. The following year, Park purchased another 40 percent interest in Zoo and became the managing owner of Le Prive, with Hong retaining the remaining 10 percent interest in the business.^[2] All of those transactions were conducted through written contracts, including the February 2005 modification agreement providing that upon sale of Le Prive to a third party, Park would pay Hong $200,000 for her remaining interest in Zoo. Subsequently, by a written agreement of January 2007, Park was guaranteed a payment of $900,000 following consummation of the anticipated sale of the club. A few days later, by a separate agreement and unbeknownst to Park, Kea entered into a consulting agreement with 22 Wilshire whereby Kea would receive $600,000 upon close of escrow for the purpose of helping 22 Wilshire obtain the permits necessary to run the club.
Some months after the sale, Hong and Kea sued Park for a variety of claims, including (1) unjust enrichment based on allegations that Park and his parents subsequently encumbered the parcels of Korean real property originally transferred by Park's parents to Hong and Kea as part of the consideration for Park's purchase of the 40 percent interest in Zoo, thereby preventing Hong and Kea from developing or selling the properties; (2) breach of contract based in part on Park's failure to make the $200,000 payment to Hong required by the February 2005 modification agreement; and (3) breach of fiduciary duty for failing to pay Hong and Kea their full 10 percent share of the club's profits during the time Park was the 90 percent owner.^[3] Park filed a cross-complaint alleging a variety of claims, including that Hong and Kea breached the January 2007 contract by paying him only $640,000 of the $900,000 guaranteed by that agreement.
Following a trial, the jury awarded a total of $1,519,970 to Hong and Kea, specially finding that Park was unjustly enriched in the amount of $1,050,000, based on the encumbrances Park's parents placed on the Korean properties; Park was liable for $200,000 for breach of the February 2005 modification agreement; and he was liable for $269,015 for breaching his fiduciary duty. The jury also awarded Hong and Kea a 10 percent share of the money remaining in the escrow account for the sale of the club to 22 Wilshire. On the cross-complaint, the jury awarded $268,591.40 to Park plus his 90 percent share of the remaining escrow funds based on Hong and Kea's failure to pay Park the entire $900,000 in guaranteed sales proceeds as promised in the January 2007 contract.^[4]
In his timely appeal, Park contends (1) the restitution award for unjust enrichment is legally invalid because there was no breach of the contract on which the claim is based or, alternatively, the award was a disguised double recovery of restitution on the contract, which requires Hong and Kea to convey the Korean properties to him as a condition of recovery; (2) Zoo is entitled to judgment on its claim for breach of fiduciary duty as a matter of law because Kea was Zoo's agent at the time he entered into the undisclosed consulting agreement with 22 Wilshire; and (3) Hong and Kea cannot recover for Park's breach of the February 2005 modification agreement because that contract was superseded by the January 2007 agreement.
We affirm.

STATEMENT OF FACTS

In a written agreement dated July 31, 2003, Park purchased a 50 percent interest in Le Prive for $925,000. Park understood he would receive half of the business's profits. Park soon decided he wanted to increase his ownership interest. Park's father frequently met with Kea concerning his son's investment in the club and was actively involved in the negotiation and revision of the agreement that made Park the 90 percent owner of the business. A written agreement of October 15, 2004, contained the terms for Park's acquisition of 90 percent of the ownership, with Hong retaining 10 percent. Park would run the business and Kea would be a consultant. There was an option for Park to buy the remaining 10 percent one year after the agreement's date for $200,000.
Crucial for purposes of this appeal, the agreement provided that part of the purchase price would be paid with parcels of Korean properties owned by Park's parents. Specifically, $1,050,000 of the total $1,375,000 purchase price would be paid for by transfer of nine properties in Korea â€