Case Name: Vinh Duc Nguyen, et al. v. Peter Pau, et al.

Case No.: 16CV302578

Plaintiff’s Motion for Judgment on the Pleadings

Factual and Procedural Background

Plaintiff Vinh Duc Nguyen aka Vince D. Nguyen, individually and doing business as Newton Law Group (“Nguyen”), is a licensed California real estate broker. (Second Amended Complaint (“SAC”), ¶2.) In July 2011, plaintiff Nguyen and his wife, Teri Ha (“Ha”), entered into discussions with the principals of Vallco Shopping Mall, LLC (“VSM”), owners of real property known as the Vallco Fashion Mall located at 10123 North Wolfe Road in Cupertino (“Subject Property”), to exclusively represent VSM in connection with the sale of the Subject Property. (SAC, ¶¶7 – 8.)

On or about August 2, 2011, VSM and plaintiff Nguyen entered into an exclusive right to sell agreement entitled “Owner-Broker Agreement-Vallco Shopping Center” (“Listing Agreement”). (SAC, ¶9.) Pursuant to the Listing Agreement, VSM agreed plaintiff Nguyen would have the exclusive right to list and sell the Subject Property and procure a buyer to purchase the Subject Property with a minimum sale price of $100 million. (SAC, ¶10.) Specifically, VSM agreed that “[t]he first Buyer who submits the purchase contract, or a Letter of Intent to Seller, with proof of financial ability to buy the [Subject Property], together with a deposit amount earlier than the others has the right to buy the [Subject Property].” (Id.) Pursuant to the Listing Agreement, VSM agreed to pay plaintiff Nguyen and his associates a six percent (6%) commission based on the sale price, which also included the commission for the buyer’s broker. (Id.)

On August 9, 2011, plaintiff Nguyen entered into an agent/ sub-agent type agreement entitled “Broker Cooperation Agreement” with Marcus & Millichap (“M&M”) whereby plaintiff Nguyen agreed to pay a certain percentage of his commission to M&M in the event M&M was successful in assisting plaintiff Nguyen in procuring a buyer of the Subject Property. (SAC, ¶11.) M&M assigned Jeffrey John Taughinbaugh (“Taughinbaugh “) and Anh Stovall (“Stovall”) to work with plaintiff Nguyen. (Id.)

By the end of August 2011, M&M and plaintiff Nguyen obtained nine potential buyers each of whom executed a “Non-Circumvent Agreement” agreeing not to circumvent plaintiff Nguyen in purchasing the Subject Property. (SAC, ¶12.) On August 11, 2011, defendant Peter Pau (“Pau”), individually and doing business as Sand Hill Property Company, and Taughinbaugh executed a non-circumvent agreement (“NCA”) which repeatedly referenced Newton Law Group as one of the brokers for the owner of the Subject Property. (SAC, ¶15.) In the NCA, defendant Pau agreed that if he closed the purchase of the Subject Property, M&M and Newton Law Group would be “compensated the agreed upon fee in the Contract executed with the Owner on 8/2/2011.” (Id.) Defendant Pau also agreed that all negotiations would be conducted through M&M and acknowledged that defendant Pau “is not working with any other broker or agent in connection with the Property.” (Id.) Defendant Pau’s obligations under the NCA applied to a twelve month period beginning on the date of execution. (Id.)

Under the terms of the NCA, defendant Pau requested “Offering Materials” which M&M provided while assisting with negotiations. (SAC, ¶16.) Defendant Pau asked for additional information which plaintiff Nguyen provided along with assistance to defendant Pau. (Id.) Other people assisted plaintiff Nguyen in serving as VSM’s exclusive listing agent, including Ha, who is a licensed real estate agent; Tammy Pham (“Pham”), who worked for plaintiff Nguyen as an independent contractor; and Kham Tran (“Tran”), Ha’s cousin living in Vietnam. (SAC, ¶17.) Pursuant to VSM’s instructions, Ha and Pham contacted Mike Rohde (“Rohde”) for due diligence documents relating to the Subject Property, but Rohde did not cooperate. (Id.) In response to pressure from defendant Pau and other interested buyers for further due diligence documents, plaintiff Nguyen, Ha, Pham, and Stovall went to Vietnam to meet with VSM’s principals. (SAC, ¶18.)

On September 25, 2011, VSM’s principals insisted on being provided with the identities of the prospective buyers. (SAC, ¶19.) In reliance on his rights under the Listing Agreement, plaintiff Nguyen provided names of five potential buyers to VSM. (Id.) On September 26 – 27, 2011, plaintiff Nguyen, along with Ha, Tran, Pham, and Stovall, met with VSM’s principals in Saigon. (SAC, ¶20.) Among the VSM principals present were Be Tram, Cuu Nguyen (representing a silent but powerful partner), Ngan Tram (Be Tram’s son), and Hoa Tran (Be Tram’s younger son). (Id.) The VSM principals promised to have due diligence documents to plaintiff Nguyen within seven days and instructed plaintiff Nguyen to work directly with Cuu Nguyen in obtaining the due diligence documents. (Id.) After the meetings, VSM demanded information about the identities of the remaining potential buyers before releasing due diligence documents. (SAC, ¶21.)

On October 3, 2011, VSM requested plaintiff Nguyen release the remaining list of nine potential buyers and, in exchange, VSM would provide updated financial documents to plaintiff Nguyen. (SAC, ¶22.) Plaintiff Nguyen and his associates provided information regarding the remaining potential buyers, but VSM did not provide plaintiff Nguyen with updated financial documents. (Id.)

In the meantime, plaintiff Nguyen and M&M identified another potential buyer, Catalina Investment Company (aka The Irvine Company) (“Catalina”). (SAC, ¶23.) On or about October 17, 2011, Catalina signed a non-circumvent agreement with M&M and plaintiff Nguyen. (Id.)

On November 16, 2011, plaintiff Nguyen received a letter from Walter Merkle of Kay & Merkle (“Merkle”) claiming to represent VSM and purporting to terminate the Listing Agreement on the false basis that plaintiff Nguyen did not have a real estate broker’s license. (SAC, ¶24.) Plaintiff Nguyen reported this letter to Cuu Nguyen who assured plaintiff the letter was unauthorized. (Id.) Cuu Nguyen instructed plaintiff Nguyen to ignore the letter and continue working with VSM. (Id.) In reliance on Cuu Nguyen’s assurances coupled with the fact that VSM continued working with plaintiff Nguyen and his assistants, plaintiff Nguyen continued working on obtaining the sale of the Subject Property. (SAC, ¶25.)

At defendant Pau’s request, plaintiff Nguyen and M&M organized an international telephone conference call (“ITC”) for April 10, 2012 to allow Pau to speak directly with VSM members in Vietnam and confirm plaintiff as the listing agent because Pau had received communications from individuals unassociated with plaintiff who were soliciting Pau to purchase the Subject Property. (SAC, ¶26.) Before agreeing to participate in the ITC, defendant Pau demanded proof that the participants in the ITC were, in fact, authorized representatives of the owner of the Subject Property. (SAC, ¶27.) Stovall provided defendant Pau with business cards for the principals of VSM. (Id.) Plaintiff sent Pham to Vietnam to help set up the ITC and to translate during the ITC because VSM’s principals do not speak English. (SAC, ¶28.)

Before the scheduled ITC, defendant Pau induced Taughinbaugh to conditionally release Pau from the NCA by representing that “if the owners confirm to me that they have only authorized [M&M] to represent them and no other brokerage firm is involved, then I will work with you.” (SAC, ¶29.) Trusting Pau, Taughinbaugh conditionally released defendant Pau from the NCA without plaintiff Nguyen’s knowledge or authorization. (Id.) The ITC occurred on April 10, 2012 during which Be Tram confirmed VSM’s intent to sell the Subject Property and plaintiff Nguyen was the only agent with exclusive authority to sell the Subject Property on VSM’s behalf. (SAC, ¶¶30 – 31.) At the conclusion of the ITC, Pau expressed his satisfaction and stated his intent to prepare an offer to submit to M&M and plaintiff Nguyen to hand carry to Vietnam. (SAC, ¶31.) With Be Tram’s confirmation that plaintiff Nguyen (and sub-agent M&M) was the only listing agent, the terms of the conditional “release” were not met, thereby rendering it void. (SAC, ¶32.)

After the ITC, on April 27, 2012, Cuu Nguyen confirmed VSM would continue working with plaintiff Nguyen to complete the sale of the Subject Property to Pau and assured plaintiff would be entitled to the commission in the Listing Agreement. (SAC, ¶33.)

On May 15, 2012, defendant Pau represented to M&M that he would make an offer to purchase the Subject Property but needed more time to prepare the offer. (SAC, ¶34.) Without plaintiff Nguyen’s knowledge or involvement, defendant Pau hired his own broker, Efi Luzon, and involved his financial partner, Abu Dhabi Investment Authority (“ADIA”), to negotiate and finalize the purchase of the Subject Property directly with VSM in violation of the terms of the NCA. (SAC, ¶¶35 and 39.) In May 2012, VSM started dealing directly with Pau in circumventing plaintiff Nguyen as the listing agent. (SAC, ¶39.)

In or about May 2013, plaintiff learned that Pau had made an offer to buy the Subject Property directly from VSM and one of the conditions of the offer was a credit to Pau for the 6% commission VSM would save by not having to pay plaintiff and his associates. (SAC, ¶37.) Based upon this and other information, plaintiff Nguyen filed a complaint on May 6, 2013 against VSM for breach of contract and other causes of action in Santa Clara County Superior Court case number 1-13-CV-245854 (“Vallco Litigation”). (Id.)

To hide their wrongful acts from plaintiff Nguyen, Pau and ADIA formed one or more entities that would act as a mere shell, instrumentality, or conduit to purchase the Subject Property. (SAC, ¶40.) In June 2014, Pau formed Commercial Real Properties-CA 173 LLC (“CA 173 LLC”) to act as a straw buyer of the Subject Property. (Id.) In the same month, CA 173 LLC presented a letter of intent (“LOI”) to buy the Subject Property which Ngan Tram signed on behalf of VSM. (Id.) In July 2014, pursuant to the terms of the LOI between CA 173 LLC and VSM, ADIA deposited $116 million into escrow on behalf of CA 173 LLC. (SAC, ¶41.)

In or about October 2014, Pau or defendant Vallco Property Owner, LLC (“VPO”) purchased properties adjacent to the Subject Property for approximately $200 million. (SAC, ¶44.) Pau’s plan from the beginning was to purchase the Subject Property and adjacent properties in order to redevelop the entire Vallco Shopping District. (SAC, ¶¶44 – 45.)

As early as February 2012, before the ITC and during the non-circumvention period under Pau’s NCA with plaintiff and M&M, Pau opened escrow on the Subject Property. (SAC, ¶46.) Pau worked with M&M and plaintiff Nguyen in order to obtain contact with the owners of the Subject Property and deal with them directly. (Id.) After Be Tram learned of Pau’s identity as the potential buyer, he recruited plaintiff’s assistant to help carry out his scheme to deal directly with Pau to avoid payment of the commission to plaintiff and his associates. (SAC, ¶¶47 – 51.)

On July 3, 2012, Pau submitted an offer to buy the Subject Property directly to VSM. (SAC, ¶49.) For the two years that followed, Pau continued working with VSM. (SAC, ¶52.) When it appeared Pau’s master plan to purchase the entire Vallco Shopping District might collapse, Pau agreed to close the deal for a $116 million purchase price, no contingencies, and a quick closing. (Id.) The purchase and sale agreement was entered into on November 3, 2014 and the grant deed conveying the Subject Property to VPO was recorded on November 12, 2014. (SAC, ¶53.)

In the meantime, plaintiff joined Pau as a co-defendant in the Vallco Litigation. (SAC, ¶54.) Pau’s attorney aggressively sought Pau’s dismissal by filing a motion for sanctions. (Id.) In support of that motion, Pau made various false statements. (SAC, ¶¶56 – 59.) Trusting Pau would not lie under oath, plaintiff agreed to dismiss Pau from the Vallco Litigation without prejudice. (SAC, ¶55.)

On November 10, 2016, plaintiff Nguyen filed a complaint against Pau, individually and doing business as Sand Hill Property Company, Sand Hill Property Management, LLC, and VPO asserting causes of action for:

(1) Breach of Contract
(2)
(3) Breach of Implied Covenant of Good Faith and Fair Dealing
(4)
(5) Intentional Interference with Contractual Relations
(6)
(7) Intentional Interference with Prospective Economic Advantage
(8)
(9) Fraud-Deceit
(10)
(11) Violation of Business & Professions Code §17200, et seq.
(12)

On January 6, 2017, plaintiff Nguyen filed a first amended complaint (“FAC”) asserting the same six causes of action.

On March 30, 2017, defendants Pau, individually and doing business as Sand Hill Property Company (“SHPC”), Sand Hill Property Management, LLC, and VPO filed a demurrer to plaintiff Nguyen’s FAC.

On May 9, 2017, the court sustained, in part, and overruled, in part, the defendants’ demurrer to plaintiff Nguyen’s FAC.

On May 24, 2017, plaintiff Nguyen filed the operative SAC against Pau, individually and doing business as SHPC, and VPO. The SAC now asserts the following causes of action:

(1) Breach of Contract
(2)
(3) Breach of Implied Covenant of Good Faith and Fair Dealing
(4)
(5) Intentional Interference with Contractual Relations
(6)
(7) Intentional Interference with Prospective Economic Advantage
(8)
(9) Fraud-Deceit
(10)
(11) Quasi-Contract/ Unjust Enrichment
(12)
(13) Violation of Business & Professions Code §17200, et seq.
(14)
(15) Conspiracy to Commit Fraud, to Interfere with Contractual Relations and Interfere with Prospective Economic Advantage
(16)

On July 14, 2017, defendants Pau, individually and doing business as SHPC, and VPO filed an answer and a demurrer to the fifth and seventh causes of action in plaintiff Nguyen’s SAC. On September 26, 2017, the court issued an order overruling the demurrer to the fifth cause of action but sustaining, without leave to amend, the demurrer to the seventh cause of action.

On September 28, 2018, defendants Pau, individually and doing business as SHPC, and VPO filed a motion for summary adjudication of the first, second, third, fourth, and sixth causes of action in plaintiff Nguyen’s SAC. On December 14, 2018, the court issued an order denying defendants’ motion for summary adjudication of the first, second, third, and fourth causes of action. The court continued the motion for summary adjudication as to the sixth cause of action only. On February 28, 2019, the court granted defendants Pau, individually and doing business as SHPC, and VPO’s motion for summary adjudication of the sixth cause of action of plaintiff Nguyen’s SAC.

On July 23, 2019, plaintiff Nguyen filed the motion now before the court, a motion for judgment on the pleadings pursuant to Code of Civil Procedure section 438.

I. Requests for judicial notice.
II.

In support of and in opposition to the motion for judgment on the pleadings, both sides request judicial notice of various court records. The requests for judicial notice are DENIED as the court did not find the various records necessary in ruling on the motion for judgment on the pleadings. (See Duarte v. Pacific Specialty Insurance Company (2017) 13 Cal.App.5th 45, 51, fn. 6—denying request where judicial notice is not necessary, helpful or relevant.)

III. Plaintiff Nguyen’s motion for judgment on the pleadings is DENIED.
IV.

Plaintiff Nguyen’s motion for judgment on the pleading is made specifically pursuant to Code of Civil Procedure section 438 which states, in relevant part, “The motion provided for in this section may only be made on one of the following grounds: If the moving party is a plaintiff, that the complaint states facts sufficient to constitute a cause or causes of action against the defendant and the answer does not state facts sufficient to constitute a defense to the complaint.” (Code Civ. Proc., §438, subd. (c)(1)(A).) “The motion provided for in this section may be made as to either of the following: … The entire answer or one or more of the affirmative defenses set forth in the answer.” (Code Civ. Proc., §438, subd. (c)(2)(B).)

As a preliminary matter, defendants Pau, individually and doing business as SHPC, and VPO contend plaintiff Nguyen’s motion for judgment on the pleadings is untimely. Both sides acknowledge Code of Civil Procedure section 438, subdivision (e) states, “No motion may be made pursuant to this section if a pretrial conference order has been entered pursuant to Section 575, or within 30 days of the date the action is initially set for trial, whichever is later, unless the court otherwise permits.”

Plaintiff argues that “[b]ecause no pretrial conference order has been entered in this matter, the instant motion is timely per statute.” Plaintiff’s interpretation and application of this provision is incorrect. The deadline is written in the disjunctive. A motion may not be made either (1) if a pretrial conference order has been entered pursuant to Section 575; or (2) within 30 days of the date the action is initially set for trial. A party pursuing such a motion is entitled to the later of those two events.

As defendants point out in the opposition, at a trial setting conference on October 30, 2018, the court initially set this matter for trial on May 13, 2019. Even if, as plaintiff argues, no pretrial conference order has been entered, then the initial trial date triggers a deadline of April 13, 2019. Plaintiff did not file this motion until July 23, 2019, beyond the deadline imposed by subdivision (e) of Code of Civil Procedure section 438.

Accordingly, plaintiff Nguyen’s motion for judgment on the pleadings pursuant to Code of Civil Procedure section 438 is DENIED.