TVBI Company Limited v. Hong Thoa Thi Pham, No. 3:2017cv05858 - Document 96 (N.D. Cal. 2019)
Court Description: ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENTgranting 85 Motion for Partial Summary Judgment. (Illston, Susan) (Filed on 4/23/2019)
Download PDF
<![CDATA[
1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 6 TVBI COMPANY LIMITED, Plaintiff, 7 v. 8 9 Case No. 17-cv-05858-SI HONG THOA THI PHAM, et al., Defendants. 10 ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT Re: Dkt. No. 85 United States District Court Northern District of California 11 12 Before the Court is a motion for partial summary judgment filed by plaintiff TVBI Company 13 Limited (“TVBI”), seeking judgment of liability on its second cause of action for breach of fiduciary 14 duty and fifth cause of action for breach of contract, with the amount of damages to be established 15 at trial. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution 16 without oral argument and VACATES the hearing set for April 26, 2019. 17 BACKGROUND1 18 19 In June, 2013, in a separate but related action, TVBI sued Ms. Pham alleging she received 20 fraudulent transfers from her then business partner and boyfriend, Wang Yu Lin, who was also a 21 judgment debtor of TVBI (the “Fraudulent Transfer Action”). See TVBI Company Limited v. Hong 22 Thoa Thi Pham, 13-cv-2492. In that action, TVBI alleged Ms. Pham received a residence in 23 Milpitas, California and a 92% shareholder interest in San Yang Entertainment (“San Yang”) 24 through fraudulent transfers. Id. Following the transfers, Ms. Pham became the sole owner of San 25 Yang and its sole asset, the Lido Nightclub. Ms. Pham does not dispute any of these facts. Dkt. 26 No. 93 at 2 (Opposition). 27 28 1 The following facts are undisputed unless otherwise stated. United States District Court Northern District of California 1 On or about August 22, 2014, TVBI and Pham settled the Fraudulent Transfer Action by 2 entering into a written settlement agreement (the “Settlement Agreement”). Dkt. No. 85-5 (Exhibit 3 C to Hilton Decl. – Settlement Agreement). Pursuant to the Settlement Agreement: (a) Pham 4 executed a promissory note in the amount of $120,000, secured by the Milpitas residence transferred 5 to her by Wang (Dkt. No. 85-5 at 1 (Exh. C to Hilton Decl. – Settlement Agreement)); (b) Pham 6 transferred 92% shareholder interest in San Yang to TVBI and she retained the remaining 8% (Id. 7 at 2); (c) Pham executed an Employment and Management Agreement (“Employment Agreement”) 8 and continued to operate the Lido Nightclub for compensation of $8,000 per month (Id.; See also 9 Dkt. No. 85-6 (Exh. D to Hilton Decl. – Employment Agreement)); (d) TVBI was to receive a 10 minimum of $1,000 per month from the proceeds of the Lido Nightclub for the first 12 months 11 following the settlement, and a minimum of $2,000 per month thereafter, along with copies of 12 monthly profit and loss statements (Dkt. No. 85-5 at 3 (Exh. C to Hilton Decl. – Settlement 13 Agreement); and (e) any Lido Nightclub profits after paying out Pham’s $8,000 monthly salary 14 would be split – 2/3 to TVBI and 1/3 to Pham (Id. at 3). The parties also agreed that “[a]ll loans 15 made by PHAM [to San Yang] will be documented with a note …. At no time shall the loans by 16 PHAM exceed $10,000 and all loans shall be approved by TVBI in writing, prior to creating any 17 obligation to pay PHAM for loans made to SAN YANG.” Id. at 2-3 (emphasis added). 18 It is undisputed that Ms. Pham sold the Milpitas Property and paid TVBI the $120,000 19 proceeds pursuant to the Settlement Agreement and that TVBI held 92% of San Yang. Dkt. No. 93 20 at 2 (Opposition). Ms. Pham also followed through and made monthly payments to TVBI for a 21 period of time; however, the payments were never increased to $2,000 per month as required by the 22 Settlement Agreement. Dkt. No. 85-2 (Hilton Decl. ¶ 6.). Finally, beginning in February 2017, 23 Pham stopped sending checks altogether. Id. ¶ 7; Dkt. No. 85-7 (Exh. E to Hilton Decl. – payment 24 spreadsheet tracking Ms. Pham’s payments from October 2014 – December 2016). 25 Several months after it stopped receiving payments, TVBI learned that in March 2016, Ms. 26 Pham unilaterally dissolved San Yang Entertainment and transferred all its assets to Lido Enterprise2 27 28 2 Lido Enterprise was registered with the California Secretary of State on October 16, 2013 and is controlled exclusively by Ms. Pham. Dkt. No. 93-1 at ¶ 12 (Pham Decl.); Dkt. No. 39 ¶ 5 2 United States District Court Northern District of California 1 – a company she solely owns and controls. Dkt. No. 93-1 ¶ 12 (Pham Decl.); Dkt. No. 93 at 3 2 (Opposition) (“Ms. Pham does not dispute that on March 16, 2016, she dissolved San Yang.”); Dkt. 3 No. 85-11 (Exh. I to Hilton Decl. – Responses to Requests for Admission (“RAF”) Nos. 23, 24, 4 25)3; Dkt. No. 39 ¶ 5 (Answer to Second Amended Complaint).4 Specifically, on March 16, 2016, 5 Pham filed a Certificate of Dissolution of San Yang Entertainment, Inc. with the California 6 Secretary of State. Id.; Dkt. No. 85-8 (Exh. F to Hilton Decl. – Certificate of Dissolution); Dkt. No. 7 85-11 (Exh. I to Hilton Decl. – Response to RAF No. 26).5 The Certificate of Dissolution falsely 8 stated that the election to dissolve was made by a vote of all outstanding shares – meaning TVBI 9 voted in favor of the dissolution and transfer of assets to Lido Enterprise when in fact it had no idea 10 the dissolution and transfer occurred. Id. Ms. Pham admits she summarily dissolved and transferred 11 the assets to Lido Enterprise without informing TVBI. Id.; Dkt. No. 85-12 at No. 7 (Exh. J to Hilton 12 Decl. – Ms. Pham’s Responses to Special Interrogatories).6 13 14 LEGAL STANDARD 15 16 Summary judgment is proper if the pleadings, the discovery and disclosure materials on file, 17 and any affidavits show there is no genuine dispute as to any material fact and the movant is entitled 18 19 20 (Answer to Second Amended Complaint). Lido Enterprise should not be confused with the Lido Nightclub which is a separate and distinct entity. Lido Nightclub was San Yang’s sole asset. 3 Ms. Pham admitted RAF Nos. 23-25 which read respectively: (23) Admit that YOU filed the DISSOLUTION CERTIFICATE without giving notice to 21 22 23 TVBI; (24) Admit that YOU filed the DISSOLUTION CERTIFICATE without seeking approval of TVBI; (25) Admit that TVBI did not elect to dissolve San Yang Entertainment, Inc. 24 4 25 5 26 27 28 Admitting Pham is the sole shareholder, sole officer and sole director of Lido Enterprise. Ms. Pham admitted RAF No. 26 which reads: Admit that the statement in the DISSOLUTION CERTIFICATE that “[t]he election to dissolve was made by a vote of all the outstanding shares” was false. Special Interrogatory No. 7 requested M. Pham identify “each person or entity that received any of San Yang Entertainment, Inc.’s assets upon dissolution.” The only person or entity she listed in her response was Lido Enterprise. 3 6 United States District Court Northern District of California 1 to judgment as a matter of law. See Fed. R. Civ. P. 56(a). The moving party bears the initial burden 2 of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 3 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). The moving party has no burden to disprove 4 matters on which the non-moving party will have the burden of proof at trial. The moving party 5 need only demonstrate an absence of evidence to support the non-moving party’s case. Id. at 325. 6 Once the moving party has met its burden, the burden shifts to the non-moving party to 7 “designate ‘specific facts showing that there is a genuine issue for trial.’” Id. at 324 (quoting then 8 Fed. R. Civ. P. 56(e)). To carry this burden, the non-moving party must “do more than simply show 9 that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. 10 Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). “The mere 11 existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury 12 could reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 13 252, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). 14 When evaluating a motion for summary judgment, the Court must view evidence in the light 15 most favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255. 16 “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences 17 from the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment 18 . . .” Id. However, conclusory, speculative testimony in affidavits and moving papers is insufficient 19 to raise genuine issues of fact and defeat summary judgment. Thornhill Publ’g Co., Inc. v. Gen. Tel. 20 & Elec. Corp., 594 F.2d 730, 738 (9th Cir. 1979). Parties must present admissible evidence. Fed. R. 21 Civ. P. 56(c). 22 DISCUSSION 23 24 25 I. Second Cause of Action: Breach of Fiduciary Duty 26 “The elements of a cause of action for breach of fiduciary duty are: (1) existence of a 27 fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” 28 Stanley v. Richmond, 35 Cal. App. 4th 1070, 1086, 41 Cal. Rptr. 2d 768 (1995). 4 1 TVBI alleges Ms. Pham breached her fiduciary duties by “failing to make the distributions 2 of profit that were due to TVBI and keeping the money herself, dissolving the corporation without 3 the knowledge or consent of TVBI, and distributing the assets of San Yang to herself or to Lido 4 Enterprise or friends and/or family members.” Dkt. No. 32 ¶ 34 (Amended Complaint).7 5 Ms. Pham does not dispute that she owed TVBI a fiduciary duty. Dkt. No. 93 at 6-7 6 (Opposition). Rather, Ms. Pham argues (1) that she did not breach her duty and (2) TVBI cannot 7 establish damages. Id. Her arguments fail. 8 United States District Court Northern District of California 9 A. Breach 10 Ms. Pham argues that she did not breach her fiduciary duty when she dissolved San Yang 11 because she was exercising her business judgment and therefore cannot be liable. She claims that 12 dissolving San Yang and transferring all its assets to Lido Enterprise was necessary to protect San 13 Yang from wage-and-hour lawsuits from current and former employees. 14 (Opposition). But the business judgment rule “does not shield actions taken without reasonable 15 inquiry, with improper motives, or as a result of a conflict of interest.” Berg & Berg Enterprises, 16 LLC v. Boyle, 178 Cal. App. 4th 1020, 1045, 100 Cal. Rptr. 3d (2009) quoting Everest Investors 8 17 v. McNeil Partners, 114 Cal.App.4th 411, 430 (2003). Ms. Pham has admitted that she is the sole 18 shareholder, officer and director of Lido Enterprise. Dkt. No. 39 ¶ 5 (Answer to Second Amended 19 Complaint). She also admits that San Yang’s assets were dissolved and transferred without 20 informing TVBI. Dkt. No. 85-8 (Exh. F to Hilton Decl. – Certificate of Dissolution); Dkt. No. 85- 21 11 (Exh. I to Hilton Decl. – Response to RAF Nos. 23-26). Ms. Pham does not dispute that TVBI 22 was a 92% shareholder of San Yang and that she did not seek or receive TVBI’s approval – as the 23 majority shareholder – to dissolve San Yang. Dkt. No. 85-11 (Exh. I to Hilton Decl. – Responses 24 to Requests for Admission (“RAF”) Nos. 23, 24, 25); Dkt. No. 93 at 2 (Opposition). The transaction 25 was inherently conflicted and therefore cannot be protected by the business judgment rule. Dkt. No. 93 at 6 26 27 28 7 TVBI also alleges Ms. Pham breached her fiduciary duty by overpaying herself. Dkt. No. 85-1 at 10. However, these allegations do not appear in the Amended Complaint. See Dkt. No. 32. It would be improper to grant summary judgement with respect to allegations that do not appear in the Amended Complaint. 5 1 Ms. Pham next argues she did not breach her fiduciary duty because TVBI knew Lido 2 Enterprise was running Lido Nightclub.8 Dkt. No. 93 at 7 (Opposition). But even if TVBI knew 3 that Lido Enterprise existed, pursuant to its 92% stake in San Yang, TVBI would have had to 4 approve the transaction to dissolve San Yang. Simply knowing that Lido Enterprise exists is 5 meaningless. Ms. Pham has failed to raise a material issue of fact with respect to breach. United States District Court Northern District of California 6 7 B. 8 Ms. Pham argues TVBI has failed to establish not just the amount but the existence of 9 damages on its breach of fiduciary duty claim. By her own admission, the Lido Nightclub had at 10 least $2,000 worth of assets – all of which went to Lido Enterprises, an entity wholly owned and 11 controlled by Ms. Pham. Dkt. No 93 at 4 (Opposition). San Yang’s only asset was the Lido 12 Nightclub. Ms. Pham does not dispute that she owned 8% of San Yang and TVBI owned 92%. 13 Thus, at a minimum, TVBI was entitled to 92% of the $2,000 of which it received none. Damages 14 The existence of damages for purposes of the breach of fiduciary duty claim has been 15 established. Because TVBI has established all the necessary elements, summary judgment with 16 respect to liability on its second cause of action for breach of fiduciary duty is proper. 17 18 II. Fifth Cause of Action: Breach of Contract 19 “[T]he elements of a cause of action for breach of contract are (1) the existence of the 20 contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) 21 the resulting damages to plaintiff.” Oasis West Realty, LLC v. Goldman, 51 Cal.4th 811, 821, 124 22 Cal. Rptr. 3d 256, 250 P.3d 1115 (2001). 23 24 25 26 27 28 8 Ms. Pham argues TVBI was on notice that Lido Enterprise was running Lido Nightclub because TVBI received profit and loss statements for San Yang that referred to Lido Enterprise. Dkt. No. 93 at 7. Ms. Pham cites to a declaration from her accountant, Vicky Nguyen, which states profit and loss statements were sent to TVBI until February 2016, when they stopped being sent because “TVBI stopped requesting them.” Dkt. No. 93-2 ¶ 9 (Nguyen Decl. In Support of Opposition). Notably, Ms. Pham does not attach or otherwise submit copies of such statements as evidence. Further, TVBI denies receiving such statements and notes that even if they had, they did not receive any statements, by Ms. Nguyen’s own admission, after February 2016. Dkt. No. 94 at 7. Lido Nightclub was dissolved in March 2016; thus any alleged profit and loss statements TVBI did receive would not have put it on notice of the dissolution. Id. 6 1 TVBI alleges “Pham breached the Settlement Agreement by failing to pay the monthly 2 payments due to TVBI, by failing to make any profit distributions to TVBI, and by failing to provide 3 monthly financial statements to TVBI.” Dkt. No. 32 ¶ 69. 4 In her opposition, Ms. Pham does not dispute whether she breached; rather, she argues the 5 amount of damages are still very much at issue. She even estimates that “at the end of the day … 6 TVBI could end up owing her money .…”9 Dkt. No. 93 at 8 (Opposition). While the Court will 7 refrain from deciding the exact amount of damages due to TVBI at this time, the suggestion that 8 TVBI will owe Ms. Pham money strikes the Court as highly unlikely. 9 10 Because Ms. Pham does raise not any material issues of fact with respect to the breach of contract claim, summary judgment of liability is proper. United States District Court Northern District of California 11 CONCLUSION 12 13 For the reasons stated above, the Court hereby GRANTS plaintiff TVBI’s motion for partial 14 summary judgment with respect to liability on the second and fifth causes of action for breach of 15 fiduciary duty and breach of contract respectively. The amount of damages for both causes of action 16 must be determined at trial. 17 18 19 IT IS SO ORDERED. Dated: April 23, 2019 ______________________________________ SUSAN ILLSTON United States District Judge 20 21 22 23 24 25 26 27 28 9 Ms. Pham claims to have contributed $289,366.97 of her personal funds to Lido Nightclub that she argues should offset any alleged damages to TVBI. Dkt. No. 93-1 at ¶ 34; Dkt. No. 93-3 (Lowenthal Decl. Ex. A – copies of checks from Ms. Pham to Lido Enterprise). However, of these contributions, Pham contributed all but $10,000 to Lido Enterprise – not Lido Nightclub – the former Ms. Pham admits she exclusively operates and controls. Id. 7
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
