Developer of "Viet Nam Town" in San Jose takes deposits but doesn't build. $3.13 million
Developer takes deposits to build mixed-use community and market to Vietnamese Americans in San Jose; declares bankruptcy before project is built.
- Case Name: Del Piero, Bankruptcy Trustee, v. Lap Tang and Ha Ly
- Court and Case Number: Santa Clara County Superior Court, Case 1-13-CV-254614
- Date of Verdict or Judgment: Tuesday, April 04, 2017
- Date Action was Filed: Wednesday, October 23, 2013
- Type of Action: Breach of Contract
- Judge or Arbitrator(s): Hon. Neal Cabrinha
Plaintiffs: Marc Del Piero, Bankruptcy Trustee for Estate of Hai and Lieng Truong
Defendants: Lap Thanh Tang, Ha Vinh Ly
- Type of Result: Bench Verdict
- Gross Verdict or Award: $2,000,000 plus prejudgment interest of $1,134,000
Award as to each Defendant:
Joint and several liability
- Trial or Arbitration Time: 4 days.
- Post Trial Motions & Post-Verdict Settlements: Defendants plan to appeal the verdict based upon error of law.
Attorney for the Plaintiff:
Victorian Legal Center by James Hand, Oakland.
Attorney for the Defendant:
Law Offices of Ismael Perez by Ismael Perez, San Jose.
Mark Oto, San Jose.
Facts and Background
Facts and Background:
TWN Investment Group LLC was formed to buy and develop a Hewlitt Packard site on Story Road in San Jose. It planned to build 214 commercial condos and market them to the Vietnamese community as "Vietnam Town," where Vietnamese merchants would open restaurants, dental practices, CPA offices, and the like. It planned to finance the acquisition and development primarily through buyer deposits. Hai Truong put down a $2,000,000 deposit to buy several units, including a large one for operation of a grocery store. TWN was unable to complete the development and filed bankruptcy. The buyers were the only creditors.
Truong filed suit against two of TWN's principals, Lap Thanh Tang and Ha Vinh Ly, because they had promised the bank in writing that they would repay buyer deposits (the bank was worried the buyers' lien rights would be senior to the bank's construction loan). Truong himself entered into bankruptcy. The trustee for his bankruptcy, Marc Del Piero, substituted-in in Truong's state court suit.
That the buyers were only incidental beneficiaries of Tang's and Ly's promise to repay buyer deposits. Also, that when Tang and Ly settled the Los Angeles Superior Court lawsuit the bank filed against them, it effectively rescinded their promise to repay buyer deposits. Defendants also contended that plaintiff's claims were barred by the four year statute of limitations under CCP Sections 312, 337 in that plaintiff's claims accrued on June 30, 2018, the last date promised for completion of the units and plaintiff file his way after the four year limitation.
The Court agreed with plaintiff – the buyers were intended beneficiaries of Tang's and Ly's promise to repay buyer deposits. It awarded plaintiff $2,000,000 plus prejudgment interest of $1,134,000. Note: Tang and Ly earlier turned down an offer to settle for $275,000.