Facts

On Feb. 10, 2005, Chong Lee and Yong Lee, plaintiffs, and Pom Kim and Ki Kim, defendants, entered into an operating agreement for Murrieta 15 Investors LLC. Pom was supposed to convey certain property in Riverside County to Murrieta 15 Investors. Under the contract, Chong would have a 35 percent interest in the company while Yong and Ki would each have a 15 and 50 percent interest in the company, respectively.

On Feb. 23, 2005, Pom transferred the property to Murrieta 15 Investors and the parties met with city and county officials to go over the details of the development. The parties agreed to put the development on hold because of these discussions. Ki made several offers to sell the property as permitted by the contract. On July 19, 2005, Ki re-conveyed the property to Pom without members' votes. On July 28, 2005, Pom conveyed the property to Rancho Glenoaks Limited Partnership.

PLAINTIFFS' CONTENTIONS:
The plaintiffs alleged Ki tried to sell the property to Kwak, but did not tell her that the parcel had no utilities or that ingress existed only one parcel. Chong claimed he told Kwak of Ki's misrepresentations, and Chong told Kwak that an adjacent property could be obtained for a lower price.

The plaintiffs alleged breach of contract, fraudulent conveyance, breach of fiduciary duty, duty of loyalty, and duty of care.

DEFENDANTS' CONTENTIONS:
The defendants cross-claimed and sought rescission of the contract. The defendants also sought damages for fraud and intentional interference with prospective economic advantage. The defendants alleged plaintiffs promised to develop the property and pay them money within 30 days of signing the contract.

Settlement Discussions

The plaintiffs requested $300,000 and defendants offered $20,000.

Damages

The plaintiffs claimed $3,500,000 compensatory damages and $1 million in punitive damages.

Result

After a bench trial, Chong was awarded $265,300, and Yong was awarded $113,700 against the Kims.

Other Information

FILING DATE: Oct. 13, 2005.