Facts

On Dec. 7, 2006, plaintiffs Peter Kanamoni and Kenny Hai entered into a written contract with defendants Tu A. Nguyen and Kieu Loan Nguyen for the purchase and operation of four vehicles (two commercial buses and two vans) in a commercial bus line, AA Auto Bus.

Each partner was to come up with $40,000: one-third to Peter Kanamoni, one-third to Hai and one-third to the Nguyens. The Nguyens represented that the vehicles belonged to them and AA Vacation and Tour Company. The Nguyens further explained the operation of a bus line, allowed visual inspection of the vehicles, and showed Kanamoni and Hai the permit/license issued by the California Public Utilities Commission ("PUC"). The Nguyens represented that all the vehicles were in good condition.

Hai provided his $40,000 share to the Nguyens on or about June 2006. Kanamoni provided a $40,000 security lien on his daughter, Nora Kanamoni's house.

Shortly after entering into the written contract, Kanamoni and Hai discovered that the title to one of the vehicles belonged to Nguyens' sister-in-law, Suong Hong Tran; that the vehicles needed repairs in order to operate; and that the insurance had lapsed and that the operational permit from PUC had been revoked as a result.

PLAINTIFF'S CONTENTIONS:
Plaintiffs alleged that they were defrauded by the defendants.

Kanamoni and Hai contended that they assumed the responsibility to pay for the maintenance and repair because AA Auto Bus was their investment and because the Nguyens failed to do anything. Kanamoni and Hai contended that, even though the vehicles were to be transferred to AA Auto Bus for a bus line operation, the Nguyens continued to use the vehicles for AA Trucking School, a business entity, which was not part of the partnership agreement. Allegedly, the Nguyens collected tuition fees but did not compensate Kanamoni and Hai from profits thereof for use of the vehicles.

DEFENDANT'S CONTENTIONS:
Defendants claimed that plaintiffs' causes of action for breach of contract, fraud and quiet title were without merit.

Defendants filed a cross-action for breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, conversion, accounting and constructive trust.

Damages

Plaintiffs claimed that they had been damaged, at the very least, in the sum of $50,120, and demanded the return of the note/lien.

Result

Judgment in favor of Peter Kanamoni and Hai against defendants for breach of contract and fraud. Partnership between the parties is dissolved. Hai is to recover $10,500 from Tu A. Nguyen and $10,500 from Peter Kanamoni. Title to house is quieted to Nora Kanamoni. Defendants to retain commercial buses.

Other Information

FILING DATE: Aug. 8, 2007. Defendants will appeal.