Facts

Plaintiff Ocean Fresh Trading is a seafood importer based in Southern California. Ocean Fresh is owned by three siblings, Judy Wu, Yuen Dang, and Jimmie Dang. In February 2003, Ocean Fresh obtained a line of credit from defendant East West Bank. Ocean Fresh's loan officer at East West Bank, Markus Kamarga, was a friend of and former loan officer to Jimmie Dang. Over the course of their 19-year relationship, Markus Kamarga and Jimmie Dang developed both a business and personal relationship.

In 2006, while Jimmie Dang was an officer and director of Ocean Fresh, he started a competing seafood company, Sea Lion. Jimmie Dang started Sea Lion without the permission or knowledge of Judy Wu and Yuen Dang. In mid-2006, Jimmie Dang opened a line of credit for Sea Lion at East West Bank. Markus Kamarga prepared the loan application. Shortly after the loan was prepared, Markus Kamarga's wife started to work at Sea Lion as a salesperson. Markus Kamarga did not disclose his wife's employment at Sea Lion to East West Bank.

Judy Wu and Yuen Dang ultimately discovered that Jimmie Dang owned Sea Lion and that Kamarga's wife worked there. They also learned that Kamarga's wife was listed as the Chief Financial Officer of Sea Lion on a California Statement of Information. Upon further investigation, Judy Wu and Yuen Dang learned that Markus Kamarga sold a car to Jimmie Dang, and that Markus Kamarga and Jimmie Dang also took a family vacation together. Markus Kamarga did not disclose the foregoing facts to his employer, East West Bank.

Judy Wu and Yuen Dang claimed that Markus Kamarga had a conflict of interest and that he violated bank policy by allowing Jimmie Dang to open an account for a competing business while still an owner and director of Ocean Fresh. Judy Wu and Yuen Dang reported Markus Kamarga's improper conduct to his superiors at East West Bank.

In October 2006, Judy Wu and Yuen Dang ousted Jimmie Dang as president of Ocean Fresh, and had disputes concerning the ownership and management of the company. East West Bank became insecure with respect to repayment of its line of credit to Ocean Fresh. In November 2006, East West Bank froze Ocean Fresh's line of credit based, among others, on a violation of the financial loan covenants with East West Bank, as well as Jimmie Dang's decision to revoke his personal guaranty.

On behalf of Ocean Fresh, Judy Wu and Yuen Dang filed a lawsuit against their brother Jimmie Dang. They alleged that Jimmie Dang breached his fiduciary duties to Ocean Fresh by starting a competing seafood importing company, embezzling money, and stealing customers from Ocean Fresh. Ocean Fresh also brought suit against East West Bank and Markus Kamarga for, among other things, aiding and abetting Jimmie Dang's breaches of fiduciary duty, breaching the loan agreement between East West Bank and Ocean Fresh, deceit, and interference with prospective economic relations.

PLAINTIFF'S CONTENTIONS:
Ocean Fresh argued that Markus Kamarga and East West Bank aided and abetted Jimmie Dang in embezzling funds, stealing customers, and ultimately shutting down the company.

Judy Wu and Yuen Dang testified that East West Bank placed Ocean Fresh's line of credit in default with the intent of assisting Jimmie Dang. They further testified that East West Bank had no legitimate basis for calling the default, and that the alleged violation of the loan covenants was merely a pretext. Judy Wu and Yuen Dang stated that their business would have continued to realize profits but for East West Bank's improper conduct.

Ocean Fresh relied on Markus Kamarga's conflict of interest in arguing that he and East West Bank aided and abetted Jimmie Dang. Ocean Fresh also emphasized that East West Bank continued its relationship with Jimmie Dang even after learning that Jimmie Dang allegedly stole money and customers Ocean Fresh. And Ocean Fresh elicited evidence to show that Markus Kamarga prepared loan documentation for Jimmie Dang's competing company even after East West Bank was aware of the conflict of interest.

Ocean Fresh offered the testimony of a banking expert, who testified that Markus Kamarga and East West Bank violated generally accepted bank policies in deciding to place Ocean Fresh in default and loaning money to a competitor of Ocean Fresh. Ocean Fresh also presented a damages expert who testified that it suffered millions in lost profits as a result of the defendants' improper conduct. During Jimmie Dang's examination, he admitted to starting Sea Lion without the knowledge or consent of his siblings and to taking customers away from Ocean Fresh. Jimmie Dang further admitted to using Ocean Fresh's line of credit to purchase seafood on behalf of his other company, Sea Lion.

DEFENDANT'S CONTENTIONS:
East West Bank admitted that Markus Kamarga had a conflict of interest, but argued that Ocean Fresh suffered no harm as a result of this conflict of interest. Instead, East West Bank argued that Ocean Fresh caused its own demise. East West Bank elicited testimony from Judy Wu and Yuen Dang to show that they had each withdrawn substantial amounts of cash from the business during the last few years and that they disagreed about the ownership and management of Ocean Fresh.

East West Bank further argued that it acted reasonably in calling Ocean Fresh's line of credit into default. East West Bank presented a banking expert who testified that it complied with all laws and procedures in collecting the outstanding loan amount.

Result

Unanimous jury verdicts for defendants.

Deliberation

two hours

Length

six days