United States District Court, S.D. New York
Kevin L. Smith, David A. Sifre, Michele L. Pahmer, Stroock & Stroock & Lavan, LLP, New York, New York, for the Plaintiff Alphonse Hotel Corporation.
George Bochetto, David P. Heim, Albert Belmonst, Bochetto & Lentz, P.C., Philadelphia, PA, for the Defendant Nam Tran.
OPINION & ORDER
DENISE COTE, District Judge.
Plaintiff Alphonse Hotel Corporation ("AHC"), brings a motion for partial summary judgment pursuant to Rule 56, Fed.R.Civ.P. AHC requests an order dismissing defendant Nam Tran's ("Nam") eight counterclaims ("Counterclaims"), which seek a declaratory judgment that an oral joint venture agreement (the "Joint Venture") existed between Nam and AHC, and relief in connection with a purported breach of that Joint Venture, as well as a declaratory judgment that a lease purportedly entered into by AHC and Nam in connection with the former Franklin Chocolate Factory at 2101 Washington Avenue in Philadelphia, Pennsylvania (the "Lease" and the "Property") is enforceable, and for relief in connection with a purported breach of the Lease. AHC requests an order granting AHC's first and third claims in its amended complaint, to wit, a declaration that the Lease is void, and a declaration that there is no enforceable Joint Venture agreement between AHC and Nam. For the following reasons, AHC's motion is granted in full.
The following facts are uncontroverted or taken in the light most favorable to Nam. AHC is a New York corporation. AHC owns and manages several real estate properties. One of those properties is the Property which is the subject of this dispute. The Property is described by Nam as an "enormous abandoned four-story former chocolate factory and warehouse." It was acquired by AHC on February 7, 2007, for $5, 750, 000.
Defendant Nam is the oldest son of Truong Dinh Tran ("Truong"), now deceased. Truong was the founder and former President of AHC. Upon his death in May of 2012, Truong owned eighty percent of the shares of AHC. The remaining shares were, and are, held five percent each by Sang K. Nguyen, Hung Nguyen ("Hung"), Cham Nguyen ("Cham"), and Hoa Pham. Truong served as the President and sole director of AHC until he suffered a stroke in September 2008. Following the stroke, AHC added two seats to its board of directors and appointed Hung and Cham as directors, in addition to Truong. Truong stepped down as President of AHC in September or October of 2010. Hung was elected President of AHC in a "Unanimous Written Consent of the Board of Directors, " which states that it is "executed... as of September 30, 2010, " but which is notarized and dated October 27, 2010.
Truong died intestate in May of 2012. Upon Truong's death, control of AHC and Truong's estate was contested. Two lawsuits were instigated: one by shareholders of AHC in the Supreme Court of New York, County of New York ("Shareholder Litigation"), and one by claimants to Truong's estate in the Surrogates Court of New York County ("Estate Litigation"). In October of 2012 the courts overseeing the Shareholder Litigation and the Estate Litigation appointed the Honorable Stanley Parness, a former Supreme Court Justice, as Temporary Administrator of Truong's estate ("Administrator"). The Administrator thereby took control of Truong's 80% share of AHC, and in April of - he assumed management of AHC as its President and sole director.
Upon assuming his position, the Administrator discovered that AHC owned the Property. The Administrator ultimately decided that it was in the interest of AHC to sell the Property. In searching for the keys to the property, the Administrator learned that Nam was the purported lessee of the Property. In response to the Administrator's inquiries, Nam produced the Lease between AHC and Nam, naming Nam as the lessee of the Property and AHC as the lessor.
On October 10, 2013, AHC commenced a declaratory judgment action in the Supreme Court of New York, County of New York, seeking a judgment that the Lease is invalid, as well as money damages for Nam's use and occupancy of the Property since October 18, 2010. Nam removed the action to this Court pursuant to 28 U.S.C. § 1441 on November 4, 2013. AHC filed an amended complaint on December 4. Nam answered the amended complaint on February 7, 2014. With that answer, Nam pled the eight Counterclaims addressed to the existence of the alleged Joint Venture, which Nam contends was entered into prior to the 2007 acquisition of the Property. Nam also seeks to recover for AHC's purported breach of the terms of the alleged Joint Venture. The Lease and the alleged Joint Venture will be described below.
I. Joint Venture
Nam contends that he entered into an oral joint venture agreement with Truong (acting on behalf of AHC) at some time in or before 2007, to develop the then dilapidated Property into a renovated mixed use property to be called "New Vietnam." The Joint Venture purportedly planned that "New Vietnam" would contain a "Vietnamese Cultural Center, " as well as other residential and commercial development. Nam submits no documentary evidence mentioning the existence of the alleged Joint Venture. Instead, Nam submits his own declaration testifying to the existence of the Joint Venture, a declaration of Nam's wife, Ha Chu Tran ("Ha Chu") testifying to actions undertaken in securing regulatory approvals to redevelop the Property purportedly in the name of the Joint Venture, various documents evidencing actions undertaken to secure design and regulatory approval for the redevelopment of the Property, and a copy of the Lease, which Nam contends was executed to secure Nam's stake in the Joint Venture during the period of redevelopment.
Nam asserts that under the terms of the Joint Venture AHC was to provide the capital for the redevelopment of the Property, and Nam and his family would provide the "sweat equity" by working with professionals to design the redevelopment of the Property, and to manage the redeveloped property.
Nam describes the terms of the Joint Venture as follows:
(i) AHC would purchase an appropriate property in Philadelphia for redevelopment, (ii) the redevelopment, construction and carrying costs for the property would be funded entirely by AHC, and (iii) the time, labor and energy necessary for the process of redeveloping, managing and subletting the property would be handled entirely by Nam and his family.
Nam describes his responsibilities in connection with the Joint Venture in the following way:
It was further agreed and understood that (i) Nam would be named the lessee on a long-term lease for the property, (ii) Nam would be responsible for overseeing the development and the operational management of the redeveloped facility for a minimum of twenty years, (iii) during the leasehold period, Nam would benefit economically through the receipt of rents, sub-rents and other fees collected from the operation of the redeveloped property and that (iv) at end of leasehold period, the redeveloped real estate would be surrendered to AHC at a greatly appreciated value.
AHC paid all costs associated with the renovation. Nam states that significant redevelopment and rehabilitation of the Property was required before it could fulfill the purpose of the Joint Venture and become a Vietnamese Cultural Center and mixed use facility. Nam's describes in detail several actions taken by "Nam and his family" to design the proposed New Vietnam center, to obtain community support for the project, and to secure various governmental approvals for the redevelopment. Nam states that the redevelopment work was handled "primarily [by] Ha Chu, " Nam's wife, who Nam states was selected by Truong and Nam to be the primary manager of the Joint Venture.
The Lease is dated October 18, 2010, and purports to take effect on that date, but has the date October 22, 2010 next to the signature lines. It names "Nam T Tran" as the "Lessee, " and "Alphonse Hotel Corp" as the "Lessor." Truong had suffered a stroke in September 2008 and an "x" appears on the Lease above his typewritten name. Hung has signed the Lease as a ...