Alphonse Hotel Corp. v. Tran

828 F.3d 146, 2016 U.S. App. LEXIS 12712, 2016 WL 3675321
CourtCourt of Appeals for the Second Circuit
DecidedJuly 11, 2016
DocketDocket No. 14-3447-cv
StatusPublished
Cited by92 cases

This text of 828 F.3d 146 (Alphonse Hotel Corp. v. Tran) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alphonse Hotel Corp. v. Tran, 828 F.3d 146, 2016 U.S. App. LEXIS 12712, 2016 WL 3675321 (2d Cir. 2016).

Opinion

HALL, Circuit Judge:

This case concerns a lease (“the Lease”) and a purported joint venture agreement (“the Joint Venture Agreement”) entered into between a son and his father, the now-deceased former president and majority shareholder of a real estate development [149]*149corporation. The Lease grants the son, defendant-counter-plaintiff-appellant Nam T. Tran (“Nam”), control over a multimillion-dollar property for a period of 20 years in exchange for a payment of $20. The Joint Venture Agreement covers Nam’s development of this property. After the father’s death, the corporation, plaintiff-counter-defendant-appellee Alphonse Hotel Corporation (“AHC”), under the control of a court-appointed temporary administrator, sought damages for Nam’s use and occupancy of the property and a judgment declaring that the Lease and Joint Venture Agreement were void. Nam counterclaimed, seeking a declaratory judgment that those agreements were valid and seeking damages for AHC’s breaches of both agreements. The district court granted AHC’s motion for partial summary judgment on its declaratory judgment claims and denied Nam’s requests for additional discovery. On appeal, we consider: (1) whether Nam’s requests for additional discovery in his Rule 56(d) motion identified specific materials in AHC’s possession that were sufficiently germane to the case and not cumulative such that the district court abused its discretion in denying that motion for production; (2) whether under New York law the Lease, which was executed by Nam’s father in his former capacity as president of AHC, is void as a gift or corporate waste; and (3) if the Lease is void, whether under Pennsylvania law the integration clause contained in the Lease survives such that a separate prior-in-time oral agreement to enter a joint venture is voided by that clause. For the reasons that follow, we affirm the district court’s rulings denying Nam’s discovery request and granting summary judgment to AHC.

BACKGROUND

AHC is a New York closely held corporation that owns and manages real estate, including, among other properties, the former Franklin Chocolate Factory in Philadelphia, PA (“the Property”), which is the subject of this case. Nam, a Pennsylvania citizen, is the eldest son of AHC’s former president, Truong Dinh Tran (“Truong”). Upon his death in 2012, Truong owned 80% of AHC’s shares, and the four mothers of his children, Sang Kay Nguyen, Hung Nguyen (“Hung”), Cham Nguyen (“Cham”), and Hoa Pham, each owned 5%. Truong served as AHC’s president and sole director until September 2008, when he suffered a stroke, at which point he added two seats to the board of directors and appointed two of the mothers, Hung and Cham, to fill those seats. Truong resigned as president in September or October 2010, and Hung was elected president.

Truong died intestate in May 2012; control of AHC and Truong’s estate was contested. Shareholders of AHC along with claimants to Truong’s estate commenced litigation. The New York State courts overseeing these actions appointed a temporary administrator of the estate, who took control of Truong’s 80% share of AHC and, in April 2013, assumed the roles of president and sole director.

Nam alleges that sometime around 2007 he entered into the Joint Venture Agreement with Truong, who was acting on behalf of AHC, to develop the then dilapidated Property into a mixed-use development. Nam submitted no documentary evidence of this agreement, only his own declaration testifying to its existence and a declaration of his wife testifying to actions, purportedly taken in the name of the Joint Venture, toward securing design and regulatory approvals for redevelopment of the Property. According to Nam, under the Joint Venture AHC would provide the capital for redevelopment and pay to maintain the Property, and in exchange Nam and his [150]*150family would provide the “sweat equity” to design and manage the redeveloped property. As Nam explains in his declaration, AHC facilitated this Joint Venture Agreement by leasing the property to Nam for 20 years, with rights to sublet the property. During the leasehold period, Nam would benefit through receipt of rents and other fees from operation of the redeveloped property, while AHC would benefit by receiving, at the end of 20 years, a higher-value property.

As for the Lease, AHC has no corporate records of it ever being approved, and no copies could be found among the corporation’s files. The Lease that has been admitted into evidence is the one that Nam produced when AHC’s director asked him about the Property after discovering a record indicating that Nam was the lessee. According to its terms, the Lease is between AHC, as lessor, and Nam, as lessee. Although the parties dispute the effective dates of the Lease and Truong’s resignation, and, depending on that timing, whether Truong actually had the authority to execute the Lease on behalf of AHC, the parties agreed for purposes of the summary judgment motion to assume that the signatures were effective.1

The Lease provides that Nam will pay AHC a total of $20 in rent for the entire term of 20 years. The Lease states that AHC “will not sell the ... property during the 20 years term of this Lease.” J.A. at 376. The Lease does not mention the Joint Venture Agreement, but contains several provisions relevant to its existence.

First, the Lease contains an integration clause:

The Lessor and Lessee hereby agree that this Lease sets forth all the promises, agreements, conditions and understandings between the Lessor ... and the Lessee relative to the demised premises, and that there are no promises, agreements, conditions or understandings, either oral or written, between them other than as herein set forth, and any subsequent alteration, amendment, change or addition' to this Lease shall not be binding upon the Lessor or Lessee unless reduced to writing and signed by them.

J.A. at 380.

Second, the Lease provides that AHC has no obligation to make alterations to the Property:

The Lessor has let the demised premises in their present condition and without any representation on the part of the Lessor, his officers, employees, servants and/or agents. It is understood and agreed that the Lessor is under no duty to make alterations at the time of letting or at any time thereafter.

J.A. at 378.

The Lease also prohibits Nam from leasing the Property, or making any improvements, without the written consent of AHC:

[Ljessee covenants and agrees that he will do none of the following things without the consent in writing of lessor: ... (b) ... sub-lease the demised premises, or any part thereof, or permit another person ... to occupy the demised premises, or any part thereof .... (d) Make [151]*151any alterations, improvements, or additions to the demised premises ....

On October 10, 2013, AHC, through its director, filed an action in the New York Supreme Court seeking both a declaratory judgment that the Lease was invalid and money damages for Nam’s use and occupancy of the Leased Property. In November 2013, Nam removed the action to federal court pursuant to 28 U.S.C. § 1441.2 AHC filed an amended complaint, seeking an additional declaration that the alleged oral Joint Venture Agreement was invalid.

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Bluebook (online)
828 F.3d 146, 2016 U.S. App. LEXIS 12712, 2016 WL 3675321, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alphonse-hotel-corp-v-tran-ca2-2016.