Blair Construction Co. v. Chung

Opinion

2 t: 32 3

4 IN THE SUPERIOR COURT OF GUAi'Nl 5

6 BLA!IR CONSTRUCTION CO., LTD., ) CIVIL CA!SE NO. CV1753-09 7 ) Plaintiff, ) 8 ) ) FINDINGS OF FA!CT A!ND 9 ) CONCLUSIONS OF LA!W vs. ) (Bench Trial) 10 ) ) 11 PETER S. CHUNG, EA!RTH ROAlD ) (GUA!M), INC. and JUNG DO KWON ) 12 ) Defendants. ) 13

14 INTRODUCTION 15 This matter carne before the Honorable Anita A. Sukola on July 13, 2011, July 14, 2011 16

17 October 6, 2011, December 7, 2011, February 9, 2012, and May 2, 2012, for a bench trial.

18 Attorney Mun Su Park represented Blair Construction Co., LTD. ("Plaintiff). Attorney Philli 19 Torres represented PeterS. Chung, Earth Road (Guam) Inc., and Jung Do Kwon ("Defendants"). 20 The Court took the matter under advisement on October 31, 2012, after the parties confirrne 21 that all information in the case including their proposed findings of fact and conclusions of la 22

23 were submitted for the Court's consideration. Upon review of the evidence, oral and writte

24 arguments, and legal authorities presented by the parties, the Court hereby issues its Findings o 25 Fact and Conclusions of Law. 26 FINDINGS OF FA!CT 27 By preponderance of the evidence, the Court makes the following findings of fact: 28

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page I of9 Findings of Fact and Conclusions of Law-Bench Trial 1. Plaintiff Blair Construction Co., LTD. ("Plaintiff') is, and at all relevant times, was 1

2 corporation organized and existing under the laws of the Republic of Korea, with it

3 principal place of business located in Seoul, South Korea. Transcri t JDAASC 4 (7/13/2011) at 2:54:56 5 2. Hueng Koo Lee ("Mr. Lee") is, and at all relevant times, was the owner and presiden 6 of Blair Construction Co. /d. at 2:37:18. 7

8 3. Defendant Peter S. Chung ("Defendant Chung") is a licensed real estate broker i

9 Guam and is the owner of a real estate broker company based in Guam known a 10 "Expo Realty." !d. 11 4. Defendant Earth Road (Guam), Inc. is and at all relevant times, was a corporatio 12 organized and existing under the laws of Guam, with its principal place of busines 13

14 located at 201 Harmon Road, Harmon Industrial Park, Guam.

15 5. Defendant Jung Do Kwon is, and at all relevant times, was a director and treasurer o 16 Earth Road. 17 6. On or about January 24, 2008, Mr. Lee purchased Unit 502, Oka Towers, throug 18

19 Defendant Chung. Defendant Chung was the real estate broker for the transactio

20 and dealt primarily with Ms. Ja Young Yim, who assisted Mr. Lee. 21 7. In January 2008, around the period of closing of Unit 502, Mr. Lee asked Defendan 22 Chung to find him a "suitable" property for a housing development. Mr. Lee was no 23 specific in identifying what characteristics he wanted in the property but Defendan 24

25 Chung began looking for large parcels of property that could be used fo

26 development. Defendant Chung did find certain properties and reviewed thos 27 properties with Mr. Lee and Ms. Yim. 28

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page2 of9 Findings of Fact and Conclusions of Law-Bench Trial 8. Ms. Yim was Plaintiff's local representative and received her job assignments an 1

2 instructions from Mr. Lee. Plaintiff Company paid Ms. Yim for her services, livin

3 expenses including hotel and automobile on Guam. See De osition of Ja Youn Yi 4 (Dec. 20, 2010). 5 9. In early 2008, Mr. Lee and Ms. Yim were shown a number of different lots t 6 determine if they were suitable for development. One of these lots was Lot 7134 7

8 Yigo, Guam.

9 10. On February 1, 2008, Defendant Earth Road entered into a Contract to purchase Lo 10 7134, Yigo, Guam, from its owner, David Lujan. 11 11. Defendant Earth Road paid an initial deposit of Twenty Thousand Dollars ($20,000 12 on February 1, 2008, a second deposit of Fifty Thousand Dollars ($50,000) on Marc 13

14 7, 2008 and a third deposit of Twenty-Five Thousand Dollars ($25,000) on March 20

15 2008. All of those deposits were irrevocably released to Mr. David Lujan before th 16 sale was closed. 17 12. Plaintiff, through Mr. Lee, indicated its serious interest in Lot 7134 in March 2008. 18

19 Through Defendant Chung and Ms. Yim, Mr. Lee began to negotiate with Defendan

20 Earth Road for purchase of the property. Defendant Earth Road initially wanted Tw 21 Million Eight Hundred Thousand Dollars ($2,800,000) for the lot. 22 13. Mr. Lee entered into a Contract to purchase Lot 7134 from Defendant Earth Road o 23 March 10, 2008 for Two Million Four Hundred Fifty Thousand Dollars ($2,450,000). 24

25 The contract was initially signed by Ms. Yim for the purchaser, and Mr. Lee signe

26 later. 27

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page 3 of9 Findings of Fact and Conclusions of Law-Bench Trial 14. On April 18, 2012, GSP sent Expo Realty a deposit check for Fifty Thousand Dollar 1

2 ($50,000) (Exhibit 11 ).

3 15. Prior to entering into the Agreement, Defendant Chung had provide Ms. Yim and Mr 4 Lee, the duly authorized representatives of GSP, along with Plaintiff, a propert 5 transaction report ("PTR") on Lot 7134. The PTR stated that David Lujan was th 6 owner of Lot 7134. (Exhibit 6). 7

8 16. Ms. Yim and Mr. Lee were aware that although the PTR stated that David Lujan w

9 the owner of Lot 7134, they would be purchasing the lot from Defendant Earth Road. 10 See Deposition of Ja Young Yim (Dec. 20, 2010). 11 17. Ms. Yim and Mr. Lee were aware of Defendant Chung's affiliation with Defendan 12

13 Earth Road.

14 18. The closing for the sale of Lot 7134 from David Lujan to Defendant Earth Roa

15 occurred immediately before the sale of Lot 7134 from Defendant Earth Road t 16 GSP. Earth Road realized a gain of Eight Hundred Thousand Dollars ($800,000) o 17 the transaction. Defendant Chung disclosed to Plaintiff the financial details of thi 18

19 transaction. (Exhibits 14 and 15).

20 CONCLUSIONS OF LAW 21 The principal issues arising out of the facts developed at trial are: 1) whether Defendant 22 Peter S. Chung was acting as an agent for Plaintiff? If so, what duties did he owe his Principal? 23 Secondly, whether Ms. Ja Young Yim was an agent for Plaintiff such that communications 24

25 made to Ms. Yim can be imputed to Plaintiff?

26 Guam law defines an agent as follows: 27 An agent is one who represents another, called the principal, in dealings with 28 third persons. Such representation is called agency.

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page4 of9 Findings of Fact and Conclusions of Law-Bench Trial 18 GCA § 20101 (2005). 1

2 "Any person having capacity to contract may appoint an agent, and any person may be an

3 agent." 18 GCA § 20102. Moreover, "an agent may be authorized to do any acts which his 4 principal might do, except those to which the latter is bound to give his personal attention." 18 5 GCA § 20201. Likewise, "[a]n agent represents his principal for all purposes within the scope 6 of his actual or ostensible authority, and all the rights and liabilities which would accrue to the 7

8 agent from transactions within such limit, if they had been entered into on his own account,

9 accrue to the principal." 18 GCA § 20301. As to the first question, Defendant Chung admitted 10 that he was acting as real estate agent in these transactions. In carrying out his duties, he dealt 11 with Mr. Lee on a couple of occasions but Defendant Chung primarily dealt with Ms. Yim. In 12 effectuating the transaction for the purchase of Lot 7134, Yigo, Guam, Defendant Chung was 13

14 the principal broker handling the transactions and Ms. Sue Kim was the buyer's agent involved

15 in Plaintiffs sales transaction. 16 The law contemplates that a situation may arise wherein a real estate agent acting at 17 once as agent and a principal; an actor can be both a buyer and a seller, or act on their behalf, as 18

19 long as he has disclosed the fact. See e.g. Roberts v. Lomato, 112 Cal.App.4th 1553, 1563

20 (2003) ("If an agent ... purchases ... property, the agent's fiduciary duties continue even though 21 he or she may be a principal in the transaction." Taborsky v. Mathews, 121 So.2d 61 (FL 1960). 22 "Such an agent is charged with the duty of fullest disclosure of all material facts concerning the 23 transaction that might affect the principal's decision" Roberts, supra. Plaintiff has produced no 24

25 case which expressly forbids Defendant from entering into such an arrangement, provided that

26 proper disclosures have been made. As demonstrated by testimony at trial, those disclosures 27 were made by Defendant Chung both to Mr. Lee, and to Plaintiffs agent on Guam, Ms. Yim. 28

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page 5 of9 Findings of fact and Conclusions of Law-Bench Trial As to the second question, Ms. Yim' s status as an agent of Plaintiff is apparent from her 1

2 testimony. "An agency relationship is created when there is mutual consent, express or implied,

3 that the agent is to act on behalf and for the benefit of the principal, and subject to the 4 principal's control." 2A C.J.S. Agency§ 32 (2013). "There is no particular mode by which an 5 agency must be established, and usually no particular method or form of expression is 6 required." !d. In the instant case, Ms. Yim testified in deposition that her job was to "establish 7

8 the company GSP and Blair in Guam." Deposition of Ja Young Yim at 6 (Dec. 20, 2010). She

9 stated that she executed a purchase agreement for a $300,000 piece of property in Oka Towers 10 on behalf of Mr. Lee in 2007. !d. at 9. She also testified that she received a management-level 11 salary in Korea and living expenses in Guam; that she was acting at Mr. Lee's direction when 12 she began looking at property for development on Guam in 2008; and that she made regular 13

14 reports to Mr. Lee when she was on Guam and he was in Korea. !d. at 12-13, 16. This

15 testimony was corroborated by Defendant's testimony as to his dealings with Ms. Yim, 16 including his testimony that in March 2010 he was asked by Ms. Yim to negotiate for the 17 purchase of Lot 7134. 18

19 As the sole finder of fact in this case, the Court must weigh these corroborating accounts

20 against Mr. Lee's testimony that Ms. Yim was not his agent or plaintiffs agent or employee or 21 otherwise authorized to conduct the sales transaction at issue, and that Ms. Yim never disclosed 22 that Plaintiff would be buying the property from Defendant Earth Road instead of owner David 23 Lujan. Mr. Lee's testimony in this regard is less credible than that of Ms. Yim because unlike 24

25 Ms. Yim, he is an interested party who stands to gain in this suit by denying the agency

26 relationship; it is also contradicted by the documents in evidence. The Land Purchase 27 Agreement itself was first signed by Ms. Yim on March 10, 2008, and afterwards by Mr. Lee. 28

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page6 of9 Findings of Fact and Conclusions of Law-Bench Trial (Exhibit 9). Thus, as a matter of law, an agency relationship existed between Ms. Yim and 1

2 Plaintiff at all times during this transaction.

3 Upon establishing that Ms. Yim was Plaintiffs agent in this transaction, it is necessary 4 to establish what Defendant Chung disclosed to her. "As against a principal, both principal and 5 agent are deemed to have notice of whatever either has notice of, and ought, in good faith and 6 the exercise of ordinary care and diligence, to communicate to the other." 18 GCA § 20303. 7

8 Thus, information conveyed to Ms. Yim may be imputed to Plaintiff, whether actually

9 communicated by her or not. In the present case, however, imputation is unnecessary because 10 she actually communicated the information in question, directly and through regular written 11 reports. 12 Ms. Yim testified that she knew that Jung Do Kwon, who signed the Land Purchase 13

14 Agreement (Exhibit 9) as Seller, owned Earth Road, Inc. Deposition of Ja Young Yim at 19

15 (Dec. 20, 201 0). She knew that Defendant Chung was affiliated with Earth Road, Inc. !d. at 34, 16 38-39. She testified that when she was looking into the purchase of Lot 7134, the owner of 17 record was not Earth Road but David Lujan. !d. at 20. She explicitly stated that she was 18

19 informed of this by Defendant Chung. She also stated that before March 10, 2008, Defendant

20 Chung explained to her that when Plaintiff decided to purchase the property, Earth Road had 21 already entered into a purchase agreement with David Lujan. !d. at 20, 21, 24, 39, 41, 42, 46. 22 Likewise, Mr. Lee was informed both by Defendant Chung and Ms. Yim, directly and through 23 written reports. !d. at 23-26, 29-30, 46. Again, this contradicts the testimony of Mr. Lee, but 24

25 corroborates the testimony of Defendant Chung.

26 Defendant Chung testified that he was aware of his disclosure obligations to Plaintiff 27 and its agents and that he disclosed the details of Lot 7134 and its pending transaction at the 28

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page 7 of9 Findings of Fact and Conclusions of Law-Bench Trial time he initially showed the property to Mr. Lee and Ms. Yim in January 2010. At that time, 1

2 Mr. Lee was not interested in acquiring the property.

3 Defendant Chung testified that in March 201 0 he was asked by Ms. Yim to negotiate for 4 the purchase of Lot 7134. Defendant Chung testified that he disclosed to Ms. Yim that the 5 property was under a sales contract to Defendant Earth Road. Nonetheless, Ms. Yim instructed 6 Defendant Chung to move forward with negotiations. 7

8 The Court may therefore resolve this case by a simple analysis of agency and imputed

9 notice. Defendant Chung, as agent to Plaintiff, had a fiduciary duty of disclosure to his 10 principal. He fulfilled this both by direct communications with Mr. Lee, and by direct 11 communication with Ms. Yim. Ms. Yim, as the agent of Plaintiff on Guam, not only imputed 12 notice to the Plaintiff, but also actually gave notice to the Plaintiff through regular reports. 13

14 Defendant Chung fully disclosed to Plaintiff all facts regarding his involvement in this

15 transaction. He did not withhold information from Plaintiff about his relationship with Earth 16 Road, Earth Road's purchase of Lot 7134, the original ownership of Lot 7134, or any other 17 circumstance related to this transaction. As such, he violated no duties and perpetrated no fraud 18

19 on Plaintiff, who entered into the transaction for the purchase of Lot 7134 fully informed of all

20 surrounding facts and circumstances. 21 CONCLUSION 22 By preponderance of the evidence and based on the foregoing reasons, the Court finds 23 the following: 24

25 1. Defendant Chung fully upheld his fiduciary duties to Plaintiff by disclosing all facts

26 and circumstances relative to the sale and purchase of Lot 7134. 27

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page 8 of9 Findings of Fact and Conclusions of Law-Bench Trial 2. While Plaintiff may be experiencing regret for not purchasing the property sooner 1

2 for a lower price, Plaintiff entered into the transaction with full awareness of the

3 facts. 4 3. The law does not function to allow Plaintiff to go back in time to take advantage of a 5 missed opportunity, or to transfer the burden of his hesitation onto the Defendant in 6 this matter. 7

8 4. The parties are responsible for their respective costs and attorney's fees.

9 SO ORDERED this 28th day of FEBRUARY, 2013. 10

15 HONORABLE ANITA A. SUKOLA Judge, Superior Court of Guam 16

Blair Construction Co., LTD v. PeterS. Chung, Earth Road (Guam) Inc. and Jung Do Kwon Page9 of9 Findings of Fact and Conclusions of Law-Bench Trial