Lin v. Ambassador Properties

Filed 4/17/06 Lin v. Ambassador Properties CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, John M. Watson, Judge. Reversed and remanded.

Pheil & Associates and David B. Pheil for Plaintiffs and Appellants.

Law Offices of Frank Satalino and Frank A. Satalino for Defendants and Respondents.

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Plaintiffs Hsiuh Chin Lin (Lin), Hsiang Lan Tung Lin, and Yea Chang (USA), Inc., (Yea Chang) appeal a judgment in favor of defendants Ambassador Properties, Inc., Diamond 2000 Construction, Inc., Yuh-Pyng Jou, Stelian Onufrei, Michael Joseph Shelley, David Lin, and Eduard Simionescu on plaintiffs' suit seeking to strike certain promissory notes and deeds of trust recorded against plaintiffs' hotel. Plaintiffs contend the trial court's statement of decision is inadequate and substantial evidence does not support its finding that plaintiffs owed defendant $363,000 for work performed on plaintiffs' hotel.

We agree the statement of decision is deficient because it fails to make any finding on a material issue at trial, i.e., whether the promissory notes and trust deeds were procured by fraud or mistake. Although substantial evidence supports the other trial court findings, we reverse and remand for a more complete statement of decision.

I

Factual and Procedural Background

Lin is the owner of the Best Inn Hotel in Buena Park, California. Although Lin moved to the United States from Taiwan in 1982, he has limited skill in the English language. When Lin became ill from diabetes and a malfunctioning kidney, he arranged with a company named Rapid Apex to operate and perform repairs on the hotel. Rapid Apex attempted to purchase the hotel from Lin, but a dispute arose and Rapid Apex sued Lin for a return of its purchase deposit. The parties settled the lawsuit when Lin agreed to pay Rapid Apex $460,000 and resume control of the hotel. In December 2001, a still ailing Lin requested defendant Ambassador Properties, Inc., (Ambassador) to take over hotel management. Shortly thereafter, Ambassador hired defendant Diamond 2000 Construction, Inc., (Diamond) to make hotel repairs. Specifically, Diamond agreed to repair the hotel's north and south buildings for $300,000 and the east building for an estimated cost of $560,000.

In May 2002, Ambassador agreed to purchase the hotel from Lin for $3.8 million. The down payment for the transaction was to consist of Ambassador's release of two notes in the amounts of $250,000 and $550,000, and deeds of trust secured by the hotel. The sale to Ambassador fell through, however, because a lis pendens from Lin's prior suit with Rapid Apex had not been expunged.

Plaintiffs filed a complaint seeking injunctive and declaratory relief, and damages under a number of legal theories. The complaint alleged Lin never authorized Ambassador to make major repairs to the hotel, and that defendants misled Lin into executing the notes and trust deeds by telling him they would not be recorded against the hotel. The case culminated in a bench trial which focused principally on the causes of action seeking to rescind or cancel the notes and trust deeds recorded against the hotel.

The trial judge issued a tentative ruling in favor of defendants, but reduced the notes from $800,000 to $363,000. Plaintiffs filed a request for a statement of decision, and defendants filed a request for clarification, seeking to have the trial court address additional matters in the statement of decision, and requested a hearing. Responding to plaintiffs' request, the trial court issued a minute order entitled â€