Preview
Filed
11J uly 18 A10:12
Gary Fitzsimmons
District Clerk
Dallas District
CAUSE NO. 10-08730-K
KI PONG NA, CHONG SOOK NA, IN THE DISTRICT COURT
COCO C-STORE, INC, and
KSCJ INVESTMENTS, INC.,
PLAINTIFFS,
vs.
K-192™ JUDICIAL DISTRICT
UNITED CENTRAL BANK,
DONG SIK YOO a/k/a JIMMY YOO,
IN SUK SUNG, YOUNG HO AHN,
HANS S. YOO and HANS S, YOO, P.C.,
DEFENDANTS. DALLAS COUNTY, TEXAS
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION
COMES NOW, KI PONG NA, CHONG SOOK NA, COCO C-STORE, INC,, and KSCJ
INVESTMENTS, INC. (“Plaintiffs”), and files this their Plaintiffs’ Original Petition, complaining of
UNITED CENTRAL BANK, DONG SIK YOO a/k/a JIMMY YOO, IN SUK SUNG, YOUNG HO
AHN, HANS S. YOO and HANS S. YOO, P.C. (“Defendants”), and for complaint and cause of
action would respectfully show the Court the following:
I
DISCOVERY LEVEL
Pursuant to Rule 190.4, discovery is intended to be conducted under Level 3.
PLAINTIFFS’
PLAINT FIRST AMENDED ORIGINAL PETITION
—————_—E_E__
EE re — Page 1
IL.
PARTIES AND VENUE
1 Plaintiffs KI PONG NA and CHONG SOOK NA are individuals residing in Dallas
County, Texas,
2 Plaintiff COCO C-STORE, INC. is a domestic for-profit corporation which is
authorized to do business in the State of Texas. Plaintiff has a place of business in Dallas County,
Texas.
3 Plaintiff KSC] INVESTMENTS, INC, is a domestic for-profit corporation
corporation which is authorized to do business in the State of Texas. Plaintiffhas a place of business
in Dallas County, Texas.
4 Defendant UNITED CENTRAL BANK is a Texas State Financial Institution
(“Defendant UCB”) with its principle place of business at 4555 West Walnut Street, Garland, Dallas
County, Texas 75042. Defendant UCB has already appeared and answered herein.
5 Defendant DONG SIK YOO a/k/a JIMMY YOO is an individual (“Defendant J.
Yoo”) who has already appeared and answered herein.
6 Defendant IN SUK SUNG is an individual (“Defendant Sung”) who may be served
with process at 3911 Grandbury Drive, Dallas, Dailas County, Texas, 75287,
7 Defendant YOUNG HO AHN is an individual (“Defendant Ahn”) who has already
appeared and answered herein.
8 Defendant HANS S. YOO is an individual (“Defendant H, Yoo”) who has already
appeared and answered herein.
9 Defendant HANS S. YOO, P.C. isa professional corporation (“Defendant Hans Yoo,
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 2
P.C.”) with its principle place of business at 2560 Royal Lane, Suite 217, Dallas, Dallas County,
Texas. Defendant Hans Yoo, P.C. has already appeared and answered herein.
III.
FACTS OF CASE
10. The Korean business community is close knit business community which is based on
aculture far different from the normal American business experience. While unique to American
culture, it is an established way of life for the Korean community.
ll. For more than ten years, Plaintiffs (Mr. Na, in particular) have maintained a
longstanding cultural and personal, as well as business, relationship with Jimmy Yoo and the bank of
which he was Chairman of the Board of Directors, and a Director, United Central Bank (“UCB”)
which goes beyond the typical business relationship. That relationship was a special relationship of
the utmost faith and confidence in each other. As an example, on more than one occasion, Mr. Na
was asked by Jimmy Yoo to refinance and/or guarantee UCB loans to other customers as an
accommodation to UCB and in furtherance of this relationship. In return, Jimmy Yoo promised to
locate business opportunities for Plaintiffs, for which UCB would provide financing for the mutual
benefit of Jimmy Yoo and UCB on the one hand, and Plaintiffs or their business entities on the other
hand. The relationship with UCB and Jimmy Yoo was not unlike that of business partners who share
in the profits of business ventures. In addition, with the full knowledge of all Parties (including
UCB), Jimmy Yoo and his business partner, Young Ho Ahn, received disbursements as part of their
participation in the profits of these ventures. UCB and Jimmy Yoo and Mr. Ahn are in control of
this special relationship.
12. One of these ventures involved the purchase of the assets (in 2004) and the later
PLAINTIFES’ FIRST AMENDED ORIGINAL PETITION — Page 3
purchase of the underlying real property (in 2006) for the convenience store known as “Super Buy
Lo” (referred to before acquisition as “Super Buy Lo”) and later renamed when acquired as Coco-C-
Store (hereinafter after acquisition as the “Coco-C-Store”).
13. The purchase of the Super Buy Lo was orchestrated as a part of a three-property,
triangular transfer by Jimmy Yoo while acting in his capacity as a director and Chairman of the
Board of UCB. Mr. Na was initially approached to buy the Super Buy Lo by John Chong. John
Chong told Mr. Na that he was acting at the behest of and on behalf of Jimmy Yoo. As stated by In
Suk Sung at the time of the transaction, the Super Buy Lo (or the entity which owned it) was, on
paper, purchased in 2000 and 100% owned by Mr. Sung, with financing provided by UCB.
However, Mr. Sung later admitted that in fact Young Ho Ahn was a “silent investor” in the Super
Buy Lo, having invested $300,000 without any written agreement. Mr, Sung stated that Mr. Ahn’s
ownership in Super Buy Lo was arranged by, and well known to, Jimmy Yoo (and, therefore, UCB).
It is widely known, and Jimmy Yoo personally admitted, that Mr. Sung owned the Super Buy Lo for
the benefit of Jimmy Yoo and Mr. Ahn. Defendant Jimmy Yoo conspired with the other Defendants
to sell the Store to Plaintiffs, while knowingly and intentionally failing to disclose, and concealing,
the fact that hundreds of thousands of dollars of sales taxes were claimed to have gone unpaid by the
Super Buy Lo to the State of Texas.
14, In 2004, Jimmy Yoo and Mr. Ahn to encouraged Mr. Sung to sell the Super Buy Lo
to Plaintiffs. Initially, Mr. Chong offered to sell Super Buy Lo for $800,000; that offer was declined.
Then, Jimmy Yoo personally interceded in the negotiations wherein he told Mr. Na, and Mr, Sung
confirmed that he was also told by Jimmy Yoo, that Jimmy Yoo and UCB wanted Plaintiffs to
instead pay $1.4 million (consisting of roughly $1.1 million for the business and $300,000 for the
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 4
inventory), a $600,000 higher price even than what Mr. Sung and Mr. Chong were initially asking for
the Super Buy Lo. Jimmy Yoo admitted that he needed Plaintiffs to pay a higher price so “he would
not lose face.” In fact, Plaintiffs later learned from Mr. Sung that Jimmy Yoo wanted the purchase
price increased not only so as to repay the UCB loan, but for the purposes of returning to Mr, Ahn
and Jimmy Yoo their original $300,000 investment, along with an additional $500,000, to be paid to
Mr. Ahn, all of which would be funded out of the sale proceeds, which were in turn funded by a new,
purchase-money loan from UCB. As a consequence, the purchase price for the Coco-C-Store was
elevated to roughly $1,370,419.70, for which Mr. and Mrs. Na made a down-payment of
$578,888.08; of the proceeds of the sale of the Super Buy Lo, $800,000 (the initial $300,000, plus an
additional $500,000, which is believed was shared with Mr. Yoo, and was equal to the amount of the
UCB loan) was paid to Mr. Ahn, and the remaining proceeds were used to pay off the UCB loan of
Super Buy Lo, and to pay Mr. Sung."
15, Shortly before the time of the purchase of the Super Buy Lo, Mr. and Mrs. Na owned
Chan Chan Corp., which owned and operated another liquor store in the vicinity called “John’s Best
Buy Liquor, Beer and Wine” (hereafter, “John’s Liquor”). This liquor store was successful and
operating at a profit, Jimmy Yoo first suggested that the Nas sell John’s Liquor to a corporation
controlled by Mr. Ahn, and then insisted that they lower the price of John’s Liqour from $2.3 million
to $2.1 million, Jimmy Yoo promised Plaintiffs that if they agreed to lower the price of John’s
Liquor, and agreed to pay the higher price for the Store, he would ensure that they were approved for
1 At this same time, Mr. Sung stated that Mr. Ahn owned an interest in Jefferson Beer & Wine which, as the
final part of this three-way transaction, he sold to In Suk Sung, Mr. Ahn did not tell Mr. Sung that his reason for
selling Jefferson Beer & Wine was his knowledge that the area it bordered, where zoning restrictions prohibited
liquor sales, would soon go “wet” and that its revenue would be drastically reduced. Within months of the
acquisition of Jefferson Beer & Wine, the area went “wet” and, shortly thereafter, Mr, Sung went bankrupt.
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 5
a purchase money loan to buy a Shell Station and liquor store owned by Centennial (or one of its
affiliates) at 2750 E. President George Bush Turnpike in Plano, Texas (the “Plano Shell Station”).
That loan was subsequently approved.
16. After the purchase of the Coco-C-Store from Mr, Sung, Jimmy Yoo, on behalf of
UCB, demanded that Plaintiffs take full responsibility for and pay UCB’s indebtedness to KSCJ, Inc.
(“KSCJ”) and its investor owners, Simon Lee, Jin Sup Cho, and Seung Whan Lee, to settle a lawsuit
filed by them against UCB and Jimmy Yoo. Plaintiffs were promised that if they assumed liability
for the Bank’s exposure and resolved the suit, for which UCB was alleged by the plaintiffs to be
liable, that Mr, Na’s company, KP Million, would receive financing from UCB to acquire the real
estate that I had hoped to acquire on which I planned to develop a Korean grocery located near I-35
and Walnut Hill Lane. (That loan to KP Million was later approved by UCB as promised by Jimmy
Yoo.) Settlement of the KSCJ lawsuit was accomplished by Mr. Na’s payment of $200,000 to the
plaintiffs, and UCB’s funding of the remaining balance through loans to Plaintiffs or their
corporations in the amounts of $550,000 and $600,000 (the latter secured by the assets of Mitoo
Corporation), The settlement was funded in this way so that UCB could report that it did not suffer a
“loss” associated with this lawsuit, and after the settlement, Plaintiffs made payments on those loans.
All totaled, Plaintiffs or their corporations assumed or paid $1,350,000 to help UCB and Jimmy Yoo
settle the suit against them.
17. Jimmy Yoo then approached Plaintiffs to buy the real estate on which the Store sits,
which they did in 2006 with financing acquired from UCB. All totaled, the purchase price of the
Covo-C-Store (assets and land) was approximately $2,500,000.00 exclusive of additional funds
invested in the Coco-C-Store. Plaintiffs also later acquired properties adjacent to the Coco-C-Store
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 6
(the store sits on the corner of Dolphin and 1-30) with the plans of later re-developing these
properties collectively.
18. In connection with the purchase of the real estate on which the Coco-C-Store sits, the
original asking price for the properly was $1.2 million, Jimmy Yoo asked Mr. Na whether, if he
were able to persuade the seller to reduce the purchase price of the property, Mr. Na would agree to
split the price difference with him on a 50%-50% basis. Mr. Na agreed. Jimmy Yoo later stated that
he had persuaded the seller to reduce the price to $1.0 million, and asked Mr. Na to pay him half of
the difference under that arrangement, which Mr. Na did by personally delivering Jimmy Yoo
$100,000 in cash at UCB. Jimmy Yoo told Mr, Na he negotiated this price reduction directly with
the owner; Plaintiffs were not involved in the negotiation of the reduced price of the property.
19, In regards to the Plano Shell Station, the purchase price was $5.4 million. Mr. Na,
through his corporation, paid $1.2 million as a down-payment, and UCB funded a $3.0 million
acquisition loan. The remainder of the financing was “owner financing” in the sum of $1.2 million.
In 2006, when Mr. Na was looking to sell the Plano Shell Station, Jimmy Yoo contacted him and
stated that he (Jimmy Yoo) could persuade the holder of the “owner financing” to reduce the $1.2
million obligation to $600,000, but that for doing so Jimmy Yoo expected to receive $200,000 in
cash in exchange. Mr. Na agreed, and when Jimmy Yoo claimed he had persuaded the owner to
reduce the owner financing by half, Mr. Na personally delivered Jimmy Yoo $200,000 in cash at
UCB in Jimmy Yoo’s office in 2006.
20. Since the purchase of the Coco-C-Store, in 2011 Mr. Sung first revealed that between
2000 and 2004, UCB received regular financial reporting regarding the financial condition of the
Store from Mr, Sung and his accountant, Haeyoung Chang, CPA. Mr. Sung also confirmed that
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 7
between five and seven months prior to my purchase of the Store, he and his accountant, Ms. Chang,
became aware that the Comptroller for the State of Texas had initiated an investigation of the Store’s
underpayment of sales taxes to the State, and that there would likely be a liability to the State for
unpaid sales taxes, interest and possibly penalties owing from the Store. At the time of the purchase
of the Coco-C-Store, neither Mr. Sung nor Jimmy Yoo, nor Mr. Ahn, nor anyone from UCB
disclosed to Plaintiffs the existence of any investigation, or of any actual or potential unpaid sales
taxes to be resolved by the prior owner or to be paid in advance of the purchase. Instead, Mr. Sung
admitted that he, knowing of the likely sales tax liability and the Comptroiler’s investigation, did not
disclose to Plaintiffs the existence of what the State claimed was hundreds of thousands of dollars of
unpaid sales taxes owed by the Store to the State of Texas.
21. They concealed the investigation of the unpaid sales taxes from Plaintiffs through the
closing on the sale of the Store. UCB retained Hans Yoo, P. C. to draft the sale agreements for both
sides of the buy-sell agreement, and inconsistent with standard practices in such transactions, Hans
Yoo, P. C. did not procure confirmation that the sales taxes had not been paid, though such
confirmation was obtained by UCB in regards to the John’s Liquor transaction. Given the $500,000
“profit” which was paid to Mr, Ahn and, indirectly, to Mr. Yoo, there were ample funds with which
Mr, Sung and/or the Store could have fully paid or at least largely reduced any unpaid sales tax
obligations to the Comptroller. The sales tax liability was concealed from Plaintiffs so as to ensure
that the sale of the Store went through and, at the same time, to protect Mr. Ahn’s and Mr. Yoo’s
$500,000 “profit” from the sale of the Store.
22. In 2005, Plaintiffs did receive mail addressed to Mr, Sung from the Comptroller.
Without opening the mail, which was addressed to Super Buy Lo, Plaintiffs’ predecessor, Mr. Sung,
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 8
and he came to the Store to retrieve the mail. Plaintiffs were not told until 2011 that this
correspondence was regarding the Compiroller’s assessment of liability against the Store. In 2007,
Mr, Na first became aware of the sales tax issue and brought it to the attention of Jimmy Yoo.
Plaintiffs raised this with Jimmy Yoo because the Comptroller’s demand did not relate to sales taxes
they did not pay, but rather was in relation to sales taxes allegedly not paid by UCB’s former
borrower and the former owner of the Store, Mr. Sung. In this conversation, Jimmy Yoo
unequivocally assured Mr. Na that there must be a mistake, that he would cause someone from UCB
to handle the problem, and that Plaintiffs should not worry about it, With these assurances, and
based on a) the long-standing trust in Mr. Yoo, as well as the multiple loans Plaintiffs and their
businesses had with UCB, and b) the fact that Hans Yoo, P. C., a law firm, had closed the
transaction, Plaintiffs then justifiably believed Jimmy Yoo’s promises that if anything needed to be
done to resolve the tax problem with State, he or someone from UCB would see that it was done.
Therefore, at the time, and in reliance on assurances from UCB and Jimmy Yoo, Plaintiffs neither
took action to protect themselves against liability for these taxes, nor did they take any action against
UCB, having been encouraged instead to wait on the outcome of UCB’s and Jimmy Yoo’s efforts to
resolve the problem.
23. However, neither Jimmy Yoo nor UCB took action to address the unpaid taxes
attributed to the Super Buy Lo while it was owned and operated by Messrs. Ahn and Sung. Plaintiffs
believe and allege that Mr. Yoo and UCB did nothing to address, or cause Messrs. Ahn or Sung to
address, these tax claims, and are am not aware of any action taken either by Jimmy Yoo or UCB in
this regard. Asa result, the Comptroller imposed what it determined as the predecessor’s liability,
including penalties and interest, on Plaintiffs’ business at the Coco-C-Store,
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 9
24, The Defendants named above concealed the facts concerning the existence of the past
due sales taxes on the Store; they further misrepresented the nature of the sales tax problem, and
Jimmy Yoo specifically promised and/or misrepresented that he/JCB would take care of the
problem. Plaintiffs believe based upon the foregoing, and therefore allege, that these last two
misrepresentations were made to induce them to not file suit at that time, and also not to take action
to protect their interests. Plaintiffs relied upon these misrepresentations and omissions and took no
action when they otherwise could have to protect their interests.
25. Much later, Jimmy Yoo told Plaintiffs that UCB was not going to defend the sales tax
liability claim - - which was now being attributed to Plaintiffs’ business as the successor - - and that
Plaintiffs would have to do so. Having little choice at the time, and when doing so was no longer
legally effective, they were forced to attempt to defend the claim. Plaintiff's were referred to counsel
for this purpose by UCB (initially, Tailim Song, who is believed to have had little or no experience
defending Comptroller claims, and later, counsel in Austin), and they attempted defended the sales
tax claim in Austin; however, due to the delays occasioned by the unfulfilled promises of Jimmy
Yoo to deal with this on Plaintiffs’ behalf, the opportunity to successfully defend our liability as
successors of Mr, Sung was already lost, and the decision of the Comptroller was to impose the
predecessor owner’s liability on Plaintiffs, The decision of the State Comptroller became final in
2010, and the Comptroller’s decision was to impose liability on the Store as the successor entity.
The amount allegedly owed to the State for taxes, penalties and interest was, when this lawsuit was
filed, $1,172,214.90, and it continues to climb. Consequently, the Store has now been closed by
order of the State Comptroller’s office and remains closed as of today. After its closure, UCB
foreclosed on the Store itself, and later upon the real property of KSCJ Investments on which the
PLAINTIFFS” FIRST AMENDED ORIGINAL PETITION — Page 10
Store was located.
26. Plaintiffs have spent more than $100,000.00 in attorney fees just in defending the tax
claim with the State Comptroller. Moreover, because the Store has been closed down, Plaintiffs’
investment in it, including inventory and in the business, the real estate, and the payments to the
Bank, has been completely lost. More harmful yet, due to the lost revenue from the Store, the loan
for the purchase of the business, the loan for the Walnut Hill/1-35 land, the KP Miilion loan, and all
other business acquisition loans from UCB (including loans for the properties adjacent to the Store),
have gone into default. Plaintiffs have also continued to pay interest to UCB (which was current
through the middle of January, 2011), on the KP Million loan to stave off repeated threats by UCB to
foreclose on it and, since KP Million is presently undeveloped, it generates no income from which to
make these payments, such that KP Million was being supported by Plaintiffs’ other businesses until
it filed a Chapter 11 bankruptcy. However, due to the losses occasioned by the loss of the Store and
its attendant damage to the revenue stream from our other businesses, it has become impossible for
the other businesses to continue support the debt burden imposed by UCB.
27, All totaled, losses incurred by Plaintiffs are well in excess of $3.0 million, and
continue to climb.
Iv,
COUNT ONE - BREACH OF FIDUCIARY DUTY AND OF GOOD FAITH AND.
FAIR DEALING
Plaintiffs hereby incorporate paragraphs 1 through 27 the same as if set forth herein verbatim.
28. Plaintiffs, Defendant J. Yoo and Defendant UCB had a special relationship of trust,
loyalty and confidence, Furthermore, Plaintiffs and these Defendants formed a special relationship
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION -- Page 11
of trust and confidence to protect and preserve the assets of their joint ventures and to fully disclose
material facts that were detrimental to their business ventures, Defendants also profited directly
from their business dealings with Plaintiffs in a manner that was not arms-length during the existence
of this special relationship.
29. The conduct of Defendant UCB and Defendant J. Yoo constitutes breach of fiduciary
duty. The conduct of these Defendants also constitutes breach of their duty of good faith and fair
dealing. In particular, Defendants bore a duty to disclose known facts, which they both failed to
disclose and apparently concealed, concerning the sales tax liabilities of the Super Buy Lo.
30. Plaintiffs would show that as a result of the foregoing conduct, the Store has been
closed. As a result, Plaintiff(s) have been damaged in an amount that exceeds the minimum
jurisdictional limits of this Court, and is well in excess of $3.0 million. Defendants’ conduct entitles
Plaintiffs to actual damages, as well as equitable disgorgement of funds obtained as a consequence of
a breach of duty. In addition, Plaintiffs would show that the conduct of Defendants was done with
conscious indifference to the rights of Plaintiffs and constitutes conduct for which the law allows the
imposition of punitive damages.
Vv.
COUNT TWO - FRAUD
Plaintiffs hereby incorporate by reference Paragraphs | through 30 the same as set forth
herein verbatim.
31. Defendants misrepresented and/or concealed the facts concerning the existence of the
past due sales taxes on the Store so that Plaintiffs would remain unaware of the existence of the
problem and that their predecessor’s liability may be their own; consequently, limitations are tolled
PLAINTIFFS? FIRST AMENDED ORIGINAL PETITION — Page 12
during this period in accordance with the discovery rule. In addition, after acquisition of the Coco-
C-Store, when Plaintiffs became aware of the alleged sales tax liability, Defendants misrepresented
the nature of the sales tax problem, and also misrepresented that Defendants would take care of the
problem. The last two misrepresentations were made to induce Plaintiffs to not file suit at that time,
such that limitations was tolled during that time and until the determination of the successor liability
to Plaintiffs had taken place. The misrepresentations and omissions of material fact made by
Defendants were made knowingly and with the intention that the misrepresentations and omissions
be relied upon by Plaintiffs to their detriment. Plaintiffs relied upon these misrepresentations and
omissions to their detriment. Plaintiffs’ reliance on Defendant’s statements and omissions was
reasonable and foreseeable and was the proximate cause of damages to Plaintiff. Plaintiffs would
show that the conduct of Defendants constitutes common law fraud,
32. Plaintiffs would further show that Defendants knew that the statements were false
when they made them or made them recklessly without any knowledge of the truth and as a positive
assertion, Defendants made these misrepresentations with the intention that they be acted upon by
Plaintiffs, and in fact Plaintiffs acted in reliance upon the misrepresentations. Additionally,
Defendants benefitted from the foregoing misrepresentations.
33, Plaintiffs reasonably relicd on Defendants’ statements and omissions and as result of
said reliance have suffered damages in an amount in excess of the minimum jurisdictional limits of
this court. In addition, Plaintiffs would show that the conduct of Defendants was done with
conscious indifference to the rights of Plaintiffs and constitutes conduct for which the law allows the
imposition of punitive damages.
PLAINTIFES’ FIRST AMENDED ORIGINAL PETITION - Page 13
Vi
COUNT THREE-NEGLIGENT MISREPRESENTATION
Plaintiffs hereby incorporates by reference Paragraphs 1 through 33 the same as set forth
herein verbatim.
34. In the alternative, Plaintiffs would show that the conduct of Defendants constitutes
negligent misrepresentation in that a reasonably prudent entity/person in the position of Defendants
would not have made the misrepresentations and/or omissions which are more specifically set forth
above. Furthermore, Plaintiffs would show that the misrepresentations and omissions made by
Defendants were made negligently. As a result of Defendants’ negligent conduct, Plaintiffs have
suffered actual damages in an amount in excess of the minimum jurisdictional limits of this Court.
35. The foregoing conduct of Defendants constitutes negligent misrepresentation, As a
result of the foregoing negligent misrepresentations and the lesser-included duty of good faith by
Defendants, Plaintiffs have been damaged in an amount in excess of the minimum jurisdictional
limits of this Court.
VIL.
COUNT FOUR -NEGLIGENCE
Plaintiffs hereby incorporate by reference Paragraphs 1 through 35 the same as set forth
herein verbatim.
36. Plaintiffs would show that the foregoing conduct of Defendants constitutes
negligence.
37. As a result, Plaintiffs have been damaged in an amount in excess of the minimum
jurisdictional limits of this Court.
PLAINTIEFS? FIRST AMENDED ORIGINAL PETITION — Page 14
VIII.
COUNT FIVE - BREACH OF CONTRACT
Plaintiffs hereby incorporate by reference Paragraphs | through 37 the same as set forth
herein verbatim,
38. In the alternative, Plaintiffs and Defendant(s) entered into several agreements that
constitute the joint business relationship of the Parties. As part of that relationship, Defendant
Jimmy Yoo agreed that the past due taxes would be paid and that problem with that State
Comptroller would be resolved on behalf of Plaintiffs. Defendants have breached these agreements
by failing to pay the sales taxes as agreed and by failing to resolve the problem as agreed.
39. The foregoing conduct constitutes breach of contract, for which Plaintiffs have been
damaged in an amount in excess of the minimum jurisdictional limits of the Court.
IX,
COUNT SIX — CONSPIRACY
Plaintiffs hereby incorporate paragraphs 1 through 39 the same as if set forth herein verbatim.
40. One or more Defendants were members, and constituted a combination of persons
knowingly acting together for the accomplishment of common, unlawful objectives or purposes, and
one, several or all of them used or authorized the use of unlawful means for accomplishing their
purposes. There was a meeting of the minds between one or more Defendants on the object and the
course of action, and the Defendants were responsible both individually and as representatives of the
collective for the wrongful conduct in furtherance of the conspiracy. Based upon the above facts,
one or more Defendants committed overt, unlawful acts in furtherance of their common objectives or
purposes, which acts were a proximate cause of harm to Plaintiffs, Accordingly, the Defendants who
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 15
conspired to share joint and several responsibility for the damages resulting from their combination.
41. In addition to the foregoing, Plaintiffs would show that most if not all individual
Defendants shared in the proceeds of the sale of the Store and the monthly rental from 2004 through
2006. In addition, and upon information and belief, all Defendants knowingly conspired with each
other to defraud Plaintiff(s) into paying for the past due sales taxes and to induce Plaintiffs to not file
suit to recover those damages.
xX,
COUNT SEVEN - EXEMPLARY DAMAGES
Plaintiffs hereby incorporate paragraphs | through 38 the same as if set forth herein verbatim.
42, The acts and omissions of Defendant(s) complained of herein were committed
knowingly, willfully, intentionally, with actual awareness, and with the specific and predetermined
intention of enriching one or more Defendants at the expense of Plaintiff. In order to punish such
Defendants for such unconscionable overreaching and to deter such actions and/or omissions in the
future, Plaintiffs also seek recovery from those Defendants for exemplary and/or punitive damages as
provided by the Texas Civil Practice and Remedies Code, including without limitation Chapter 41.
Xi.
ATTORNEYS FEES
43, Plaintiffs have repeatedly presented the claim arising out of the aforestated causes of
action to Defendants, or their agents, and demanded payment thereof; and, although more than thirty-
one (31) days have expired since presentment and demands were made, this claim has not been
satisfied. By reason thereof, Plaintiffs have been required to employ the undersigned attorneys to
initiate and maintain this action and has contracted to pay said attorneys a reasonable attorneys’ fees
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 16
for such service. Plaintiffs are entitled to recover its reasonable attorneys’ fees in accordance with
the Texas Civil Practice and Remedies Code §38.001(1), (7) and (8).
XI.
44, Plaintiffs would further show this Court that it is entitled to pre-judgment interest at
the highest legal rate per annum. In addition, all conditions precedent to the filing and enforcement
of Plaintiffs’ claims have occurred or been met.
XII,
SPOLIATION NOTICE
45. Plaintiffs hereby demand that Defendants take all appropriate measures to preserve
and maintain the integrity of, and prevent any deletion, alteration or destruction of, any and all
documents and data relative to its management of the subject properties, including, without
limitation:
a) Defendants’ communications with the Plaintiffs or any of them;
b) Defendants communications with third parties in connection with the subject
properties to include tenants, employees of Defendants, and independent contractors retained by or
for Defendants and/or purporting to provide services at the subject properties or to Defendants in
connection therewith;
¢) Defendants’ banking and financial records relative to all monetary transactions
regarding the subject properties; and
4) computers or other media for electronic storage containing any electronic data relative
to the above and/or the subject properties, particularly including any financial or bookkeeping data
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 17
maintained using bookkeeping software, such as Peachtree or Quickbooks, and also including the
data stored and organized by or using the “One Site” program.
46, This demand specifically requires and includes the suspension of any policies,
procedures or programs with regard to the automatic destruction, deletion or overwriting of
documents or data, whether in hard copy or on any electronic storage media (as well as any ad hoc
deletion or destruction of data), and requires that Defendants take immediate steps to do protect and
preserve all such documents or data.
47. To the extent that Defendants fail to immediately take any and all appropriate and
necessary measures to preserve and maintain the integrity of the data and documents relative to the
subject properties and any such data or documents are in any way altered, destroyed, deleted or
otherwise compromised hereafter, Plaintiffs will assert that such was willful and intentional, that
such conduct constitutes wrongful “spoliation” of material evidence, and that the documents or data
affected thereby must be presumed to have been helpful to Plaintiffs in connection with their claims
in this litigation.
XIV.
REQUEST FOR JURY TRIAL
48. Plaintiffs requests that the case be tried to a jury, and hereby tender the jury fee along
with the filing charges for this lawsuit.
WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray that Defendants be cited to
appear and answer herein, and that upon final trial, Plaintiffs have and recover judgment against
Defendants, jointly and severally, as follows:
a, For actual damages against Defendants for Breach of Fiduciary Duty and Duty of Good
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 18
Faith and Fair Dealing;
For actual damages against Defendants for Fraud;
For actual damages against Defendants for Negligent Misrepresentations;
For actual damages against Defendants for Negligence;
For actual damages against Defendants for breach of contract;
For actual damages against Defendants for conspiracy;
For exemplary and/or punitive damages against one or more Defendants as provided
by the Texas Civil Practice and Remedies Code, including without limitation Chapter
4].
h For reasonable and necessary trial and appellate attorneys’ fees incurred by Plaintiffs in
prosecuting this action;
For pre-judgment interest at the highest legal rate per annum;
For post-judgment interest at the highest legal rate per annum from the date of
judgment until paid in full;
For all costs of court; and
For such other and further relief, both general and special, at law or in equity, to
which Plaintiffs may show themselves justly entitled.
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 19
Respectfully submitted,
STROMBERG STOCK, P.L.L.C.
By
Mark Stromberg
State Bar No. 19408830
Two Lincoln Centre
5420 LBJ Freeway, Suite 300
Dallas, Texas 75240
Telephone: (972) 458-5353
Facsimile: (972) 770-2156
HOWARD F. CARTER, JR. PC
Attorneys & Counselors
by Elsah
F Ce To/ly pemie
State Bar No. 03916500
Centura Tower 1
14185 Dallas Parkway - Suite 1275
Dallas, Texas 75254
Telephone: 972-455-2001
Telecopier: 972-455-2015
Email: carter carter-holmes.com
ATTORNEYS FOR PLAINTIFFS
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 20
CERTIFICATE OF SERVICE
This is to certify that a true and correct copy of the above and foregoing Plaintiffs Firsst
Amended Ori inal Petition was served by email and facsimile upon the following attorneys of record
§
on this the 18" day of July, 2011:
Robbie Malone
Robbie Malone, PLLC
Northpark Central, Suite 1850
8750 North Central Expressway
Dallas, Texas 75231
Facsimile: 214-346-2631
Email: rmalone@rmalonelaw,com
Counsel for Hans S, Yoo and Hans S. Yoo P.C.
Craig A. Capua
West & Associates, L.L.P.
320 South R.L. Thornton Frwy., Suite 300
Dallas, Texas 75203
Facsimile: 214-941-1399
Email: craig.c@westllp.com
Counsel for Jimmy Yoo
Timothy R. McCormick
Timothy E. Hudson
Thompson & Knight, LLP
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Facsimile: 214-969-1751
Email: Tim.Hudson@tlklaw.com
and
Lindy D, Jones
Laura Worsham
Jones, Allen & Fuquay, L.L.P.
8828 Greenville Avenue
Dallas, Texas 75243
Facsimile: 214-343-7455
Email: ljones@jonesallen.com and !worsham@jonesallen,com
Counsel for UCB
MARK STROMBERG
PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 21
Preview
Filed 11J uly 18 A10:12 Gary Fitzsimmons District Clerk Dallas District CAUSE NO. 10-08730-K KI PONG NA, CHONG SOOK NA, IN THE DISTRICT COURT COCO C-STORE, INC, and KSCJ INVESTMENTS, INC., PLAINTIFFS, vs. K-192™ JUDICIAL DISTRICT UNITED CENTRAL BANK, DONG SIK YOO a/k/a JIMMY YOO, IN SUK SUNG, YOUNG HO AHN, HANS S. YOO and HANS S, YOO, P.C., DEFENDANTS. DALLAS COUNTY, TEXAS PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION COMES NOW, KI PONG NA, CHONG SOOK NA, COCO C-STORE, INC,, and KSCJ INVESTMENTS, INC. (“Plaintiffs”), and files this their Plaintiffs’ Original Petition, complaining of UNITED CENTRAL BANK, DONG SIK YOO a/k/a JIMMY YOO, IN SUK SUNG, YOUNG HO AHN, HANS S. YOO and HANS S. YOO, P.C. (“Defendants”), and for complaint and cause of action would respectfully show the Court the following: I DISCOVERY LEVEL Pursuant to Rule 190.4, discovery is intended to be conducted under Level 3. PLAINTIFFS’ PLAINT FIRST AMENDED ORIGINAL PETITION —————_—E_E__ EE re — Page 1 IL. PARTIES AND VENUE 1 Plaintiffs KI PONG NA and CHONG SOOK NA are individuals residing in Dallas County, Texas, 2 Plaintiff COCO C-STORE, INC. is a domestic for-profit corporation which is authorized to do business in the State of Texas. Plaintiff has a place of business in Dallas County, Texas. 3 Plaintiff KSC] INVESTMENTS, INC, is a domestic for-profit corporation corporation which is authorized to do business in the State of Texas. Plaintiffhas a place of business in Dallas County, Texas. 4 Defendant UNITED CENTRAL BANK is a Texas State Financial Institution (“Defendant UCB”) with its principle place of business at 4555 West Walnut Street, Garland, Dallas County, Texas 75042. Defendant UCB has already appeared and answered herein. 5 Defendant DONG SIK YOO a/k/a JIMMY YOO is an individual (“Defendant J. Yoo”) who has already appeared and answered herein. 6 Defendant IN SUK SUNG is an individual (“Defendant Sung”) who may be served with process at 3911 Grandbury Drive, Dallas, Dailas County, Texas, 75287, 7 Defendant YOUNG HO AHN is an individual (“Defendant Ahn”) who has already appeared and answered herein. 8 Defendant HANS S. YOO is an individual (“Defendant H, Yoo”) who has already appeared and answered herein. 9 Defendant HANS S. YOO, P.C. isa professional corporation (“Defendant Hans Yoo, PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 2 P.C.”) with its principle place of business at 2560 Royal Lane, Suite 217, Dallas, Dallas County, Texas. Defendant Hans Yoo, P.C. has already appeared and answered herein. III. FACTS OF CASE 10. The Korean business community is close knit business community which is based on aculture far different from the normal American business experience. While unique to American culture, it is an established way of life for the Korean community. ll. For more than ten years, Plaintiffs (Mr. Na, in particular) have maintained a longstanding cultural and personal, as well as business, relationship with Jimmy Yoo and the bank of which he was Chairman of the Board of Directors, and a Director, United Central Bank (“UCB”) which goes beyond the typical business relationship. That relationship was a special relationship of the utmost faith and confidence in each other. As an example, on more than one occasion, Mr. Na was asked by Jimmy Yoo to refinance and/or guarantee UCB loans to other customers as an accommodation to UCB and in furtherance of this relationship. In return, Jimmy Yoo promised to locate business opportunities for Plaintiffs, for which UCB would provide financing for the mutual benefit of Jimmy Yoo and UCB on the one hand, and Plaintiffs or their business entities on the other hand. The relationship with UCB and Jimmy Yoo was not unlike that of business partners who share in the profits of business ventures. In addition, with the full knowledge of all Parties (including UCB), Jimmy Yoo and his business partner, Young Ho Ahn, received disbursements as part of their participation in the profits of these ventures. UCB and Jimmy Yoo and Mr. Ahn are in control of this special relationship. 12. One of these ventures involved the purchase of the assets (in 2004) and the later PLAINTIFES’ FIRST AMENDED ORIGINAL PETITION — Page 3 purchase of the underlying real property (in 2006) for the convenience store known as “Super Buy Lo” (referred to before acquisition as “Super Buy Lo”) and later renamed when acquired as Coco-C- Store (hereinafter after acquisition as the “Coco-C-Store”). 13. The purchase of the Super Buy Lo was orchestrated as a part of a three-property, triangular transfer by Jimmy Yoo while acting in his capacity as a director and Chairman of the Board of UCB. Mr. Na was initially approached to buy the Super Buy Lo by John Chong. John Chong told Mr. Na that he was acting at the behest of and on behalf of Jimmy Yoo. As stated by In Suk Sung at the time of the transaction, the Super Buy Lo (or the entity which owned it) was, on paper, purchased in 2000 and 100% owned by Mr. Sung, with financing provided by UCB. However, Mr. Sung later admitted that in fact Young Ho Ahn was a “silent investor” in the Super Buy Lo, having invested $300,000 without any written agreement. Mr, Sung stated that Mr. Ahn’s ownership in Super Buy Lo was arranged by, and well known to, Jimmy Yoo (and, therefore, UCB). It is widely known, and Jimmy Yoo personally admitted, that Mr. Sung owned the Super Buy Lo for the benefit of Jimmy Yoo and Mr. Ahn. Defendant Jimmy Yoo conspired with the other Defendants to sell the Store to Plaintiffs, while knowingly and intentionally failing to disclose, and concealing, the fact that hundreds of thousands of dollars of sales taxes were claimed to have gone unpaid by the Super Buy Lo to the State of Texas. 14, In 2004, Jimmy Yoo and Mr. Ahn to encouraged Mr. Sung to sell the Super Buy Lo to Plaintiffs. Initially, Mr. Chong offered to sell Super Buy Lo for $800,000; that offer was declined. Then, Jimmy Yoo personally interceded in the negotiations wherein he told Mr. Na, and Mr, Sung confirmed that he was also told by Jimmy Yoo, that Jimmy Yoo and UCB wanted Plaintiffs to instead pay $1.4 million (consisting of roughly $1.1 million for the business and $300,000 for the PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 4 inventory), a $600,000 higher price even than what Mr. Sung and Mr. Chong were initially asking for the Super Buy Lo. Jimmy Yoo admitted that he needed Plaintiffs to pay a higher price so “he would not lose face.” In fact, Plaintiffs later learned from Mr. Sung that Jimmy Yoo wanted the purchase price increased not only so as to repay the UCB loan, but for the purposes of returning to Mr, Ahn and Jimmy Yoo their original $300,000 investment, along with an additional $500,000, to be paid to Mr. Ahn, all of which would be funded out of the sale proceeds, which were in turn funded by a new, purchase-money loan from UCB. As a consequence, the purchase price for the Coco-C-Store was elevated to roughly $1,370,419.70, for which Mr. and Mrs. Na made a down-payment of $578,888.08; of the proceeds of the sale of the Super Buy Lo, $800,000 (the initial $300,000, plus an additional $500,000, which is believed was shared with Mr. Yoo, and was equal to the amount of the UCB loan) was paid to Mr. Ahn, and the remaining proceeds were used to pay off the UCB loan of Super Buy Lo, and to pay Mr. Sung." 15, Shortly before the time of the purchase of the Super Buy Lo, Mr. and Mrs. Na owned Chan Chan Corp., which owned and operated another liquor store in the vicinity called “John’s Best Buy Liquor, Beer and Wine” (hereafter, “John’s Liquor”). This liquor store was successful and operating at a profit, Jimmy Yoo first suggested that the Nas sell John’s Liquor to a corporation controlled by Mr. Ahn, and then insisted that they lower the price of John’s Liqour from $2.3 million to $2.1 million, Jimmy Yoo promised Plaintiffs that if they agreed to lower the price of John’s Liquor, and agreed to pay the higher price for the Store, he would ensure that they were approved for 1 At this same time, Mr. Sung stated that Mr. Ahn owned an interest in Jefferson Beer & Wine which, as the final part of this three-way transaction, he sold to In Suk Sung, Mr. Ahn did not tell Mr. Sung that his reason for selling Jefferson Beer & Wine was his knowledge that the area it bordered, where zoning restrictions prohibited liquor sales, would soon go “wet” and that its revenue would be drastically reduced. Within months of the acquisition of Jefferson Beer & Wine, the area went “wet” and, shortly thereafter, Mr, Sung went bankrupt. PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 5 a purchase money loan to buy a Shell Station and liquor store owned by Centennial (or one of its affiliates) at 2750 E. President George Bush Turnpike in Plano, Texas (the “Plano Shell Station”). That loan was subsequently approved. 16. After the purchase of the Coco-C-Store from Mr, Sung, Jimmy Yoo, on behalf of UCB, demanded that Plaintiffs take full responsibility for and pay UCB’s indebtedness to KSCJ, Inc. (“KSCJ”) and its investor owners, Simon Lee, Jin Sup Cho, and Seung Whan Lee, to settle a lawsuit filed by them against UCB and Jimmy Yoo. Plaintiffs were promised that if they assumed liability for the Bank’s exposure and resolved the suit, for which UCB was alleged by the plaintiffs to be liable, that Mr, Na’s company, KP Million, would receive financing from UCB to acquire the real estate that I had hoped to acquire on which I planned to develop a Korean grocery located near I-35 and Walnut Hill Lane. (That loan to KP Million was later approved by UCB as promised by Jimmy Yoo.) Settlement of the KSCJ lawsuit was accomplished by Mr. Na’s payment of $200,000 to the plaintiffs, and UCB’s funding of the remaining balance through loans to Plaintiffs or their corporations in the amounts of $550,000 and $600,000 (the latter secured by the assets of Mitoo Corporation), The settlement was funded in this way so that UCB could report that it did not suffer a “loss” associated with this lawsuit, and after the settlement, Plaintiffs made payments on those loans. All totaled, Plaintiffs or their corporations assumed or paid $1,350,000 to help UCB and Jimmy Yoo settle the suit against them. 17. Jimmy Yoo then approached Plaintiffs to buy the real estate on which the Store sits, which they did in 2006 with financing acquired from UCB. All totaled, the purchase price of the Covo-C-Store (assets and land) was approximately $2,500,000.00 exclusive of additional funds invested in the Coco-C-Store. Plaintiffs also later acquired properties adjacent to the Coco-C-Store PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 6 (the store sits on the corner of Dolphin and 1-30) with the plans of later re-developing these properties collectively. 18. In connection with the purchase of the real estate on which the Coco-C-Store sits, the original asking price for the properly was $1.2 million, Jimmy Yoo asked Mr. Na whether, if he were able to persuade the seller to reduce the purchase price of the property, Mr. Na would agree to split the price difference with him on a 50%-50% basis. Mr. Na agreed. Jimmy Yoo later stated that he had persuaded the seller to reduce the price to $1.0 million, and asked Mr. Na to pay him half of the difference under that arrangement, which Mr. Na did by personally delivering Jimmy Yoo $100,000 in cash at UCB. Jimmy Yoo told Mr, Na he negotiated this price reduction directly with the owner; Plaintiffs were not involved in the negotiation of the reduced price of the property. 19, In regards to the Plano Shell Station, the purchase price was $5.4 million. Mr. Na, through his corporation, paid $1.2 million as a down-payment, and UCB funded a $3.0 million acquisition loan. The remainder of the financing was “owner financing” in the sum of $1.2 million. In 2006, when Mr. Na was looking to sell the Plano Shell Station, Jimmy Yoo contacted him and stated that he (Jimmy Yoo) could persuade the holder of the “owner financing” to reduce the $1.2 million obligation to $600,000, but that for doing so Jimmy Yoo expected to receive $200,000 in cash in exchange. Mr. Na agreed, and when Jimmy Yoo claimed he had persuaded the owner to reduce the owner financing by half, Mr. Na personally delivered Jimmy Yoo $200,000 in cash at UCB in Jimmy Yoo’s office in 2006. 20. Since the purchase of the Coco-C-Store, in 2011 Mr. Sung first revealed that between 2000 and 2004, UCB received regular financial reporting regarding the financial condition of the Store from Mr, Sung and his accountant, Haeyoung Chang, CPA. Mr. Sung also confirmed that PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 7 between five and seven months prior to my purchase of the Store, he and his accountant, Ms. Chang, became aware that the Comptroller for the State of Texas had initiated an investigation of the Store’s underpayment of sales taxes to the State, and that there would likely be a liability to the State for unpaid sales taxes, interest and possibly penalties owing from the Store. At the time of the purchase of the Coco-C-Store, neither Mr. Sung nor Jimmy Yoo, nor Mr. Ahn, nor anyone from UCB disclosed to Plaintiffs the existence of any investigation, or of any actual or potential unpaid sales taxes to be resolved by the prior owner or to be paid in advance of the purchase. Instead, Mr. Sung admitted that he, knowing of the likely sales tax liability and the Comptroiler’s investigation, did not disclose to Plaintiffs the existence of what the State claimed was hundreds of thousands of dollars of unpaid sales taxes owed by the Store to the State of Texas. 21. They concealed the investigation of the unpaid sales taxes from Plaintiffs through the closing on the sale of the Store. UCB retained Hans Yoo, P. C. to draft the sale agreements for both sides of the buy-sell agreement, and inconsistent with standard practices in such transactions, Hans Yoo, P. C. did not procure confirmation that the sales taxes had not been paid, though such confirmation was obtained by UCB in regards to the John’s Liquor transaction. Given the $500,000 “profit” which was paid to Mr, Ahn and, indirectly, to Mr. Yoo, there were ample funds with which Mr, Sung and/or the Store could have fully paid or at least largely reduced any unpaid sales tax obligations to the Comptroller. The sales tax liability was concealed from Plaintiffs so as to ensure that the sale of the Store went through and, at the same time, to protect Mr. Ahn’s and Mr. Yoo’s $500,000 “profit” from the sale of the Store. 22. In 2005, Plaintiffs did receive mail addressed to Mr, Sung from the Comptroller. Without opening the mail, which was addressed to Super Buy Lo, Plaintiffs’ predecessor, Mr. Sung, PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 8 and he came to the Store to retrieve the mail. Plaintiffs were not told until 2011 that this correspondence was regarding the Compiroller’s assessment of liability against the Store. In 2007, Mr, Na first became aware of the sales tax issue and brought it to the attention of Jimmy Yoo. Plaintiffs raised this with Jimmy Yoo because the Comptroller’s demand did not relate to sales taxes they did not pay, but rather was in relation to sales taxes allegedly not paid by UCB’s former borrower and the former owner of the Store, Mr. Sung. In this conversation, Jimmy Yoo unequivocally assured Mr. Na that there must be a mistake, that he would cause someone from UCB to handle the problem, and that Plaintiffs should not worry about it, With these assurances, and based on a) the long-standing trust in Mr. Yoo, as well as the multiple loans Plaintiffs and their businesses had with UCB, and b) the fact that Hans Yoo, P. C., a law firm, had closed the transaction, Plaintiffs then justifiably believed Jimmy Yoo’s promises that if anything needed to be done to resolve the tax problem with State, he or someone from UCB would see that it was done. Therefore, at the time, and in reliance on assurances from UCB and Jimmy Yoo, Plaintiffs neither took action to protect themselves against liability for these taxes, nor did they take any action against UCB, having been encouraged instead to wait on the outcome of UCB’s and Jimmy Yoo’s efforts to resolve the problem. 23. However, neither Jimmy Yoo nor UCB took action to address the unpaid taxes attributed to the Super Buy Lo while it was owned and operated by Messrs. Ahn and Sung. Plaintiffs believe and allege that Mr. Yoo and UCB did nothing to address, or cause Messrs. Ahn or Sung to address, these tax claims, and are am not aware of any action taken either by Jimmy Yoo or UCB in this regard. Asa result, the Comptroller imposed what it determined as the predecessor’s liability, including penalties and interest, on Plaintiffs’ business at the Coco-C-Store, PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 9 24, The Defendants named above concealed the facts concerning the existence of the past due sales taxes on the Store; they further misrepresented the nature of the sales tax problem, and Jimmy Yoo specifically promised and/or misrepresented that he/JCB would take care of the problem. Plaintiffs believe based upon the foregoing, and therefore allege, that these last two misrepresentations were made to induce them to not file suit at that time, and also not to take action to protect their interests. Plaintiffs relied upon these misrepresentations and omissions and took no action when they otherwise could have to protect their interests. 25. Much later, Jimmy Yoo told Plaintiffs that UCB was not going to defend the sales tax liability claim - - which was now being attributed to Plaintiffs’ business as the successor - - and that Plaintiffs would have to do so. Having little choice at the time, and when doing so was no longer legally effective, they were forced to attempt to defend the claim. Plaintiff's were referred to counsel for this purpose by UCB (initially, Tailim Song, who is believed to have had little or no experience defending Comptroller claims, and later, counsel in Austin), and they attempted defended the sales tax claim in Austin; however, due to the delays occasioned by the unfulfilled promises of Jimmy Yoo to deal with this on Plaintiffs’ behalf, the opportunity to successfully defend our liability as successors of Mr, Sung was already lost, and the decision of the Comptroller was to impose the predecessor owner’s liability on Plaintiffs, The decision of the State Comptroller became final in 2010, and the Comptroller’s decision was to impose liability on the Store as the successor entity. The amount allegedly owed to the State for taxes, penalties and interest was, when this lawsuit was filed, $1,172,214.90, and it continues to climb. Consequently, the Store has now been closed by order of the State Comptroller’s office and remains closed as of today. After its closure, UCB foreclosed on the Store itself, and later upon the real property of KSCJ Investments on which the PLAINTIFFS” FIRST AMENDED ORIGINAL PETITION — Page 10 Store was located. 26. Plaintiffs have spent more than $100,000.00 in attorney fees just in defending the tax claim with the State Comptroller. Moreover, because the Store has been closed down, Plaintiffs’ investment in it, including inventory and in the business, the real estate, and the payments to the Bank, has been completely lost. More harmful yet, due to the lost revenue from the Store, the loan for the purchase of the business, the loan for the Walnut Hill/1-35 land, the KP Miilion loan, and all other business acquisition loans from UCB (including loans for the properties adjacent to the Store), have gone into default. Plaintiffs have also continued to pay interest to UCB (which was current through the middle of January, 2011), on the KP Million loan to stave off repeated threats by UCB to foreclose on it and, since KP Million is presently undeveloped, it generates no income from which to make these payments, such that KP Million was being supported by Plaintiffs’ other businesses until it filed a Chapter 11 bankruptcy. However, due to the losses occasioned by the loss of the Store and its attendant damage to the revenue stream from our other businesses, it has become impossible for the other businesses to continue support the debt burden imposed by UCB. 27, All totaled, losses incurred by Plaintiffs are well in excess of $3.0 million, and continue to climb. Iv, COUNT ONE - BREACH OF FIDUCIARY DUTY AND OF GOOD FAITH AND. FAIR DEALING Plaintiffs hereby incorporate paragraphs 1 through 27 the same as if set forth herein verbatim. 28. Plaintiffs, Defendant J. Yoo and Defendant UCB had a special relationship of trust, loyalty and confidence, Furthermore, Plaintiffs and these Defendants formed a special relationship PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION -- Page 11 of trust and confidence to protect and preserve the assets of their joint ventures and to fully disclose material facts that were detrimental to their business ventures, Defendants also profited directly from their business dealings with Plaintiffs in a manner that was not arms-length during the existence of this special relationship. 29. The conduct of Defendant UCB and Defendant J. Yoo constitutes breach of fiduciary duty. The conduct of these Defendants also constitutes breach of their duty of good faith and fair dealing. In particular, Defendants bore a duty to disclose known facts, which they both failed to disclose and apparently concealed, concerning the sales tax liabilities of the Super Buy Lo. 30. Plaintiffs would show that as a result of the foregoing conduct, the Store has been closed. As a result, Plaintiff(s) have been damaged in an amount that exceeds the minimum jurisdictional limits of this Court, and is well in excess of $3.0 million. Defendants’ conduct entitles Plaintiffs to actual damages, as well as equitable disgorgement of funds obtained as a consequence of a breach of duty. In addition, Plaintiffs would show that the conduct of Defendants was done with conscious indifference to the rights of Plaintiffs and constitutes conduct for which the law allows the imposition of punitive damages. Vv. COUNT TWO - FRAUD Plaintiffs hereby incorporate by reference Paragraphs | through 30 the same as set forth herein verbatim. 31. Defendants misrepresented and/or concealed the facts concerning the existence of the past due sales taxes on the Store so that Plaintiffs would remain unaware of the existence of the problem and that their predecessor’s liability may be their own; consequently, limitations are tolled PLAINTIFFS? FIRST AMENDED ORIGINAL PETITION — Page 12 during this period in accordance with the discovery rule. In addition, after acquisition of the Coco- C-Store, when Plaintiffs became aware of the alleged sales tax liability, Defendants misrepresented the nature of the sales tax problem, and also misrepresented that Defendants would take care of the problem. The last two misrepresentations were made to induce Plaintiffs to not file suit at that time, such that limitations was tolled during that time and until the determination of the successor liability to Plaintiffs had taken place. The misrepresentations and omissions of material fact made by Defendants were made knowingly and with the intention that the misrepresentations and omissions be relied upon by Plaintiffs to their detriment. Plaintiffs relied upon these misrepresentations and omissions to their detriment. Plaintiffs’ reliance on Defendant’s statements and omissions was reasonable and foreseeable and was the proximate cause of damages to Plaintiff. Plaintiffs would show that the conduct of Defendants constitutes common law fraud, 32. Plaintiffs would further show that Defendants knew that the statements were false when they made them or made them recklessly without any knowledge of the truth and as a positive assertion, Defendants made these misrepresentations with the intention that they be acted upon by Plaintiffs, and in fact Plaintiffs acted in reliance upon the misrepresentations. Additionally, Defendants benefitted from the foregoing misrepresentations. 33, Plaintiffs reasonably relicd on Defendants’ statements and omissions and as result of said reliance have suffered damages in an amount in excess of the minimum jurisdictional limits of this court. In addition, Plaintiffs would show that the conduct of Defendants was done with conscious indifference to the rights of Plaintiffs and constitutes conduct for which the law allows the imposition of punitive damages. PLAINTIFES’ FIRST AMENDED ORIGINAL PETITION - Page 13 Vi COUNT THREE-NEGLIGENT MISREPRESENTATION Plaintiffs hereby incorporates by reference Paragraphs 1 through 33 the same as set forth herein verbatim. 34. In the alternative, Plaintiffs would show that the conduct of Defendants constitutes negligent misrepresentation in that a reasonably prudent entity/person in the position of Defendants would not have made the misrepresentations and/or omissions which are more specifically set forth above. Furthermore, Plaintiffs would show that the misrepresentations and omissions made by Defendants were made negligently. As a result of Defendants’ negligent conduct, Plaintiffs have suffered actual damages in an amount in excess of the minimum jurisdictional limits of this Court. 35. The foregoing conduct of Defendants constitutes negligent misrepresentation, As a result of the foregoing negligent misrepresentations and the lesser-included duty of good faith by Defendants, Plaintiffs have been damaged in an amount in excess of the minimum jurisdictional limits of this Court. VIL. COUNT FOUR -NEGLIGENCE Plaintiffs hereby incorporate by reference Paragraphs 1 through 35 the same as set forth herein verbatim. 36. Plaintiffs would show that the foregoing conduct of Defendants constitutes negligence. 37. As a result, Plaintiffs have been damaged in an amount in excess of the minimum jurisdictional limits of this Court. PLAINTIEFS? FIRST AMENDED ORIGINAL PETITION — Page 14 VIII. COUNT FIVE - BREACH OF CONTRACT Plaintiffs hereby incorporate by reference Paragraphs | through 37 the same as set forth herein verbatim, 38. In the alternative, Plaintiffs and Defendant(s) entered into several agreements that constitute the joint business relationship of the Parties. As part of that relationship, Defendant Jimmy Yoo agreed that the past due taxes would be paid and that problem with that State Comptroller would be resolved on behalf of Plaintiffs. Defendants have breached these agreements by failing to pay the sales taxes as agreed and by failing to resolve the problem as agreed. 39. The foregoing conduct constitutes breach of contract, for which Plaintiffs have been damaged in an amount in excess of the minimum jurisdictional limits of the Court. IX, COUNT SIX — CONSPIRACY Plaintiffs hereby incorporate paragraphs 1 through 39 the same as if set forth herein verbatim. 40. One or more Defendants were members, and constituted a combination of persons knowingly acting together for the accomplishment of common, unlawful objectives or purposes, and one, several or all of them used or authorized the use of unlawful means for accomplishing their purposes. There was a meeting of the minds between one or more Defendants on the object and the course of action, and the Defendants were responsible both individually and as representatives of the collective for the wrongful conduct in furtherance of the conspiracy. Based upon the above facts, one or more Defendants committed overt, unlawful acts in furtherance of their common objectives or purposes, which acts were a proximate cause of harm to Plaintiffs, Accordingly, the Defendants who PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 15 conspired to share joint and several responsibility for the damages resulting from their combination. 41. In addition to the foregoing, Plaintiffs would show that most if not all individual Defendants shared in the proceeds of the sale of the Store and the monthly rental from 2004 through 2006. In addition, and upon information and belief, all Defendants knowingly conspired with each other to defraud Plaintiff(s) into paying for the past due sales taxes and to induce Plaintiffs to not file suit to recover those damages. xX, COUNT SEVEN - EXEMPLARY DAMAGES Plaintiffs hereby incorporate paragraphs | through 38 the same as if set forth herein verbatim. 42, The acts and omissions of Defendant(s) complained of herein were committed knowingly, willfully, intentionally, with actual awareness, and with the specific and predetermined intention of enriching one or more Defendants at the expense of Plaintiff. In order to punish such Defendants for such unconscionable overreaching and to deter such actions and/or omissions in the future, Plaintiffs also seek recovery from those Defendants for exemplary and/or punitive damages as provided by the Texas Civil Practice and Remedies Code, including without limitation Chapter 41. Xi. ATTORNEYS FEES 43, Plaintiffs have repeatedly presented the claim arising out of the aforestated causes of action to Defendants, or their agents, and demanded payment thereof; and, although more than thirty- one (31) days have expired since presentment and demands were made, this claim has not been satisfied. By reason thereof, Plaintiffs have been required to employ the undersigned attorneys to initiate and maintain this action and has contracted to pay said attorneys a reasonable attorneys’ fees PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 16 for such service. Plaintiffs are entitled to recover its reasonable attorneys’ fees in accordance with the Texas Civil Practice and Remedies Code §38.001(1), (7) and (8). XI. 44, Plaintiffs would further show this Court that it is entitled to pre-judgment interest at the highest legal rate per annum. In addition, all conditions precedent to the filing and enforcement of Plaintiffs’ claims have occurred or been met. XII, SPOLIATION NOTICE 45. Plaintiffs hereby demand that Defendants take all appropriate measures to preserve and maintain the integrity of, and prevent any deletion, alteration or destruction of, any and all documents and data relative to its management of the subject properties, including, without limitation: a) Defendants’ communications with the Plaintiffs or any of them; b) Defendants communications with third parties in connection with the subject properties to include tenants, employees of Defendants, and independent contractors retained by or for Defendants and/or purporting to provide services at the subject properties or to Defendants in connection therewith; ¢) Defendants’ banking and financial records relative to all monetary transactions regarding the subject properties; and 4) computers or other media for electronic storage containing any electronic data relative to the above and/or the subject properties, particularly including any financial or bookkeeping data PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 17 maintained using bookkeeping software, such as Peachtree or Quickbooks, and also including the data stored and organized by or using the “One Site” program. 46, This demand specifically requires and includes the suspension of any policies, procedures or programs with regard to the automatic destruction, deletion or overwriting of documents or data, whether in hard copy or on any electronic storage media (as well as any ad hoc deletion or destruction of data), and requires that Defendants take immediate steps to do protect and preserve all such documents or data. 47. To the extent that Defendants fail to immediately take any and all appropriate and necessary measures to preserve and maintain the integrity of the data and documents relative to the subject properties and any such data or documents are in any way altered, destroyed, deleted or otherwise compromised hereafter, Plaintiffs will assert that such was willful and intentional, that such conduct constitutes wrongful “spoliation” of material evidence, and that the documents or data affected thereby must be presumed to have been helpful to Plaintiffs in connection with their claims in this litigation. XIV. REQUEST FOR JURY TRIAL 48. Plaintiffs requests that the case be tried to a jury, and hereby tender the jury fee along with the filing charges for this lawsuit. WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray that Defendants be cited to appear and answer herein, and that upon final trial, Plaintiffs have and recover judgment against Defendants, jointly and severally, as follows: a, For actual damages against Defendants for Breach of Fiduciary Duty and Duty of Good PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 18 Faith and Fair Dealing; For actual damages against Defendants for Fraud; For actual damages against Defendants for Negligent Misrepresentations; For actual damages against Defendants for Negligence; For actual damages against Defendants for breach of contract; For actual damages against Defendants for conspiracy; For exemplary and/or punitive damages against one or more Defendants as provided by the Texas Civil Practice and Remedies Code, including without limitation Chapter 4]. h For reasonable and necessary trial and appellate attorneys’ fees incurred by Plaintiffs in prosecuting this action; For pre-judgment interest at the highest legal rate per annum; For post-judgment interest at the highest legal rate per annum from the date of judgment until paid in full; For all costs of court; and For such other and further relief, both general and special, at law or in equity, to which Plaintiffs may show themselves justly entitled. PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION — Page 19 Respectfully submitted, STROMBERG STOCK, P.L.L.C. By Mark Stromberg State Bar No. 19408830 Two Lincoln Centre 5420 LBJ Freeway, Suite 300 Dallas, Texas 75240 Telephone: (972) 458-5353 Facsimile: (972) 770-2156 HOWARD F. CARTER, JR. PC Attorneys & Counselors by Elsah F Ce To/ly pemie State Bar No. 03916500 Centura Tower 1 14185 Dallas Parkway - Suite 1275 Dallas, Texas 75254 Telephone: 972-455-2001 Telecopier: 972-455-2015 Email: carter carter-holmes.com ATTORNEYS FOR PLAINTIFFS PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 20 CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the above and foregoing Plaintiffs Firsst Amended Ori inal Petition was served by email and facsimile upon the following attorneys of record § on this the 18" day of July, 2011: Robbie Malone Robbie Malone, PLLC Northpark Central, Suite 1850 8750 North Central Expressway Dallas, Texas 75231 Facsimile: 214-346-2631 Email: rmalone@rmalonelaw,com Counsel for Hans S, Yoo and Hans S. Yoo P.C. Craig A. Capua West & Associates, L.L.P. 320 South R.L. Thornton Frwy., Suite 300 Dallas, Texas 75203 Facsimile: 214-941-1399 Email: craig.c@westllp.com Counsel for Jimmy Yoo Timothy R. McCormick Timothy E. Hudson Thompson & Knight, LLP 1722 Routh Street, Suite 1500 Dallas, Texas 75201 Facsimile: 214-969-1751 Email: Tim.Hudson@tlklaw.com and Lindy D, Jones Laura Worsham Jones, Allen & Fuquay, L.L.P. 8828 Greenville Avenue Dallas, Texas 75243 Facsimile: 214-343-7455 Email: ljones@jonesallen.com and !worsham@jonesallen,com Counsel for UCB MARK STROMBERG PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION ~ Page 21