Renovatio, LLC v. Dato Soh Chee Wen
| Decision Date | 22 November 2022 |
| Docket Number | 55847-5-II |
| Parties | RENOVATIO, LLC, a Washington limited liability company, Appellant, v. DATO SOH CHEE WEN, an individual; CAPRI INVESTMENTS, L.L.C., a Washington limited liability company; IPCO INTERNATIONAL LTD., a Singapore corp.; ASIA PLAN LTD, a BVI corporation; and NEPTUNE CAPITAL GROUP, LTD, a BVI Corp., Respondents. |
| Court | Washington Court of Appeals |
UNPUBLISHED OPINION
- Renovatio, LLC (Renovatio) appeals the superior court's order granting summary judgment and dismissing its case that sought to enforce a series of promissory notes. The notes are related to the financing of a large development project by Capri Investments, LLC (Capri) and IPCO International, Ltd. (IPCO). Capri and IPCO assert that the statute of limitations has run on most of the notes, making Renovatio's claims untimely. Capri and IPCO also argue that Renovatio is not the beneficiary named on the notes and is not entitled to enforce them. Finally, Capri and IPCO argue the loans for the notes have been repaid.
Renovatio asks this court to reject Capri and IPCO's arguments claiming its lawsuit is timely, it is entitled to enforce the notes, and money is owed. Renovatio further argues that the superior court erred in its attorney fees award because the court failed to adequately reduce the award for unwarranted fees and failed to explain its decision.
We affirm the superior court's orders granting summary judgment and awarding attorney fees to Capri and IPCO. We also grant Capri and IPCO their attorney fees for this appeal.
In 2002, Gerald Patrick Healy and Dato Soh Chee Wen began working together to develop a large property development called Falling Water, located in Bonney Lake Washington.[1] Healy lived in Washington and oversaw the building and planning of Falling Water. Soh and Healy intended that Soh would finance Falling Water's development through the entity Capri, a limited liability company. In 2002, Capri purchased over 500 acres of land where Falling Water would be built. In 2003, Capri was acquired by codefendant IPCO, its present parent company.
In 2002, Soh was arrested in Malaysia for charges related to stock market manipulation. Soh was thereafter unable to finance the development of Falling Water, and he requested that Healy find financing elsewhere. Healy began gathering additional investors to provide loans to Capri to continue developing Falling Water. These additional investors led to a series of loans documented with multiple promissory notes.
One of the investors Healy approached was his brother. Healy's brother owned portions of companies called Landsail Investments, Inc. (Landsail) and Lodestar One, LLC (Lodestar). Landsail and Lodestar each made unsecured loans to Capri.
Landsail and Capri executed promissory notes (Landsail Notes) detailing the terms of the loans. Landsail was the beneficiary on five notes executed and due on the following dates for the following amounts:
Date of Note:
Date Payment was Due:
Note Amount
October 18, 2004
November 1, 2005
$423,154.40
February 16, 2005
September 16, 2005
$282,403.62
August 3, 2005
September 3, 2005
$147,680.00
August 12, 2005
September 12, 2005
$309,984.92
August 22, 2005
September 22, 2005
$156,307.72
Clerk's Papers (CP) at 956-60.
Lodestar and Capri also executed promissory notes (Lodestar Notes) detailing the terms of the loans from that company. Lodestar was the beneficiary on two notes executed and due on the following dates for the following amounts:
Date of Note:
Date Payment was Due:
Note Amount
February 18, 2005
September 18, 2005
$78,000.00
February 23, 2005
September 18, 2005
$52,000.00
A third company, Westridge Development, LLC (Westridge), made loans to Capri for the project. Although there is conflicting evidence in the record about who owned Westridge, portions of the record reflect that Healy and Soh may have co-owned Westridge.[2] Westridge made a series of unsecured loans to Capri. Ultimately, Capri and Westridge executed five separate promissory notes (Westridge Notes) detailing the terms of these loans. Westridge was the beneficiary on the following five notes:
Date of Note:
Date Payment was Due:
Note Amount
June 22, 2005
September 1, 2005
$ 61,580.01
November 11, 2005
June 11, 2006
$ 69,499.58
March 16, 2006
June 14, 2006
$280,800.00
March 9, 2007
July 9, 2007
$ 83,200.00
April 17, 2007
August 15, 2007
$ 26,000.00
Healy also approached a business associate, William Hurme, to help finance Falling Water. Healy and Hurme had worked together on development projects in the past. Renovatio alleges that the Healy family provided funding for around 85 percent of two loans, and Hurme provided funding for the other 15 percent of the loans. Capri and Hurme executed two promissory notes (Hurme Notes) detailing the terms of these loans. Only Hurme appears on the Hurme Notes as a named beneficiary; Healy's name does not appear on the Notes. The Hurme Notes were executed and due on the following dates for the following amounts:
Date of Note:
Date Payment was Due:
$ 104,000.00
All of the notes included a provision enabling the beneficiary to recover attorney fees in a lawsuit for collection on the note.
In March 2019, Healy formed Renovatio as a limited liability company. Healy and his wife are the only members of Renovatio.
Two months later, Renovatio filed this lawsuit against Capri and IPCO, seeking enforcement of all the notes. An amended complaint was filed six months later. In addition to suing on the notes, Renovatio asserted claims against Soh and related entities and included additional equitable claims against all defendants, such as unjust enrichment, imposition of a constructive trust, promissory estoppel, and quantum meruit.
Capri and IPCO answered and filed a third-party complaint against Healy, alleging damages for unjust enrichment, conversion, breach of fiduciary duties, and undue influence.[3]
In March 2021, Capri filed a motion for partial summary judgment, seeking dismissal of all of Renovatio's claims against them. With evidence outlined below, Capri argued that the statute of limitations made the claims untimely on all but the Hurme Notes and that Renovatio was not a party entitled to enforce the notes.
Capri argued the statute of limitations ran on the Landsail, Lodestar, and Westridge Notes (non-Hurme Notes) well before Renovatio filed suit because Capri made its last payment on any non-Hurme Notes in 2007. To support its argument, Capri relied on its QuickBooks records from 2002 to 2007, which contained the following entries identifying outgoing payments to Landsail, Lodestar, and Westridge:
Date
Check No.
Payment
Recipient
Transaction
Memo[4]
Amount
08/09/2005
1380
Landsail
n/a
$147,680.00
08/31/2005
1394
Landsail
n/a
$ 1,262.36
10/14/2005
1432
Landsail
n/a
$125,000.00
01/06/2006
1478
Westridge
n/a
$ 75,000.00
04/26/2006
1548
Landsail
Partial Payment of
$ 65,000.00
11/08/2006
1655
Westridge
Partial Repayment of
$ 55,000.00
11/21/2006
1659
Westridge
Partial Repayment of
$200,000.00
01/12/2007
1713
Westridge
Final Payment of PN
$ 65,040.99
01/31/2007
1721
Landsail
Partial Repayment of
$ 25,000.00
07/17/2007
1817
Landsail
Final Payment of 2/26
$184,710.29
07/17/2007
1814
Lodestar
Final Payment of 2/18
$ 97,948.44
07/17/2007
1815
Lodestar
Final Payment of Orig
$ 68,848.31
07/17/2007
1816
Westridge
Final Payment of 3-9
$ 82,700.88
07/17/2007
1820
Westridge
Final Payment of 4-17
$ 25,593.73
CP at 628-31, 633, 637, 639, 642.
Capri also relied on records produced by Renovatio in discovery that purport to show a summary of loans made to Capri, dated March 11, 2007. The records appear to show note renegotiations when Capri could not repay some notes in full, as well as the tracking of outstanding balances for the loans. The records also appear to show payment amounts for partial payments on loans, including check numbers for some of those payments.
Capri further relied on other records produced by Renovatio that purport to show Falling Water's outstanding invoices through July of 2007 and note renegotiations and payments that Capri made on the notes until the end of 2007. None of the records showed any payments made on the non-Hurme Notes after 2007.
Renovatio responded that the statute of limitations was extended by partial payments. Renovatio supported its argument with receipts from bank transfers to Healy personally. The receipts appear to show that the last of these transfers occurred in June 2016. The bank transfers appear to be from nonparties, such as Neptune Capital Group, Ltd. via Neo Kim Hock, Powerlite Ventures Ltd., and James Hong. Most payments ranged from $3,000 to $12,000, with the largest payment being for $90,000. The receipts document periodic payments, with no regularity.
Renovatio also relied on emails that Healy sent to Soh from 2010 to 2016, in which Healy asserted money was owed on the notes and requested payment. Renovatio further relied on emails received by Healy in which Soh stated that he would remit payments to Healy.
Capri replied that Renovatio's evidence did not prove these payments were payments on the non-Hurme Notes. As Capri observed, Renovatio's bank receipts showed all post-2007 payments were made to Healy personally. Further, the payments appeared to be made by third parties, not Capri. Some of the receipts also included details...
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