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Okada v. Whitehead

United States District Court, C.D. California

April 4, 2017

DONALD OKADA, Plaintiff and Counter-Defendant,
MARK WHITEHEAD, Defendant and Counter-Claimant.




         Following a four-day jury trial in this matter, the Court issues the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52. To the extent that any findings of fact are included in the Conclusions of Law section, they shall be deemed findings of fact, and to the extent that any conclusions of law are included in the Findings of Fact section, they shall be deemed conclusions of law.


         A. Background

         1. Plaintiff Donald Okada and Defendant Mark Whitehead were business partners who formed Beverly Hillbillys, LLC to acquire a piece of land located in Beverly Hills, California. (Stip. ¶ 5.1, Doc. 226.)

         2. Okada and Whitehead also formed an entity called Cheap as Chips LLC for the purpose of buying and selling real estate and/or investing in real estate development. (Stip. ¶ 5.5, Doc. 226; 12/5 Tr. Vol. 1 at 92:1-3, Doc. 255.)

         3. Okada and Whitehead also jointly purchased a property located in Newport Beach, California (“Ocean Ridge”). Both Whitehead and Okada had a 50% share in Ocean Ridge. (12/5 Tr. Vol. 1 at 92:7-9, 93:2-5, Doc. 255; Stip. ¶ 5.2, Doc. 226.) Okada and Whitehead agreed that Whitehead and his family could reside in Ocean Ridge so long as Whitehead was responsible for the monthly mortgage and homeowners' association dues payments. (12/7 Tr. Vol. 2 at 21:23-22:4, Doc. 257.)

         4. Around Spring 2014, Okada brought two separate lawsuits against Whitehead. One lawsuit was over the breach of a promissory note (the “Whitehead Action”) while the other lawsuit concerned Cheap as Chips, LLC (the “CAC Action”). (Stip. ¶ 5.6, Doc. 226; Tr. Vol. 1 at 101:4-15, Doc. 255; 12/7 Tr. Vol. 2 at 22:17-23:21; 23:22-24:21, Doc. 257.)

         5. Beginning in late 2013, a group of international investors called Kamprad Venture Capital, LP and Premium Invest, Limited (collectively, “Kamprad”) offered to purchase Beverly Hillbillys LLC in exchange for $1.2 million, a promissory note in the amount of $2, 319, 110 and a 100% equity ownership interest in Rockford Investment, Inc. (“Rockford”), a Belizean real estate holding company. (Stip. ¶ 5.7, Doc. 226; 12/5 Vol. 1, 101:21-102:19.)

         6. Rockford owned five Dominican Republic corporate entities called SHR SOLAR 24, SHR SOLAR 134, SHR SOLAR 135, SHR SOLAR 136 and SHR SOLAR 137 (collectively, the “SHR SOLAR Companies”). (Stip. ¶ 5.8, Doc. 226; 12/5 Tr. Vol. 1 at 102:20-25, Doc. 255.) The SHR SOLAR Companies, in turn, owned a series of real property lots in the Dominican Republic that were collectively called the Lions Gate Mansion (“Lions Gate”). (Stip. ¶ 5.8, Doc. 226; 12/5 Tr. Vol. 1 at 103:1-4, Doc. 255.)

         7. Okada was not initially interested in the terms offered by Kamprad, but Whitehead repeatedly attempted in January through March 2014 to persuade Okada to accept that deal. (Stip. ¶ 5.9, Doc. 226; 12/5 Tr. Vol. 1 at 103:12-19, Doc. 255.)

         8. Okada and Whitehead engaged in settlement discussions to resolve all outstanding issues between the parties, including the sale of Beverly Hillbillys LLC to Kamprad in exchange for cash, a promissory note and ownership of Rockford. (Stip. ¶ 5.10, Doc. 226; 12/5 Tr. Vol. 1 at 107:13-19, Doc. 255.)

         9. Kamprad used the services of a Dominican Republic attorney named Guido Perdomo and his law firm Perdomo Law for Lions Gate and the SHR SOLAR Companies. (Stip. ¶ 5.11, Doc. 226; Trial Exh. 200 ¶ 13; 12/5 Tr. Vol. 2 at 8:12-9:7; Perdomo Tr. at 14:18-16:15.)

         10. Whitehead reached out to Perdomo to obtain information about Lions Gate. (Stip. ¶ 5.13, Doc. 226; Perdomo Tr. 17:08-18:14.)

         11. During the parties' negotiations over the Settlement Agreement, the parties agreed that Rockford would be managed by a third party administrator, mutually agreed upon to be Perdomo, pursuant to written instructions jointly provided by Okada and Whitehead until the $950, 000 obligation was paid off. (Stip. ¶¶ 5.28-5.29, Doc. 226.)

         12. On July 31, 2014, Okada and Whitehead entered into a Settlement Agreement and General Release (“Settlement Agreement”). (Stip. ¶ 5.28, Doc. 226.) The Court incorporates by reference the terms of the Settlement Agreement (Trial Exh. 5).

         13. Under the Settlement Agreement, Whitehead was to record Okada's first priority lien against Lions Gate within 24 hours after the closing of the Beverly Hillbillys LLC-Kamprad transaction. (Summary Judgment Order at 9-13, Doc. 183.)

         14. On August 13, 2014, Okada and Whitehead executed the First Amendment to Settlement Agreement (“First Amendment”). The Court incorporates by reference the terms of the First Amendment (Trial Exh. 12).

         15. The Beverly Hillbillys LLC-Kamprad transaction closed on August 15, 2014. (Stip. ¶ 5.33, Doc. 226.)

         16. On or around August 15, 2014, Okada and Whitehead each received their monetary consideration from the Beverly Hillbillys LLC-Kamprad transaction, and their respective ownership interests in Rockford were conveyed by Kamprad to Perdomo to be held in trust for Okada and Whitehead. (Stip. ¶ 5.34, Doc. 226.)

         17. Okada fully performed all of his obligations under the Settlement Agreement. Specifically, (1) Okada filed a Notice of Conditional Settlement of Entire Case in the CAC Action and that lawsuit was suspended; (2) Okada has never sought to enforce his Stipulated Judgment in the Whitehead Action; (3) on August 15, 2014, Okada transferred all legal and ownership interest in Ocean Ridge to Whitehead and Whitehead's wife through a grant deed; (4) Whitehead has never presented a claim for indemnification to Okada, nor is Okada aware of any action pending against Whitehead for acts committed by Okada; (5) Okada and Whitehead evenly split the costs regarding various tax liabilities and expenses relating to Beverly Hillbillys LLC and Cheap As Chips, LLC; and (6) Okada filed all the ...

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