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Lee v. Rusu

United States District Court, N.D. California

June 19, 2017





         In this action for breach of contract and misrepresentation in connection with a failed purchase agreement, defendants move to dismiss. The motion is Denied.


         This action arises out of a contract dispute between two families over the failed purchase of a valuable violin crafted by Tommaso Balestrieri of Mantua in 1765. The following statement of facts is taken from the well-pled allegations of the complaint (Dkt. No. 1).[1]

         Plaintiffs Donghoon Shin and Mi Sook Lee are husband and wife, respectively, and hail from Korea. In 2000, Donghoon worked at the University of California, San Francisco, on a visa good for one year. During that year, he lived in the United States with Mi Sook and their seven-year-old daughter, Yoomin Shin, both of whom held derivative visas (id. ¶¶ 1, 3).

         Yoomin had played the violin since she was three years old. While in the United States, plaintiffs sought a violin instructor for her and located defendant Serban Rusu through the UCSF website. Serban began teaching Yoomin at a starting rate of $85 per hour, and rented one of his violins to her for $50 per month because he thought hers “was too large” (id. ¶ 2).[2]

         Within their first two months together, Serban showed Yoomin his Balestrieri violin and told her it “was a very good violin.” Soon after, Serban began telling Mi Sook that “Yoomin was a very smart student, and if she were his daughter, she would be famous.” On one such occasion, Serban offered to sell the Balestrieri to Mi Sook. She declined because she did not have the money to buy the violin, and in any case “Yoomin was too young for such a violin because [it] was full size.” Nevertheless, Serban “continued on a regular basis to try to persuade [Mi Sook] to buy the Violin” (id. ¶¶ 3-5).

         Mi Sook hoped for Yoomin to eventually study music at the Juilliard School and at some point told Serban of this aspiration. Serban responded that it would be better for Yoomin to study at the Curtis Institute of Music. In August 2001, when Serban learned that Yoomin's family would return to Korea, he asked plaintiffs to allow her to stay in the United States with him and his wife, defendant Kyoko Rusu. Serban claimed he had a “special musical program that would help make Yoomin a great violinist.” The parties agreed that Yoomin would return to the United States during Christmas and summer breaks to attend Serban's program at the cost of two thousand dollars per month. Yoomin did so from January 2002 until she started high school in Michigan in the fall of 2007. While in high school, she continued to study violin. During breaks, she lived with defendants and continued her lessons with Serban (id. ¶¶ 6-7).

         Meanwhile, starting in the summer of 2002, Kyoko attempted to persuade Mi Sook to purchase the Balestrieri, “telling her that it would be hard to find another violin, and the Violin would be good for Yoomin.” Mi Sook initially resisted but eventually began to believe that the Balestrieri “would have more meaning to [Yoomin] because it was owned by a teacher” and in “Korean culture, teachers are highly respected and hold a position of great trust” (id. ¶¶ 8-9).

         Here the timeline set forth in the complaint takes some perplexing turns. According to the complaint, in 2004, Serban convinced Mi Sook to buy a different violin for Yoomin from a friend of his for twenty thousand dollars. Meanwhile, “[o]n or about early 2004, ” plaintiffs allegedly agreed to purchase the Balestrieri for half a million dollars. In “approximately January 2005, ” however, Mi Sook discussed purchasing the Balestrieri with Donghoon. He initially opposed the idea, but she persuaded him to go along with the purchase because the Balestrieri “was owned by Serban . . . a teacher of great prestige, and it would enhance Yoomin's career.” Then, “[o]n or about November 2005, ” plaintiffs gave Kyoko one hundred thousand dollars “as a down payment on the purchase price” of the Balestrieri. “There was no discussion or agreement as to how and when to make the down payment, nor with respect to payment of the balance of the purchase price, ” except that Mi Sook told Kyoko “she would try to periodically send Defendants further monies.” The parties did not enter into any written contract for the purchase, and defendants kept possession of the Balestrieri. Additionally, in 2006, Serban allegedly sold Mi Sook “a full-size violin for Yoomin” (ostensibly different from the Balestrieri) for twenty-five thousand dollars (id. ¶¶ 10-15).

         Over the next “approximately three years, ” plaintiffs paid defendants another $157, 000. In 2009, Serban told Yoomin she was “old enough” to take possession of the Balestrieri. The complaint alleges, inconsistently, that Yoomin turned eighteen both in 2009 and in 2010. Since Yoomin was allegedly seven years old in 2000, this order assumes she turned eighteen in 2010. In any case, Yoomin then decided she did not want to become a violinist and did not want the Balestrieri. Mi Sook relayed Yoomin's change of heart to Kyoko and asked her to find another buyer for the Balestrieri. Kyoko said she needed time to think about Mi Sook's request. On May 10, 2011, Kyoko told Mi Sook that she had spoken with Serban and “they would change their ‘financial plan' and repay Plaintiffs, either with periodic payments similar to those Plaintiffs made . . . or, depending on the finances of Serban Rusu's company, a larger sum. Plaintiffs accepted this offer” (id. ¶¶ 16-19).

         On November 4, 2011, Serban wrote Mi Sook to say “that he was glad that he did not have to part with the Violin, and the best way to resolve the payment details was for everyone to discuss the matter when [Mi Sook] next came to the United States.” On December 2, 2011, Mi Sook responded that “she had respected and put her trust in [Serban], and she could not understand why he had tried to sell the Violin to Yoomin, who was so young.” Mi Sook added “that she and her husband had to borrow the money for the violin payments and they [were] still paying 4.5 percent interest every year” (id. ¶¶ 20-21).

         The parties continued to “negotiate the details of the repayment” until November 10, 2013, when Mi Sook wrote Kyoko “that almost three years had passed since Defendants had promised to repay Plaintiffs the monies paid toward the Violin, [yet] there had been no ‘specific' method of repayment agreed upon.” On March 3, 2014, Kyoko responded that she had “not been well for several months.” On April 14, Mi Sook replied that “she believed [Kyoko] was putting her off, ” that she had asked Kyoko for an IOU in November 2013, and that she had yet to receive said IOU. Kyoko replied the same day that “she had been in Tokyo attending to her mother [and] that when she returned to the United States, she was not well, and therefore was not able to discuss the repayment terms” (id. ¶¶ 22-26).

         On July 7, Mi Sook again wrote Kyoko “that she still [had] not heard from her concerning repayment.” On July 22, Kyoko responded by letter “that her mother's health condition was not good, and that she had decided to hire a lawyer to represent her and her husband with respect to the Violin matter.” Kyoko's letter also said “the sale of the Violin to Plaintiff[s] was part of their ‘financial plan' for their old age” (id. ¶¶ 27-28).

         Plaintiffs' nine-page complaint does not explain how the foregoing communications occurred and does not append any copies thereof. The complaint also alleges that the parties signed a “tolling agreement” on June 25, 2015, but does not append the agreement (id. ¶ 30).

         Based on the foregoing allegations, plaintiff asserts claims for relief for (1) “promise with no intent to perform” with “exemplary damages in a sum to be proven at trial, ” (2) “rescission of contract and novation” with attendant damages of approximately $270, 000, and (3) declaratory relief to “determine the timeframe and amount of repayment of the monies paid by Plaintiffs to Defendants” (id. at 6-8).

         Defendants now move to dismiss all three claims (Dkt. No. 19). This order follows full briefing and oral argument.


         1. Scope ...

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