playdate pdx v pearl pdx and shaowen yu

7/21/2019 PlayDate PDX v Pearl PDX and Shaowen Yu

1/16

SUSSMAN SHANK LLP, ATTORNEYS AT LAW

1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130

Page 1 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MULTNOMAH

PLAYDATE PDX, LLC, an Oregon limitedliability company,

Plaintiff,

v.

PEARL PDX, LLC, an Oregon limitedliability company; and SHAOWEN YU, anindividual,

Defendants.

)))))))

)))))))

Case No.

FIRST AMENDED COMPLAINT FOR:

(1) Breach of contract(2) Intentional interference with

prospective economic relations

(3) Breach of the implied covenant ofgood faith and fair dealing

(Damages sought: $217,000)

CLAIM NOT SUBJECT TOMANDATORY ARBITRATION

For its Complaint against Pearl PDX, LLC (Pearl PDX) and Shaowen Yu (Yu),

plaintiff PlayDate PDX (Plaintiff), alleges as follows:

FIRST CAUSE OF ACTION

(BREACH OF WRITTEN LEASE AGREMENT)

Count 1 Failure to Repair Against Pearl PDX

1.

At all material times, Plaintiff was and is an Oregon limited liability company with

its principal place of business in Portland, Oregon. Plaintiff is an indoor childrens

playground with an attached caf for parents and private party rooms. Plaintiff operates

in a building owned by Pearl PDX. The address of the building is 1434 NW 17thAve,

Portland, Oregon (the Property), which is located in Multnomah County, Oregon.


2/16



Page 2 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

2.

At all material times, defendant Pearl PDX was and is an Oregon limited liability

company with its principle place of business in Portland, Oregon. Pearl PDX is

Plaintiffs landlord pursuant to a retail lease dated February 18, 2010 (the Lease). A

copy of the Lease is attached as Exhibit A and incorporated herein by this reference.

3.

At all material times, defendant Yu was and is a resident of Portland, Oregon. Yu

and/or his affiliated companies operate one or more businesses at the Property.

4.

The Lease was executed by Yus former business partner, Michael Allport.

Plaintiff is informed and believes, and on the basis of such information and belief

alleges, that after the lease was executed, Allport assigned the lease to his family trust.

5.

On December 11, 2013, the Lease was assigned from the Allport Family Trust to

defendant Yu and his wife, Jiamin Gao.

6.

On February 26, 2014, Yu and Gao assigned the Lease to Pearl PDX.

7.

By way of the assignment alleged above in Paragraph 6, Pearl PDX assumed all

obligations and liabilities under the Lease.

8.

The Lease requires Pearl PDX to effect [s]tructural repairs and maintenance and

repairs necessitated by structural disrepair or defects. (Ex. A, 7(a)(i).)9.

The Lease requires Pearl PDX to handle [r]epair and maintenance of the

exterior walls, roof, gutters, downspouts . . . . (Ex. A, 7(a)(ii).)


3/16



Page 3 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

10.

Pearl PDX has failed to make the repairs required by the Lease. Beginning in or

about January 2012, Plaintiff notified Yu of a leak in the roof. Water from that leak was

dripping into Plaintiffs rented space and onto the play structure used by children and

their parents. The leak was not repaired.

11.

On numerous occasions, Plaintiff notified its landlord that the roof was leaking

and that it was disrupting Plaintiffs business. However, despite repeated assurances

that the roof would be repaired, the leak has never been properly repaired and

continues to leak.

12.

On one occasion, Yu intentionally hindered repair efforts by threatening to call

the police when Allport sent contractors to repair the roof.

13.

By failing to repair the roof as required, Pearl PDX has breached the Lease.

14.

Plaintiff has performed all conditions required of it under the Lease, and all

conditions precedent to Pearl PDXs performance, if any, have occurred or been

performed.

15.

Plaintiff has suffered lost profits resulting from the interruption of Plaintiffs

business. Plaintiff has had to close portions of the play structure on numerous

occasions due to leaking water. Plaintiffs damages will be proven at trial but arebelieved not to be less than $25,000.


4/16



Page 4 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

16.

Pursuant to the Lease, Plaintiff is entitled to recover the attorneys fees Plaintiff

has paid for interpreting or enforcing any provision of the Lease or with respect to any

dispute relating to the Lease. (Ex. A, 26.)

17.

As a result of Pearl PDXs breaches, Plaintiff has been damaged in an amount

according to proof at trial, but not less than $25,000.

18.

Plaintiff is entitled to specific performance of Pearl PDXs obligation to repair,

pursuant to Section 7(a) of the Lease.

19.

Pursuant to the Lease, Plaintiff is entitled to recover attorneys fees in connection

with bringing this action.

Count 2 Attorneys Fees in Connection With Obtaining Records of Expenses

against Pearl PDX

20.

Plaintiff hereby incorporates paragraphs 1 through 7, as though set forth in full.

21.

The Lease requires Plaintiff to pay the landlord an amount, determined annually,

constituting Plaintiffs share of certain expenses incurred by the landlord in the course of

operating the Property. Pursuant to section 3(a) of the Lease, the landlord may charge

Plaintiff:a) Plaintiffs share of all real property taxes and assessments levied or

imposed during the relevant year;


5/16



Page 5 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

b) Costs of insurance provided by the landlord, as described in detail in

section 4(a) of the Lease; and

c) A proportionate share of Operating Expenses incurred by the landlord

in connection with the Property.

22.

The Lease uses the terms Operating Expenses and NNN Expenses

interchangeably. NNN Expenses are defined as:

a) All expenses paid or incurred by the landlord, as reasonably

determined by the landlord to be necessary or appropriate for the

efficient operation, management, maintenance, and repair of the land

and the Property, and including all amounts for all water and sewer

facilities, garbage collection, and recycling;

b) The cost of any reasonable capital improvements to the Property,

amortized with a reasonable finance charge over the shorter period of

(i) its useful life, or (ii) the longest period during which the cost can be

amortized under applicable tax laws. However, such capital

improvements cannot increase the NNN expense by more than 20%

over the prior years capital improvement NNN amount. In addition, no

capital improvements related to the roof may be charged to Plaintiff;

and,

c) A reasonable management fee calculated in accordance with Section

3(a), but such management fee shall not exceed 10% of the total NNN

Expense.23.

The Lease requires each tenant in the Property to pay its share of estimated

NNN Expenses on a monthly basis. The Lease required the landlord to provide, within


6/16



Page 6 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

90 days of the close of each calendar year, a written statement of the actual NNN

Expenses for the prior year, together with a computation of the charge or credit to

Plaintiff of any difference between the actual cost and the estimated cost paid by

Plaintiff for such a period. (Ex. A, 3(b).)

24.

Plaintiff was not provided with the required written statement within 90 days of

the close of calendar years 2011, 2012 and 2013.

25.

In the face of Pearl PDXs refusal to produce the documentation as required

under the Lease, Plaintiff hired legal counsel in order to secure Pearl PDXs

compliance. Pearl PDX has now produced the NNN Expense statements for 2011,

2012, and 2013 in response to the demands of Plaintiffs counsel.

26.

Plaintiff has incurred legal fees, in an amount exceeding $2,000 but subject to

proof at trial, in connection with attempting to obtain annual written statements

regarding NNN Expenses for years 2011, 2012 and 2013.

27.

Pursuant to the Lease, Plaintiff is entitled to recover the attorneys fees Plaintiff

has paid for interpreting or enforcing any provision of the Lease or with respect to any

dispute relating to the Lease. (Ex. A, 26.)

28.

As a result of Pearl PDXs breaches, Plaintiff has been damaged in the amount

of the attorneys fees he has incurred in attempting to obtain the aforementioned NNNExpense documentation according to proof at trial.

29.


7/16



Page 7 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26



Count 3 Overcharge for NNN Expenses against PearlPDX

30.


31.

As alleged above, despite earlier refusals to produce documentation of NNN

Expenses, Pearl PDX now has provided to Plaintiff the NNN statements required under

Section 3(b) of the Lease.

32.

Upon preliminary review, the NNN Expenses documentation indicates that

Plaintiff has been overcharged for NNN Expenses. This overcharge includes, but is not

limited to:

(a) Characterizing certain items as NNN Expenses so as to inflate the

management fee, which is capped at 10% of NNN expenses;

(b) Charges for certain HVAC expenses through October 2012, despite

the fact that Plaintiff repeatedly performed its own repairs even

though it was the landlords responsibility;

(c) Charges for supplies attributable solely to Yus own business rather

than the Building at large;

(d) A cleaning fee, which Plaintiff is informed and believes is actually

a bank charge that is not an eligible NNN Expense;

(e) Redundant line-item charges, cleaning fees, and simple additionerrors resulting in thousands of dollars in duplicate, unsupported,

and/or incorrect charges;

(f) Charges for Pearl PDXs member tax returns;


8/16



Page 8 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

(g) A $6,600 charge for parking lot repair that never occurred;

(h) Charges for tenant improvements (not eligible NNN Expenses);

and,

(i) Incorrect square footage calculations of Plaintiffs space, common

area space and/or the space occupied by Yus business at the

Property. Such square footage calculations serve as the basis for

apportioning the NNN Expenses.

Plaintiff anticipates that discovery in this case will reveal additional bases for

Plaintiffs overcharge claim.

33.

Plaintiff has been damaged in the amount of the overpayment not refunded, plus

interest on that sum at nine-percent (9%) per annum from the date it was due until paid.

The amount of the overcharge will be proven at trial, but Plaintiff believes it to be not

less than $20,000.

34.



Count 4 Breach of Quiet Enjoyment Provision against PearlPDX

35.


36.

Paragraph 32 of the Lease states, in relevant part: Landlord warrants that aslong as Tenant complies with all terms of this Lease it shall be entitled to possession of

the Premises free from any eviction or disturbance by Landlord or parties claiming

through Landlord. (Ex. A, p. 16.)


9/16



Page 9 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

37.

On several occasions, both before and after this lawsuit was filed, Yu has

engaged in disruptive and harassing conduct at the Property. That conduct has been

directed toward Plaintiff.

38.

Yu has acted aggressively toward PearlPDX personnel, including but not limited

to the daughter of PearlPDXs owner.

39.

Yu has parked his business vehicles so as to occupy the entirety of the parking

lot.

40.

Yu has parked his business vehicles so as to block Plaintiffs delivery ramp and

refused to move the vehicle

41.

Yu has removed the parked motorcycle of PearlPDXs owner from the public

street to the sidewalk, and then parked his business vehicles in its place.

42.

This conduct, and other similar conduct Yu has committed, constitutes a breach

of Paragraph 32 of the Lease, in that Plaintiff has not been free from Landlords

disturbance.

43.

Plaintiff is entitled to specific performance of Paragraph 32 and an order

preventing PearlPDX and its agents from violating Plaintiffs right to quiet enjoyment.


10/16



Page 10 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

SECOND CAUSE OF ACTION

(INTENTIONAL INTERFERENCE WITH ECONOMIC RELATIONS)

Count 1 Against Yu

44.


45.

In or about February 2010, in the course of evaluating whether to rent to Plaintiff,

Yu requested Plaintiff to provide to him Plaintiffs business plan and other financial

documents, including but not limited to equipment lists and revenue projections.

Plaintiff provided the requested information to Yu.

46.

Each page of the business plan was stamped CONFIDENTIAL and contained

detailed information concerning Plaintiffs business model, market demographics,

growth plans, and other sensitive information.

47.

In or about April 2012, Plaintiffs manager was discussing with Plaintiffs real

estate agent plans for potential expansion to other Portland locations. In the course of

this discussion, Plaintiffs manager referenced a map that identified possible expansion

locations in the family play experience business.

48.

During the conversation, Yu approached the two men and asked Plaintiff toprovide an update on Plaintiffs financial status. Plaintiff complied with Yus request

because, pursuant to the Lease, Plaintiff was required to provide financial information to

Yu. Yu examined the map Plaintiff had shared with Plaintiffs real estate agent.


11/16



Page 11 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

49.

Plaintiff is informed and believes, and on the basis of such information and belief

alleges, that as of April 2012, Yu did not own or operate any business similar to that of

Plaintiff.

50.

During the summer of 2012, Plaintiff responded to additional queries from Yu

regarding Plaintiffs financial condition and client volume.

51.

In or about July 2012, Yu purchased real property located at 17112 SE Powell,

Portland, Oregon.

52.

In or about September 2012, Yu entered Plaintiffs rented property on two

occasions in order to take photographs. On the occasion of the first entry, Yu was

accompanied by 3 men, at least one of whom was carrying a camera. Yu claimed that

the men were from an insurance company and that the men needed to photograph the

inside of Plaintiffs rented property. On the second occasion, Yu entered unannounced

(in violation of the Lease) and took additional photographs. He again claimed the

photographs were for insurance purposes.

53.

On or about October 22, 2013, the City of Portland granted Yu a temporary

Certificate of Occupancy for 17112 SE Powell Blvd thus allowing him to operate a

business at that location.

54.By January 2013 at the latest, Yu had begun to operate a business called

Monkey King Play House at 17112 SE Powell Blvd. Monkey King Play House has all

the elements of Plaintiffs business: a play area, a large play structure, a caf for


12/16



Page 12 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

parents, and rooms for private events. The liability waiver forms Monkey King Play

House used until July 2013 were verbatim copies (other than the name of the business)

of those used by Plaintiff.

55.

Yu is an owner of Monkey King Play House LLC, which operates Monkey King

Play House. According to the Secretary of State, Monkey King Play House LLC is an

Oregon limited liability company that operates in Multnomah County, Oregon.

56.

Prior to January 2013, Plaintiff was on the verge of expanding its business to a

location in Portlands Eastside.

57.

Plaintiff had actual and/or prospective business relationships with customers who

would have been served by an Eastside location of PlayDatePDX.

58.

Yu intentionally interfered with those business relationships by opening and

operating a business that is nearly identical in material respects to PlayDatePDX.

59.

Yu has interfered with Plaintiffs prospective business relationships through

improper means. Yu wrongfully used his position as Plaintiffs landlord to obtain

sensitive business information, including Plaintiffs business plan and photographs of

the facility Plaintiff designed, in order to open a virtually identical business.

60.

By opening and operating Monkey King Play House on the Eastside, Defendantshave saturated the market in which Plaintiff otherwise would have expanded.

Defendants interference thus has damaged Plaintiffs prospective economic relations.


13/16



Page 13 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

61.

Plaintiff has suffered damages in the form of lost profits and lost opportunity in an

amount to be proven at trial, but which Plaintiff believes is not less than $75,000.

Count 2 Against Yu

62.


63.

In addition to the conduct described in the paragraphs incorporated herein,

defendant Yu has engaged, inter alia, in the following wrongful conduct:

a) Parking vehicles bearing the Money King Play House name and logo

directly in front of Plaintiffs leased space;

b) Occupying a large section of customer parking with vehicles connected

to Yus other businesses, while stating that other tenants staff may not

park in that same lot under threat of being towed;

c) Failing to properly install and maintain HVAC equipment servicing

Plaintiffs leased space; and

d) Refusing to ensure that exterior lighting, which Defendants control,

remains on during business hours.

64.

Plaintiff has existing and prospective business relationships with customers at its

location in the Property.65.

Defendants intentionally interfered with those business relationships through the

above-described acts or omissions.


14/16



Page 14 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

66.

Yu interfered with Plaintiffs business relationship through improper means. Yu

abused his role as Plaintiffs landlord, and is currently abusing his role as agent of

Plaintiffs current landlord, to do so.

67.

Plaintiff has suffered damages in the form of lost profits and lost opportunity in an

amount to be proven at trial, but which Plaintiff believes is not less than $20,000.

THIRD CAUSE OF ACTION

(BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING)

Against Pearl PDX LLC

68.

Plaintiff hereby incorporates paragraphs 2, 4, 5, 6, 7, 8-12, 14, 16, 19, 36-39, 41-

47, as though set forth in full.

69.

The law imposes a duty of good faith and fair dealing in the performance of every

contract, including the Lease.

70.

Pearl PDX and its predecessors-in-interest did not perform, and are not

performing, the Lease in good faith or fairly. Pearl PDX and its predecessors-in-interest

engaged in the conduct set forth in paragraphs 2, 4, 5, 6, 7, 8-12, 14, 16, 19, 36-39, 41-

47 in order to hinder Plaintiffs business and to unfairly compete with Plaintiff.

71.When entering into the Lease, Plaintiff reasonably expected that Yu would not

engage in such conduct.


15/16



Page 15 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

72.

The amount of Plaintiffs damages will be proven at trial, but Plaintiff believes

them to be no less than $75,000.

73.



WHEREFORE, Plaintiff prays for the following relief:

On the First Cause of Action:

1. For an award of damages according to proof at trial, but in any event, not less

than $47,000;

2. For an award of Plaintiffs costs and disbursements;

3. For an award of attorneys fees pursuant to the Lease; and,

4. For specific performance on Counts 1 and 4.

On the Second Cause of Action:


than $95,000; and,

2. For an award of Plaintiffs costs and disbursements.

On the Third Cause of Action:


than $75,000;

2. For an award of Plaintiffs costs and disbursements; and

3. For an award of attorneys fees pursuant to the Lease.On all Causes of Action:

1. For such further relief as the Court deems just and equitable.


16/16

SUSSMAN SHANK LLP ATTORNEYS AT LAW

Page 16 - COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Dated this 6th day of June, 2014.

SUSSMAN SHANK LLP

By _________________________________________Jason W. Alexander, OSB No. [email protected] S. Davidson, OSB No. [email protected]

Attorneys for Plaintiff

Trial Attorneys: Jason W. AlexanderClifford S. Davidson

*22558-002\FIRST AMENDED COMPLAINT (01887091);1

playdate pdx v pearl pdx and shaowen yu

Documents