Nguyen v. Vu ( 2020 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
QUANG NGUYEN,
Plaintiff,
v. No. 19-cv-894 (DLF)
KIMBERLY VU, et al.,
Defendants.
MEMORANDUM OPINION
In this diversity case, Quang Nguyen brings various state law claims against Kimberly
Vu and two of her solely-owned companies, Global Real Estate Management, Inc. and Global
Financial Group, Inc., based on their failed joint business venture. Nguyen seeks compensatory
and punitive damages. Before the Court is Nguyen’s Amended Motion for Summary Judgment,
Dkt. 63. For the reasons that follow, the Court will grant the motion in part and deny the motion
in part.
I. BACKGROUND
Vu, who was initially represented by counsel but now represents herself pro se, and her
two companies, who remain unrepresented, failed to respond to Nguyen’s summary judgment
motion, despite being warned of the consequences, see, e.g., Minute Order of September 1, 2020.
Thus, the Court accepts the factual assertions in Nguyen’s statement of undisputed facts and
supporting documents as true. See Neal v. Kelly, 963 F.2d 453, 456–57 (D.C. Cir. 1992); see,
e.g., Etessami v. Customs & Border Prot., No. 16-cv-945, 2017 WL 2869422, at *3 (D.D.C. May
19, 2017). 1
Nguyen, a resident of Texas, see Compl. ¶ 2, Dkt. 1, and Vu, a resident of Virginia, see
id. ¶ 3, first formed a friendship on social media, see Pl.’s Stmt. of Undisputed Facts ¶¶ 1–2, Dkt.
63-2, and eventually entered into business together, see generally id. First, Vu invited Nguyen to
invest $50,000 in a project flipping investment properties in Washington, D.C. Id. ¶ 3. She
indicated that she had had extensive experience and success in flipping properties in that area.
Id. ¶ 4. Vu further indicated that she had invested $200,000 in the project herself. Id. ¶¶ 6, 9.
She also provided Nguyen with the operating agreement of one of her solely-owned companies,
Global Real Estate Management, a Washington, D.C. corporation (and a defendant in this case),
see id. ¶ 9; Compl. ¶ 4, which showed a capital infusion of $200,000, Pl.’s Stmt. of Undisputed
Facts ¶ 9. Contrary to Vu’s representations, however, she had not invested any capital in the
joint venture at the time. Id. ¶ 12. Rather, at the time Vu secured Nguyen’s commitment, the
account for the project had an overdraft balance of –$147.56. Id. ¶¶ 11–13.
In addition, Vu provided Nguyen with other investment documents indicating his relative
share and the operating costs of the project. Id. ¶¶ 15–17. They agreed, in relevant part, that
Nguyen would be paid back the entirety of his investment plus transaction fees, and any profits
would be split between the two according to their relative ownership interests. Id. ¶ 22. Based
on all of these representations, Nguyen agreed to contribute to the venture. Id. ¶ 19. Vu told
1 “[A]ny factual assertion in the movant’s affidavits will be accepted by the [Court] as being true
unless the plaintiff submits his own affidavits or other documentary evidence contradicting the
assertion.” Neal, 963 F.2d at 456–57. The local rules of this district likewise dictate that “[i]n
determining a motion for summary judgment, the court may assume that facts identified by the
moving party in its statement of material facts are admitted, unless such a fact is controverted in
the statement of genuine issues filed in opposition to the motion.” LCvR7(h)(1).
2
Nguyen that she would use one of her other solely-controlled entities, the Global Financial
Group, also a Washington, D.C. corporation, Compl. ¶ 5, and defendant in this case, as “the
primary vehicle to purchase and sell real estate in furtherance of the Business Venture,” Pl.’s
Stmt. of Undisputed Facts ¶ 23, and would store the investment capital in bank accounts
controlled by Global Financial Group, id. Mere days after Nguyen contributed the agreed upon
sum of $50,000, Vu requested that he contribute another $50,000, which Nguyen did. Id. ¶¶ 30,
31, 34.
Ultimately, though, Vu did not intend to use Nguyen’s capital investments for the project
as described, but rather for “personal expenditures unrelated to the flipping of real estate in the
Washington, D.C. Metropolitan Area.” Id. ¶ 20. For example, on “the same day she received
Mr. Nguyen’s second capital contribution payment . . . Ms. Vu initiated another transfer of
$4,700.00 to her personal account, withdrew $9,500.00 in cash, which remains unaccounted for,
transferred $9,000.00 to a Vietnam account for purposes of ‘family support,’ and, between
January 22 and 23, 2018, went on a shopping spree, including spending $3,922.00 in purchases
at Gucci, $1,534.83 at the Apple store, and $3,286.00 at Bloomingdales.” Id. ¶ 37.
Meanwhile, Vu gave Nguyen assurances that she was “very actively working on [the]
project.” Id. ¶ 38. The two then met in person, at which point Vu suggested they both contribute
an additional $100,000. Id. ¶ 39. In reliance on Vu’s assurances, Nguyen agreed, and
transferred the funds. Id. ¶ 40. Although Vu represented that she too would contribute an
additional $100,000, she did not. Id. ¶¶ 41–42. Instead, in the week following Nguyen’s
transfer, “Vu withdrew $31,000.00 of Mr. Nguyen’s investment funds in cash . . . transferred
$50,000.00 to a personal account for Global Realty Management, Inc.[] opened on March 31,
2018, and spent an additional $3,400.00 at various retailers.” Id. ¶ 43. Vu again made various
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unaccounted for withdrawals the next month, including a $32,500 cash withdrawal, a $3,000
wire to Vietnam for “family support,” and a $7,500 check payable to herself. Id. ¶ 44. Vu then
asked Nguyen to contribute an additional $100,000, which he did, making his total contribution at
that point $300,000. Id. ¶ 46. Vu continued to represent that she had contributed $200,000 to the
project, even though she had yet to contribute any funds. Id. ¶ 51. Vu then asked Nguyen to loan
her $50,000 for personal expenses and debts, which he did, based on her representation that she
would repay the principal amount and any transaction fees by December 30, 2018, plus any
interest on the principal at the rate of 15%. Id. ¶¶ 52–53.
Vu then asked Nguyen to contribute an additional $50,000 to the joint venture,
representing that this would be the final investment needed to complete the project successfully.
Id. ¶ 59. Nguyen reluctantly agreed. Id. ¶ 60. But Vu later changed course, suggesting that “it
would be preferable to purchase a commercial building in the Washington, D.C. area, for which
the Business Venture would require even more funding.” Id. ¶ 60 (emphasis added). When
Nguyen informed Vu that he did not have the money, “Vu warned that his failure to [pay] could
result in the loss of his investment to date . . . and instructed Mr. Nguyen to withdraw funds held
in various retirement accounts and liquidate other assets to raise this capital.” Id. ¶ 62. Vu
further promised that Nguyen would make up any consequential losses in the proceeds from the
business venture. Id. ¶ 63. Nguyen accordingly liquidated his retirement and credit assets and
contributed an additional $150,000 to the project, incurring transactional costs of $13,500. Id. ¶
65. Here again, though, Vu did not use Nguyen’s contributions to further the joint venture. Id. ¶
69. Rather, Vu made various unaccounted for withdrawals and personal purchases, including
$20,500 withdrawn for “family support,” $28,100 withdrawn in cash, $1,252.50 spent at
Bloomingdales, $7,923.50 spent at Neiman Marcus, $1,650 spent at a dentist’s office, and $7,000
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withdrawn in a check Vu wrote to herself and deposited in her personal checking account. Id. ¶¶
70–76.
In the end, Nguyen contributed a total of $505,000 in investment funds plus $50,000 for
the personal loan. Id. ¶ 77. None of those funds were used to purchase real estate, and he has
not been repaid any portion of his investment contribution or the personal loan. Id. ¶ 101.
Nguyen was also never paid the $8,125 in accrued interest on the loan as of the date of Nguyen’s
summary judgment filing. See id. ¶ 53 (noting that the parties agreed to a 15% interest rate on
the personal loan); Am. Mot. for Summ. J. at 31 (noting the total interest due). Nguyen also lost
$13,500 in fees and penalties for liquidating his retirement and credit assets, at the direction of
Vu, Pl.’s Stmt. of Undisputed Facts ¶ 65, as well as $430 in wire transfer fees, see Am. Mot. for
Summ. J. Ex. 7 (receipts for wire transfers); see also Pl.’s Stmt. of Undisputed Facts ¶¶ 29, 34,
49, 55. This brings Nguyen’s total loss to $577,055.
Nguyen filed his complaint in this suit on March 28, 2019, Dkt. 1. The day after Vu and
the defendant companies were served with the complaint in this litigation, on April 4, 2019, Vu
initiated a criminal complaint against Nguyen, alleging that he had committed sexual battery
against her. Pl.’s Stmt. of Undisputed Facts ¶ 92. Nguyen denied the allegation, and Vu
dropped the charge. Id. ¶ 98. Vu and her companies then responded to the complaint with an
eleven-count counterclaim. Dkt. 11. The Court later granted in part Nguyen’s partial motion to
dismiss the counterclaims, Dkt. 13, dismissing three of the eleven counterclaims, see Order of
February 21, 2020, Dkt. 53.
Vu and her companies were initially represented by counsel, but Vu now represents
herself pro se. See Minute Order of December 6, 2019 (granting a motion to withdraw as
attorney due to irreconcilable differences between counsel and defendant). The Court “advised
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Ms. Vu on multiple occasions,” however, that although she may represent herself pro se, she
cannot represent the corporate defendants. Id. (citing Rowland v. Cal. Men’s Colony, 506 U.S.
194, 201–02 (1993) (“It has been the law for the better part of two centuries . . . that a
corporation may appear in the federal courts only through licensed counsel.”)). Nevertheless, Vu
has failed, as of this point, to comply with the Court’s instruction that she retain counsel to
represent her companies.
Throughout this litigation, Vu has failed to comply with numerous other orders of this
Court. Despite the Court’s repeated orders that Vu comply with the discovery process, for
example, she declined to do so. See, e.g., Minute Order of October 22, 2019; Minute Order of
November 8, 2019; Minute Order of November 25, 2019; Minute Order of December 6, 2019;
and Minute Order of December 17, 2019. Given Vu’s persistent refusal to comply, the Court
laid out a discovery plan in which discovery would proceed in stages. See Hearing of December
17, 2019. Specifically, the Court explained that until Vu complied with Nguyen’s long-standing
discovery requests, including requests for information supporting her own counterclaims, the
Court would not entertain Vu’s broad discovery requests. Id. Vu still refused to meaningfully
participate in discovery as ordered, see Hearing of January 6, 2020, and Nguyen was forced to
seek Vu’s bank records through costly subpoenas to financial institutions. Am. Mot. for Summ.
J. at 2–3. Vu has also failed to appear at multiple scheduled hearings before this Court. See,
e.g., Hearing of January 6, 2020; Hearing of February 21, 2020. Eventually, after holding a
hearing on the motion at which Vu declined to appear, the Court granted Nguyen’s motion to
compel discovery responses, Dkt. 39, and motion for attorney’s fees and sanctions, Dkt. 41; see
Order of January 6, 2020, Dkt. 47; Order of February 3, 2020, Dkt. 51.
6
Nguyen then filed a motion for summary judgment, Dkt. 62, and later an Amended
Motion for Summary Judgment, Dkt. 63, on the remaining counts in the complaint and the
counterclaim. The Court warned Vu, see Minute Order of September 1, 2020, that on a motion
for summary judgment, “any factual assertions in the movant’s affidavits will be accepted as
being true unless [the opposing party] submits his own affidavits or other documentary evidence
contradicting the assertion.” Neal v. Kelly, 963 F.2d 453, 456 (D.C. Cir. 1992). The Court
further admonished that: “Under Fed. R. Civ. P. 56(e), if a party fails to properly support an
assertion of fact or fails to properly address another party’s assertion of fact as required by Rule
56(c), the court may: (1) give an opportunity to properly support or address the fact; (2) consider
the fact undisputed for purposes of the motion; (3) grant summary judgment if the motion and
supporting materials including the facts considered undisputed show that the movant is entitled
to it; or (4) issue any other appropriate order.” Minute Order of September 1, 2020.
Nonetheless, as noted, neither Vu nor her companies, which remain unrepresented, responded to
Nguyen’s motion for summary judgment. The motion is now ripe for review.
II. LEGAL STANDARDS
A court grants summary judgment if the moving party “shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). A
“material” fact is one with potential to change the substantive outcome of the litigation. See
Liberty Lobby, 477 U.S. at 248; Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). A
dispute is “genuine” if a reasonable jury could determine that the evidence warrants a verdict for
the nonmoving party. See Anderson, 477 U.S. at 248; Holcomb, 433 F.3d at 895. “If there are
no genuine issues of material fact, the moving party is entitled to judgment as a matter of law if
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the nonmoving party ‘fails to make a showing sufficient to establish the existence of an element
essential to that party’s case, and on which that party will bear the burden of proof at trial.’” Id.(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
It is well established, however, that “a plaintiff opposing summary judgment” must
“substantiate [allegations] with evidence” that “a reasonable jury could credit in support of each
essential element of her claims.” Grimes v. District of Columbia, 794 F.3d 83, 94 (D.C. Cir.
2015). The moving party is entitled to summary judgment if the nonmoving party “fails to make
a showing sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322.
Although Vu has not agreed that Virginia law should apply to these state law claims, no
substantive choice of law analysis is required, as there is no material “conflict between the laws
of the relevant jurisdictions” in the legal standards for the substantive claims in this case. Young
Women’s Christian Ass’n of the Nat’l Capital Area, Inc. v. Allstate Ins. Co. of Canada, 275 F.3d
1145, 1150 (D.C. Cir. 2002). 2
2 If there were a conflict, the Court would “then determine, pursuant to District of Columbia
choice of law rules, which jurisdiction has the more substantial interest in the resolution of the
issues.” Young Women’s Christian Ass’n, 275 F.3d at 1150; see also Eli Lilly & Co. v. Home
Insurance Co., 764 F.2d 876, 882 (D.C. Cir. 1985) (“In a diversity case a federal court must
apply the choice of law principles of the jurisdiction in which it sits.”). Vu is a citizen of
Virginia, and her companies are incorporated in the District of Columbia; Nguyen is domiciled
in Texas. See Compl. ¶¶ 2–5. The January 2018 meeting in which the parties decided to enter a
joint venture and established the terms of their agreement occurred in Virginia, Pl.’s Stmt. of
Undisputed Facts ¶ 5, as did the later March meeting, id. ¶ 39. Other meetings occurred in
Texas, id. ¶ 61, and California, id. ¶ 45. Vu made her personal purchases with Nguyen’s
contributions primarily in Virginia as well. Id. ¶ 70. And although the plan between the parties
was to flip properties in Washington, D.C., Vu never actually purchased any property there. Id. ¶
101. Given these facts, Virginia would likely have the most substantial interest in the resolution
of this case, and Virginia law would apply should there be a conflict of law.
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III. ANALYSIS
Nguyen’s claims include counts of fraud, breach of contract, breach of fiduciary duties,
and a request for punitive damages and attorney’s fees. See generally Mot. for Am. Summ. J.
Similarly, in her counterclaim, Vu alleges several counts of fraud, breach of contract, breach of
fiduciary duties, and various tort claims. See generally Countercl.
A. Fraud Claims
Two fraud claims remain: count I of the complaint, which alleges that Vu fraudulently
induced Nguyen’s participation in the business venture; and count VIII of the counterclaim,
which alleges that Nguyen fraudulently induced Vu’s participation in the business venture.
Based on the undisputed facts above, the Court will grant summary judgment to Nguyen on both
claims.
For a claim of fraud in the inducement under Virginia law, “a plaintiff must prove the
following three elements by clear and convincing evidence: (1) the defendant made a material
misrepresentation for the purpose of procuring a contract; (2) the plaintiff relied on the
misrepresentation; and (3) the plaintiff was induced by the misrepresentation to enter into the
agreement.” Fransmart, LLC v. Freshii Dev., LLC, 768 F. Supp. 2d 851, 864 (E.D. Va. 2011)
(citing Brame v. Guarantee Fin. Co., 139 Va. 394 (1924)). The undisputed facts show that Vu
made several material misrepresentations, including about her own financial contributions to the
joint venture, see, e.g., Pl.’s Stmt. of Undisputed Facts ¶¶ 6, 11–13, and her intended use of
Nguyen’s contributions, see, e.g., id. ¶¶ 15–16, 20, 101. She represented, for example, that she
had already contributed $200,000 to the project herself when she had contributed nothing, see id.
¶¶ 6, 11–13, and that she would use Nguyen’s contributions for the agreed-upon purchase of real
estate, when she instead used the funds for personal expenses unrelated to the joint venture, id.
9
¶¶ 15–16, 20, 101. Further, Nguyen relied on Vu's misrepresentations, see id. ¶ 32, and was
induced to participate in the project and to continue to contribute additional significant sums on
the basis of her misrepresentations, id. ¶¶ 10–11, 39–40.
On the other hand, the undisputed facts make clear that Vu cannot prevail on her fraud
counterclaim. She alleges that Nguyen misrepresented his wealth, his ability to contribute
$500,000 quickly, and the fact that he wanted a business, not romantic, relationship with Vu.
Countercl. ¶¶ 176–78. The undisputed facts, however, establish that “[w]hen finalizing the terms
of the Business Venture on January 6, 2018, Mr. Nguyen did not make any representation to Ms.
Vu that he intended to invest more than the agreed-upon $50,000 sum toward the Business
Venture, and did not otherwise make any representations to Ms. Vu about his personal wealth
and/or income.” Pl.’s Stmt. of Undisputed Facts ¶ 28. Further, the undisputed facts contain no
support for the proposition that Nguyen misrepresented his motivation for entering into the joint
venture. See generally Pl.’s Stmt. of Undisputed Facts. For these reasons, Vu cannot establish
that Nguyen made any material misrepresentations, and her fraud counterclaim cannot survive
summary judgment.
B. Contractual Claims
The remaining contractual claims include: count III of the complaint, which alleges that
Vu breached the January 2018 investment contract; count IV of the complaint, which alleges that
Vu breached the loan agreement; and counts I and II of Vu’s counterclaims, which allege that
Nguyen breached the January 2018 investment contract. The elements of a breach of contract
claim include: the existence of “(1) a legally enforceable obligation of a defendant to a plaintiff;
(2) the defendant’s violation or breach of that obligation; and (3) injury or damage to the plaintiff
10
caused by the breach of obligation.” Navar Inc. v. Federal Business Council, 291 Va. 338, 344
(2016).
Based on the undisputed facts, Nguyen has established the elements of breach of contract
both as to the January 2018 investment contract and the later personal loan agreement. First, as
for the investment contract, the undisputed facts show that Nguyen and Vu had a “meeting of the
minds” at the January 6, 2018 meeting in which they agreed to begin the joint venture. Phillips
v. Mazyck, 273 Va. 630, 636 (2007) (“It is elementary that mutuality of assent—the meeting of
the minds of the parties—is an essential element of all contracts.”); see Pl.’s Stmt. of Undisputed
Facts ¶¶ 6–19. At that meeting, the parties discussed specific terms and reached an agreement:
Nguyen accepted Vu’s offer of a 25% ownership interest in the project to flip real estate in
Washington, D.C. in exchange for his $50,000 investment. Pl.’s Stmt. of Undisputed Facts ¶ 7.
“The basic elements of a contract are an offer, acceptance, and consideration,” Sfreddo v.
Sfreddo, 59 Va. App. 471, 488 (2012), and this agreement satisfies all three. Because Vu did not
oppose the motion for summary judgment, furthermore, she does not dispute these facts or offer
any defenses to contract formation. In any case, she concedes in her counterclaim allegations
that “[o]n or around January 5, 2018, Mr. Nguyen and Ms. Vu entered into the Contract to invest
in and develop real estate in the United States and abroad.” Countercl. ¶ 115. Second, the
undisputed facts show that Vu breached the agreement and that Nguyen suffered damages. For
example, Vu promised to use one of her companies “as the primary vehicle to purchase and sell
real estate in furtherance of the Business Venture, as well as to safeguard the stakeholders’
respective investments in bank accounts . . . and use such exclusively in furtherance of the
Business Venture.” Pl.’s Stmt. of Undisputed Facts ¶ 23. She failed, however, to safeguard
Nguyen’s investment and in fact used the funds on personal purchases unrelated to the agreed
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upon purpose. Id. ¶¶ 37, 101. Vu also breached subsequent agreements (or modifications to the
original agreement) by failing to contribute additional funds, despite promises to do so. Id. ¶ 39.
And Nguyen was damaged by this breach—he has received no repayment for any of his
$505,000 in investment contributions or associated fees and penalties. Id. ¶ 101.
Nguyen has likewise established breach and damages as to his June 2018 personal loan to
Vu. In the written promissory note agreement, id. ¶¶ 53–54, Nguyen agreed to lend Vu $50,000
at a rate of 15% interest. Id. Vu agreed to pay the principal amount, fees, and interest on or
before December 30, 2018. Id. With that deadline long passed, Vu has breached the agreement
by failing to pay Nguyen any amount in repayment of the loan. Id. ¶ 101.
Vu’s breach of contract claims, meanwhile, find no support in the undisputed facts. In
her counterclaim, Vu alleged that Nguyen breached the January 6, 2018 agreement by
“parcel[ing] out his capital contributions in small amounts and over time,” instead of providing
$500,000 right away, Countercl. ¶ 121; failing to sign certain documents in furtherance of the
venture or listen to Vu’s business plans, id. ¶ 122; conditioning his payments on sexual
advances, id. ¶ 132; and using the investment contract as a way to pressure Vu into a romantic
relationship, id. ¶ 133. The undisputed facts establish, however, that “Nguyen never agreed to
remit more than his initial $50,000.00 to the Business Venture in January 2018,” Pl.’s Stmt. of
Undisputed Facts ¶ 86, that Nguyen “never delayed, impeded, or otherwise harmed the
operations of the Business Venture,” id. ¶ 89, “never refused to execute any documents and/or
agreements related to the operations of the Business Venture,” id. ¶ 88, “and never conditioned
his provision of funds on Ms. Vu’s participation in a romantic relationship with Mr. Nguyen,” id.
Thus, without any other bases for Vu’s breach of contract claims, the claims cannot survive as a
matter of law.
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C. Fiduciary Claims
The fiduciary claims include: count II of the complaint, which alleges that Vu and her
companies unlawfully converted Nguyen’s investment funds; count V of the complaint, which
alleges that Vu and her companies breached their fiduciary duties to Nguyen by exploiting their
position of trust; and count III and count V of Vu’s counterclaims, which allege that Nguyen
breached fiduciary duties that he owed to Vu and her companies.
“If the parties are joint venturers, a fiduciary duty then exists between or among them.”
G. Bogert, et al., The Law of Trusts and Trustees § 488 (2020); see also Hamby v. St. Paul
Mercury Indem. Co., 217 F.2d 78, 80 (4th Cir. 1954) (“Certainly there can be no question as to
the existence of the fiduciary capacity in a case where the agent has been entrusted with money
to be used for a specific purpose.”). Thus, “[i]n receiving and handling the funds entrusted to
[her] . . . [Vu] occupied a fiduciary relationship . . . with a transcendent duty to disburse the
funds as [] directed.” Pickus v. Va. State Bar, 232 Va. 5, 10 (1986). And “[c]onversion is a tort
involving injury to property,” Hartzell Fan, Inc. v. Waco, Inc., 256 Va. 294, 301 (1998), and
“includes any distinct act of dominion wrongfully exerted over property that is in denial of, or
inconsistent with, the owner’s rights,” id. at 301–02.
Here, Vu assumed responsibility for the management of the funds, Pl.’s Stmt. of
Undisputed Facts ¶ 24, and was obligated to safeguard Nguyen’s financial property as the sole
owner of her companies’ bank accounts and the manager of the business venture, see id. ¶¶ 24,
42. But, as discussed at length above, Vu and her companies did not safeguard the funds or use
them for the real estate project, despite their duty to do so. Id. ¶ 101. Thus, the defendants
breached their fiduciary duty to Nguyen by failing to use the funds for the agreed upon purpose
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and converted the funds by using them for an improper purpose inconsistent with their authority
over Nguyen’s property.
As for Vu’s counterclaim, Nguyen likewise owed Vu and her companies a fiduciary duty.
But it is undisputed that Nguyen “never delayed, impeded, or otherwise harmed the operations of
the Business Venture,” id. ¶ 89, “never refused to execute any documents and/or agreements
related to the operations of the Business Venture,” id. ¶ 88, “and never conditioned his provision
of funds on Ms. Vu’s participation in a romantic relationship with Mr. Nguyen,” id. Thus, there
is no evidence that Nguyen breached any fiduciary duties owed to the defendants.
D. Tort Claims
Finally, Vu brings several tort claims against Nguyen: count V of the counterclaim,
which alleges that Nguyen committed battery against Vu, specifically by touching her in an
inappropriate manner on a business trip in California; count VII of the counterclaim, which
alleges that Nguyen tortuously interfered with Vu’s prospective business advantage; count X of
the counterclaim, which alleges that Nguyen made negligent misrepresentations to entice Vu to
enter into the business agreement; and count XI of the counterclaim, which alleges that Nguyen
acted negligently by failing to “sign documents, invest money, and otherwise act with the
ordinary standard of care.” Countercl. ¶ 211.
Based on the undisputed facts, none of these claims survive summary judgment. Battery
requires offensive contact, see Ashcraft v. King, 228 Cal. App. 3d 604, 611 (1991), 3 but it is
undisputed that “Mr. Nguyen has never engaged in any offensive physical contact with Ms. Vu
3 Because the alleged incident occurred in California, Countercl. ¶ 78, the Court cites California
law, although there is no conflict on this issue between the relevant jurisdictions. See Dao v.
Faustin, 402 F. Supp. 3d 308, 317 (E.D. Va. 2019) (stating the elements for battery under
Virginia law).
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at any time,” Pl.’s Stmt. of Undisputed Facts ¶ 99, and “Mr. Nguyen and Ms. Vu have never
engaged in sexual or offensive physical contact at any time,” id. ¶ 100.
Next, both the negligence counterclaim and the interference with prospective business
advantage counterclaim are based on allegations that Nguyen failed to make capital contributions
and refused to sign important documents. See Countercl. ¶¶ 168, 211. It is undisputed, however,
that Nguyen “never refused to execute any documents and/or agreements related to the
operations of the Business Venture,” Pl.’s Stmt. of Undisputed Facts ¶ 88, and in fact made
$505,000 in capital contributions, id. ¶ 77.
For the negligent misrepresentation claim, Vu alleges that Nguyen misrepresented that
(1) “he had significantly more personal wealth and expendable investment funds than he does,”
Countercl. ¶ 199; (2) “he could and would pay his $500,000 investment into the Business
Venture in a relatively limited, quick payment or payments, spanning a short period of time,” id.
¶ 200; (3) “that he wanted a business, not a romantic, relationship with Ms. Vu,” id. ¶ 201; and
(4) “he would cooperate with rather than hinder Ms. Vu’s efforts to develop real estate deals,” id.
¶ 202. The undisputed facts, meanwhile, establish that (1) “Nguyen did not make any
representation to Ms. Vu that he intended to invest more than the agreed-upon $50,000.00 sum
toward the Business Venture, and did not otherwise make any representations to Ms. Vu about
his personal wealth and/or income,” Pl.’s Stmt. of Undisputed Facts ¶ 28; (2) Nguyen “never
delayed, impeded, or otherwise harmed the operations of the Business Venture,” id. ¶ 89, and;
(3) “Mr. Nguyen and Ms. Vu have never engaged in sexual or offensive physical contact at any
time,” id. ¶ 100. Given that the undisputed facts contradict Vu’s allegations in full, these
counterclaims do not survive.
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E. Punitive Damages and Attorney’s Fees4
Nguyen requests punitive damages “in an amount not less than $350,000,” 5 Am. Mot. for
Summ. J. at 43, although he provides no support justifying that particular amount, see id. “A
prevailing plaintiff in a fraud claim may be entitled to punitive damages if there is a showing of
‘actual malice, or such recklessness or negligence as to evidence a conscious disregard of the
rights of others.”’ Glaser v. Hagen, No. 14-cv-1726, 2016 WL 521454, at *2 (E.D. Va. Feb. 5,
2016) (quoting Jordan v. Suave, 247 S.E.2d 739, 741 (Va. 1978)). “[T]he Virginia Supreme
Court held that punitive damages in a fraud action may be recovered only if there is proof, either
direct or circumstantial, showing actual malice.” Job Am. Mgmt. Exp. Imp.—N. Carolina, Ltd. v.
Kaltone Petrol. Mktg. Corp., No. 99-cv-24, 1999 WL 33228367, at *6 (E.D. Va. Dec. 10, 1999)
(internal quotation marks omitted). This requires a “state of mind above the threshold level
required to establish liability for compensatory relief.” Sit–Set, A.G. v. Universal Jet Exchange,
Inc., 747 F.2d 921, 928 (4th Cir. 1984). “Where this line of aggravation is to be drawn in fraud
cases is of course a matter difficult of definition and application,” id., but requires “an element of
wantonness, or malice, or overreaching going beyond mere shadiness in commercial dealings,”
id. (internal quotation marks omitted).
4 Unlike the relevant legal standards for the substantive claims in this case, the laws of the
District of Columbia and Virginia diverge slightly when it comes to punitive damages. Compare
Butera v. District of Columbia, 235 F.3d 637, 657 (D.C. Cir. 2001) (requiring “malice,” defined
as “fraud, ill will, recklessness, wantonness, oppressiveness, willful disregard of the plaintiff’s
right, or other circumstances tending to aggravate the injury”), with Jordan v. Suave, 247 S.E.2d
739, 741 (Va. 1978) (requiring “actual malice” defined as “ill will, malevolence, grudge, spite,
wicked intention, or a conscious disregard of the rights of another.”). But, as discussed above,
supra n.2, the Court will apply the law of Virginia, pursuant to this forum’s choice of law rules.
5This amount represents the statutory maximum for punitive damages under Virginia law. See
Va. Code Ann. § 8.01-38.1.
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Punitive damages are “determined by the trier of fact.” Va. Code Ann. § 8.01-38.1.
Accordingly, even taking the undisputed facts as true, the Court cannot determine as a matter of
law that Nguyen is entitled to any sum, let alone a specific sum, of punitive damages. Rather,
the trier of fact will have to weigh the facts and adjudge whether the events here are so egregious
as to establish “actual malice.” Jordan, 247 S.E.2d at 741. The record before the Court does not
support a legal conclusion on that issue, so summary judgment on punitive damages would be
improper.
Nguyen also requests attorney’s fees and costs. “The general rule in [Virginia law] is that
in the absence of a statute or contract to the contrary, a court may not award attorney’s fees to the
prevailing party.” Carlson v. Wells, 705 S.E.2d 101, 109 (Va. 2011). One “exception[]” to the
rule, however, is that “in a fraud suit, a chancellor, in the exercise of his discretion, may award
attorney’s fees to a defrauded party.” Id. at 109–110; see also C.F. Tr., Inc. v. First Flight Ltd.
P’ship, 359 F. Supp. 2d 497, 501 (E.D. Va. 2005) (recognizing this exception). This is
especially relevant when there is a “pattern of misconduct,” Carlson, 705 S.E.2d at 110, in
which the fraudulent party “engaged in callous, deliberate, deceitful acts,” Prospect Dev. Co. v.
Bershader, 515 S.E.2d 291, 301 (1999). Such an award is a matter of “discretion.” Tauber v.
Commonwealth ex rel. Kilgore, 263 Va. 520, 547 (2002); see also In re Wassenaar, 268 B.R.
477, 481 (W.D. Va. 2001) (“Bershader leaves it to the trial court’s discretion to determine if
attorney’s fees should be awarded in a fraud case.”).
Nguyen provides no statutory or contractual basis for the award of attorney’s fees and
costs, but instead relies on this state common law exception to the general rule. See Am. Mot.
for Summ. J. at 2–3. And although Virginia law provides for a fraud exception, the fraud claims
in this case represent only a minority of the claims brought. See generally Compl. Indeed, only
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one count of Nguyen’s complaint (count I) alleges a claim for fraud. Id. Further, the fraud
exception in Virginia law is closely tied to a chancellor’s particular powers in equity. See
Bershader, 258 Va. at 92 (holding that “a chancellor, in the exercise of his discretion, may award
attorney’s fees to a defrauded party”); JTH Tax, Inc. v. Aime, No. 16-cv-279, 2017 WL 2999970,
at *4 (E.D. Va. June 26, 2017), aff’d in part, vacated in part, 744 F. App’x 787 (4th Cir. 2018)
(“[T]he Bershader decision heavily relied upon the chancellor’s equitable powers in granting an
award of attorneys’ fees.”); Anand v. Allison, 55 Va. Cir. 261 (2001) (assuming “doubtfully, that
the trial judge in a law action in which fraud has been proven, has the same power to award
attorney’s fees as does the chancellor” (emphasis added)). And “this exception, like all
exceptions to the rule against awarding attorneys’ fees unless authorized by statute or contract,
should be interpreted narrowly.” C.F., 359 F. Supp. at 503. Thus, without any other basis to
justify a departure from the ordinary rule, the Court will deny the request for attorney’s fees and
costs. See, e.g., Aime, 2017 WL 2999970, at *4 (finding that a case involving fraud, among
other claims, did not “qualify as a limited circumstance where the Court should exercise its
discretion to grant Defendants an award of attorneys’ fees”).
CONCLUSION
For the foregoing reasons, the motion for summary judgment is granted in part and
denied in part. Accordingly, Nguyen is entitled to compensatory damages totaling $577,055, see
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supra at 5, against the defendants. A separate order consistent with this decision accompanies
this memorandum opinion.
________________________
DABNEY L. FRIEDRICH
December 20, 2020 United States District Judge
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