`
`Charles S. Bronitsky, Esq. (SBN 124332)
`Law Office of Charles S. Bronitsky
`533 Airport Blvd., Suite 326
`Burlingame, CA 94010
`Tel: (650) 918-5760
`Fax: (650) 649-2316
`
`Attorneys for Plaintiffs
`San Pablo SR2, LLC and
`San Palbo SR3, LLC
`
`
`
`
`
`ELECTRONICALLY
`F I L E D
`
`Superior Court of California,
`County of San Francisco
`08/16/2021
`Clerk of the Court
`BY: EDWARD SANTOS
`Deputy Clerk
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`
`FOR THE CITY COUNTY OF SAN FRANCISCO
`UNLIMITED CIVIL CASE
`
`SAN PABLO SR2, LLC, a California Limited Case No.: CGC-19-575729
`
`THIRD AMENDED COMPLAINT
`
`
`
`
`
`Defendants
`
`Cross-Complainant,
`
`vs.
`
`
`Liability Company, and SAN PABLO SR3,
`LLC, a California Limited Liability Company
`
`Plaintiffs,
`
`
`
`
`vs.
`
`SPARX 7, LLC, a California Limited Liability
`Company; KEVIN LEE, an individual and
`DOES 1 through 20, inclusive,
`
`
`
`_______________________________
`
`SPARX 7, LLC
`
`
`
`
`
`
`SAN PABLO SR2, LLC; SAN PABLO SR3,
`LLC; SUNRIDGE II, LLC; SUNRIDGE III, LLC;
`SUNRIDGE VI, LLC; DIXON NG; DEANNA
`KUNG; DONALD KUNG; PORTFOLIO
`LENDING; GREEN WORLD DEVELOPMENT,
`LLC and ROES 1 through 50, inclusive
`
`
`
`
`
`
`
`
`Cross-Defendants
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
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`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`
`

`

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`Plaintiffs, SAN PABLO SR2, LLC, and SAN PABLO SR3, LLC allege:
`GENERAL ALLEGATIONS
`
`1.
`
`Plaintiff, SAN PABLO SR2, LLC, is, and at all times relevant to this action
`
`was, a California limited liability company.
`
`2.
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`Plaintiff, SAN PABLO SR3, LLC, is, and at all times relevant to this action
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`was, a California limited liability company.
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`3.
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`Plaintiffs are informed and believe and thereon allege that Defendant, SPARX
`
`7, LLC, is, and at all times relevant to this action was, a California limited liability company
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`with its principal place of business located in the City and County of San Francisco, California.
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`4.
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`Plaintiffs are informed and believe and thereon allege that Defendant KEVIN
`
`LEE is, and at all times relevant to this action was, an individual residing in the City and County
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`of San Francisco, California. Plaintiffs are informed and believe and thereon allege that
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`Defendant KEVIN LEE is, and at all times relevant to this action was the sole member and
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`manager of Defendant, SPARX 7, LLC and made specific representations to Plaintiffs in
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`connection with the transactions set forth herein.
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`5.
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`Venue is proper in the Superior Court for the City and County of San Francisco
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`on the basis that Defendant’s principal place of business is located there.
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`6.
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`Plaintiffs are unaware of the true names, capacities, or basis for liability of
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`defendants DOES 1 through 20, inclusive, and therefore sues said defendants by their fictitious
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`names. Plaintiffs will amend this complaint to allege their true names, capacities, or basis for
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`liability when the same has been ascertained. Plaintiffs are informed and believe and thereon
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`alleges that defendants DOES 1 through 20, inclusive, and each of them, are in some manner
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`liable to Plaintiffs.
`
`7.
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`Plaintiffs are informed and believe and thereon allege that at all times relevant to
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`this action, each defendant, including those fictitiously named, was the agent, servant,
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`employee, partner, joint venturer, or surety of the other defendants and was acting within the
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`scope of said agency, employment, partnership, venture, or suretyship, with the knowledge and
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`consent or ratification of each of the other defendants in doing the things alleged herein.
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`2
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

`
`
`FACTUAL ALLEGATIONS
`
`8.
`
`Prior to December of 2017, Defendant SPARX 7, LLC was the owner of that
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`certain parcel of land located at 3020 San Pablo Avenue, Berkeley, California (the “Property”).
`
`Defendant KEVIN LEE is and was the sole member of Defendant SPARX 7, LLC.
`
`9.
`
`In May and June of 2017, Defendant KEVIN LEE and DONALD KUNG who
`
`is one of the principals of Plaintiff, SAN PABLO SR3, LLC’s met and communicated by
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`telephone and text regarding the purchase of the Property. In those discussions, the parties
`
`agreed that Defendant KEVIN LEE and Plaintiffs would form a joint venture for the
`
`development of the Property. They would do this by having Plaintiffs acquire the property and
`
`pay in excess of the market price so that the additional funds could be used to pay rent to
`
`Plaintiffs and to fund the efforts needed to undertake the development. Defendant KEVIN
`
`LEE and Plaintiffs also agreed that Defendant KEVIN LEE would secure the amount Plaintiffs
`
`were paying in excess of the market value of the Property with assets that Defendant KEVIN
`
`LEE controlled which were unrelated to Defendant SPARX 7, LLC, and with a personal
`
`guarantee from Defendant KEVIN LEE.
`On or about August 14, 2017, Plaintiffs SAN PABLO SR2, LLC, and SAN
`
`10.
`
`PABLO SR3, LLC’s through their predecessors in interest SUNRIDGE II, LLC; SUNRIDGE III,
`
`LLC; and SUNRIDGE VI, LLC, on the one hand, and Defendant KEVIN LEE and an entity
`
`owned by Defendant KEVIN LEE, GREEN BUILDERS, LLC, on the other hand, entered
`
`into a written binding term sheet (the “Binding Term Sheet”) a copy of which is attached
`
`hereto as Exhibit A.
`
`11.
`
`The purpose of the Binding Term Sheet was to document the terms of the verbal
`
`agreement reached between Defendant KEVIN LEE and Plaintiffs, through the discussions
`
`between Defendant KEVIN LEE and DONALD KUNG. Pursuant to Paragraphs 1 and 4 of
`
`the Binding Term Sheet, Plaintiff’s predecessors-in-interest were purchasing the Property from
`
`KEVIN LEE and KEVIN LEE was to provide certain guarantees.
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
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`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

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`12.
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` Also, on or about August 14, 2017, Defendant KEVIN LEE individually, signed
`
`a Vacant Land Purchase Agreement, so sell the Property to Plaintiffs. A true and correct copy
`
`of the contract signed by KEVIN LEE individually, is attached hereto as Exhibit B.
`
`13.
`
`Also, on or about August 14, 2017, Defendant KEVIN LEE individually, signed
`
`an agreement entitled “Assignment of Contracts, Warranties, Licenses and Intangibles” in
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`which Defendant KEVIN LEE individually, is assigning, as the seller of the Property, all
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`existing rights related to the Property. A copy of the Assignment is attached hereto as Exhibit
`
`C.
`
`14.
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`Also, on or about August 14, 2017, Defendant KEVIN LEE, this time as
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`“Manager” of an entity named Green Builders, LLC signed a Ground Lease in which
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`Defendant KEVIN LEE as manager of Green Builders, LLC agreed to lease the Property from
`
`Plaintiffs. A copy of the Ground Lease is attached hereto as Exhibit D.
`
`15.
`
`Plaintiffs entered into these agreements based upon Defendant KEVIN LEE’s
`
`financial representations which were provided in writing by Defendant KEVIN LEE. A copy of
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`those representations are attached hereto as Exhibit E.
`
`16.
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`For several months following the execution of the Binding Term Sheet, the
`
`parties went about the process of drafting the documents and agreements they had agreed in the
`
`Binding Term Sheet, that they would execute. On or about December 22, 2017, Plaintiffs, SAN
`PABLO SR2, LLC, and SAN PABLO SR3, LLC, through their counsel, sent Defendants,
`
`SPARX 7, LLC, and KEVIN LEE a new ground lease (the “Ground Lease”), an Agreement to
`
`Form Joint Venture. a Construction Rider Work Letter, a Guaranty to be executed by KEVIN
`
`LEE, and a Guaranty to be executed by 790 Portrero, LLC, an entity owned and controlled by
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`Defendant KEVIN LEE. Copies of these documents are attached hereto as Exhibits F, G, H. I
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`and J. As is clear from the execution of Exhibits A through E, the email correspondence
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`between the parties, it was the intention and agreement of the parties that the integration clause
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`in the Ground Lease was to only relate to the Ground Lease terms and not to the entire joint
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`venture and financing agreements as set forth in the Binding Term Sheet and was contingent
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`upon Defendant KEVIN LEE executing all of the documents, including all of the exhibits to the
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`4
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

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`Ground Lease.
`
`17.
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`Defendant, KEVIN LEE, signed the December 2017 version of the Ground
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`Lease but without cause, and in breach of the Binding Term Sheet, refused to sign the
`
`remaining documents that were part of the entire agreement. Because Plaintiffs had deadlines
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`due to the 1031 exchange laws, Plaintiffs had no choice but to close or suffer a significant tax
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`penalty and so ultimately proceeded forward with the purchase of the Property based on
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`representations by Defendant, KEVIN LEE, that he would sign the remaining documents and
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`perform what he had agreed to perform under the Binding Tem sheet.
`
`18.
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`In addition to the breach of the Binding Term Sheet by failing to sign all of the
`
`necessary documents and by failing to perform Paragraphs 4, 5 and 6 thereof, Defendants
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`SPARX 7, LLC and KEVIN LEE entered into the Ground Lease, which, in Section 2.2
`
`provides that Defendant, SPARX 7, LLC, was to finance and complete construction and to
`purchase a performance bond naming Plaintiffs, SAN PABLO SR2, LLC, and SAN PABLO
`SR3, LLC as beneficiaries. Defendants, SPARX 7, LLC and KEVIN LEE, breached the
`
`Ground Lease by failing to do so.
`
`19.
`
`The Binding Term Sheet, in Section 4 provides that Defendant KEVIN LEE
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`will guarantee Plaintiffs’ investment by, in part, posting collateral from one or more parcels of
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`real property owned by him or by an entity controlled by him including a property located at
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`417-417 Clayton Street in San Francisco, California, (the “Clayton Street Property”) owned by
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`Defendant KEVIN LEE or by an entity controlled by him. Defendant, KEVIN LEE, breached
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`the Binding Term Sheet by failing to do so.
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`20. As part of the Ground Lease, the parties also executed Lease Addendum 1, a
`
`copy of which is attached hereto as Exhibit K (“Lease Addendum 1”).
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`21.
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`Pursuant to Lease Addendum 1, Defendant, SPARX 7, LLC, was to have
`
`established a “Soft-Costs Account” that required signatures from both Defendant, KEVIN
`
`LEE and Plaintiffs’ principals and to have funded said account from the net proceeds of the sale
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`the Clayton Street Property. Defendants SPARX 7, LLC and KEVIN LEE breached
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`Addendum 1 to the Ground Lease by failing to do so.
`
`5
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

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`22.
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`Also pursuant to Lease Addendum 1, prior to the sale of the Clayton Street
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`Property, Defendants, SPARX 7, LLC, and KEVIN LEE were to have granted a security
`interest to Plaintiffs, SAN PABLO SR2, LLC, and SAN PABLO SR3, LLC in the Clayton
`Street Property. Defendants SPARX 7, LLC and KEVIN LEE breached the Ground Lease by
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`failing to do so.
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`23.
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`Despite repeated demand therefore, Defendants, SPARX 7, LLC and KEVIN
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`LEE breached the Vacant Land Purchase Agreement, Binding Term Sheet and the Ground
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`Lease, including Lease Addendum 1 in the following additional ways:
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`a.
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`Defendant KEVIN LEE breached the Vacant Land Purchase Agreement
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`and the Binding Term Sheet by failing to sign the final Agreement to Form Joint
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`Venture, the Construction Rider Work Letter, the Guaranty to be executed by KEVIN
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`LEE, and the Guaranty to be executed by 790 Portrero, LLC, an entity owned and
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`controlled by Defendant KEVIN LEE. Defendant KEVIN LEE was a party to the
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`agreements alleged in Paragraphs 12, 13 and 14 by the fact that he signed them
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`individually and also by the fact that Defendant, SPARX 7, LLC could not have
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`provided either of the guarantees that were required under the Binding Term Sheet or in
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`Addendum 1 to the Vacant Land Purchase Agreement. Thus, in signing those
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`documents Defendant KEVIN LEE had to be acting in his individual capacity and
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`thereby agreeing to personally do what those agreements required him to do;
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`b.
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`Defendant SPARX 7, LLC breached the agreements by failing to pay the
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`monthly rent required by the Ground Lease since February 1, 2019;
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`c.
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`Defendant SPARX 7, LLC breached the agreements by failing to pay the
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`property taxes as required by the Ground Lease;
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`d.
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`Defendant SPARX 7, LLC breached the agreements by failing to
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`maintain the Property as required by the Ground Lease;
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`e.
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`Defendant KEVIN LEE breached the Vacant Land Purchase Agreement
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`and the Binding Term Sheet by failing to provide the security interest in the Clayton
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`Street Property;
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`6
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

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`f.
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`Defendant KEVIN LEE breached the Vacant Land Purchase Agreement
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`and the Binding Term Sheet by failing to sell the Clayton Street Property
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`g.
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`Defendant SPARX 7, LLC breached the agreements by failing to place
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`the net proceeds from the sale of the Clayton Street Property into the Soft-Costs
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`Account;
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`h.
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`Defendant SPARX 7, LLC breached the agreements by diverting funds
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`of $171,829 from the sale of the Property to pay mortgages, taxes and other liabilities
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`that were undisclosed to Plaintiffs until shortly before close of escrow, after it was too
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`late for Plaintiffs to void the transaction;
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`i.
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`Defendant SPARX 7, LLC breached the agreements by failing to take
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`any action to obtain a loan or other finance the construction;
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`j.
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`Defendant SPARX 7, LLC breached the agreements by failing to retain a
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`contractor to build the project that could qualify for the required performance bond;
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`and,
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`24.
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`Plaintiffs have performed all things necessary and required of plaintiffs under the
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`various agreements, except to the extent that Plaintiffs were prevented or excused from
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`performing by the breaches of Defendants as alleged herein.
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`FIRST CAUSE OF ACTION
`Breach of Contract
`Plaintiffs reallege and incorporate by this reference each and every allegation of
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`25.
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`the above paragraphs 1 through 24 inclusive, as if fully set forth herein.
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`26. Defendants, SPARX 7, LLC and KEVIN LEE individually and collectively
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`breached the Binding Term Sheet and the Ground Lease as set forth in Paragraph 11 through 17,
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`above.
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`27. As a result of said breach of the agreement, Plaintiffs, SAN PABLO SR2, LLC,
`and SAN PABLO SR3, LLC, have been damaged in an amount not yet determined but well in
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`excess of the minimum jurisdictional amount for this Court.
`Plaintiffs, SAN PABLO SR2, LLC, and SAN PABLO SR3, LLC have made
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`28.
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`repeated demands on Defendants, SPARX 7, LLC and KEVIN LEE to perform their
`7
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

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`obligations under the various agreements. Defendants, SPARX 7, LLC and and KEVIN LEE
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`have refused and failed and continue to refuse and fail to perform. Based on such conduct by
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`Defendants, SPARX 7, LLC, and and KEVIN LEE Defendants are liable for damages incurred
`and Plaintiffs SAN PABLO SR2, LLC, and SAN PABLO SR3, LLC are released from any
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`obligation to develop the Property with Defendant, SPARX 7, LLC.
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`WHEREFORE, Plaintiffs pray judgment as set forth below: STOPPED HERE
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`SECOND CAUSE OF ACTION
`Fraud
`
`Plaintiffs reallege and incorporate by this reference each and every allegation of
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`29.
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`the above paragraphs 1 through 28 inclusive, as if fully set forth herein.
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`30.
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`In August of 2017, in writing in various emails and by signing the Binding Term
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`Sheet and verbally, Defendant KEVIN LEE represented to Plaintiffs, that he would guarantee
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`Plaintiffs’ investment individually and by pledging certain collateral owned by entities owned or
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`controlled by Defendants;
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`31.
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`Plaintiffs are informed and believe that these representations were false when
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`made and Defendant KEVIN LEE made them knowing they were false and with the intent that
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`they be relied upon by Plaintiffs in agreeing to jointly develop the property and then paying at
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`least $1,000,000 more for the property than its market value as part of their investment in the
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`joint development project.
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`32.
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`Plaintiffs reasonably and justifiably relied on the promises made by Defendant,
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`Defendant KEVIN LEE in agreeing to jointly develop the property and then paying at least
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`$1,000,000 more for the property than its market value as part of their investment in the joint
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`development project.
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`33.
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`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
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`Plaintiffs have been damaged in the amount of $1,000,000.
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`34.
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`Plaintiffs are informed and believes that Defendant’s conduct was done with
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`oppression, fraud and malice and with the intent to injure Plaintiffs for which Defendants
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`should be subject to exemplary damages in an amount to be proven at trial.
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`8
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`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

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`WHEREFORE, Plaintiffs prays judgment as set forth below:
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`THIRD CAUSE OF ACTION
`Negligent Misrepresentation
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`Plaintiff realleges and incorporates by reference each and every allegation of the
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`35.
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`above paragraphs 1 through 30, 32 and 33 inclusive, as if fully set forth herein.
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`36.
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`Plaintiffs are informed and believe that Defendants’ promises, as set forth
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`herein, were made with negligent disregard for the truth or falsity of said statements, so that
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`Defendants could induce Plaintiffs agree to jointly develop the property and then pay at least
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`$1,000,000 more for the property than its market value as part of their investment in the joint
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`development project.
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`37.
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`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
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`Plaintiffs have been damaged in the amount of $1,000,000.
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`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`FOURTH CAUSE OF ACTION
`Fraud
`
`Plaintiffs reallege and incorporate by this reference each and every allegation of
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`38.
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`the above paragraphs 1 through 28 inclusive, as if fully set forth herein.
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`39.
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`In August of 2017, in writing and verbally, KEVIN LEE represented to Plaintiffs,
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`that he would individually or through an entity wholly controlled by him fund all costs of
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`development, obtain a construction loan and guarantee costs of construction;
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`40.
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`Plaintiffs are informed and believe that these representations were false when
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`made and Defendant KEVIN LEE made them knowing they were false and with the intent that
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`they be relied upon by Plaintiffs in agreeing to jointly develop the property and then paying at
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`least $1,000,000 more for the property than its market value as part of their investment in the
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`joint development project.
`
`41.
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`Plaintiffs reasonably and justifiably relied on the promises made by Defendant,
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`Defendant KEVIN LEE in agreeing to jointly develop the property and then paying at least
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`9
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

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`18
`19
`20
`21
`22
`23
`24
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`26
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`28
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`$1,000,000 more for the property than its market value as part of their investment in the joint
`
`development project.
`
`42.
`
`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
`
`Plaintiffs have been damaged in the amount of $1,000,000.
`
`43.
`
`Plaintiffs are informed and believes that Defendant’s conduct was done with
`
`oppression, fraud and malice and with the intent to injure Plaintiffs for which Defendants
`
`should be subject to exemplary damages in an amount to be proven at trial.
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`FIFTH CAUSE OF ACTION
`Negligent Misrepresentation
`
`Plaintiff realleges and incorporates by reference each and every allegation of the
`
`44.
`
`above paragraphs 1 through 28, 39, 41 and 42 inclusive, as if fully set forth herein.
`
`45.
`
`Plaintiffs are informed and believe that Defendants’ promises, as set forth
`
`herein, were made with negligent disregard for the truth or falsity of said statements, so that
`
`Defendants could induce Plaintiffs agree to jointly develop the property and then pay at least
`
`$1,000,000 more for the property than its market value as part of their investment in the joint
`
`development project.
`
`46.
`
`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
`
`Plaintiffs have been damaged in the amount of $1,000,000.
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`SIXTH CAUSE OF ACTION
`Fraud
`
`Plaintiffs reallege and incorporate by this reference each and every allegation of
`
`47.
`
`the above paragraphs 1 through 28 inclusive, as if fully set forth herein.
`
`48.
`
`Between August and December of 2017, in writing and verbally, Defendant
`
`KEVIN LEE represented to Plaintiffs, that he individually or through an entity wholly controlled
`
`by him would sign the Agreement to Form Joint Venture. the Construction Rider Work Letter,
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`10
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

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`the individual Guaranty, and the Guaranty to be executed by 790 Portrero, LLC, an entity owned
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`and controlled by Defendant KEVIN LEE.
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`49.
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`Plaintiffs are informed and believe that these representations were false when
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`made and Defendant KEVIN LEE made them knowing they were false and with the intent that
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`they be relied upon by Plaintiffs in agreeing to jointly develop the property and then paying at
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`least $1,000,000 more for the property than its market value as part of their investment in the
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`joint development project.
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`50.
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`Plaintiffs reasonably and justifiably relied on the promises made by Defendant,
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`Defendant KEVIN LEE in agreeing to jointly develop the property and then paying at least
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`$1,000,000 more for the property than its market value as part of their investment in the joint
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`development project.
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`51.
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`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
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`Plaintiffs have been damaged in the amount of $1,000,000.
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`52.
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`Plaintiffs are informed and believes that Defendant’s conduct was done with
`
`oppression, fraud and malice and with the intent to injure Plaintiffs for which Defendants
`
`should be subject to exemplary damages in an amount to be proven at trial.
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`SEVENTH CAUSE OF ACTION
`Negligent Misrepresentation
`
`
`
`53.
`
`Plaintiff realleges and incorporates by reference each and every allegation of the
`
`above paragraphs 1 through 28, 48, 50 and 51 inclusive, as if fully set forth herein.
`
`54.
`
`Plaintiffs are informed and believe that Defendants’ promises, as set forth
`
`herein, were made with negligent disregard for the truth or falsity of said statements, so that
`
`Defendants could induce Plaintiffs agree to jointly develop the property and then pay at least
`
`$1,000,000 more for the property than its market value as part of their investment in the joint
`
`development project.
`
`55.
`
`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
`
`Plaintiffs have been damaged in the amount of $1,000,000.
`
`11
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

`
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`EIGHTH CAUSE OF ACTION
`Fraud
`
`Plaintiffs reallege and incorporate by this reference each and every allegation of
`
`56.
`
`the above paragraphs 1 through 28 inclusive, as if fully set forth herein.
`
`57.
`
`In December of 2017, both in writing and verbally, Defendant SPARX 7, LLC
`
`represented to Plaintiffs, that it would perform all of the terms of the Ground Lease, including,
`
`but not limited to (a) Pay the monthly rent required by the Ground Lease; (b) Pay the property
`
`taxes as required by the Ground Lease; and (c) Maintain the Property as required by the Ground
`
`Lease.
`
`58.
`
`Plaintiffs are informed and believe that these representations were false when
`
`made and Defendant SPARX 7, LLC made them knowing they were false and with the intent
`
`that they be relied upon by Plaintiffs in agreeing to jointly develop the property and then paying
`
`at least $1,000,000 more for the property than its market value as part of their investment in the
`
`joint development project.
`
`59.
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`Plaintiffs reasonably and justifiably relied on the promises made by Defendant,
`
`Defendant SPARX 7, LLC in agreeing to jointly develop the property and then paying at least
`
`$1,000,000 more for the property than its market value as part of their investment in the joint
`
`development project.
`
`60.
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`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
`
`Plaintiffs have been damaged in the amount of $1,000,000.
`
`61.
`
`Plaintiffs are informed and believes that Defendant’s conduct was done with
`
`oppression, fraud and malice and with the intent to injure Plaintiffs for which Defendants
`
`should be subject to exemplary damages in an amount to be proven at trial.
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`///
`
`
`
`
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`12
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`1
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`28
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`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

`1
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`28
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`
`
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`
`
`NINTH CAUSE OF ACTION
`Negligent Misrepresentation
`
`62.
`
`Plaintiff realleges and incorporates by reference each and every allegation of the
`
`above paragraphs 1 through 28, 57, 59 and 60 inclusive, as if fully set forth herein.
`
`63.
`
`Plaintiffs are informed and believe that Defendants’ promises, as set forth
`
`herein, were made with negligent disregard for the truth or falsity of said statements, so that
`
`Defendants could induce Plaintiffs agree to jointly develop the property and then pay at least
`
`$1,000,000 more for the property than its market value as part of their investment in the joint
`
`development project.
`
`64.
`
`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
`
`Plaintiffs have been damaged in the amount of $1,000,000.
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`TENTH CAUSE OF ACTION
`Fraud
`
`Plaintiffs reallege and incorporate by this reference each and every allegation of
`
`65.
`
`the above paragraphs 1 through 28 inclusive, as if fully set forth herein.
`
`66.
`
`In August of 2017 and again in December of 2017, both in writing and verbally,
`
`Defendant KEVIN LEE represented to Plaintiffs, that he in connection with the Clayton Street
`
`Property he would provide the security interest in the Clayton Street Property, sell the Clayton
`
`Street Property and thereafter place the net proceeds from the sale of the Clayton Street Property
`
`into the Soft-Costs Account.
`
`67.
`
`Plaintiffs are informed and believe that these representations were false when
`
`made and Defendant KEVIN LEE made them knowing they were false and with the intent that
`
`they be relied upon by Plaintiffs in agreeing to jointly develop the property and then paying at
`
`least $1,000,000 more for the property than its market value as part of their investment in the
`
`joint development project.
`
`68.
`
`Plaintiffs reasonably and justifiably relied on the promises made by Defendant,
`
`Defendant KEVIN LEE in agreeing to jointly develop the property and then paying at least
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`13
`
`Burlingame, CA 94010
`
`(650) 318-5760
`
`533 Airport Blvd., Suite 326
`
`Law Office of Charles S. Bronitsky
`CHARLES S. BRONITSKY
`
`

`

`1
`2
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`4
`5
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`28
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`$1,000,000 more for the property than its market value as part of their investment in the joint
`
`development project.
`
`69.
`
`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
`
`Plaintiffs have been damaged in the amount of $1,000,000.
`
`70.
`
`Plaintiffs are informed and believes that Defendant’s conduct was done with
`
`oppression, fraud and malice and with the intent to injure Plaintiffs for which Defendants
`
`should be subject to exemplary damages in an amount to be proven at trial.
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`ELEVENTH CAUSE OF ACTION
`Negligent Misrepresentation
`
`
`
`71.
`
`Plaintiff realleges and incorporates by reference each and every allegation of the
`
`above paragraphs 1 through 28, 66, 68 and 69 inclusive, as if fully set forth herein.
`
`72.
`
`Plaintiffs are informed and believe that Defendants’ promises, as set forth
`
`herein, were made with negligent disregard for the truth or falsity of said statements, so that
`
`Defendants could induce Plaintiffs agree to jointly develop the property and then pay at least
`
`$1,000,000 more for the property than its market value as part of their investment in the joint
`
`development project.
`
`73.
`
`As a direct and proximate result of Defendant’s fraudulent misrepresentations,
`
`Plaintiffs have been damaged in the amount of $1,000,000.
`
`WHEREFORE, Plaintiffs prays judgment as set forth below:
`
`TWELFTH CAUSE OF ACTION
`Fraud
`
`Plaintiffs reallege and incorporate by this reference each and every allegation of
`
`74.
`
`the above paragraphs 1 through 28 inclusive, as if fully set forth herein.
`
`75.
`
`From August through December of 2017, both in writing and verbally, Defendant
`
`KEVIN LEE represented to Plaintiffs that, in connection with the development of the project, he
`
`would obtain a loan or otherwise finance the construction, he would thereafter retain a contractor
`
`Third Amended Complaint
`San Pablo SR2, LLC, et al. v. Sparx 7, LLC, et al.
`Case No. CGC-19-575729
`
`
`14
`
`Burlingame, CA 94010
`
`(650)