Case 3:19-cv-00244-JSC Document 1 Filed 01/14/19 Page 1 of 6

1 FREDRICK C. CROMBIE (State Bar No. 244051)

LAURA R. SEEGAL (State Bar No. 307344)
2 COBLENTZ PATCH DUFFY & BASS LLP
One Montgomery Street, Suite 3000
3 San Francisco, California 94104-5500
Telephone: 415.391.4800
4 Facsimile: 415.989.1663
Email: [email protected]
5 [email protected]
One Montgomery Street, Suite 3000, San Francisco, California 94104-5500

6 Attorneys for Plaintiff

BARBARA SHIH
7

8 UNITED STATES DISTRICT COURT

9 NORTHERN DISTRICT OF CALIFORNIA

COBLENTZ PATCH DUFFY & BASS LLP

10
415.391.4800 • Fax 415.989.1663

11 BARBARA SHIH, an individual, Case No.

12 Plaintiff, COMPLAINT FOR BREACH OF

CONTRACT
13 v.

14 SAISON DINING GROUP LLC, a California JURY TRIAL DEMANDED

limited liability company; SAISON GROUP
15 LLC, a California limited liability company;
JOSH SKENES, an individual; and DOES 1
16 through 50, inclusive,

17 Defendants.

18
19 Plaintiff Barbara Shih ("Plaintiff") alleges as follows:
20 PARTIES
21 1. Plaintiff Barbara Shih is, and at all times herein mentioned was, a resident of Hong
22 Kong, China.

23 2. Plaintiff is informed and believes, and on that basis alleges, that at all times herein
24 mentioned Defendant Saison Dining Group LLC ("Saison Dining") is, and at all times herein

25 mentioned was, a limited liability company organized under the laws of the state of California

26 with its principal place of business in San Francisco, California. Plaintiff is further informed and

27 believes, and thereon alleges, that Saison Dining is doing business as and/or operates the three-

28 Michelin-star restaurant called Saison also located in San Francisco.

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1 3. Plaintiff is informed and believes, and on that basis alleges, that Defendant Saison

2 Group LLC ("Saison Group") is, and at all times herein mentioned was, a limited liability

3 company organized under the laws of the state of California with its principal place of business in

4 San Francisco, California.

5 4. Plaintiff is informed and believes, and on that basis alleges, that Defendant Josh
One Montgomery Street, Suite 3000, San Francisco, California 94104-5500

6 Skenes ("Skenes") resides in San Francisco, California and is, and at all times herein mentioned,

7 held an ownership interest in, was a managing member of, and was the person in control of

8 Defendant Saison Dining. Plaintiff is further informed and believes, and on that basis alleges, that

9 Defendant Skenes is, and at all times herein mentioned also, held an ownership interest in, was a
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10 managing member of, and was the person in control of Defendant Saison Group.
415.391.4800 • Fax 415.989.1663

11 5. Plaintiff is ignorant of the true names and capacities of Defendants sued as DOES 1

12 through 50, inclusive, and therefore sue those Defendants by fictitious names. Plaintiff will

13 amend this complaint to allege their true names and capacities when ascertained. Plaintiff is

14 informed and believes, and thereon alleges, that each of these fictitiously named Defendants are

15 legally responsible in some manner for the actions herein alleged, and that Plaintiff's damages

16 were proximately caused by their conduct.

17 6. Plaintiff is informed and believes, and on that basis alleges, that Skenes and DOES

18 1 through 50, through their majority and de facto control over both Saison Dining and Saison
19 Group treat those entities as their alter egos and manages them as a single "Saison" enterprise.

20 Plaintiff is further informed and believes, and on that basis alleges, that Skenes and DOES 1

21 through 50 have:

22 A. comingled Saison Dining and Saison Group funds by, inter alia, paying

23 Saison Dining expenses with Saison Group funds pursuant to fictitious loans that Skenes and

24 DOES 1 through 50 never intended to and never caused Saison Dining to pay and Saison Group to

25 collect;

26 B. utilized Saison Dining and Saison Group funds to pay for and maintain

27 Skenes's personal lifestyle, including but not limited to paying his personal credit card debt,

28 funding his extravagant wedding in Japan, and funding his and his family's personal travel;
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1 C. concentrating their majority ownership of both Saison Dining and Saison

2 Group member interests such that they in fact control both entities;

3 D. used both Saison Dining and Saison Group as mere shells, instrumentalities

4 or conduits, without independent assets or operations, for the single business venture of operating

5 the Saison restaurant;

One Montgomery Street, Suite 3000, San Francisco, California 94104-5500

6 E. disregarded corporate formalities by ignoring the separate existence of

7 Saison Dining and Saison Group;

8 F. failed to maintain an arms-length relationship between Saison Dining and

9 Saison Group;
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10 G. formed Saison Group and solicited its investors and creditors with the
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11 undisclosed intent of using the Saison Group corporate form to raise funds for the Saison

12 restaurant while simultaneously permitting Saison Dining, Skenes and DOES 1 through 50 to

13 avoid any repaying those funds; and

14 H. committed other similar acts or omissions.

15 7. As a consequence, at all times material hereto the Defendants, were alter egos of

16 each other and/or were part of a single enterprise in that they so dominated and controlled each

17 other, and so conducted their business affairs as though their identities were the same such that

18 there is and should be no separateness among them. The Defendants are for all practical and legal
19 purposes the same as each other, and they are all jointly and severally liable for the acts, omissions

20 and conduct of each other.

21 JURISDICTION

22 8. This Court has diversity jurisdiction over this action pursuant to 28 U.S.C. §

23 1332(a) because the amount in controversy exceeds $75,000 and there is diversity of citizenship

24 between the parties. Plaintiff is a citizen of the Republic of China. Defendant Skenes is a citizen

25 of California. Defendants Saison Dining and Saison Group are entities organized and existing

26 under the laws of the State of California with their principal places of business in the State of

27 California.

28
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1 VENUE

2 9. Venue is appropriate in this District pursuant to 28 U.S.C. § 1391(b) because

3 Defendants are citizens of the State of California, and they reside, conduct business, and/or

4 maintain their principal places of business in this District. Venue is also proper pursuant to 28

5 U.S.C. § 1391(b) because a substantial part of the events or omissions giving rise to this claim
One Montgomery Street, Suite 3000, San Francisco, California 94104-5500

6 occurred in this District.

7 INTRADISTRICT ASSIGNMENT

8 10. Assignment in the San Francisco division of the United States District Court for the

9 Northern District of California is proper pursuant to Rule 3-2(c) of the Civil Local Rules because a
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10 substantial part of the events or omissions giving rise to the claim occurred in San Francisco.
415.391.4800 • Fax 415.989.1663

11 JURY DEMAND

12 11. Plaintiff hereby demands trial by jury.

13 FIRST CAUSE OF ACTION

Breach of Promissory Note
14 (Against All Defendants)

15 12. Plaintiff re-alleges and incorporates by reference the allegations contained in

16 paragraphs 1 through 11 of this Complaint as though fully set forth herein.

17 13. On or about February 13, 2013, for valuable consideration, namely funds in the

18 amount of $300,000.00, Defendant Saison Group executed a written promissory note in favor of
19 Plaintiff, in the principal sum of three hundred thousand dollars ($300,000.00), plus interest at a

20 fixed rate equal to five percent (5%) per annum, and delivered the same to Plaintiff. All principal

21 and accrued interest on the note was payable in one lump sum and was required to be paid no later

22 than one year from the date of the note, or February 14, 2013.

23 14. By early 2014, it was clear that Saison Group would be unable to make the lump

24 sum payment required under the terms of the February 13, 2013 note. On or about January 18,

25 2014, Saison Group executed a replacement promissory note in favor of Plaintiff, in the principal

26 sum of three hundred and fifteen thousand dollars ($315,000.00), plus interest at a fixed rate equal

27 to five percent (5%) per annum. All principal and accrued interest on the note was payable in one

28 lump sum and required to be paid no later than August 1, 2014.

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1 15. By late July 2014, it again became clear that Saison Group would be unable to

2 make the lump sum payment required under the terms of the January 18, 2014 note. On or about

3 August 1, 2014, Saison Group executed a second replacement promissory note in favor of

4 Plaintiff, in the principal sum of three hundred and twenty-two thousand, eight hundred and

5 seventy-five dollars ($322,875.00), plus interest at a fixed rate equal to five percent (5%) per
One Montgomery Street, Suite 3000, San Francisco, California 94104-5500

6 annum (the "Saison Group Note"). A true and correct copy of the Saison Group Note is attached

7 hereto as Exhibit A and incorporated by reference as if set forth fully herein.

8 16. As a condition precedent to the effectiveness of the Saison Group Note was the

9 execution by Saison Dining of a separate promissory note in favor of Plaintiff in the principal
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10 amount of $201,986.39. That condition precedent was met, and that separate promissory note
415.391.4800 • Fax 415.989.1663

11 executed by Saison Dining related to a different indebtedness that is not the subject of this action.

12 17. Pursuant to the terms of the Saison Group Note, Defendant Saison Group was

13 required to pay all principal and accrued interest in full no later than August 1, 2015.

14 18. Defendant Saison Group has never paid any payment on the Saison Group Note,

15 and the full amount of principal ($322,875.00) and accrued interest remains outstanding.

16 19. On March 2, 2016 Plaintiff made a written demand for payment of the full amount

17 of principal and interest due under the Saison Group Note. Since that time, Plaintiff has made

18 other, repeated demands that Saison Group either repay or renegotiate the Saison Group Note.
19 20. Defendant Saison Group has breached the Saison Group Note by refusing to pay,

20 by August 1, 2015, and then subsequently upon demand, all sums required to be paid under the

21 Saison Group Note.

22 21. As of March 2, 2016, the total unpaid indebtedness under the Saison Group Note

23 was $394,526.71.

24 22. As alleged in paragraphs 6 and 7, supra, all of the defendants were the alter egos of

25 each other and/or were part of a single enterprise, and there exists and at all times herein

26 mentioned there existed, a unity of interest and ownership between and among all of the

27 Defendants, such that any individuality and separateness between them have ceased.

28 23. Adherence to the fiction of the separate existences of Defendants would permit an
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1 abuse of the limited liability company privilege and would promote the injustice of, inter alia,

2 permitting Skenes, Saison Dining and DOES 1 through 50 to retain Saison Group funds at the

3 expense of Saison Group's legitimate creditors, including Plaintiff.

4 PRAYER FOR RELIEF

5 WHEREFORE, Plaintiff prays for judgment against Defendants as follows:

One Montgomery Street, Suite 3000, San Francisco, California 94104-5500

6 2. Judgment against all Defendants in the principal amount of $322,875.00 together

7 with all accrued and unpaid interest thereon accruing at the rate of five percent (5%) per annum

8 from August 1, 2014 through the date of judgment;

9 3. For post-judgment interest as allowed by law;

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10 4. For attorney's fees and costs of suit incurred herein on all causes of action; and
415.391.4800 • Fax 415.989.1663

11 5. For such other and further relief as the Court deems just and proper with respect to

12 each cause of action.

13 DATED: January 14, 2019 COBLENTZ PATCH DUFFY & BASS LLP

14

15
By: /s/ Fredrick C. Crombie
16 Fredrick C. Crombie
Attorneys for Plaintiff
17 BARBARA SHIH
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