Jury Orders Fukai to Pay $180,000 to Ex-Associate

A Superior Court jury has awarded $180,000 to a former business associate of Gardena City Councilman Mas Fukai after finding that the councilman broke a 1979 promise to operate a Hollywood restaurant and to pay all obligations of the business while it was managed by Fukai’s son.

The Los Angeles jury ruled 9 to 3 on Monday that Fukai violated a verbal agreement with Hirohisa Yamada, owner of the now-closed Copper Penny restaurant, which the younger Fukai ran between 1979 and 1981.

However, the jury concluded that Fukai had not intentionally misled Yamada and therefore was not guilty of malice or fraud, a finding that could have prompted punitive damages.

In response to a cross-complaint by Fukai, the jury also ordered Yamada to repay Fukai $4,000 he still owes on a $20,000 loan. The loan was part of a deal that installed the councilman’s son, Rick, then a 27-year-old real estate agent, as manager of the restaurant.

The younger Fukai also was accused in Yamada’s lawsuit of breach of contract, fraud and embezzlement, but he was dismissed from the case after his bankruptcy in 1986. Judge Jerome K. Fields threw out an accusation of embezzlement against Mas Fukai before the trial.

A juror, who asked not to be named, said the jury was split 6 to 6 at one point during daylong deliberations Friday. But 9 of 12 jurors, the minimum required, finally agreed that Fukai had made a binding promise to Yamada and failed to keep it, she said.

‘I Don’t Believe It’

The verdict, following a two-week trial, left Fukai shaken.

“I don’t know what happened. It’s just crazy. I don’t believe it,” said Fukai, chief deputy to Los Angeles County Supervisor Kenneth Hahn.

Fukai’s lawyer Kim West said he would move for a new trial.

“This indicates to me that, regardless of the evidence, they thought Mas was responsible for his son’s behavior,” West said. “I think this was based on (jurors’) feelings that a father might make certain statements on behalf of his child.”

Yamada, a Japanese businessman who operates a real estate investment company in Los Angeles, said he also was disappointed with the verdict.

He had sought damages of $360,000 to make up for losses he said resulted from the Fukais’ operation of his restaurant. Included in his claim was $140,000 for the Copper Penny designation he said he lost in April, 1981, because the Fukais had not paid $50,000 in franchise fees.

As Yamada and Fukai, friends before the lawsuit, stood in a courthouse hallway after the verdict, Yamada said through an interpreter:

“I am extremely disappointed to find a man who is responsible to society who behaves in this way. I expected him to be more honorable.”

Both Fukai and Yamada said that no valid written contract ever existed between them.

But Yamada and Robert Iwasaki, his attorney in 1979, each testified that in a conversation with them Fukai promised to devote his time “solely and exclusively” to the business and to cover its obligations.

Bruce McIntosh, Yamada’s lawyer, said his client thought this was possible, even with Fukai holding his county and city positions, because it is very common for Japanese businessmen to work two full-time jobs.

Yamada never would have turned day-to-day management of the restaurant over to the young and inexperienced Fukai if his father had not made those promises, McIntosh told the jury.

“Mas Fukai had a position in the community . . . and they were friends,” McIntosh said.

Limited Involvement

But Fukai insisted that he was involved with the restaurant only as an interpreter in negotiations between his son and Yamada and by virtue of his $20,000 loan to Yamada.

Attorney West told jurors: “Mas Fukai is the victim here.”

West characterized Yamada as a sophisticated businessman who “took advantage of Mas’ trust and Mas’ kindness (in) trying to unload” a failing business. “Mas Fukai trusted Mr. Yamada, so he didn’t ask any questions.”

According to West, Yamada misled the Fukais by saying his restaurant was profitable and in good physical condition, while it had been losing money and needed costly repairs.

After the business failed under the management of Rick Fukai, Yamada sued “because of a cultural belief that father and son are one party,” West argued.

Mas Fukai was never involved in the business and even paid for his own meals when there, West said.

Although Rick Fukai wrote checks for the restaurant and had been instructed by Yamada to forward $1,000 a month to his father to repay the $20,000 loan, Mas Fukai was paid only $16,000 over two years, West said. Otherwise, his client never took a penny out of the restaurant, West said.

McIntosh, however, produced two restaurant checks written to Fukai for $610 and $1,500. The lawyer noted that the amounts did not jibe with the $1,000 that was to be repaid monthly.

Even before the verdict, Fukai said the lawsuit was a no-win situation.

“I’m relieved it’s over. It’s been seven years of this,” he said. “But a guy can’t win. It cost us $60,000 (for legal fees) before the trial. You have to put your house up to pay for this.”