Dean Kim and Jacob Koo started a business selling high-end mattresses in West Hollywood. A few years later, Koo offered to buy Kim’s 50% share for $850,000, and Kim accepted. Koo financed the purchase through a $500,000 bank loan and a $350,000 promissory note made out to Kim. When the note matured, Koo refused to pay, claiming that the documents for the bank loan limited the purchase price to $500,000. After a bench trial, the trial court found that the parties agreed to a $850,000 purchase price and that Koo was liable under the $350,000 promissory note.
Koo appealed, and Kim retained Horvitz & Levy to defend his judgment. The Court of Appeal affirmed, rejecting Koo’s argument that the bank loan documents reflected the true terms of the parties’ buyout agreement. The court agreed with Horvitz & Levy that the parol evidence rule, which in certain circumstances bars evidence of prior agreements or contemporaneous oral agreements, does not apply if the parties never intended a particular writing to embody the terms of their agreement. Here, substantial evidence showed that the parties did not intend to embody the true terms of the buyout in the bank loan documents and that Koo agreed to finance the purchase in part through the promissory note.
Kim v. Koo 
