IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON YING CHAN, ) No. 80619-0-I ) Respondent, ) DIVISION ONE ) v. ) UNPUBLISHED OPINION ) WHATCOM OPPORTUNITIES ) REGIONAL CENTER, INC., ) ) Appellant. ) ) HAZELRIGG, J. — Ying Chan brought suit for breach of contract against Whatcom Opportunities Regional Center, Inc. (WORC) based on their agreement for his work on an immigration investor project. WORC asserted an affirmative defense of illegality, claiming the contract violated certain federal securities regulations, and Chan responded that WORC was estopped from raising that affirmative defense. After years of litigation, a jury trial was conducted which resulted in a verdict in Chan’s favor and the trial court entered judgment for him. WORC appealed, claiming that the trial court erred by instructing the jury on Chan’s theory of equitable estoppel and by entering judgment in favor of Chan. Because equitable estoppel may not be used to enforce an illegal contract, we reverse and remand. Citations and pinpoint citations are based on the Westlaw online version of the cited material. No. 80619-0-I/2 FACTS The United States Citizenship and Immigration Service (USCIS) EB-51 Immigrant Investor Program2 (EB-5) allows foreign nationals to obtain lawful permanent resident status by investing $500,000 in an approved project that is shown to create a specific number of new permanent jobs in the United States. WORC was authorized by USCIS to develop EB-5 projects and sell interests to qualified foreign investors. In 2007, WORC received USCIS approval for a project to develop retirement homes in Whatcom County. WORC entered into a contract with Ying Chan to employ him to help with their operations in China. Chan is a Chinese citizen who earned his undergraduate, master of business, and law degrees in the United States. The terms of the employment contract expressly indicate that Chan was both a vice president of WORC and an independent contractor. WORC paid Chan after he submitted periodic invoices for his services. To obtain immigration benefits from participation in an EB-5 project, a foreign investor must obtain an I-526 approval from USCIS. Chan’s primary task was to work with licensed immigration agents in China to help connect the clients of those immigration firms with investment projects in the United States, such as WORC. Chan helped verify that individuals were qualified for the program and assisted in ensuring that the immigration documents were prepared properly and that other necessary steps were completed. Because WORC’s securities were 1 Employment–Based Immigration, Fifth Preference. 2 Immigration Act of 1990, Pub. L. 101–649, § 121(a), 104 Stat. 4978, 4987. -2- No. 80619-0-I/3 offered under Securities Regulation D3, Chan would also verify that participants met the requirements for accredited investors under federal securities law. Once Chan had obtained signed subscription agreements and ensured the completion of all the documents, he would send the packets to WORC president, David Andersson, for review and submission to USCIS. Upon submission of the subscription agreement to WORC, investors paid WORC a $40,000 transaction fee and separately deposited …
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