FANG-LING WEN, ET AL. VS MADISON REALTY EQUITIES, LLC., ET AL.

Tentative Rulings

Case Number: 21GDCV00412 Hearing Date: March 22, 2022 Dept: 3

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES – NORTHEAST DISTRICT

DEPARTMENT 3

FANG-LING WEN , et al.; Plaintiffs, vs. MADISON REALTY EQUITIES, LLC , et al., Defendants.	Case No.:	21GDCV00412
Hearing Date:	March 22, 2022
Time:	8:30 a.m.
[TENTATIVE] ORDER RE: DEFENDANT GT MADISON REALTY, LLC’S DEMURRER TO FIRST AMENDED COMPLAINT

MOVING PARTY: Defendant GT Madison Realty, LLC

RESPONDING PARTY: Plaintiffs Fang-Ling Wen and Ching Hwang Chen

Defendant GT Madison Realty, LLC’s Demurrer to First Amended Complaint

The court considered the moving papers, opposition, and reply papers filed in connection with this motion.

BACKGROUND

Plaintiffs Fang-Ling Wen and Ching Hwang Chen filed this action on March 23, 2021. The operative First Amended Complaint (“FAC”) was filed on December 10, 2021 and asserts causes of action for (1) breach of contract, (2) fraud, (3) intentional misrepresentation, (4) negligent misrepresentation, (5) conversion, (6) breach of fiduciary duty, (7) violation of Business and Professions Code section 17200, (8) accounting, and (9) conspiracy to commit fraud.

Defendant GT Madison Realty, LLC (“GT”) now demurs to the fifth, eighth, and ninth causes of action on the basis that each fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., 430.10, subd. (e).)

LEGAL STANDARD

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. ( PsychCase Full.CaseCitation 39 Cal. 3d 311 ","ParentCiteID":null,"Processed":true,"Citation":{"current_string":"Blank v. Kirwan (1985) 39 Cal.3d 311, 318","original_string":"Blank v. Kirwan (1985) 39 Cal.3d 311, 318","error":null,"fullText":"Blank v. 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Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)"},"foundBy":"PsychCase","pattern":"Full.CaseCitation","tabName":"39 Cal. 3d 311"},{"$id":"14","Name":"CITRUS_BOOKMARK4","Range":{"$id":"15","ts":{"$ref":"11"},"_Start":418,"_End":492,"_Text":"A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967.) 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Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) "},"foundBy":null,"pattern":null,"tabName":null}],"Range":{"$id":"20","ts":{"$ref":"11"},"_Start":0,"_End":830,"_Text":"A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hosp. Dist. 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"}" id="1728185440">Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “Correct quotation (No suggestions)","CitationText":"C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872","ModifiedCitationText":"C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872","IsUseMyText":true,"IsMarkMyText":false,"IsEditMyText":false,"SuggestionForCitation":[],"IconIndicator":8,"UseCurrentIconIndicator":8,"UseCurrentMarkQuoteIconIndicator":0,"UseSuggestionIconIndicator":8,"IsEnabled":false,"IsUserConfirmed":false,"SuggestionCount":0,"IsManagedCite":false,"PinpointPageText":"View suggested pinpoint page","IsViewPinpointPage":true,"IsCorrect":true,"ShowPinPointPage":false,"SuggestionVisibility":false,"SuggestedDocUri":"To%20survive%20a%20demurrer,%20the%20complaint%20need%20only%20allege%20facts%20sufficient%20to%20state%20a%20cause%20of%20action;%20each%20evidentiary%20fact%20that%20might%20eventually%20form%20part%20of%20the%20plaintiff%e2%80%99s%20proof%20need%20not%20be%20alleged."}}}" id="702903547">To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” ( PsychCase Full.CaseCitation 53 Cal. 4th 861 ","ParentCiteID":null,"Processed":true,"Citation":{"current_string":"C.A. v. 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Hart Union High School Dist. (2012) 53 Cal.4th 861, 872C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872Full.CaseCitationciteCaseNameXYZZY v. KamalaCaseName.FirstPartyC.A.CaseName.FirstParty._PatternParty.PartyCaseName.FirstParty.PartyC.A.CaseName.SecondPartyWilliam S. Hart Union High School Dist.CaseName.SecondParty._PatternParty.PartyCaseName.SecondParty.PartyWilliam S. 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PinPages.First._PatternFirstPageInRange.FirstPageInRangeReporter._PatternReporter.ReporterReporter.FirstPage861Reporter.NameCal. 4thReporter.pagepageReporter.Reporter.pagepageReporter.RequiredComma, Reporter.RequiredComma._PatternRequiredComma.RequiredCommaReporter.RequiredComma.Comma,Reporter.Volume53RequiredComma, RequiredComma._PatternRequiredComma.RequiredCommaSecondPartyWilliam S. Hart Union High School Dist. suprasupra, supra.,, supra._PatternShortCaseSupra.ShortCaseSuprasupra.suprasupramaster_name RESULTS_2"},"IconIndicator":{"Id":1,"Title":"Cite is formatted correctly, its long and short form are automatically being updated, and it will be included in TOA.","IconType":1,"ImagePath":"~/Content/Images/CCF/RecognizedNoSuggestions.png","Description":"Number of cites recognized by system as valid."},"Display":"C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872","CitationRichText":"C.A. v. William S. Hart Union High School Dist. 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William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872","ShortText":"53 Cal. 4th 861","IsParentCorrect":true,"IsParentCorrectableConfirmed":false,"IsParentUnknownConfirmed":false,"IsParentCorrectable":false,"IsParentUnknown":false,"CitationOriginalText":"C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872","ModifiedCiteText":null,"MarkUp":null,"IsCheckCurrent":false,"PreviousCitationRetain":null},"CQ":"","TOA":"","html":" "}" id="-468822467">C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967Full.CaseCitationciteReporter.NameCal. 4thReporter.Volume2Reporter.FirstPage962Reporter. PinPages.First966","Markup":null,"Master":"","name":"Psych_Cite_72","Original_string":"Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967","Page":null,"Parallel":"","Pattern":"Full.CaseCitation","PinPage":"966","ReadOrderIndex":2717,"Refers_To":null,"ShortText":"2 Cal. 4th 962","Start":2680,"Story":"wdMainTextStory"},"TOA":"","html":" "}" id="-1477757001">Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “Correct quotation (No suggestions)","CitationText":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","ModifiedCitationText":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","IsUseMyText":true,"IsMarkMyText":false,"IsEditMyText":false,"SuggestionForCitation":[],"IconIndicator":8,"UseCurrentIconIndicator":8,"UseCurrentMarkQuoteIconIndicator":0,"UseSuggestionIconIndicator":8,"IsEnabled":false,"IsUserConfirmed":false,"SuggestionCount":0,"IsManagedCite":false,"PinpointPageText":"View suggested pinpoint page","IsViewPinpointPage":true,"IsCorrect":true,"ShowPinPointPage":false,"SuggestionVisibility":false,"SuggestedDocUri":"does%20not%20admit%20contentions,%20deductions%20or%20conclusions%20of%20fact%20or%20law."}}}" id="-1726828653">does not admit contentions, deductions or conclusions of fact or law.” ( PsychCase Full.CaseCitation 67 Cal. 2d 695 ","ParentCiteID":null,"Processed":true,"Citation":{"current_string":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","original_string":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","error":null,"fullText":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","refers_to_cite":null,"shortText":"67 Cal. 2d 695","isParallel":false,"parallel":"","legistlativeHistory":null,"isLegislativeHistory":false,"start":2826,"end":2874,"pattern":"Full.CaseCitation","readOrderIndex":2826,"index":779,"citeType":1,"CiteShepSignal":2,"CiteShepSignalLink":"https: advance.lexis.com/api/shepards?context=1000516&id=urn:contentItem:7XWN-0391-2NSF-C1JS-00000-00","story":"wdMainTextStory","PinPage":"713","name":"CITRUS_BOOKMARK6","foundBy":"PsychCase","FullTextParen":null,"ParentheticalType":null,"IntermediateCite":false,"TOAHeading":null,"ts":{"$ref":"11"},"master":" RESULTS_3","kernel_data":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713Full.CaseCitationciteCaseNameXYZZY v. KamalaCaseName.FirstPartyDaarCaseName.FirstParty._PatternParty.PartyCaseName.FirstParty.PartyDaarCaseName.SecondPartyYellow Cab Co.CaseName.SecondParty._PatternParty.PartyCaseName.SecondParty.PartyYellow Cab Co.CaseName.vv.CourtParenthetical (1967) CourtParenthetical._PatternCourtParenthetical.CourtParentheticalCourtParenthetical.Date1967 CourtParenthetical.Date._PatternCourtParenthetical.Date.DateCourtParenthetical.Date.Year1967CourtParenthetical.Date.Year._PatternCourtParenthetical.Date.Year.YearCourtParenthetical.Date.Year.Year1967CourtParenthetical.ForbiddenComma._PatternForbiddenComma.ForbiddenCommaCourtParenthetical.Switch ( [ L (CourtParenthetical.Switch ( [ L.((CourtParenthetical.Switch ( [ L._PatternSwitch ( [ L.Switch ( [ LCourtParenthetical.Switch ) ] R) CourtParenthetical.Switch ) ] R.))CourtParenthetical.Switch ) ] R._PatternSwitch ) ] R.Switch ) ] RFirstPartyDaar HAS_AUTHORITATIVE_DATAYESNY L Paren(NY R Paren)Reporter67 Cal.2d 695, 713Reporter.[[Reporter.]]Reporter. PinPages713Reporter. PinPages._PatternPinPages.PinPagesReporter. PinPages.First713Reporter. PinPages.First. PageNumber713Reporter. PinPages.First._PatternFirstPageInRange.FirstPageInRangeReporter._PatternReporter.ReporterReporter.FirstPage695Reporter.NameCal. 2dReporter.pagepageReporter.Reporter.pagepageReporter.RequiredComma, Reporter.RequiredComma._PatternRequiredComma.RequiredCommaReporter.RequiredComma.Comma,Reporter.Volume67RequiredComma, RequiredComma._PatternRequiredComma.RequiredCommaSecondPartyYellow Cab Co. suprasupra, supra.,, supra._PatternShortCaseSupra.ShortCaseSuprasupra.suprasupramaster_name RESULTS_3"},"IconIndicator":{"Id":1,"Title":"Cite is formatted correctly, its long and short form are automatically being updated, and it will be included in TOA.","IconType":1,"ImagePath":"~/Content/Images/CCF/RecognizedNoSuggestions.png","Description":"Number of cites recognized by system as valid."},"Display":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","CitationRichText":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","IconShepardSignal":{"Id":2,"Title":"Possible negative treatment - cases","IconType":0,"ImagePath":"/Content/Images/IconSignalPossibleNegative.gif","Description":null},"ShepardSignalLink":"https: advance.lexis.com/api/shepards?context=1000516&id=urn:contentItem:7XWN-0391-2NSF-C1JS-00000-00","ShowShepardSignal":true,"ShowParentLink":false,"ParentCitation":null,"SuggestionsForCitation":[],"SuggestionsForCite":[],"SelectedSuggestion":null,"IsSuggestionEnabled":false,"UseCurrentIconIndicator":{"Id":1,"Title":"Cite is formatted correctly, its long and short form are automatically being updated, and it will be included in TOA.","IconType":1,"ImagePath":"~/Content/Images/CCF/RecognizedNoSuggestions.png","Description":"Number of cites recognized by system as valid."},"UseSuggestionIconIndicator":{"Id":1,"Title":"Cite is formatted correctly, its long and short form are automatically being updated, and it will be included in TOA.","IconType":1,"ImagePath":"~/Content/Images/CCF/RecognizedNoSuggestions.png","Description":"Number of cites recognized by system as valid."},"OriginalUseCurrentIconIndicator":{"Id":1,"Title":"Cite is formatted correctly, its long and short form are automatically being updated, and it will be included in TOA.","IconType":1,"ImagePath":"~/Content/Images/CCF/RecognizedNoSuggestions.png","Description":"Number of cites recognized by system as valid."},"CitationMarkupText":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","ShortText":"67 Cal. 2d 695","IsParentCorrect":true,"IsParentCorrectableConfirmed":false,"IsParentUnknownConfirmed":false,"IsParentCorrectable":false,"IsParentUnknown":false,"CitationOriginalText":"Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713","ModifiedCiteText":null,"MarkUp":null,"IsCheckCurrent":false,"PreviousCitationRetain":null},"CQ":"","TOA":"","html":" "}" id="1171754344">Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

DISCUSSION

In the FAC, Plaintiffs allege that, in 2012, they invested $500,100 in a business venture with Defendant Madison Realty Equities, LLC (“Madison”) and its manager, Gary Langendoen (“Langendoen”). (FAC, 3, 12, 19.) The purpose of the investment was to form a company, Punta Gorda Acquisitions, LLC (“Acquisitions”), so that Plaintiffs could qualify for an EB-5 immigrant visa. (FAC, 4.) In turn, Acquisitions was created to expand the Palms of Punta Gorda, a 56-bed memory care and assisted living community located in Punta Gorda, Florida. (FAC, 6.) Plaintiffs were promised a full return on their investment, but no return on their investment ever materialized. Plaintiffs allege that Madison and Langendoen instead misappropriated their money for wrongful purposes. (FAC, 31.) Specifically, Plaintiffs allege that money invested into Acquisitions was loaned to a different entity, Punta Gorda Senior Living, L.P. (“Senior Living”), and those loans were never paid back. (FAC, 35-36.) GT is a general partner of the Senior Living limited partnership.

Plaintiffs’ conversion claim against GT is based on the loans that were made to Senior Living. The court finds that Plaintiffs lack standing for such a claim because, as argued by GT, Plaintiffs do not have any ownership or possessory interest in the loan proceeds at the time of their alleged conversion. After Plaintiffs invested in Acquisitions in February 2012, their capital contributions solely belonged to Acquisitions. And at the time of the loans to Senior Living in 2013 (FAC, 83), Plaintiffs did not have an absolute right to a return of their investment. In order to state a claim for conversion, a plaintiff must allege entitlement to “immediate possession at the time of conversion.” (Farmers Ins. Exch. v. Zerin (1997) 53 Cal.App.4th 445, 452.)

GT also argues that the cause of action for conspiracy to commit fraud must fail because Plaintiffs do not adequately allege the existence of an agreement among the defendants to defraud Plaintiffs. The court finds that Plaintiffs have sufficiently alleged the existence of a conspiracy. Plaintiffs allege that the defendants created a scheme to induce investors like Plaintiffs to invest money for a project that would never offer any investment returns. (See, e.g., FAC, 12, 35, 37.)

Lastly, GT argues that the accounting claim must fail because there is no underlying claim for wrongdoing by GT. But as noted above, the conspiracy claim is adequately pled. GT also argues that Plaintiffs fail to allege that they are owed any money by GT. The court agrees. Plaintiffs have not alleged facts showing that they are entitled to compensation for the loan from Acquisitions to Senior Living.

CONCLUSION

Based on the foregoing, the court sustains in part and overrules in part GT’s demurrer to the FAC. The court sustains GT’s demurrer to the causes of action for conversion and accounting, with leave to amend. The court overrules GT’s demurrer to the cause of action for conspiracy to commit fraud.

The court orders Plaintiffs to file and serve an amended complaint, if any, within 20 days of the date of this order. If no amended complaint is filed within 20 days, the court orders GT to file and serve its answer within 30 days of the date of this order.

GT is ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED: March 22, 2022

Colin Leis

Judge of the Superior Court