On 12/20/2019 RUIZENG JIANG filed a Contract - Other Contract lawsuit against YU LI. This case was filed in Los Angeles County Superior Courts, Compton Courthouse located in Los Angeles, California. The Judges overseeing this case are MAURICE A. LEITER and THOMAS D. LONG. The case status is Pending - Other Pending.
Pending - Other Pending
MAURICE A. LEITER
THOMAS D. LONG
MUSE LOGISTIC INC. A CALIFORNIA CORPORATION
ATHENA FREIGHT INC. A CALIFORNIA CORPORATION
CHOW CHUN MAN
MATSON ESQ. DONALD JOHN
LAW OFFICES OF DONALD J. MATSON A CALIFORNIA PROFESSIONAL CORPORATION
APEX LAW CENTER CORP. DBA LAW OFFICES OF DIXON WONG A CALIFORNIA CORPORATION
WONG ESQ. DIXON YICK-SUN
LO KELVIN J.
GREEN JAMES B
OSBORNE CARL K
GREEN JAMES BRADLEY
CHANG GRACE LEA
2/10/2021: Notice of Case Reassignment and Order for Plaintiff to Give Notice
2/16/2021: Notice - NOTICE OF CASE REASSIGNMENT
3/30/2021: Substitution of Attorney
6/30/2021: Notice of Case Reassignment and Order for Plaintiff to Give Notice
7/12/2021: Notice - NOTICE OF CASE REASSIGNMENT
8/19/2021: Notice of Rejection Of Electronic Filing
8/23/2021: Certificate of Mailing for - CERTIFICATE OF MAILING FOR [NOTICE OF REJECTION OF ELECTRONIC FILING]
8/30/2021: Statement of the Case
8/30/2021: Substitution of Attorney
9/2/2021: Proof of Service (not Summons and Complaint) - PROOF OF SERVICE (NOT SUMMONS AND COMPLAINT) OF EX PARTE
9/2/2021: Declaration - DECLARATION OF KELVIN J. LO IN SUPPORT OF PLAINTIFFS EX PARTE MOTION TO CONTINUE TRIAL
9/2/2021: Ex Parte Application - EX PARTE APPLICATION PLAINTIFFS NOTICE OF EX PARTE MOTION AND EX PARTE MOTION TO CONTINUE TRIAL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
9/7/2021: Minute Order - MINUTE ORDER (PLAINTIFF'S EX PARTE APPLICATION TO CONTINUE TRIAL FINAL STA...)
9/8/2021: Notice - NOTICE AMENDED NOTICE OF CONTINUANCE OF TRIAL AND RELATED DATES
9/17/2020: Request for Dismissal
9/14/2020: Request for Dismissal
9/9/2020: Notice of Ruling
Hearing06/27/2022 at 09:00 AM in Department A at 200 West Compton Blvd., Compton, CA 90220; Jury TrialRead MoreRead Less
Hearing06/20/2022 at 09:00 AM in Department A at 200 West Compton Blvd., Compton, CA 90220; Final Status ConferenceRead MoreRead Less
Docketat 09:00 AM in Department A, Thomas D. Long, Presiding; Jury Trial ((Time estimate 9 days)) - Not Held - Advanced and Continued - by CourtRead MoreRead Less
DocketNotice (Amended Notice of Continuance of Trial and Related Dates); Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
Docketat 09:00 AM in Department A, Thomas D. Long, Presiding; Final Status Conference - Held - ContinuedRead MoreRead Less
Docketat 08:30 AM in Department A, Thomas D. Long, Presiding; Hearing on Ex Parte Application (to Continue Trial) - Held - Motion GrantedRead MoreRead Less
DocketMinute Order ( (PLAINTIFF'S EX PARTE APPLICATION TO CONTINUE TRIAL FINAL STA...)); Filed by ClerkRead MoreRead Less
DocketDeclaration (OF KELVIN J. LO IN SUPPORT OF PLAINTIFF?S EX PARTE MOTION TO CONTINUE TRIAL); Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketPLAINTIFF'S EX PARTE APPLICATION TO CONTINUE TRIAL; Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketProof of Service (not Summons and Complaint) (of Ex Parte); Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketNotice of Rejection - Pleadings; Filed by ClerkRead MoreRead Less
DocketSummons (on Complaint); Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketAmended Complaint; Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketSummons (on Amended Complaint (1st)); Filed by ClerkRead MoreRead Less
DocketAmended Complaint ((1st)); Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketCivil Case Cover Sheet; Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketComplaint; Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketSummons (on Complaint); Filed by Ruizeng Jiang (Plaintiff)Read MoreRead Less
DocketNotice of Case Assignment - Unlimited Civil Case; Filed by ClerkRead MoreRead Less
DocketNotice of Case Management Conference; Filed by ClerkRead MoreRead Less
Case Number: 19CMCV00360 Hearing Date: September 08, 2020 Dept: A
# 5. Ruizeng Jiang v. Yu Li, et al.
Case No.: 19CMCV00360
Matter on calendar for: demurrer and motion to strike
Plaintiff Ruizeng Jiang is an EB-5 Visa investor who invested $505,000 in a job-creating business in the United States. Jiang formed Muse Logistic, Inc., with defendants Yu Li and Chun Man Chow in December 2016. Shortly thereafter Li and Chow allegedly began funneling money out of the company and into their own accounts. By February 2019, all of the company’s accounts had been emptied. Defendant Athena Freight, Inc., is a corporation formed by defendant Qi Chen. Li is the director of Athena and Chow is its CFO. Over $198,010 was paid to Athena in the form of consulting fees. Defendant Apex Law Center assisted in processing the EB-5 application. Defendants Donald J. Matson and the Law Offices of Donald J. Matson were retained by Muse to provide its business plan.
The Complaint alleges the following causes of action:
Breach of contract;
Breach of the implied covenant of good faith and fair dealing;
Breach of fiduciary duty;
Aiding and abetting breach of fiduciary duty;
Tort of another for attorney’s fees;
Violation of Penal Code § 496;
Intentional infliction of emotional distress;
Legal malpractice; and
Defendants Donald J. Matson and the Law Offices of Donald J. Matson, PC, now demur to the Complaint and move to strike its request for punitive damages. The motions are opposed.
The Complaint alleges the following causes of action against moving defendants: 4, 10, 11, 13, 14, 15, 16, and 17.
A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The Court may not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.) Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show that the complaint alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (C.C.P., § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.)
Sufficient facts are the essential facts of the case "with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) "Whether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.) Under Code Civil Procedure § 430.10(f), a demurrer may also be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing, they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)
Motion to strike
Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of the pleading. (C.C.P., § 435(b)(1); Cal. Rules of Court, Rule 3.1322(b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (C.C.P. § 437.) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of the pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (C.C.P., §§ 436(a)-(b); Stafford v. Schultz (1954) 42 Cal.2d 767, 782 [“matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)
Defendants generally demur to the Complaint, arguing uncertainty. The Court has reviewed the Complaint and concludes it sufficiently apprises defendants of the issues they are being asked to meet. (See Williams, supra, 185 Cal.App.3d at 139, fn.2.)
The demurrer based on uncertainty is overruled.
Statute of limitations
" 'Statutes of limitations' is the collective term applied to acts or parts of acts that prescribe the periods beyond which a plaintiff may not bring a cause of action. [Citation.]" (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806.) The purpose is to protect "parties from 'defending stale claims, where factual obscurity through the loss of time, memory or supporting documentation may present unfair handicaps.' [Citation.]" (Ibid.) It also encourages a plaintiff to diligently pursue their claim. (Ibid.) "A plaintiff must bring a claim within the limitations period after accrual of the cause of action. [Citations.] In other words, statutes of limitation do not begin to run until a cause of action accrues. [Citation.]" (Ibid.) Accrual " 'the time when the cause of action is complete with all of its elements.' [Citation.]" (Id. at 806–807.) An important exception to this is the discovery rule.
The discovery rule “postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. [Citations.]” (Fox, supra, 35 Cal.4th at 807.) “[W]hen a plaintiff has notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to [their] investigation . . . the statute commences to run." (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1374 (citing authority omitted).) “A plaintiff has reason to discover a cause of action when he or she ‘has reason at least to suspect a factual basis for its elements.’ [Citation.]” (Ibid.) Plaintiffs “ ‘must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence’ [Citation.]” (Fox, supra, 35 Cal.4th at 808.)
Here, the Complaint contains specific details setting forth the alleged scheme and Jiang’s discovery of it. Whether these allegations are supported by the facts cannot be addressed on demurrer. The demurrer based on statute of limitations is overruled.
Fourth cause of action | aiding and abetting a breach of fiduciary duty
“The elements of a claim for aiding abetting a breach of fiduciary duty are: (1) a third party's breach of fiduciary duties owed to plaintiff; (2) defendant's actual knowledge of that breach of fiduciary duties; (3) substantial assistance or encouragement by defendant to the third party's breach; and (4) defendant's conduct was a substantial factor in causing harm to plaintiff. [Citations.]” (Nasrawi v. Buck Consultants LLC (2014) 231 Cal.App.4th 328, 343.) Some courts require the plaintiff plead defendant’s underlying intent to facilitate the tort as well. (Id. at 344.)
Jiang has alleged the required elements of this cause of action. On demurrer, the Court assumes the truth of the factually pled allegations and those facts that may be reasonably inferred from them. (Blank, supra, 39 Cal.3d at 318.) Jiang alleges Li and Chow breached their fiduciary duty to him and that defendants intentionally, knowingly and substantially aided this breach by developing Muse’s business plan. Plaintiffs allege this was a substantial factor in causing Jiang’s harm.
The demurrer to the fourth cause of action is overruled.
Tenth cause of action | conversion
The elements of conversion are: (1) the plaintiff had a right to personal property, (2) the defendant substantially interfered with the plaintiff’s property, (3) the plaintiff did not consent to the interference, (4) the plaintiff was harmed, and (5) the defendant’s conduct was a substantial factor in causing the plaintiff’s harm. (CACI No. 2100.)
Defendants argue Jiang failed to plead conversion because, when they were paid $47,000, Jiang had yet to fund Muse with $505,000. However, Jiang alleges the payment came from his funds; such an allegations does not necessarily conflict with the later funding of Muse. (Complaint, ¶ 53.)
The demurrer to the tenth cause of action is overruled.
Eleventh cause of action | conspiracy
The elements of civil conspiracy are: (1) the formation and operation of the conspiracy with (2) resulting damage to the plaintiff from acts done in furtherance of the conspiracy. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) “Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. [Citation.]” (Id. at 510–511.) “While a complaint must contain more than a bare allegation the defendants conspired, a complaint is sufficient if it apprises the defendant of the ‘character and type of facts and circumstances upon which she was relying to establish the conspiracy.’ [Citations.]” (AREI II Cases (2013) 216 Cal.App.4th 1004, 1022.)
The Complaint sufficiently alleges how defendants, including moving defendants, acted in concert to siphon off Jiang’s funds through various devices. As to moving defendants, one can reasonably infer from the Complaint that their role stems from the business plan and that it was used to further the conspiracy. The Complaint sufficiently alleges a civil conspiracy.
The demurrer to the eleventh cause of action is overruled.
Thirteenth cause of action | tort of another for attorneys’ fees
The general rule is “[i]n the absence of some special agreement, statutory provision, or exceptional circumstances, attorney’s fees are to be paid by the party employing the attorney. [Citations.]” (Prentice v. North Am. Title Guaranty Corp., Alameda Division (1963) 59 Cal.2d 618, 620.) “Exception: A person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against at third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred. [Citations.]” (Ibid. [emphasis omitted].) The underlying tort and the action against the party who enabled the tort may be brought in the same action. (Id. at 621.)
The demurrer argues Jiang’s cause of action fails under Code of Civil Procedure § 1021.6, which governs claims for the tort of another for implied indemnity. (Burger v. Kuimelis (N.D. Cal. 2004) 325 F.Supp.2d 1026, 1043.) However, the cause of action is based instead on the common law tort of another, and is adequately pleaded.
The demurrer to the thirteenth cause of action is overruled.
Fourteenth cause of action | violation of Penal Code § 496
Penal Code § 496(a) makes it a crime to receive property from another knowing the property was stolen or obtained in any manner constituting theft or extortion. Subsection (c) provides a civil cause of action for the injured party for the same conduct and allows for the recovery of treble damages.
Defendants argue the Complaint Jiang has alleged that defendants knew the $47,000 they received was misappropriated from Jiang. (Complaint, ¶ 173.) Defendants’ argument as to the actual source of the $47,000 is a factual dispute that cannot be addressed on demurrer.
The demurrer to the fourteenth cause of action is overruled.
Fifteenth cause of action | intentional infliction of emotional distress
The elements of an intentional infliction of emotional distress cause of action are: (1) extreme and outrageous conduct by the defendant; (2) intention to cause or reckless disregard of the probability of causing emotional distress; (3) severe emotional suffering; and (4) actual and proximate causation of the emotional distress. (See Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 780; Wilson v. Hynek (2012) 207 Cal.App.4th 999, 1009.)
To satisfy the element of extreme and outrageous conduct, defendant’s conduct “‘must be so extreme as to exceed all bounds of that usually tolerated in a civilized society.’” (Moncada, supra, 221 Cal.App.4th at 780 (quoting Tererice v. Blue Cross of California (1989) 209 Cal.App.3d 878, 883).) “Behavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiff’s interest; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress.” (McDaniel v. Gile (1991) 230 Cal.App.3d 363, 372.) “[I]t is not enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by ‘malice,’ or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort.” (Cochran v. Cochran (1998) 65 Cal.App.4th 488, 496.) “Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” (Id.) While there is no bright-line as to what constitutes outrageous conduct and thus this involves a case-by-case analysis, courts can determine whether conduct was sufficiently outrageous at the demurrer stage. (Id. at 494.)
Here, defendants were in a position of power over Jiang and used that power not only to take his money but to prevent him from being able to immigrate with his family. The allegations are not outrageous as a matter of law.
The demurrer to the fifteenth cause of action is overruled.
Sixteenth cause of action | legal malpractice
The elements of a legal malpractice claim are: “ ‘ “(1) the duty of the attorney to use such skill, prudence and diligence as members of the profession commonly possess; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage. [Citations.]” [Citation.]’ [Citation.]” (Blanks v. Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336, 356–357.)
Defendants argue they did not owe a duty to Jiang. “To be sure, an attorney will normally be held liable for malpractice only to the client with whom the attorney stands in privity of contract, and not to third parties. [Citations.]” (Borissoff v. Taylor & Faust (2004) 33 Cal.4th 523, 529.) However, there are several exceptions including “circumstances under which someone not a party to a contract may sue to enforce it as a third party beneficiary. [Citations.]” (Ibid.)
“ ‘An attorney may be liable for damage caused by his negligence to a person intended to be benefited by his performance irrespective of any lack of privity of contract between the attorney and the party to be benefited. [Citation.] The liability sounds in tort. [Citation.] The determination of whether the duty undertaken by an attorney extends to a third person not in privity “involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant's conduct and the injury suffered, the moral blame attached to the defendant's conduct, and the policy of preventing future harm.” [Citations.]’ [Citations.]” (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 110–111.)
Defendants’ argument ignores the alleged purpose of Muse Logistics’s and Jiang’s role in the company. Defendants fail to address the foreseeability of harm and degree of certainty inherent in the duty analysis.
The demurrer to the sixteenth cause of action is overruled.
Seventeenth cause of action | unfair competition
The Unfair Competition Law (“UCL”), Bus. & Prof. Code § 17200, prohibits “unfair competition,” which is defined as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising . . . . (Bus. & Prof. Code, § 17200.) “The UCL’s purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) “In service of that purpose, the Legislature framed the UCL’s substantive provisions in “’broad, sweeping language’” [Citations] and provided ‘courts with broad equitable powers to remedy violations’ [citation.]” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 320.)
Defendants’ demurrer targets the unfair prong of the UCL but fails to address the unlawful prong despite several alleged statutory violations. The demurrer to the seventeenth cause of action is overruled.
Motion to strike
Defendants move to strike the request for punitive damages. California Civil Code § 3294 allows for punitive damages against defendants if, by clear and convincing evidence, they have been guilty of oppression, fraud, or malice. (Civ. Code § 3294.) Malice means “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code § 3294(c)(1).) As the Court held in College Hospital v. Superior Court (1994) 8 Cal.4th 704, 713, Civil Code, § 3294 was amended in 1987 to require that, where malice is based on a defendant’s conscious disregard of a plaintiff’s rights, the conduct must be both despicable and willful. The Court in College Hospital found that “despicable conduct refers to circumstances that are ‘base,’ ‘vile,’ or ‘contemptible’. [Citation.]” (Id. at 725.) " ' "Oppression" means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.’ [Civ. Code, § 3294(c)(2).]” ‘ “Fraud" is an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.’ [Civ. Code, § 3294(c)(3).]” (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63.)
“‘[I]ntent,’ in the law of torts, denotes not only those results the actor desires, but also those consequences which he knows are substantially certain to result from his conduct.” (Shroeder v. Auto Driveway Co. (1974) 11 Cal.3d 908, 922.)
To support punitive damages the complaint must “’allege ultimate facts of the defendant’s oppression, fraud, or malice.’ [Citation.]” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1055.) The court in Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6–7, noted that “’the distinction between conclusions of law and ultimate facts is not at all clear and involves at most a matter of degree’ [Citation.] . . . . What is important is that the complaint as a whole contain sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief. [Citations.]”
The Complaint contains allegations that meet the definitions of despicable and willful. Whether Jiang will be able to prove those allegations is inappropriate at this stage of the proceedings.
The demurrer is overruled. Defendants to answer within 20 days.
The motion to strike is denied.
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