Judge: Christian R. Gullon, Case: 20PSCV00406, Date: 2025-04-15 Tentative Ruling

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Case Number: 20PSCV00406    Hearing Date: April 15, 2025    Dept: O

Tentative Ruling

DEFENDANTS VANITA S. CHEUNG AND CHEUNGS LAW GROUP'S NOTICE OF MOTION AND MOTION FOR AN ORDER REQUIRING PLAINTIFF LI SUN TO POST A SECURITY UNDERTAKING / BOND IN THE AMOUNT OF $120,000.00 PURSUANT TO C.C.P. SECTION 1030 is GRANTED; the declaration of James Wolf, which is otherwise undisputed by Plaintiff, shows the petition submitted to the USCIS on behalf of plaintiff Li Sun was completed in compliance with the standard of care such that Defendants have a reasonable possibility of prevailing on the merits. (The court requests that Defendants file a proposed order.)

Background

This is a fraud case. Plaintiff Ling Sun filed suit against Defendants AMERICAN EVERGLOW REGIONAL CENTER, LLC, a California Limited Liability Company; UNIVERSITY CAMPUS HOTEL, LLC, a California Limited Liability Company; UNIVERSITY CAMPUS HOTEL FUND, L.P., a California Limited Partnership; PRIME INVESTMENT INTERNATIONAL, INC., a California Corporation; BLOOMING INVESTMENT GROUP, INC., a California Corporation; PROMI INTERNATIONAL INVESTMENT GROUP,  an Unknown Business Entity; HUA GUO, an individual; LORY LIN, an individual; STEVEN QIN, an individual; DECHEUNG HOU, an individua;; Mr. Fang, an individual; VANITA S. CHEUNG, an individual; and CHEUNG’S LAW GROUP alleging that Defendants used the EB-5 Immigrant Investor Visa Program to defraud Plaintiff Ling Sun out of $170,000 that Plaintiff Ling Sun paid on behalf of her sister, Plaintiff Li Sun.

On June 23, 2020, Plaintiff filed a complaint.

On April 2, 2021, Plaintiffs Ling Sun and Li Sun filed their second amended complaint (SAC) for 1. INTENTIONAL MISREPRESENTATION 2. NEGLIGENT MISREPRESENTATION 3. FRAUDULENT CONCEALMENT 4. BREACH OF FIDUCIARY DUTY 5. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS 6. BREACH OF ORAL AGREEMENT 7. PROFESSIONAL NEGLIGENCE [Legal Malpractice] 8. COMMON COUNT [Money Had and Received] against the same defendants, except for DECHEUNG HOU and Mr. Fang.

On March 29, 2023, Plaintiffs dismissed Lory Lin.

On February 20, 2025, the parties attended an MSC; the matter was not settled.

On February 21, 2025, Defendants Vanita S. Cheung and Cheungs Law Group (“Attorney Defendants”) filed the instant motion.

On February 28, 2025, Attorney Defendants filed a motion for summary adjudication. (ISSUE ONE: There is no triable issue of material fact with respect to the seventh cause of action for Professional Negligence (Legal Malpractice) because Moving Defendants complied with the applicable standard of care.  ISSUE TWO: There is no triable issue of material fact with respect to the seventh cause of action for Professional Negligence (Legal Malpractice) because Moving Defendants were not a substantial factor in causing plaintiff LI SUN's alleged injuries and damage.)

On April 3, 2025, Plaintiff Li Sun filed her opposition to the Attorney Defendants’ motion. (The opposition was untimely by one day.)

On April 7, 2025, Attorney Defendants filed their reply.

Discussion

Attorney Defendants brings forth this motion pursuant to Code of Civil Procedure (CCP)[1] section 1030. The relevant portions of the statute are as follows:

(a) When the plaintiff in an action or special proceeding resides out of the state, or is a foreign corporation, the defendant may at any time apply to the court by noticed motion for an order requiring the plaintiff to file an undertaking to secure an award of costs and attorney's fees which may be awarded in the action or special proceeding. For the purposes of this section, “attorney's fees” means reasonable attorney's fees a party may be authorized to recover by a statute apart from this section or by contract.

(b) The motion shall be made on the grounds that the plaintiff resides out of the state or is a foreign corporation and that there is a reasonable possibility that the moving defendant will obtain judgment in the action or special proceeding. The motion shall be accompanied by an affidavit in support of the grounds for the motion and by a memorandum of points and authorities. The affidavit shall set forth the nature and amount of the costs and attorney's fees the defendant has incurred and expects to incur by the conclusion of the action or special proceeding.

(c) If the court, after hearing, determines that the grounds for the motion have been established, the court shall order that the plaintiff file the undertaking in an amount specified in the court's order as security for costs and attorney's fees.

(d) The plaintiff shall file the undertaking not later than 30 days after service of the court's order requiring it or within a greater time allowed by the court. If the plaintiff fails to file the undertaking within the time allowed, the plaintiff's action or special proceeding shall be dismissed as to the defendant in whose favor the order requiring the undertaking was made. (Code of Civ. Proc., § 1030 subds. (a)-(d), emphasis added.)

a.     Plaintiff Li Sun is an Out-Of-State Resident

Here, it is undisputed that Plaintiff Li Sun is an out-of-state resident as she is a resident of Shanghai, China. (See SAC, ¶2.)

b.     Defendants have a Reasonable Possibility of Prevailing

Plaintiff alleges that Attorney Defendants breached the standard of care by: 1) failing to advise plaintiff Li Sun that she would not meet the USCIS requirements as an EB-5 investor because her capital contribution in the Project did not come from her own funds and instead, was actually paid by plaintiff Ling Su; filing plaintiff Li Sun's I-526 petition with the USCIS with false information that the investment funds came from her and not from a borrowed source of funds; and 3) signing the I-526 petition without plaintiff Li Sun's knowledge and consent. (See SAC, ¶¶122-123.)

Here, Attorney Defendants rely upon the expertise of James Wolf, an attorney who specializes in immigration and nationality law. According to Wolf, at the time the I-526 petition was filed, the USCIS permitted many different funding sources for the EB-5 investment, including the investor’s own funds derived from income, borrowing from another person, and gift from another person. Accordingly, under the terms of the USCIS Policy Manual, a loan or gift from Plaintiff Ling Sun to Plaintiff Li Sun is a permitted source of funds. Additionally, to the extent that Plaintiff Li Sun argues that the attorney signed her name on the petition without her authorization, the signature (i) matches other forms and (ii) it is not unusual for an immigration attorney to sign a fee agreement and required immigration forms to avoid delays. In any event, as of the signing of the declaration, Plaintiff Li Sun’s I-526 Petition is still pending; there has been no denial or rejection of the petition.

To the extent an opposition has been filed, it is brief and doesn’t dispute Wolf’s declaration. To the extent that Plaintiff argues that the motion should be denied because the attorney-client fee agreement does not provide for attorney's fees, the relevancy of this argument.

c. Amount of Bond

Attorney Defendants have incurred more than $50,000.00 in attorneys' fees and in costs to date.  (See Rubaum Decl., ¶9).  This amount is expected to grow exponentially as the case approaches trial.  It is anticipated that Defendants will incur attorneys' fees and costs going forward in the amount of an additional $70,000.00 or more though trial.

Here, as the opposition does not take issue with the amount of bond, the court orders Li Sun to post a security undertaking/bond in the amount of $120,000.00.

Conclusion

Based on the foregoing, the motion is granted.