Judge: Christian R. Gullon, Case: 23PSCV02558, Date: 2023-12-06 Tentative Ruling

Case Number: 23PSCV02558    Hearing Date: December 6, 2023    Dept: O

Tentative Ruling

 

Defendant Yihang Duan’s Demurrer is SUSTAINED with leave to amend.

Background

This is a contracts case. Plaintiff CHENSHUO FAMILY OFFICE CORP alleges the following against Defendants CCR AUTO FINANCING LLC (“CCR”), RUI YU (“R. Yu”), YIHANG DUAN (“Duan”), and JIAN YU (“J. Yu”) (collectively, “Defendants”)[1]: Since September of 2023, Plaintiff and Defendants entered into an oral agreement to enter business relationship to operate a rental car business. Plaintiff provided the initial funding to purchase the vehicles. On or about December 1, 2022, Defendants stopped all profit distributions. (P19.) Despite demands that Defendants return “Plaintiff’s vehicle” (P20) and provide immediate accounting, Defendants refuse to do so.

On August 22, 2023, Plaintiff filed suit for the following causes of action (COAs):

1.     Breach of Contract

2.     Conversion

3.     Breach of Fiduciary Duty

4.     Fraud

On October 6, 2023, the court granted Plaintiff’s writ of possession (for the vehicles).

On October 23, 2023, moving Defendant (Duan) filed three motions: MOTION FOR JUDICIAL NOTICE, [2]MOTION TO DISQUALIFY COUNSEL (Robert Hsu as attorney of record for Plaintiff Chenshuo Family Office Corp.); and the instant demurrer.

Discussion[3]

 

This demurrer is based upon the following grounds: 1. The attorney who initiated the lawsuit did so without the proper authorization from the named Plaintiff. A complaint filed by some other entity other than the real party in interest in subject to demurrer. 2. The Complaint is uncertain because it is both ambiguous and unintelligible. (Demurrer pp. 1-2.)

 

The court SUSTAINS the demurrer on both grounds.

 

A.    The person who filed the Complaint does not have the legal capacity to sue

 

As noted in the Statement of Information filed with Secretary of State on September 7, 2023, Defendant Duan was the only officer and director of the Plaintiff Chenshuo Family Office Corp. The matter is capable of judicial notice as the official records of the California Secretary of State, an executive department of the State of California, would qualify as “official act” of the executive department of the State of California. (See Rodas v. Spiegel (2001) 87 Cal. App. 4th 513, 518; Evidence Code §451(c).)

 

As the only officer or director of the Plaintiff corporation, then Defendant is seemingly the only one with capacity to sue on behalf of Plaintiff. (Demurrer p. 4, Del Mar Beach Club Owners Assn v. Imperial Contracting Co. (1981) 123 Cal.App.3d 898, 906.) According to CCP section 367, “every action must be prosecuted in the name of the real party in interest.” The person possessing the right sued upon by reason of the substantive law is the real party in interest. (3 Witkin, Cal. Procedure (2d ed.), Pleading, s 93.) Again, Defendant is the person with the right to sue (i.e., Defendant has standing).

 

What adds more confusion is that the complaint’s signature line states it is filed on behalf of “Belong Inc.” (Complaint p. 7 of 14 of PDF.)

 

Therefore, as it is uncertain as to who the real party in interest is, the court SUSTAINS the demurrer.

 

B.    The complaint is uncertain. It is ambiguous and unintelligible

 

As noted by Defendant and observed by the court, there are numerous ways in which the complaint is uncertain. For example, the complaint alleges that:

 

-        Defendant Huang agreed to provide rental services (¶16), but Defendant Huang is not a named defendant.

-        The complaint alleges that since September of 2023, Plaintiff and Defendants entered into an oral agreement to enter business relationship to operate a rental car business. (¶15.)  But the complaint was filed before in August 2023.

 

All in all, both the facts and identity of the parties are unclear.

 

Conclusion

 

Based on the foregoing, the demurrer is SUSTAINED with leave to amend.


[1] “Plaintiff is informed and believes and thereon alleges that Defendants JIAN YU, YI HANG DUAN AND RUI YU ("Joint Defendants") are aliases of each other and that Defendant RUI YU is the current name Defendant YIHANG DUAN assumed.” (Complaint P6.)

 

[2] The motion for judicial is made on the grounds that it is related to the disposition of the demurrer. A party need not make a formal motion to request judicial notice (RJN). Generally, a formal motion for judicial notice is required for purposes of an appeal. (See CRC Rule 8.252.) However, when a party is seeking RJN with a demurrer, the request must be made in a separate document that lists the specific items for which notice is requested and must comply with Cal Rules of Ct 3.1306(c). Cal Rules of Ct 3.1113(l). Thus, as Defendant’s motion provides the requisite information just in a different form, the court will treat the motion for judicial notice as an RJN.

 

[3] It does not appear the parties met and conferred. While Defense Counsel sent an email to Plaintiff’s Counsel to discuss the demurrer, no further details have been provided. (Demurrer, Ex. B, p. 12 of 14 of PDF.)