Judge: Douglas W. Stern, Case: 22STCV04880, Date: 2023-02-01 Tentative Ruling

Case Number: 22STCV04880    Hearing Date: February 1, 2023    Dept: 68

Yu Chen vs. Cong Ye, et al., Case No. 22STCV04880

MOVING PARTY:                Defendant JPMorgan Chase Bank, National Association

RESPONDING PARTY:      Plaintiff Yu Chen

MOTION:                               Demurrer to Complaint

I. BACKGROUND

The basic allegation of this Complaint is succinctly stated by Plaintiff. As can be seen, the allegations relate to the conduct of Defendant Ye, with no allegations that relate to the conduct of any other defendant.

“In April and May 2021, upon leaving the United States and at various times, Plaintiff deposited or caused to be deposited the sum of USD 105,000 (“FUND”) to Defendant YE’s bank account. Plaintiff asked Defendant to temporarily hold the FUND on Plaintiff’s behalf and to promptly return all of the FUND to Plaintiff upon Plaintiff’s request.

But most of the funds were not returned by Defendant Ye when Plaintiff requested the return.

Plaintiff filed a complaint on February 8, 2022, alleging four causes of action for (1) Conversion, (2) Common Count; (3) Constructive Trust; and (4) Violation of Penal Code Section 496. Initially the only named defendant was Defendant Cong Ye. Plaintiff alleged that Plaintiff put money in Defendant Ye’s bank account, and Defendant Ye and some Doe defendants misappropriated the funds from that account by not returning $79,000 of the funds to Plaintiff. (Opposition at p. 2.)

            On October 14, 2022, Plaintiff filed an amendment to the complaint, adding Defendant JPMorgan Chase in place of one of the Does. Plaintiff did not otherwise amend the complaint. 

            Defendant JP Morgan Chase filed this Demurrer to the Complaint on December 29, 2022. Plaintiff filed a dismissal for the First and Fourth Causes of Action as to Defendant JPMorgan Chase on January 17, 2023. Plaintiff filed an opposition to the remaining two causes of action on January 18, 2023. Defendant filed its reply on January 25, 2023.

            Although Plaintiff made no allegations that relate even indirectly to how defendant JP Morgan Chase is involved in the allegedly wrongful acts, Plaintiff chose to not amend to allege a factual basis for joining JP Morgan Chase in this action, but instead chose to stand on the allegations of the Complaint.

II. ANALYSIS

A. The Demurrer

As a general matter, in a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

1. First and Fourth Causes of Action

            Defendant demurred to the first and fourth causes of action, but Plaintiff has since dismissed Defendant as to those causes of action, so it is unnecessary to address them.

                        2. Second Cause of Action for Common Count

            Defendant demurs to the Second Cause of Action for Common Count on the basis that Plaintiff has failed to plead facts sufficient to maintain a cause of action against Defendant.

“The only essential allegations of a common count are ‘(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.’” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460, internal citations omitted.)

Plaintiff contends that:

“A pleading which is sufficient as a common count is not generally subject to general demurrer or to special demurrer on the ground of uncertainty. (Pike v. Zadig (1915) 171 Cal. 273, 277 [152 P. 923])”  (Opp. Pg 4:4-6.)

He goes on to note:

“Plaintiff alleged in the Complaint that YE and all other Defendants owe him in an amount no less that USD 79,000, and have failed to return such amount to him upon his requests. Plaintiff’s allegations are sufficient as for a cause of action of common count, therefore pursuant to Pike v. Zadig, this cause of action is not subject to general demurrer or to special demurrer on the ground of uncertainty.”  (Op ppg. 4:16-20.)

What Plaintiff misses is that a pleading must reveal a factual basis for suing the particular defendant – in this case JP Morgan Chase.  Point out that he had stated a claim against Ye provides no factual basis for understanding how JP Morgan Chase is involved. This Complaint leaves everyone guessing “What did JP Morgan Chase do?”

            Plaintiff has not pled how Defendant would be indebted to Plaintiff or what the sum would be. It was Defendant Ye who withdrew the funds, and Plaintiff has not pled how JPMorgan Chase is indebted to Plaintiff.

            Defendant’s demurrer to Plaintiff’s Second Cause of Action is sustained with 20 days leave to amend.

                        3. Third Cause of Action for Constructive Trust

            A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. The essence of the theory of constructive trust is to prevent unjust enrichment and to prevent a person from taking advantage of his or her own wrongdoing. (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990; Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 920.)

To allege a constructive trust, a plaintiff must plead: 1) a wrongful act (underlying claim incorporated into the cause of action); 2) specific, identifiable property or property interest, or excuse for inability to describe it; 3) plaintiff’s right to the property; and defendant has title thereto. (Communist Party, supra, 35 Cal.App.4th at 990.)

Plaintiff has failed to plead any wrongdoing on the part of Defendant JPMorgan Chase, or that Defendant currently has title to the property that Plaintiff is alleging was wrongfully taken. As such, Plaintiff may not maintain a cause of action for constructive trust against Defendant JPMorgan Chase.

Accordingly, Defendant’s Demurrer as to Plaintiff’s Third Cause of Action is sustained with 20 days leave to amend.