Judge: Glenn R. Salter, Case: 22-1249217, Date: 2023-08-10 Tentative Ruling

Motion to Disqualify Counsel

The motion of cross-defendant Tao Xu to disqualify attorney James Howard for defendant and cross-complainant Microwine Group, Inc. [Microwine], is GRANTED.

The court notes the motion is unopposed.  Further, at the last hearing the court was advised by attorney Howard that the client was “onboarding” new counsel, and that new counsel should be engaged in about 15-30 days.  (See ROA 163.)

The prior hearing was June 22, 2023.  As of the publication of these tentative rulings, no new counsel has filed a substitution of attorney.  (One was rejected August 7, 2023 (ROA 168), which the court assumes was to substitute out Howard.)  Because Microwine is a corporation, the order shall advise it that it may only appear by counsel licensed to practice law in California.

Demurrer/Motion to Strike (Microwine Cross-Complaint)

The demurrer and motion to strike of cross-defendant Tao Xu to the cross-complaint filed by Microwine (see ROA 86) is CONTINUED on the court’s own motion to September 14, 2023, at 1:30 pm.  The continuance will allow Microwine sufficient time to engage new counsel, and sufficient time for new counsel to become familiar with the case.

Similarly, the Request for Judicial Notice filed by Xu is also CONTINUED to September 14, 2023, at 1:30 pm.

Demurrer (the Zhus’ Cross-Complaint)

The demurrer of cross-defendant Xu to the First, Second, Third, and Fifth causes of action of the cross-complaint filed by Hank Zhu, Karen Zhu, and Junhua Michael Zhu (the Zhus) (see ROA 80), is SUSTAINED in part and OVERRULED in part.

The First Cause of Action is for Elder Abuse and the Second Cause of Action is for Assault.  Both causes arise from the same alleged conduct.  The Zhus allege Xu told a friend that if Hank Zhu did not comply with his demands about Microwine he would kill the entire Zhu family.  This threat was relayed to Hank Zhu.

As to the claim for elder abuse, Welfare and Institutions Code section 15610.63 defines physical abuse as an assault as defined in Penal Code section 240.  It defines assault as “an unlawful attempt, coupled with a present ability, to commit a violent injury on the person of another.”  As there was no attempt to commit an assault, the allegations are insufficient to allege elder abuse.

As to the claim for assault, there is no allegation that the defendant was about to carry out the threat, only an allegation he made the threat to someone else.  This is an element of the cause of action and is missing.

The demurrer is SUSTAINED as to the First and Second Causes of Action with 20 days leave.

The Third Cause of Action is for intentional infliction of emotional distress.  It is also based on the alleged threat by Xu to kill the Zhu family.

An allegation that the cross-defendant threatened to kill the cross-complainant and his family if it failed to take certain action is sufficiently outrageous conduct to justify this cause of action.  (Kiseskey v. Carpenters’ Trust for So. California (1983) 144 Cal.App.3d 222, 229-230 [threat to kill plaintiff and family if failed to sign union agreement].)

The demurrer as to the Third Cause of Action is OVERRULED.

(The demurrer states it is attacking the Fourth Cause of Action.  But the cross-complaint’s Fourth Cause of Action is for something completely different.  The notice meant to attack the Fifth Cause of Action.)

The Fifth Cause of Action is for Breach of Fiduciary Duty

The allegations are that Xu breached his fiduciary duties by diverting or converting Microwine’s shareholder and investment funds for his own personal use and for the use of others, and by retaining possession of Microwine’s books and accounts, despite demands to inspect them.

Xu argues this cause of action fails because he was not in a position to take advantage of the Zhus, who are the majority owners and corporate officers of Microwine.  But this argument brings in facts outside the four corners of the cross-complaint.

The demurrer as to the Fifth Cause of Action is OVERRULED.

Motion to Strike (the Zhus’ Cross-Complaint)

Xu filed a motion to strike the allegations of punitive damages.  The cross-complaint fails to adequately allege facts that show malice, oppression, or fraud.  A statement that Xu would kill the Zhu family, made to another in conjunction with an ongoing corporate dispute is insufficient, without more, to justify the imposition of punitive damages here.

The motion also seeks to strike the allegations seeking attorney fees.  The causes of action remaining in the cross-complaint fail to allege a legal basis for the imposition of attorney fees.

The motion to strike is GRANTED.

Notice

Cross-defendant Xu shall give notice.