Judge: Jon R. Takasugi, Case: 20STCV13063, Date: 2023-11-20 Tentative Ruling

Case Number: 20STCV13063    Hearing Date: February 22, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ motion to enforce settlement is GRANTED.

On 4/2/2020, Plaintiff Miawa Investment, Inc. and Maggie-Dawson, Inc. (collectively, Plaintiffs) filed suit against Zhou Cai, and Vista Selection, Inc., alleging: (1) breach of contract; and (2) fraud.

            On 5/26/2020, Zhou Cai and Vita Selection, Inc. filed a cross-complaint against Miawa Investment, Maggie-Dawson, Inc., Juan Li, and Seven Bubble, Inc., alleging: (1) breach of contract; (2) common counts; (3) fraud; (4) intentional tort; and (5) general negligence.

            On 3/1/2022, Vista Selection, Inc. filed a cross-complaint against MKM Trading, LLC and Christie Ly (collectively, MKM Defendants), alleging: (1) breach of contract; and (2) fraud.

            On 11/20/2023, the Court continued Defendants Zoui Cai, Vista Selection, Inc., and Bingjie Zhao (collectively, Defendants’) motion to enforce the Settlement Agreement.

            Now, the Court considers the motion based on the submitted supplemental materials.

Discussion 

            In its 11/20/2023 ruling, the Court found that supplemental materials were necessary to determine whether or not the Settlement Agreement was unenforceable as the product of misrepresentation or mistake.

            Now, having read the supplemental materials, the Court determines that Defendants’ motion should be granted.

            In opposition, Plaintiffs did not submit any evidence which could show that Defendants knowingly misrepresented that MKM was the responsible party. While Plaintiffs previously claimed that Defendants had forged a shipping label, they now “acknowledge that there is not sufficient evidence to conclude that Defendants lied about who the supplier was.” (Opp., 2:3-4.)  As such, there is no basis for Plaintiffs argument that Defendants induced Plaintiffs to enter into the Settlement Agreement based on false representations.

            Still, Plaintiffs argue that “…if Defendants did not know that MKM was the supplier, then the agreement was the result of mutual mistake and Plaintiffs are entitled to be relieved of their obligations.” (Opp., 2: 6-7.) The Court finds this argument confusing and unpersuasive. Plaintiffs’ counsel agreed on the record that his client agreed to dismiss Defendants regardless of the outcome of the Cross-Complaint:

The Court: And my understanding that we discussed back in chambers was that, irrespective of whatever a jury may rule with regard to the Cross-Defendants MKM, that so long as the current Defendants testify consistent with your understanding of what they are going to say consistent with the deposition that you are going to take within the next day or so, that so long as they have signed any right to judgment, you are going to dismiss against them.

Mr. Wang: Yes, your Honor, that is correct.

(Crawley Decl. ¶3, Ex. 1, p. 3.)

As such, at the time of the Settlement Agreement, it was understood that a jury may or may not determine that Defendants MKM were liable. Accordingly, the unilateral or mutual mistake argument was only available if it was based on knowing misrepresentations by Defendants that MKM was involved. This is because “Plaintiffs have known, from the very commencement of the Settlement Agreement, that Mr. Cai’s knowledge of the identity of the Supplier came solely from representations Mr. Wang made to Mr. Cai during their business venture, that MKM had supplied them with the masks in question.” (D’s Supp. Brief: 4: 22-25.)

Second, Plaintiffs argue that this motion is premature because there has been no anticipatory breach. However, Plaintiffs’ counsel expressly stated to Vista’s counsel, to paraphrase, “We’re bringing you back in” and “We will submit Defendants’ names to the jury” because Plaintiffs’ counsel determined based on its own investigation that “MKM was not the supplier”. (Crawley Decl. ¶6.)

However, as noted by Defendants in their supplemental materials:

Plaintiffs’ argument now is that the motion is premature and the Court cannot provide relief because Mr. Cai and Ms. Zhao have not provided testimony in the trial yet. Plaintiffs’ counsel certainly made such assertions of nonperformance and never contested Mr. Cai, Vista, and Ms. Zhao’s counsel’s representations to the Court on September 29, 2023 that Plaintiffs had made such representations. The Court then directed Mr. Cai, Vista, and Ms. Zhao’s counsel to file this motion instead of waiting until trial to sort out this matter. (Crawley Decl. ¶7.)

(D’s Supp. Brief, 3: 19-25.)

Tellingly, Plaintiffs’ motion does not cite a single case in support of its contention that counsel’s assertions do not constitute anticipatory breaches. As such, the Court finds sufficient evidence of anticipatory breach to render this motion ripe.

In its 11/23/2023 ruling, the Court wrote:

The Court agrees with Defendants that Plaintiff may not void the settlement agreement simply because they have not been successful in obtaining the additional evidence they feel they need to tie MKM to the transaction. However, the Court agrees with Plaintiff that it cannot be bound to a Settlement Agreement if it was based on fraudulent misrepresentations or a product of mutual mistake.  Additional briefing will clarify the situation at hand.

Here, after allowing supplemental materials, Plaintiffs have not submitted any evidence to show that the Settlement Agreement was based on fraudulent misrepresentations or a product of mutual mistake. Indeed, Plaintiffs now acknowledge that there isn’t evidence that Defendants lied about who the supplier was. Rather, as was understood at the time the Settlement Agreement was agreed to, the identity of the supplier is a question of fact.

Based on the foregoing, Defendants’ motion to enforce settlement is granted.  

It is so ordered.

Dated:  February    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.