Judge: Maurice A. Leiter, Case: 24STCV01427, Date: 2024-07-31 Tentative Ruling

Case Number: 24STCV01427    Hearing Date: July 31, 2024    Dept: 54

Hearing Date: July 31, 2024

Department 54, Judge Maurice Leiter

1.         Demurrer and Motion to Strike by Defendant Skybox Holdings 81

2.         Demurrer by Defendants Zhu, Wong, Zhang, and LA Fruity Inc.

3.         Demurrer by Defendant JPMorgan Chase, N.A.’

T/R:     The demurrers are sustained with 30 days leave to amend.

Plaintiff to give notice.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:30 am on the day of the hearing.

            The Court considers the moving papers, oppositions, and replies.

BACKGROUND

            Plaintiff Shuolin Wen sued Defendants Qingzhou Zhu, Fangshuo Guo, Guoqiang Zhu, Sisley Wong, Xiaodan Zhang, Hanh Phuong Giang, Yash Dave, Skybox Holdings 81, SAM Management, LLC, Wharf Fun, Inc., Green Planets Express, Ice Castle Inc., Casa Cannabis Inc., JPMorgan Chase Bank, N.A., and LA Fruity Inc. on January 18, 2024.

            On May 3, 2024, Plaintiff filed the operative first amended complaint (“FAC”). It asserts twenty-seven causes of action: twelve of breach of contract (1, 3, 6, 8, 12, 14, 16, 19-22, and 26); ten of fraud (2, 5, 7, 9, 11, 13, 15, 17-18, and 23), and five of money had and received (4, 10, 24-25, and 27). Plaintiff alleges all causes of action against all defendants.

Generally, Plaintiff alleges that Quingzhou Zhu was an employee or managing agent of JPMorgan Chase Bank at relevant times. The remaining individual defendants acted as managing agents for one or more of the entity defendants. Zhu induced Plaintiff to loan money to him or other defendants by misrepresenting facts about the prospects for success of various ventures. Plaintiff loaned and invested considerable funds, which were mismanaged and/or not repaid.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.

A.    Skybox Holdings 81’s Demurrer to the FAC

Skybox demurs to all causes of action in the FAC based on uncertainty and failure to state a claim.

1. All Except the Twenty-Second Count

Skybox’s name appears six times in the body of the FAC. Two merely identify the parties and contain no other factual allegations. Two references appear in the twenty-third count for fraud. The FAC fails to allege sufficient facts against Skybox for any of these causes of action.  

The demurrer is sustained as to all these counts.

2. Twenty-Second Count for Breach of Contract

The twenty-second count appears to contain the basics of a breach of contract claim: (1) the contract, (2) the plaintiff’s performance, (3) defendant’s breach, and (4) resulting damages. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) Plaintiff appears to allege that he and Skybox agreed he would lend Skybox $100,000.00, Plaintiff supplied the funds, and Skybox did not pay him back.

But Plaintiff does not allege that he entered into an agreement with Skybox.  Plaintiff alleges that he loaned Defendant Zhu $100,000.00, “via check to SKYBOX HOLDINGS 81”. (FAC, ¶ 144(a).) Plaintiff’s boilerplate allegation that all his agreements are between “PLAINTIFF” and “DEFENDANTS” (id., ¶ 144) is insufficient.

A copy of the contract apparently underlying the twenty-second count is attached to the FAC as Exhibit K. That shows the contract was not between Plaintiff and Skybox. It refers to Plaintiff as LENDER and Zhu as BORROWER. The only reference to Skybox is as payee on the check made out for Zhu’s benefit.

The demurrer is sustained.

B.        Individual Defendants’ Demurrer to FAC

1. Defendants Sisley Wong and Xiaodan Zhang

Defendant Sisley Wong’s name appears once in the body of the FAC, in the list of parties. The FAC states no claims against her. The demurrer is sustained.

Defendant Xiaodan Zhang appears once outside the list of parties, where Plaintiff alleges that on approximately June 6, 2021, she “told PLAINTIFF that she was pregnant and she had put a lot of effort into LA FRUITY, INC.” This single allegation is not linked to any cause of action, nor does it state a claim for fraud. The demurrer is sustained.

2. Demurrers for Uncertainty

Plaintiff sued fifteen defendants based on at least ten written agreements and more that may or may not be written. They are employment contracts (FAC, Ex. I), shareholder agreements (id., Ex. J), and promissory notes (id., Exs. H, K). Some of the defendants are borrowers on promissory notes, while others are payees. (See id., Ex. E [defendant Guo as borrower, defendant Sam Management as payee for check], Ex. K [defendant Zhu and Skybox, same].) One promissory note names only defendant Zhu. (See id., Ex. B.) But Plaintiff asserts all causes of action against all Defendants. The FAC makes no effort to differentiate which Defendants are liable on which contracts, other than to conclude that all Defendants are liable for everything.

The demurrer is sustained.

C.        JPMorgan Chase’s Demurrer to FAC

JPMorgan Chase appears in two places in the FAC. At paragraphs 8 and 9, Plaintiff alleges, without supporting facts, that Zhu acted as Chase’s employee or agent. At paragraphs 18 and 19, Plaintiff alleges that two alleged misrepresentations occurred at a Chase branch.

None of these allegations states any claim against JPMorgan Chase.

            The demurrer is sustained.

D.        Motion to Strike

            The motion to strike is denied as moot.