Judge: Peter A. Hernandez, Case: 19PSCV00291, Date: 2024-01-16 Tentative Ruling
Case Number: 19PSCV00291 Hearing Date: January 16, 2024 Dept: K
Background
Plaintiffs Zengpeng Feng (“Zengpeng”), Jiaxiang (“Jiaxiang”) Feng and Yongxiang Feng (“Yongxiang”) (collectively, “Plaintiffs”) allege as follows:
Plaintiffs are Chinese nationals with
limited knowledge of English and limited knowledge of the California real
estate markets. In or around April 2012, Zengpeng and non-party Zhengjun Wang
(“Zhengjun”) traveled together to Las Vegas, where they won a significant sum
of money gambling. While in Las Vegas, Zengpeng and Zhengjun met Fai Wong
(“Wong”), who represented himself as a casino host. Wong told Zengpeng and
Zhengjun that they could not legally return to China with their winnings or
otherwise transfer the money to China and that they had to invest the money in
the United States. Wong represented that he knew of properties in Las Vegas
that could be purchased as an investment for approximately the amount of money
Zengpeng and Zhengjun had won and that he could handle this transaction for
them. Zhengjun provided Wong with $470,000.00, and Zengpeng provided additional
funds.
Wong promised to invest the money in
properties in Las Vegas, and the first of the properties was purchased on or
about May 7, 2012. These properties are currently involved in litigation in
Case No. A-18-777837-C (the “Nevada Case”). Zengpeng, and his sons Jiaxiang and
Yongxiang, agreed to acquire additional properties, including properties in
Southern California, by and through Wong. Wong would recommend a particular
property and then, on Wong’s instructions, Plaintiffs would transfer funds into
accounts controlled by Wong in China. Wong and his associates, including his
wife Liming Jiang (“Jiang”), would use funds transferred into the account to
purchase the recommended property through a now-defunct entity controlled by
them (i.e., Golden Ocean Investment, LLC [“Golden Ocean”]) and then have Golden
Ocean sell the property to Zengpeng or his sons at inflated prices.
In 2012, Wong purchased three
properties, (1) 14730 Finisterra Place, Hacienda Heights, California (the
“Finisterra Property”), (2) 8684 Via Santa Cruz, Whittier, California (“8684
Property”) and (3) vacant land near Via Santa Cruz and La Cuarta Street, Whittier,
California (the second and third properties collectively, the “Santa Cruz
Properties”) on behalf of Zengpeng, which were titled in Jiaxiang’s and
Yongxiang’s names. On or about January 29, 2015, the Santa Cruz Properties were
transferred to Global Panda Entertainment LLC (“Global Panda”) without
Plaintiffs’ knowledge or consent. Global Panda allowed a mortgage to be
recorded against the Property by Lone Oak Fund, LLC (“Lone Oak”), again without
Plaintiffs’ knowledge or consent. On or about January 4, 2017, Global Panda
transferred the 8684 Property to Global Travel & Cultural Entertainment
(“Global Travel”). On or about November 3, 2017, a mortgage was recorded
against the 8684 Property by Lone Oak, without Plaintiffs’ knowledge or
consent. On or about November 7, 2017, Global Travel acquired a loan from
Qualfax, Inc. (“Qualfax”), which was secured by a deed of trust encumbering the
Santa Cruz Properties. On or about January 9, 2019, Qualfax conducted a
foreclosure sale and took possession of the Santa Cruz Properties. Also, on or
about November 9, 2015, a mortgage lien was recorded against the 14730
Finisterra Property by Royal Business Bank (“RBB”) without Plaintiffs’
knowledge or consent. On or about June 15, 2018, a grant deed was recorded, in which
the vacant lot near Via Santa Cruz was transferred to Global Travel, again
without Plaintiffs’ knowledge or consent.
On August 24, 2020, a “Judgment in Favor of Defendant Royal Business Bank” and a “Judgment in Favor of Defendants Lone Oak Fund, LLC and Qualfax, Inc.” were filed.
On May 4, 2021, the court ordered the case stayed in its entirety.
On May 27, 2022, remittitur was filed.
On July 11, 2022, Plaintiffs filed a Second Amended Complaint, asserting causes of action against Wong, Jiang, Global Travel, Global Panda, Lone Oak, RBB, Qualfax, Does I-X and Roe Entities I-X for:
1.
Quiet Title
2.
Constructive Trust
3.
Equitable Lien
4.
Preliminary and Permanent Injunction
On August 26, 2022, Qualfax filed a First Amended Cross-Complaint, asserting a cause of action against Zengpeng, Jiaxiang, Yongxiang and Roes 11-50 for:
1.
Equitable Subrogation/Equitable Lien
On September 6, 2022, Wong’s, Jiang’s, Global Travel’s and Global Panda’s defaults were entered on Plaintiffs’ SAC.
On September 9, 2022, Lone Oak filed a cross-complaint, asserting causes of action against Wong, Jiang, Global Travel, Global Panda, Qualfax, Zengpeng, Jiaxiang, Yongxiang and Roes 1-20 for:
1.
Declaratory Relief—Deed of Trust is Valid
2.
Declaratory Relief—Agency and Authority
3.
Declaratory Relief—Ratification and Consent
4.
Unjust Enrichment
5.
Equitable Lien
6.
Judicial Foreclosure
7.
Quiet Title
8.
Fraud
9.
Indemnification
10.
Attorney’s Fees—Tort of Another
On December 16, 2022, an “Order Re: Joint Ex Parte Application by All Parties for a Court Order Approving the Substation of Res from Real Property to Sale Proceeds from the Anticipated Sale of the Property” was filed.
On December 28, 2022, RBB filed a cross-complaint, asserting causes of action against Zengpeng, Jiaxiang, Yongxiang, Wong, Jiang, Global Travel and Roes 1-20 for:
1.
Declaratory Relief—Deed of Trust is Valid
2.
Declaratory Relief—Agency and Authority
3.
Declaratory Relief—Ratification and Consent
4.
Quiet Title
5.
Equitable Lien
6.
Unjust Enrichment
7.
Judicial Foreclosure
8.
Breach of Guaranty
9.
Breach of Limited Guaranty
10.
Waste
11.
Fraud
12.
Indemnification
13.
Tort of Another Attorneys’ Fees
On October 25, 2023, the court was advised by the parties that the matter had settled.
RBB moves the court to expunge a notice of pendency of action recorded against the Finisterra Property. The lis pendens RBB seeks to have expunged was recorded “in connection with the civil action entitled Zhenjun Wang, et al. v. Fai Wong, et al., filed in Clark County, Nevada, Case Number A-18-777837-C (the “Nevada Case”).
California’s lis pendens statutes (i.e., Code Civ. Proc., §§ 405-405.61) do not authorize recording a notice of litigation that is pending in the court of another state concerning real property located in California; as such, a California court may grant a defendant’s motion to expunge such a notice. (Formula Inc. v. Superior Court (2008) 168 Cal.App.4th 1455, 1457).
Notwithstanding the above, the court believes that it may be appropriate to continue the hearing at this juncture, on the basis that it does not appear that notice of the continued January 16, 2024 hearing date was provided to Donald Williams, whom RBB identifies as the attorney for Yang and Liu (in addition to Wong, Jian, Global Travel and Global Panda) in the Nevada Case. Yang and Liu are not parties to this instant case. Wong, Jian, Global Travel and Global Panda are parties to this instant case, but are in default on the SAC.
The court will hear from the parties in this regard at the time of the hearing.