Judge: Peter A. Hernandez, Case: 23PSCV00325, Date: 2024-05-09 Tentative Ruling
Case Number: 23PSCV00325 Hearing Date: May 9, 2024 Dept: K
Plaintiffs Zhenni
Zou’s and Xiaoye Cui’s unopposed Motion for Consolidation of Cases is GRANTED.
Background
Case No. 23PSCV00325
Plaintiffs Zhenni Zou (“Zou”) and Xiaoye Cui (“Cui”) (together, “Zou/Cui”) allege as follows:
On July 30, 2023, CC Express Trucking
(“CC Express”) was formed by Zou/Cui as 50/50 shareholders, each contributing
$20,000.00, and registered as a general stock corporation with the State of
California; Zou was named as its Director, CEO and CFO, while Cui was named as
its Secretary.
On August 29, 2020,
Qian Yu (“Yu”) visited Zou/Cui’s
house, during which time an oral agreement was entered into wherein Yu would
become a 20% shareholder of CC Express for a $10,000.00 investment and Zou/Cui were to remain equal,
majority shareholders with 40% each of the remaining shares. On September 4,
2020, CC Express received Yu’s $10,000 investment.
On November 6, 2020,
CC Express, partially with a capital contribution from Yu, purchased truck #6
for the use and benefit of CC Express with title to the truck in Yu’s name. It
was orally agreed by Yu and Zou/Cui
that Zou/Cui and Yu would
each be 33.3% shareholders. Between October-December 2021, two of CC Express’
trucks, including truck #6, broke down out-of-state, resulting in expensive
repairs and towing costs paid by CC Express. On November 26, 2021, a CC Express
truck was sold for $100,000.00; the profits from same were split equally
between Zou/Cui and Yu. Yu
used her share of the profits for her own benefit, while Zou/Cui deposited the remaining
amount into the CC Express account. Zou/Cui
believe Yu has converted truck #6 for her own use and benefit. Zou/Cui and Yu have material
disagreements which have resulted in the mismanagement of CC Express assets.
On July 5, 2023, Case Nos. 23PSCV00325 and 23STCV02756 were related; Case No. 23PSCV00325 was designated as the lead case.
On February 13, 2024, Zou/Cui filed a Derivative First Amended Complaint, asserting causes of action against Yu and Does 1-50 and Nominal Defendant CC Express for:
1. Conversion
2. Dissolution of Corporation Pursuant to
California Corporations Code § 1800 et seq.
On April 9, 2024, Yu’s default was entered.
A Case Management Conference is set for May 9, 2024.
Case No. 23STCV02756
Yu alleges as follows: Yu, Zu and Cui are each 33.3% shareholders of CC Express. On or about September 14, 2021, Zou and Cui set up CSZ Logistics, Inc. (“CSZ”); since that time, Zou and Cui have transferred the entire business of CC Express to CSZ without Yu’s consent.
On February 8, 2023, Yu filed a complaint, asserting causes of action against CC Express, CSZ Logistics, Inc., Zou, Cui and Does 1-50 for:
1.
Breach of
Fiduciary Duty
2.
Conversion
3.
Shareholder’s
Derivative Action for Damages
4.
Accounting—Request
for Appointment of Receiver
5.
Breach of
Oral Contract
6.
False
Promise
7.
Intentional
Interference with Contractual Relations
8.
Intentional
Interference with Prospective Economic Relations
9.
Unfair
Competition
10.
Unjust
Enrichment
On April 3, 2023, CC Express’ default was entered. On March 12, 2024, the court ordered CSZ’s answer stricken and default entered.
A Case Management Conference is set for May 9, 2024.
Legal Standard
“When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.” (Code Civ. Proc., § 1048, subd. (a).)
“There are two types of consolidation: a complete consolidation resulting in a single action, and a consolidation of separate actions for trial. Under the former procedure, which may be utilized where the parties are identical and the causes could have been joined, the pleadings are regarded as merged, one set of findings is made, and one judgment is rendered. In a consolidation for trial, the pleadings, verdicts, findings and judgments are kept separate; the actions are simply tried together for the sake of convenience and judicial economy.” (Sanchez v. Superior Court (1988) 203 Cal.App.3d 1391, 1396 [citation omitted].)
“A notice of motion to consolidate must: (A) List all named parties in each case, the names of those who have appeared, and the names of their respective attorneys of record; (B) Contain the captions of all the cases sought to be consolidated, with the lowest numbered case shown first; and (C) Be filed in each case sought to be consolidated.” (Cal. Rules of Court [“CRC”] Rule 3.350(a)(1).) “The motion to consolidate: (A) Is deemed a single motion for the purpose of determining the appropriate filing fee, but memorandums, declarations, and other supporting papers must be filed only in the lowest numbered case; (B) Must be served on all attorneys of record and all nonrepresented parties in all of the cases sought to be consolidated; and (C) Must have a proof of service filed as part of the motion.” (CRC Rule 3.350, subd. (b).)
Discussion
Zou/Cui move the court for an order consolidating Case Nos. 23PSCV00325 and 23STCV02756 for all purposes.
Procedural Deficiencies
At the outset, the court notes that Plaintiff’s motion fails to comply with CRC Rule 3.350, subdivision (a)(1)(A) and (C) [see above]. Zou/Cui’s counsel is admonished in this regard.
Merits
Case No. 23PSCV00325 arises from disputes between Zou/Cui and Yu, the three individual shareholders of CC Express. Case No. 23STCV02756 likewise involves disputes between Zou/Cui and Yu regarding CC Express.
Plaintiff’s unopposed request for consolidation is granted. The court determines that Case Nos. 23PSCV00325 and 23STCV02756 should be consolidated for all purposes because (1) there is a factual and legal overlap of the issues in the two cases, (2) there is an overlap in the evidence and witnesses in both cases, (3) consolidation would provide convenience to the parties and attorneys and (4) consolidation would promote judicial economy.