Judge Randolph M. Hammock, Case Number: 23STCV09298, Date: 2025-05-29 Tentative Ruling

Plaintiff Caidi Zhou, as Administrator of the Estate of Ting Jue Zhou, brings this action against Defendants Shungyan Hang Lee and Man Cheng for theft and embezzlement. Defendant Shungyan Hang Lee was the caregiver for Plaintiff’s father, Ting Jue Zhou. Plaintiff alleges that Defendants took her elderly father—who suffered from dementia and memory loss—to various banks to withdraw approximately $750,000 in funds, which they retained for their benefit.

Defendant Shungyan Hang Lee moves for leave to file a Cross-Complaint against Plaintiff. Defendant’s proposed Cross-Complaint will assert causes of action against Plaintiff for (1) malicious prosecution, (2) conversion, and (3) intentional infliction of emotional distress. Defendant will allege that she assisted Mr. Zhou at Mr. Zhou’s request to withdraw funds from his accounts so that his daughter (Plaintiff) could not commandeer his assets. (Wegman Decl., Exh. A.) Further, Defendant will allege that Plaintiff filed a false police report against her and Defendant Cheng, and then entered Defendant’s living quarters and destroyed her personal property. (Id.)

Defendant filed this motion for leave on March 21, 2025. The declaration of counsel Stephen D. Wegman states that he was “recently retained” as counsel for Defendant and discovered from his “review of all the facts and materials that Defendant had good claims against the Plaintiff.” (Wegman Decl. ¶ 6.) Then, he “acted with diligence to bring” this motion. (Id.) Counsel attests that leave to appropriate because “no depositions have been taken, and only minimal initial written discovery has been completed to date…” (Id. ¶ 9.) In addition, Counsel attests the Cross-Complaint “does not widen the scope of discovery [because] the facts put in issue by the complaint and answer are the basis for the cross-complaint.” (Id.)

Cross-claims against complainants arising from the same transaction or series thereof, existing at the time of filing an answer, are compulsory. (See, e.g., CCP §426.30(a); Al Holding Co. v. O’Brien & Hicks, Inc. (1999) 75 Cal.App.4th 1310, 1313-14.) Leave to file compulsory cross-complaints must be granted where moving parties acted in good faith. (CCP § 426.50; Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98-99.) The “principle of liberality requires that a strong showing of bad faith be made in order to support a denial of the right to file a cross-complaint under this section.” (Foot's Transfer & Storage Co. v. Superior Ct. (1980) 114 Cal. App. 3d 897, 902 [emphasis added].) “The legislative mandate is clear. A policy of liberal construction of section 426.50 to avoid forfeiture of causes of action is imposed on the trial court. A motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated where forfeiture would otherwise result.” (Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98-99.)

Here, because the pleadings are generally based on the same transaction or facts and circumstances, the cross-complaint is compulsory. Therefore, the opposing party must make a strong showing of bad faith. By failing to oppose, Plaintiff has not made that showing.

It is also noted that Defendant Cheng filed a substantially similar Cross-Complaint against Plaintiff as a matter of right on March 21, 2025. [FN 2] Because this Cross-Complaint will need to be litigated as a matter of course, there is little undue prejudice to Plaintiff if Shungyan Hang Lee’s Cross-complaint is also filed. Given the related nature of the claims and conflicting accusations of wrong-doing, justice is best-served where all issues are litigated together.

This court need not address the merits of the Cross-Complaint at this time. Rather, the “better course of action” is to permit the filing “and then let the parties test its legal sufficiency in other appropriate proceedings,” such as by demurrer or motion to strike. (Atkinson v. Elk Corp. (2003) 109 Cal. App. 4th 739, 760.)

Finally, given the recent addition of the Cross-Complaint(s), and the revelation that there have been no depositions taken and only minimal written discovery, it would appear that the parties will not be ready to try this case on July 28, 2025. The court will address any potential continuance of the trial date upon motion by any party.

Judge of the Superior Court

FN 1 - Defendant served the motion on Plaintiff’s counsel electronically on March 21, 2025. (See Proof of Service.)

FN 2 - Plaintiff served Defendant Cheng on May 23, 2023. (See Proof of Personal Service.) Cheng did not file an Answer to the Complaint, and on November 20, 2023, Plaintiff requested entry of default. (See 11/20/2023 Request for Entry of Default). The default was not entered. (Id.) Plaintiff failed to seek entry of the default after that point. On March 25, 2025—over 2 years after being served—Defendant Cheng filed an Answer and Cross-Complaint.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.