Shinebest Property, LLC, et al. v. Genterica Corporation, et al. 

(1) DEFENDANT JOHNNY YU’S DEMURRER TO THE FIRST AMENDED COMPLAINT

(2) MOTION TO STRIKE

 

MOVING PARTY: Defendant Johnny Yu

RESPONDING PARTY(S): None

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiffs allege they are the owners and property managers of properties located in Los Angeles and Ontario, CA. Plaintiffs allege they transferred the properties to Defendant to be held in trust for the benefit of Plaintiffs. Defendants then encumbered the properties and sold them under fraudulent means. 

Defendant Johnny Yu now demurrers to the First Amended Complaint. No opposition was filed.

TENTATIVE RULING:

As discussed herein in section (C), Defendant must establish valid service of the Demurrer and MTS on the Plaintiffs. Assuming he does so, the court’s Tentative Ruling is as follows:

Defendant’s Demurrer to the First Amended Complaint is SUSTAINED IN ITS ENTIRETY. Whether leave to amend is given will depend on whether Plaintiffs can make a sufficient “offer of proof” at the hearing.

Defendant’s Motion to Strike is MOOT.

Moving party is ordered to give notice.

DISCUSSION:

Demurrer

A. Lack of Opposition and Possible Proper Service on Plaintiff

Plaintiffs have not filed an opposition to the demurrer. However, this court has concerns with service that might explain the absence of any opposition. 

Notably, the Proof of service for the demurrer and MTS purports to have served Plaintiffs’ counsel by electronic means only on December 19, 2024. (See Proof of Service.) The Proof of service reflects service at three email address: lawamerica@gmail.com, info@russellgroup.com, and shannon@russellgroup.com. (Id.) 

These emails, however, do not match those listed for Plaintiffs’ counsel in the header of the Complaint or FAC. Instead, those list the following email addresses: dennis@russellgroup.legal, shannon@russellgroup.legal, and info@russellgroup.legal. 

Thus, while the Proof of Service contains email addresses ending with “@russellgroup.com,” the Complaint lists emails ending with “@russellgroup.legal.” It is not clear where Defendant obtained the “lawamerica@gmail.com” email address and whether that is a valid service address (which is not listed on the FAC or Complaint.) This raises the question of whether any of the three email addresses were proper service destinations. 

Additionally, while the Proof of Service does list a physical mailing address that appears to match the mailing address on the FAC Complaint, the Proof of Service does not reflect that any mail-service at that address was actually attempted. Again, the only service was by electronic means.

In light of these apparent issues, Defendant must demonstrate effective service at the February 7th hearing. If it cannot do so, this court will continue the hearing to allow Defendant to effectuate valid service. In that event, the date of the rescheduled hearing on the demurrer and MTS will be March 21, 2025, on which date a demurrer by Defendant C&W Investment Group, LLC is already set to be heard.  

Assuming there has been, in fact, proper service, the following is this court’s tentative ruling, without any opposition being filed:

B. Meet and Confer

The Declaration of Attorney Andrew Leff reflects that the parties met and conferred. 

C. Judicial Notice

Pursuant to Defendant’s request, the court takes judicial notice of the First Amended Complaint.

D. Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.)  When considering demurrers, courts read the allegations liberally and in context.  (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.)  In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice.  (CCP § 430.30(a).)  A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)  Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.  (Id.)  The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.  (Hahn, 147 Cal.App.4th at 747.)

E. Analysis

Defendant Yu demurrers to the Fifth, Sixth, Seventh, and Eighth Causes of Action in the FAC. Because the issues raised apply to each, the court addresses them together.

In support of the demurrer, Yu argues that as the seller’s agent and broker, he did not owe Plaintiffs a legal duty because they were not a seller or prospective buyer of the property. 

Generally, “the source of substantive liability [for civil conspiracy] arises out of a preexisting legal duty and its breach.” (Navarrete v. Meyer (2015) 237 Cal. App. 4th 1276, 1292.)  Real estate brokers owe legal duties only to customers and intended beneficiaries of the real estate transaction. (See, e.g., Coldwell Banker Residential Brokerage Co. v. Superior Ct. (2004) 117 Cal. App. 4th 158.)

Plaintiffs allege they were the owners of properties in Los Angeles and Ontario, CA. (FAC ¶¶ 16, 17.) Plaintiffs then transferred the properties to Defendant Genterica, Inc., to be held in trust with the understanding that “that the properties would be transferred back to [Plaintiffs] at a later date.” (Id. ¶ 21.) Defendant then encumbered the properties and eventually sold them without Plaintiff’s consent. (Id.) 

Plaintiffs allege Defendant Yu was the sellers’ agent and broker for the sale of the properties at issue. (Id. ¶ 40.) Plaintiffs allege they informed Defendant Yu that the owned the properties and “did not consent to the sales and that they should not go forward.” (Id.) “Further, despite being made aware of Plaintiffs’ claim to the properties, Defendant YU never provided Plaintiffs with any escrow documentation or information regarding status of the sales which would have allowed them to pursue their claims prior to close of escrow.” (Id.) On these allegations, Plaintiffs assert causes of action (5) for conspiracy to defraud, (6) elder abuse, (7) injunctive relief, and (8) declaratory relief. 

Here, Plaintiffs have not alleged facts demonstrating the existence of a legal duty owed to them by Defendant Yu. Additionally, by failing to oppose the demurrer, Plaintiffs have not established a legal duty should exist based on the facts as currently pleaded. 

Accordingly, Defendant’s Demurrer to the Fifth, Sixth, Seventh, and Eighth Cause of Action is SUSTAINED. 

Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment.  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) Plaintiffs must demonstrate this possibility at the hearing if they seek leave to amend.

Motion to Strike

A. Legal Standard

A motion to strike lies either (1) to strike any irrelevant, false or improper matter inserted in any pleading; or (2) to strike any pleading or part thereof not drawn or filed in conformity with the laws of this state, a court rule or order of court.  (CCP § 436.)

B. Analysis

Defendant moves to strike portions of the FAC. Because Defendant’s demurrer is SUSTAINED in its entirety, the Motion to Strike is MOOT.

IT IS SO ORDERED.

Dated:   February 6, 2025 ___________________________________