Judge: Ronald F. Frank, Case: 22TRCV00077, Date: 2024-05-01 Tentative Ruling
Case Number: 22TRCV00077 Hearing Date: May 1, 2024 Dept: 8
TENTATIVE RULING
Date: May 1, 2024
Case No.: 22TRCV00077
Plaintiffs: LAT Group, Inc. and Qiandai Zhao
Defendants: Manhong Zhang, Sunshine Investment, Inc., Estate of Jacky Lo, Torrance Family Trust, et. al, Defendants
Application: Application for Default Judgment by the Court
Tentative Ruling: Deny the default judgment without prejudice
In this matter set for a Case Management Conference on May 1, 2024, Plaintiff have a pending application for a Court Judgment by default. The proposed money judgment is for over $6 Million and against Defendant Harbor Green Grain, LP, and separately against other defendants as well based on the same evidence. Plaintiffs’ evidence submitted in support of the claimed default judgments as to each of the defaulting defendants is the Declaration of Qiandai Zhao, who asserts she is the owner of LAT Group Inc. The evidence is insufficient for the Court to enter the requested money judgment, for the following reasons:
1. The Zhao Declaration in paragraph 3 asserts that in November of 2020, Zhao responded to a WeChat group chat message by “promising to wire $50,000 from her Bank of America account. Lo did not pay back.” The evidence before the Court does not show that Zhao did in fact wire $50,000 or some other amount to the late Jacky Lo. There is no bank account statement, no confirmation of wire transfer, no attached copies of WeChat messages, nor any other corroboration for the inference Plaintiffs seek for the Court to draw from paragraph 3 that Zhao sent any amount of money to Jacky Lo.
2. The Zhao Declaration in paragraph 4 asserts that in December of 2020, Plaintiffs, Jacky Lo and Sunshine Investment signed a cooperation agreement, but that agreement is not attached to the declaration. This paragraph also asserts that the agreement concerned the assertion that a 300,000 loan (presumably $300,000) was to be transferred “to an account of Defendant’s designation” to pay for costs to be incurred in the purchase of 5 billion 3M Brand model 1860 masks. Although there are a dozen defendants listed in the lawsuit and in the declaration, paragraph 4 does not specify which of the defendants were to have designated the account or did designate an account, what that account was, and whether Zhao wired or transferred money to such a designated account. Nor does paragraph 4 state that Zhao did in fact transfer $300,000 or some other amount to Jacky Lo or to some other defendant.
3. The Zhao Declaration in paragraph 5 asserts that “in” December 4, 2020, “Defendants represented to Plaintiff that they would receive a return of $5,000,000 if Defendants’ purchase of N95 face masks returned an interest.” While the Court interprets this as a contention that one or more of the Defendants made a promise of this phenomenal rate of return, the declaration does not identify which of the defendants made that representation, what the time period was for the claimed return on investment, whether the promise was made in writing or orally, and if in writing the declaration fails to attach the corroborating document. Further, the phrase ”returned an interest” is vague and unclear, i.e., does that mean that the $5M amount was a rate of interest, or that the supplier of the masks expressed an interest in making the transaction, or something else. Further still, it is not clear whether the N95 mask is the same or different from the 3M Brand model 1860 masks referenced in the prior paragraph of the declaration.
4. The Zhao Declaration in paragraph 6 asserts that “some” of the defendants were alter egos of other defendants, but the declaration does not provide facts from which the Court could determine whether any one defendant was the alter ego of any other defendant, aside from the facts that Mr. Lo was an officer or director in “a number of corporations and partnerships” and that some of them shared a common mailing address. This is insufficient to prove that every defendant was the alter ego of every other defendant.
5. The Zhao Declaration in paragraph 10 asserts that Lo misrepresented his health, but it fails to specify what facts would lead the Court to draw that conclusion, i.e., what statements were made to whom and when about his health.
6. The prejudgment interest of $1,620,432.82 is claimed at 10%, but it is not clear from the Zhao declaration what the commencement date should be for the running of any pre-judgment interest.
7. The Zhao declaration indicates that Jacky Lo has passed away and that Manhong Zhang is his widow, but it does not indicate whether there is a probate case pending or whether a claim has been filed to the estate for some or any of the amounts claimed here.
8. The Zhao declaration lacks facts sufficient for the Court to make a determination that Haotian Lao was an ‘accomplice” to Jacky Lo’s alleged scheme or how Linda Bao was “a part of or at least knew of the scheme to defraud the Plaintiffs.”
9. The signature block for Ms. Zhao’s signature on the declaration lacks a consistent appearance with that of the rest of the document, giving the Court the impression that the signature itself may have been cut and pasted from another document.
In the Court’s view, many of these deficiencies may be correctable with a more robust and detailed CCP section 585 declaration of the Plaintiff. But on the facts presented, the Court cannot enter a default judgment for any amount against any defendant.