Judge: Salvatore Sirna, Case: 20PSCV00842, Date: 2023-02-08 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 20PSCV00842    Hearing Date: February 8, 2023    Dept: G

Plaintiff Fnu Jinghui’s Application for Default Judgment

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff Fnu Jinghui’s Application for Default Judgment is DENIED without prejudice.

BACKGROUND

This is a derivative business litigation action. On February 4, 2020, Matthew Chiang (Chiang) and Quinghua Huang (Huang), who were officers, directors, or managers of the NE Plus Corporation (NE Plus) invited Plaintiff Fnu Jinghui to invest $500,000 in NE Plus in exchange for Plaintiff being nominated as chairman of the board for NE Plus, which would have allowed Plaintiff to receive an annual salary of $180,000 and to enroll an incentive stock program with six million shares at three year vesting periods with an exercise price of ten cents per share. Plaintiff accepted the invitation and invested $500,000 in NE Plus. Plaintiff then alleges that Huang and Does 1-10 diverted funds in excess of $2,372,813.20 from NE Plus to another entity, NE Plus Enterprises. Plaintiff alleges Chiang, the acting CEO of NE Plus, was aware of Huang’s activities and condemned them as illegal but failed to stop Huang from diverting funds.

On December 3, 2020, Plaintiff filed a complaint individually and derivatively on behalf of NE Plus against Chiang, Huang, NE Plus Enterprises, Does 1-20, and NE Plus as a nominal defendant, alleging the following causes of action: (1) breach of fiduciary duty, (2) rescission, (3) declaratory relief, (4) abuse of control, (5) conversion, (6) fraud, (7) negligent misrepresentation, (8) intentional interference with contractual relations, (9) negligence, (10) accounting, (11) money had and received, (12) unfair competition, and (13) injunctive relief.

On December 11, 2020, Plaintiff’s registered process server served NE Plus and Chiang via substitute service in Walnut. On February 1, 2021, Plaintiff amended the complaint to replace Doe 1 with NE Plus Direct Sale Corp (NE Plus Direct). On February 11, Plaintiff’s registered process server personally served NE Plus Direct in Irvine. On June 8, default was entered against NE Plus and NE Plus Direct. On June 17, Plaintiff amended the complaint to replace Doe 2 with NE Plus Enterprises, LLC (NE Plus Enterprises LLC).

From June to July 2021, Plaintiff served notice on Huang via publication. On September 7, default was entered against Huang. In April 2022, notice was served on the remaining defendants via publication. On June 7, default was entered against NE Plus Enterprises.

On January 11, 2023, Plaintiff dismissed Chiang from this action. On January 31, Plaintiff submitted the present application for default judgment.  

A final status conference is set for February 8, 2023, with a non-jury trial set for February 27.    

LEGAL STANDARD

Code of Civil Procedure section 585 permits entry of a default judgment after a party has filed to timely respond or appear.  A party seeking judgment on the default by the court must file a Request for Court Judgment, and: (1) a brief summary of the case; (2) declarations or other admissible evidence in support of the judgment requested; (3) interest computations as necessary; (4) a memorandum of costs and disbursements; (5) a proposed form of judgment; (6) a dismissal of all parties against whom judgment is not sought or an application for separate judgment under CCP § 579, supported by a showing of grounds for each judgment; (7) exhibits as necessary; and (8) a request for attorneys’ fees if allowed by statute or by the agreement of the parties.  (Cal. Rules of Court 3.1800.) 

ANALYSIS

Plaintiff seeks default judgment against Defendants in the total amount of $2,373,775, including $2,372,813 in damages and $962 in costs. Because Plaintiff did not complete the declaration of nonmilitary status (item 8 of CIV-100 form) as required by Rule 3.1800, subdivision (a)(5) of the California Rules of Court, the court DENIES Plaintiff’s application without prejudice.

CONCLUSION

Based on the foregoing, Plaintiff’s application for default judgment is DENIED without prejudice.