Judge: Thomas Falls, Case: 20PSCV00387, Date: 2022-10-26 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, attorneys are advised to check this website to determine if any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Dept. R at 909-802-1117 before 8:30 the morning of the hearing.

Case Number: 20PSCV00387    Hearing Date: October 26, 2022    Dept: R

FCC LOGISTICS, INC.A CALIFORNIA CORPORATION vs TEAM ALLIANCE LOGISTICS, A CORPORATION INC., et al.  (20PSCV00387)

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Plaintiffs’ APPLICATION FOR DEFAULT JUDGMENT

Tentative Ruling

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

Background   

Plaintiff FCC Logistics, Inc. (“Plaintiff”) alleges as follows: Chia Chun Jimmy Chi (“Chi”), Yu

Lung Kwei (“Kwei”) and Jacky Chen (“Chen”) (hereinafter collectively, “Trio”) were officers of

Wild West Investment Group, Inc. (“Wild West”). On or around July 15, 2018, the Trio

approached Plaintiff’s President, Tammy Chou, to request (1) a loan in the sum of $250,000.00 and (2) a lease of the industrial zoned property located at 400 E. Compton Blvd., unincorporated Los Angeles County, CA 90248 (“Industrial Site”) for the development and operation of Wild West. Plaintiff entered into the loan and lease with the Trio, with the Trio’s personal guaranty. The Trio concealed that the true reason for the loan and lease were for their own personal benefit and for the start-up capital of Team Alliance Logistics Inc. (“Team Alliance”), in order for Team Alliance to derive income from the Industrial Site. On or about August 6, 2019, Ally Wang (“Wang”) proceeded to incorporate Team Alliance and the Trio diverted the loan proceeds to themselves and to Team Alliance. The loan was not repaid and monthly lease payments were not made.

On June 15, 2020, Plaintiff filed a complaint, asserting causes of action against Team Alliance,

Chi, Kwei, Chen, Wang and Does 1-20 for:

1.      Conspiracy

2.      Fraud and Deceit

3.      Common Count

4.      Breach of Lease

5.      Unjust Enrichment

On February 18, 2021, June 22, 2021, and August 17, 2021, and March 2, 2022, the court denied Plaintiff’s applications for default judgment.

On March 22, 2022, Plaintiff filed an amended complaint (“FAC”) against Defendants for:

1.      Fraud and Deceit

2.      Common Count and

3.      Unjust Enrichment

On May 31, 2022, default was entered against Defendants Chi and Kwei but NOT entered as to Defendant Wild West because the name of the defendant did not match that on the FAC.

On July 13, 2022, Plaintiff filed the instant application for default judgment as to Defendants Chi and Kwei.

On July 15, 2022, default was entered against Defendant Wild West. That same day, Plaintiff filed the instant application for default judgment as to Defendant Wild West.

Discussion

There are numerous defects with this application.

First, Plaintiff attempts to hold the corporate entity and the two individual defendants each liable for $326,837, placing Plaintiff’s recovery at total recovery of $980,511. This far exceeds any allegations in the complaint.

Second, as the court noted in its March 2, 2022 tentative, “the Loan Agreement, moreover, appears to have been signed by Chi on behalf of Wild West. It is unclear to the court how the above constitutes a personal guaranty made by Chi.” This defect has not been cured.

Third, to the extent that Plaintiff filed and served a FAC making alter ego allegations, this is a default judgment wherein evidence of such allegations is required. No such evidence has been provided.

Fourth, to the extent that Plaintiff provides the declaration of Patty Wang, a certified public account, presumably to demonstrate that a $250,000 loan was made, Plaintiff has not provided a calculation of such payments.

Conclusion