Judge: Upinder S. Kalra, Case: BC683554, Date: 2022-11-07 Tentative Ruling
Case Number: BC683554 Hearing Date: November 7, 2022 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: November
7, 2022
CASE NAME: John Dian Lei v. Shan Shen et al.
CASE NO.: BC683554
PLAINTIFF’S
MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT
MOVING PARTY: Plaintiff Joan Huang
RESPONDING PARTY(S): Defendants 1804 Bannister, LLC
and Shan Shen filed a Notice of Nonopposition
REQUESTED RELIEF:
1.
An order granting leave to amend the
Second Amended Complaint.
TENTATIVE RULING:
2.
Motion for Leave to Amend the Second
Amended Complaint is GRANTED.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On November 14, 2017, John Dian Lei (“Plaintiff”) filed a
Complaint against Defendants Shan Shen, Fa Chan Chuong, Joan Huang, 1804
Bannister, LLC, Bannis Corporation and Does 1 through 10. The complaint alleged
19 causes of action: (1) Battery; (2) Intentional Infliction of Emotional
Distress, (3) Negligence, (4) Intentional Misrepresentation, (5) Negligent Misrepresentation,
(6) Concealment, (7) Civil Conspiracy, (8) Breach of Fiduciary Duty, (9) Abuse
of Control, (10) Corporate Waste, (11) Unjust Enrichment, (12) Breach of
Contract, (13) Common Count: Goods And Services Rendered, (14) Common
Count: Money Had and Received, (15) Common Count: Open Book, (16) Trespass to
Chattel, (17) Conversion, (18) Alter Ego, and (19) Request for Preliminary
Injunction. The complaint alleges that the Plaintiff grew Jujube and Lychee
trees on the Subject Property and was a majority shareholder of Bannis.
Plaintiff later entered into a lease agreement with Zhu, which allowed the
cultivation of the trees. The complaint further alleges that the Defendants
conspired to defraud the Plaintiff, specifically to take control of Bannis.
On December 18, 2017, Defendant 1804 Bannister, LLC filed a
Cross-Complaint.
On April 6, 2018, Defendant Joan Huang filed an Answer.
On June 22, 2018, Plaintiff filed a Second Amended
Complaint.
On December 20, 2018, Joan Huang, Defendant in matter No. BC683554,
filed a complaint against Defendant Shan Shen, 1804 Bannister, LLC, Fung Liu,
a.k.a. John Dian Lei as well as Bannis Corporation – as a nominal defendant.
This is Case No. 18PSCV00205.
On February 14,
2019, a Notice of Related Case indicated that matter BC683554 is related to
case No. 18PSCV00205.
On May 24, 2019, Defendant Bannister filed a Demurrer
without a Motion to Strike.
On October 17, 2019, Plaintiff filed an Amended Complaint.
On January 8, 2020, Plaintiff filed an Answer.
On January 17, 2020, Defendant Bannister filed a Demurrer without Motion to
Strike.
On February 28, 2020, Defendant Shen filed a Demurrer without a Motion to
Strike.
On November 13, 2020, Defendant Bannister and Shen filed an Answer.
On July 23, 2021, Plaintiff filed an Amendment to Complaint,
Fictious/Incorrect Name, naming Doe 1 as ABC Green Farm, Inc.
On April 22, 2022, Defendant Bannister filed a Motion for Leave to Amend
Cross-Complaint.
On September 22, 2022, Plaintiff Huang filed a Motion for Leave to file a
Second Amended Complaint.
LEGAL STANDARD:
California Code of Civil Procedure
section 473, subdivision (a)(1) provides, in relevant part: “The court may, in
furtherance of justice, and on any terms as may be proper, allow a party to
amend any pleading or proceeding by adding or striking out the name of any
party, or by correcting a mistake in the name of a party, or a mistake in any
other respect; and may, upon like terms, enlarge the time for answer or
demurrer. The court may likewise, in its discretion, after notice to the
adverse party, allow, upon any terms as may be just, an amendment to any
pleading or proceeding in other particulars; and may upon like terms allow an
answer to be made after the time limited by this code.”
“This discretion should be exercised
liberally in favor of amendments, for judicial policy favors resolution of all
disputed matters in the same lawsuit.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d
1045, 1047.) Ordinarily, the court will not consider the validity of the
proposed amended pleading in ruling on a motion for leave since grounds for a
demurrer or motion to strike are premature. The court, however, does have
discretion to deny leave to amend where a proposed amendment fails to state a
valid cause of action as a matter of law and the defect cannot be cured by
further amendment. (See California
Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274,
281 (overruled on other grounds by Kransco v.
American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390).)
Under California Rules of Court Rule,
rule 3.1324, subdivision (a), a motion to amend a pleading shall (1) include a
copy of the proposed amendment or amended pleading, which must be serially numbered
to differentiate it from previous pleadings or amendments; (2) state what
allegations in the previous pleading are proposed to be deleted, if any, and
where, by page, paragraph and line number, the deleted allegations are located;
and (3) state what allegations are proposed to be added to the previous
pleading, if any, and where, by page, paragraph, and line number, the
additional allegations are located.
Under
California Rule of Court, rule 3.1324, subdivision (b), a separate declaration
must accompany the motion and must specify (1) the effect of the amendment; (2)
why the amendment is necessary and proper; (3) when the facts giving rise to
the amended allegations were discovered; and (4) the reasons why the request
for amendment was not made earlier.
ANALYSIS:
Plaintiff moves for leave to file a Third
Amended Complaint.
Plaintiff argues that good cause
exists for leave to amend. In June 2022, Plaintiff took the deposition of Shan
Shen, as an individual and corporate representative of 1804 Bannister, LLC. In
this deposition, Shen admitted to knowledge of Bannis’ existing shareholders,
including Paintiff, Shen and Lei’s agreement to defraud Bannis, Shen and Lei’s
conspiracy to defraud Bannis, and Shen and Lei’s efforts to conceal the fraud. (Motion
7: 23 – 8: 3; Dec. Rottman, Ex. A.) The new amended complaint will include additional
factual allegations learned from this deposition, causes of action for
“Breaches of Fiduciary Duties, Aiding and Abetting of Breach of Fiduciary Duty,
Tortious Interference, and Interference with Prospective Economic Advantage,”
and adding new prayers for relief, like recovery of lost profits. (Dec. Rottman
¶ 8.)
Moreover, Plaintiff has been
diligent in seeking leave. After the depositions in June and July, Plaintiff’s
counsel contacted counsel on August 8, 2022, about an intention to file an amended
complaint. After sending the proposed amended complaints to 1804 Bannister,
counsel for 1804 Bannister indicated it was unwilling to stipulate to allow an
amended complaint. (Motion 8: 16-21; Dec. Rottman, ¶ 4-6, Ex. E-G.) Lastly,
none of the parties will be prejudiced as no party objected to the proposed
changes or claimed any prejudice. (Motion 8: 23-27.)
“It is the general rule
that amendments to pleadings should be liberally allowed.” (Simons v. Kern County (1965) 234
Cal.App.2d 362, 367). Further, “And it is a rare case in which ‘a court will be
justified in refusing a party leave to amend his pleadings so that he may
properly present his case.” (Morgan v.
Superior Court of Cal. In and For Los Angeles County (1959) 172 Cal.App.2d
527, 530).
Here,
the information for the proposed amendments was not discovered until recently,
in the June 2022 deposition of Shen. As Plaintiff argues, this new information
conforms to the claims to proof/facts. (Motion 9: 1-3.) There will be no
prejudice adding these new amendments, as trial is not set for April 2023. Moreover,
on October 28, 2022, Defendants filed a non-opposition to the motion for leave
to amend.
The Court notes that
under Rule 3.1324, the party seeking leave to amend must attach the proposed
motion, state which allegations were changed, and where these allegations are
being changed by page, paragraph, and line number. The documents attached to
the Rottman Declaration include the proposed Third Amended Complaint. In lieu
of a line by line declaration, the Plaintiff has included the proposed amended
complaint with track changes on it, which indicates which allegations have been
added and where.
Motion
for Leave to Amend the Second Amended Complaint is GRANTED.
Conclusion:
For
the foregoing reasons, the Court decides the pending motion as follows:
Motion
for Leave to Amend the Second Amended Complaint is GRANTED.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: November
7, 2022 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court
PLAINTIFF
IN INTERVENTION/INTERVENORS’ MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT IN
INTERVENTION
MOVING PARTY: Plaintiffs-in-Intervention Stephen E.
Gallup and SJB Capital, Inc. 401(k) Profit Sharing Plan
RESPONDING PARTY(S): Defendants 1804 Bannister, LLC
and Shan Shen filed a Notice of Nonopposition
REQUESTED RELIEF:
1.
An order granting leave to file an
Amended Complaint-in-Intervention.
TENTATIVE RULING:
1. Motion
for Leave to File an Amended Complaint-in-Intervention is GRANTED.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On November 14, 2017, John Dian Lei (“Plaintiff”) filed a
Complaint against Defendants Shan Shen, Fa Chan Chuong, Joan Huang, 1804
Bannister, LLC, Bannis Corporation and Does 1 through 10. The complaint alleged
19 causes of action: (1) Battery; (2) Intentional Infliction of Emotional
Distress, (3) Negligence, (4) Intentional Misrepresentation, (5) Negligent Misrepresentation,
(6) Concealment, (7) Civil Conspiracy, (8) Breach of Fiduciary Duty, (9) Abuse
of Control, (10) Corporate Waste, (11) Unjust Enrichment, (12) Breach of
Contract, (13) Common Count: Goods And Services Rendered, (14) Common
Count: Money Had and Received, (15) Common Count: Open Book, (16) Trespass to
Chattel, (17) Conversion, (18) Alter Ego, and (19) Request for Preliminary
Injunction. The complaint alleges that the Plaintiff grew Jujube and Lychee
trees on the Subject Property and was a majority shareholder of Bannis.
Plaintiff later entered into a lease agreement with Zhu, which allowed the
cultivation of the trees. The complaint further alleges that the Defendants
conspired to defraud the Plaintiff, specifically to take control of Bannis.
On December 18, 2017, Defendant 1804 Bannister, LLC filed a
Cross-Complaint.
On April 6, 2018, Defendant Joan Huang filed an Answer.
On June 22, 2018, Plaintiff filed a Second Amended
Complaint.
On December 20, 2018, Joan Huang, Defendant in matter No. BC683554,
filed a complaint against Defendant Shan Shen, 1804 Bannister, LLC, Fung Liu,
a.k.a. John Dian Lei as well as Bannis Corporation – as a nominal defendant.
This is Case No. 18PSCV00205.
On February 14,
2019, a Notice of Related Case indicated that matter BC683554 is related to
case No. 18PSCV00205.
On May 24, 2019, Defendant Bannister filed a Demurrer
without a Motion to Strike.
On October 17, 2019, Plaintiff filed an Amended Complaint.
On January 8, 2020, Plaintiff filed an Answer.
On January 17, 2020, Defendant Bannister filed a Demurrer without Motion to
Strike.
On February 28, 2020, Defendant Shen filed a Demurrer without a Motion to
Strike.
On November 13, 2020, Defendant Bannister and Shen filed an Answer.
On July 23, 2021, Plaintiff filed an Amendment to Complaint,
Fictious/Incorrect Name, naming Doe 1 as ABC Green Farm, Inc.
On April 22, 2022, Defendant Bannister filed a Motion for Leave to Amend
Cross-Complaint.
On September 15,
2022, Plaintiffs in Intervention Stephen E. Gallup and SJB Capital, Inc.
401(k) Profit Sharing Plan filed the current Motion for Leave to file an
Amended Complaint in Intervention.
LEGAL STANDARD:
California Code of Civil Procedure
section 473, subdivision (a)(1) provides, in relevant part: “The court may, in
furtherance of justice, and on any terms as may be proper, allow a party to
amend any pleading or proceeding by adding or striking out the name of any
party, or by correcting a mistake in the name of a party, or a mistake in any
other respect; and may, upon like terms, enlarge the time for answer or
demurrer. The court may likewise, in its discretion, after notice to the
adverse party, allow, upon any terms as may be just, an amendment to any
pleading or proceeding in other particulars; and may upon like terms allow an
answer to be made after the time limited by this code.”
“This discretion should be exercised
liberally in favor of amendments, for judicial policy favors resolution of all
disputed matters in the same lawsuit.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d
1045, 1047.) Ordinarily, the court will not consider the validity of the
proposed amended pleading in ruling on a motion for leave since grounds for a
demurrer or motion to strike are premature. The court, however, does have
discretion to deny leave to amend where a proposed amendment fails to state a
valid cause of action as a matter of law and the defect cannot be cured by
further amendment. (See California
Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274,
281 (overruled on other grounds by Kransco v.
American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390).)
Under California Rules of Court Rule,
rule 3.1324, subdivision (a), a motion to amend a pleading shall (1) include a
copy of the proposed amendment or amended pleading, which must be serially
numbered to differentiate it from previous pleadings or amendments; (2) state
what allegations in the previous pleading are proposed to be deleted, if any,
and where, by page, paragraph and line number, the deleted allegations are
located; and (3) state what allegations are proposed to be added to the
previous pleading, if any, and where, by page, paragraph, and line number, the
additional allegations are located.
Under California Rule
of Court, rule 3.1324, subdivision (b), a separate declaration must accompany
the motion and must specify (1) the effect of the amendment; (2) why the
amendment is necessary and proper; (3) when the facts giving rise to the
amended allegations were discovered; and (4) the reasons why the request for
amendment was not made earlier.
ANALYSIS:
Plaintiffs in Intervention Stephen E
Gallup and SJB Capitol, Inc. 401 (K) Profit Sharing Plan move for leave to file
an Amended Complaint-in-Intervention.
Plaintiffs-in-Intervention
argue that good cause exists for leave to amend. In June 2022, Shan Shen, as an
individual and corporate representative of 1804 Bannister, LLC, sat for a
deposition. In this deposition, Shen admitted to knowledge of Bannis’ existing
shareholders, including Plaintiffs-in-Intervention, Shen and Lei’s agreement to
defraud Bannis and shareholders, Shen and Lei’s conspiracy to defraud Bannis
and shareholders, and Shen and Lei’s efforts to conceal the fraud. (Motion 8:17-25;
Dec. McKown, Ex. A.) The new amended complaint will include additional factual
allegations learned from this deposition, causes of action for “Breaches of
Fiduciary Duties, Aiding and Abetting of Breach of Fiduciary Duty, Tortious
Interference, and Interference with Prospective Economic Advantage,” and adding
new prayers for relief, like recovery of lost profits. (Dec. McKown ¶ 3.)
Moreover, Plaintiffs-in-Intervention
have been diligent in seeking leave. After the depositions in June and July,
counsel contacted other counsel on August 7, 2022, about an intention to file
an amended complaint. After sending the proposed amended complaints to all
other parties, Defendant John Lei, indicated an unwillingness to stipulate to
allow an amended complaint. (Motion 9: 12-17; Dec. McKown, ¶ 4-12, Ex. E-K.)
Lastly, none of the parties will be prejudiced as no party objected to the
proposed changes or claimed any prejudice. (Motion 9: 19-28.)
“It is the general rule
that amendments to pleadings should be liberally allowed.” (Simons v. Kern County (1965) 234
Cal.App.2d 362, 367). Further, “And it is a rare case in which ‘a court will be
justified in refusing a party leave to amend his pleadings so that he may
properly present his case.” (Morgan v.
Superior Court of Cal. In and For Los Angeles County (1959) 172 Cal.App.2d
527, 530).
Here,
the information for the proposed amendments was not discovered until recently,
in the June 2022 deposition of Shen. As Plaintiffs-in-Intervention argues, this
new information conforms to the claims to proof/facts. (Motion 9: 26-28.) There
will be no prejudice adding these new amendments, as trial is not set for April
2023. Moreover, on October 28, 2022, Defendants filed a non-opposition to the
motion for leave to amend.
The Court notes that
under Rule 3.1324, the party seeking leave to amend must attach the proposed
motion, state which allegations were changed, and where these allegations are
being changed by page, paragraph, and line number. The documents attached to
the McKown Declaration include the proposed Third Amended Complaint. (Dec.
McKown, Ex. B.) In lieu of a line by line declaration, the
Plaintiffs-in-Intervention have included the proposed amended complaint with
track changes on it, which indicates which allegations have been added and
where.
Motion for Leave to File Amended
Complaint-in-Intervention is GRANTED.
Conclusion:
For
the foregoing reasons, the Court decides the pending motion as follows:
Motion for
Leave to File Amended Complaint-in-Intervention is GRANTED.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: November
7, 2022 _________________________________ Upinder
S. Kalra
Judge
of the Superior Court