Judge William A. Crowfoot, Case Number: 22AHCV00029, Date: 2024-07-30 Tentative Ruling

Judge: William A. Crowfoot, Case: 22AHCV00029, Date: 2024-07-30 Tentative Ruling

On January 18, 2022, Fan Peng (“Peng”) filed this action against Yun Xiang Tseng (“Tseng”), Zhao Cesarone, Anna Grace, Kristine A. Naldjian, Dao House, LLC, and WDA, LLC for breach of contract, intentional and negligent misrepresentation, false advertising, conversion, unjust enrichment, intentional infliction of emotional distress, “purchase money resulting trust”, and “alter ego.”

Peng filed an amended complaint (“FAC”) on January 31, 2022, which added Childwise International Corporation as a defendant.

On March 30, 2022, Tseng filed a cross-complaint for breach of contract against Peng.

Peng filed the Second Amended Complaint (“SAC”) on July 19, 2022, which added Zhou Sail Electronic Co., Ltd. (“Sail Electronic”) as a plaintiff.

On March 28, 2024, Peng filed this motion as a cross-defendant seeking summary judgment/summary adjudication on Tseng’s cross-complaint. There is only one cause of action for “Breach of Housing Agreement” asserted within the cross-complaint. Tseng filed an opposition brief on July 12, 2024. Peng filed a reply brief on July 25, 2024. Tseng filed, with leave of court, a sur-reply on July 29, 2024.

Tseng alleges that in March 2021, he and Peng entered into a Housing Agreement so that Peng’s son could enroll in San Marino High School. (XC, ¶ 10.) Peng used Tseng’s credit score to lease a home at 625 Chester Ave, San Marino (“Residence”) and agreed to make all lease payments. (Id.) She and her son would live in the master bedroom suite and second largest bedroom, while Tseng and his assistant, Anna Grace, were given two of the smaller three bedrooms to live in for free. (Id.) Tseng alleges that Grace was to provide Peng “with assistance and services as requested” and that Tseng would, for additional charges, provide Peng with “personal and business consultation services while they jointly lived in the Residence.” (Id.) Shortly thereafter, in April 2021, Peng agreed for Kristina Naldjian to move from Colorado to the Residence to live there for free while also providing her personal assistance to Peng. (XC, ¶ 12.)

Tseng alleges that Peng breached the Housing Agreement when she moved out of the Residence on August 6, 2021, and failed to make all rent payments. (XC, ¶¶ 19-20, 25.) Tseng also alleges that Peng breached the Housing Agreements by failing to pay him for various services, amounting to $175,750. (XC, ¶¶ 21, 25.) These alleged services are described in two invoices attached to the Cross-Complaint. One invoice for $138,250 is based on the approximately 500 hours of: (1) private business consulting provided to Peng for her Chinese company, Zheng Zhou Sail Electric LLC, including logo design, brand building, marketing strategy, and Yi Jing analysis of employees, (2) assistance with the formation of a subsidiary of Peng’s company, SailUSA, Corp., and (3) private banking assistance with Peng’s son’s education and other personal business matters. (XC, Ex. 2.) Another invoice is for 150 hours of private coaching and consultation services in the amount of $37,500 to Peng. (XC, Ex. 1.) These services included coaching in Taiji, Qigong, Dao Yin, meditation, and healing.

In reviewing a motion for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) A defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(2).) The supporting evidence can be in the form of affidavits, declarations, admissions, depositions, answers to interrogatories, and matters of which judicial notice may be taken. (Code Civ. Proc., § 437c, subd. (b)(1).) “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).)

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if that party contends that the cause of action has no merit or that there is no affirmative defense thereto, or that there is no merit to an affirmative defense as to any cause of action, or both, or that there is no merit to a claim for damages . . . or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).) A motion for summary adjudication shall proceed in all procedural respects as a motion for summary judgment. (Id., subd. (f)(2).)

Peng requests judicial notice of her verified SAC, Tseng’s cross-complaint, and San Marino Housing Ordinance 23.02.01. The RJN is GRANTED.

It is undisputed that on March 27, 2021, Tseng and Peng entered into a lease with landlord Ho Cheng (“Cheng”) to rent the Residence beginning April 1, 2021, and ending March 31, 2022 (“Lease”). (UMF No. 1.) It is also undisputed that Peng paid the first six months’ rent in full ($39,000) upon signing the Lease and paid the security deposit of $6,800. (UMF No. 3.) However, Peng argues that Tseng’s claim for breach of the Housing Agreement fails because the alleged Housing Agreement was never formed.

Peng first argues that there is no evidence of mutual assent because there is no written evidence of the alleged Housing Agreement and there are no “sufficiently definite terms” which would provide a basis for determining the existence of a breach, such as its duration, any terms of payment, or the specific categories of services that would be provided. As evidence, Peng declares that “[Tseng] never entered into any contract with [her] and never provided any coaching or personal business consulting services” such as Taiji, Qigon, Dao Yin, or meditation and self-healing based on Daoist principles. (Motion, Peng Decl., ¶ 5.) She also states that Tseng “never charged psychological consultations to [her]” and “never discussed any payment for personal coaching or business consultation services with [her].” (Peng Decl., ¶ 11.) She further states that she owns a factory in China that employs around 120 people and “clearly [does] not need business advice from [Tseng].” She also claims that Tseng’s invoices are fabricated because they are both dated July 4, 2021, which contradicts Tseng’s allegations in the XC that one of them was provided on August 8, 2021.

Peng also argues that there was no alleged Housing Agreement because there was no mutual assent or consideration. But in discussing this particular argument, Peng actually contends that the Housing Agreement was unenforceable and illegal because Chapter XXIII, Section 23.02.01 of the City of San Marion’s Code of Ordinance provides that occupations within single-family dwellings shall be restricted to “in-home tutoring of educational, cultural, artistic, or recreational subjects to individuals permanently residing within this dwelling; and professional services not requiring clients to visit the dwelling.” Peng then claims that the contract is illegal because Tseng does not possess any business license to provide treatment for physical or mental conditions. (Motion, pp. 16-17.) However, triable issues of material fact exist as to whether any of Tseng’s personal coaching or consulting services constitute “in-home tutoring of educational, cultural, artistic, or recreational subjects” as prohibited by city ordinance.

In her late-filed reply brief, Peng argues for the first time that the alleged Housing Agreement is barred by the statute of frauds because it is a contract that cannot be performed within 1 year from the date of its making. “The statute of frauds does not apply to an employment contract unless its terms provide that the employee cannot completely perform it within one year from the making of the contract.” (White Lighting Co. v. Wolfson (1968) 68 Cal.2d 336, 343.) Peng argues that Tseng’s agreement to provide services is “not likely to be finished in one year as the parties signed a one-year lease in order for Tseng to perform his service in that Residence.” (Reply, pp. 3-4.) This argument is not persuasive because the lease only lasts one year, which shows that the agreement could, in fact, be performed within that year.

Peng’s other newly-raised argument in her reply brief is that the Cross-Complaint “fails to state facts sufficient to state a claim” because there is no allegation that Tseng actually performed its obligations under the alleged Housing Agreement. However, this argument is more suited to a demurrer and in any event, Peng fails to show there are no triable issues regarding Tseng’s performance of the Housing Agreement. Peng notably does not address Tseng’s allegation that the parties agreed – outside of the Lease – that Peng would use Tseng’s credit score to lease the Residence for herself and her son and pay rent. In fact, Plaintiff necessarily concedes that such an auxiliary agreement exists because her own SAC alleges that they agreed to split rent equally. (RJN, Ex. 1, ¶ 39.) Without any agreement between the two of them, Peng’s own contract claim would fail. Rather, her motion focuses on whether there was a specific agreement between them for Tseng’s various services, raising triable issues regarding the terms of that agreement. Furthermore, granting Peng’s motion, which solely addresses the issue of personal services, would not entirely dispose of Tseng’s breach of contract claim which has a broader scope including Peng’s purported failure to pay rent under their Housing Agreement. Accordingly, summary judgment/adjudication is improper.

In light of the foregoing, the motion for summary judgment/adjudication is DENIED.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.