Judge William A. Crowfoot, Case Number: 22AHCV00806, Date: 2024-08-13 Tentative Ruling

Judge: William A. Crowfoot, Case: 22AHCV00806, Date: 2024-08-13 Tentative Ruling

On October 1, 2022, plaintiff Ling Chen (“Plaintiff”) filed this action against defendants Zihan Geng (“Defendant”), Bo Tai Group (“BTG”), and Yong Han (“Han”). Plaintiff asserts causes of action for breach of oral contract, breach of written contract, money had and received, money lent, and unjust enrichment.

On March 28, 2024, Defendant filed this motion for summary judgment. In the alternative, Defendant seeks summary adjudication of the Second, Third, Fourth, and Fifth Causes of Action.

In or about August 2021, Han told Plaintiff that several containers of gloves shipped to BTG were withheld by customs and BTG needed $73,000 for a security deposit in order to release them. (Compl., ¶ 7.) Han allegedly orally promised to pay back the amount when the containers were released and Plaintiff lent Han the money (“First Loan Agreement”). The containers were released in or about September 2021, but Han refused to repay Plaintiff in accordance with the First Loan Agreement.

In or around December 2021, Han told Plaintiff that BTG needed money to have a minimum amount deposited in its bank account in order to submit a bid to supply gloves to “Home Depo.” (Compl., ¶ 10.) On December 22, 2021, Plaintiff lent BTG $1.3 million as evidenced in a written Loan Agreement (“Second Loan Agreement”). (Compl., Ex. 1.) Han agreed to personally guarantee BTG’s timely repayment of the money and Defendant allegedly agreed to personally guarantee BTG’s timely repayment “according to her pro rata ownership of BTG.” (Compl., ¶ 12.) BTG breached the terms of the Second Loan Agreement by failing and refusing to repay Plaintiff $1.3 million by February 28, 2022. (Compl., ¶ 13.) Han and Defendant also failed to honor their personal guarantees. (Compl., ¶ 14.)

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).) To meet this burden of showing a cause of action cannot be established, a defendant must show not only “that the plaintiff does not possess needed evidence” but also that “the plaintiff cannot reasonably obtain needed evidence.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) A moving defendant need not conclusively negate an element of plaintiff’s cause of action, but it is insufficient for the defendant to merely point out the absence of evidence. (Id. at p. 854; Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.) 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. (Aguilar, supra, 25 Cal.4th at p. 855.) “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).) The plaintiff may not merely rely on allegations or denials of its pleadings to show that a triable issue of material fact exists, but instead, “shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action.” (Ibid.) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)

“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).)

Defendant requests judicial notice of BTG’s filings with the Secretary of State and a judgment issued by the Orange County Superior Court in the case entitled Geng v. Han (Case No. 30-2030-01310230-CU-FR-CJC). The request is GRANTED.

Plaintiff objects to portions of the Declaration of David Yu based on lack of personal knowledge, foundation, speculation, and hearsay. Objections to the description of bank records attached to Yu’s declaration are OVERRULED to the extent that they were produced in response to a subpoena and accompanied by an executed affidavit of the deponent’s custodian of records. Exhibit C includes an unexecuted declaration from the deponent’s custodian of records. Therefore, Objection No. 1, 2, 3, 7, and 13 are SUSTAINED to the extent the evidence objected to relies on Exhibit C. All other objections are OVERRULED because the bank records are business records which are not subject to the hearsay rule; they are also accompanied by an executed affidavit from the custodian of records.

All 7 of Plaintiff’s objections to Defendant’s declaration are OVERRULED. Defendant has personal knowledge of events which she experienced and the actions she took and testimony of those events and actions is not speculative, irrelevant, or hearsay.

Geng declares that on or about December 22, 2021, she signed the personal guarantee in the Second Loan Agreement on Han’s orders. (Geng Decl., ¶ 3.) She declares that she initially declined to sign it but Han threatened to kill her. (Id., ¶ 5.) She also states that Han “convinced [her] that the attorneys had already prepared the loan document and that he had already promised [Plaintiff] that [she] would also personally agree to guarantee the loan.” (Ibid.) She claims that she signed the Second Loan Agreement under physical duress and that Han agreed to indemnify her for the loan. (Ibid.) She agreed to sign the loan agreement but requested that her guarantee be limited to the percentage of ownership she might have in BTG. (Id., ¶ 6.) She said prior to signing the Second Loan Agreement, Han had promised her that she would become a shareholder of BTG.

It is undisputed that the Second Loan Agreement, which sets forth Defendant’s obligations, provides that Defendant will “personally guarantee the timely return of the Loan on the Lender according to her pro rata shareholder interest in [BTG[.” (UMF No. 3.) Defendant argues that she is not liable for any amount under the Second Loan Agreement because she does not own any shares of BTG. (Geng Decl., ¶ 8.) She states that Han told her that she was his secretary, which is why the Second Loan Agreement refers to her as a secretary. (Ibid.) She claims that she was not an officer and that BTG’s Statement of Information and Articles of Incorporation do not identify her as an officer, and she never had and was never given any control over BTG’s bank account which received Plaintiff’s money. (Geng Decl., ¶ 9.)

In opposition, Plaintiff claims that Defendant’s arguments are precluded by the doctrine of estoppel by contract and the parol evidence rule. Neither are applicable. First, the Second Loan Agreement explicitly states that Defendant is only liable according to her pro rata interest in BTG. Plaintiff introduces no evidence that Defendant has any shareholder interest in BTG. Plaintiff’s reliance on Defendant’s discovery responses are insufficient to raise a triable issue of material fact because Defendant only stated on information and belief that “HAN was always the sole shareholder of [BTG]” and “if HAN did actually provide the 5% interest of [BTG] to [nonparty] UTV, [Defendant] would own 2.45% shareholder interest in [BTG] through UTV.” (Xuan Decl. ¶ 2.) Defendant’s discovery response is not evidence that she owns any shares of BTG because there is no evidence that any transaction between BTG and UTV occurred. Also, Defendant’s status as a secretary is irrelevant because Plaintiff offers no authority stating that the officer of a corporation is necessarily the shareholder of a corporation.

Defendant argues that Plaintiff’s third, fourth, and fifth causes of action for money had and received, money lent, and unjust enrichment, respectively fail because she never received any of the money Plaintiff lent to BTG and had no access to the accounts which received the money lent pursuant to the Second Loan Agreement. (Geng Decl., ¶¶ 9, 10; UMF Nos. 11-13.) Defendant’s declaration is sufficient to make a prima facie showing that Plaintiff cannot establish her third, fourth, and fifth causes of action. In opposition, Plaintiff “disputes” these facts but offers no evidence in her separate statement to contradict Defendant’s declaration. Accordingly, Plaintiff fails to raise a triable issue of fact with respect to her third, fourth, and fifth causes of action.

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.