Preview
1 Ryan K. J. Mau – SBN 146221
LAW OFFICE OF RYAN MAU, PC
2 333 Bush Street, 21st Floor ELECTRONICALLY
3
San Francisco, CA 94104
Tel: (415) 296-7700
F I L E D
Superior Court of California,
Fax: (415) 296-7600 County of San Francisco
4 Email: ryan@rmaulaw.com 09/30/2019
Clerk of the Court
5 Attorneys for Defendants, BY: ERNALYN BURA
WILLIAM WONG and WWJW FAMILY LLC Deputy Clerk
6
7
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SAN FRANCISCO – UNLIMITED CIVIL JURISDICTION
10
11 TON KIANG RESTAURANT, INC. ) Case No. CGC-19-574262
)
12 Plaintiff, ) (Consolidated with Case No. CUD-19-664262)
)
13 vs. )
) DEFENDANTS’ MEMORANDUM OF
14 WILLIAM WONG, WWJW FAMILY LLC, ) POINTS AND AUTHORITIES IN
a California Limited Liability Company, and ) SUPPORT OF DEMURRER TO
15 DOES 1 - 10, inclusive, ) PLAINTIFF TON KIANG RESTAURANT,
) INC.’S SECOND AMENDED
16 Defendants. ) COMPLAINT
)
17 )
AND CONSOLIDATED ACTION. )
18 )
) Hearing Date: October 28, 2019
19 ) Time: 9:30 a.m.
) Department: 501
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 I. INTRODUCTION
2 Plaintiff TON KIANG RESTAURANT, INC.’S (“TON KIANG”) Verified Second
3 Amended Complaint (“SAC”) is its third attempt to state viable causes of action against
4 Defendants WILLIAM WONG (“WONG”) and WWJW FAMILY LLC (“WWJW”). The SAC,
5 however, continues to be deficient. Plaintiff’s entire complaint hinges on an alleged oral
6 agreement involving real property between WONG and a non-party. However, in its SAC,
7 Plaintiff:
8 fails to properly allege fraud by Defendants in their procurement of title to the
9 subject property;
10 fails to allege a fiduciary relationship between itself and Defendants;
11 fails to allege that it provided the entire consideration for the purchase of the
12 property by Defendants; and
13 ultimately lacks standing to obtain any of its requested relief.
14 Moreover, Code of Civil Procedure § 430.41(e)(1) directs the court to limit the number
15 of times that leave to amend should be granted when sustaining a demurrer. Here, Plaintiff has
16 reached the limit and there is no reasonable possibility that its defects can be cured to
17 sufficiently state a cause of action. Defendants’ demurrer should be sustained with prejudice.
18 II. PRIOR ORDERS
19 As in its Verified Complaint and its Verified First Amended Complaint (“FAC”), TON
20 KIANG’S SAC continues to assert the existence of an oral trust and the breach of some duty
21 owed to it as the equitable beneficiary by Defendants; the subject of such trust is the property
22 where TON KIANG operates its restaurant (SAC ¶ 11). Defendants have consistently argued in
23 its demurrers that it is long held that “a trust [involving real property] can be created only by an
24 instrument in writing, subscribed by the party creating it.” (Barr v. O’Donnell (1888) 76 Cal.
25 469, 471.) (Code of Civil Procedure § 1971.) Accordingly, this Court ruled that:
26 “California recognizes the existence of a trust resting on parol
27 evidence, where a trustee has committed fraud.” (Order on
28 Defendants’ Demurrer to Plaintiff Ton Kiang Restaurant, Inc.’s
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 Verified Complaint (“Order”), 1:25-27.)
2 This Court allowed TON KIANG to amend its complaint with the following instruction:
3 “Plaintiff must plead actual or constructive fraud with specificity.
4 (Tindell v. Murphy (2018) 22 Cal.App.5th 1239.) In particular,
5 Plaintiff’s complaint should minimally contain specific factual
6 allegations of the date, involved parties, and circumstances concerning
7 the creation of a fiduciary relationship between Plaintiff and
8 Defendants.” (Emphasis Added.) (Order, 1:27-28 and 2:1-2.)
9 TON KIANG was unsuccessful in its attempt to amend its complaint as this Court once again
10 sustained Defendants’ demurrer but granted TON KIANG leave to amend its FAC with the
11 following instruction:
12 “Plaintiff to allege in good faith facts showing that per Father’s
13 directions William took title and Plaintiff took care of any and all
14 funds involved in the transfer and any attendant debt servicing.
15 (FAC, paragraph 11). Facts should include description of the ‘funds,’
16 ‘debt’ and payments, if any.” (Emphasis Added.) (Order on
17 Defendants’ Demurrer to Plaintiff Ton Kiang Restaurant, Inc.’s
18 Verified First Amended Complaint, 1:26-28 and 2:1.)
19 However, the subject of the instant demurrer, TON KIANG’S SAC, continues to
20 insufficiently allege fraud with any particularity. TON KIANG has had multiple opportunities
21 to supplement its complaint with the requisite facts but is unable to do so.
22 III. STANDARD OF REVIEW
23 A demurrer tests the sufficiency of a complaint by raising questions of law. Seidler v.
24 Municipal Court (1993) 12 Cal.App.4th 1229, 1233; Johnson v. County of Los Angeles (1983)
25 143 Cal.App.3d 298, 306. If a complaint fails to state facts sufficient to constitute a cause of
26 action, the demurrer must be sustained. Code of Civil Procedure § 430.10 (a) and (e); Stevenson
27 v. San Francisco Housing Authority (1994) 24 Cal.App.4th 269, 215; Blank v. Kirwan (1985) 39
28 Cal.3d 311, 318.
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 A demurrer may be properly sustained without leave to amend where facts are not in
2 dispute, and the nature of plaintiff’s claim is clear, but no liability exists under the law. Routh v.
3 Quinn (1942) 20 Cal.2d 488, 493; (Berkeley Police Association v. Berkeley (1977) 76
4 Cal.App.3d 931, 942.)
5 Plaintiffs have the burden of proving that there is a reasonable possibility the pleading
6 defects can be cured by amendment. Blank v. Kirwan, supra, 39 Cal.3d at 318.
7 IV. FIRST CAUSE OF ACTION—BREACH OF TRUST
8 The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a
9 fiduciary relationship; (2) its breach; and (3) damage proximately caused by that breach. (Knox
10 v. Dean (2012) 205 Cal.App.4th 417, 432.)
11 Here, TON KIANG’S cause of action is based on an alleged oral trust involving real
12 property. Consequently, as this Court previously ruled, the recognition of such an oral trust is
13 first dependent on the trustee committing fraud. Thus, as pled, TON KIANG has not alleged
14 fraud and thus cannot allege a valid trust and as such, cannot allege a fiduciary relationship with
15 Defendants and thus cannot allege a breach by Defendants.
16 A. Insufficient Pleading for Fraud
17 Despite this Court’s order, TON KIANG has failed to plead actual or constructive fraud
18 with specificity. Although TON KIANG avers that “defendant William’s breach of trust and
19 breach of fiduciary duties constituted constructive fraud” (SAC, ¶ 21), such a conclusory
20 allegation is insufficient. See Moore v. Regents of Univ. of Cal., 51 Cal.3d 120, 125 (1990)
21 (citing Daar v. Yellow Cab Co., 67 Cal.2d 695, 713 (1967)) (holding in ruling on a demurrer, the
22 Court need not “assume the truth of contentions, deductions, or conclusions of fact or law”
23 alleged in the complaint).
24 While TON KIANG maintains that its allegations constitute a constructive fraud action,
25 “the allegations in a fraud action need not be liberally construed. Instead, fraud must be
26 specifically pleaded. This means: (1) general pleading of the legal conclusion of fraud is
27 insufficient; and (2) every element of the cause of action for fraud must be alleged in full,
28 factually and specifically, and the policy of liberal construction of pleading will not usually be
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 invoked to sustain a pleading that is defective in any material respect. [Citation.] ‘It is bad for
2 courts to allow and lawyers to use vague but artful pleading of fraud simply to get a foot in the
3 courtroom door.’ [Citation.]” (Wilhelm v. Pray, Price, Williams & Russell (1986) 186
4 Cal.App.3d 1324, 1331).
5 1. Required Elements for Constructive Fraud
6 “To prove such an allegation [of constructive fraud], the [plaintiffs] must show (1) a
7 fiduciary relationship, (2) nondisclosure, (3) intent to deceive, and (4) reliance and resulting
8 injury. Constructive fraud is any breach of duty that, without fraudulent intent, gains an
9 advantage to the person at fault by misleading another to his prejudice. [Citation omitted.] Like
10 an action for fraud, constructive fraud must be pled with specificity.” (Tindell v. Murphy (2018)
11 22 Cal.App.5th 1239, 1249-1250.)
12 B. No Fiduciary Relationship Between Plaintiff and Defendants
13 1. No Allegation of a Fiduciary Relationship Between Plaintiff and Defendants
14 To be clear, Plaintiff is a corporation. It is a corporation, albeit comprised solely of
15 family members, of which WONG holds an 8.333% share and is neither an officer nor a director.
16 In its SAC, TON KIANG only alleges that “[a]ll of these family members are … fiduciaries to
17 each other ….” (SAC ¶ 13.) TON KIANG completely fails to assert any allegation of a
18 fiduciary relationship between the corporation and Defendants and absent an oral trust
19 establishing TON KIANG as a third-party beneficiary, there is no fiduciary relationship between
20 TON KIANG and Defendants.
21 2. Alleged Circumstances Fail to Demonstrate Creation of Fiduciary
22 Relationship Between Plaintiff and Defendants
23 TON KIANG has now supplemented its complaint by attempting to comply with this
24 Court’s instruction to allege facts demonstrating that TON KIANG took care of any and all
25 funds involved in the transfer of the real property to WONG and any attendant debt servicing.
26 Once again, TON KIANG’S complaint falls short.
27 TON KIANG alleges that “Father liquidated stock holdings and paid to William the
28 $400,000 [down payment]” and that WONG “obtain[ed] bank financing in the amount of
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 $700,000”. (SAC ¶ 11.) TON KIANG’S allegations concerning its payment of WONG’S
2 subsequent carrying costs, however, are insufficient.
3 a. Rental Payments
4 TON KIANG alleges that “[f]ollowing the close of escrow, TON KIANG commenced
5 paying William his carrying costs for the Property in the lump sum of $10,000 per month as if it
6 was ‘rent,’ covering his debt service payments to First Republic Bank on the $700,000 he
7 borrowed.” (SAC ¶ 11.) Such allegation is purposefully misleading and woefully inadequate.
8 Although TON KIANG attempts to mischaracterize its rental payments as some form of
9 reimbursement, it resolutely omits the date that it ceased making its rental payments and omits
10 the total amount of rent actually paid. Nevertheless, while TON KIANG adamantly maintains
11 that WONG holds legal title as the nominee, even with the mischaracterization of its rental
12 payments, TON KIANG has not and cannot allege that it paid the alleged $700,000 mortgage in
13 its entirety.
14 TON KIANG fails to allege clearly, convincingly and unambiguously the precise amount
15 or proportion of the consideration allegedly furnished by it towards the purchase price/debt
16 service of the subject property.
17 b. Business Property Tax is not Real Property Tax
18 TON KIANG also alleges that “as and when Ton Kiang received a bill for the property
19 tax, Ton Kiang would pay it, consistent with its understanding that it would be responsible for
20 William’s carrying costs in being Ton Kiang’s nominee. A sample copy of the property tax
21 payment record is attached hereto as Exhibit G.” (SAC ¶ 11.) Again, such allegation is
22 purposefully misleading and woefully inadequate.
23 TON KIANG specifically fails to allege dates and amounts paid for property taxes but
24 more importantly, it specifically fails to allege that it ever paid real property tax on the subject
25 property. Instead of a tax on real property, TON KIANG’S allegation that it paid a property tax
26 is for a tax on its business property, which includes such items as supplies, equipment, and
27 fixtures. TON KIANG offers a “sample copy” of its property tax payment rather than a true and
28 correct copy of the real property tax invoice. Such document presents no evidence that such
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 payment is for a tax on real property and to offer it in this context is nothing short of
2 disingenuous. TON KIANG has not and cannot allege that it ever paid the real property tax on
3 the subject property.
4 Furthermore, TON KIANG avers that it has an “understanding” that it is responsible for
5 WONG’S carrying costs related to the subject property but fails to allege that it has any actual
6 legal obligation to pay for any such costs. Specifically, TON KIANG fails to allege that it ever
7 executed an agreement between itself and WONG, oral or otherwise, that it would assume all of
8 the carrying costs related to the subject property. Clearly, for well over 9 years, TON KIANG’S
9 alleged understanding went little towards any actual payment.
10 In any event, Plaintiff has not advanced sufficient factual allegations to meet the
11 heightened pleading requirements for a fraud action. TON KIANG had the opportunity to
12 provide facts to allege each element of fraud with the requisite specificity and is unable to do so.
13 Consequently, as pled, TON KIANG has not alleged a fiduciary relationship between itself and
14 Defendants and thus fails to meet a required element for constructive fraud. Therefore, as TON
15 KIANG fails to allege fraud by an alleged trustee, there is no obligation that parol evidence must
16 be received to establish a trust. (Toney v. Nolder (1985) 173 Cal.App.3d. 791, 796.)
17 Consequently, as TON KIANG fails to establish the existence of an oral trust, it follows that
18 TON KIANG cannot allege a fiduciary relationship as a third-party beneficiary with Defendants
19 and absent any fiduciary relationship, a cause of action for breach of trust will not lie against
20 Defendants. There is no reasonable possibility the pleading defects can be cured by amendment
21 and thus Defendants’ demurrer to TON KIANG’S entire SAC must be sustained without leave
22 to amend.
23 C. No Damage Caused by Alleged Breach
24 The final requisite element of a cause of action for breach of trust/fiduciary duty is
25 damage proximately caused by the breach. Here, TON KIANG wholly fails to allege any factual
26 allegation of damage caused by any breach.
27 The closest the Defendants can get to surmising at any allegation of damage is TON
28 KIANG’S allegation that WONG “in effect controls the life and death of the family corporation,
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 in that evicting it would eviscerate the very purpose for which the subject property had been
2 purchased and built upon.” (SAC ¶14.) TON KIANG has not been evicted. Such alleged
3 damage is anticipatory, uncertain and speculative in the highest degree.
4 “Breach of duty causing only speculative harm is insufficient to create such a cause of
5 action. [Citation omitted.] ‘[D]amages may not be based upon sheer speculation or surmise,
6 and the mere possibility or even probability that damage will result from wrongful conduct does
7 not render it actionable. [Citation.]’” (Thompson v. Halvonik (1995) 36 Cal.App.4th 657, 661-
8 662.)
9 WWJW’S action for unlawful detainer against TON KIANG has been consolidated with
10 the instant action. As such, any eviction of TON KIANG has not yet occurred and thus could
11 not cause any actionable damage to TON KIANG. Until the eviction process is completed, any
12 alleged claim TON KIANG might have for damage proximately caused by an alleged breach is
13 premature and not actionable. Thus TON KIANG has failed to properly plead the final requisite
14 element of a cause of action for breach of fiduciary duty and Defendants’ demurrer to TON
15 KIANG’S first cause of action for breach of trust must be sustained without leave to amend.
16 V. SECOND CAUSE OF ACTION—BREACH OF FIDUCIARY DUTY
17 This Court sustained Defendants’ demurrer to the original second cause of action for
18 breach of fiduciary duty with leave to amend and ruled as follows:
19 “As to the second cause of action, Plaintiff must allege specific
20 allegations showing how Defendant Wong’s control of subject
21 property amounted to a controlling influence of Ton Kiang Restaurant,
22 Inc.” (Order, 2:3-5.)
23 A. No Fiduciary Relationship—Not a Controlling Shareholder
24 In TON KIANG’S second cause of action for breach of fiduciary duty, TON KIANG
25 alleges that WONG is a “controlling shareholder” as WONG is the “holder of legal title to the
26 subject property … [thus WONG] in effect controls the life and death of the family corporation,
27 in that evicting it would eviscerate the very purpose for which the subject property had been
28 purchased and built upon.” (SAC ¶ 14.) As in its original complaint and in defiance of this
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 Court’s order, TON KIANG fails to allege how, as a shareholder, WONG exerted his influence
2 upon TON KIANG.
3 Although a court assumes the truth of facts alleged in a complaint, it “[does] not assume
4 the truth of contentions, deductions, or conclusions of fact or law and may disregard allegations
5 that are contrary to the law or to a fact which may be judicially noticed.” (Haro v. City of
6 Solana Beach (2011) 195 Cal.App.4th 542, 549.) Thus, the Court may properly disregard the
7 unsupported assertion that WONG is a controlling shareholder of TON KIANG and owes a
8 fiduciary duty. Simply put, WONG’S mere status as both the owner of the subject property and
9 a minority shareholder in TON KIANG does not equate to a controlling shareholder.
10 Here, TON KIANG has not and cannot allege that Defendants exercised any control over
11 TON KIANG’S business, or had any authority to enter into contracts or transactions on TON
12 KIANG’S behalf. In the absence of any factual allegations showing control or the ability to act
13 on behalf of TON KIANG, there is no fiduciary relationship and, a fortiori, there can be no
14 breach of a fiduciary duty. Thus, TON KIANG’S breach of fiduciary duty cause of action fails
15 as a matter of law. Therefore, Defendants’ demurrer to TON KIANG’S second cause of action
16 for breach of fiduciary duty must be sustained without leave to amend.
17 B. No Damage Caused by Breach
18 Again, as discussed above, there is no damage proximately caused by the alleged breach.
19 Any alleged claim TON KIANG might have for damage proximately caused by the alleged
20 breach is premature and not actionable. Thus TON KIANG has failed to properly plead the final
21 element of a cause of action for breach of fiduciary duty and Defendants’ demurrer to TON
22 KIANG’S second cause of action for breach of fiduciary duty must be sustained without leave to
23 amend.
24 VI. THIRD CAUSE OF ACTION—QUIET TITLE; FOURTH CAUSE OF ACTION—
25 DECLARATORY RELIEF; FIFTH CAUSE OF ACTION—INJUNCTIVE RELIEF
26 TON KIANG’S FAC and SAC restate the exact same causes of action that were the
27 subject of the demurrer to Plaintiff’s original complaint which was sustained by this Court. This
28 Court ruled that:
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 “The demurrer [to Plaintiff’s original complaint] has to be sustained as
2 to the remaining claims [Third Cause of Action—Quiet Title, Fourth
3 Cause of Action—Declaratory Relief, and Fifth Cause of Action—
4 Injunctive Relief] because they are substantively tethered to the first
5 and second causes of action.” (Order, 2:6-7.)
6 Here, in its SAC, TON KIANG again fails to cure the defects in its first and second causes of
7 action. Accordingly, as with the original complaint, Defendants’ demurrer to TON KIANG’S
8 third, fourth, and fifth causes of action must be sustained without leave to amend.
9 In particular, as argued by Defendants’ in their previous demurrers to the third cause of
10 action for quiet title, there is a general rule that the holder of equitable title cannot maintain a
11 quiet title action against the holder of legal title. The reason for the rule is said to be that “if the
12 owner of equities could sue to quiet title he might obtain a judgment based upon his adversary’s
13 fraud without setting up in his pleadings the facts constituting such fraud. This would be
14 manifestly unfair.” (Bacon v. Bacon (1937), 21 Cal.App.2d 540, 544.)
15 There is an exception to this general rule described above—if the legal title was acquired
16 by fraud. Here, fraud is not alleged in the SAC and accordingly, the necessary factual
17 allegations of fraud in Defendants’ acquisition of title is not pled. Nevertheless, this exception
18 to the general rule only applies in a scenario where a defendant fraudulently obtains title
19 from the plaintiff, not from a third-party. The plaintiff has to be the victim of the fraud in
20 order to state a cause of action – i.e., grounds for relief from the court. That is not the case here
21 as WONG and WWJW did not acquire title from TON KIANG. Thus Defendants’ demurrer to
22 TON KIANG’S third cause of action for quiet title must again be sustained without leave to
23 amend.
24 As discussed at length above, TON KIANG has failed to allege a breach of
25 trust/fiduciary duty. Accordingly, as there was no breach of trust/fiduciary duty, no cause of
26 action for declaratory relief or injunctive relief exists against Defendants and Defendants’
27 demurrer to TON KIANG’S fourth cause of action for declaratory relief and fifth cause of action
28 for injunctive relief should be sustained without leave to amend.
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
1 VII. DEFENDANTS’ DEMURRER SHOULD BE SUSTAINED WITH PREJUDICE
2 Despite Defendants’ good faith efforts to resolve various issues in Plaintiff’s complaint,
3 Plaintiff is still unable to state viable causes of action after three successive opportunities to
4 amend its complaint. Courts have historically sustained demurrers without leave to further
5 amend where a plaintiff has had as many chances. See Smith v. State Farm Mutual Automobile
6 Ins. Co. (2001) 93 Cal.App.4th 700, 709 footnote 10 (affirming trial court’s ruling sustaining
7 demurrer where “Plaintiffs have been given three successive opportunities to amend and it now
8 appears that they are unable to allege sufficiently the elements of a valid cause of action”).
9 More recently, Code of Civil Procedure § 430.41(e)(1) provides that “[i]n response to a
10 demurrer and prior to the case being at issue, a complaint … shall not be amended more than
11 three times, absent an offer to the trial court as to such additional facts to be pleaded that there
12 is a reasonable possibility the defect can be cured to state a cause of action.” (Emphasis Added.)
13 Here, Plaintiff has had ample opportunities to cure its defects but is unable and unwilling to do
14 so. The Court should not give Plaintiff yet another opportunity to waste this Court’s and the
15 parties’ time and resources and should sustain Defendants’ demurrer without leave to amend.
16 VIII. CONCLUSION
17 TON KIANG has alleged no viable claim against Defendants and the allegations as
18 currently pled fail to state a claim against Defendants under any legal theory. Consequently,
19 Defendants respectfully request that this Court sustain their demurrers, without leave to amend,
20 to each cause of action alleged in the Second Amended Complaint.
21
22 Dated: September 30, 2019 LAW OFFICE OF RYAN MAU, PC
23
24 By: /s/ Ryan K.J. Mau
Ryan K. J. Mau
25 Attorneys for Defendants
WILLIAM WONG and
26 WWJW FAMILY LLC
27
28
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DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT
Preview
1 Ryan K. J. Mau – SBN 146221 LAW OFFICE OF RYAN MAU, PC 2 333 Bush Street, 21st Floor ELECTRONICALLY 3 San Francisco, CA 94104 Tel: (415) 296-7700 F I L E D Superior Court of California, Fax: (415) 296-7600 County of San Francisco 4 Email: ryan@rmaulaw.com 09/30/2019 Clerk of the Court 5 Attorneys for Defendants, BY: ERNALYN BURA WILLIAM WONG and WWJW FAMILY LLC Deputy Clerk 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SAN FRANCISCO – UNLIMITED CIVIL JURISDICTION 10 11 TON KIANG RESTAURANT, INC. ) Case No. CGC-19-574262 ) 12 Plaintiff, ) (Consolidated with Case No. CUD-19-664262) ) 13 vs. ) ) DEFENDANTS’ MEMORANDUM OF 14 WILLIAM WONG, WWJW FAMILY LLC, ) POINTS AND AUTHORITIES IN a California Limited Liability Company, and ) SUPPORT OF DEMURRER TO 15 DOES 1 - 10, inclusive, ) PLAINTIFF TON KIANG RESTAURANT, ) INC.’S SECOND AMENDED 16 Defendants. ) COMPLAINT ) 17 ) AND CONSOLIDATED ACTION. ) 18 ) ) Hearing Date: October 28, 2019 19 ) Time: 9:30 a.m. ) Department: 501 20 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// -1- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 I. INTRODUCTION 2 Plaintiff TON KIANG RESTAURANT, INC.’S (“TON KIANG”) Verified Second 3 Amended Complaint (“SAC”) is its third attempt to state viable causes of action against 4 Defendants WILLIAM WONG (“WONG”) and WWJW FAMILY LLC (“WWJW”). The SAC, 5 however, continues to be deficient. Plaintiff’s entire complaint hinges on an alleged oral 6 agreement involving real property between WONG and a non-party. However, in its SAC, 7 Plaintiff: 8 fails to properly allege fraud by Defendants in their procurement of title to the 9 subject property; 10 fails to allege a fiduciary relationship between itself and Defendants; 11 fails to allege that it provided the entire consideration for the purchase of the 12 property by Defendants; and 13 ultimately lacks standing to obtain any of its requested relief. 14 Moreover, Code of Civil Procedure § 430.41(e)(1) directs the court to limit the number 15 of times that leave to amend should be granted when sustaining a demurrer. Here, Plaintiff has 16 reached the limit and there is no reasonable possibility that its defects can be cured to 17 sufficiently state a cause of action. Defendants’ demurrer should be sustained with prejudice. 18 II. PRIOR ORDERS 19 As in its Verified Complaint and its Verified First Amended Complaint (“FAC”), TON 20 KIANG’S SAC continues to assert the existence of an oral trust and the breach of some duty 21 owed to it as the equitable beneficiary by Defendants; the subject of such trust is the property 22 where TON KIANG operates its restaurant (SAC ¶ 11). Defendants have consistently argued in 23 its demurrers that it is long held that “a trust [involving real property] can be created only by an 24 instrument in writing, subscribed by the party creating it.” (Barr v. O’Donnell (1888) 76 Cal. 25 469, 471.) (Code of Civil Procedure § 1971.) Accordingly, this Court ruled that: 26 “California recognizes the existence of a trust resting on parol 27 evidence, where a trustee has committed fraud.” (Order on 28 Defendants’ Demurrer to Plaintiff Ton Kiang Restaurant, Inc.’s -2- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 Verified Complaint (“Order”), 1:25-27.) 2 This Court allowed TON KIANG to amend its complaint with the following instruction: 3 “Plaintiff must plead actual or constructive fraud with specificity. 4 (Tindell v. Murphy (2018) 22 Cal.App.5th 1239.) In particular, 5 Plaintiff’s complaint should minimally contain specific factual 6 allegations of the date, involved parties, and circumstances concerning 7 the creation of a fiduciary relationship between Plaintiff and 8 Defendants.” (Emphasis Added.) (Order, 1:27-28 and 2:1-2.) 9 TON KIANG was unsuccessful in its attempt to amend its complaint as this Court once again 10 sustained Defendants’ demurrer but granted TON KIANG leave to amend its FAC with the 11 following instruction: 12 “Plaintiff to allege in good faith facts showing that per Father’s 13 directions William took title and Plaintiff took care of any and all 14 funds involved in the transfer and any attendant debt servicing. 15 (FAC, paragraph 11). Facts should include description of the ‘funds,’ 16 ‘debt’ and payments, if any.” (Emphasis Added.) (Order on 17 Defendants’ Demurrer to Plaintiff Ton Kiang Restaurant, Inc.’s 18 Verified First Amended Complaint, 1:26-28 and 2:1.) 19 However, the subject of the instant demurrer, TON KIANG’S SAC, continues to 20 insufficiently allege fraud with any particularity. TON KIANG has had multiple opportunities 21 to supplement its complaint with the requisite facts but is unable to do so. 22 III. STANDARD OF REVIEW 23 A demurrer tests the sufficiency of a complaint by raising questions of law. Seidler v. 24 Municipal Court (1993) 12 Cal.App.4th 1229, 1233; Johnson v. County of Los Angeles (1983) 25 143 Cal.App.3d 298, 306. If a complaint fails to state facts sufficient to constitute a cause of 26 action, the demurrer must be sustained. Code of Civil Procedure § 430.10 (a) and (e); Stevenson 27 v. San Francisco Housing Authority (1994) 24 Cal.App.4th 269, 215; Blank v. Kirwan (1985) 39 28 Cal.3d 311, 318. -3- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 A demurrer may be properly sustained without leave to amend where facts are not in 2 dispute, and the nature of plaintiff’s claim is clear, but no liability exists under the law. Routh v. 3 Quinn (1942) 20 Cal.2d 488, 493; (Berkeley Police Association v. Berkeley (1977) 76 4 Cal.App.3d 931, 942.) 5 Plaintiffs have the burden of proving that there is a reasonable possibility the pleading 6 defects can be cured by amendment. Blank v. Kirwan, supra, 39 Cal.3d at 318. 7 IV. FIRST CAUSE OF ACTION—BREACH OF TRUST 8 The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a 9 fiduciary relationship; (2) its breach; and (3) damage proximately caused by that breach. (Knox 10 v. Dean (2012) 205 Cal.App.4th 417, 432.) 11 Here, TON KIANG’S cause of action is based on an alleged oral trust involving real 12 property. Consequently, as this Court previously ruled, the recognition of such an oral trust is 13 first dependent on the trustee committing fraud. Thus, as pled, TON KIANG has not alleged 14 fraud and thus cannot allege a valid trust and as such, cannot allege a fiduciary relationship with 15 Defendants and thus cannot allege a breach by Defendants. 16 A. Insufficient Pleading for Fraud 17 Despite this Court’s order, TON KIANG has failed to plead actual or constructive fraud 18 with specificity. Although TON KIANG avers that “defendant William’s breach of trust and 19 breach of fiduciary duties constituted constructive fraud” (SAC, ¶ 21), such a conclusory 20 allegation is insufficient. See Moore v. Regents of Univ. of Cal., 51 Cal.3d 120, 125 (1990) 21 (citing Daar v. Yellow Cab Co., 67 Cal.2d 695, 713 (1967)) (holding in ruling on a demurrer, the 22 Court need not “assume the truth of contentions, deductions, or conclusions of fact or law” 23 alleged in the complaint). 24 While TON KIANG maintains that its allegations constitute a constructive fraud action, 25 “the allegations in a fraud action need not be liberally construed. Instead, fraud must be 26 specifically pleaded. This means: (1) general pleading of the legal conclusion of fraud is 27 insufficient; and (2) every element of the cause of action for fraud must be alleged in full, 28 factually and specifically, and the policy of liberal construction of pleading will not usually be -4- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 invoked to sustain a pleading that is defective in any material respect. [Citation.] ‘It is bad for 2 courts to allow and lawyers to use vague but artful pleading of fraud simply to get a foot in the 3 courtroom door.’ [Citation.]” (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 4 Cal.App.3d 1324, 1331). 5 1. Required Elements for Constructive Fraud 6 “To prove such an allegation [of constructive fraud], the [plaintiffs] must show (1) a 7 fiduciary relationship, (2) nondisclosure, (3) intent to deceive, and (4) reliance and resulting 8 injury. Constructive fraud is any breach of duty that, without fraudulent intent, gains an 9 advantage to the person at fault by misleading another to his prejudice. [Citation omitted.] Like 10 an action for fraud, constructive fraud must be pled with specificity.” (Tindell v. Murphy (2018) 11 22 Cal.App.5th 1239, 1249-1250.) 12 B. No Fiduciary Relationship Between Plaintiff and Defendants 13 1. No Allegation of a Fiduciary Relationship Between Plaintiff and Defendants 14 To be clear, Plaintiff is a corporation. It is a corporation, albeit comprised solely of 15 family members, of which WONG holds an 8.333% share and is neither an officer nor a director. 16 In its SAC, TON KIANG only alleges that “[a]ll of these family members are … fiduciaries to 17 each other ….” (SAC ¶ 13.) TON KIANG completely fails to assert any allegation of a 18 fiduciary relationship between the corporation and Defendants and absent an oral trust 19 establishing TON KIANG as a third-party beneficiary, there is no fiduciary relationship between 20 TON KIANG and Defendants. 21 2. Alleged Circumstances Fail to Demonstrate Creation of Fiduciary 22 Relationship Between Plaintiff and Defendants 23 TON KIANG has now supplemented its complaint by attempting to comply with this 24 Court’s instruction to allege facts demonstrating that TON KIANG took care of any and all 25 funds involved in the transfer of the real property to WONG and any attendant debt servicing. 26 Once again, TON KIANG’S complaint falls short. 27 TON KIANG alleges that “Father liquidated stock holdings and paid to William the 28 $400,000 [down payment]” and that WONG “obtain[ed] bank financing in the amount of -5- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 $700,000”. (SAC ¶ 11.) TON KIANG’S allegations concerning its payment of WONG’S 2 subsequent carrying costs, however, are insufficient. 3 a. Rental Payments 4 TON KIANG alleges that “[f]ollowing the close of escrow, TON KIANG commenced 5 paying William his carrying costs for the Property in the lump sum of $10,000 per month as if it 6 was ‘rent,’ covering his debt service payments to First Republic Bank on the $700,000 he 7 borrowed.” (SAC ¶ 11.) Such allegation is purposefully misleading and woefully inadequate. 8 Although TON KIANG attempts to mischaracterize its rental payments as some form of 9 reimbursement, it resolutely omits the date that it ceased making its rental payments and omits 10 the total amount of rent actually paid. Nevertheless, while TON KIANG adamantly maintains 11 that WONG holds legal title as the nominee, even with the mischaracterization of its rental 12 payments, TON KIANG has not and cannot allege that it paid the alleged $700,000 mortgage in 13 its entirety. 14 TON KIANG fails to allege clearly, convincingly and unambiguously the precise amount 15 or proportion of the consideration allegedly furnished by it towards the purchase price/debt 16 service of the subject property. 17 b. Business Property Tax is not Real Property Tax 18 TON KIANG also alleges that “as and when Ton Kiang received a bill for the property 19 tax, Ton Kiang would pay it, consistent with its understanding that it would be responsible for 20 William’s carrying costs in being Ton Kiang’s nominee. A sample copy of the property tax 21 payment record is attached hereto as Exhibit G.” (SAC ¶ 11.) Again, such allegation is 22 purposefully misleading and woefully inadequate. 23 TON KIANG specifically fails to allege dates and amounts paid for property taxes but 24 more importantly, it specifically fails to allege that it ever paid real property tax on the subject 25 property. Instead of a tax on real property, TON KIANG’S allegation that it paid a property tax 26 is for a tax on its business property, which includes such items as supplies, equipment, and 27 fixtures. TON KIANG offers a “sample copy” of its property tax payment rather than a true and 28 correct copy of the real property tax invoice. Such document presents no evidence that such -6- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 payment is for a tax on real property and to offer it in this context is nothing short of 2 disingenuous. TON KIANG has not and cannot allege that it ever paid the real property tax on 3 the subject property. 4 Furthermore, TON KIANG avers that it has an “understanding” that it is responsible for 5 WONG’S carrying costs related to the subject property but fails to allege that it has any actual 6 legal obligation to pay for any such costs. Specifically, TON KIANG fails to allege that it ever 7 executed an agreement between itself and WONG, oral or otherwise, that it would assume all of 8 the carrying costs related to the subject property. Clearly, for well over 9 years, TON KIANG’S 9 alleged understanding went little towards any actual payment. 10 In any event, Plaintiff has not advanced sufficient factual allegations to meet the 11 heightened pleading requirements for a fraud action. TON KIANG had the opportunity to 12 provide facts to allege each element of fraud with the requisite specificity and is unable to do so. 13 Consequently, as pled, TON KIANG has not alleged a fiduciary relationship between itself and 14 Defendants and thus fails to meet a required element for constructive fraud. Therefore, as TON 15 KIANG fails to allege fraud by an alleged trustee, there is no obligation that parol evidence must 16 be received to establish a trust. (Toney v. Nolder (1985) 173 Cal.App.3d. 791, 796.) 17 Consequently, as TON KIANG fails to establish the existence of an oral trust, it follows that 18 TON KIANG cannot allege a fiduciary relationship as a third-party beneficiary with Defendants 19 and absent any fiduciary relationship, a cause of action for breach of trust will not lie against 20 Defendants. There is no reasonable possibility the pleading defects can be cured by amendment 21 and thus Defendants’ demurrer to TON KIANG’S entire SAC must be sustained without leave 22 to amend. 23 C. No Damage Caused by Alleged Breach 24 The final requisite element of a cause of action for breach of trust/fiduciary duty is 25 damage proximately caused by the breach. Here, TON KIANG wholly fails to allege any factual 26 allegation of damage caused by any breach. 27 The closest the Defendants can get to surmising at any allegation of damage is TON 28 KIANG’S allegation that WONG “in effect controls the life and death of the family corporation, -7- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 in that evicting it would eviscerate the very purpose for which the subject property had been 2 purchased and built upon.” (SAC ¶14.) TON KIANG has not been evicted. Such alleged 3 damage is anticipatory, uncertain and speculative in the highest degree. 4 “Breach of duty causing only speculative harm is insufficient to create such a cause of 5 action. [Citation omitted.] ‘[D]amages may not be based upon sheer speculation or surmise, 6 and the mere possibility or even probability that damage will result from wrongful conduct does 7 not render it actionable. [Citation.]’” (Thompson v. Halvonik (1995) 36 Cal.App.4th 657, 661- 8 662.) 9 WWJW’S action for unlawful detainer against TON KIANG has been consolidated with 10 the instant action. As such, any eviction of TON KIANG has not yet occurred and thus could 11 not cause any actionable damage to TON KIANG. Until the eviction process is completed, any 12 alleged claim TON KIANG might have for damage proximately caused by an alleged breach is 13 premature and not actionable. Thus TON KIANG has failed to properly plead the final requisite 14 element of a cause of action for breach of fiduciary duty and Defendants’ demurrer to TON 15 KIANG’S first cause of action for breach of trust must be sustained without leave to amend. 16 V. SECOND CAUSE OF ACTION—BREACH OF FIDUCIARY DUTY 17 This Court sustained Defendants’ demurrer to the original second cause of action for 18 breach of fiduciary duty with leave to amend and ruled as follows: 19 “As to the second cause of action, Plaintiff must allege specific 20 allegations showing how Defendant Wong’s control of subject 21 property amounted to a controlling influence of Ton Kiang Restaurant, 22 Inc.” (Order, 2:3-5.) 23 A. No Fiduciary Relationship—Not a Controlling Shareholder 24 In TON KIANG’S second cause of action for breach of fiduciary duty, TON KIANG 25 alleges that WONG is a “controlling shareholder” as WONG is the “holder of legal title to the 26 subject property … [thus WONG] in effect controls the life and death of the family corporation, 27 in that evicting it would eviscerate the very purpose for which the subject property had been 28 purchased and built upon.” (SAC ¶ 14.) As in its original complaint and in defiance of this -8- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 Court’s order, TON KIANG fails to allege how, as a shareholder, WONG exerted his influence 2 upon TON KIANG. 3 Although a court assumes the truth of facts alleged in a complaint, it “[does] not assume 4 the truth of contentions, deductions, or conclusions of fact or law and may disregard allegations 5 that are contrary to the law or to a fact which may be judicially noticed.” (Haro v. City of 6 Solana Beach (2011) 195 Cal.App.4th 542, 549.) Thus, the Court may properly disregard the 7 unsupported assertion that WONG is a controlling shareholder of TON KIANG and owes a 8 fiduciary duty. Simply put, WONG’S mere status as both the owner of the subject property and 9 a minority shareholder in TON KIANG does not equate to a controlling shareholder. 10 Here, TON KIANG has not and cannot allege that Defendants exercised any control over 11 TON KIANG’S business, or had any authority to enter into contracts or transactions on TON 12 KIANG’S behalf. In the absence of any factual allegations showing control or the ability to act 13 on behalf of TON KIANG, there is no fiduciary relationship and, a fortiori, there can be no 14 breach of a fiduciary duty. Thus, TON KIANG’S breach of fiduciary duty cause of action fails 15 as a matter of law. Therefore, Defendants’ demurrer to TON KIANG’S second cause of action 16 for breach of fiduciary duty must be sustained without leave to amend. 17 B. No Damage Caused by Breach 18 Again, as discussed above, there is no damage proximately caused by the alleged breach. 19 Any alleged claim TON KIANG might have for damage proximately caused by the alleged 20 breach is premature and not actionable. Thus TON KIANG has failed to properly plead the final 21 element of a cause of action for breach of fiduciary duty and Defendants’ demurrer to TON 22 KIANG’S second cause of action for breach of fiduciary duty must be sustained without leave to 23 amend. 24 VI. THIRD CAUSE OF ACTION—QUIET TITLE; FOURTH CAUSE OF ACTION— 25 DECLARATORY RELIEF; FIFTH CAUSE OF ACTION—INJUNCTIVE RELIEF 26 TON KIANG’S FAC and SAC restate the exact same causes of action that were the 27 subject of the demurrer to Plaintiff’s original complaint which was sustained by this Court. This 28 Court ruled that: -9- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 “The demurrer [to Plaintiff’s original complaint] has to be sustained as 2 to the remaining claims [Third Cause of Action—Quiet Title, Fourth 3 Cause of Action—Declaratory Relief, and Fifth Cause of Action— 4 Injunctive Relief] because they are substantively tethered to the first 5 and second causes of action.” (Order, 2:6-7.) 6 Here, in its SAC, TON KIANG again fails to cure the defects in its first and second causes of 7 action. Accordingly, as with the original complaint, Defendants’ demurrer to TON KIANG’S 8 third, fourth, and fifth causes of action must be sustained without leave to amend. 9 In particular, as argued by Defendants’ in their previous demurrers to the third cause of 10 action for quiet title, there is a general rule that the holder of equitable title cannot maintain a 11 quiet title action against the holder of legal title. The reason for the rule is said to be that “if the 12 owner of equities could sue to quiet title he might obtain a judgment based upon his adversary’s 13 fraud without setting up in his pleadings the facts constituting such fraud. This would be 14 manifestly unfair.” (Bacon v. Bacon (1937), 21 Cal.App.2d 540, 544.) 15 There is an exception to this general rule described above—if the legal title was acquired 16 by fraud. Here, fraud is not alleged in the SAC and accordingly, the necessary factual 17 allegations of fraud in Defendants’ acquisition of title is not pled. Nevertheless, this exception 18 to the general rule only applies in a scenario where a defendant fraudulently obtains title 19 from the plaintiff, not from a third-party. The plaintiff has to be the victim of the fraud in 20 order to state a cause of action – i.e., grounds for relief from the court. That is not the case here 21 as WONG and WWJW did not acquire title from TON KIANG. Thus Defendants’ demurrer to 22 TON KIANG’S third cause of action for quiet title must again be sustained without leave to 23 amend. 24 As discussed at length above, TON KIANG has failed to allege a breach of 25 trust/fiduciary duty. Accordingly, as there was no breach of trust/fiduciary duty, no cause of 26 action for declaratory relief or injunctive relief exists against Defendants and Defendants’ 27 demurrer to TON KIANG’S fourth cause of action for declaratory relief and fifth cause of action 28 for injunctive relief should be sustained without leave to amend. -10- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT 1 VII. DEFENDANTS’ DEMURRER SHOULD BE SUSTAINED WITH PREJUDICE 2 Despite Defendants’ good faith efforts to resolve various issues in Plaintiff’s complaint, 3 Plaintiff is still unable to state viable causes of action after three successive opportunities to 4 amend its complaint. Courts have historically sustained demurrers without leave to further 5 amend where a plaintiff has had as many chances. See Smith v. State Farm Mutual Automobile 6 Ins. Co. (2001) 93 Cal.App.4th 700, 709 footnote 10 (affirming trial court’s ruling sustaining 7 demurrer where “Plaintiffs have been given three successive opportunities to amend and it now 8 appears that they are unable to allege sufficiently the elements of a valid cause of action”). 9 More recently, Code of Civil Procedure § 430.41(e)(1) provides that “[i]n response to a 10 demurrer and prior to the case being at issue, a complaint … shall not be amended more than 11 three times, absent an offer to the trial court as to such additional facts to be pleaded that there 12 is a reasonable possibility the defect can be cured to state a cause of action.” (Emphasis Added.) 13 Here, Plaintiff has had ample opportunities to cure its defects but is unable and unwilling to do 14 so. The Court should not give Plaintiff yet another opportunity to waste this Court’s and the 15 parties’ time and resources and should sustain Defendants’ demurrer without leave to amend. 16 VIII. CONCLUSION 17 TON KIANG has alleged no viable claim against Defendants and the allegations as 18 currently pled fail to state a claim against Defendants under any legal theory. Consequently, 19 Defendants respectfully request that this Court sustain their demurrers, without leave to amend, 20 to each cause of action alleged in the Second Amended Complaint. 21 22 Dated: September 30, 2019 LAW OFFICE OF RYAN MAU, PC 23 24 By: /s/ Ryan K.J. Mau Ryan K. J. Mau 25 Attorneys for Defendants WILLIAM WONG and 26 WWJW FAMILY LLC 27 28 -11- DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRER TO PLAINTIFF TON KIANG RESTAURANT, INC.’S SECOND AMENDED COMPLAINT