Answer: CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND XIANG ZHANG et al

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                                DRONA

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
Nov-29-2011 12:23 pm

Case Number: CGC-10-500934
Filing Date: Nov-29-2011 12:22
Juke Box: 001 Image: 03400526
ANSWER

CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND XIANG ZHANC

001003400526

Instructions:
Please place this sheet on top of the document to be scanned.BY FAX

Ne

Michael Gerard Fletcher (State Bar No. 070849)
mfletcher@frandzel.com

Kenneth N. Russak (State Bar No. 107283)
krussak@franzel.com

Hanna B. Raanan (State Bar No. 261014)
hraanan@frandzel.com

6500 Wilshire Boulevard
Seventeenth Floor

Los Angeles, California 90048-4920
Telephone: (323) 852-1000
Facsimile: (323) 651-2577

Attomeys for Plaintiff and Cross-Defendant
CATHAY BANK

CATHAY BANK, a California banking
corporation,

Plaintiff,
v.

RAYMOND XIANG KAI ZHANG, aka
RAYMOND KAI ZHANG, aka RAYMOND
ZHANG, aka XIANG KAI ZHANG, aka
XIANG ZHANG, aka ZHANG XIANG, an
individual; CINDY ZHANG, an individual;
DONG YING QUI, an individual; XIANG
KAI, LLC; a California limited liability
company; RAY KAI, LLC , a Califorma
limited liability company; ZHANGS, LLC, a
California limited liability company; and
DOES 1 through 200, inclusive,

Defendants.

FRANDZEL ROBINS BLOOM & CSATO, L.C.

AND RELATED CROSS-ACTIONS

925721.1 | 023000-0790

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

CASE NO. CGC-10-500934

CATHAY BANK'S ANSWER TO XIANG
KAI LLC'S CROSS-COMPLAINT
AGAINST CATHAY BANK FOR:

i. FRAUD IN THE INCEPTION

2, FRAUDULENT INDUCEMENT INTO
A CONTRACT

3. BREACH OF CONTRACT (LOAN
AGREEMENT)

4. BREACH OF CONTRACT (DEED OF
TRUST)

5. WRONGFUL FORECLOSURE
(FRAUD IN THE INCEPTION)

6. | WRONGFUL FORECLOSURE
(FRAUDULENT INDUCEMENT)

7. BREACH OF IMPLIED COVENANT
OF GOOD FAITH AND FAIR DEALING
8 INTENTIONAL
MISREPRESENTATION

9, FRAUD-CONCEALMENT

10, NEGLIGENT MISREPRESENTATION
11. INTENTIONAL INTERFERENCE
WITH PROSPECTIVE ADVANTAGE

12, NEGLIGENT INTERFERENCE
WITH PROSPECTIVE ADVANTAGE

13. VIOLATION OF BUSINESS AND
PROFESSION 17200

14. EQUITABLE ESTOPPEL

15. ACCOUNTING

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ANSWER TO XIANG RAI LLC'S CROSS-COMPLAINTLos ANGELES, CALIFORNIA GOO4S-4920
(323) 852-1000

FRANDZEL ROBINS BLOOM & Csaro, L.C.
GEOO WiLsniRE BOULEVARD, 1 77H FLOOR

27

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Plaintiff and Cross-Defendant Cathay Bank ("Cathay"), for its answer to "Xiang Kai LLC's
Cross-Complaint Against Cathay Bank For : 1. Fraud in the Inception, 2 Fraudulent Inducement
into a Contract, 3. Breach of Contract (Loan Agreement), 4. Breach of Contract (Deed of Trust), 5.
Wrongful Foreclosure (Fraud in the Inception), 6. Wrongful Foreclosure (Fraudulent Inducement),
7. Breach of the Implied Covenant of Good Faith and Fair Dealing, 8. Intentional
Misrepresentation, 9. Fraud - Concealment, 10. Negligent Misrepresentation, 11. Intentional
{Interference with Prospective Economic Advantage, 12. Negligent Interference with Prospective
Economic Advantage, 13. Violation of Business and Profession 17200, 14. Equitable Estoppel, 15.
Accounting" ("Cross-complaint"), admits, denies and alleges as follows:

Cathay denies generally all of the material allegations of the Cross-complaint pursuant to

California Code of Civil Procedure § 431.30(4).

FIRST AFFIRMATIVE DEFENSE
1. The Cross-complaint, and each and every purported cause of action contained
therein, individually and collectively, fails to state facts sufficient to constitute a cause of action
against Cathay.
SECOND AFFIRMATIVE DEFENSE
2. Cathay is informed and believes and thereon alleges that the Cross-complaint, and
each cause of action alleged therein, is barred by the doctrine of waiver.
THIRD AFFIRMATIVE DEFENSE
3. Cathay is informed and believe and thereon alleges that the Cross-complaint, and
cach cause of action alleged therein, is barred by the doctrine of estoppel.
FOURTH AFFIRMATIVE DEFENSE
4, Cathay is informed and believe and thereon alleges that the Cross-complaint, and
each cause of action alleged therein, is barred by the doctrine of laches.
FIFTH AFFIRMATIVE DEFENSE
5. Cathay is informed and believe and thereon alleges that the Cross-complaint, and

each cause of action alleged therein, is barred by the doctrine of unclean hands.

9257211 | 023000-0790

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"ANSWER TO XIANG KAI LLC'S CROSS-COMPLAINTLOS ANGELES, CALIFORNIA GOO48-4920
(323) 852-1000

FRANDZEL ROBINS BLOOM & CsaTo, L.C.
S00 WILSHIRE BOULEVARD, 71H FLOOR

SIXTH AFFIRMATIVE DEFENSE

6. Cathay is informed and believe and thereon alleges that any alleged damages, loss
or injury to Xiang Kai LLC ("Xiang") was the result of Xiang's failure to make reasonable efforts
to avoid or mitigate its alleged damages.

SEVENTH AFFIRMATIVE DEFENSE

7. Cathay is informed and believe and thereon alieges that the Complaint, and each
cause of action alleged therein, is barred due to the negligence, breach of contract or other
wrongful conduct of Xiang.

EIGHTH AFFIRMATIVE DEFENSE

8. Cathay is informed and believe and thereon alleges that the Cross-complaint, and
each cause of action alleged therein, is barred due to the negligence, breach of contract or other
wrongful conduct of third parties, for which Cathay is not responsible.

NINTH AFFIRMATIVE DEFENSE

9. Cathay is informed and believe and thereon alleges that each of the claims asserted
against them in the Cross-complaint are barred because Defendants breached no duties to Xiang.

TENTH AFFIRMATIVE DEFENSE

10, Cathay is informed and believe and thereon alleges that each of the claims asserted
against them in the Cross-complaint are barred because Defendants were not the actual or
proximate cause of any of Xiang's damages, if any.

ELEVENTH AFFIRMATIVE DEFENSE

11. Cathay is informed and believe and thereon alleges that Xiang expressly and with

full knowledge of the facts assumed the risk of the conduct alleged in the Cross-complaint.
TWELFTH AFFIRMATIVE DEFENSE

12. Cathay is informed and believe and thereon alleges that each of the claims asserted

against them in the Cross-complaint arc barred because Xiang executed and delivered the subject

joan documents with full knowledge of all of the facts, circumstances, and conditions of which it

now purports to complain.

9257211 | 02300-0790

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ANSWER TO XIANG KAI LLC'S CROSS-COMPLAINTFRANDZEL RogiNS BLoom & Csaro, L.C.

SOO WisHiRE ACULEVARD, 17TH FLOOR
LOS ANGELES, CALIFORNIA GOO4E-4920

(323) BS2-1000

THIRTEENTH AFFIRMATIVE DEFENSE
13. Cathay is informed and believe and thereon alleges that the Cross-complaint, and
each and every purported cause of action stated therein, is barred by the provisions of one or more
of the statute of limitations provisions contained in California Code of Civil Procedure, including
but not limited to, sections 337, 338, 339, 340, 343 and 344,
FOURTEENTH AFFIRMATIVE DEFENSE
14. Cathay is informed and believe and thereon alleges that that the Cross-complaint
fails to join indispensable and/or necessary parties to the case.
FIFTEENTH AFFIRMATIVE DEFENSE
15. Cathay is informed and believe and thereon alleges that in the event Cathay is held
liable to Xiang, which liability is expressly denied herein, then the liability of Defendant would be
passive, imputed or secondary, while others would be actively or primarily liable for Xiang’s

alleged injuries and damages.

SIXTEENTH AFFIRMATIVE DEFENSE

16. The Cross-complaint, and cach purported cause of action alleged therein, is vague,

ambiguous and uncertain.
SEVENTEENTH AFFIRMATIVE DEFENSE

17. Cathay is informed and believe and thereon alleges that the Cross-complaint, and

each cause of action alleged therein, is barred by the doctrine of waiver.
EIGHTEENTH AFFIRMATIVE DEFENSE

18. Defendants allege that they cannot fully anticipate all affirmative defenses that may
be applicable to the within action. Accordingly, Defendants reserve the right to assert additional
affirmative defenses, if and to the extent that such affirmative defenses arc applicable, as they may

become known through the course of discovery.

9257211 | 02300-0790

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ANSWER TO XIANG KAI LLC’S CROSS-COMPLAINTWHEREFORE, Cathay prays as follows:
lL. That Xiang takes nothing by its Cross-Cross-complaint;

2. For judgment in favor of Cathay and against Xiang as to all claims in the Cross-

Cross-complaint; and,

3. That Cathay have such other and further relief as the Court deems just and proper.

DATED: November 29, 2011 Respectfully submitted,

6500 WILSHIRE BOULEVARO, | 7TH FLOOR
Los ANGELES, CALITORMA GCO4E-4920
132.2) 852-1000

FRANOZEL ROBINS BLOOM & Csato, L.C.

FRANDZEL ROBINS BLOOM & CSATO, L.C.
MICHAEL GERARD FLETCHER

KENNETH RUSSAK
HANNA B. RAANAN

be /

ie, te

[ANNA B. RAANAN

“Attomeys for Plaintiff and Cross-Defendant Cathay
Bank

925721.1 | 02300-0790

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NOTICE OF DEMURRERS AND DEMURRERS TO XIANG KAI LLC'S CROSS-COMPLAINTFRANDZEL ROBINS BLoom & CsaTo, L.C.
G50 WisniRe BOULEVARD, | 77H FLOOR
Los ANGELES, CAUIFORWIA SOOLB-4920

(3231 882-1000

PROOF OF SERVICE

1, the undersigned, declare and certify as follows:

Tam over the age of eighteen years, not a party to the within action and employed in the
County of Los Angeles State of California. Iam employed in the office of Frandzel Robins
Bloom & Csato, L.C., members of the Bar of the above-entitled Court, and | made the service
referred to below at their direction. My business address is 6500 Wilshire Boulevard, Seventeenth
Floor, Los Angeles, California 90048-4920

On November 29, 2011, I served true copy(ies) of the CATHAY BANK'S ANSWER TO
XIANG KAI LLC'S CROSS-COMPLAINT AGAINST CATHAY BANK FOR: 1) FRAUD
IN THE INCEPTION; 2) FRAUDULENT INDUCEMENT INTO A CONTRACT; 3)
BREACH OF CONTRACT (LOAN AGREEMENT); 4) BREACH OF CONTRACT (DEED
OF TRUST); 5) WRONGFUL FORECLOSURE (FRAUD IN THE INCEPTION); 6)
WRONGFUL FORECLOSURE (FRAUDULENT INDUCEMENT); 7) BREACH OF
IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING; 8) INTENTIONAL
MISREPRESENTATION; 9) FRAUD-CONCEALMENT; 10) NEGLIGENT
MISREPRESENTATION; 11) INTENTIONAL INTERFERENCE WITH PROSPECTIVE
ADVANTAGE; 12) NEGLIGENT INTERFERENCE WITH PROSPECTIVE
‘ADVANTAGE; 13) VIOLATION OF BUSINESS AND PROFESSION 17200; 14)
EQUITABLE ESTOPPEL; 15) ACCOUNTING, the original(s) of which is(are) affixed hereto.
to the party(ies) on the attached service list.

BY MAIL: 1am “readily familiar” with the firm’s practice of collection and processing
correspondence for mailing with the United States Postal Service. Under that practice, it
would be deposited with the United States Postal Service that same day in the ordinary
course of business. Such document(s) were placed in envelopes addressed to the person(s)
served hereunder for collection and mailing with postage thereon fully prepaid at Los
Angeles, California, on that same day following ordinary business practices.

I certify under penalty of perjury under the laws of the State of California and the United
States of America that the foregoing is true and correct.

Executed on November 29, 2011, at Los Angeles, California.

Linda Tokubo

925721.1 | 02300-0790 5
NOTICE OF DEMURRERS AND DEMURRERS TO XIANG KAI LLC'S CROSS-COMPLAINTFRANDZEL ROBINS BLOOM & CsaTo, L.C.
SOO WILSHIRE BOULEVARD, 17TH FLOOR
Los ANGELES, CALIFORNIA QOC4E-4920
(323) @52-1000

SERVICE LIST

Chijeh Hu .

Law Office of Chijeh Hu
456 8" Street

Oakland, CA 94607

ch@cjhulaw.com

925721.1 { G23000-0790

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NOTICE OF DEMURRERS AND DEMURRERS TO XIANG KAI LLC'S CROSS-COMPLAINT