Motion-Secondary: CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND XIANG ZHANG et al

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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
Nov-16-2011 3:37 pm

Case Number: CGC-10-500934
Filing Date: Nov-16-2011 3:36
Juke Box: 001 Image: 03388234
REPLY

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

001003388234

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

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‘BY

(323) 852-1000)

6500 WILSHIRE BOULEVARD, |

FRANDZEL ROBINS BLoom & Csaio, LC.
Los ANGELES, CALIFORNIA 9¢

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21

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

ERY 3 SOURT
FRANDZEL ROBINS BLOOM & CSATO, L.@Y:
Deputy Clerk

6500 Wilshire Boulevard
Seventeenth Floor

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

Attorneys for Plaintiff and Cross-Defendant
CATHAY BANK

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jan Francoise

NOYEG 207 ays

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

CATHAY BANK, a California banking
corporation,

Plaintiff,
Vv.

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 California
limited liability company; ZHANGS, LLC, a
California limited liability company; and
DOES 1 through 200, inclusive,

Defendants.

AND RELATED CROSS-ACTION

922781.1 | 023000-0790

CASE NO, CGC-10-500934

CATHAY BANK'S REPLY TO
DEFENDANTS’ OPPOSITION TO
CATHAY BANK'S MOTION TO STRIKE
SECOND AMENDED CROSS-
COMPLAINT, OR IN THE
ALTERNATIVE, TO STRIKE PORTIONS
OF THE SECOND AMENDED CROSS-
COMPLAINT

{Concurrently Filed and Served with Reply to
Opposition to Demurrer to Second Amended
Cross-Complaint]

Date: November 21, 2011
Time: 9:30 a.m.
Dept.: 302

400 McAllister Street

San Francisco, CA 94102

1
REPLY TO OPPOSITION TO MOTION TO STRIKE SECOND AMENDED CROSS-COMPLAINTFRANDZEL ROBINS BLoom & CsaTo, L.C.
6500 WILSHIRE BOULEVARD, 1 7TH FLOOR:
Los ANGELES, CALIFORNIA 90046-4920

(323) 852-1000

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BRRhRBB BS Se AGBEBH ES

Plaintiff and Cross-Defendant Cathay Bank (the "Bank") respectfully submits its reply to
the Defendants’ and Cross-complainants' Opposition to its Motion to Strike the second amended
cross-complaint ("SACC").

i
INTRODUCTION

Defendants and Cross-complainants Rai Kai, LLC (Rai Kai"), Raymond Zhang ("R.
Zhang"), Cindy Zhang ("C. Zhang") (collectively the "Zhangs"), and Zhangs LLC (hereinafter
collectively the "Defendants" or "Cross-complainants") filed their Opposition to the Bank's
Motion to Strike, but fail to address the facts as alleged in the SACC. Instead, the Opposition
presents a completely different set of facts which although interesting do not match the allegations
made in the SACC. Instead of addressing the facts alleged in the SACC, the Defendants
essentially scratch the SACC and argue a different Cross-complaint entirely — conceding that the
SACC is inadequate, that it does not plead sufficient facts to support the causes of action claimed,
and appear to be arguing that the Court should allow them leave to amend to add these additional
facts which only came to light three iterations later. The Defendants have had three chances to
amend the Cross-complaint to state facts sufficient to state a cause of action against the Bank and
have failed. They continue to fail.

il.
ARGUMENT

The Opposition does not address the issues raised in the Motion to Strike and rather makes
the case for allowing the Defendants' to amend the SACC based on the ineffectiveness of prior
counsel. The Opposition argues that judicial policy favors deciding litigation on the merits. That
argument is ineffective in this case where the Parties are not at the inception of this case, but
almost two years since the filing of the Complaint and almost one-year since the filing of the
Cross-complaint. Defendants have had numerous opportunities amend their pleading to assert
facts sufficient to state a cause of action and have failed. Furthermore, they continue to play
musical chairs with their causes of action, adding claims, removing them, and then attempting to
add them back. The case law is clear — ultimately, the Court has discretion to strike portions of a

922781.1 | 02300-0790 2
REPLY TO OPPOSITION TO MOTION TO STRIKE SECOND AMENDED CROSS-COMPLAINTFRANDZEL ROBINS BLOOM & Csato, L.C.
6500 WILSHIRE BOULEVARD, | 7TH FLOOR:
Los ANGELES, CALIFORNIA 90048-4520
(323) 852-1000

2 A A

pleading. In this case, the Court should strike the newly added causes of action as being
inconsistent with the previous first amended cross-complaint. As discussed in the Motion to
Strike, when a demurrer is sustained with leave to amend, the leave must be construed as
permission to the pleader to amend the causes of action to which the demurrer has been sustained,
not add entirely new causes of action. Patrick v. Alacer Corp. 167 Cal.App. 4th 995, 1015 (2008)
(citing People ex rel. Dept. Pub. Wks, v. Clausen 248 Cal.App.2d 770, 785 (1967) [“such granting
of leave to amend [in an order sustaining a demurrer] must be construed as permission to the
pleader to amend the cause of action which he pleaded in the pleading to which the demurrer has
been sustained”],). The Opposition does not rebut this argument, nor does it address it,

The Opposition argues that Mr. Zhang speaks limited English and that as a result he was
unable to effectively communicate with his previous counsel, and in support of this argument, the
Opposition points to the Bank's counsel offering the deposition interpreter to assist Mr. Zhang in
communicating with his prior counsel as evidence that Bank's counsel has concluded that Mr.
Zhang in fact is illiterate in the English language. One inference from the offer is the one made in
the Opposition. Another equally valid inference might be that the Bank's counsel believed that
Mr. Zhang was falsely claiming that he could not understand English and that the offer of use of
the deposition interpreter was designed to assure that Mr. Zhang could not come back later and
again make a false claim that he did not understand what was being communicated to him. There
are other inferences that might also be drawn. In any event, any decision by the Bank or its
attorneys to use an interpreter is a strategic decision which is immune from discovery under the
attorney client privilege and work-product doctrine. The Bank's counsel will not be drawn into a
waiver of the privilege to discuss what its actual motivations were when it offered to provide its
translator to Mr. Zhang and his counsel.

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922781.1 | 02300-0790 3
REPLY TO OPPOSITION TO MOTION TO STRIKE SECOND AMENDED CROSS-COMPLAINTFRANDZEL ROogiNS BLoom & Csato, L.C.
‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR:
Los ANGELES, CALIFORNIA 20048-4920
(323) 852-1000

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BReRARREBES CSB DATDESTES S

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CONCLUSION
For the foregoing reasons, the Opposition does not properly address the Motion to Strike.

For the foregoing reasons, the motion to strike the second amended cross-complaint in its entirety,
or in the alternative to strike portions of the second amended cross-complaint, should be granted.
DATED: November 16, 2011 Respectfully submitted,

FRANDZEL ROBINS BLOOM & CSATO, L.C.

MICHAEL GERARD FLETCHER

KENNETH RUSSAK.

jomeys for Plaintiff and Cross-Defendant Cathay

922781.1 | 023000-0790 4

REPLY TO OPPOSITION TO MOTION TO STRIKE SECOND AMENDED CROSS-COMPLAINTFRANDZEL ROBINS BLOOM & CsaTo, L.C.
6500 WILSHIRE BOULEVARD, | 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920

(323) 852-1000

So 20 me YD HW BR YW NY

ROOF OF SERVICE
I, the undersigned, declare and certify as follows:

I am over the age of eighteen years, not a party to the within action and employed in the
County of Los Angeles State of California. I am employed in the office of Frandzel Robins
Bloom & Csato, L.C., members of the Bar of the above-entitled Court, and I 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 16, 2011, I served true copy(ies) of the CATHAY BANK'S REPLY TO
DEFENDANTS' OPPOSITION TO CATHAY BANK'S MOTION TO STRIKE SECOND
AMENDED CROSS-COMPLAINT, OR IN THE ALTERNATIVE, TO STRIKE PORTIONS
OF THE SECOND AMENDED CROSS-COMPLAINT, the original(s) of which is(are) affixed
hereto. to the party(ies) on the attached service list,

& BY FAX TRANSMISSION: At approximately 3:30 pm, I caused said document(s) to be
transmitted by facsimile. The telephone number of the sending facsimile machine was
(323) 651-2577, The name(s) and facsimile machine telephone number(s) of the person(s)
served are set forth in the service list. The document was transmitted by facsimile
transmission, and the sending facsimile machine properly issued a transmission report
confirming that the transmission was complete and without error.

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 16, 2011, at Los Angeles, California. —~

[eda WS

LINDA TOKUBO

922781.1 | 023000-0790 5
REPLY TO OPPOSITION TO MOTION TO STRIKE SECOND AMENDED CROSS-COMPLAINTFRANDZEL ROBINS BLOOM & Csato, L.C.
SOO WILSHIRE BOULEVARD, 17TH FLOOR
Los ANGELES, CALIFORNIA SOO46-4920

(329) 852-1000

SERVICE LIST

Chijeh Hu .

Law Office of Chijeh Hu
456 8" Street

Oakland, CA 94607
FAX (510) 893-0155

922781.1 | 023000-0790

6
REPLY TO OPPOSITION TO MOTION TO STRIKE SECOND AMENDED CROSS-COMPLAINT