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IN THE SUPERIOR COURT OF GWINNETT COUNTY
STATE OF GEORGIA
PU CHENG CHANG,
CAI JUAN ZOU,
LONGFENG WANG, and
TINA CHOI,
Plaintiffs,
v. CAFN 22-A-07655-4
THE JUICY CRAB, INC.,
THE JUICY CRAB MANAGEMENT GA INC.,
THE JUICY CRAB ASSETS, INC.,
DESHI CHEN A/K/A LEO CHEN,
KEYING CHEN A/K/A RAYMOND CHEN,
and
SHUYING CHEN,
Defendants.
REPLY WITH RESPECT TO DEFENDANTS’ MOTION TO DISMISS
AND FOR JUDGMENT ON THE PLEADINGS
For their reply with respect to their motion to dismiss and for judgment on the pleadings
(“Defendants’ motion”) , Defendants, The Juicy Crab, Inc.; The Juicy Crab Management GA Inc.;
The Juicy Crab Assets, Inc.; Deshi Chen a/k/a Leo Chen; Keying Chen a/k/a Raymond Chen; and
Shuying Chen, show as follows:
Defendants agree with Plaintiffs’ contention that adding various parties – as sought in
Plaintiffs’ motion to add party Plaintiffs and party Defendants, filed November 13, 2022 – would
cure the issues specifically raised in Defendants’ motion except with respect to Count II. Given
that Defendants do not oppose Plaintiffs’ motion to add, Defendants’ motion will presumably be
largely moot.
However, Defendants are still entitled to judgment on the pleadings with respect to Count
II except with respect to any investment in JC 2220 Madison LLC. In Count II, Plaintiffs allege
the limited liability company interests purchased by “Plaintiffs” 1 in various Juicy Crab entities 2
are “securities” and Defendants violated O.C.G.A. § 10-5-20 by failing to register those securities.
As set forth in Defendants’ original papers, this claim is time barred.
O.C.G.A. § 10-5-20 makes the sale of (and offer to sell) certain non-exempt securities
illegal unless those securities are registered. O.C.G.A. § 10-5-58(b), however, creates the cause
of action by a buyer for violations of O.C.G.A. § 10-5-20. O.C.G.A. § 10-5-58(j)(1) states: “[a]
person may not obtain relief under subsection (b) of this Code section [f]or a violation of O.C.G.A.
§ 10-5-20 …, unless the action is instituted within two years after the violation occurred.”
Here, “the violation” is the sale of the alleged “securities” without registration.
The “sale” of the securities at issue is evidenced by the date of the Operating Agreements
for the various Juicy Crab entities. See, e.g., O.C.G.A. § 10-5-2(29) (“‘Sale’” includes every …
disposition of security … for value”); O.C.G.A. § 14-11-505(a), (b) (persons are admitted as
members of a limited liability company “at the time provided in and upon compliance with … any
written operating agreement”). Except for the interest in JC 2220 Madison LLC, all the purported
“securities” at issue were “sold” more than two (2) years before Plaintiffs commenced this action
and are barred as a matter of law. Cf. Curry v. TD Ameritrade, Inc., No. 1:14-CV-1361-LMM,
1The actual purchasers were Onyx Investment Holding LLC, C&Z Marketing Inc., Longe JC 10
LLC, and TN20 LLC, who are associated with the current Plaintiffs Pu Cheng Chang, Cai Juan
Zhou, Longfeng Wang, and Tina Choi, respectively.
2Those entities are JC Dothan LLC, JC Hoover LLC, JC Norfolk LLC, JC Pensacola LLC, JC
4306 Richmond LLC, JC 5590 Columbia LLC, JC 970 Clarksville LLC, JC 4218 Greensboro
LLC, JC Stonecrest LLC, and JC 2220 Madison LLC.
2
2015 WL 11251449, at *16-18 (N.D. Ga. June 30, 2015) (dismissing claims for sale of unregistered
securities under Georgia law as time barred). 3
Plaintiffs contend the Court cannot consider the Operating Agreements for the various
Juicy Crab entities without converting Defendants’ motion into one for summary judgment. That
would be true if the basis for Defendants’ motion with respect to Count II was Rule 12(b)(1).
However, here, Defendants have moved for a judgment on the pleadings pursuant to Rule 12(c)
and, under that rule, the Court may properly consider the exhibits attached to the Answer. See
Small v. Chatham Cnty., 360 Ga. App. 500, 501 (2021). All the Operating Agreements for all the
various Juicy Crab entities at issue are attached to the Answer, and Plaintiffs have not made any
allegations in their Complaint that the alleged “securities” were sold on any dates other than the
dates set forth in the Operating Agreements.
Accordingly, the Court should enter judgment on the pleadings against Plaintiffs on Count
II except with respect to the sale of an interest in JC 2220 Madison LLC.
Dated: February 27, 2023.
/s/ William Daniel Davis
William Daniel Davis, GA 746811
Cary Ichter, GA 382515
3 In their papers, Plaintiffs do not make a tolling argument. To the extent they try and raise one
later, there is no basis to toll claims arising from the sale of unregistered securities, even for fraud.
See, e.g., Uniform Securities Act § 509 cmt. 14 (2002) (“Section 509(j)(1), as with the 1956 Act,
is a unitary statute of repose, requiring an action to be commenced within one year after a violation
occurred. It is not intended that equitable tolling be permitted”); Temple v. Gorman, 201 F.Supp.2d
1238, 1241–42 (S.D.Fla.2002) (agreeing with “numerous other district courts that have held that
the discovery rule does not apply” to claims brought under the federal Securities Act for the sale
of unregistered securities and noting that the discovery rule is unjustified in such cases because
non-registration violations are easily uncovered) (collecting cases). Furthermore, even if the Court
could toll the limitation period applicable to this claim, the claim would still be untimely. It is
self-evident that if Plaintiffs had exercised reasonable diligence, they could have learned that the
alleged securities at issue were not registered.
3
Ichter Davis LLC
400 Interstate N. Parkway SE, Suite 860
Atlanta, Georgia 30339
404.869.7600
ddavis@ichterdavis.com
cichter@ichterdavis.com
Attorneys for Defendants
4
Certificate of Service
I hereby certify that I caused Reply with Respect to Defendants’ Motion to Dismiss and for
Judgment on the Pleadings to be emailed as a .pdf file with the subject line STATUTORY
ELECTRONIC SERVICE to akan@kanclarklaw.com and aclark@kanclarklaw.com.
Dated: February 27, 2023.
/s/ William Daniel Davis
William Daniel Davis
5
Preview
IN THE SUPERIOR COURT OF GWINNETT COUNTY STATE OF GEORGIA PU CHENG CHANG, CAI JUAN ZOU, LONGFENG WANG, and TINA CHOI, Plaintiffs, v. CAFN 22-A-07655-4 THE JUICY CRAB, INC., THE JUICY CRAB MANAGEMENT GA INC., THE JUICY CRAB ASSETS, INC., DESHI CHEN A/K/A LEO CHEN, KEYING CHEN A/K/A RAYMOND CHEN, and SHUYING CHEN, Defendants. REPLY WITH RESPECT TO DEFENDANTS’ MOTION TO DISMISS AND FOR JUDGMENT ON THE PLEADINGS For their reply with respect to their motion to dismiss and for judgment on the pleadings (“Defendants’ motion”) , Defendants, The Juicy Crab, Inc.; The Juicy Crab Management GA Inc.; The Juicy Crab Assets, Inc.; Deshi Chen a/k/a Leo Chen; Keying Chen a/k/a Raymond Chen; and Shuying Chen, show as follows: Defendants agree with Plaintiffs’ contention that adding various parties – as sought in Plaintiffs’ motion to add party Plaintiffs and party Defendants, filed November 13, 2022 – would cure the issues specifically raised in Defendants’ motion except with respect to Count II. Given that Defendants do not oppose Plaintiffs’ motion to add, Defendants’ motion will presumably be largely moot. However, Defendants are still entitled to judgment on the pleadings with respect to Count II except with respect to any investment in JC 2220 Madison LLC. In Count II, Plaintiffs allege the limited liability company interests purchased by “Plaintiffs” 1 in various Juicy Crab entities 2 are “securities” and Defendants violated O.C.G.A. § 10-5-20 by failing to register those securities. As set forth in Defendants’ original papers, this claim is time barred. O.C.G.A. § 10-5-20 makes the sale of (and offer to sell) certain non-exempt securities illegal unless those securities are registered. O.C.G.A. § 10-5-58(b), however, creates the cause of action by a buyer for violations of O.C.G.A. § 10-5-20. O.C.G.A. § 10-5-58(j)(1) states: “[a] person may not obtain relief under subsection (b) of this Code section [f]or a violation of O.C.G.A. § 10-5-20 …, unless the action is instituted within two years after the violation occurred.” Here, “the violation” is the sale of the alleged “securities” without registration. The “sale” of the securities at issue is evidenced by the date of the Operating Agreements for the various Juicy Crab entities. See, e.g., O.C.G.A. § 10-5-2(29) (“‘Sale’” includes every … disposition of security … for value”); O.C.G.A. § 14-11-505(a), (b) (persons are admitted as members of a limited liability company “at the time provided in and upon compliance with … any written operating agreement”). Except for the interest in JC 2220 Madison LLC, all the purported “securities” at issue were “sold” more than two (2) years before Plaintiffs commenced this action and are barred as a matter of law. Cf. Curry v. TD Ameritrade, Inc., No. 1:14-CV-1361-LMM, 1The actual purchasers were Onyx Investment Holding LLC, C&Z Marketing Inc., Longe JC 10 LLC, and TN20 LLC, who are associated with the current Plaintiffs Pu Cheng Chang, Cai Juan Zhou, Longfeng Wang, and Tina Choi, respectively. 2Those entities are JC Dothan LLC, JC Hoover LLC, JC Norfolk LLC, JC Pensacola LLC, JC 4306 Richmond LLC, JC 5590 Columbia LLC, JC 970 Clarksville LLC, JC 4218 Greensboro LLC, JC Stonecrest LLC, and JC 2220 Madison LLC. 2 2015 WL 11251449, at *16-18 (N.D. Ga. June 30, 2015) (dismissing claims for sale of unregistered securities under Georgia law as time barred). 3 Plaintiffs contend the Court cannot consider the Operating Agreements for the various Juicy Crab entities without converting Defendants’ motion into one for summary judgment. That would be true if the basis for Defendants’ motion with respect to Count II was Rule 12(b)(1). However, here, Defendants have moved for a judgment on the pleadings pursuant to Rule 12(c) and, under that rule, the Court may properly consider the exhibits attached to the Answer. See Small v. Chatham Cnty., 360 Ga. App. 500, 501 (2021). All the Operating Agreements for all the various Juicy Crab entities at issue are attached to the Answer, and Plaintiffs have not made any allegations in their Complaint that the alleged “securities” were sold on any dates other than the dates set forth in the Operating Agreements. Accordingly, the Court should enter judgment on the pleadings against Plaintiffs on Count II except with respect to the sale of an interest in JC 2220 Madison LLC. Dated: February 27, 2023. /s/ William Daniel Davis William Daniel Davis, GA 746811 Cary Ichter, GA 382515 3 In their papers, Plaintiffs do not make a tolling argument. To the extent they try and raise one later, there is no basis to toll claims arising from the sale of unregistered securities, even for fraud. See, e.g., Uniform Securities Act § 509 cmt. 14 (2002) (“Section 509(j)(1), as with the 1956 Act, is a unitary statute of repose, requiring an action to be commenced within one year after a violation occurred. It is not intended that equitable tolling be permitted”); Temple v. Gorman, 201 F.Supp.2d 1238, 1241–42 (S.D.Fla.2002) (agreeing with “numerous other district courts that have held that the discovery rule does not apply” to claims brought under the federal Securities Act for the sale of unregistered securities and noting that the discovery rule is unjustified in such cases because non-registration violations are easily uncovered) (collecting cases). Furthermore, even if the Court could toll the limitation period applicable to this claim, the claim would still be untimely. It is self-evident that if Plaintiffs had exercised reasonable diligence, they could have learned that the alleged securities at issue were not registered. 3 Ichter Davis LLC 400 Interstate N. Parkway SE, Suite 860 Atlanta, Georgia 30339 404.869.7600 ddavis@ichterdavis.com cichter@ichterdavis.com Attorneys for Defendants 4 Certificate of Service I hereby certify that I caused Reply with Respect to Defendants’ Motion to Dismiss and for Judgment on the Pleadings to be emailed as a .pdf file with the subject line STATUTORY ELECTRONIC SERVICE to akan@kanclarklaw.com and aclark@kanclarklaw.com. Dated: February 27, 2023. /s/ William Daniel Davis William Daniel Davis 5