Motion-Secondary: BRYANT FU ET AL VS. TINA YAN ET AL

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                                | San Francisco CA 94105
(415) 778-0700

www.hedanichoy.com

iiding & Salvagione, LLP

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RANDALL P. CHOY (SBN 83194)
CHARLIE W. YU (SBN 268233)

HEDANI, CHOY, SPALDING & SALVAGIONE LLP ELEGTRONIGALLY:
595 Market Street, Suite 1100 FILED
San Francisco, CA 94105 Superior Court of California,
Telephone: (415) 778-0800 County of San Francisco
Facsimile: (415) 778-0700 09/25/2018
Clerk of the Court
Attorneys for Cross-Defendant BY: MEREDITH GRIER
STELLA CHEN aka HONG XING FU aka HONG XING CHEN Deputy Clerk

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
UNLIMITED CIVIL JURISDICTION

BRYANT FU et ai., Reservation No. 0925 1025-05
Plaintiffs, CASE NO. CGC-17-556769
vs. MEMORANDUM IN SUPPORT OF
DEMURRER TO CHIU’S CROSS-
TINA YAN etal., COMPLAINT
Defendants. Date: October 25, 2018
Time: 9:30am
Dept.: 302
And RELATED CROSS-COMPLAINT Judge: Hon. Harold E, Kahn

INTRODUCTION

Demas Yan aka Dennis Yan has filed numerous lawsuits against Tony Fu in San
Francisco Superior Court for the last decade. Cross-Defendant STELLA CHEN is Tony Fu’s
sister, and collateral damage arising out of the dispute between Demas Yan and Tony Fu,
although she has nothing to do with the dispute. The Court has found that Demas Yan aka
Dennis Yan is a vexatious litigant. To get around his vexatious litigant status, Demas Yan aka
Dennis Yan “assigned” his “claims” to Cross-Complainant THAI MING CHIU, and assigned
the same claims to KAMAN LIU, his brother in law, as co-assignees. In the operative Cross-

Complaint, Demas Yan is listed as Cross-Complainant THA] MING CHIU’s attorney of

I
MEMORANDUM IN SUPPORT OF DEMURRER TO CHIU’S CROSS-COMPLAINT
CASE NO. GC-17-556769record', and Cross-Complainant THAI MING CHIU is making the same claims that Demas

2 || Yan has been making against Cross-Defendant STELLA CHEN since 2010, in no less than
3 || four different lawsuits (see Exhibits A-E attached to the Request for Judicial Notice). In
4 |/addition to this action, the same complaint and allegations have been made in San Francisco
5 |} Superior Court Case Nos. CGC-10-501321, CGC-12-522566, and CGC-16-553702, and is
6 || currently pending in CGC-16-553702.
7 There is also a misjoinder of parties because the Assignor and Co-Assignee are not
8 || joined as part of the same Cross-Complaint.
9 ARGUMENT
10 A demurrer is a pleading used to test the legal sufficiency of other pleadings, i-e., it
s 11 || raises issues of law, not fact, regarding the form or content of the opposing party’s pleading
3 : s 12 || (Code of Civil Procedure §§ 422.10, 589; see Donabedian v. Mercury Insurance Co. (2004) 116
g i Z 13 || Cal.App.4th 968, 994; Lewis v. Safeway, Inc, (2015) 235 Cal.App.4th 385, 388; SJJC Aviation
i 5 zt 14 || Services, LLC v. City of San Jose (2017) 12 Cal.App.Sth 1043, 1051-1052.)
Bee g 15 A demurrer can be used only to challenge defects that appear on the face of the pleading
: i 16 |] under attack; or from matters outside the pleading that are judicially noticeable. (Blank v.

17 || Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Insurance Co. (2004) 116

18 || Cal.App.4th 968, 994.) The Code specifically authorizes the court to consider, as ground for
19 || demurrer, any matter which the court must or may judicially notice under Evidence Code §§
20 |)451 or 452. (Code of Civil Procedure § 430.30(a).) The court can take judicial notice of the
21 || records in the pending action, or in any other action pending in the same court or any other
22 || court of record in the United States. (Evidence Code § 452(d).)

23 ||A. ANOTHER ACTION PENDING

24 Code of Civil Procedure § 430.10(c) provides that the party whom a cross-complaint
25 |/has been filed may object by demurrer on the ground that “There is another action pending
26 || between the same parties on the same cause of action.”

' Demas Yan has been disbarred by the State Bar of California, and Cross-Complainant KAMAN LIU is now
28 || represented by Mr. Mark Lapham.

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MEMORANDUM IN SUPPORT OF DEMURRER TO CHIU’S CROSS-COMPLAINT
CASE NO. GC-17-5567698
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Here, Cross-Complainant THAI MING CHIU has the exact same claims as Cross-
Complainant KAMAN LIU, with the same alleged underlying debt and as a co-assignee of the
debt with Cross-Complainant KAMAN LIU. In other words, the Court should find that THAI
MING CHIU and KAMAN LIU are one in the same. Cross-Complainant KAMAN LIU has
filed the exact same Cross-Complaint with the same causes of action and against the same
parties in San Francisco Superior Court Case No. CGC-16-553702. (See Exhibit A attached to
the Request for Judicial Notice.) As such, the Court should sustain the demurrer because the
exact same claims with the exact same causes of action exist in another action in this Court.

This, notwithstanding the argument that there is a misjoinder of parties as argued in
Section D below.

B. STATUTE OF LIMITATIONS

The Cross-Complaint alleges three causes of action against Cross-Defendant STELLA
CHEN: (1) fraudulent conveyance; (2) conspiracy on fraudulent conveyance; and (3) aiding
and abetting fraud. Under Civil Code § 3439.09, the statute of limitations for a fraudulent
conveyance claim is at most four years. The exact same fraudulent transfer claim with the
exact same allegations have been made since August 9, 2010. (See Complaint attached as
Exhibit D to the Request for Judicial Notice, San Francisco Superior Court Case No. CGC-10-
501321.)

The statute of limitations has run on August 9, 2014 at the latest, and this claim is now
time-barred, As such, the Court should sustain the demurrer because the claims against Cross-
Defendant STELLA CHEN are time-barred.

C, FRAUD NOT PLEAD WITH SPECIFICITY

Cross-Complainant THAI MING CHIU’s causes of action against Cross-Defendant
CHEN all arise out of an alleged fraudulent transfer, that is, fraud. The elements of fraud are:
(1) a representation, usually of fact; (2) which is false; (3) knowledge of its falsity; (4) intent to
defraud; (5) justifiable reliance upon the misrepresentation; and (6) damage resulting from that
justifiable reliance. (Stansfield vy. Starkey (1990) 220 Cal.App.3d 59, 72) In order to make a

proper fraud allegation, “every element of the cause of action for fraud must be alleged in the

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MEMORANDUM IN SUPPORT OF DEMURRER TO CHIU’S CROSS-COMPLAINT
CASE NO. GC-17-556769www hedanichoy.com

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proper manner and the facts constituting the fraud must be alleged with sufficient specificity to
allow defendant to understand fully the nature of the charge made.” (/d.) A proper fraud

allegation requires “pleading facts which show how, when, where, to whom, and by what

means the representations were tendered.” (Id.)

The Cross-Complaint contains no specific allegations regarding the alleged fraud as
against Cross-Defendant CHEN other that “FU transferred and continues to transfer ... other
sums of money to his sister STELLA CHEN.” There is no allegation as to how, when, where,
and by what means these alleged fraudulent transfers take place.

The Court should sustain the demurrer because the fraud claims against Cross-
Defendant CHEN are not alleged with the required specificity.

D. — MISJOINDER OF PARTIES

Failure to join the assignor and all other partial assignees constitutes an
impermissible “splitting” of the cause of action on the debt. Upon proper objection by the
defendant-debtor, the joinder of such parties is compulsory. Where there has been a partial
assignment of a claim, the assignor and assignee are regarded as “indispensable” parties in

any action to enforce the claim against the debtor. Allowing either to proceed without joining
the other would prejudice the debtor by exposing him or her to the harassment and expense of
having to defend multiple lawsuits on the same debt. (See Bank of the Orient v. Superior Court
(San Francisco Federal Savings & Loan Association) (1977) 67 Cal.App.3d 588, 595.)

Here, there are two assignees, Cross-Complainants KAMAN LIU and THAI MING
CHIU, of an alleged debt. As such, the Assignor and both assignees, including Complainants
KAMAN LIU and THAI MING CHIU, must be joined to the same complaint or cross-
complaint. Here, the Assignor has not been joined to the Cross-Complaint, and the co-
assignees have filed separate cross-complaints rather than being adjoined in a single cross-
complaint. Moreover, because Cross-Complainant KAMAN LIU has another action pending
arising out of the same claims and the same underlying alleged debt and cannot be joined in
this action, joinder in this action is not proper. As such, the Court should dismiss Cross-

Complainant THAI MING CHIU’s Cross-Complaint without leave to amend.

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MEMORANDUM IN SUPPORT OF DEMURRER TO CHIU’S CROSS-COMPLAINT
CASE NO. GC-17-556769‘www.hedanichoy.com

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E. MEET AND CONFER

On September 10, 2018, counsel for Cross-Defendant STELLA CHEN met and
conferred by telephone with Cross-Complainant THAI MING CHIU’s attorney, provided
Cross-Defendant STELLA CHEN’s position regarding the demurrer and why the Cross-
Complaint is legally insufficient by telephone, and followed up the telephone call with an
email. Counsel for Cross-Defendant STELLA CHEN never received a response and therefore
sent a follow up email. To date, counsel for Cross-Complainant THAI MING CHIU has not
responded to the issues raised by Cross-Defendant STELL CHEN’s counsel. (See Exhibit A
attached to the Declaration of Charlie W. Yu.)

CONCLUSION

The Court should sustain the demurrer without leave to amend because: (1) the statute

of limitations has run; (2) the claims are being made in a concurrent pending action; (3) the

claims are otherwise not plead with particularity; and (4) there is a misjoinder of parties.

DATED: September 25, 2018 HEDANI, CHOY, SPALDING & SALVAGIONE
CHARLIE W. YU
Attomey for Cross-Deféndfant
STELLA CHEN

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MEMORANDUM IN SUPPORT OF DEMURRER TO CHIU’S CROSS-COMPLAINT
CASE NO. GC-17-556769