Preview
Stephanie Berman Schneider - SBN 168519
Howard Smith - SBN 166571
BERMAN BERMAN BERMAN
SCHNEIDER & LOWARY, LLP
11900 West Olympic Blvd., Suite 600
Los Angeles, California 90064-1151
Telephone: (310) 447-9000
Facsimile: (310) 447-9011
Attorneys for Defendants, JEAN D, CHEN
and LAW OFFICES OF JEAN D. CHEN
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SANTA CLARA — UNLIMITED JURISDICTION
10
11 TRUE SOLAR USA INC, a California CASE NO: 17CV311092
corporation and JONES DEVELOPMENT [Assigned to Honorable William J. Elfving]
12 PROJECTION, LLC, a California limited Action Filed: May 30, 2017
liability company
13
Plaintiffs, NOTICE OF SETTLEMENT AND
14 APPLICATION OF DEFENDANTS JEAN D.
VS. CHEN AND LAW OFFICES OF JEAN D.
15 CHEN FOR DETERMINATION OF GOOD
JEAN D. CHEN, an individual; TONY YE) FAITH SETTLEMENT (CODE OF CIVIL
16 (aka Tony Jianyun Ye), an individual, LAW ) PROCEDURE SECTION 877.6)
OFFICES OF JEAN D, CHEN, a
17 Professional Corporation, TREE LINED
PROPERTIES LLC, a California limited [Filed concurrently: (1) Declaration of
18 liability company, TREE LINED Howard Smith with Exhibits; and (2)
HOLDINGS, LLC, a California limited [Proposed] Order.]
19 liability company and DOES 1-50,
20 Defendants. Trial Date: None
21
TO ALL PARTIES AND THEIR COUNSEL OF RECORD:
22
PLEASE TAKE NOTICE that Defendants JEAN D, CHEN and LAW OFFICES OF JEAN D.
23
CHEN (collectively “Chen”) hereby apply to this Court for an order determining that their settlement
24
with Plaintiffs TRUE SOLAR USA INC. and JONES DEVELOPMENT PROJECTION, LLC
25
(“Plaintiffs”) is in good faith pursuant to Code of Civil Procedure Section 877.6, thereby dismissing all
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potential Cross-Complaints or third-party Complaints and barring all claims against Chen for Equitable
27
Comparative Contribution or Partial or Comparative Indemnity based upon claims which include
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Comparative Negligence or Comparative or Total Equitable Indemnity.
1
NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
As the settlement between Plaintiffs and Chen only applies to Chen and no other Defendants in
the action, the settlement is contingent upon Chen obtaining a good faith settlement determination.
This (unopposed) application is submitted on the grounds the settlement meets the standard of "good
faith" set forth by the California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Assoc.
(1985) 38 Cal.3d 448, 499 on grounds, which include the following:
1 Chen disputes liability for all of Plaintiffs’ claims and allegations;
2 There is only limited insurance coverage available and Plaintiffs have agreed to
accept the amount remaining on Chen’s $100,000 “burning limits” policy - $76,000;
3 Another civil action and related criminal proceeding were filed against Chen
during the pendency of this action, which would both take priority over this case; and
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4 Chen is unavailable to contribute any additional funds to the settlement.
11
(Declaration of Howard Smith (“Smith Dec.”), at §§.3-8, 10-11; Exhibits “2-4.”)
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This application is unopposed as David Henshaw, Esq. of HENSHAW & HENRY, PC, counsel
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for the other Defendants in this action, TONY YE aka TONY JIANYUN YE, and TREE LINED
14
HOLDINGS, LLC has advised these Defendants do not oppose Chen’s Application for Determination
15
of Good Faith Settlement. (Smith Dec., at 4.12; Exhibit “7.”)
16
This application is based on this notice and application, the concurrently filed declaration of
17 Howard Smith with exhibits, all pleadings, papers and records on file in this action, and upon such
18 other oral argument and documentary evidence as may be presented. Pursuant to Code of Civil
19 P re ‘ocedure Section 877.6 (a)(2), copies of this notice and application, the declaration of Howard Smith
20 with Exhibits and [Proposed] Order are being served on all of the other parties in this action through
21 certified mail, return receipt requested.
22
DATED: Augus br, BERMAN BERMA E) [AN
23 LLP
24
B
25 STEPHANIE BERMAN SCHNEIDER
HOWARD SMITH
26 Attorneys for Defendants,
JEAN D. CHEN and LAW OFFICES OF
27 JEAN D,. CHEN
28
2
NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
I INTRODUCTION AND SUMMARY OF ARGUMENT.
Plaintiffs TRUE SOLAR USA INC and JONES DEVELOPMENT PROJECTION, LLC
(“Plaintiffs”) and Defendants JEAN D. CHEN and LAW OFFICES OF JEAN D. CHEN (collectively
referred to as “Chen”) have reached a settlement in this action. As the settlement is contingent upon
Chen obtaining a good faith settlement determination, Chen submits this (unopposed) application.
(Declaration of Howard Smith (“Smith Dec.”), at §.12; Exhibit “7.”)
IL. STATEMENT OF FACTS
Plaintiffs filed this action on May 30, 2017, against Chen and two other Defendants, TONY
YE, TREE LINED PROPERTIES LLC and TREE LINED HOLDINGS, LLC. (Smith Dec., at {f].1, 2;
10 Exhibit “1.”) Plaintiffs allege Defendants provided them with investment advice to purchase an item
11 of commercial real estate and during the transaction, Chen took a commission and/or secured a profit
12 of over $680,000 from the purchase without making the necessary disclosures. (Smith Dec., at §.2;
13 Exhibit “1,” at 49.21, 26, 41-42, 54.) Defendants deny these allegations. (Smith Dec., at §.2.)
14 Chen is being defended in this action under a policy of professional liability insurance with
15 Imperium Insurance Company. (Smith Dec., at §.3; Exhibit “2,” at p.6, line 20 through p.7, lines 16.)
16 The firm of Berman Berman Berman Schneider & Lowary, LLP has been appointed by Imperium to
17 defend Chen in this action. (Smith Dec., at .3.) The Imperium policy has limits of $100,000 on “a
18 burning limits” basis, with all funds used for the defense of the action lowering the amount available
19 for indemnity to pay any settlement and/or judgment rendered in the action. (Smith Dec., at 4.3;
20 Exhibit “2,” at p.7, lines 11-16.) Given the limited available insurance coverage, Chen sought to settle
21 the action without protracted litigation. (Smith Dec., at .3.) Plaintiffs, however, were reluctant to
22 reach an early settlement. (Smith Dec., at 4.3.)
23 Chen wholly disputes they are liable in any manner for any of Plaintiffs’ allegations and were
24 prepared to defend Plaintiffs’ claims based upon the following verified facts:
25 “First, no fraud of any kind took place in connection with the
26 April 2013 real estate transaction at issue in this case. The $2.9 million
27 sale price was fully disclosed to Plaintiffs. Ms. Lanlan Fei, the 51%
28 shareholder of Jones Development at the time, specifically stated that
1
NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
this sale price was acceptable to her. She was not interested in the profit
that Tree Lined Holdings would be making, but instead was only
interested in how much profit she stood to make in the future. Ms. Fei
also specifically stated that she was agreeable to Defendant Tree
Lined’s expected $600,000 profit from the transaction at issue, as the
land was valuable. This conversation took place among four people:
Ms. Lanlan Fei, Mr. Yi Li, Jean Chen, and Tony Ye. Ms. Fei held 51%
of the ownership of the property purchased, and Mr. Yi Li held 49%
ownership. Ms. Fei was the controlling shareholder.
10 The price Tree Lined Holdings paid to purchase the property
11 from its prior owner was a matter of public record. That public record
12 of the prior transaction clearly shows that Tree Lined would be making
13 a $600,000 profit above its initial purchase price, and Tony Ye was the
14 owner of Tree Lined Holding, as shown on a previous deed in January
15 2013. In addition to all of the written property discloses from the title
16 company and oral disclosures from Jean Chen and Tony Ye, public
17 records will show all the 2013 transaction, and Tony Ye as owner of
18 Tree Lined Holdings.
19 Plaintiffs’ claim is barred by the three-year statute of
20 limitations for fraud. Plaintiffs had full knowledge at the time of the
21 April 20, 2013 transaction of the price of the property, the profit made
22 on the sale, the relationships between Ms. Chen, Mr. Ye and the Tree
23 Lined Properties Defendants, and all information material to the sale.
24 This was over three years before this action was filed on May 30, 2017.
25 There was no attorney-client relationship with respect to the
26 transaction at issue. Any immigration law matters for which the
27 Plaintiffs were represented by the Law Offices were entirely distinct
28 from and unrelated to the claims in this case, which was based on a real
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
estate transaction that did not involve legal representation or require
representation under California law, and Plaintiffs knew these facts.
Rather, the April 2013 sale was conducted by Old Republic Title
Company, with all proper disclosures as part of the real estate
transaction. Each immigration or other corporate matter for which the
Law Offices may have represented Plaintiffs was separately performed
and billed. The Commercial Purchase and Sale Agreement at issue in
this case was not prepared by the Law Offices of Jean D, Chen.
The Plaintiffs incorrectly allege Chen and her firm “strongly
10 encouraged” them to pursue the formation of regional center, and
11 promoted the concept that forming a regional center would be very
12 profitable. This is wrong. Jones Development’s former owners, Ms.
13 Lanlan Fei and Yi Li, are sophisticated developers and investors, who
14 are quite experienced in investment and real estate matters. It was their
15 decision to pursue the regional center. Both signed the retainer
16 agreement to retain Law Offices of Jean D. Chen to start the regional
17 center application process. But regardless—and most importantly—the
18 regional center application was an entirely separate legal matter,
19 unrelated to the April 2013 real estate sale, the subject of this lawsuit.
20 Additionally, Plaintiffs knew Defendant Ye was involved with
21 Tree Lined Properties, LLC, that Ms. Chen was not handling this
22 transaction in any professional capacity, that TLP made $600,000 from
23 the 2013 sale of the 180 Jones Property, and that no information
24 material to the transaction was ever withheld from the Plaintiffs.
25 Tony Ye also personally accompanied Ms. Fei to San
26 Francisco City Hall to confirm entry of the property public records,
27 which had already been disclosed to Ms. Fei. Ms. Fei also contacted
28 builders and architects to commence construction of the house at the
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
land. Ms. Fei was determined to build the houses on the site; she
indicated that this was what Mr. Li wanted her to do because Mr. Li did
not want her to be bored. Ms. Fei and Mr. Li were long-time friends.
At that time, they were living together.
Plaintiffs suffered no injury or damages in any event, as they
later flipped this same property a short time later, selling it for $6
million to a foreign investor in or around October 2015. This later sale
yielded Plaintiffs a $3 million profit, such that they cannot now claim
that they were injured in any way by the earlier April 2013 transaction
10 at issue in this case.”
11 (Smith Dec., at 4.4; Exhibit “2,” at p.8, line 28 through p.10, line 23.)
12 During the course of this action, another civil action and related criminal proceeding were filed
13 against Chen. (Smith Dec., at 5.) On October 18, 2018, public information reveals that the Security
14 and Exchange Commission (SEC) filed a civil action against Chen and others. (Smith Dec., at .6;
15 Exhibit “3.”) “The SEC’s Complaint alleges that Jean Danhong Chen, Tony Jianyun Ye and Law
16 Offices of Jean D. Chen, with the assistance of a personal friend, Kuansheng Chen, secured over $10
17 million in undisclosed commissions by selling EB-5 securities to hundreds of Chen’s legal clients.”
18 (Smith Dec., at §.6,; Exhibit “3.”)
19 After the SEC Complaint was filed, public information reveals that “[a] Federal grand jury
20 indicted San Jose Immigration lawyer Danhong ‘Jean’ Chen and her ex-husband and office manager
21 Jianyun ‘Tony’ Ye ina fraud scheme targeting more than 100 foreign investors looking to obtain visas
22 into the United States, according to authorities.” (Smith Dec., at §.7; Exhibit “4.”) It was also
23 publically reported that while Ye appeared in federal court and was released on bond, “Chen remains
24 at large,” having become a “naturalized citizen of Dominica, a small Caribbean island, and fled the
25 country,” (Smith Dec., at §.7; Exhibit “4.”)
26 Given the pending SEC action and the fact Chen appears to no longer be present in the United
27 States, Plaintiffs have agreed to settle their claims against Jean Chen and the Law Offices of Jean Chen
28 for the amount remaining on the “burning limits” policy - $76,000. (Smith Dec., at §.8; Exhibit “5.”)
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
As the settlement would only apply to Chen and no other Defendants, the settlement is contingent upon
Chen obtaining a good faith settlement determination. (Smith Dec., at §.8; Exhibit “5.”)
This application requests a determination the settlement between Plaintiffs and Chen is in
good faith pursuant to Code of Civil Procedure Section 877.6, as it meets the standard set forth in
Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 448, 499. This application is
unopposed as David Henshaw, Esq. of HENSHAW & HENRY, PC, counsel for the other Defendants
in this action, TONY YE aka TONY JIANYUN YE, and TREE LINED HOLDINGS, LLC has advised
that these Defendants do not oppose Chen’s Application for Determination of Good Faith Settlement.
(Smith Dec., at §.12; Exhibit “7.”)
10 Ill. TERMS OF SETTLEMENT
ll The material terms of the settlement between Plaintiffs and Chen are as follows:
12 qd) Chen will pay Plaintiffs $76,000 (the amount remaining on the
13 $100,000 burning limits policy);
14 (2) Plaintiffs agree to release and discharge Chen from all claims
15 related to the allegations set forth in the operative Second
16 Amended Complaint;
17 (3) Plaintiffs will waive the protection of Civil Code Section 1542;
18 (4) Plaintiffs will file a Request for Dismissal with prejudice as to
19 their Complaint against Chen;
20 () The settlement is contingent upon a good faith settlement
21 determination;
22 (6) Each party to bear his/her/its own attorneys’ fees and costs; and;
23 %) No party to the settlement is admitting to the sufficiency of any
24 claims, allegations, assertions, defenses, contentions or
25 positions of any other party.
26 || (Smith Dec., at 9.8; Exhibit “5.”)
271 1//
284 ///
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
1 IV. STATUTORY BASIS FOR SETTLEMENT
Pursuant to the Code of Civil Procedure Section 877.6(a)(2), this Court may determine a
settlement to be in good faith without the necessity of a motion or hearing, as follows:
“A settling party may give notice of a settlement to all parties and to the
court, together with an application for determination of good faith
settlement and a proposed order. The application shall indicate the
settling parties, and the basis, terms and amount of the settlement. The
notice, application and proposed order shall be given by certified mail,
return receipt requested. Proof of service shall be filed with the court.
10 Within 25 days of the mailing of the notice, application and proposed
ll order, a non-settling party may file a notice of motion to contest the
12 good faith of the settlement. If none of the non- settling parties files a
13 motion within 25 days of mailing of the notice, application and
14 proposed order, the Court may approve the settlement.”
15 A determination that the settlement was reached in "good faith" also authorizes the Court to
16 dismiss and/or bar any actual or potential claims for Indemnity or Contribution pursuant to Code of
17 Civil Procedure Section 877.6(c), which provides, as follows:
18 “A determination by the Court that the settlement was made in good
19 faith shall bar any other joint tortfeasor or co-obligor from any further
20 claims against the settling tortfeasor or co-obligor for equitable
21 comparative contribution, or partial or comparative indemnity based on
22 comparative negligence or comparative fault.:
23 Concurrently with the filing of this notice/application, Chen is serving all parties to the action,
24 with the Declaration of Howard Smith with exhibits and a [Proposed] Order Determining Good Faith
25 Settlement. Pursuant to Code of Civil Procedure Section 877.6(a)(2), these documents will be served
26 on the other parties through certified mail, return receipt requested.
27 //1
28 //1
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
1 Vv. THE SETTLEMENT IS IN GOOD FAITH
A. The Settlement between Plaintiffs and Chen Meets the Tech-Bilt Standard for a
Good Faith Settlement
The California Supreme Court's decision in Tech-Bilt, Inc. v. Woodward-Clyde & Associates,
supra, 38 Cal.3d at p. 448, sets forth the standard by which the "good faith" of a settlement is
determined. The factors include: (1) A rough approximation of Plaintiff's total recovery and the
settlor's proportionate liability; (2) The amount paid in settlement; (3) The allocation of the settlement
proceeds among Plaintiffs; (4) A recognition that a settlor should pay less in settlement than he would
if he/she/it were found liable after a trial; (5) The financial condition and insurance policy limits of the
10 settling Defendant; and (6) Whether there is the existence of collusion, fraud, or tortious conduct
ll aimed to injure the interests of non-settling Defendants. (Id., at p. 499.)
12 Here, the Tech-Bilt factors are met:
13 1 Rough Approximation of Plaintiffs’ Total Recovery and Chen's Proportionate
14 Liability
15 A good faith settlement does not call for perfect or even nearly perfect apportionment of
16 liability, but calls for only a rough approximation between a settling tortfeasor's offer of settlement and
17 his/her/its proportionate liability. (North County Contractor's Assn. v. Touchstone Ins. Services
18 (1994) 27 Cal.App.4'h 1085, 1090-1091.)
19 Chen wholly disputes they are liable in any manner for any of Plaintiffs’ allegations and were
20 prepared to defend Plaintiffs’ claims based upon specific verified facts. However, the amount being
21 paid to Plaintiffs in the settlement is reasonable and determined through careful consideration of the
22 attorneys’ fees and costs associated with continuing this litigation.
23 2 Settlement Amount
24 Plaintiffs have agreed to accept the amount remaining on the policy - $76,000 in exchange for a
25 full release of all claims and a waiver of the protections of Civil Code Section 1542.
26 3 Allocation of Settlement Proceeds among Plaintiffs
27 This Tech-Bilt factor is inapplicable, as a single payment is being made to both Plaintiffs.
28 //1
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
4 Settlement Amount Less Than the Amount That Would Be Paid If Chen were
Found Liable at Trial
Taking into consideration the cost to litigate against Plaintiffs’ claims, the limited amount of
coverage, Chen’s unavailability and the potential risk of exposure to Chen, the settlement allows the
parties to conclude the action, avoid the uncertainty of litigation and the settlement amount is less than
or close to the amount that Chen would pay should the matter proceed to trial.
5 Chen's Financial Condition and Insurance Policy Limits
The settlement of $76,000 is the amount remaining on Chen’s $100,000 “burning limits”
policy: All funds used for the defense of the action lowering the amount available for indemnity to pay
10 any settlement and/or judgment rendered in the action. Moreover, Chen is unavailable to make any
11 personal contribution to the settlement.
12 6. Existence of Collusion, Fraud, or Tortious Conduct.
13 This action was filed over two-years ago on May 30, 2017, with liability being disputed. The
14 settlement is intended to prevent Chen from expending further amounts in continued litigation with
15 Plaintiffs. There is no collision, fraud or tortious conduct in connection with the settlement. In fact,
16 counsel for the other Defendants - TONY YE, TREE LINED PROPERTIES LLC and TREE LINED
17 HOLDINGS, LLC - has advised they do not oppose Chen’s application.
18 VI. CONCLUSION
19 Based on the foregoing, Defendants JEAN D. CHEN and LAW OFFICES OF JEAN D. CHEN
20 respectfully request that the Court enter an order finding the settlement between these Defendants and
21 Plaintiffs TRUE SOLAR USA INC. and JONES DEVELOPMENT PROJECTION, LLC to be in good
22 faith, pursuant to Code of Civil Procedure Section 877.6.
29,
DATED: August, 2019 BERMAN BERMAN BERMAN
24 SCHNEIDER & L ARY, LLP
25
26
By
TEPHANIE BERMAN SCHNEIDER
HOWARD SMITH
27 Attorneys for Defendants,
JEAN D. CHEN and LAW OFFICES OF
28 JEAN D. CHEN
8
NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
PROOF OF SERVICE
STATE OF CALIFORNIA )
) ss.
COUNTY OF PLACER )
Tam employed in the County of Los Angeles, State of California. I am over the age of 18 and
not a party to the within action. My business address is 11900 W. Olympic Blvd., Suite 600, Los
Angeles, CA 90064
On
SETTLEMENT
August
Ag
AN
2019, I served the foregoing document
APPLICATION OF DEFENDANTS JEAN D. CHEN AND LAW
OFFICES OF JEAN D. CHEN FOR DETERMINATION OF GOOD FAITH SETTLEMENT
described as "NOTICE OF
(CODE OF CIVIL PROCEDURE SECTION 877.6)" on the interested parties in this action by
placing a [X] true copy thereof[ ] the original document enclosed in a sealed envelope addressed as
follows:
[SEE ATTACHED SERVICE LIST]
10 X (BY MAIL) In accordance with the regular mail collection and processing practices of this
business office, with which I am familiar, by means of which mail is deposited with the United States
ll Postal Service at Roseville, California that same day in the ordinary course of business, I deposited
such sealed envelope for collection and mailing on this same date following ordinary business
12 practices, which includes the use of certified mail, return receipt requested pursuant to Code of Civil
Procedure Section 877.6(a)(2).
13
(BY ELECTRONIC MAIL) Based on the parties’ agreement to accept service by electronic
14 transmission, I sent the above document(s) to the person(s) at the electronic address(es) noted in the
attached service list from my electronic service address which is “msperez@b3law.com”
15
(BY OVERNIGHT MAIL)
16 I caused such envelope to be delivered by hand to the office of the
a
addressee, either by overnight delivery via Federal Express or Overnite Express.
17
(BY PERSONAL SERVICE)
18 = By personally delivering copies to the person served.
— I delivered such envelope by hand to the office of the addressee pursuant to
19 C.C.P. Section 1011.
I caused such envelope to be delivered by hand to the office of the
20 addressee, by local courier service.
I caused such envelope to be delivered to the office of the addressee, by
21 telecopier or facsimile machine. Proof of such delivery is attached hereto.
22 STATE
Xx I declare under penalty of perjury under the laws of the State of California that the above is
23 true and correct.
24 Executed on August (2019, at Los Angeles, California.
25
Maria S. Perez
26 Name Si ture
27
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
Service List
True Solar USA Inc., et al. v. Jean D, Chen, et al.
Santa Clara Superior Court Case No: 17CV311092
James L. Jacobs, Esq.
Kathryn C. Curry, Esq.
GCA LAW PARTNERS LLP
2570 W. El Camino Real, Suite 400
Mountain View, California 94040
Telephone: (650)428-3900
Facsimile:
ve (650)428-3901
acobs@gcalaw.com
keurry@gcalaw.con
Attorneys for Plaintiff
10 TRUE SOLAR USA INC, and
JONES DEVELOPMENT PROJECT LLC
1
David S. Henshaw, Esq.
12 HENSHAW & HENRY, PC
1871 The Alameda, Suite 333
13 San Jose, CA 95126
14
Telephone: (408)533-1075
Fax: (408)583-4016
david@henshawhenry.com
1S Attorneys for Defendants,
TONY YE aka TONY JIANYUN YE and
16 TREE LINED HOLDINGS, LLC
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NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT.
Preview
Stephanie Berman Schneider - SBN 168519 Howard Smith - SBN 166571 BERMAN BERMAN BERMAN SCHNEIDER & LOWARY, LLP 11900 West Olympic Blvd., Suite 600 Los Angeles, California 90064-1151 Telephone: (310) 447-9000 Facsimile: (310) 447-9011 Attorneys for Defendants, JEAN D, CHEN and LAW OFFICES OF JEAN D. CHEN SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA — UNLIMITED JURISDICTION 10 11 TRUE SOLAR USA INC, a California CASE NO: 17CV311092 corporation and JONES DEVELOPMENT [Assigned to Honorable William J. Elfving] 12 PROJECTION, LLC, a California limited Action Filed: May 30, 2017 liability company 13 Plaintiffs, NOTICE OF SETTLEMENT AND 14 APPLICATION OF DEFENDANTS JEAN D. VS. CHEN AND LAW OFFICES OF JEAN D. 15 CHEN FOR DETERMINATION OF GOOD JEAN D. CHEN, an individual; TONY YE) FAITH SETTLEMENT (CODE OF CIVIL 16 (aka Tony Jianyun Ye), an individual, LAW ) PROCEDURE SECTION 877.6) OFFICES OF JEAN D, CHEN, a 17 Professional Corporation, TREE LINED PROPERTIES LLC, a California limited [Filed concurrently: (1) Declaration of 18 liability company, TREE LINED Howard Smith with Exhibits; and (2) HOLDINGS, LLC, a California limited [Proposed] Order.] 19 liability company and DOES 1-50, 20 Defendants. Trial Date: None 21 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: 22 PLEASE TAKE NOTICE that Defendants JEAN D, CHEN and LAW OFFICES OF JEAN D. 23 CHEN (collectively “Chen”) hereby apply to this Court for an order determining that their settlement 24 with Plaintiffs TRUE SOLAR USA INC. and JONES DEVELOPMENT PROJECTION, LLC 25 (“Plaintiffs”) is in good faith pursuant to Code of Civil Procedure Section 877.6, thereby dismissing all 26 potential Cross-Complaints or third-party Complaints and barring all claims against Chen for Equitable 27 Comparative Contribution or Partial or Comparative Indemnity based upon claims which include 28 Comparative Negligence or Comparative or Total Equitable Indemnity. 1 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT As the settlement between Plaintiffs and Chen only applies to Chen and no other Defendants in the action, the settlement is contingent upon Chen obtaining a good faith settlement determination. This (unopposed) application is submitted on the grounds the settlement meets the standard of "good faith" set forth by the California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 448, 499 on grounds, which include the following: 1 Chen disputes liability for all of Plaintiffs’ claims and allegations; 2 There is only limited insurance coverage available and Plaintiffs have agreed to accept the amount remaining on Chen’s $100,000 “burning limits” policy - $76,000; 3 Another civil action and related criminal proceeding were filed against Chen during the pendency of this action, which would both take priority over this case; and 10 4 Chen is unavailable to contribute any additional funds to the settlement. 11 (Declaration of Howard Smith (“Smith Dec.”), at §§.3-8, 10-11; Exhibits “2-4.”) 12 This application is unopposed as David Henshaw, Esq. of HENSHAW & HENRY, PC, counsel 13 for the other Defendants in this action, TONY YE aka TONY JIANYUN YE, and TREE LINED 14 HOLDINGS, LLC has advised these Defendants do not oppose Chen’s Application for Determination 15 of Good Faith Settlement. (Smith Dec., at 4.12; Exhibit “7.”) 16 This application is based on this notice and application, the concurrently filed declaration of 17 Howard Smith with exhibits, all pleadings, papers and records on file in this action, and upon such 18 other oral argument and documentary evidence as may be presented. Pursuant to Code of Civil 19 P re ‘ocedure Section 877.6 (a)(2), copies of this notice and application, the declaration of Howard Smith 20 with Exhibits and [Proposed] Order are being served on all of the other parties in this action through 21 certified mail, return receipt requested. 22 DATED: Augus br, BERMAN BERMA E) [AN 23 LLP 24 B 25 STEPHANIE BERMAN SCHNEIDER HOWARD SMITH 26 Attorneys for Defendants, JEAN D. CHEN and LAW OFFICES OF 27 JEAN D,. CHEN 28 2 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT I INTRODUCTION AND SUMMARY OF ARGUMENT. Plaintiffs TRUE SOLAR USA INC and JONES DEVELOPMENT PROJECTION, LLC (“Plaintiffs”) and Defendants JEAN D. CHEN and LAW OFFICES OF JEAN D. CHEN (collectively referred to as “Chen”) have reached a settlement in this action. As the settlement is contingent upon Chen obtaining a good faith settlement determination, Chen submits this (unopposed) application. (Declaration of Howard Smith (“Smith Dec.”), at §.12; Exhibit “7.”) IL. STATEMENT OF FACTS Plaintiffs filed this action on May 30, 2017, against Chen and two other Defendants, TONY YE, TREE LINED PROPERTIES LLC and TREE LINED HOLDINGS, LLC. (Smith Dec., at {f].1, 2; 10 Exhibit “1.”) Plaintiffs allege Defendants provided them with investment advice to purchase an item 11 of commercial real estate and during the transaction, Chen took a commission and/or secured a profit 12 of over $680,000 from the purchase without making the necessary disclosures. (Smith Dec., at §.2; 13 Exhibit “1,” at 49.21, 26, 41-42, 54.) Defendants deny these allegations. (Smith Dec., at §.2.) 14 Chen is being defended in this action under a policy of professional liability insurance with 15 Imperium Insurance Company. (Smith Dec., at §.3; Exhibit “2,” at p.6, line 20 through p.7, lines 16.) 16 The firm of Berman Berman Berman Schneider & Lowary, LLP has been appointed by Imperium to 17 defend Chen in this action. (Smith Dec., at .3.) The Imperium policy has limits of $100,000 on “a 18 burning limits” basis, with all funds used for the defense of the action lowering the amount available 19 for indemnity to pay any settlement and/or judgment rendered in the action. (Smith Dec., at 4.3; 20 Exhibit “2,” at p.7, lines 11-16.) Given the limited available insurance coverage, Chen sought to settle 21 the action without protracted litigation. (Smith Dec., at .3.) Plaintiffs, however, were reluctant to 22 reach an early settlement. (Smith Dec., at 4.3.) 23 Chen wholly disputes they are liable in any manner for any of Plaintiffs’ allegations and were 24 prepared to defend Plaintiffs’ claims based upon the following verified facts: 25 “First, no fraud of any kind took place in connection with the 26 April 2013 real estate transaction at issue in this case. The $2.9 million 27 sale price was fully disclosed to Plaintiffs. Ms. Lanlan Fei, the 51% 28 shareholder of Jones Development at the time, specifically stated that 1 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT this sale price was acceptable to her. She was not interested in the profit that Tree Lined Holdings would be making, but instead was only interested in how much profit she stood to make in the future. Ms. Fei also specifically stated that she was agreeable to Defendant Tree Lined’s expected $600,000 profit from the transaction at issue, as the land was valuable. This conversation took place among four people: Ms. Lanlan Fei, Mr. Yi Li, Jean Chen, and Tony Ye. Ms. Fei held 51% of the ownership of the property purchased, and Mr. Yi Li held 49% ownership. Ms. Fei was the controlling shareholder. 10 The price Tree Lined Holdings paid to purchase the property 11 from its prior owner was a matter of public record. That public record 12 of the prior transaction clearly shows that Tree Lined would be making 13 a $600,000 profit above its initial purchase price, and Tony Ye was the 14 owner of Tree Lined Holding, as shown on a previous deed in January 15 2013. In addition to all of the written property discloses from the title 16 company and oral disclosures from Jean Chen and Tony Ye, public 17 records will show all the 2013 transaction, and Tony Ye as owner of 18 Tree Lined Holdings. 19 Plaintiffs’ claim is barred by the three-year statute of 20 limitations for fraud. Plaintiffs had full knowledge at the time of the 21 April 20, 2013 transaction of the price of the property, the profit made 22 on the sale, the relationships between Ms. Chen, Mr. Ye and the Tree 23 Lined Properties Defendants, and all information material to the sale. 24 This was over three years before this action was filed on May 30, 2017. 25 There was no attorney-client relationship with respect to the 26 transaction at issue. Any immigration law matters for which the 27 Plaintiffs were represented by the Law Offices were entirely distinct 28 from and unrelated to the claims in this case, which was based on a real 2 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT estate transaction that did not involve legal representation or require representation under California law, and Plaintiffs knew these facts. Rather, the April 2013 sale was conducted by Old Republic Title Company, with all proper disclosures as part of the real estate transaction. Each immigration or other corporate matter for which the Law Offices may have represented Plaintiffs was separately performed and billed. The Commercial Purchase and Sale Agreement at issue in this case was not prepared by the Law Offices of Jean D, Chen. The Plaintiffs incorrectly allege Chen and her firm “strongly 10 encouraged” them to pursue the formation of regional center, and 11 promoted the concept that forming a regional center would be very 12 profitable. This is wrong. Jones Development’s former owners, Ms. 13 Lanlan Fei and Yi Li, are sophisticated developers and investors, who 14 are quite experienced in investment and real estate matters. It was their 15 decision to pursue the regional center. Both signed the retainer 16 agreement to retain Law Offices of Jean D. Chen to start the regional 17 center application process. But regardless—and most importantly—the 18 regional center application was an entirely separate legal matter, 19 unrelated to the April 2013 real estate sale, the subject of this lawsuit. 20 Additionally, Plaintiffs knew Defendant Ye was involved with 21 Tree Lined Properties, LLC, that Ms. Chen was not handling this 22 transaction in any professional capacity, that TLP made $600,000 from 23 the 2013 sale of the 180 Jones Property, and that no information 24 material to the transaction was ever withheld from the Plaintiffs. 25 Tony Ye also personally accompanied Ms. Fei to San 26 Francisco City Hall to confirm entry of the property public records, 27 which had already been disclosed to Ms. Fei. Ms. Fei also contacted 28 builders and architects to commence construction of the house at the 3 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT land. Ms. Fei was determined to build the houses on the site; she indicated that this was what Mr. Li wanted her to do because Mr. Li did not want her to be bored. Ms. Fei and Mr. Li were long-time friends. At that time, they were living together. Plaintiffs suffered no injury or damages in any event, as they later flipped this same property a short time later, selling it for $6 million to a foreign investor in or around October 2015. This later sale yielded Plaintiffs a $3 million profit, such that they cannot now claim that they were injured in any way by the earlier April 2013 transaction 10 at issue in this case.” 11 (Smith Dec., at 4.4; Exhibit “2,” at p.8, line 28 through p.10, line 23.) 12 During the course of this action, another civil action and related criminal proceeding were filed 13 against Chen. (Smith Dec., at 5.) On October 18, 2018, public information reveals that the Security 14 and Exchange Commission (SEC) filed a civil action against Chen and others. (Smith Dec., at .6; 15 Exhibit “3.”) “The SEC’s Complaint alleges that Jean Danhong Chen, Tony Jianyun Ye and Law 16 Offices of Jean D. Chen, with the assistance of a personal friend, Kuansheng Chen, secured over $10 17 million in undisclosed commissions by selling EB-5 securities to hundreds of Chen’s legal clients.” 18 (Smith Dec., at §.6,; Exhibit “3.”) 19 After the SEC Complaint was filed, public information reveals that “[a] Federal grand jury 20 indicted San Jose Immigration lawyer Danhong ‘Jean’ Chen and her ex-husband and office manager 21 Jianyun ‘Tony’ Ye ina fraud scheme targeting more than 100 foreign investors looking to obtain visas 22 into the United States, according to authorities.” (Smith Dec., at §.7; Exhibit “4.”) It was also 23 publically reported that while Ye appeared in federal court and was released on bond, “Chen remains 24 at large,” having become a “naturalized citizen of Dominica, a small Caribbean island, and fled the 25 country,” (Smith Dec., at §.7; Exhibit “4.”) 26 Given the pending SEC action and the fact Chen appears to no longer be present in the United 27 States, Plaintiffs have agreed to settle their claims against Jean Chen and the Law Offices of Jean Chen 28 for the amount remaining on the “burning limits” policy - $76,000. (Smith Dec., at §.8; Exhibit “5.”) 4 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT As the settlement would only apply to Chen and no other Defendants, the settlement is contingent upon Chen obtaining a good faith settlement determination. (Smith Dec., at §.8; Exhibit “5.”) This application requests a determination the settlement between Plaintiffs and Chen is in good faith pursuant to Code of Civil Procedure Section 877.6, as it meets the standard set forth in Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 448, 499. This application is unopposed as David Henshaw, Esq. of HENSHAW & HENRY, PC, counsel for the other Defendants in this action, TONY YE aka TONY JIANYUN YE, and TREE LINED HOLDINGS, LLC has advised that these Defendants do not oppose Chen’s Application for Determination of Good Faith Settlement. (Smith Dec., at §.12; Exhibit “7.”) 10 Ill. TERMS OF SETTLEMENT ll The material terms of the settlement between Plaintiffs and Chen are as follows: 12 qd) Chen will pay Plaintiffs $76,000 (the amount remaining on the 13 $100,000 burning limits policy); 14 (2) Plaintiffs agree to release and discharge Chen from all claims 15 related to the allegations set forth in the operative Second 16 Amended Complaint; 17 (3) Plaintiffs will waive the protection of Civil Code Section 1542; 18 (4) Plaintiffs will file a Request for Dismissal with prejudice as to 19 their Complaint against Chen; 20 () The settlement is contingent upon a good faith settlement 21 determination; 22 (6) Each party to bear his/her/its own attorneys’ fees and costs; and; 23 %) No party to the settlement is admitting to the sufficiency of any 24 claims, allegations, assertions, defenses, contentions or 25 positions of any other party. 26 || (Smith Dec., at 9.8; Exhibit “5.”) 271 1// 284 /// 5 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT 1 IV. STATUTORY BASIS FOR SETTLEMENT Pursuant to the Code of Civil Procedure Section 877.6(a)(2), this Court may determine a settlement to be in good faith without the necessity of a motion or hearing, as follows: “A settling party may give notice of a settlement to all parties and to the court, together with an application for determination of good faith settlement and a proposed order. The application shall indicate the settling parties, and the basis, terms and amount of the settlement. The notice, application and proposed order shall be given by certified mail, return receipt requested. Proof of service shall be filed with the court. 10 Within 25 days of the mailing of the notice, application and proposed ll order, a non-settling party may file a notice of motion to contest the 12 good faith of the settlement. If none of the non- settling parties files a 13 motion within 25 days of mailing of the notice, application and 14 proposed order, the Court may approve the settlement.” 15 A determination that the settlement was reached in "good faith" also authorizes the Court to 16 dismiss and/or bar any actual or potential claims for Indemnity or Contribution pursuant to Code of 17 Civil Procedure Section 877.6(c), which provides, as follows: 18 “A determination by the Court that the settlement was made in good 19 faith shall bar any other joint tortfeasor or co-obligor from any further 20 claims against the settling tortfeasor or co-obligor for equitable 21 comparative contribution, or partial or comparative indemnity based on 22 comparative negligence or comparative fault.: 23 Concurrently with the filing of this notice/application, Chen is serving all parties to the action, 24 with the Declaration of Howard Smith with exhibits and a [Proposed] Order Determining Good Faith 25 Settlement. Pursuant to Code of Civil Procedure Section 877.6(a)(2), these documents will be served 26 on the other parties through certified mail, return receipt requested. 27 //1 28 //1 6 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT 1 Vv. THE SETTLEMENT IS IN GOOD FAITH A. The Settlement between Plaintiffs and Chen Meets the Tech-Bilt Standard for a Good Faith Settlement The California Supreme Court's decision in Tech-Bilt, Inc. v. Woodward-Clyde & Associates, supra, 38 Cal.3d at p. 448, sets forth the standard by which the "good faith" of a settlement is determined. The factors include: (1) A rough approximation of Plaintiff's total recovery and the settlor's proportionate liability; (2) The amount paid in settlement; (3) The allocation of the settlement proceeds among Plaintiffs; (4) A recognition that a settlor should pay less in settlement than he would if he/she/it were found liable after a trial; (5) The financial condition and insurance policy limits of the 10 settling Defendant; and (6) Whether there is the existence of collusion, fraud, or tortious conduct ll aimed to injure the interests of non-settling Defendants. (Id., at p. 499.) 12 Here, the Tech-Bilt factors are met: 13 1 Rough Approximation of Plaintiffs’ Total Recovery and Chen's Proportionate 14 Liability 15 A good faith settlement does not call for perfect or even nearly perfect apportionment of 16 liability, but calls for only a rough approximation between a settling tortfeasor's offer of settlement and 17 his/her/its proportionate liability. (North County Contractor's Assn. v. Touchstone Ins. Services 18 (1994) 27 Cal.App.4'h 1085, 1090-1091.) 19 Chen wholly disputes they are liable in any manner for any of Plaintiffs’ allegations and were 20 prepared to defend Plaintiffs’ claims based upon specific verified facts. However, the amount being 21 paid to Plaintiffs in the settlement is reasonable and determined through careful consideration of the 22 attorneys’ fees and costs associated with continuing this litigation. 23 2 Settlement Amount 24 Plaintiffs have agreed to accept the amount remaining on the policy - $76,000 in exchange for a 25 full release of all claims and a waiver of the protections of Civil Code Section 1542. 26 3 Allocation of Settlement Proceeds among Plaintiffs 27 This Tech-Bilt factor is inapplicable, as a single payment is being made to both Plaintiffs. 28 //1 7 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT 4 Settlement Amount Less Than the Amount That Would Be Paid If Chen were Found Liable at Trial Taking into consideration the cost to litigate against Plaintiffs’ claims, the limited amount of coverage, Chen’s unavailability and the potential risk of exposure to Chen, the settlement allows the parties to conclude the action, avoid the uncertainty of litigation and the settlement amount is less than or close to the amount that Chen would pay should the matter proceed to trial. 5 Chen's Financial Condition and Insurance Policy Limits The settlement of $76,000 is the amount remaining on Chen’s $100,000 “burning limits” policy: All funds used for the defense of the action lowering the amount available for indemnity to pay 10 any settlement and/or judgment rendered in the action. Moreover, Chen is unavailable to make any 11 personal contribution to the settlement. 12 6. Existence of Collusion, Fraud, or Tortious Conduct. 13 This action was filed over two-years ago on May 30, 2017, with liability being disputed. The 14 settlement is intended to prevent Chen from expending further amounts in continued litigation with 15 Plaintiffs. There is no collision, fraud or tortious conduct in connection with the settlement. In fact, 16 counsel for the other Defendants - TONY YE, TREE LINED PROPERTIES LLC and TREE LINED 17 HOLDINGS, LLC - has advised they do not oppose Chen’s application. 18 VI. CONCLUSION 19 Based on the foregoing, Defendants JEAN D. CHEN and LAW OFFICES OF JEAN D. CHEN 20 respectfully request that the Court enter an order finding the settlement between these Defendants and 21 Plaintiffs TRUE SOLAR USA INC. and JONES DEVELOPMENT PROJECTION, LLC to be in good 22 faith, pursuant to Code of Civil Procedure Section 877.6. 29, DATED: August, 2019 BERMAN BERMAN BERMAN 24 SCHNEIDER & L ARY, LLP 25 26 By TEPHANIE BERMAN SCHNEIDER HOWARD SMITH 27 Attorneys for Defendants, JEAN D. CHEN and LAW OFFICES OF 28 JEAN D. CHEN 8 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF PLACER ) Tam employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is 11900 W. Olympic Blvd., Suite 600, Los Angeles, CA 90064 On SETTLEMENT August Ag AN 2019, I served the foregoing document APPLICATION OF DEFENDANTS JEAN D. CHEN AND LAW OFFICES OF JEAN D. CHEN FOR DETERMINATION OF GOOD FAITH SETTLEMENT described as "NOTICE OF (CODE OF CIVIL PROCEDURE SECTION 877.6)" on the interested parties in this action by placing a [X] true copy thereof[ ] the original document enclosed in a sealed envelope addressed as follows: [SEE ATTACHED SERVICE LIST] 10 X (BY MAIL) In accordance with the regular mail collection and processing practices of this business office, with which I am familiar, by means of which mail is deposited with the United States ll Postal Service at Roseville, California that same day in the ordinary course of business, I deposited such sealed envelope for collection and mailing on this same date following ordinary business 12 practices, which includes the use of certified mail, return receipt requested pursuant to Code of Civil Procedure Section 877.6(a)(2). 13 (BY ELECTRONIC MAIL) Based on the parties’ agreement to accept service by electronic 14 transmission, I sent the above document(s) to the person(s) at the electronic address(es) noted in the attached service list from my electronic service address which is “msperez@b3law.com” 15 (BY OVERNIGHT MAIL) 16 I caused such envelope to be delivered by hand to the office of the a addressee, either by overnight delivery via Federal Express or Overnite Express. 17 (BY PERSONAL SERVICE) 18 = By personally delivering copies to the person served. — I delivered such envelope by hand to the office of the addressee pursuant to 19 C.C.P. Section 1011. I caused such envelope to be delivered by hand to the office of the 20 addressee, by local courier service. I caused such envelope to be delivered to the office of the addressee, by 21 telecopier or facsimile machine. Proof of such delivery is attached hereto. 22 STATE Xx I declare under penalty of perjury under the laws of the State of California that the above is 23 true and correct. 24 Executed on August (2019, at Los Angeles, California. 25 Maria S. Perez 26 Name Si ture 27 28 1 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT Service List True Solar USA Inc., et al. v. Jean D, Chen, et al. Santa Clara Superior Court Case No: 17CV311092 James L. Jacobs, Esq. Kathryn C. Curry, Esq. GCA LAW PARTNERS LLP 2570 W. El Camino Real, Suite 400 Mountain View, California 94040 Telephone: (650)428-3900 Facsimile: ve (650)428-3901 acobs@gcalaw.com keurry@gcalaw.con Attorneys for Plaintiff 10 TRUE SOLAR USA INC, and JONES DEVELOPMENT PROJECT LLC 1 David S. Henshaw, Esq. 12 HENSHAW & HENRY, PC 1871 The Alameda, Suite 333 13 San Jose, CA 95126 14 Telephone: (408)533-1075 Fax: (408)583-4016 david@henshawhenry.com 1S Attorneys for Defendants, TONY YE aka TONY JIANYUN YE and 16 TREE LINED HOLDINGS, LLC 17 18 19 20 21 22 23 24 25 26 27 28 2 NOTICE OF SETTLEMENT AND APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT.