Filed 3/17/22 Hang v. Nguyen CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Stephanie George, Judge. Reversed.

SKT Law, P.C., Heidi S. Lewis and Eliot F. Krieger for Plaintiffs and Appellants.

Buley Law APC, Michael J. Buley and Michael S. Vasin for Defendant and Respondent.

* * *

Plaintiffs Tran Thi Thu Hang and Le Quoc Bao appeal from a dismissal of their complaint as against defendant Quynh Mai Nguyen after the trial court sustained Nguyen’s demurrer to the complaint without leave to amend on grounds of misjoinder. They contend the trial court erred in sustaining the demurrer and dismissing the complaint for various substantive and procedural reasons. Among the reasons are that a finding of misjoinder was unwarranted because the complaint’s allegations evidence plaintiffs’ respective claims arise from a related series of transactions and occurrences, and there are common issues of fact and law. We agree. Allegations of a civil conspiracy among all defendants, including Nguyen, to defraud Vietnamese citizens, including Hang and Bao, through a collectively devised investment scheme involving misrepresentations, false promises and concealment, are sufficient to make permissive joinder proper. Accordingly, we reverse the judgment and remand the matter to the trial court for further proceedings, with directions to vacate the orders sustaining Nguyen’s demurrer without leave to amend, dismissing the complaint as to her and awarding her costs as a result.

FACTS

Plaintiffs sued defendants after allegedly being defrauded out of several thousands of dollars by them. The original form complaint alleged (1) fraud based on intentional misrepresentation, negligent misrepresentation, concealment and promise without intent to perform; (2) negligence; (3) breach of contract; (4) a common count for money had and received for plaintiffs’ benefit; and violation of unfair competition laws (Bus. & Prof. Code, § 17200 et seq.). It also alleged defendants conspired as to all of the foregoing and sought an accounting. A first amended complaint elaborated on plaintiffs’ accusations against defendants.

Nguyen demurred to the first amended complaint and moved to strike certain portions of it. Among other things, she argued the individual plaintiff’s respective claims were misjoined because they had no common ground in fact or law. The trial court sustained the demurrer on grounds of misjoinder and concluded the motion to strike was moot in light of the former ruling.

Plaintiffs filed a second amended complaint, including a couple of additional causes of action and incorporating additional facts. It alleged defendants conspired to fraudulently induce plaintiffs to pay money to them for services defendants never intended to provide and/or investments in non-existing or non-cooperating business entities.

More specifically as to Hang, the second amended complaint alleged Nguyen, a close friend of Hang’s at the time, introduced Hang to her business partners, Sophia and Patrick. During a meeting at which Nguyen was present, the latter two offered to sell Hang a one percent share of interest in a limited liability company which they formed and of which they were the sole members—American P3 Capital LLC (AMP3). The stated purpose of AMP3, which Sophia and Patrick said was worth $20 million, was “international advisory and investment, exclusively focused on international ‘public private partnership’ or ‘P3’ opportunities primarily in the Middle East and increased security for Vietnam’s citizens.”

In exchange for Hang’s $200,000 investment, defendants promised to arrange an L1 visa within six months which would allow her to work for AMP3 and move to the United States with her two daughters. Patrick indicated he would like Hang to manage AMP3’s purported $5 million investment in a Mullen Technologies, Inc. (Mullen Technologies) related project.

After the meeting, Nguyen called Hang three or more times per day. She lauded to Hang the benefit of AMP3’s relationship with Mullen Technologies. In addition, she underscored the magnitude of the opportunity being afforded to her by the offered investment, job, and visa.

Hang accepted the proposal and transferred $200,000 to defendants’ agent in Vietnam. Patrick confirmed receipt of the money, and roughly one week later he notified Hang they had initiated a visa case for her using the company’s attorney.

After a few months, Patrick and Sophia met Hang in Vietnam and offered her a finance manager position at AMP3. They also requested she transfer to them an additional $22,600 to pay costs and attorney fees associated with the L1 visa application. Hang did so. Roughly six months later, Patrick contacted Hang to assure her everything was “‘ok’” and they would issue letters for her visa and travel upon finalization of a business contract on which they were waiting.

The L1 visa never came to fruition. Patrick communicated to Hang he did not believe the necessary contract for AMP3 would be completed, and he simultaneously encouraged her to invest $300,000 in other businesses he and Sophia had which would qualify her for a visa under a different program. After emails from Hang to Patrick, Sophia and Nguyen about the L1 visa went unanswered, Patrick and Sophia eventually offered Hang a new job at one of their other companies—ANOI Inc. (ANOI) and/or ANOI Energy, Inc. (ANOI Energy). Unbeknownst to Hang at the time, there was no such available position.

Six months passed and Hang once again met with Patrick and Sophia, this time in San Diego. They claimed her initial investment in AMP3 was lost due to a third party failure and she needed to transfer her interest in AMP3 to ANOI and/or ANOI Energy, in addition to making a further $100,000 investment in those companies. Patrick urged her to return to the United States in two months, at which time he would have a green card ready for her and her children. Hang returned and met with Sophia and Nguyen. They informed her Patrick was living and working in Dubai for two years; they would not discuss Hang’s prior investment, the promised visa, or offered jobs. The next communication from Patrick likewise avoided discussion of those topics and instead asked for an additional $100,000 “to complete the process.”

In the end, Hang never received any promised visa or job, and, despite demands, defendants did not return any portion of the $222,600 she paid to them.

With respect to Bao, the second amended complaint alleges a similar investment scheme. Around the time Hang made her initial investment with defendants, Bao met with Patrick and Sophia in Vietnam. They offered him an L1 visa in exchange for a $150,000 investment in AMP3, which they said was worth $20 million. After Bao indicated he was not interested in the visa, Patrick and Sophia told him they would invest the money in shares of Mullen Technologies held by AMP3 in exchange for a promissory note.

Bao accepted the proposal and transferred $150,000 to defendants’ agent in Vietnam. The promissory note Bao received from Patrick in return stated AMP3 promised to pay Bao the greater of “‘interest equal to one percent per annum (1%) or the total amount of United States dollar-equivalent of twenty thousand shares (20,000) of Mullen Technology [sic] stock priced as of May 31, 2017[.]” Even though the promissory note stated AMP3 was a contractual recipient of common stock of Mullen Technologies, Bao later came to learn Mullen Technologies had ceased its business relationship with Patrick, Sophia and AMP3 months prior.

As with Hang, Bao never received the promised Mullen Technology shares and, despite demands, defendants never returned his $150,000.

Nguyen once again demurred and filed a motion to strike portions of the complaint. The trial court heard the motions and reached the same conclusion as with the prior demurrer: plaintiffs’ allegations were deficient in demonstrating a common issue of fact or law, such that plaintiffs’ claims were misjoined. As a result, the court never reached the merits of Nguyen’s other demurrer arguments or the motion to strike. It denied plaintiffs’ requested leave to amend, dismissed the entire complaint as to Nguyen with prejudice, and awarded her costs pursuant to statute.

Plaintiffs timely appealed.[1]

DISCUSSION

Plaintiffs contend the sustaining of Nguyen’s demurrer without leave to amend and dismissal of the complaint as to her with prejudice was error for four reasons. First, they argue their respective claims were properly joined in the same suit because they arise out of the same series of transactions and there are common questions of law and fact. Second, they should have been afforded leave to amend the complaint to cure the misjoinder by removing Bao’s causes of action and allegations against Nguyen. Third, the dismissal should have, at most, been limited to one plaintiff’s claims against Nguyen. Fourth, dismissal with prejudice was improper because the sustaining of the demurrer was not based on the merits of the case, but instead based on a procedural misstep by plaintiffs. We only reach the first of these arguments because we conclude the trial court erred in sustaining the demurrer on the grounds of misjoinder.

Code of Civil Procedure section 378[2] provides for joinder of more than one plaintiff in a single action under specified circumstances. In relevant part, it allows people to join in one action as plaintiffs if “[t]hey assert any right to relief jointly, severally, or in the alternative, in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action.” (§ 378, subd. (a)(1).) “It is not necessary that each plaintiff be interested as to every cause of action or as to all relief prayed for. Judgment may be given for one or more of the plaintiffs according to their respective right to relief.” (§ 378, subd. (b).)

In her demurrer, Nguyen asserted plaintiffs’ causes of action against her do not arise out of the same transaction or occurrence, or series thereof, and do not give rise to any common question of fact or law. She takes the same position on appeal. From her perspective, each plaintiff’s respective claims are entirely separate and distinct from the other’s claims, based on distinct occurrences at different times and sharing no connection.

But, case law is clear the permissive joinder standards must “be liberally construed so as to prevent the diseconomy of a ‘multiplicity’ of cases.” (Petersen v. Bank of America Corp. (2014) 232 Cal.App.4th 238, 249 (Petersen).) To that end, the “same transaction” or “series of transactions” component is satisfied if there is any factual relationship between the claims joined. (Ibid.)

Petersen is instructive. Nearly one thousand plaintiffs sued the mortgage lender from which they borrowed money to purchase houses, alleging the lender had a business strategy of using appraisers to provide inflated appraisals and inducing borrowers, through misrepresentations, to take loans the lender knew they could not afford. (Petersen, supra, 232 Cal.App.4th at p. 241.) The appellate court upheld joinder of all the plaintiffs despite the existence of separate transactions over several years, varying forms of loan impropriety and disparate damages. (Id. at p. 252.) In doing so, it emphasized the “business practice” aspect of the allegations (i.e., common factual questions) and common issues of liability (i.e., common legal questions). (Id. at pp. 252-253.)

Perhaps even more apropos to the case at hand is Adams v. Albany (1954) 124 Cal.App.2d 639 (Adams). There, the appellate court found proper a joinder of more than 40 sets of home buyers who alleged the defendants “fraudulently conspired to induce [them] to purchase homes at prices in excess of maximum ceiling prices fixed by the federal government, and in excess of their reasonable value.” (Id. at p. 640.) The allegedly fraudulent scheme involved torts taking place at different times and places, and the defendants claimed evidence as to one house would have no probative value as to any other house. (Id. at pp. 645-646.) Nevertheless, the appellate court found section 378’s “series of transactions” language satisfied by the alleged scheme involving a conspiracy to defraud home buyers using similar misrepresentations and similar kinds of transactions. (Id. at p. 647.) It explained: “A very large part of the evidence as to one of the series of incidents would be equally applicable to the others. While some of the evidence, as to details and amounts, would vary with respect to the different plaintiffs, no good reason appears in law or in reason to compel the filing of 40 separate actions, with a resulting duplication, that many times, of all of the evidence.” (Ibid.)

Here, the operative complaint alleges a conspiracy among defendants, including Nguyen, to defraud through an investment scheme targeting Vietnamese citizens. Though some of the details as to how defendants allegedly stole money from Hang and Bao are different, and the amounts at issue vary, the characteristics of the overarching scheme are consistent: Nguyen assisted Patrick and Sophia in convincing each one to invest money in a couple of shell companies in exchange for promised visas and job opportunities which never came to fruition. Bao ultimately rejected the visa offer and instead was satisfied with a direct investment for monetary gain, but such a distinction does not obviate defendants’ fundamental ploy. And though the allegations as to Nguyen’s involvement with Bao are sparce, the conspiracy allegations are sufficient to subject Nguyen to potential liability for all of Patrick and Sophia’s actions in furtherance of the investment scheme. (See Black v. Sullivan (1975) 48 Cal.App.3d 557, 566 [civil conspiracy “renders each participant in the wrongful act responsible as a joint tortfeasor for all damages ensuing from the wrong, irrespective of whether or not he was a direct actor and regardless of the degree of his activity”].)

As in Petersen and Adams, given the allegations, a large part of the evidence related to Hang’s claims would be equally applicable to Bao. By forcing them to pursue their respective claims in separate suits would impede furtherance of the purposes underlying permissive joinder of plaintiffs—access to justice and conservation of judicial resources. (See Petersen, supra, 232 Cal.App.4th at p. 253.)

In sum, the operative complaint’s allegations demonstrate plaintiffs’ claims arise out of a series of related transactions and present some common questions of fact and law. Accordingly, it was error for the trial court to sustain Nguyen’s demurrer based on grounds of improper joinder, and the dismissal and the subsequent award of costs to Nguyen must be vacated. Because the trial court did not reach the other arguments asserted by Nguyen in her demurrer and motion to strike, we remand the matter to the trial court for consideration of those matters in the first instance.

DISPOSITION

The judgment is reversed. The matter is remanded for further proceedings consistent with this opinion, and with directions to vacate the orders sustaining Nguyen’s demurrer without leave to amend, and the resulting dismissal and cost award as a result. Plaintiffs are entitled to their costs on appeal.

MARKS, J.*

WE CONCUR:

BEDSWORTH, ACTING P. J.

GOETHALS, J.

*Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

[1] Plaintiffs appeal from the order dismissing the complaint in its entirety as to Nguyen. Because the written order was signed by the trial court and filed in the action, it constitutes a judgment and plaintiffs’ appeal is proper. (See Code of Civ. Proc., § 581(d); City of Los Angeles v. City of Los Angeles Employee Relations Bd. (2016) 7 Cal.App.5th 150, 157.)

[2] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.