Bing Wu v. Lian Tong, LLC
| Decision Date | 30 March 2023 |
| Docket Number | A163131,A163455,A163635,A163768 |
| Parties | BING WU et al., Plaintiffs and Appellants, v. LIAN TONG, LLC, et al., Defendants and Respondents. |
| Court | California Court of Appeals |
NOT TO BE PUBLISHED
(City & County of San Francisco Super. Ct. No. CGC-21-589219)
Appellants Bing Wu and Kai Ming Lei, filed this malicious prosecution action against two sets of respondents, Lian Tong, LLC and its owner Sheng Liu (collectively, Lian Tong), and Lian Tong's former counsel, the Horner Law Group, P.C Clifford Horner, and Brendan Dooley (collectively, Horner Law). Appellants contend that respondents lacked probable cause and acted with malice when they pursued a claim against appellants for breaching a restaurant construction contract. Lian Tong and Horner Law each filed special motions to strike appellants' complaint pursuant to California's anti-SLAPP statute. (Civ. Proc. Code, § 425.16, subd (b); undesignated statutory references are to this code.) The trial court granted both motions and awarded respondents attorney fees. We affirm.
The underlying case arose out of a failed project to construct a restaurant at two commercial addresses (565 and 575) on 4th Street in San Francisco.
Property owner Lian Tong retained Bing Wu Construction Company (BW Construction) to work on its restaurant project pursuant to a contract executed on March 30, 2014 (the BW contract). Three individual contractors signed the BW contract on behalf of BW Construction: James Chen, who drafted the contract, and appellants, Wu and Lei. The BW contract was executed on behalf of Lian Tong by Yi Fang Liu (Y.F. Liu), who is the father of respondent Sheng "Leo" Liu (Liu). The seven-page contract outlines work BW Construction agreed to perform, which ranged from demolition to finishing work to other "miscellaneous" tasks. (Block capitalization omitted.) The contract price was $400,000, which was to be paid in installments as various stages of the project were completed. The last two terms of the contract became the focus of the underlying case, so we repeat them here:
This last sentence was handwritten on the typed page.
Ten months later, on February 6, 2015, Chen and Y.F. Liu executed a "Contract Termination Agreement" on behalf of BW Construction and Lian Tong. The document was handwritten by Chen in Chinese on a piece of lined paper.
On February 12, 2015, Chen on behalf of Egoodat Inc. and Y.F. Liu on behalf of Lian Tong executed a new construction contract (the Egoodat contract). This written agreement is a marked up version of the BW contract that substituted Egoodat's name for BW Construction's name at the top of the document and added the following handwritten term at the bottom: "the whole project is awarded to Egoodat, Inc. since the date of 2/12/15." Appellants are not parties to the Egoodat contract.
In February 2016, Lian Tong filed a complaint for damages arising out of the restaurant project, alleging causes of action for breach of contract against BW Construction, breach of contract and negligence against Egoodat, and fraud and breach of contract against Chen. As support for these claims, Lian Tong alleged the following facts: The BW contract Chen negotiated on behalf of BW Construction provided that work would begin "immediately" once Lian Tong provided "approved permits and drawings," and the parties "agreed and understood" that the project would be completed within six months, "or approximately by early October 2014." For months, Chen made false representations that work was progressing. In February 2015, Lian Tong discovered that no work had been completed, and Chen admitted that his business partner had stolen the BW contract funds, which prevented BW Construction from starting work. Because BW Construction failed to perform, Lian Tong had to find another contractor, and Chen proposed that his other company, Egoodat, would do the work. On February 12, 2015, the parties made handwritten changes to the BW contract and then executed that document. Egoodat's work was deficient, and the project was never completed. Ultimately, Lian Tong was forced to terminate its lease with its restaurant tenant and suffered damages in excess of $1,000,000.
Chen and Egoodat filed a joint answer to Lian Tong's complaint, and Egoodat also filed a cross-complaint against Lian Tong for breach of contract and "Common Counts." Initially, BW Construction failed to respond to the complaint, but in September 2016, appellants obtained relief from default and filed a general denial answer on behalf of BW Construction, which they identified as their fictitious business name.
Appellants also filed a cross-complaint against Lian Tong and Y.F. Liu for breach of contract, fraud, and declaratory relief. Appellants alleged that Lian Tong breached the 2015 termination contract by failing to release appellants from the BW contract and that Y.F. Liu fraudulently induced appellants to execute the 2015 contract by falsely representing that appellants would be released from the BW contract.
As support for its cross-claims, appellants alleged the following facts: After executing the BW contract, Lian Tong caused delays that prevented BW Construction from starting work on the project by failing to provide approved plans and failing to obtain permission from its property owners' association. Due to such delays, "none of which were caused" by appellants, it became "impracticable and/or impossible" for BW Construction to perform the BW contract. On February 6, 2015, appellants and Lian Tong entered into a "new written contract," which released appellants' from the BW contract in exchange for a payment of $20,500 to Lian Tong and its agent, Y.F. Liu. When this new contract was negotiated, Y.F. Liu represented that appellants would be released from the BW contract if they paid $20,500, but Lian Tong and Y.F. Liu never intended to release appellants or cancel the BW contract.
Pretrial litigation was vigorous and protracted, as documented in the 30-page register of actions for the underlying case. Meanwhile, the parties actively pursued discovery, taking 11 depositions, exchanging interrogatories, and disclosing experts. Chen, appellants Wu and Lei, and respondent Liu all gave depositions. However, Y.F. Liu was in China, and the trial court denied appellants' motion to compel Lian Tong to produce Y.F. Liu for a deposition.[1]
In January 2019, appellants filed a first amended cross-complaint, which included the following new allegations: Immediately before the BW contract was executed, Y.F. Liu made false representations that Lian Tong had obtained all necessary approvals to begin construction, and that construction could begin immediately. When the BW contract was executed, Lian Tong's restaurant project had not been approved by the Palms Owners' Association (the Palms). Lian Tong's delay in obtaining approval from the Palms constituted a breach of the BW contract, prevented BW Construction from performing its contractual obligations, and "barred" Lian Tong from terminating the BW contract, appellants alleged. Appellants alleged further that they were harmed because Lian Tong misled them to believe that approval from the Palms had been obtained, and then "unreasonably delayed in obtaining [that] approval until January 2015."
Lian Tong challenged appellants' amended cross-claims by filing a motion to strike, a motion for judgment on the pleadings, and a motion for summary judgment. To support its summary judgment motion, Lian Tong obtained a declaration from Y.F. Liu that was executed in China. Y.F. Liu stated, among other things, that: Chen and his partner BW Construction agreed to build the restaurant pursuant to plans for the initial work that had been prepared by Derrick Wu, and Lian Tong provided those approved plans and permits to BW Construction, as the BW contract required; prior to execution of the BW contract, Y.F. Liu did not say or represent that Lian Tong had already obtained approval for the project from the Palms; BW Construction and Chen caused delays by failing to obtain consent for construction from the Palms and by failing to take other steps necessary to commence construction; when the BW contract was terminated, Y.F. Liu did not represent that appellants or Chen would be released from the contract but only that the agreement was terminated.
On May 14, 2019, the superior court granted Lian Tong's motion to strike portions of the first amended cross-complaint including appellants' prayer for attorney fees, which was stricken because they failed to allege any contractual or statutory basis for recovering attorney fees. The court also granted Lian Tong's motion for judgment on the pleadings, but granted appellants leave to amend its fraud claim and to allege a new cause of action for recission of the 2015 termination contract. That ruling mooted Lian Tong's fully briefed ...
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