Feng v. Lone Oak Fund CA2/4


Filed 3/23/22 Feng v. Lone Oak Fund CA2/4 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 SECOND APPELLATE DISTRICT DIVISION FOUR ZENGPENG FENG et al., B308695 Plaintiffs and Appellants, (Los Angeles County Super. Ct. No. 19PSCV00291) v. LONE OAK FUND LLC et al., Defendants and Respondents. APPEAL from judgments of the Superior Court of Los Angeles County, Peter A. Hernandez, Judge. Reversed and remanded with directions. MagStone Law and Dezhan Li for Plaintiffs and Appellants Zengpeng Feng, Jixiang Feng and Yongxiang Feng. Garrett & Tully, Robert Garrett, Candie Y. Chang, Zi C. Lin, and Sonia Plesset Edwards for Defendants and Respondents Lone Oak Fund LLC and Royal Business Bank. Fidelity National Law Group and Kevin R. Broersma for Defendant and Respondent Qualfax, Inc. ______________________________________ INTRODUCTION Appellants Zengpeng Feng and his sons Jixiang Feng and Yongxiang Feng1 sued respondents Lone Oak Fund, LLC (Lone Oak), Qualfax, Inc. (Qualfax), and Royal Business Bank (Royal) (among others), seeking to quiet title to two pieces of real property (one owned by Jixiang and one owned by Yongxiang) or, failing that, to establish an equitable lien against the properties. Appellants alleged that, without their knowledge or consent, both properties were encumbered with deeds of trust in favor of respondents, securing loans respondents made to entities unaffiliated with appellants. Additionally, in 2019, Qualfax initiated a 1 Because appellants share a surname, we refer to them by their first names. 2 nonjudicial foreclosure sale at which it purchased Jixiang’s property. In the proceedings below, Lone Oak and Qualfax moved for judgment on the pleadings and Royal demurred. Relying on documents they asked the court to judicially notice, all argued the operative complaint failed to state causes of action against them because they were bona fide encumbrancers. The court granted both motions, sustained the demurrer without leave to amend, and subsequently entered judgments in respondents’ favor. On appeal, appellants contend both that the court erred in granting the motions and sustaining the demurrer, and that regardless, we should remand because they can amend their operative complaint to state a cause of action. We conclude we need not determine whether the court erred in granting the motions for judgment on the pleadings or in sustaining the demurrer because appellants have demonstrated a reasonable possibility that they can amend the operative complaint to state a cause of action against each respondent. We therefore reverse the judgments and remand the matter to permit them to do so. STATEMENT OF RELEVANT FACTS A. The First Amended Complaint Appellants filed a complaint in March 2019, and a first amended complaint (FAC) in June 2019. The FAC alleged that defendant Fai Wong aided appellants, “Chinese 3 nationals who have …

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