Case Name: Hoang v. Vu Nguyen, et al.
Case No.: 16-CV-300868

Plaintiff/cross-defendant Chi Hoang (“Hoang”) demurs to the cross-complaint filed by defendant/cross-complainant Vu Nguyen (“Vu”).

1. Factual and Procedural Background

This action arises out of a property and business dispute involving Hoang and defendants/cross-complainants Vu Nguyen and Thien Nguyen (“Thien”). On June 21, 2017, Hoang filed a first amended complaint (“FAC”), the operative pleading, on her own behalf and derivatively on behalf of La Belle Cosmeceuticals, Inc. (“LBC”), a cosmetics business maintained by her and Vu. On behalf of LBC, she asserts claims against Vu (and Thien) for (1) breach of fiduciary duty for abuse of control, (2) breach of fiduciary duty for gross mismanagement, (3) breach of fiduciary duty for waste of corporate assets, and (4) unjust enrichment. Individually, Hoang asserts the following claims against Vu: (5) breach of contract (6) breach of implied covenant of good faith and fair dealing; (7) unjust enrichment; (8) fraud; (9) for services rendered; (10) quantum meruit; (11) involuntary dissolution; (12) accounting and partition; and (13) declaratory relief.

The initial complaint in this action was filed by Hoang on October 11, 2016, and was a direct action which requested partition by sale of a property in San Jose equally owned by Hoang and Vu. Vu was personally served with the summons and complaint on October 17, 2016 and Thien was served on November 6, 2016. Vu did not timely file an answer and consequently, on November 23, 2016, Hoang filed a request for default, which was entered that day. Nevertheless, on December 6, 2016, Vu filed an answer and cross-complaint against Hoang jointly with Thien. As Vu was in default when he attempted to file his answer and cross-complaint, Hoang, on January 5, 2017, filed a demurrer and motion to strike these pleadings on that basis. On February 7, 2017, the Court granted the motion to strike in part and sustained the demurrer, giving defendants/cross-complainants nine days to file an amended cross-complaint. Vu and Thien subsequently filed an amended cross-complaint on February 17, 2017.

On March 2, 2017, Hoang filed another demurrer and motion to strike, the latter with respect to Vu in particular. Hoang argued that Vu had no right to participate in the proceedings at the time he filed the amended cross-complainant because default had been entered against him. Approximately a month prior to the hearing on the foregoing motions, the Court issued an order granting a motion filed by Vu to set aside his default. In the order on that motion, the Court ordered that Vu “shall file and serve his Answer to the Complaint and Cross-Complaint within twenty (20) days of notice of this Order.” Consequently, Vu’s filing deadline was March 27, 2017. Vu failed to file a cross-complaint by that time.

On April 27, 2017, the Court granted the aforementioned motion by Hoang to strike the amended cross-complaint as to Vu without leave to amend, effectively disposing of it. The Court agreed with Hoang that because he was in default at the time the amended cross-complaint was filed, Vu had no right to participate in the proceedings. In its order, the Court included the following footnote: “Notably, this ruling is not intended to, and does not, affect in any way Vu’s ability to file an initial cross-complaint in accordance with the terms of the March 7, 2017 court order, setting aside the default entered against Vu.” On May 17, 2017, Vu filed the cross-complaint that is the subject of the instant motion. The demurrer itself was filed on January 21, 2017. Vu opposes the motion.

II. Hoang’s Demurrer

As an initial matter, the Court notes that Vu filed an untimely opposition to the demurer. Code of Civil Procedure section 1005, subdivision (b), requires all opposing papers to be filed and served at least nine court days before the hearing. No papers may be rejected for filing on the ground that it was submitted late for filing. (Cal. Rules of Court, rule 3.1300(d).) If the court, in its discretion, refuses to consider a late-filed paper, the minutes or order must so indicate. (Id.)

Here, the hearing on Hoang’s demurrer is scheduled for August 1, 2017. Thus, Vu needed to file and serve his opposition papers no later than July 19, 2017 in order for them to be considered timely. However, Vu did not actually file his opposition until July 24, 2017, and in her reply filed the following day, Hoang asserts that neither of the offices of her co-counsel have received a service copy of that document as of the date of her reply. Having previously filed numerous documents with the Court, including opposition papers to various motions filed by Hoang, Vu is no stranger to the applicable filing and service deadlines. Ultimately, given the untimely filing of the opposition papers and the apparent lack of service, the Court will disregard Vu’s opposition and consider the merits of the demurrer. (See Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 765 [a trial court has broad discretion under rule 3.1300(d) of the California Rules of Court to refuse to consider papers served and filed beyond the deadline without a prior court order finding good cause of late submission].)

Turning to Hoang’s motion, she first asserts that Vu lacks standing to pursue the claims asserted in his cross-complaint because he is procedurally precluded from filing that pleading. While Hoang characterizes this argument as one based on a lack of standing, this is a misnomer because she is not arguing that Vu is not the real party in interest on the claims asserted in his cross-complaint, which is how an argument based on lack of standing is properly defined. (See Powers v. Ashton (1975) 45 Cal.App.3d 783, 787.) Rather, she is asserting that Vu lacks the ability to file his pleading based on the Court’s March 7th order on Vu’s motion to set aside default, which expressly provided that he had only until 20 days later, i.e., March 27th, to file a cross-complaint. This directive was again noted by the Court in its April 27th order on Hoang’s demurrer and motion to strike, where it advised that its striking of the amended cross-complaint as to Vu did not affect his ability to file an initial cross-complaint in accordance with the March 7th order. In other words, regardless of the amended cross-complaint being stricken as to him in particular, Vu’s ability to file the initial cross-complaint was still subject to the 20-day deadline set forth in the March 7th order. Here, based on the fact that Vu did not ultimately file his cross-complaint until well after that deadline, i.e., March 27th, on May 17, 2017, the Court finds that the appropriate course of action is to strike the pleading without leave to amend, which the Court maintains the authority to do on its own motion. (Code Civ. Proc., § 436.) Thus, Vu’s cross-complaint is STRICKEN and as a consequence, Hoang’s demurrer MOOT.