In a legal fraud conspiracy case, Riverside Superior Judge Carol Greene tentatively sustained a demurrer to release a bank and a loan officer from four causes of action.
Plaintiff Yangling Liu bought a Corona property for $609,000 in June 2017, using a $406,000 loan from Ding Hong Holding Limited, a Hong Kong company.
Liu was later swindled by multiple actors into signing documents for a new loan in favor of Chen Jingping, Liu claims.
While signing the loan documents, conspirators inserted an extra signatory page later used as a signatory page for a second deed of trust for her property also in favor of Jingping, and inserted a note stating that Jingping had lent Liu $360,000, Liu’s complaint claimed, according to the tentative ruling.
Liu received a notice of default against her property in December, 2020, in connection with a loan secured by the second deed of trust, according to the ruling.
Her complaint claims quiet title, cancellation of instruments, wrongful foreclosure, declaratory relief, slander of title, fraud/deceit and negligence, variously applied across seven defendants, including the the loan agent, Cynthia Li; the loan’s originator, Tina Chen; and the bank they work for, Sterling Bank.
Sterling Bank demurred as to the slander of title, fraud/deceit and negligence claims, and so did Chen through a joiner.
The court approved the demurrer for the bank, and sustained the demurrer for the slander of title claim against Chen.
Sterling Bank
Liu attempted to hold Sterling Bank responsible for Li’s actions, but the claims against Sterling Bank failed because they don’t demonstrate vicarious liability, the ruling found.
A principal may be liable for the wrongful conduct committed by its agent if the principal directly authorizes the act to be committed, if the agent commits the act in the scope of their employment and in performing service on behalf of the principal, or if the principal ratifies its agents conduct after the fact by adopting the conduct as their own, the court ruled.
In this case, Liu alleged Li took part in a fraudulent scheme, but no evidence shows that the bank authorized Liu’s conduct, that Li’s conduct was on behalf of Sterling Bank rather than her own, or that the bank ratified her conduct, the court found.
Through another test, an employer is vicariously liable for injuries caused by an employee if the conduct was performed as required or due to their duties, or if the misconduct was reasonably foreseeable by the employer, the ruling said, referencing Halliburton Energy Services, Inc. v Department of Transportation.
Li’s alleged actions—inserting signature pages as part of a scheme—were outside the scope of her duties, the court found, and the demurrer was sustained.
Chen and slander of title
Liu’s second amended complaint, at more than 300 paragraphs, failed to prove a pecuniary loss that is needed for a slander of title claim, the court found.
Although Liu claimed she sustained more than $138,000 in damages, she failed to allege a pecuniary loss, the court found. Liu’s loans helped her pay off her property, and she does not allege that her property was foreclosed on as a direct result of the recording of the second deed of trust and the notice of default against the property, the court found. The claim for slander of title fails to allege a direct and immediate pecuniary loss, the court found.
The causes of actions for fraud and negligence were shared among defendants, including Chen, on the theory of conspiracy liability, the court found.
Parties
Edna Fok represents Liu.
Valentina Ambarchyan of Ambarchyan Law APC represents Jingping and Li.
Michelangelo Tatone represents Chen.
Oscar Ramallo represents Sterling Bank.
Maurice Wong represents defendant Phoung “Rose” Tran.
Case number CVRI2101196
