Yan v. Lei et al

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MEMO RE TONY FU’S
MTN FOR SUMM. JUDG. 	-1-
UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re
DEMAS WAI YAN, aka DENNIS YAN,
Debtor.
DEMAS WAI YAN, aka DENNIS YAN,
Plaintiff,
vs.
LI MING LEI, aka CRYSTAL LEI, and
DONG XING FU, aka TONY FU,
Defendants.
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Case No. 04-33526 TEC 7
Chapter 7
Adv. Proc. No. 07-3082 TC
Date: November 2, 2007
Time: 9:30 a.m.
Ctrm: Hon. Thomas E. Carlson
235 Pine Street
San Francisco, CA
MEMORANDUM RE TONY FU’S MOTION FOR SUMMARY JUDGMENT
On November 2, 2007, the court held a hearing on Defendant
Tony Fu’s Motion for Summary Judgment. 	Joanne Lafreniere appeared
for the chapter 7 trustee. 	Demas Wai Yan appeared in pro per.
Tony Fu also appeared in pro per. 	Bartholomew Lee appeared for
Crystal Lei.
Signed and Filed: January 08, 2008
________________________________________
THOMAS E. CARLSON
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
January 09, 2008
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 07-03082 Doc# 15 Filed: 01/08/08 Entered: 01/09/08 08:54:08 Page 1 of 5

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MEMO RE TONY FU’S
MTN FOR SUMM. JUDG. 	-2-
Because the claims asserted by Yan against Fu in the above-
captioned adversary proceeding are barred by the doctrine of claim
preclusion, it is not necessary to address the merits of Fu’s
motion. 	The court will enter an order dismissing the adversary
proceeding with prejudice as to Fu.
FACTS
In early December 2005, this court concluded a trial in
consolidated adversary proceedings nos. 05-3236 and 05-3257
(collectively, the Prior Proceedings), in which Yan asserted claims
against Fu regarding Yan and Fu’s joint venture to develop 663
Chenery St., San Francisco, California. 	The assignee of Fu’s
interest in the joint venture, Wei Suen, asserted claims against
Yan to recover proceeds from the joint venture. 	Crystal Lei was
not a party to the Prior Proceedings.
On December 22, 2005, the court entered in the Prior
Proceedings its decision after trial and a judgment (Judgment).
The Judgment provides in part as follows:
(2) Demas Yan is entitled to a determination that he
has no enforceable obligation to Tony Fu or Wei Suen. 	He
is entitled to no further relief against Stella Chen,
Tony Fu or Wei Suen.
(3) Wei Suen shall recover nothing on his complaint.
Judgment, at 2:9-11.
On July 2, 2007, Yan filed an action in San Francisco Superior
Court against Fu and Lei, entitled Yan vs. Lei et al., Case No. 07-
464671 (State-Court Action).
In the State-Court Action, Yan asserts three claims arising
out of the Chenery Street joint venture. 	Yan alleges that Fu
fraudulently induced him: (1) to deposit $236,000 in a checking
account for the purpose of developing 663 Chenery Street, and
Case: 07-03082 Doc# 15 Filed: 01/08/08 Entered: 01/09/08 08:54:08 Page 2 of 5

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MEMO RE TONY FU’S
MTN FOR SUMM. JUDG. 	-3-
(2) to execute a check in the amount of $1,000 for renovation and
repair of 663 Chenery Street (collectively the Funds). 	Yan alleges
that Fu used $173,000 of the Funds for his personal use; that on
January 15, 2002, Lei used almost half of the Funds to purchase
real property; and, that on October 12, 2002, Fu purchased a Toyota
Truck with some of the Funds.
On July 26, 2007, the trustee removed the State-Court Action
to bankruptcy court.
On August 2, 2007, Fu filed a motion for summary judgment.
On September 27, 2007, this court filed a tentative ruling
stating that it was inclined not to resolve Fu’s motion on the
merits, because it appeared that the claims asserted in the State-
Court Action were barred under the doctrine of claim preclusion.
At the hearing on Fu’s motion for summary judgment, Yan argued
that the claims in the State-Court Action are not barred because he
was unaware of their existence at the time of trial in the Prior
Proceedings.
DISCUSSION
Yan lacked standing to file the State-Court Action, because
the claims asserted therein arose prepetition and can only be
asserted in Yan’s bankruptcy case by the chapter 7 trustee. 	11
U.S.C. § 323; Estate of Spirtos v. One San Bernardino County Sup.
Court Case No. SPR 02211, 443 F.3d 1172, 1175-76 (9th Cir. 2006).
Yan’s claims against Fu are also barred by the doctrine of
claim preclusion, which bars the relitigation of claims arising out
of the same nucleus of operative facts as claims previously
litigated. 	Restatement (Second) of Judgments § 24 cmt. b (1982).
Case: 07-03082 Doc# 15 Filed: 01/08/08 Entered: 01/09/08 08:54:08 Page 3 of 5

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-4-
That a number of different legal theories casting
liability on an actor may apply to a given episode does
not create multiple transactions and hence multiple
claims. 	This remains true although the several legal
theories depend on different shadings of the facts, or
would emphasize different elements of the facts, or would
call for different measures of liability or different
kinds of relief.
Id. cmt c; accord Kabes v. School Dist. of River Falls, 387 F.Supp.
2d 955, 967 (W.D. Wis. 2005). 	Because Yan’s claims in the State-
Court Action arise out of the same nucleus of operative facts as
the claims resolved by the Judgment (i.e., the joint venture
between Yan and Fu to develop 663 Chenery Street), they are barred.
Id. 	Allowing Yan to bring a new lawsuit regarding 663 Chenery
Street every time he discovers additional causes of action would
undermine the finality of the Judgment. 	Id. 	The above-captioned
adversary proceeding should be dismissed with prejudice as to Fu.
Because Lei was not a party to the Prior Proceedings, the
trustee may assert the claims against Lei in the State-Court Action
as a set-off to Lei’s proof of claim.
**END OF MEMORANDUM**
Case: 07-03082 Doc# 15 Filed: 01/08/08 Entered: 01/09/08 08:54:08 Page 4 of 5

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Court Service List
Dong Xing Fu
aka Tony Fu
5813 Geary Boulevard
PMB 188
San Francisco, CA 94121
Li Ming Lei
aka Crystal Lei
337 28th Avenue
San Francisco, CA 94121
Demas Wai Yan
1433 7th Avenue
San Francisco, CA 94122
Joanne M. LaFreniere, Esq.
Law Offices of Stromshiem and Associates
201 California Street, Suite 350
San Francisco, CA 94111
Bartholomew Lee, Esq.
Spiegel Liao & Kagay, LLP
338 Market St., Ste 900
San Francisco, CA 94111
Case: 07-03082 Doc# 15 Filed: 01/08/08 Entered: 01/09/08 08:54:08 Page 5 of 5