Demas Wai Yan

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UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re
DEMAS WAI YAN,
aka DENNIS YAN,
Debtor.
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Case No: 	04-33526 TEC
Chapter 7
Date: November 2, 2007
Time: 9:30 a.m.
Ctrm: Hon. Thomas E. Carlson
235 Pine Street
San Francisco, CA
MEMORANDUM RE TRUSTEE’S ORAL MOTION TO DISMISS, PURSUANT TO RULE
12(b)(6), AMENDED CLAIM NO. 9 OF TONY FU
The court held a hearing at the above date and time on the
trustee’s objection to amended claim no. 9 of Tony Fu. 	At the
hearing, the trustee orally moved to dismiss Fu’s amended claim for
failure to state a claim upon which relief can be granted. 	Joanne
LaFreniere appeared for the chapter 7 trustee. 	Tony Fu (aka Dong
Fu) appeared in pro per.
Upon due consideration, the court determines that the
trustee’s oral motion should be granted in part and denied in part.
Signed and Filed: January 31, 2008
________________________________________
THOMAS E. CARLSON
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
January 31, 2008
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 04-33526 Doc# 288 Filed: 01/31/08 Entered: 01/31/08 14:59:09 Page 1 of
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FACTS
On April 20, 2005, Fu filed a general unsecured claim in the
amount of $60,000 based on “breach of contract/good faith” (Claim
No. 9). 	Claim No. 9 provides no additional detail other than that
the debt was incurred on August 8, 2003.
On March 29, 2006, Fu filed another general unsecured claim in
the amount of $3,000,000 based on “fraud, breach of contract, etc.”
(Claim No. 10). 	Claim No. 10 provides no additional detail other
than that the debt was incurred in February 2004.
On October 19, 2006, Fu filed a third general unsecured claim
in the amount of $3,000,000 based on “fraud” and “breach of good
faith”. 	(Claim No. 15). 	Claim No. 15 provides no additional
details.
None of the claims filed by Fu specify the date the contracts
at issue were entered into or the subject matter of the contracts.
On July 5, 2007, the court entered an order denying the three
Fu claims to the extent they relate to the Chenery Street
partnership agreement, because they are based on contracts Fu
assigned to a third party. 	The order granted Fu leave to file an
amended proof of claim to set forth any prepetition claims against
Debtor not related to the assigned contracts.
On July 31, 2007, Fu filed an amended general unsecured claim.
The amended claim has four parts: (1) $36,000 for proceeds
allegedly earned by Fu from his partnership with Yan to develop and
sell real property located at 192 Majestic, San Francisco; this
aspect of the claim has no detail regarding when the alleged
partnership was entered into and whether there is a written
Case: 04-33526 Doc# 288 Filed: 01/31/08 Entered: 01/31/08 14:59:09 Page 2 of
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contract related to the partnership; (2) $335 “plus other costs the
Court would consider at trial” related to costs Fu incurred to file
an answer and cross-complaint in Superior Court Case No. CGC-06-
448895, filed by Yan on January 26, 2006; (3) $453.56 “plus other
sums as are proven at trial” relating to Sierra Point Lumber
invoices for products allegedly provided for Yan’s sole benefit and
for which Fu has been determined by this court to be liable; and
(4) $1 “plus additional sums” for Yan’s alleged slander of Fu
relating to statements made to the press in connection with Fu’s
complaints to the FBI and District Attorney regarding San Francisco
Department of Building Inspection Officials. 	Fu does not identify
with specificity the allegedly slanderous and defamatory
statements, such as when the statements were made, what the
statements were, or how they damaged Fu.
This case was converted from chapter 11 to chapter 7 on
September 15, 2006. 	The claims bar date in the chapter 7 case was
April 24, 2007.
DISCUSSION
A creditor can amend his claim after the bar date. 	Sambo’s
Restaurants, Inc. v. Wheeler (In re Sambo’s Restaurants, Inc.), 754
F.2d 811, 816-17 (9th Cir. 1985). 	Absent prejudice, the court
should freely allow amendments that relate back to the filing of
the original claim to cure a defect or to describe the claim with
greater particularity. 	Id. 	An amendment relates back to the
original when it arises out of the same conduct, transaction, or
occurrence. 	State Bd. of Equalization v. Ulrich (In re Solari), 63
B.R. 115, 117 (9th Cir. BAP 1986). 	If a late-filed claim does not
Case: 04-33526 Doc# 288 Filed: 01/31/08 Entered: 01/31/08 14:59:09 Page 3 of
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1 This claim is deemed to have arisen prepetition. 	See 11
U.S.C. § 548(d).
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relate back to the original proof of claim, it is subordinated to
the timely-filed claims. 	11 U.S.C. § 726(a)(3).
1. 	Costs related to State Case
Fu’s claim for costs related to Superior Court Case No. CGC-
06-448895 1 (State Case) fails to state a claim upon which relief can
be granted because Yan’s conduct in filing the lawsuit was
privileged, and there is nothing in the record to suggest that Fu
has prevailed on an action for malicious prosecution (in which case
the litigation privilege would not apply). 	Cal. Civ. Code §47(b)
(litigation privilege); Pacific Gas & Electric. Co. v. Bear Stearns
& Co., 50 Cal. 3d 1118 (1990). 	Accordingly, this claim should be
dismissed.
2, 	Slander claim
Fu’s slander claim does not state a claim upon which relief
can be granted because it does not identify the substance of the
words that Yan allegedly spoke or wrote to the press, the time and
place of their utterance, or how the false statements injured Fu.
See Cal. Civ. Code § 46; Witkin, Cal. Proc. (4th Ed.), 5 Pleading,
§ 695 (1997). 	Accordingly, this claim should be dismissed.
3. 	Claims re Majestic Street and Sierra Point Lumber
invoices
Fu’s claims relating to the Majestic Street property and the
Sierra Point Lumber invoices state claims upon which relief may be
granted because if the facts alleged in the amended claim are true,
Yan would be liable to Fu for the $36,000 allegedly promised to Fu
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under the Majestic partnership agreement, and for the $453.56 for
Sierra Point Lumber product Fu allegedly paid for Yan’s sole
benefit. 	The question then, is whether these late-filed claims
relate back to Fu’s first three claims for breach of contract and
breach of the covenant of good faith and fair dealing. 	The court
cannot make this determination, however, on the record before it,
because Fu has not yet provided any details regarding the
partnership agreements underlying these claims, such as when and
where they were entered into, their subject matter, and the
signatories to the agreements. 	Nor has Fu provided copies of the
written partnership agreements, if any. 	In order to avoid
dismissal of these claims, Fu must provide sufficient detail about
the partnership agreements and copies of such agreements (if they
in writing), so that the court can determine whether these aspects
of Fu’s late-filed claim relate back to Fu’s timely-filed claims.
**END OF MEMORANDUM**
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Court Service List
Demas Wai Yan
1433 7th Avenue
San Francisco, CA 94122
Joanne M. LaFreniere, Esq.
Stromsheim & Associates
201 California Street, Ste. 350
San Francisco, CA 94111
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