Filed 3/7/16 New Peking Buffet v. Lin CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication 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 ONE

NEW PEKING BUFFET, INC.,

Plaintiff and Appellant,

v.

SHENG LI LIN et al.,

Defendants and Respondents.

 B258842

 (Los Angeles County

 Super. Ct. No. BC494420)

APPEAL from a judgment of the Superior Court of Los Angeles County. Michael 

M. Johnson, Judge. Affirmed.

Ellis Law Group, Mark E. Ellis, Ronald R. Poirier and Steven T. Kelly for 

Plaintiff and Appellant.

Bryan Cave, John W. Amberg and Jonathan G. Fetterly for Defendants and 

Respondents.

__________________________________
2

New Peking Buffet, Inc. (New Peking), an Illinois corporation whose principal 

place of business is in Los Angeles County, challenges a judgment of dismissal entered 

after the trial court sustained the demurrer of defendants Sheng Li Lin, Jin Xing Yang, 

Kiat Yeung, Xue Hua Zheng, Xiao Xia Ling (collectively Respondents), Ding He Chen,

and Jin Bin Chen without leave to amend the second amended complaint (SAC). New 

Peking did not appeal the judgment in favor of defendants Ding He Chen and Jin Ben 

Chen (collectively the Chens). New Peking argues the court erred in finding the act of 

state doctrine barred its claims.1 We disagree and affirm.

BACKGROUND

According to New Peking’s SAC,

2 in 2002 the government of the People’s 

Republic of China (PRC) was looking for foreign investors to develop land in Jingdezhen 

City, Jiangxi Province, into an industrial park (the Jingdezhen project). The Chens,

Chinese citizens, learned of this project and approached Tony Chen,3 an American citizen 

and president and sole owner of New Peking, with this investment opportunity. New 

Peking claims Tony Chen and the Chens entered into an oral joint venture agreement to 

pursue investing in the Jingdezhen project. The terms of their oral agreement, allegedly, 

were for (1) New Peking to act as the foreign investor, (2) New Peking to raise the capital 

necessary for an initial investment, and (3) the parties to equally share in the profits, after 

New Peking’s initial capital investment was repaid. New Peking alleges Tony Chen and 

1 “The judicially created act of state doctrine precludes the courts of this country 

from inquiring into the validity of governmental acts of a recognized foreign sovereign 

committed within its own territory.” (Black’s Law Dict. (6th ed. 1990) p. 34, col. 1; see, 

e.g., Banco Nacional de Cuba v. Sabbatino (1964) 376 U.S. 398, 400–401 [84 S.Ct. 923] 

(Banco Nacional).)

2 When reviewing a demurrer, we “accept[] as true all facts properly pleaded in the 

complaint in order to determine whether the demurrer should be overruled.” (Cryolife, 

Inc. v. Superior Court (2003) 110 Cal.App.4th 1145, 1152.)

3 It is unclear what relationship, if any, Ding He Chen and Jin Bin Chen have to 

Tony Chen, and the parties did not explain the relationship, if any.
3

all the defendants4 later orally further agreed to (1) sell the individual buildings 

developed for the Jingdezhen project and (2) reinvest the profits from the buildings’ sales 

back into the Jingdezhen project, minus New Peking’s initial capital contribution, which 

was to be repaid. New Peking, and “investors,” then created Jiangxi Shengdu Zhi Yei 

Company Ltd. (Shengdu), a Chinese corporation, to manage the Jingdezhen project. On 

September 24, 2002, after an application process through the Ministry of Commerce 

(MOFCOM), a branch of the PRC (the Administration for Industry and Commerce of 

Jingdezhen City) issued Shengdu a business license, which listed New Peking as 

Shengdu’s sole owner.5

As agreed, New Peking raised capital and invested $5 million into the Jingdezhen 

project. Under New Peking’s version of events, at some unspecified time after the 

project began, the defendants conspired to breach the joint venture agreement between 

Tony Chen and the Chens and divert the Jingdezhen project’s profits to themselves, 

without repaying New Peking’s initial investment or reinvesting the profits. To 

accomplish this, the defendants conspired to steal New Peking’s corporate records and 

official seal in order to falsify documents necessary to fraudulently induce the PRC to 

transfer ownership of Shengdu from New Peking to the defendants. New Peking alleges

sometime in 2011 or 2012, at the direction of defendants, Ding He Chen traveled to Los 

Angeles and stole New Peking’s records and seal. After obtaining the records and seal, 

the defendants used them to fraudulently induce the PRC to transfer ownership of 

Shengdu to defendant and respondent Kiat Yeung (Yeung). With the power of this new 

4 “Defendants” refers to Respondents and the Chens, the parties sued as 

defendants below.

5 We may properly consider allegations from prior pleadings that are omitted from 

a later pleading when the allegations are omitted to conceal a flaw. (Vallejo Development 

Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 946.) In its later pleadings, 

New Peking characterized an official Chinese document evidencing its ownership of 

Shengdu merely as a “stock certificate.” As the trial court recognized, however, a 

“previous demurrer established that the ‘stock certificate’” was really “a business 

certificate/license issued by the PRC through its [wholly foreign-owned enterprise] laws 

and procedures.”
4

ownership, the defendants then misappropriated funds from Shengdu to themselves in 

violation of the joint venture agreement.

On October 24, 2012, New Peking sued the defendants for conversion, fraud, and 

negligence.6 The defendants filed a motion for judgment on the pleadings. In response, 

New Peking submitted a first amended complaint (FAC). In the FAC, New Peking 

abandoned its original causes of action and instead pleaded three new causes: (1) 

declaratory relief, (2) accounting, and (3) violation of California’s Unfair Competition 

Law (UCL) (Bus. & Prof. Code, § 17200 et seq.). On October 9, 2013, the court granted 

the defendants’ motion for judgment on the pleadings with leave to amend, recognizing 

the already submitted FAC as filed in response to the grant of leave to amend.

On November 8, 2013, the defendants filed a demurrer to the FAC. The 

defendants claimed each cause of action in the FAC was barred by the act of state 

doctrine. The court sustained the demurrer with leave to amend, ruling that the causes of 

action, as pleaded, were barred by the act of state doctrine. On April 1, 2014, New 

Peking filed its SAC, asserting the FAC’s three causes of action (declaratory relief, 

accounting, and violation of the UCL) and adding a fourth: breach of contract and breach 

of the implied covenant of good faith and fair dealing. Once again, the defendants 

demurred, in part, under the act of state doctrine. This time, the court sustained the 

demurrer without leave to amend, invoking the act of state doctrine for all four counts. 

The court did not grant leave to amend because New Peking “has had three opportunities 

to allege sufficient causes of action, and there appears to be no reasonable probability that 

[New Peking] can do so. E.g., Sprinkles v. Associated Indemnity (2010) 188 Cal.App.4th 

69, 76. Leave to amend should not be granted when amendment of the complaint would 

6 According to the record, New Peking had previously filed an administrative 

complaint in China in December 2011 against the “Bureau of Investment Promotion and 

Cooperation of Jingdezhen City,” the “Administration for Industry and Commerce of 

Jingdezhen City,” and Yeung, requesting that the governing body revoke the approval of 

the transfer of shares and ownership of Shengdu. The record does not reveal the outcome 

of this administrative proceeding, but the record does show that Chinese authorities 

arrested and detained the Chens.
5

be futile. Long v. Century Indemnity (2008) 163 Cal.App.4th 1460, 1468; Vaillette v. 

Fireman’s Fund (1993) 18 Cal.App.4th 680, 685.” New Peking appealed.7

DISCUSSION

On appeal, New Peking argues the trial court erred in sustaining the defendants’ 

demurrer because New Peking’s claims were not barred by the act of state doctrine and it 

pleaded sufficient facts to support the complaint. We disagree.

We review the sustaining of a demurrer de novo. (Martin v. Bridgeport 

Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031.) That is, we determine 

“whether, as a matter of law, the complaint states facts sufficient to constitute a cause of 

action.” (Ibid.) In addition to considering the facts, we “may also consider . . . any 

matter that is judicially noticeable under Evidence Code section . . . 452,” including the 

PRC’s laws and regulations. (Cryolife, Inc. v. Superior Court, supra, 110 Cal.App.4th at 

p. 1152.) “A judgment of dismissal after a demurrer has been sustained without leave to 

amend will be affirmed if proper on any grounds stated in the demurrer, whether or not 

the court acted on that ground.” (Carmon v. Alvord (1982) 31 Cal.3d 318, 324.) We do 

not consider whether New Peking will be able to prove its allegations at trial, but New 

Peking has the burden of proving the court below erred in sustaining the demurrer. 

(Ferrick v. Santa Clara University (2014) 231 Cal.App.4th 1337, 1341; Vaughn v. LJ 

Internat., Inc. (2009) 174 Cal.App.4th 213, 219.)

We review the decision denying leave to amend for abuse of discretion. (Dey v. 

Continental Central Credit (2008) 170 Cal.App.4th 721, 725–726; accord, Buller v. 

Sutter Health (2008) 160 Cal.App.4th 981, 985–986.) A plaintiff establishes an abuse of 

discretion by showing it can effectively amend the complaint, consistent with its theory 

of the case. (Dey, at p. 731.)

7 Tony Chen and Kurt Miller, plaintiffs below, are not parties to this appeal.
6

I. The act of state doctrine bars relief for all of New Peking’s causes of action, as 

they were pleaded

The act of state doctrine prevents courts from assessing the validity of a foreign 

government’s official acts made in its sovereign capacity. (Kirkpatrick Co. v. 

Environmental Tectonics Corp. (1990) 493 U.S. 400, 409 [110 S.Ct. 701, 707] 

(Kirkpatrick).) That is, “‘courts of one country will not sit in judgment on the acts of the 

government of another, done within its own territory. Redress of grievances by reason of 

such acts must be obtained through the means open to be availed of by sovereign powers 

as between themselves.’” (In re Philippine Nat’l. Bank (9th Cir. 2005) 397 F.3d 768, 

772, quoting Underhill v. Hernandez (1897) 168 U.S. 250, 252 [18 S.Ct. 83].) Under the 

act of state doctrine, we are to presume other countries’ official acts are valid. 

(Kirkpatrick, at p. 409.) This deference has constitutional separation of power 

underpinnings and prevents the judiciary from improperly interfering with the executive’s 

domain of foreign relations. (Kirkpatrick, at pp. 404–405, citing Banco Nacional, supra, 

376 U.S. at p. 423.)

Not every act of state is afforded deference under the act of state doctrine, 

however. (Kirkpatrick, supra, 493 U.S. at p. 409.) For example, and of importance here, 

mere ministerial official acts do not render a case nonjusticiable. (See ibid. [courts 

ordinarily have the obligation to exercise their jurisdiction].) Ministerial acts are 

generally those in which the state actor “‘“is left no choice of his own”’” and is merely 

executing “a set task.” (Johnson v. State of California (1968) 69 Cal.2d 782, 788 

[rejecting definitively defining “ministerial” but quoting Morgan v. County of Yuba

(1964) 230 Cal.App.2d 938, 942, as an example of how “ministerial” is commonly 

understood]; Ne Casek v. City of Los Angeles (1965) 233 Cal.App.2d 131, 134–135 

[executing “a set task”].) In contrast, acts of state which require “‘“personal deliberation, 

decision and judgment”’” are not ministerial and represent decisive state action. 

(Johnson, at p. 788.) Using these general definitions, the kinds of state action the United 

States Supreme Court has protected under the act of state doctrine have been deliberative. 

(See, e.g., Underhill v. Hernandez, supra, 168 U.S. 250 [refusal to grant a passport]; 
7

Oetjen v. Central Leather Co. (1918) 246 U.S. 297 [38 S.Ct. 309] [confiscation of hides]; 

Kirkpatrick, supra, 493 U.S. 400 [issuance of military contract].) These actions are the 

kind which “‘constitute an exercise of governmental administration’” and “‘should 

“‘remain beyond the range of judicial inquiry’”’” because “‘“judicial review . . . would 

place the court in the unseemly position of determining the propriety of decisions 

expressly entrusted to a coordinate branch of government.”’” (Masters v. San 

Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th 30, 45–46, 

quoting Johnson, at pp. 793–794.)

The PRC’s act of approving the transfer of Shengdu’s ownership from New 

Peking to Yeung was deliberative, not ministerial, and is therefore presumed valid under 

the act of state doctrine. Under the PRC’s laws and regulations,8 a party petitioning for 

change in corporate ownership must go through the same process necessary to establish a 

corporate entity. (PRC, Law on Wholly Foreign-Owned Enterprises, Standing Com. Nat. 

People’s Cong. (Oct. 31, 2000) art. 10 <http://english.mofcom.gov.cn/aarticle/lawsdata/

chineselaw/200301/20030100062858.html> [as of Mar. 2, 2016].) The corporate 

approval process requires more than the PRC’s ministerial “rubber-stamping” of 

applications. It instead requires, for example, submission of documents containing 

information on the “amount of environmental pollution likely to [be] caused and [the] 

corresponding measures for solution”; “capital construction and capital, resources and 

raw materials required for production and operations and supply measures”; the 

“personnel framework, arrangements for employee recruitment, training, wages, welfare 

benefits, insurance, labor protection”; and the “main types of production equipment to be 

used and respective age of equipment, production technology, level of technology and 

source of supply.” (PRC, Detailed Rules for Implementation of Law on Wholly ForeignOwned Enterprises, State Council (Apr. 12, 2001) art. 14 <http://english.

mofcom.gov.cn/aarticle/lawsdata/chineselaw/200301/20030100062868.html> [as of 

8 We take judicial notice under Evidence Code section 452 of the PRC’s relevant 

laws and regulations.
8

Mar. 2, 2016].) Applicants must also submit documents establishing articles of 

association and a “feasibility study report.” (Id., art. 10.) These documents must be 

“examined and approved” by various “departments of the State.” (Regs. of the PRC,

Admin. of Co. Registration, State Council (Dec. 18, 2005) art. 22 <http://tradeinservices.

mofcom.gov.cn/en/b/2005-12-18/17120.shtml> [as of Mar. 2, 2016].) Without this 

approval, a corporate entity cannot exist in the PRC. (Id., art. 25.)

This kind of action is not merely a matter of the PRC’s paper recognition of a 

change in corporate ownership as New Peking argues. Rather, it is the result of a 

complex, deliberative process, indicating a choice on the PRC’s part to allow Shengdu to 

operate within its jurisdiction. California courts should not be placed in a position of 

judging the validity of such an act by the PRC or one of its constituent parts. 

(Kirkpatrick, supra, 493 U.S. at p. 409.) If New Peking believes the PRC was 

fraudulently induced into transferring ownership of Shengdu from New Peking to Yeung, 

causing it to suffer damages, it needs to petition the appropriate Chinese authorities to 

redress that harm. (See In re Philippine Nat’l. Bank, supra, 397 F.3d at p. 772.)

It is possible New Peking could have argued that regardless of who owned 

Shengdu, Respondents violated Tony Chen and the Chens’s oral joint venture agreement, 

which Respondents were parties to by their ratification, by diverting funds from the 

Jingdezhen project to themselves. This would have allowed New Peking, at a minimum,

to seek an accounting and damages for breach of contract without questioning the validity 

of the PRC’s transfer of Shengdu to Yeung; such a pleading would question only whether 

Respondents had misappropriated funds from New Peking through Shengdu, regardless 

of who owned Shengdu. New Peking, however, did not plead its causes of action by 

arguing ownership of Shengdu was irrelevant. In fact, each cause of action mentioned 

and was tied to the transfer of ownership in Shengdu.

To start, New Peking requested a “Declaration of Plaintiff NPB’s ownership 

interest and rights in Shengdu, specifically an order confirming that NPB is the legal 

owner of one hundred percent of Shengdu’s outstanding shares of stock.” Next, in the 

accounting cause of action, New Peking states, “NPB and the Defendants disagree as to 
9

the control of and ownership interest in Shengdu.” Due in part to the allegedly fraudulent 

transfer, New Peking requested an accounting to determine whether and, if so, how much 

defendants owed New Peking. In the breach of contract and breach of the covenant of 

good faith and fair dealing cause of action, New Peking alleges defendants “wrongfully 

transferred ownership in Shengdu from NPB to themselves.” New Peking argued 

defendants’ fraudulently induced transfer was part of a series of events which constituted 

a breach of the joint venture agreement. Finally, under its UCL cause of action, New 

Peking alleged, “Defendants’ scheme of transferring the ownership of Shengdu,” in 

conjunction with other actions, constituted a violation of the UCL, and that “Defendants’ 

conduct” also “constitutes unfair competition resulting from Defendants’ ongoing 

wrongful misappropriation and conversion of the ownership of Shengdu from NPB to 

Defendants.” Although each cause of action mentioned other wrongs, including 

Respondents’ failure to return New Peking’s initial capital contribution and distribute the 

Jingdezhen project’s profits equally, each cause of action was also squarely premised on 

the allegedly wrongful transfer of Shengdu. Allowing the trial court to adjudicate the 

causes of action based in part upon the assumption or recognition that Shengdu was 

fraudulently transferred would violate the act of state doctrine.

New Peking also failed to propose on appeal an amendment to the pleadings that 

would not require the court to pass judgment on the PRC’s transfer of Shengdu. Instead, 

it argued the act of state did not apply because the PRC’s act was ministerial or, in the 

alternative, the “commercial exception” applied. Under either scenario, New Peking is 

admitting that the transfer of Shengdu required some government action. As described 

above, based on the PRC’s approval process, the PRC’s level of state action was 

significant enough to invoke the act of state doctrine; as described below, the commercial 

exception does not apply.

As a defense to the application of the act of state doctrine, New Peking argues that 

the parties’ actions fell under the “commercial dispute” exception. The commercial 

dispute exception, however, applies when a sovereign acts in a commercial capacity, not 

when the parties act in a commercial capacity. (Alfred Dunhill of London, Inc. v. 
10

Republic of Cuba (1976) 425 U.S. 682, 695 [96 S.Ct. 1854].) That is, “the concept of an 

act of state should not be extended to include the repudiation of a purely commercial 

obligation owed by a foreign sovereign or by one of its commercial instrumentalities.” 

(Id., italics added.) Here, the PRC was not acting in a commercial capacity, even though 

its approval of Shengdu through MOFCOM related to commercial matters.9 Instead, it 

was acting in its sovereign administrative and regulatory capacities, to which the act of 

state applies. (Banco Nacional, supra, 376 U.S. 398, 445, fn. 3 (dis. opn. of White, J.)

[“‘The expression “act of State” usually denotes “an executive or administrative exercise 

of sovereign power”’”].) Therefore, the commercial dispute exception does not bar 

application of the act of state doctrine here.

II. New Peking did not allege sufficient facts to show Respondents ratified the

joint venture agreement

New Peking argues that if one of the causes of action were barred by the act of 

state doctrine, the other causes of action could still be adjudicated. Although the cases 

New Peking cites are from other jurisdictions and therefore not binding, we agree that 

even if a claim is barred by the act of state doctrine, other properly pleaded claims are not 

barred if they are severable. (Sun ’n Sand, Inc. v. United California Bank (1978) 21 

Cal.3d 671, 703 [allowing certain causes of action, but not others, to survive a 

demurrer].) The trial court nevertheless properly sustained the demurrer as to all of New 

Peking’s causes of action, however, because New Peking failed to state sufficient

supporting facts.

9 In OBB Personenverkehr AG v. Sachs (2015) ___ U.S. ___ [136 S.Ct. 390], the 

Supreme Court held that a railroad operated by Austria could not be hauled into an 

American court as a defendant in a personal injury case under the commercial exception 

doctrine of the Foreign Sovereign Immunities Act. This decision represents the Court’s 

continuing commitment to respect the sovereignty of foreign governments and the need 

for American citizens to redress harms done by foreign governments within those 

governments’ jurisdiction, even when the governments’ actions have some relationship to 

or bearing on commercial activity. 
11

A. Breach of contract and of the covenant of good faith and fair dealing

and declaration of conclusions premised on the breach

New Peking argues Respondents breached their contractual duties to New Peking 

under an alleged oral joint venture agreement. In the SAC under a section entitled,

“General Allegations,” however, New Peking admits that Tony Chen, on behalf of New 

Peking, initially entered into the oral joint venture agreement with only the Chens, who 

are not parties to this appeal. Their agreement was “for the purpose of investing in, 

financing, and managing the Chinese development project” and they were to “share 

equally [in] the profits after return of paid in capital.” New Peking does not allege 

Respondents were involved in this initial agreement and it appears from the SAC that, of 

Respondents, only Sheng Li Lin (Lin) and Jin Xing Yang (Yang) became involved at this 

time when they joined Shengdu’s board. New Peking does not allege that Lin or Yang 

even knew of the joint venture agreement allegedly agreed to by Tony Chen and the 

Chens when they joined Shengdu’s board, let alone agreed with it or became parties to it. 

Lin’s and Yang’s board membership after the formation of the alleged joint venture 

agreement is insufficient alone to demonstrate they knew of or ratified that agreement. 

Nor does New Peking allege when the board was formed the other Respondents knew of 

the joint venture agreement or became parties to it. In fact, New Peking does not 

describe the relationship between Xue Hua Zheng (Zheng) and Xiao Xia Ling (Ling) to 

New Peking or Shengdu at all in the SAC.10 If Zheng and Ling were not parties to the 

joint venture agreement, were not Shengdu board members, and never initially or 

eventually had an interest in Shengdu, it is unclear how they were involved with New 

Peking, Shengdu, or the Jingdezhen Project. These facts do not allege Respondents were 

parties to the joint venture agreement.

10 In the FAC, New Peking originally alleged that Defendants, not only the Chens, 

had become aware of the Jingdezhen project and it was Defendants, not only the Chens, 

who entered into the original joint venture agreement with New Peking. We do not 

consider these allegations, which connect Respondents to the joint venture agreement, 

however, because New Peking omitted them in the SAC.
12

Other subsequent language regarding the agreement is confusing at best, and fails 

to coherently allege facts demonstrating Respondents were parties to it. For example, 

New Peking also alleged that, after the formation of Shengdu, it “and all of the 

Defendants subsequently agreed that the parties would sell off each building of the 

development project upon its completion. The parties further agreed that initially any 

profits from the sale of the individual units would be reinvested in the project. However, 

it was agreed the initial capital contributions would be repaid earlier.” New Peking 

makes no mention of the joint venture in this allegation. New Peking then alleged, 

“Following the commencement of the project and contrary to their prior agreement, . . . 

Defendants . . . decided to pay themselves out of the project, even prior to the completion 

of the project, and in derogation of the joint venture agreement.” (Italics added.) New 

Peking’s allegations make it sound as if the alleged “subsequent” agreement between 

New Peking and Defendants was separate from the joint venture agreement; if this were 

true, it would confirm that Respondents were, indeed, not parties to the joint venture 

agreement.

Adding confusion to the nature of the agreement, if any, between Respondents and 

New Peking, under a section entitled, “Third Cause of Action for Breach of Contract and 

of the Covenant of Good Faith and Fair Dealing,” New Peking again admits that the 

original joint venture agreement was made by New Peking, acting through Tony Chen, 

and the Chens; again, Respondents are not mentioned as being part of this agreement. 

New Peking then specifically states: “Defendants Din He Chen[] and Jin Bin Chen have 

breached the agreement by depriving NPB of the expected benefits of the bargain by 

wrongfully usurping the interest previously held by NPB in Shengdu, by preventing it 

from being reimbursed for some or all of the initial seed money contributed, and by 

preventing it from sharing in the profits, which . . . Plaintiff NPB believes the other 

Defendants have siphoned from the corporate opportunity, and wrongfully divided 

among themselves.” (Italics added.) Much like the general allegation language, this 

language, again, makes it appear as if New Peking concedes that Respondents were not 

parties to the joint venture agreement.
13

Without explaining how or when Respondents became parties to the joint venture 

agreement, New Peking states in the next paragraph of the breach of contract cause of 

action: “Under this contract, the Defendants owed a duty to do all the things necessary to 

ensure that NPB was reimbursed for its seed money and was able to share in the profits. 

As part of the agreement, Defendants were subject to the implied covenant of good faith 

and fair dealing which obligated them to act in all ways which would not frustrate NPB’s 

rights to receive the benefits of the agreement.” Without specific facts alleging how 

Respondents became parties to the alleged joint venture agreement, New Peking’s 

statements that Respondents owed them a duty under it are conclusory and insufficient to 

establish the necessary contractual relationship giving rise to remediable breaches of 

duties.

New Peking again perpetuates the confusion by alleging that “[b]y the acts 

described above, Defendants Din He Chen, Jin Bin Chen, and the other Defendants in 

aiding and abetting them, have deprived NPB of the benefits of the agreement and have 

frustrated and interfered with the purpose of the agreement.” (Italics added.) To the 

extent the clause refers to Respondents’ alleged ratification of the original joint venture 

agreement, it still does not describe how Respondents became parties to the joint venture 

agreement and, in fact, again, makes it sound as if Respondents were not parties to the 

joint venture agreement and their subsequent actions merely assisted the Chens in 

breaching their joint venture agreement. The use of the phrase “the agreement” also 

suggests New Peking entered into only one agreement, and that agreement was with the 

Chens. (Italics added.)

New Peking tries to avoid these defects by alleging in a conclusory fashion “that at 

all times mentioned herein Defendants, individually and jointly acted as the agents, 

employees, partners, principles, representatives and/or affiliates of each of the remaining 

Defendants and were, at all times herein mentioned, acting within the course and scope of 

such relationship . . . . [E]ach of the Defendants did confirm, consent to, affirm, direct, 

authorize, acknowledge, and ratify the acts of each and every of the Defendants herein.” 

Such boilerplate language, even in conjunction with conclusory allegations such as 
14

Respondents “aided and abetted” the Chens, fails to provide sufficient specific facts to 

show Respondents were parties to the joint venture agreement, knew of it, ratified it, or 

breached it. (See, e.g., Moore v. Regents of University of California (1990) 51 Cal.3d 

120, 134, fn. 12 (Moore).)

11 Because “[s]pecific factual allegations modify and limit 

consistent general statements” (B & P Development Corp. v. City of Saratoga (1986) 185 

Cal.App.3d 949, 953), an absence of any specific facts supporting a boilerplate general 

statement may be construed as the general statement lacking any factual basis. We will 

not assume such a bare conclusion of law is true, and we therefore disregard this 

allegation. (Moore, at p. 125 [conclusions of law are not assumed as fact].)

Although it is possible New Peking could have alleged its facts and pleaded its 

causes of action to support a theory that Respondents and New Peking were parties to a 

joint venture agreement and Respondents breached the agreement, it did not. New 

Peking has had three opportunities to plead such facts and three opportunities to 

comprehensibly amend its pleadings, but failed to do so. We will not construe New 

Peking’s pleadings to marshal potential facts and craft coherent arguments to support an 

agreement and breach theory.

Without an underlying contractual obligation, Respondents could not breach any 

contractual obligations to New Peking or violate the duty of good faith and fair dealing. 

Likewise, Respondents cannot be declared to have any contractual duties to an agreement 

11 In Moore, the court found the certain “secondary-liability allegations,” similar 

to New Peking’s ratification allegations, as “egregious examples of generic boilerplate.” 

(51 Cal.3d at p. 134, fn. 12.) The language stated: “‘each of the defendants was the 

agent, joint venturer and employee of each of the other remaining defendants, and is 

jointly liable for the acts of every other defendant and in doing the things hereinafter 

alleged, each was acting within the course and scope of said agency, employment, 

partnership and joint venture with the advance knowledge, acquiescence or subsequent 

ratification of each and every remaining defendant, and that each defendant joined 

together with every other defendant . . . had a fiduciary duty to the plaintiff, and each 

acted in concert with every other defendant in violating their [sic] duties to plaintiff.’” 

(Ibid.) The court noted that “[n]owhere in the third amended complaint does Moore 

specifically allege that any defendant other than Golde knew that Moore had not received 

adequate disclosures.” (Ibid.)
15

to which they were not parties. (See Racine & Laramie, Ltd. v. Department of Parks & 

Recreation (1992) 11 Cal.App.4th 1026, 1031 [“The implied covenant of good faith and 

fair dealing rests upon the existence of some specific contractual obligation”].)

B. Violation of the UCL

New Peking alleged three wrongs under the UCL: (1) fraudulent transfer of 

Shengdu’s ownership, (2) failure to pay back New Peking’s initial capital contribution, 

and (3) failure to distribute New Peking’s share of the project’s profits. All of these 

wrongs, however, are either barred by the act of state doctrine or tied to an agreement 

New Peking did not sufficiently plead. To start, and again, ruling on whether 

Respondents fraudulently transferred Shengdu’s ownership would require a California 

court to pass judgment on the validity of the PRC’s transfer of Shengdu’s ownership. For 

the reasons discussed above, California courts are prevented from doing so by the act of 

state doctrine. As to Respondents’ failure to return New Peking’s initial capital 

contribution or distribute the Jingdezhen project’s profits to New Peking, again, New 

Peking did not plead sufficient facts to demonstrate that Respondents were parties to the

joint venture agreement; therefore, without the underlying contractual agreement, New 

Peking cannot show Respondents owed it any duties.

III. Accounting

New Peking also asks the court to order an accounting of Shengdu’s finances 

because “NPB and the Defendants disagree as to the control of and ownership interest in 

Shengdu, including what amount should be paid to each of the parties upon the 

dissolution of Shengdu,” and “NPB is entitled to know whether funds exist so it may be 

reimbursed its initial contribution as agreed to by the parties, and whether or not profits 

exist which should have been distributed to NPB, but for the wrongful acts, fraud and 

conversion of these profits by the Defendants for their own purposes.”

Based on the grounds it presented, New Peking’s request for an accounting is 

unwarranted. To the extent that an accounting rests on the grounds of Shengdu’s 

fraudulent transfer, we may not allow an accounting under the act of state doctrine. To 

the extent it rests on the grounds of Respondents’ alleged agreement with Tony Chen, 
16

New Peking failed to allege sufficient facts to demonstrate Respondents joined the 

agreement. In light of the fact that there are no justiciable issues against Respondents, an 

accounting claim cannot proceed.

IV. Conclusion

The court did not abuse its discretion by denying leave to amend. New Peking 

submitted three complaints where all the causes of actions were barred by the act of state 

doctrine or failed to coherently show Respondents were parties to the joint venture 

agreement. New Peking did not argue on appeal it could amend the SAC to state viable 

causes of action. In light of this, we agree with the trial court that granting further leave 

to amend would be “‘futile.’” (Long v. Century Indemnity Co., supra, 163 Cal.App.4th at 

p. 1468; Vaillette v. Fireman’s Fund Ins. Co., supra, 18 Cal.App.4th at p. 685.)

DISPOSITION

The judgment is affirmed. Respondents are awarded their costs on appeal under 

California Rules of Court, rule 8.278.

NOT TO BE PUBLISHED.

LUI, J.

We concur:

ROTHSCHILD, P. J.

JOHNSON, J.