Court Opinion

ID: 4686723
Source: CourtListenerOpinion
Date Created: 2021-05-13 21:04:01.21616+00
Date Added: 2024-06-11T08:04:35.330444
License: Public Domain

Filed 5/13/21 Shi v. Wolfsdorf Rosenthal CA2/5
    NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 has not been certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

  ZHAO HUI SHI et al.,                                              B303465

            Plaintiffs and Appellants,                              (Los Angeles County
                                                                    Super. Ct. No. BC662775)
            v.

  WOLFSDORF ROSENTHAL,
  LLP,

       Defendant and
  Respondent.

      APPEAL from a judgment of the Superior Court of Los
 Angeles County, Richard J. Burdge, Jr., Judge. Affirmed.
      Law Offices of Steven P. Scandura and Steven P.
 Scandura; Howard Posner, for Plaintiffs and Appellants.
      Haight Brown & Bonesteel, Valerie Ann Moore,
 Jennifer K. Saunders, for Defendant and Respondent.
                 __________________________
      Named plaintiffs and appellants, Zhao Hui Shi and her
husband Jun Lu (Plaintiffs), appeal the judgment of
dismissal of their suit for legal malpractice against
defendant and respondent Wolfsdorf Rosenthal, LLP
(Wolfsdorf), following the trial court’s order sustaining
Wolfsdorf’s demurrer to the third amended complaint (TAC)
without leave to amend. Plaintiffs sought to bring a class
action against Wolfsdorf for its alleged role in a conspiracy to
defraud foreign investors in connection with an investment
visa program under the United States government’s EB-5
investment visa program. Neither named plaintiff was
represented by Wolfsdorf; however Shi, who was represented
by attorney Rachel H. Lew, alleges to have been harmed in
an identical manner to Wolfsdorf’s clients who invested in
the scheme, such that there is sufficient commonality for her
to fairly represent those investors.1
      On appeal, Plaintiffs argue that (1) the class action
should proceed against Wolfsdorf with Shi as a named
plaintiff although she lacks standing, because she is suitable
to fairly represent the class of all plaintiffs; (2) the claims of
the class were sufficiently common to make class
certification appropriate; and (3) if dismissal is appropriate,

      1
       Plaintiff Lu did not invest in the visa program
directly. He lent money to Shi to participate in the program.
Plaintiffs do not argue that Lu is a suitable representative of
the Wolfsdorf subclass.

                                2
the trial court was required to give notice to the subclass of
plaintiffs who were Wolfsdorf’s clients.
      We affirm the judgment.

                FACTS AND PROCEEDINGS2

First Amended Complaint

      Plaintiffs filed the first amended complaint (FAC)3 on
December 19, 2017, which alleged as follows: Plaintiffs
wished to invest in the EB-5 Immigrant Investor Program
administered by U.S. Citizenship and Immigration Services
(USCIS), which promotes economic growth in the United
States by granting visas to foreign investors. Immigrants
who have invested or are in the process of investing
$500,000 in a targeted employment area in a new
commercial enterprise that will benefit the U.S. economy
and create at least 10 full-time positions for qualifying
employees may be eligible for conditional permanent
residency status under the program. The commercial
enterprise must either be, or be affiliated with, an entity

     2
       The facts and proceedings through our affirmance of
the trial court’s order granting in part Wolfsdorf’s anti-
SLAPP motion are taken from our prior unpublished opinion
in Shi v. Wolfsdorf Rosenthal, LLP (Oct. 29, 2019, B290792
[nonpub. opn.] (Shi)).
     3
         The complaint is not contained in the record.

                                3
designated as a “regional center” to administer EB-5
investment projects by the USCIS.
       Charles C. Liu founded Pacific Proton Therapy Center,
LLC (Pacific Proton), which would purportedly develop
Beverly Proton Center, LLC (Beverly Proton), a proton
therapy cancer treatment center in Southern California.
Beverly Proton would be funded by eligible EB-5 immigrant
investors. Liu also formed the Pacific Proton EB-5 Fund,
LLC (EB-5 Fund), into which foreign investors would make
EB-5 eligible investments. On June 28, 2012, the USCIS
approved Liu’s Form I-924, the form application to designate
Pacific Proton as an EB-5 regional center.
      Between October 2014 and April 2016, class members
each invested $500,000 in limited liability company funds in
the EB-5 Fund. The total investment from all investors was
at least $26,967,918. Each investor was provided a May
2013 Private Offering Memorandum (POM) drafted by
Miller Mayer, LLP (Miller Mayer), which set forth the terms
of the investment and emphasized the crucial roles of both
Liu and Dr. John Thropay, a radiation oncologist, to the
project. Liu and his wife, Lisa Wang, conspired with Dr.
Thropay to create the appearance that Beverly Proton was a
legitimate project. They never intended to build the cancer
center, but instead used it as a pretext to defraud Plaintiffs
of their investments. Liu and Wang were aided and abetted
in their fraudulent venture by several attorneys who
prosecuted I-526 visa petitions for the investors, including
Wolfsdorf.

                              4
      Wolfsdorf was retained by approximately 35 of the
investors who were referred to Wolfsdorf by “the
perpetrators of the fraud.” Wolfsdorf either knew of the
scheme to defraud potential immigrants or should have
known but for its willful ignorance, or negligently and
recklessly ignored the high probability that its clients’
money would be stolen. Wolfsdorf failed to conduct any due
diligence and limited its duties to its clients to exclude any
responsibility to investigate the legitimacy of the underlying
transaction. The documents Wolfsdorf drafted did not
contain safeguards to protect the investors. Wolfsdorf did
not communicate to its clients that the enterprise lacked
basic capital controls and that no mechanisms were in place
to protect their money.
      Little, if any, work was performed on the project. In
2015, invested funds were used to demolish a building Dr.
Thropay owned, which inured solely to his benefit. Liu and
Wang diverted almost $21.1 million from the EB-5 Fund for
personal use and to pay overseas marketers. By June 3,
2016, only $234,899.19 of the original $26.9 million
contributed by foreign investors remained, despite this total
lack of progress.
       Plaintiffs alleged causes of action in fraud, legal
malpractice, negligent misrepresentation, and entitlement to
treble damages and attorney fees for violation of Penal Code
section 496, subdivision (c) against Wolfsdorf and several
other defendants, including Lew, the attorney who
prosecuted Shi’s I-526 visa petition with the USCIS, and

                              5
David Gerald Derrico, an attorney who purportedly
prosecuted I-526 visa petitions for other investors.
      Plaintiffs claimed that Wolfsdorf, Lew, and Derrico
(the attorney defendants) conspired in the fraud. Plaintiffs
were referred to the attorney defendants specifically because
the attorneys had experience with the Beverly Proton project
and could vouch for its viability and legitimacy. The
attorney defendants knew that these representations would
be conveyed through their representation, but did not
express any doubts to Plaintiffs. Plaintiffs relied on these
representations and the attorney defendants’ credibility
when deciding to invest. The attorney defendants failed to
place protections in the relevant documents, did not conduct
rudimentary investigations on Plaintiffs’ behalf, did not
advise Plaintiffs of potential concerns, and purposefully
limited their own liability. As a direct and proximate result
of these actions, Plaintiffs each lost over $500,000. The
attorney defendants acted with a conscious disregard for
Plaintiffs’ rights, entitling Plaintiffs to punitive damages.

Special Motion to Strike

      Wolfsdorf moved to strike all four causes of action
under Code of Civil Procedure section 425.16. The trial court
granted the motion as to all but the legal malpractice cause
of action.4 On appeal, we affirmed the trial court’s judgment,

     4
       “A special motion to strike under section 425.16—the
so-called anti-SLAPP statute—allows a defendant to seek

                              6
concluding that the prosecution of I-526 visa petitions with
the USCIS was protected petitioning activity, and that
Plaintiffs failed to demonstrate that there was even minimal
merit to their causes of action for fraud, negligent
misrepresentation, and violating Penal Code section 496.
(Shi, supra, B290792, at *7-*8, *19-*22.)

Second Amended Complaint and Demurrer

      Plaintiffs filed the second amended complaint (SAC) on
May 25, 2018, asserting a legal malpractice claim against
Wolfsdorf and the other attorney defendants identical to the
claim in the FAC in the essentials.
      Wolfsdorf demurred to the SAC. The trial court
sustained the demurrer with leave to amend. The court
found that Shi and Lu lacked standing to pursue a legal
malpractice claim against Wolfsdorf, because Wolfsdorf did
not represent Shi or Lu and did not owe either of them a
legal duty. Plaintiffs’ argument that all class members
suffered the same loss in the same manner was not sufficient
to establish that the named plaintiffs had standing as to
Wolfsdorf.

early dismissal of a lawsuit that qualifies as a SLAPP.
‘SLAPP is an acronym for “strategic lawsuit against public
participation.”’ (Jarrow Formulas, Inc. v. LaMarche (2003)
31 Cal.4th 728, 732, fn. 1.)” (Nygard, Inc. v. Uusi-Kerttula
(2008) 159 Cal.App.4th 1027, 1035.)

                              7
      The court then addressed Plaintiffs’ arguments
regarding their ability to establish class treatment for their
claims. The court found that Plaintiffs’ claims against
Wolfsdorf involved factual questions that could only be
resolved by individual proof. The SAC thus failed to plead
sufficient facts to establish a community of interests.
      The court ordered Wolfsdorf to submit to pre-
certification discovery as to the identity and contact
information of its clients who were involved in the EB-5
project and any payments received by Wolfsdorf and sources
thereof.

Discovery

      Plaintiffs propounded pre-certification special
interrogatories on Wolfsdorf on September 5, 2018.
Wolfsdorf timely filed its response and objections on October
5, 2018. Plaintiffs failed to file a motion to compel further
responses until May 21, 2019, well past the 45-day deadline
to do so under Code of Civil Procedure section 2030.300,
subdivision (c). The trial court denied the motion to compel
as untimely, noting that compliance with the statute was
mandatory and the court could not entertain a belated
motion to compel.

                              8
Third Amended Complaint and Demurrer

      Plaintiffs filed the Third Amended Complaint (TAC) on
July 15, 2019, alleging the same legal malpractice claim
against Wolfsdorf. In an attempt to remedy the standing
issue, the TAC divided the class into subclasses of plaintiffs
according to which attorney had represented the subclass.
Plaintiffs did not claim to have been represented by
Wolfsdorf personally, but argued that any insufficiency in
standing was due to Wolfsdorf’s refusal to comply with
discovery.
      On August 16, 2019, Wolfsdorf filed the instant
demurrer on the grounds that Plaintiffs lacked standing to
sue and did not materially amend the TAC sufficiently to
state a legal malpractice cause of action against Wolfsdorf.
The trial court sustained the demurrer and dismissed the
TAC without leave to amend. The court ruled that Plaintiffs
lacked standing to sue individually because they had not
actually been injured by Wolfsdorf. Because they lacked
individual standing, they could not represent the class; a
class action is a procedural mechanism that may not be used
to achieve standing, and in an action against multiple
defendants the named plaintiffs must have standing to sue
each of the defendants. The court noted that although
Plaintiffs claimed that their failure to allege new facts to
establish that Wolfsdorf owed them a duty of care was due to
Wolfsdorf’s refusal to comply with discovery, the discovery
related to Wolfsdorf’s clients who were investors in the EB-5

                              9
project and would not aid the named plaintiffs in
establishing standing. The designation of subclassifications
did not cure the standing issue. Plaintiffs’ addition of new
language to emphasize that the representation was identical
for each subclass did not set forth any new facts. The trial
court further ruled that Plaintiffs’ claims against Wolfsdorf
were not appropriate for class treatment because they
involved factual questions that could only be resolved by
individual proof. The fact that all investors received the
same POM was, by itself, insufficient to establish
commonality.
      Plaintiffs timely appealed.

                       DISCUSSION

Standard of Review

      “‘“On review from an order sustaining a demurrer, ‘we
examine the complaint de novo to determine whether it
alleges facts sufficient to state a cause of action under any
legal theory, such facts being assumed true for this purpose.
[Citations.]’ [Citation.] We may also consider matters that
have been judicially noticed. [Citations.]” [Citation.]
“‘[W]hen the allegations of the complaint contradict or are
inconsistent with such facts, we accept the latter and reject
the former. [Citations.]’ [Citation.] We give the same
precedence to facts evident from exhibits attached to the
pleading.”’ [Citation.]

                             10
       “‘If a demurrer is sustained, we exercise our
independent judgment on whether a cause of action has been
stated as a matter of law, regardless of reasons stated by the
trial court. [Citation.] We affirm if the trial court’s decision
was correct on any theory. [Citation.]’ [Citation.]
       “It is beyond dispute that trial courts are permitted to
decide the issue of class certification on demurrer. (Tucker
[v. Pacific Bell Mobile Services (2012)] 208 Cal.App.4th [201]
212 [(Tucker)]; see Linder v. Thrifty Oil Co. (2000) 23 Cal.4th
429, 440 [noting the issue is ‘settled’ that courts are
authorized to ‘weed[ ] out’ legally meritless class action suits
prior to certification by demurrer or pretrial motion].) A
trial court may sustain a demurrer to class action allegations
where ‘“it concludes as a matter of law that, assuming the
truth of the factual allegations in the complaint, there is no
reasonable possibility that the requirements for class
certification will be satisfied.”’ (Tucker, at p. 211, italics
added; see Canon U.S.A., Inc. v. Superior Court (1998) 68
Cal.App.4th 1, 5 [(Canon)] [noting that when the ‘invalidity
of the class allegations is revealed on the face of the
complaint, and/or by matters subject to judicial notice, the
class issue may be properly disposed of by demurrer or
motion to strike,’ and noting that ‘[i]n such circumstances,
there is no need to incur the expense of an evidentiary
hearing or class-related discovery’].)
       “When a demurrer is sustained without leave to
amend, as in the instant case, ‘“we decide whether there is a
reasonable possibility that the defect can be cured by

                              11
amendment: if it can be, the trial court has abused its
discretion and we reverse; if not, there has been no abuse of
discretion and we affirm. [Citations.] The burden of proving
such reasonable possibility is squarely on the plaintiff.”
[Citation.] Leave to amend should not be granted where
amendment would be futile. [Citation.]’ (Tucker, supra, 208
Cal.App.4th at p. 211.)” (Schermer v. Tatum (2016) 245
Cal.App.4th 912, 922–923 (Schermer).)

Standing of Named Plaintiffs to Represent the
Wolfsdorf Subclass

      Plaintiffs concede that Shi does not have an individual
claim against Wolfsdorf, but argue that Shi’s lack of
standing does not preclude her from representing the
subclass of plaintiffs in the legal malpractice claim against
Wolfsdorf, because Shi can fairly represent the subclass’s
interests. Plaintiffs aver that the trial court applied the
wrong standard when it determined that Shi could not
represent the class because she lacked standing, rather than
assessing her suitability to continue to represent the class.
Plaintiffs view the issue as “a question of practicality, not
jurisdiction.”
      We reject Plaintiffs’ argument, which attempts to paint
an exception as the rule. Standing is very much relevant to
the inquiry whether a particular plaintiff can fairly
represent a class, and in most instances lack of standing will
prevent a named plaintiff from such representation. As we

                             12
will discuss, Shi does not fall under the exception to the
general requirement that a class representative has
standing, as addressed in the cases upon which Plaintiffs
rely.
      “‘In general, a named plaintiff must have standing to
prosecute an action [Citation.] . . . “As a general principle,
standing to invoke the judicial process requires an actual
justiciable controversy as to which the complainant has a
real interest in the ultimate adjudication because he or she
has either suffered or is about to suffer an injury of sufficient
magnitude reasonably to assure that all of the relevant facts
and issues will be adequately presented to the adjudicator.
[Citations.] To have standing, a party must be beneficially
interested in the controversy; that is, he or she must have
‘some special interest to be served or some particular right to
be preserved or protected over and above the interest held in
common with the public at large.’ [Citation.] The party
must be able to demonstrate that he or she has some such
beneficial interest that is concrete and actual, and not
conjectural or hypothetical. . . .” [Citation.] “Without
standing, there is no actual or justiciable controversy, and
courts will not entertain such cases. [Citation.]” [Citation.]’
[Citation.]
      “Related is the problem of ‘mootness.’ When a plaintiff
has received all that he or she has demanded in the
complaint, the case is considered ‘moot’; in other words,
there is no further relief the court could provide.
‘“Generally, courts decide only ‘actual controversies’ which

                               13
will result in a judgment that offers relief to the parties.
[Citations.]”’ [Citation.]” (Schoshinski v. City of Los Angeles
(2017) 9 Cal.App.5th 780, 791 (Schoshinski).)
       “‘“‘[M]ootness has been described as “‘the doctrine of
standing set in a time frame: The requisite personal interest
that must exist at the commencement of the litigation
(standing) must continue throughout its existence
(mootness).’” [Citations.]’” [Citations.]’ [Citations.]”
(Schoshinski, supra, 9 Cal.App.5th at p. 791.)
      “Because a class action suit involves potential relief to
absent class members in addition to the plaintiff who brings
the suit, courts have recognized the duty a named plaintiff
owes to the class, and the ‘flexible character’ of mootness in
such actions. [Citations.] Thus, even when the named
plaintiff’s claims are moot, courts have under some
circumstances applied exceptions to the mootness doctrine to
allow the plaintiff to continue prosecuting the suit.”
(Schoshinski, supra, 9 Cal.App.5th at pp. 791–792.)
      Here, Plaintiffs rely on two cases that address
circumstances under which it may be appropriate for the
named plaintiff to continue to represent a class despite the
fact that his or her claims have been mooted: La Sala v.
American Sav. & Loan Assn. (1971) 5 Cal.3d 864 (La Sala),
superceded by statute as stated in Warrington 611
Associates v. Aetna Life Ins. Co. (D.N.J. 1989) 705 F.Supp.
229, 233, and Kagan v. Gibraltar Sav. & Loan Assn. (1984)
35 Cal.3d 582 (Kagan), disapproved of on another issue by
Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 643, fn.

                              14
3. Both La Sala and Kagan are readily distinguishable from
the case at bar, and we discuss them in turn. In La Sala, the
named plaintiffs brought suit against the defendant lender
challenging the validity of a clause contained in deeds of
trust that the lender used, which accelerated the loan if the
borrower executed a junior encumbrance on the secured
property. (La Sala, supra, 5 Cal.3d at p. 868.) After the
named plaintiffs sued on behalf of themselves and others
similarly situated, and before a hearing on the lender’s
demurrer, the lender agreed to waive the “due on
encumbrance” clause as to the named plaintiffs, but did not
provide this benefit to the entire class. (Id. at pp. 868-870.)
The trial court ruled that there was no remaining plaintiff to
represent the class, and dismissed the action without
prejudice without notifying the class members of the
dismissal. (Id. at p. 870.)
      The Supreme Court in La Sala held that “whenever
the dismissal of a class action stems from a defendant’s
grant of benefits to the representative plaintiffs, which are
not provided to the class as a whole, the court may not
dismiss the action without notice to the class.” (Id. at p.
868.) Moreover, the lender’s waiver of the acceleration
clause as to the named plaintiffs did not render them per se
unfit to represent the class. (Id. at p. 871.) Instead, the trial
court had discretion to determine their suitability. (Id. at
pp. 871-872.) Finally, the Supreme Court held that even if
the trial court found named plaintiffs were no longer
suitable to represent the class “it should at least afford

                               15
plaintiffs the opportunity to amend their complaint, to
redefine the class, or to add new individual plaintiffs, or
both, in order to establish a suitable representative.” (Id. at
p. 872.) “If, after the court has thus extended an opportunity
to amend, the class still lacks a suitable representative, the
court may conclude that it must dismiss the action.” (Ibid.)
      The Supreme Court explained the rationale for its
approach to mootness under the particular circumstances in
La Sala as follows: “If defendant is permitted to succeed
with such revolving door tactics, only members of the class
who can afford to initiate or join litigation will obtain
redress; relief for even a portion of the class would compel
innumerable appearances by individual plaintiffs. Yet the
function of the class action is to avoid the imposition of such
burdens upon the class and upon the court. [Citation.] If we
sanction [defendant’s] tactic defendants can always defeat a
class action by the kind of special treatment accorded
plaintiffs here and thus deprive other members of the class
of the benefits of the litigation and any notice of opportunity
to enter into it.” (Id. at p. 873.)
      Kagan addressed a similar situation in a class action
brought pursuant to the Consumer’s Legal Remedies Act
(CLRA) (Civ. Code, § 1750 et seq.). In Kagan, the named
plaintiff opened an individual retirement account with the
defendant financial institution, which represented it would
not charge management fees. (Kagan, supra, 35 Cal.3d at p.
587.) After the plaintiff opened the account, the defendant
notified her that it would charge her a fee for administering

                              16
the account. (Ibid.) The plaintiff tried unsuccessfully to
protest the fee, and ultimately retained counsel, who advised
the defendant that it had violated the CLRA, demanded that
it cease its misleading advertising, and demanded that it
reimburse and/or refrain from deducting the fees from the
accounts of the plaintiff and similarly-situated persons. (Id.
at pp. 588-589.) The defendant complied with some of the
demands but made no attempt to identify and reimburse
customers who had already been charged the fee. (Id. at p.
589.) The plaintiff brought a class action. (Ibid.) The
defendant moved for a determination that the action lacked
merit under Civil Code section 1781, subdivision (c)(3).
(Ibid.) The defendant argued that the plaintiff had not
suffered damages, because the fee had never been deducted
from her account, and therefore she was not a member of the
class she claimed to represent. (Ibid.) The trial court
granted the motion, and the plaintiff appealed. (Ibid.)
      The Supreme Court in Kagan construed the plaintiff’s
demand letter as having been made on behalf of the class.
(Kagan, supra, 35 Cal.3d at pp. 590-592.) To defeat a class
action lawsuit under Civil Code section 1782, subdivision (c),
the defendant was required to adequately notify the class
members and provide an opportunity for remedy of defective
goods or services. (Id. at p.591.) Because the defendant had
not complied with Civil Code section 1782, subdivision (c),
the remedy the defendant offered the plaintiff was not
adequate to preclude a class action. (Id. at p. 592.)

                             17
       The Supreme Court rejected the defendant’s argument
in Kagan that allowing the plaintiff to bring a class action
was contrary to the well-established rule that a class
representative must be a member of the class that she
purports to represent because the argument “ignores the
clear legislative intent that prospective defendants under
the [CLRA] not avert a class action by exempting or ‘picking
off’ prospective plaintiffs one-by-one through the provision of
individual remedies.” (Kagan, supra, 35 Cal.3d at p. 593.)
The Kagan court noted that the result was consistent with
its opinion in La Sala, decided before the effective date of the
CLRA. (Id. at p. 594.)
       Here, Plaintiffs maintain that these cases establish the
rule that if a named plaintiff had standing when the
litigation was initiated, the court must evaluate whether the
named plaintiff may still be suitable to represent the class in
the event that standing is lost. They argue that Shi had
standing to sue Wolfsdorf at the outset of this litigation by
virtue of Plaintiffs’ fraud-based claims, which were grounded
on the theory that Wolfsdorf conspired with the other
defendants to defraud the class. As noted above, this court
previously affirmed dismissal of those claims because they
were based on protected petitioning activity (i.e., Wolfsdorf’s
prosecution of I-526 visa applications with the government
on behalf of its clients), and those claims did not have even
minimal merit.
       Plaintiffs’ reading of La Sala and Kagan is overly
broad. La Sala and Kagan articulate the “pick off” exception

                              18
to standing, which applies where a defendant unilaterally
attempts to resolve a class representative’s claims in order to
“pick off” the representative and thwart the class action
against it. (See Schoshinski, supra, 9 Cal.App.5th at pp.
791-792 [discussing La Sala, Kagan, and the “pick off”
exception].) Shi never had standing to maintain a legal
malpractice action against Wolfsdorf independent of
Plaintiffs’ fraud claim. She could not have met the
requirements to establish a legal malpractice claim at any
time in the lawsuit, as Wolfsdorf did not represent her and
owed her no duty of care. Unlike the named plaintiffs in La
Sala and Kagan, whose claims were mooted by the
defendants’ actions to evade the possibility of liability to the
entire class, Wolfsdorf did not “pick off” Shi by providing
satisfaction to Shi for a malpractice against it, thereby
leaving other members of the purported class unrepresented.
The circumstances here are in no way comparable to the
circumstances underlying the exception at issue in La Sala
and Kagan.5
      In the absence of an exception, Plaintiffs are left with
the rule: Shi cannot represent a class in an action against a
defendant against whom she has no individual claim. (See
Baltimore Football Club, Inc. v. Superior Court (1985) 171
Cal.App.3d 352, 359 (Baltimore Football Club) [“In the

     5
       We also note that Kagan, although consistent with
the spirit of La Sala, hinged on the Supreme Court’s
interpretation of a CLRA provision, which has no application
in this case.

                              19
absence of a conspiracy between all of the defendants,
California has adopted the rule that a class action may only
be maintained against defendants as to whom the class
representative has a cause of action”]; see also Simons v.
Horowitz (1984) 151 Cal.App.3d 834, 845 [“[a] plaintiff
cannot use the procedure of a class action to establish
standing to sue a class or group of defendants unless the
plaintiff has actually been injured by each of the defendants
in the class”].)

Appropriateness of Class Certification

       As a preliminary matter, Plaintiffs argue that the trial
court abused its discretion by deciding the issue of
commonality at this stage in proceedings. Plaintiffs assert
that they were “precluded from conducting any meaningful
discovery” before the demurrer was sustained because
Wolfsdorf brought the Anti-SLAPP motion and the trial
court denied their motion to compel further responses.
Plaintiffs specifically complain that “[t]he identities and
contact information for the Wolfsdorf subclass plaintiffs are
still being kept secret by Wolfsdorf.” In fact, the record
demonstrates that Plaintiffs were precluded from completing
precertification discovery by their failure to timely file their
motion to compel further responses.
       Regardless, we conclude that it was appropriate for the
trial court to decide commonality at this stage of proceedings
because “‘it is clear that there is no reasonable possibility

                              20
that the plaintiffs could establish a community of interest
among the potential class members and that individual
issues predominate over common questions of law and fact.
[Citations.]’ [Citations.]” (Tucker, supra, 208 Cal.App.4th at
p. 212.) Although “‘[t]he preferred course is to defer decision
on the propriety of the class action until an evidentiary
hearing has been held on the appropriateness of class
litigation’ [Citation.] . . . if the defects in the class action
allegations appear on the face of the complaint or by matters
subject to judicial notice, the putative class action may be
defeated by a demurrer . . . . [Citation.]” (In re BCBG
Overtime Cases (2008) 163 Cal.App.4th 1293, 1298–1299; see
also Bridgeford v. Pacific Health Corp. (2012) 202
Cal.App.4th 1034, 1041–1042.) “In such circumstances, there
is no need to incur the expense of an evidentiary hearing or
class-related discovery.” (Canon, supra, 68 Cal.App.4th at p.
5.)
      “Section 382 of the Code of Civil Procedure authorizes
a class action when ‘the question is one of a common or
general interest, of many persons, or when the parties are
numerous, and it is impracticable to bring them all before
the court.’ ‘[W]e have articulated clear requirements for the
certification of a class’ under this statute. [Citation.] ‘The
party advocating class treatment must demonstrate the
existence of an ascertainable and sufficiently numerous
class, a well-defined community of interest, and substantial
benefits from certification that render proceeding as a class
superior to the alternatives.’ [Citation.] ‘The community of

                              21
interest requirement involves three factors: “(1)
predominant common questions of law or fact; (2) class
representatives with claims or defenses typical of the class;
and (3) class representatives who can adequately represent
the class.”’ [Citation.] Regarding the first of these factors,
we have recognized ‘“[a]s a general rule”’ that ‘“if the
defendant’s liability can be determined by facts common to
all members of the class, a class will be certified even if the
members must individually prove their damages. ”’
[Citations.] Relatedly, ‘In certifying a class action, the court
must also conclude that litigation of individual issues,
including those arising from affirmative defenses, can be
managed fairly and efficiently.’ [Citation.] Finally, other
considerations relevant to certification ‘include the
probability that each class member will come forward
ultimately to prove his or her separate claim to a portion of
the total recovery and whether the class approach would
actually serve to deter and redress alleged wrongdoing.’
[Citation.]” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th
955, 968–969.)
      Plaintiffs contend there is sufficient commonality
between class members’ claims that class certification is
appropriate. They assert that all putative class members
have nearly identical claims—they lost the same amount of
money in the same way at the hands of a group of
defendants who all played the same role in the scam.
Plaintiffs allege that the attorney defendants accepted
blocks of clients and processed the same forms, which were

                               22
prepared by Miller Mayer. None of the attorney defendants
did sufficient investigation or ensured a meaningful escrow
for the funds. Plaintiffs urge that the fraudulent POM
drafted by Miller Mayer and the fraudulent escrow alone are
sufficient to establish commonality. We disagree.
       Here, there is “‘no reasonable possibility that
[Plaintiffs] could establish a community of interest among
the potential class members and that individual issues
predominate over common questions of law and fact.
[Citations.]’ [Citations.]” (Tucker, supra, 208 Cal.App.4th at
p. 212.)
       First, “[i]f the plaintiff class representative only has a
personal cause of action against one defendant and never
had any claim of any kind against the remaining defendants,
his claim is not typical of the class. This prerequisite is also
absent when the class representative’s cause of action,
although similar to those of other members, is only against a
defendant as to whom the other class members have no
cause of action. The typicality requirement is thus not
fulfilled merely because the plaintiffs allege that they
suffered injuries similar to those of other parties at the
hands of other defendants.” (Baltimore Football Club, supra,
171 Cal.App.3d at p. 359; see also Phillips v. Cocker–Citizens
National Bank (1974) 38 Cal.App.3d 901, 906–908
(Phillips).) Plaintiffs concede that the members of each
subclass were represented by a different attorney. As none
of the investors were represented by all three attorneys,

                               23
there is not a plaintiff who has claims that are typical of the
class. It is irrelevant that their injuries are the same.
      Second, “a plaintiff who is unable to secure standing
for himself is not in a position to fairly insure the adequate
representation of those alleged to be similarly situated . . . .
if each of the respondents was guilty of wrongdoing, it was
not as to appellant and she therefore could not fairly and
adequately represent the interests of the class . . . .”
(Phillips, supra, 38 Cal.App.3d at p. 908.) None of the
investors were represented by more than one attorney, so
there is no one who could fairly and adequately represent
the class.
      Third, “class actions will not be permitted, for example,
where there are diverse factual issues to be resolved, even
though there may be many common questions of law.”
(Brown v. Regents of University of California (1984) 151
Cal.App.3d 982, 988–989.) As the trial court reasoned, the
legal malpractice claims would involve factual questions that
could only be resolved by individual proof. The claims would
require an individualized inquiry into the representations
each law firm made to each investor, the scope of the work
undertaken on behalf of a given client, and the degree to
which each investor relied upon those representations.
Plaintiffs’ focus on the alleged fraudulent nature of the
offering memorandum is beside the point; with respect to the
clients of Wolfsdorf, the commonality must be shown as to
the alleged legal malpractice in prosecuting their

                              24
immigration petitions. Plaintiffs fail to show such
commonality.

Notice to the Wolfsdorf Subclass

      Plaintiffs contend that if Shi cannot continue to
represent the subclass, the trial court erred in dismissing
the action against Wolfsdorf without also giving notice to
Wolfsdorf’s clients. Here, again, Plaintiffs attempt to
extrapolate the Supreme Court’s circumstance-specific
ruling in La Sala to a much broader category of cases, which
would encompass their own. They assert that La Sala’s
mandate of notice to the class applies in all instances where
a purported class representative is prevented from
representing the class. However, La Sala’s mandate is more
limited: the La Sala court held that “whenever the
dismissal of a class action stems from a defendant’s grant of
benefits to the representative plaintiffs, which are not
provided to the class as a whole, the court may not dismiss
the action without notice to the class . . . .” (La Sala, supra, 5
Cal.3d at p. 868, italics added.) The notice requirement
based on a selective grant of benefits to class representatives
does not apply in this case.
      More generally, notice of a dismissal to class members
is governed by Rules of Court, rule 3.770(c), which provides:
“If the court has certified the class, and notice of the
pendency of the action has been provided to class members,
notice of the dismissal must be given to the class in the

                               25
manner specified by the court. If the court has not ruled on
class certification, or if notice of the pendency of the action
has not been provided to class members in a case in which
such notice was required, notice of the proposed dismissal
may be given in the manner and to those class members
specified by the court, or the action may be dismissed
without notice to the class members if the court finds that
the dismissal will not prejudice them.” In this case, the trial
court impliedly found that the dismissal would not prejudice
the subclass members. (See Massachusetts Mutual Life Ins.
Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1287–1288
[findings necessary to support the trial court’s order may be
implied if supported by substantial evidence].) Given the
lack of commonality on issues involving alleged malpractice,
Plaintiffs’ failure to pursue pre-certification discovery and
provide information about Wolfsdorf’s alleged malpractice,
we cannot say the trial court abused its discretion in
dismissing the action without notifying a purported sub-
class.
       Finally, the trial court did not abuse its discretion by
sustaining the demurrer without leave to amend. Plaintiffs
were given multiple opportunities to amend their complaint,
cannot cure the defect in their own standing because of the
lack of relationship with Wolfsdorf, and have proposed no
other amendments that would cure the defects in their case.
(See Schermer, supra, 245 Cal.App.4th at p. 923.)

                              26
                     DISPOSITION

     The judgment is affirmed. Respondent Wolfsdorf
Rosenthal, LLP is awarded its costs on appeal.

          MOOR, J.

     WE CONCUR:

          RUBIN, P. J.

          KIM, J.

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