Court Opinion

ID: 4706459
Source: CourtListenerOpinion
Date Created: 2021-07-26 19:05:18.327527+00
Date Added: 2024-06-11T08:06:36.786040
License: Public Domain

Filed 7/26/21 Ko v. Ly CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

LANDRY KO,                                                              B303438

         Plaintiff and Respondent,                                      (Los Angeles County
                                                                        Super. Ct. No. BC631656)
         v.

VANESSA ELISA LY et al.,

         Defendants and Appellants.

     APPEAL from a judgment of the Superior Court of Los
Angeles County. Barbara A. Meiers, Judge. Affirmed.
     Law Offices of Edgardo M. Lopez and Edgardo M. Lopez for
Defendants and Appellants.
     Landry Ko in pro. per. for Plaintiff and Respondent.

                            _____________________________
       Landry Ko transferred substantial cash and real estate to
Vanessa Ly and her various companies, including Golden Pacific
Investment, Inc. (Golden Pacific), in connection with several
business deals. Ko filed a lawsuit against Ly and Golden Pacific
(together, Defendants), alleging they owed him money on a
promissory note and fraudulently took out loans on his
properties. Following a bench trial at which Ko represented
himself, the court entered judgment in his favor for more than
$4 million. On appeal, Defendants argue Ko lacked standing to
pursue his claims, and the judgment is not supported by
sufficient evidence. We disagree and affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
       Ko was introduced to Ly through his sister’s boyfriend.
Ly represented herself as a real estate expert with millions of
dollars of property and connections to cheap materials and labor.
Ko and Ly completed numerous business and real estate
transactions. Their relationship soured, however, and Ko
eventually filed a complaint against Ly and Golden Pacific, along
with numerous other defendants that are not involved in this
appeal. In the operative first amended complaint, Ko asserted
causes of action for breach of contract, fraud, declaratory relief,
conversion, unjust enrichment, and constructive trust.
       The case proceeded to a bench trial, at which Ko
represented himself. Ko presented evidence of three transactions
with Ly for which he sought compensation.
       The first transaction involved a hard money loan to Ly
made through Ko’s sister’s company, TPB Investments, LLC
(TPB). Ko transferred $380,000 to TPB, and TPB loaned Ly a
total of $760,000. The loan was evidenced by a promissory note,
and Ly paid interest on the note directly to Ko. Ko eventually

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demanded repayment of the principal, but Ly refused. TPB then
assigned the note to Ko.
       The second transaction involved a joint venture to purchase
and develop property that the parties refer to as the Mandevilla
Property. To purchase the property, Ko directed Tri Diamond,
LLC (Tri Diamond)—which he owned jointly with his sisters—to
send $940,000 to Genus Capital, LLC, which Ly owned. Ko and
his sisters had decided to shut down the operations of Tri
Diamond and divvy up its funds, and the $940,000 represented
Ko’s share.
       Ko later discovered that Ly did not use the funds to
purchase the Mandevilla Property, but instead transferred them
to one of her other companies. Nonetheless, Ly somehow
purchased the property and built a home on it. After
construction was complete, Ly told Ko they could take out a loan
on the property and then lend the cash at a higher interest rate.
Ko agreed to the plan.
       Unbeknownst to Ko, however, Ly had already taken out a
loan on the property for $630,000. Ly transferred some of those
funds into another company she owned called Ly Family, Inc.
She also used some of the funds to purchase a property for a man
named Brad Lin.
       Ly eventually transferred title to the Mandevilla Property
to Ko, but she stopped making payments on the loan. Ko sold the
property to avoid foreclosure, and he received approximately
$42,000 from the sale.
       The final transaction involved a home that the parties refer
to as the Vista Property. Ko originally owned the Vista Property,
which was worth $1.8 million free and clear of any debt. The
plan was to make renovations to the property and then sell it.

                                3
Ko agreed to transfer the property to Golden Pacific because Ly
represented she had capital losses that could offset any resulting
capital gains.
      Ko and Ly effectuated the transfer using a “fake sale,”
which made it appear as though Golden Pacific purchased the
property from Ko. In reality, Ko did not receive any payment
from Golden Pacific. In addition, one of Ly’s companies put a
fake mechanic’s lien on the property for the sales price,
apparently to avoid having to pay taxes.
      After the transfer was complete, and without Ko’s
permission, Ly took out a $1.5 million loan on the property.
The remodel work stalled and eventually stopped, and the
property was in disrepair. Ly offered to destroy the property and
pay Ko the insurance proceeds, but Ko refused.
      Ly eventually transferred the property back to Ko.
However, she stopped making payments on the loan, and the
property was sold at a foreclosure sale. Ko spent about $50,000
trying to repair the property, but he did not receive any money
from the sale.
      Following trial, the court issued a “tentative partial
statement of decision” in Ko’s favor, finding he established his
fraud claims, “as well as . . . other theories such as conversion,
with a constructive lien imposed as sought in his operative
Complaint . . . .” The court specifically found Ly fraudulently
induced Ko, “through a whole series of misrepresentations on
which Ko reasonably relied, into entrusting Ly with very
substantial assets and funds, some of which went directly to Ly,
but which more often were directed by her to be deposited or paid
over to one of the entities which she employed to carry out her
fraudulent schemes. [¶] . . . [T]he first step was to fraudulently

                                4
induce Ko to put title to [the Mandevilla Property and Vista
Property] into her shell companies, even though neither they nor
Ly had put in one cent in return. The second was for Ly to use
her shells to apply for loans against the properties and, without
Ko’s consent, to pull very substantial sums out of each property
by means of issuing promissory notes to lenders . . . . Once Ko
discovered these transactions, of course, Ly promised to make all
the payments on the loans in issue, but she did not, and,
although she ultimately transferred title ‘back’ to Ko as to each
property, he had no ability to pay the debts which she had put on
the properties, causing them to be lost to him either through
foreclosure or short sale . . . .”
      As to damages, the court determined Ly and Golden Pacific
were jointly and severally liable for $4,233,357, consisting of
$940,000 related to the Mandevilla Property, $2,533,357 related
to the Vista Property, and $760,000 under the promissory note.
The court entered judgment reflecting the same, and Ly and
Golden Pacific appealed.1

1     Defendants filed a request that we take judicial notice of
their Joint Motion for Judgment filed in the trial court.
The Joint Motion for Judgment already appears in the clerk’s
transcript, and Defendants do not explain why it is necessary to
separately take judicial notice of the document. Accordingly, we
deny the request.
      We also deny Ko’s request that we take judicial notice of
documents filed in a related bankruptcy case. The documents are
not relevant to the issues raised on appeal.

                                5
                           DISCUSSION
I.     Ko’s Motion to Dismiss Lacks Merit
       Before turning to the merits of Defendants’ appeal, we
address Ko’s motion to dismiss. Ko asserts numerous arguments,
none of which has merit.
       First, Ko urges us to dismiss the appeal because Golden
Pacific was placed in default for failing to file a notice designating
record on appeal, pay a deposit for a reporter’s transcript, and
pay a fee for holding the reporter’s transcript deposit in trust.
California Rules of Court, rule 8.140(b) permits the reviewing
court to dismiss an appeal if a party fails to timely do an act
required to procure the record. Although Golden Pacific received
a notice of default under this rule, the appellate record contains a
reporter’s transcript as well as a copy of a notice designating
record on appeal. It appears, therefore, that Golden Pacific cured
any default. Accordingly, we decline to dismiss the appeal on this
basis.
       Ko next argues that Golden Pacific may not pursue this
appeal because, according to a printout from the Nevada
Secretary of State’s website, its corporate status was revoked.
“California law recognizes that the continuing legal existence of a
corporation depends on the law of the state of incorporation.”
(CM Record Corp. v. MCA Records, Inc. (1985) 168 Cal.App.3d
965, 967.) Ko does not provide any authority explaining the legal
effect under Nevada law of Golden Pacific’s “revoked” status, let
alone authority showing it prevents Golden Pacific from
appealing a judgment against it. Accordingly, we decline to
dismiss the appeal on this basis.

                                  6
       Ko alternatively urges us to dismiss the appeal because
Defendants filed their opening brief a day late. The California
Rules of Court provide that “[i]f a party fails to timely file an
appellant’s opening brief or a respondent’s brief, the reviewing
court clerk must promptly notify the party in writing that the
brief must be filed within 30 days after the notice is sent, and
that failure to comply may result in” sanctions. (Cal. Rules of
Court, rule 8.360(c)(5).) If the party fails to comply with the
notice, the court may then impose sanctions. (Id., rule
8.360(c)(6).) Here, it does not appear the clerk provided notice of
Defendants’ failure to file a timely opening brief. In any event,
Defendants filed their brief within one day of the deadline.
Under these circumstances, no sanctions are warranted.
       Ko further contends dismissal is warranted because
Defendants submitted altered exhibits in support of their opening
brief on appeal. None of the alterations Ko complains about are
relevant to the issues on appeal. Accordingly, we decline to
dismiss the appeal on this basis.
       Finally, Ko urges us to dismiss the appeal because Golden
Pacific’s corporate veil is nonexistent, and because he already
received a partial payment of the judgment in connection with a
bankruptcy action. Ko fails to explain why, even if true, either
warrants dismissing the appeal. Accordingly, we will proceed to
consider the merits of Defendants’ appeal.
II.    Scope and Standard of Review
       The scope of our review of a judgment following a bench
trial depends on whether the trial court issued a statement of
decision in response to a party’s request. Here, the record on
appeal does not contain a final statement of decision or any
indication that a party requested one. Instead, there is only a

                                7
“tentative partial statement of decision,” which the trial court
issued in a minute order the same date it entered judgment.
Defendants do not reference or rely on the tentative decision,
argue that it is the final statement of decision, or otherwise
ascribe any significance to it. Therefore, we will treat it as what
it purports to be: a tentative statement of decision.
       While a tentative decision “may be valuable in illustrating
the trial judge’s theory,” it will not “be used to impeach the order
or judgment on appeal. [Citation.] This is because a trial court
retains inherent authority to change its decision, its findings of
fact, or its conclusions of law at any time before entry of
judgment and then the judgment supersedes any memorandum
or tentative decision or any oral comments from the bench.
[Citations.] . . . . In the absence of a statement of decision, a
reviewing court looks only to the judgment to determine error.”
(Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 268
(Shaw).)
       Accordingly, although we will use the court’s tentative
factual findings and conclusions of law as a guide in our review of
the judgment, we will not construe the tentative so as to impeach
the judgment. We will also “presume that the trial court made
all factual findings necessary to support the judgment for which
substantial evidence exists in the record. In other words, the
necessary findings of ultimate facts will be implied and the only
issue on appeal is whether the implied findings are supported by
substantial evidence.” (Shaw, supra, 170 Cal.App.4th at p. 267.)
       Under the substantial evidence standard of review, “[w]e
presume the record contains evidence sufficient to support the
judgment, consider the evidence in the light most favorable to the
judgment, and resolve all conflicts in favor of the judgment.

                                 8
[Citation.]” (County of San Bernardino v. Walsh (2007) 158
Cal.App.4th 533, 540, fn. omitted.) We also do not reweigh
evidence or reassess the credibility of witnesses. (Schmidt v.
Superior Court (2020) 44 Cal.App.5th 570, 582.)
III. Ko Had Standing to Pursue His Claims
       Defendants contend Ko lacked standing to pursue claims
related to the TPB loan and Mandevilla Property. According to
Defendants, the real parties in interest with respect to those
claims were TPB and Tri Diamond, respectively. We disagree.
       A. Relevant Law
       “Every action must be prosecuted in the name of the real
party in interest, except as otherwise provided by statute.”
(Code Civ. Proc. § 367.) When a plaintiff is not a real party in
interest, the plaintiff lacks standing to sue. (Cloud v. Northrop
Grumman Corp. (1998) 67 Cal.App.4th 995, 1004.) A real party
in interest is a party “possessing the right sued upon by reason of
the substantive law.” (Killian v. Millard (1991) 228 Cal.App.3d
1601, 1605.) Lack of standing is a jurisdictional defect that
requires judgment against the nominative plaintiff. (Scott v.
Thompson (2010) 184 Cal.App.4th 1506, 1510.)
       Generally, standing is a question of law that we review de
novo. (San Luis Rey Racing, Inc. v. California Horse Racing Bd.
(2017) 15 Cal.App.5th 67, 73.) “However, where the superior
court makes underlying factual findings relevant to the question
of standing, we defer to the superior court and review the
findings for substantial evidence.” (Ibid.; see Burrtec Waste
Industries, Inc. v. City of Colton (2002) 97 Cal.App.4th 1133,
1137.)

                                 9
       B. The TPB Loan
       The trial court awarded Ko damages related to the TPB
loan based on its finding that TPB assigned him the relevant
promissory note. Defendants contend there is insufficient
evidence to support that finding, and that Ko lacked standing as
a result. We disagree.
       “The burden of proving an assignment falls upon the party
asserting rights thereunder [citations]. In an action by an
assignee to enforce an assigned right, the evidence must not only
be sufficient to establish the fact of assignment when that fact is
in issue, [citation] but the measure of sufficiency requires that
the evidence of assignment be clear and positive to protect an
obligor from any further claim by the primary obligee.” (Cockerell
v. Title Ins. & Trust Co. (1954) 42 Cal.2d 284, 292.)
       Here, Ko introduced into evidence a document purporting
to assign him the promissory note, which his mother signed on
TPB’s behalf. Defendants insist the trial court could not rely on
this document because there is no evidence showing Ko’s mother
had the authority to assign the note. We disagree. The
assignment itself states that Ko’s mother is a managing member
of TPB, which generally would have given her authority to act on
TPB’s behalf. (See Cal. Corp. Code, § 17703.01, subds. (a), (b)(2)
[managers of an LLC generally have authority to bind the
corporation].) Defendants did not object to the document on
hearsay grounds, meaning the court was free to consider its
contents for the truth of the matters asserted therein.2 (See

2     Defendants argue on appeal that the document does not
qualify under the business records exception to the hearsay rule.
They did not raise this objection below, which forfeits it on
appeal. (See Coit Drapery Cleaners, Inc. v. Sequoia Ins. Co.

                                10
Burke v. Bloom (1960) 187 Cal.App.2d 155, 165 [absent an
objection, “hearsay evidence may be considered in support of the
judgment”]; Smith v. Smith (1955) 135 Cal.App.2d 100, 105
[hearsay evidence admitted without objection “became competent
evidence”].) Ko also introduced into evidence, without objection,
documents filed with the California Secretary of State indicating
his mother was both a member and an executive officer of TPB.
From this evidence, the trial court could reasonably conclude Ko’s
mother had the authority to, and did in fact, assign the note to
Ko, thereby giving him standing to seek repayment under it.3
       We further reject Defendants’ passing contention that Ko
failed to submit evidence showing his mother signed the
assignment. Ly raised this issue in the trial court after the close
of evidence, and Ko responded that he watched his mother sign
the document. The trial court offered to allow Ko to reopen his
case to make a proper record of that fact. Ly, however, told the
court that was not necessary, which effectively withdrew the
objection. As such, the issue is forfeited, and we decline to
consider it. (Cf. People v. Jones (2003) 29 Cal.4th 1229, 1255 [the

(1993) 14 Cal.App.4th 1595, 1611 [“It is hornbook law that a
timely and specific objection is required to prevent the
consideration of certain evidence; the failure to object at all
waives any claim of error.”].)

3     Defendants briefly contend the trial court should have
excluded the promissory note itself, and had it done so, Ko would
lack standing to pursue his claim. It is not clear, and Defendants
do not explain, how the admission of the promissory note is
relevant to the standing issue.

                                 11
withdrawal of an objection to the introduction of evidence forfeits
the issue on appeal].)
       C. The Mandevilla Property
       Defendants contend Ko lacked standing to pursue claims
related to the Mandevilla Property because the relevant funds for
its purchase came from Tri Diamond, rather than Ko. The trial
court disagreed, finding the funds constituted Ko’s proceeds from
the liquidation of Tri Diamond. That finding was supported by
substantial evidence. Specifically, Ko testified that he and the
other owners of Tri Diamond decided to shut down the
corporation’s operations, and the funds represented his share of
its assets. According to Ko, rather than receive a disbursement,
he directed Tri Diamond to send the funds directly to Ly’s
company. This is sufficient evidence to show Ko is the real party
in interest with respect to the Mandevilla Property funds.
III. The Judgment is Supported by Substantial Evidence
       Defendants contend that Ko failed to prove fraud or
conversion in connection with any of the relevant transactions.
None of their arguments warrants reversal.
       A. The Mandevilla Property
       Defendants argue there is insufficient evidence showing
fraud in connection with the Mandevilla Property. “ ‘The
elements of fraud, which give rise to the tort action for deceit, are
(a) misrepresentation (false representation, concealment, or
nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent
to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e)
resulting damage.’ [Citations.]” (Lazar v. Superior Court (1996)
12 Cal.4th 631, 638.)

                                  12
       Defendants first contend Ko failed to prove fraud because
there is no evidence showing Ly took out a loan on the
Mandevilla Property without his knowledge and consent. Not so.
Ko expressly testified, without objection, that Ly did precisely
that.
       Defendants alternatively argue that, even if Ly obtained
the loan without permission, Ko suffered no resulting damages
given he subsequently agreed to a loan on the property.
Defendants overlook that although Ko agreed to a loan, he did so
on the condition that the cash be reloaned at a higher interest
rate. The evidence at trial showed that Ly instead used some of
the funds to purchase a property for a man named Brad Lin, and
she transferred other funds to one of her companies. This was
sufficient to show fraud in connection with the Mandevilla
Property.
       B. The Vista Property
       As to the Vista Property, Defendants argue there is
insufficient evidence showing Ko was fraudulently induced to
transfer the property to Golden Pacific, or that he suffered any
resulting damages. Defendants’ entire argument consists of a
single sentence, and they fail to support it with meaningful
analysis, relevant authority, or citations to the record.
Accordingly, the issue is forfeited and we need not consider it.
(See Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784–
785 [“When an appellant fails to raise a point, or asserts it but
fails to support it with reasoned argument and citations to
authority, we treat the point as waived.”].)

                               13
       Even if we overlooked the forfeiture, we would conclude Ko
submitted sufficient evidence of fraud. Ko testified that Ly
convinced him to transfer the Vista Property to Golden Pacific,
apparently in order to reduce capital gains in a subsequent sale.
Ly then took out a loan on the property without Ko’s knowledge
or permission, and failed to make all the payments due on that
loan. Considered with the evidence showing Ly did something
similar in connection with the Mandevilla Property, the trial
court could have reasonably inferred that Ly devised a plan to
convince Ko to transfer title to Golden Pacific so that she could
take out a loan on the property. The court could also reasonably
infer that Ly purposefully withheld her plan from Ko, and that he
would not have gone forward with the transaction had he been
aware of it. Ko, moreover, presented evidence that Defendants’
failure to pay the loan resulted in the Vista Property being sold
at a foreclosure sale, which caused him to lose all his equity in it.
This was sufficient to prove fraud.
       Defendants alternatively contend the doctrine of unclean
hands barred Ko from any recovery related to the Vista Property
given he was involved in an illegal “fake sale.” The doctrine of
unclean hands “demands that a plaintiff act fairly in the matter
for which he seeks a remedy. He must come into court with clean
hands, and keep them clean, or he will be denied relief,
regardless of the merits of his claim. [Citations.] The defense is
available in legal as well as equitable actions. [Citations.]”
(Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76
Cal.App.4th 970, 978.) Whether to apply “the unclean hands
defense is a matter within the trial court’s discretion.” (Farahani
v. San Diego Community College Dist. (2009) 175 Cal.App.4th
1486, 1495.)

                                 14
       Initially, we find Defendants forfeited their unclean hands
defense by failing to raise it in the trial court. Defendants
suggest Golden Pacific asserted the defense during its closing
argument when it argued that Ko was “not an innocent party”
given the evidence showing his involvement in the “fake sale.”
Golden Pacific did not, however, directly tie this evidence to an
unclean hands defense. Instead, it argued such evidence showed
Ko was a sophisticated actor who “knew what was going on
and . . . was a part of all of the transactions that Golden Pacific
participated in.” At no point did either defendant directly argue
that Ko’s participation in the “fake sale” barred him from
recovering on his fraud claim under the doctrine of unclean
hands. Their failure to do so forfeits the issue on appeal. (See
Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333,
355 [concluding the failure to raise an unclean hands defense in
the trial court forfeited the issue on appeal].)
       Even if we were to overlook the forfeiture, we would reject
Defendants’ argument on the merits. At the conclusion of trial,
the court found “the idea to avoid taxes was [Ly’s] idea; not [Ko’s]
at all. I believe that she’s the one who came up with ‘let’s use a
[mechanic’s] lien’ idea, not Mr. Ko. I believe he was a novice as
he stated, guided, and directed by her all along the line.” This
suggests the court determined Ko and Ly were not equally at
fault for any illegality surrounding the “fake sale.” That factual
finding, which Defendants do not challenge, was sufficient to
defeat an unclean hands defense. (See Warren v. Merrill (2006)
143 Cal.App.4th 96, 115 [“the doctrine of unclean hands does not
automatically bar equitable relief where the parties are not
equally at fault”].)

                                 15
       C. The TPB Loan
       Defendants contend there is insufficient evidence showing
fraud in connection with the TPB loan. Although we tend to
agree, that alone does not require reversal given Ko sought relief
under multiple, alternative theories. (Shaw, supra, 170
Cal.App.4th at p. 269 [reviewing court may affirm the judgment
if correct on any legal basis, even if that basis was not invoked by
the trial court].) Based on our review of the operative complaint
and Ko’s arguments at trial, it appears his primary theory of
relief related to the TPB loan was breach of contract. Moreover,
because there is no final statement of decision, we may infer the
lower court made all factual findings necessary to support the
judgment under such a theory.4 (Shaw, supra, 170 Cal.App.4th
at p. 267; Fladeboe v. American Isuzu Motors Inc. (2007) 150
Cal.App.4th 42, 58.) There is nothing in the record to suggest the
court did not make the requisite findings, and Defendants offer
no other reason why Ko could not prevail on his breach of

4     Even if the “partial tentative statement of decision”
constituted the final statement of decision, we would still reach
the same conclusion. An appellate court may make implied
findings related to ambiguities and omissions in a statement of
decision, unless they were brought to the lower court’s attention
and the court failed to correct them. (Fladeboe v. American Isuzu
Motors Inc. (2007) 150 Cal.App.4th 42, 58; see Code Civ. Proc.,
§ 634.) Here, there is nothing in the record showing Defendants
objected to the trial court’s statement of decision or otherwise
pointed out that the court failed to address Ko’s breach of
contract claim.

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contract claim. Accordingly, we may affirm the judgment on that
basis.5
                        DISPOSITION
      The judgment is affirmed. Ko is awarded his costs on
appeal.

                                           OHTA, J. *
We Concur:

             GRIMES, Acting P. J.

             STRATTON, J.

5     Because we conclude the judgment was supported under
fraud and breach of contract theories, we need not consider
Defendants’ arguments that Ko failed to prove conversion.

*     Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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