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Court of Appeal:
LASC Properly Decided Which Chinese National Owns Funds
Presiding Justice Edmon Says Judge Rice Did Not Err in Rejecting Motion Based on Forum Non Conveniens
By a MetNews Staff Writer
The Court of Appeal for this district held on Friday that ownership of funds from an investment in a Los Angeles company was properly tried in the Los Angeles Superior Court notwithstanding that the parties competing for the funds are Chinese nationals and the issue was which of two documents that were proffered was the actual settlement agreement signed in a Shanghai courtroom where divorce proceedings took place.
Judge Stuart M. Rice found the former wife, Anping Zeng, to be more credible and, based on the provisions of the agreement he determined to be the genuine one, awarded her the $500,000 she and her ex-husband, Feng Jiang, had invested in the Los Angeles Film Regional Center (“LAFRC”). The funds had been interpleaded by LAFRC.
Rice added awards of $245,075.11 in prejudgment interest and $205,077.75 in attorney fees.
Basis of Appeal
Jiang appealed on the ground that Rice erred in denying his motion to dismiss Zeng’s action for declaratory relief based on forum non conveniens. In an opinion that was not certified for publication, Presiding Justice Lee Edmon of this district’s Div. Three wrote:
“[T]he trial court found that while China generally is a suitable alternative forum…, it was not suitable in this case. China was an unsuitable forum here because the res of the lawsuit—the $500,000—was already in the California court’s possession, and the enforceability of a Chinese judgment in California courts was uncertain. To this, Jiang responds that the trial court could have stayed rather than dismissed the case. Even so, the fact remains that Jiang failed to establish that a Chinese court would have jurisdiction over the interpleaded funds.”
Suitability of Forum
Edmon said that if an alternative forum is found unsuitable, that ends the inquiry, but noted that Rice nonetheless addressed the question that arises if the other forum would be suitable: what interests, public and private, predominate? In weighing the interests, the trial judge found the scale tipped in favor of a trial in California.
“That conclusion was well-within the bounds of reason based on substantial evidence,” Edmon declared.
She pointed out that the investment was in a Los Angeles company rendering “trial and the enforceability of the ensuing judgment potentially more expeditious and relatively inexpensive in California”; Zeng and her son were California residents and Jiang, though claiming to reside in China was served at an abode he owns in San Marino; and the parties invested in LAFRC in order to gain green cards, evidencing an intent to reside here.
Narrow Issue
Edmon went on to say:
“[A]lthough Jiang argues that China has an interest in enforcing contracts entered into there and under its laws, we do not agree with how Jiang frames the issue. The issue in this case does not concern broader issues about the parties and their divorce agreement and how they divided their assets. It concerns the narrow issue of the parties’ singular investment in the United States for the purpose of obtaining green cards, i.e., residence in the United States. It is therefore not clear that China would have an interest in a dispute concerning a foreign investment made by nationals residing outside of China. At a minimum, it cannot be said that China’s interest in the dispute necessarily is greater than California’s interest in it. Given this, we cannot find that the trial court exceeded the bounds of reason in concluding that the factors favored California as a forum.”
The judgment was reversed, with a remand, as to the award of prejudgment interest because, Edmon said, “it appears that the trial court might not have considered the interest rate” specified in the settlement agreement.
The case is Zeng v. Jiang, B305886.
Robert A. Bailey and Yaw-Jiun (Gene) Wu of the Pasadena firm of Anglin Flewelling & Rasmussen represented Jiang. Mid-Wilshire practitioner Barry G. Florence acted for Zeng.
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