Brighten Investment Group, Inc. v. Walnut Education Time, Inc., et al.

relationship if the elements of the claim can be established independently of the parties' contractual rights and obligations, and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract." (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 13.)

In this case, Plaintiff has not alleged that he suffered any physical injury or that there was any damage to property other than to the subject vehicle. Thus, Plaintiff has alleged only economic loss. Plaintiff has not alleged a breach of duty beyond contractual obligations. The fraud claim is premised on VGA's failure to provide a vehicle free of defects, which is a breach of warranty. In other words, the fraud claim cannot be "established independently of the parties' contractual rights and obligations." (See Rattagan, supra, 17 Cal.5th at p. 13.) Therefore, the fraudulent concealment claim is barred by the economic loss rule.

Moreover, a duty to disclose only arises in "direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large." (Bjoin v. J-M Manufacturing Co., Inc. (2025) 113 Cal.App.5th 884, 902.) Here, the complaint fails to allege any direct dealings between Plaintiff and VGA. "[Plaintiff] did not transact with [VGA] in any way." (Id. at p. 903.) The fraudulent concealment claim fails for this independent reason.

CONCLUSION

Defendants' motion for judgment on the pleadings is GRANTED as to the sixth cause of action without leave to amend and OVERRULED in all other respects.

BRIGHTEN INVESTMENT GROUP, INC., Plaintiff, v. WALNUT EDUCATION TIME, INC., et al., Defendants. | Case No.: 25STCV29824 Hearing Date: August 24, 2026 [TENTATIVE] order RE: plaintiff/cross-defendant brighten investment group, inc.'s motions to compel further responses (CRS# 0506, 8781, 8777, 0396) | | |

I. BACKGROUND

a. The Underlying Complaint

On October 13, 2025, Plaintiff Brighten Investment Group, Inc. (Brighten) filed this action against Defendants Walnut Education Time, Inc. (Walnut) and Connie Lin Sun (Sun). The complaint asserts (1) breach of fiduciary duties, (2) abuse of control, (3) waste of corporate assets, (4) unjust enrichment, (5) request for accounting, and (6) specific performance. The complaint alleges that Brighten is a majority shareholder of Walnut under an Investment Agreement executed in October 2018. (Compl. P. 9.)

Brighten appointed two individuals, Huan Dan Luan (Luan) and Yun Yu (Yu), to Walnut's board of directors. (Id., P. 11.) Brighten alleges that Sun, the president and CEO of Walnut, refused to cooperate in the board's oversight of Walnut and prevented Brighten from inspecting corporate records. (Id., P.P. 13-15.) This has allegedly allowed Sun to conceal her abuse and breaches of fiduciary duty. (Id., P. 15.) Sun also allegedly removed Luan and Yu from the board without following the proper procedures. (Id., P. 16.) Furthermore, Sun allegedly utilized Walnut's facilities to operate a separate business owned by Sun, without obtaining proper approval. (Id., P.P. 17-18.)

b. Cross-Complaint

On December 22, 2025, Sun filed a cross-complaint against Brighten and Luan for declaratory relief. The cross-complaint alleges that the purported Investment Agreement by which Brighten obtained a majority interest in Walnut is invalid and must be rescinded. (Cross-Compl. P. 20.) According to the cross-complaint, the United States Citizenship and Immigration Service (USCIS) has determined that Brighten's stock certificate is void and confers no rights. (Id., P. 21.) Luan is a citizen and resident of China. (Id., P. 16.)

c. The Instant Motion

On June 18, 2026, Brighten filed the instant four motions to compel Sun's further responses to discovery. Sun filed an omnibus opposition on August 11, 2026. Brighten filed an omnibus reply on August 17, 2026.

II. LEGAL STANDARD

Upon receiving responses to its discovery requests, the propounding party may move for an order compelling further responses if the responses are incomplete or evasive, or objections are without merit or too general. (Code Civ. Proc., Sec.Sec. 2030.300(a), 2031.310(a), 2033.290(a).)

III. DISCUSSION

Brighten's motions and separate statements set forth the substance of each discovery request at issue, as well as the defect in Sun's responses. Sun does not dispute this showing. Instead, Sun argues that Brighten's counsel cannot properly represent Brighten in the case and therefore cannot pursue discovery on Brighten's behalf. However, Sun's arguments have been rejected in the Court's concurrent ruling on her motion to disqualify. In short, Brighten's counsel has not been disqualified and may properly represent Brighten. Therefore, the discovery requests were properly propounded, and Sun must provide code-compliant responses.

Sanctions are warranted, as the Court finds no substantial justification for Sun's failure to provide proper responses. The Court awards $2,000 (5 hrs. x $400/hr.), plus $240 in filing fees, for a total of $2,240.

IV. CONCLUSION

Plaintiff/Cross-Defendant Brighten Investment Group, Inc.'s motions to compel further responses are GRANTED. Defendant/Cross-Complainant Connie Lin Sun shall provide further responses to the subject discovery within 20 days of today. The Court sanctions Sun in the amount of $2,240, to be paid within 30 days of today.

BRIGHTEN INVESTMENT GROUP, INC., Plaintiff, v. WALNUT EDUCATION TIME, INC., et al., Defendants. | Case No.: 25STCV29824 Hearing Date: August 24, 2026 [TENTATIVE] order RE: defendant/cross-complainant connie lin sun's motion to disqualify counsel (CRS# 2861) | | |

I. BACKGROUND

a. The Underlying Complaint

On October 13, 2025, Plaintiff Brighten Investment Group, Inc. (Brighten) filed this action against Defendants Walnut Education Time, Inc. (Walnut) and Connie Lin Sun (Sun). The complaint asserts (1) breach of fiduciary duties, (2) abuse of control, (3) waste of corporate assets, (4) unjust enrichment, (5) request for accounting, and (6) specific performance. The complaint alleges that Brighten is a majority shareholder of Walnut under an Investment Agreement executed in October 2018. (Compl. P. 9.)

Brighten appointed two individuals, Huan Dan Luan (Luan) and Yun Yu (Yu), to Walnut's board of directors. (Id., P. 11.) Brighten alleges that Sun, the president and CEO of Walnut, refused to cooperate in the board's oversight of Walnut and prevented Brighten from inspecting corporate records. (Id., P.P. 13-15.) This has allegedly allowed Sun to conceal her abuse and breaches of fiduciary duty. (Id., P. 15.) Sun also allegedly removed Luan and Yu from the board without following the proper procedures. (Id., P. 16.) Furthermore, Sun allegedly utilized Walnut's facilities to operate a separate business owned by Sun, without obtaining proper approval. (Id., P.P. 17-18.)

b. Cross-Complaint

On December 22, 2025, Sun filed a cross-complaint against Brighten and Luan for declaratory relief. The cross-complaint alleges that the purported Investment Agreement by which Brighten obtained a majority interest in Walnut is invalid and must be rescinded. (Cross-Compl. P. 20.) According to the cross-complaint, the United States Citizenship and Immigration Service (USCIS) has determined that Brighten's stock certificate is void and confers no rights. (Id., P. 21.) Luan is a citizen and resident of China. (Id., P. 16.)

c. The Instant Motion

On June 25, 2026, Sun filed the instant motion to disqualify Guerrero & Chan LLP (GC) as counsel for Brighten and Luan. Brighten filed an opposition on August 11, 2026. Sun filed a reply on August 17, 2026.

II. LEGAL STANDARD

"A trial court's authority to disqualify an attorney derives from its inherent power to 'control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.'" (Clark v. Superior Court (2011) 196 Cal.App.4th 37, 47, quoting Code Civ. Proc., Sec. 128(a)(5).) "The power is frequently exercised on a showing that disqualification is required under professional standards governing ... potential adverse use of confidential information." (Ibid.) "When ruling on a disqualification motion, the paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar.

The important right to counsel of one's choice must yield to ethical considerations that affect the fundamental principles of our judicial process." (Id. at pp. 47-48.)

III. DISCUSSION

a. Conflict of Interest

"A lawyer shall not, without informed written consent from each client and compliance with paragraph (d), represent a client if the representation is directly adverse to another client in the same or a separate matter." (Cal. Rules of Prof. Conduct, Rule 1.7(a).) "[O]nce a conflict has arisen between a corporation and one or more of its officers, directors or shareholders, corporate counsel may not simultaneously represent the corporation and the adverse officer, director or shareholder." (La Jolla Cove Motel & Hotel Apartments, Inc. v. Superior Court (2004) 121 Cal.App.4th 773, 785.)

Sun argues that GC, having served as counsel for Sun and Walnut, cannot represent Brighten and Luan, whose interests are adverse to Sun's and Walnut's. Specifically, Sun points out that this action involves a dispute between Sun and Walnut on the one hand, and Brighten and Luan on the other, regarding the validity of Brighten's and Luan's interests in Walnut. Sun contends that GC, as Walnut's corporate counsel, cannot choose sides in a dispute between Walnut's shareholders.

The basis of Sun's motion is that GC previously represented Sun and Walnut in petitions to the USCIS regarding Luan's immigration status. However, GC ceased this representation upon Luan's departure from the U.S. (Chan Decl. P. 8.) Thus, there is no issue of concurrent representation of adverse interests, which is what Rule 1.7(a) concerns. [1] Sun's motion does not otherwise raise any issue of successive representation, which is governed by different rules. Moreover, GC was not Walnut's corporate counsel. GC was retained solely to handle the immigration matter. (Chan Decl. P. 5.) Thus, the cases barring corporate counsel from taking sides in a shareholder dispute are inapposite. For these reasons, the motion fails to articulate a basis for disqualification.

b. Standing

Separately, "an attorney-client relationship between the complaining party and the attorney sought to be disqualified is a prerequisite to seeking disqualification." (Moreci v. Scaffold Solutions, Inc. (2021) 70 Cal.App.5th 425, 432.) Here, GC represented Walnut in the immigration appeal. (Chan Decl. P. 5, Ex. A.) Sun signed the retainer agreement on behalf of Walnut, not in her personal capacity. (Ibid.) Sun also signed a Notice of Entry of Appearance in her capacity as director of Walnut, authorizing GC to represent Walnut. (Id., Ex. C.) Walnut was the petitioner of record in the USCIS appeal. (Id., Ex. D.) This shows that GC did not represent Sun in her personal capacity.

In the face of this specific documentary evidence, Sun's conclusory declaration that "the Chan Law Firm represented me personally" is not credible. (See Sun Reply Decl. P. 8.) Sun presents no facts demonstrating an attorney-client relationship between GC and herself. Therefore, Sun has no standing to pursue the instant motion. This constitutes an independent reason to deny the motion.

IV. CONCLUSION

Defendant/Cross-Complainant Connie Lin Sun's motion to disqualify counsel is DENIED.

BRIGHTEN INVESTMENT GROUP, INC., Plaintiff, v. WALNUT EDUCATION TIME, INC., et al., Defendants. | Case No.: 25STCV29824 Hearing Date: August 24, 2026 [TENTATIVE] order RE: cross-defendant huan dan luan's motion to quash service of summons (CRS# 9754) | | |

I. BACKGROUND

a. The Underlying Complaint

On October 13, 2025, Plaintiff Brighten Investment Group, Inc. (Brighten) filed this action against Defendants Walnut Education Time, Inc. (Walnut) and Connie Lin Sun (Sun). The complaint asserts (1) breach of fiduciary duties, (2) abuse of control, (3) waste of corporate assets, (4) unjust enrichment, (5) request for accounting, and (6) specific performance. The complaint alleges that Brighten is a majority shareholder of Walnut under an Investment Agreement executed in October 2018. (Compl. P. 9.)

Brighten appointed two individuals, Huan Dan Luan (Luan) and Yun Yu (Yu), to Walnut's board of directors. (Id., P. 11.) Brighten alleges that Sun, the president and CEO of Walnut, refused to cooperate in the board's oversight of Walnut and prevented Brighten from inspecting corporate records. (Id., P.P. 13-15.) This has allegedly allowed Sun to conceal her abuse and breaches of fiduciary duty. (Id., P. 15.) Sun also allegedly removed Luan and Yu from the board without following the proper procedures. (Id., P. 16.) Furthermore, Sun allegedly utilized Walnut's facilities to operate a separate business owned by Sun, without obtaining proper approval. (Id., P.P. 17-18.)

b. Cross-Complaint

On December 22, 2025, Sun filed a cross-complaint against Brighten and Luan for declaratory relief. The cross-complaint alleges that the purported Investment Agreement by which Brighten obtained a majority interest in Walnut is invalid and must be rescinded. (Cross-Compl. P. 20.) According to the cross-complaint, the United States Citizenship and Immigration Service (USCIS) has determined that Brighten's stock certificate is void and confers no rights. (Id., P. 21.) Luan is a citizen and resident of China. (Id., P. 16.)

c. The Instant Motion

On July 10, 2026, Luan filed the instant motion to quash service of summons. Sun filed an opposition on August 11, 2026. Luan filed a reply on August 17, 2026.

II. LEGAL STANDARD

"[T]he court in which an action is pending has jurisdiction over a party from the time summons is served on him as provided by Chapter 4 (commencing with Section 413.10)." (Code Civ. Proc, Sec. 410.50(a).) "[A] court acquires jurisdiction over a party by proper service of process or by that party's general appearance." (In re Jennifer O. (2010) 184 Cal.App.4th 539, 547.) Actual notice of a lawsuit is not a substitute for proper service of process. (Abers v. Rohrs (2013) 217 Cal.App.4th 1199, 1206.) A defendant may serve and file a notice of motion to quash service of summons on the ground that the court lacks jurisdiction. (Code Civ. Proc., Sec. 418.10(a).)

III. DISCUSSION

"A summons may be served by personal delivery of a copy of the summons and of the complaint to the person to be served." (Code Civ. Proc., Sec. 415.10.) Alternatively, a summons may be served by leaving a copy of the summons and complaint at the person's dwelling house, usual place of abode, usual place of business, or usual mailing address, in the presence of a competent member of the household or a person apparently in charge, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and complaint to the same location. (Id., Sec. 415.20.)

According to a proof of service (POS) filed June 3, 2026, Sun served the cross-complaint on Luan by substitute service. The POS states that the server left the documents with Carolina Diaz, a front desk clerk, on May 20, 2026, at the address 20781 Amar Road, Unit #1, Walnut, California 91789. The POS indicates that this address is Luan's office or usual place of business. However, Luan has resided in China as of October 2022. (Luan Decl. P. 4.) Since then, Luan has not worked at or maintained any working relationship with Montessori Preschool, the business located at 20781 Amar Road. (Id., P. 5.) Luan denies that the 20781 Amar Road address is her current work or business address. (Ibid.) Additionally, Luan claims that Sun operates Montessori Preschool, meaning Sun knows that the location is not Luan's present business address. (Id., P.P. 6-8.)

These facts show that substitute service was not performed at Luan's "dwelling house, usual place of abode, usual place of business, or usual mailing address." (See Code Civ. Proc., Sec. 415.20(b).) Thus, the service was defective.

In opposition, Sun points to Secretary of State filings for Brighten, listing Luan as an officer and agent for service, with an address at 20781 Amar Road. (Niu Decl., Ex. B, C.) However, the corporate filings for Brighten are not dispositive. First, these filings pertain to Brighten, and the listed individuals are identified as representatives of Brighten. But Luan is being sued in her personal capacity. The information on the corporate filings is not necessarily reflective of Luan's personal dwelling house, usual place of abode, usual place of business, or usual mailing address.

Second, Sun does not dispute that Luan in fact left the U.S. in 2022. Sun does not dispute that she operates Montessori Preschool and is aware that Luan has not worked there since 2022. Sun cannot use the Secretary of State filings as a pretext to serve the 20781 Amar Road address if she actually knows that the address is not Luan's usual place of business.

In sum, the purported substitute service did not occur at Luan's dwelling house, usual place of abode, usual place of business, or usual mailing address. Accordingly, Luan has not been properly served with the cross-complaint.

IV. CONCLUSION

Cross-Defendant Huan Dan Luan's motion to quash service of summons is GRANTED. [1] Sun's motion also cites former Rule 3-310 for the same proposition.