Long Chen et al vs John Ly et al

Case No. 21CV376417 Motion to Set Asude Default/ Judgment

I. BACKGROUND A. BRIEF FACTUAL BACKGROUND On January 18, 2021, Plaintiffs Long Chen as an individual and personal representative of the estate of Angeline Chen, Dan Zhu, and Bojian Li (collectively “Plaintiffs”) filed a Complaint against Defendants Dynasty Group, Inc. dba Dynasty Chiense Seafood Restaurant (“Dynasty”), Asian Square Inc. dba Grand Century Shopping Mall (“Asian Square”), John Ly, Nancy Dao, and DOES 1-100 (collectively “Defendants”) for damages arising from an October 11, 2021 personal incident where a vehicle collided into the dining area in the parking lot Dynasty Restaurant.

Angeline Chen was affianced to Bojian Li and they were dinging with her parents Long Chen and Dan Zhu. Following the incident, Angeline Chen succumbed to her injuries. Plaintiffs allege six causes of actions including: negligence, negligent entrustment, premises liability, negligent infliction of emotional distress, wrongful death, and wrongful death. (Complaint).

B. RELEVANT PROCEDURAL BACKGROUND The underlying issue in this present motion stems from Defendant Asian Square’s acceptances of offers to compromise under Code of Civil Procedure section 998 that was served by plaintiffs’ counsel Aimee Kirby. Within hours of Asian Square’s accepting the offers to compromise, plaintiffs’ counsel notified Asian Square that Plaintiffs Long Chen and Dan Zhu had not provided informed consent for these offers.1 Defendant Asian Square refused to revoke the acceptances of the offers to comprise and argued that the judgment was valid upon acceptance.

On December 6, 2023 the clerk’s office entered the three judgments of Defendant Asian Square’s acceptance of offer to compromise under Code of Civil Procedure section 998 as follows: (1) Plaintiff Long Chen against the defendants Asian Square in the amount of $500,000.00; (2) Plaintiff Bojian Li against the defendants Asian Square in the amount of $1,000,000.00; and (3) Plaintiff Dan Zhu against the defendants Asian Square in the amount of $500,000.00. Defendant Asian Squire filed a notice of entry of the clerk’s judgment in favor of Plaintiffs Long Chen, Bojian Li, and Dan Zhu against Defendant Asian Square on December 28, 2023.

Plaintiffs’ counsel filed a motion to vacate the December 6, 2023 judgments for Plaintiffs Long Chen and Dan Zhu on January 18, 2024. The motion was continued to April 25, 2024, and then heard by the Honorable Drew Takaichi, who took the matter under submission. On June 3, 2024, Judge Takaichi issued an order denying the motion to vacate. Defendant Asian Square entered an order on June 6, 2024.

Plaintiffs Long and Chen filed a notice of Appeal, H052309 on July 3, 2024. On May 1, 2026, the Sixth Appellate District issued a Remittitur reversing the June 3, 2024 judgment issued by Judge Takaichi. The Appellate Court directed the court to consider the motion a new and consider Code of Civil Procedure section 283. (Plaintiff’s Exhibit A).

C. PRESENT MOTION Before the Court is the Plaintiffs renewed motion to vacate the December 6, 2023 judgments concerning Plaintiffs Long Chen and Dan Zhu. On August 4, 2026, the plaintiff filed its supplemental and second motion to vacate the

1 Plaintiff Bojian Li ratified Ms. Kirby’s service of the 998 offer to compromise, thus plaintiff Li is not part of this present motion to vacate. 4

December 6, 2023 judgements. The motion was accompanied by a proof of service indicating electronic service to defense counsel and counsel for plaintiff in interpleader. Notice is proper. Defendants filed an opposition brief on August 14, 2026.

The Plaintiff filed a reply brief on August 21, 2026.

The Court has carefully reviewed the plaintiffs August 4, 2026 notice of motion and memorandum of points and authorities (totaling 11 pages); Plaintiffs’ Exhibit List and Evidence in support of the motion to vacate, including the Declaration of Christopher B. Dolan (Exhibit J) and Declaration of Aimee Kirby (Exhibit K) (totaling 164 pages); Defendants’ opposition (totaling 20 pages); Plaintiff’s Reply brief (totaling 11 pages); Plaintiff’s August 18, 2024 motion to vacate (totaling 75 pages); Defendants’ February 8, 2024 Opposition (totaling 19 pages); February 9, 2024 Declaration of Kevin Mintz in support of the Opposition (totaling 5 pages); Plaintiffs’ February 9, 2024 Reply brief (10 pages); May 1, 2026, Remitter (totaling 12 pages); proof of service; and the pleadings.

II. PROCEDURAL VIOLATION The Court notes procedural violation by the defendant. Defendant filed opposition papers on August 14, 2026. Per Code of Civil Procedure section 1005(b) opposition papers were to be filed by August 12, 2026. The opposition brief is untimely as they are two court days late.

The Plaintiff then filed a reply brief on August 21, 2026, which were on August 18, 2026 per Code of Civil Procedure section 1005(b).

California Rules of Court, rule 3.1300, subdivision (d) states, “No paper may be rejected for filing on the ground that it was untimely submitted for filing. If the court, in its discretion, refuses to consider a late filed paper, the minutes or order must so indicate.”

Here, the Court balances the totality of circumstances, including judicial economy to avoid the expenditure of any further judicial resources, the court will look past the procedural violations and consider the defendants’ opposition and the plaintiffs’ reply brief on its merits. However, the parties are hereby admonished to comply with Rule of Court and Code of Civil Procedure. Any future violations may result in the court’s refusal to consider untimely filed papers.

III. LEGAL STANDARD

A. CODE OF CIVIL PROCEDURE SECTION 283 Pursuant to Code of Civil Procedure section 283 in relevant portions provide that an attorney has the authority:

1. To bind his client in any of the steps of an action or proceeding by his agreement filed with the Clerk, or entered upon the minutes of the Court, and not otherwise;

(Code of Civ. Proc., § 281(1)). An attorney has the authority “to bind the client in procedural matters arising during the course of the action.” (Linsk v. Linsk (1969) 70 Cal.2d 272, 276).

However, an attorney does not have the authority to "impair the client's substantial rights or the cause of action itself." (Linsk, supra, 70 Cal.2d at 276; see also, Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396, 403). A “substantial right” includes the right to settle a case, which requires the attorney to have specific authorization of the client to settle and compromise a claim. The attorney does not have implied or ostensible attorney to bind his or her

client to compromise a settlement of pending litigation. (Blanton v. Womancare, Inc., supra, 38 Cal.3d at 404, 403, quoting Whittier Union High School Dist. v. Superior Court (1977) 66 Cal.App.3d 504, 508).

B. CODE OF CIVIL PROCEDURE 473(B) Code of Civil Procedure section § 473(b) provides for both discretionary and mandatory relief. In terms of discretionary relief section 473(b), in pertinent part, reads as follows:

The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. . .

The mandatory provision of section 473(b) reads, in pertinent part, as follows:

Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.

The general underlying purpose is to promote the determination of actions on their merits. (Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830). Under this statute, an application for relief must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought and must be accompanied by an affidavit of fault attesting to the mistake, inadvertence, surprise or neglect of the moving party or its attorney. (Code of Civ. Proc., § 473(b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143).

Where an “attorney affidavit of fault” is filed, there is no requirement that the attorney's mistake, inadvertence, or neglect be excusable. Relief must be granted even where the default or dismissal resulted from inexcusable neglect by the attorney. (Robert E. Weil, et al., California Practice Guide: Civil Procedure Before Trial ¶ 5:495 (2018). For example, if an attorney voluntarily dismisses a case without authority from his or her client, this may be proof of the attorney acting beyond the scope of his or her authority. Upon evidence of strong and convincing factual proof that the attorney was unauthorized in disposing of the client’s substantive rights, the court may exercise its inherent authority to vacate the dismissal. (Romadka v. Hoge (1991) 232 Cal.App.3d 1231, 1236).

IV. ANALYSIS As a threshold matter, the court finds that the motion to vacate the motion was timely filed under section 473(b) as the plaintiffs filed the motion on January 18, 2024, a little after a month the judgments were entered on December 6, 2023. Moreover, the underlying issue arises from plaintiffs’ counsel Aimee Kirby admitting that she conveyed offers to compromise under Code of Civil Procedure 998 without any consent by her clients, plaintiffs Long Chen and Dan Zhu. (Plaintiffs’ motion, p. 2; Declaration of Kirby ⁋6).

Upon discovery this issue, within hours, plaintiffs’ lead counsel, immediately notified the attorneys for Defendant Asian Square and explained why the offers extended were unauthorized. (Plaintiffs’ Exhibit D). Plaintiffs Long Chen and Dan Zhu promptly objected to the entry of any judgment arising from the 998 agreements. However, Asian Square refused to revoked the agreements and argued that judgment was valid. On December 3, 2023, the clerk’s office entered judgments

arising from a 998 offer to compromise, in favor of Plaintiffs Long Chen and Dan Zhu against Defendant Asian Box in the amount of $500,000.00 each. (Plaintiffs’ Exhibit B-C). Plaintiffs’ counsel asserts that a 998 offer to compromise that is offered or accepted without the client’s consent and authority is voidable by the client as the attorney is acting beyond the scope of his or her authority. Thus, upon proper proof of such evidence, the court has the inherent authority to vacate the judgment under Code of Civil Procedure section 283 and 473(b). (Plaintiff’s motion, p. 2-3).

Defendants argue that the court’s inherent authority is narrowly circumscribed to rescind settlements based on statutory offers to comprise under Code of Civil Procedure section 998. (Opposition, p. 8). The court’s inherent authority should only be exercised necessary to “fill in holes” in statutory frameworks or where remedies or procedures are needed in order to perform “essential functions.” (Id., at p. 9, citing Estrada v. Royalty Carpet Mills, Inc. (2024) 15 Cal.5th 582; Bauguess v. Paine (1978) 22 Cal.3d 626, 635).

Defendants assert that the court does not have authority to nullify the judgments in this matter as there is strong legislative policy regarding 998 offers to settle. (Opposition, p. 11). Defense does not argue that a recourse for the moving party includes seeking a malpractice action against their counsel rather than seeking to set aside the judgment entered in this matter.

Plaintiffs in its reply brief assert that the cases cited in defense briefs are inapplicable.

In the alternative, Defendant Asia Box to open discovery, including the deposition of Bojian Li, who is no longer part of the case against Asian Square, to determine the scope of the mistake. Plaintiffs oppose this request on the grounds that Asian Square has forfeited this argument as untimely.

Here, the Court finds that extending an offer to compromise under Code of Civil Procedure section 998 is more than merely procedural as upon acceptance, result in a settlement of the pending litigation. Upon acceptance, the plaintiffs would be precluded from pursuing the merits of the case and seeking further damages, aside from perhaps attorney’s fees or costs. The entry of judgment of the offer to compromise would then likely result in dismissal of the case. Given the finality of a case resolving, an attorney cannot comprise or settle a claim without the express authority of his or her client. (Robinson v.

Hiles (1953) 119 Cal.App.2d 666, 672; see also Bowden v. Green (1982) 128 Cal.App.3d 65; Ambrose v. McDonald (1878) 53 Cal. 28). It is essential for attorneys to communicate settlement offers and agreements to protect clients from “inordinately low settlements.” (Anand vs. California Dept. of Developmental Services (2009) 626. F.Supp.2d 1061; 1065; citing Levy v. Superior Court (1995) 10 Cal.4th 578, 583). Thus, serving an offer to compromise without the consent and informed consent of Plaintiffs Chen and Zhu constitutes an attorney acting beyond the scope of her authority as plaintiffs’ counsel. (Romadka v.

Hoge, supra, 232 Cal.App.3d at 1236; Whittier Union, supra, 66 Cal.App.3d at 508).

Upon review, the court finds that there is strong and convincing factual proof that Plaintiffs Chen and Zhu did not grant authority to compromise, surrender, and essentially end their claims. Plaintiff’s counsel Aimee Kirby does not contest that she did not have the consent of her clients, plaintiffs Chen and Zhu to extend a 998 offer to resolve their case for $500,000.00 each. (Exhibit H, Declaration of Zhu ⁋ 6-13; Exhibit I, Declaration of Chen ⁋ 6-15; Exhibit J, Declaration of Dolan ⁋ 27-28; Exhibit K, Declaration of Kirby ⁋ 6).

Similar to Romadka v. Hoge, supra, 232 Cal.App.3d at 1236, the plaintiffs’ counsel acted beyond the scope of her authority to dispose of plaintiff Chen and Zhu’s substantive rights. Thus, the court may exercise its inherent authority to vacate the dismissal. Dan Zhu attested, “I did not tell my attorneys, including Ms. Kirby, that she could make this offer for me.” (Declaration of Zhu, ⁋ 9; Declaration of Chen, ⁋ 11). “Had I been asked I WOULD HAVE SAID NO to the idea of making such an offer, its amount, and allowing the defendants to accept the offer and terminate my case.” (Declaration of Zhu, ⁋ 10; Declaration of Chen, ⁋ 12).

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V. CONCLUSION Based on the foregoing, the Plaintiffs’ motion to vacate the December 6, 2023 judgments in favor of Plaintiff Long Chen and Dan Zhu and against Defendant Asian Square is GRANTED.

The defendant’s request in their opposition for discovery on issues raised in this motion is DENIED without prejudice as the issue is not before the Court.

The Court will prepare the formal order.

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