LI, et al. vs CHEN

24CV095244: LI, et al. vs CHEN 07/30/2026 Hearing on Motion for Leave to Amend Motion for Leave to Amend Complaint; filed by YONGYI LI (Plaintiff) + CRS# 598197290809 in Department 517

Tentative Ruling - 07/27/2026 Keith Fong

The Motion for Leave Amended Motion for leave to file first amended complaint filed by YONGYI LI, LANCASTER INVESTMENT COMPANY OF CALIFORNIA, a California limited liability company on 05/28/2026 is Granted.

Plaintiffs’ Motion for Leave to Amend is GRANTED.

This action arises from a dispute between Plaintiff Yongyi Li (“Li”), the founder and alleged longtime manager of Plaintiff Lancaster Investment Company of California LLC (“Lancaster”), and Defendant Yanling Chen (“Chen”). In their Complaint filed on October 8, 2024, Plaintiffs allege that Chen exploited Li’s advanced age and cognitive decline to obtain approximately $600,000 in personal funds, misappropriate Lancaster assets, and remove Li from control and ownership of Lancaster. Plaintiffs assert causes of action for breach of contract, conversion, fraud, financial elder abuse, and declaratory relief concerning ownership and control of Lancaster and its bank accounts.

Li passed away on May 5, 2025. Thereafter, Plaintiffs filed a Motion to Substitute Plaintiff pursuant to Code of Civil Procedure section 377.31 seeking to substitute Qunhua Li in place of Li. In the motion, Plaintiffs represented that Qunhua Li was acting “as executor of the estate of Yongyi Li,” that she “has been appointed as executor of the decedent’s estate,” and that Li’s will appointed his four children as co-executors, with the remaining siblings subsequently assigning their co-executor rights to Qunhua Li. Plaintiffs further represented that Li died with both a valid will and revocable trust in place and that substitution was proper under Code of Civil Procedure section 377.31. The motion was unopposed. On August 7, 2025, the Court granted the motion and substituted Qunhua Li in place of Yongyi Li.

On January 15, 2026, the Court denied Defendant’s Motion for Summary Adjudication. However, the Order dismissed Plaintiffs’ breach of contract claims as to the $200,000 and $300,000 debts. (1/15/26 Order.)

Plaintiffs now seek leave to amend the operative pleading as follows: (1) add facts to support the claim for financial elder abuse, including those relating to undue influence and wrongful taking; (2) clarify and streamline the First Cause of Action for Breach of Contract pursuant to the Court’s 1/15/26 ruling on the Motion for Summary Adjudication; and (3) add Wenying Ge as a Plaintiff, as decedent Yongyi Li’s surviving spouse. Counsel contends that the information supporting the amendments was found through discovery occurring in 2025. (Wu Decl. ¶ 3.) The amendment would also remove Plaintiffs’ claim of fraud/misrepresentation. (Wu Decl. Exhs. A, B.)

Defendant contends that the amendments are major substantive changes that should be denied. 24CV095244: LI, et al. vs CHEN 07/30/2026 Hearing on Motion for Leave to Amend Motion for Leave to Amend Complaint; filed by YONGYI LI (Plaintiff) + CRS# 598197290809 in Department 517 Defendant argues that removing facts as to the Breach of Contract claim would nullify the prior allegations and impact her right to attorneys’ fees. Defendant further contends that the allegations regarding undue influence would violate the sham pleading rule and would be highly prejudicial to Defendant by introducing a new theory of liability months before the September 21, 2026 trial date.

Defendant argues that removal of the fraud/misrepresentation would deprive Defendant of the entitlement to establish at trial that Plaintiff made false and malicious claims against her. Defendant concedes that the addition of Ms. Ge is necessary, but Ge must be represented by independent counsel due to a conflict of interest with Plaintiff Qunhua Li.

Under the sham pleading doctrine, a plaintiff is precluded from amending a complaint to omit harmful allegations, without explanation, from prior complaints to avoid attacks raised in demurrers or motions for summary judgment. (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425.) Here, the sham pleading doctrine is inapplicable because the motion for summary adjudication already ruled on the breach of contract claim. The amendment does not seek to avoid attacks by dispositive motion, but instead, reflect the findings from the summary adjudication motion. The removal of the allegations do not negate or nullify the Court’s finding that certain theories of liability under breach of contract have been dismissed.

Moreover, Plaintiffs’ amendment regarding undue influence is not a wholly new claim, but rather, a theory of liability based on new information to support Plaintiffs’ existing claim of financial elder abuse. Plaintiffs contend that the new information was revealed in discovery and as such, the information was available to Defendant. The prior complaint already alleged that decedent was susceptible to undue influence and that Defendant manipulated decedent. (Compl. ¶¶ 56-57.)

Based upon the foregoing, Plaintiffs’ motion for leave to amend is GRANTED.

This Order shall not be construed as a determination on the merits, or as to the sufficiency of the new allegations set forth in the proposed pleading.

Plaintiff shall file and serve the First Amended Complaint by or before August 7, 2026. Please note that the proposed First Amended Complaint submitted with the moving papers is NOT deemed filed or served.

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