Ishikawa v. Chio et al

each of the demurrers, and each Defendant replies.

As part of the replies, Defendants complain the oppositions were filed and served late. However,

the objection is waived because the replies then proceed to address the oppositions on their

merits. (Clark v. Stabond Corp. (1987) 197 Cal.App.3d 50, 58-59.)

ANALYSIS

Meet and Confer Requirement

Code of Civil Procedure sections 430.41 and 435.5 require, before filing a demurrer or motion to

strike, the moving party must meet and confer in person, by telephone, or via video conference

with the party who filed the pleading in order to determine if an agreement can be reached to

resolve the objections to the pleading. The parties must meet and confer at least five days

before the responsive pleading is due, but if they are unable to do so, an automatic 30-day

extension of time within which to file the responsive pleading will be granted by filing and serving

a declaration on or before the date the response would be due, stating a good faith attempt was

made to meet and confer. The moving party then must file and serve a meet and confer

declaration with the motion stating either the means by which the parties met and conferred, or

the party who filed the pleading failed to respond to the meet and confer request. (Code Civ.

Proc., §§430.41, subd. (a), 435.5, subd. (a).)

Defense attorney Edward J. Loya, Jr., submits declarations in support of each of the demurrers

(referred to collectively) providing counsel unsuccessfully met and conferred via Zoom on

November 11, 2025. (Loya Decls., ¶¶3-4.)

In opposition, Plaintiffs’ counsel Seong Kim provides a responding declaration disputing the

adequacy of the meet and confer efforts. Kim attaches an email in which she asked for a

summary of challenges before the call which defense counsel declined to provide. After the call,

Kim emailed opposing counsel to “confirm that you refused our request that you provide us with

legal authorities supporting the basis for your contemplated Demurrer” and reiterating the

request for such authority. In response, Loya indicated he was unaware of an obligation to such

legal authority. In the final exchange, Loya asserted that during the call Plaintiffs’ counsel had

stated they did “not want to hear about statutes and citations to statutes.” (Kim Decl., ¶¶5-7; Exh.

A.)

Code of Civil Procedure section 430.41, subdivision (a)(1) requires the demurring party to

“identify with legal support the basis of the deficiencies.” Plaintiffs apparently interpret this as

requiring specific legal citations, while Defendants interpret it more broadly. The Court generally

agrees with the proposition that meet and confer efforts are better served and more likely to be

successful if more specific legal authority is provided, but the statute is somewhat ambiguous on

this point. Given the voluminous nature of these demurrers and the fact that this case is being

heavily litigated with 22 discovery motions upcoming, the Court is putting the parties on notice

that it is requiring a more detailed meet and confer process than usual.

Moving forward, counsel for the moving party MUST provide specific legal authority including

statutory and case citations before any party files any further demurrers or discovery motions.

(CCP section 128, subdivisions (a)(5) and (8).)

Raytam’s Demurrer

Raytam demurs to the sixth, seventh, eighth, thirteenth, and fifteenth causes of action.

Sixth cause of action for avoidance of transfers under the California Uniform Voidable

Transactions Act. Plaintiff alleges under the Uniform Voidable Transactions Act (UVTA, Civ.

Code, §3439 et seq.) Plaintiffs are creditors and Defendants are debtors. Plaintiffs have a right

to payment from Defendants. Defendants have transferred assets or incurred obligations to

themselves as insiders or to others. Defendants made the transfers or incurred the obligations

with actual intent to hinder, delay, or defraud Plaintiffs. Defendants retained possession or

control of the property transferred after the transfer. The transfer or obligation was concealed.

Defendants removed or concealed the assets and intended to do so to make it more difficult for

Plaintiffs to collect. Plaintiffs have been harmed and prejudiced in that the property has been

placed out of the reach of Plaintiffs that could have been used to pay the debt. Individual

Plaintiffs Ishikawa and Yoko experienced damage to the value of their stock. (SAC, ¶¶104-116.)

The UVTA, formerly known as the Uniform Fraudulent Transfer Act (see Stats. 2015, ch. 44, §

2), “permits defrauded creditors to reach property in the hands of a transferee.” (Mejia v.

Reed (2003) 31 Cal.4th 657, 663 [3 Cal. Rptr. 3d 390, 74 P.3d 166].) “A fraudulent conveyance

is a transfer by the debtor of property to a third person undertaken with the intent to prevent a

creditor from reaching that interest to satisfy its claim.” (Yaesu Electronics Corp. v.

Tamura (1994) 28 Cal.App.4th 8, 13 [33 Cal. Rptr. 2d 283].) The transferee “‘holds only an

apparent title [to the transferred property], a mere cloak under which is hidden the hideous

skeleton of deceit, the real owner being the scheming and shifty judgment debtor ... .’” (Cortez v.

Vogt (1997) 52 Cal.App.4th 917, 936 [60 Cal. Rptr. 2d 841].) The purpose of the voidable

transactions statute is “‘to prevent debtors from placing property which legitimately should be

available for the satisfaction of demands of creditors beyond their reach ... .’” (Chichester v.

Mason (1941) 43 Cal.App.2d 577, 584 [111 P.2d 362].)

A creditor seeking to set aside a transfer as fraudulent under section 3439.04 may satisfy either

section 3439.04, subdivision (a)(1) by showing actual intent, or section 3439.04, subdivision

(a)(2) by showing constructive fraud. (Monastra v. Konica Business Machines, U.S.A.,

Inc. (1996) 43 Cal.App.4th 1628, 1635 [51 Cal. Rptr. 2d 528]; Annod Corp. v. Hamilton &

Samuels (2002) 100 Cal.App.4th 1286, 1294 [123 Cal. Rptr. 2d 924]; see Reddy v.

Gonzalez (1992) 8 Cal.App.4th 118, 122–123 [10 Cal. Rptr. 2d 55, 10 Cal. Rptr. 2d 58].) Under

the UVTA, “a transfer of assets made by a debtor is fraudulent as to a creditor, whether the

creditor's claim arose before or after the transfer, if the debtor made the transfer (1) with an

actual intent to hinder, delay or defraud any creditor, or (2) without receiving reasonably

equivalent value in return, and either (a) was engaged in or about to engage in a business or

transaction for which the debtor's assets were unreasonably small, or (b) intended to, or

reasonably believed, or reasonably should have believed, that he or she would incur debts

beyond his or her ability to pay as they became due.” (Monastra, at p. 1635, italics added, citing

to § 3439.04.)

The UVTA allows a judgment to be entered against (1) the first transferee of the fraudulently

transferred asset, (2) the transfer beneficiary, and (3) any subsequent transferee other than a

good faith transferee. (§ 3439.08, subd. (b)(1) & (2).) Section 3439.08, subdivision (b)(1)

provides that “to the extent a transfer is voidable, ‘the creditor may recover judgment’ for the

lesser of the value of the asset or the amount needed to satisfy the creditor's claim, and the

‘judgment may be entered’ against the person for whose benefit the transfer was made.

[Citation.] Ordinarily, when a statute provides a court ‘may’ do something, the statute is

permissive, not mandatory, and grants the court a discretionary authority. [Citations.] In

exercising discretion to provide relief from fraudulent transfers, courts are directed by the [UVTA]

to consider ‘the principles of law and equity,’ which ‘supplement its provisions.’ [Citations.]

Hence, a court may refuse to enter a money judgment against a person for whose benefit a

fraudulent transfer was made if an applicable legal or equitable principle bars entry of such a

judgment.” (Renda v. Nevarez (2014) 223 Cal.App.4th 1231, 1237 [167 Cal. Rptr. 3d 874], some

italics added.) (Lo v. Lee (2018) 24 Cal.App.5th 1065, 1071-1072.)

Raytam argues the allegations fail to identify a specific relationship in which it is the debtor and

any Plaintiff is a creditor. Raytam further argues the SAC does not allege it disposed of any

asset to keep Plaintiffs from reaching the asset to satisfy the debt. Raytam further argues no

facts allege any actual intent to defraud a creditor or constructive fraud; made the transfer

without receiving reasonably equivalent value; and became insolvent due to the transfer.

In opposition, Plaintiffs correctly observe the term “claim” under the UVTA is broadly defined as

“a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated,

fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or

unsecured.” (Civ. Code, §3439.01, subd. (b).) Plaintiffs further cite to its allegations that Raytam

improperly and unfairly competed by purchasing competitors’ products and causing Fuji Corp. to

pay for them and then reselling them to Fuji Corp. at a further markup (¶45); the Chios’

arrangement for payments of $25,000 to Raytam (¶46); and Raytam’s purchase of Fuji Corp.’s

goods at a 20% discount to be resold by Raytam’s wholly owned affiliate (¶¶47-48). Plaintiffs

further argue they have expressly pled actual intent to defraud. Raytam further contends

insolvency is only required for constructive fraud and not actual fraud.

Plaintiffs clearly allege Raytam colluded with the Chios to defraud and/or steal from Plaintiffs.

They seem to contend that they should be construed as creditors because they have claims

against Raytam for these violations that could be reduced to judgment at some point

subsequent. Even if the Court accepts that Raytam is a debtor under the UVTA (and the nature

of the debt is not clearly pled), the SAC fails to clearly allege what asset(s) were improperly

transferred to avoid recovery by Plaintiffs. If it was the goods that Raytam allegedly obtained

improperly at a discount or otherwise, it is not clearly stated here. Accordingly, the Court

sustains Raytam’s demurrer to the sixth cause of action with 20 days leave to amend.

Seventh cause of action for avoidance of transfers as California common law fraudulent

conveyances. The allegations in the seventh cause of action effectively echo those in the sixth

cause of action. (SAC, ¶¶121-136.)

The UVTA supplements but does not replace common law fraud principles. (Berger v. Varum

(2019) 35 Cal.App.5th 1013, 1019.) “Traditionally, creditors could bring fraudulent transfer cases

under common law.” (Ibid.) “However much a conveyance may be tainted with fraud, no creditor

may set it aside, unless some specific property out of which he has a right to satisfy his claims is

by the fraudulent conveyance, withdrawn beyond his reach. The intent to delay or defraud

creditors is not enough; there must also be a resulting injury to the creditor, which must be

affirmatively shown.” (Bennett v. Paulson (1935) 7 Cal.App.2d 120, 123, citation omitted.)

Raytam argues the common law fraudulent transfer claim fails to allege (a) a creditor/debtor

relationship; (b) an intent to delay or defraud creditors; and (c) specific property transferred for

purpose of keeping it away from a creditor.

The Court sustains Raytam’s demurrer to this cause of action with 20 days leave to amend for

the same reasons as the preceding cause of action.

Eighth cause of action for avoidance of transfers under the Texas Uniform Fraudulent Transfer

Act. This cause of action again effectively repeats the same facts pled in support of the sixth and

seventh fraudulent transfer claims brought under California law. (SAC, ¶¶138-153.)

The Texas Uniform Fraudulent Transfer Act (TUFTA, Tex. Bus. & Com. Code §24.005, subd. (a)

provides:

(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the

creditor’s claim arose before or within a reasonable time after the transfer was made or the

obligation was incurred, if the debtor made the transfer or incurred the obligation:

(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or

(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and

the debtor:

(A) was engaged or was about to engage in a business or a transaction for which the remaining

assets of the debtor were unreasonably small in relation to the business or transaction; or

(B) intended to incur, or believed or reasonably should have believed that the debtor would incur,

debts beyond the debtor’s ability to pay as they became due.

The Court sustains the demurrer to this cause of action with 20 days leave to amend for the

same reasons as discussed above in addressing the California fraudulent transfer claims.

Thirteenth cause of action for unjust enrichment and restitution. Plaintiffs allege Defendants have

received benefits in relation to Plaintiffs’ personal and real property. It would be unjust for

Defendants to retain those benefits. Under principles of equity, Defendants should make

restitution to Plaintiffs. (SAC, ¶¶188-190.)

Raytam argues this claim fails because there is no standalone cause of action for unjust

enrichment.

“Although some California courts have suggested the existence of a separate cause of action for

unjust enrichment, this court has recently held that ‘[t]here is no cause of action in California for

unjust enrichment.’ Unjust enrichment is synonymous with restitution.” (Levine v. Blue Shield of

California (2010) 189 Cal.App.4th 1117, 1138, citations omitted; See Peterson v. Cellco

Partnership (2010) 164 Cal.App.4th 1583—a 4th Dist., Div. 3 case suggesting there is a separate

cause of action for unjust enrichment based on the Court’s outlining of the elements of such a

claim.) Under Peterson, the elements of an unjust enrichment claim are the “receipt of a benefit

and [the] unjust retention of the benefit at the expense of another.” (Peterson, supra, 164

Cal.App.4th at p. 1593; See also Hirsch v. Bank of America, N.A. (2003) 107 Cal.App.4th 708,

721-22, [Based on equitable principles of restitution, the claim for unjust enrichment survived

demurrer because banks collected and retained excessive fees passed through to them by title

companies at the expense of the plaintiffs].) “A plaintiff may not, however, pursue or recover on a

quasi-contract claim if the parties have an enforceable agreement regarding a particular subject

matter.” (Klein v. Chevron U.S.A. (2012) 202 Cal.App.4th 1342, 1388.) “[I]f a plaintiff was

uncertain as to whether the parties had entered into an enforceable agreement, the plaintiff

would be entitled to plead inconsistent claims predicated on both the existence and absence of

such an agreement.” (Ibid.)

Given the split of authority, the Court overrules the demurrer to the unjust enrichment/restitution

claim. Plaintiffs adequately allege Defendants, including Raytam, effectively stole or took

Plaintiffs’ property at an unauthorized discount. Such is adequate to bring this claim.

Fifteenth cause of action for injunctive relief. Raytam again argues this is not a standalone

cause of action. Indeed, in Allen v. City of Sacramento (2015) 234 Cal.App.4th 41, the Court of

Appeal held as much in affirming dismissal of a cause of action for injunction on demurrer

because it “is not a cause of action”. (Id. at p. 65.) However, the Court concurrently noted the

plaintiffs may still obtain injunctive relief if they prevail on another cause of action

notwithstanding dismissal of the injunctive relief cause of action. (Id. at pp. 65-66.)

In opposition, Plaintiffs suggest the appropriate result would be to construe this as a request for

equitable relief rather than sustain the demurrer. Plaintiffs cite no authority for this proposition.

The Court sustains the demurrer to the fifteenth cause of action for injunctive relief without leave

to amend because this is not a proper cause of action but is rather a remedy. Nonetheless,

dismissal of this cause of action does not preclude Plaintiffs from obtaining an injunction if

otherwise appropriate.

Tamami’s Demurrer

Tamami demurs to the first, third, sixth, seventh, eighth, tenth, eleventh, thirteenth, fifteenth,

nineteenth, twenty-second, twenty-third, twenty-fourth, and twenty-fifth causes of action.

First cause of action for breach of fiduciary duty. Plaintiffs allege the Chios, as Fuji Corp.

executives and/or officers, were insider employees, agents, and fiduciaries of their principles

which include all Plaintiffs. Notwithstanding, the Chios breached their fiduciary duties and the

confidences reposed to them by entering into the unauthorized and illegal insider self-dealing

financial acts, transactions, and thefts as alleged without board or shareholder approval.

Plaintiffs have suffered damages. Individual Plaintiffs Terumi and Yoko (collectively, the

Ishikawas) suffered damages and losses to their shares of stock separate and apart from the

corporate Plaintiffs’ losses. (SAC, ¶¶54-63.)

Tamami demurs to this cause of action only to the extent it is brought by the Ishikawas and not

the claims brought by the corporate Plaintiffs. “It is a general rule that a corporation which suffers

damages through wrongdoing by its officers and directors must itself bring the action to recover

the losses thereby occasioned, or if the corporation fails to bring an action, suit may be filed by a

stockholder acting derivatively on behalf of the corporation. An individual [stockholder] may not

maintain an action in his own right . . . for destruction of or diminution in the value of the stock.”

(Paclink Communications Internat. v. Superior Court (2001) 90 Cal.App.4th 958, 965, citation

omitted.)

In opposition, the Ishikawas contend they are permitted to bring the action as a “double

derivative” suit.

A ‘double derivative’ suit has been defined as an action brought by a shareholder of a holding or

parent company, on behalf of that corporation, to enforce a cause of action in favor of the

subsidiary company. The shareholder is, in effect, maintaining a derivative action on behalf of

the subsidiary, since the holding or parent company has derivative rights to the cause of action

possessed by the subsidiary.

(Heshejin v. Rostami (2020) 54 Cal.App.5th 984, 987, fn. 1, citation omitted.)

The problem here is that no derivative lawsuit is necessary in the first instance because

the corporations themselves (both Fuji Corp. and Fuji Inc.) have directly alleged these claims. A

derivative action is appropriate if the corporation fails or refuses to bring an action, but here the

corporations did file this action. As no claim for diminution in stock value is available to the

Ishikawas, this claim fails as to them.

Plaintiffs also argue the demurrer fails because it attacks only a part of a cause of action.

Not so. This demurrer attacks the entire cause of action to the extent it is brought by the

Ishikawas. The claim stands to the extent it is brought by the corporate Plaintiffs. Thus, the Court

sustains the demurrer to the first cause of action by the Ishikawas without leave to amend.

Third cause of action for concealment. Plaintiffs allege they were harmed because the

Chios concealed from Plaintiffs the activities, facts, information, and transactions alleged. Had

Plaintiffs known, they would have behaved differently, and the wrongdoing would have been

prevented and avoided. (SAC, ¶¶79-87.)

A fraudulent concealment claim requires a plaintiff to plead the following: (a) defendant

concealed or suppressed a material fact; (b) defendant was under a duty to disclose the fact to

the plaintiff; (c) defendant intentionally concealed or suppressed the fact with the intent to

defraud the plaintiff; (d) plaintiff was unaware of the fact and would not have acted in the same

manner knowing of the concealed fact; (e) causation; and (f) damages. (Jones v. ConocoPhillips

Co. (2011) 198 Cal.App.4th 1187, 1198; Civ. Code, § 1710.)

The facts that constitute fraud must be alleged fully, factually, and specifically. (Wilhelm v. Pray,

Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.) For concealment, the plaintiff

needs to specifically plead the elements, i.e., the content of the omitted facts, the defendant’s

awareness of the materiality of those facts, the inaccessibility of the fact by the plaintiff, the

general point that the omitted fact should or could have been disclosed, and the plaintiff’s

justifiable reliance. (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43-44.)

Tamami argues the SAC contains only conclusory allegations of Tamami’s intent to defraud.

While the SAC does not state all the facts supporting this cause of action under the third cause

of action directly, reference to the complaint as a whole clearly alleges intent. The gravamen of

the entire complaint is that the Chios engaged in self-dealing at every turn and basically robbed

Plaintiffs blind. The allegations are sufficiently pled even for a fraud-based claim like

concealment. Hence, the Court overrules the demurrer to the third cause of action.

Sixth cause of action for avoidance of transfers under the UVTA, seventh cause of action for

avoidance of transfers as California common law fraudulent conveyances, and eighth cause of

action for avoidance of transfers under the TUFTA. Tamami demurs to these claims on the

same grounds as Raytam.

The analysis is much the same, although the claims against Tamami are clearly much more

comprehensive than those against Raytam since the Chios are the primary alleged wrongdoers

here with the corporate Defendants’ involvement more limited. As indicated above, the SAC

does not clearly plead a debtor/creditor relationship between the parties and does not

specifically state what the voidable transfers are.

In opposition, Plaintiffs here identify the following specific voidable transfers: (a) the February 24,

2021 $4.2 million Citizens Business Bank loan taken in Fuji Corp.’s name with its headquarters

as collateral, the proceeds of which were diverted to the RT; (b) the lease-back agreement

forcing Fuji Corp. to pay RT $28,000 in monthly rent plus additional costs; and (c) diversion of

Fuji Corp.’s goods and products to Tamani’s insider entities at steep discounts.

The SAC as pled still fails to properly state the existence of a debt. As to the specific voidable

transfers, Plaintiffs would have Defendants scour this 52-page, 296-paragraph SAC to figure out

that these are the transfers involved in this cause of action. It is further questionable whether

these transfers make sense here in light of the purpose of these claims. The fraudulent transfer

statutes and common law claims are intended to stop a party from getting rid of their own assets

to avoid paying a debt. Plaintiffs’ allegations in this respect are far too confusing and need to be

clarified and presented in a more understandable manner. As this issue can potentially be cured,

the Court sustains Tamami’s demurrer to the sixth, seventh, and eighth causes of action with 20

days leave to amend.

Tenth cause of action for resulting trust. Plaintiff alleges when a transfer of real property is made

to one person and the consideration is paid for by another, a trust is presumed to result in favor

of the person by or for whom such payment is made by operation of law from a transfer of

property under circumstances showing the transferee was not intended to take the beneficial

interest. Creditor Plaintiffs assert a resulting trust against the Chios and RT in relation to the

Texas property and warehouse, allowing them to step into to Defendants’ shoes to establish a

resulting trust. (SAC, ¶¶172-173.)

Tamami argues a resulting trust is not an independent cause of action. In Stansfield v. Starkey

(1990) 220 Cal.App.3d 59, the Court of Appeal held a resulting trust is not a cause of action, but

only a remedy. (Id. at p. 76.) The Court further held the trial court acted within its discretion in

sustaining a demurrer to the claim without leave to amend. (Ibid.)

In opposition Plaintiffs cite to Fidelity National Title Ins. Co. v. Schroeder (2009) 179 Cal.App.4th

834 for the proposition that a resulting trust may be a standalone claim, but it does not clearly so

hold. Therefore, the Court sustains the demurrer to this cause of action without leave to amend.

Plaintiffs can assert a prayer for a resulting trust in connection with one of the other causes of

action, but not a standalone resulting trust cause of action.

Eleventh cause of action for rescission. Plaintiffs allege the lease should be rescinded because

consent was obtained improperly; consideration fails through Defendants’ fault and is void; and

because the contract is unlawful and prejudices the public interest. (FAC, ¶¶176-179.)

Rescission may be sought by a contracting party if his/her consent was made by mistake,

duress, menace, fraud or undue influence exercised by the other party to the contract. (Civ.

Code, §1689, subd. (b)(1).) “Rescission may be had ... if enforcement of the contract as made

would be unconscionable....” (White v. Berrenda Mesa Water Dist. (1970) 7 Cal.App.3d 894,

900-901.) A pleading for rescission pursuant to Civil Code section 1689 is sufficient if stripped of

its conclusions, it sets forth sufficient facts to justify legal relief. (Odorizzi v. Bloomfield School

Dist. (1966) 246 Cal.App.2d 123, 127.) To affect a rescission, a party to a contract must promptly

give notice to the other party that he/she seeks to rescind. Additionally, rescinding party must

restore to the other party everything of value that he/she has received from him/her under the

contract or offer to restore the same upon the condition the other party do likewise. (Civ. Code,

§1691; White, supra, 7 Cal.App.3d at pp. 900-901.)

Tamami argues the SAC does not state what contract it seeks to rescind. However,

paragraph 176 expressly seeks rescission of “the lease”, which presumably refers to the

leaseback of the Texas property and warehouse to RT as alleged in paragraphs 33 through 36.

Tamami next argues Plaintiffs failed to adequately allege they sought rescission promptly

as required by Civil Code section 1691. Plaintiff alleges they learned of the existence of the

leaseback in October 2023. (SAC, ¶35.) This lawsuit was filed on May 10, 2024, and the original

complaint included the same eleventh cause of action seeking rescission of the lease. Tamami

cites no authority demonstrating this was insufficiently prompt under section 1691. Therefore, the

Court overrules the demurrer to the eleventh cause of action.

Thirteenth cause of action for unjust enrichment. Tamami argues this is not a standalone

cause of action. The Court overrules Tamami’s demurrer to the thirteenth cause of action for the

reasons explained above in connection with Raytam’s demurrer.

Fifteenth cause of action for injunctive relief. Tamami again argues injunctive relief is a

remedy rather than a cause of action. The Court sustains Tamami’s demurrer to the fifteenth

cause of action without leave to amend for the reasons explained above in addressing Raytam’s

demurrer.

Nineteenth cause of action for civil theft. After quoting various statutory provisions,

Plaintiff alleges the Chios and RT committed misconduct in a laundry list of ways that constituted

civil theft. (SAC, ¶¶248-257.)

Penal Code section 496, subdivision (a), provides: “Every person who buys or receives

any property that has been stolen or that has been obtained in any manner constituting theft or

extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or

aids in concealing, selling, or withholding any property from the owner, knowing the property to

be so stolen or obtained” shall be subject to specified criminal penalties. A victim of this

provision may bring an action for three times the amount of actual damages. (Pen. Code, §496,

subd. (c).)

Tamami argues Plaintiffs fail to allege any of the cited transactions were anything other

than business decisions made by Tamami as Fuji Corp.’s CEO or that Tamami had knowledge

any property in question was stolen. Tamami further argues the complaint fails to adequately

allege intent to defraud.

As with the third cause of action for concealment, the SAC taken as a whole clearly

alleges the Chios engaged in self-dealing in a myriad of forms, took what they wanted, and

concealed it all from corporate headquarters in Japan. The Court overrules the demurrer to the

nineteenth cause of action for civil theft.

Twenty-second cause of action for improper division of corporate funds. Plaintiffs allege

all the acts described in the SAC constitute “improper diversion of corporate funds” and specified

Penal Code violations. (SAC, ¶¶271-274.)

Tamami demurs to this cause of action only to the extent it is brought by the Ishikawas

because (a) they do not allege they were Fuji Corp.’s shareholders (except indirectly through

their ownership in Fuji Inc.); (b) as individual shareholders they lack standing to sue for harm

done to the corporation; and (c) they failed to make a demand on the corporation’s board.

Plaintiffs do not address this cause of action in their opposition papers. As it appears all

corporate assets stolen belonged to Fuji Corp. rather than Fuji Inc., the Ishikawas individually do

not appear to have a direct interest. Moreover, as discussed above in connection with the first

cause of action for breach of fiduciary duty, they cannot bring a claim for diminution in

shareholder value. As these defects cannot be cured and this portion of the demurrer is

unopposed, the Court sustains the demurrer to the twenty-second cause of action without leave

to amend.

Twenty-third cause of action for conversion of personal property of Chino Hills residence.

This claim is brought solely by Plaintiff Yoko against Defendant Tamami. The SAC alleges Yoko

owns and owned residential property located at 13571 Whispering Willow in Chino Hills. On or

about June 29, 2017 (as recorded October 11, 2017), Yoko transferred this property such that

after the transfer Yoko and Tamami held the property as joint tenants. Since that time, Tamami

has collected rents on the property but failed and refused to remit the rent receivables to Yoko

despite demand. Tamami has also failed and refused to pay property taxes, leaving it to Yoko to

do so. (SAC, ¶¶276-281.)

The SAC further alleges Yoko has owned and has possessed and had a right to possession of

individual items of personal property “as alleged in the foregoing paragraphs.” (SAC, ¶282.)

Tamami actually and substantially interfered with Yoko’s ownership and right to possession of

individual items of property by knowingly and intentionally taking possession thereof and by

preventing Yoko access. (SAC, ¶283.)

Tamami argues because the transfer of property occurred on June 29, 2017, the three-year

statute of limitations for conversion under Code of Civil Procedure section 338, subdivision (c)

ran before this action was filed in 2024. However, it is not the real property that Plaintiff alleges

was converted under this claim but rather personal property and money due Yoko. The date of

such alleged conversion is not clearly stated on the SAC, but it appears to be ongoing. Thus, the

Court overrules the demurrer to the twenty-third cause of action.

Twenty-fourth cause of action for unjust enrichment and restitution with respect to Chino Hills

residence. Again, this claim is brought solely by Yoko against Tamami. The SAC alleges

Tamami has received benefits in relation to Yoko’s personal property and residential real

property. It would be unjust for Tamami to retain those benefits at Yoko’s expense, and

restitution is required under equitable principles. (SAC, ¶¶289-291.)

Tamami again argues unjust enrichment or restitution is not a valid standalone cause of action.

This argument fails for reasons discussed above. Tamami also argues even if the claim is

permissible, it is barred by the applicable three-year statute of limitations for unjust enrichment

claims as articulated in First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1670.

Tamami contends that the claim does not allege that anything occurred within the past three

years; the only dates specified concern the transfer of the property from Yoko alone to Yoko and

Tamami jointly in 2017. Tamami further argues there are no allegations of what benefits Tamami

has improperly received.

Although not specified under the twenty-fourth cause of action, the allegations under the twenty-

third cause of action discussed immediately ante provide Tamami collected rent on the Chino

Hills property to which Yoko was entitled. This appears to be an ongoing issue. Although this

claim is somewhat vague and perhaps duplicative, the Court overrules the demurrer to the

twenty-fourth cause of action.

Twenty-fifth cause of action for declaratory relief with respect to Chino Hills residence. This final

cause of action is also pled only by Yoko against Tamami. The SAC alleges the parties have an

actual and present controversy over Yoko’s residential real and personal property and money

and accounts which Tamami wrongfully misappropriated. The SAC seeks a declaration of the

parties’ legal rights and duties in this respect. (SAC, ¶¶294-295.)

Tamami argues this claim is entirely duplicative of the claims sought in the twenty-third cause of

action for conversion of personal property, and that declaratory relief is not appropriate where an

adequate alternate remedy exists. However, this claim is not duplicative because it seeks a

declaration of the parties’ ongoing rights and duties with respect to the property, as opposed to

the conversion claim which seeks recovery for past wrongs. The Court overrules the demurrer to

the twenty-fifth cause of action.

Raymond’s Demurrer

Raymond demurs to the first, third, sixth, seventh, eighth, tenth, eleventh, thirteenth,

fifteenth, nineteenth, and twenty-second causes of action. The arguments and analysis as to

these claims are identical or nearly identical to those addressing Tamami’s demurrer, and

therefore the Court rules the same way: (a) sustains without leave as to the first, tenth, fifteenth,

and twenty-second causes of action; (b) overrules as to the third, eleventh, thirteenth, and

nineteenth causes of action; and (c) sustains with 20 days leave to amend as to the sixth,

seventh, and eighth causes of action.

RT’s Demurrer

Defendant RT demurs to the sixth, seventh, eighth, tenth, eleventh, thirteenth, fifteenth,

nineteenth, and twenty-second causes of action. The analysis is the same as addressed above

in connection to the Chios’ legal challenges. Therefore, the Court (a) sustains with 20 days leave

to amend as to the sixth, seventh, and eighth causes of action; (b) sustains without leave to

amend as to the tenth, fifteenth, and twenty-second causes of action; and (c) overrules as to the

eleventh, thirteenth, and nineteenth causes of action.

Pacific and Urban’s Demurrers

Pacific and Urban each separately demur to the sixth, seventh, eighth, thirteenth, and

fifteenth causes of action. Again, the analysis is mostly the same. Pacific and Urban’s

connections to Plaintiffs are certainly more attenuated than those of the Chios and RT, which

could make the fraudulent conveyance claims more difficult to plead. Nonetheless, the Court

grants 20 days leave to amend on those claims because Plaintiff could possibly amend to make

them viable. The Court sustains the demurrer to the sixth, seventh, and eighth causes of action

with 20 days leave to amend; overrules as to the thirteenth cause of action; and sustains without

leave as to the fifteenth cause of action.

RULING

For all the reasons stated above, the Court rules as follows:

1. Deems the meet and confer requirement as to each demurrer satisfied, but order both

counsel to provide legal authority, including appropriate statutory and case citations,

to each other during the meet and confer process prior to filing any future demurrers

or discovery motions.

2. As to Raytam’s demurrer:

a. Sustains with 20 days leave to amend as to the sixth, seventh, and eighth

causes of action;

b. Overrules as to the thirteenth cause of action; and

c. Sustains without leave to amend as to the fifteenth cause of action.

3. As to Tamami’s demurrer:

a. Sustains without leave to amend as to the first, tenth, fifteenth, and twenty-

second causes of action;

b. Overrules as to the third, eleventh, thirteenth, nineteenth, twenty-third, twenty-

fourth, and twenty-fifth causes of action; and

c. Sustains with 20 days leave to amend as to the sixth, seventh, and eighth

causes of action.

4. As to Raymond’s demurrer:

a. Sustains without leave to amend as to the first, tenth, fifteenth, and twenty-

second causes of action;

b. Overrules as to the third, eleventh, thirteenth, and nineteenth causes of action;

and

5. Sustains with 20 days leave to amend as to the sixth, seventh, and eighth causes of

action.As for RT’s demurrer:

a. Sustains with 20 days leave to amend as to the sixth, seventh, and eighth

causes of action;

b. Sustain without leave to amend as to the tenth, fifteenth, and twenty-second

causes of action; and

c. Overrules as to the eleventh, thirteenth, and nineteenth causes of action.

6. As for Pacific’s demurrer:

a. Sustains with 20 days leave to amend as to the sixth, seventh, and eighth

causes of action;

b. Overrules as to the thirteenth cause of action; and

c. Sustains without leave to amend as to the fifteenth cause of action.

7. As for Urban’s demurrer:

a. Sustains with 20 days leave to amend as to the sixth, seventh, and eighth

causes of action;

b. Overrules as to the thirteenth cause of action; and

c. Sustains without leave to amend as to the fifteenth cause of action.