Lin v. Zhang

The Federal Arbitration Act (FAA) governs this dispute because the arbitration agreement expressly states it applies. (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355.; Vega Decl., Ex. A at p. 3.) The FAA incorporates the EFAA. (9 U.S.C. § 2.) Plaintiff alleges a viable claim for hostile work environment sexual harassment under the California Fair Employment and Housing Act, Gov. Code § 12940 et. seq. (Fisher v. San Pedro Peninsula Hosp. (1989) 214 Cal.App.3d 590, 607-608 [elements of sexual harassment] Compl. ¶¶ 32-40, 75-89.)

Because at least one claim fits within the scope of the EFAA, the arbitration agreement is unenforceable as to all claims asserted in the lawsuit. (Liu v. Miniso Depot CA, Inc. (2024) 105 Cal.App.5th 791, 800; Doe v. Second Street Corp. (2024) 105 Cal.App.5th 552, 577.) The motion is therefore DENIED.

Counsel for Plaintiff shall give notice of this ruling. 11 Lin v. Zhang Before the Court is a motion by plaintiff Gary Lin for an award of attorney’s fees in the amount of $1,103,418 against defendants Ark Electronics USA, Inc. and Wen Xia Zhang (collectively, “Defendants”). The motion is GRANTED in part, and DENIED in part, as set forth herein.

A party seeking an award of fees has the burden of establishing entitlement to an award, and of documenting the appropriate hours spent, and the hourly rates. (569 E. County Blvd. LLC v Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 432; Lunada Biomedical v Nunez (2014) 230 Cal.App.4th 459, 486.)

At trial, plaintiff prevailed on the cause of action for violation of Pen. Code § 496 which provides for recovery of reasonable attorney’s fees. The 3/25/26 Judgment states, in part: “Zhang and Ark are jointly and severally liable to Lin for treble damages under California Penal Code Section 496 in the amount of $2,700,054, along with Lin's cost of suit and reasonable attorneys' fees, in an amount to be determined by the Court.”

In support of the motion for attorney’s fees, plaintiff submits the declarations of Phillip Kaplan and Ellsworth Vines which are accompanied by detailed billing statements for attorney’s fees incurred in this action. The time entries are billed to the tenth of an hour and appear recorded on a per task basis. Kaplan and Vines also attest to the reasonableness of the rates and billing. Defendants do not contest the reasonableness of the rates charged. The court finds plaintiff has sufficiently established reasonableness of the rates and a basis for the fees in addition to sufficiently documenting the hours billed.

In challenging an attorney fee request, the burden falls upon the challenging party to point to specific items challenged, with arguments and citation to evidence. General claims that fees are excessive insufficient. (Premier Medical Management Systems, Inc. v. California Insurance Guarantee Association (2008) 163

Cal.App.4th 550, 564.) A party cannot litigate tenaciously and then be heard to complain about the time incurred. (Peak-Las Positas Partners v. Bollag (2009) 172 Cal.App.4th 101, 114.)

Defendants advance three arguments as to how the plaintiff’s fee request should be reduced. Each of the arguments are by reference to specific exhibits attached to the declaration of Kristopher Wood, and are therefore addressed by reference to the same exhibits.

Defendants’ Exhibits 1 & 2 – Employment Specific Time Entries

The employment claim was added in the 5th amended complaint in February 2025. There are several entries in the billing related to seeking leave to amend, opposing the demurrer and for taking select depositions related to the amended complaint allegations. Defendants attach as Exhibits 1 and 2 two charts which identify specific entries which appear to be for work on the motion for leave to amend and work opposing the defendant’s demurrer. Based on the descriptions, this billing can be fairly said to have been solely related to adding the employment cause of action to the complaint. In the Reply, plaintiff does not respond to this argument, thereby conceding the point.

The total amount of the specific entries identified in Exhibits 1 and 2 is $57,803. The Court finds that these entries were not related to the Penal Code §496 cause of action and therefore the motion is DENIED as to this amount.

Defendants’ Exhibit 4 – Clerical Work

Defendants argue there should be a 10% reduction of the overall bill as excessive because many of the entries were for “clerical” work. Wood attaches to his declaration at Exh. 4 a spreadsheet listing “examples of administrative time entries.”

Exhibit 4 lists 26 entries by multiple persons totaling $7,219.50. The 26 entries are not all clerical. For example, Exh. 4 identifies a 1.2 hr. entry by Feng on 10/28/24 where he billed for “Strategize re: budget and next steps.” Further, there is no basis seeking a reduction for excessive or clerical time based on counsel’s personal estimates based on a small sample of entries. “In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” (Premier Med. Mgmt. Sys., Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal. App. 4th 550, 564)

Notwithstanding, the Court has reviewed the 26 entries identified by Defendants and finds that the 11 entries on 8/26/24, 9/5/24, 9/17,24, 9/18/24, 10/23/24, 10/28,24, 12/2/24, 1/6/25, 1/7/25, 2/11/25, 7/28/25 and 9/5/25 were for clerical tasks and not recoverable as attorney’s fees. These 11 entries total $870. The motion is therefore DENIED as to $870.

Exhibit 3 – Request for “across the board” reduction of 40%

Defendants attach as Exhibit 3 a list of time entries totaling $457,564.50. Defendants argue that because the “trial was nearly evenly split” between employment and stock theft claims, there should be an across the board reduction of 40%, which would result in a $183,025.80 reduction in plaintiff’s fee request. The Court disagrees.

When liability issues are so intertwined, apportionment is not appropriate. The Court explained in Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1134: “When a cause of action for which attorney fees are provided by statute is joined with other causes of action for which attorney fees are not permitted, the prevailing party may recover only on the statutory cause of action. However, the joinder of causes of action should not dilute the right to attorney fees. Such fees need not be apportioned when incurred for representation of an issue common to both a cause of action for which fees are permitted and one for which they are not.

All expenses incurred on the common issues qualify for an award. When the liability issues are so interrelated that it would have been impossible to separate them into claims for which attorney fees are properly awarded and claims for which they are not, then allocation is not required.”

This litigation spanned five years and culminated in a lengthy court trial. While Defendants argue in their opposition that the trial was evenly split between employment and stock claims, Exhibit 4 does not establish such. In fact, no evidence was submitted to support the conclusion the time at trial was evenly split. “In law and motion practice, factual evidence is supplied to the court by way of declarations.” (Calcor Space Facility, Inc. v. Superior Ct. (1997) 53 Cal.App.4th 216, 224) Notwithstanding the lack of evidence, the Court is of the opinion the employment and stock theft claims were inextricably intertwined.

As the Cout stated in its Statement of Decision, “This case presents a classic tale of "buyer's remorse." Having welcomed Lin as an officer, director, and one of the Ark's three founders, Defendants later came to regret their decision to include him in the business and attempted to undo their decision through a rewrite of history.” (ROA 454) Throughout the trial, the theory of the case presented by plaintiff was that there was a conspiracy to fire him in order to get his stock. The same witnesses testified as to both the theft and employment claims.

Accordingly, the Court declines to make an across the board reduction in plaintiff’s attorney’s fees.

Based on the foregoing, plaintiff’s motion for attorney’s fees is GRANTED, in part, and plaintiff is awarded $1,044,745 ($1,103,418 less $57,803 and $870) in attorney’s fees against Ark Electronics USA, Inc. and Wen Xia Zhang, jointly and severally.

Plaintiff to submit a proposed amended judgment.

Plaintiff shall give notice. 12 Spread Your Before the Court is a demurrer filed by defendants Kristy Rodriguez Wings, LLC v. (Kristy), Monica Rodriguez (Monica) and Diana Hsueh (Hsueh), Tran Yvonne Padron (Padron) and Ascend Services, Inc. (Ascend)(collectively, Defendants) to the Fourth Amended Complaint (4AC) filed by plaintiffs Spread Your Wings, LLC and Andrew Dumbuya (Plaintiffs). For the reasons set forth below, as to Ascend, the demurrer is OVERRULED as to the 5th and 14th causes of action and SUSTAINED as to the 9th-13th causes of action without leave to amend. As to Kristy, Monica and Hsueh, the demurrer is SUSTAINED without leave to amend. As to Pardon, the demurrer is SUSTAINED with 20 days’ leave to amend. Plaintiffs request for judicial notice is GRANTED. (Evid. Code § 452, subd. (d).)

Ascend: The California Uniform Trade Secrets Act, Civil Code section 3426 et. seq. (CUTSA) preempts common law claims for misappropriation of trade secrets. (K.C. Multimedia, Inc. v. Bank of America Tech. & Operations, Inc. (2009) 171 Cal.App.4th 939, 954.) Common law claims and statutory unfair competition claims that are “based on the same nucleus of facts as the misappropriation of trade secrets claim for relief” are also preempted by CUTSA. (Id. at 958, 961-962.) CUTSA does not preempt other California statutes regulating trade secrets; nor does it affect “contractual remedies, whether or not based upon misappropriation of a trade secret” or “other civil remedies that are not based upon misappropriation of a trade secret. (Civ.

Code § 3426.7; Angelica Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 507.) The Court finds that the 9th-13th causes of action are based on the same nucleus of facts as the 4th cause of action for misappropriation of trade secrets claim under CUTSA, but the 5th and 14th cases of action are not. (See 4AC ¶¶ 78, 69-76, 78-81, 86-113, 116.)

The Court also rejects Defendants’ argument the 5th cause of action for violation of Penal Code section 496 does not apply to receipt of stolen trade secrets. (People v. Gopal (1985) 171 Cal.App.3d 524, 541 [“Anything that can be the subject of theft can also be property under section 496” including a trade secret]’; see also Civ. Code § 3426.1, subd. (a) [acquisition of a trade secret by “[i]mproper means includes theft, bribery, misrepresentation . . . through electronic or other means”]; 4AC ¶¶ 1, 78.)

The demurrer is thus SUSTAINED as to the 9th-13th causes of action without leave to amend and OVERRULED as to the 5th and 14th causes of action.

Kristy, Monica and Hsueh: Plaintiffs failed to cure the defect in the prior pleading. The 4AC does not add any new material and/or specific facts against Kristy, Monica and Hsueh. In the 4AC, Plaintiffs now allege they “intentionally and/or negligently interfered with SYW’s existing contractual relations and SYW’s prospective economic relations” but without identifying any specific conduct by Monica and Hsueh. The additional facts alleged against Kristy (4AC ¶ 40) are