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Aluminicaste Fundicion De Mex. S. De Rl CV v. Shen

United States District Court, C.D. California

June 22, 2017


          Present: The Honorable CHRISTINA A. SNYDER, U.S DISTRICT JUDGE


         Proceedings: DEFENDANT YUFEN SHEN'S MOTION TO STRIKE PORTIONS OF COMPLAINT (Dkt. 12, filed May 18, 2017)

         DEFENDANT YUFEN SHEN'S MOTION TO DISMISS (Dkt. 14, filed May 18, 2017)

         The Court finds these motions appropriate for decision without oral argument. See Fed.R.Civ.P. 78; C.D. Cal. L.R. 7-15. Accordingly, the hearing date of June 26, 2017 is vacated, and the matters are hereby taken under submission.


         Plaintiff Aluminicaste Fundicion De Mexico S. De RL De CV initiated this action against defendants Yufen Shen[1] and Po Chi “Eric” Shen on March 22, 2017, asserting five claims: (1) conversion, (2) fraudulent concealment, (3) breach of fiduciary duty, (4) unjust enrichment, and (5) money had and received. Dkt. 1. (“Compl.”). As to the second, third, and fourth claims, plaintiff alleges that Yufen Shen aided and abetted Eric Shen's allegedly unlawful acts. Id. at 7-9. Plaintiff asserts its claim for money had and received against Yufen Shen alone. Id. at 9.

         On May 18, 2017, Yufen Shen (the “moving defendant”) filed a motion to strike portions of the complaint that allegedly refer to privileged material. Dkt. 12 (“MTS”). Specifically, the moving defendant seeks to strike information that she alleges plaintiff obtained from Mr. and Ms. Shen's tax returns, which were produced in the course of a suit before a federal district court in Texas in which only Mr. Shen is named as a defendant. Id. at 2-3. Ms. Shen asserts that the allegations in paragraphs 6, 8, 15, 22, and 30 of plaintiff's complaint are based on her allegedly privileged tax returns, and thus seeks to strike those paragraphs under Federal Rule of Civil Procedure 12(f). Id. at 7. Also on May 18, 2017, the moving defendant filed a motion to dismiss plaintiff's complaint against her on the grounds that plaintiff's claims are barred by the applicable statutes of limitations. Dkt. 14 (“MTD”). The moving defendant also argues that plaintiff fails to sufficiently plead several elements of its second and third claims. Id. On June 2, 2017, plaintiff filed oppositions to both motions. Dkts. 18 (“Opp'n to MTD”), 19. On June 12, 2017, the moving defendant filed replies in support of her motions. Dkts. 23, 24.

         Having carefully considered the parties' arguments, the Court finds and concludes as follows.


         Plaintiff alleges the following facts.

         Plaintiff is an aluminum manufacturing and production company organized under the laws of Mexico “as a Sociedad de Responsibilidad Limitada de Capital Variable, ” headquartered in San Jose Iturbide, Guanajuato, Mexico. Compl. at 2. Yufen Shen is a resident of California and the former wife of co-defendant Eric Shen. Id. Mr. Shen has not joined in either of Ms. Shen's motions. In 2011 and 2012, Mr. Shen was an employee of Scuderia Capital Partners, Inc. (“Scuderia”), a U.S. company based in Orange County, California. Id. While working for Scuderia, Mr. Shen was responsible for the oversight and management of certain aspects of plaintiff's business operations, including making expenditures concerning the construction of an aluminum foundry in Mexico. Id. at 3.

         Plaintiff alleges that in 2011, Mr. Shen was responsible for an unspecified number of unauthorized wire transfers, totaling at least €625, 000, amounting to more than $850, 000, to a bank account at HSBC in Taiwan, in the name of Yufen Shen. Id. at 4. Plaintiff alleges that at least two of the wire transfers came from its Deutsche Bank account: the first on or around September 6, 2011, and the second on or around October 6, 2011. Id. Mr. Shen did not report or disclose to plaintiff any of the transfers from the plaintiff's account to Ms. Shen's account, nor did he account for the transfers in plaintiff's books. Id. No consideration was provided for the transfers, and plaintiff alleges that Mr. Shen's intentionally concealed the transfers. Id.

         During the period when Ms. Shen was receiving the transfers, she was employed by the U.S. Internal Revenue Service (“IRS”). Id. at 2. Plaintiff alleges that as a U.S. citizen, Ms. Shen was obligated by law to file Reports of Foreign Bank and Financial Accounts with respect to her HSBC account in Taiwan, and that she failed to do so. Id. at 4. Ms. Shen failed to report any income on the Taiwan account to the IRS, in violation of federal law. Id. According to plaintiff, these two omissions were part of an intentional effort by Ms. Shen to conceal the illicit transfers that Mr. Shen was directing to her Taiwan account, and “to further [Mr. Shen's] plan to defraud Plaintiff and steal Plaintiff's funds.” Id. Plaintiff alleges that both defendants personally profited from the transfers, with the funds being used for “household expenses, ” and for Ms. Shen's “personal enjoyment.” Id. at 5.

         Plaintiff discovered the transfers that Mr. Shen directed from plaintiff's accounts to his then wife's Taiwan account until 2016, “after [plaintiff] began a comprehensive review of its financial records upon discovering other misconduct by Eric Shen.” Id. at 2. Plaintiff alleges that the transfers went undiscovered for so long because ...

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