Facts

Wenqing Yao and Bingbing Zhu sued Jean Tung-Navarro, Taihe Wang, Law Offices of Taihe Wang, and Joyce Tung, in connection with an investment.

PLAINTIFFS' CONTENTIONS:
Plaintiffs allegedly applied for an EB-5 investment immigration petition by investing $1 million into the creation of Dimiya Inc. Plaintiffs sued defendants for losses incurred as a result of defendants' alleged inadequacies.

Plaintiffs allegedly entered into an agreement with Tung-Navarro to act as Dimiya's COO. However, Tung-Navarro, failed to pay operating costs, causing the Franchise Tax Board to suspend Dimiya. Planitiffs thereafter entered into an attorney-client agreement with Wang and his law office to prevent Tung-Navarro from further embezzling from Dimiya and for Dimiya's continued representation. Wang allegedly failed to perform any legal services and, above all, was not licensed to practice law in the state. With respect to Tung, plaintiffs allegedly hired Tung to handle all corporate tax matters. Tung, however, failed to do so, resulting in Dimiya's suspension.

Plaintiffs alleged causes of action against Tung-Navarro for breach of fiduciary duty; breach of contract; intentional misrepresentation; negligent misrepresentation; fraudulent concealment; and conversion. Plaintiffs asserted claims against the law firm for breach of contract; intentional misrepresentation; negligent misrepresentation; fraudulent concealment; legal malpractice; and practicing law without a license. As to defendant Tung, plaintiffs asserted causes of action for breach of contract; intentional misrepresentation; negligent misrepresentation; fraudulent concealment; accounting malpractice; and practicing accounting without a license. As to all defendants, plaintiffs asserted causes of action for open book and indemnity.

DEFENDANTS' CONTENTIONS:
Plaintiffs' claims allegedly hinged on plaintiffs being the client and that defendants were obligated to provide services under the agreement. However, defendants claimed that plaintiffs were not the client as shown in the agreement. Thus, plaintiffs could not rely on the defendants' alleged misrepresentations. Overall, defendants demurred, on grounds of standing.

Result

The court sustained the demurrer with leave to amend.