Li v. Suo

Background

Li alleged that Jie Suo assisted him with buying a house in California in 2016. While Li was preparing to return to China, he signed a power of attorney at Suo’s instruction. Li alleged that he believed the document authorized Suo only to set up utilities, but that it instead allowed Suo to take out loans in Li’s name secured by the house.

According to the amended complaint, Suo took out a $560,000 loan from Roger Anderson, trustee of the RWA Trust Dated March 14, 2014. The loan was secured by a deed of trust against Li’s house and was used to pay off an earlier $400,000 loan. Li alleged that he paid $28,000 toward interest to try to avoid foreclosure.

Motion and Legal Standard

Anderson moved to dismiss the amended complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). That rule permits dismissal when a complaint does not allege enough facts to plausibly show that the plaintiff is entitled to relief. The court also applied Rule 8, which requires a short and plain statement of the claim, and Rule 9(b), which requires fraud allegations to describe the circumstances in detail, including who, what, when, where, and how.

Although Li was representing himself and did not need to identify specific legal theories if his facts showed that he might be entitled to relief, he still had to satisfy these pleading requirements.

Court’s Analysis

The court found that the amended complaint did not state a claim against Anderson. Li alleged that Anderson “colluded with” Suo, chose to transact with her, and knew that she lacked a power of attorney. But the complaint did not provide factual allegations supporting those conclusions. The court also found that Li did not state what relief he sought.

The court separately found that the amended complaint did not satisfy Rule 9(b). Although Li did not identify a specific cause of action, his allegations involved alleged fraud. The court held that Li needed to describe Anderson’s own alleged fraudulent conduct with particularity, rather than mainly describing alleged conduct by Suo and other individuals. The court found that the amended complaint contained very few allegations specifically concerning Anderson.

Disposition

The court GRANTED Anderson’s motion to dismiss Li’s amended complaint. Because the court found that Li might be able to correct the deficiencies, it dismissed the complaint WITH LEAVE TO AMEND. Any amended complaint was due by June 5, 2025, and had to state each claim, identify the supporting legal authority and facts, and specify the requested relief. The court warned that failure to file by that date would result in dismissal of the case. Judge Araceli Martinez-Olguin also vacated the scheduled May 15, 2025 hearing.