Liping Zhang v. Hung Ern Toh, 2:17-cv-07745

Plaintiff Liping Zhang, a Chinese national, alleges Hung Ern Toh induced her to invest $250,000 in entities Barr Consulting & Holdings, Inc. and Barr Holdings, LLC by promising immigration benefits (L‑1 visa path to permanent residence) and escrow protection.
Zhang deposited $250,000 into Beverly Hills Escrow (BHE); funds were later released to the Barr defendants without her authorization and allegedly diverted by Toh for personal use.
Zhang sued Toh, the Barr defendants, and BHE asserting claims for fraud, conversion, rescission/restitution (fraud), and violation of California Business & Professions Code § 17200; claims against BHE included aiding and abetting and breach of fiduciary duty.
Counsel for Toh and the Barr defendants withdrew; the defendants failed to retain new counsel, ignored multiple court orders, and did not defend the action. Default was entered against Toh and the Barr defendants.
Zhang moved for default judgment seeking $250,000 in compensatory damages and $400 in costs; the motion was unopposed.
The Court applied the Eitel factors, found Zhang’s pleadings adequate (including fraud pleadings under Rule 9(b)), found no excusable neglect, and awarded $250,400 plus post-judgment interest.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether default judgment should be entered	Zhang: defendants failed to appear or defend; Eitel factors favor default	Toh/Barr: no opposition or response filed	Court granted default judgment—Eitel factors weigh for entry
Sufficiency of fraud claim under Rule 9(b)	Zhang: pleaded who, what, when, where, how regarding misrepresentations about escrow and immigration promises	Defendants: made no response/argument	Court held fraud pleaded with required particularity; fraud, rescission/restitution claims sufficient
Conversion claim viability	Zhang: $250,000 was misappropriated and is a readily ascertainable sum	Defendants: no response	Court held conversion claim stated and supports recovery of $250,000
UCL (unlawful business practice) claim	Zhang: suffered economic injury from deceptive scheme inducing investments; funds misappropriated	Defendants: no response	Court held UCL claim adequately alleged and supports relief

Pena v. Seguros La Comercial, S.A., 770 F.2d 811 (9th Cir. 1985) (defaults should be viewed with disfavor; courts prefer decisions on the merits)
Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (sets seven-factor test for default-judgment analysis)
PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 2d 1172 (C.D. Cal. 2002) (discusses prejudice and Eitel factors in default-judgment context)
Geddes v. United Fin. Grp., 559 F.2d 557 (9th Cir. 1977) (well‑pleaded allegations in complaint are assumed true upon default)
Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261 (9th Cir. 1992) (deficiency of necessary facts or legally insufficient claims are not established by default)
Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (Rule 9(b) requires pleading the who, what, when, where, and how of fraud)
Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590 (9th Cir. 2010) (elements of conversion claim explained)