Xinxin Wang v. Jin Hui Guo

1

2024 IL App (1st) 221245-U

XINXIN WANG et al., Plaintiffs-Appellants, v. JIN HUI GUO et al., Defendants-Appellees

No. 1-22-1245

Court of Appeals of Illinois, First District, Sixth Division

January 26, 2024

This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of Cook County No. 2021 L 10030 The Honorable Mary Colleen Roberts, Judge, presiding.

JUSTICE TAILOR delivered the judgment of the court. Presiding Justice Oden Johnson and Justice C.A. Walker concurred in the judgment.

ORDER

TAILOR JUSTICE

Held We affirm the circuit court decision to dismiss the plaintiffs' complaint based on the provision in the loan agreement selecting China as the forum for the resolution of any disputes.

¶ 1 I. BACKGROUND

¶ 2 This appeal arises out of the alleged breach of a loan agreement to finance a real estate development project in China. We begin, as we typically do, by summarizing the allegations of the complaint. However, our task is difficult because the allegations in the complaint are in many respects incomprehensible and appear at times counterintuitive if the purpose of the agreement was to loan money or invest in a real estate project. The gist of the complaint is that the parties agreed that the plaintiff lender would loan the defendant borrower millions of dollars and the defendant borrower was to immediately repay the plaintiff. The plaintiff sent the defendant over $13 million by wire transfers but the defendant only repaid $5.4 million. In an affidavit supporting plaintiffs' motion for service by special order of court, plaintiffs' counsel avers that defendants Jinhui Guo and Ashley Liu were being investigated for money laundering. We do not know whether the parties were engaged in money laundering here but raise this point because of the peculiar allegations of the parties' dealings and the fundamental principle that courts do not assist those seeking to enforce illegal contracts. Merchandise Nat. Bank of Chicago v Kolber, 50 Ill.App.3d 365, 369-370 (1977) ("Where enforcement of an illegal contract is sought, the courts will aid neither party but will leave them where they have placed themselves[.]"); see also, Galan v. Jackson, No. B184916, 2006 WL 648852 (Cal.Ct.App. Mar. 16, 2006) (court declined to rescind an illegal money laundering contract); Martinez v. Guajardo, No. 13-20-00165-CV, 2022 WL 400837 (Tex. App. Feb. 10, 2022) (court declined to enforce an agreement to launder drug money).

¶ 3 On October 10, 2021, plaintiffs XinXin Wang and Primatrix Investment, Inc., filed a six-count complaint against defendants Jinhui Guo, Xin Li, Xiangyu Zhou, Ashley Liu, and three companies owned by Zhou and Li (who are married to each other and live in Cook County, Illinois): RM Material, LLC, Cabinets Depot, LLC, and Rimei International, Inc. Count I alleges breach of contract against Guo and counts II and III allege breach of contract against Liu. Counts IV and V allege fraud and conversion, respectively, against Guo, Liu, Zhou, and Li. Count VI alleges a civil conspiracy against all defendants.

¶ 4 We summarize the allegations as best we can. In March 2019, plaintiff Wang, a Chinese citizen who resides in China, and his "attorney-in-fact" and agent Ming Dou, attended a real estate developer event in Chicago where they met defendant Li. Wang told Li that he was interested in real estate development opportunities. Li introduced Wang and Dou to a third party who was developing real estate in Glenview, Illinois. At Li's urging, Wang invested in that project.

¶ 5 On August 1, 2019, Zhou contacted Dou and told him that Guo, a resident of China, was seeking funding for a real estate development project in China and that "Guo had $3 Million dollars that he can wire to Wang's bank accounts." It is unclear from the complaint why Guo, who was seeking funding for a real estate development project in China, would wire $3 million to Wang.

¶ 6 On August 2, 2019, Zhou sent a text message to Dou advising him that Guo had obtained funding for his project in China through other investors and now only needed $720,000. That same day, Zhou sent Dou the payee and bank account information over the WeChat messaging application. On August 3, 2019, Wang transferred by wire 5,000,000 RMB (the currency of China), the equivalent of $720,000, to the two Chinese bank accounts designated by Guo.

¶ 7 Dou also provided Zhou with Wang's bank account information into which Guo was to wire transfer $720,000. Zhou advised Dou at 11:27 pm on August 2, 2019, that the transfer of the $720,000 to Wang should be completed before midnight Chicago time. As of August 4, 2019, however, Wang had not received the funds from Guo, and Dou so advised Zhou. Zhou assured Dou that the "money is safe. His relatives (Ashley Liu) in the United States are next to me now."

¶ 8 On August 5, 2019, Zhou told Dou that Guo was willing to take additional funding from Wang and provided Dou the bank account information for defendants RM Materials, LLC and Cabinet Depot, LLC, which Zhou represented were companies she owned. Zhou told Dou that "each of her company account would receive $2.5 Million Dollar USD for Wang; Dou's two company bank accounts would receive $500,000 dollars USD each; and Wang's three bank accounts would receive a total of $8 million Dollars USD." Later that day, Zhou told Dou that she had "already told [Guo] and [Liu] that [Wang] will want the whole 14 million USD." Zhou then provided Dou the bank account information for four individuals, including Guo; Liu's mother, Zixia Zhao; and two other individuals, Bo Li and Dong Xu. Zhou said that Guo would receive 10 million RMB, Xu would receive 20 million RMB, and Zhao would receive the remaining amount.

¶ 9 On August 6, 2019, Dou told Zhao that Wang wanted "all of the $14 million USD" and gave Zhao information for seven U.S. bank accounts where the funds could be transferred by wire. Later that day, Zhou sent Dou a text message, stating, "You need to transfer the RMB as soon as the bank opens at 9:00 am. Otherwise there will be the other competitors who also need USD, once then made the transfer first, Guo and Liu will have the deal with other people." Zhou then left Dou a voicemail, stating, "If we can just send the first wire transfer receipt of RMB to him, then it will show to Guo that we are committed to do the deal, he will not go to the other guys." Zhou called Dou shortly thereafter, and said, "I just called. Your friend need to transfer 20 million RMB to each of the four people. Guo and Liu will confirm the last account, and will transfer the balance left into the 3rd account." Shortly thereafter, Zhou told Dou, "You just transferred the first, once you have the bank receipt, pls send to me as soon as possible." Two hours later, Zhou texted Dou, stating, "Hurry up, Please!" and "The competitors are using the wire transfer, they are faster than us."

¶ 10 Dou then sent Zhou pictures of four receipts showing the transfer of 20 million RMB to each of Guo, Xu, Li, and Zhao.

¶ 11 When Dou told Zhou that Wang was getting nervous, Zhou replied, "You don't have to worry about security of the fund, tell [Wang] that we can be guarantee." Zhou also told Dou, "If you guys are really not comfortable, I can freeze the same amount of fund in my company's account and provide the guarantee to you. When his money finally received, we defreeze the fund, then."

¶ 12 On August 7, 2019, when Dou expressed concern that Guo had not wired money to Wang, Zhou replied, "Yesterday they transferred 6 million USD in total. They will finish all of the other amount tomorrow. The wire transfer receipts are all ready. Because they are using the same company and that company already transferred 2.4 Million USD." Zhou also stated, "I will use my company's fund to provide proof of fund today. So your friend will not be worried." Zhou also stated, "Yesterday there are 6,427,000 USD wired; and Wang wired 80 million RMB, equals to 11,222,715 USD. The USD not wired yet is: 11,222,715-6,427,000=$4,795,715."

¶ 13 On August 12, 2019, when Dou told Zhou that the $2.1 million had not arrived in the Primatrix Investment, Inc. (Primatrix) account, Zhou responded, "I will call the BOA customer service number of our company accounts, to see whether it is pending or not." When the $2.1 million did not arrive the next day, Zhou told Dou, "Guo and Ashley Liu will arrange someone to go to the bank. If there is still nothing showed up, they will see what to do at the bank."

¶ 14 Zhou stated that, as of August 14, 2019, the "current status is: previous unpaid balance to Mr. Wang is $6,322,732, 8/14, $4,200,000 was wired, still 2,122,732 left; on 8/15, Wang will wire transfer 27,000,000 RMB according to the exchange rate of USD: RMB=1:703.85; it will be additional $3,836,045. On 8/15, they should wire total $5,958,777 to Wang's U.S. account."

¶ 15 On August 19, 2019, Zhou told Dou, "Singapore just gave the latest confirmation. On Tuesday morning, Singapore time, the bank will release the 3 wires together (to three business accounts), they asked us to check on Tuesday U.S. time." On August 20, 2019, when Dou asked Zhou for an update on the transfers, Zhou responded by asking Dou for his identification, stating, "The bank is asking for company accounts' holder IDs. Once we sent the IDs to the bank, the wires will be processed." Dou then sent Zhou a copy of his driver's license, to which Zhou responded, "Now everything is OK. All approved."

¶ 16 No funds were ever transferred from the bank in Singapore. Zhou continued to mislead Dou by falsely stating that she had been advised by her bank, Bank of America, that wire transfers...