Liu v. Sun
Filed 2/15/13 Liu v. Sun CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
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Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
JUNWEI LIU,
Plaintiff and Appellant,
v.
JING SUN et al.,
Defendants and Respondents.
B236305
(Los Angeles County
Super. Ct. No. KC053835)
APPEAL from
a judgment of the Superior Court of
County, Robert A. Dukes, Judge. Affirmed.
Jeanne
Collachia for Plaintiff and Appellant.
King, Cheng
& Miller, Katharine A. Miller and David P. King for Defendants and
Respondents.
_____________________
Plaintiff and cross-defendant Junwei
Liu appeals a judgment entered against him and in favor of defendants and
cross-complainants Jing Sun and Unity Professional Insurance Services, Inc.
(Unity) after a bench trial. Liu and Sun
formed JSL Insurance Solutions, Inc. (JSL) as a company engaged in the
insurance sales business. Unfortunately,
Liu and Sun had many disputes regarding the operation of JSL and Unity, Sun’s
wholly owned company. In their
pleadings, both sides asserted numerous direct claims against each other, as
well as derivative claims on behalf of JSL.
At trial the
two sides presented evidence regarding two very different versions of events
which led to this action. The trial
court found Liu’s testimony not credible and Sun’s testimony credible, and then
entered a statement of decision and judgment in favor of Sun and Unity. We affirm.
1. The Formation of JSL
In February
2007, Liu and Sun met at a seminar where Sun was a speaker. At the time, Liu was working as a manager at
Prudential Financial Planning Services (Prudential). Sun operated Unity. Both Liu and Sun were licensed insurance
brokers and agents.
According to
Sun, Liu solicited her to go into business with him. Sun and Liu discussed the matter numerous
times in the spring and summer of 2007.
Liu repeatedly told Sun that he had many high-net-worth clients at
Prudential, that he managed 30 or 40 agents there, and that he had extensive
experience recruiting and training agents.
Sun was interested in going into business with Liu because of the
clients and agents he could bring with him from Prudential and because he was
an experienced recruiter and trainer.
Sun offered to sell 50 percent of Unity for $125,000. Liu, however, declined this offer because he
did not have sufficient resources.
Eventually
Sun and Liu decided to form a new company.
They contemplated their new company would be general agent, that is, an
insurance wholesaler which has contracts directly with insurers and “downlineâ€
agents. Unity, by contrast, was an
insurance retailer, which sold insurance directly to customers but did not have
contracts with insurers. As a general
agent, a company can make commissions by selling insurance directly to
customers, as well as “overrides†on commissions earned by its downline agents.
In August or
September 2007, Sun and Liu entered into an oral
agreement regarding their contemplated company. While Sun and Liu do not dispute many of the
terms of this agreement, they do dispute the terms relating to Unity. Liu contends Sun agreed to “close downâ€
Unity. Sun contends the parties agreed
Unity could keep its existing clients and downline agents, and that all new
clients and agents would belong to the newly formed company.
On September
11, 2007,
Liu and Sun incorporated JSL and appointed themselves the officers and
directors of the company. At about the
time JSL was formed, Liu and Sun each contributed $20,000 in cash to the
company, which was placed in a bank account held by JSL. Both Liu and Sun were 50 percent shareholders
of JSL.
JSL operated
out of an office leased by Unity. It
also used the furniture and equipment owned by Unity. According to Sun, Liu agreed that JSL would
pay Unity $28,800 for the furniture and equipment once it had the revenues to
make this payment. Liu contends that
they agreed JSL could purchase Unity in its entirety for $28,800.
2. Liu’s
Termination from His Position at Prudential
From June to
October 2007, Liu’s boss at Prudential, Jay Skolnick, wrote a series of letters
to him regarding his alleged poor work performance and failure to address
Prudential’s concerns. In the final
letter, dated October 4, 2007, Skolnick advised Liu he was
terminated immediately. According to
Sun, she did not know of Prudential’s concerns about Liu’s performance before
she agreed to form JSL with him.
3. JSL’s
AIG and ING Contracts
Beginning in
October 2007, JSL sought to obtain general agency contracts with two large
insurers, AIG and ING. These contracts
were critical for JSL because it could not do any business in its own name
without them. While JSL was negotiating
with AIG and ING, JSL made sales “through†Unity. Sun contends that the commissions Unity
earned were paid to JSL. In January
2008, JSL obtained general agency contracts with AIG and ING.
4. Liu’s
Withdrawal of $39,000 in April 2008
At the end
of March 2008, Liu submitted an application on behalf of a customer named Zhou
to purchase an AIG life insurance policy.
Sun met Zhou before Zhou’s application was submitted. Although she thought Zhou was trustworthy
because she was introduced to Zhou by Liu, she was struck by how few questions
Zhou asked about the insurance policy and how little attention Zhou seemed to
pay to the matter.
On April
2, 2008, AIG
transferred $39,070.24 into JSL’s bank account.
This payment was for the $38,366.77 commission JSL earned on Zhou’s
policy, plus commissions for a number of other much smaller sales. Within hours after JSL received the payment
from AIG, Liu withdrew $39,000 from the JSL account.
Liu did not
inform Sun of this withdrawal. Sun
nevertheless learned about the withdrawal on the same day because she checked
the JSL account balance on line. Sun was
“shocked†by the withdrawal. She was
also concerned that JSL could not pay its bills because there was not enough
money in its account. Sun called Liu
about the matter, and he admitted to taking the money.
5. The
Second Agreement
Both Sun and
Liu agree that they entered into a new oral agreement regarding their business
in April 2008. They tell, however,
different tales about that agreement.
Under Sun’s
version, she and Liu had meetings regarding Liu’s withdrawal of $39,000 and the
future of JSL on or about April 3 and 7, 2008.
During those meetings, Sun indicated she did not want to do business
with Liu anymore. Liu accused Sun of
wrongfully diverting commissions belonging to JSL to Unity. After Sun reviewed with Liu the records
regarding the commissions, however, Liu conceded that she had not done so. Liu also admitted he was “wrong†to pay
himself $39,000, and promised he would return the money as soon as
possible. However, because Liu stated he
needed the money to take care of his family, Sun didn’t insist that Liu return
the money immediately.
name="_ftnref2" title="">[2]
Liu
convinced Sun to stay in business with him.
He also agreed to purchase a 50 percent interest in Unity from Sun
for $150,000. Liu persuaded Sun to
maintain her business relationship with him by, inter alia, stating it was
“very likely†JSL would earn a multi-million dollar commission from the sale of
a $50 million AIG life insurance policy to Frank Hu. Hu was a friend of Liu and a former
Prudential customer. In April of 2008,
Hu’s application was still pending. If
JSL earned the large commission from Hu’s policy, Liu could easily purchase 50
percent of Unity with his share of the commission.
Liu’s
contentions regarding the parties’ second oral agreement are very
different. He denies that he had a
meeting with Sun regarding his $39,000 withdrawal, which he claims was
legitimate. Rather, Liu contends, he and
Sun had a meeting to discuss his discovery that Sun had not closed down
Unity. Liu also contends Sun admitted
she and Unity wrongfully took commissions, overrides and bonuses that belonged
to JSL. Sun allegedly agreed to close
down Unity and to repay the funds she and Unity wrongfully took.
It is
undisputed that pursuant to the parties’ second oral agreement, Liu was added
as a signatory to several of Unity’s bank accounts. Sun contends Liu was not an “owner†of the
accounts.
6. Unity’s
and Sun’s Loans to JSL
After Liu’s
withdrawal of $39,000, there was only $100 left in JSL’s bank account. Unity thus paid JSL’s expenses that were due
in April 2008. These payments
constituted a “loan†to JSL. Because JSL had a negative cash flow, Sun
also made loans to JSL in May, June and July 2008. According to Sun, she authorized these loans
in reliance on Liu’s promise to purchase 50 percent of Unity.
7. The
Cancellation of Zhou’s Life Insurance Policy and AIG’s Termination of Its Contract with JSL
Under AIG’s
policy terms, customers have a 10-day “free look†period during which they can
cancel their policy and receive a full refund of premium. According to Sun, Zhou’s AIG life insurance
policy was never “delivered†to Zhou by Liu.
Instead, during the free look period, Zhou cancelled the policy. AIG thus demanded JSL return its $38,366.77 commission. Under its contract with AIG, JSL was required
to immediately do so. JSL, however, did
not have sufficient funds to pay back the entire amount at once. AIG thus ultimately terminated its general
agency contract with JSL.
8. The
Deterioration in the Relationship Between Liu and Sun, and Liu’s Withdrawals from JSL and Unity Bank Accounts in August
2008
After
entering into a second oral agreement with Liu, Sun worked with Hu on his
pending life insurance application. One
issue was obtaining a $3.4 million loan to fund the premium on the policy In order to obtain the loan, Hu needed to
produce certain financial documents. He
also needed to obtain a letter from a certified public accountant (CPA)
regarding his financial condition.
Unfortunately, there were many delays.
Hu never obtained the necessary letter from a CPA. By June 2008, Sun suspected there were
serious problems with Hu’s case. Hu’s
application was apparently never approved.
Sun was also frustrated by Liu’s
failure to pay her $150,000 for 50 percent of Unity, as he allegedly
promised. At some point, she advised Liu
that he needed to pay the full amount due by the end of July 2008. On August 6, 2008, Sun advised Liu that she
was going to end her business relationship with him as of August 7, 2008. According to Sun, Liu was “very, very madâ€
about this development. On August 7,
2008, Sun paid JSL’s employee and told the employee not to come back to work.
On August
14, 2008, within a few hours, Liu withdrew all of the funds from five different
bank accounts. First, he withdrew
$512.24 out of JSL’s Bank of America account, leaving a zero balance. Next, he made withdrawals in the amounts of
$128.16 and $3,745.12, for a total of $3,873.28, from Sun’s two Citibank
accounts, closing out both accounts.
Finally, he withdrew $10,275.23 from Unity’s Comerica Bank account and
$77.12 from JSL’s Comerica Bank account, leaving a zero balance in both
accounts. Shortly thereafter, on the
same day, Liu charged $112.18 on JSL’s American Express card to pay for food
and alcoholic beverages at a restaurant in Malibu.
Sun also
contends that in August 2008, Liu misappropriated two computers from JSL. Additionally, Sun contends Liu received $500
in cash from a broker-dealer named Wei Luo, which belonged to JSL. Liu allegedly never paid that money to JSL.
9. Dissolution
of JSL
On August
14, 2008—the same day Liu was cleaning out JSL’s and Unity’s bank accounts and
apparently celebrating in Malibu—Sun went to an attorney seeking assistance
drafting a notice to Liu of a special shareholders’ meeting of JSL. The next day, August 15, 2008, Sun personally
served the notice on Liu.
The meeting
occurred on August 26, 2008. Liu did not
attend. At the meeting, Sun voted to
dissolve JSL.
10.
In September 2008, Liu filed his
initial complaint in this action. Liu’s
operative pleading, the second amended complaint (SAC), set forth causes of
action for breach of contract, conversion, breach of fiduciary duty, fraud,
constructive trust and unfair competition against Sun and Unity. The SAC set forth claims on behalf of Liu
individually, as well as derivative claims on behalf of JSL. The gravamen of the SAC is that Sun breached
her contract with Liu, and Sun and Unity committed various torts by
transferring new agents recruited by JSL to Unity and by diverting commissions from
JSL to Unity.
Sun and
Unity filed a verified cross-complaint against Liu, wherein they pursued
individual and derivative claims on behalf of JSL. The cross-complaint set forth causes of
action for breach of oral contract, fraudulent inducement into contractual
relationship, conversion, and breach of fiduciary duty. In addition to compensatory and punitive
damages, the cross-complaint prayed for injunctive relief, the involuntary
dissolution of JSL, an accounting and a constructive trust.
11. Trial
The superior
court held a bench trial on the SAC and cross-complaint in late August and
early September 2010. At the end of the
trial, the court orally announced its findings, most of which were in favor of
Sun and Unity. The court also asked the
parties to meet and confer regarding the appointment of a person to conduct an
accounting of JSL’s finances so that the corporation could be dissolved and
wound up.
12. Statement
of Decision
Shortly
after trial, Liu requested a written statement of decision from the court. Pursuant to the court’s order, Sun and Unity
prepared a proposed statement of decision.
Liu filed objections to the proposed statement. On November 29, 2010, the trial court entered
the statement of decision proposed by Sun and Unity.
The statement of decision provided
as follows. For numerous reasons, the
court found Liu was not credible and Sun was credible. The court ruled against Liu on all of his
causes of action. It also found that
under the agreement between the parties, Unity could continue operating with
its preexisting business.
Although the
court found that Liu did not breach his contract with Sun, it also found that
Liu fraudulently induced Sun to enter into a second agreement with him. Specifically, the court found that Liu
fraudulently promised he would purchase Unity “without expecting or intending
to perform, with the intention instead of gaining access to funds in accounts
that belonged to Sun and Unity and that Liu did indeed thereby gain access and
raided those accounts.†The court
further found that “Hu was an illusory insured and the process of applying for
insurance for Hu was a set-up by Liu for the purpose of Liu being able to raid
JSL’s accounts.†However, the court did
not find this fraudulent inducement by clear and convincing evidence, and thus
concluded that punitive damages were not awardable to Sun.
The court
found in Sun’s favor on her three conversion causes of action. It found that each of Liu’s withdrawals on
August 14, 2008 and his payment to himself of $39,000 in April 2008,
constituted conversion. The court also
found that Zhou was an illusory insured Liu used to set-up his misappropriation
of $39,000 in commissions, and that this was the same scheme “as he was setting
up and acting upon with respect to Hu.â€
Additionally,
the court found that Liu breached his fiduciary duties to both JSL and Sun by,
inter alia, converting JSL’s funds. This
forced Sun and Unity to loan JSL funds which they did not recover.
The court
concluded by stating JSL shall be dissolved “upon the winding up and an
accounting of its assets and liabilitiesâ€; that JSL’s liabilities included a
loan from Sun in the amount of $19,743.67 and a loan from Unity in the amount
of $20,583.01; that Liu personally is holding a trust in the amount of
$39,512.24 for the benefit of JSL, $10,275.53 for the benefit of Unity, and
$3,950.28 for the benefit of Sun.
13.
On April 29,
2011, Liu filed a motion for a new trial on the grounds that (1) there was an
irregularity of the proceedings, (2) newly discovered evidence justified a new
trial, (3) damages were excessive, (4) there was insufficient evidence to
support the court’s findings, and (5) the court’s decision was contrary to
law. This motion was based on Code of
Civil Procedure section 657, subdivisions 1, 4, 5, 6 and 7. The motion was not based on an alleged “accident or surprise†pursuant to Code of
Civil Procedure section 657, subdivision 3.
On June 13, 2011, the trial court denied the motion on the merits.
14. Report
by Accountant-Referee
Pursuant to
Code of Civil Procedure sections 638 and 639, the court appointed Timothy
Thompson as an accountant and referee to perform the final accounting of JSL,
and to prepare the company’s tax returns.
In June 2011, Thompson filed a report on JSL, as well as draft tax
returns. In July 2011, the trial court
approved the report.
15. Second
Motion for New Trial
On August 2,
2011, Liu filed a notice of motion and motion for new trial. This second motion for new trial was based on
numerous grounds, including Liu’s contention that there was an “accident or
surprise†within the meaning of Code of Civil Procedure section 657,
subdivision 3. On August 30, 2011, the
trial court denied the motion.
16. Judgment
and Appeal
On August
30, 2011, the trial court entered judgment in favor of Sun and Unity and
against Liu. Based on the statement of
decision and Thompson’s accounting, the judgment awarded the cross-complainants
damages and constructive trusts against Liu, dissolved JSL, and required Sun
and Liu to make certain payments to third-party creditors of JSL. Liu filed a timely notice of appeal of the
judgment.
1.
$39,000
“ ‘The
elements of a conversion are the plaintiff’s ownership or right to possession
of the property at the time of the conversion; the defendant’s conversion by a
wrongful act or disposition of property rights; and damages.’ †(Farmers
Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451.) “Money can be the subject of an action for
conversion if a specific sum capable of identification is involved.†(Id.
at p. 452.)
Here, the
trial court ruled in Sun’s favor on her derivative claim for conversion against
Liu. The court expressly and impliedly
found that on April 2, 2008, Liu withdrew $39,000 from JSL’s Bank of America
account without Sun’s consent or knowledge, leaving JSL without funds to pay
its expenses and liabilities. There was
substantial evidence to support these findings, namely documents relating to
the Bank of America account, including the actual check Liu wrote to himself,
and the testimony of Sun and Liu. Based
on its factual findings, the trial court could have reasonably concluded that
each of the elements of conversion were satisfied.
Liu contends
that Sun “ratified†his wrongful taking of $39,000 of JSL funds during
conversations she had with him shortly after he took the money. The testimony Liu cites, however, does not
support his argument. Sun testified that
she told Liu he had to “return the money,†but he did not have to do so
immediately. This testimony does not
show that Sun gave her consent to Liu’s conversion before or after he
misappropriated $39,000 from JSL. It
merely shows that Sun granted Liu leniency in making amends for his tortious
conduct.
Liu’s
reliance on French v. Smith Booth Usher
Co. (1942) 56 Cal.App.2d 23 (French)
is misplaced. In French, the plaintiff purchased equipment from the defendant
pursuant to an installment contract.
Under the terms of the agreement, the defendant could take the equipment
back if the plaintiff failed to make the payments due. When the plaintiff advised the defendant he
could not make a scheduled payment, the defendant’s representative said, “
‘Then, according to our agreement, it will be necessary for us to come and get
the equipment,’ to which plaintiff responded ‘All right.’ †(Id.
at p. 27.) The present case is
distinguishable from French because
Sun did not expressly authorize Liu to take JSL’s funds before he did so.
Liu also
cites Farrington v. A. Teichert & Son
(1943) 59 Cal.App.2d 468 (Farrington)
to support his position. In
rock, sand and gravel from a remote area it believed belonged to the City of
Los Angeles, which gave the defendant permission to do so. When the plaintiff first noticed the
defendant’s operations, he did not object.
(Id. at p. 471.) At some point, the plaintiff suspected that
the defendant was removing some materials from plaintiff’s property. When the plaintiff and defendant discussed
the matter, the plaintiff stated he wanted to be compensated the reasonable
value of any material removed from his land.
At no time, however, did the plaintiff ask the defendant to cease
excavating from the gravel pit in question.
(Id. at p. 472.) The present case is clearly distinguishable
from Farrington. Sun never gave Liu her tacit or express
permission to withdraw $39,000 from JSL’s Bank of America account.
2. Liu
Did Not Show That Sun and Unity Ratified His Conversion of Money in Their Bank
Accounts
The trial
court found that Liu converted $10,275.53 from Unity’s Comerica Bank account
and $3,950.28
title="">[3] from
Sun’s accounts at Citibank and Comerica Bank by withdrawing all of the funds in
those accounts on August 14, 2008, without Unity’s or Sun’s permission. There was substantial evidence to support
these findings, including bank statements and related documents and the
testimony of Sun and Liu.
Liu argues that Unity and Sun
“ratified†his conversion of these funds by issuing 1099-MISC tax forms which
listed payments to Liu as “Non-Employee Compensation.†Liu, however, did not introduce these tax
forms into evidence or make this argument at trial. Instead, Liu attached the forms to a
declaration supporting a pre-trial motion regarding miscellaneous accounting
and tax issues he filed in March of 2010 (tax motion)
and to a declaration supporting the second motion for new trial he filed in
August 2011. We cannot, however,
consider the 1099-MISC form filed with the tax motion because Liu did not raise
his ratification argument in that motion, and thus forfeited the argument on
appeal. (Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc.
(2006) 136 Cal.App.4th 212, 226 (Kaufman).) We also cannot consider the 1099-MISC form
filed with the second motion for new trial because, as we explain
jurisdiction to consider the motion. Liu
thus did not meet his burden of showing that Unity and Sun “ratified†his
conversion of funds in their bank accounts by issuing tax forms.
3. The
Trial Court Was Not Required to Reject Sun’s Fraudulent Inducement Claim
as a Matter of Law
Liu argues
that as a matter of law he did not fraudulently induce Sun into entering into
the second oral agreement. He first
contends that the finding in the written statement of decision that Frank Hu
was a “straw man†was not in conformity with the oral statements the court made
at the end of trial, and thus should be disregarded. Liu cites no legal authority to support his
position because there is none. The
trial court’s oral statements during trial were superseded by its statement of
decision, and cannot be considered as the basis for an appeal. (In re
Marriage of Ackerman (2006) 146 Cal.App.4th 191, 203 [“We review the
result, not the trial court’s reasoning, and do not consider comments by the
trial judgeâ€]; Whyte v. Schlage Lock Co.
(2002) 101 Cal.App.4th 1443, 1451 [“Because we review the correctness of
the order, and not the court’s reasons, we will not consider the court’s oral
comments or use them to undermine the order ultimately enteredâ€];
200 Cal.App.2d 245, 249 [“oral opinions or statements of the court may not
be considered to reverse or impeach the final decision of the court which is
conclusively merged in its findings and judgmentâ€]; Birch v. Mahaney (1955) 137 Cal.App.2d 584, 588 [“remarks made
by a trial judge during a trial or argument, or even an opinion filed by him,
cannot be used to impeach a formal decision, order or judgment later made or
enteredâ€].)
Liu also
argues that his alleged misrepresentations about Hu were not actionable because
they related to future events, not existing or past facts. He further argues that Sun could not have
justifiably relied on Liu’s promise that JSL would obtain a large commission if
Hu obtained a life insurance policy because she knew of facts that reduced the
probability that Hu would obtain such a policy.
Both of these arguments miss the mark.
Liu’s
arguments assume the trial court’s ruling on Sun’s fraudulent inducement cause
of action was based solely on its findings regarding Liu’s misrepresentations
concerning Hu’s policy. This is simply
not true. The trial court also found
that Liu never intended to keep his promise to pay Sun $150,000 for a 50
percent interest in Unity, and that Sun spent money in reliance on this false
promise. There was ample circumstantial
evidence to support these findings, including Sun’s testimony regarding Liu’s
statements and conduct, both before and after the second oral agreement, and
her expenditures after Liu’s false promise. Moreover, the trial court’s factual
findings regarding Liu’s false promise to pay Sun $150,000 support a fraud
cause of action. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153,
158-159 [A false promise to perform in the future is actionable fraud].)
4. Liu
Did Not Meet His Burden of Showing the Citibank Accounts Were Jointly Owned by Liu and Sun
In its
statement of decision, the trial court found that Liu converted $3,950.28 in
“Sun’s [Citibank] accounts.†Although
Liu’s argument is difficult to follow, it appears he contends that the trial
court erroneously found that these accounts were solely owned by Sun, and that
the trial court should have concluded that the accounts were jointly owned by
Sun and Liu.
Liu argues
that the “Citibank account†was held jointly by Sun and Liu because it is the
“account where Fortune Securities commission checks were deposited.†JSL and Fortune Securities, Inc. (Fortune
Securities) had a referral agreement whereby Fortune Securities would pay JSL
commissions on the sale of Fortune Securities’ financial products to
third-party customers. Liu contends that
the trial court erroneously concluded that Sun owned the “Citibank accountâ€
based on its erroneous determination that the agreement between Fortune
Securities and JSL was “illegal.â€
name="_ftnref5" title="">[5]
We reject
Liu’s argument. The portion of the
statement of decision relating to conversion does not make any findings
regarding Fortune Securities, or even mention the company or its agreement with
JSL. Thus there is no basis for Liu’s
assumption that the trial court made some sort of erroneous finding regarding
the legality of the referral agreement.
Moreover,
the only evidence Liu cited to support his argument are documents that show
deposits made into Citibank account number 40045256720 by Liu and Sun. This was the account from which Liu converted
$128.16. The documents do not show any
deposits in Citibank account number 40045256738, which was the account from
which Liu converted $3,745.12. Further,
the documents do not show that the deposits were Fortune Securities commission checks, as Liu contends. Liu therefore cited no evidence in the record
to support his argument that he was a joint owner of the Citibank accounts.
5. The
Trial Court’s Alleged Erroneous Admission of Character Evidence
Liu contends
that the trial court erroneously admitted evidence regarding his alleged
failure at Prudential to properly train and supervise agents who violated the
company’s policy against money laundering.
This evidence, Liu argues, was character evidence barred by Evidence
Code section 1101, subdivision (a).
name="_ftnref6" title="">[6] We shall analyze Liu’s argument by reviewing
the evidence regarding money laundering and the context of its admission.
Liu called
himself as the first witness at trial.
He testified extensively about his numerous professional achievements at
Prudential and other companies, including the many awards he received. Several times the court asked why this
information was relevant, to which Liu’s counsel responded he wanted to prove
Liu’s “background.†Sun’s counsel agreed
that the testimony was relevant because Sun alleged that Liu defrauded her by
lying about his credentials at Prudential.
During
cross-examination, Sun’s counsel David King asked Liu questions about a series
of letters Liu received in 2007 from Jay Skolnick, his boss at Prudential. The letters were dated June 12, July 19,
September 14, August 27 and October 4, 2007.
King first asked Liu questions about the letter dated July 19, 2007,
which dealt mainly with Liu’s alleged poor performance at Prudential. This letter did not state anything about alleged money laundering, and King’s
questions regarding the letter did not
concern the issue of money laundering.
At one point
during King’s questioning regarding the July 19, 2007, letter, Liu’s counsel
made the following objection: “Objection
on the ground that this whole line of questioning is trying to elicit the
information about the witness’s character . . . .†The court overruled this objection.
Subsequently,
King asked Liu a series of questions about Skolnick’s letter dated August 27,
2007. This letter also primarily dealt
with Liu’s alleged poor performance at Prudential. The letter discussed, inter alia, Liu’s
alleged failure to properly train and supervise former agents concerning
Prudential’s policies to prevent money laundering. King asked Liu several questions about the
money laundering allegations. Liu’s
counsel, however, did not object to any of these questions, or the admission
into evidence of the August 27, 2007, letter.
We cannot
reverse a judgment on appeal based on the erroneous admission of evidence
unless a timely objection was made to the evidence. (Evid. Code, § 353, subd. (a).) In this case, Liu did not make a timely
objection to the evidence concerning money laundering. He thus forfeited on appeal any claim of
error regarding the admission of such evidence.
name="_ftnref8" title="">[8] (SCI
California Funeral Services, Inc. v. Five Bridges Foundation (2012) 203
Cal.App.4th 549, 563.)
To the
extent Liu relies on his objection to the “line of questioning†regarding the
letter dated July 19, 2007, we review the court’s ruling for abuse of
discretion. (People v. Jablonski (2006) 37 Cal.4th 774, 805.) The line of questioning related to Liu’s
alleged poor performance at Prudential.
This evidence was admissible to impeach Liu’s own testimony regarding
his work performance, as well as Liu’s credibility. (Evid. Code, § 785 [credibility of a
witnesses may be attacked], § 1101, subd. (c) [Evidence Code section 1101 does
not affect the admissibility of evidence to attack the credibility of a
witness].) We therefore conclude the
trial court did not abuse its discretion in overruling Liu’s objection to the
line of questioning regarding the July 19, 2007, letter.
6. The
Trial Court’s Denial of Liu’s Motions for New Trial
a. Standard
of Review
Liu argues
that the trial court erroneously denied his motions for new trial. Generally, we review an order denying a
motion for new trial for abuse of discretion.
v. Los Angeles County Dept. of Public Social Services (2008) 169
Cal.App.4th 1167, 1176, fn. 6.) “To the
extent that the trial court confronted conflicting declarations in denying the
new trial motion, we affirm the trial court’s factual determinations, whether
express or implied, if supported by substantial evidence.†(Ibid.) If we find the trial court abused its
discretion in denying the motion, we independently review whether the court’s
error was prejudicial. (
b.
Liu’s Second Motion for New Trial
A trial
court does not have jurisdiction to vacate a final order denying a motion for
new trial, regularly made, except for clerical error or to grant relief under
Code of Civil Procedure section 473. (
(1987) 43 Cal.3d 539, 542; Bloomquist v.
Haley (1928) 204 Cal. 258, 260; Uzyel
v. Kadisha (2010) 188 Cal.App.4th 866, 901.) Here, there is no evidence in the record that
the trial court’s order denying Liu’s first motion for new trial was the result
of clerical error, and there were no grounds under which to vacate the order
pursuant to Code of Civil Procedure section 473. Indeed, in the trial court, Liu did not
attempt to vacate the order and did not argue there was any clerical error or
mistake. Accordingly, regardless of the
merits of Liu’s second motion for new trial, the trial court did not abuse its
discretion in denying it.
c. Accident
or Surprise
Liu argues
that the trial court should have granted him a new trial because there was an
“[a]ccident or surprise, which ordinary prudence could not have guarded
against.†(Code Civ. Proc., § 657, subd.
3.) According to Liu, this accident or
surprise consisted of two categories of evidence admitted at trial: (1) evidence regarding Liu’s alleged failure
to properly supervise and train agents regarding money laundering; and (2)
evidence regarding payments Sun claimed were loans to JSL. Liu, however, did not make this argument in
his first motion for new trial, and thus forfeited the claim of error on
appeal. (Kaufman, supra, 136
Cal.App.4th at p. 226.)
Additionally, before the trial commenced Sun argued in
her trial brief that Liu “was found . . . to have violated Prudential’s
policies against money laundering.†Sun
also argued in her trial brief that after Liu converted $39,000 of JSL’s funds,
she and Unity were compelled to cover JSL’s obligations, “and their doing so
became loans to JSL.†Thus evidence
regarding money laundering and loans from Sun to JSL was not admitted by
“accident.†Further, Liu did not argue
before or during trial that he was surprised by such evidence, or that he
needed a continuance of the trial in order to respond to it. “It is well settled that a party’s right to a
new trial upon the ground of surprise is waived if the alleged surprise is not
called to the court’s attention by a motion for a continuance or other
relief.†(Noble v. Tweedy (1949) 90 Cal.App.2d 738, 742.)
d. Newly
Discovered Evidence
A motion for
new trial can be granted if there is “[n]ewly discovered evidence, material for
the party making the application, which he could not, with reasonable
diligence, have discovered and produced at the trial.†(Code Civ. Proc., § 657, subd. 4.) Liu contends that he presented such evidence
in his first motion for new trial. This
evidence consisted of a U5 form filed by Prudential with the Financial Industry
Regulatory Authority after Liu’s termination.
Liu contends that the U5 form indicates he was terminated for poor
performance, and not for money laundering.
The trial
court rejected Liu’s argument for two main reasons. First, Liu admitted in his deposition that he
obtained the U5 form 30 days after his termination by Prudential, long before
the commencement of the trial. Second,
the trial court stated that the U5 form “would not have altered the court’s
opinion about Liu’s credibility. Liu[’]s
acts of bleeding the JSL accounts indicate that he is less than trustworthy,
and he was continually impeached, both in trial and based upon his inconsistent
deposition testimony. Nothing in the
‘U5’ notice alters the court’s findings and the underlying rational of the
court as the trier of fact.â€
We hold that
the trial court did not abuse its discretion in denying Liu’s motion for new
trial on the ground of newly discovered evidence. Liu’s deposition testimony indicates that the
evidence was not, in fact, “newly discovered.â€
considered the U5 form at trial, it would have reached the same conclusion
regarding Liu’s credibility based on numerous other factors. The evidence therefore was not sufficiently
“material†to compel the trial court to grant Liu’s motion.
e. Insufficiency
of the Evidence
Liu argues
that the trial court should have granted his motion for new trial because there
was insufficient evidence to support its decision. (Code Civ. Proc., § 657, subd. 6.) He first contends that Sun’s “[c]laim to
ownership of 100% of commission checks from Fortune Securities is not supported
by substantial evidence.†Liu does not
cite, however, anything in the record indicating that the trial court made a
finding regarding the ownership of Fortune Securities commission checks, or
that it based its judgment on such a finding.
Liu thus fails to make a coherent legal argument for reversing the
judgment based on Sun’s alleged claim regarding these checks.
Liu also
argues that there was no substantial evidence supporting the trial court’s
findings that Sun and Unity made loans to JSL.
“When a trial court’s factual determination is attacked on the ground
that there is no substantial evidence to sustain it, the power of an appellate
court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted
or uncontradicted, which will support the determination, and when two or more
inferences can reasonably be deduced from the facts, a reviewing court is
without power to substitute its deductions for those of the trial court. If such
substantial evidence be found, it is of no consequence that the trial court
believing other evidence, or drawing other reasonable inferences, might have
reached a contrary conclusion.†(
870, 873-874.)
Turning to
the evidence of defendants’ loans to JSL, Liu admits that Sun testified
regarding these loans, but claims that this testimony was insufficient as a
matter of law because she did not provide “backup documentation†for her
testimony. Liu does not cite any legal
authority to support this argument because there is none. The trial court, as the trier of fact, was
free to believe or disbelieve Sun’s testimony, whether or not she provided any
“backup documentation.â€
Moreover,
Sun and Unity produced documentary evidence of their loans, including written
summaries of payments they made on behalf of JSL and copies of checks, bank
statements, invoices and other documents indicating the payments were
made. Liu’s argument that there was no
substantial evidence to support the trial court’s findings regarding Sun’s and
Unity’s loans to JSL is totally without merit.
7.
Liu argues that there were “serious
accounting issues†presented by Thompson’s accounting report on JSL. After reviewing these issues in great detail
over almost five pages of his opening brief, Liu accused Thompson of “merely
rubber stamp[ing]†Sun’s position. Liu
does not, however, present a coherent legal
argument as to why the trial court committed reversible error in connection
with Thompson’s report. He thus does not
meet his burden of showing such error.
DISPOSITION
The judgment
is affirmed. Respondents Jing Sun and
Unity Professional Insurance Services, Inc. are awarded costs on appeal.
NOT TO BE
PUBLISHED IN THE OFFICIAL REPORTS
KITCHING,
J.
We concur:
KLEIN, P. J.
ALDRICH, J.
in both Liu’s second amended complaint and the verified cross-complaint of Sun
and Unity. The company is not a party to
this appeal.
Sun testified that Liu said he
need the money “for the families and stuff.
So I [Sun] didn’t really push that hard.
I say, you know, you [Liu] have to return the money, but I didn’t say
the second day or third day.â€
