Liu v. Sun
Filed 3/4/13 Liu v. Sun CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
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)
ORDER
MODIFYING OPINION
[NO
CHANGE IN JUDGMENT]
THE COURT:
It is ordered
that the opinion filed herein on February 15, 2013, be
On page 13, the first paragraph,
beginning “Liu argues that†is deleted and the following paragraph is inserted
in its place:
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. Although Liu attached the forms to declarations
supporting (1) a pre-trial motion regarding miscellaneous accounting and tax
issues he filed in March of 2010 and (2) his motion for new trial, he did
not make his ratification argument in either motion. Liu thus forfeited the argument on appeal. (Kaufman
v. Broad communities, Inc. v. Performance Plastering, Inc. (2006)
136 Cal.App.4th 212, 226 (Kaufman).) Moreover, even assuming the argument was not
forfeited, we reject it on the merits.
Liu cites no legal authority—and we have found none—to support his
argument. The issue is whether
committed conversion. However Sun, Unity
or their accountant subsequently classified Liu’s withdrawals for tax purposes
makes no difference with respect to whether Liu committed conversion.
There is no change in the judgment.
Filed 2/15/13
Liu v. Sun CA2/3 (unmodifed version)
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties
from citing or relying on opinions not certified for publication or ordered
published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
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 Los Angeles 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.
name="_ftnref1" title="">[1]
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.
PROCEDURAL BACKGROUND
1.
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 “downline†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.
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.
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.
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.
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 “deliveredâ€
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.
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.
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.
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.
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.
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.
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.
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.’ †(
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
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 (
position. In Farrington, the defendant was removing 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.
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
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)
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. (
Performance Plastering, Inc. (2006) 136 Cal.App.4th 212, 226 (
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€
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 . . . .â€
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.
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.
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.
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.†(
If we find the trial court abused its discretion in denying the motion,
we independently review whether the court’s error was prejudicial. (Ibid.;
accord, Nazari v. Ayrapetyan (2009)
171 Cal.App.4th 690, 694.)
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€
if the trial court had 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€
