Sylvester v. Yuh



















Filed 4/25/13 Sylvester v. Yuh CA4/3



















NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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



FOURTH APPELLATE
DISTRICT



DIVISION THREE




>

LANCE SYLVESTER et al., Plaintiffs and Respondents, v. LUNDAR YUH, Defendant and Appellant.

G046704 (Super. Ct. No. 30-2010-00410269) O P I N I O N

Appeal from a judgment
of the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Orange
County, David T. McEachen, Judge. Affirmed in part as modified, reversed in
part, and remanded with directions.

Schwartz & Asiedu
and Kwasi A. Asiedu for Defendant and Appellant.

Law Offices of Douglas
Lee Weeks and Douglas Lee Weeks for Plaintiffs and Respondents.

*
* *

>

>Introduction

Defendant
Lundar Yuh appeals from a default judgment entered after the trial court
imposed terminating sanctions against him for misuse of the discovery
process. Following a default prove‑up
hearing, the court awarded plaintiffs Lance Sylvester and Elena Sylvester
(together, the Sylvesters) $60,000 in compensatory
damages and $300,000 in punitive damages.


We
conclude the trial court did not abuse its discretion by imposing terminating
sanctions against Yuh for misuse of the discovery process or by denying Yuh’s
motion to vacate the default judgment under Code of Civil Procedure
section 473, subdivision (b).
We affirm the award of compensatory damages in favor of both Elena
Sylvester and Lance Sylvester. We
conclude, however, the Sylvesters failed to present admissible evidence of
Yuh’s financial condition sufficient for us to make a well‑informed
decision whether the amount of punitive damages is excessive, as Yuh
contends. We lack jurisdiction to
consider his challenge to the postjudgment order denying the motion to vacate
the judgment.

We
therefore strike the award of punitive damages and remand for a new default
prove‑up hearing only on the issue of the amount of punitive
damages. In all other respects, and with
one modification, the judgment is affirmed.



Facts

The
following facts were adduced at the default prove-up hearing.

Elena
Sylvester borrowed money from Yuh in 2005 and 2006. She believed the loan from Yuh was
unsecured. Later, she discovered that
four deeds of trust in favor of Yuh had been recorded against the home she
owned with her husband, Lance Sylvester.
A notice of default had been recorded for one of the deeds of trust.

The
Sylvesters filed a lawsuit against Yuh (Orange County Superior Court case
No. 30‑2008‑00103942), alleging the deeds of trust were forged
and appeared to have been notarized by Yuh’s daughters, Jia Juh Yuh and Jia Wei
Yuh. Yuh filed a cross‑complaint
against Elena Sylvester, alleging she owed some $142,000 on the loans.

Before
the forgery case went to trial, the parties reached a settlement, the terms of
which were set forth in a stipulation for entry of judgment (the Stipulation)
executed by the parties in April 2009.
Under the terms of the Stipulation, Elena Sylvester agreed to pay Yuh
the sum of $93,000 in four installments between May 2009 and March 2010. Yuh agreed to rescind the notice of default
upon execution of the Stipulation, reconvey the four deeds of trust upon
receipt of the first installment payment, and dismiss the cross‑complaint
with prejudice upon receipt of the final installment.

Elena
Sylvester made all four installment payments.
Yuh rescinded the notice of default, reconveyed the four deeds of trust,
and filed a request for dismissal with prejudice of the cross‑complaint. The dismissal was entered in April 2010.

On
March 5, 2010, Yuh had
a forged deed of trust in the amount of $55,000 recorded against the
Sylvesters’ home. He took one of the
reconveyed deeds of trust and used “white out” to cover the amount of $22,000,
over which he typed $55,000. He attached
the second page of the $22,000 deed of trust, bearing a disputed signature of
Elena Sylvester, and instructed his daughter, Jia Wei Yuh, to notarize the
forged deed of trust. During his
deposition, Yuh testified he forged the $55,000 deed of trust.

On
March 15, 2010, Yuh
sent Elena Sylvester a letter demanding she pay him $55,000. The letter did not mention the forged deed of
trust. Ignoring the Stipulation, Yuh
stated in the letter that Elena Sylvester owed $55,000 on the amounts loaned to
her and threatened legal action if she failed to pay him.

In
April 2010, after the dismissal of the cross-complaint had been entered, Yuh
filed a small claims lawsuit against Elena Sylvester. He later filed a proof of service stating
Elena Sylvester had been personally served at her home on May 29, 2010 at 9:47 a.m. The
proof of service was signed under penalty of perjury by “Tony Lan.” On May 29,
2010, Elena Sylvester was in the Philippines
and her home was unoccupied. She
submitted a photocopy of her passport stamped for arrival in the Philippines
on May 17, 2010 and
departing the Philippines
on May 30, 2010. The address given by the process server on
the proof of service is a vacant lot.

After
receiving a notice of entry of judgment on Yuh’s small claims lawsuit, Elena
Sylvester retained counsel who filed a motion to vacate the judgment. The court granted the motion and entered a
judgment that Elena Sylvester owed Yuh nothing on his claim.

In
a letter to the Sylvesters, dated August 3,
2010, Yuh wrote: “Notice is
given to above mentioned party. That you
are being sued again in the different Court very shortly, no matter I won or
Loss in this court. [¶] . . .
[¶] Especially with your olden age, it
is by all means NOT HEALTHY at all.
Please wait for an inauspicious event.”

In
early September 2010, the Sylvesters discovered the $55,000 forged deed of
trust that Yuh had recorded against their home.
They were afraid of Yuh and placed security cameras at their home. Lance Sylvester weekly checked the Orange
County Recorder’s Office online to see if Yuh had recorded anything else.



Procedural History

In
September 2010, after discovering the forged deed of trust, the Sylvesters
filed a verified complaint against Yuh, asserting causes of action for
(1) malicious prosecution, (2) breach of contract, (3) tortious
breach of contract, (4) intentional infliction of emotional distress,
(5) abuse of process, (6) cancellation of instrument, (7) quiet
title, and (8) unfair business practices.
At some point, the Sylvesters abandoned the quiet title cause of action,
and the judgment does not refer to it.

In
January 2011, the Sylvesters served a set of special interrogatories and a set
of requests for production of documents on Yuh’s counsel, Thomas F. Nowland of
Nowland Stone LLP. Yuh, through his
counsel, served responses to the special interrogatories, which asserted
standard boilerplate responses to all of them and answered only special
interrogatory Nos. 19, 20, 21, and 22.
The responses were verified by Yuh and signed by his counsel. Special interrogatory No. 19 asked Yuh
if he contended Elena Sylvester owed him money, and special interrogatory
Nos. 20, 21, and 22 asked him to state all facts and to identify each
document and witness supporting such contention. Yuh answered special interrogatory
No. 19, “[y]es.” In response to
special interrogatory No. 20, he stated, “ELENA SYLVESTER borrowed money
from responding party and has not fully repaid responding party”; in response
to special interrogatory No. 21, he identified cancelled checks and the
loan agreement; and in response to special interrogatory No. 22, he
identified Lance Sylvester and Elena Sylvester.

In
response to the requests for production of documents, Yuh asserted standard
boilerplate objections and produced documents in response only to request
No. 1, which asked for all documents identified in Yuh’s responses to the
special interrogatories. The responses
to the requests for production of documents were verified by Yuh and signed by
his counsel. The documents produced
consisted of 21 pages of photocopies of checks from 2005 to 2007 and a copy of
a document dated April 30, 2007.
Those documents related to the previously settled case.

Counsel
for the Sylvesters and counsel for Yuh exchanged letters regarding the
discovery responses. When counsel spoke
at a case management conference, Yuh’s counsel declined to agree to provide
further discovery responses. On
March 28, 2011, the Sylvesters filed a motion to compel further responses
to their special interrogatories and a motion to compel further responses to
their requests for production of documents.
Yuh’s counsel filed opposition to the motions and argued, among other
things, the motions did not include the separate statement required by the
California Rules of Court governing discovery motions. In response to the oppositions, the
Sylvesters took the two motions off calendar and, on April 25, 2011, filed
corrected motions that included the required separate statements. Yuh did not oppose these motions.

On
May 10, 2011, Yuh filed a substitution of counsel, by which he substituted
himself, in propria persona, in place of counsel. He later explained he fired his counsel
because counsel had advised him to assert the Fifth Amendment instead of
responding to discovery.

On
May 24, 2011, the trial court granted the Sylvesters’ motion to compel
further responses to request for production of documents Nos. 2, 3, and 5,
and denied the motion as to request for production of documents
No. 4. The court imposed sanctions
of $750 against Yuh personally. The
court granted in full the Sylvesters’ motion to compel further responses to the
special interrogatories and imposed sanctions of $1,540 against Yuh
personally. On both motions, the court
ordered Yuh to provide further responses within 14 days.

Yuh
did not comply with the order compelling discovery and imposing sanctions. During his deposition on June 22, 2011,
Yuh told the Sylvesters’ counsel he would not comply with the order. When the Sylvesters’ counsel said he would
file a motion to strike the answer if Yuh did not comply with the discovery
order within two weeks, Yuh replied, “I’d like to see you try.”

Also
during his deposition, Yuh admitted he fabricated and recorded a $55,000 deed
of trust that the Sylvesters never signed, and induced the notary public to
notarize a signature purporting to be that of Elena Sylvester without her being
present. He also admitted he had sued
the Sylvesters on a claim that had been settled, and admitted he might sue
Elena Sylvester on the same claim again.

In
July 2011, the Sylvesters filed a motion seeking terminating sanctions against
Yuh for misuse of the discovery process.
The motion was made on the ground that Yuh “willfully failed to obey
orders compelling further responses to interrogatories, further responses to
demand for production of documents, and payment of sanctions.” Yuh did not file opposition to the
motion.

The
motion for terminating sanctions was heard on August 30, 2011. At the hearing, the Sylvesters’ counsel
confirmed that Yuh had not served amended discovery responses, paid the
monetary sanctions, or opposed the motion for terminating sanctions. Yuh responded: “May I ask one more time, it’s the last time,
whatever paper he need, give me a list, I’ll do tomorrow morning. Whatever reproduction of documentation or any
question . . . , I will answer anything, because I have special
excuse because my lawyer—I give to him, he doesn’t want to give to him. That’s why we fight. We fired the lawyer. I just don’t know why he can’t give me one
more . . . chance . . . .” The trial court gave Yuh one week to comply
with the order compelling discovery, including payment of sanctions, and
informed the Sylvesters they could appear ex parte if he did not timely comply.


Eight
days later, on September 7, 2011, the Sylvesters filed an ex parte
application to strike the answer filed by Yuh and enter his default. In a supporting declaration, the Sylvesters’
counsel stated he had received 44 pages of documents from Yuh in an “unverified
mishmash of paper” that did not comply with discovery law. “I am left to guess,” counsel stated, “which
of the 44 pages, if any, are in response to the orders compelling Responses to
Request for Production of Documents, and Interrogatories.” Counsel had not received payment from Yuh of
the monetary sanctions imposed against him personally.

On
September 8, 2011, the trial court granted the Sylvesters’ ex parte
application to strike the answer filed by Yuh and enter his default. His answer was ordered stricken and his
default was entered. (Yuh’s answer does
not appear in the appellate record.)
Later that month, Yuh filed an ex parte application for reconsideration
under Code of Civil Procedure section 1008, subdivision (a) and to
set aside the default under Code of Civil Procedure sections 473 and
473.5. The trial court denied Yuh’s ex
parte application on September 23, 2011.
On that same day, Yuh filed a noticed motion to set aside the default
and for reconsideration of the order granting terminating sanctions.

Before
that motion was heard, Yuh filed another noticed motion to set aside default
and default judgment pursuant to Code of Civil Procedure sections 473 and
473.5. In a supporting declaration, Yuh
asserted the Sylvesters’ counsel had denied his request for additional copies
of the discovery requests, that he had delivered all the documents in his
possession, which were responsive to the requests, and that he believed, in
good faith, that he had complied with the trial court’s discovery order.

The
court heard Yuh’s first noticed motion to set aside the default and for
reconsideration on November 1, 2011.
At the hearing, Yuh stated the Stipulation was unfair to him, he
accepted it under duress, and he “should have finished the case.” He acknowledged he had filed the small claims
court action against Elena Sylvester “to get [a] little bit [of] interest of
$7,500.” At the end of the hearing, the
trial court denied Yuh’s motion. Two
weeks later, the court denied Yuh’s second noticed motion to set aside the
default and default judgment. The court
found, “no mistake, inadvertence, surprise, or excusable neglect is shown to
support relief pursuant to [Code of Civil Procedure] Section 473.”

A
default prove‑up hearing was conducted on December 19, 2011. The Sylvesters testified at the hearing. A judgment, entered on the same day, ordered
the cancellation of the forged deed of trust recorded on March 5, 2010,
awarded the Sylvesters compensatory damages of $60,000, punitive damages of
$300,000, attorney fees of $22,986.70, and costs of $1,842, for a total
judgment of $384,828.70.

In
April 2012, after filing a notice of appeal from the judgment, Yuh brought a
motion in the trial court to vacate the judgment on the ground it was void “for
lack of due process notice of the damages sought by the Plaintiff[s] in the
Complaint.” The motion was filed by
Yuh’s counsel, Patrick Lund and Gregory Richardson of the Lund Law Group. In their opposition, the Sylvesters pointed
out they had served a statement of damages with the summons and complaint. In May 2012, the trial court denied the
motion to vacate the judgment. Yuh did
not file a notice of appeal from the order denying that motion.

>

>Discussion

>I.

>The Trial Court Did Not Abuse Its
Discretion by Issuing Terminating Sanctions.

Yuh
argues the trial court abused its discretion by striking his answer and
entering his default as a sanction for misuse of the discovery process. He asserts his conduct did not rise to the
level of discovery abuse that warranted terminating sanctions.

At
the outset, we address Yuh’s self‑description as a “clueless >pro per defendant,” to whom the trial
court did not give the same consideration and courtesy given to attorneys. Throughout much of the proceedings in the
trial court, Yuh was represented by counsel, and he fired his counsel over a
disagreement in strategy, not due to inability to pay his counsel fees. A litigant appearing in propria persona is
held to the same rules as an attorney. (>Rappleyea v. Campbell (1994) 8 Cal.4th
975, 984‑985.) We see nothing in
the record to suggest the trial court treated Yuh any worse than it would have
treated counsel in the same position.

“Imposition
of sanctions for misuse of discovery lies within the trial court’s discretion,
and is reviewed only for abuse.” (>Doppes v. Bentley Motors, Inc. (2009)
174 Cal.App.4th 967, 991 (Doppes).) The abuse of discretion standard has been
described in these general terms: “The
appropriate test for abuse of discretion is whether the trial court exceeded
the bounds of reason.” (>Shamblin v. Brattain (1988) 44 Cal.3d
474, 478.) A trial court exceeds the
bounds of reason when, in light of the evidence and the applicable law, the
court’s decision was not a permissible option.
“The abuse of discretion standard . . . measures whether,
given the established evidence, the act of the lower tribunal falls within the
permissible range of options set by the legal criteria. ‘The scope of discretion always resides in
the particular law being applied, i.e., in the “legal principles governing the
subject of [the] action . . . .”
Action that transgresses the confines of the applicable principles of
law is outside the scope of discretion and we call such action an “abuse” of
discretion.’” (Department of Parks & Recreation v. State Personnel Bd. (1991)
233 Cal.App.3d 813, 831.)

“California
discovery law authorizes a range of penalties for conduct amounting to ‘misuse
of the discovery process.’” (>Doppes, supra, 174 Cal.App.4th at p. 991.) As relevant here, misuses of the discovery
process include “[f]ailing to respond or to submit to an authorized method of
discovery” (Code Civ. Proc., § 2023.010, subd. (d)); “[m]aking,
without substantial justification, an unmeritorious objection to discovery” (>id., § 2023.010, subd. (e));
“[m]aking an evasive response to discovery” (id., § 2023.010, subd. (f)); and “[d]isobeying a court
order to provide discovery” (id.,
§ 2023.010, subd. (g)).

“[Code
of Civil Procedure s]ection 2023.030 authorizes a trial court to impose
monetary sanctions, issue sanctions, evidence sanctions, or terminating
sanctions against ‘anyone engaging in conduct that is a misuse of the discovery
process.’ [¶] . . . [¶] As to terminating sanctions, Code of Civil
Procedure section 2023.030, subdivision (d) provides: ‘The court may impose a terminating sanction
by one of the following orders: [¶] (1) An order striking out the pleadings
or parts of the pleadings of any party engaging in the misuse of the discovery
process. [¶] (2) An order staying further proceedings
by that party until an order for discovery is obeyed. [¶]
(3) An order dismissing the action, or any part of the action, of
that party. [¶] (4) An order rendering a judgment by
default against that party.’” (Doppes,
supra, 174 Cal.App.4th at
pp. 991‑992.)

In
Doppes, we explained that in
selecting the appropriate sanction, a trial court “should consider both the
conduct being sanctioned and its effect on the party seeking discovery,” and
should tailor the sanction to fit the harm caused by the abuse of the discovery
process. (Doppes, supra, 174
Cal.App.4th at p. 992.) The trial
court cannot impose sanctions for misuse of the discovery process as a
punishment. (Ibid.) “The discovery
statutes evince an incremental approach to discovery sanctions, starting with
monetary sanctions and ending with the ultimate sanction of termination. ‘Discovery sanctions “should be appropriate
to the dereliction, and should not exceed that which is required to protect the
interests of the party entitled to but denied discovery.”’ [Citation.]
If a lesser sanction fails to curb misuse, a greater sanction is
warranted: continuing misuses of the
discovery process warrant incrementally harsher sanctions until the sanction is
reached that will curb the abuse. ‘A
decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by
a history of abuse, and the evidence shows that less severe sanctions would not
produce compliance with the discovery rules, the trial court is justified in imposing
the ultimate sanction.’
[Citation.]” (>Ibid., fn. omitted.)

The
trial court did not abuse its discretion by striking the answer and ordering
Yuh’s default as a sanction for misuse of the discovery process. Yuh’s responses to the Sylvesters’ special
interrogatories and requests for production of documents were utterly
inadequate and his boilerplate objections had no merit. Yuh thus “[f]ail[ed] to respond or to submit
to an authorized method of discovery” and he made, “without substantial
justification, an unmeritorious objection to discovery.” (Code Civ. Proc., § 2023.010,
subds. (d) & (e).) Yuh did not
oppose the Sylvesters’ motions to compel.
As the first increment in sanctions to curb Yuh’s misuse of the
discovery process, the trial court (1) granted the Sylvesters’ motion to compel
further responses to the special interrogatories and motion to compel further
responses to requests for production documents and (2) imposed monetary
sanctions against Yuh personally.

Yuh
disobeyed the court’s order compelling discovery and imposing monetary
sanctions. (Code Civ. Proc.,
§ 2023.010, subd. (g).) He
neither provided further discovery responses nor paid the sanctions. Although by this time he had fired his
counsel and was representing himself, a litigant appearing in propria persona is held to the same
rules and standards as an attorney and is entitled to no greater consideration.> (>Rappleyea v. Campbell, >supra, 8 Cal.4th at pp. 984‑985.)> As monetary sanctions had failed to curb the
discovery abuse, the trial court could have stepped up to the next increment of
discovery sanctions and imposed issue or evidentiary sanctions against
Yuh. In response to the Sylvesters’
motion for terminating sanctions, the court took the more moderate approach of
giving Yuh one more chance to comply with the order compelling discovery. He yet again disobeyed the order compelling
discovery.

At
this point, the trial court’s permissible range of options included the
imposition of the next level increment of sanctions—terminating sanctions. Yuh’s discovery abuses had been quite
egregious. After being given two chances
to comply with the order compelling discovery, he had failed even to pay the monetary
sanctions. Other than terminating
sanctions, the only option available to the trial court was to impose issue or
evidentiary sanctions against Yuh. The
special interrogatories and requests for production sought information and
documents that were the basis for Yuh’s claims and defenses. Based on the special interrogatories and
requests for production of documents to which Yuh refused to respond, the
appropriate issue sanctions would have been the functional equivalent of
striking his answer and entering his default.


As
terminating sanctions were within the trial court’s permissible range of
options, the court did not abuse its discretion by ordering entry of Yuh’s
default as a sanction for misuse of the discovery process.

Yuh
argues the trial court abused its discretion because nothing he did “came any
where [sic] near the abusive conduct even in the cases where this court
reversed similar sanctions.” He cites >McGinty v. Superior Court (1994) 26
Cal.App.4th 204 (McGinty) and other
cases cited by McGinty, in which the
Court of Appeal reversed discovery sanctions for being disproportionate to the
sanctioned conduct.

In
McGinty, supra, 26 Cal.App.4th at pages 206‑208, the trial court
entered a discovery order disqualifying the plaintiffs’ expert witness as a
sanction because the witness inadvertently disclosed to the plaintiffs’ counsel
the defendant’s trade secrets that had been confidentially disclosed in another
action. The Court of Appeal concluded
the sanction was out of proportion to the sanctioned conduct, the prejudice to
the defendant was minimal because the disclosed documents were discoverable,
the sanction placed the defendant in a better position than it would have been
absent the violation, and the sanction was tantamount to dismissing the
plaintiffs’ case. (Id. at pp. 213‑214.)
In reaching that conclusion, the McGinty
court relied on Wilson v. Jefferson (1985)
163 Cal.App.3d 952, People v. Edwards (1993)
17 Cal.App.4th 1248, Caryl Richards, Inc.
v. Superior Court (1961) 188 Cal.App.2d 300, Fabricant v. Superior Court (1980) 104 Cal.App.3d 905, >Yarnell & Associates v. Superior Court (1980)
106 Cal.App.3d 918, and Fred >Howland Co. v. Superior Court (1966) 244
Cal.App.2d 605, as “[c]ases which have disapproved discovery sanctions for
being out of proportion to the sanctioned conduct.” (McGinty,
supra, 26 Cal.App.4th at
p. 212.)

Here,
we conclude that terminating sanctions were not out of proportion to Yuh’s
conduct. Unlike that of the expert
witness in McGinty, Yuh’s conduct was
not inadvertent. Yuh asserts the
appropriate sanction might have been “a continuance, coupled with a sterner
admonition and the threat of additional monetary sanctions.” An order compelling him to comply with
discovery and imposing monetary sanctions is a stern enough admonition. Yuh had been given additional time to comply
with the discovery order, and there was no reason to believe additional
monetary sanctions would have made any difference because he did not pay the
sanctions already imposed against him.
Less severe sanctions, and even the threat of terminating sanctions, had
not convinced him to comply with the order compelling discovery.

>

>II.

>The Trial Court Did Not Abuse Its
Discretion by Denying Yuh’s Motion to Vacate the Default.

Yuh
challenges the trial court’s order of November 15, 2011, denying his
motion to vacate default and default judgment under Code of Civil Procedure
sections 473 and 473.5. He argues
the trial court abused its discretion because he submitted with his motion
evidence that he had complied with the court’s discovery order.

We
review an order denying a motion to vacate under Code of Civil Procedure
section 473 under an abuse of discretion standard. (Rappleyea
v. Campbell, supra, 8 Cal.4th at
p. 981.) In denying Yuh’s motion,
the trial court found that no showing of mistake, inadvertence, surprise, or excusable
neglect to support relief under section 473, subdivision (b). The trial court did not abuse its discretion.

In
his declaration submitted with the motion to vacate the default, Yuh stated he
did not comprehend the trial court’s discovery order and claimed he did not
have the discovery requests propounded by the Sylvesters because his prior
counsel kept all of the case files. Yuh
stated that the Sylvesters’ counsel refused his request for copies of the
discovery requests. When, according to
Yuh, he eventually did obtain copies of the discovery requests from the court
clerk, he promptly advised the court and opposing counsel he would deliver all
of the responsive documents to opposing counsel. He stated he delivered to opposing counsel
all of the responsive documents, which exceeded 60 pages, and he attached to
the declaration verified responses to the request for production of documents
and special interrogatories. He claimed
that, at the hearing on August 30, 2011, he believed in good faith he had
“complied with the instructions of this Court” and that “the striking of my
Answer was the result of mistake, excusable neglect, inadverten[ce] and
surprise.” Yuh also claimed the
Sylvesters’ counsel failed to inform the court that he had produced documents
in response to the requests for production.


As
the trier of fact, the trial court was the ultimate judge of witness credibility, and could disbelieve
Yuh’s declaration. (Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1450.) The trial court would have been justified in
disbelieving Yuh because his assertion that the Sylvesters’ counsel failed to
inform the court he had produced documents in response to the requests for
production was false. When the Sylvesters’
counsel applied ex parte on September 7, 2011 for an order striking Yuh’s
answer, counsel submitted a declaration informing the court he had received 44
pages of documents from Yuh in an “unverified mishmash of paper” that did not
comply with discovery law. Counsel had
not received payment from Yuh of the monetary sanctions.

>

>III.

>The Evidence at the Default Prove‑up
Hearing Supported the Compensatory Damages but Not the Amount

of Punitive Damages.

Yuh
argues the amount of damages awarded against him in the default judgment was,
for several reasons, “grossly oppressive” and in violation of Civil Code
section 3359.href="#_ftn1" name="_ftnref1"
title="">^[1] He argues the damages were excessive because
(1) Lance Sylvester had no connection with Yuh to support the allegations
of the complaint; (2) the evidence submitted by the Sylvesters at the
default prove‑up hearing was inadmissible and the trial court failed to
fulfill its “gatekeeper” function; (3) the evidence did not support the
amount of compensatory damages awarded; and (4) the evidence did not
support the award of punitive damages.

The
complaint asserted eight causes of action:
(1) malicious prosecution, (2) breach of contract,
(3) tortious breach of contract, (4) intentional infliction of
emotional distress, (5) abuse of process, (6) cancellation of
instrument, (7) quiet title, and (8) unfair business practices. The judgment found in favor of the Sylvesters
on all but the seventh cause of action, which, apparently, had been dismissed
previously. The judgment cancelled the
deed of trust recorded on March 5, 2010, in accordance with the prayer
under the sixth cause of action. The
judgment awarded both Elena Sylvester and Lance Sylvester compensatory damages
of $60,000 without allocation among the causes of action, and awarded them
punitive damages of $300,000.



A.

>Recovery of Damages by Lance Sylvester

Yuh
argues the judgment awarded damages in favor of Lance Sylvester even though he
had no connection with Yuh to support the allegations of the complaint. Of the eight causes of action asserted in the
Sylvesters’ complaint, all but the first (malicious prosecution) were brought
by both Elena Sylvester and Lance Sylvester.


Because
the Sylvesters did not seek a definite, fixed amount of damages, they were
required to submit evidence at the default prove‑up hearing to establish
their entitlement to the amount of damages sought. (Kim v.
Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 287 (>Kim).)
The Sylvesters submitted evidence at the default prove-up hearing that
Lance Sylvester suffered damages caused by Yuh under the cause of action for
intentional infliction of emotional distress.href="#_ftn2" name="_ftnref2" title="">^[2] Lance Sylvester testified he was afraid of
Yuh and believed he would carry out his threats. Lance Sylvester testified he installed
security cameras at his home, constantly watched the front of his home, would
not answer the front door, and weekly checked the Orange County Recorder’s
office Web site to see if Yuh had recorded anything else. This evidence supported recovery of
compensatory damages by Lance Sylvester.

Because
the evidence supported recovery of damages by Lance Sylvester for intentional
infliction of emotional distress, we do not discuss recovery under the other
causes of action.

B.

>The Evidence Supporting the Compensatory
Damages in the Judgment Was Admissible.

The
evidence at the default prove‑up hearing consisted of a joint declaration
(with attached exhibits) from Elena Sylvester and Lance Sylvester and their
live testimony. Yuh argues this evidence
was inadmissible because “[m]ost of the statements in their >joint declaration for judgment
are objectionable on the grounds of hearsay and for being conclusory.” Yuh does not, however, identify with
particularity the parts of the declaration which, he argues, were inadmissible. We therefore decline to address his objections
to the joint declaration.

Moreover,
the joint declaration and the testimony at the default prove-up hearing
constituted admissible evidence supporting the award of compensatory
damages. The primary function of a
default prove‑up hearing is for the plaintiff to establish entitlement to
damages when, as here, the complaint does not seek damages in a sum
certain. (Kim, supra, 201
Cal.App.4th at p. 287.) The
plaintiff has no responsibility to provide the court with sufficient evidence
to prove the properly pleaded facts in the complaint, for they are treated as
true for purposes of the default judgment.
(Id. at p. 281.)> Most
of the joint declaration tracks allegations of the complaint, and a few parts
pertain to compensatory damages.
Paragraph 11 refers to Yuh’s August 2010 letter to the Sylvesters,
warning them to “wait for an inauspicious event” and states a copy of the
letter is attached. In
paragraph 11, the Sylvesters stated they “were and are in terror” of Yuh,
and, in paragraph 13, they stated they had incurred $24,347.20 in attorney
fees in prosecuting the lawsuit. At the
default prove‑up hearing, both Elena Sylvester and Lance Sylvester
testified to the emotional distress that Yuh caused them to suffer. None of this evidence on damages was
objectionable.

With
their complaint, the Sylvesters served a statement of damages pursuant to Code
of Civil Procedure section 425.11.
The statement of damages claimed $60,000 in general damages, which was
the amount of compensatory damages awarded by the trial court. The amount of damages awarded in the judgment
therefore complied with Code of Civil Procedure section 580,
subdivision (a) (“[t]he relief granted to the plaintiff, if there is no
answer, cannot exceed that demanded in the complaint, in the statement required
by Section 425.11”).

Yuh
argues the trial court made little inquiry into the Sylvesters’ claims and
“took no more than ten minutes to conclude the proceedings.” From the transcript of the default prove‑up
hearing, we cannot gauge the amount of time the trial court used to reach its
decision, but that is beside the point.
However long the proceedings might have been, the issue is whether the
trial court abused its discretion in its award of damages.

Yuh
argues the default prove‑up hearing did not comply with the requirements
for a quiet title action. As reflected
in the default judgment, the trial court did not find in the Sylvesters’ favor
on the quiet title cause of action. In
his reply brief, Yuh argues the judgment cancelling the forged deed of trust is
a judgment for quiet title. We
disagree. The complaint included a
separate cause of action for cancellation of instrument seeking cancellation of
the forged deed of trust. A quiet title
action is broader than an action to remove a cloud on title by cancellation of
an instrument and is governed by a separate statute. (5 Witkin, Cal. Procedure (5th ed. 2008)
Pleading, § 655, p. 83.)

C.

The Evidence Supported the Amount of Compensatory Damages Awarded in
the Judgment.

Yuh
argues the $60,000 in compensatory damages is “unsupportable” because Lance
Sylvester could not bring any causes of action for which he could recover
damages. As we have explained, Lance
Sylvester presented evidence supporting damages under the cause of action for
intentional infliction of emotional distress.

Yuh
also argues the default judgment is
erroneous because it found in favor of Lance Sylvester on the first cause of
action (malicious prosecution), to which he was not a party, and on the fifth
cause of action (abuse of process), when he was not the subject of the process
abused. This argument has merit. In addition, as we have explained, Lance
Sylvester did not submit evidence of damages on any but the cause of action for
intentional infliction of emotional distress, and neither Lance Sylvester nor
Elena Sylvester can recover damages for unfair business practices.

Those
mistakes can be corrected by modifying paragraph 2 of the judgment
(page 2, lines 3‑8) to read as follows: “The court finds in favor of plaintiff Lance
Sylvester and against defendant Lundar Yuh on plaintiffs’ Fourth Cause of
Action for Intentional Infliction of Emotional Distress only. The court finds in favor of plaintiff Elena
Sylvester and against defendant Lundar Yuh on plaintiffs’ First Cause of Action
for Malicious Prosecution, Second Cause of Action for Breach of Contract, Third
Cause of Action for Tortious Breach of Contract, Fourth Cause of Action for
Intentional Infliction of Emotional Distress, and Fifth Cause of Action for
Abuse of Process.” This modification
would not affect the award of $60,000 in compensatory damages or the award of
punitive damages because Lance Sylvester can share in those damages under the
cause of action for intentional infliction of emotional distress.

D.

>The Sylvesters Did Not Present Admissible
Evidence of Yuh’s Financial Condition Sufficient to Make a Well‑informed
Decision Whether the Punitive Damages Are Excessive.

The
judgment awards the Sylvesters punitive damages of $300,000—precisely the
amount claimed in the statement of damages and five times the amount of
compensatory damages.href="#_ftn3"
name="_ftnref3" title="">^[3] Yuh argues the punitive damages were
excessive and not supported by the evidence.

It
is unclear whether Yuh is arguing the evidence of his conduct did not support
imposition of punitive damages.
Appellate review of a default judgment is limited to jurisdiction,
defects in pleadings, and claims of excessive damages. (See Uva
v. Evans (1978) 83 Cal.App.3d 356, 362‑363.) Thus, we cannot review the trial court’s
decision to impose punitive damages; we can only review the amount
awarded. We note, however, the well‑pleaded
allegations of the Sylvesters’ verified complaint, which are accepted as true,
and the joint declaration with exhibits submitted at the default prove‑up
hearing, establish Yuh engaged in fraud and oppression, and acted
maliciously. (See Civ. Code,
§ 3294, subd. (a).)

The
permissible amount of punitive damages is constrained both by federal due
process and by California state law. “A
court determining whether a punitive damages award is excessive under the due
process clause must consider three guideposts:
‘(1) the degree of reprehensibility of the defendant’s misconduct;
(2) the disparity between the actual or potential harm suffered by the
plaintiff and the punitive damages award; and (3) the difference between
the punitive damages awarded by the jury and the civil penalties authorized or
imposed in comparable cases.
[Citation.]’” (>Bullock v. Philip Morris USA, Inc. (2011)
198 Cal.App.4th 543, 558, quoting State
Farm Mut. Automobile Ins. Co. v. Campbell (2003) 538 U.S. 408, 418.) Under California law, the defendant’s
financial condition is “an essential factor” in setting the amount of punitive
damages. (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159,
1185.)

Yuh
challenges the amount of punitive damages as excessive on several grounds, one
of which, we conclude, has merit. Yuh
asserts the punitive damages award is not supported by substantial evidence of
his net worth. “A reviewing court cannot
make a fully informed determination of whether an award of punitive damages is
excessive unless the record contains evidence of the defendant’s financial
condition.” (Adams v. Murakami (1991) 54 Cal.3d 105, 110 (Adams).) “Absent such
evidence, a reviewing court cannot make an informed decision whether the amount
of punitive damages is excessive as a matter of law.” (Id.
at p. 118.) The plaintiff has the
burden of proof of a defendant’s financial condition. (Id.
at p. 120.)

The
Adams court did not prescribe a rigid
standard for measuring a defendant’s ability to pay punitive damages and stated it could not
conclude, based on the record before it, “that any particular measure of
ability to pay is superior to all others or that a single standard is
appropriate in all cases.” (>Adams, supra, 54 Cal.3d at p. 116, fn. 7.) Net worth is often described as “the critical
determinant of financial condition”; however, “there is no rigid formula and
other factors may be dispositive especially when net worth is manipulated and
fails to reflect actual wealth.” (>County of San Bernardino v. Walsh (2007)
158 Cal.App.4th 533, 546.)

Appellate
courts have interpreted Adams to
require the plaintiff to provide a balanced overview of the defendant’s
financial condition; a selective presentation of financial condition evidence
will not survive scrutiny. (See >Baxter v. Peterson (2007) 150
Cal.App.4th 673, 676, 681 [record “silent with respect to . . .
liabilities” is insufficient]; Kelly v.
Haag (2006) 145 Cal.App.4th 910, 916‑917; Robert L. Cloud & Associates, Inc. v. Mikesell (1999) 69
Cal.App.4th 1141, 1151‑1153; Lara
v. Cadag (1993) 13 Cal.App.4th 1061, 1063‑1064.) Courts may not infer sufficient wealth to pay
a punitive award from a narrow set of data points, such as ownership of
valuable assets or a substantial annual income.


In
this case, the totality of evidence presented at the default prove‑up
hearing of Yuh’s financial condition is the following passage from the
Sylvesters’ joint declaration:

“15. At his deposition LUNDAR YUH testified that
he owns the following property:

“1. 850 South Western Avenue, Anaheim, CA 92804

“Value: $500,000.00

“1st
Mortgage: $150,000.00

“2nd
Mortgage: $300,000.00



“2. 10391 Magnolia Avenue, Anaheim, CA 92804

“Value: $400,000.00

“1st
Mortgage: $200,000.00



“3. 4566 Maplewood Avenue, Los Angeles, CA 90004

“Value: $600,000.00

“1st
Mortgage: $500,000.00

“3
Units: Generating
$4,000.00/month rent



“4. 1909‑1913 4th Street, Long Beach, CA

“Owned
free and clear of mortgages

“Restaurant
generating $1800.00/month rent



“(See
page 22 line 1 through Page 26 line 8).”

This
portion of the joint declaration is inadmissible for lack of foundation because
the Sylvesters never stated they attended Yuh’s deposition or read the
deposition transcript (Evid. Code, § 702 [testimony of witness is
inadmissible unless witness has personal knowledge of matter]) and because it
is inadmissible hearsay (Evid. Code, § 1200). The relevant passages of Yuh’s deposition
testimony are not attached to the joint declaration, the joint declaration
states only that a copy of the deposition transcript “is made available to the
court,” and the appellate record lacks a notice of lodging or any other evidence
the transcript was actually presented to the trial court. The transcript of Yuh’s deposition is not
part of the appellate record.

Even
if this part of the joint declaration were admissible, it would not provide a
balanced picture of Yuh’s financial condition.
Instead, the information in the joint declaration was a select
presentation of Yuh’s financial condition based on his ownership of several
assets. The Sylvesters did not present
balance sheets, profit/loss statements, income statements, a complete list of
assets, or other documentation presenting a balanced overview of Yuh’s
financial condition. The joint
declaration does not provide a value for property No. 4 and purports to
identify only the monthly rental generated by property Nos. 3 and 4, not the
monthly net income. We may not infer
sufficient wealth to pay a punitive award of $300,000 from the limited and
narrow data provided in the joint declaration.

In
Baxter v. Peterson, >supra, 150 Cal.App.4th at page 681,
the appellate court
reversed a punitive damage award of $75,000 because the record demonstrated
only current ownership of substantial assets (about 10 residential rental
properties, at least two of which were valued at more than $700,000), without
any evidence whether there were mortgages on those assets or whether the rental
properties were profitable. The
plaintiff did not present evidence of the defendant’s compensation from
employment. (Ibid.) “In sum, although the
record shows that [the defendant] owns substantial assets, it is silent with
respect to her liabilities. The record
is thus insufficient for a reviewing court to evaluate [the defendant]’s
ability to pay $75,000 in punitive damages.”
(Ibid.)

Here,
the joint declaration did purport to give the amount of the mortgages against
three pieces of Yuh’s real property and the amount of monthly income from two
of them. Nonetheless, the joint
declaration sought to provide a picture of Yuh’s financial condition based only
on the purported value of four selected assets.
The information does not provide “meaningful evidence of [Yuh’s]
financial condition.” (>Adams, supra, 54 Cal.4th at p. 109.)

There
are two exceptions to the rule in Adams. One exception is that the plaintiff’s burden
of producing evidence of the defendant’s financial condition may be excused if
the defendant violates an order compelling production of financial information
at trial. (Caira v. Offner (2005) 126 Cal.App.4th 12, 37‑38.) The other exception is that evidence of a
defendant’s profit from the wrongdoing at issue in a fraud action may form a
basis for punitive damages up to the amount of the wrongful profits, even with
evidence of the defendant’s financial condition. (Cummings
Medical Corp. v. Occupational Medical Corp. (1992) 10 Cal.App.4th 1291,
1298‑1301.) Neither exception
applies to this case.

We
need not, however, reverse the part of the judgment awarding punitive
damages. The Sylvesters are entitled to
recover punitive damages; the only question is the amount. In such a situation, we may strike the award
of punitive damages and remand for a new trial on the amount of punitive
damages alone, based on evidence of Yuh’s financial condition at the time of
retrial. (See Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269,
1286; Lara v. Cadag, >supra, 13 Cal.App.4th at p. 1065; >Washington v. Farlice (1991) 1
Cal.App.4th 766, 777.) The Sylvesters
may subpoena documents and witnesses to be available at retrial for the purpose
of establishing Yuh’s financial condition, and, in addition, we will direct the
trial court to enter an order permitting discovery of Yuh’s financial
condition. (Civ. Code, § 3295,
subd. (c).)

Because
we conclude the award of punitive damages cannot be sustained on state law
grounds, we do not consider whether the punitive damages are excessive under
the due process clause.

>IV.

>We Lack Jurisdiction to Consider Yuh’s
Challenge to the Postjudgment Order Denying the Motion to

Vacate the Default Judgment.

Yuh
argues the trial court abused its discretion by denying his motion to vacate
the default judgment. Yuh filed the
motion in April 2012, after he filed the notice of appeal from the default
judgment in March. On May 10, 2012,
the trial court entered an order denying Yuh’s motion to vacate the
judgment.

An
order denying a postjudgment motion to vacate a judgment is an appealable
order. (Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1137; >Generale Bank Nederland v. Eyes of the
Beholder Ltd. (1998) 61 Cal.App.4th 1384, 1394.) A notice of appeal from the order denying
Yuh’s postjudgment motion to vacate the judgment does not appear in the
record. Yuh’s notice of appeal was filed
before Yuh brought the motion to vacate the default judgment and therefore does
not mention or include the order denying it.
As the order denying the motion to vacate the judgment was separately
appealable, and Yuh did not file a notice of appeal from it, we lack
jurisdiction to consider his challenge to that order.



Disposition

The
award of punitive damages in the judgment is stricken and the matter is
remanded for a new default prove‑up hearing only on the issue of the
amount of punitive damages. We direct
the trial court to issue an order under Code of Civil Procedure
section 3295, subdivision (c), permitting the Sylvesters to conduct
discovery into Yuh’s financial condition.
We also direct the trial court to modify paragraph 2 of the
judgment (page 2, lines 3‑8) to read as follows: “The court finds in favor of plaintiff Lance
Sylvester and against defendant Lundar Yuh on plaintiffs’ Fourth Cause of
Action for Intentional Infliction of Emotional Distress only. The court finds in favor of plaintiff Elena
Sylvester and against defendant Lundar Yuh on plaintiffs’ First Cause of Action
for Malicious Prosecution, Second Cause of Action for Breach of Contract, Third
Cause of Action for Tortious Breach of Contract, Fourth Cause of Action for
Intentional Infliction of Emotional Distress, and Fifth Cause of Action for
Abuse of Process.”

In
all other respects, and as modified, the judgment is affirmed. The Sylvesters shall recover costs incurred
on appeal.







FYBEL,
J.



WE CONCUR:







O’LEARY, P.
J.







MOORE, J.