Filed 7/21/26 Yang v. Wu 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
HE YANG,
Plaintiff and Appellant, G065565
v. (Super. Ct. No. 30-2019-01116609)
YUNZHOU WU et al., OPINION
Defendants and Respondents.
Appeal from a judgment of the Superior Court of Orange County,
Andre De La Cruz, Judge. Reversed and remanded with instructions.
He Yang, in pro. per, for Plaintiff and Appellant.
Law Offices of Mokri & Associates and Brad A. Mokri for
Defendants and Respondents.
Code of Civil Procedure1 section 583.310 provides that actions
“shall be brought to trial within five years after the action is commenced
against the defendant.” If the action is not brought to trial within that
timeframe, the court must dismiss it on its own motion or that of the
defendant, “after notice to the parties.” (§ 583.360, subd. (a).)
In this case, plaintiffs’ lawsuit was dismissed upon an oral
motion by defendants on the date set for trial without advance notice to
plaintiffs. Under these circumstances, we find the dismissal was improper,
and we reverse the judgment and remand for further proceedings.
STATEMENT OF FACTS
Yang and his fellow plaintiff Wenhua Yu (who is not a party to
this appeal) (plaintiffs) worked for Yunzhou Wu’s company, Swapsy, Inc.,
formerly known as USYNO, Inc.2 Yang alleged he was originally hired as an
independent contractor in March 2018 to redevelop the company’s website
and online currency exchange platform. However, within one month, Yang
alleged he was made a full-time employee of Swapsy. He claims he later
became chief technology officer of Swapsy, but with no ownership interest in
the company.
Swapsy was founded by Wu and a partner in 2017, and Wu later
became the company’s sole officer. Plaintiffs alleged in their complaint that
Wu suddenly informed Swapsy employees in October 2019 that he was
1 All undesignated statutory references are to the Code of Civil
Procedure.
2 According to the operative pleading in this case, Swapsy is a
financial technology startup which provides an online platform for users
around the world to easily exchange currency.
2
resigning as chief executive officer. Plaintiffs feared Wu would siphon
company funds after hearing he was considering moving back to China.
Plaintiffs alleged they confronted Wu about what they viewed as
his embezzlement of funds. Wu agreed to provide his bank statements to
provide an accounting for any improperly diverted company monies, however,
he later reneged on that agreement. Plaintiffs also alleged Wu was
manipulating revenue data to entice investors.
Yang alleged that he was targeted for retaliation based on his
inquiries into the diversion of company funds and was threatened with
termination and/or a lawsuit if he did not hand over access to the company’s
data. He claims he was removed from the company’s payroll prematurely and
that he worked for at least two weeks without compensation before he was
finally terminated.
PROCEDURAL BACKGROUND
Plaintiffs filed their complaint against Wu and Swapsy on
December 6, 2019 for various violations of the Labor Code and wrongful
termination.3 Plaintiffs filed an amended complaint in February 2020. Wu
and Swapsy answered that complaint in December 2020 and filed a cross-
complaint against plaintiffs for slander.
Trial on the complaint was originally scheduled for August 23,
2021. In October 2021, plaintiffs amended their first amended complaint to
add Tao Yu and Tianyu “Mark” Ma as fictitious defendants (together with
3 The complaint also alleged causes of action for breach of
fiduciary duty, accounting, and a demand for inspection of Swapsy’s books
and records, but these claims were alleged by Yu only, not Yang.
3
Wu and Swapsy, collectively defendants). The trial was continued to
November 1, 2021, and then March 28, 2022.
In January 2022, as the pleadings were being tested through
demurrer, and Wu was the subject of a motion to compel deposition, the
parties stipulated to further continue the trial date. Plaintiffs filed their
second amended complaint in September 2022 (the operative complaint). The
court continued the trial to October 3, 2022.
The parties sought a further continuance to February 27, 2023,
which the court granted. The trial thereafter was continued to October 16,
2023.
On April 19, 2023, defendants filed a notice of automatic stay
because Swapsy had filed for chapter 11 bankruptcy. The court issued a
minute order on May 15, 2023, taking pending discovery motions off calendar
due to Swapsy’s bankruptcy; it set an order to show cause (OSC) hearing
regarding the bankruptcy for October 16, 2023.
The case was reassigned to Judge De La Cruz as of August 2023.
The trial date of October 16 was taken off calendar, and the OSC was
continued to October 30, 2023. In ruling on demurrers filed by Yu and Ma
(the Doe defendants), Judge De La Cruz found the automatic stay did not
extend to the individual defendants.
On January 17, 2024, the trial court issued a minute order
stating it had reviewed the file and set an OSC hearing regarding sanctions
for noncompliance with California Rules of Court, rules 3.724 and 3.725 for
February 26, 2024. The court also ordered the parties to submit declarations
of compliance before the OSC hearing.
Both counsel filed their declarations. Defendants’ counsel’s
declaration noted outstanding discovery issues and asked the trial court to
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set trial for November or December 2024, or January 2025. By the end of
2024, Yang’s counsel had filed a motion to be relieved as Yang’s counsel,
which was granted by the court on February 24, 2025.
At the February 26, 2024 OSC hearing regarding sanctions, the
court continued the trial date to March 24, 2025. In its minute order, the
court stated, “[t]rial dates are firm and continuances will not be granted
absent good cause.” Nonetheless, the court later sua sponte continued the
trial date to April 7, 2025, and then to April 21, 2025, after defendants’
counsel raised a scheduling conflict.
On April 21, 2025, the date set for trial, Yang appeared on his
own behalf, along with defendants’ counsel. There was discussion with the
court regarding trial logistics and the status of defendants. Defendants’
counsel indicated Swapsy was still in bankruptcy and would not proceed with
its cross-complaint. Without being prompted, the court spontaneously pointed
out that the case had been pending for over five years.
Defendants’ counsel immediately made an oral motion to dismiss
the case under section 583.310. Defendants’ counsel indicated no formal
tolling had occurred, and Yang concurred “inadvertently.”4 The trial court
granted the oral motion and dismissed the entire case without prejudice
pursuant to section 583.360, subdivision (b). The court entered the dismissal
on July 8, 2025.5
4 The court’s minute order states, “Both parties indicate time has
not been tolled.” Yang claims he misunderstood what the court meant.
5 Yang filed a motion to augment the record with several more
documents, most of which postdate the appeal. We deny the motion as to any
documents filed or entered after July 18, 2025, the date the dismissal
judgment was filed in our court—that is, exhibits 1, 2, 4, and 5.
“‘Augmentation does not function to supplement the record with materials
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DISCUSSION
Yang argues the dismissal was improper for two reasons.6 First,
Yang contends that section 583.360, subdivision (b), requires notice to the
parties before the court can dismiss the lawsuit. Second, Yang asserts that
the five-year period had not expired due to a bankruptcy, and/or it was tolled
due to emergency orders during the COVID-19 pandemic, and/or it was
impossible, impracticable, or futile to bring the case to trial within five years.
(§§ 583.340 and 583.350.). Since we agree with Yang’s first contention, we do
not reach his second contention.
not before the trial court. [Citations.] . . . Rather, normally “when reviewing
the correctness of a trial court’s judgment, an appellate court will consider
only matters which were part of the record at the time the judgment was
entered.” [Citation.]’ [Citation.] The augmentation procedure cannot be used
to bring up matters occurring during the pendency of the appeal because
those matters are outside the superior court record. (See Eisenberg et al., Cal.
Practice Guide: Civil Appeals and Writs (The Rutter Group 2015) ¶ 5:134,
p. 5–45.)” (In re K.M. (2015) 242 Cal.App.4th 450, 455–456.) The motion is
granted as to exhibits 3, 6, 7, and 8. Exhibit 3 is itself a compendium of
exhibits filed in September 2025, and it contains documents predating the
appeal.
6 Yang also argues the trial court erred by taking his motion to
set aside the dismissal off calendar, because the court said it lacked
jurisdiction to rule on it due to the present appeal. The motion to vacate the
dismissal postdates the dismissal being appealed, and Yang has not filed a
separate notice of appeal as to the trial court’s ruling on that motion.
Therefore, we do not address this issue. (See In re Zeth S. (2003) 31 Cal.4th
396, 405 [“It has long been the general rule and understanding that ‘an
appeal reviews the correctness of a judgment as of the time of its rendition,
upon a record of matters which were before the trial court for its
consideration’”].)
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I.
STANDARD OF REVIEW
“We independently review a ruling on a motion to dismiss for
failure to bring an action to trial within the five-year period provided by
section 583.310 to the extent the ruling is based on an interpretation of the
statute.” (Munoz v. City of Tracy (2015) 238 Cal.App.4th 354, 358.)
II.
THE COURT ERRED BECAUSE A LAWSUIT MAY NOT BE DISMISSED
UNDER SECTION 583.360 WITHOUT PROPER NOTICE
The five-year “dismissal requirement is mandatory and ‘not
subject to extension, excuse, or exception except as expressly provided by
statute.’ [Citation.] ‘Under the press of this statutory requirement, anyone
pursuing an “action” in the California courts has an affirmative obligation to
do what is necessary to move the action forward to trial in timely fashion.’”
(Seto v. Szeto (2022) 86 Cal.App.5th 78, 85.)
Notice of a motion to dismiss under section 583.360,
subdivision (a), is, as the statutory language clearly states, a prerequisite to
the validity of a dismissal entered under it. If the defendant moves for
dismissal, a noticed motion is generally required. (See Harris v. Board of
Education (1957) 152 Cal.App.2d 677, 681–682.) St. Paul Fire & Marine Ins.
Co. v. Superior Court (1984) 156 Cal.App.3d 82 states, “The California
Supreme Court has announced the ‘general rule’ that ‘ . . . notice of motion
must be given whenever the order sought may affect the rights of an adverse
party. [Citations.]’ [Citation.] Restated, ‘. . . in an adversary proceeding where
an order may affect the rights of an adverse party, notice must be given to
protect the adverse party's right to be heard on the issue as a matter of due
process of law. [Citations.]’” (Id. at p. 85.) In re Marriage of Straczynski
7
(2010) 189 Cal.App.4th 531 provides, “The constitutional guarantee of due
process requires that a court give notice to a party and an opportunity to
respond before sua sponte dismissing an action.” (Id. at p. 538.)
Section 1005, subdivision (a), states, “Written notice shall be
given, as prescribed in subdivisions (b) and (c), for the following motions:
[¶] . . . [¶] (13) Any other proceeding under this code in which notice is
required, and no other time or method is prescribed by law or by court or
judge.”
Based on the settled statement, on April 21, 2025, the date set for
trial, the trial court “. . . spontaneously raised the issue that the case had
been pending for over five years . . . .” Prompted by this comment, defendants’
counsel immediately made an oral motion to dismiss the case under
section 583.310.
Here, defendants did not file a written, noticed motion as
expressly required by sections 583.360, subdivision (a), and 1005,
subdivision (a)(13). Rather, the motion was made orally and granted when
the case was called for trial. From a due process perspective, there was no
opportunity for Yang to prepare an opposition to explain the reasons why the
trial court should deny defendants’ motion to dismiss pursuant to section
583.310. Yang could not fairly be expected to do so spontaneously on the
record—hence we cannot construe his claimed confusion in court as a waiver
of the notice requirement.
We note the result would be the same even if the trial court had
been the one to move for dismissal here, as is permitted under section
583.360, subdivision (a). Regardless of who makes the motion, proper notice
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is required.7 Because it was not given, and Yang did not waive it, the court
lacked authority to dismiss the action under section 583.360.
III.
COMPUTATION OF THE FIVE-YEAR PERIOD/TOLLING
As to Yang’s contention regarding tolling and the computation of
the five-year period, we express no opinion whether dismissal may be
appropriate pursuant to sections 583.310 and 583.360 after defendants or the
trial court provides the required notice.
DISPOSITION
The judgment of dismissal is reversed, and the matter is
remanded to the trial court with directions to vacate the dismissal and for
7 Defendants argue the court’s order setting trial for March 24,
2025, was entered at an OSC regarding dismissal. Their brief, however,
contains no record citations to support this assertion, and our review of the
record does not bear it out. The February 26, 2024 OSC hearing was
regarding the failure by both sides to file case management statements, and
was originally noticed as an OSC hearing regarding sanctions. Although the
minute order for the February 2024 OSC hearing states that it was an OSC
regarding sanctions/dismissal, the court’s January 17, 2024 minute order
setting the OSC did not explicitly mention dismissal, only the more general
term “sanctions.”
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further proceedings consistent with this opinion. Appellant to recover his
costs on appeal.
SCHWARM, J.*
WE CONCUR:
MOORE, ACTING P. J.
DELANEY, J.
*Judge of the Orange County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
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