Yang v. Hsiao

SHIN P. YANG, Plaintiff, Cross-defendant and Appellant, v. WANG CHIEN EGO HSIAO et al., Defendants, Cross-complainants and Appellants.

B302443

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO

February 22, 2021

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BC648006)

APPEALS from a judgment of the Superior Court of Los Angeles County. William D. Stewart, Judge. Affirmed.

Pierry Law Firm, Joseph P. Pierry, Law Offices of Shin P. Yang and Frank Carleo for Plaintiff, Cross-defendant and Appellant.

Marshall & Associates and Robert O. Marshall for Defendants, Cross-complainants and Appellants.

After an attorney obtained a default judgment of $255,056 for a motel employee in a wage and hour employment action, the attorney learned that his client's former employer had contacted the client directly and induced him to sign a settlement for $20,000 without notifying the attorney, after the entry of default and filing of the damages statement. The employer subsequently cross-complained against the employee for not timely dismissing the case under the terms of the settlement agreement, assisted the employee to dismiss his own action and substitute in for the attorney as a self-represented litigant, then obtained a default judgment of $13,899 against the now-unrepresented employee.

The attorney, who had been retained on a contingency fee basis, sued the employer for interference with contractual relations. The trial court awarded the attorney $103,948 in compensatory damages and $100,000 in punitive damages.

The employer appeals the trial court's judgment in favor of the attorney. The attorney cross-appeals the award of punitive damages on the grounds that the trial court improperly discounted the award by considering the employers' status as an individual as opposed to a business entity. We affirm the trial court's judgment, including the award of punitive damages.

FACTUAL AND PROCEDURAL HISTORY

The basic facts of this case are not in serious dispute. "In the few areas of disagreement we accept, as we must, the findings of the trial judge who, after a careful hearing, made a thorough and well prepared record and statement of decision." (Bouvia v. Superior Court (1986) 179 Cal.App.3d 1127, 1135.)

A. The Hang Wage and Hour Action

Ms. Wang Chien Ego Hsiao and Mr. Long Tzong Syiau are a married couple who operate the Champion Motel in SanGabriel. On August 31, 2015, Attorney Shin P. Yang filed a wage and hour action against the Champion Motel, Hsiao, and Syiau on behalf of his client William Hang, who had worked at the Champion Motel since June 2010.

Hang had retained Yang on a contingency fee basis to pursue his wage and hour claims. The retainer agreement provided, among other things, that Yang would receive a fee of 40 percent of the gross recovery after litigation commenced, and granted an attorney fees lien to Yang for his reasonable services should he be discharged prior to concluding the case.

On October 6, 2015, Yang served a statement of damages on the Champion defendants by mail, pursuant to Code of Civil Procedure section 425.11, subdivision (c). Hang stated damages of $300,000 in general damages, $300,000 in special damages, and $600,000 in punitive damages. On October 13, 2015, having received no response to the complaint, Yang filed a request for entry of default along with the statement of damages, and default was entered. On October 21, 2015, Hang executed a declaration in support of default judgment, describing working 14-hour days five days a week without breaks or overtime, for $905 per month—far below minimum wage—and seeking $787,465 in damages. This was filed with the court October 26, 2015.

Unbeknownst to Yang, Hsiao contacted Hang and met with him in mid-October 2015, and convinced him to sign a $20,000 settlement agreement. In a declaration filed by Hang in opposition to an unsuccessful subsequent motion by Hsiao to enforce the settlement, Hang stated that Hsiao met him for tea and told him she felt sorry for having underpaid him. She promised to "make up" for his loss by loaning him $20,000, knowing he needed money. They met again later in October andHsiao brought a document for him to sign, telling him it was a "receipt" for the loan while holding $20,000 cash. Hang told her he could not read the paper in English, especially with all the legal terms he did not understand. Hsiao told him, "don't worry," assured him it was just a "receipt," and promised to give him more money in the future. Hang needed the money to support his family and three daughters, so he signed the agreement and Hsiao gave him the $20,000 cash.

The three-page settlement agreement was dated October 23, 2015, and executed by Hang and Hsiao. In relevant part, it provided that "Defendants, and each of them individually, agree to pay the amount of $20,000, jointly payable to the Plaintiff's Attorney and Plaintiff," no later than one week after execution of the document. It set forth a comprehensive mutual release of all claims, and provided that upon execution and payment Hang would "file a dismissal with prejudice of the entire Subject Action," including against Syiau, who did not execute the agreement. The agreement was drafted by Ms. Hsiao's daughter, a certified public accountant; the trial court found it "shows a considerable degree of sophistication."

Yang was not jointly paid any of the settlement amount and would not learn of the October 23 settlement agreement until August 2016, nine months later. No notice of settlement or request for dismissal was filed around the time the agreement was signed.

In the meantime, Yang continued to work on Hang's wage and hour action, including submitting briefing on statute of limitations issues at the request of the trial court. Both sides were served with the trial court's request for this briefing onNovember 9, 2015. Yang filed and served a memorandum on statute of limitations on January 27, 2016.

On January 26, 2016, Hang signed a declaration in support of application for default judgment, seeking $255,056.50 in damages. On January 28, 2016, Yang filed a request for judgment with the trial court, along with Hang's declaration and supporting documentation.

On January 29, 2016, the trial court issued a default judgment for Hang in the sum of $255,056.50.

In April 2016, Hsiao took Hang to a notary public and had him re-sign the settlement agreement and a request for dismissal in front of a notary.

In August 2016, Yang filed an application for a debtor's examination of Hsiao to enforce the judgment, and a hearing was scheduled for September 9, 2016. Shortly thereafter, Yang received a letter from Hsiao's counsel informing him of the settlement and attaching a copy of the agreement, which Yang had not known existed until then. Yang met with Hang the next day, and Hang showed him copies of the settlement agreement, an unfiled substitution of attorney form dated January 28, 2016, and a notarized unfiled request for dismissal dated January 29, 2016, which Hang stated he had signed all in exchange for money from Hsiao. Hang told Yang—who was aware Hang could not read English—that he didn't know what the documents were and that no one had explained them to him.

On October 4, 2016, Hsiao filed an ex parte application to set aside the judgment, enforce the settlement agreement, and dismiss the entire case with prejudice. Yang opposed the application, with a supporting declaration from Hang describingHang's experience with Hsiao inducing him to sign the agreement.

On October 7, 2016, the trial court denied Hsiao's application except that it set aside the default judgment (but not the default) on procedural grounds because the original complaint had not stated a specific amount of damages sought and default judgments may not exceed the amount stated in the complaint pursuant to Code of Civil Procedure section 580, subdivision (a).

On December 8, 2016, Yang filed an amended complaint.

Defendants filed an answer to the amended complaint on January 13, 2017, as well as a cross-complaint against Hang for breach of the settlement agreement, breach of the implied covenant of good faith and fair dealing, and fraudulent and negligent misrepresentation for not dismissing the case within a week after settlement.

On January 23, 2017, Hang filed a substitution of attorney substituting himself in place of Yang as a self-represented party and filed a request for dismissal with prejudice of the complaint but not of the cross-complaint (although, as the trial court noted in the underlying statement of decision here, the box for "Entire action of all parties and all causes of action" appeared to have originally been checked and then whited out).

Defendants continued pursuing their cross-compliant against Hang and ultimately obtained a default judgment against Hang on September 20, 2017, in the amount of $13,899.35.

B. The Yang Intentional Interference Action

On January 24, 2017, Yang sued Hsiao, Syiau, and Hang for intentional interference with contractual relations, civil conspiracy, and intentional and negligent interference withprospective economic relations. The case proceeded to a four-day bench trial on the single issue of intentional interference with contract against Hsiao and Syiau.¹

After conclusion of trial and posttrial briefings, the trial court issued a detailed 17-page statement of decision. The trial court found Hsiao's testimony incredible, concluded that Yang had proved intentional interference with contractual relations, and awarded actual damages of $102,022 (based on 40 percent of the default judgment obtained in the Hang action), $1,926 in...