This case was last updated from Los Angeles County Superior Courts on 05/25/2019 at 13:35:29 (UTC).

MAXTRADE LLC VS WING LEE ET AL

Case Summary

On 12/01/2016 MAXTRADE LLC filed a Contract - Other Contract lawsuit against WING LEE. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is DENNIS J. LANDIN. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****2490

  • Filing Date:

    12/01/2016

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

DENNIS J. LANDIN

 

Party Details

Plaintiff and Cross Defendant

MAXTRADE LLC

Defendants and Cross Plaintiffs

PAN YEE HUNG LEE

LEE CONNIE

JULY TRADING LLC DOE 3

LEE LI FAN

LEE WING

WONG CHIU KWONG

Cross Defendants

MA JEFF

MAXTRADE LLC

Attorney/Law Firm Details

Plaintiff Attorneys

HALABY ANDREW F.

YU JASON

HATEM ROBERT J.

Defendant Attorneys

LEVINE PETER K.

MATSON DONALD J.

Cross Defendant Attorney

FINLEY KEVIN D.

Other Attorneys

YU JASON T. ESQ.

 

Court Documents

Minute Order

2/21/2018: Minute Order

ORDER GRANTING EX PARTE APPLICATION FOR ORDER SHORTENING TIME TO HEAR MOTION TO QUASH SERVICE OF SUMMONS AND FIRST AMENDED COMPLAINT BY SPECIALLY APPEARING DEFENDANT CHIU KWONG WONG (DOE 2)

8/22/2018: ORDER GRANTING EX PARTE APPLICATION FOR ORDER SHORTENING TIME TO HEAR MOTION TO QUASH SERVICE OF SUMMONS AND FIRST AMENDED COMPLAINT BY SPECIALLY APPEARING DEFENDANT CHIU KWONG WONG (DOE 2)

DEFENDANT WING LEE'S ANSWER TO PLAINTIFF'S UNVERIFIED FIRST AMENDED COMPLAINT

8/23/2018: DEFENDANT WING LEE'S ANSWER TO PLAINTIFF'S UNVERIFIED FIRST AMENDED COMPLAINT

CROSS-COMPLAINT FOR: 1. CIVIL EXTORTION 2. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

8/24/2018: CROSS-COMPLAINT FOR: 1. CIVIL EXTORTION 2. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

NOTICE OF MOTION AND MOTION FOR AN ORDER EXPUNGING LIS PENDENS AND FOR ATTORNEY FEES AND COSTS IN THE AMOUNT OF $5,975.00 AS AGAINST MAXTRADE, LLC; ETC.

9/13/2018: NOTICE OF MOTION AND MOTION FOR AN ORDER EXPUNGING LIS PENDENS AND FOR ATTORNEY FEES AND COSTS IN THE AMOUNT OF $5,975.00 AS AGAINST MAXTRADE, LLC; ETC.

Minute Order

9/18/2018: Minute Order

PLAINTIFF MAXTRADE, LLC'S NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENA UPON NON-PARTY JASON T. YU, ESQ.

10/2/2018: PLAINTIFF MAXTRADE, LLC'S NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENA UPON NON-PARTY JASON T. YU, ESQ.

Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

10/17/2018: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

Unknown

10/30/2018: Unknown

Minute Order

11/9/2018: Minute Order

Declaration

11/13/2018: Declaration

Challenge To Judicial Officer - Peremptory (C.C.P., ? 170.6)

11/14/2018: Challenge To Judicial Officer - Peremptory (C.C.P., ? 170.6)

Notice of Case Management Conference

11/21/2018: Notice of Case Management Conference

Answer

11/27/2018: Answer

Demurrer

12/17/2018: Demurrer

SUMMONS

12/1/2016: SUMMONS

SUBSTITUTION OF ATTORNEY

6/19/2017: SUBSTITUTION OF ATTORNEY

PLAINTIFF MAXTRADE, LLC'S SEPARATE STATEMENT OF ITEMS IN DISPUTE IN SUPPORT OF PLAINTIFF MAXTRADE, LLC?S MOTION TO COMPEL FURTHER RESPONSES TO PLAINTIFF MAXTRADE, LLC'S REQUEST FOR PRODUCTION OF DOCUM

9/22/2017: PLAINTIFF MAXTRADE, LLC'S SEPARATE STATEMENT OF ITEMS IN DISPUTE IN SUPPORT OF PLAINTIFF MAXTRADE, LLC?S MOTION TO COMPEL FURTHER RESPONSES TO PLAINTIFF MAXTRADE, LLC'S REQUEST FOR PRODUCTION OF DOCUM

135 More Documents Available

 

Docket Entries

  • 05/21/2019
  • at 08:30 AM in Department 34; Hearing on Motion - Other (NOTICE OF MOTION AND MOTION FOR AN ORDER EXPUNGING LIS PENDENS AND FOR ATTORNEY FEES AND COSTS S AGAINST MAXTRADE, LLC; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION IN SUPPORT THEREOF; [PROPOSED] ORDER EXPUNGING LIS PENDENS) - Not Held - Rescheduled by Party

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  • 05/09/2019
  • at 08:30 AM in Department 34; Hearing on Motion - Other (NOTICE OF MOTION AND MOTION FOR AN ORDER EXPUNGING LIS PENDENS AND FOR ATTORNEY FEES AND COSTS S AGAINST MAXTRADE, LLC; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION IN SUPPORT THEREOF; [PROPOSED] ORDER EXPUNGING LIS PENDENS) - Not Held - Rescheduled by Party

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  • 03/11/2019
  • at 10:00 AM in Department 74; Jury Trial - Not Held - Vacated by Court

    Read MoreRead Less
  • 03/01/2019
  • at 08:30 AM in Department 74; Final Status Conference - Not Held - Vacated by Court

    Read MoreRead Less
  • 02/25/2019
  • Notice of Ruling; Filed by Maxtrade, LLC (Cross-Defendant)

    Read MoreRead Less
  • 02/21/2019
  • at 08:30 AM in Department 34; Hearing on Motion for Protective Order - Held

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  • 02/21/2019
  • Minute Order ( (Hearing on Motion for Protective Order)); Filed by Clerk

    Read MoreRead Less
  • 02/21/2019
  • Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

    Read MoreRead Less
  • 02/13/2019
  • Reply (Plaintiff Maxtrade LLC's Reply in Support of Its Motion for Protective Order); Filed by Maxtrade, LLC (Cross-Defendant)

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  • 02/13/2019
  • Notice of Appearance; Filed by Maxtrade, LLC (Plaintiff)

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276 More Docket Entries
  • 12/28/2016
  • Notice; Filed by Maxtrade, LLC (Plaintiff)

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  • 12/28/2016
  • Proof-Service/Summons; Filed by Maxtrade, LLC (Plaintiff)

    Read MoreRead Less
  • 12/28/2016
  • NOTICE OF PENDENCY OF ACTION-RECORDED

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  • 12/20/2016
  • Amendment to Complaint; Filed by Maxtrade, LLC (Plaintiff)

    Read MoreRead Less
  • 12/20/2016
  • AMENDMENT TO COMPLAINT

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  • 12/14/2016
  • Notice of Case Management Conference; Filed by Clerk

    Read MoreRead Less
  • 12/14/2016
  • NOTICE OF CASE MANAGEMENT CONFERENCE

    Read MoreRead Less
  • 12/01/2016
  • Complaint; Filed by Maxtrade, LLC (Plaintiff)

    Read MoreRead Less
  • 12/01/2016
  • COMPLAINT FOR: (1) FRAUD; ETC

    Read MoreRead Less
  • 12/01/2016
  • SUMMONS

    Read MoreRead Less

Tentative Rulings

Case Number: BC642490    Hearing Date: February 04, 2020    Dept: 34

SUBJECT: Motion to Sever

Moving Party: Lee Defendants

Resp. Party: Plaintiff Maxtrade, LLC

The Lee Defendants’ motion to sever is DENIED.

BACKGROUND:

On December 1, 2016, Plaintiff Maxtrade, LLC, filed the instant action against Defendants Wing Lee, Li Fan Lee, and Yee Hung Lee Pan. On December 20, 2016, Plaintiff filed an amendment to complaint, replacing Doe 1 with Connie Lee. The matter was assigned to Department 74.

On January 5, 2017, Defendants Li Fan Lee, Pan Yee Hung Lee, and Connie Lee filed their answer. On January 13, 2017, Defendant Wing Lee filed an answer to the complaint.

On March 23, 2017, the Court set trial for December 4, 2017. On October 19, 2017, pursuant to a stipulation, the Court continued trial and all discovery cut-off dates to May 11, 2018. On April 17, 2018, pursuant to an ex parte application, the Court continued trial and all discovery cut-off dates to November 13, 2018.

On July 20, 2018, Plaintiff filed an amendment to complaint, replacing Doe 2 with Chiu Kwong Wong. On the same date, the Court granted Plaintiff’s ex parte application to file a first amended complaint, and Plaintiff filed the amended complaint that day. The FAC asserts claims for (1) Fraud; (2) Conversion; (3) Embezzlement; (4) Breach of Contract; (5) Fraudulent Transfer; (6) Bus. & Prof. Code § 17200; and (7) Unjust Enrichment. Plaintiff alleges Defendant Wing Lee, a former employee, embezzled hundreds of thousands of dollars from Plaintiff, and wrongfully transferred those funds to his parents (Defendants Li Fan Lee and Pan Yee Hung Lee) and sister (Connie Lee), in order to enrich themselves through various investments and real estate purchases. Plaintiff alleges Wing Lee has signed various acknowledgements, admitting to the embezzlement and agreeing to repay the funds, but has repeatedly breached the agreements and failed to make any repayments.

On August 23, 2018, Defendant Wing Lee filed an answer to the FAC. On August 24, Defendants Li Fan Lee, Pan Yee Hung Lee, and Connie Lee filed an answer to the FAC. Simultaneously, they filed a cross-complaint against Plaintiff Maxtrade and Plaintiff’s president, Jeff Ma, asserting causes of action for (1) Civil Extortion; and (2) Intentional Infliction of Emotional Distress. Cross-Complainants allege that they were tricked into meeting with Cross-Defendants about their son and brother’s alleged embezzlement, and that they were harassed and threatened by Cross-Defendants in that meeting, with Cross-Defendants threatening to report Cross-Complainants to the FBI if they did not immediately sign a settlement agreement acknowledging Wing Lee’s embezzlement, and agreeing to act as personal guarantors of his agreement to repay the settlement.

On September 26, 2018, Plaintiffs/Cross-Defendants Maxtrade and Ma filed a demurrer and motion to strike the cross-complaint. The matter was originally set for hearing on November 2, 2018. On October 30, 2018, it was continued by the Court to January 7, 2019.

On October 12, 2018, pursuant to a stipulation, the Court continued trial and all discovery cut-off dates to March 11, 2019.

On October 17, 2018, Plaintiff filed an amendment to complaint, replacing Doe 3 with July Trading, LLC.

On November 14, 2018, after a different judge began presiding in Department 74, a preemptory challenge was filed, and the matter was reassigned to Department 51. Another preemptory challenge was thereafter filed, and the matter was reassigned to Department 34.

On December 17, 2018, Defendant July Trading, LLC, only, filed a demurrer to the FAC, which was set to be heard on January 14, 2019. On December 31, 2018, rather than file an opposition, Plaintiff filed a second amended complaint. The SAC asserts the same causes of action as the FAC, but provides additional allegations as to July Trading.

On January 14, 2019, the Court took Defendant July Trading, LLC’s demurrer to the FAC of calendar as moot. The Court sustained Cross-Defendant’s demurrer to the first cause of action and overruled the demurrer to the second cause of action in the cross-complaint.

On February 21, 2019, the Court granted without prejudice Plaintiff’s motion for protective order prohibiting deposition of non-party Jason T. Yu.

On October 2, 2019, the Court denied Defendant Connie Lee’s motion to compel Plaintiff to provide further responses to Requests for Admissions, set one, and companion Form Interrogatories, set one, as to interrogatory 17.1.

On October 22, 2019, the Court denied Defendants Li Fan Lee, Yee Hung Lee Pan, Connie Lee, Chiu Kwong Wong, and July Trading, LLC’s motion for summary judgment and denied their motion for summary adjudication as to the fifth, sixth, and seventh causes of action.

On January 9, 2020, Li Fan Lee, Yee Hung Lee Pan, Connie Lee, Chiu Kwong Wong, and July Trading (“Lee Defendants”) filed the instant motion to sever Plaintiffs’ claims against co-defendant Wing Lee from all claims and counter-claims of the Lee Defendants to avoid unfair prejudice to the Lee Defendants, and avoid confusion of the issues to the jury. (Motion, pp. 1:28-2:2.)

ANALYSIS:

A. Legal Standard

Code of Civil Procedure section 598 provides in pertinent part:

“The court may, when the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby, on motion of a party, after notice and hearing, make an order, no later than the close of pretrial conference in cases in which such pretrial conference is to be held, or, in other cases, no later than 30 days before the trial date, that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case, except for special defenses which may be tried first pursuant to Sections 597 and 597.5. The court, on its own motion, may make such an order at any time.” (Code Civ. Proc., § 598.)

Code Civil Procedure section 598 was enacted by the legislature to avoid “the waste of time and money caused by the unnecessary trial of damage questions in cases where the liability issue is resolved against the plaintiff.” (Horton v. Jones (1972) 26 Cal.App.3d 952, 955.)

Code of Civil Procedure section 1048, subdivision (b) states:

“The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any cause of action, including a cause of action asserted in a cross-complaint, or of any separate issue or of any number of causes of action or issues, preserving the right of trial by jury required by the Constitution or a statute of this state or of the United States.” (Code Civ. Proc., § 1048, subd. (b).)

B. Discussion

Lee Defendants argue that good cause exists to sever Plaintiff’s claims and hear its claims against Wing Lee first because there is substantial evidence to be offered by Maxtrade, LLC as against Wing Lee that is inadmissible as a matter of law against the Lee Defendants and this inadmissible evidence will poison the jury and cause prejudice to the Lee Defendants. (Motion, p. 2:3-9.) Lee Defendants maintain that substantial undue prejudice will occur if the claims are not severed because “Maxtrade has made it clear that it intends to rely on the written admissions of defendant Wing Lee as evidence of Wing Lee’s liability for fraud, breach of contract, embezzlement and conversion.” (Id. at p. 7:12-13.) Lee Defendants argue that “these out of court statements will be used by Maxtrade to ‘prove the truth of the matters asserted in them’ which includes statements by Wing Lee purporting to state that some of the embezzled funds were transferred to the Lee Transferee Defendants.” (Id. at p. 7:14-16.) Lee Defendants assert that this statement of admission by Wing Lee may be admitted against Wing Lee as a “party admission” exception to the hearsay rule, but it is not admissible against the Lee Defendants as they were not the party to make this admission. (Id. at p. 7:22-27.)

Lee Defendants also argue that good cause exists to sever Plaintiff’s claims and hear the claims against Wing Lee first because “Plaintiff’s claims against the Lee Defendants are dependent upon Maxtrade, LLC’s proof of liability against Wing Lee – the failure of which will completely dispose of all claims against the Lee Defendants without the need to try any of the claims against them, saving the court and the parties substantial time and resources.” (Id. at p. 2:10-13.) Lee Defendants maintain that the convenience of witnesses will be substantially served because the Lee Defendants “have no testimony or evidence of any kind to present in support or defense of the claims being made by Maxtrade as against Wing Lee.” (Id. at p. 9:1-3.) Lee Defendants state that the witnesses and evidence presented by Maxtrade against Wing Lee will have no bearing on the claims made by or against the Lee Defendants. (Id. at p. 9:7-12.)

In opposition, Maxtrade argues that the motion should be denied because (1) Wing Lee’s admission is not inadmissible hearsay when used against the Lee Defendants because the admission qualifies as a declaration against interest; (2) even assuming the admission was inadmissible to prove the Lee Defendants received stolen funds, any prejudice to the Lee Defendants could be eliminated by a limiting instruction from the Court; (3) trying Maxtrade’s claims against Wing Lee and the Lee Defendants separately would create a risk of inconsistent judgments and waste judicial resources — not conserve them; and (4) severing the claims would not serve the convenience of witnesses because Maxtrade intends to call the same witnesses to establish Wing Lee’s liability as it does to establish the Lee Defendants’ liability. (Opp., p. 2:18-28.)

The claims asserted against the Lee Defendants are fraudulent transfer, violation of Business and Professions Code section 17200, and unjust enrichment. For the fraudulent transfer cause of action, Maxtrade will have to present evidence to the jury regarding the intent element, as Maxtrade will have to demonstrate that “a transfer by a debtor of property to a third person [was] undertaken with the intent to prevent a creditor from reaching that interest to satisfy its claim.” (See Yaesu Electronics Corp. v. Tamura (1994) 28 Cal.App.4th 8, 13.)

The Lee Defendants argue that “We anticipate that Maxtrade has and will continue to attempt to introduce these hearsay statements not only as to WING LEE, but also as evidence of the Lee Defendants' foundational liability. While the written admissions of WING LEE may be admitted as against WING LEE as a "party admission" exception to the hearsay rule, it is not admissible as against the Lee Defendants as a matter of law.” (Motion, p. 7:20-24.)

The Court currently does not know what evidence will be offered by either side and what objections will be made by the opposing parties. Of course, the Lee Defendants also don’t know what evidence Maxtrade intends to attempt to introduce, which is why they state that they “anticipate that Maxtrade . . . will . . . attempt to introduce” the Wing Lee declaration as against the Lee Defendants.)

Although the issue is not currently before the Court, the Court will assume for today’s hearing that Wing Lee’s Declaration is inadmissible as against the Lee Defendants. However, if the Wing Lee Declaration is introduced as against Wing Lee, the Court can issue a limiting instruction. There is no reason for this Court to believe that a jury could not follow such an instruction. Alternatively, the Court could admit a redacted version of the Wing Lee declaration that does not mention or implicate the Lee Defendants. Thus, the Court does not believe that the Lee Defendants would be prejudiced.

The Lee Defendants state in their Reply that

“the Opposition papers claim that "Wing Lee's liability to Maxtrade is undisputed." (See Opposition, page 11, line 21.) Inasmuch as Wing Lee likely won't testify, there's no reason to even have a jury for Plaintiff's case in chief against Wing Lee. There's no defense by Wing Lee. That case can be heard by the court with minimum time and minimal loss of judicial economy. Therefore, any loss of judicial economy caused by severance will be negligible.” (Reply, p. 8:17-22.)

However, the Lee Defendants cannot deprive Wing Lee of his constitutional right to a jury trial. Should both Wing Lee and Maxtrade decide that the allegations against Wing Lee can be tried to the Court, the Court agrees that “any loss of judicial economy caused by severance will be negligible.” However, the Court has not been presented with any such stipulation to waive a jury trial.

Barring such a stipulation, the Court does not believe that severance would lead to judicial economy. First, it appears that many of the Plaintiff’s witnesses will testify against both sets of defendants. Further, the Court reminds the parties that this case has been set for a 5-day jury trial. The Court believes that two separate trials – with two separate juries – would easily double the time for trial.

The Court DENIES the Lee Defendants’ motion to sever Plaintiff’s claims against co-defendant Wing Lee from all claims and counter-claims of the Lee Defendants.

Case Number: BC642490    Hearing Date: January 29, 2020    Dept: 34

SUBJECT: (1) Motion for Summary Judgment

Moving Party: Cross-Defendants Maxtrade, LLC and Jeff Ma

Resp. Party: Cross-Complainant Yee Hung Lee Pan

(2) Motion for Summary Judgment

Moving Party: Cross-Defendants Maxtrade, LLC and Jeff Ma

Resp. Party: Cross-Complainant Connie Lee

(3) Motion for Summary Judgment

Moving Party: Cross-Defendants Maxtrade, LLC and Jeff Ma

Resp. Party: Cross-Complainant Li Fan Lee

Cross-Defendants’ motions for summary judgment are DENIED.

PRELIMINARY COMMENTS:

Pursuant to California Rules of Court, rule 8.74(b)(2)(A), the format of documents filed electronically must be text-searchable while maintaining original document formatting.

Cross-Complainants have failed to comply with Rule 8.74(b)(2)(A) in that none of the documents they electronically filed were text-searchable. The Court directs the parties that they must comply with California Rules of Court regarding proper electronic filing.

BACKGROUND:

On December 1, 2016, Plaintiff Maxtrade, LLC, filed the instant action against Defendants Wing Lee, Li Fan Lee, and Yee Hung Lee Pan. On December 20, 2016, Plaintiff filed an amendment to complaint, replacing Doe 1 with Connie Lee. The matter was assigned to Department 74.

On January 5, 2017, Defendants Li Fan Lee, Pan Yee Hung Lee, and Connie Lee filed their answer. On January 13, 2017, Defendant Wing Lee filed an answer to the complaint.

On March 23, 2017, the Court set trial for December 4, 2017. On October 19, 2017, pursuant to a stipulation, the Court continued trial and all discovery cut-off dates to May 11, 2018. On April 17, 2018, pursuant to an ex parte application, the Court continued trial and all discovery cut-off dates to November 13, 2018.

On July 20, 2018, Plaintiff filed an amendment to complaint, replacing Doe 2 with Chiu Kwong Wong. On the same date, the Court granted Plaintiff’s ex parte application to file a first amended complaint, and Plaintiff filed the amended complaint that day. The FAC asserts claims for (1) Fraud; (2) Conversion; (3) Embezzlement; (4) Breach of Contract; (5) Fraudulent Transfer; (6) Bus. & Prof. Code § 17200; and (7) Unjust Enrichment. Plaintiff alleges Defendant Wing Lee, a former employee, embezzled hundreds of thousands of dollars from Plaintiff, and wrongfully transferred those funds to his parents (Defendants Li Fan Lee and Pan Yee Hung Lee) and sister (Connie Lee), in order to enrich themselves through various investments and real estate purchases. Plaintiff alleges Wing Lee has signed various acknowledgements, admitting to the embezzlement and agreeing to repay the funds, but has repeatedly breached the agreements and failed to make any repayments.

On August 23, 2018, Defendant Wing Lee filed an answer to the FAC. On August 24, Defendants Li Fan Lee, Pan Yee Hung Lee, and Connie Lee filed an answer to the FAC. Simultaneously, they filed a cross-complaint against Plaintiff Maxtrade and Plaintiff’s president, Jeff Ma, asserting causes of action for (1) Civil Extortion; and (2) Intentional Infliction of Emotional Distress. Cross-Complainants allege that they were tricked into meeting with Cross-Defendants about their son and brother’s alleged embezzlement, and that they were harassed and threatened by Cross-Defendants in that meeting, with Cross-Defendants threatening to report Cross-Complainants to the FBI if they did not immediately sign a settlement agreement acknowledging Wing Lee’s embezzlement, and agreeing to act as personal guarantors of his agreement to repay the settlement.

On September 26, 2018, Plaintiffs/Cross-Defendants Maxtrade and Ma filed a demurrer and motion to strike the cross-complaint. The matter was originally set for hearing on November 2, 2018. On October 30, 2018, it was continued by the Court to January 7, 2019.

On October 12, 2018, pursuant to a stipulation, the Court continued trial and all discovery cut-off dates to March 11, 2019.

On October 17, 2018, Plaintiff filed an amendment to complaint, replacing Doe 3 with July Trading, LLC.

On November 14, 2018, after a different judge began presiding in Department 74, a preemptory challenge was filed, and the matter was reassigned to Department 51. Another preemptory challenge was thereafter filed, and the matter was reassigned to Department 34.

On December 17, 2018, Defendant July Trading, LLC, only, filed a demurrer to the FAC, which was set to be heard on January 14, 2019. On December 31, 2018, rather than file an opposition, Plaintiff filed a second amended complaint. The SAC asserts the same causes of action as the FAC, but provides additional allegations as to July Trading.

On January 14, 2019, the Court took Defendant July Trading, LLC’s demurrer to the FAC of calendar as moot. The Court sustained Cross-Defendant’s demurrer to the first cause of action and overruled the demurrer to the second cause of action in the cross-complaint.

On February 21, 2019, the Court granted without prejudice Plaintiff’s motion for protective order prohibiting deposition of non-party Jason T. Yu.

On October 2, 2019, the Court denied Defendant Connie Lee’s motion to compel Plaintiff to provide further responses to Requests for Admissions, set one, and companion Form Interrogatories, set one, as to interrogatory 17.1.

On October 22, 2019, the Court denied Defendants Li Fan Lee, Yee Hung Lee Pan, Connie Lee, Chiu Kwong Wong, and July Trading, LLC’s motion for summary judgment and denied their motion for summary adjudication as to the fifth, sixth, and seventh causes of action.

On November 14, 2019, Cross-Defendants Maxtrade, LLC and Ma filed the instant three motions for summary judgment as to Cross-Complainants Li Fan Lee, Connie Lee, and Yee Hung Lee Pan.

ANALYSIS:

A. Legal Standard

The function of a motion for summary judgment is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil Procedure Section 437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (Code of Civ. Proc. § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense. To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

B. Request for Judicial Notice

Cross-Complainants request that the Court take judicial notice of Cross-Defendants’ answer to the cross-complaint.

This request is DENIED as superfluous. (Cal. Rules of Court, rule 3.110(d).) Any party that wishes to draw the Court’s attention to a matter filed in this action may simply cite directly to the document by execution and filing date. (See Cal. Rules of Court, rule 3.1110(d).)

C. Evidentiary Objections

Cross-Complainants object to paragraph 3 of the Jeff Ma declaration and Exhibit A to the Robert Hatem, Esq. declaration.

The Court SUSTAINS these two objections.

D. Procedural Objection Based on the Undernoticed Motions

The Court overrules Cross-Complainants’ objection to the motions for summary judgment based on the argument that they were undernoticed. Although the motions were undernoticed by one day, Cross-Complainants filed a substantive combined opposition to the motions and failed to demonstrate any prejudice from the undernoticing of the motions, and therefore waived their objection.

Code of Civil Procedure section 437c, subdivision (a)(2) provides that “[n]otice of the motion and supporting papers shall be served on all other parties to the action at least 75 days before the time appointed for hearing. . . . If the notice is served by facsimile transmission, express mail, or another method of delivery providing for overnight delivery, the required 75-day period of notice shall be increased by two court days.” Code of Civil Procedure section 1010.6, subdivision (a)(4) requires that two court days be added to the 75-day notice period for a summary judgment motion where the method of service is electronic service.

Electronic service of the motions was made on November 14, 2019. (See 11/22/19 Notice of Errata Regarding Proofs of Service.) The hearing is set for January 29, 2020; thus, the electronic service was required to be made by November 13, 2019. The Court finds that Cross-Defendants’ motions for summary judgment were electronically served one day late.

There is a substantial amount of case law indicating that a trial court lacks the authority to shorten time on a summary judgment/adjudication motion in advance (i.e., by effectively shortening time on a motion for summary judgment/adjudication). (See, e.g., Boyle v. CertainTeed Corp. (2006) 137 Cal.App.4th 645, 654-655; McMahon v. Sup. Ct. (2003) 106 Cal.App.4th 112, 117-118; Urshan v. Musicians' Credit Union (2004) 120 Cal.App.4th 758, 768.) However, the question of whether a trial court has the authority, after-the-fact, to hear a motion for summary judgment that was undernoticed where the opposing party files a substantive opposition and fails to demonstrate prejudice resulting from the undernoticing is less clear. (See Carlton v. Quint (2000) 77 Cal.App.4th 690, 697-698; Urshan v. Musicians' Credit Union (2004) 120 Cal.App.4th 758, 767-768.)

Here, as in Quint, the Court did not shorten the notice period on Cross-Defendants’ motions in advance. In Robinson v. Woods, as cited by Cross-Complainants, the Court of Appeal suggested that if a party does not oppose an undernoticed summary judgment motion on the merits, but instead files a response merely consisting of objections to the undernoticing, then the trial court has no basis for finding a waiver of the notice requirements and no right to hear the motion even in the absence of any showing of prejudice. (See Robinson v. Woods (2008) 168 Cal. App. 4th 1258, 1267-1268.)

In Robinson, the motion for summary judgment was served only 76 days prior to the hearing, rather than the required 80 days (75 days’ notice plus 5 days due to service by mail). The plaintiffs responded to the motion merely by arguing that the motion was untimely made, and did not argue the merits of the motion. (Id. at p. 1260.) The Court of Appeal held that the Court could not find a “Quint” waiver in the absence of a substantive opposition, and therefore the trial court could not hear the motion on the noticed date. The Court of Appeal also found that the trial court could not resolve the notice defect by anything less than a continuance of the hearing for the full period of notice (in that case, 75 days). (Id. at 1267-1268.) As a result, if Cross-Complainants had merely filed an objection to Cross-Defendants’ noticing of the motions without filing a substantive opposition, the Court would have had no authority to rule on Cross-Defendants’ motions.

However, here Cross-Complainants have filed a substantive opposition to Cross-Defendants’ motions: as a result, the question arises whether Cross-Complainants waived their objection to the undernoticing of the motion under Carlton v. Quint. Cross-Complainants do not make any request for a continuance of the hearing on the motion, or make any claim (much less any showing) of prejudice from the undernoticing of the motion.

The Court also notes that on January 7, 2020, the opposing party filed an ex parte to strike the Motions for Summary Judgment. The Court denied the ex parte, but indicated that it would continue the hearing on the ex parte if requested. Cross-complainants specifically rejected this accommodation to allow them to have the full 75 days to oppose the motion.

The Court finds that Cross-Complainants waived their objection based on the undernoticing of the motion, and that there is no prejudice to the Cross-Complainants for this one-day undernoticing. The Court will reach the substantive merits of Cross-Defendants’ motions.

E. Discussion of the Merits

Cross-Defendants bring three motions for summary judgment as to the intentional infliction of emotional distress (“IIED”) claim in the cross-complaint of Cross-Complainants Li Fan Lee, Connie Lee, and Yee Hung Lee Pan. (LFL Motion, pp. 1:27-2:2; CL Motion, pp. 1:27-2:2; YHLP Motion, pp. 1:27-2:2. [As each of the three motions are substantially the same, the Court will cite to the Li Fan Lee Motion (“LFL Motion”), unless indicated otherwise.]) Cross-Defendants argue that there exists no triable issues of material facts as to the IIED claim because: “(1) the alleged conduct was not extreme or outrageous, and therefore does not meet the high threshold required for [IIED] claims, and (2) all of the alleged statements are covered by [the] litigation privilege.” (LFL Motion, p. 2:3-9.)

a. Elements of the IIED Claim

“The elements of the tort of intentional infliction of emotional distress are: (1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff's suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant's outrageous conduct. Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Christensen v. Superior Court (1991) 54 Cal.3d 868, 903.) “Generally, conduct will be found to be actionable where the ‘recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, ‘Outrageous!’” (Cochran v. Cochran (1998) 65 Cal.App.4th 488, 494.)

“While the outrageousness of a defendant's conduct normally presents an issue of fact to be determined by the trier of fact, the court may determine in the first instance, whether the defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery.” (Trerice v. Blue Cross of California (1989) 209 Cal.App.3d 878, 883.) “Liability for intentional infliction of emotional distress does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities.” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1051.) Still, “[a]lthough it may be that mere insulting language, without more, ordinarily would not constitute extreme outrage [insulting language coupled with] aggravated circumstances” may be considered outrageous conduct. (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 499.) The relationship between the parties is significant when determining whether liability should be imposed. (Id. at 498, fn. 2.)

Cross-Defendants assert that “the entirety of Cross-Complainants’ IIED claim focuses on statements made in conjunction with attempts to settle a pre-litigation embezzlement claim, wherein alleged references to an FBI investigation were made, and potential consequences of such an investigation.” (LFL Motion, pp. 6:27-7:2.) Cross-Defendants argue that “it is clear from the context of the situation that the statements were made not to harm the emotional state of Cross-Complainants, but rather in the context of encouraging settlement to avoid a potential lawsuit.” (Id. at p. 7:2-4.) Cross-Defendants maintain that “the statements allegedly made to Cross-Complainants were clearly not persuasive, as Cross-Complainants did not execute the proposed settlement agreement.” (Id. at p. 7:4-6.) Further, Cross-Defendants argue that the reference made to a potential FBI investigation does not amount to “outrageous and extreme conduct” needed support an IIED claim. (Id. at p. 4:18-28.)

On or about November 1, 2016, and prior to the filing of the original complaint, Cross-Defendant Ma, president of Cross-Defendant Maxtrade, and Jason Yu, litigation counsel for Cross-Defendant Maxtrade, met at the office of Snell & Wilmer with Cross-Complainants and Wing Lee. (UMF No. 4 [citing to Ma Decl., ¶ 4, Cross-Complaint, ¶ 11].) At this meeting, Cross-Complainants assert that Cross-Defendant Jeff Ma and Jason Yu informed the Cross-Complainants that they would contact the FBI to investigate them, if they did not execute the proposed settlement agreement. (UMF No. 7 [citing Cross-Complaint, ¶ 15].)

Cross-Complainants declare that for more than 3 hours, Cross-Defendant Ma and Jason Yu threatened them that the FBI would seize their property and their businesses if Cross-Defendant Ma or Jason Yu called them and told them they were involved in the embezzlement. (CL Decl., ¶¶ 9-13; LFL Decl., ¶¶ 8-11; YHLP Decl., ¶¶ 8-11.) Cross-Complainants attest that during the meeting, Cross-Complainant Yee Hung Lee Pan became visibly ill from the stress and from the threats of Jason Yu and Cross-Defendant Ma stating that they intended to file false reports with the FBI about Cross-Complainants, and she nearly collapsed while begging Jason Yu to stop threatening them with criminal charges. (CL Decl., ¶ 11; YHLP Decl., ¶ 11; LFL Decl., ¶ 13.) During the meeting, Cross-Complainants state that Cross-Defendant Ma told Jason Yu to call the FBI and Jason Yu picked up the phone and started dialing the FBI to further intimidate Cross-Complainants. (CL Decl., ¶ 10; LFL Decl., ¶ 9; YHLP Decl., ¶ 9.)

Despite Cross-Complainants’ reactions to these threats during the meeting, Cross-Complainants declare that Cross-Defendant Ma and Jason Yu continued to threaten them with filing criminal complaints against them if they did not agree to pay Wing Lee’s debts owed to Cross-Defendant Maxtrade. (CL Decl., ¶ 11; YHLP Decl., ¶¶ 11-12.) Even after the meeting, Cross-Defendant Ma called Cross-Complainant Li Fan Lee to threaten again to have the FBI seize his home and business if Cross-Complainants Li Fan Li and Yee Hung Lee Pan did not sign a document promising to be personally liable for Wing Lee’s debts. (LFL Decl., ¶ 11; YHLP Decl., ¶ 12.)

Cross-Defendants have failed to carry their burden showing there are no triable issues of material fact as to the elements of extreme and outrageous behavior, and that they are entitled to judgment as a matter of law. As stated in the Opposition:

“Cross-Complainants were not debtors of cross-defendants, were known by cross-defendants not to have been involved in Wind Lee’s embezzlement, yet were threated that they had committed crimes and such crimes would subject them to seizure of their homes and business if they did not sign the document promising to pay for the debt of another which they had no legal obligation to pay. This conduct is unacceptable in our society – using fear and threats of criminal prosecution to extract money.” (Opposition, p. 6:24 – p. 7:2 [bolding omitted].)

A jury could reasonably find these facts to constitute extreme and outrageous conduct.

Cross-Defendants’ motions for summary judgment of the intentional infliction of emotional distress claim are DENIED.

b. Litigation Privilege

Cross-Defendants argue that the litigation privilege applies to the statements which form the basis of the IIED claim because the statements “were made in: (1) a judicial or a quasi-judicial setting (i.e. settlement conference), (2) by litigants or other participants (Jeff Ma and Maxtrade attorney Jason Yu), and (3) were to achieve the object of the litigation and/or (4) have some connection or logical relation to the action (alleged threats directly involve the embezzled funds, which form the basis for the subsequent lawsuit).” (LFL Motion, p. 9:22-28.)

Cross-Defendants identify the specific statements of the Cross-Complaint that support the IIED claim are as follows:

· “‘Wing Lee drove [Cross-Complainants] to the law offices of Snell & Wilmer where they were taken into a conference room.’ (Cross-Complaint, Pg. 3, Ln. 15-16.)

· ‘Thereafter, while in the conference room, attorney Jason Yu, who speaks Mandarin, introduced himself as Jeff Ma and Maxtrade’s lawyer. Attorney Jason Yu then handed a settlement agreement, written in English, to Wing Lee and asked Wing Lee to give it to his father ([Cross-Complainant] Li Fan Lee) and mother ([Cross-Complainant] Yee Hung Lee Pan) to sign.’ (Cross-Complaint, Pg. 3, Ln. 17-20.)” (Id. at p. 10:3-9.)

Cross-Defendants argue that “all of the statements allegedly said to Cross-Complainants were made in the context of a pre-litigation settlement meeting (meeting at Snell & Wilmer regarding the signature of a settlement agreement), or pre-litigation settlement discussions.” (Id. at p. 10:11-13.) Cross-Defendants maintain that “the alleged statements which purportedly caused emotional upset are directly related to the issues in the underlying dispute, i.e., alleged Fraud, Conversion and Embezzlement, and, therefore, fall squarely within the litigation privilege protections.” (Id. at p. 10:13-16.) Cross-Defendants argue that “because all of the communications at issue were part and parcel to prelitigation settlement discussions, there is a complete bar to any action against Cross-Defendants for IIED, based on statements uttered in those discussions.” (Id. at p. 10:16-18.)

In opposition, Cross-Complainants argue that because Cross-Defendants have not raised the litigation privilege in their answer, their motion for summary judgment based on the litigation privilege must be denied as Cross-Defendants have waived this defense. (Opp., p. 8:7-13 [citing Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 812-813].)

i. Cross-Defendants Have Waived the Litigation Privilege

“The answer to a [cross-]complaint shall contain . . . [a] statement of any new matter constituting a defense.” (Code Civ. Proc., §431.30, subd. (b)(2).) “ ‘The phrase “new matter” refers to something relied on by a defendant which is not put in issue by the plaintiff. [Citation.] Thus, where matters are not responsive to essential allegations of the complaint, they must be raised in the answer as “new matter.”’ ” (Quantification, supra, 201 Cal.App.4th at 812 [citing State Farm Mut. Auto. Ins. Co. v. Superior Court (1991) 228 Cal.App.3d 721, 725].)

“Such ‘new matter’ is also known as ‘an affirmative defense.’” (Id. at p. 812 [citing Advantec Group., Inc. v. Edwin’s Plumbing Co., Inc. (2007) 153 Cal.App.4th 621, 627].) “A party who fails to plead affirmative defenses waives them.” (Id. at p. 813 [citing California Academy of Sciences v. County of Fresno (1987) 192 Cal.App.3d 1436, 1442].)

The litigation privilege is an affirmative defense and the party asserting the privilege carries the burden of establishing the preliminary facts upon which the privilege rests. (Edward v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 37.) “The litigation privilege, codified at Civil Code section 47, subdivision (b), provides that a publication or broadcast made as part of a judicial proceeding is privileged. This privilege is absolute in nature, applying to all publications, irrespective of their maliciousness. The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that [has] some connection or logical relation to the action. The privilege is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards.” (Action Apartment Ass'n, Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241 [internal citations and quotations omitted].)

In their answer to the cross-complaint, Cross-Defendants assert the following affirmative defenses:

(1) failure to state a cause of action;

(2) estoppel;

(3) failure to mitigate damages;

(4) statute of limitations;

(5) third-party conduct;

(6) no punitive damages;

(7) no proximate cause;

(8) permissible conduct;

(9) community standards;

(10) good faith;

(11) waiver;

(12) laches;

(13) unclean hands;

(14) uncertainty;

(15) speculative damages;

(16) consent;

(17) pre-existing illness or injury;

(18) no outrageous conduct;

(19) no severe emotional suffering;

(20) lack of intent to cause emotional distress;

(21) actual and proximate causes;

(22) no reckless disregard;

(23) additional defenses that cannot be articulated due to Cross-Complainants’ failure to particularize their claims; and

(24) reserves right to amend answer. (01/30/19 Answer to Cross-Complaint.)

Cross-Defendants failed to plead the affirmative defense of the litigation privilege in their answer, thus have waived this defense and are barred from asserting in this motion. (See Quantification, supra, 201 Cal.App.4th at 813; see also 01/30/19 Answer to Cross-Complaint.)

ii. On its Merits, the Litigation Privilege Does not Apply

The Court also finds that the litigation privilege does not apply to the facts of this case. Although some pre-litigation communications can fall within the litigation privilege, the communications at issue did not relate to the contemplated civil action before the Court. Here, the telephone call and meeting that occurred in Cross-Defendants’ counsel’s office with Cross-Complainants, were made prior to the commencement of this civil lawsuit and was not regarding Cross-Complainants’ civil liability that is the subject of this case. Instead, the pre-litigation meeting and phone call was to threaten to inform the FBI to commence an investigation into the criminal liability for the embezzlement. (See Ma Decl., ¶ 4; CL Decl., ¶¶ 9-13; LFL Decl., ¶¶ 8-11, 13; YHLP Decl., ¶¶ 8-12; Cross-Complaint, ¶¶ 11, 15.) Further, the Fraud, Conversion and Embezzlement claims in the FAC are not even alleged against these Cross-Complainants. In fact, there are no allegations in the FAC that would subject these Cross-Complainants to criminal liability.

The litigation privilege does not bar Cross-Complainants’ IIED claim.

The Court DENIES Cross-Defendants’ motions for summary judgment based on the litigation privilege.