Case Name: Hua Lin v. Cindy Cheung aka Suet Ying Lau, et al.
Case No.: 2015-1-CV-276321

Motion for Summary Judgment to the Second Amended Complaint by Defendants Cindy Cheung aka Suet Ying Lau, Tony Cheung, and Maxim Best Corporation

Factual and Procedural Background

This action arises out of a dispute between Hua Lin (“Plaintiff”) and his former employer defendant Maxim Best Corporation (“Maxim”), which is a grocery store owned and operated by defendants Cindy Cheung (aka Suet Ying Lau) and Tony Cheung. According to the allegations in the Second Amended Complaint (“SAC”), Maxim failed to provide Plaintiff with overtime pay, rest breaks, and wage statements during his employment there. (SAC, ¶¶ 9-23.) Cindy and Tony Cheung also failed to return shares of Maxim stock to him, which he temporarily transferred to them during the pendency of his divorce. (Id. at ¶¶ 31-35.) Plaintiff asserts causes of action against Maxim for: (1) failure to pay overtime; (2) failure to provide rest breaks; (3) failure to provide wage statements; (4) unfair business practices; and (5) fraudulent conveyance. Plaintiff additionally asserts a cause of action against Cindy and Tony Cheung for fraudulent conveyance.

On October 17, 2016, Plaintiff dismissed the first, second, third, and fourth causes of action without prejudice. Thus, the only viable claim is the cause of action for fraudulent conveyance.

Motion for Summary Judgment

Currently before the Court is the motion for summary judgment to the SAC by defendants Maxim, Cindy and Tony Cheung (collectively, “Defendants”). (Code Civ. Proc., § 437c.) Defendants filed a request for judicial notice in conjunction with the motion. Plaintiff filed written opposition. Defendants filed reply papers and objections to evidence. Trial is set for May 7, 2018.

Request for Judicial Notice

In support of the motion, Defendants request judicial notice of the following: (1) the Court’s docket in this case showing the action was initiated on February 2, 2015 (Exhibit 1); (2) the operative SAC filed on December 3, 2015 (Exhibit 2); (3) a copy of Maxim’s Articles of Incorporation filed with the Secretary of State of California on October 15, 1997 (Exhibit 3); and (4) the Court’s docket in the family law case of Hua Lin v. Yu Yun Ou-Yang (2002-1-FL-109368) initiated on October 2, 2002 and finalized on June 17, 2003 (Exhibit 4).

The request for judicial notice is GRANTED IN PART and DENIED IN PART. The request is granted with respect to Exhibits 1 and 2 as these are records of the superior court under Evidence Code section 452, subdivision (d). The request is denied as to Exhibits 3 and 4 as these materials are not relevant in resolving issues raised by the motion for summary judgment. (See Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 [a court may take judicial notice only of “those matters which are relevant to the issue at hand”].) In reply, Defendants request judicial notice of the Court’s Order denying Plaintiff’s motion for leave to file a SAC. (See Request for Judicial Notice ISO Defendants’ Reply at Exhibit 1.) The Court also denies this request which is not relevant in resolving the motion for summary judgment.

Defendants’ Evidentiary Objections

In reply, Defendants filed objections to evidence submitted by Plaintiff in opposition to the motion. The Court SUSTAINS Objection No. 12. The Court declines to rule on the remaining objections which are not material in resolving issues raised by the motion for summary judgment. (See Code Civ. Proc., § 437c, subd. (q) [in granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion].)

Legal Standard

Summary judgment is properly granted when no triable issue exists as to any material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A defendant moving for summary judgment has met his or her burden of showing a cause of action has no merit if the defendant has shown that one or more elements of the plaintiff’s cause of action cannot be established. (Code Civ. Proc., § 437c, subd. (p)(2).) “[T]he defendant bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact. [Citation.] If the defendant carries the burden of production, the burden shifts to the plaintiff to make his or her own prima facie showing of the existence of a triable issue of fact.” (McGonnell v. Kaiser Gypsum Co. (2002) 98 Cal.App.4th 1098, 1103.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 [fn. omitted].) The evidence in favor of the party opposing the motion must be liberally construed, and all doubts concerning the evidence must be resolved in favor of that party. (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 460.)

Fifth Cause of Action: Fraudulent Conveyance

Defendants seek an order granting summary judgment on the following grounds: (1) Plaintiff has no evidence to establish a claim for fraudulent conveyance; and (2) the fifth cause of action is barred by the statute of limitations.

To determine whether Plaintiff has evidence to establish a claim for fraudulent conveyance, the Court must first examine the pleadings. (See Hilton K. v. Greenbaum (2006) 144 Cal.App.4th 1406, 1412 [“[A] summary judgment motion is directed to the issues framed by the pleadings.”]; see also Turner v. State of California (1991) 232 Cal.App.3d 883, 891 (Turner) [“The pleadings delimit the issues to be considered on a motion for summary judgment.”].) In the fifth cause of action, Plaintiff alleges he was issued 25% of Maxim stock on June 1, 2000. (SAC, ¶ 32.) On September 1, 2006, Plaintiff claims that defendant Tony Cheung suggested to him that he return his shares because of Plaintiff’s pending divorce. (Id. at ¶ 33.) It was understood that Plaintiff’s shares would be returned to him at a later date. (Ibid.) Plaintiff alleges that Cindy and Tony Cheung refused to return his 25% interest in Maxim stock which was fraudulently transferred to defendants in early 2013. (Id. at ¶ 35.)

Defendants argue that Plaintiff has no evidence to establish any fraudulent promise to support the fifth cause of action. In support, Defendants provide an excerpt from Plaintiff’s deposition testimony containing the following exchange between Plaintiff and defense counsel:

“Q: Is it correct that in 2006 you wanted to return outstanding shares of Maxim back to the corporation?

A: No, that’s not accurate, because I haven’t seen this document before.

Q: Well, setting aside the document, whether you’ve seen the document or not, I’m asking you whether it was true in 2006 or around that time that you wanted to return your ownership interest to Maxim to the company.

A: There was no such thing.

Q: Did you ever have a discussion with Tony or Cindy about that?

A: No.

Q: You’ve never discussed this topic with either Tony or Cindy; is that correct?

A: Correct.”

(See Defendants’ Separate Statement of Undisputed Facts at No. 14 [Plaintiff’s Depo at p. 99:8-22].)

Based on this evidence, Plaintiff admitted during deposition that he never had a discussion with defendants Tony or Cindy Cheung regarding the return of his Maxim shares to the company. Having done so, Defendants meet their initial burden in showing that Plaintiff has no evidence establishing a false promise to support the fifth cause of action. The burden now shifts to Plaintiff to raise a triable issue of fact.

In opposition, Plaintiff fails to even address his deposition testimony cited by Defendants in the moving papers. Instead, Plaintiff urges the Court to accept his declaration signed under penalty of perjury which provides that defendant Tony Cheung made a false promise to him regarding the return of his Maxim shares to the company. (See Plaintiff’s Declaration at ¶¶ 4-5.) However, the law is clear in California that “[a]dmissions or concessions made during the course of discovery govern and control over contrary declarations lodged at a hearing on a motion for summary judgment.” (Visueta v. General Motors Corp. (1991) 234 Cal.App.3d 1609, 1613; see Archdale v. American Internat. Specialty Lines Ins. Co. (2007) 154 Cal.App.4th 449, 473 [“Where a party’s self-serving declarations contradict credible discovery admissions and purport to impeach that party’s own prior sworn testimony, they should be disregarded.”]; see also Rivera v. Southern Pacific Transportation Co. (1990) 217 Cal.App.3d 294, 299 [“Where a party makes an admission or concession during discovery, the trial court is entitled to find no triable issue as to the fact conceded.”].) Given the state of the law, the Court concludes that Plaintiff’s sworn deposition testimony controls over his contrary declaration filed in opposition to the motion.

In addition, Plaintiff disputes material fact no. 14 in the separate statement by citing to evidence and exhibits from the Declaration of Vikram Subramanian. (See Plaintiff’s Disputed Fact at No. 14.) However, as the reply papers point out, Plaintiff did not file and serve this declaration in support of his opposition. (See Reply at p. 6, fn. 1.) The Court notes also that the declaration and supporting exhibits are not contained on the proof of service attached to the opposition. Therefore, such evidence is not properly before the Court and thus cannot be considered as part of Plaintiff’s opposition. (See Defendants’ Evidentiary Objection at No. 12.)

Accordingly, Plaintiff fails to raise any triable issue of material fact to defeat the motion and summary judgment is therefore warranted. (See Turner, supra, 232 Cal.App.3d at p. 891 [“A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff’s asserted causes of action can prevail.”].) In light of this ruling, the Court declines to consider the secondary argument based on the statute of limitations.

Disposition

The motion for summary judgment is GRANTED.

After Defendants have served written notice of entry of this order signed by the Court, Defendants shall submit a proposed judgment.

The Court will prepare the Order.

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