Case Name: Levania Yue Juan Cheung v. Kent Kin Sun Tse, et al.
Case No.: 1-13-CV-252171

This is an action to recover an alleged debt. On November 17, 2014, the Court denied plaintiff Levania Yue Juan Cheung’s (“Plaintiff”) motion for summary adjudication of her third and fourth causes of action for restitution and money had and received. The Court found that Plaintiff met her initial burden to demonstrate that defendant Kent Kin Sun Tse (“Defendant”) owed her $40,000. However, Defendant presented a declaration stating that when Plaintiff, the mother of his children, gave him the $40,000, she never indicated that she would want the money back. This evidence suggested that the $40,000 was a gift, and raised a triable issue of material fact as to both claims at issue in the motion for summary adjudication.

On November 26, 2014, Plaintiff filed a motion for reconsideration of the Court’s order. Plaintiff asserts that on November 10, 2014, Defendant produced an “I.O.U.” that proves that the $40,000 was not a gift. (Code Civ. Proc., § 1008, subd. (a).)

I. Requirements of Section 1008

Code of Civil Procedure section 1008 represents the Legislature’s attempt to regulate what the Supreme Court has referred to as “repetitive motions” that call upon a court to revisit questions that it has already addressed. (See Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 Cal.App.4th 868, 885.) It “requires that any such motion be (1) filed within 10 days after service upon the party of written notice of entry of the order of which reconsideration is sought, (2) supported by new or additional facts, circumstances or law, and (3) accompanied by an affidavit detailing the circumstances of the first motion and the respects in which the new motion differs from it.” (Ibid.)

Here, Plaintiff satisfies the first and third requirements, and Defendant does not argue otherwise. With respect to the second requirement, motions for reconsideration are restricted to circumstances where a party offers the court some fact or circumstance not previously considered, and some valid reason for not offering it earlier. (See Baldwin v. Home Sav. of America (1997) 59 Cal.App.4th 1192, 1198.) The burden under section 1008 “is comparable to that of a party seeking a new trial on the ground of newly discovered evidence: the information must be such that the moving party could not, with reasonable diligence, have discovered or produced it at the trial.” (New York Times Co. v. Super. Ct. (Wall St. Network, Ltd.) (2005) 135 Cal.App.4th 206, 212-213.)

The document that Plaintiff characterizes as an “I.O.U.” is an unexecuted agreement between the parties entitled a “Mutual Release Agreement.” (Decl. of Levania Yue Juan Chen ISO Mot., Ex. 2.) It was produced by Defendant well after the Court had taken Plaintiff’s motion under submission. As urged by Defendant, Plaintiff acknowledges that she first saw this document on July 17, 2013. (See Chen Decl., ¶ 4.) However, in December 2013, Plaintiff served Defendant with a request for production seeking “[t]he ‘I.O.U.’ which Defendant showed to Plaintiff in late July or early August 2013 which memorialized Plaintiff’s September 2011 loan of $40,000 to Defendant.” (See Decl. of Andrew Steinfeld ISO Mot., ¶ 12, Ex. 3, Request No. 6.) Defendant responded by objecting that the request was vague, ambiguous, and unintelligible due to its use of the term “I.O.U.” and stating that no such document was in his possession or control. (See Steinfeld Decl., ¶ 12, Ex. 4, Response to Request No. 6.) Defendant contends that the disputed document is not an “I.O.U.,” and asserts that he did not produce it in response to Plaintiff’s request because he did not understand the request.

The Court seriously doubts this assertion. Given that Defendant must have known that he showed Plaintiff the “Mutual Release Agreement” and specifically objected to Plaintiff’s use of the term “I.O.U.” in her request for production, it appears likely that Defendant knew that the request referred to the “Mutual Release Agreement.” However, rather than producing that document while objecting to its characterization as an “I.O.U.,” Defendant stated that he did not have the document in his possession or control. The conclusion that Defendant knew that Plaintiff was seeking the “Mutual Release Agreement” is further supported by Plaintiff’s February 2014 production of instant messages between the parties discussing the agreement, in which Plaintiff specifically referred to it as an “I.O.U.,” and Defendant’s service of requests for admissions that discussed the agreement in specific terms and referred to it as an “I.O.U.” (See Steinfeld Decl., ¶ 13, Ex. 6, Response to Request No. 10, ¶ 15, Ex. 7, Request Nos. 89-94.)

Regardless of the truth of Defendant’s assertion, the issue for the Court is whether Plaintiff exercised reasonable diligence in attempting to discover the document. While it may have been prudent to use a more neutral term in her request for production, Plaintiff was entitled to rely on Defendant’s statement that he did not have such a document in his possession or control. Nevertheless, she continued to follow up on her request, including by serving an abundantly clear supplemental request for production seeking “[t]he ‘I.O.U.’ entitled ‘Mutual Release Agreement’ … as set forth in Defendant’s Request for Admissions …,” while Defendant continued to avoid acknowledging his possession of the document until Plaintiff prepared to file a motion to compel. (See Steinfeld Decl., ¶¶ 16-19, Exs. 8-12.) Plaintiff was thus reasonably diligent in her efforts to obtain the agreement.
Finally, Defendant argues that there is no evidence that the $40,000 referenced by the “Mutual Release Agreement” is the same $40,000 that Plaintiff either loaned or gifted to Defendant, and the document is consequently “collateral” to the motion to summary adjudication decided by the Court. (See Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500 [“a ‘new’ or ‘different’ fact or circumstance wholly collateral to the merits of the initial motion” is insufficient to warrant reconsideration].) However, Plaintiff’s declaration stating that the “Mutual Release Agreement” pertains to the $40,000 she lent Defendant is sufficient evidence on this point. (See Chen Decl., ¶ 4.)
In light of the above, Plaintiff has satisfied the threshold requirements of Code of Civil Procedure section 1008, subdivision (a), and her motion for reconsideration is GRANTED.
II. Analysis

Having found that the “Mutual Release Agreement” constitutes new evidence concerning the $40,000 at issue, the Court must determine whether its earlier ruling should be modified in light of this document.

As an initial matter, Defendant correctly argues that the “Mutual Release Agreement” is an inadmissible settlement offer. (See Evid. Code, § 1152 [settlement offers and negotiations inadmissible to prove liability].) On its face, the document states that it “is intended to settle any and all … claims [extraneous to child custody, visitation, and support] that [Plaintiff] may have against [Defendant], and any and all such claims that [Defendant] may have against [Plaintiff], including, but not limited to, claims arising from contract ….” (Chen Decl., Ex. 2, p. 1.) Plaintiff does not dispute that the “Mutual Release Agreement” is a settlement offer, but argues that the document is nonetheless admissible because she offers it to impeach Defendant’s testimony that the $40,000 was a gift, rather than to prove Defendant’s liability. However, the ultimate purpose of this “impeachment” is to prove Defendant’s liability for the $40,000; Plaintiff cannot avoid the application of section 1152 by couching her argument in terms of impeachment. (See C & K Engineering Contractors v. Amber Steel Co. (1978) 23 Cal.3d 1, 13 [statements made during settlement negotiations that would have impeached a witness’s testimony were inadmissible under section 1152].)

Furthermore, even if the Court considered the “Mutual Release Agreement,” it does not reflect an admission by Defendant that he owed Plaintiff $40,000. In fact, the agreement expressly provides that it “is not to be construed as an admission on the part of either party regarding any of the facts or circumstances of their relationship. Each party expressly denies any such liability or wrong doing.” (Chen Decl., Ex. 2, p. 2.) While the agreement may lend some support to Plaintiff’s argument that the $40,000 was a loan, on summary judgment, it would be improper for the Court to weigh this evidence against Defendant’s testimony that Plaintiff never indicated that the money was a loan. (See Melorich Builders v. Super. Ct. (Serabia, et al.) (1984) 160 Cal.App.3d 931, 935 [the court does not weigh evidence on summary judgment].)

In light of the above, the Court reaffirms its order denying Plaintiff’s motion for summary adjudication. (See Corns v. Miller (1986) 181 Cal.App.3d 195, 202 [“If the requirements [of section 1008] have been met to the satisfaction of the court but the court is not persuaded the earlier ruling was erroneous, the proper course is to grant reconsideration and to reaffirm the earlier ruling.”].)