Yang v. Hsiao CA2/2

Filed 2/22/21 Yang v. Hsiao CA2/2

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has not been certified for publication or ordered published for purposes of rule 8.1115.


                         SECOND APPELLATE DISTRICT

                                        DIVISION TWO

 SHIN P. YANG,                                                    B302443

           Plaintiff, Cross-defendant                             (Los Angeles County
           and Appellant,                                         Super. Ct. No. BC648006)


 et al.,

           Defendants, Cross-
           complainants and

     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
     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.
       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 San

Gabriel. 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 and

Hsiao 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 on

November 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 describing

Hang’s experience with Hsiao inducing him to sign the
       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 with

prospective 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
litigation costs advanced by Yang in the Hang action, and
$100,000 in punitive damages against Hsiao, individually and as
Syiau’s agent.
       This appeal and cross-appeal followed.
I.     Interference With Contract
       Hsiao contends that no evidence supported the award of
damages for intentional interference with contract. Where a
party challenges the sufficiency of the evidence to support a
judgment, “we apply the substantial evidence standard of review.
[Citations.] In applying this standard, we ‘view the evidence in
the light most favorable to the prevailing party, giving it the
benefit of every reasonable inference and resolving all conflicts in
its favor.’ ” (Zagami, Inc. v. James A. Crone, Inc. (2008) 

160 Cal. App. 4th 1083

, 1096.) We review claims of law, and the
application of law to facts, de novo. (Yumori-Kaku v. City of
Santa Clara (2020) 

59 Cal. App. 5th 385

, 409–410.) On review, we
conclude that there was substantial evidence to support the
judgment and that the trial court did not err in concluding that

      1   Hang died before trial and was dismissed from the case.

Hsiao intentionally interfered with the contract between Yang
and his client Hang.
       A.     Relevant Legal Principles
       The elements of a cause of action for intentional
interference with contractual relations are (1) a valid contract
between the plaintiff and a third party; (2) the defendant’s
knowledge of this contract; (3) the defendant’s intentional acts
designed to induce a breach or disruption of the contractual
relationship; (4) actual breach or disruption of the contractual
relationship; and (5) resulting damage. (Ixchel Pharma, LLC v.
Biogen, Inc. (2020) 

9 Cal. 5th 1130

, 1141 (Biogen).)
       Our Supreme Court has recently held that actions for
intentional interference with at-will contracts also require some
“independent wrongful act” apart from just the interference with
the contract itself, as is required for the related tort of intentional
interference with prospective economic advantage. 

(Biogen, supra

, 9 Cal.5th at pp. 1140–1148.) This is because, “[l]ike
parties to a prospective economic relationship, parties to at-will
contracts have no legal assurance of future economic relations.
[Citation.] An at-will contract may be terminated, by its terms,
at the prerogative of a single party, whether it is because that
party found a better offer from a competitor, because the party
decided not to continue doing business, or for some other reason.
And the other party has no legal claim to the continuation of the
relationship. The contracting parties presumably bargained for
these terms, aware of the risk that the relationship may be
terminated at any time. At-will contractual relations are thus
not cemented in the way that a contract not terminable at will
is.” (Id. at p. 1147.)

       B.    Independent Wrongful Act Requirement
       Hsiao contends that Biogen’s independent wrongful act
requirement is applicable to actions for interference with
attorney contingent fee agreements because the client can
terminate the agreement for any reason at any time. (See
Fracasse v. Brent (1972) 

6 Cal. 3d 784

, 790 [“a client should have
both the power and the right at any time to discharge his
attorney with or without cause”].)
       However, Biogen does not specifically address contingent
fee agreements, and longstanding Supreme Court authority not
discussed or repudiated by Biogen states that “[a]n attorney’s
interest in his contingent fee agreement is greater than that of a
party to a contract terminable at will, as to which it has been held
that an intentional and unjustifiable interference is actionable.”
(Herron v. State Farm Mut. Ins. Co. (1961) 

56 Cal. 2d 202

, 206,
italics added (Herron) [holding that an action may lie for
intentional interference with an attorney’s contingent fee
agreement under then-existing rule which did not distinguish
between intentional interference with contract and intentional
interference with prospective economic advantage].)2 Contingent
fee attorneys have an interest in their reasonable fees up to the
point of termination of their service by the client (Fracasse v.

Brent, supra

, 6 Cal.3d at p. 792) and an interest in their
percentage fee that accrues when settlement or recovery occurs

      2 As noted in Biogen, only since our Supreme Court’s
decision in Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995)

11 Cal. 4th 376

has there been “ ‘a sharpened distinction between
claims for the tortious disruption of an existing contract and
claims that a prospective contractual or economic relationship
has been interfered with.’ ” 

(Biogen, supra

, 9 Cal.5th at p. 1142.)

(ibid.)—a constructive attorney lien that provides “a security
interest in the proceeds of the litigation” (Isrin v. Superior Court
of Los Angeles County (1965) 

63 Cal. 2d 153

, 158). Given these
interests of an attorney party to a contingent fee agreement (and
such agreement’s nonreciprocal nature, in that the attorney may
not terminate at will), Yang contends that Biogen’s independent
wrongful act requirement for at-will contracts is not applicable to
actions for interference with attorney contingent fee agreements.
We conclude it appears to be an open question whether an
independent wrongful act is required for interference with an
attorney’s contingent fee agreement post-Biogen.
         However, we need not determine whether an independent
wrongful act is in fact required because in any event Hsiao’s
failure to jointly pay the settlement to Yang along with his client
was a sufficient independent wrongful act.
         “ ‘[A]n act is independently wrongful if it is unlawful, that
is, if it is proscribed by some constitutional, statutory, regulatory,
common law, or other determinable legal standard.’ ” 

(Biogen, supra

, 9 Cal.5th at p. 1142, quoting Korea Supply Co. v. Lockheed
Martin Corp. (2003) 

29 Cal. 4th 1134

, 1159.) Here, the settlement
by its own terms directed that the settlement funds be “jointly
payable” to Hang and his attorney—i.e. Yang—within one week.
Where the terms of a settlement agreement “ ‘ “necessarily
require the promisor to confer a benefit on a third person, then
the contract, and hence the parties thereto, contemplate a benefit
to the third person.” ’ ” (Provost v. Regents of University of
California (2011) 

201 Cal. App. 4th 1289

, 1299.) Third-party
beneficiaries may sue for breach of contract under contracts that
have a “motivating purpose” of benefiting them (Goonewardene v.
ADP, LLC (2019) 

6 Cal. 5th 817

, 821), and “broken promises of

future conduct” may be actionable for intentional
misrepresentation, as in an action for deceit based on a false
promise. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 

2 Cal. App. 4th 153

, 158–159; see Civ. Code, § 1710, subd. (4) [deceit
is “[a] promise, made without any intention of performing it”].)
       By paying the entire sum of $20,000 to Hang in cash when
he signed the settlement agreement, Hsiao plainly indicated that
she had no intention of paying Yang any amount of the
settlement in the future. We conclude that Hsiao’s failure to
jointly pay Yang along with Hang was hence an independently
wrongful act proscribed by law, which affected Yang as a third-
party beneficiary of the settlement agreement. Because we
conclude that this act alone was independently wrongful, we need
not determine whether any other acts by Hsiao constitute an
independent wrongful act.
       C.     Valid Contract, Knowledge of Contract, and
              Intentional Acts Disrupting It
       Substantial evidence supports the next elements of
intentional interference with contract. Hsiao conceded at trial
that the retainer agreement was a valid contract between Yang
and Hang and that at the time of the settlement agreement she
knew Hang was represented by Yang.3 Hsiao argues that she
was unaware of the precise details of their attorney-client
agreement and was primarily pursuing her own interests, but a
plaintiff in an intentional interference with contract action need
not establish that the primary purpose of the defendant’s actions
was to disrupt the contract. Rather, interference is established
even where “ ‘the actor does not act for the purpose of interfering

      As the trial court noted, Hsiao evaded admitting that she
knew Hang was represented until her response brief at trial.

with the contract or desire it but knows that the interference is
certain or substantially certain to occur as a result of his [or her]
action.’ ” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 

19 Cal. 4th 26

, 56, quoting Rest.2d Torts, § 766, com. j, p. 12.) Here,
Hsiao’s acts were intentional and designed to induce a breach or
disruption of the contractual relationship between Hang and
Yang. She concedes that she approached Hang with the
intention of obtaining a settlement; as discussed, she obtained his
signature through the independent wrongful act of
misrepresenting the nature of the document to a financially
vulnerable individual and executing a document promising joint
payment to Hang and his attorney—which she never jointly
delivered to Yang.
      We conclude there is substantial evidence that Hsiao knew
that a signed settlement would interfere with Hang’s agreement
for Yang to litigate his wage and hour case, and that not jointly
paying as promised in the agreement would interfere with their
financial agreement, whatever the details might be.
      Hsiao argues that she did not actually interfere with their
contractual relationship because Yang continued representing
Hang for many months after the settlement agreement.
However, Yang’s continued efforts on behalf of Hang until August
2016 were because he was unaware there had been any
settlement because of the confounding effect on Hang of Hsiao’s
misrepresentations as well as Hsiao’s failure to jointly pay Yang
under the settlement, which would have alerted him to its
existence. Thereafter, he worked to try to dismiss the settlement
and enforce the default judgment on behalf of his client, until
Hang, presumably under Hsiao’s coaching, dismissed his action
and substituted in as his own attorney in January 2017. We

conclude that there is sufficient evidence that their contractual
relationship was significantly disrupted by Hsiao’s actions. “The
plaintiff need not allege an actual breach, but only interference
with or disruption of his or her contractual relations.” (LiMandri
v. Judkins (1997) 

52 Cal. App. 4th 326

, 344.)
       D.    The Trial Court’s Actual Damages Award Was
       Hsiao levies a variety of arguments against the trial court’s
finding of damages and damages award. Hsiao contends that the
trial court erroneously awarded Yang contract damages in a tort
action; erred in awarding damages based on Yang’s anticipated
contingency fee; failed to consider the effect of the settlement,
amended complaint, and Hang’s dismissal with prejudice of the
underlying action; and failed to follow Judge Matz’s order finding
the prior default judgment to be void.
       We find each of Hsiao’s contentions unavailing.
       As Hsiao concedes, an attorney may bring a damage claim
against a third party who induces the attorney’s client to
terminate the attorney-client relationship by unlawful means,
despite the client’s unilateral right to terminate the agreement at
any time. (See 

Herron, supra

, 56 Cal.2d at p. 206; Abrams & Fox,
Inc. v. Briney (1974) 

39 Cal. App. 3d 604

, 608.) In Fracasse v.

Brent, supra


6 Cal. 3d 784

, our Supreme Court held that “a
discharged attorney” is entitled to “the reasonable value of the
services he has rendered up to the time of discharge. In doing so,
we preserve the client’s right to discharge his attorney without
undue restriction, and yet acknowledge the attorney’s right to
fair compensation for work performed.” (Id. at p. 791.) This
entitlement, while based in contract, can support damages for
two different causes of action: Although an attorney’s action

against his client sounds in contract—“whether it be upon the
written contingency agreement or on the quasi-contractual
obligation to pay the reasonable value of services rendered before
the breach,” “[t]he present action is in tort, seeking damages
against a third party for wrongfully inducing breach of a valid
attorney-client relationship.” (Trembath v. Digardi (1974) 

43 Cal. App. 3d 834

, 837.) Contract damages were not awarded here.
       The trial court also did not err by accepting the default
judgment in the Hang action as the proper measure of damages.
“[A]n attorney who is wrongfully discharged is generally entitled
to the same amount of compensation as if he had completed the
contemplated services.” (

Herron, supra

, 56 Cal.2d at p. 205; see
Little v. Amber Hotel Co. (2011) 

202 Cal. App. 4th 280

, 304
[defendant liable for all harm flowing from its conduct in
interfering with attorney’s retainer agreement].) Here, Yang did
complete his contemplated services and obtained a substantial
judgment for his client. The settlement, as discussed, was
procured through an independently wrongful act, through no
work of Yang’s, thus provides no alternate basis for measure of
his damages. Although Yang presented extensive evidence of
damages at trial (and Hsiao proffered no credible evidence that
any figures were excessive), the trial court found that “the best
measure of damages here are the findings and award of Judge
Matz in the [Hang] default judgment,” noting that “[i]t is readily
abundant that the judgment received appropriate judicial review
and consideration.” The trial court was entitled to adopt the
figures previously vetted by the trial court in the Hang action,
despite the fact that the default judgment was not enforceable.
That the default judgment was unenforceable or that the action
was ultimately dismissed with prejudice pursuant to the

settlement agreement does not moot Yang’s claims of economic
damages—indeed, it is precisely the evaporation of Yang’s fully
realized judgment figure that provides the basis for his damages.
II.    The Punitive Damage Award Was Proper
       Having concluded that the trial court’s damages award was
not improper, we next address the $100,000 award of punitive
       On appeal, Hsiao contends that the evidence was
insufficient to support a punitive damages award and that the
award was excessive and improperly based on the perceived harm
to Hsiao’s employee Hang, as opposed to harm to Yang. On cross-
appeal, Yang contends that the trial court improperly discounted
the appropriate amount of punitive damages by factoring Hsiao’s
status as an individual, as opposed to a corporation, into its
punitive damages determination.
       We conclude that punitive damages were proper and affirm
the trial court’s award and determination of punitive damages.
       A.    Substantial evidence supports the trial court’s
             finding that Hsiao engaged in conduct
             warranting punitive damages
       We review the evidence supporting punitive damages under
the substantial evidence standard. (Stewart v. Union Carbide
Corp. (2010) 

190 Cal. App. 4th 23

, 34.) Punitive damages are
permissible on a showing of conduct amounting to “oppression,
fraud, or malice.” (Civ. Code, § 3294, subd. (a).) Our substantial
evidence review proceeds in light of the clear and convincing
standard of proof applicable at trial, considering whether the
record as a whole contains substantial evidence from which a
reasonable trier of fact could have found clear and convincing
evidence of “ ‘oppression, fraud, or malice’ ” that allows for the

imposition of punitive damages. (Conservatorship of O.B. (2020)

9 Cal. 5th 989

, 999; Civ. Code, § 3294, subd. (a).)
      There was sufficient evidence in the record that Hsiao
engaged in fraudulent and/or malicious conduct resulting in
Yang’s harm. Because of her misrepresentations and his poor
English, Hang was unaware he had signed a settlement and
continued litigating his case with Yang. Although the agreement
purported to be jointly payable to Hang and his attorney within a
week of execution, Yang was never paid anything by Hsiao
thereunder. Hsiao’s misrepresentations and false promises
directly led to Yang’s harm and constitute sufficient evidence of
conduct amounting to oppression, fraud, or malice to support
punitive damages.
      B.     The punitive damages award was not excessive
      Courts weigh three factors or “guideposts” in determining
whether punitive damages are constitutionally excessive: (1) the
degree of reprehensibility of the defendant’s misconduct; (2) the
disparity between the actual or potential harm to the plaintiff
and the punitive damages award; and (3) the difference between
the punitive damages award and any comparable civil penalties.
(Simon v. San Paolo U.S. Holding Co., Inc. (2005) 

35 Cal. 4th 1159

, 1171–1172 (Simon); State Farm Mut. Auto. Ins. Co. v.
Campbell (2003) 

538 U.S. 408

, 418 (State Farm); Major v.
Western Home Ins. Co. (2009) 

169 Cal. App. 4th 1197

, 1222–1223;
see CACI No. 3940.) We review the award de novo, making an
independent assessment of the factors. (Simon, at p. 1172.)
Where, as here, the parties identify no corresponding civil
penalties, we consider only the first two factors. (Tilkey v.
Allstate Ins. Co. (2020) 

56 Cal. App. 5th 521

, 559.)

      “ ‘[T]he most important indicium of the reasonableness of a
punitive damages award is the degree of reprehensibility of the
defendant’s conduct.’ ” (State 

Farm, supra

, 538 U.S. at p. 419.)
Courts “ ‘determine the reprehensibility of a defendant by
considering whether: the harm caused was physical as opposed
to economic; the tortious conduct evinced an indifference to or a
reckless disregard of the health or safety of others; the target of
the conduct had financial vulnerability; the conduct involved
repeated actions or was an isolated incident; and the harm was
the result of intentional malice, trickery, or deceit, or mere
accident.’ ” 

(Simon, supra

, 35 Cal.4th at p. 1180, quoting State

Farm, supra

, at p. 419.)
      Here, although the harm was not physical or in disregard of
health or safety, Hsiao accomplished the relevant harm to Yang
by targeting a financially vulnerable individual, his client Hang,
whom she knew needed cash. There also is evidence that she
convinced Hang to sign the settlement agreement through
intentional deceit, including telling him she would “loan” him
$20,000, presenting him a document in English which he could
not fully read and telling him the document was merely a
“receipt” for the promised “loan.” And although she promised
under the settlement agreement to pay the settlement “jointly” to
Hang and his attorney, Hsiao never sent Yang any portion of the
money. The making of these intentionally false representations
and promises indicates intentional deceit rather than “mere
accident.” (State 

Farm, supra

, 538 U.S. at p. 419.) Hsiao’s
affirmative misrepresentations and false promises show she “was
not merely indifferent to, but actively sought an injury to” Yang’s
rights. Overall, the subfactors weigh on the side of moderate

       There is little disparity between the punitive damages
award and actual damages. The $100,000 in punitive damages is
slightly under a 1:1 ratio to the amount of compensatory damages
and is within the constitutionally permitted range in view of the
degree of reprehensibility of Hsiao’s conduct.
       C.     The punitive damages award was not
              improperly determined
       We reject Hsiao’s contention that the punitive damages
award was improperly awarded for harm to a third party. The
trial court expressly stated in its statement of decision, albeit
with some regret, that its punitive damages award was limited to
the harm to Yang. The trail court noted that Hsiao’s violation of
her employee Hang’s rights, as well as “harming the civil justice
system,” were circumstances justifying punitive damages; and
that “the greater victim” of Hsiao’s actions was Hang himself.
However, the trial court explained that although Hsiao’s conduct
“was reprehensible in many ways and harmful to more than one
person, the reprehensibility as reflected in the punitive damages
award is to be measured by the harm done to the plaintiff alone,”
namely, proceeding in derogation of Yang’s rights and depriving
him of his fees for legal services, “as well as violating the
provision of the settlement agreement with Mr. Hang which
required [Hsiao]’s endorsement of the settlement funds to Mr.
Hang.” Despite its suspicions that Hsiao’s machinations were
motivated by the desire to maintain her workforce under
exploitative conditions, the trial court explained that “the law
does not provide a basis for an award of punitive damages to one
person based upon injury to others,” “[t]here is no provision for
the affront to the legal system as it exists for the benefit of the
entire civil order,” and “there is no possible provision for the

continuing harm suspected to continue to occur to defendants’
       Although the trial court noted its suspicion that Hsiao was
an unscrupulous employer, and considered her oppression of
Hang and abuse of the court system part of the reprehensibility
of her actions that harmed Yang and that it wished to deter, it
made clear that its punitive damages award solely reflected the
conduct that harmed Yang. (See Johnson v. Ford Motor Co.

35 Cal. 4th 1191

, 1204 [“ ‘[a] defendant’s dissimilar acts,
independent from the acts upon which liability was premised,
may not serve as the basis for punitive damages. A defendant
should be punished for the conduct that harmed the plaintiff, not
for being an unsavory individual or business’ ”].)
       We also reject Yang’s contention on cross-appeal that the
trial court went beyond the permitted factors of consideration in
its determination of punitive damages.
       Yang specifically takes issue with this language in the trial
court’s statement of decision, rejecting Yang’s proposed higher
amounts: “Suggestions of amounts by plaintiff herein seem more
appropriate to corporations, where the specific act constituting
the tort is likely to be part of a pattern of conduct carried on by a
large economic actor. Punitive verdicts from juries against
individual defendants, in this court’s experience have been more
closely aligned with actual damages.” Yang contends that given
the reprehensibility of Hsiao’s conduct and her stipulated
financial condition of $9 million, the punitive damages award
would and should have been far greater had the trial court not
considered her as an individual rather than a corporate
defendant. Yang argues that a punitive damages award of

$1 million is more appropriate and asks us to remand for
       We find no error with the trial court’s statement and
ultimate determination in this regard. The trial court’s analysis
hinged not on whether Hsiao was an individual or corporate
actor, but on whether there was a pattern or practice of the
specific behavior justifying punitive damages, a valid
consideration. “A pattern or practice of wrongful conduct is often
introduced as evidence of malice or oppression to justify a
punitive damage award,” and a court may “properly consider[]
the absence of evidence of similar practices as a relevant factor”
in determining whether a punitive award amount is excessive.
(George F. Hillenbrand, Inc. v. Insurance Co. of North America

104 Cal. App. 4th 784

, 820–821.)
       Although Hsiao may well have a pattern of exploiting
workers across her business entities (as Yang suggests should be
considered), there was no proof of this offered, nor is it relevant to
the singular and specific acts constituting Hsiao’s tort of
interference with contractual relations against Yang. The trial
court expressly stated that despite its suspicions that Hsiao
subjected her larger workforce to substandard employment
terms—for which the larger punitive amounts sought by Yang
“could have been entirely appropriate in amount”—“[t]hese
suspicions cannot form the basis for an award.” Rather, it had to
be measured by the harm done by Hsiao to Yang alone, for which
the trial court concluded that a punitive damages award closer to
a 1:1 ratio was more appropriate. The trial court has
“considerable discretion” to impose punitive damages within a
constitutional range, as it did here. (Bullock v. Philip Morris
USA, Inc. (2011) 

198 Cal. App. 4th 543

, 563, fn. 9; see McGee v.

Tucoemas Federal Credit Union (2007) 

153 Cal. App. 4th 1351

1362.) Accordingly, we will not disturb its determination.
      Finding no error, we affirm the trial court’s award of
punitive damages.

     The judgment is affirmed. Yang is awarded costs on

                                       LUI, P. J.
We concur:


     CHAVEZ, J.


Add comment


Recent Posts

Recent Comments