Preview
1 MATTHEW A. HAULK (SBN: 272457) 9/28/2021
JOSE M. HERRARA (SBN: 289590)
2 RAGGHIANTI FREITAS LLP
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1101 Fifth Avenue, Suite 100
San Rafael, California 94901
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Telephone: (415) 453-9433
Facsimile: (415) 453-8269
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Attorneys for Defendants
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PUNIT K. SARNA and
PUJA SARNA
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8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SAN MATEO
10 LOUIS PAYCHECK, CASE NO.: 19CIV02595
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Plaintiff, OPPOSITION TO MOTION FOR
12 RECONSIDERATION
vs.
13 DATE: October 12, 2021
PUNIT K. SARNA, et al., TIME: 2:00 p.m.
14 DEPT.: 4
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Defendants. JUDGE: Hon. Nancy Fineman
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AND RELATED CROSS-ACTION.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 INTRODUCTION
2 Louis Paycheck (“Paycheck”) filed this action against Punit Sarna and Puja Sarna
3 regarding a dispute over a construction project. Punit and Puja Sarna asserted that
4 Paycheck was barred from bringing the action under Business and Professions Code
5 Section 7031 because he was not duly licensed as a contractor throughout the project.
6 Punit Sarna (“Sarna”) filed a Cross-Complaint and First Amended Cross-Complaint
7 against Paycheck asserting a Sixth Cause of Action for disgorgement under Business
8 and Professions Code section 7031. RJN # 1 and # 2. The case was bifurcated between
9 a “Licensing Claims Trial” and a “Construction Claims Trial”.
10 Punit and Puja Sarna prevailed at the Licensing Claims Trial and the court
11 determined that Paycheck acted as an unlicensed contractor. RJN # 5 and # 9. In his
12 second round of objections to the Proposed Statement of Decision, Paycheck argued (for
13 the very first time) that Sarna’s Sixth Cause of Action was barred by the statute of
14 limitations. RJN # 7. In the final Statement of Decision, and after considering briefing on
15 the issue, the court found that Paycheck had failed to request a statement of decision on
16 the statue of limitations, that Paycheck had failed to raise the statute of limitations as an
17 affirmative defense, and that the defense failed on the merits. RJN # 9.
18 More than fifty days later, Paycheck filed this Motion for Reconsideration under
19 Code of Civil Procedure section 1008. Paycheck argues (falsely) that he raised the
20 statute of limitations through his general denial and his equitable defense of waiver, that
21 he requested a statement of decision on his affirmative defenses (including the statute of
22 limitations) and that Sarna’s claim was untimely. The Motion should be denied because
23 section 1008 applies to applications for orders, i.e., motions, and not to statements of
24 decisions, because this Motion is untimely, and because the Motion is not based on new
25 or different facts, circumstances, or law. Paycheck’s arguments also fail on the merits.
26 The reality is that Paycheck failed to request a decision on the statute of limitations, failed
27 to assert it as a defense, and it fails on the merits. The court should deny this motion and
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 sanction Paycheck under section 1008(d).
2 STATEMENT OF FACTS
3 On May 10, 2019, Louis Paycheck filed this action against Punit Sarna and Puja
4 Sarna for, among other claims, breach of contract, negligence, and violation of the
5 prompt payment statutes. Punit Sarna and Puja Sarna denied Paycheck’s allegations and
6 denied he was licensed during the project. On July 2019, Punit Sarna filed a Cross-
7 Complaint. RJN # 1. On October 10, 2019, Sarna filed a First Amended Cross-Complaint.
8 In his Sixth Cause of Action, Sarna alleged that Paycheck was not duly licensed during
9 the project and he sought disgorgement under Business and Professions Code section
10 7031. RJN # 2. Paycheck denied the allegations and asserted a variety of affirmative
11 defenses. Paycheck did not plead the statute of limitations as a defense. RJN # 3.
12 The trial of this action was bifurcated between a Phase 1 Trial regarding the
13 licensing claims and a Phase 2 Trial regarding the construction claims, i.e., everything
14 else. The licensing claims trial proceeded on May 12, 2021 and May 26, 2021. On May
15 28, 2021, the parties submitted a “Joint Request for C.R.C. 3.1590 Statement of
16 Decision” on four issues (RJN # 5):
17 1. Was LOUIS PAYCHECK dba EUROPEAN ENTERPRISES a duly
18 licensed contractor at all times during the performance of that act or
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contract at 721 Rollins Road, Burlingame, CA, which is the subject
matter of this action, pursuant to §7031(a) and (b)?
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If the court’s analysis is “yes”, no further analysis is required by the court.
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If the court’s analysis is “no”, proceed to Issue no. 2.
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2. Was LOUIS PAYCHECK dba EUROPEAN ENTERPRISES in
23 substantial compliance with licensure requirements pursuant to
24 Business and Professions Code Section 7031(e)?
25 If the court’s analysis is “yes”, no further analysis is required by the court.
If the court’s analysis is “no”, proceed to Issue no.’s 3 and 4.
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3. Is Plaintiff LOUIS PAYCHECK dba EUROPEAN ENTERPRISES’s
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Complaint, and all causes of action therein, against Defendants PUNIT
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 K. SARNA and PUJA SARNA barred by Business and Professions Code
2 section 7031(a)? and,
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4. Is Cross Complainant, PUNIT K. SARNA, to recover all compensation
paid to the unlicensed contractor, LOUIS PAYCHECK dba EUROPEAN
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ENTERPRISES, for the performance of any act or contract at 721
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Rollins Road, Burlingame, CA pursuant to Business and Professions
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Code section 7031(b)? If yes, what is the amount the court awards.
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On June 7, 2021, the court issued a Proposed Statement of Decision. RJN # 5.
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The court determined that Paycheck’s license was suspended on the project and that he
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failed to satisfy the elements of a defense under Business and Professions Code section
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7031(e). The court requested additional briefing or a stipulation regarding the amount of
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compensation paid by Sarna to Paycheck for the purpose of calculating damages. The
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parties stipulated to the amount of $228,330.63.
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On June 18, 2021, Paycheck filed “Plaintiff’s Objections to Proposed Statement of
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Decision”. RJN # 6. Paycheck argued that the court’s conclusions regarding his defense
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under Business and Professions Code section 7031(e) were mistaken. On June 21,
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2021, Paycheck filed an “Amendment to Plaintiff’s Objections to Proposed Statement of
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Decision”. RJN # 7. Paycheck argued that he stopped work on the project in September
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2018, that Sarna filed his First Amended Cross-Complaint on October 10, 2019, and that
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Sarna’s disgorgement claim was therefore barred pursuant to San Francisco CDC LLC v.
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Webcor Construction L.P. (2021) 62 Cal.App.5th 266.
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On June 21, 2021, the same day as Paycheck’s Amendment, Sarna filed “Sarna’s
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Amendment to Non-Objection to Proposed Statement of Decision”. RJN # 8. Sarna
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argued that Paycheck failed to request a statement of decision on the statute of
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limitations, that Paycheck failed to assert the statute of limitations, that Sarna filed the
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First Amended Cross-Complaint within the statute of limitations, and that the First
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Amended Cross-Complaint “related back” to the Cross-Complaint, which was also filed
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within the statute of limitations period.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 On June 30, 2021, the court filed and served its Statement of Decision. RJN # 9.
2 The court found that Paycheck failed to request a statement of decision on the statute of
3 limitations, that Paycheck failed to assert the statute of limitations as a defense, and that
4 the statute of limitations defense failed on the merits. The court reserved judgment
5 because of the impending Phase II trial. On August 17, 2021, Sarna dismissed his
6 remaining causes of action and the case became ripe for judgment.
7 On August 20, 2021, Paycheck filed a Notice of Motion for Reconsideration of
8 Statement of Decision based on Code of Civil Procedure section 1008. On September
9 13, 2021, Paycheck filed a Memorandum of Points and Authorities and on September 20,
10 2021, Paycheck filed the Declaration of Louis Paycheck. Paycheck contends that he
11 raised an affirmative defense based on the statute of limitations, that he requested a
12 decision based on the statute of limitations, and that the statute of limitations barred
13 Sarna’s cause of action for disgorgement.
14 DISCUSSION
15 1. Legal Standard
16 Code of Civil Procedure section 1008 provides, in relevant part, as follows:
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(a) When an application for an order has been made to a judge, or to a
18 court, and refused in whole or in part, or granted, or granted conditionally,
or on terms, any party affected by the order may, within 10 days after
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service upon the party of written notice of entry of the order and based
20 upon new or different facts, circumstances, or law, make application to the
same judge or court that made the order, to reconsider the matter and
21 modify, amend, or revoke the prior order. The party making the application
22 shall state by affidavit what application was made before, when and to
what judge, what order or decisions were made, and what new or different
23 facts, circumstances, or law are claimed to be shown.
24 ...
(e) This section specifies the court's jurisdiction with regard to applications
25 for reconsideration of its orders and renewals of previous motions, and
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applies to all applications to reconsider any order of a judge or court, or for
the renewal of a previous motion, whether the order deciding the previous
27 matter or motion is interim or final. No application to reconsider any order
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 or for the renewal of a previous motion may be considered by any judge or
court unless made according to this section.
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In summary, section 1008(a) authorizes a losing party to file a motion for
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reconsideration of an “application for an order” in limited circumstances. An “application
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for an order” is a motion: “Every direction of a court or judge, made or entered in writing,
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and not included in a judgment, is denominated an order. An application for an order is a
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motion”. Code of Civ. Proc. § 1003 [Emphasis added].
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A motion for reconsideration must be filed within ten days of notice of the entry of
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order on the motion and must be based on “new or different facts, circumstances, or law”
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and supported by an affidavit identifying the “new or different facts, circumstances, or
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law”. Code of Civ. Proc. § 1008(a). Facts that a party is aware of at the time of the
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original ruling are not “new or different” and cannot support a motion for reconsideration
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under section 1008(a). In re Marriage of Herr (2009) 174 Cal. App. 4th 1463, 1468. If a
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motion for reconsideration is based on new facts, a moving party must provide an
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explanation for failing to offer those facts in the first instance. Id.
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Notwithstanding Section 1008, a trial court has the inherent constitutional power to
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sua sponte reconsider its prior orders and to correct its own errors. Le Francois v. Goel
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(2005) 35 Cal.4th 1094, 1107. Section 1008 does not limit this authority. However, a
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party is prohibited from filing a motion under Section 1008 to ask the court to sua sponte
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reconsider its rulings:
21 If a court believes one of its prior interim orders was erroneous, it should
be able to correct that error no matter how it came to acquire that belief.
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For example, nothing would prevent the losing party from asking the court
23 at a status conference to reconsider a ruling. (See Weil & Brown, Cal.
Practice Guide: Civil Procedure Before Trial, supra, § 9:327.8, p. 9(1)–
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107.) But a party may not file a written motion to reconsider that has
25 procedural significance if it does not satisfy the requirements of section
437c, subdivision (f)(2), or 1008. The court need not rule on any
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suggestion that it should reconsider a previous ruling and, without more,
27 another party would not be expected to respond to such a suggestion. As
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 one court explained, “were a party to suggest that the court reconsider a
motion, the court would have every right to do so, even if that required the
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party to bring a new motion. In that circumstance, the responding party
3 would not bear the burden of preparing opposition unless the court
indicated an interest in reconsideration.” (Schachter v. Citigroup, Inc.,
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supra, 126 Cal.App.4th at p. 739, 23 Cal.Rptr.3d 920.)
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Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108 [Emphasis Added].
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A party that violates section 1008 may be sanctioned for contempt or under
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section 128.7. A contempt sanction may result in a sanction of $1,000 plus reasonable
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attorney’s fees incurred by the opposing party. Code of Civ. Proc. § 1218. An award of
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sanctions under Code of Civil Procedure section 128.7 requires the court to supply the
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litigant with a 21-day safe harbor period to withdraw the Motion. Code of Civ. Proc. §
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128.7; Moofly Production, LLC v. Favila (2018) 234 Cal.Rprtr. 3d 769.
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2. This Motion for Reconsideration Fails to Satisfy the Elements of Code of
13 Civil Procedure Section 1008 and Should Be Denied on that Basis.
14 a. Code of Civil Procedure Section 1008 Does Not Apply to a
Statement of Decision.
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Section 1008 allows a party to bring a motion for reconsideration of an “application
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for an order”, i.e., a motion. Code of Civ. Proc. § 1003. A statement of decision is not an
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application for an order (a motion) and it is not an order. A statement of decision is an
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explanation of the factual and legal basis for the trial court’s decision in a disputed matter.
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Code of Civ. Proc. § 632. The court should therefore deny this Motion.
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b. This Motion for Reconsideration Is Untimely.
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On June 30, 2021, the Court mail-served a Statement of Decision. On August 20,
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2021, more than 50 days later, Paycheck filed his Notice of Motion for Reconsideration. If
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a Statement of Decision could be the proper subject of a motion for reconsideration (it is
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not) Paycheck’s Motion would be untimely.
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c. This Motions Is Not Based on New or Different Facts,
Circumstances, or Law.
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A motion for reconsideration must be based on new or different facts,
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 circumstances, or law. Facts that a party is aware of at the time of the original ruling are
2 not “new or different” and cannot support a motion for reconsideration under section
3 1008(a). In re Marriage of Herr (2009) 174 Cal. App. 4th 1463, 1468. A motion for
4 reconsideration must be supported by a declaration identifying the new facts,
5 circumstances, or law, and the motion must explain the losing party’s failure to raise
6 those issues in the original motion. Id. Paycheck argues that he raised the statute of
7 limitations, that he requested a decision on the statute of limitations, and that his
8 testimony at trial supports a statute of limitations defense. These are not new or different
9 facts, circumstances, or law and, if they were, Paycheck has failed to explain why he did
10 not raise them sooner. Separately, Paycheck’s declaration fails to satisfy the
11 requirements of section 1008(a).
12 3. Paycheck Waived the Statute of Limitations as a Defense and Sarna Filed
His Cross-Complaint and First Amended Cross-Complaint Within the
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Statute of Limitations.
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a. Paycheck Failed to Request a Statement of Decision on the Statute
15 of Limitations.
16 A request for a statement of decision must identify the controverted issues to be
17 addressed by the court. Code Civ. Proc. § 632. A party waives its right to object to any
18 issue that is omitted from its request for a statement of decision. City of Coachella v.
19 Riverside County Airport Land Use Com. (1989) 210 Cal.App.3d 1277 [Defendant failed
20 to identify the affirmative defense of laches in its request for a statement of decision, and
21 therefore waived its right to object to the statement of decision on the ground that it did
22 not address the doctrine of laches].
23 Paycheck argues that the following Issue No. 4 put the statute of limitations at
24 issue:
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4. Is Cross Complainant, PUNIT K. SARNA, to recover all compensation
26 paid to the unlicensed contractor, LOUIS PAYCHECK dba EUROPEAN
27 ENTERPRISES, for the performance of any act or contract at 721 Rollins
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
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1 Road, Burlingame, CA pursuant to Business and Professions Code section
2 7031(b)? If yes, what is the amount the court awards.
3
Issue number 4 relates to the amount of damages Sarna is entitled to recover
4 against Paycheck. It does not request an analysis of Paycheck’ various affirmative
5 defenses. If Paycheck wanted a statement of decision on the statute of limitations (which
6 he never raised as a defense) or a statement of decision on “waiver” (an equitable
defense that does not apply Sarna’s Sixth Cause of Action)1 he should have made a
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timely request. He failed to do so.
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Notably, the court addressed the statute of limitations in its Statement of Decision.
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A statement of decision is only required to state the ultimate, not the evidentiary, facts.
10 Antelope Valley Groundwater Cases (2020) 59 Cal.App.5th 241, 265-266. The statement
11 need only specify the grounds on which the judgment is based, without necessarily
12 specifying the particular evidence the judge considered in reaching a decision. Marriage
of Williamson (2014) 226 Cal.App.4th 1303, 1318. In this case, the Statement of
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Decision included the ultimate facts necessary to dispose of Paycheck’s unasserted
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statute of limitations defense. The court found that Paycheck failed to properly assert the
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defense, failed to request a statement of decision on the defense, and that the defense
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lacked merit.
17 b. Paycheck Failed to Assert the Statute of Limitations as an
Affirmative Defense.
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The statute of limitations is an affirmative defense that is forfeited if not properly
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invoked by the defendant. Minton v. Cavaney (1961) 56 Cal.2d 576, 581. The defendant
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must raise the statute of limitations by demurrer or answer or it is waived. Berendsen v.
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McIver (1954) 126 Cal.App.2d 347, 351. A party must plead the statute of limitations in
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compliance with Code of Civil Procedure section 458:
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In pleading the Statute of Limitations it is not necessary to state the facts
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showing the defense, but it may be stated generally that the cause of
action is barred by the provisions of Section ____ (giving the number of
26 the section and subdivision thereof, if it is so divided, relied upon) of the
27 1 Judicial Counsel of California v. Jacobs Facilities (2015) 239 Cal.App.4th 882, 897 [Unlicensed
contractors are barred from asserting equitable defenses].
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
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1 Code of Civil Procedure; and if such allegation be controverted, the party
pleading must establish, on the trial, the facts showing that the cause of
2 action is so barred
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Paycheck failed to plead the statute of limitations in his Answer. A
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general denial does not raise the statute of limitations and Paycheck’s
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affirmative defense of “waiver” does not comply with section 458. Paycheck’s
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Second Affirmative Defense of waiver merely states, “Sarna waived any and all
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claims it may have had or has against Defendant1 and Defendant2 arising from
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the transactions and occurrences set forth in the FAXC.” RJN # 3.
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10 4. Sarna filed his Cross-Complaint and First Amended Cross-Complaint
Within the Statute of Limitations.
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Paycheck testified at trial that he started work on the project in mid-November
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2017 and completed work in late-November 2018. Decl. Haulk, Exh. A (Trial Transcript,
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p. 103:23-104:07). This is consistent with Paycheck’s responses to written discovery. Id.
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This is also consistent with Sarna’s trial testimony and checks showing payment to
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Paycheck in October 2018 and November 2018. Decl. Haulk, Exh. A (Trial Transcript, p.
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153:11-155:15); Decl. Haulk, Exh. B (Trial Exh. 4, pp. 14-15).
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This is consistent with the allegations in Plaintiff’s Complaint, which are judicial
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admissions. Castillo v. Barrera (2007) 146 Cal.App.4th 1317, 1324. Paycheck’s
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Complaint alleges that he recorded his mechanic’s lien against the property on February
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15, 2019, “which was less than 90-days after Plaintiff’s completion of work on the
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project.” Complaint, ¶ 7. Thus, and based on his own allegations, Paycheck completed
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work (at the earliest) on November 17, 2018, i.e., 90-days before the date the lien was
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recorded on February 15, 2019.
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Sarna filed his First Amended Cross-Complaint on October 10, 2019, before
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November 2019 and within the one-year statute of limitations. Further, Sarna’s First
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Amended Cross-Complaint “relates back” to his July 11, 2019, Cross-Complaint for the
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purpose of calculating the statute of limitations because both pleadings are based on the
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR
RECONSIDERATION
1 same general set of facts. Point San Diego Residential Community L.P. v. Procopio,
2 Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 277 [“An amended
3 complaint relates back to an earlier complaint if it is based on the same general set of
4 facts, even if the plaintiff alleges a new different legal theory or new cause of action.”].
5 5. The Court Should Impose Sanctions Against Paycheck.
6 This Motion lacks legal or factual merit and fails to meet basic procedural
7 requirements of section 1008. Paycheck all but concedes that his motion is untimely but
8 asks the court to sua sponte reconsider its decision. This is an improper request under
9 binding California Supreme Court precedent. Le Francois v. Goel (2005) 35 Cal.4th 1094,
10 1108. Further, Paycheck’s only “new” argument is the baseless claim that Sarna is rich,
11 Paycheck is poor, and the law is unfair. These arguments are specious and irrelevant.
12 Paycheck is a wealthy man who is buying time with frivolous motions. The court should
13 issue an Order to Show Cause regarding contempt pursuant to Code of Civil Procedure
14 section 1008(d). The Court should enter judgment in Sarna’s favor.
15 CONCLUSION
16 This Motion should be denied and the court should issue contempt sanctions
17 under section 1008(d).
18 Dated: September 27, 2021 RAGGHIANTI FREITAS LLP
19
By: ___________________________________
20
MATTHEW A. HAULK
21 JOSE M. HERRERA
22 Attorneys for Defendants
PUNIT K. SARNA and PUJA SARNA
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Preview
1 MATTHEW A. HAULK (SBN: 272457) 9/28/2021 JOSE M. HERRARA (SBN: 289590) 2 RAGGHIANTI FREITAS LLP 3 1101 Fifth Avenue, Suite 100 San Rafael, California 94901 4 Telephone: (415) 453-9433 Facsimile: (415) 453-8269 5 Attorneys for Defendants 6 PUNIT K. SARNA and PUJA SARNA 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SAN MATEO 10 LOUIS PAYCHECK, CASE NO.: 19CIV02595 11 Plaintiff, OPPOSITION TO MOTION FOR 12 RECONSIDERATION vs. 13 DATE: October 12, 2021 PUNIT K. SARNA, et al., TIME: 2:00 p.m. 14 DEPT.: 4 15 Defendants. JUDGE: Hon. Nancy Fineman 16 AND RELATED CROSS-ACTION. 17 18 19 20 21 22 23 24 25 26 27 28 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 INTRODUCTION 2 Louis Paycheck (“Paycheck”) filed this action against Punit Sarna and Puja Sarna 3 regarding a dispute over a construction project. Punit and Puja Sarna asserted that 4 Paycheck was barred from bringing the action under Business and Professions Code 5 Section 7031 because he was not duly licensed as a contractor throughout the project. 6 Punit Sarna (“Sarna”) filed a Cross-Complaint and First Amended Cross-Complaint 7 against Paycheck asserting a Sixth Cause of Action for disgorgement under Business 8 and Professions Code section 7031. RJN # 1 and # 2. The case was bifurcated between 9 a “Licensing Claims Trial” and a “Construction Claims Trial”. 10 Punit and Puja Sarna prevailed at the Licensing Claims Trial and the court 11 determined that Paycheck acted as an unlicensed contractor. RJN # 5 and # 9. In his 12 second round of objections to the Proposed Statement of Decision, Paycheck argued (for 13 the very first time) that Sarna’s Sixth Cause of Action was barred by the statute of 14 limitations. RJN # 7. In the final Statement of Decision, and after considering briefing on 15 the issue, the court found that Paycheck had failed to request a statement of decision on 16 the statue of limitations, that Paycheck had failed to raise the statute of limitations as an 17 affirmative defense, and that the defense failed on the merits. RJN # 9. 18 More than fifty days later, Paycheck filed this Motion for Reconsideration under 19 Code of Civil Procedure section 1008. Paycheck argues (falsely) that he raised the 20 statute of limitations through his general denial and his equitable defense of waiver, that 21 he requested a statement of decision on his affirmative defenses (including the statute of 22 limitations) and that Sarna’s claim was untimely. The Motion should be denied because 23 section 1008 applies to applications for orders, i.e., motions, and not to statements of 24 decisions, because this Motion is untimely, and because the Motion is not based on new 25 or different facts, circumstances, or law. Paycheck’s arguments also fail on the merits. 26 The reality is that Paycheck failed to request a decision on the statute of limitations, failed 27 to assert it as a defense, and it fails on the merits. The court should deny this motion and 28 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 sanction Paycheck under section 1008(d). 2 STATEMENT OF FACTS 3 On May 10, 2019, Louis Paycheck filed this action against Punit Sarna and Puja 4 Sarna for, among other claims, breach of contract, negligence, and violation of the 5 prompt payment statutes. Punit Sarna and Puja Sarna denied Paycheck’s allegations and 6 denied he was licensed during the project. On July 2019, Punit Sarna filed a Cross- 7 Complaint. RJN # 1. On October 10, 2019, Sarna filed a First Amended Cross-Complaint. 8 In his Sixth Cause of Action, Sarna alleged that Paycheck was not duly licensed during 9 the project and he sought disgorgement under Business and Professions Code section 10 7031. RJN # 2. Paycheck denied the allegations and asserted a variety of affirmative 11 defenses. Paycheck did not plead the statute of limitations as a defense. RJN # 3. 12 The trial of this action was bifurcated between a Phase 1 Trial regarding the 13 licensing claims and a Phase 2 Trial regarding the construction claims, i.e., everything 14 else. The licensing claims trial proceeded on May 12, 2021 and May 26, 2021. On May 15 28, 2021, the parties submitted a “Joint Request for C.R.C. 3.1590 Statement of 16 Decision” on four issues (RJN # 5): 17 1. Was LOUIS PAYCHECK dba EUROPEAN ENTERPRISES a duly 18 licensed contractor at all times during the performance of that act or 19 contract at 721 Rollins Road, Burlingame, CA, which is the subject matter of this action, pursuant to §7031(a) and (b)? 20 If the court’s analysis is “yes”, no further analysis is required by the court. 21 If the court’s analysis is “no”, proceed to Issue no. 2. 22 2. Was LOUIS PAYCHECK dba EUROPEAN ENTERPRISES in 23 substantial compliance with licensure requirements pursuant to 24 Business and Professions Code Section 7031(e)? 25 If the court’s analysis is “yes”, no further analysis is required by the court. If the court’s analysis is “no”, proceed to Issue no.’s 3 and 4. 26 3. Is Plaintiff LOUIS PAYCHECK dba EUROPEAN ENTERPRISES’s 27 Complaint, and all causes of action therein, against Defendants PUNIT 28 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 K. SARNA and PUJA SARNA barred by Business and Professions Code 2 section 7031(a)? and, 3 4. Is Cross Complainant, PUNIT K. SARNA, to recover all compensation paid to the unlicensed contractor, LOUIS PAYCHECK dba EUROPEAN 4 ENTERPRISES, for the performance of any act or contract at 721 5 Rollins Road, Burlingame, CA pursuant to Business and Professions 6 Code section 7031(b)? If yes, what is the amount the court awards. 7 On June 7, 2021, the court issued a Proposed Statement of Decision. RJN # 5. 8 The court determined that Paycheck’s license was suspended on the project and that he 9 failed to satisfy the elements of a defense under Business and Professions Code section 10 7031(e). The court requested additional briefing or a stipulation regarding the amount of 11 compensation paid by Sarna to Paycheck for the purpose of calculating damages. The 12 parties stipulated to the amount of $228,330.63. 13 On June 18, 2021, Paycheck filed “Plaintiff’s Objections to Proposed Statement of 14 Decision”. RJN # 6. Paycheck argued that the court’s conclusions regarding his defense 15 under Business and Professions Code section 7031(e) were mistaken. On June 21, 16 2021, Paycheck filed an “Amendment to Plaintiff’s Objections to Proposed Statement of 17 Decision”. RJN # 7. Paycheck argued that he stopped work on the project in September 18 2018, that Sarna filed his First Amended Cross-Complaint on October 10, 2019, and that 19 Sarna’s disgorgement claim was therefore barred pursuant to San Francisco CDC LLC v. 20 Webcor Construction L.P. (2021) 62 Cal.App.5th 266. 21 On June 21, 2021, the same day as Paycheck’s Amendment, Sarna filed “Sarna’s 22 Amendment to Non-Objection to Proposed Statement of Decision”. RJN # 8. Sarna 23 argued that Paycheck failed to request a statement of decision on the statute of 24 limitations, that Paycheck failed to assert the statute of limitations, that Sarna filed the 25 First Amended Cross-Complaint within the statute of limitations, and that the First 26 Amended Cross-Complaint “related back” to the Cross-Complaint, which was also filed 27 within the statute of limitations period. 28 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 On June 30, 2021, the court filed and served its Statement of Decision. RJN # 9. 2 The court found that Paycheck failed to request a statement of decision on the statute of 3 limitations, that Paycheck failed to assert the statute of limitations as a defense, and that 4 the statute of limitations defense failed on the merits. The court reserved judgment 5 because of the impending Phase II trial. On August 17, 2021, Sarna dismissed his 6 remaining causes of action and the case became ripe for judgment. 7 On August 20, 2021, Paycheck filed a Notice of Motion for Reconsideration of 8 Statement of Decision based on Code of Civil Procedure section 1008. On September 9 13, 2021, Paycheck filed a Memorandum of Points and Authorities and on September 20, 10 2021, Paycheck filed the Declaration of Louis Paycheck. Paycheck contends that he 11 raised an affirmative defense based on the statute of limitations, that he requested a 12 decision based on the statute of limitations, and that the statute of limitations barred 13 Sarna’s cause of action for disgorgement. 14 DISCUSSION 15 1. Legal Standard 16 Code of Civil Procedure section 1008 provides, in relevant part, as follows: 17 (a) When an application for an order has been made to a judge, or to a 18 court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after 19 service upon the party of written notice of entry of the order and based 20 upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and 21 modify, amend, or revoke the prior order. The party making the application 22 shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different 23 facts, circumstances, or law are claimed to be shown. 24 ... (e) This section specifies the court's jurisdiction with regard to applications 25 for reconsideration of its orders and renewals of previous motions, and 26 applies to all applications to reconsider any order of a judge or court, or for the renewal of a previous motion, whether the order deciding the previous 27 matter or motion is interim or final. No application to reconsider any order 28 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 or for the renewal of a previous motion may be considered by any judge or court unless made according to this section. 2 3 In summary, section 1008(a) authorizes a losing party to file a motion for 4 reconsideration of an “application for an order” in limited circumstances. An “application 5 for an order” is a motion: “Every direction of a court or judge, made or entered in writing, 6 and not included in a judgment, is denominated an order. An application for an order is a 7 motion”. Code of Civ. Proc. § 1003 [Emphasis added]. 8 A motion for reconsideration must be filed within ten days of notice of the entry of 9 order on the motion and must be based on “new or different facts, circumstances, or law” 10 and supported by an affidavit identifying the “new or different facts, circumstances, or 11 law”. Code of Civ. Proc. § 1008(a). Facts that a party is aware of at the time of the 12 original ruling are not “new or different” and cannot support a motion for reconsideration 13 under section 1008(a). In re Marriage of Herr (2009) 174 Cal. App. 4th 1463, 1468. If a 14 motion for reconsideration is based on new facts, a moving party must provide an 15 explanation for failing to offer those facts in the first instance. Id. 16 Notwithstanding Section 1008, a trial court has the inherent constitutional power to 17 sua sponte reconsider its prior orders and to correct its own errors. Le Francois v. Goel 18 (2005) 35 Cal.4th 1094, 1107. Section 1008 does not limit this authority. However, a 19 party is prohibited from filing a motion under Section 1008 to ask the court to sua sponte 20 reconsider its rulings: 21 If a court believes one of its prior interim orders was erroneous, it should be able to correct that error no matter how it came to acquire that belief. 22 For example, nothing would prevent the losing party from asking the court 23 at a status conference to reconsider a ruling. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, § 9:327.8, p. 9(1)– 24 107.) But a party may not file a written motion to reconsider that has 25 procedural significance if it does not satisfy the requirements of section 437c, subdivision (f)(2), or 1008. The court need not rule on any 26 suggestion that it should reconsider a previous ruling and, without more, 27 another party would not be expected to respond to such a suggestion. As 28 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 one court explained, “were a party to suggest that the court reconsider a motion, the court would have every right to do so, even if that required the 2 party to bring a new motion. In that circumstance, the responding party 3 would not bear the burden of preparing opposition unless the court indicated an interest in reconsideration.” (Schachter v. Citigroup, Inc., 4 supra, 126 Cal.App.4th at p. 739, 23 Cal.Rptr.3d 920.) 5 Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108 [Emphasis Added]. 6 A party that violates section 1008 may be sanctioned for contempt or under 7 section 128.7. A contempt sanction may result in a sanction of $1,000 plus reasonable 8 attorney’s fees incurred by the opposing party. Code of Civ. Proc. § 1218. An award of 9 sanctions under Code of Civil Procedure section 128.7 requires the court to supply the 10 litigant with a 21-day safe harbor period to withdraw the Motion. Code of Civ. Proc. § 11 128.7; Moofly Production, LLC v. Favila (2018) 234 Cal.Rprtr. 3d 769. 12 2. This Motion for Reconsideration Fails to Satisfy the Elements of Code of 13 Civil Procedure Section 1008 and Should Be Denied on that Basis. 14 a. Code of Civil Procedure Section 1008 Does Not Apply to a Statement of Decision. 15 Section 1008 allows a party to bring a motion for reconsideration of an “application 16 for an order”, i.e., a motion. Code of Civ. Proc. § 1003. A statement of decision is not an 17 application for an order (a motion) and it is not an order. A statement of decision is an 18 explanation of the factual and legal basis for the trial court’s decision in a disputed matter. 19 Code of Civ. Proc. § 632. The court should therefore deny this Motion. 20 b. This Motion for Reconsideration Is Untimely. 21 On June 30, 2021, the Court mail-served a Statement of Decision. On August 20, 22 2021, more than 50 days later, Paycheck filed his Notice of Motion for Reconsideration. If 23 a Statement of Decision could be the proper subject of a motion for reconsideration (it is 24 not) Paycheck’s Motion would be untimely. 25 26 c. This Motions Is Not Based on New or Different Facts, Circumstances, or Law. 27 A motion for reconsideration must be based on new or different facts, 28 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 circumstances, or law. Facts that a party is aware of at the time of the original ruling are 2 not “new or different” and cannot support a motion for reconsideration under section 3 1008(a). In re Marriage of Herr (2009) 174 Cal. App. 4th 1463, 1468. A motion for 4 reconsideration must be supported by a declaration identifying the new facts, 5 circumstances, or law, and the motion must explain the losing party’s failure to raise 6 those issues in the original motion. Id. Paycheck argues that he raised the statute of 7 limitations, that he requested a decision on the statute of limitations, and that his 8 testimony at trial supports a statute of limitations defense. These are not new or different 9 facts, circumstances, or law and, if they were, Paycheck has failed to explain why he did 10 not raise them sooner. Separately, Paycheck’s declaration fails to satisfy the 11 requirements of section 1008(a). 12 3. Paycheck Waived the Statute of Limitations as a Defense and Sarna Filed His Cross-Complaint and First Amended Cross-Complaint Within the 13 Statute of Limitations. 14 a. Paycheck Failed to Request a Statement of Decision on the Statute 15 of Limitations. 16 A request for a statement of decision must identify the controverted issues to be 17 addressed by the court. Code Civ. Proc. § 632. A party waives its right to object to any 18 issue that is omitted from its request for a statement of decision. City of Coachella v. 19 Riverside County Airport Land Use Com. (1989) 210 Cal.App.3d 1277 [Defendant failed 20 to identify the affirmative defense of laches in its request for a statement of decision, and 21 therefore waived its right to object to the statement of decision on the ground that it did 22 not address the doctrine of laches]. 23 Paycheck argues that the following Issue No. 4 put the statute of limitations at 24 issue: 25 4. Is Cross Complainant, PUNIT K. SARNA, to recover all compensation 26 paid to the unlicensed contractor, LOUIS PAYCHECK dba EUROPEAN 27 ENTERPRISES, for the performance of any act or contract at 721 Rollins 28 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 Road, Burlingame, CA pursuant to Business and Professions Code section 2 7031(b)? If yes, what is the amount the court awards. 3 Issue number 4 relates to the amount of damages Sarna is entitled to recover 4 against Paycheck. It does not request an analysis of Paycheck’ various affirmative 5 defenses. If Paycheck wanted a statement of decision on the statute of limitations (which 6 he never raised as a defense) or a statement of decision on “waiver” (an equitable defense that does not apply Sarna’s Sixth Cause of Action)1 he should have made a 7 timely request. He failed to do so. 8 Notably, the court addressed the statute of limitations in its Statement of Decision. 9 A statement of decision is only required to state the ultimate, not the evidentiary, facts. 10 Antelope Valley Groundwater Cases (2020) 59 Cal.App.5th 241, 265-266. The statement 11 need only specify the grounds on which the judgment is based, without necessarily 12 specifying the particular evidence the judge considered in reaching a decision. Marriage of Williamson (2014) 226 Cal.App.4th 1303, 1318. In this case, the Statement of 13 Decision included the ultimate facts necessary to dispose of Paycheck’s unasserted 14 statute of limitations defense. The court found that Paycheck failed to properly assert the 15 defense, failed to request a statement of decision on the defense, and that the defense 16 lacked merit. 17 b. Paycheck Failed to Assert the Statute of Limitations as an Affirmative Defense. 18 The statute of limitations is an affirmative defense that is forfeited if not properly 19 invoked by the defendant. Minton v. Cavaney (1961) 56 Cal.2d 576, 581. The defendant 20 must raise the statute of limitations by demurrer or answer or it is waived. Berendsen v. 21 McIver (1954) 126 Cal.App.2d 347, 351. A party must plead the statute of limitations in 22 compliance with Code of Civil Procedure section 458: 23 24 In pleading the Statute of Limitations it is not necessary to state the facts 25 showing the defense, but it may be stated generally that the cause of action is barred by the provisions of Section ____ (giving the number of 26 the section and subdivision thereof, if it is so divided, relied upon) of the 27 1 Judicial Counsel of California v. Jacobs Facilities (2015) 239 Cal.App.4th 882, 897 [Unlicensed contractors are barred from asserting equitable defenses]. 28 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 Code of Civil Procedure; and if such allegation be controverted, the party pleading must establish, on the trial, the facts showing that the cause of 2 action is so barred 3 Paycheck failed to plead the statute of limitations in his Answer. A 4 general denial does not raise the statute of limitations and Paycheck’s 5 affirmative defense of “waiver” does not comply with section 458. Paycheck’s 6 Second Affirmative Defense of waiver merely states, “Sarna waived any and all 7 claims it may have had or has against Defendant1 and Defendant2 arising from 8 the transactions and occurrences set forth in the FAXC.” RJN # 3. 9 10 4. Sarna filed his Cross-Complaint and First Amended Cross-Complaint Within the Statute of Limitations. 11 Paycheck testified at trial that he started work on the project in mid-November 12 2017 and completed work in late-November 2018. Decl. Haulk, Exh. A (Trial Transcript, 13 p. 103:23-104:07). This is consistent with Paycheck’s responses to written discovery. Id. 14 This is also consistent with Sarna’s trial testimony and checks showing payment to 15 Paycheck in October 2018 and November 2018. Decl. Haulk, Exh. A (Trial Transcript, p. 16 153:11-155:15); Decl. Haulk, Exh. B (Trial Exh. 4, pp. 14-15). 17 This is consistent with the allegations in Plaintiff’s Complaint, which are judicial 18 admissions. Castillo v. Barrera (2007) 146 Cal.App.4th 1317, 1324. Paycheck’s 19 Complaint alleges that he recorded his mechanic’s lien against the property on February 20 15, 2019, “which was less than 90-days after Plaintiff’s completion of work on the 21 project.” Complaint, ¶ 7. Thus, and based on his own allegations, Paycheck completed 22 work (at the earliest) on November 17, 2018, i.e., 90-days before the date the lien was 23 recorded on February 15, 2019. 24 Sarna filed his First Amended Cross-Complaint on October 10, 2019, before 25 November 2019 and within the one-year statute of limitations. Further, Sarna’s First 26 Amended Cross-Complaint “relates back” to his July 11, 2019, Cross-Complaint for the 27 purpose of calculating the statute of limitations because both pleadings are based on the 28 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION 1 same general set of facts. Point San Diego Residential Community L.P. v. Procopio, 2 Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 277 [“An amended 3 complaint relates back to an earlier complaint if it is based on the same general set of 4 facts, even if the plaintiff alleges a new different legal theory or new cause of action.”]. 5 5. The Court Should Impose Sanctions Against Paycheck. 6 This Motion lacks legal or factual merit and fails to meet basic procedural 7 requirements of section 1008. Paycheck all but concedes that his motion is untimely but 8 asks the court to sua sponte reconsider its decision. This is an improper request under 9 binding California Supreme Court precedent. Le Francois v. Goel (2005) 35 Cal.4th 1094, 10 1108. Further, Paycheck’s only “new” argument is the baseless claim that Sarna is rich, 11 Paycheck is poor, and the law is unfair. These arguments are specious and irrelevant. 12 Paycheck is a wealthy man who is buying time with frivolous motions. The court should 13 issue an Order to Show Cause regarding contempt pursuant to Code of Civil Procedure 14 section 1008(d). The Court should enter judgment in Sarna’s favor. 15 CONCLUSION 16 This Motion should be denied and the court should issue contempt sanctions 17 under section 1008(d). 18 Dated: September 27, 2021 RAGGHIANTI FREITAS LLP 19 By: ___________________________________ 20 MATTHEW A. HAULK 21 JOSE M. HERRERA 22 Attorneys for Defendants PUNIT K. SARNA and PUJA SARNA 23 24 25 26 27 28 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF OPPOSITION TO MOTION FOR RECONSIDERATION