Corder v. Corder
Filed 3/30/06 Corder v. Corder CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
| SHERRY WU CORDER et al., Plaintiffs and Appellants, v. LISA REY CORDER etc., et al., Defendants and Respondents. | B179618 (Los Angeles County Super. Ct. No. SC080349) |
APPEAL from a judgment of the Superior Court of Los Angeles County.
Allan J. Goodman, Judge. Affirmed.
David & Heubeck and John C. Heubeck for Plaintiff and Appellants.
The Law Office of Ronal E. Harrington, Inc. and Ronald E. Harrington for Defendants and Respondents.
_______________
In the view of plaintiffs and appellants Sherry Wu Corder and John Heubeck,
this case concerns a trial court's jurisdiction to make an order distributing the proceeds of a settlement in an wrongful death action. We agree with respondents Lisa Corder and Ronald Harrington that the case is not about jurisdiction, but is an attempt to forum shop, avoid compliance with a court order, and obtain a stay pending appeal without incurring the expense of an appeal bond. Needless to say, we affirm the trial court orders dismissing appellants' complaint in interpleader and ordering the interpleaded funds distributed in accord with an earlier order of another trial court. We also affirm the trial court order imposing sanctions on Heubeck, and, in the last part of our opinion, grant respondents' motion for sanctions on appeal.
These are the facts:
In May of 2001, a man named Raymond Corder died in a construction accident. He left behind a wife of eight months, appellant Sherry Corder, and a daughter, respondent Lisa Corder, then 26 years old. The accident took place in Orange County, and both Sherry and Lisa[1] filed wrongful death actions in the Superior Court in that county. John Heubeck represented Sherry. Ronald Harrington represented Lisa. The two wrongful death actions were consolidated and assigned to Judge Randall Wilkinson.
In January 2003, one of the wrongful death defendants, Morrow Equipment Company, settled for $1.1 million, contingent on "the court determining that the settlement is in good faith settlement pursuant to Code of Civil Procedure sections 877.6." The Superior Court in Orange County made the finding of good faith.
On the day the settlement was signed, Sherry and Lisa entered into a stipulation regarding the apportionment of their recovery. It provided that:
"Following the verdict or settlement of the [wrongful death] case, should the Plaintiffs fail to agree on an allocation or apportionment of damages between the heirs, that either Plaintiff shall have the right to a further trial regarding the allocation or apportionment of damages among or between the Plaintiffs. Furthermore, either party may supplement their witness list by identifying witnesses not previously disclosed and that those witnesses may be called as witnesses at the further trial proceeding."
This stipulation was signed by Harrington, for Lisa, and Joseph Davis of Davis & Heubeck, appellant Huebeck's law firm, for Sherry.
Sherry and Lisa then went to trial against the remaining defendants, and lost. Judgment was entered in the wrongful death action in March, 2003. Discovery on the apportionment issues began, as did discovery disputes. Sherry took the deposition of Raymond's sister and others of Lisa's witnesses, and Lisa sought Sherry's deposition and additional discovery. This all took place under caption of the wrongful death case.
In May, the Morrow settlement checks were deposited into Heubeck's trust account, in a bank in Century City. This happened after counsel for Morrow wrote to Heubeck and Harrington, reminding them that the settlement checks, made out to Heubeck, were still in his possession. Heubeck then wrote to Harrington, proposing that Morrow send him the check, and promising that:
"I will endorse them and place the funds in our escrow account. [¶] We promise to hold the funds in our escrow account and not make any disbursement of them until we have received either 1) an order from the court as to the appropriate disbursement of the funds or 2) we have reached a settlement . . . [¶] Frankly, I cannot imagine why this agreement would not be acceptable to you. The Rules of Professional Conduct and the Bar Association require that the funds be placed in an approved trust account and that we not make any disbursements unless approved by the clients or the court. When the court tells us how to divide the funds, we will immediately write a check to you and your client for your portion of the funds." [Emphasis added.]
When Sherry filed the quiet title lawsuit, Lisa moved for a trial date in Orange County, contending that the Orange County court had jurisdiction to apportion the settlement proceeds and that Sherry had violated their stipulation by filing in Los Angeles. The Orange County court ruled that it had jurisdiction to apportion the proceeds and set the trial date.
Trial on the apportionment issues took place in October. Judge Wilkinson issued his Statement of Decision on November 14, 2003, allocating 90 percent of the settlement proceeds to Lisa and 10 percent to Sherry. Judgment consistent with the Statement of Decision was entered on December 10, 2003. The judgment read, inter alia,
"Given that the full 1.1 million dollar settlement proceeds are currently located in the Davis & Heubeck Trust Account, Davis & Heubeck are hereby ordered to immediately pay to Plaintiff Lisa Corder and her counsel $990,000." [Emphasis added.]
Heubeck did not comply with Judge Wilkinson's order or his agreement with Lisa. On January 8, 2004, when post-trial motions were still pending before Judge Wilkinson, he filed a new complaint in interpleader in the Superior Court in Los Angeles County and deposited the settlement proceeds with the court. The complaint sought to have the proceeds of the wrongful death action allocated entirely to Sherry. Sherry and Davis & Heubeck, LLP, were the plaintiffs. The case was assigned to Judge Allan Goodman. This is the case before us here.
This complaint, too, alleged that the Superior Court in Los Angeles had jurisdiction to hear the case because the funds were in Los Angeles. Unlike the earlier Los Angeles complaint, this complaint referred to the Orange County case, alleging that "The Orange County Court's order regarding apportionment of the settlement funds is unenforceable as being in excess of the Court's jurisdiction."
The complaint also alleged that the settlement proceeds were a common fund, and that under the common fund doctrine Sherry and Davis & Heubeck were entitled to be reimbursed for expenses incurred in obtaining the wrongful death settlement, and that Sherry should be reimbursed for the costs assessed against her in the wrongful death action and for the amount of the subrogation claim asserted by Raymond's workers' compensation carrier, which she had agreed to resolve.
On February 24,[2] Sherry filed a notice of appeal of Judge Wilkinson's apportionment judgment, challenging the Orange County court's jurisdiction to hear the issues and the sufficiency of the evidence for the trial court's ruling. She did not post a bond.
Back in Los Angeles, Lisa demurred to the interpleader complaint and shortly thereafter moved for an order disbursing the funds pursuant to Judge Wilkinson's order. On March 30, 2004, Judge Goodman struck the demurrer on his own motion, citing failure to comply with court rules.
He also found that "[I]t is apparent to this Court that Plaintiffs are improperly seeking to collaterally attack an order of the Orange County Superior Court (and do so while an appeal from the challenged Orange County Superior Court order remains pending)," and set a date on which Heubeck was to appear to show cause why he should not be sanctioned in the amount of $1500 for filing a frivolous complaint (Code Civ. Proc., § 128.7, subds. (c) and (d)) and why the complaint should not be stricken pursuant to Code of Civil Procedure section 436. The order provides that the OSC re sanctions would be taken off calendar if the complaint was dismissed with prejudice by April 28.
Appellants did not dismiss the complaint. On May 5, Judge Goodman
granted Lisa's motion regarding disbursement of funds and ordered the clerk to disburse $990,000 plus interest from the date of Judge Wilkinson's judgment to Lisa and her attorneys, $70,000 to Sherry and her attorneys, and $12,622 to Sentry Transportation Insurance.[3]
The OSC was continued on Heubeck's motion, and a briefing schedule was set. The matter was further delayed by appellants' motion to disqualify Judge Goodman on the ground that he was prejudiced against them, a motion which was assigned to Judge Nancy Wieben Stock and denied.
On September 30, Judge Goodman dismissed the complaint and ordered sanctions in the amount of $1500. The lengthy order notes that the court considered Heubeck's written responses to the OSC and took judicial notice of the Orange County file, and fully explains the court's reasoning:
"Having reviewed . . . the facts and the circumstances of the two actions, it is established beyond peradventure that this action was filed for an improper purpose -- to cause unnecessary delay and needlessly increase the cost of the litigation between the parties. Further, it is clear that: (1) the claims advanced in the complaint in this action were and are not warranted by existing law or by a nonfrivolous argument for the extension or change in existing law; (2) it is Mr. Heubeck who signed and cause the complaint in this action to be filed and served, and later appeared and argued in support of that complaint; (3) the filing and maintenance of the action in this Court represent a deliberate plan and effort to evade the orders of the Orange County Superior Court and the effect of the judgment entered in that action, and to obtain a de facto stay of that judgment without posting the bond required to stay a money judgment pending appeal.
[¶] . . .[¶]
As further evidence of sanctionable conduct, the Court finds that Mr. Heubeck filed and litigated this action after having stipulated and warranted that the post-judgment procedure undertaken in Orange County was acceptable to plaintiff and her counsel and that the funds would be paid out promptly . . . . [¶] There is nothing complex about the legal principle at issue here, e.g., it is well-established and well-understood that the stay of a money judgment pending appeal requires the posting of a bond. It is also evident that the primary purpose of the instant litigation is to harass and cause needless delay and expense to defendant and obtain that stay de facto without complying with the law. In attempting to justify his conduct in this matter, Mr. Heubeck intentionally miscited cases, in one instance leaving out the critical paragraph."
The court imposed sanctions of $1500 and dismissed the complaint, concluding its order by finding that the sanctions were
". . . appropriate to serve the purpose of deterring Mr. Heubeck and others from filing similar actions in the future, and engaging in the types of unprofessional conduct demonstrated by Mr. Heubeck's filing and maintaining this action. The Court indicated from the outset that Mr. Heubeck in filing of this action and interpleading of the settlement funds constituted a deliberate attempt to avoid the underlying judgment, which ordered the Plaintiffs . . . to 'immediately' pay Defendants their share of the settlement funds, plus interest, upon entry of an order of the Orange County Superior Court, which order was made several months prior to the filing of the action in this Court. Rather than terminate this action, which constituted a patently improper collateral attack on the Orange County Superior Court judgment in the underlying action, Mr. Heubeck (in numerous documents filed with the Court and numerous hearings) vociferously insisted on the propriety of his conduct and misrepresented legal authorities to the Court in an attempt to prevent disbursement of the interpleaded funds. Mr. Heubeck's conduct throughout has been willful and demonstrates a pattern of unprofessional conduct."
Discussion
The order dismissing the interpleader complaint
Appellants' opening brief is in large part concerned with arguments attacking the Orange County trial court's jurisdiction to hear the apportionment issues. The Fourth District's opinion deciding those issues was published before appellants filed their reply brief, but appellants persisted in those arguments in that brief, criticizing the Fourth District and making arguments better addressed to the Supreme Court, which has now accepted review of the Orange County case.[4]
The Supreme Court has indicated that it may entertain appellants' jurisdictional arguments. We will not. Appellants' contention is that Judge Goodman erred by failing to hear and decide issues which had already decided been by Judge Wilkinson and which were then being considered by the Fourth District. The contention is frivolous.
Appellants rely on cases concerning collateral attacks on judgments entered when the court had no jurisdiction to do so. Those cases do not apply. A litigant may collaterally attack a final judgment for lack of jurisdiction, but that is not what appellants did. They disregarded a settlement agreement and tried to "collaterally attack" a judgment which was still pending in the trial court. A non-final judgment cannot be collaterally attacked. It can be appealed. Appellants filed a notice of appeal, and that is all they were entitled to do.
This is not a collateral attack. It is a futile attempt to confuse and delay. At best, it is forum shopping. "Forum shopping, of course, is '[t]he practice of choosing the most favorable jurisdiction . . . in which a claim might be heard.' (Black's Law Dict. (7th ed.1999) p. 666.)" (In re Seaton (2004) 34 Cal.4th 193, 221, fn. 12.) It is not permitted. "It is often said as a general rule one trial judge cannot reconsider and overrule an order of another trial judge. There are important public policy reasons behind this rule. 'For one superior court judge, no matter how well intentioned, even if correct as a matter of law, to nullify a duly made, erroneous ruling of another superior court judge places the second judge in the role of a one-judge appellate court.' The rule also discourages forum shopping, conserves judicial resources, prevents one judge from interfering with a case ongoing before another judge and prevents a second judge from ignoring or arbitrarily rejecting the order of a previous judge . . . ." (People v. Riva (2003) 112 Cal.App.4th 981, 991, fns. omitted.)[5]
Judge Goodman's orders dismissing the interpleader complaint and disbursing the funds pursuant to Judge Wilkinson's order were entirely correct.
Appellants next argue that even if Judge Wilkinson's apportionment order was binding, Judge Goodman should have heard the interpleader action because it included Sherry's other claims to the money, under common fund and other theories. Appellants then argue that we should either remand the case to Judge Goodman to hear those arguments, or decide them ourselves.
The argument runs afoul of rule against claim-splitting. "[A]n entire claim cannot be divided and made the basis of several suits. If an effort is made to split a cause of action into more than on lawsuit, the defendant in the second suit may plead the pendency of the first in abatement. If the judgment has previously been rendered on the merits in the first suit, the defendant in the second suit can plead the judgment as a bar, based on res judicata. The rule against splitting has been set forth in numerous cases. (See cases collected in 3 Witkin, Cal. Procedure (2d ed. 1971) Pleading, § 32, pp. 1715-1716.) The California Supreme Court has held that the rule against splitting is based on two principles, as follows: (1) The defendant should be protected against vexatious litigation; and (2) it is against public policy to permit litigants to consume the time of the courts by relitigating matters already judicially determined, or by asserting claims which properly should have been settled in some prior action. (Wulfjen v. Dolton (1944) 24 Cal.2d 891, 894-895.)" (Phillips v. Western Pac. R. Co. (1971) 22 Cal.App.3d 441, 444.)
Appellants had ample opportunity to litigate all issues regarding the apportionment of the settlement funds in the proceedings before Judge Wilkinson. Having failed to do so, they could not initiate a separate proceeding in another court, after the apportionment issues were decided.
The order imposing sanctions
Heubeck's challenge to the sanctions order amounts to no more than an argument that Judge Goodman was motivated by personal animus against him. This is, first, an improper attempt to seek review of Judge Weiben Stock's order denying appellants' motion to disqualify Judge Goodman. (Code Civ. Proc., § 170.3, subd. (d).)
Next, Judge Goodman's personal feelings during the proceedings are beside the point. His order accurately described Heubeck's conduct in this case, which more than justified the award of sanctions. When Heubeck filed the interpleader suit, he breached his explicit promise to respondents to disburse the funds as soon as there was a court order, and violated Judge Wilkinson's order that the funds be disbursed immediately. Further, he could have had no legitimate reason for filing the interpleader suit. Any lawyer knows that a court order cannot be avoided by filing an identical proceeding in another court. Any lawyer knows that when a Court of Appeal is reviewing an order apportioning funds, there can be no other litigation concerning the apportionment of those self-same funds.
What purpose could Heubeck have had in filing the interpleader action, except delay and to avoid the expense of an appeal bond?[6] What actual relief could he have hoped to get in the Los Angeles case, given that the Fourth District was going to rule? None. Heubeck's conduct was objectively unreasonable, justifying the imposition of sanctions. (In re Marriage of Reese & Guy (1999) 73 Cal.App.4th 1214, 1221.)
Finally, Heubeck's arguments regarding bias are meritless. For instance, he argues that Judge Goodman exhibited bias on March 3, when he noted that the case appeared to be an improper collateral attack on the Orange County judgment and set an OSC sanctions. In Heubeck's view, Judge Goodman wrongly expressed views about the case before he had had a chance to present arguments, and threatened him with sanctions in order "to intimidate and coerce plaintiff's counsel to change his litigation position." As Heubeck must know, Judge Goodman did no more than comply with the safe harbor provisions of Code of Civil Procedure section 128.7, subdivision (c)(2).
Nor did Judge Goodman manifest an intentional disregard for the law, as Heubeck argues. In support of this contention, Heubeck cites a number of cases which involve collateral attacks on judgments. (Jones v. World Life Research Institute (1976) 60 Cal.App.3d 836; Vasquez v. Vasquez (1952) 109 Cal.App.2d 280; Burtnett v. King (1949) 33 Cal.2d 805; Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489; Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228; County of Ventura v. Tillett (1982) 133 Cal.App.3d 105.) Of course, none of these cases holds that a collateral attack can be filed on a judgment still pending, or on appeal.
The motion for sanctions on appeal
Respondents filed a separate motion for sanctions, as the Rules of Court require. (Cal. Rules of Court, rule 27(e).) We issued a notice under California Rules of Court, rule 27(e)(3), informing the parties that we were considering imposing sanctions on appellants. Appellants filed an opposition in which they contended that they were entitled to challenge the Orange County court's jurisdiction to apportion the settlement proceeds. After oral argument and consideration of the briefs, we have concluded that sanctions should be imposed.
Under Code of Civil Procedure section 907, "When it appears to the reviewing court that the appeal was frivolous or taken solely for delay, it may add to the costs on appeal such damages as may be just." Under California Rules of Court, rule 27, subdivision (e), "a Court of Appeal may impose sanctions, including the award or denial of costs, on a party or an attorney for: (A) taking a frivolous appeal or appealing solely to cause delay."
For this purpose, an appeal is frivolous when it is prosecuted for an improper motive or when it indisputably has no merit, that is, when any reasonable attorney would agree that the appeal is totally and completely without merit. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) Our review of the "merits," above, has established that this appeal has none.
Appellants could not, under any circumstances, have obtained any meaningful relief by prosecuting this appeal. The issues they raised here were before the Fourth District when the opening brief was filed. Did appellants hope that we would rule contrary to the Fourth District, if that District rejected their claim? To rule redundantly to the Fourth District? Did they expect us to rule before the Fourth District did, creating chaos? Of course, we would do nothing but what we have done, which is to note that the appellants' contentions should be -- and have been -- made in another forum. The appeal was thus clearly taken for purposed of delay.
Having decided that sanctions should be awarded, we now consider the amount. Respondents seek compensation for the fees they spent in trial, in bringing the sanctions motion, and in defending this appeal. We do not believe that amounts spent in the trial court can form the basis for sanctions on appeal.
(Harris v. Sandro (2002) 96 Cal.App.4th 1310, 1316; Barnard v. Langer (2003) 109 Cal.App.4th 1453, 1465.) Although respondents cite cases which hold that greater sanctions can be imposed when lesser sanctions have been inadequate deterrence (Papadakis v. Zelis (1992) 8 Cal.App.4th 1146, 1150: Say & Say v. Castellano (1994) 22 Cal.App.4th 88, 95), those cases involve repeated, increasing, sanctions on appeal. This case does not.
"Appellate sanctions are imposed to discourage frivolous appeals and to compensate for losses caused by such an appeal. [Citation.] One generally accepted measure of that loss is the amount of attorney's fees incurred by respondent in opposing the appeal." (Harris v. Sandro, supra, 96 Cal.App.4th 1310, 1316.) We thus order Heubeck to pay respondents $10,000, representing their reasonable expenses in defending this appeal and in bringing the sanctions motion.
Because the appellate system, the taxpayers, and other litigants waiting for this court to resolve their bona fide claims are also harmed by this frivolous appeal, we order Heubeck to pay $2,500 to the clerk of this court, to compensate the government for its expense in processing, reviewing and deciding a frivolous appeal. (In re Marriage of Schnabel (1994) 30 Cal.App.4th 747, 755; Pierotti v. Torian (2000) 81 Cal.App.4th 17.)
Disposition
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
ARMSTRONG, Acting P.J.
We concur:
MOSK, J.
KRIEGLER, J.
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Analysis and review provided by Escondido Apartment Manager Attorneys.
[1]Because Sherry and Lisa share the same last name, we refer to them by their first names for convenience and to avoid confusion. No disrespect is intended.
[2] We take judicial notice of the date, on our own motion. (Evid. Code § 452, subd. (d).)
[3] Sentry filed a lien in the Los Angeles action. The award is not further explained.
[4] Appellants assert that if the Supreme Court agrees with them on jurisdiction, they will be vindicated. To the contrary. The fact that the case is now before the Supreme Court only reinforces the point respondents and Judge Goodman made, and we echo: appellants' complaint about the jurisdiction of the trial court in Orange County belonged in an appeal from the Orange County judgment, and no where else.
[5] As respondents note, on this appeal, appellants essentially admit that they were forum shopping, writing in their reply brief that "Plaintiffs did not want the wrongful death trial judge in Orange County to apportion the settlement and never agreed that the same judge would do so. Plaintiffs had grave doubts about the objectivity of Judge Wilkinson and were fearful that he would punish Sherry . . . ."
[6] Once again, appellants' reply brief tells the tale. They write "As for the repeated criticism that the plaintiff did not post an appeal bond, the plaintiff is guilty as charged. Why did she not do so? Money. Or more correctly, the lack of money. It takes money, a lot of money, to post an appeal bond for a $1.1 million judgment. Sherry Wu Corder did not have the financial resources to do so. That fact should not be used against her."
