Cuccias v. Gambina

Filed 8/8/07 Cuccias v. Gambina CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

APPEAL from a judgment of the Superior Court of Los Angeles County, Elihu M. Berle and Ernest George Williams, Judges. Reversed.

Brian J. Jacobs for Plaintiff and Appellant.

Law Office of Joseph P. Scully and Joseph P. Scully for Defendant and Respondent.

___________________________________

INTRODUCTION

Appellant Jonathan Robert Cuccias appeals from a judgment dismissing his conversion action, entered during a bench trial after the court invited and granted a motion for judgment pursuant to Code of Civil Procedure section 631.8, on the ground that appellant was not the owner of the allegedly converted motor vehicle.[1] Appellant contends that the motion was an unauthorized sua sponte motion, and that the court erred in finding that his signature under penalty of perjury on the certificate of title to the vehicle effected a transfer of ownership as a matter of law, despite the absence of a transferee or the satisfaction of other formalities required by the Vehicle Code. Although we reject appellants contention that the courts manner of proceeding requires reversal, we agree the court erred in granting the motion, and we reverse the judgment.

Appellant also complains of an order striking the untimely filed second amended complaint (SAC), and vacating the default entered at appellants request after respondent failed to file a timely answer or motion to strike the SAC. As appellant was ultimately permitted to refile the SAC, which was eventually superseded by the third amended complaint, and as he has not established that the order vacating the default was an abuse of discretion, we reject these contentions.

BACKGROUND

Appellant commenced this action against respondent Ralph John Gambina in 2003, by filing a complaint alleging abuse of process, intentional infliction of emotional distress and interference with economic relations. Trial went forward on the third amended complaint (TAC) August 22, 2005.[2]

The TAC alleged that appellant was the registered and legal owner of a 1955 Chevrolet pickup truck which had been stored at the home of his brother, Christopher. Respondent allegedly arranged to have the truck hotwired and brought to his premises, in order to collect storage fees or to sell it and keep the proceeds in payment of such fees. The TAC alleged that respondent served appellant with a notice of lien, then obtained a small claims judgment for storage charges, but appellant appealed the judgment, which was vacated after a trial de novo. It was also alleged that appellants savings were depleted by legal fees and litigation costs made necessary by respondents alleged wrongs, causing appellant to lose an opportunity to advance in his baseball career. The TAC sought compensatory damages in excess of $100,000, injunctive relief, an accounting and punitive damages.

The matter was tried to the court without a jury. Appellant testified he was the owner of the truck. A copy of his certificate of title was admitted into evidence, and appellant testified the original was in his possession. It was registered as a nonoperational vehicle and no other owner appeared on the title. Appellant testified that while he was away at college, he stored the truck at his parents home, until his brother Christopher asked him for permission to work on it, as an activity to help him quit smoking. Appellant agreed, provided the vehicle was stored in Christophers garage or driveway, and the truck was moved to Christophers property in 1998 or 1999. Appellant testified he last saw the truck in late 2000, or early 2001, and that Christopher had kept it in good condition.

When appellant graduated from college in 2000, he became a minor league professional baseball player in Northern California. Appellant claimed he did not see the truck while attending college or playing ball. In August or September 2001, Christopher told appellant he had stored the truck in a friends garage when he moved from his house into an apartment. Approximately one week later, appellant received respondents lien notice, which had been mailed to appellant as the registered owner, claiming storage fees. Appellant testified that when he telephoned respondent after receiving the notice, respondent told him that respondent would not release the truck until the accrued storage fees were paid. The lien amount was $3,185, assessed at the rate of $35 per day, plus $70, the cost of conducting a sale.

Appellant testified that when he again questioned his brother, Christopher changed his original story, claiming the truck had been taken illegally, without permission, and that he had been too embarrassed to tell appellant about it. However, Christopher then denied respondent had stolen it. Appellant reported to the police that Christopher had been involved in the disappearance, but would not tell him the truth about it.

In October 2001, appellant went to respondents place of business with the police, and overheard respondents conversation with the officer. Appellant testified that respondent claimed the truck had been abandoned on his premises, that he had tried to contact the owner, thinking it was Christopher, but Christopher never responded, and that no storage agreement existed. Respondent claimed he had acted on the advice of the Department of Motor Vehicles (DMV).

Respondent later obtained a judgment against appellant in small claims court for $1,800. Appellant appealed, and judgment was subsequently entered in favor of appellant after respondent failed to appear for the trial de novo. Appellant testified that by that time, the truck was no longer parked at respondents place of business, and respondent had failed to comply with appellants demand to inspect the vehicle. Appellant found the truck months later, and had it towed from respondents property with the help of the police. Appellant testified regarding the poor condition of the truck, his investigation costs, the difference in the trucks value before respondent obtained possession and after appellant recovered it, and his emotional distress. Appellant also presented the testimony of Robert Bessenbacher, an auto body expert, regarding the condition of the truck.

The certificate of title to the truck shows appellant as the sole registered owner; however, appellants undated signature appears below the following sentence: I certify under penalty of perjury under the laws of the State of California, that the signature(s) below releases interest in the vehicle. Appellant denied that he had released his interest in the truck or that he had sold the truck to Christopher. He claimed the truck had never belonged to Christopher, and his signature was not meant to release his interest. Appellant explained that he signed the certificate of title when he bought the truck as a teenager, because he had been told to sign it.

On the first day of trial, after appellant had finished his testimony and his attorney had told the court that he had no additional witnesses at that time, the court invited a motion for judgment. The trial judge stated: All right. I tell you what I want to have, a [Code of Civil Procedure section] 631.8 motion on title; 101, exhibit 101, signature done under penalty of perjury and the signature releasing the vehicle. After hearing argument from both attorneys, the court granted the motion. No statement of decision was requested or prepared. The trial courts comments indicated the ruling was based upon a finding that appellant did not own the truck, because he had signed the release on the certificate of title under penalty of perjury.[3] Judgment was entered August 25, 2005, and appellant timely filed a notice of appeal October 25, 2005.

DISCUSSION

1. Pretrial Orders

In pretrial proceedings, the trial court sustained respondents demurrers to three causes of action of the first amended complaint (FAC) with leave to file an amended complaint within 10 days. Thirty days later, without seeking leave of court, appellant filed the SAC. Respondent did not move to strike the tardily filed SAC; instead, he disregarded it and filed an answer to the FAC, expressly excepting the causes of action to which his demurrer had been sustained.[4]

Appellant waited approximately three months, and then took respondents default on the SAC, without bringing to the attention of the court the irregularities of either the SAC or the answer to the FAC. Three weeks before the date set for trial, respondent brought an ex parte motion to set aside the default, to strike the SAC and for sanctions against appellants counsel.

In opposition to respondents motions, appellants attorney submitted his declaration explaining that he had misunderstood the courts order granting leave to amend within 10 days, incorrectly hearing 30 days. The trial court granted respondents motion to vacate the default, and allowed appellant to file a motion for leave to file an amended complaint, which was subsequently granted. The trial court later sustained a demurrer to the SAC with leave to file the TAC.[5]

Appellant contends the trial court erred in striking his unauthorized SAC. An order striking all or part of a pleading is reviewed for abuse of discretion, and will not be disturbed except upon a clear showing that the courts exercise of discretion exceeded all bounds of reason. (Quiroz v. SeventhAve.Center (2006) 140 Cal.App.4th 1256, 1282; Code Civ. Proc., 435, 436.) Appellant had no right to file an untimely amended complaint without leave of court, and as appellant did not seek leave, the trial court acted within its discretion in striking it upon respondents motion. (See Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 612-613; Code Civ. Proc., 436, 473.) Moreover, appellant has shown no prejudice. He was allowed to file the TAC, alleging the same causes of action alleged in the stricken SAC, and he does not claim he was prevented from going to trial on any valid cause of action.

Appellant also contends the trial court erred in relieving respondent of the default entered by appellant after respondent disregarded the SAC and instead filed an answer to the superseded FAC. He argues the ruling was an abuse of discretion, because respondent made no showing of mistake, surprise, inadvertence or neglect, as required by Code of Civil Procedure section 473. Appellant points out that relief is not appropriate when the default resulted from the defendants deliberate strategy. (See Northridge Financial Corp. v. Hamblin (1975) 48 Cal.App.3d 819, 823-824.)

A review of the declaration of appellants counsel, filed in opposition to the motion to vacate, shows that when he took respondents default, counsel had been served with the answer to the FAC, was aware that opposing counsel believed the SAC was a nullity and that the answer to the FAC would suffice, and made a deliberate decision to take the default in response to respondents refusal to make a settlement offer. Courts are not powerless to formulate rules of procedure where justice demands it. [Citations.] (Western Steel & Ship Repair, Inc. v. RMI, Inc. (1986) 176 Cal.App.3d 1108, 1116.) Courts have inherent power to control their processes in order to prevent wrongful use of process and unfair results, although there is no specific statutory provision authorizing the proceeding. (Ibid.; see also Citizens Utilities Co. v. Superior Court (1963) 59 Cal.2d 805, 812-813; Code Civ. Proc.,  187.)

It is apparent from the trial courts remarks in ruling on the motion that the court considered appellants own deliberate strategy and found it to be unfair: Under the circumstances of this case, . . . it was inappropriate to enter the default of the defendant who had filed an answer [as a result of the] inadvertent misunderstanding or confusion or error of defense counsel . . . . The court did not err (see Western Steel & Ship Repair, Inc. v. RMI, Inc., supra, 176 Cal.App.3d at p. 1116), and appellant has not met his burden to establish an abuse of discretion. (See Denham v. Superior Court (1970) 2 Cal.3d 557, 566.)

2. Motion for Judgment

Appellant first contends the trial court had no power to make a motion for judgment sua sponte, because the statute authorizing the motion provides that either party may make the motion. (See Code Civ. Proc., 631.8, subd. (a).) The trial court did not expressly make the motion. The trial judge stated, All right. I tell you what I want to have, a 631.8 motion . . . . So, who wants to start that? In essence, the court invited the motion, and respondents counsel accepted the invitation by arguing in favor of granting such motion.

Neither party has submitted published authority on the issue, and our research has revealed no authority prohibiting the court from inviting such a motion.[6] A courts inherent powers to control litigation and conserve judicial resources authorize it to conduct hearings and formulate rules of procedure as justice may require. [Citations.]  (Coshow v. City of Escondido (2005) 132 Cal.App.4th 687, 701, citing Walker v. Superior Court (1991) 53 Cal.3d 257, 267-268 & Cottle v. Superior Court (1992) 3 Cal.App.4th 1367, 1377.) One commentator has said that as a practical matter, a judge may . . . invite a motion for judgment to short-cut the proceedings. (Wegner et al., Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2006) 16:31, p. 16-11.) We agree, and find no error in inviting the motion.

Appellant contends the trial courts finding -- that, as a matter of law, appellant no longer owned the truck and no longer had the right of possession -- was the sole basis for granting the motion and was erroneous. The trial court invited the motion on the ground that by signing the certificate of title under penalty of perjury, appellant had released his title to the truck and was no longer the owner. The court allowed argument on that single issue, after which, the court granted the motion and orally announced its findings, stating: The court finds there is no conversion and no testimony needs to be introduced. And exhibit 101 shows signature under penalty of perjury by [appellant] and he is the registered owner. And down at the bottom[,] important, read carefully. Signature releases interest in vehicle.[] So judgment for the defendant . . . .

Appellant contends respondent was required to plead as an affirmative defense that appellant had released his ownership interest in the truck. The plaintiffs ownership or right to possession of the subject property is an essential element of a cause of action for conversion. (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066; Civ. Code, 3336.) As all facts tending to disprove an element of a cause of action are put in issue by a denial, facts negating the element need not be pleaded as an affirmative defense. (Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal.App.4th 1532, 1546.) As a valid transfer of ownership, if proven, may disprove an element of conversion, it was not new matter, and there was no need to plead it as an affirmative defense.

Appellant also contends that at the time of the motion for judgment, there was no issue of ownership to be resolved by the court. In his opening statement, counsel for respondent stated, Your Honor, the case involves really three people: [Appellant], John Cuccias, who is in the back there with the tie on. He is the owner of the truck. Unambiguous factual concessions orally made by counsel to the court constitute judicial admissions. (Smith v. Walter E. Heller & Co. (1978) 82 Cal.App.3d 259, 269.) In the absence of fraud, the client is bound by such admissions. (Horn v. Atchison T. & S. F. Ry. Co. (1964) 61 Cal.2d 602, 605; Bank of America v. Lamb Finance Co. (1956) 145 Cal.App.2d 702, 708.) Further, although a court may allow a party to withdraw a judicial admission, one that is not withdrawn should be given effect. (Parker v. Manchester Hotel Co. (1938) 29 Cal.App.2d 446, 458.)

Respondent does not claim his attorneys concession on the issue of ownership was induced by fraud -- or even that it was a mistake. Without responding to appellants argument on this point, respondent contends that the trial courts interpretation of the certificate of title was correct, and the judgment was otherwise supported by substantial evidence. Because appellant did not oppose the motion for judgment on the basis of counsels admission or bring the issue to the attention of the trial court in any manner, we do not base our opinion on the admission, but consider the parties substantial evidence arguments.

The standard of review of a judgment and its underlying findings entered pursuant to [Code of Civil Procedure] section 631.8 is the same as a judgment granted after a trial in which evidence was produced by both sides.  In other words, the findings supporting such a judgment are entitled to the same respect on appeal as are any other findings of a trial court, and are not erroneous if supported by substantial evidence. [Citations.] (San Diego Metropolitan Transit Development Bd. v. Handlery Hotel, Inc. (1999) 73 Cal.App.4th 517, 528.) However, when the decisive facts are undisputed, the reviewing court is confronted with a question of law and is not bound by the findings of the trial court. [Citation.] In other words, the appellate court is not bound by a trial courts interpretation of the law based on undisputed facts, but rather is free to draw its own conclusion of law. [Citation.] (Ibid.)

As we construe the trial courts remarks, the court found that appellants signature on the certificate of title released his interest in the vehicle as a matter of law. However, under Vehicle Code section 5600, a mere signature is insufficient to effect a change in title as a matter of law. That section provides, in relevant part:

(a) No transfer of the title or any interest in or to a vehicle registered under this code shall pass, and any attempted transfer shall not be effective, until the parties thereto have fulfilled either of the following requirements:

(1) The transferor has made proper endorsement and delivery of the certificate of ownership to the transferee as provided in this code and the transferee has delivered to the department or has placed the certificate in the United States mail addressed to the department . . . . 

(2) The transferor has delivered to the department or has placed in the United States mail addressed to the department the appropriate documents for the registration or transfer of registration of the vehicle pursuant to the sale or transfer  . . . .

The registered owner of a motor vehicle is commonly understood to be its owner. (Liberty Mutual Fire Ins. Co. v. McKenzie (2001) 88 Cal.App.4th 681, 689.) However, DMV records do not necessarily or conclusively establish the true ownership. (Gates v. Levers (1951) 108 Cal.App.2d 131, 133.) For example, persons whose names do not appear in the title may be found to have equitable ownership. (Government Employees Ins. Co. v. Superior Court (2000) 79 Cal.App.4th 95, 100-101.) Further, circumstances may show the invalidity of a transfer of ownership, although the face of DMV records shows compliance with the Vehicle Code. (See Liberty Mutual Fire Ins. Co. v. McKenzie, supra, at pp. 687-688.) Nevertheless, a DMV certificate of title constitutes prima facie evidence of ownership by the person named as the registered owner. (Louis & Diederich, Inc. v. Cambridge European Imports, Inc. (1987) 189 Cal.App.3d 1574, 1589; Getz v. Whisenant (1949) 93 Cal.App.2d 182, 185.)

Respondent contends other evidence supports an inference that appellant intended his signature to be a release of the truck to his brother. He points to the absence of registration for the years from 1997 through 2001, when the alleged conversion took place, suggesting that appellants failure to register the truck during that period shows he was not the owner. However, vehicles stored in privately owned offstreet parking areas do not require registration. (Veh. Code,  4000, subd. (a).) Further, a certificate of ownership may be issued to an owner who has not registered a vehicle. (Veh. Code, 4452.) Appellant testified that he instructed his brother to keep the truck in his driveway or garage, and that he observed the truck there until January 2001. So long as Christopher complied, registration was not required.

Respondent points out that the trial court was not required to believe appellants testimony. He argues the trial court was entitled to infer from appellants signature and from his having given Christopher possession of the truck that appellant intended to transfer title to Christopher. It is clear from the courts remarks, however, that the judgment was based not upon a determination of appellants credibility or any inference regarding his intent, but solely upon the courts conclusion that appellants signature on the certificate of title transferred any interest he may have had and necessarily deprived him of any ownership interest in the truck. This was error, as appellants signature alone simply did not effect a transfer. Californias most basic principle of automobile ownership requires a formal transfer. As a full-title state, Californias primary interest is in providing that anyone doing business with the purported owner of a motor vehicle may depend upon the state of the recordtitle. [Citation.] (Government Employees Ins. Co. v. Superior Court, supra, 79 Cal.App.4th at p. 101.) Respondent did, in fact, acknowledge and depend upon formal title -- he sent a lien notice and demand for storage fees, addressed to appellant as the registered owner of the truck.

Respondent contends the judgment is nevertheless correct, because appellant did not have possession of the truck. Respondent also claims that because appellant voluntarily relinquished possession of the truck to Christopher, he had no right to possession. However, respondent refers to no evidence suggesting that Christopher could have lawfully refused to return the truck to appellant upon demand. Giving over possession of the truck for purposes of storage does not, by itself, suggest a release of ownership, as [a]n owner is a person having all the incidents of ownership, including the legal title of a vehicle whether or not such person lends, rents, or creates a security interest in the vehicle  . . . . (Veh. Code, 460.) A plaintiff who does not have actual possession of a vehicle meets his burden to prove a right to possession by producing a certificate of title in his name. (General Motors A. Corp. v. Dallas (1926) 198 Cal. 365, 370-373.) Appellant did just that.

In short, whatever appellants intent at the time he wrote his signature, he made a prima facie showing at trial of his ownership by submitting DMV records showing that no formal transfer had taken place and that he was still the registered owner. (See Louis & Diederich, Inc. v. Cambridge European Imports, Inc., supra, 189 Cal.App.3d at p. 1589; Veh. Code, 5600, 5750, 5751.) The trial court erred in finding appellants signature on the certificate of title conclusively established that he had not met his burden of proving ownership, and in cutting short the trial.

DISPOSITION

The judgment is reversed. Appellant shall have his costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

MANELLA, J.

We concur:

EPSTEIN, P. J.

SUZUKAWA, J.

Publication courtesy of San Diego free legal advice.

Analysis and review provided by Santee Property line attorney.

[1] Code of Civil Procedure section 631.8, subdivision (a), provides in part: After a party has completed his presentation of evidence in a trial by the court, the other party, without waiving his right to offer evidence in support of his defense or in rebuttal in the event the motion is not granted, may move for a judgment. The court as trier of the facts shall weigh the evidence and may render a judgment in favor of the moving party. . . .

[2] The TAC set forth four causes of action -- conversion, abuse of process, interference with economic relations and racketeering. However, the docket indicates the court sustained a demurrer to the pleading, although neither the demurrer nor the courts order appears in the record on appeal. Respondents answer states that it is directed to the TAC as modified by the Courts April 18, 2005 order sustaining Gambinas demurrer to the second, third and fourth causes of action . . . . We assume from this language that the trial went forward only on the first cause of action for conversion.

[3] The court noted, Exhibit 101 shows signature under penalty of perjury by Johathan [sic] Cuccias and he is the registered owner. And down at the bottom important, read carefully. Signature releases interest in vehicle.[] So judgment for the defendant and the defendant shall prepare a judgment and thank you very much.

[4] Respondent also filed a cross-complaint against appellants brother, Christopher Cuccias. Christophers default was entered approximately nine months prior to trial, and he later failed to appear for his deposition.

[5] The demurrer to the SAC and the ruling on the demurrer are mentioned in the Superior Courts docket, but do not appear in the appellate record.

[6] Motions for nonsuit in jury trials, which are analogous to motions for judgment, may not be made sua sponte. (See Gullick v. Interstate Drilling Co. (1931) 111 Cal.App. 263, 267; Code Civ. Proc., 581c, subd. (a).) Similarly, courts are discouraged from inviting motions for nonsuit. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 748-749.) [G]iven the constitutional right to jury trial and a policy of judicial economy against willy-nilly disregarding juries hard work . . . , the basic rules regarding these motions are predictably strict. (Fountain Valley Chateau Blanc Homeowners Assn. v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 750.) However, the rationale for prohibiting a sua sponte motion for nonsuit does not pertain to motions for judgment under Code of Civil Procedure section 631.8, as the latter are applicable only in court trials. Further, it has long been held that rules applicable to a motion for nonsuit do not apply to motions for judgment under section 631.8. (Charles C. Chapman Building Co. v. California Mart (1969) 2 Cal.App.3d 846, 858, fn. 2.)