Morry Canoa Hills v. Best Best & Krieger

Filed 4/21/06 Morry Canoa Hills v. Best Best & Krieger CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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 FOUR

APPEAL from a judgment of the Superior Court of Los Angeles County, Cesar C. Sarmiento, Judge. Affirmed in part, reversed in part.

Stream & Werner, Kenneth B. Stream, David D. Werner; Gresham Savage Nolan & Tilden, Kenneth B. Stream and David D. Werner for Defendants and Appellants.

Reich, Adell, Crost & Cvitan, Paul Crost and J. David Sackman for Respondent.

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In this action, the trial court issued a judgment against the law firm of Best, Best and Krieger (BB&K) under Code of Civil Procedure section 708.470, subdivision (c).[1] It did so because BB&K, with knowledge that Geraldine Gibson had filed a creditor's lien, paid her judgment debtors money subject to the lien. We conclude that BB&K was subject to a judgment under that statute, but reverse the trial court's calculation of the amount.

FACTUAL AND PROCEDURAL SUMMARY

This is our second opinion arising from this matter. We take some of our factual summary from our first unpublished opinion, Morry Canoa Hills, Inc. v. Seyfarth, Shaw, Fairweather & Geraldson (July 31, 2003, B146703) (Morry I).

Morry Desert Falls, Morry California, and Morry Canoa Hills, all California corporations, owned and operated golf courses in California and Arizona. We sometimes refer to these entities collectively as the Morry companies. The parent corporation was Morry International, owned by Japanese citizens. The law firm, BB&K, was the United States general counsel for the Morry companies, and also was the registered agent for service of process for Morry California and Morry Desert Falls. Michael D. Harris, a partner at BB&K, was at one time an officer of Morry California and Morry Desert Hills.

In 1993, Geraldine M. Gibson, a former employee of Morry Desert Falls, sued Morry California, Morry Desert Falls, and Harris (in his capacity as a corporate officer) for sexual harassment. Because of Harris' status as a partner at BB&K, Seyfarth, Shaw, Fairweather & Geraldson (Seyfarth) was retained to represent the defendants in the Gibson litigation. As we detailed in Morry I, Gibson obtained a default judgment against Morry California and Morry Desert Falls for $2,653,600.33. A trial court order amending this default judgment to add Morry Canoa Hills and Morry International as judgment debtors was reversed by Division Two of the Fourth District Court of Appeal in an unpublished opinion, Gibson v. Morry California, Inc. (Mar.10, 1999, E019548). There was no other appeal from the judgment, which became final. Counsel for Gibson filed a notice of lien pursuant to section 708.410 on August 11, 1997. The notice of lien was served on the Morry companies.

The Morry companies sued Seyfarth, BB&K, and individual partners of these firms, for legal malpractice, and other causes of action. The charging pleading is the second amended complaint. In Morry I, we reversed summary judgment in favor of Seyfarth and BB&K against Morry California and Morry Desert Falls. We affirmed an order sustaining Seyfarth's demurrer to the claims brought on behalf of Morry Canoa Hills.

In the meantime, pursuant to a written stipulation, Gibson had received payments from Morry Canoa Hills, which totaled $198,589.28. She then reached an agreement with Morry California, Morry Desert Falls, and Morry Canoa Hills. We refer to this as the Gibson/Morry agreement, although BB&K refers to it in the briefing as the â€