Filed 9/28/17 Ose Properties, Inc. v. Priest CA3

NOT TO BE PUBLISHED

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Sacramento)

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Defendant Maurice A. Priest appeals from the trial court’s postjudgment order denying his motion to vacate renewal of a money judgment against him under the Enforcement of Judgments Law, Code of Civil Procedure section 680.010 et seq. (Unless otherwise set forth, statutory references that follow are to this Code.) This automatic renewal of the 1993 judgment was obtained in May 2013 by Ose Properties, Inc., as “Assignee” of the original judgment creditor Hallmark Associates. A formal Acknowledgment of Assignment is dated May 2013.

Priest contends the trial court erred in denying his motion to vacate the 2013 renewal, because Hallmark (a limited partnership created by Enlow A. Ose and others) dissolved and cancelled its partnership certificate in 1995 and therefore no longer existed and could not assign anything to Ose Properties, Inc. in 2013.

Enlow A. Ose of Ose Properties, Inc. attested in this proceeding that Hallmark assigned its interest to Ose Properties, Inc. before cancelling Hallmark’s partnership certificate in 1995. In that case, says Priest, denial of his motion is still error because the 2003 renewal of the judgment by Hallmark was improper in that (1) Hallmark had already assigned away its interest, and (2) Hallmark no longer existed in 2003. Although Priest did not challenge the renewal in 2003 and at that time was already treating Ose Properties, Inc. as successor in interest to the judgment creditor, Priest says he did not know at that time that Hallmark had ceased to exist as a partnership.

Priest seeks to vacate the renewal of judgment and obtain a refund of his past payments. We conclude he fails to show grounds for reversal. We grant Priest’s November 13, 2014, request for judicial notice of certified copies of documents filed with the Secretary of State (certificates of limited partnership, amendment, dissolution, and cancellation), uncertified copies of which were submitted in the trial court. Respondent does not oppose judicial notice.

Fact and Proceedings

Hallmark Associates formed as a limited partnership in 1984, with Enlow A. Ose as general partner.

In 1988, Priest, an attorney, leased commercial space from Hallmark. Priest fell behind in the rent.

In May 1993, the parties signed and the trial court entered a stipulated judgment for Priest to vacate the premises and pay Hallmark $161,029.23 in back rent plus interest and $4,446.32 in attorney fees. “[A]lthough this agreement is being filed as a judgment herein and entered as such, Plaintiff or its successors or assigns, shall not have the right to obtain a writ of execution upon this judgment or to obtain and record an abstract of judgment” unless Priest defaults in his promise to pay at least $1,000 per month to Hallmark “or its successors or assigns.”

Hallmark’s general partner, Enlow Ose, signed the stipulated judgment on behalf of Hallmark.

Priest vacated the premises and began making monthly payments on the judgment.

In March 1995, Enlow Ose withdrew as Hallmark’s general partner. The new general partner was Melenco Corporation, of which Enlow Ose was president, as reflected in an amendment filed with the Secretary of State.

In December 1995, Hallmark filed with the Secretary of State a “CERTIFICATE OF DISSOLUTION--LIMITED PARTNERSHIP,” executed by Enlow Ose as president of Melenco Corporation with a “CONSENT TO DISSOLUTION” signed by Enlow Ose as president of general partner Melenco and also signed by limited partners including Enlow Ose.

Also in December 1995, Hallmark filed with the Secretary of State a “CERTIFICATE OF CANCELLATION--LIMITED PARTNERSHIP,” executed by Enlow Ose as president of Melenco Corporation.

Enlow Ose attested in a declaration submitted to the trial court in this 2013 proceeding that Hallmark assigned its interest in the 1993 judgment to Ose Properties, Inc. “prior to the date the certificate of cancellation was filed for Hallmark Associates [December 18, 1995].”

Priest has sent his monthly payments on the judgment to Ose Properties, Inc., since at least March 2003 according to the trial court record.

In May 2003, Hallmark’s attorney filed an application to renew the judgment for Hallmark as “Judgment creditor” and served notice of renewal on Priest. (§ 368.5 [after transfer of interest, proceeding may continue in name of original party]; § 680.240 [“judgment creditor” means the person in whose favor a judgment is rendered or “the assignee of record” or “other successor in interest of the judgment creditor”].)

In July 2003, Ose Properties, Inc. sent a letter to Priest, advising that he was in default on the judgment and, if he did not pay within 10 days, Ose Properties, Inc. would take steps to enforce the judgment. Priest did not protest that Ose Properties, Inc. lacked power to enforce the judgment.

In May 2013, Ose Properties, Inc., c/o Enlow A. Ose, filed an application for renewal of judgment, as “Assignee of record” in the case of Hallmark Associates v. Priest. The document was signed by Enlow Ose as “CFO, Ose Properties, Inc.” On the same date, Ose Properties, Inc. also filed in the trial court “JUDGMENT CREDITOR HALLMARK ASSOCIATES’ ACKNOWLEDGEMENT OF ASSIGNMENT OF JUDGMENT TO OSE PROPERTIES, INC.,” signed by Enlow A. Ose “On behalf of Plaintiff and Judgment Creditor Hallmark Associates.” The Acknowledgement, signed by Ose on May 17, 2013, and filed in court on May 21, 2013, did not specify any date of assignment.

On May 29, 2013, Priest wrote to Enlow Ose, Ose Properties, Inc., care of its attorney: “For the past 20 years, I have paid $1,000 per month to Ose Properties based on a judgment to which I stipulated.” Priest asserted he was no longer in a financial position to continue making payments and asked Ose to forgive the balance owing on the judgment. On the same date, Priest sent a letter to the lawyer for “Your Client: Hallmark Associates & Ose Properties, Inc.” claiming a miscalculation in the amount due.

In June 2013, Priest moved to vacate the renewal of judgment or the judgment itself on the ground that Hallmark, having ceased to exist, lacked legal capacity to assign the judgment, and therefore Ose Properties, Inc. lacked capacity to renew the judgment. Priest cited both section 683.160 (motion to vacate renewal) and section 473, subdivision (d) (motion to set aside void judgment or order). Priest also asked for a refund of all payments he made since December 18, 1995, plus interest and attorney fees. Priest alternatively asked the court to modify the amount owed on the judgment, but the court said Priest failed to show any miscalculation or cite any authority. Priest does not pursue that matter on appeal.

In opposition to Priest’s motion to vacate, Enlow Ose submitted a declaration dated July 11, 2013, attesting he is Chief Financial Officer of Ose Properties, Inc., and Hallmark assigned its interest in the 1993 judgment to Ose Properties, Inc. “prior to the date the certificate of cancellation was filed for Hallmark[.]” Ose’s declaration attached (a) the Certificate of Cancellation of Limited Partnership dated December 18, 1995, (b) Priest’s May 2013 letter to Ose, and (c) letters from Ose Properties to Priest between July 2003 and July 2004 demanding overdue payments on the judgment. The opposition noted that, before filing the motion to vacate, Priest never objected to making his payments to Ose Properties, Inc. Ose attached copies of checks from Priest made payable to Ose Properties, Inc. Ose asserted Ose Properties, Inc. has received checks from Priest roughly on a monthly basis “since prior to May of 2003.”

Priest’s reply included his declaration that, before the 2013 application to renew the judgment, he did not know of Hallmark’s cancellation of partnership and was not served with any document providing notice to the court that Hallmark was assigning its interest in the judgment to Ose Properties, Inc. Priest admitted he has sent his payments to the same American River Drive address for over 20 years but argued the 2003 renewal by Hallmark was a “fraud on the Court,” and section 473 allows the court to set aside any void judgment or order for lack of subject matter jurisdiction or personal jurisdiction or if it was procured by fraud on the court. He argued the 2013 renewal was based on an invalid assignment.

The trial court denied Priest’s motion, observing that, though nominally addressed to the 2013 renewal, the motion was actually an untimely attack on the 2003 renewal. If Priest had filed a timely motion in 2003, the 2003 renewal could have been corrected to substitute assignee Ose Properties, Inc. (§ 683.170, subd. (c) [court may vacate renewal and enter a different renewal]; Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 243 (Branick) [repeal of statutory authorization to sue on behalf of general public did not preclude court from allowing amendment of complaint to substitute as plaintiffs the persons who have standing to sue].) The court added that Priest submitted no evidence that the 1995 assignment was invalid and failed to show any prejudice to him, since he has known of and has made payments on the judgment directly to Ose Properties for years. Instead, Ose Properties would be unfairly prejudiced if the court vacated the renewal judgment.

Discussion

I

Legal Principles and Standard of Review

The 1982 Enforcement of Judgments Law (§ 680.010 et seq.) is a summary procedure for renewal of judgments as an alternative to having to obtain a new judgment by filing an independent action based on the judgment. (Goldman v. Simpson (2008) 160 Cal.App.4th 255, 260 (Goldman).) Under this summary procedure, a money judgment is enforceable for 10 years (§ 683.020), but the judgment creditor can renew the judgment for another 10 years by filing an application for renewal with the clerk of the court that entered the judgment. (§§ 683.130, 683.140.) “Upon the filing of the application, the court clerk shall enter the renewal of the judgment in the court records.” (§ 683.150, subd. (a).) The creditor serves notice of the renewal on the debtor, who then has 30 days to move to vacate or modify the renewal. (§§ 683.160, subd. (a), 683.170, subd. (b).)

“The statutory renewal of judgment is an automatic, ministerial act accomplished by the clerk of the court; entry of the renewal of judgment does not constitute a new or separate judgment. [Fn. omitted.] ‘Filing the renewal application (and paying the appropriate filing fee . . .) results in automatic renewal of the judgment. No court order or new judgment is required. The court clerk simply enters the renewal of judgment in the court records. . . .’ [Citation.] . . . ‘[R]enewal does not create a new judgment or modify the present judgment. Renewal merely extends the enforceability of the judgment.’ [Citation.] The renewed judgment ‘has no independent existence’ from the original judgment. [Fn. omitted.] [Citation.]” (Goldman, supra, 160 Cal.App.4th at p. 262.)

The renewal of a judgment is not an appealable event. (Goldman, supra, 160 Cal.App.4th at pp. 262-263, fn. 4.) Instead, it is the order denying a motion to vacate renewal of judgment that is appealable as an order after (the underlying) judgment. (Ibid.)

A motion to vacate renewal may be brought “on any ground that would be a defense to an action on the judgment . . . .” (§ 683.170, subd. (a).) “Not later than 30 days after service of the notice of renewal . . . , the judgment debtor may apply by noticed motion under this section for an order of the court vacating the renewal of the judgment. . . .” (§ 683.170, subd. (b).) “Upon the hearing of the motion, the renewal may be ordered vacated upon any ground provided in subdivision (a), and another and different renewal may be entered, including, but not limited to, renewal of the judgment in a different amount . . . .” (§ 683.170, subd. (c).)

The judgment debtor bears the burden of proving by a preponderance of the evidence that he is entitled to relief under section 683.170. (Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal.App.4th 195, 199 (Fidelity).) On appeal, we examine the evidence in a light most favorable to the trial court’s order and review the trial court’s ruling for abuse of discretion. (Ibid.)

II

No Grounds for Reversal

1. The 2003 Renewal

A judgment debtor has only 30 days after service of notice of renewal of judgment to move to vacate the renewal. (§ 683.170, subd. (b).) Priest’s 2013 challenge to the 2003 renewal came 10 years too late. Although he says he was unaware in 2003 of Hallmark’s 1995 dissolution and cancellation of partnership certificate, Priest offers no legal analysis or authority for tolling the 30-day limitations period.

Priest hopes to circumvent the 30-day limitations period by arguing the 2003 renewal application filed by the attorney for the nonexistent Hallmark was a “fraud on the court” and therefore was “void ab initio” and could be attacked at any time. He argues that Hallmark -- having dissolved and cancelled its partnership certificate in 1995 -- no longer existed and therefore lacked capacity to file the 2003 application and the court lacked jurisdiction.

Priest appears to accept Ose’s attestation that Hallmark transferred its interest to Ose Properties before Hallmark filed its cancellation certificate in 1995. Priest does not show any defect in that transfer but merely argues he was not served with any transfer document before the 2003 renewal. Yet Priest was clearly on notice of the transfer because -- before the 2003 renewal -- Priest was already making his payments on the judgment payable to Ose Properties, Inc. He instead argues that Hallmark -- having already transferred its interest in the judgment to Ose Properties in 1995 -- no longer had any interest in the judgment and therefore could not file the 2003 application.

As a general proposition, “[a] man who owes money cannot object to the debt being assigned. All he has a right to ask is that proper proof of the assignment be shown him before he is asked to pay; the rest is none of his business.” (Gering v. Superior Court of Los Angeles County (1951) 37 Cal.2d 29, 32 [bankruptcy].)

We observe Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, in a distinguishable context of nonjudicial foreclosure, issued a narrow ruling that a borrower does not lack standing to sue for wrongful foreclosure based on an allegedly void (as opposed to voidable) assignment merely because he or she was in default on the loan and was not a party to the challenged assignment. (Id. at p. 924.) Defects in a voidable transaction can be cured by ratification of the parties to the transaction, while defects in a void transaction cannot be cured. (Id. at p. 930.) The Supreme Court did not hold or suggest that the plaintiff had alleged facts showing a void assignment. (Id. at p. 924.) It is the plaintiff’s burden to prove that an assignment is void as opposed to voidable. (Id. at pp. 924, 938.)

Priest offers no facts or legal authority that the transfer of Hallmark’s interest in the judgment to Ose Properties, Inc. was void. (Lewis v. County of Sacramento (2001) 93 Cal.App.4th 107, 113-114 (Lewis) [appellant bears the burden to demonstrate grounds for reversal with appropriate legal analysis and authority and failure to do so may be deemed forfeiture].)

Moreover, Priest ignores legal principles that defeat his position. Thus, a transfer of interest does not abate an action, which may be continued in the name of the original party. (§ 368.5.) Though not cited by the parties, section 368.5 provides: “An action or proceeding does not abate by the transfer of an interest in the action or proceeding or by any other transfer of an interest. The action or proceeding may be continued in the name of the original party, or the court may allow the person to whom the transfer is made to be substituted in the action or proceeding.” Additionally, “ ‘judgment creditor’ ” under the Enforcement of Judgment Law means the person in whose favor a judgment is rendered or “the assignee of record” or “other successor in interest of the judgment creditor . . . .” (§ 680.240.) In the event of a transfer of interest in a pending action, the attorney for the assignor does not automatically cease to be attorney of record. (Hearn Pacific Corp. v. Second Generation Roofing, Inc. (2016) 247 Cal.App.4th 117, 139-140, fn. 17.)

We note respondent agrees with Priest that the 2003 application “incorrectly identified” Hallmark as judgment creditor. Respondent apparently accepts Priest’s argument, unsupported by legal authority, that the 1995 cancellation certificate prevented the action from continuing in Hallmark’s name. We are not so sure.

Priest argues the partnership did not merely transfer Hallmark’s interest but also terminated its existence in 1995 and therefore could not renew the judgment in 2003 “any more than a human judgment creditor who died could rise from the grave years later to do the same.” Priest has chosen a poor analogy. Even death does not abate a pending action. (§ 377.21.) After death, the executor of the decedent’s estate may be substituted in as a party. (Woolley v. Seijo (1964) 224 Cal.App.2d 615, 620 [judgment for or against dead person is void only if the person was dead before the action began].) Section 686.010 provides: “After the death of the judgment creditor, the judgment may be enforced as provided in this title by the judgment creditor’s executor or administrator or successor in interest.” Priest’s reply brief assumes this statute applies only to humans, and he suggests that lack of an equivalent statute for death of business entities must mean that the judgment dies when the business entity dies without perfecting a transfer of interest. We need not address this point, raised for the first time in the reply brief and unsupported by analysis or authority.

At the time of the 2003 renewal, the action continued in the name of the original party, Hallmark, and the 2003 application for renewal was filed by the same lawyer who filed the complaint on behalf of Hallmark. Even if there was no formal “assignment of record” at that time, Priest obviously accepted Ose Properties, Inc. as a successor in interest of the judgment creditor, because Priest at the time of the 2003 renewal was already making his payments on the judgment payable to Ose Properties, Inc. Priest fails to show anything wrong with that.

Priest cites former provisions of the Corporations Code in effect when Hallmark dissolved, that a limited partnership could be: (1) formed by executing a partnership agreement and filing a certificate of limited partnership with the Secretary of State, (2) dissolved by filing a certificate of dissolution with the Secretary of State, (3) allowed to continue conducting business after dissolution to wind up its affairs, and (4) upon completion of winding up its affairs, file a certificate of cancellation upon which the limited partnership certificate was cancelled. (Former Corp. Code, §§ 15621 [certificate of limited partnership “is conclusive evidence of the formation of a limited partnership and prima facie evidence of its existence”], 15623 [upon dissolution of partnership, partners file a certificate of dissolution and “upon the completion of the winding up of the affairs of the limited partnership” the partners file a certificate of cancellation], 15626 [“upon the filing of a certificate of cancellation . . . the certificate of limited partnership is canceled”], repealed by Stats. 2006, ch. 495, § 18, Assem. Bill No. 339, operative Jan. 1, 2010.)

But, in general, a dissolution operates only with respect to future transactions; as to everything past the partnership continues until all pre-existing matters are terminated. (Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 445; King v. Stoddard (1972) 28 Cal.App.3d 708, 711.) The powers of partners with respect to rights created during the partnership remain after dissolution of the partnership. (Braun v. Woollacott (1900) 129 Cal. 107, 111; 48 Cal.Jur.3d Partnership §§ 130, 185.)

Priest offers no authority that a certificate of cancellation should deprive Hallmark or its successor in interest from collecting on the judgment which is part of winding up the affairs of the partnership. Cancellation terminates any apparent authority to bind the limited partnership, as suggested in a Uniform Limited Partnership Act Comment to the new statute for certificates of cancellation, Corporations Code section 15902.03. (24A West’s Ann. Cal. Codes, Corporations, § 15902.03, Uniform Limited Partnership Act Comment, p. 266.) While perhaps Hallmark could have waited to file the cancellation certificate until Priest paid the judgment in full, the likelihood of that happening may have seemed remote. And cancellation would prevent anyone from attempting to bind Hallmark to new transactions.

Priest cites Timberline, Inc. v. Jaisinghani (1997) 54 Cal.App.4th 1361, 1365-1367, that a suspended corporation could not renew a judgment. However, that case was decided on the basis that a specific statute (Rev. & Tax Code, § 23301) expressly deprived corporations of corporate powers during a suspension for nonpayment of taxes, though the corporation could revive its status by paying the taxes, which would retroactively legitimize acts performed during the suspension. (Timberline, at pp. 1365-1367.) Priest cites no similar provision applicable to partnerships.

Priest cites cases that supposedly stand for the proposition that, by assigning the judgment to Ose Properties in 1995, Hallmark lost all right to enforce the judgment. However, in the cited cases the lawsuits were filed by persons or entities who had already assigned away their rights before the lawsuits were filed. (Botsford v. Haskins & Sells (1978) 81 Cal.App.3d 780, 784; McCown v. Spencer (1970) 8 Cal.App.3d 216, 225; see also, Johnson v. County of Fresno (2003) 111 Cal.App.4th 1087, 1096 [once a transfer has been made, the assignor lacks standing to sue on the claim].) Here, it is undisputed that Hallmark had an interest in its claim against Priest when it sued and when judgment was entered.

Priest claims the 2003 application for renewal was “a fraud on the court” and on him because the application, signed under penalty of perjury, falsely named Hallmark as “Applicant” and “Judgment creditor.” Priest also claims that, because Hallmark ceased to be a legal entity in 1995, the court lacked jurisdiction in the fundamental sense and had no power to act at all in 2003. However, as indicated, the action could continue in the name of the original party after transfer of interest (§ 368.5), and Priest fails to show the cancellation of partnership deprived the court of fundamental jurisdiction over the case. Goldman, supra, 160 Cal.App.4th 255, rejected a judgment debtor’s argument that renewal was void because he had moved to Florida and therefore no longer had sufficient contacts with California for personal jurisdiction. The court that entered the original judgment had continuing jurisdiction to enforce the judgment under section 410.50, which provides “Jurisdiction of the court over the parties and the subject matter of an action continues throughout subsequent proceedings in the action,” including subsequent proceedings incidental thereto. (Goldman, supra, 160 Cal.App.4th at p. 263 [motion to vacate was also properly denied as untimely].)

Priest cites no supporting authority but instead ineffectually relies on inapposite cases, including cases from other jurisdictions, dealing with other issues, e.g., that where a lawsuit is brought by or against an entity that is legally nonexistent when the complaint is filed, the proceeding is void ab initio and is not fixable by amendment to name an existing person or entity. (E.g., Oliver v. Swiss Club Tell (1963) 222 Cal.App.2d 528, 537.) Here, however, Hallmark was an existing entity when it filed the lawsuit against Priest for nonpayment of rent and when judgment was entered in 1993.

Priest cites inapposite cases where parties submitted false declarations falsifying facts material to the dispute, such as when a plaintiff to secure service of summons by publication falsely declared the defendant lived somewhere else despite knowing her true address (e.g., Aldrich v. Aldrich (1928) 203 Cal. 433, 437) or a lawyer falsely declared he was independent counsel for a party he assertedly advised regarding consequences of signing a confession of judgment (Rivercourt Co. v. Dyna-Tel, Inc. (1996) 41 Cal.App.4th 1477, 1481-1482). Priest has not offered any factual or legal analysis that what happened in this case was fraud as opposed to inadvertence.

Priest shows no grounds for reversal based on the 2003 renewal.

2. The 2013 Renewal

Ose Properties, as assignee, renewed the judgment in 2013 and submitted a 2013 acknowledgement of assignment. An assignee may enforce the judgment if “an acknowledgement of assignment of judgment to that assignee has been filed under Section 673 or the assignee has otherwise become an assignee of record.” (§ 681.020; see also, Macmillan Petroleum Corp. v. Griffin (1950) 99 Cal.App.2d 523 [holder of purported assignment of judgment made prior to dissolution of a corporate judgment creditor could be substituted in as party plaintiff in a proceeding to enforce the judgment].) Section 673 states a judgment creditor’s assignee may become an “assignee of record” by filing with the court clerk an acknowledgement of assignment of judgment meeting specified requirements, or by any other means by which an assignee may become an assignee of record.

Priest argues the 2013 renewal is invalid because (1) Hallmark no longer existed in 2013 and therefore could not execute an Acknowledgement of Assignment in 2013, and (2) the 2013 Acknowledgement was not signed by Ose on behalf of Hallmark’s general partner (i.e., as president of Melenco) or limited partners, who would have authority to wind up partnership affairs (under former Corp. Code, § 15683), but as “Enlow [A.] Ose on behalf of Plaintiff and Judgment Creditor Hallmark Associates.” Priest asserts that this was a noncurable defect on the face of the acknowledgement requiring reversal as a matter of law. However, he offers no supporting authority that it was a noncurable defect but instead suggests it was respondent’s burden on appeal to explain how the defect could be cured. The burden is on Priest as appellant.

Priest attempts to raise on appeal a new argument that he did not raise in the trial court, i.e., that the 2013 Acknowledgement of Assignment does not comply with statutory requirements of section 673, subdivision (b), governing recording of assignment of judgment rights, because the document was not made in the manner of an acknowledgement of a conveyance of real property (by the general partner or a majority of limited partners), and it was not and could not be executed by a judgment creditor which no longer existed. Priest argues we should consider the contention despite his forfeiture, because it presents a pure question of law. We decline to do so.

Priest fails to show error, and we therefore need not address his misguided claim improperly raised for the first time in his reply brief, that (1) he need not show prejudice because he is challenging the judgment on the merits rather than claiming procedural error, and (2) that error was prejudicial by leaving him subject to indebtedness on the money judgment plus accrued interest.

Disposition

The order denying Priest’s motion to vacate the 2013 renewal of judgment is affirmed. Respondent shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a).)

HULL , Acting P. J.

We concur:

BUTZ , J.

DUARTE , J.