Court Opinion

ID: 2743440
Source: CourtListenerOpinion
Date Created: 2014-10-17 17:02:20.45338+00
Date Added: 2024-06-11T10:05:33.997710
License: Public Domain

Filed 10/17/14
                                CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                SECOND APPELLATE DISTRICT

                                       DIVISION FOUR

NIXON PEABODY LLP,                                B256871

                  Petitioner,                     (Los Angeles County
                                                  Super. Ct. No. BC483658)
                     v.

SUPERIOR COURT OF THE COUNTY
OF LOS ANGELES,

                  Respondent;

CABOT GOLF CL-PP 1, LLC., et al.

                  Real Parties in Interest.

        ORIGINAL PROCEEDINGS in mandate. Michael L. Stern, Judge. Petition
granted.
        Hill, Farrer & Burrill, Kevin H. Brogan, Dean E. Dennis, and William A. Meyers,
for Petitioner.
        No appearance for Respondent.
        Winsten Law Group and Michael S. Winsten, for Real Parties in Interest.

                                ______________________________
       Petitioner Nixon Peabody LLP seeks a writ of mandate directing the trial court to
                                        1
set aside its order granting real parties’ motion to vacate their voluntary dismissal under
                                                       2
Code of Civil Procedure section 473, subdivision (d) on the ground that the dismissal
was void. Petitioner argues the trial court erred in its finding. We agree with petitioner
and issue the writ.

                      FACTUAL AND PROCEDURAL SUMMARY
       The facts concerning the instant petition for writ are undisputed. In 2007, real
parties purchased interests in two Florida golf clubs. Petitioner represented real parties in
the transaction. On April 27, 2012, real parties initiated the underlying action in the Los
Angeles County Superior Court against numerous entities, alleging that the private
placement memorandum used was false and misleading and that petitioner failed in its
duty to ensure proper disclosures were made to real parties. On advice of their new
counsel, Michael S. Hull, real parties filed nearly identical suits in the United States
District Court for the Eastern District of Texas on April 28, 2012, and in the United
States District Court for the Central District of California on April 30, 2012.
       Over the next several months, real parties actively litigated the three cases. Then,
in November 2012, on Mr. Hull’s advice, real parties dismissed the instant case and the
federal action pending in the Central District of California, leaving only the federal action
1
      The real parties in interest are Cabot Golf CL-PP 1, LLC, Cabot Golf CL-PP 3,
LLC, Cabot Golf CL-PP 4, LLC, Cabot Golf CL-PP 5, LLC, Cabot Golf CL-PP 6, LLC,
Cabot Golf CL-PP 7, LLC, Cabot Golf CL-PP 8, LLC, Cabot Golf CL-PP 9, LLC, Cabot
Golf CL-PP 11, LLC, Cabot Golf CL-PP 12, LLC, Cabot Golf CL-PP 13, LLC, Cabot
Golf CL-PP 14, LLC, Cabot Golf CL-PP 15, LLC, Cabot Golf CL-PP 16, LLC, Cabot
Golf CL-PP 17, LLC, Cabot Golf CL-PP 18, LLC, Cabot Golf CL-PP 19, LLC, Cabot
Golf CL-PP 20, LLC, Cabot Golf CL-PP 21, LLC, Cabot Golf CL-PP 22, LLC, Cabot
Golf CL-PP 23, LLC, Cabot Golf CL-PP 24, LLC, Cabot Golf CL-PP 25, LLC, Cabot
Golf CL-PP 26, LLC, Cabot Golf CL-PP 28, LLC, Cabot Golf CL-PP 29, LLC, Cabot
Golf CL-PP 30, LLC, Cabot Golf CL-PP 31, LLC, Cabot Golf CL-PP 32, LLC, Cabot
Golf CL-PP 33, LLC, and Cabot Golf CL-PP 34, LLC.
2
       Subsequent section references are to the Code of Civil Procedure.

                                              2
in the Eastern District of Texas. Doing so exposed real parties to the federal two-
               3
dismissal rule. Realizing this, petitioner moved to dismiss the Texas case under this rule,
arguing real parties’ second voluntary dismissal operated as a dismissal on the merits and
claiming the Texas case was barred under the doctrine of res judicata. The District Court
granted petitioner’s motion and dismissed the Texas case with prejudice. Real parties
appealed; the dismissal was affirmed by the Fifth Circuit. (Cabot Golf CL-PP 1, LLC v.
Nixon Peabody, LLP (5th Cir. July 7, 2014, No. 13-40912) 2014 U.S. App. LEXIS
12780.) Real parties also attempted to reopen their case in the Central District of
California; their motion was denied. An appeal from that decision is pending before the
Ninth Circuit. (Cabot Golf 1, LLC v. Cabot Golf CL-PP Acquisition, LLC (9th Cir., No.
14-55095) app. pending, app. filed Jan. 15, 2014.)
       This proceeding concerns real parties’ efforts to revive their case in the superior
court. In October 2013, real parties filed a motion to vacate and set aside their voluntary
dismissal of this action. Relying on section 473, subdivision (d), they argued the
voluntary dismissal was void because they did not provide “informed consent.” The
argument was that, based on Mr. Hull’s mistake, real parties were assured their decision
to voluntarily dismiss the two actions would have no adverse impact upon the related
Texas federal action. In opposition, petitioner argued real parties fully consented to the
voluntary dismissal, but did not authorize the negative result; an error of that kind does
not render a voluntary dismissal “void.” The trial court found the voluntary dismissal
was void, granted the motion to vacate on January 24, 2014, and stayed the case until
September 2015 pending appeal. Petitioner appealed the trial court’s order on March 5,
2014; real parties filed a motion to dismiss the appeal on the ground that the trial court’s
order was not appealable. We agreed with real parties and dismissed the appeal on May
15, 2014.
3
        Rule 41, subdivision (a)(1)(B) of the Federal Rules of Civil Procedure (28 U.S.C.)
states that “[u]nless the notice or stipulation states otherwise, the dismissal is without
prejudice. But if the plaintiff previously dismissed any federal- or state-court action
based on or including the same claim, a notice of dismissal operates as an adjudication on
the merits.”
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       On June 12, 2014, petitioner filed a petition for writ of mandate, and on July 23,
2014, we issued an alternative writ ordering the superior court to vacate its order granting
the motion of real parties to set aside their dismissal without prejudice, and enter a new
order denying that motion, or in the alternative, to show cause why a peremptory writ of
mandate should not issue. We permitted real parties to file a return to the alternative writ.

                                        DISCUSSION
                                                I
       Petitioner filed its writ petition on June 12, 2014. The petition was untimely under
the 60-day rule. (Cal West Nurseries v. Superior Court (2005) 129 Cal. App. 4th 1170,
1173.) However, this rule is not jurisdictional; an appellate court may consider a writ
petition at any time despite the 60-day rule if it considers the circumstances
extraordinary. (Volkswagen of America, Inc. v. Superior Court (2001) 94 Cal. App. 4th
695, 701.)
       Petitioner explains its writ petition was not timely filed because it first sought a
direct appeal of the trial court’s January 24, 2014 order. Petitioner filed the writ petition
less than a month after the appeal was dismissed. Because petitioner diligently sought
relief and, as discussed below, the trial court clearly erred in its interpretation of section
473, we exercise our discretion to consider the petition.

                                               II
       Section 473, subdivision (d) provides, “The court may, upon motion of the injured
party, or its own motion, . . . set aside any void judgment or order.” The inclusion of the
word “may” means that even if the trial court determines the order or judgment was void,
it still retains discretion to set the order aside or allow it to stand. (Talley v. Valuation
Counselors Group, Inc. (2010) 191 Cal. App. 4th 132, 146; Cruz v. Fagor America, Inc.
(2007) 146 Cal. App. 4th 488, 495 (Cruz).) The reviewing court generally faces two
separate determinations when considering an appeal based on section 473, subdivision
(d): whether the order or judgment is void and, if so, whether the trial court properly

                                                4
exercised its discretion in setting it aside. Evaluating an order or judgment as void is a
question of law, reviewed de novo. (Cruz, at p. 496.) Ordinarily, we review the trial
court’s decision to set aside a dismissal for abuse of discretion. (Romadka v. Hoge
(1991) 232 Cal. App. 3d 1231, 1235 (Romadka).) But in this case, we need not reach the
question of whether the trial court abused its discretion because the voluntary dismissal is
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not void. (Cruz, at pp. 495-496)

                                              III
        The issue before us is whether the real parties’ voluntary dismissal of this action is
“void” under section 473, subdivision (d). Real parties contend Mr. Hull “had no
inherent or implied authority to dismiss the action without the clients’ informed consent
as to all of the risks and alternative options.” Real parties do not dispute that they
consented to the dismissal; they argue, however, Mr. Hull’s failure to advise them of the
federal two-dismissal rule rendered their consent, and thus their voluntary dismissal,
void.
        Real parties rely heavily on Romadka to support their position. In Romadka, the
plaintiff obtained a default judgment against defendant but failed to timely serve it,
subjecting the case to mandatory dismissal without prejudice. (Romadka, supra,
232 Cal.App.3d at p. 1234.) Within the period of limitations, plaintiffs filed a new action
and authorized their attorney to dismiss the original action without prejudice. (Ibid.)
Plaintiffs’ attorney completed the request for dismissal form but mistakenly checked the
“with prejudice” box. (Ibid.) Realizing plaintiffs’ error, defendant raised a defense of res
judicata in the new action. (Ibid.) Plaintiffs then moved to vacate their dismissal; the
trial court denied their motion. (Ibid.) Plaintiffs appealed, arguing their dismissal with
prejudice was void under section 473, subdivision (d). (Romadka, supra, at p. 1235.)
4
       Real parties argue the proper standard of review in this instance is abuse of
discretion. For reasons stated in this opinion it is clear that real parties’ voluntary
dismissal was not void. Thus, even if evaluated under an abuse of discretion standard, we
find the trial court abused its discretion in granting real parties’ motion to set aside the
voluntary dismissal.
                                               5
The Romadka court reversed the trial court’s order denying the motion to vacate the
dismissal, holding that the “attorney’s lack of authority invalidated her dismissal” as
void. (Id. at p. 1237.) In doing so, it relied on cases standing for the proposition that an
attorney’s unauthorized disposition of a client’s substantive rights is invalid and the
resulting judgment or dismissal is therefore void. (See, e.g., Linsk v. Linsk (1969)
70 Cal. 2d 272, 276 [attorney, over client’s objection, entered into a stipulation that the
action could be decided upon record made in prior trial]; Whittier Union High Sch. Dist.
v. Superior Court (1977) 66 Cal. App. 3d 504, 506 [attorney forged clients’ signatures and
entered into settlement agreement without clients’ knowledge].)
       These cases do not support real parties’ position; the attorneys in the cited cases
were not authorized to undertake the actions at issue. This case, on the other hand, does
not involve a dispute over whether real parties were unaware of or did not authorize the
dismissal; they discussed the matter with Mr. Hull and authorized him to dismiss the two
cases, including this one. We are not aware of, and real parties have not cited to, any
authority indicating a voluntary dismissal resulting from erroneous legal advice is void
under section 473, subdivision (d). The fact that Mr. Hull mistakenly gave incorrect
advice leading to dismissal of a separate case in another jurisdiction does not render the
dismissal in this action void.
       The Legislature has taken account of instances of mistake under section 473,
subdivision (b). This provision allows the court to “relieve a party or his or her legal
representative from a judgment, dismissal, order, or other proceeding taken against him
or her through his or her mistake, inadvertence, surprise, or excusable neglect” if the
motion is made within six months. (§ 473, subd. (b); 8 Witkin, Cal. Procedure (5th ed.
2008) Attack on Judgment in Trial Court, § 153, p. 747 [“It is well settled that relief may
be granted under C.C.P. § 473(b) for a mistake of law . . . .”].) Real parties’ motion to set
aside their voluntary dismissal was an issue more appropriately considered under section
473, subdivision (b) because it arose from a mistake—one which Mr. Hull
acknowledged. Real parties did not seek relief under this provision, presumably because

                                              6
their motion to vacate and set aside their dismissal was filed well after the six-month
deadline had passed.
       Since the real parties’ tactical decision to voluntarily dismiss the underlying case
without prejudice was not a void judgment or order, the trial court had no authority to set
aside the dismissal as void. (Cruz, supra, 146 Cal.App.4th at p. 496.)

                                       DISPOSITION
       The alternative writ is discharged. Let a peremptory writ of mandate issue
directing the trial court to vacate its order granting real parties’ motion to set aside their
dismissal without prejudice and to enter a new order denying that motion. Petitioner
shall recover costs incurred in these writ proceedings.

       CERTIFIED FOR PUBLICATION

EPSTEIN, P. J.

MANELLA, J.

COLLINS, J.

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