Court Opinion

ID: 9950330
Source: CourtListenerOpinion
Date Created: 2024-03-13 19:04:45.6786+00
Date Added: 2024-06-11T14:36:37.266183
License: Public Domain

Filed 3/13/24 Green v. Green CA2/2
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                        DIVISION TWO

ROBERT GREEN,                                            B321805

         Plaintiff and Appellant,                        (Los Angeles County
                                                         Super. Ct. No. 20STCV05251)
         v.

PAULA GREEN,

     Defendant and
Respondent.

      APPEAL from a judgment and order of the Superior Court
of Los Angeles County, William F. Fahey, Judge. Affirmed.

     Beach Cities Law Group, Frank Sandelmann and Brennan
Mitch for Plaintiff and Appellant.

     Caldwell Law Firm and Larry J. Caldwell for Defendant
and Respondent.

                                 _______________________
       Appellant Robert Green contends substantial evidence does
not support the judgment in favor of respondent Paula Green on
his claim that Paula made false claims in multiple fee waiver
applications.1 Robert also challenges the trial court’s finding his
“claim was clearly frivolous, clearly vexatious, or brought
primarily for purposes of harassment” when it granted Paula’s
motion for attorney’s fees under Government Code section 12652,
subdivision (g)(9)(A).
       We find substantial evidence supports the trial court’s
finding that Paula did not knowingly make false claims in her fee
waiver applications. We also find substantial evidence supports
the finding that Robert’s claims were frivolous and brought solely
to harass Paula in that they had no reasonable chance of success
and were brought as part of a “sibling feud.”
       We affirm the judgment and order.

                          BACKGROUND
       The parties in this case are siblings who have litigated
several claims arising from the probate of their father’s estate.
The trial court provided some background in its June 21, 2021
order disqualifying sibling Attorney Matthew Green from
representing his brother, Robert:
       “This case represents the latest chapter in a sibling feud
which goes back several decades. As particularly pertinent to the
instant case, a large judgment against Paula Green was entered
on February 27, 2018 in the Probate Court. See In re the Matter
of Irvin Green, et al., 16STPB01322. The judgment provided that

1   We refer to the parties who share a surname by their first
names for ease of reference and not out of disrespect.

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Paula’s brothers, Matthew Green (who is a lawyer) and Robert
Green, were the prevailing parties. Thereafter, Matthew and
Robert have vigorously pursued collection efforts against Paula’s
assets.”
       The trial court observed, “More recently, Matthew and
Robert decided to try a new strategy against their sister. On
February 10, 2020, Matthew filed the instant ‘qui tam’ complaint
in the name of Robert which purports to be on behalf of the State
of California and the County of Los Angeles. The basis of this
complaint is that Paula allegedly obtained several court fee
waivers based on fraudulent claims of financial distress. The
complaint was initially filed under seal to permit the California
Attorney General’s Office to decide if it had any interest in
intervening. Not surprisingly, the Attorney General declined to
get involved in this family dispute. On December 9, 2020, the
case was unsealed.”
       During the three-day bench trial, Robert attempted to
prove his qui tam2 complaint, seeking to establish Paula provided
false information in five fee waiver applications. In these
applications Paula indicated her gross monthly household income
was below $1,761.46, and she did not have sufficient income to
pay her household’s basic needs and the court fees. Robert
provided business records to show Paula’s monthly income
exceeded the $1,761.46 amount because she received numerous
transfers of funds from two companies, Glaser & Weil, LLC, and
Fumar USA, LLC. Robert also introduced expert testimony that

2      “Qui tam is short for ‘qui tam pro domino rege quam pro se
ipso in hac parte sequitur,’ which means ‘who pursues this action
on our Lord the King’s behalf as well as his own.’” (Rockwell Int’l
Corp. v. United States (2007) 549 U.S. 457, 463, fn. 2.)

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such payments are presumed to be taxable income unless they
qualify for an exception under the Internal Revenue Code.
However, the expert conceded he could not opine that the
transfers from the companies were income to Paula without
examining the companies’ general ledgers.
       Paula testified the companies were real estate companies
she operated with her mother and the funds she received were
the return of her initial capital contributions. She maintained she
had no income and relied solely on these returns of her prior
contributions for household expenses.
       The trial court found in favor of Paula. In its statement of
decision, the trial court concluded Robert had not met his burden
to show the transfers were income. It also noted Paula testified
she had no intent to defraud with her fee waiver applications.
       Subsequently, the court granted Paula’s motion for
attorney’s fees, finding the lawsuit was frivolous and brought to
harass Paula. As a result, Robert was ordered to pay attorney’s
fees of $83,700 to Paula.
       Robert filed timely notices of appeal of the judgment and
the attorney’s fees order.3

                  CONTENTIONS ON APPEAL
      Robert argues a lack of substantial evidence supports the
findings that the monetary transfers to Paula from the LLC’s did
not constitute income. Additionally, he contends it was an error
of law to require him to prove specific intent to defraud.

3      The notice of appeal for the judgment was filed June 20,
2022, and the notice of appeal for the attorney fees order was
filed September 15, 2022. The appeals were consolidated on
February 27, 2023.

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      Finally, Robert claims the attorney’s fees order should be
reversed, asserting his case was not clearly frivolous, vexatious,
or brought primarily for harassment, as required by Government
Code section 12652, subdivision (g)(9)(A).

                             DISCUSSION
I.     Applicable law and standard of review
       On review of a judgment entered after a bench trial, “‘we
review the entire record in the light most favorable to the
judgment to determine whether there are sufficient facts,
contradicted or uncontradicted, to support the judgment.’”
(Patricia A. Murray Dental Corp. v. Dentsply Internat., Inc.
(2018) 19 Cal.App.5th 258, 270 (Patricia A. Murray Dental
Corp.).)
       We review findings of fact in the statement of decision for
substantial evidence. (Gomez v. Smith (2020) 54 Cal.App.5th
1016, 1026.) Under this test, “‘“[W]e are bound by the established
rules of appellate review that all factual matters will be viewed
most favorably to the prevailing party [citations] and in support
of the judgment . . . . ‘In brief, the appellate court ordinarily looks
only at the evidence supporting the successful party, and
disregards the contrary showing.’ [Citation.] All conflicts,
therefore, must be resolved in favor of the respondent.”’”
(Patricia A. Murray Dental Corp., supra, 19 Cal.App.5th at
pp. 269-270.)
       “Substantial evidence is evidence that is reasonable and
credible. In evaluating the evidence, we accept reasonable
inferences in support of the judgment and do not consider
whether contrary inferences may be made from the evidence.’”

                                   5
(Patricia A. Murray Dental Corp., supra, 19 Cal.App.5th at
p. 270.)
      Here, the question whether Robert can be ordered to pay
attorney’s fees under Government Code section 12652,
subdivision (g)(9)(A), depends on a finding that his “claim was
clearly frivolous, clearly vexatious, or brought primarily for
purposes of harassment.” This is a mixed question of law and fact
and, when the question is predominantly factual, as it is here, the
determination is reviewed under the substantial evidence test.
(Crocker National Bank v. City and County of San Francisco
(1989) 49 Cal.3d 881, 888.)
II.   California’s False Claims Act (CFCA)
      Robert claims Paula made false statements about her
income to obtain fee waivers from both the Los Angeles Superior
Court and the Second District Court of Appeal. He brought this
action under CFCA seeking remedies on behalf of the State of
California and the County of Los Angeles, as these fees would
have been paid to these public entities.
      “The [CFCA] provides that any person who commits certain
acts against the state or a political subdivision is liable to the
state or political subdivision for treble damages. (Gov. Code,
§ 12651, subd. (a).) Among the prohibited acts are knowingly
presenting or causing to be presented ‘a false claim for payment
or approval’ by the state or a political subdivision, and knowingly
making or using or causing to be made or used ‘a false record or
statement to get a false claim paid or approved.’ (Id., § 12651,
subd. (a)(1), (2).) The [CFCA] also provides that any person who
commits such an act may be liable for a civil penalty of up to
$10,000 for each ‘false claim.’ (Id., § 12651, subd. (a).) Thus, the
act provides for both treble damages for certain acts and a civil

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penalty for each ‘false claim.’” (Fassberg Construction Co. v.
Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th
720, 734-735, fns. omitted.)
       Thus, the essential elements of Robert’s CFCA claim are (1)
Paula filed for and received fee waivers and (2) Paula knowingly
made false statements in those fee waiver applications to avoid
paying required court fees. (See Mao’s Kitchen, Inc. v. Mundy
(2012) 209 Cal.App.4th 132, 148.)
       When an individual qui tam plaintiff initiates an action
pursuant to Government Code section 12652, subdivision (c)(1),
the qui tam plaintiff brings the action “for the person and . . . for
a political subdivision in the name of the political subdivision.”
Thus, the individual brings the action on behalf of the individual
and the government entity, although the government entity is
only a nominal plaintiff at the time of filing.
III. Substantial evidence supports the finding Paula did
       not knowingly make false statements in her fee
       waiver applications
       Robert, as the qui tam plaintiff, argued Paula obtained fee
waivers by making false statements about her income. He
contends the trial court erred by requiring him to demonstrate
Paula had the specific intent to defraud in her applications.
       Provisions of the CFCA require Robert to show Paula had
made false claims “knowingly.” (Gov. Code, § 12651, subd. (a)(4),
(7).) Under the CFCA, “knowingly” means one “[h]as actual
knowledge of the information,” “[a]cts in deliberate ignorance of
the truth or falsity of the information,” or “[a]cts in reckless
disregard of the truth or falsity of the information.” (Gov. Code,
§ 12650, subd. (b)(3).) Proof of specific intent to defraud is not
required. (Ibid.)

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       CFCA “was enacted in 1987 and was modeled on the
federal False Claims Act (31 U.S.C. § 3729 et seq.) . . . .” (State of
California ex rel. Standard Elevator Co., Inc. v. West Bay
Builders, Inc. (2011) 197 Cal.App.4th 963, 973.) Accordingly, “it is
appropriate to turn to federal cases for guidance in interpreting
the [CFCA].” (City of Pomona v. Superior Court (2001) 89
Cal.App.4th 793, 802.) “In defining knowingly, Congress
attempted ‘to reach what has become known as the “ostrich” type
situation where an individual has “buried his head in the sand”
and failed to make simple inquiries which would alert him that
false claims are being submitted.’ [Citation.] Congress adopted
‘the concept that individuals and contractors receiving public
funds have some duty to make a limited inquiry so as to be
reasonably certain they are entitled to the money they seek.’”
(U.S. v. Bourseau (9th Cir. 2008) 531 F.3d 1159, 1168.) However,
“Congress specifically expressed ‘“its intention that the act not
punish honest mistakes or incorrect claims submitted through
mere negligence.”’” (U.S. ex rel. Hefner v. Hackensack University
Medical Center (3d Cir. 2007) 495 F.3d 103, 109.)
       Paula claimed her income was low enough that her filing
fees should be waived. The process for obtaining a fee waiver is
governed by Government Code sections 68630–68641 and
California Rules of Court, rules 3.50–3.58. Applicants are
required to use form FW-001 to explain their need for a waiver.
       Paula stipulated she had applied for and obtained fee
waivers in five cases. In the applications, she used form FW-001
and checked a box in paragraph 5, subsection (b), indicating her
gross monthly household income was less than the $1,761.46
amount listed on the application for a two-person household
(Paula and her mother). Paula also checked the box in paragraph

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5, subsection (c), indicating she did not have enough income to
pay for her household’s basic needs and the court fees. Based on
these statements, she qualified for the fee waivers.
      To show Paula violated the CFCA, it was Robert’s task to
show Paula “knowingly” included false statements in her fee
waiver. This required evidence Paula had actual knowledge her
household monthly income exceeded $1,761.46, that she acted in
deliberate ignorance of the truth or falsity of the information, or
acted in reckless disregard of the truth or falsity of the
information.
      Robert submitted bank statements showing Paula received
transfers of funds from two companies, Glaser & Weil, LLC, and
Fumar USA, LLC. However, the statements alone, without facts
identifying and explaining each transfer, fail to establish Paula
knowingly made false statements about her monthly household
income.
      Robert attempted to use expert testimony from Steven
Jager, a certified public accountant, to meet his burden. Jager
opined that, for federal tax purposes, payments received are
presumed to be taxable income unless they qualify for an
exception. However, Jager admitted he had no experience with
form FW-001 and offered no opinion whether the federal tax
definition of “taxable income” could be used to define “monthly
household income” on form FW-001. Jager also admitted he could
not render an opinion that the transfers from the named
companies were income to Paula without reviewing the
companies’ general ledgers, which he had not done.4

4     Jager testified that withdrawals of capital from an LLC are
not income.

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       Paula’s testimony characterized the transfers as returns of
the capital contributions she made to her real estate businesses.
She stated Glaser & Weil, LLC, was a real estate business she
and her mother operated. She added that her mother and she had
made capital contributions of $327,337.33 to the company. Paula
also stated Fumar USA, LLC, was a real estate business to which
she had transferred $165,000 from Glaser & Weil, LLC, as a
capital investment. Paula considered none of the transfers from
Glaser & Weil, LLC, to be income because she had contributed
capital to the company. When asked, Paula testified she had no
income, and her sole source of money was from the two
companies that she used to pay household expenses.
       If determined to be credible, this is substantial evidence
that Paula believed the money transfers from the companies were
a return of her capital contributions and not income. No evidence
was presented to show Paula had actual knowledge the money
transfers increased her “household monthly income” to exceed
$1,761.46 or that the transfers were income according to form
FW-001 such that she could pay her household expenses and
court fees. Paula’s testimony showed she believed she was
recovering her own money from the real estate businesses.
       Paula’s testimony also showed she had no knowledge the
companies were paying her money that could be considered
income, e.g., payment for services or goods she provided to them.
Instead, her testimony was she believed she was recovering
capital contributions from her businesses. Robert did not offer
evidence that Paula acted in deliberate ignorance of the truth or
falsity of the information about her income or that she acted in
reckless disregard of the truth or falsity of the information about
her income. Robert also failed to provide evidence to show Paula

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“knowingly” made false statements in her fee applications.
Robert’s contention that the trial court implicitly required him to
show specific intent to defraud does not identify reversible error.
       Therefore, Paula’s testimony supports the trial court’s
finding that Paula did not violate CFCA.
IV. Substantial evidence supports attorney’s fees award
       to Paula
       Robert also challenges the order directing him to pay Paula
$83,700 in attorney’s fees. The order was issued pursuant to
Government Code section 12652, subdivision (g)(9)(A), which
authorizes a trial court to award reasonable attorney’s fees to a
prevailing party when the false claim action is “clearly frivolous,
clearly vexatious, or brought primarily for purposes of
harassment.”
       The trial court found Robert’s claim frivolous and
harassing. “A claim is clearly frivolous if it is ‘“utterly lacking in
legal merit and evidentiary support.”’ [Citation.] Stated
otherwise, a claim is clearly frivolous ‘when, viewed objectively, it
may be said to have no reasonable chance of success, and present
no valid argument to modify present law.’” (State of California ex
rel. Standard Elevator Co., Inc. v. West Bay Builders, Inc., supra,
197 Cal.App.4th at p. 982.) Harassment too has been found
“when the plaintiff pursues the litigation with an improper
purpose, such as to annoy or embarrass the defendant.”
(Pfingston v. Ronan Engineering Co. (9th Cir. 2002) 284 F.3d 999,
1006.)
       Robert offered no evidence of Paula’s monthly household
income and relied on evidence of fund transfers from businesses
Paula operated, without providing facts needed to establish these
transfers were income. No reasonable person would think this to

                                 11
be sufficient to establish Paula violated CFCA in her fee waiver
applications. As a result, Robert’s claim had no reasonable chance
of success.
       Substantial evidence also supports the finding that Robert’s
claim was brought solely for the purpose of harassment. As the
trial court noted, Robert’s case is “the latest chapter in a sibling
feud which goes back several decades.” The trial court also found
the lawsuit had “little to do with the interests of the State of
California and/or the County of Los Angeles, but more to do with
Matthew and Robert’s desire to perpetuate the bitter battle with
their sister.” In the context of a “sibling feud,” Robert’s pursuit of
a claim like this, with no chance of success, must have been
intended to annoy or embarrass Paula.
       Robert claimed, too, that Paula’s motion for sanctions was
untimely. The trial court rejected this argument, finding no
prejudice as Robert was able to file and serve opposition papers,
despite the motion being “late by about one or two days.”
       “‘It is well settled that the appearance of a party at the
hearing of a motion and his or her opposition to the motion on its
merits is a waiver of any defects or irregularities in the notice of
motion. [Citations.] This rule applies even when no notice was
given at all. [Citations.] Accordingly, a party who appears and
contests a motion in the court below cannot object on appeal or by
seeking extraordinary relief in the appellate court that he had no
notice of the motion or that the notice was insufficient or
defective.’” (Carlton v. Quint (2000) 77 Cal.App.4th 690, 697.)
Robert filed opposition papers that addressed the merits of
Paula’s motion. He did not ask for a continuance. He did not show
prejudice. He had the opportunity to present argument at the

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hearing. As a result, he waived any defects or irregularities in the
notice of motion.

                          DISPOSITION
       We affirm the trial court’s judgment and order of attorney’s
fees to respondent, who is also awarded her costs of appeal.

                                     ________________________
                                     CHAVEZ, J.

We concur:

____________________________
LUI, P. J.

____________________________
ASHMANN-GERST, J.

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