Court Opinion

ID: 6324867
Source: CourtListenerOpinion
Date Created: 2022-03-18 19:03:14.232604+00
Date Added: 2024-06-11T09:21:55.404643
License: Public Domain

Filed 3/18/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION EIGHT

NHIENLE MAC et al.,                      B309490

       Plaintiffs and Respondents,       (Los Angeles County
                                         Super. Ct. No. BC680594)
       v.

EDWIN MINASSIAN et al.,

       Defendants and Appellants.

      APPEAL from a judgment of the Superior Court of Los
Angeles County. Gregory W. Alarcon, Judge. Affirmed in part,
reversed in part.
      Matthew D. Rifat for Defendants and Appellants.
      K & L Gates, Mitchell S. Kim and Joseph A. Milano for
Plaintiffs and Respondents.

                _________________________________
       Edwin Minassian and Los Robles Ventures, Inc.
(Los Robles) appeal from a judgment against them for breach of
written contracts and related claims. They contend that the
judgment should not have been issued against Minassian because
plaintiffs-respondents Nhienle Mac (Mac), Sean Cunningham
(Cunningham), and We Got Eaten, LLC (collectively, plaintiffs),
dismissed Minassian (along with Mac and Cunningham) from the
suit well before trial when they signed a stipulation and filed the
fourth amended complaint, which did not include Minassian as a
defendant (or Mac and Cunningham as plaintiffs). Accordingly,
appellants assert that Minassian was prejudiced by the court’s
judgment against him, based upon the post-trial fifth amended
complaint. Los Robles also asserts that it is entitled to a new
trial.
       We agree that Minassian was prejudiced. At trial, and for
months before, the court and the parties proceeded on the
understanding that the fourth amended complaint was the
operative complaint and plaintiffs would need to amend their
complaint to add Minassian. Nothing before or during trial put
Minassian on notice that the court viewed him as a party,
resulting in substantial prejudice to his due process rights when
the trial court included him in the judgment. The trial court
recognized this when it denied plaintiffs’ motion to file an
amended complaint after trial, but then it inexplicably
contradicted itself, added Minassian to the decision and
judgment, and referred to the post-trial fifth amended complaint
as the relevant complaint.
       We reverse the judgment as to Minassian. We decline to
remand for a new trial as to Los Robles. We make no ruling on

                                2
whether plaintiffs are barred from filing a separate action
against Minassian (an issue not addressed in the trial court).
                          BACKGROUND1
I.    “The Mixx” Joint Business Venture
      Sometime in 2017, Cunningham and Minassian decided to
partner and open a new restaurant and nightclub in Pasadena,
California to be called “The Mixx.”
      Minassian was already involved in a business called Los
Robles Ventures, Inc. Cunningham’s mother, Mac, wanted to
help her son, so she gave him money to start a company called
We Got Eaten, LLC (WGE).
      In May 2017, Mac lent money to Los Robles through a
promissory note that was signed by Minassian on behalf of Los
Robles, with the understanding that Cunningham and Minassian
would use it to open The Mixx.
      In June 2017, Mac again lent Los Robles money for The
Mixx through a second promissory note signed by Minassian on
behalf of Los Robles.
      In June 2017, Los Robles and WGE entered into a written
contract titled “Master Services Agreement” regarding The Mixx.
Cunningham signed the agreement for WGE and Minassian
signed for Los Robles. The contract stated that WGE would
provide certain food services at The Mixx in exchange for defined
monetary compensation. Los Robles and WGE were also to split
the costs of utilities and operations.
      Neither Minassian nor Los Robles ever repaid the money
lent under the promissory notes to Mac. In addition, Los Robles

1    Unless otherwise noted, the description of the factual
background is taken chiefly from the plaintiffs’ trial testimony
and exhibits.

                                 3
never paid WGE for services rendered or operating costs and
utilities under the terms of the Master Services Agreement.
II.    First Three Complaints
       In October 2017, plaintiffs filed suit against Minassian and
Los Robles for breaching the Master Services Agreement and the
May and June promissory notes.
       In February 2018, May 2018, and October 2018, plaintiffs
filed their first, second, and third amended complaints, all with
the same plaintiffs and defendants.
III. Fourth Amended Complaint and Stipulation
       In March 2019, after the plaintiffs retained new counsel,
plaintiff WGE filed a fourth amended complaint. The fourth
amended complaint removed the individual plaintiffs and
Minassian. Los Robles answered the fourth amended complaint
on May 17, 2019.
       WGE filed the fourth amended complaint pursuant to a
signed and filed stipulation between the parties. The trial court,
however, never signed the stipulation. WGE stated that it
“recently” realized that the court had not signed the stipulation.
WGE’s Statement of the Case prepared for trial on May 31, 2019,
referred to WGE as the sole plaintiff and to Los Robles as the sole
Defendant. WGE’s counsel elaborated:
       “When I got into this case, I was given a representation, by
opposing counsel, that the stipulation was actually accepted and
granted by the Court. And because of that representation, we
relied on the fact that, okay, we have to abide by what was
already entered into, via stipulation. And, based on that
stipulation . . . some of the original parties that were named in
the caption were left out or agreed to be left out in the fourth-
amended complaint.”

                                 4
         WGE’s counsel then told the court that because the
stipulation was never signed by the court, “in effect, these parties
[the individual plaintiffs and Minassian] are still in the case and
being represented.” “But given the facts that we know now . . . if
it was never granted by the Court, and that, you know, the
representation was somewhat misconstrued, then we have
concerns as to the form of the complaint and the parties thereof.
Now, we could just add the parties and extend and add a couple of
sentences . . . .” (Italics added.) WGE’s counsel told the court
that opposing counsel would likely object to adding the parties
“because some of these parties have been removed” due to lack of
standing.
         The court replied to WGE’s counsel by noting that you
“probably have . . . an argument that you could amend to proof . .
. and add these folks.” The court then asked if the parties might
settle, and WGE’s counsel stated that settlement is why he
subpoenaed Minassian to appear at trial. WGE’s counsel pointed
out that Minassian was not present despite the subpoena, and
Los Robles’s counsel responded that Minassian could be present
in 10 minutes.
         Los Robles’s counsel then argued against adding Minassian
back into the case, asserting that “the signed stipulation clearly
stated who the parties would be,” it was submitted to the court in
November 2018, and Minassian had relied on it since then.
Counsel added, “[y]our honor didn’t get a chance to sign [the
stipulation]. And we figured it was moot because [the] trial
continuance that the previous counsel requested, came and
went . . . [and] they filed a fourth-amend[ed] complaint. We
relied on that . . . . We file[d] an answer. So, it’s a matter
of . . . due process for my . . . client and all the parties who are

                                 5
part of this . . . [Los Robles] filed an answer [to] the fourth
amendment. We prepared for a jury trial [on] that . . . .”
        The court responded: “[I]t doesn’t come as any surprise.
You know who the parties are.” Counsel interrupted him, stating
“Well, yeah, I – it’s written.” The court elaborated: “it’s written
out, in the fourth amendment, that you know.” (Italics added.)
The court then said to WGE’s counsel, “you can do a little
research about adding [a] party.”
        That same morning, the two-day bench trial commenced.
At no time during the trial did WGE’s counsel move to amend the
complaint or to amend to conform to proof.
IV. Fifth Amended Complaint
        The day after trial, WGE filed a motion for leave to file a
fifth amended complaint, which would add back the parties from
the third amended complaint. In July 2019, the trial court held a
hearing on the motion. WGE’s counsel argued that leave to file a
fifth amended complaint was warranted because he was misled
by prior counsel into thinking the stipulation had been granted
by the court. Los Robles’s counsel countered that adding
Minassian back into the case after trial would be prejudicial
because the parties had been operating for months as if he was
dismissed, but that if the court were to grant leave to amend then
at least “Minassian should be allowed to take advantage of the
six months that he lost. He will be able to litigate, do discovery,
and participate in trial.”
        In August 2019, the trial court denied the motion for leave
to file the fifth amended complaint, holding: The “trial has
already been completed. The court’s minute order of July 14,
2019 shows that both sides have rested and a statement of
decision is pending. Permitting an amendment to add a

                                6
defendant dismissed before trial when trial has now already been
concluded can only be prejudicial to that defendant because there
is no opportunity for the defendant to present a defense. Further,
Plaintiff does not present any excuse, reasonable or otherwise, for
the delay in seeking leave to amend. Therefore, the motion is
denied.”
V.     Proposed Statement of Decision and
       Supplemental Briefing
       Despite its order denying the motion to file the fifth
amended complaint due to prejudice to Minassian, that very
same day the trial court issued its Proposed Statement of
Decision, making findings against Minassian. The trial court
stated plaintiffs had proven their claims in the “Fifth Amended
Complaint.” (Italics added.) Minassian and Los Robles filed
objections, pointing out the prejudice to Minassian and
contradictions between the court’s order denying leave to file an
amended complaint and the Proposed Statement of Decision.
       In December 2019, the trial court ordered supplemental
briefing on whether, “[i]f the Fourth Amended Complaint is the
operative complaint, is Plaintiff [WGE] an intended or an
incidental beneficiary to the agreements and donations made
toward The Mixx [i.e., the promissory notes which did not name
WGE]?” (Italics added.) At a hearing on that briefing in
February 2020, the court took the matter under submission.
VI. Final Decision and Judgment Against Minassian
       In May 2020, the trial court overruled all objections to the
Proposed Statement of Decision and adopted it, unchanged, as
the Statement of Decision, referring to the “Fifth Amended
Complaint.” (Italics added.) The decision made no reference to

                                7
the court’s prior, contradictory order denying leave to amend, nor
to Minassian’s and Los Robles’s objections.
       The trial court entered a $219,713.33 judgment against
Minassian and Los Robles in favor of Mac, Cunningham and
WGE. The judgment states that Minassian did not appear at
trial and is explicitly premised on the “Fifth Amended
Complaint.”
       Minassian and Los Robles timely appealed.
                            DISCUSSION
I.     Standard of Review
       We review rulings on a motion to amend a complaint for an
abuse of discretion. (Tung v. Chicago Title Co. (2021) 63
Cal.App.5th 734, 747.) A trial court has “ ‘wide discretion’ ” in
allowing the amendment of any pleading, and as a matter of
policy the ruling of the trial court in such matters will be upheld
unless a “ ‘manifest or gross abuse of discretion is shown.’ ” (Id.
at p. 747.)
II.    Minassian Was Not a Party to the Suit at Trial
       Minassian argues that the fourth amended complaint was
the operative complaint at trial. Plaintiffs argue it was the third
amended complaint because the stipulation allowing the fourth
amended complaint to be filed was never signed by the trial
court. This dispute is critical because “[i]t has long been the rule
that an amended complaint that omits defendants named in the
original complaint operates as a dismissal as to them.”
(Fireman’s Fund Ins. Co. v. Sparks Construction, Inc. (2004) 114
Cal.App.4th 1135, 1142.) We conclude that the fourth amended
complaint was the operative complaint, such that Minassian was
not a party to the case at trial.

                                 8
       A party may amend its pleading “once without leave of the
court at any time before the answer, demurrer, or motion to
strike is filed, or after a demurrer or motion to strike is filed but
before the demurrer or motion to strike is heard if the amended
pleading is filed and served no later than the date for filing an
opposition to the demurrer or motion to strike. A party may
amend the pleading after the date for filing an opposition to the
demurrer or motion to strike, upon stipulation by the parties.”
(Code Civ. Proc., § 472.) Otherwise, leave of court is required
under Code of Civil Procedure section 473.
       Given the court’s conduct at trial and the presumption of
correctness, we conclude that the trial court viewed the fourth
amended complaint as the operative complaint at trial and
effectively treated its filing as approved, even though it was
never signed by the court. The court specifically stated “[y]ou
know who the parties are . . . it’s written out, in the fourth
amendment, that you know.” (Italics added.) Furthermore, the
court instructed WGE’s counsel to “do a little research about
adding a party,”—a statement that would be unnecessary if the
third amended complaint was the operative complaint as WGE
claims. The court also told WGE it had an argument it could
“add these folks” by later amendment, which would make sense
only if they were not named in the operative complaint. The
record is also devoid of any statement or indication by the trial
court that it intentionally had declined to sign the stipulation.
It would have had no reason to reject a stipulated amended
complaint that streamlined the case by dropping parties. In sum,
the trial court appears to have accepted the parties’ stipulation
by nature of its conduct on the record at trial, and after trial
when it denied the motion for leave to amend to add Minassian

                                  9
specifically because he was not part of the case at trial. Although
the court never specifically said it was granting permission to file
the amended complaint pursuant to the stipulation, “ ‘ “[a]ll
intendments and presumptions are indulged to support [the
judgment] on matters as to which the record is silent[.]” ’ ”
(Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554,
563.) The court’s rulings and statements at the time of trial
were only consistent with the fourth amended complaint being
controlling (or stated differently, were inconsistent with treating
the third amended complaint as the operative complaint). The
failure to sign the stipulation was clearly a mere clerical
oversight.
       Additionally, California courts have recognized
circumstances where a stipulation pursuant to section 473 of the
Code of Civil Procedure need not be signed by the court to be
enforceable. In Harding v. Collazo (1986) 177 Cal.App.3d 1044,
1052 (Harding), the court held that a plaintiff was bound by an
oral stipulation regarding leave to amend a complaint where the
plaintiff admitted orally stipulating to the amendment and
defendants had given up rights and advantages in reliance on
that stipulation. The court in Harding noted that “[t]he
stipulation of the parties was oral; it had not been filed with the
clerk nor had it been entered upon the minutes of the court.
We are aware that stipulations by counsel are binding upon the
parties if they are filed with the clerk of the court or entered upon
the minutes of the court, but not otherwise. ([Code Civ. Proc.,]
§ 283.) However, the courts have not given this general rule a
strict application in all cases.” (Harding, supra, 177 Cal.App.3d
at p. 1052, citing Waybright v. Anderson (1927) 200 Cal. 374, 379
[holding that a plaintiff’s delay in filing an amended complaint,

                                 10
where that delay was based upon an oral stipulation with
opposing counsel, was excusable; citing Code Civ. Proc., §§ 283,
473]; see also Smith v. Whittier (1892) 95 Cal. 279, 288 [where
stipulation was only oral and one party relied upon it such that
they lost a right, the other party is not allowed to “repudiate the
obligation of his own agreement upon the ground that it had not
been entered in the minutes of the court”].)
       Contrary to plaintiffs’ assertion, McKeown v. Superior
Court (1927) 81 Cal.App. 720 (McKeown), does not address the
“exact” issue on appeal here. McKeown concerns proper service of
summons, which is a jurisdictional requirement. (Id. at p. 722.)
The court in McKeown could not enforce the judgment because it
never had jurisdiction over the party for whom the superior court
had never issued an order for publication of summons. (Ibid.)
Here, there is no jurisdictional issue; only the technical one of the
trial court inadvertently not signing the stipulation which, as
noted above, is not always a requirement.
       We conclude that Minassian was dismissed from the case
by the fourth amended complaint based on the parties’
stipulation to file that complaint and the court treating it as
operative at the time of trial.
III. The Trial Court Abused Its Discretion in Permitting
       Amendment of the Complaint After Trial to Add
       Minassian as a Defendant
       The trial court denied, in writing, the plaintiffs’ motion to
add Minassian back into the case by filing the fifth amended
complaint, yet later effectively ignored its own ruling because it
relied on the fifth amended complaint for its decision and
judgment against Minassian. This was an abuse of discretion.

                                 11
       In their motion for leave to file the fifth amended
complaint, plaintiffs relied upon Code of Civil Procedure section
473, subdivision (a)(1), which provides that “[t]he court may, in
furtherance of justice, and on any terms as may be proper, allow
a party to amend any pleading or proceeding by adding or
striking out the name of any party, or by correcting a mistake in
the name of a party, or a mistake in any other respect. . . . The
court may likewise, in its discretion, after notice to the adverse
party, allow, upon any terms as may be just, an amendment to
any pleading or proceeding in other particulars . . . .”
       “ ‘California courts “have a policy of great liberality in
allowing amendments at any stage of the proceeding so as to
dispose of cases upon their substantial merits where the
authorization does not prejudice the substantial rights of others.”
[Citation.]’ ” (Board of Trustees v. Superior Court (2007) 149
Cal.App.4th 1154, 1163.)
       As the trial court recognized in its August 2019 order
denying leave to file an amended complaint adding Minassian as
a defendant after trial, adding him back into the case is
prejudicial to his due process rights. First, both sides proceeded
as if Minassian had been dismissed from the case for at least
several months before trial. Plaintiffs did not include Minassian
as a defendant in their statement prepared for trial, and on the
morning before trial began, plaintiffs stated on the record that
they would need to do something to add Minassian back into the
case.
       Second, nothing during trial put Minassian on notice that
the trial court viewed him as part of the case. The trial court
instructed WGE’s counsel to do research about adding a party,
which would be relevant only if the fourth amended complaint,

                                12
which omitted the individual parties, was the operative
complaint. Counsel for Los Robles had also been Minassian’s
counsel, so his presence was not an indication that Minassian
was participating in the trial. As counsel for Los Robles and
Minassian said at trial, if the court were to allow leave to amend
to bring Minassian back into the case, Minassian should at least
be allowed to conduct discovery, litigate, and participate at trial
or he would be severely prejudiced. Nonetheless, the trial went
forward with no opportunity for Minassian to prepare for trial.
       California courts have denied leave to amend where the
proposed amendment to the complaint is during or after trial,
and the amendment would require the defendant to have
litigated or acted differently to assert his rights before and at
trial. (See, e.g., Cota v. County of Los Angeles (1980) 105
Cal.App.3d 282, 293 [“Granting of the motion would have been
prejudicial to defendants, inasmuch as they were not prepared to
defend against such evidence”].) For example, where a plaintiff
filed a motion to amend mid-trial that changed how the
defendant might have litigated because it added a new theory of
damages, a court of appeal found it would result in prejudice to
the defendant because he had not been on notice to conduct
discovery on the issue, nor to retain an expert to testify at trial,
and he may have acted differently in respect to settlement
negotiations. (Duchrow v. Forrest (2013) 215 Cal.App.4th 1359,
1381; see also Magpali v. Farmers Group, Inc. (1996) 48
Cal.App.4th 471, 488 [“Where the trial date is set, the jury is
about to be impaneled, counsel, the parties, the trial court, and
the witnesses have blocked the time, and the only way to avoid
prejudice to the opposing party is to continue the trial date to

                                 13
allow further discovery, refusal of leave to amend cannot be an
abuse of discretion”].)
       Minassian was similarly prejudiced here. If he knew in the
months before trial that he could be held personally liable, he
may have conducted discovery, answered or brought motions
regarding the fourth amended complaint, and participated in the
trial as a defendant, by hiring an expert for example. That he
was subpoenaed to appear at trial as a witness, or for purposes of
settlement, which is the reason proffered by WGE’s counsel for
the subpoena, is not the same as defending his rights at trial as a
defendant.
       Most significantly, the trial court itself recognized the
prejudice to Minassian’s due process rights if WGE filed a fifth
amended complaint adding him as a defendant after trial. Its
subsequent, unexplained actions treating Minassian as a
defendant prejudiced his due process rights.
       Tellingly, the parties do not point to any case where a
defendant was pled into a case post-trial without prejudice, and
this court could find none. Possibly analogous circumstances are
cases concerning motions to amend judgments to add a defendant
who is the alter ego of another defendant against whom the
plaintiff obtained a judgment, which are filed pursuant to Code of
Civil Procedure section 187. (See NEC Electronics Inc. v. Hurt
(1989) 208 Cal.App.3d 772, 778.) Yet, the “ability under section
187 to amend a judgment to add a defendant, thereby imposing
liability on the new defendant without trial, requires both (1) that
the new party be the alter ego of the old party and (2) that the
new party had controlled the litigation, thereby having had the
opportunity to litigate, in order to satisfy due process concerns.”

                                14
(Triplett v. Farmers Ins. Exchange (1994) 24 Cal.App.4th 1415,
1421.)
       Here, the plaintiffs do not point to any motion under Code
of Civil Procedure section 187 in the record or to any alter ego
argument made before the trial court as to Minassian, nor do
plaintiffs argue on appeal that Minassian was the alter ego of Los
Robles and controlled Los Robles’s litigation. Plaintiffs merely
argue that trial evidence established that “Minassian was Los
Robles Ventures, Inc. (or, at least, an agent thereof)” in asserting
that Minassian was not prejudiced.
       We conclude that Minassian was severely prejudiced by the
post-trial amendment of the operative complaint because he
lacked notice that he was part of the case at trial or in the
months before. His due process rights were violated because he
reasonably relied upon the filed stipulation and fourth amended
complaint, and upon statements by the court at trial that he
would need to be pled back into the case. The trial court abused
its discretion in issuing a judgment against Minassian.
IV. Appellants Do Not Support Their Claim That Los
       Robles Is Entitled to a New Trial
       Appellants argue that we should reverse the trial court’s
judgment as to Los Robles and order a new trial.
       We reject this claim, in part. We begin with the
presumption that the judgment is correct, and the burden is on
the appellants to overcome this presumption. (Jameson v. Desta
(2018) 5 Cal.5th 594, 608–609.) They can overcome this
presumption only by supporting their contention with argument
and citations to authority and the record that demonstrate error.
(Cal. Rules of Court, rule 8.204(a)(1)(C); Hernandez v. First
Student, Inc. (2019) 37 Cal.App.5th 270, 276–277.) Appellants

                                15
make only a brief conclusory request that we should reverse the
judgment as to Los Robles and order a new trial. They cite to no
authority, nor do they explain why Los Robles would be entitled
to a new trial.
       At oral argument, counsel for Los Robles asserted that a
significant portion of the promissory notes at issue in the case
solely obligated Minassian, which therefore justified overturning
the verdict against Los Robles to the extent the judgment was
based on Minassian’s personal debt. This argument, factually
and legally, appears nowhere in Los Robles’s briefs, and Los
Robles has identified no justification for its omission. As such,
WGE has had no opportunity to evaluate or respond to this
assertion by Los Robles. We are entitled to disregard arguments
that do not appear in the briefs, lack citations to the record, and
are unaccompanied by legal authority. (United Grand Corp. v.
Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 153.) Los
Robles forfeited this argument.
       But appellants do correctly assert that, since the fourth
amended complaint was operative for purposes of trial, Plaintiffs-
Respondents Mac and Cunningham had been dismissed from the
case. The motion to file the fifth amended complaint, adding Mac
and Cunningham (and Minassian) back into the case, was denied.
It was improper for the trial court to enter judgment in favor of
parties who had been dismissed from the case. We therefore
reverse the judgments for Mac and Cunningham and affirm as to
WGE’s judgment against Los Robles only.
                          DISPOSITION
       The judgment of the trial court is reversed in its entirety as
to Minassian. The judgment is also reversed as to Mac and
Cunningham’s claims against Los Robles. The judgment as to

                                 16
WGE’s claims against Los Robles is affirmed. We express no
opinion as to whether WGE, Mac and/or Cunningham are barred
from pursuing the claims that have been reversed in a separate
action, as that issue was not litigated in the trial court, and was
raised in passing, without analysis, for the first time on appeal.2
Minassian is awarded his costs on appeal. All other parties shall
bear their own costs.
      CERTIFIED FOR PUBLICATION

                                                               *
                                            HARUTUNIAN, J.
We concur:

                  GRIMES, Acting P. J.

                  WILEY, J.

2       Minassian asks us, without legal citation, to “deem” his
dismissal from the fourth amended complaint (and the trial
court’s denial of the motion to add him back in a fifth amended
complaint) as a dismissal with prejudice. While we agree that
the time has passed for filing any amended complaints in this
case adding back in any parties, we decline to address the
hypothetical and unbriefed issues that might arise (under
collateral estoppal, res judicata, statute of limitations, waiver,
etc.) if a dismissed claim is asserted in a new action.

*     Judge of the San Diego Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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