Court Opinion

ID: 2827185
Source: CourtListenerOpinion
Date Created: 2015-08-13 19:04:33.939428+00
Date Added: 2024-06-11T11:31:24.251551
License: Public Domain

Filed 8/13/15 Crimson Property Management v. CC Fund II, LLC CA2/8
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                 DIVISION EIGHT

CRIMSON PROPERTY                                                     B259748
MANAGEMENT, LLC,
                                                                     (Los Angeles County
         Plaintiff and Respondent,                                   Super. Ct. No. LC098715)

         v.

CC FUND II, LLC,

         Defendant,

ROBERT G. KLEIN,

         Objector and Appellant.

         APPEAL from an order of the Superior Court of Los Angeles County.
Frank J. Johnson, Judge. Affirmed.

         Law Office of Robert G. Klein, and Robert G. Klein for Appellant.

         Geragos & Geragos, Mark J. Geragos, Ben J. Meiselas and Tyler M. Ross for
Plaintiff and Respondent.

                                  ________________________________
       In conjunction with an order vacating a default judgment that had been entered
when neither the defendant limited liability company nor its attorney of record appeared
for a calendared trial date, the trial court ordered the defendant’s attorney, Robert Klein,
to pay $1,000 to the plaintiff’s attorney for the failed start of trial. Attorney Klein (Klein)
appeals what he views as a “sanctions” order.1 We affirm.
                                           FACTS
       In October 2012, plaintiff and respondent Crimson Property Management, LLC
(Crimson) commenced an action against CC Fund II, LLC (hereafter CCF) alleging that
CCF had breached a written contract for the sale of real property. Crimson’s complaint
alleged a first cause of action for specific performance of the property sale transaction
and related causes of action seeking money damages. The dispute involved a sale of
property valued at over $9 million. The case was assigned to Judge Maria Stratton.
In April 2013, Crimson filed a first amended complaint. In August 2013, CCF filed its
answer represented by Klein. The record suggests that the parties, through their
respective attorneys, diligently litigated the dispute after it was placed at issue by the
pleadings. At some point in 2013, Judge Stratton set a trial date for December 2, 2013.
       On November 20, 2013, the clerk’s office prepared a standard form Los Angeles
Superior Court document entitled “Notice to Attorneys Re: Continuance of Hearing.”
The document was addressed to both Klein as well as to Crimson’s attorney. It included
a clerk’s office conformed copy file stamp dated November 20, 2013, and a certificate of
mailing which indicated it had been deposited in the mail on November 20, 2013.
The document included the following language: “You are hereby notified that the Trial-
Jury previously set for hearing on December 2, 2013 in Dept. NWT has been reset for
hearing in the same Department on December 9, 2013 at 10:00 am.” (Italics added.)

1
       The order to pay money challenged here is appealable because Klein has been
substituted out of the underlying case, and, thus, the order is a “final order” insofar as his
involvement in the case is concerned. (See Barton v. Ahmanson Developments, Inc.
(1993) 17 Cal. App. 4th 1358, 1361.) We are not convinced Klein’s characterization of
the $1,000 he was ordered to pay opposing counsel was a “sanction,” an issue we address
more fully in this opinion.
                                              2
       On November 22, 2013, Judge Stratton held a final status conference where both
parties and counsel appeared. At that time, Judge Stratton entered a minute order stating
that equitable issues would be tried first by non-jury trial on December 3, 2013. The
minute order indicates that Judge Stratton informed the parties that the case would be
assigned to Judge Frank Johnson for trial.2
       On November 25, 2013, Klein received in the mail a copy of the court clerk’s
“Notice of Continuance” described above. Klein immediately emailed his client, CCF,
informing it that trial had been continued to December 9, 2013. According to Crimson’s
attorney (who was a law student at the time), he also received the clerk’s notice of
continuance in the mail on November 25, 2013, but he responded differently. The notice
of continuance caused him some confusion and concern because of the December 3, 2013
trial date set by Judge Stratton at the final status conference on November 22, 2013, a
date which was after the November 20, 2013 file-stamp date on the notice of continuance.
Crimson’s attorney called Judge Johnson’s court clerk to verify whether the December 3,
2013 trial date remained on calendar, and was told that it did.
       On December 3, 2013, Crimson’s attorney appeared for trial with his client; CCF
and Klein did not. When CCF and Klein did not appear for trial, Judge Johnson struck
CCF’s answer to Crimson’s first cause of action for specific performance and then
entered its default “as to [the first] cause of action only,” and issued a finding “in favor of
[Crimson] as to the 1st cause of action for specific performance.” Further, Judge Johnson
issued an order to show cause to strike CCF’s entire answer to Crimson’s first amended
complaint and set a hearing for December 27, 2013. There is nothing in the court’s
minute order of December 3, 2013, to indicate that any attempt was made to inquire into
the reason CCF and Klein did not appear for trial on a dispute involving more than $9
million.

2
       In his opening brief on appeal, Klein tells us that Judge Stratton advised the parties
that she had been transferred to the probate court.
                                              3
       On December 4, 2013, Judge Johnson signed and entered a “judgment for specific
performance” in favor of Crimson and against CCF. The judgment directed Crimson to
deposit the purchase price of $9.25 million into escrow within 45 days and directed CCF
to execute all documents, including a grant deed, necessary to transfer ownership of the
subject property to Crimson.
       On December 10, 2013, Klein filed an ex parte application to set aside the default
judgment against CCF pursuant to Code of Civil Procedure section 473, subdivision (b)3
(hereafter section 473(b)). The application for relief was supported by a declaration from
Klein who explained that he did not appear for trial on December 3, 2013, because he had
received a notice from the court clerk that trial had been continued to December 9, 2013.
Klein’s memorandum of points and authorities argued there were good cause for setting
aside the judgment under mandatory relief provision set forth in 473(b) based on
“attorney fault,” as well as mistake or excusable neglect. The memorandum of points and
authorities did not contend the default judgment was void or otherwise challenge the trial
court’s power to enter it.
       Crimson filed an opposition arguing there was no excusable neglect. It’s
opposition, not supported by evidence in the form of a declaration, stated that its counsel
also had received a copy of the notice of continuance described above, but had found it
confusing as its file-stamped date of November 20 pre-dated the orders issued by Judge
Stratton at the final status conference on November 22. According to Crimson’s papers,
its counsel had checked with the court clerk who informed counsel that trial date
remained set on calendar for December 3, 2013. Accordingly, Crimson’s counsel had
shown up at the scheduled time for trial on December 3, 2013. Crimson requested
compensatory legal fees in the event the court granted the requested relief.
       The arguments at the ex parte hearing are not part of the record, and we are not
certain they were recorded. At the conclusion of the ex parte hearing, Judge Johnson
issued a minute order which reads, in relevant part, as follows:

3
       All further undesignated statutory references are to the Code of Civil Procedure.
                                             4
              “Pursuant to CCP Section 473 the Court finds fault in failing appear
      at trial lies with defense counsel. Good cause appearing, the application is
      granted. The Court orders the judgment on the 1st cause of action for
      specific performance, entered on 12/4/13 in favor of [Crimson], set aside
      and vacated. The Court further orders [Klein] to pay sanctions in the
      amount of $1,500.00 to [Crimson]’s counsel.”

       In June 2014, Crimson’s counsel obtained a writ of execution for the $1,500 which
the trial court had ordered Klein to pay. In August 2014, Crimson’s counsel served a
notice of levy on the Los Angeles County Sheriff’s Department. A week later, the
Department mailed the notice of levy to Klein’s bank. Eventually, a request for
exemption seeking to quash the writ of execution and stay judgment was filed by Klein
and was set on the trial court’s calendar for October 24, 2014.
       On October 10, 2014, CCF filed a substitution of attorney indicating that Klein
was no longer its attorney of record.
       On October 24, 2014, the trial court denied Klein’s request for exemption, denying
the motion to quash the writ of execution and stay, but reduced the amount of money
ordered paid to Crimson’s attorney to $1,000. In the motion seeking exemption, Klein
argued for the first time that the default judgment was void.
       On October 27, 2014, Klein filed a notice of appeal on his own behalf from the
trial court’s order directing him to pay money to Crimson’s attorney.
                                        DISCUSSION
       Klein contends the trial court erroneously ordered him to pay $1,000 to Crimson’s
attorney. We disagree.
       As noted above, Klein filed an ex parte motion to vacate the default judgment that
had been entered against CCF based expressly on section 473(b). The motion argued that
attorney Klein was either responsible for a default entered as a result of “attorney fault”
or as a result of “excusable neglect,” within the meaning of section 473(b). In granting
                                              5
CCF’s motion to vacate the default judgment, the trial court accepted attorney Klein’s
affidavit of fault.
       Section 473, provides, in pertinent part:

               “(b) . . . [T]he court shall, whenever an application for relief
       is . . . accompanied by an attorney’s sworn affidavit attesting to his or her
       mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default
       entered by the clerk against his or her client, and which will result in entry
       of a default judgment, or (2) resulting default judgment or dismissal entered
       against his or her client . . . . The court shall, whenever relief is granted
       based on an attorney’s affidavit of fault, direct the attorney to pay
       reasonable compensatory legal fees and costs to opposing counsel or
       parties. . . .”
               “(c)(1) Whenever the court grants relief from a default, default
       judgment, or dismissal based on any of the provisions of this section, the
       court may do any of the following:
               “(A) Impose a penalty of no greater than one thousand dollars
       ($1,000) upon an offending attorney or party.
               “(B) Direct than an offending attorney pay an amount no greater
       than one thousand dollars ($1,000) to the State Bar Client Security Fund.
               “(C) Grant other relief as is appropriate.” (Italics added.)

         Here, Klein argued that the default judgment against CCF had been entered as a
result of his actions. The trial court accepted Klein’s argument, and, in vacating the
judgment, agreed to Crimson’s counsel’s request that Klein compensate Crimson’s
attorney, as is either required or allowed under section 473. We simply see no reversible
error; the trial court granted relief as requested by Klein and under the law presented to it.

                                              6
         Klein contends the trial court abused its discretion in ordering him to pay money
to Crimson’s attorney counsel. The trial court’s minute order labeled the payment as
“sanctions” to be paid to opposing counsel. While this leaves us uncertain as to whether
the order was for opposing counsel’s compensatory legal fees or imposed pursuant to the
discretionary sections of 473, subdivision (c)(1)(A) or (C), we find it appropriate under
any circumstance. As noted, a compensatory payment of attorney’s fees is mandatory
aspect of relief under the attorney affidavit of fault provisions in section 473(b). So, if
the $1,000 order was such compensation, it could not be an abuse of discretion. If the
$1,000 was a penalty imposed under the other discretionary provisions of section 473,
subdivision (c)(1), we still find no error. A trial court abuses its discretion when its
ruling exceeds the bounds of reason, all of the circumstances before it being considered.
(See, e.g., Denham v. Superior Court (1970) 2 Cal. 3d 557, 566; Sargon Enterprises, Inc.
v. University of Southern California (2012) 55 Cal. 4th 747, 773.) The trial court could
reasonably have expected that Klein would have inquired into the confusion caused by
the clerk’s notice of continuance. Indeed, Crimson’s attorney, who was then only a law
student, did just that.
       In a further attempt to avoid this result, Klein contends that the default judgment
entered against CCF was “void” and that the trial court had no authority to order him to
pay money to anybody for “making a motion to set aside a void judgment . . . .” We
agree that the default judgment which the trial court later set aside was void when it was
entered under Heidary v. Yadollahi (2002) 99 Cal. App. 4th 857 (Heidary) and the cases
cited and discussed therein. Heidary and similar cases teach that a trial court’s only
options when a defendant who has answered a complaint does not appear for a trial is to
go forward with the trial as an uncontested proceeding in the defendant’s absence, or to
continue the trial. (Id. at pp. 862-864.) As stated in Heidary: “Where a defendant has
filed an answer, neither the clerk nor the court has the power to enter a default based
upon the defendant’s failure to appear at trial, and a default entered after the answer has
been filed is void [citations], and is subject to expungment at any time either by motion

                                              7
made pursuant to Code of Civil Procedure, section 473 or by virtue of the court’s inherent
power to vacate a judgment or order void on its face. [Citations.]” (Id. at pp. 863-864.)
However, we do not agree that the order to pay $1,000 when vacating the default
judgment must be reversed. The motion to vacate the default judgment that Klein filed in
the trial court did not rely on, or even cite to, cases concerning entry of a void judgment.
In point of fact, Klein did not bring the issue of a void judgment to the court’s attention
until many months after the court ruled on his motion for relief from default, when he
filed a motion for exemption seeking to quash the writ of execution and request for stay.
The fact that the default judgment could have been vacated under Heidary does not mean
the trial court was wrong to have followed Klein’s request to vacate the default judgment
under the attorney fault provision of section 473, thus avoiding the Heidary issue.4 There
simply was no error.
                                      DISPOSITION
       The trial court’s order of December 13, 2013, directing Robert G. Klein to pay
$1,000 to Crimson’s attorney is affirmed.5 Respondent is to recover costs on appeal.

                                                          BIGELOW, P.J.
I concur:
                       RUBIN, J.

4
       We summarily reject Klein’s argument that he was denied due process by not
getting proper notice of the hearing on the section 473 motion given that it was an ex
parte motion he brought, especially considering the only record of the proceedings also
indicates the trial court gave counsel the opportunity to further brief the issues and set the
hearing for another date.
5
       In the “Conclusion” section of his opening brief on appeal, attorney Klein states
that we “should order the County of Los Angeles to pay [him] the funds that were levied
upon by the Sheriff . . . .” We decline to issue such an order for the simple reason that we
have affirmed the trial court’s decision to order attorney Klein to pay attorney’s fees to
Crimson’s attorney.
                                              8
Flier, J., Dissenting

       I respectfully dissent.
       After the final status conference in this case, appellant Robert G. Klein (counsel
Klein) received a notice from the clerk of the trial court indicating that trial was
continued from December 3, 2013, to December 9, 2013. Apparently that notice was
mistaken; trial was not continued. Crimson’s counsel also received the notice and was
confused by the continuance. Counsel for Crimson Property Management, LLC
(Crimson) called the trial court to inquire about the date of the trial and learned that it
was set for December 3, 2013, but did not inform counsel Klein that the trial court’s
notice continuing trial was in error.
       Believing that trial started December 9, counsel Klein did not appear at trial on
December 3, and the court “[found] in favor of the plaintiff” Crimson. The court later set
aside and vacated judgment in favor of plaintiff and ordered counsel Klein to “pay
sanctions in the amount of $1,500.00 to plaintiff’s counsel.” The $1,500 sanction was
later reduced to $1,000 without opposition from Crimson’s counsel. Code of Civil
Procedure section 473, subdivision (c)(1)(A) permits a maximum $1,000 penalty.
       The trial court abused its discretion in awarding the $1,000 sanction. Counsel
Klein’s failure to appear was the result of court error—an incorrect notice of continuance.
An attorney should be able to rely on notice from the trial court clerk indicating that trial
is continued. I would therefore reverse the trial court’s sanction order.
       The trial court did not award attorney fees even though plaintiff Crimson
requested fees in addition to a penalty. The trial court was not required to award fees
because it did not order relief under Code of Civil Procedure section 473’s mandatory

                                               1
provision, the only provision requiring fees.1 This court cannot review an attorney fee
award never entered by the trial court.
       I would reverse the order requiring counsel Klein to pay sanctions to opposing
counsel.

                                                 FLIER, J.

1
       Code of Civil Procedure section 473, subdivision (b) contains a discretionary and
a mandatory provision. (Noceti v. Whorton (2014) 224 Cal. App. 4th 1062, 1065-1066.)
“The discretionary provision applies to ‘a judgment, dismissal, order, or other proceeding
taken against’ a party, while the mandatory provision applies only to a ‘default entered by
the [court] clerk,’ or a resulting ‘default judgment or dismissal.’” (Ibid.) The mandatory
provision requires reasonable compensatory legal fees when relief is granted based on
attorney affidavit of fault. (§ 473, subd. (b).)

                                            2