Court Opinion

ID: 9407355
Source: CourtListenerOpinion
Date Created: 2023-07-06 17:05:40.356869+00
Date Added: 2024-06-11T17:20:37.159476
License: Public Domain

Filed 7/6/23 The Palm Grove v. Pirozzi CA2/6

   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 SIX

 THE PALM GROVE, LLC, et al.,                                    2d Civil No. B320449
                                                             (Super. Ct. No. 20CV02870)
      Plaintiffs and Respondents,                              (Santa Barbara County)

 v.

 ADAM PIROZZI et al.,

      Defendants and Appellants.

      Appellant Adam Pirozzi and respondent Dennis Hoey were
business partners in a Santa Barbara golf course venture.1 A
dispute arose and Pirozzi agreed to buy Hoey’s interest in the
business. Hoey sued when Pirozzi failed to complete the

       Appellants are Pirozzi and three co-defendants:
         1

Quicklink Asset Services, LLC, Five Deep Entertainment, Inc.,
and Hidden Oaks Ranch, LLC. A fourth co-defendant, Central
Holding Group LLC, is not a party to this appeal. Respondents
are Hoey and two co-plaintiffs: The Palm Grove, LLC and
Vantage Group Investments, LLC.
purchase. The trial court found Pirozzi in breach of the buyout
agreement and ordered the golf course sold on the open market.
We affirmed the judgment in a prior appeal.2
       Pirozzi now challenges a post-judgment order distributing
the proceeds from the golf course sale and awarding Hoey
additional attorney’s fees. We again affirm.
        FACTUAL AND PROCEDURAL BACKGROUND3
       Pirozzi and Hoey formed a partnership to acquire Hidden
Oaks Golf Course (Hidden Oaks) in 2015. Hoey took title to the
property and Pirozzi received a 25-year lease to operate the golf
course and clubhouse. Their relationship soured when Pirozzi
fell behind on lease payments. Hoey filed two actions in 2019:
one to dissolve the partnership and the other to evict Pirozzi.4
They reached a compromise before trial and signed a multi-part
settlement agreement (settlement).5 The settlement gave Pirozzi
60 days to buy Hidden Oaks from Hoey for $4.4 million. It
stipulated they would sell Hidden Oaks on the open market if

     2Palm Grove, LLC, v. Pirozzi (Sept. 27, 2022, B313186)
[nonpub. opn.] (Palm Grove I).

     The underlying facts are set forth in Palm Grove I. We
     3

summarize them here.
     4  Santa Barbara Superior Court case nos. 19CV03509
(action to dissolve partnership, etc.) and 19CV03511 (unlawful
detainer).
     5  Their “Settlement Agreement and Release of All Claims”
included two exhibits: (1) a “Memorandum of Understanding”;
and (2) a “Residential Income Property Purchase Agreement and
Joint Escrow Instructions” with attachments and addenda. All
were signed on August 13, 2020.

                                2
Pirozzi was “unable” or “unwilling” to close the transaction. Hoey
would receive the first $4.4 million from the sale and split any
excess proceeds with Pirozzi.
       Hoey filed this action for declaratory relief when the buyout
failed to close. The trial court conducted a four-day bench trial.
It found Pirozzi “ha[d] the expertise to make the settlement
agreement work if he wanted to do it; but his demeanor and his
testimony conclusively convinced the Court that he elected not to
do it.”6 It entered judgment on June 15, 2021 (judgment)
dissolving the partnership, terminating Pirozzi’s lease, and
authorizing Hoey to sell Hidden Oaks on the open market. The
judgment entitled Hoey to receive the first $4,723,859 from the
sale and awarded him attorney fees of $94,600. The court
reserved jurisdiction to modify these figures when escrow closed.
We affirmed the judgment in Palm Grove I.
       Kingdom Hospitality Group, LLC (Kingdom) agreed to buy
Hidden Oaks for $7 million. As the closing date neared, Hoey
moved ex parte for an order finalizing distribution of the sale
proceeds. Pirozzi objected to the post-judgment attorney’s fees
sought by Hoey and requested the court exclude certain personal
items at Hidden Oaks from the sale. The trial court overruled
the objections and issued an “Order Granting Plaintiffs’ Request
to Finalize Distribution of Sale Proceeds Pursuant to Judgment”
on April 5, 2022 (distribution order).

      6 The trial court further observed, “[Pirozzi’s] testimony in
opposition to [Hoey’s] evidence and his defense to the relief
sought by [Hoey] was neither reconcilable nor credible. Based
upon his testimony and actions in the past, it is reasonable to
assume he will frustrate any effort to sell the property to a third-
party.”

                                 3
       Pirozzi again appealed. He challenges the following: the
distribution order’s award of additional attorney’s fees to Hoey;
the decision to deny Pirozzi’s request to exclude personal items
from the sale to Kingdom; and the trial court’s failure to value
Hidden Oaks’ ongoing business operations separately from its
real property and personal property assets.
                           DISCUSSION
                  A. Post-Judgment Attorney’s Fees
       Hoey sought post-judgment attorney’s fees in his ex parte
request for an order approving distribution of sale proceeds.
Pirozzi argues the court erred because it awarded those fees
without a fully noticed motion. (Cal. Rules of Court, rule 3.1702.)
He also challenges the award as insufficiently documented by
Hoey. We reject both arguments.
       The timing requirements for fee motions are “not intended
to govern the time for bringing motions for fees arising from post-
final-judgment activities.” (See Crespin v. Shewry (2004) 125
Cal.App.4th 259, 265.) The appropriate inquiry is whether
deciding Hoey’s request on shortened notice unfairly prejudiced
Pirozzi. (Id., at pp. 271-272.) It did not. The judgment
authorized the trial court to modify the fees award “at the time of
close of escrow of the third-party sale.” Hoey notified Pirozzi of
the March 30 ex parte hearing on March 25 and served his
papers on March 29. Counsel for both parties appeared on March
30. The court continued the hearing for a week and gave Pirozzi
three days to respond more fully. Pirozzi then filed a 15-page
supplemental opposition along with revised objections, three
declarations, and exhibits. The court stated to Pirozzi’s counsel
at the April 5 hearing that it had “read everything that you have
to say” and heard oral argument from both sides.

                                 4
       Hoey was “entitled to the reasonable and necessary costs”
of enforcing his judgment. (Code Civ. Proc., § 685.040.) This
included attorney’s fees, which the judgment awarded pursuant
to the settlement’s provisions. (Id., citing § 1033.5, subd.
(a)(10)(A).) These additional fees are supported by substantial
evidence. Hoey’s counsel filed declarations describing the nature
of their work, the number of hours incurred, and their hourly
rates. The trial court found these figures reasonable considering
Pirozzi’s “extremely hard-fought and aggressive defense to delay
and, at certain times, outright avoid compliance with the
Judgment.” Our review of the record gives us no reason to
question this finding.
        B. Personal Items Sold During the Third-Party Sale
       Pirozzi contends the trial court violated his due process
rights when it denied his request to exclude certain personal
items from the sale to Kingdom. These items included what he
described as family heirlooms, furnishings, and other property
bought with personal funds. He argues “[n]either the judgment
nor litigation in this case involved claims on personal property”
and that the settlement, particularly the memorandum of
understanding, “made no mention of personal property.” We
conclude the trial court properly considered and denied Pirozzi’s
request.
       As a threshold matter, it strains credibility to argue this
action does not encompass disputes over personal property stored
at Hidden Oaks. The settlement states: “[t]he Parties have,
rather than engaging in protracted litigation, negotiated a full,
complete and final settlement of the Partnership Dispute . . .
pursuant to the terms of this Settlement Agreement and the
Memorandum of Understanding.” In turn, the memorandum of

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understanding states at paragraph 13 that Pirozzi would receive
“[a]ny asset, improvement, research, or personal property
acquired as part of the partnership investment of business
operations” pursuant to his buyout of Hoey’s interest in Hidden
Oaks. (Italics added.) Further, an addendum to their purchase
agreement stated both Pirozzi and Hoey had “personal property,
equipment, fixtures, etc.” at Hidden Oaks and would retain
ownership of their items after the buyout. Hoey expressly
incorporated these settlement documents into his first amended
complaint by reference and attached them as Exhibit “1.” He
requested, among other remedies, a judgment: “determining that
Defendants are in breach of the Settlement Agreement and
MOU”; and “dissolving the Partnership and terminating the
Master Lease and terminating any and all business opportunities
of all Parties created as a result of the original purchase,
Partnership Agreement, and Master Lease.” (Italics added.)
Finally, the judgment ordered that “[i]n order to continue the
business operations on the parcels, the Court orders that nothing
will be removed, altered or tampered with.”
       Granting Hoey’s motion on shortened notice did not deprive
Pirozzi of due process. Pirozzi knew long ago that personal
property issues might arise at closing. The trial court’s
statement of decision and judgment ordered nothing “be removed,
altered, or tampered with” pending a third-party sale so Hidden
Oaks could continue operating. Pirozzi knew Hoey was actively
marketing the property and might sell at any time. We agree the
request to exclude any personal property was made, in the court’s
words, “vastly too late.”
       Lastly, the abbreviated hearing schedule gave Pirozzi
occasion to voice his concerns fully. Hoey’s moving papers stated

                               6
that Kingdom paid $150,000 above the asking price for “certain
personal property items associated with The Parcels,” including
golf course maintenance equipment, household furnishings, and
electronics. He proposed splitting these proceeds with Pirozzi
because the items were “purchased with assets flowing from the
former 50%/50% partnership.” Pirozzi disagreed and presented
evidence that he bought certain items with personal funds and
never intended to sell them. In reply, Hoey submitted evidence
that Pirozzi’s representatives had already retrieved those
personal items he wanted to keep, and that all items remaining
were treated as “business inventory” to increase Hidden Oaks’
sale value. The trial court resolved these factual disputes in
Hoey’s favor. Its findings are supported by substantial evidence.
                     C. Business Opportunities
       Pirozzi contends the distribution order “failed to address
the sale of the business that was being operated by the parties.”
He argues the court should have appointed appraisers to value
the ongoing business as part of the post-judgment dissolution of
the partnership. (Corp. Code, § 15908.02.) The contention is
forfeited because Pirozzi did not raise it in the trial court.
(Regency Midland Construction, Inc. v. Legendary Structures Inc.
(2019) 41 Cal.App.5th 994, 999.) Even if not forfeited, the
argument fails. Pirozzi cannot use the distribution order as a
Trojan Horse in which he can push a belated appeal of the
judgment. Whether Hidden Oaks’ ongoing business operations
should have been valued or marketed separately from its physical
assets is an issue Pirozzi should have raised during the
statement of decision process after trial or in his direct appeal.
       The argument fails on the merits as well. The judgment is
not a piecemeal disposition of the Hidden Oaks business venture.

                                7
Hoey’s first amended complaint sought a judgment “terminating
any and all business opportunities of all Parties created as a
result of the original purchase, Partnership Agreement, and
Master Lease.” (Italics added.) The trial court found Hoey proved
“the allegations in the FAC are true” and that he was “entitled to
a judgment for declaratory relief.” Echoing the first amended
complaint, the resulting judgment terminated “[a]ny and all
business opportunities possessed by [Pirozzi] and created as a
result of the original purchase [price], Partnership Agreement,
and [the] Master Lease.” It placed Hoey “in charge of the
continued business operations of the Parcels up through and
including a successful third-party sale” and ordered his operating
expenses reimbursed out of Hidden Oaks’ revenues. The
judgment’s terms are clear: Pirozzi’s right to conduct ongoing
business operations terminated upon entry of judgment; and
Hoey’s right to conduct business operations terminated upon its
sale to a third party. The distribution order did not address the
sale of the “business” separately because the judgment did not
recognize it as a separate asset in the first place. We will not
infer its existence from the distribution order’s silence.
       Pirozzi requests judicial notice of a deed of trust recorded
after the sale to Kingdom granting a $12 million security interest
to an entity named NPI Debt Fund I, LP (NPI). Pirozzi offers the
deed as evidence Hoey received $5 million outside of escrow to
purchase the business above the listed sale price of $7 million.
We are not persuaded. The deed shows, if anything, that
Kingdom borrowed $12 million from NPI. It states nothing about
Hoey. We will not speculate why NPI’s security interest exceeds
the listed sale price nor assume Hoey received the excess $5
million in an illicit side deal. Such facts would not be established

                                 8
even if shown by the deed, which they are not. (See Mangini v.
R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063, overruled
on another other ground in In re Tobacco Cases II (2007) 41
Cal.4th 1257 [“‘[T]he taking of judicial notice of the official acts of
a governmental entity does not in and of itself require acceptance
of the truth of factual matters which might be deduced
therefrom’”].) The request for judicial notice is denied.
                            CONCLUSION
       The trial court’s distribution order fell within its retained
authority to enforce the judgment. Judgment is affirmed.
Respondents shall recover their costs on appeal.
       NOT TO BE PUBLISHED.

                                      CODY, J.

We concur:

      GILBERT, P. J.

      YEGAN, J.

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                  Thomas P. Anderle, Judge
           Superior Court County of Santa Barbara
              ______________________________

     Kirker Wright Law Group, Vanessa Kirker Wright; Berg
Law Group, Eric Berg, for Plaintiffs and Respondents, The Palm
Grove, LLC, Dennis Hoey, and Vantage Group Investments, LLC.
     Ozbirn Law, Jasper Ozbirn, for Defendants and Appellants
Adam Pirozzi, Quicklink Asset Services, Five Deep
Entertainment, and Hidden Oaks Ranch, LLC.

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