Ratner v. Wilson CA4/3 ( 2015 )

Filed 12/17/15 Ratner v. Wilson CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
AARON T. RATNER,
Plaintiff and Appellant, G051264
v. (Super. Ct. No. 30-2011-00455729)
PETER WILSON, OPINION
Defendant and Respondent.
Appeal from a postjudgment order of the Superior Court of Orange County,
Timothy J. Stafford, Judge. Reversed and remanded.
Law Offices Robert G. Loewy, P.C. and Robert G. Loewy for Plaintiff and
Appellant.
No appearance by Defendant and Respondent.
Aaron Ratner appeals from a postjudgment order denying him contractually
authorized attorney fees. Ratner’s contract dispute with Peter Wilson, Jeffrey Flegel, and
Wilson’s company WK Holdings was resolved by a settlement agreement. When Wilson
violated the terms of the agreement, Ratner filed a motion for entry of judgment pursuant
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to Code of Civil Procedure section 664.6, authorizing courts to enter judgments
consistent with parties’ settlement agreement. Temporary Judge Michael Balmages
granted the motion and ruled Wilson must pay Ratner $350,000 in damages, costs, and
attorney fees. The judgment did not designate an amount for costs and attorney fees, and
Ratner was ordered to file a cost bill and motion for attorney fees.
A different trial judge, Judge Timothy J. Stafford, considered and denied
Ratner’s motion for attorney fees. In this appeal, Ratner maintains Judge Stafford denied
the motion for improper reasons, arguing Judge Stafford improperly reconsidered the
validity of the settlement agreement and decided Judge Balmages wrongly decided the
issue. We conclude Judge Stafford lacked jurisdiction to reconsider Judge Balmages’s
ruling. Judge Stafford’s authority was limited to reviewing the scope of the attorney fee
provision contained in the settlement agreement and to calculate the reasonable amount
of fees, if any, to be awarded. We reverse the order denying Ratner’s attorney fee motion
and remand for a new hearing on the matter.
I
In 2011, Ratner filed a lawsuit against Flegel, Wilson, and WK Holdings
after a business venture, in which Ratner helped secure financing for a clothing company,
went sour. The first amended complaint prayed for declaratory relief, breach of fiduciary
duty, breach of implied and oral joint venture agreement, breach of implied contract,
misappropriation of confidential information, fraud, intentional interference with
prospective economic advantage, and quantum meruit.
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All further statutory references are to the Code of Civil Procedure, unless
otherwise indicated.
2
Before trial, the parties reached a settlement. All the parties agreed to and
signed a “Term Sheet” outlining the general terms of the settlement in contemplation of
drafting a long form settlement agreement. The parties agreed to the following:
(1) Ratner would receive four $100,000 installment payments; (2) Wilson would transfer
stock to Ratner pursuant to a separate stock agreement; and (3) Ratner could sell the
stocks back to Wilson for a pre-set price, totaling about $350,000 (termed the “Put
Option”).
These three terms were included in the full-length settlement agreement
(Settlement Agreement). It also contained an attorney fee provision in paragraph 13,
which was not included in the Term Sheet.
Paragraph 13 provides in pertinent part, “If any action is brought to enforce
the terms of this [Settlement Agreement] against any party, the prevailing party shall be
entitled to recover his or its reasonable attorney[] fees, costs[,] and expenses, in addition
to any other relief to which the prevailing party may be entitled.”
Flegel refused to sign the Settlement Agreement, claiming it involved only
Ratner and Wilson. Ratner, Wilson, and WK Holdings, LLP (with Wilson as signatory)
signed the Settlement Agreement.
Flegel, Wilson, and WK Holdings made all four $100,000 payments and
Wilson transferred the stock to Ratner. Shortly thereafter, Ratner chose to exercise his
Put Option to sell the stocks back to Wilson for $350,000. Ratner transferred the stock
back to Wilson, but Wilson never paid Ratner.
In response, Ratner filed a motion to enter judgment under section 664.6.
Judge Balmages granted the motion and ruled Wilson must pay Ratner $350,000 in
damages. He ordered Ratner to submit a cost bill and motion for attorney fees. Judge
Balmages dismissed Flegel and WK Holdings from the case. The court entered judgment
using Judicial Council form JUD-100. Judge Balmages checked the boxes for damages,
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costs, and attorney fees, leaving the amount blank on the latter two items because he
anticipated a second hearing to consider the cost bill and attorney fee motion.
Ratner then filed a section 1033.5, subdivision (a)(10)(A), motion (here
after 1033.5 motion) for attorney fees as the prevailing party and as permitted by
paragraph 13 of the Settlement Agreement. This motion was considered by a different
trial judge, Judge Stafford. After hearing oral argument, Judge Stafford took the matter
under submission. Ratner filed supplemental points and authorities addressing Judge
Stafford’s reservation regarding Flegel’s failure to sign the Settlement Agreement and its
effect on the enforceability of the Settlement Agreement.
Judge Stafford denied Ratner’s motion for attorney’s fees, reasoning, “The
Term Sheet, which is enforceable under [section] 664.6, does not contain an attorney[]
fee[] provision. And, while . . . Wilson signed the formal Settlement Agreement, it is not
enforceable under [section] 664.6 as it was not signed by all parties to it.”
II
Section 664.6 gives the trial court authority to enter judgment upon
agreements “in a writing signed by the parties outside the presence of the court or orally
before the court, for settlement of the case, or part thereof[.]” Judge Balmages granted
Ratner’s section 664.6 motion and entered a judgment in his favor. The minute order
stated, in pertinent part, “Judgment granted in the sum of $350,000. [Ratner] to submit a
cost bill and [m]otion for attorney[] fees.” The judgment awarded damages, costs, and
attorney fees, leaving blank spaces for the latter two items. No party appealed the
judgment in favor of Ratner.
Because the judgment awarded costs and attorney fees, Ratner properly
filed a 1033.5 motion, which permits a prevailing party to collect contractually authorized
attorney fees. When the matter came before Judge Stafford, he certainly had jurisdiction
to consider the attorney fee motion.
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Attorney fee awards are generally reviewed for abuse of discretion.
However, Ratner’s contention is that the trial court lacked the authority as a matter of law
to deny attorney fees based on its reconsideration of a prior final judgment. Our review
of this question is de novo. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169,
1175.)
When no statute or law otherwise entitles a prevailing party to recover
attorney fees, the party seeking fees must show a contractual right to recover such fees.
(See §§ 1021, 1033.5, subd. (a)(10); EnPalm, LLC v. Teitler (2008) 162 Cal.App.4th 770,
774.) Judge Balmages determined the Settlement Agreement was enforceable when it
granted the section 664.6 motion in Ratner’s favor. The Settlement Agreement contained
an express provision authorizing attorney fees. For this reason, we can infer the
judgment was not based on enforcement of the Term Sheet because it did not authorize
attorney fees. The judgment plainly awarded damages, costs, and attorney fees
authorized by the Settlement Agreement.
The parties do not dispute paragraph 13 of the Settlement Agreement
mandated attorney fees for the party prevailing on a section 664.6 motion. Thus, as a
matter of law, Judge Stafford had jurisdiction to consider and award attorney fees under
the terms of the Settlement Agreement. Based on Judge Balmages’s judgment, the only
issue to be decided by Judge Stafford was what amount would be a reasonable award.
However, Judge Stafford denied attorney fees not because the amount
claimed was unreasonable, but because he determined fees were not recoverable under
the Term Sheet. In deciding the attorney fee motion, Judge Stafford essentially
reconsidered the merits of the section 664.6 motion and disagreed with Judge Balmages’s
determination the Settlement Agreement was enforceable. However, Judge Stafford
lacked jurisdiction to do so. One trial judge cannot reconsider and overrule the ruling of
another trial judge. (In re Marriage of Oliverez (2015) 238 Cal.App.4th 1242, 1248
(Olivarez).) “This principle is founded on the inherent difference between a judge and a
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court and is designed to ensure the orderly administration of justice. ‘If the rule were
otherwise, it would be only a matter of days until we would have a rule of man rather
than a rule of law. To affirm the action taken in this case would lead directly to forum
shopping, since if one judge should deny relief, defendants would try another and another
judge until finally they found one who would grant what they were seeking. Such a
procedure would instantly breed lack of confidence in the integrity of the courts.’
[Citation.]” (In re Alberto (2002) 102 Cal.App.4th 421, 427, 428 (Alberto) [“This rule
has been applied in a myriad of settings in both criminal and civil cases”].)
“For one superior court judge, no matter how well intended, even if correct
as a matter of law, to nullify a duly made, erroneous ruling of another superior court
judge places the second judge in the role of a one-judge appellate court.” (Alberto, supra,
102 Cal.App.4th at p. 427.) “The Superior Court [of Orange County], though comprised
of a number of judges, is a single court and one member of that court cannot sit in review
on the actions of another member of that same court.” (People v. Woodard (1982)
131 Cal.App.3d 107, 111; Ford v. Superior Court (1986) 188 Cal.App.3d 737, 741-742
[one judge lacked power to enjoin enforcement of a judgment rendered by another
judge].)
There are some exceptions to this rule, but none are applicable to this case.
The first exception pertains to motions for reconsideration where the first judge is
unavailable to re-hear the motion and a different judge must hear it. (Oliverez, supra,
238 Cal.App.4th at p. 1248.) This exception does apply because Ratner did not file a
motion for reconsideration of the section 664.6 motion, but rather sought attorney fees as
the prevailing party of that motion. The second exception applies where the underlying
facts have changed or the judge is asked to consider further evidence or law. (Id. at p.
1248.) Here, Ratner’s attorney fee motion did not ask Judge Stafford to consider new
facts, law, or evidence. Judge Stafford denied Ratner’s motion because he determined it
was significant that Flegel did not sign the Settlement Agreement. Flegel’s failure to
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execute the Settlement Agreement and this fact’s relevance to the enforceability of the
Settlement Agreement was previously decided by Judge Balmages. The evidence had not
changed since judgment was entered. Finally, the first ruling may be overturned if there
is evidence of inadvertence, fraud, or mistake. (Id. at pp. 1248-1249.) There is no such
evidence in this case.
Since none of the above exceptions apply, Judge Stafford’s “[m]ere
disagreement . . . with the prior trial judge’s ruling . . . is not enough to overturn that
ruling.” (Oliverez, supra, 328 Cal.App.4th at p. 1249.) Therefore, Judge Stafford’s
denial of the attorney fee motion is reversed and the matter remanded for consideration of
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Ratner’s motion.
III
The trial court’s order denying attorney fees is reversed and remanded with
instructions to hold a hearing and consider what fees should be reasonably awarded for
enforcing the Settlement Agreement. Ratner shall recover his costs and attorney fees on
appeal.
O’LEARY, P. J.
WE CONCUR:
RYLAARSDAM, J.
MOORE, J.
2
In the alternative, Ratner argues Judge Stafford erred in denying his motion
for attorney fees because he did not properly analyze or apply California contract law.
Pursuant to the above discussion, we need not address this argument.
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