Santiago, Rodnunsky & Jones v. Spahl CA2/2 ( 2015 )

Filed 1/14/15 Santiago, Rodnunsky & Jones v. Spahl CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 TWO
SANTIAGO, RODNUNSKY & JONES, B254488
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. LC096375)
v.
STEVEN SPAHL et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los Angeles County. Huey P.
Cotton, Judge. Affirmed.
Law Offices of G. Marshall Hann and G. Marshall Hann for Defendants and
Appellants.
Benedon & Serlin, Douglas G. Benedon and Wendy S. Albers for Plaintiff and
Respondent.
Steven Spahl and Donny Spahl (appellants) appeal from a judgment in favor of
respondent Santiago, Rodnunsky & Jones (respondent) entered after respondent, who was
the plaintiff in the trial court, successfully moved for summary judgment of its claim for
breach of written settlement agreement. We affirm.
FACTUAL BACKGROUND
Respondent law firm represented appellants for approximately four years in trust
litigation. Appellants terminated respondent and retained new counsel on April 15, 2009.
At the time of termination, respondent contended that appellants owed respondent
$717,908.43 in unpaid legal fees.
In June 2009, respondent filed an arbitration action against appellants to recover
its legal fees. The parties eventually settled the fee dispute and on November 10, 2009,
entered into a written settlement agreement. Under the terms of the settlement
agreement, appellants would pay respondent $460,000 immediately, and an additional
$103,000 from any subsequent distribution of funds or, if no funds were available for
distribution, from the sale of certain property. In exchange, respondent agreed to dismiss
its arbitration action.
The settlement agreement contained a mutual general release. Each party agreed
to fully release and discharge the other “from all rights, claims, and actions which each
party and [their] successors now have against the other party . . . stemming from their
differences arising from the subjects of the complaints.”
The parties also explicitly waived all claims against each other “whether those
injuries, damages, or losses are known or unknown, foreseen or unforeseen, patent or
latent.”
The parties further certified that they had read Civil Code section 1542 (section
1542), and expressly waived its protections.1 The agreement specifically stated that the
1 Section 1542 provides: “A general release does not extend to claims which the
creditor does not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her settlement
with the debtor.”
2
parties “consciously intend” to waive all claims, even those which the parties “do not
know exist, and which, if known, would materially affect their decision to execute this
release, regardless of whether their lack of knowledge is the result of ignorance,
oversight, error, negligence, or any other cause.”
The parties warranted that, in executing the agreement, they had relied on their
attorney of choice and that they fully understood the consequences of the agreement.
On November 11, 2009, appellants made a payment of $460,000 to respondent as
required by the terms of the settlement agreement. However, appellants failed to pay the
remaining $103,000 due under the agreement.
PROCEDURAL HISTORY
On February 16, 2012, respondent filed its complaint against appellants for breach
of the settlement agreement. On September 27, 2013, respondent filed its motion for
summary judgment, or in the alternative, summary adjudication (summary judgment
motion). Respondent argued there were no triable issues of fact as to any of the elements
of its claim for breach of contract. Respondent attached a declaration of Artemio M.
Santiago (Santiago declaration) in support of its motion, as well as a separate statement
of undisputed material facts.
Appellants filed their opposition on December 5, 2013. Appellants attached
evidentiary objections to the Santiago declaration. In their separate statement, appellants
admitted to settling the arbitration proceeding for $563,000. They also admitted paying
$460,000 to respondent. They admitted that under the terms of the settlement document,
respondent is owed an additional $103,000. Finally, appellants admitted they received
subsequent distributions from the trust litigation.
However, appellants disputed that they owed respondent the remaining $103,000
due to discrepancies in the calculation of the fees underlying the arbitration. To their
opposition to the summary judgment motion they attached a declaration of Bill Marsh
(Marsh), a friend of appellants’ who was personally present throughout the trust litigation
and spoke with respondent on numerous occasions. Marsh declared that he asked
Santiago numerous times for an itemized bill in January through March of 2009 . None
3
was provided until February 12, 2010 -- after the November 2009 settlement agreement
had been signed.
In its reply brief, filed December 13, 2013, respondent argued that any facts
appellants learned after signing the settlement agreement cannot create a triable issue
because appellants released any and all claims against respondent when they signed the
settlement agreement.
Respondent’s summary judgment motion was heard on January 2, 2014. The
court granted the motion and stated that its tentative ruling would be the order of the
court. In the tentative ruling, the court explained that respondent met its burden of
proving the existence of a written agreement and breach of that agreement. As to
appellants’ claims that it did not sign the agreement with full knowledge, the court stated,
“there is no explanation regarding why the [appellants] entered into a legally binding
settlement agreement before they had all the information they needed.” Appellants
“provided no facts that would allow the court to decline to enforce the settlement
agreement.” There was “no evidence of duress, mutual mistake, fraud, etc.” In short, the
court concluded, appellants “raised no triable issue of fact.”
On February 27, 2014, appellants filed their notice of appeal.
DISCUSSION
I. Standard of review
The standard of review for an order granting or denying a motion for summary
judgment is de novo. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860
(Aguilar).) The trial court’s stated reasons for granting summary relief are not binding on
the reviewing court, which reviews the trial court’s ruling, not its rationale. (Kids’
Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878.)
A party moving for summary judgment “bears the burden of persuasion that there
is no triable issue of material fact and that he is entitled to judgment as a matter of law.”
(Aguilar, supra, 25 Cal.4th at p. 850, fn. omitted.) “There is a triable issue of material
fact if, and only if, the evidence would allow a reasonable trier of fact to find the
underlying fact in favor of the party opposing the motion in accordance with the
4
applicable standard of proof.” (Ibid., fn. omitted.) “A defendant bears the burden of
persuasion that ‘one or more elements of’ the ‘cause of action’ in question ‘cannot be
established,’ or that ‘there is a complete defense’ thereto. [Citation.]” (Ibid.)
Generally, “the party moving for summary judgment bears an initial burden of
production to make a prima facie showing of the nonexistence of any triable issue of
material fact; if he carries his burden of production, he causes a shift, and the opposing
party is then subjected to a burden of production of his own to make a prima facie
showing of the existence of a triable issue of material fact. . . . A prima facie showing is
one that is sufficient to support the position of the party in question. [Citation.]”
(Aguilar, supra, 25 Cal.4th at pp. 850-851, fn. omitted.)
II. Respondent’s prima facie showing
The elements of a cause of action for breach of contract are: “‘(1) the contract, (2)
plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4)
damage to plaintiff therefrom. [Citation.]’ [Citation.]” (Wall Street Network, Ltd. v.
New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.) A settlement agreement is
governed by the same rules applicable to other contracts. (Winet v. Price (1992) 4
Cal.App.4th 1159, 1165.)
In its motion for summary judgment, respondent set forth a prima facie case for
breach of the settlement agreement. Respondent showed the existence of the settlement
agreement, which provided that appellants would pay respondent the sum of $563,000,
with $460,000 due immediately and an additional $103,000 upon subsequent distribution
of funds from the trust that was the subject of the underlying litigation. Respondent
showed that it performed its obligation under the agreement by dismissing its claims
against appellants. Respondent also provided evidence that while appellants paid the
initial $460,000 due under the agreement, appellants failed to pay the outstanding
$103,000 owed to respondent, and that respondent has been damaged in this amount.
Having set forth a prima facie case for breach of the settlement agreement, the
burden shifted to appellants to raise a triable issue of fact.
5
III. Appellants have failed to raise a triable issue of material fact
Appellants argue that they have raised triable issues of material fact by denying
several of the facts set forth in respondent’s separate statement. Specifically, appellants
claim that their denial of material fact Nos. 5,7, 8, 9, 10, 14, 15, 16, 17, and 19 mandate
denial of respondent’s summary judgment motion.
A review of appellants’ opposition to respondent’s separate statement reveals that
appellants’ disputes do not concern facts that are material to this breach of contract case.
Respondent’s undisputed material fact No. 5 states: “Despite [respondent’s]
diligent representation, on April 15, 2009, [appellants] terminated [respondent] and
retained new counsel, McNally & Associates.” Appellants do not dispute that they
terminated respondent. Instead, they dispute respondent’s characterization of the
representation as diligent. Appellants state: “The basis of the termination was the lack of
diligent representation and the pre-occupation of [respondent] with getting as much
money in this case as possible.”
The reason for respondent’s termination in the trust litigation is irrelevant to this
proceeding for breach of the settlement agreement. Thus, this dispute does not provide a
basis for reversal of the trial court’s judgment. (Zavala v. Arce (1997) 58 Cal.App.4th
915, 926 [“to be ‘material’ a fact must relate to some claim or defense in issue under the
pleadings”].)
Respondent’s undisputed fact No. 7 indicates that at the time respondent was
terminated, appellants owed $717,908.43 in unpaid attorney fees. Appellants dispute the
amount owed, stating that they “did not know how much the actual attorneys fees were,
nor how much they should be, given the credits and offsets.”
The precise amount of attorney fees owed at the time that appellants terminated
respondent is irrelevant to this dispute. Any such amount was superseded by the
settlement agreement signed in November 2009. This disputed fact is not material to the
current proceeding, and does not provide a basis for reversal.
Respondent’s undisputed fact No. 8 states that “[b]ecause [appellants] failed to
pay the attorneys’ fees, [respondent] was forced to file an arbitration claim seeking
6
payment.” In disputing this fact, appellants again attack the underlying fees, claiming
“[t]he attorney fees [respondent] wants are wrong and fraudulent.” Appellants claim that
they “did not have the breakdown of attorneys fees” until “after the Arbitration and after
the Settlement Agreement was entered into by [appellants].” However, pursuant to the
terms of the settlement agreement at issue here, appellants have explicitly waived any
such arguments of unfairness. Again, appellants’ dispute does not raise a triable issue of
material fact.
In its undisputed fact No. 9, respondent sets forth the allegation against appellants
contained in its arbitration claim. In response, appellants dispute that they owed the
$717,908.43 alleged in the arbitration claim, but admit that it was the amount claimed by
respondent. As set forth above, the accuracy of respondent’s initial claim for attorney
fees is now irrelevant. Only the settlement agreement is at issue.
Respondent’s undisputed fact No. 10 states that as a result of the arbitration,
respondent and appellants entered into a settlement agreement, including a waiver of
section 1542 and other express waiver provisions. Appellants response is: “Denied as a
result of the statements, half truths and subsequent discovery, that [respondent] was
aware of prior to agreeing to the Settlement Agreement and the resolution of Arbitration.”
In short, appellants do not deny that they entered into the agreement. “‘An issue of fact
can only be created by a conflict of evidence.’” (Brown v. Ransweiler (2009) 171
Cal.App.4th 516, 525.) Appellants’ denial is nonsensical, vague, and irrelevant, and fails
to create a triable issue of fact. (Ibid. [“‘an issue of fact is not raised by “cryptic, broadly
phrased, and conclusory assertions”. . . or mere possibilities . . .’”].)
Respondent’s undisputed fact Nos. 14, 15 and 16 explain the terms of the
agreement concerning the outstanding $103,000 owed. Number 14 states that “[t]he
remaining $103,000 owed to [respondent] was to be paid by [appellants] from any
subsequent distribution of funds owed to [appellants] from the Franz Spahl Inter Vivos
Trust (Section 2(a)(ii)).” Numbers 15 and 16 explain that the outstanding $103,000 was
to be paid before any other distributions were made to appellants by the trust, and that in
the event that there were no remaining funds for distribution, the remaining $103,000 was
7
to be paid from the sale of certain property. In response to each of these undisputed
material facts, appellants admit that the agreement says this, but deny owing the money.
However, they provide no evidence suggesting that the payment was made. As set forth
above, these blanket denials and conclusory allegations are insufficient to create a triable
issue of fact. (Nelson v. United Technologies (1999) 74 Cal.App.4th 597, 614 [non-
moving party may not “‘“rest[] merely upon conclusory allegations, improbable
inferences, and unsupported speculation”’”].)
Respondent’s undisputed fact No. 17 states that appellants further agreed to
execute a promissory note payable to respondent in the amount of $103,000 secured by a
deed of trust on certain property and payable in full with interest no later than May 1,
2010. Appellants again attempt to create a dispute, stating: “The promissory note
agreement was made before [appellants] knew of the actual amount of attorneys fees, and
before the fraudulent intent and misrepresentations by [respondent]. The execution of the
promissory note was not made because of the [appellants’] discovery of these facts and
events.”
These irrelevant allegations fail to defeat summary judgment. The agreement in
question contains explicit waivers of the protections of section 1542, and specifically
states that the parties consciously intended to waive all claims, even those which the
parties “do not know exist, and which, if known, would materially affect their decision to
execute this release, regardless of whether their lack of knowledge is the result of
ignorance, oversight, error, negligence, or any other cause.” Given the scope of the
waiver to which appellants freely agreed, appellants cannot defeat summary judgment by
claiming that they now have information which would have caused them to decline to
enter the settlement agreement.
Appellants cite case law which, they argue, supports their position that the broad
releases contained in the agreement do not bar their current defenses. We find the cases
readily distinguishable. The first, DuBois v. Sparrow (1979) 92 Cal.App.3d 290(DuBois), was a personal injury lawsuit arising out of an automobile collision. The
plaintiff had allegedly signed a release in favor of the defendants covering all liability
8
resulting from the accident in exchange for the sum of $2,240 “‘for the purpose of paying
and discharging her medical, hospital and doctor bills incurred to that date and to acquire
a new automobile.’” (Id. at p. 293.) The plaintiff admitted to signing the document but
contended that it was blank at the time, and was later altered or changed. Her counsel
also argued that her signature could have been traced or copied onto the alleged
agreement. The trial court granted nonsuit in favor of the defendants based on testimony
from an insurance adjuster that the plaintiff had signed in his presence, which, the trial
court felt, “authenticated” the document. (Id. at pp. 295-296.) The Court of Appeal
reversed, finding that there was “substantial evidence from which the jury could have
found that exhibit A was not authenticated as an agreement between plaintiff and
defendants.” (Id. at p. 296.)
Furthermore, the appellate court found, “if the release was authentic, there was
substantial evidence that plaintiff was under a misapprehension as to its scope, which was
induced by defendants’ overreaching.” (DuBois, supra, 92 Cal.App.3d at p. 296.) The
court went on to explain that the insurance adjuster had acted as the plaintiff’s insurer and
failed to reveal that the defendants were covered by the same insurance company. “As a
result of [the insurance adjuster’s] courteous and helpful treatment, plaintiff came to
place trust and confidence in [the insurance adjuster].” (Id. at p. 300.) However, in
obtaining the release on behalf of the defendants, the insurance adjuster “adopted an
entirely contradictory posture toward plaintiff, one in which his position was adverse to
her interests.” (Ibid.) Under the circumstances, there was ample evidence for a jury to
find the release invalid.
No such circumstances exist here. There is no question as to the validity of the
document. Appellants were represented by independent counsel. They warranted that
they relied on that counsel and fully understood the consequences of the agreement. In
sum, the evidence of fraud and misrepresentation that existed in DuBois is not present in
this case.
Appellants also rely on Frusetta v. Hauben (1990) 217 Cal.App.3d 551 (Frusetta),
another personal injury case resulting from an automobile collision. In Frusetta, the
9
defendants moved for summary judgment on the ground that the plaintiff had deposited a
check from defendants’ insurer stating that it was in full and final settlement of all bodily
injury claims. Plaintiff opposed the motion on the ground that one of the insurance
adjusters had told her that it was only partial settlement.
The defendants’ summary judgment motion was granted by the trial court, but
reversed by the Court of Appeal. The Court of Appeal cited the plaintiff’s statement that,
based on the statements of an insurance adjuster, she understood that the check was in
partial settlement of her claims. The court noted that the plaintiff was not represented by
counsel, nor was she advised that she could retain counsel. (Frusetta, supra, 217
Cal.App.3d at p. 555.) Instead, she relied upon the statements of the insurance adjuster.
The Court of Appeal found that a triable issue of fact existed as to fraud or overreaching
by the insurance company. “If a jury accepted appellant’s testimony that a Twentieth
Century [Insurance Company] adjuster stated to her that the check was a partial
settlement and the rest would be paid later, then it might be found that Twentieth Century
violated its duty to act in good faith.” (Id. at p. 558.) The appellate court concluded,
“[t]he instant case may not be decided by a summary judgment without a thorough
exploration of the facts and circumstances surrounding the release.” (Id. at p. 560.)
Appellants in this case raise no suggestion of the type of fraud or
misrepresentation at issue in DuBois and Frusetta. Appellants were represented by
counsel of their choice and freely agreed to sign the settlement. Having asked for a final
accounting several times prior to signing the release, appellants had full knowledge that
they were signing the agreement without the benefit of the information that might be
contained in that accounting. Nevertheless, they settled the case and expressly waived
any unknown claims that might arise.
Appellants have failed to raise a triable issue of fact as to respondent’s breach of
contract claim. The contract existed, respondent fully performed, and appellants
breached. As set forth above, appellants’ current complaints that they signed the
agreement without full knowledge of the amount owed are irrelevant and cannot serve to
10
create a triable issue of material fact due to the broad waivers that appellants expressly
accepted.
IV. The trial court did not abuse its discretion in denying appellants’ evidentiary
objections
Appellants argue that they filed objections to the Santiago declaration and the trial
court did not rule on their objections. Appellants’ objections concerned Santiago’s
personal knowledge of the initial retainer agreement between respondent and appellants.
Appellants argue that the trial court erred in failing to sustain their objections because the
initial retainer agreement was never signed by Santiago, nor is there any indication that
he was present at the time that it was signed.
The summary judgment statute authorizes declarations, such as the one provided
by Santiago, to support summary judgment motions. (Code Civ. Proc., § 437c, subd.
(b)(1).) If a trial court “fails to rule expressly on evidentiary objections relating to a
summary judgment motion, the court’s silence ‘effects an implied overruling of all
objections.’” (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 525.) We review these
implied rulings under the deferential abuse of discretion standard. (DiCola v. White
Brothers Performance Products, Inc. (2008) 158 Cal.App.4th 666, 679.) The trial court’s
ruling on admissibility “‘implies whatever finding of fact is prerequisite thereto.’”
(Miyamoto v. Department of Motor Vehicles (2009) 176 Cal.App.4th 1210, 1218.) We
may only overturn a trial court’s discretionary ruling upon a clear showing of abuse.
(Ibid.)
We find that the trial court did not abuse its discretion in admitting the attorney-
client retainer agreement over appellants’ objections that Santiago did not have personal
knowledge of the contract. Santiago attested to the fact that he had personal knowledge
of all of the facts set forth in his declaration. He also attested that he is a partner in
respondent law firm. Further, he stated that the contract attached to his declaration was a
true and correct copy of the attorney-client agreement between respondent and appellants.
The declaration was signed under penalty of perjury under the laws of the State of
California.
11
Given that Santiago is a named partner in respondent law firm, and was
representing respondent at the time of the summary judgment proceedings, the trial court
did not abuse its discretion in implicitly overruling appellants’ objections.
V. The procedural issues raised by appellants do not constitute reversible error
Appellants raise several procedural issues. First, appellants object that the trial
court did not “specify the reasons for its determination,” as required by law. (Code Civ.
Proc., § 437c, subd. (g).) As appellants point out, the court is required to specify its
reasons for granting a motion for summary judgment “by written or oral order.” (Ibid.)
“The order shall specifically refer to the evidence proffered in support of, and if
applicable in opposition to, the motion which indicates that no triable issue exists.”
(Ibid.) Appellants argue that the trial court’s statement in this matter did not meet these
requirements.
A statement of reasons is sufficient if it allows for meaningful appellate review.
(W. F. Hayward Co. v. Transamerica Ins. Co. (1993) 16 Cal.App.4th 1101, 1111.) The
order should refer to evidence in opposition to the motion only if such evidence is
applicable. (Truck Ins. Exchange v. Amoco Corp. (1995) 35 Cal.App.4th 814, 829.) An
adequate statement of reasons will leave “‘no question about the reason this motion for
summary judgment was granted.’” (Ibid.)
We find the trial court’s statement to be sufficient under these standards. The
court provided a two-page tentative decision, which became the order of the court. The
court discussed its finding that respondent met its burden of showing breach of contract,
specifically referring to the Santiago declaration. The trial court then discussed
appellants’ evidence “attempting to attack the settlement agreement.” The court
explained that this evidence was not relevant given that the retainer agreement was
superseded by the settlement agreement. In sum, the trial court stated, appellants
provided no evidence to allow the court to decline to enforce the settlement agreement.
This statement adequately sets forth the trial court’s reasoning and allows for meaningful
review. Reversal is not required.
12
Appellants next claim that respondent filed its reply brief late. Appellants filed a
written objection to the late-filed brief. Appellants pointed out that pursuant to Code of
Civil Procedure section 1013a, service should have been effected by December 10, 2013,
yet service was not made until December 13, 2013. Appellants provided no information
or argument suggesting that they were prejudiced by the three-day delay in receiving the
document.
The trial court has discretion to consider late documents where there is no
prejudice to the opposing party. (Hoover Community Hotel Development Corp. v.
Thomson (1985) 168 Cal.App.3d 485, 488 [“a trial court has broad discretion in allowing
relief from a late filing where, as here, there is an absence of a showing of prejudice to
the opposing party”], fn. omitted.) In fact, without evidence of such prejudice, it may be
an abuse of discretion for the trial court to fail to consider the tardy document.
(Kapitanski v. Von’s Grocery Co. (1983) 146 Cal.App.3d 29, 32-33 [trial court abused its
discretion in failing to read and consider late-filed declaration where defendant did not
show that it would suffer prejudice or that injustice would result].) When prejudice is
caused by a late-filed or served document, the appropriate remedy is to continue the
hearing and order the offending party to pay reasonable costs. (Id. at p. 33.) Under the
circumstances of this case, the trial court did not abuse its discretion in considering the
untimely-served reply where there was no showing of prejudice to the appellants.
Finally, appellants claim that respondent’s separate statement failed to comply
with the format prescribed in California Rules of Court, rule 3.1350(h). In particular,
appellants claim that respondent combined issues without stating whether the undisputed
material facts and supporting evidence apply to each issue separately or concurrently.
Appellants fail to provide a citation to the record indicating that they raised this
objection in the trial court. The trial court had the authority to provide appellants the
opportunity to re-submit the statement without the alleged errors. (Parkview Villas Assn.,
Inc. v. State Farm Fire & Casualty Co. (2005) 133 Cal.App.4th 1197, 1211 (Parkview)
[“the proper response in most instances, if the trial court is not prepared to address the
merits of the motion in light of the deficient separate statement, is to give the opposing
13
party an opportunity to file a proper separate statement rather than entering judgment
against that party based on its procedural error”].)
The purpose of the separate statement is to “give the parties notice of the material
facts at issue in the motion and to permit the trial court to focus on whether those facts
are truly undisputed. [Citation.]” (Parkview, supra, 133 Cal.App.4th at p. 1210.)
Without a citation to the record indicating that this issue was raised and addressed in the
trial court, we assume that the separate statement filed by respondent was sufficient for
the trial court to proceed with the motion. Any objection to the format of the separate
statement is forfeited.
DISPOSITION
The judgment is affirmed. Respondent is awarded its costs of appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
____________________________, J.
CHAVEZ
We concur:
__________________________, P. J.
BOREN
__________________________, J.
ASHMANN-GERST
14