Engel & Engel v. Shuck CA2/2 ( 2021 )

Filed 12/16/21 Engel & Engel v. Shuck 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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
ENGEL & ENGEL, LLP, B306491
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No.
v. BC620667)
THOMAS E. SHUCK et al.,
Defendants and
Appellants.
APPEAL from an order of the Superior Court of Los
Angeles County, Stephanie M. Bowick, Judge. Dismissed.
Randall S. Waier for Defendants and Appellants.
Tisdale & Nicholson and Michael D. Stein; Law Offices of
Chad Biggins and Chad Biggins for Plaintiff and Respondent.
******
In this case, the defendants moved for sanctions prior to
trial on the ground that the plaintiff’s lawsuit was frivolous. The
trial court denied the motion. Five months after the entry of
judgment for the defendants, the defendants renewed their
sanctions motion. The trial court denied their motion to renew,
both procedurally and on the merits. We lack jurisdiction to
entertain the defendants’ appeal from this denial. In an effort of
avoid this result, the defendants urge upon us several arguments
that are inconsistent with the positions they took below and
inconsistent with one another; in the course of doing so, they also
do not accurately represent the record below. Such
argumentative gymnastics and strategic omissions are unhelpful
and, ultimately, unavailing. We accordingly dismiss the appeal.
FACTS AND PROCEDURAL BACKGROUND
I. Underlying Transactions
Over a decade ago, two persons solicited investments in a
surgical building in Newport Beach from Wells Fargo Equipment
Finance, Inc. (Wells Fargo), from John and Judith DeLong (the
DeLongs), and from Leona Horowitz (Horowitz). When the
investments failed, Wells Fargo, the DeLongs, and Horowitz sued
the solicitors in separate lawsuits for misuse of their funds.
In the spring of 2014, Engel & Engel, LLP (plaintiff) was
retained to do the forensic accounting in support of one or more of
these pending lawsuits. Although Wells Fargo, the DeLongs, and
Horowitz discussed a pooling arrangement under which the three
would split the costs of plaintiff’s services, only the DeLongs and
Horowitz signed retainer agreements with plaintiff. Plaintiff
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ended up billing over $110,000 in fees on the pending lawsuits in
May, June, and July 2014. Although plaintiff allocated its bills
between Wells Fargo, the DeLongs, and Horowitz, only Horowitz
paid those bills.
In 2014, plaintiff sued the DeLongs for its unpaid fees.
During the ensuing arbitration, plaintiff took the positions that
the DeLongs were solely responsible for all of the remaining
unpaid bills or for all but $16,909.49 of the unpaid bills. The
arbitrator ruled that the DeLongs were liable to plaintiff in
quantum meruit, and awarded $27,100.13 as the value of
plaintiff’s services. The award was subsequently confirmed.
II. Procedural Background
A. Plaintiff’s lawsuit as a whole
In May 2016, plaintiff sued Wells Fargo—as well as the
lawyer who represented Wells Fargo in its lawsuit against the
solicitors of the investment (Thomas E. Shuck (Shuck)) and the
law firm Shuck worked for at the time (Parker Milliken Clark
O’Hara & Samuelian, APC (the law firm)) (collectively,
defendants). Specifically, plaintiff asserted claims for (1)
intentional misrepresentation, (2) false promise, (3) negligent
misrepresentation, (4) quantum meruit, and (5) promissory
estoppel. In this lawsuit, plaintiff took the position that Wells
Fargo was solely responsible for at least $37,571.32 of the fees it
charged in 2014.
Defendants responded that plaintiff’s lawsuit was barred
by the doctrine of judicial estoppel because plaintiff’s position in
this case (namely, that Wells Fargo was liable for at least
$37,571.32 of its fees) was factually inconsistent with plaintiff’s
position in its case against the DeLongs (namely, that the
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DeLongs were liable for the bulk of the unpaid fees and that
Wells Fargo was liable for, at most, $16,909.49 of the fees).
Defendants moved for summary adjudication. On June 28,
2018, the trial court granted summary adjudication on plaintiff’s
quantum meruit claim on the grounds of judicial estoppel, but
denied the motion as to plaintiff’s remaining representation-
related claims because there were “triable issues of fact as to
whether plaintiff relied upon the representations made by Shuck
to its detriment.” Thereafter, plaintiff dismissed its promissory
estoppel claim.
The remaining claims proceeded to a three-day bench trial
in November 2018. In a final statement of decision filed on
February 27, 2019, the trial court ruled that plaintiff’s remaining
claims were also barred by the judicial estoppel doctrine because
plaintiff had previously taken the inconsistent positions that the
DeLongs and now defendants were solely responsible for the
same fees.
The court entered judgment for defendants on April 19,
2019.1
B. Adjudication of sanctions motion
1. Initial sanctions motion
On June 11, 2018, which was prior to the trial court’s
summary adjudication ruling and prior to trial, the law firm and
Shuck moved for sanctions under Code of Civil Procedure section
1 In a separate appeal, we ruled that the trial court’s findings
were supported by substantial evidence and affirmed the
judgment. (Engel & Engel, LLP v. Shuck (Nov. 4, 2021, B297421)
[nonpub. opn.].)
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128.72 against plaintiff and its attorney. The motion argued that
plaintiff’s complaint was “without evidentiary merit” due to
judicial estoppel and was also “filed for an improper purpose.”
The motion did not request a specific amount of sanctions.
After further briefing, the trial court held a hearing on the
motion on October 1, 2018. At the hearing’s conclusion, the trial
court took the matter under submission and continued it until
October 22, 2018.
A few days before the October 22 hearing date, the trial
court issued a tentative ruling. In that ruling, the court denied
the sanctions motion, reasoning that (1) plaintiff’s quantum
meruit claim was not initially frivolous but “may have be[come]
frivolous” in light of its principal’s admissions that the DeLongs
were solely liable for the bulk of plaintiff’s fees, (2) plaintiff’s
remaining claims—particularly in light of the court’s intervening
denial of summary adjudication—were “not frivolous,” and (3) it
would be incredibly difficult to “apportion sanctions” between the
frivolous and nonfrivolous claims, particularly when defendants
“failed to set forth the amount [of] sanctions they [were] seeking.”
At the October 22 hearing, the trial court rejected Shuck’s
and the law firm’s request to postpone ruling on the sanctions
motion until after the trial. Instead, the court voiced its
intention to “rule on [the motion]” that day and, in response to
questioning from counsel, indicated that it had “ruled on [the]
motion for sanctions,” ostensibly by virtue of its tentative ruling.
However, the trial court did not ever state—either on the record
or in its minute order for the October 22 hearing—that it adopted
its tentative ruling.
2 All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
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However, three days after the October 22 hearing, plaintiff
served a notice of ruling that (1) stated the trial court “denied”
the motion for sanctions, and (2) attached a copy of the trial
court’s tentative ruling. The law firm and Shuck never objected
to the notice of ruling.
2. Renewed motion for sanctions
On September 26, 2019, which was five months after
judgment was entered, seven months after the post-trial final
statement of decision was filed, and 11 months after the trial
court’s October 22 ruling on the sanctions motion, the law firm
and Shuck filed a motion to renew their initial sanctions motion;
they cited section 1008, subdivision (b). The renewal motion was
premised on the trial court’s denial of the initial sanctions
motion: Defendants asked the court “to consider anew its denial”
of the prior motion, characterized the motion as a “renew[al of]
their prior and unsuccessful sanction motion,” and explained the
procedural history that after taking the motion under submission
the court had “denied the [initial] motion without prejudice.”
Indeed, their counsel went so far as to declare, under penalty of
perjury, that the “original sanction motion . . . was denied.” The
law firm and Shuck argued that renewal of the motion was
proper under section 1008, subdivision (b), because of (1) “‘new’
and ‘different circumstances,’ namely the [c]ourt’s factual and
legal findings in its ‘Final Statement of Decision,’” and (2) the
“‘new’ fact of the amount of attorney fees, totaling $148,875” that
the law firm and Shuck incurred from the time they gave plaintiff
notice of the sanctions motion in May 2018 until judgment was
entered in defendants’ favor in April 2019. After receiving
separate opposition papers from plaintiff and its attorney, the
law firm and Shuck repeatedly reaffirmed their position that the
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trial court had ruled upon—and denied—the initial sanctions
motion.
On December 19, 2019, the trial court ordered the parties
to provide supplemental briefs on “whether or not” the court had
“issued a final ruling” on the initial sanctions motion. Upon
receiving this order, the law firm and Shuck then did a proverbial
“180” and took the position that the trial court had never ruled on
the initial motion, going so far as to have their counsel file a
supplemental declaration—wholly inconsistent with his prior
declaration—swearing that “there was no final . . . ruling” on the
original motion. As a result of this new position, the law firm
and Shuck now asked the trial court to “finally rule on the
originally-filed [s]ection 128.7 motion.”
Following a further hearing on January 29, 2020, the trial
court denied the motion in a 12-page minute order issued on
February 13, 2020. Specifically, the court ruled that (1) it had
“formally ruled” and denied the initial sanctions motion, (2) the
absence of a minute order reflecting that ruling was a “clerical
error,” (3) the law firm and Shuck’s motion was a motion to
renew the initial sanctions motion under section 1008,
subdivision (b), (4) the court lacked jurisdiction to entertain a
“post-judgment renewal of a prior sanctions motion,” and (5) even
if the court had jurisdiction, the court would deny the motion to
renew because the law firm and Shuck (a) did not act with
“sufficient diligence” in waiting seven months after the final
statement of decision and five months after the entry of judgment
to bring the renewal motion, and (b) did not “sufficiently show[]
new or different facts justifying renewal of the [initial sanctions]
motion.” In the alternative, the court ruled that, even if it
treated the law firm and Shuck’s motion as a wholly independent
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motion for sanctions under section 128.7, the motion would be
denied because (1) they “had not been diligent in seeking
sanctions,” (2) section 128.7 sanctions may not be sought after
judgment because (a) such a postjudgment motion “cannot
effectuate the legislative intent of the statute” to “prevent
frivolous pleadings,” and (b) it is impossible to satisfy section
128.7’s “safe harbor” requirement (that is, by giving the party
against whom sanctions are sought 21 days to withdraw the
offending pleading) after judgment because, at that time, that
party “would have no way to withdraw the ‘offending pleading.’”
The law firm and Shuck filed this timely appeal.
DISCUSSION
The law firm and Shuck argue that the trial court erred in
denying their motion for sanctions. We generally review a trial
court’s ruling denying sanctions for abuse of discretion (Peake v.
Underwood (2014) 227 Cal.App.4th 428, 441), although we review
subsidiary factual questions for substantial evidence (In re
Marriage of Feldman (2007) 153 Cal.App.4th 1470, 1478-1479)
and subsidiary legal questions de novo (Optimal Markets, Inc. v.
Salant (2013) 221 Cal.App.4th 912, 921 (Optimal Markets)). We
independently review whether we have jurisdiction to entertain
an appeal. (California Redevelopment Assn. v. Matosantos (2011)
53 Cal.4th 231, 252; Berg & Berg Enterprises, LLC v. Sherwood
Partners, Inc. (2005) 131 Cal.App.4th 802, 818, 820.)
We conclude that we do not have jurisdiction to entertain
this appeal. In its February 2020 order, the trial court found that
it had denied the initial motion for sanctions at the October 22,
2018 hearing. This finding is supported by substantial evidence.
The colloquy between the court and counsel evinced the court’s
intention to rule on the motion. The parties also acted as if the
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court had issued a ruling: Plaintiff filed a notice of ruling
reporting that the trial court had ruled on the motion, and
neither the law firm nor Shuck objected to that notice of ruling.3
Although the trial court’s ruling was not in a minute order and
was thus not immediately effective (In re Marriage of Drake
(1997) 53 Cal.App.4th 1139, 1170), that omission was a clerical
error that the trial court was empowered to—and, in its February
2020 order, did—correct retroactively, although the court did so
without using the words “nunc pro tunc.” (People v. Sanchez
(2019) 41 Cal.App.5th 261, 268 [“Entering the order in the
minutes is a purely clerical function”]; People v. Borja (2002) 95
Cal.App.4th 481, 485 [court may issue “nunc pro tunc order[s]” to
“correct[] clerical errors”]; accord, Badella v. Miller (1955) 44
Cal.2d 81, 86 [trial courts are “ordinarily . . . in a better position
to” correct their own clerical errors].) Because the initial
sanctions motion was denied prior to the entry of judgment, the
order denying that motion became part of the judgment and was
subject to appeal—if at all—from that judgment. (Wells
Properties v. Popkin (1992) 9 Cal.App.4th 1053, 1055-1056 [denial
of sanctions motion is not separately appealable, but may be
appealed as part of the judgment]; see generally, Barton v.
Ahmanson Developments, Inc. (1993) 17 Cal.App.4th 1358, 1360
[explaining “one final judgment rule”].) Although plaintiff filed a
timely appeal from the judgment, the law firm and Shuck did not.
Instead, the law firm and Shuck filed their motion to renew the
initial sanctions motion that the trial court had denied. Because
a trial court’s denial of a renewal motion is not appealable (Tate
3 For this purpose, it does not matter whether the law firm
or Shuck had a duty to object to a notice of ruling or whether
plaintiff had an initial duty to file a proposed order.
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v. Wilburn (2010) 184 Cal.App.4th 150, 160; Global Protein
Products, Inc. v. Le (2019) 42 Cal.App.5th 352, 363-364; Chango
Coffee, Inc. v. Applied Underwriters, Inc. (2017) 11 Cal.App.5th
1247, 1254), we lack jurisdiction over the appeal before us now.
The law firm and Shuck resist this conclusion with what
can be grouped into three arguments.
First, the law firm and Shuck argue that the trial court
never ruled on the initial motion for sanctions; that their
postjudgment “motion for renewal” is, despite its name, really a
motion asking the trial court to finally issue a ruling on the
initial motion; and that, under Day v. Collingwood (2006) 144
Cal.App.4th 1116, 1123 (Day), a postjudgment order denying
sanctions is appealable as long as the motion, as here, was
initially served prior to judgment. We reject this argument for
several reasons. Most notably, and as we have explained above,
the trial court did rule on the initial motion for sanctions. Even
if we ignore this critical fact, a party forfeits the right to
appellate review if it does not press the court for a ruling on its
motions or objections prior to the time to seek an appeal, which is
typically when judgment is entered. (E.g., People v. Valdez (2012)
55 Cal.4th 82, 143; Phillips v. Campbell (2016) 2 Cal.App.5th
844, 848 [failure to press for a ruling waives the issue on appeal];
Sommer v. Martin (1921) 55 Cal.App. 603, 610 [“The law casts
upon the party the duty of looking after his legal rights and of
calling the judge’s attention to any infringement of them”].)
Here, accepting the law firm and Shuck’s premise for the
moment, they did not press the trial court for a ruling on the
initial sanctions motion until after judgment. Thus, they
forfeited any right to challenge the lack of ruling on the sanctions
ruling. Even if we ignored this second defect, the law firm and
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Shuck waited five months after judgment to file their motion.4
Parties must typically act with reasonably diligence (see, e.g.,
Even Zohar Construction & Remodeling, Inc. v. Bellaire
Townhouses, LLC (2015) 61 Cal.4th 830, 839 [party seeking
renewal of motion must show “diligence with a satisfactory
explanation for not having presented the new or different
information earlier”]; Huh v. Wang (2007) 158 Cal.App.4th 1406,
1420-1421 [both one-month and six-month delays show
insufficient diligence for purposes of relief under section 473];
Nave v. Taggart (1995) 34 Cal.App.4th 1173, 1178 [party cannot
“take no action and rely on this [appellate] court to beneficently
grant relief”]), and the trial court here found that the law firm
and Shuck did not. This finding is supported by substantial
evidence. Were we to hold otherwise, a party could file a
“renewal” motion months or years after judgment was entered
and breathe new life into a potential appeal that had long since
been dead and buried. We decline to give succor to such an
unholy resurrection.
Second, the law firm and Shuck argue that the trial court
never ruled on the initial motion for sanctions; that their
postjudgment “motion for renewal” is, despite its name, really a
brand new motion for sanctions under section 128.7; and that
postjudgment motions for sanctions are both appropriate and
appealable. We reject this argument for several reasons. As with
the first argument, the trial court did rule on the initial motion
4 The law firm and Shuck repeatedly argued to the trial
court and to this court that there is only a three-month delay
between the judgment and their renewal motion. As we read the
calendar, the time between April 19 (as the fourth month of the
year) and September 26 (as the ninth month of the year) is five
months, not three.
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for sanctions, and the law firm and Shuck did not act with
reasonable diligence in filing the motion seven months after the
trial court issued its final statement of decision and five months
after the entry of judgment—particularly when the basis for the
allegedly new sanctions motion was the trial court’s findings in
the statement of decision that plaintiff’s remaining claims at trial
lacked merit. Moreover, we harbor significant doubts that a
wholly new motion for sanctions can be filed after the entry of
judgment where, as here, what is being challenged is the
opposing party’s prejudgment position. (See Banks v. Hathaway,
Perrett, Webster, Powers & Chrisman (2002) 97 Cal.App.4th 949,
954-955 [sanctions motion under section 128.7 ‘“served and filed
by a defendant after judgment has been entered”’ is improper ‘“if
the conduct alleged to be sanctionable is the improper filing
and/or advocating of the plaintiff’s complaint”’ (italics added)];
Barnes v. Department of Corrections (1999) 74 Cal.App.4th 126,
128 [same]; Hart v. Avetoom (2002) 95 Cal.App.4th 410, 414
[same]; cf. Optimal Markets, supra, 221 Cal.App.4th at pp. 918-
923 [sanctions motion filed, and decided, prior to entry of
judgment]; Eichenbaum v. Alon (2003) 106 Cal.App.4th 967, 975-
976 [sanctions motion before party files voluntary dismissal];
Day, supra, 144 Cal.App.4th at p. 1123 [sanctions motion served
before judgment is entered]; Pittman v. Beck Park Apartments
Ltd. (2018) 20 Cal.App.5th 1009, 1022-1025 [vexatious litigant
motions filed and then plaintiff dismissed defendants who filed
motions]; Shelton v. Rancho Mortgage & Investment Corp. (2002)
94 Cal.App.4th 1337, 1343 [sanctions motion filed after
judgment, but based on postjudgment misconduct in evading
judgment].) Lastly, even if we ignored this authority and held
that we could entertain this appeal, the law firm and Shuck have
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made no effort to argue in their briefs why the trial court erred in
denying sanctions beyond suggesting that sanctions are
automatic once a trial court determines that a case is frivolous;
that is not the law. (Kojababian v. Genuine Home Loans, Inc.
(2009) 174 Cal.App.4th 408, 422 [“Section 128.7, subdivision (c)
does not require the imposition of monetary sanctions upon the
finding of a violation of section 128.7, subdivision (b); rather, it
gives the trial court discretion to impose sanctions based on such
a finding”].)
Finally, the law firm and Shuck argue that the trial court’s
failure to issue a minute order on their initial sanctions motion
leaves them in a “purgatory,” and implore us to liberate them
from this limbo by construing their appeal as petition for a writ of
mandate seeking a remand so the trial court can consider their
motion for sanctions and issue a formal order. If the law firm
and Shuck are in a purgatory, it is one of their own making: If
they truly believed (as they say now) that the trial court did not
rule on the initial motion, they could have objected to the notice
of ruling or otherwise sought clarification prior to judgment; if
they truly believed (as they initially said before the trial court)
that the trial court ruled on the initial motion, they could have
filed a motion to renew in the two months between the final
statement of decision and the entry of judgment. Yet they took
none of these actions. What is more, a remand for the trial court
to rule on their initial motion would serve no purpose. Contrary
to what the law firm and Shuck represent in their appellate
briefs, the trial court’s comprehensive minute order did not just
rest on jurisdictional grounds; the trial court also expressed its
ruling on the merits. Ordering a remand so that the trial court
can say, “Yes, that’s what I meant” would do nothing but waste
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time and judicial resources, both of which are limited and
precious.
DISPOSITION
The appeal is dismissed. Plaintiff is entitled to its costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
______________________, J.
HOFFSTADT
We concur:
_________________________, P. J.
LUI
_________________________, J.
ASHMANN-GERST
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