Charles v. U.S. Bank, N.A. CA3 ( 2021 )

Filed 9/27/21 Charles v. U.S. Bank, N.A. CA3
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
THIRD APPELLATE DISTRICT
(Nevada)
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STANLEY PETER CHARLES III, C089024
Plaintiff and Appellant, (Super. Ct. No. TCU12-5038)
v.
U.S. BANK, N.A.,
Defendant;
TORY M. PANKOPF,
Third Party Claimant and Respondent.
Appellant, Stanley Peter Charles III, appeals the trial court’s order transferring the
registry funds held with the court to Charles’s former attorney’s client trust account. He
complains: (1) the trial court exceeded its subject matter jurisdiction in granting relief to
nonparty former attorney Tory M. Pankopf; (2) Pankopf does not have a valid attorney
fee lien; (3) Pankopf is not a third party beneficiary to the settlement agreement; and (4)
Pankopf cannot demonstrate estoppel entitlement to the funds held in trust by the court.
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We conclude Charles has failed to demonstrate the trial court was without subject
matter jurisdiction to grant Pankopf’s application to transfer the funds pursuant to
language in Charles’s settlement agreement, and any argument that the court acted in
excess of its jurisdiction has been waived by Charles’s failure to object below. Because
the trial court expressly did not decide the ongoing dispute between Charles and Pankopf
concerning those funds, we will not address defendant’s remaining claims concerning an
award that never occurred.
FACTUAL AND PROCEDURAL BACKGROUND
As recounted in this court’s earlier unpublished decision, Charles filed suit “for
breach of contract, breach of implied covenant of good faith, failure to comply with
mortgage statutes, promissory estoppel, and declaratory and injunctive relief.” (Charles
v. U.S. Bank, N.A. (Oct. 26, 2018, C082489) [nonpub. opn.].) The parties settled the vast
majority of Charles’s claims related to various banking entities in an agreement dated
September 26, 2014 (the settlement agreement).1 We recognized the binding nature of
the settlement agreement in our previous opinion, which upheld the trial court’s grant of
summary judgment and dismissal of Charles’s claims against the respondent banking
entities.
On December 24, 2018, Charles’s attorney Pankopf filed a document in the trial
court entitled “AMENDED APPLICATION FOR AN ORDER TO RELEASE FUNDS
DEPOSITED WITH COURT.” This application stated that Pankopf, “attorney for
Plaintiff STANLEY PETER CHARLES, III (‘Plaintiff’ or ‘Charles’), applies for an order
to release the funds deposited with the court by Plaintiff to the Law Offices of Tory M.
Pankopf (‘Application’) pursuant to the settlement agreement . . . .” The application
argued that the settlement agreement provided that the funds previously deposited with
1 Expressly exempted from the settlement agreement was CitiMortgage.
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the court were to be released following foreclosure and moveout and should be sent to
Pankopf in accordance with settlement agreement paragraphs (d) and (h). According to
the application, the trial court had previously determined that the funds deposited with the
court had been set aside pursuant to the settlement agreement for the payment of
Pankopf’s attorney fees. Pankopf provided this written ruling filed on March 17, 2017,
which denied a motion to release the funds held by the trial court to one of the banking
parties to the settlement agreement.2 The application averred Pankopf was owed
$291,310.66 in legal fees and requested the court issue an order releasing the money
deposited in the court account, with interest.
Charles, acting through new counsel, opposed Pankopf’s application to release the
funds deposited with the court, arguing: (1) Pankopf did not have a valid attorney fee
lien and (2) any possible benefit owed Pankopf under the settlement agreement had been
waived. In reply, Pankopf argued: (1) the settlement agreement clearly stated that the
funds held by the court were to be released to Pankopf; (2) that consistent with his right
to the funds held by the court, Pankopf had already received $30,000 from CitiMortgage;
(3) that Charles should be estopped from denying Pankopf’s claim to the money held by
the court; (4) that Charles owed Pankopf fees and costs as a result of a 2011 fee
agreement that provided for an hourly charge; (5) that Charles had not disputed the
accuracy of the outstanding amounts owed; and (6) that the agreement to split the funds
deposited with the court was predicated on the release of that money to Pankopf, which
Charles failed to do.
2 This motion was brought by Caliber Home Loans, Inc. (Caliber), and the ruling stated
that the settlement agreement “transformed the funds deposited to the court by Charles
from security to support the restraining order, into security to ensure payment to Mr.
Pankopf of his attorneys’ fees.”
3
On January 24, 2019, Charles filed a request to file a surreply, including that
surreply and supporting documents responding to Pankopf’s reply brief. The record does
not reflect that court ruled on this request. Thereafter, on January 25, 2019, the court
issued a tentative ruling that stated in pertinent part: “Mr. Pankopf’s Motion to Release
Funds is granted as prayed. The settlement agreement on file with the Court and
previously found to be enforceable by this court specifically states to release the funds to
Pankopf. Thus, this Court will release the funds to Mr. Pankopf’s client trust account.
Whether or not a subsequent oral agreement was entered into between Mr. Pankopf and
Mr. Charles is not an issue properly before this court. If Mr. Charles determines that Mr.
Pankopf is overpaid by this distribution, Mr. Charles has other legal recourse available to
him.”
On January 28, 2019, the parties appeared at a hearing on the application wherein
Charles argued that the court’s tentative ruling failed to interpret the entire settlement
agreement, and highlighted a provision awarding the funds deposited with the court to
Charles following foreclosure and moveout. Charles requested amendments to the
tentative ruling that would “release the funds to Mr. Pankopf’s trust account with
directions to allow Mr. Charles to obtain all funds that he deposited in the court register.”
In response to these arguments, the court made clear that its ruling merely
transferred the money into Pankopf’s client trust account and did not decide whether
Pankopf or Charles was entitled to those funds. Rather, if Pankopf and Charles could not
come to an agreement regarding that money, another lawsuit to settle the issue would be
required. The court also highlighted if Pankopf were to mishandle funds from the client
trust account, that would be taken very seriously by the State Bar, and Charles would
have other remedies, but not in this lawsuit. Accordingly, the court adopted the tentative
ruling. Charles prematurely appealed the court’s ruling the same day, on January 28,
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2019.3 The court’s actual order granting the motion to release the funds to Pankopf’s
client trust account was executed February 22, 2019, and filed February 25, 2019. The
trial court also denied Charles’s motion to stay enforcement on the postjudgment order
pending appeal on February 22, 2019.4 At no time during these proceedings did Charles
question the trial court’s jurisdiction to rule on the application.
DISCUSSION
It is axiomatic that Charles, as appellant, bears the burden on appeal of
demonstrating prejudicial trial court error by an adequate record. (Ballard v. Uribe
(1986) 41 Cal.3d 564, 574; see Estate of Davis (1990) 219 Cal.App.3d 663, 670, fn. 13
[“to overcome the presumption of the correctness,” appellant must assure record reflects
the asserted error].) “[T]he reviewing court presumes the judgment of the trial court is
correct and indulges all presumptions to support a judgment on matters as to which the
record is silent.” (Baker v. Children’s Hospital Medical Center (1989) 209 Cal.App.3d
1057, 1060.) “Failure to provide an adequate record on an issue requires that the issue be
resolved against [the appellant].” (Hernandez v. California Hospital Medical Center
(2000) 78 Cal.App.4th 498, 502.) Charles has failed to meet this burden on appeal.
We first note that if, as Charles asserts, the trial court had determined the validity
of Pankopf’s asserted attorney fee lien in Charles’s breach of contract action, the trial
court would have acted in excess of its jurisdiction. (See, e.g., Brown v. Superior Court
(2004) 116 Cal.App.4th 320, 328-329 (Brown) [noting the longstanding rule that an
3 Under California Rules of Court, rule 8.104(d)(2), we may treat this premature notice
of appeal from the announcement of the intended ruling as having been filed immediately
after the filing of the entry of judgment.
4 Charles has not explained how his premature notice of appeal from the court’s
postjudgment order granting Pankopf’s application operates to provide notice of appeal
from the court’s denial of his motion to stay enforcement of the order on Pankopf’s
application pending appeal, which was issued nearly a month later.
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attorney must bring a separate action against the client to adjudicate any such lien].)
However, that is not what the court did. While Pankopf may have requested the court
release funds to him in light of his attorney fee lien, the trial court’s ultimate
determination on the application did not determine the validity of Pankopf’s lien. Rather,
the court made clear it was transferring the money held in trust by the court to Pankopf’s
client trust account and was not deciding the fee dispute between Charles and Pankopf.
Transfer of those funds upon foreclosure and verification of moveout was dictated by the
settlement agreement in the underlying case.
Moreover, assuming without deciding that the court’s order granting Pankopf’s
application -- filed as Charles’s attorney, but which Charles opposed with new counsel --
may have been in excess of the court’s jurisdiction because Pankopf was not a party to
the litigation (see Brown, supra, 116 Cal.App.4th at p. 328 [trial court has “fundamental
jurisdiction over the subject matter and over the parties” but acts in excess of its
jurisdiction if it adjudicates a contractual lien of a nonparty attorney in an underlying
action]), we conclude any error was waived by Charles’s failure to object. (Id. at p. 332
[a party may waive court action in excess of jurisdiction by not objecting thereto]; see
People v. Lara (2010) 48 Cal.4th 216, 225 [contrasting objections to the lack of
fundamental jurisdiction, which cannot be waived, with acts in excess of jurisdiction,
which may be precluded by waiver].)
Finally, we note that nothing in the record demonstrates the trial court was without
fundamental jurisdiction to enter the challenged postjudgment order. While the dismissal
in favor of the respondent banks previously upheld on appeal is not part of this appellate
record (Charles v. U.S. Bank, N.A., supra, C082489), it appears that the trial court
retained jurisdiction over the matter, as both Pankopf acting for Charles and Caliber (a
signatory bank to the settlement agreement) brought postjudgment motions entertained by
the court regarding the disbursement of the funds held in trust. (See, e.g., Wackeen v.
Malis (2002) 97 Cal.App.4th 429, 437-439 [the court’s subject matter jurisdiction ends if
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there is a voluntary dismissal of the entire action following settlement, but continues if
only some of the parties are dismissed or if the court retains jurisdiction to enforce the
settlement under Code of Civil Proc., § 664.6].) If the court lacked fundamental
jurisdiction to entertain the application pursuant to the settlement agreement, the record
does not reveal it. Accordingly, we reject Charles’s jurisdictional arguments.
Because Charles’s remaining contentions concern an affirmative award of the
funds held in trust that did not occur, we do not address them here.
DISPOSITION
The judgment is affirmed. Respondent Pankopf shall recover costs on appeal.
(Cal. Rules of Court, rule 8.278(a)(1) & (2).)
/s/
Hoch, J.
We concur:
/s/
Hull, Acting P. J.
/s/
Murray, J.
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