Pope v. Potts CA2/6

Filed 1/19/23 Pope v. Potts 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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
ILSE M. POPE, 2d Civil No. B322856
(Cons. w/ B322857)
Plaintiff and Appellant, (Super. Ct. No. VCU281949)
(Tulare County)
v.
JASON E. POTTS,
Defendant and Respondent.
Appellant Ilse Pope settled a lawsuit against respondent
Jason Potts for $350,000. In 2009, the trial court entered
judgment against Potts after he defaulted on the first of five
scheduled settlement payments to Pope. Pope sought to renew
the judgment in 2020. The court clerk rejected her request as
filed beyond the 10-year statute of limitations. (Code Civ. Proc.,
§§ 683.020, 337.5.)1 Pope then filed this enforcement action.
We refer to the Code of Civil Procedure unless stated
1
otherwise.
Pope alleged her settlement agreement with Potts
remained enforceable. The trial court tentatively sustained
Potts’ demurrer to the complaint without leave to amend. It
changed course at hearing when Pope’s counsel insisted he could
still plead a timely cause of action. The trial court granted leave
but cautioned counsel that sanctions were forthcoming if the
amended complaint did not present a “new or different” basis of
recovery. The amended complaint did not clear this hurdle. The
trial court sustained Potts’ second demurrer without leave and
awarded $5,100 in monetary sanctions against counsel. This was
less than the amount requested by counsel for respondent. Pope
and counsel appeals the judgment of dismissal and the order
granting sanctions.
We affirm. The lynchpin of our ruling is cogently stated by
Presiding Justice Turner: “‘The period prescribed in Section
683.020 [ten years] commences on the date of entry and is not
tolled for any reason. . . .’” (Fidelity Creditor Service, Inc. v.
Browne (2001) 89 Cal.App.4th 195, 201.)
FACTUAL AND PROCEDURAL BACKGROUND
Pope sued Potts in 2007 after she lost money in a series of
real estate investments promoted by Potts and his associates.2
They signed a written settlement agreement in March of 2009
(settlement). Potts agreed to pay a total of $350,000 to Pope:
$150,000 within 60 days, then $50,000 each year for the next four
years on the anniversary of the initial payment. The settlement
specified that Pope to seek judgment if Potts defaulted. Potts did
not make the initial payment. The trial court entered judgment
against him on July 6, 2009, for “monetary damages in the sum of
Pope v. Potts (Super. Ct. Tulare County, 2007, No. 07-
2
222909).)
2
$350,000.00 plus 10% legal interest until paid in full” (2009
judgment).
Pope collected about $112,000 from Potts over the next
decade by way of wage garnishments. The balance remained
unpaid when she sought to renew her judgment in January of
2020. (§ 683.110 et seq.) The clerk returned the notice of
renewal as untimely. Pope then filed a “Complaint on Judgment”
reciting the terms of the settlement agreement and explaining
how Potts defaulted by failing to make the initial payment. She
sought a new judgment for the “balance of the [2009] judgment
that came due on May 22, 2010 and on that same date in 2011,
2012, and 2013, together with interest from the earliest of those
dates . . . .”
Potts demurred to the complaint as barred by the 10-year
statute of limitations for actions on judgments. (§§ 683.020,
337.5.) The trial court issued a tentative ruling sustaining the
demurrer without leave to amend. At hearing, Pope’s counsel
sought leave to file an amended complaint with additional
allegations that would show the statute of limitations had not yet
run. The trial court granted leave but warned that it might
impose sanctions if the amended complaint “set forth the same or
similar facts with the same or similar argument.” Pope’s counsel
stated that he believed he could “come up with . . . facts and
others causes of action” that would survive demurrer.
Pope filed a first amended complaint containing new
allegations about her original dispute with Potts and the reasons
the parties agreed to settle. She alleged two causes of action.
The first sought judgment on the four $50,000 installment
payments. The second sought a declaration, among other things,
that “[e]ntry of judgment on the [settlement] did not and still
does not limit [her] remedies to judgment but also allows all
3
remedies to remain enforceable until the [settlement] was fully
performed.”
Potts demurred again. The trial court sustained the
demurrer without leave to amend and granted Potts’ subsequent
motion for sanctions pursuant to section 128.7. It found the
amended complaint “did nothing to cure the deficiencies noted by
the court in its ruling on Defendant’s first demurrer.” The
amended complaint did not plead any exception to the ten-year
rule. The trial court rejected Pope’s argument that Potts served
his motion for sanctions improperly. Pope separately appealed
the judgment of dismissal and sanctions order. We consolidated
the appeals for oral argument and decision.3
Order Sustaining Demurrer
We review an order sustaining a demurrer without leave to
amend de novo, exercising our independent judgment as to
whether a cause of action has been stated as a matter of law
under any legal theory. (Villafana v. County of San Diego (2020)
57 Cal.App.5th 1012, 1016; McKell v. Washington Mutual, Inc.
(2006) 142 Cal.App.4th 1457, 1469.) We interpret the complaint
reasonably, considering all properly pleaded material facts and
those matters subject to judicial notice. (Blank v. Kirwan (1985)
39 Cal.3d 311, 318; Yvanova v. New Century Mortgage Corp.
(2016) 62 Cal.4th 919, 924.)
The trial court entered judgment against Potts on July 6,
2009. It stated in toto: “The parties entered into a written
agreement resolving this case. The agreement was signed by
3 See Order dated November 7, 2022. The appeals were
transferred from the Sixth Appellate District to this court by
order of the Chief Justice dated August 9, 2022. They were
originally assigned numbers F082288 (B322856) and F082883
(B322857).
4
Plaintiff on March 19, 2009, with Defendant, JASON POTTS
signing on March 23, 2009. Defendant, JASON POTTS has failed
to make any payments under the agreement. The first payment
under the agreement was due on or about May 22, 2009.
Defendant had until June 29, 2009 to cure this default, but failed
to do so. [¶] IT IS HEREBY ORDERED, ADJUDGED AND
DECREED that Plaintiff ILSE POPE shall recover from
Defendant JASON POTTS monetary damages in the sum of
$350,000.00 plus 10% legal interest until paid in full.”
Pope sought to renew the judgment in 2020. This was
outside section 683.020’s ten-year period to enforce money
judgments. The first amended complaint seeks to circumvent
demurrer by alleging the parties did not intend to limit Pope’s
enforcement rights to statutory creditor’s remedies when they
settled. What they may have intended when settling is not
relevant. “When a final judgment is entered, all causes of action
arising from the same obligation are merged into the judgment.”
(Butler America, LLC v. Aviation Assurance Co., LLC (2020) 55
Cal.App.5th 136, 143, citing Diamond Heights Village Assn., Inc.
v. Financial Freedom Senior Funding Corp. (2011) 196
Cal.App.4th 290, 301.) “The judgment extinguishes the
contractual rights of the parties and substitutes only such rights
as attach to the judgment.” (Butler America, supra, at p. 143.)
The 2009 judgment leaves nothing open to interpretation.
Potts defaulted on a settlement with Pope; Potts failed to cure;
Pope could recover $350,000 plus post-judgment interest from
Potts. The judgment does not require Pope to enforce her debt
piecemeal as the installment payments would have come due
each May 22. It does not incorporate the terms of the settlement
or refer to the settlement as an exhibit. If Pope or Potts intended
this, the time to correct the 2009 judgment passed long ago. A
5
party must seek relief from judgment taken “through his or her
mistake, inadvertence, surprise, or excusable neglect” within a
reasonable time, but “in no case exceeding six months” after
judgment is taken. (§ 473, subd. (b).) A decade has passed.
Assuming for the sake of argument the settlement
remained enforceable independently of the judgment, any cause
of action in contract has likewise expired. (§ 337, subd. (a) [four-
year limitations period applies to “[a]n action upon any contract,
obligation or liability founded upon an instrument in
writing”].) The settlement contains no provision waiving the
statutory limitations period. (§ 360.5 [“No waiver shall bar a
defense to any action that the action was not commenced within
the time limited by this title unless the waiver is in writing and
signed by the person obligated”].) The first amended complaint’s
invitation to consider intent and implication contravenes the
integration clause, which describes the settlement as the “entire,
final and binding understanding between the parties.”
Sanctions Award
Section 128.7, subdivision (b)(2) requires attorneys and
unrepresented parties to certify that “claims, defenses, and other
legal contentions” contained in their court filings “are warranted
by existing law or by a nonfrivolous argument for the extension,
modification, or reversal of existing law or the establishment of
new law.” “[T]he trial court retains the discretion, upon the
finding of a violation of [section 128.7,] subdivision (b), to
determine whether a sanction is warranted in the first instance;
and, if so, the type and amount of sanctions warranted.”
(Kojababian v. Genuine Home Loans, Inc. (2009) 174 Cal.App.4th
408, 422.) We reverse only if the court’s abuse of discretion
amounts to a miscarriage of justice. (Ibid.)
6
Counsel’s zealous advocacy earned his client a second
opportunity to plead her case. The trial court cautioned counsel
to “present something new or different” or risk sanctions. The
subsequent pleading, however, simply ornamented the same
flawed theory of recovery and did not allege why the ten-year rule
was not applicable. No amount of even “artful pleading” can
circumvent the ten-year rule of section 683.020. There was no
miscarriage of justice in granting of sanctions in favor of a party
compelled to indulge his opponent’s repackaging of meritless
claims. Counsel’s duty of zealous advocacy must on occasion
yield to their duties to the court. The line counsel must walk is
sometimes narrow. (See Pacific Trends Lamp & Lighting
Products, Inc. v. J. White, Inc. (1998) 65 Cal.App.4th 1131, 1136
[sanction statutes “were crafted by the Legislature to strike a
balance between competing interests: the need to control
improper litigation ‘tactics’ and the desire to avoid chilling
vigorous advocacy”].)
CONCLUSION
Judgment is affirmed. Respondent shall recover his costs
on appeal.
NOT TO BE PUBLISHED.
YEGAN, J.
We concur:
GILBERT, P. J.
BALTODANO, J.
7
David C. Mathias, Judge
Superior Court County of Tulare
______________________________
Herr Pedersen & Berglund, Leonard C. Herr , Ron Statler
and Monica Rast, for Plaintiff and Appellant.
Wanger Jones Helsley, Oliver W. Wanger and Steven M.
Crass, for Defendant and Respondent.