Wunch v. Richardson CA4/1 ( 2015 )

Filed 4/14/15 Wunch v. Richardson CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
MARK A. WUNCH, D065544
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2012-
CU-OR-CTL)
DEANNA M. RICHARDSON,
Defendant and Respondent.
APPEAL from orders of the Superior Court of San Diego County, John S. Meyer,
Judge. Appeal dismissed.
Mele & Ros and Jose Ramon Ros for Plaintiff and Appellant.
The Law Office of Robin Jean Sassi and Robin Jean Sassi for Defendant and
Respondent.
Plaintiff Mark A. Wunch appeals the court's orders granting respondent DeAnna
M. Richardson's two separate ex parte applications: 1) ordering Wunch to accept a
buyer's offer to purchase their jointly owned residential rental property, and 2) appointing
an elisor to sell the property.1
Wunch contends: (1) the court lacked jurisdiction to "modify" the judgment by
granting the ex parte applications; (2) Richardson's ex parte applications did not comply
with California Rules of Court requiring a supportive declaration; (3) his due process
rights were violated because Richardson did not properly notice her ex parte applications;
and (4) the court ordered sale of the property to Richardson's mother violated
Richardson's fiduciary duties to the partnership under Corporations Code section 16404.
Richardson requests that we dismiss this appeal as moot because the property has
been sold and there is no remedy. Richardson has also moved for sanctions against
Wunch for filing this frivolous appeal. We dismiss the appeal because the completed sale
has rendered the appeal moot. We decline to impose sanctions.
FACTUAL AND PROCEDURAL BACKGROUND
In March 2013, Wunch sued Richardson, his former girlfriend and business
partner, for breach of a partnership contract, and sought dissolution of their partnership
and sale of their jointly-owned residential property located in San Diego (the property).
Wunch alleged he and Richardson each owned an undivided one-half interest in the
property, but Richardson had not participated equally with her time and money in
administering the property. Wunch claimed he should "be equitably allowed the first
1 An elisor is a person appointed to perform certain functions such as deed and
document execution in cases involving recalcitrant litigants who refuse to obey court
orders. (Rayan v. Dykeman (1990) 224 Cal.App.3d 1629, 1635, fn. 2.)
2
right to purchase the property in order to avoid economic waste by selling to a third
party." In his trial brief, Wunch elaborated: "[Wunch] should be granted the first right of
purchase of the property. The two existing mortgages on the property are already solely
in his name. Furthermore, [he] is financially capable and willing to purchase the
property, based on the current appraised value. [Richardson] is insolvent and unable to
purchase the property. [¶] Furthermore, granting first right of purchase to [him] would
be the most cost effective option and would benefit both parties. If the property was sold
in the open market, [he and Richardson] would lose approximately 6 [percent] of the
sales price due to the commissions and about 2 [percent] in closing costs. Based on the
current appraised value of $375,000, that would result in a $30,000 loss to [him and
Richardson]." (Some capitalization omitted.)
In a April 25, 2013 declaration Wunch submitted with his ex parte application for
order shortening time of trial, he repeated his claim Richardson lacked finances to buy
the property, and requested its sale either to him or on the open market.
In October 2013, following a bench trial, the court ruled in Wunch's favor,
ordering the partnership's dissolution, division of the partnership account, and sale of the
property "AS IS to the highest bidder forthwith for at least the appraised value of
$375,000.00. Net proceeds, or losses, to be divided equally between the parties." The
court retained jurisdiction over the matter.
In November 2013, Wunch filed an ex parte application to compel sale of the
property and appointment of a real estate broker. Wunch stated in a declaration that he
filed the application because Richardson was objecting to the court's ordered sale of the
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property on the open market. He claimed the property's value had increased and could be
sold in the range of $475,000 to $510,000. The court denied the application. No
transcript exists of the hearing on that motion because a court reporter was not retained.
In December 2013, Richardson filed an ex parte application for a court order
requiring Wunch to accept a purchase offer from Rosemary Benefield, who is
Richardson's mother. Wunch opposed the application in writing, arguing that a sale to
Benefield would violate: (1) the court's judgment that the property be sold to the highest
bidder; (2) Richardson's fiduciary duty under Corporations Code section 16404 because
of Richardson's relationship to Benefield; and (3) Code of Civil Procedure section 663,2
which requires a formal motion to vacate a judgment and enter a new one.
Wunch's counsel renewed those arguments orally at the ex parte hearing. He also
argued that a real estate broker had informed him the property's value had increased from
$375,000 to approximately $470,000. Wunch requested the property be placed on the
open market instead of being sold to Benefield. The court asked Wunch's counsel
whether any specific prospective buyer was ready to pay $470,000 for the property, but
counsel did not identify any, stating that the property had not been publicly marketed.
At the December 5, 2013 hearing, Richardson's counsel represented to the court
that Benefield had offered $385,000 in cash for the property and would pay closing costs
by the end of December, 2013.
2 All statutory references are to the Code of Civil Procedure unless otherwise stated.
4
The court ascertained Wunch had stipulated to the property's value in this
colloquy:
"The Court: . . . [T]he parties stipulated to the value of the property.
"[Richardson's counsel]: They did at [$375,000].
"The court: Isn't that correct?
"[Wunch's counsel]: That is true, your honor. They estimated [that] but that
appraisal, which is—my client had to do—it is old. The market conditions have changed.
"The court: The market has changed since your client stipulated to the value of
the property?
"[Wunch's counsel]: They stipulated to the appraisal. The appraisal was
[$375,000] or higher and the defendant did not take the time to do their own appraisal
and spend [$375,000], but your honor, this is a very classic situation of dissolving a
partnership. You have a major asset and it needs to be liquidated, it needs to be sold in
the open market and to the highest bidder. [¶] Having here a partner trying to sell the
property to her mother for [$100,000] less of fair market value is a violation of the
fiduciary duty of loyalty.
"The court: At the trial your client stipulated that the property is worth [$375,000]
and the mother is paying more than that.
"[Wunch's counsel]: I understand, your honor. But the issue is that they are
preventing the property to be sold in the open market to the highest bidder, which is what
your honor ordered, and if there is . . . nobody else within a reasonable time that offers
more than . . . Ms. Richardson's mother would be the highest bidder, but if this is correct
5
and the property is worth a hundred thousand dollars more, they are trying to take
advantage of this situation.
"The court: I remember the case and I am satisfied your client does not want his
ex-partner or whatever she was to have anything to do with the property.
"[Wunch's counsel]: That is—
"The court: And that is my recollection and that is, I think, what is going on.
Your client stipulated that the property was worth $375,000. Her mother now is going to
pay more than that without a broker, without any closing costs and—"
Ruling it would "hold [Wunch] to his stipulation that the property is worth
$375,000," the court granted Richardson's ex parte application and ordered the sale to
Benefield at that price. The court advised Richardson that if Wunch refused to sell the
property, she could request the court appoint an elisor.
On March 4, 2014, the court granted Richardson's ex parte application to appoint
an elisor to sell the property.3
On March 5, 2014, Wunch filed a notice of appeal but did not post a bond under
section 917.2.
On March 19, 2014, Wunch filed a lis pendens with the San Diego County
Recorder's office.4
3 We have not located a copy of Richardson's moving papers in the record, but the
record shows the court granted the application.
4 Richardson notes in her motion to dismiss this appeal that Wunch never lodged the
lis pendens in the trial court.
6
On March 24, 2014, the elisor signed the grant deed transferring ownership of the
property to Benefield.
On April 4, 2014, the grant deed was recorded.
On April 15, 2014, Wunch filed an ex parte application requesting delivery of the
grant deed to Wunch's counsel, confirmation of an automatic stay of appeal under section
916, and an order that Wunch collect rent and be authorized to pay the mortgage that
Richardson assertedly was not paying. In an attached declaration, Wunch stated: "Since
the appeal in this case stays this proceeding, and [Richardson] should have not taken any
steps to bypass the automatic stay and persuade the elisor to sign a grant deed and deliver
the grant deed to [Richardson's attorney], the grant deed should be ordered to be deliver
[sic] to [Wunch's] attorney for his destruction, or to keep on hold until the final
determination of the pending appeal. [¶] . . . [¶] I respectfully request the deed is set
aside pending the result of the appeal, and because the execution of the deed by elisor is
does [sic] not comply with the court order. In addition, preserving the status quo is
necessary in order to sell the property on the open market for a fair and just market value
of approximately $500,000, instead of allowing [Richardson] to profit to the detriment of
the partnership if she sells the . . . property to her mother for $375,000." (Some
capitalization omitted.)
On April 16, 2014, the court denied Wunch's ex parte application.
On August 8, 2014, Richardson moved to dismiss the appeal, and for sanctions
against Wunch for filing a frivolous appeal.
7
On August 18, 2014, we granted Wunch's request for a time extension to file an
opposition to Richardson's motions.
On September 15, 2014, Wunch filed an opposition to the motion to dismiss the
appeal but without addressing the issue of sanctions.
DISCUSSION
I. Claim of Due Process Violation
Wunch contends that the court violated his due process rights by granting
Richardson's ex parte applications, noting Richardson did not comply with Rule of Court,
rule 3.1202, subdivision (c)'s requirement that she submit a supportive declaration. He
correctly cites to the controlling law: " ' "The fundamental requisite of due process of
law is the opportunity to be heard." [Citation.] The hearing must be "at a meaningful
time and in a meaningful manner." [Citation.] In the present context these principles
require that a recipient have timely and adequate notice.' " (Goldberg v. Kelly (1970) 397
U.S. 254, 267.)
However, Wunch misapplies the law. The record shows that besides receiving
adequate notice and taking the opportunity to file opposition papers, Wunch's attorney
attended the ex parte hearing and raised the same arguments as on appeal. At that
hearing, the court specifically stated that an elisor would be appointed if Wunch refused
to cooperate with the order to sell the property. Therefore, Wunch was on notice the
court would grant Richardson's subsequent ex parte application.
Wunch's contention regarding the rule of court violation is belied by documents he
includes in the appellant's appendix; specifically, Richardson's attorney's timely filed
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declaration supporting her first ex parte application: "I have attempted to meet and
confer with [Wunch] to no avail. [He] refuses to sell the property. Ms. Benefield's
offered [sic] was accepted by Defendant, DeAnna M. Richardson, on October 11, 2013."
Wunch has not explained, and we fail to see, how this declaration fails to comport with
due process requirements or that of California Rules of Court, rule 3.1202, subdivision
(c).
II. Modification of Judgment Claim
Wunch contends the judgment became final in October 2013, when the court
ordered the property sold; therefore, the court's subsequent orders for the property's sale
to Benefield and the appointment of an elisor were impermissible modifications of the
prior judgment. He claims Richardson was required to file a noticed motion under
section 473, subdivision (b), which provides that the court "may upon any terms as may
be just, relieve a party or his or legal representative from a judgment, dismissal, order, or
other proceeding taken against him or her through his or her mistake, inadvertence,
surprise, or excusable neglect." Wunch also relies on section 663, which states: "A
judgment or decree, when based upon a decision by the court . . . may, upon motion of
the party aggrieved, be set aside and vacated by the same court, and another and different
judgment entered, for either of the following causes, materially affecting the substantial
rights of the party and entitling the party to a different judgment: 1. Incorrect or
erroneous legal basis for the decision, not consistent with or not supported by the facts;
and in such case when the judgment is set aside the statement of decision shall be
amended and corrected."
9
We reject Wunch's analysis because its premise—that by granting Richardson's ex
parte applications the court modified its October 2013 judgment—is fundamentally
flawed. The reality is that at the ex parte hearing, the same judge who had presided over
the trial did nothing more than confirm that Wunch previously had stipulated to the value
of the property, and entered an order holding Wunch to his prior stipulation. On four
occasions the court had the opportunity to review its original judgment—upon ruling on
Richardson's two ex parte applications and on Wunch's two ex parte application—and
each time the court found no inconsistency between its original judgment for sale of the
property to the highest bidder and its subsequent orders to sell the property to Benefield,
and appoint an elisor.
We conclude that sections 473 and 663 are inapplicable here because in the ex
parte applications, Richardson did not seek, and the court did not grant her, relief from
the court's earlier judgment. Richardson did not seek to set aside or vacate the court's
judgment, or claim that the judgment was erroneous. Rather, the court did not err in
finding that the sale of the property to Benefield complied with its order because the
operative considerations in both the original judgment and the postjudgment orders were
that the sale price be at least the amount the parties had stipulated to and the sale would
be completed speedily. Moreover, despite stating in his trial brief he was willing to bid
on the property, Wunch failed to do so; the trial court could reasonably conclude that if
Wunch, who wanted to be the first to purchase the property did not bid on it when the
stipulated value was $375,000, no higher bidder would be found for it at approximately
10
$470,000; therefore it was preferable not to have a bidding process that would further
delay the sale that had been ordered conducted forthwith.
The court's challenged postjudgment rulings were permissible under the court's
inherent authority to enforce its judgment under section 128, subdivision (4), providing
that every court shall have the power to "compel obedience to its judgments, orders, and
process . . . in an action or proceeding pending therein." (Accord, Cates v. California
Gambling Control Com. (2007) 154 Cal.App.4th 1302, 1314 [no abuse of discretion
shown in trial court's order exercising its authority under section 128].)
The appointment of an elisor is one method available to a court for enforcement of
its judgments. (Rayan v. Dykeman (1990) 224 Cal.App.3d 1629, 1635.) "Where one of
the parties will not or cannot execute a document necessary to carry out a court order, the
clerk of the superior court or his or her authorized representative or designee may be
appointed as an elisor to sign the document." (Super. Ct. San Diego County, Local
Rules, rule 2.5.11.)
III. Breach of Fiduciary Duty Claim
We quote Wunch's contention on this point in its entirety: "[Wunch's] opposition
papers also discussed that under California Corporation[s] Code [section] 16404,
[Richardson's] ex parte request to sell the partnership real property to her mother for less
than fair market value to the detriment of the partnership and its partners was a breach of
her fiduciary duty to the partnership. An oral objection was also presented on this issue,
but the court ignored it[.]"
11
An appellant must affirmatively demonstrate error through reasoned argument,
citation to the appellate record, and discussion of legal authority. (Guthrey v. State of
California (1998) 63 Cal.App.4th 1108, 1115-1116 (Guthrey); Cal. Rules of Court, rule
8.204(a)(1)(C).) As a general rule, "[a]n appellant must provide an argument and legal
authority to support his contentions. This burden requires more than a mere assertion that
the judgment is wrong. 'Issues do not have a life of their own: If they are not raised or
supported by argument or citation to authority, [they are] . . . waived.' [Citation.] It is
not our place to construct theories or arguments to undermine the judgment and defeat the
presumption of correctness. When an appellant fails to raise a point, or asserts it but fails
to support it with reasoned argument and citations to authority, we treat the point as
waived.'' (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852.) Wunch
did not satisfy the requirements of providing adequate legal analysis for this contention;
we therefore treat it as waived.
IV. Richardson's Motion to Dismiss this Appeal
Richardson argues the court's postjudment orders to sell the property and appoint
an elisor are moot because Benefield now owns the property and this court can no longer
grant Wunch relief from the appealed orders.
Wunch counters: "This court of appeal would have no difficulty in directing the
trial court to fashion a proper remedy. In fact, the reversal of the orders on appeal would
provide an adequate remedy, since anyone who acquires an interest in real property with
constructive knowledge that the property is subject to litigation, takes that interest subject
to any judgment, or order that may be entered in the lawsuit."
12
Having rejected all of Wunch's appellate contentions, we have no occasion to
remand this matter to the trial court. "Generally, courts decide only 'actual controversies'
which will result in a judgment that offers relief to the parties. [Citations.] Thus,
appellate courts as a rule will not render opinions on moot questions: '[W]hen, pending
an appeal from the judgment of a lower court, and without fault of the [respondent], an
event occurs which renders it impossible for [the reviewing court] if it should decide the
case in favor of [appellant], to grant [appellant] any effectual relief whatever, the court
will not proceed to a formal judgment, but will dismiss the appeal.' [Citations.] The
policy behind this rule is that courts decide justiciable controversies and will normally
not render advisory opinions." (Ebensteiner Co., Inc. v. Chadmar Group (2006) 143
Cal.App.4th 1174, 1178-1179.)
Wunch has not disputed Richardson's claim he failed to file a copy of the lis
pendens with the superior court. Therefore, he appears to misapprehend the law
regarding the legal effect of the lis pendens he recorded and the lack of an automatic stay.
He claims Benefield "stepped into [Richardson's] shoes when she obtained a grant deed
to the real property being fully aware of the pending litigation, the recorded lis pendens,
and having been personally served with the notice of appeal." (Some capitalization
omitted.) Section 405.23 states: "Any notice of pendency of action shall be void and
invalid as to any adverse party or owner of record unless the requirements of Section
405.22 [requiring filing of the lis pendens in the superior court] are met for that party or
owner and a proof of service . . . has been recorded with the notice of pendency of
13
action." Therefore, the lis pendens Wunch recorded was void and invalid because he
failed to file it in the superior court.
In pursuing this appeal, Wunch, as a joint tenant, had a right to possession of the
property, but he did not post an undertaking under section 917.4, which provides an
exception to the general rule in section 916 that a court loses jurisdiction over a case after
judgment is entered. Section 917.4 states: "The perfecting of an appeal shall not stay
enforcement of the judgment or order in the trial court if the judgment or order appealed
from directs the sale, conveyance or delivery of possession of real property which is in
the possession or control of the appellant or the party ordered to sell, convey or deliver
possession of the property, unless an undertaking in a sum fixed by the trial court is given
that the appellant or party ordered to sell . . . the property will not commit or suffer to be
committed any waste thereon . . . ." Therefore, as the trial court concluded, here the sale
was not automatically stayed pending this appeal, and the court did not err in ordering the
sale. (Accord, Royal Thrift & Loan Co. v. County Escrow, Inc. (2004) 123 Cal.App.4th
24, 36-37.)
Here, the property was properly sold pursuant to the trial court's order.
"Consequently, this court cannot fashion any order which would have the effect of
reversing the trial court's order of sale or otherwise preventing the sale of the property, an
event which has already occurred." (First Federal Bank of California v. Fegen (2005)
131 Cal.App.4th 798, 801.) Therefore, this appeal is moot.
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V. Motion for Sanctions
Richardson requests that we impose sanctions against Wunch in the amount of
$30,376.50 for her attorney fees and costs. She contends Wunch's appeal was without
merit and taken to increase her litigation costs and to delay the property's sale.
Richardson also submits documents supporting her claim that Wunch engaged in a
series of actions aimed at delaying the property's sale. Specifically, Richardson states
that after filing this appeal, Wunch contacted her with settlement offers requiring her to
accept the offer within one day and pay him additional monies, in exchange for him to
dismiss the lawsuit. Wunch's attorney sent Richardson an email stating that she should
abstain from taking any action to sell the property because a stay was in place pending
this appeal. An escrow company's agent informed Richardson it refused to proceed with
the property sale during the pendency of this appeal, asserting an automatic stay was in
place.5 Wunch refused to sign the grant deed, thus obligating Richardson to file an ex
parte application for an elisor.
Applicable Law
Section 907 provides: "When it appears to the reviewing court that the appeal was
frivolous or taken solely for delay, it may add to the costs on appeal such damages as
may be just." Rule 8.276 (a) of the California Rules of Court gives us the authority to
"impose sanctions . . . on a party or an attorney for: [¶] . . . Taking a frivolous appeal or
5 Richardson adds that after filing this appeal, Wunch sued Benefield in a pending
superior court case, alleging causes of action for imposition of constructive trust, unjust
enrichment, quiet title, declaratory relief, injunctive relief, conversion, accounting, and
cancellation of instrument. We do not consider these claims in resolving this appeal.
15
appealing solely to cause delay." The California Supreme Court has explained that "an
appeal should be held to be frivolous only when it is prosecuted for an improper
motive—to harass the respondent or delay the effect of an adverse judgment—or when it
indisputably has no merit—when any reasonable attorney would agree that the appeal is
totally and completely without merit." (In re Marriage of Flaherty (1982) 31 Cal.3d 637,
650 (Flaherty).)
In determining whether an appeal indisputably has no merit, California cases have
applied both subjective and objective standards. The subjective standard looks to the
motives of the appealing party and his or her attorney, while the objective standard looks
at the merits of the appeal from a reasonable person's perspective. (See Flaherty, supra,
31 Cal.3d at pp. 649-650.) Whether the party or attorney acted in an honest belief there
were grounds for appeal makes no difference if any reasonable person would agree the
grounds for appeal were totally and completely devoid of merit. (In re Walters' Estate
(1950) 99 Cal.App.2d 552, 558.)
The objective and subjective standards "are often used together, with one
providing evidence of the other. Thus, the total lack of merit of an appeal is viewed as
evidence that appellant must have intended it only for delay." (Flaherty, supra, 31
Cal.3d at pp. 649-650.) An unsuccessful appeal, however, " 'should not be penalized as
frivolous if it presents a unique issue which is not indisputably without merit, or involves
facts which are not amenable to easy analysis in terms of existing law, or makes a
reasoned argument for the extension, modification, or reversal of existing law.' " (Dodge,
Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1422.)
16
Richardson argues Wunch had two improper subjective motives for prosecuting
this appeal: "(1) he did not want his ex[-]girlfriend [Richardson] to have anything to do
with the property, and (2) he was attempting to make more money off the property by
delaying the sale." She further argues that under the objective standard, Wunch's appeal
lacked merit because he failed to acknowledge the proper standard of review; he
misrepresented the record by falsely labeling the court's postjudgment orders as
"modifications"; his argument regarding the breach of fiduciary duty cause of action is
incoherent and not supported by authority; he distorts the record and has no basis in law
or fact for his contentions; and his appeal is moot.
Analysis
We do not regard Richardson's claim that Wunch brought this appeal for purposes
of delay as sufficient grounds for imposing sanctions. The notice of appeal was filed on
March 5, 2014, and the title deed granting Benefield ownership of the house was
recorded on April 4, 2014. Therefore, Richardson's relief was not significantly delayed
by the filing of the appeal.
On the other hand, Richardson was not prompt in bringing her motion for
dismissal and sanctions, despite the fact the mootness of Wunch's claim was apparent
from the date the title deed was recorded. Richardson filed her motions for sanctions and
dismissal on August 8, 2014, and September 15, 2014 respectively. A leading treatise
includes a practice pointer on this matter: "Of course, the earlier an appeal is dismissed,
the greater respondent's saving of time and expense (especially in preparing a brief).
Thus, it is to respondent's advantage to file a motion to dismiss as soon as the grounds
17
become apparent . . . . [¶] Also consider that, where dismissal is discretionary with the
court of appeal, the court may be less amenable to granting a motion to dismiss filed after
substantial court time has been invested in preparing for a determination on the merits.
For this reason, respondent's counsel may have an implicit obligation to move for
dismissal at the earliest possible opportunity to save the court the time and effort of
working up a case unnecessarily." (Eisenberg et al., Cal. Practice Guide: Civil Appeals
and Writs (The Rutter Group 2014) ¶ 5:41, p. 5-22.)
Richardson also claims the appeal is frivolous and lacks merit. Despite having
concluded this appeal is moot, we do not think it is entirely lacking in merit. Wunch had
a marginally colorable claim that the trial court did not sell the property to the highest
bidder because although Benefield originally offered $385,000, the court ordered it sold
for the stipulated price of $375,000. Therefore, we conclude this appeal was not totally
and completely without merit under the standard set forth in Flaherty, supra, 31 Cal.3d at
page 650.
Finally, although we decline to impose sanctions, we take strong exception to
Wunch's misrepresentation in this appeal that he was not required to post a bond and the
appeal was automatically stayed. His claim he had no right to possession of the property
following the court's sale order is flatly contradicted by his conduct after filing this
appeal: he recorded a lis pendens stating he had filed an appeal and "[t]he action affects
title to or right to possess the real property [identified by address and parcel number]."
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DISPOSITION
The appeal is dismissed. DeAnna M. Richardson shall recover her costs on
appeal. Richardson's motion for sanctions is denied.
O'ROURKE, J.
WE CONCUR:
HALLER, Acting P. J.
McINTYRE, J.
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