Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court for the County of Los Angeles. William R. Chidsey, Jr., Judge. Reversed and remanded with directions. Los Angeles County Super. Ct. No. TS007925
Walter L. Gordon III for Defendant and Appellant Barry Reed.
George M. Halimi, in pro. per., for Defendant and Respondent.
BIGELOW, J.
Cal-Western Reconveyance Corporation (Cal-Western) sold real property at a trustee’s sale, and paid the creditor/beneficiary under the deed of trust, after which it held approximately $175,000 in surplus proceeds from the sale. Cal-Western thereafter filed a “Petition and Declaration Regarding Unresolved Claims and Deposit of Undistributed Surplus Proceeds of Trustee’s Sale.” (See Civ. Code, § 2924j.) The petition identified several persons who claimed portions of the surplus proceeds, including Barry Reed, the former record owner of the property which had been sold at the trustee’s sale. At the time the petition was filed, Attorney George Halimi represented Reed in connection with his attempts to recover the surplus proceeds. Reed later discharged Halimi as his attorney of record. (See Cal-Western Reconveyance Corp. v. Reed (2007) 152 Cal.App.4th 1308, 1312-1313 (Cal-Western Corp.).)
In April 2005, the trial court issued orders authorizing Cal-Western to deposit the surplus proceeds with the court, and discharging the company of further responsibility. (Cal-Western Corp., supra,152 Cal.App.4th at p. 1313.) In March 2006, the court entered orders for the distribution of the surplus proceeds, including a payment of $8,863.06 to Attorney Halimi for money owed to him by Reed. (Id. at pp. 1313-1314.)
On a prior appeal by Reed, we ruled that the trial court had lacked jurisdiction to order the distribution of the $8,863 to Attorney Halimi because his claim for funds from the pool of surplus proceeds arose from a debt which was not secured by a recorded interest in the real property that was sold, and which, instead, arose from his ancillary right to be paid for his legal services and on a promissory note. (Cal-Western Corp., supra, 152 Cal.App.4th at pp. 1321-1323.)
After the matter was remanded to the trial court, Reed filed a motion for an order directing Attorney Halimi to pay over to Reed the $8,863 that the trial court had wrongly distributed to Halimi. The trial court denied Reed’s motion, and Reed now appeals that order. We reverse.
FACTS
In May 2004, Cal-Western, as the trustee under a deed of trust on real property executed by Reed, sold the property at a trustee’s sale. After the trustee sale, and after payment of costs and the obligation secured by the deed of trust, surplus proceeds in the amount of approximately $175,000 remained available to satisfy the obligations secured by junior liens or other encumbrances in the order of their priority.
In July 2004, Reed retained Attorney George Halimi to assist Reed in recovering the surplus proceeds from the trustee’s sale. At the same time, Halimi agreed to loan a sum of $5,000 to Reed in anticipation of an eventual recovery from the surplus proceeds, and Reed executed a promissory note for the $5,000 in favor of Reed.
On February 25, 2005, Cal-Western filed a petition regarding the undistributed surplus proceeds. (See Civ. Code, § 2924j [when surplus proceeds remain after a trustee conducts a trustee’s sale, and the trustee cannot determine the priority of recorded claims, the trustee may deposit the funds with the trial court].) Cal-Western’s petition identified the following persons who claimed rights to portions of the surplus proceeds:
1. Barry Reed, the trustor, represented by Attorney Halimi;
2. Valerie Reed, Barry Reed’s former spouse, who claimed the latter owed her money under the terms of a judgment of dissolution of their marriage; and
3. The Los Angeles County Department of Child Support Services (County) which claimed Barry owed it money for child and spousal support arrearages under a 1998 support judgment.
On April 14, 2005, the trial court issued an order authorizing Cal-Western to deposit the surplus proceeds, and discharging the company of any further responsibility. During the hearing on April 14, Barry Reed informed the court he wished to obtain new counsel, and the matter was continued. On April 18, Barry Reed filed a substitution of attorney, indicating that Halimi was no longer Reed’s attorney of record.
Also on April 18, 2005, Attorney Halimi filed a written notice of lien under the case number assigned to Cal-Western’s action. Halimi’s notice of lien stated that, by virtue of a written fee agreement dated July 26, 2004, Halimi had claims ahead of all others to secure payment for legal services, plus the $5,000 advanced to Barry Reed.
At a hearing in December 2005, the trial court ruled that the County was entitled to recover amounts due under prior orders of the family law court, and took the remaining claims under submission. On March 14, 2006, the court issued a final order, distributing the surplus proceeds as follows:
1. The sum of $33,678.90 to Valerie Reed to satisfy child support arrearages through March 14, 2006;
2. The sum of $1,162.84 to Valerie Reed to satisfy spousal support arrearages through March 14, 2006;
3. The sum of $3,887.12 for Valerie Reed’s attorney fees, payable to the Law Offices of Errol J. Gordon;
4. The sum of $15,424.11 for Valerie Reed’s equalization payment claim, payable to Valerie; and
5. The sum of $8,863.06, payable to George Halimi, for his $5,000 loan, interest on the loan, costs advanced, and quantum meruit for services rendered in the amount of $2,725.
Barry Reed filed an appeal, and in June 2007, we ruled that the trial court erred by distributing the $8,863 from the surplus proceeds to Halimi. (Cal-Western Corp., supra, 152 Cal.App.4th at pp. 1321-1323.) We reversed the trial court’s order and remanded the cause to the trial court with directions to enter a new order consistent with our opinion. (Id. at p. 1324.) The remittitur issued in August 2007. After that, nothing happened for about seven months.
Our other conclusions regarding the remaining payments from the surplus proceeds are not involved in the current appeal and are ignored in this opinion.
Then, on March 21, 2008, Barry Reed filed a motion to “set amounts on remand.” Reed’s motion asked the trial court to order Attorney Halimi to repay the $8,863 that he previously received from the trial court directly to Reed. On April 21, 2008, Halimi filed written opposition the Reed’s motion. At a hearing on April 28, 2008, the trial court denied Reed’s motion –– but did not issue a minute order –– for the following reasons stated from the bench:
“In effect what we’re doing today is, to the extent possible, rewinding the tape, going back to step one, modifying the order to acknowledge... that this court was incorrect.... [¶]... [¶]
“I thought I had jurisdiction in the first instance but the Court of Appeal has disagreed. The Court of Appeal’s ruling is paramount... and they make it... clear by way of their opinion that this court had no jurisdiction. Its orders were null and void. [¶]... [¶]... I don’t think I can order [Mr. Halimi] to pay back, per se. My intent is to modify the order in the first instance, go back to the date of the order and say the original order was incorrect, and this is the modified order: the modified order will reestablish the obligations to reimburse for child and spousal support, but in all other respects, it will be null and void. [¶]... [¶]... Here, in effect, we’re... erasing portions of the original judgment, but the original judgment will stand. All we’re doing is trying to go back to step one, adjusting the judgment. I will make an order that, in effect, the court exceeded its jurisdiction in the first instance, and that monies... were inappropriately transferred to the interested parties, including Mr. Halimi.... [¶]... [¶]... I don’t think I can issue judgments unless I have jurisdiction, and I think we spent quite a bit of time off the record discussing whether or not [this] court had jurisdiction in the first place over Mr. Halimi’s claim. I took the position that we did. The Court of Appeal said we did not, and I think the Court of Appeal was clear, from a theoretical point of view, [Mr. Halimi]’s not before [this] court. [¶]... [¶]
“[Mr. Reed’s] remedy is the same remedy that any person has, and that is to utilize the laws of the state to get [the] money back. Now, in this particular case, I recall clearly... that Mr. Reed admitted he owed the money, and if he wants to dispute that at this point in time, so be it, let him dispute it.
“Right now Mr. Halimi has that money. If [Mr. Reed] believes that [Mr. Halimi] should return it, then under those circumstances, file suit or, in the alternative, if, in fact, [Mr. Reed] owes the money and he wants to do the right thing, sit down with Mr. Halimi today and work out the details. I don’t know of any procedural way, because if I didn’t have jurisdiction in the first instance, how can I have jurisdiction now.... [¶]... [¶]
“[The Court of Appeal’s opinion is] not clear what I ought to do with the funds that were distributed to Mr. Halimi.... [¶]... [¶]... I’m going to make a ruling, as I previously indicated.... I think the appellate decision is ambiguous. It... does direct me to modify my original judgment,... but I don’t know whether or not it provides that I shall order [Mr. Halimi] to return those funds to Mr. Reed.
“If the law requires me to do that, I’ll clearly do that. I’ll give [Mr. Reed] ten days from today [to provide authority in support of such an order].... [¶]... [¶]... Mr. Reed will have an opportunity [for] ten days from today either to seek further clarification of the Court of Appeal’s [opinion], or to provide this court with legal authority which would, in effect, require this court to order Mr. Halimi, as an officer of the court and as somebody who is before this court, to pay forthwith $8,863.06.”
On October 24, 2008, the trial court issued a minute order incorporating its oral ruling made at the hearing on April 28, 2008. On November 6, 2008, the court issued an order correcting its October minute order to provide as follows: “The court’s prior order granting... George Halimi’s claim for monies advanced, interest, costs and quantum mer[u]it in the amount of $8,863.06, is hereby rescinded, the court having no jurisdiction over [Halimi] in the first instance.”
On December 24, 2008, Barry Reed filed a notice of appeal from the order entered by the trial court on November 6, 2008.
DISCUSSION
Reed contends: “The trial court’s jurisdiction is over the res, that is, the money[,] and since its error was awarding the money to Halimi [in the first instance], it must have the power to correct [its] order... ” by directing Halimi to deliver the money to Reed, the party to whom the money rightfully should have been delivered in the first instance. Reed cites no legal authority in support of his position. For his part, Halimi contends that “Reed’s argument is without merit. Jurisdiction of the trial court over Halimi would be a mandatory requirement for any order affecting Halimi.” Like Reed, Halami also cites no legal authority in support of his position. In our view, both parties are off the mark, with or without legal authority.
The confusion in this case understandably arises from inartful language found in the published opinions which we quoted in Cal-Western Corp. The language which we quoted spoke in terms of “void” trial court orders, and a “lack of jurisdiction,” suggesting we had found that the trial court in the current case had lacked subject matter jurisdiction to issue its March 2006 order distributing the $8,863 to Attorney Halimi. We did not intend such a result by our prior opinion.
“Lack of jurisdiction in its most fundamental or strict sense means an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties.” (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 288.) When a court lacks jurisdiction in this most fundamental sense, its judicial acts are void. (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 119-122; People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 660-663.) On the other hand, when a court has authority to act, but acts contrary to the authority conferred, the court exceeds its jurisdiction, and its acts are voidable. (People v. American Contractors Indemnity Co.,at p. 661.) In the present case, the trial court –– a court of general jurisdiction –– had subject matter jurisdiction to hear and determine Halimi’s claims on the $5,000 note and for his unpaid fees; the problem arose because the trial court heard and determined those matters in the context of the proceedings on the petition pursuant to Civil Code section 2924j, rather than in a separate proceeding brought by Halimi.
Our earlier opinion in Cal-Western Corp., reversing the trial court’s order distributing the $8,863 to Halimi, did no more than hold that the trial court had incorrectly distributed that money to Halimi in the first instance, in excess of trial court’s jurisdiction. We did not intend to suggest that the trial court had acted in the absence of jurisdiction, and we now hope to make clear that the trial court otherwise retained its power to enter any and all orders necessary to effectuate our opinion in Cal-Western Corp. The bottom line in these proceedings is that Halimi wrongly received $8,863 from the trial court, and he may not now take advantage of that error to retain that money. In a half-page argument, Reed contends that, in addition to ordering Halimi to return the money he received, the trial court should order Halimi to repay the money with interest, apparently payable from March 30, 2006, the date he received the money from the superior court. The two cases cited by Reed, In re Marriage of Hubner (2004) 124 Cal.App.4th 1082, and Ehretv. Congoleum Corp. (2001) 87 Cal.App.4th 202, do not support Reed’s position. Hubner and Ehret merely state the rule that interest accrues on a judgment from the date of the judgment was entered, regardless of whether the amount of the judgment is modified upward or downward on appeal. We do not understand Reed to have ever obtained a judgment against Halimi, in this case or in any case. In our prior opinion, we held that the trial court had erred by paying money out of the proverbial pot to Halimi. In the opinion we issue today, we hold that Halimi must return that money to the trial court. The possibility that the trial court will eventually deliver the money over to Reed does not mean that Reed has obtained a judgment against Halimi. At no time has Reed prevailed on any cause of action against Halimi, nor has Reed obtained a judgment against Halimi. For the same reason, we summarily reject Reed’s contention that he also should be awarded attorney fees on appeal because there exists some “contract for fees” between him and Halimi. Reed has not prevailed on any contract-based cause of action against Halimi.
DISPOSITION
The trial court’s order is reversed, and the cause is remanded to the trial court with directions to enter an order directing Attorney George Halimi to deposit with the trial court funds which he received from the trial court. The parties shall bear their own costs on appeal.
We concur: RUBIN, Acting P. J., FLIER, J.