Opinion
D076198
04-02-2020
LALANI STEEL, INC., Plaintiff and Respondent, v. INTERNATIONAL ECONOMIC AND TRADING CORPORATION, Defendant and Appellant.
Pillsbury Winthrop Shaw Pittman and Nathan M. Spatz, Justin L. Brossier for Defendant and Appellant. Levinson Arshonsky & Kurtz and Richard I Arshonsky, Jason J. Jarvis for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. CIVDS1312571) APPEAL from a judgment and postjudgment order of the Superior Court of San Bernardino County, Donna G. Garza, Judge. Judgment affirmed; postjudgment order reversed and remanded with directions. Pillsbury Winthrop Shaw Pittman and Nathan M. Spatz, Justin L. Brossier for Defendant and Appellant. Levinson Arshonsky & Kurtz and Richard I Arshonsky, Jason J. Jarvis for Plaintiff and Respondent.
Plaintiff and respondent Lalani Steel, Inc. (Lalani) sued defendant and appellant International Economic and Trading Corporation (International) for breach of an oral contract, which Lalani alleged was an exclusive supply agreement by which International would provide steel to Lalani for sale to a third party. Following a bench trial, the trial court entered judgment in Lalani's favor, finding International breached a one-year oral agreement entered into by the parties and as a result Lalani suffered $1.8 million in damages. After International filed its notice of appeal, Lalani moved under Code of Civil Procedure section 187 to amend the judgment to add China Baowu Steel Group Corporation Limited a/k/a China Baowu Steel Group Corporation (Baowu) as a judgment debtor, and the trial court granted the motion. International filed a second notice of appeal from that postjudgment order.
International states that at some point, plaintiff substituted Lalani Acquisition LLC, for Lalani Steel, Inc. However at trial, plaintiff's counsel stated that when he referred to "Lalani" in questions, he was referring to Lalani Steel, Inc. The parties make no issue about the distinction. We refer to plaintiff simply as Lalani.
Undesignated statutory references are to the Code of Civil Procedure.
International contends: (1) there is no substantial evidence to support the trial court's finding the parties had entered into an oral exclusive contract; (2) the court's award to Lalani of $1.8 million in damages is speculative and unsupported by substantial evidence; and (3) the court lacked jurisdiction to amend the judgment to add Baowu as a judgment debtor while its appeal was pending and Lalani's motion failed to satisfy the requirements to permit such an amendment.
We conclude substantial evidence supports the trial court's findings of the existence of a contract and its damages award. However, we agree the court lacked jurisdiction to amend the judgment to add a new judgment debtor following International's filing of its first notice of appeal. Accordingly, we affirm the judgment, but reverse the postjudgment order and remand with directions that the trial court deny without prejudice Lalani's motion to amend the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Reviewing a judgment based on a statement of decision following a bench trial, we state the facts from the record and draw inferences in the light most favorable to Lalani as the prevailing party. (Jackson v. LegalMatch.com (2019) 42 Cal.App.5th 760, 767; Carrington v. Starbucks Corp. (2018) 30 Cal.App.5th 504, 518; see In re Shaputis (2011) 53 Cal.4th 192, 214, fn. 11 [appellate court is not limited to facts or evidence cited in trial court's statement of decision but review extends to the entire record].)
Lalani is a steel distributor formed in about 2002. It purchases steel from various mills then sells to customers in the domestic market. Lalani did business with a company, Gonvarri Service Group (Gonvarri) or its divisions, buying secondary steel from Gonvarri in 2003 and 2004. Beginning in 2006, Lalani began selling prime steel to Gonvarri. From 2002 to August 2011, Lalani sold Gonvarri about $35 million in steel product. Iqbal Hemani is Lalani's owner and director of operations.
Secondary steel is rejected material from a mill that produces prime (or custom) steel products for a particular customer.
International is a Chinese state-owned mill that imports and exports steel products to trading companies like Lalani, who are its customers. In 2006, Lalani began doing business with International by purchasing excess prime steel from it. By 2010, Lalani was purchasing prime steel from International to sell to customers at a profit. In mid-2011, Lalani began selling prime material to Gonvarri, and Gonvarri and Lalani entered into an agreement that Lalani would act as a middleman or "trader" as commonly known in the industry to supply approximately 1,000 metric tons of steel product to Gonvarri per month for the next 12 months. It was not a written agreement, as the parties' custom and practice was to reach such agreements orally or via e-mails. To perform this agreement, Lalani purchased 1,000 metric tons of steel from International, whose representative, Louis Liu, was aware of Lalani and Gonvarri's 12-month agreement. Gonvarri was testing whether Lalani could fulfill their agreement, and Lalani was testing whether International could provide those quantities of steel. Lalani met its agreement with Gonvarri to supply 1,000 metric tons of steel for 12 months.
It was established for trial as a result of issue sanctions that: (1) International and Wugang Group did business as Wuhan Iron and Steel Group (WISCO); (2) WISCO wholly owned and managed WISCO America; (3) WISCO was in charge of the daily management of WISCO Europe, a wholly owned subsidiary of WISCO; and (4) WISCO was restructured and became International at the end of 2004.
During their year-long arrangement, Lalani sought to increase its business with Gonvarri. Thus, in mid-2012, Hemani met with a Gonvarri representative in Spain. Several days later, Hemani told International representatives about the potential for additional business from Gonvarri. In early August 2012, a Gonvarri representative communicated with Hemani via e-mail that it had approved Lalani as a qualified source in good standing, that he felt Lalani had "very competitive" pricing, and that Gonvarri was forecasting increasing its actual purchasing from Lalani to about 10,000 metric tons of steel each month, with the potential for more. Lalani forwarded that e-mail to International.
The Gonvarri representative's August 2, 2012 e-mail states in part: "Thank you for your visit to Gonvarri Madrid a couple of weeks ago. The discussions were very productive and I feel we have an excellent opportunity to work together to optimize our supply chain and improve profitability. One of the key action items from our discussion with Gonvarri's Purchasing Director was the availability of 1.2 million Metric Ton of the 3.0 million Gonvarri uses is open for purchases [sic] from Trading companies which we would like Lalani Steel to participate in. We have already taken the first step of approving Lalani Steel as a qualified source in good standing. From the pricing structure you shared with us I feel Lalani Steel does have a very competitive price and we forecast to increase actual purchasing to 10,000 Metric Ton per month from Lalani Steel as long as the price is competitive. [¶] Gonvarri Steel Services has a large base of customers from Automobile industry and we have our next contract coming due for renewal in September/Oct for Mid Feb deliver [sic], we could like Lalani Steel to [sic] participate in those inquiries as an authorized source."
On September 15, 2012, Hemani and Zhigang (also referred to as Jack) Guo, a representative of International, reached a "handshake" agreement in which Lalani would purchase from International about 10,000 metric tons of steel product each month and exclusively market International product to Gonvarri. International agreed that Lalani would be the exclusive channel to offer its material to Gonvarri, and Lalani would earn a profit of $15 per metric ton on sales of International steel to Gonvarri. Hemani expected the arrangement among the three companies to last three to five years. Lalani asked for written confirmation, and International memorialized the agreement in a "Confirmation Letter" dated September 18, 2012, reading: "We, Wuhan Iron and Steel (Group) Corp. are pleased to confirm that All [sic] inquiries coming from Gonvarri Group will be offered to Lalani . . . only." Hemani understood this to mean that Lalani would be the sole channel to quote on Gonvarri inquiries and requests. International's president placed its corporate seal on the confirmation letter and e-mailed it to Lalani. Hemani informed Gonvarri of Lalani's and International's agreement.
Hemani testified on cross-examination that as of September 2012, there was no written guarantee that Gonvarri would purchase a certain amount of steel, and Gonvarri never otherwise guaranteed it would purchase a certain amount of steel from Lalani. Hemani agreed that at the time of the September 2012 meeting, he would not have told International he had such a guarantee from Gonvarri. He also understood that Lalani was one of Gonvarri's approved vendors, but Gonvarri purchased from other traders as well. However, Hemani later testified that Lalani and Gonvarri did in fact have an agreement that Lalani would sell a certain amount of WISCO product to Gonvarri on a monthly basis based on e-mails, contracts, and the fact Lalani actually supplied the material to Gonvarri.
Several days after the September 15, 2012 meeting, Gonvarri sent a request for a quote to Hemani, who forwarded it to International. International gave Lalani a price that Lalani proposed to Gonvarri, but Gonvarri submitted a counteroffer, which Lalani again forwarded to International. In early October 2012, Lalani, International, and Gonvarri held a joint meeting at which they discussed several "key points," including that WISCO would provide competitive pricing to Gonvarri, Gonvarri's "[y]early qty [quantity] commitment," and Gonvarri's need for a six-month fixed price. At the meeting, Gonvarri's representative told International's representative Junhua Shen about the importance of timely delivery.
Eventually Lalani and Gonvarri agreed on pricing and entered into several sales contracts for 10,395 metric tons of product with shipment dates in mid-November and mid-December 2012. After the first order, International raised its base steel price on Lalani, but Lalani absorbed the difference, electing to suffer the loss in the interest of pursuing bigger business with Gonvarri. In an October 21, 2012 e-mail, Shen apologized for the inconvenience, but "reassure[d]" Hemani that "WISCO will quote material to Gonvarri through Lalani," which was consistent with Hemani's understanding of the parties' agreement.
Though Lalani had discussed the upcoming shipment dates with International, International later notified Lalani that it could not meet them and had to push them off by about two weeks. Gonvarri, however, agreed to the new dates and International issued sales confirmations accordingly. International, however, again missed the next new shipment date and sought to push it off, which was unacceptable to Gonvarri. The first order did not ship until early March 2013.
In May 2013, Hemani and Shen met with Gonvarri representatives. Shen apologized for the first order problems and again represented that Lalani would be International's exclusive channel for International steel sales to Gonvarri. That month Gonvarri placed another order with Lalani, which International filled. Lalani made its $15 per metric-ton profit on that sale.
Between September 2012 and May 2013, Lalani unsuccessfully tried to place other Gonvarri inquiries with International. International either did not respond, did not give competitive pricing, or by the time International provided a price, Gonvarri had already purchased materials from another mill.
On May 12, 2013, Guo informed Hemani that Gonvarri did not want to purchase International steel solely through Lalani. This was the first Hemani had heard this news. After Hemani expressed his surprise and shock, Guo responded, "We agree to do [Gonvarri] business through sole channel Lalani," but reiterated that Gonvarri did not agree to that arrangement. Guo proposed that Lalani work together with WISCO Europe to sell to Gonvarri. Guo's assertion that they had agreed to use Lalani as its sole channel to Gonvarri comported with Hemani's understanding of their agreement. That month, Hemani met with an International representative who told Hemani that International would be selling product to WISCO Europe, which would then sell directly to Gonvarri. Hemani later discovered that International sold steel that ended up with Gonvarri without Lalani's participation.
In October 2013, Lalani sued International for breach of contract and other claims. The matter proceeded to a bench trial on Lalani's breach of contract claim, which was based on allegations that by accepting orders directly from Gonvarri, International breached its agreement that Lalani would be the exclusive middleman for International steel sales to Gonvarri. At trial, Hemani testified about the parties' handshake agreement, as well as the confirmation letter, which he interpreted as saying "all Gonvarri inquiries and requests for quote, . . . Lalani will be the only—sole channel to quote against those inquiries." Guo on International's behalf denied he had entered into an exclusive sales agreement with Lalani; he testified Lalani would have had to enter into an exclusive sales agreement with Gonvarri first, and Lalani would have needed to prove it would be able to obtain large purchase orders from Gonvarri. He testified nobody at International could have made such an important decision at that first meeting between top-level executives of Lalani and International. Guo further testified that in his 11 years with International, it had never given any traders an exclusive sales agreement. According to Guo, the confirmation letter did not prevent International from receiving Gonvarri's inquiries from other traders.
Following the presentation of evidence, the trial court ruled in Lalani's favor, finding it established it had an exclusive contract for a one-year period and awarding it $1.8 million in damages. It later issued a statement of decision at International's request. In it, the court found that on September 15, 2012, Lalani and International entered into a one-year exclusive agreement in which (1) Lalani would fill all of its Gonvarri orders exclusively with International's steel, which would start at approximately 10,000 metric tons of product per month or more; (2) Lalani would be the exclusive intermediary between Gonvarri and International and would handle tasks such as obtaining and negotiating letters of credit, price, claims, or problems that arose during the transactions; and (3) if International received any inquiries from a source it knew to be from Gonvarri, those orders would go exclusively through Lalani. The trial court found that while the September 18, 2012 confirmation letter was not a separate contract, it confirmed the existence of the exclusive agreement. The court cited as supporting evidence for its finding the written confirmation letter and International's president's placement of International's corporate seal upon it; trial exhibit Nos. 27, 43 and 45; and the parties' "subsequent conduct and performance . . . ." The court found Hemani's testimony credible and Guo's testimony not credible.
The trial court also rejected International's statute of frauds defense, finding the agreement was an exclusive sales agency service agreement that did not fall within either the statute of frauds or Commercial Code requirements for a written sales contract involving more than $500 in goods. The court found the agreement satisfied the statute of frauds even assuming the doctrine applied. International does not assert the statute of frauds on appeal.
Though the trial court ruled any formal agreement between Gonvarri and Lalani was immaterial to the issues, it nevertheless found Gonvarri had intended to purchase 10,000 metric tons of steel each month, and had agreed to share pricing information with Lalani so it could get competitive pricing from International to fulfill Gonvarri's requirements. It found that as a result of International's breach, Lalani suffered damages of $150,000 per month beginning in October 2012 and continuing for 12 months for a total principal amount of $1.8 million, plus prejudgment interest at 10 percent per annum on those amounts. The court found that Lalani was the prevailing party and entitled to costs and attorney fees. It entered judgment in Lalani's favor, awarding it $1.8 million in breach of contract damages plus costs. About a month later, International filed a notice of appeal of the judgment.
In April 2018, the trial court corrected its judgment nunc pro tunc. The corrected judgment awarded Lalani $2,592,302.70, which included an additional $792,302.70 in prejudgment interest. The court awarded Lalani $10,375.19 in costs. Days later, Lalani moved under the court's "authority to use all means necessary to carry its jurisdiction into effect," including under section 187, to amend its judgment to add Baowu as a defendant and judgment debtor. Lalani maintained it had good cause to do so because International had merged with another company then changed its name to Baowu. In opposition, International argued the court lacked jurisdiction due to the pending appeal and Lalani had failed to satisfy the criteria to show either that Baowu was International's alter ego or that Baowu controlled the litigation. In reply, Lalani asserted that International's notice of appeal was in default, Lalani was merely enforcing its judgment, and its motion involved a collateral matter. In June 2018, the court granted the motion, adding Baowu as an additional judgment debtor.
International filed a second notice of appeal from the court's June 2018 order adding Baowu as a judgment debtor.
DISCUSSION
I. Finding of Exclusive Agreement
International contends the trial court's finding that an exclusive supply and agreement existed between Lalani and International is not supported by substantial evidence. For this proposition, International points to evidence from its own witness, Guo, who testified that International rejected Lalani's offer to enter into an exclusive contract. International argues: "[International] provides steel products internationally to many different traders, who then sell the product to Gonvarri. It goes against reason for [International] to agree to enter into an exclusive contract with a single trader, without that trader having an exclusive guarantee from Gonvarri." Asserting it was undisputed Lalani had no exclusive contract with Gonvarri, International argues "it is not a reasonable inference, let alone substantially supported by the evidence in the record, that [International] did, or even would, enter into an exclusive arrangement with Lalani." International argues the confirmation letter is merely evidence that International agreed to forward inquiries from other traders to Lalani to give Lalani an advantage in preparing bids to Gonvarri.
International further argues as to damages there is no evidence it agreed to pay Lalani a $15 per metric ton profit, and the trial court engaged in speculation to conclude Lalani would fill 10,000 metric tons of steel per month for Gonvarri. According to International, "outside of the two transactions completed between Lalani and Gonvarri, using [International] steel, there is no evidence that Gonvarri was willing or able to acquire steel from Lalani, that Lalani was able to offer competitive pricing, or that Gonvarri would agree to pay a $15 per [metric ton] mark-up." International therefore argues there is "not substantial evidence to support the finding that the parties entered into an oral contract wherein Lalani would acquire 10,000 [metric tons] of steel per month from [International] and then be able to successfully mark up the price of steel it acquired from [International] by $15 per [metric ton] and sell it to Gonvarri." A. Standard of Review
The parties correctly agree that this court reviews for substantial evidence the trial court's finding of the existence of a contract. Under this standard, " '[i]n reviewing a judgment based upon a statement of decision following a bench trial, "any conflict in the evidence or reasonable inferences to be drawn from the facts will be resolved in support of the determination of the trial court decision. [Citations.]" [Citation.] [T]he appellate court will "consider all of the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving conflicts in support of the [findings]. [Citations.]" [Citation.] We may not reweigh the evidence and are bound by the trial court's credibility determinations. [Citations.] Moreover, findings of fact are liberally construed to support the judgment. [Citation.]' [Citations.] [¶] We 'start with the presumption that the record contains evidence sufficient to support the judgment; it is the appellant's burden to demonstrate otherwise.' [Citation.] As such, the appellant is required to provide a summary of all of the evidence, not merely his or her own evidence, with citations to the record." (Carrington v. Starbucks Corp., supra, 30 Cal.App.5th at p. 518; see also In re Marriage of Fink (1979) 25 Cal.3d 877, 887; Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881; Building Industry Assn. of San Diego County v. State Water Resources Control Bd. (2004) 124 Cal.App.4th 866, 888.) B. There Is Substantial Evidence that Lalani and International Agreed Lalani Would Exclusively Supply Gonvarri with International Steel
At trial, Hemani was questioned as follows:
"[Lalani's counsel]: Did Lalani and [International] reach an agreement at the September 15th, 2012 meeting regarding Gonvarri?
"[Hemani]: Yes.
"[Lalani's counsel]: What did Lalani agree to do as part of the agreement?
"[Hemani]: Lalani agreed to exclusively market [International] product to Gonvarri.
"[Lalani's counsel]: And can you explain what that means?
"[Hemani]: That if any inquiry comes from Gonvarri, or any other comes from Gonvarri, Lalani will exclusively market [International] product and quote [International] product to Gonvarri. [¶] . . . [¶]
"[Lalani's counsel]: [W]as Lalani's promise to [International] simply to buy steel from it, or were there other components of what Lalani promised to do?
"[Hemani]: Lalani will take care of all the purchase needs of Gonvarri. Lalani will take care of [International] regarding any claims and the payment terms and negotiation and make sure that the letter of credit is clean.
"[Lalani's counsel]: Okay. Did the agreements involve a certain amount of steel products that Lalani would purchase from [International]?
"[Hemani]: Yes. Around 10,000 metric ton per month.
"[Lalani's counsel]: Okay. Was there an agreement reached at that meeting as to the profit that Lalani would keep on the Gonvarri orders?
"[Hemani]: Lalani will keep $15 per metric ton as profit.
"[Lalani's counsel]: And can you explain how that would work?
"[Hemani]: So when we get RFQ [request for quote], or inquiry, from Gonvarri, we will forward that RFQ and inquiry to [International] to quote. When we receive a price from [International], we will add that $15 and send it to Gonvarri. [¶] . . . [¶]
"[Lalani's counsel]: . . . What did [International] promise to do at the September 15th, 2012 meeting?
"[Hemani]: [International] promised . . . Lalani will be the exclusive channel to offer material to Gonvarri . . . ."
Hemani further explained that under the agreement, if any inquiry came from any third party, it would be "channel-ized through Lalani only." He testified that at the end of the September 15, 2012 meeting, he and Guo shook hands, which was the custom and practice in the industry: "Both parties agreed and it was a handshake agreement."
Thus, as summarized ante, Hemani testified that he and Guo agreed, memorialized in part by the confirmation letter—that Lalani would be the sole conduit and marketer of approximately 10,000 metric tons of International steel per month to Gonvarri, with which Lalani had a preexisting relationship and which expressed its intention to purchase about that much steel from Lalani on a monthly basis. We are bound by the trial court's finding that Hemani was the credible witness. (People v. Gomez (2018) 6 Cal.5th 243, 280 [" '[i]n deciding the sufficiency of the evidence, a reviewing court resolves neither credibility issues nor evidentiary conflicts' "]; see also Carrington v. Starbucks Corp., supra, 30 Cal.App.5th at p. 518.) His testimony by itself is enough to support the finding that the parties had entered into an arrangement where Lalani would be the exclusive seller of International steel to Gonvarri. (See Evid. Code, § 411; In re Marriage of Mix (1975) 14 Cal.3d 604, 614 [testimony of a single witness, even a party, may constitute substantial evidence]; People v. Ghobrial (2018) 5 Cal.5th 250, 281 [same].)
We are likewise bound by the court's interpretation of the confirmation letter reading "[a]ll inquiries coming from Gonvarri Group will be offered to Lalani only"—on which the parties introduced conflicting extrinsic evidence from Hemani and Guo—as memorializing the parties' agreement giving Lalani the sole or exclusive opportunity to fill Gonvarri's steel orders. (See Estate of Dodge (1971) 6 Cal.3d 311, 318 [where interpretation of writing turns on credibility of extrinsic evidence or resolving a conflict in such evidence, the trial court's determination is binding], citing Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 866, fn. 2.) That the record contains contrary evidence or permits contrary inferences (via International's witness Guo or a different view of the confirmation letter) is of no moment, as long as Hemani's testimony, considered in the light most favorable to the court's findings, is not inherently improbable or impossible. (See Ghobrial, at p. 281 [testimony of a single witness is substantial evidence unless it is physically impossible or inherently improbable].) It is not made improbable by the fact that Lalani did not have an exclusive supply contract with Gonvarri, even assuming such a fact is undisputed as International maintains. There is no basis to conclude Hemani's testimony is so flawed to be disregarded under this principle.
International's arguments to the contrary would impermissibly have us reject Hemani's credibility and assign credibility to Guo, who denied any such agreement at trial. Such credibility assessments, as we have stated, are not this court's function. International's position would also require us to reject the trial court's resolution of conflicting extrinsic evidence concerning the confirmation letter and other conflicting evidence about the parties' dealings and intent. By focusing on the evidence favorable to its own positions, International's arguments violate the "elemental principle" of substantial evidence review discussed ante: "that a party challenging the sufficiency of the evidence to support a factual determination made by the trier of fact is required to set out all evidence pertinent to that determination, on penalty of forfeiting review." (Schellinger Brothers v. Cotter (2016) 2 Cal.App.5th 984, 998, citing Foreman & Clark Corp. v. Fallon, supra, 3 Cal.3d at p. 881.)
International's challenge to the trial court's damages analysis does not change our conclusion about the evidence supporting the parties' oral agreement. International suggests Lalani did not present substantial evidence that its proposal to mark up the steel price by $15 per metric ton would be "successful[] . . . ." Whether the parties effectuated their agreement is a different question from whether they entered into such an agreement and whether International breached it, which the trial court found to be the case. Such arguments do not affect our decision regarding the agreement's existence, but we consider them in assessing the court's damages award.
II. Damages Award
Referring to trial exhibits and Hemani's testimony, the trial court in its statement of decision found "Gonvarri intended to purchase from Lalani a minimum of 10,000 [metric tons] of steel products per month, and that Gonvarri agreed to tell Lalani the pricing that Gonvarri was receiving from other traders so that Lalani could go to [International] and get competitive pricing to fulfill Gonvarri's requirements." It found "whether there was a formal agreement between Gonvarri and Lalani is immaterial to the issues in the action." It further found "as a result of [International's] breach of the Agreement, Lalani has suffered damages, consisting of the principal amount of $150,000.00 per month[] beginning in October 2012 and continuing for the 12-month term of the Agreement for a total principal amount of $1.8 million, plus prejudgment interest at 10 [percent] per annum on those amounts."
International contends the court's $1.8 million damages award is not supported by evidence in the record, but only speculation and Lalani's "best hopes." It points out that under contract principles, the nonbreaching party is entitled to recover only damages, including lost future profits, if they can be estimated with reasonable certainty and are proximately caused by the specific breach. International argues that even if it breached an oral agreement to use Lalani as a middleman, Lalani's damages must be limited to the amount of steel that International sold to Gonvarri from October 2012 to September 2013 without Lalani's participation. According to International, the court's award is speculative because there was no evidence Lalani was guaranteed to sell 10,000 metric tons of steel product to Gonvarri every month, and the eight "verifiable" transactions between International, WISCO Europe and Gonvarri between October 2012 to September 2013 amounted to only 21,238 metric tons of steel, which would total at most $318,582 in damages. It argues that based on the evidence, it was speculative for the court to find Lalani suffered $1.8 million in damages, calculated by taking 10,000 metric tons multiplied by a $15-per-ton commission for 12 months. A. Legal Principles
"Under general contract principles, when one party breaches a contract the other party ordinarily is entitled to damages sufficient to make that party 'whole,' that is, enough to place the nonbreaching party in the same position as if the breach had not occurred." (Postal Instant Press, Inc. v. Sealy (1996) 43 Cal.App.4th 1704, 1708-1709.) Contract damages seek to approximate the agreed-upon performance, or the benefit of the contractual bargain. (Lewis Jorge Construction Management, Inc. v. Pomona Unified School Dist. (2004) 34 Cal.4th 960, 967-968 (Lewis Jorge); Applied Equipment Corp. v. Litton Saudi Arabia, Ltd. (1994) 7 Cal.4th 503, 515.) But breach of contract damages must be " 'clearly ascertainable in both their nature and origin.' " (Copenbarger v. Morris Cerullo World Evangelism, Inc. (2018) 29 Cal.App.5th 1, 11, quoting Civ. Code, § 3301.) " ' "Damages which are remote, contingent or merely possible cannot serve as a legal basis for recovery." ' [Citation.] The plaintiff in a breach of contract action has the burden of proving nonspeculative damages with reasonable certainty." (Copenbarger, at p. 11; see also Mozzetti v. City of Brisbane (1977) 67 Cal.App.3d 565, 577, disapproved on other grounds in Cornette v. Department of Transportation (2001) 26 Cal.4th 63, 74.)
There are two types of contractual damages: general and special damages. (Lewis Jorge, supra, 34 Cal.4th at p. 968.) "General damages are often characterized as those that flow directly and necessarily from a breach of contract, or that are a natural result of a breach. [Citations.] Because general damages are a natural and necessary consequence of a contract breach, they are often said to be within the contemplation of the parties, meaning that because their occurrence is sufficiently predictable the parties at the time of contracting are 'deemed' to have contemplated them." (Ibid.) Under a contract in which Lalani was to be the sole supplier of International steel to Gonvarri, any lost Gonvarri business to Lalani resulting from International's breach (its direct sale to Gonvarri) would constitute general damages. The parties do not address the distinction.
Contract damages can include "future profits the breach prevented the nonbreaching party from earning at least to the extent those future profits can be estimated with reasonable certainty." (Postal Instant Press, Inc. v. Sealy, supra, 43 Cal.App.4th at p. 1709; see also Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747, 773-774 [" '[T]he general principle [is] that damages for the loss of prospective profits are recoverable where the evidence makes reasonably certain their occurrence and extent' "]; Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 907 ["evidence of lost profits must be unspeculative and . . . the evidence must show 'with reasonable certainty both their occurrence and the extent thereof' "].) In Lewis Jorge, the California Supreme Court pointed out that lost profits from related or derivative transactions can be a measure of general damages for breach of contract where the contract involves an agreement creating an exclusive sales agency. (Lewis Jorge, supra, 34 Cal.4th at pp. 971-972 [citing cases].) "The likelihood of lost profits from related or derivative transactions is so obvious in these situations that the breaching party must be deemed to have contemplated them at the inception of the contract." (Id. at p. 972.)
For these principles, Lewis Jorge relied in part on Nelson v. Reisner (1958) 51 Cal.2d 161. In Reisner, the California Supreme Court upheld a damage award to a cross-complainant assignee of a lease (Reisner) for the cross-defendant's breach of a development and sharecrop lease of 160 acres of land granting Reisner, a farmer, a right of first refusal of a new lease at expiration of the lease term. (Id. at pp. 163-164, 165, 170-172.) The trial court found the cross-defendants had entered into a new lease with third parties without Reisner's consent though Reisner was ready, willing and able to enter into a lease on the same terms and conditions, and the cross-defendants had not offered Reisner a right of first refusal, causing Reisner $30,643 in damages calculated to the date of trial. (Id. at pp. 168-169, 170.)
The cross-defendants challenged the damages award as "based 'upon conjecture and pure speculation' " or " 'general averages,' " and argued damages were not ascertainable because Reisner did not keep books on a cost accounting basis. (Nelson v. Reisner, supra, 51 Cal.2d at pp. 170, 171.) The court rejected the contention, pointing to the fact the Reisner's lease agreement (based on a set sum per acre) obviated the need for an accounting, evidence of Reisner's general practices and profits from similar transactions, testimony from other witnesses about their profits from similar crops in the same time frame, and evidence of the lease granted to the third parties. (Id. at pp. 170- 171.) Addressing the cross-defendants' claim the award based on profit averages was erroneous, the court refused to permit the cross-defendants to take advantage of their own breach, citing authorities for the proposition that where an " 'appellant by his own wrong forced respondent into the strait of proving damages, he cannot complain that the latter used the best methods left him for accomplishing the result.' " (Id. at p. 171.) The court pointed to a case involving evidence of average profits on cucumbers in which the appellate court held the " '[d]efendants could not by refusing to accept the cucumbers claim the benefit of such prevention and thereby prevent plaintiffs from obtaining damages for breach of the contract. A party to a contract cannot take advantage of his own act or omission to escape liability thereon. Where a party to a contract prevents the fulfillment of a condition or its performance by the adverse party, he cannot rely on such condition to defeat his liability.' " (Ibid., quoting Unruh v. Smith (1954) 123 Cal.App.2d 431, 436.) The court explained: "Damages consisting of the loss of anticipated profits need not be established with certainty. It is sufficient that it be shown as a reasonable probability that the profits would have been earned except for the breach of the contract." (Nelson v. Reisner, at pp. 171-172.)
"[Reisner] paid plaintiffs a sum certain per acre a year for the land under the development lease so that there was no reason for [him] to keep a separate cost accounting system for that particular land. The record shows that [Reisner] farmed 1,180 acres alone in 1951 as well as 10 acres on a fifty-fifty partnership with others; and that in 1952 he farmed 1,136 acres. Evidence was introduced showing the profit made by him per acre on comparable land in the same area where the same crops were grown. Various witnesses testified to the profits made by them per acre for the same crops during the years under consideration. [Cross-defendant's] lease to the [third parties] was also in evidence." (Nelson v. Reisner, supra, 51 Cal.2d at pp. 170-171.)
In Sargon Enterprises, Inc. v. University of Southern California, supra, 55 Cal.4th 747, the court emphasized some of these principles in a discussion of contract damages for lost business profits. Sargon explained case law distinguished between established and unestablished businesses. (Id. at p. 774.) " '[W]here the operation of an established business is prevented or interrupted, as by a . . . breach of contract . . . , damages for the loss of prospective profits that otherwise might have been made from its operation are generally recoverable for the reason that their occurrence and extent may be ascertained with reasonable certainty from the past volume of business and other provable data relevant to the probable future sales.' [Citation.] 'Lost profits to an established business may be recovered if their extent and occurrence can be ascertained with reasonable certainty; once their existence has been so established, recovery will not be denied because the amount cannot be shown with mathematical precision. [Citations.] Historical data, such as past business volume, supply an acceptable basis for ascertaining lost future profits. [Citations.] In some instances, lost profits may be recovered where plaintiff introduces evidence of the profits lost by similar businesses operating under similar conditions.' " (Ibid.) Anticipated profits dependent upon future events are allowed where their nature and occurrence can be shown by evidence of reasonable reliability. (Ibid.) Sargon reiterated the principle preventing a defendant from benefitting from its wrongdoing: "Where the fact of damages is certain, the amount of damages need not be calculated with absolute certainty. [Citations.] The law requires only that some reasonable basis of computation of damages be used, and the damages may be computed even if the result reached is an approximation. [Citation.] This is especially true where . . . it is the wrongful acts of the defendant that have created the difficulty in proving the amount of loss of profits [citation] or where it is the wrongful acts of the defendant that have caused the other party to not realize a profit to which that party is entitled.' " (Id. at pp. 774-775; see also Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal.App.4th 945, 972-973.)
Sargon ended its discussion on a "cautionary note," stating: "The lost profit inquiry is always speculative to some degree. Inevitably, there will always be an element of uncertainty. Courts must not be too quick to exclude expert evidence as speculative merely because the expert cannot say with absolute certainty what the profits would have been. Courts must not eviscerate the possibility of recovering lost profits by too broadly defining what is too speculative. A reasonable certainty only is required, not absolute certainty." (Sargon Enterprises, Inc. v. University of Southern California, supra, 55 Cal.4th at p. 775.) B. Analysis
Under the foregoing standards, we decide whether Lalani presented evidence sufficient to establish it was reasonably probable it would have realized a $1.8 million profit from steel sales to Gonvarri had International not breached its agreement to supply 10,000 metric tons of steel to Lalani and use Lalani as its exclusive intermediary to Gonvarri. (Accord, Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th 435, 470.) "In this inquiry, we construe the evidence in the light most favorable to the judgment. We draw every reasonable inference and resolve every conflict in support of the judgment." (Ibid.; Asahi Kasei Pharma Corp. v. Actelion Ltd., supra, 222 Cal.App.4th at p. 969.)
Here, the trial court credited Hemani's testimony that Lalani and International had agreed Lalani would purchase from International about 10,000 metric tons of steel every month to meet Gonvarri's orders, and add to the price so as to profit $15 per metric ton sold. According to Hemani, Lalani and Gonvarri did in fact have an agreement that Lalani would sell a certain amount of WISCO product to Gonvarri on a monthly basis based on their e-mails, contracts, and the fact Lalani actually supplied the material to Gonvarri. The record reflects Lalani advised International about its agreements with Gonvarri. While Gonvarri did not provide Lalani with a written guarantee that it would order such amounts, Hemani testified, and Gonvarri's e-mails reflect, that Lalani had been approved as a qualified source and Gonvarri "forecast[ed]" actual purchases of 10,000 per month from Lalani as long as Lalani continued its competitive pricing. The trial evidence showed Lalani was relatively established, having been in business since 2002 and having a history of prior dealings and sales with Gonvarri, including a completed 12-month agreement in which Lalani sold 1,000 metric tons of steel monthly to Gonvarri. The record contains the first sales order (reflected in three contracts) between Lalani and Gonvarri for just over 10,000 metric tons of steel product that was finally delivered in March 2013. And e-mails between the parties discussing deal points indicate that Gonvarri's quantity requirements involved a "[y]early . . . commitment" including a six-month fixed price, providing a reasonable basis to conclude Gonvarri and Lalani anticipated at least 12 months of sales, as they had done in the past.
Hemani explained during cross-examination that the deal among the three companies was a "pass-through" transaction:
"[Defense counsel:] When you say this pass-through sale, okay, it's basically an agreement between Gonvarri and Lalani; right? Gonvarri will purchase from Lalani first; right?
"[Hemani:] Gonvarri will send us an RFQ [request for quote]. We will send RFQ to [International]; [International] will give us a price. We will add $15 margin and send it to Gonvarri.
"[Defense counsel:] RFQ will come from Gonvarri to Lalani, and then Lalani will send the RFQ to [International]; right?
"[Hemani:] Yes.
"[Defense counsel:] [International] will send price to Lalani; right?
"[Hemani:] Yes.
"[Counsel:] Then Lalani will then give its own price to Gonvarri; right?
"[Hemani:] We'll add $15 and give it to Gonvarri, yes.
"[Counsel:] If this is all agreed, then Gonvarri will issue a contract to Lalani to purchase based on the quote, based on the RFQ; right?
"[Hemani:] Lalani and Gonvarri—Gonvarri will sign the sales contract.
"[Counsel:] Right. And then Lalani—once you have that contract, Lalani will send a—sign a sales contract with [International]; right?
"[Hemani:] Yes.
"[Counsel:] Okay. Now, [International] will then send the products over to Lalani; right?
"[Hemani:] It is a pass-through sale, so the shipment will directly go to Gonvarri.
"[Counsel:] Okay. Once the shipment is made, then Gonvarri will pay you, Lalani, for the products; right?
"[Hemani:] Gonvarri will pay against the sales contract.
"[Counsel:] Right. Which is based on the contract between Gonvarri and Lalani; right?
"[Hemani:] Yes." Hemani explained that payment terms involved transferable letters of credit such that once they received the letter of credit from Gonvarri, Lalani would open one to International, "[s]o when Gonvarri sends their documents to our bank and we submit the [International] documents, the bank will just give us the difference between the buy and the sell," which was $15 per metric ton.
This evidence in our view permitted the trial court to project and estimate Lalani's probable lost profits to a reasonable certainty. That is, it was reasonable to conclude that if International had supplied Lalani with the 10,000 metric tons of steel per month as it agreed to do, Lalani would have sold the steel to Gonvarri with its $15 per metric ton markup, thus profiting approximately $150,000 per month during Lalani and Gonvarri's 12-month arrangement. Lalani was not required to establish these profits with absolute certainty, particularly where International caused Lalani's inability to perform by breaching the exclusive supply agreement and preventing Lalani from giving Gonvarri competitive pricing or fulfilling the anticipated sales to Gonvarri. The goal of putting a plaintiff in as good a position had contract performance occurred can never be "exactly attained," thus "the rules governing recovery of contract damages are flexible and ' "leav[e] much to the individual feeling of the court created by the special circumstances of the particular case." [Citation.]' [Citation.] Damages cannot be calculated with absolute certainty, and California law 'requires only that some reasonable basis of computation . . . be used, and the damages may be computed even if the result reached is an approximation.' " (SCI California Funeral Services, Inc. v. Five Bridges Foundation (2012) 203 Cal.App.4th 549, 570; Sargon Enterprises, Inc. v. University of Southern California, supra, 55 Cal.4th at pp. 775.) The trial court was not obligated to restrict its damages award to evidence of International's direct sales to Gonvarri following its breach, as Lalani was not bound by any different arrangements Gonvarri may have reached with International.
International contends in reply that because Lalani asserts in its respondent's brief that the first breach occurred in May 2013, a reasonable damages award to Lalani must be limited to six months of anticipated profit ($900,000, consisting of 10,000 metric tons multiplied by $15 per metric ton multiplied by six months) because at that point only six months remained on the oral agreement. International points to Lalani's statement: "Unbeknownst to Lalani . . . almost immediately after the May 7, 2013, meeting, [International] began accepting orders directly from Gonvarri, to Lalani's exclusion, even though [International] knew it had an exclusive relationship with Lalani." We do not read Lalani's statement as an admission that International's breach only first occurred in May 2013. Further, the trial court found otherwise, at least implicitly, and International does not demonstrate that the evidence presented at trial cannot support such a finding.
Here, the natural result of International's breach was to prevent Lalani from selling to Gonvarri, including by cutting Lalani out as the middleman of International steel contrary to their agreement. The law will not permit International to take advantage of its breach, which prevented Lalani from performing its agreement with Gonvarri and obtaining its anticipated $15-per-metric-ton profit. "Where, as here, the prospective profits were the natural and direct consequences of the breach of contract by [International it] may not wholly escape on account of the difficulties of devising a perfect measure of damages which [its] own wrong has produced." (Unruh v. Smith, supra, 123 Cal.App.2d at p. 438; see Sargon Enterprises, Inc. v. University of Southern California, supra, 55 Cal.4th at pp. 774-775.)
III. Addition of Baowu as a Judgment Debtor Pending Appeal
International contends the trial court erred by amending the judgment to add Baowu as a judgment debtor after International had filed its notice of appeal. It maintains the perfecting of its appeal deprived the court of jurisdiction to modify the judgment, and the amendment "would impact the effectiveness of the appeal and interfere with the appellate court's jurisdiction." International alternatively contends that even if the trial court had the jurisdiction to entertain the motion, Lalani did not demonstrate Baowu should be added as a judgment debtor as it failed to show (1) Baowu was its alter ego; and (2) Baowu controlled the litigation.
Lalani responds that section 187 empowered the trial court to amend the judgment to correct International's corporate name, which International had changed after its merger with Baowu. It characterizes the change as not substantive but "ministerial" and within the court's "inherent power to correct 'clerical error in its records at any time' so as to conform the judgment to the truth." Comparing the circumstances to those in In re Marriage of Horowitz (1984) 159 Cal.App.3d 377, Lalani argues the appeal did not divest the trial court of jurisdiction over the postjudgment procedure to correct International's name because the change would not impact the substantial evidence issues on appeal.
Lalani does not repeat its argument below that International's appeal was in default and thus not perfected. Lalani additionally responds that it proved the elements of alter ego liability by presenting evidence that Baowu merged and changed its name and WISCO, International's operating name, was the merging entity. It alternatively suggests the successor entity Baowu was a mere continuation of the predecessor, International, justifying an amendment to add a third party debtor. Finally, Lalani suggests the trial court could properly amend the judgment to "prevent 'injustice' " so long as due process and notice requirements were met, as they were here, where Lalani filed a noticed motion that International opposed. Given our conclusion that the trial court lacked jurisdiction to amend or modify the judgment pending appeal, we do not address these arguments going to the merits of Lalani's motion.
We agree the trial court lacked jurisdiction to amend the judgment. When International filed its notice of appeal in February 18, 2018, proceedings in the matter were automatically stayed under section 916. That section provides with exceptions neither party raises on appeal: "[T]he perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order." (Id., subd. (a); see Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189 (Varian Medical Systems).)
The judgment here is a money judgment. In the trial court, Lalani invoked one of the exceptions to section 916, arguing its proceeding was to enforce its money judgment, which under section 917.1 was not stayed on appeal because International had not posted a bond. Lalani does not repeat that argument on appeal. The general rule that an appeal of a civil judgment stays trial court proceedings is subject to an exception for enforcement of a judgment for "[m]oney or the payment of money . . . ." (§ 917.1, subd. (a)(1).) Enforcement of a money judgment is not stayed by an appeal "[u]nless an undertaking is given." (Id. subd. (a); Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1428-1429.) When there is no stay of enforcement, the trial court retains jurisdiction over proceedings related to the judgment's enforcement. (§ 916, subd. (b).) Neither International nor Lalani say whether International posted a bond or undertaking, or point to record evidence of any undertaking. However, presuming in favor of the court's order that International did not post a bond and proceedings to enforce the money judgment were not stayed, Lalani's section 187 motion to amend the judgment nevertheless falls outside the exception. A motion under section 187 is a matter of obtaining a judgment against a new judgment debtor; it "does nothing to satisfy the judgment the movant seeks to amend" and thus does not enforce the judgment. (Highland Springs Conference & Training Center v. City of Banning (2019) 42 Cal.App.5th 416, 424-427 [holding attorney fees requested for making section 187 motion were prejudgment fees, not postjudgment fees incurred in enforcing a judgment], but see Oyakawa v. Gillett (1992) 8 Cal.App.4th 628, 630 , fn. 2, 631-632 [stating in dictum that an amendment adding a judgment debtor is "arguably . . . a matter of enforcement" but not deciding the point].) Hence, the result is the same: the trial court remained without jurisdiction to consider Lalani's motion to amend the judgment.
"When triggered, the automatic stay bars all proceedings that 'directly or indirectly seek to "enforce, vacate or modify [the] appealed judgment or order" ' or 'substantially interfere with the appellate court's ability to conduct the appeal.' [Citation.] The function of the automatic stay rule is ' "to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided." ' " (LAOSD Asbestos Cases (2018) 28 Cal.App.5th 862, 872, quoting Varian Medical Systems, supra, 35 Cal.4th at pp. 189-190, citing Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629 [holding "[t]he trial court's power to enforce, vacate or modify an appealed judgment or order is suspended while the appeal is pending"].)
"The principal effect of the automatic stay is to remove the trial court's subject matter jurisdiction relating to proceedings within the scope of the appeal. As our Supreme Court has explained, the stay divests the trial court of subject matter jurisdiction ' "over any matter embraced in or affected by the appeal during the pendency of that appeal." ' [Citation.] Thus, section 916 renders any subsequent trial court proceedings on such matters 'void—and not merely voidable.' [Citation.] However, the automatic stay rule does not bar collateral proceedings that do not affect the judgment on appeal." (LAOSD Asbestos Cases, supra, 28 Cal.App.5th at p. 872.)
Under these principles, the trial court lacked power to directly modify or amend the judgment under section 187 to include Baowu as an additional judgment debtor. A motion under that provision is entrusted to the trial court's discretion. (See Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership (2013) 222 Cal.App.4th 811, 815; Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486, 508.) Because the trial court exercises its discretion on such a motion to decide certain factors, including whether a unity of interest and ownership exist between the entities (see Relentless Air Racing, at pp. 815-816 [describing three factors a party must show to prevail on such a motion]), a ruling on such a motion cannot be characterized as correcting an inadvertent "clerical" error, which a court may do at any time. (Aspen Internat. Capital Corp. v. Marsch (1991) 235 Cal.App.3d 1199, 1204 [distinguishing judicial versus clerical error]; Hennefer v. Butcher (1986) 182 Cal.App.3d 492, 506, 507 ["clerical errors in a judgment . . . may be corrected at any time" and courts have "power after judgment, pending an appeal and even after affirmance of the judgment on appeal, and regardless of lapse of time, to correct clerical errors whether made by the court, clerk or counsel so that its records will conform to and speak the truth"]; Bowden v. Green (1982) 128 Cal.App.3d 65, 71 ["[a] clerical error in a judgment is an inadvertent one made by the court which cannot reasonably be attributed to the exercise of judicial consideration or discretion"].)
Lalani points to authority for the proposition that a section 187 motion to amend is " 'an equitable procedure based on the theory that the court is not amending the judgment to add a new defendant but is merely inserting the correct name of the real defendant.' " (Carr v. Barnabey's Hotel Corp. (1994) 23 Cal.App.4th 14, 21, quoting NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772, 778; see also Highland Springs Conference & Training Center v. City of Banning, supra, 42 Cal.App.5th at p. 426; Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership, supra, 222 Cal.App.4th at p. 815; Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th 1181, 1189; Greenspan v. LADT LLC, supra, 191 Cal.App.4th at p. 508.) These authorities do not discuss whether such a correction is of a clerical or judicial nature and to the contrary, they emphasize that the trial court's decision on the motion involves an exercise of discretion. (Relentless Air Racing, LLC, at p. 815; Carolina Casualty, at p. 1189; Greenspan, at p. 508.) We cannot read the statement to mean the court's discretionary decision to amend a judgment under section 187 equates to the correction of an inadvertent clerical error such that it may be done at any time, even after the filing of an appeal.
Nor are we persuaded by Lalani's suggestion, based on In re Marriage of Horowitz, supra, 159 Cal.App.3d 377, that its proceeding was ancillary or collateral to the appeal because the court's decision to add a new judgment debtor would not affect the appeal's effectiveness. As Varian Medical Systems explained, the automatic stay provision " 'prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.' " (Varian Medical Systems, supra, 35 Cal.4th at p. 189.) The question here is whether the postjudgment proceeding to amend the judgment would affect the judgment or its enforcement. (See ibid.; People v. Superior Court (Morales) (2017) 2 Cal.5th 523, 533 [characterizing Varian's holding]; Betz v. Pankow (1993) 16 Cal.App.4th 931, 938 [vacating an amended judgment would affect its enforcement, thus it was not a collateral matter over which the trial court could retain jurisdiction despite a pending appeal].) Here, the subject of Lalani's motion was the judgment; plainly, adding a debtor directly affected both the judgment itself and its ability to be later enforced against a new party in Lalani's favor. In re Marriage of Horowitz involved a modifiable interlocutory spousal support order over which the trial court retained jurisdiction for future modification; its reasoning does not apply to the circumstances here. (See In re Marriage of Horowitz, at pp. 384-385 ["We conclude that [husband's] modifiable spousal support obligation was not a matter embraced in or affected by the interlocutory judgment since the trial court reserved jurisdiction over the issue of spousal support"].)
Under these circumstances, "any 'proceedings taken after the notice of appeal was filed are a nullity' " even if they cured any purported defect in the judgment or order appealed from. (Varian Medical Systems, supra, 35 Cal.4th at pp. 197, 198.) We reverse the postjudgment order granting Lalani's motion and adding Baowu as a judgment debtor. Our holding does not prevent Lalani from renewing its motion following resolution of this appeal, and we express no opinion on the merits of such a motion.
DISPOSITION
The judgment is affirmed. The postjudgment order amending the judgment is reversed and the matter is remanded with directions that the trial court deny the motion without prejudice. The parties shall bear their own costs on appeal.
O'ROURKE, Acting P. J. WE CONCUR: IRION, J. DATO, J.