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Solomon v. Solomon

California Court of Appeals, Second District, Seventh Division
Nov 12, 2009
No. B209627 (Cal. Ct. App. Nov. 12, 2009)

Opinion

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC287055, Mary Ann Murphy, Judge.

Law Offices of William J. Beverly and William J. Beverly for Defendant and Appellant.

Sheppard, Mullin, Richter & Hampton, Mark Riera and Melanie Taylor for Plaintiff and Respondent.


JACKSON, J.

INTRODUCTION

In this action to enforce a settlement agreement, defendant Steven Solomon appeals from the judgment in favor of plaintiff Lori Solomon. Defendant contends (1) the trial judge was biased, necessitating reversal of the judgment and a new hearing before an impartial judge, (2) the trial court applied an improper measure of damages, and (3) the award of attorneys’ fees is excessive. Concluding that there is no merit to defendant’s contentions, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Defendant’s opening brief is replete with factual and procedural statements that are not supported by citations to the appellate record. Inasmuch as these statements violate California Rules of Court, rule 8.204(a)(1)(C), we disregard them. (Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601, fn. 6.)

The parties to this action once were married to each other. During their marriage, the parties owned Decorative Plant Containers, Inc., also known as Sunshine Products, Inc. (the corporation). While both parties worked for the corporation, defendant primarily was responsible for the corporation’s success.

Plaintiff subsequently filed for dissolution of her marriage to defendant. On August 27, 2003, the family law court entered a judgment dissolving the marriage. Therein, the family court found that plaintiff and defendant each owned one-half the shares of stock in the corporation and one-half the value of the corporation due to the efforts of the community and that on numerous occasions defendant breached his fiduciary duty to plaintiff. Specifically, the court found that “[a]t all times [defendant] operated the business as his sole and separate business”; that defendant failed to have yearly shareholder or Board of Directors meetings from 1983 to present; that when plaintiff refused to execute documents, defendant had his mother execute documents such as the renewal of the corporation’s line of credit and corporate minutes providing defendant with substantial bonuses and raises from $160,000 per year to $315,000 per year; and that defendant failed to apprise plaintiff of significant actions taken by the Board of Directors.

In December 2002, plaintiff filed a shareholder derivative action on behalf of the corporation against defendant and the corporation, alleging numerous improprieties by defendant in the operation of the corporation. Plaintiff subsequently filed a first amended complaint.

On December 2, 2003, prior to the date set for trial, plaintiff and defendant entered into a settlement agreement pursuant to which they stipulated to dismiss the action without prejudice provided the trial court retained jurisdiction over the case and the parties personally to enforce their written settlement agreement. The first paragraph of the settlement agreement states: “The board of Directors of Sunshine Products, Steven Solomon, and Lori Solomon shall work together cooperatively, in good faith, to preserve the benefit of their bargain under this settlement agreement. The Superior Court shall retain jurisdiction to enter judgment on the parties’ Settlement Agreement pursuant to California Code of Civil Procedure Section 664.6, and to interpret and enforce the Agreement. In any individual or derivative action brought by any party to interpret or enforce this Agreement, the losing party shall pay the attorneys’ fees, costs, and expenses of the prevailing party or parties.”

On May 10, 2007, pursuant to Code of Civil Procedure section 664.6, plaintiff filed a motion for entry of judgment on the settlement agreement. Plaintiff alleged in the motion that defendant “has repeatedly breached and continues to breach the Agreement, refusing to work cooperatively and in good faith.” Plaintiff asked the court to enter judgment on the settlement agreement and to hold defendant to his bargain. Plaintiff further asked for an award of attorneys’ fees and costs under the terms of the settlement agreement. Defendant opposed plaintiff’s motion and requested that he be awarded attorneys’ fees and costs.

On June 13, 2007, the trial court called plaintiff’s motion for hearing. The trial court’s “tentative ruling” was that defendant was “going to walk out of this courtroom with a judgment against him... in an amount that we determine he hasn’t paid so far. That’s what I think I have to do, or an order.” The court further stated that it would not entertain plaintiff’s request that defendant be removed as president of the corporation, in that plaintiff had not requested removal in its shareholder’s derivative action and the parties’ settlement agreement did not provide for removal. In addition, the court voiced its concerns regarding the contents of the parties’ papers, as well as the parties’ failure to abide fully with court rules.

This statement is the basis for defendant’s claim of judicial bias.

The court then continued the matter to enable the parties to produce documents and file additional briefing in a designated format. The court further urged the parties to meet and confer in an effort to resolve the parties’ disputes, stating that it would be “happy to iron out” any “disputed items left over.” The court then noted that it preferred to resolve the motion on documents and declarations, rather than holding an evidentiary hearing, which would be the “last resort.”

On July 24, 2007, the court set an evidentiary hearing for January 2, 2008, and directed that all trial documents and motions in limine be filed by December 21, 2007, regardless of whether the final status conference date of December 27, 2007 was continued.

Trial on the motion commenced on January 2, 2008 and lasted for five nonconsecutive days. On January 25, the fifth day of the evidentiary hearing, the trial court found that plaintiff had “proved by a preponderance of evidence that defendant... repeatedly breached the settlement agreement, engaged in self dealing, breached his fiduciary duty” and treated the corporation “as his personal account” to plaintiff’s detriment. The court found plaintiff to be a credible witness but found defendant to have “significant credibility issues.”

A complete transcript of the evidentiary hearing is not part of the record on appeal. Only a transcript from the last day of the hearing, January 25, 2008, during which the trial court entertained closing arguments from counsel, can be found in the record.

The trial court issued its statement of decision on April 24, 2008, finding therein that defendant “breached the Settlement Agreement almost immediately after making it.” After detailing the numerous ways in which defendant had breached the agreement, the court detailed the damages defendant proximately caused plaintiff.

On May 27, 2008, judgment was entered against defendant and in favor of plaintiff. The court ordered defendant to pay plaintiff “$247,867.71, together with attorneys’ fees, costs, and expenses” in an amount to be determined. On July 24, 2008, defendant filed his notice of appeal from the judgment.

Following entry of judgment in plaintiff’s favor, plaintiff filed a memorandum of costs seeking $13,418.67. Plaintiff also filed a motion to recover the attorneys’ fees and expenses incurred to investigate and prove defendant’s breaches of the settlement agreement. Specifically, plaintiff sought $394,146.60 in attorneys’ fees and $45,064.37 in expenses, for a total of $439,210.97.

On August 22, 2008, the trial court held a hearing on plaintiff’s motion for attorney’s fees, after which it awarded plaintiff all the attorneys’ fees and expenses she sought. The court ordered the court clerk “to insert in the Judgment previously entered in this matter on May 27, 2008, the sum of $439,210.97 in attorneys’ fees and expenses against defendant Steven Solomon, in addition to costs earlier awarded. In accordance with the court’s directive, the clerk inserted the amount of $452,629.64 ($13,418.67 in costs, $394,146.60 in attorneys’ fees and $45,064.37 in expenses) into the judgment.

DISCUSSION

Judicial Bias

Defendant contends that a new trial before an impartial judge is warranted, in that the trial judge was biased. Inasmuch as defendant failed to raise the issue of judicial bias below, he has forfeited the issue on appeal. (People v. Farley (2009) 46 Cal.4th 1053, 1110, petn. for cert. pending, petn. filed Nov. 3, 2009; People v. Samuels (2005) 36 Cal.4th 96, 114; Tri Counties Bank v. Superior Court (2008) 167 Cal.App.4th 1332, 1339.) Since this case “does not involve a claim of judicial gender bias or any other kind of invidious bias by the trial court,” defendant’s failure to object below is not excused. (People v. Geier (2007) 41 Cal.4th 555, 613; compare Catchpole v. Brannon (1995) 36 Cal.App.4th 237, 244.)

In any event, defendant’s claim of judicial bias is completely devoid of merit. On June 13, 2007, at the first of many hearings on plaintiff’s motion to enforce the settlement agreement, the trial court announced its “tentative ruling.” The court indicated that defendant was “going to walk out of this courtroom with a judgment against him.” The court further noted that as long as defendant violated the settlement agreement, each time the parties resorted to the court, defendant’s breaches would result in an order for him to pay. In reliance on these statements, defendant argues that the trial court prejudged this case before the taking of evidence. This argument is nonsensical.

Between the initial hearing on June 13, 2007 at which the trial court made its nonbinding tentative ruling (Khan v. Superior Court (1988) 204 Cal.App.3d 1168, 1173, fn. 4) and the signing of the statement of decision on April 24, 2008, the trial court held numerous hearings on plaintiff’s motion, including an evidentiary hearing that spanned five days. On January 25, 2008, the last day of the evidentiary hearing, the court announced that plaintiff was the prevailing party and asked plaintiff’s counsel to prepare a proposed statement of decision.

On April 24, 2008, defendant’s counsel suggested a change to the proposed statement of decision. The trial court agreed that a modification was in order explaining: “When this motion came in, I read it and decided that I couldn’t decide it; that we needed to have a full evidentiary hearing. And the only evidence I did consider—and I am going to amend my statement of decision—I only considered the witnesses that testified at the evidentiary hearing and the exhibits received in evidence. [¶] I never went back to the original motion and looked at the declarations and the pleadings. I didn’t even consider those. I just used those initial motions and pleadings to decide that I needed to have an evidentiary hearing. So I’m going to amend the decision.”

The final statement of decision, containing the court’s amendment, sets forth the basis for the trial court’s ruling as follows: “In 2007, plaintiff filed a motion to enforce settlement agreement. After considering all of the evidence submitted with the motion, the court set an evidentiary hearing to hear testimony and assess the credibility of the witnesses. [¶] The Court has considered the testimony of the witnesses at the evidentiary hearing and the exhibits received in evidence at the evidentiary hearing and the arguments of counsel at the evidentiary hearing. The court has also considered the plaintiff’s objections, the opposition thereto and the arguments of counsel on the plaintiff’s objection.”

Given the state of the record which readily reveals that the trial court ruled on plaintiff’s motion only after considering the evidence produced over the course of a five-day hearing, we can state unequivocally that if defendant had preserved his claim of judicial bias for appellate review, he would not have prevailed. Defendant has failed in all respects to establish any bias on the part of the trial court.

Proper Measure of Damages

In defendant’s view, the trial court did not apply the proper measure of damages. Ignoring the fact that the corporation was not a party to the settlement agreement, defendant maintains that judgment should have been entered against the corporation, rather than him, since liability was based upon an obligation the corporation owed to a co-shareholder. In the alternative, defendant asserts that damages should be prorated in accordance with the relative interests of each shareholder. We need not, and do not, consider defendant’s arguments, in that he has utterly failed to cite to any legal authority to support his arguments. (Murphy v. Murphy (2008) 164 Cal.App.4th 376, 405-406; People ex rel. 20th Century Ins. Co. v. Building Permit Consultants, Inc. (2000) 86 Cal.App.4th 280, 284; Cal. Rules of Court, rule 8.204(a)(1)(B).)

Attorneys’ Fees

Defendant contends the attorneys’ fee award should be stricken as excessive, in that the fees were incurred primarily for noncontract causes of action upon which plaintiff did not prevail. We disagree.

Defendant also contends the fees were punitive and reflective of the trial judge’s bias. We summarily reject this contention, as defendant has waived his claim of bias.

Defendant’s assertion that attorneys’ fees were incurred primarily for “causes of action which sounded in tort and were unrelated to the subject of the contract” completely misses the mark. Plaintiff’s motion to enforce the settlement agreement was just that—a motion. It does not contain “causes of action.” Rather, it simply sought enforcement of the provision in the settlement agreement requiring that “The board of Directors of Sunshine Products, Steven Solomon, and Lori Solomon shall work together cooperatively, in good faith, to preserve the benefit of their bargain under this settlement agreement.”

Defendant’s opening brief is devoid of any legal authority supporting his assertion that plaintiff’s motion was, in fact, “an attempt to initiate a new shareholder derivative action by motion rather than by a new complaint.”

Furthermore, defendant’s challenge to the attorneys’ fees award must be rejected. Defendant makes no effort to identify the particular fees he claims are not recoverable, and he has failed to provide this court with a reporter’s transcript of the hearing on the motion. His sweeping and generalized statements that plaintiff was not entitled to recover all of her requested attorneys’ fees are simply insufficient to demonstrate that the fees awarded her were either excessive or not recoverable in the first instance.

DISPOSITION

The judgment is affirmed. Plaintiff is awarded her costs of appeal.

We concur: PERLUSS, P. J., WOODS, J.


Summaries of

Solomon v. Solomon

California Court of Appeals, Second District, Seventh Division
Nov 12, 2009
No. B209627 (Cal. Ct. App. Nov. 12, 2009)
Case details for

Solomon v. Solomon

Case Details

Full title:LORI SOLOMON, Plaintiff and Respondent, v. STEVEN SOLOMON, Defendant and…

Court:California Court of Appeals, Second District, Seventh Division

Date published: Nov 12, 2009

Citations

No. B209627 (Cal. Ct. App. Nov. 12, 2009)