Opinion
H044004
06-12-2020
TAT CAPITAL PARTNERS, LTD., et al., Plaintiffs and Respondents, v. DAVID FELDMAN, Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 2005-1-CV-035531)
David Feldman, who is representing himself, appeals from postjudgment orders, filed September 14, 2016, that (1) denied his motion to set aside and vacate a 2010 judgment in favor of TAT Capital Partners, Ltd. (TAT), Sands Brothers Venture Capital LLC, and SB New Paradigm Associates LLC (the latter two entities collectively, Sands, and all three, respondents) and (2) directed Feldman to pay monetary sanctions of $8,025 to Sands pursuant to Code of Civil Procedure section 128.5. (See § 904.1, subds. (a)(2), (a)(12).) The challenged judgment was affirmed by our prior opinion. (See ante, fn. 1.)
All further statutory references are to the Code of Civil Procedure unless otherwise stated. By order, this court deferred Feldman's request for judicial notice, filed on May 3, 2018, for consideration with this appeal. We now deny that request except as to this court's opinion of TAT Capital Partners Ltd., et al. v. Feldman (Jul. 2, 2012, H035968) [nonpub. opn.], review denied October 17, 2012, S204675 (hereafter prior opinion), of which we take judicial notice. (See Evid. Code, §§ 452, subd. (d), 459.) By a prior order, we have taken judicial notice of the record in case No. H035968 on our own motion. (See Evid. Code, §§ 452, subd. (d), 459.) Also on our own motion, we take judicial notice of the appellate record in TAT Capital Partners Ltd., et al. v. Feldman, case No. H040790 (hereafter H040790). (See Evid. Code, §§ 452, subd. (d), 459.) We also decline to reconsider appellant's further request, filed June 11, 2019, for judicial notice and augmentation of the record and/or taking of additional evidence, which we previously denied without prejudice to reconsideration with the merits of the appeal.
This court's prior opinion stated the following facts. TAT and Sands were venture capital firms that each held or owed a certain percentage of the shares of ZF Micro Devices (Devices). Devices had "contracted with National Semiconductor Corporation (NSC) to produce the embedded 'ZFx86' microchip." ZF Micro Solutions (Solutions) was the successor company to Devices. Feldman was the founder and chief executive officer (CEO) of Devices and the president and CEO of Solutions. In a separate case, Solutions sued NSC on several grounds and ultimately settled. In this case, the trial court determined that existing contracts provided that TAT and Sands would receive their pro rata share of any Solutions' recovery from the NSC litigation, after deduction of attorney fees and litigation costs. The jury found in favor of TAT and Sands on breach-of-contract allegations, and TAT and Sands were awarded damages. Individual defendants to whom Solutions had transferred NSC proceeds were found to be "fraudulent transferees," and damages were imposed on them.
This court's prior opinion explained that as a consequence of Devices' default on a loan by a Devices investor, the investor foreclosed and then sold the Devices assets he had acquired to Solutions, which Feldman had recently started.
In our prior opinion, this court addressed multiple contentions and, as indicated, affirmed the judgment. In this appeal, Feldman contends that the challenged judgment is "void on its face." Feldman claims that (1) TAT and Sands were legally incapable of maintaining the action before they complied with Corporations Code sections 2105, subdivision (a), and 2203, subdivision (c), and therefore the trial court lacked jurisdiction to proceed with the action; (2) the trial court violated the one final judgment rule and due process by severing the first amended cross-complaint (cross-complaint) and not adjudicating all affirmative defenses in the action; and (3) TAT and Sands "induced errors" by "[m]isrepresenting essential issues of fact and law" and committed "extrinsic fraud regarding their California activities and status[, which] denied [Feldman's] right to present evidence of their incapacity."
We find no basis for reversal of the challenged orders and affirm them.
I
Procedural History
Long before the filing of Feldman's 2016 motion to set aside and vacate the judgment, defendants filed a postjudgment motion requesting an order setting aside and vacating the judgment and compelling plaintiffs and their attorneys to return all monies obtained from defendants. It was heard on January 24, 2014. The trial court denied the motion, and the ruling was appealed (H040790). Pursuant to defendants' request for dismissal of their appeal, this court dismissed the appeal.
On July 27, 2016, Feldman, acting in propria persona, filed a new postjudgment motion for an order setting aside and vacating the judgment and compelling plaintiffs and their attorneys to return all monies obtained from him and all the other defendants. The motion asserted that the judgment was void because (1) the trial court "lacked the jurisdiction" to grant relief to TAT and Sands without their prior compliance with all of the requirements of Corporations Code section 2203, subdivision (c); (2) the trial court "lacked the jurisdiction to grant relief to the [Sands] entities to proceed with their claims that were time-barred at the time the [Sands] entities registered with the Secretary of State"; (3) "no final judgment could be entered" because Solutions' "mandatory cross-complaint . . . was improperly severed"; and (4) the trial court denied defendants' due process rights by refusing to allow their affirmative defenses to be heard. (Emphasis omitted.) Feldman brought the motion pursuant to section 473, subdivision (d), which provided that a court upon motion may set aside a void judgment or order.
A hearing on Feldman's motion was held on August 25, 2016, and the trial court denied the motion. In its written order, the court stated that the motion constituted a motion to reconsider its prior rulings that had been decided adversely to Feldman and that Feldman had not satisfied the requirements of section 1008 for bringing a motion for reconsideration. The court also determined that Feldman was barred "as a matter of law" from again raising challenges to final adverse rulings that had been subject to judicial review.
The trial court further found that Feldman's motion was frivolous, meritless, unreasonable, and brought in bad faith and for the purpose of harassing TAT and Sands within the meaning of section 128.5. It determined that Sands had reasonably incurred attorney fees in the amount of $7,875.00 (17.50 hours at an hourly rate of $450) and costs in the amount of $ 150.00 in opposing Feldman's motion. It ordered Feldman to pay $8,025 to Sands.
II
Discussion
A. Governing Law
1. Void Judgments and Merely Voidable Judgments
Under subdivision (d) of section 473, a "court . . . may, on motion of either party after notice to the other party, set aside any void judgment or order." Also, "a court has inherent power, apart from statute, to correct its records by vacating a judgment which is void on its face, for such a judgment is a nullity and may be ignored. [Citations.]" (Olivera v. Grace (1942) 19 Cal.2d 570, 574 (Olivera).)
" '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.' " [Citation.] When a court lacks jurisdiction in a fundamental sense, an ensuing judgment is void, and 'thus vulnerable to direct or collateral attack at any time.' [Citation.]" (People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 660 (American Contractors Indemnity Co.).) "Because it concerns the basic power of a court to act, the parties to a case cannot confer fundamental jurisdiction upon a court by waiver, estoppel, consent, or forfeiture. [Citation.]" (Quigley v. Garden Valley Fire Protection Dist. (2019) 7 Cal.5th 798, 807 (Quigley).) " '[A]n act beyond a court's jurisdiction in the fundamental sense is null and void' ab initio. [Citation.]" (People v. Lara (2010) 48 Cal.4th 216, 225 (Lara).) "Defects in fundamental jurisdiction therefore 'may be raised at any point in a proceeding, including for the first time on appeal,' or, for that matter, in the context of a collateral attack on a final judgment. [Citation.]" (Quigley, supra, at p. 807.)
"By bringing an action, [a] plaintiff subjects himself [to the court's jurisdiction] both as to the claim sued upon and as to any counterclaim or cross-complaint that a defendant may bring against him under the local law of the state. [Citations.]" (Judicial Council com., 14A West's Ann. Code Civ. Proc. (2004 ed.) foll. § 410.10, p. 378; see Nobel Farms, Inc. v. Pasero (2003) 106 Cal.App.4th 654, 658-659; Adam v. Saenger (1938) 303 U.S. 59, 67-68.) In general, a court acquires jurisdiction over a defendant by personal service of a summons (§ 410.50, subd. (a)) or "whenever the defendant has made a general appearance in the case. [Citations.]" (Judicial Council com., 14A West's Ann. Code Civ. Proc. (2004 ed.) foll. § 410.50, pp. 514-515; see §§ 410.50, subd. (a), 1014.) " 'The principle of "subject matter jurisdiction" relates to the inherent authority of the court involved to deal with the case or matter before it.' [Citation.]" (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 196.) "Jurisdiction of the court over the parties and the subject matter of an action continues throughout subsequent proceedings in the action." (§ 410.50, subd. (b).)
In contrast, there may be a lack of jurisdiction in a non-fundamental sense when a court exceeds its power under governing law. " '[T]hough the court has jurisdiction over the subject matter and the parties in the fundamental sense, it has no "jurisdiction" (or power) to act except in a particular manner, or to give certain kinds of relief, or to act without the occurrence of certain procedural prerequisites.' " (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 288 (Abelleira).) But "[i]f the lower court has power to make a correct determination of a particular issue, it clearly has power to make an incorrect decision, subject only to appellate review and not to restraint by prohibition." (Id. at p. 287; see In re Marriage of Goddard (2004) 33 Cal.4th 49, 56 ["Once a court has established its power to hear a case, it may make errors with respect to areas of procedure, pleading, evidence, and substantive law. [Citations.]"].)
" When a court has fundamental jurisdiction, but acts in excess of its jurisdiction, its act or judgment is merely voidable. [Citations.] That is, its act or judgment is valid until it is set aside, and a party may be precluded from setting it aside by 'principles of estoppel, disfavor of collateral attack or res judicata.' [Citation.] Errors which are merely in excess of jurisdiction should be challenged directly, for example by motion to vacate the judgment, or on appeal, and are generally not subject to collateral attack once the judgment is final unless 'unusual circumstances were present which prevented an earlier and more appropriate attack.' [Citation.]" (American Contractors Indemnity Co., supra, 33 Cal.4th at p. 661, italics added.)
"Claim preclusion [or res judicata] 'prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.' [Citation.] Claim preclusion arises if a second suit involves (1) the same cause of action (2) between the same parties (3) after a final judgment on the merits in the first suit. [Citations.] If claim preclusion is established, it operates to bar relitigation of the claim altogether." (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824, first italics omitted, italics added.) "Issue preclusion [or collateral estoppel] prohibits the relitigation of issues argued and decided in a previous case, even if the second suit raises different causes of action. [Citation.]" (Ibid., first italics omitted, italics added.) "[I]ssue preclusion applies (1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party. [Citations.]" (Id. at p. 825, italics added.) "The bar [of issue preclusion] is asserted against a party who had a full and fair opportunity to litigate the issue in the first case but lost. [Citation.]" (Id. at pp. 826-827, italics added.) Under doctrine of issue preclusion, that party is not "allowed to relitigate the same issue in a new lawsuit. [Citations.]" (Id. at p. 827, italics added.) The 2010 judgment and Feldman's 2016 motion to set it aside occurred in the very same case. We discuss the finality of judgments and the law of the case doctrine, which are apropos, below.
Thus, the distinction between a court's lack of fundamental jurisdiction and its lack of jurisdiction or power to act in a particular way is critically "important because the remedies are different." (Lara, supra, 48 Cal.4th at p. 225.) For example, "[a]n act that may be in excess of jurisdiction so as to justify review by prerogative writ [citations] will nevertheless be res judicata if the court had jurisdiction over the subject and the parties. [Citation.]" (Hollywood Circle, Inc. v. Department of Alcoholic Beverage Control (1961) 55 Cal.2d 728, 731.)
Insofar as Feldman is now claiming that the judgment is void because the trial court acted in excess of its jurisdiction, those claims are without merit.
2. Finality of Judgments
"Under certain circumstances a court, sitting in equity, can set aside or modify a valid final judgment. [Citations.] This power, however, can only be exercised when the circumstances of the case are sufficient to overcome the strong policy favoring the finality of judgments." (Kulchar v. Kulchar (1969) 1 Cal.3d 467, 470 (Kulchar).)
Accordingly, a party that "has been prevented by extrinsic factors from presenting his case to the court may bring an independent action in equity to secure relief from the judgment entered against him. [Citations.] Where the court that rendered the judgment possesses a general jurisdiction in law and in equity, the jurisdiction of equity may be invoked by means of a motion addressed to that court. [Citations.]" (Olivera, supra, 19 Cal.2d at pp. 575-576.) "Fraud or mistake is extrinsic when it deprives the unsuccessful party of an opportunity to present his case to the court. [Citations.]" (Westphal v. Westphal (1942) 20 Cal.2d 393, 397 (Westphal).)
"Extrinsic fraud is a broad concept that 'tend[s] to encompass almost any set of extrinsic circumstances which deprive a party of a fair adversary hearing.' [Citations.] It 'usually arises when a party . . . has been "deliberately kept in ignorance of the action or proceeding or in some other way fraudulently prevented from presenting his claim or defense." [Citation.]' [Citations.]" (In re Marriage of Modnick (1983) 33 Cal.3d 897, 905 (Marriage of Modnick).) "The essence of extrinsic fraud is one party's preventing the other from having his day in court." (City and County of San Francisco v. Cartagena (1995) 35 Cal.App.4th 1061, 1067; see Gale v. Witt (1948) 31 Cal.2d 362, 365-366 (Gale).)
"No abstract formula exists for determining whether a particular case involves extrinsic, rather than intrinsic, fraud." (Marriage of Modnick, supra, 33 Cal.3d at p. 905) However, it has been "uniformly held that perjury is intrinsic, and not extrinsic, fraud, and therefore does not constitute a sufficient basis for equitable relief against a final judgment. [Citations.]" (Adams v. Martin (1935) 3 Cal.2d 246, 248-249 (per curiam); see Hammell v. Britton (1941) 19 Cal.2d 72, 82-83 ["False or perjured testimony is not extrinsic fraud. [Citations.]"].) "A party who has been given proper notice of an action . . . , and who has not been prevented from full participation therein, has had an opportunity to present his case to the court and to protect himself from any fraud attempted by his adversary. [Citations.] Fraud perpetrated under such circumstances is intrinsic . . . ." (Westphal, supra, 20 Cal.2d at p. 397.)
Another "ground for equitable relief is extrinsic mistake—a term broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits. [Citations.]" (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981 (Rappleyea).) Extrinsic mistake has been found in a variety of circumstances (see Kulchar, supra, 1 Cal.3d at p. 471), including, for example, where a default judgment was obtained through extrinsic mistake. (See Rappleyea, supra, at pp. 982-983; Olivera, supra, 19 Cal.2d at p. 578.)
" 'The final judgment of a court having jurisdiction over persons and subject matter can be attacked in equity after the time for appeal or other direct attack has expired only if the alleged fraud or mistake is extrinsic rather than intrinsic.' [Citations.]" (Gale, supra, 31 Cal.2d at p. 365.) "[T]he rule against vacating judgments on the ground of false evidence or other intrinsic fraud serves the important interest of finality in adjudication." (Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 10 (Cedars-Sinai).) "After the time for seeking a new trial has expired and any appeals have been exhausted, a final judgment may not be directly attacked and set aside on the ground that evidence has been suppressed, concealed, or falsified; in the language of the cases, such fraud is 'intrinsic' rather than 'extrinsic.' [Citations.]" (Ibid.) "For our justice system to function, it is necessary that litigants assume responsibility for the complete litigation of their cause during the proceedings. To allow a litigant to attack the integrity of evidence after the proceedings have concluded, except in the most narrowly circumscribed situations, such as extrinsic fraud, would impermissibly burden, if not inundate, our justice system. [Citations.]" (Silberg v. Anderson (1990) 50 Cal.3d 205, 214.)
3. Law of the Case Doctrine
"Once it becomes final, an appellate court opinion controls subsequent proceedings in the case under the doctrine of 'law of the case.' " (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2019) ¶14:171, p. 14-66; see Searle v. Allstate Life Ins. Co. (1985) 38 Cal.3d 425, 434 ["The rule of 'law of the case' generally precludes multiple appellate review of the same issue in a single case."], 435 [Its purpose is "to avoid the further reversal and proceedings on remand that would result if the initial ruling were not adhered to in a later appellate proceeding. [Citations.]"]; Gore v. Bingaman (1942) 20 Cal.2d 118, 122 (Gore).) "The law of the case doctrine states that when, in deciding an appeal, an appellate court 'states in its opinion a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to throughout its subsequent progress, both in the lower court and upon subsequent appeal . . . , and this although in its subsequent consideration this court may be clearly of the opinion that the former decision is erroneous in that particular.' [Citations.]" (Kowis v. Howard (1992) 3 Cal.4th 888, 892-893, fn. omitted (Kowis); see Griset v. Fair Political Practices Comn. (2001) 25 Cal.4th 688, 701 ["The doctrine of law of the case applies to later proceedings in the same case. [Citation.]"].) B. Denial of Feldman's Motion to Set Aside Judgment
1. No Showing that Trial Court Lacked Fundamental Jurisdiction
Feldman acknowledges that the success of this "appeal hinges on the difference between a void judgment and one merely voidable." (Emphasis omitted.) He neither argues nor establishes, however, that the trial court lacked fundamental jurisdiction in the strict sense—i.e., lacked personal or subject matter jurisdiction. Feldman essentially argues that the trial court erred in multiple respects. Some of his present contentions were addressed by this court in our prior opinion, which became final years before Feldman moved to set aside the judgment.
2. Alleged Lack of Legal Capacity to Maintain Action
On appeal, Feldman asserts, without any citation to the record, that on July 19, 2007, when the trial court was notified that that respondents were unregistered, the court "ceded jurisdiction" over them and that the court could not regain "jurisdiction" over any respondent unless there was an evidentiary hearing in which the court determined that the particular respondent had complied with Corporations Code sections 2105, subdivision (a), and 2203, subdivision (c), and consequently had the capacity to maintain an action. Insofar as we can discern, Feldman is arguing that TAT and Sands lacked the capacity to maintain its action against him because they had not shown that they had complied with those two provisions of the Corporations Code. He also maintains in this appeal that although Sands finally registered with the Secretary of State in August of 2007, by then "its claims were time-barred" and that all of respondents' claims were time-barred by the first day of trial.
"The revival of corporate powers validates any procedural act taken on behalf of the corporation while its rights were forfeited. [Citation.] Substantive defenses, such as the statute of limitations, are not revived. [Citation.]" (United Medical Management Ltd. v. Gatto (1996) 49 Cal.App.4th 1732, 1738 (United Medical Management); see Peacock Hill Assn. v. Peacock Lagoon Constr. Co. (1972) 8 Cal.3d 369, 373 (Peacock).) However, a defendant forfeits an affirmative statute of limitations defense by not properly raising it. (See Quigley, supra, 7 Cal.5th at p. 807; Minton v. Cavaney (1961) 56 Cal.2d 576, 581.) Our prior opinion does not reflect that an affirmative statute of limitations defense was properly raised in the trial court or that any statute of limitations issue was raised on appeal.
Under Corporations Code section 2105, subdivision (a), "[a] foreign corporation shall not transact intrastate business without having first obtained from the Secretary of State a certificate of qualification." (Italics added; see Corp. Code, § 191, subds. (a) [defining phrase "transact intrastate business"]; (b) [circumstances not "considered to be transacting intrastate business"], (c) [activities not "considered to be transacting intrastate business"]; see also Corp. Code, § 171[defining "foreign corporation"].) To obtain such a certificate, the foreign corporation must file the prescribed form that contains the required information and is signed by a corporate officer. (Corp. Code, § 2105, subd. (a).) Corporations Code section 2203, subdivision (c), states: "A foreign corporation subject to the provisions of Chapter 21 (commencing with Section 2100) which transacts intrastate business without complying with [s]ection 2105 shall not maintain any action or proceeding upon any intrastate business so transacted in any court of this state, commenced prior to compliance with [s]ection 2105, until it has complied with the provisions thereof and has paid to the Secretary of State a [specified] penalty . . . in addition to the fees due for filing the statement and designation required by [s]ection 2105 and has filed with the clerk of the court in which the action is pending receipts showing the payment of the fees and penalty and all franchise taxes and any other taxes on business or property in this state that should have been paid for the period during which it transacted intrastate business." (Italics added.)
"The failure of a foreign corporation to qualify to transact business prior to commencing an action is a matter of abatement of the action. [Citation.] Once a nonqualified foreign corporation commences an action regarding intrastate business, the defendant may assert by demurrer or as an affirmative defense in the answer the lack of capacity to maintain an action arising out of intrastate business. [Citation.] This abatement procedure enables the foreign corporation to obtain a judicial determination as to whether it is in fact transacting intrastate business. The defendant bears the burden of proving: (1) the action arises out of the transaction of intrastate business by a foreign corporation; and (2) the action was commenced by the foreign corporation prior to qualifying to transact intrastate business. [Citation.] If the defendant establishes the bar of the statute, then the foreign corporation plaintiff must comply with section 2203, subdivision (c)." (United Medical Management, supra, 49 Cal.App.4th at p. 1740.)
In our prior opinion, this court observed that before trial, Feldman and the other defendants "repeatedly raised the issue of TAT's and Sands' standing to prosecute this action." Defendants took the position that "as a Swiss corporation, [TAT] was not permitted to file a lawsuit because it was transacting business in California without registering with the Secretary of State or paying state taxes." "On appeal, defendants renew[ed] their challenge to TAT's standing to bring this action." In the opinion, we rejected defendants' challenge to TAT's "standing." We discussed Corporations Code sections 191, 2105, and 2203 and concluded that the facts upon which defendants relied were "insufficient to bar TAT from the litigation."
While this court's prior opinion couched defendants' claim in terms of TAT's "standing," TAT's capacity to maintain the action was the actual issue addressed. Unlike lack of standing to sue, a lack of capacity to sue is "merely a legal disability . . . that can be cured during the pendency of the litigation. [Citation.]" (Washington Mutual Bank v. Blechman (2007) 157 Cal.App.4th 662, 669; see Parker v. Bowron (1953) 40 Cal.2d 344, 351 (in bank) ["Incapacity is merely a legal disability [that] deprives a party of the right to come into court" whereas "[t]he right to relief . . . goes to the existence of a cause of action"; the absence of a right to relief is "not a plea in abatement, as is lack of capacity to sue"]; cf. American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Cal.App.4th 551, 559 ["[S]tanding to sue—the real party in interest requirement—goes to the existence of a cause of action, i.e., whether the plaintiff has a right to relief. [Citations.]"]; cf. also § 367 ["Every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute"].) " 'The purpose of a standing requirement is to ensure that the courts will decide only actual controversies between parties with a sufficient interest in the subject matter of the dispute to press their case with vigor.' [Citation.]" (Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4th 155, 169.) In contrast, "[t]he purpose of the certificate of qualification is to facilitate service of process and to protect against state tax evasion" (United Medical Management, supra, 49 Cal.App.4th at p. 1741), and "[t]he objective of the lawsuit suspension enforcement mechanism is to encourage qualification, rather than to penalize the failure to qualify earlier." (Ibid.; cf. Peacock, supra, 8 Cal.3d at p. 371 ["the purpose of section 23301 of the Revenue and Taxation Code is to put pressure on the delinquent corporation to pay its taxes, and that purpose is satisfied by a rule which views a corporation's tax delinquencies, after correction, as mere irregularities"].)
This court's decision as to whether TAT could maintain the action in light of Corporations Code sections 2105, subdivision (a), and 2203, subdivisions (a) and (c), became the "law of the case" and was subsequently binding upon the trial court. (See Kowis, supra, 3 Cal.4th at pp. 892-893.) In any event, a corporation's lack of capacity to maintain an action is not a defect in the fundamental jurisdiction of the court to proceed. (See Traub Co. v. Coffee Break Service, Inc. (1967) 66 Cal.2d 368, 371 (Traub Co.) ["the suspended status of corporate powers at the time of filing of action by a corporation does not affect the jurisdiction of the court to proceed," and "a suspension after the filing of action . . . but before rendition of judgment likewise does not deprive the court of jurisdiction or render the judgment void"]; see also Rosenbloom v. Southern Pacific Co. (1922) 59 Cal.App. 102, 104 [an "objection that the plaintiff has not legal capacity to sue does not go to the jurisdiction of the court"].)
Feldman also argues that "[r]espondents never exhausted the administrative remedies necessary for the court to regain jurisdiction." In support of this argument, he relies on the California Supreme Court's conclusion in Abelleira that "exhaustion of the administrative remedy is a jurisdictional prerequisite to resort to the courts." (Abelleira, supra, 17 Cal.2d at p. 293.) Feldman fundamentally misunderstands the exhaustion doctrine. "At issue in Abelleira was whether employers who objected to the award of employee benefits under the California Unemployment Insurance Act could seek judicial relief [by extraordinary writ] before completing the appeal process under this act. Observing that the Unemployment Insurance Act contained a complete administrative procedure, including an original proceeding and two appeals (17 Cal.2d at p. 291), [the California Supreme Court] held that under the circumstances, 'exhaustion of the administrative remedy is a jurisdictional prerequisite to resort to the courts' (id. at p. 293)." (Rojo v. Kliger (1990) 52 Cal.3d 65, 84-85.) " 'The exhaustion doctrine is principally grounded on concerns favoring administrative autonomy (i.e., courts should not interfere with an agency determination until the agency has reached a final decision) and judicial efficiency (i.e., overworked courts should decline to intervene in an administrative dispute unless absolutely necessary).' [Citations.]" (Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1080.) Administrative remedies are "exhausted only upon 'termination of all available, nonduplicative administrative review procedures.' [Citations.]" (Ibid.; see Rosenfield v. Malcolm (1967) 65 Cal.2d 559, 566 ["the mere possession by some official body of a continuing supervisory or investigatory power does not itself suffice to afford an 'administrative remedy' unless the statute or regulation under which that power is exercised establishes clearly defined machinery for the submission, evaluation and resolution of complaints by aggrieved parties"].) The requirements of Corporation Code section 2203, subdivision (c), do not establish an administrative remedy or review procedure.
Feldman has not cited any case establishing that a plaintiff's lack of capacity to maintain an action under Corporations Code section 2203, subdivision (c), constitutes a defect in fundamental jurisdiction that renders an ensuing judgment void. In Traub Co., the "[c]ross-defendants appeal[ed] from an order denying their motion to vacate and set aside a judgment which had already become final in favor of [the] cross-complainant, a California corporation." (Traub Co., supra, 66 Cal.2d at p. 369.) The California Supreme Court "concluded that the trial court was correct in its view that a final judgment is immune from [a] collateral attack" on the ground that "before entry of the judgment and continuously to the time of the motion [to vacate and set aside a final judgment] the corporate powers of [the] cross-complainant had been suspended under the provisions of section 23301 et seq. of the Revenue and Taxation Code for failure to pay corporate taxes . . . ." (Ibid., fn. omitted.)
Neither has Feldman demonstrated by citation to the record that the challenged judgment was obtained by extrinsic fraud or extrinsic mistake concerning respondents' alleged lack of capacity. Feldman had his day in court and could not obtain equitable relief from the final judgment based upon intrinsic fraud or mistake. (See Cedars-Sinai, supra, 18 Cal.4th at p. 10; Gale, supra, 31 Cal.2d at pp. 365-366.)
3. Severance of Cross-Complaint
Without any citation to the record, Feldman states in his opening brief that "[o]n the first day of trial, the court severed away ZF-Solutions' cross-complaint against TAT . . . and precluded [him] and other defendants from asserting most of their over twenty affirmative defenses." (Emphasis omitted.)
Our prior opinion explained that Devices and Solutions' original cross-complaint against TAT "alleg[ed] breach of fiduciary duty, negligent and intentional interference with prospective economic advantage, and conspiracy to destabilize the management of Devices and take control of the company" but that "[u]ltimately only one claim, for breach of fiduciary duty, remained in the cross-action."
Feldman has not shown that he has standing as an individual to complain about that severance order. Further, in case No. H035968, this court rejected the appellate challenge to the trial court's order granting a motion to sever the first amended cross-complaint and consolidate it with a separate pending action. Our prior opinion stated in part: "A trial court may order a separate trial of any cause of action asserted in a cross-complaint 'in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy.' (Code Civ. Proc., § 1048, subd. (b).) We will not interfere with the court's exercise of that discretion absent a manifest abuse. (McLellan v. McLellan (1972) 23 Cal.App.3d 343, 353.) We see no such abuse of discretion here. The cross-complaint accused TAT . . . of various acts that undermined the success of Devices from 1997 until early 2002, when Solutions acquired the Devices assets. TAT's lawsuit, on the other hand, did not name Devices as a party; it was brought against Solutions and its Series B investors for acts occurring in 2004. The court could properly conclude that the causes of action in the first amended cross-complaint belonged with [a separate] companion case, in which identical claims were asserted. No error appears on this record." (Italics & fn. omitted.)
In any case, Feldman's repeated reliance on the one final judgment rule to assert that the judgment is void is misplaced. "Under the one final judgment rule, ' "an appeal may be taken only from the final judgment in an entire action." ' [Citation.] ' "The theory [behind the rule] is that piecemeal disposition and multiple appeals in a single action would be oppressive and costly, and that a review of intermediate rulings should await the final disposition of the case." ' [Citations.]" (In re Baycol Cases I & II (2011) 51 Cal.4th 751, 756.) The one final judgment rule has been codified in section 904.1, subdivision (a). (Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 740-741. ) "Subject to exceptions . . . , that subdivision authorizes an appeal '[f]rom a judgment, except . . . an interlocutory judgment,' i.e., from a judgment that is not intermediate or nonfinal but is the one final judgment. [Citation.]" (Id. at p. 741.) In the absence of specific statutory authorization, "an appeal cannot be taken from a judgment that fails to complete the disposition of all the causes of action between the parties even if the causes of action disposed of by the judgment have been ordered to be tried separately, or may be characterized as 'separate and independent' from those remaining." (Id. at 743.)
It was not contended in the prior appeal in case No. H035968 that the severance of the cross-complaint rendered the 2010 judgment interlocutory and consequently unappealable under the one final judgment rule and section 904.1. Our prior opinion has become law of the case, including its implicit determination that this court was reviewing an appealable judgment. (See Gore, supra, 20 Cal.2d at pp. 121-122.) Moreover, "[w]here a complaint and cross-complaint are severed, two separate actions are created." (Wegner et al., Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2018) ¶ 4:350, p. 4100); see Security Pacific National Bank v. Adamo (1983) 142 Cal.App.3d 492, 496.) Feldman has failed to show that the trial court's severance order resulted in a void judgment due to a lack of fundamental jurisdiction, either subject matter or personal jurisdiction, or that the judgment was assailable based on extrinsic fraud or extrinsic mistake that resulted in the severance of the cross-complaint.
4. Alleged Failure to Adjudicate Affirmative Defenses
Feldman contends that even if severance of the cross-complaint was proper, the judgment was void because affirmative defenses, including a setoff against respondents' claims, were not adjudicated. He suggests that the "[d]enial of [his] defenses through motions in limine was the equivalent of a nonsuit." (Italics omitted.) Feldman argues that he was denied due process because those defenses were never heard.
In our prior opinion, this court noted that in conjunction with the trial court's ruling on severance, "the court granted a related motion in limine to preclude evidence or argument about the affirmative defense of unclean hands because this was a defense that could be asserted only by Devices, not by Solutions" and "the court found the defense to be inapplicable, since the complaint and cross-complaint were not related." This court further observed in the opinion that during motions in limine, the judge had "denied defendants' second motion in limine to exclude evidence of breach of contract [on the ground that] the contracts were void because TAT and Sands had transacted business without registering with the state." In the opinion, this court also stated: "The [trial] court . . . rejected defense evidence suggesting mutual mistake, waiver by plaintiffs, or plaintiffs' admission by silence. These contract defenses, the court ruled, were irrelevant and misleading to the jury, especially because any belief that there was no contract was based on an incorrect understanding of the law." We further stated: "To the extent that defendants wanted to prove waiver, mistake, and admission by silence, the court was within its discretion under Evidence Code section 352 to preclude evidence of post-contract discussions to show that these were legally viable defenses to the contract."
The prior appeal was the opportunity for any party aggrieved to obtain review of any adverse rulings concerning affirmative defenses. (See §§ 902, 906.) However, even an erroneous ruling preventing the adjudication of an affirmative defense does not render the ensuing judgment void, for such an error does not establish that the court lacked fundamental jurisdiction. (See Quigley, supra, 7 Cal.5th at p. 807 ["an objection that liability is barred by an affirmative defense . . . [is] ordinarily deemed 'waived' if the defendant does not raise [it] in its demurrer or answer to the complaint"].) Further, "[a]n erroneous [final] judgment is as conclusive as a correct one. [Citations.]" (Panos v. Great Western Packing Co. (1943) 21 Cal.2d 636, 640; see Moffat v. Moffat (1980) 27 Cal.3d 645, 654 ["it is well settled that erroneous final judgments serve as a bar to further litigation on the action"].)
Again, Feldman has not shown that the judgment is void because the trial court lacked jurisdiction in the fundamental sense—i.e., over the subject matter and over the parties. Feldman has not identified any extrinsic fraud or extrinsic mistake that prevented a meritorious affirmative defense from being adjudicated.
5. No Showing that Judgment was Obtained Through Extrinsic Fraud
Without any citation to the record, Feldman makes the general assertion that respondents' "extrinsic fraud regarding their California activities and status denied [his] right to present evidence of their incapacity [to maintain the action leading to the judgment against him]." We deem this contention forfeited. (See Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246 (Nwosu).) "It is not the function of this court to comb the record looking for the evidence or absence of evidence to support [a defendant's] argument. [Citations.]" (People ex rel. Reisig v. Acuna (2010) 182 Cal.App.4th 866, 879 (Acuna).) Under the California Rules of Court, each brief must "[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears." (Cal. Rules of Court, 8.204(a)(1)(C).)
Feldman also specifically accuses TAT of filing fraudulent or "sham pleadings" regarding whether it was authorized to conduct business in California. "The rule is well settled in this state that mere false allegations by the plaintiff . . . in [a] pleading do not constitute such fraud as justifies equitable interference since the truth or falsity of the matters alleged is conclusively determined by the judgment, in the absence of some other ground for relief. [Citations.]" (Horton v. Horton (1941) 18 Cal.2d 579, 584.) Any fraud perpetrated through TAT's pleadings was intrinsic, rather than extrinsic, and consequently could not serve as a basis for setting aside the judgment. (See Cedars-Sinai, supra, 18 Cal.4th at p. 10.)
In sum, the trial court did not err in denying Feldman's 2016 postjudgment motion to vacate and set aside the 2010 judgment. In light of our conclusions, it is unnecessary to resolve whether Feldman's motion was also an improper motion for reconsideration, as asserted by respondents. C. Sanctions Imposed on Feldman for Bringing Motion to Set Aside Judgement
Without any citation to the appellate record, Feldman asserts that the trial court erred by awarding sanctions to Sands pursuant to section 128.5 because Sands became a forfeited entity in 2014 and that consequently Sands lacked the capacity in 2016 to (1) oppose his motion to set aside the judgment, (2) appear at the hearing on that motion, or (3) move for monetary sanctions against him. We review an order awarding sanctions pursuant to section 128.5 for abuse of discretion. (See Sabek, Inc. v. Engelhard Corp. (1998) 65 Cal.App.4th 992, 1001.) "The burden is on the party complaining to establish an abuse of discretion." (Denham v. Superior Court (1970) 2 Cal.3d 557, 566.)
On appeal, Feldman asked this court to take judicial notice of a number of exhibits, including correspondence from the California Franchise Tax Board (FTB) regarding the status of respondents. The request was denied. (See ante, fn. 1.) "Reviewing courts generally do not take judicial notice of evidence not presented to the trial court." (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3; see Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 813.) "An appellate court may properly decline to take judicial notice under Evidence Code sections 452 and 459 of a matter which should have been presented to the trial court for its consideration in the first instance. [Citations.]" (Brosterhous v. State Bar (1995) 12 Cal.4th 315, 325-326.) There are no exceptional circumstances to justify our deviation from the general rule.
Feldman states that "[a]lthough a technicality, [section] 128.5 applies to '. . . tactics [that] arise from a complaint filed . . . on or before December 31, 1994.' " As amended in 1994, former section 128.5, subdivision (b)(1), stated: " 'Actions or tactics' include, but are not limited to, the making or opposing of motions or the filing and service of a complaint or cross-complaint only if the actions or tactics arise from a complaint filed, or a proceeding initiated, on or before December 31, 1994." (Stats. 1994, ch. 1062, § 1, italics added.) A 2014 amendment deleted the date limitation in subdivision (b)(1), and the limitation was not in effect in 2016. (Stats. 2014, ch. 425, § 1.)
Revenue and Taxation Code section 19719, subdivision (a), is the only legal authority cited in Feldman's opening brief to support his contentions concerning the sanctions award. That statutory provision merely states the criminal penalty for a prohibited exercise of corporate powers, rights, or privileges after suspension or forfeiture. It provides that "[a]ny person who attempts or purports to exercise the powers, rights, and privileges of a corporation that has been suspended pursuant to [s]ection 23301 or who transacts or attempts to transact intrastate business in this state on behalf of a foreign corporation, the rights and privileges of which have been forfeited pursuant to the section, is punishable" by a fine as specified, "imprisonment not exceeding one year," or both. Citation to this provision does not establish an abuse of discretion.
In his reply brief, Feldman contends for the first time that Revenue and Taxation Code section 23301 and 23301.5 "are clear regarding [the] prohibition of actions by forfeited entities . . . ." "Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant. [Citations.]" (Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 295, fn. 11.) " '[T]he rule is that points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before. [Citations.]' [Citation.]" (People v. Smithey (1999) 20 Cal.4th 936, 1017, fn. 26.) Feldman has not offered any good reason for not citing those code sections earlier.
In case No. H035968, defendants did not "pursue their opposition to Sands' right to proceed . . . ." We noted in our prior opinion that "Sands Venture registered with the California Secretary of State in August 2007."
At the hearing on Feldman's postjudgment motion to set aside the judgment and Sands' sanctions motion, Feldman told the court that he had brought with him "downloads from the Secretary of State's website" showing that the Sands entities were "forfeited" and that he had FTB documents showing that they had been "forfeited since 2014" for failing to file returns in California. At the hearing, he orally claimed that Revenue and Taxation Code section 23301 applied to the Sands entities. However, the record does not show that Feldman interposed more than cursory opposition to the sanctions motion based on the asserted forfeited status of Sands or that any supporting document was actually introduced and admitted into evidence at that hearing.
Feldman may not argue on appeal that the trial court should have denied the sanctions motion for a reason that he failed to adequately present below. "Issues presented on appeal must actually be litigated in the trial court—not simply mentioned in passing." (Natkin v. California Unemployment Ins. Appeals Bd. (2013) 219 Cal.App.4th 997, 1011.) "[A] reviewing court ordinarily will not consider a challenge to a ruling if an objection could have been but was not made in the trial court. [Citation.]" (In re S.B. (2004) 32 Cal.4th 1287, 1293, fn. omitted, superseded on another ground as stated in In re S.J. (2008) 167 Cal.App.4th 953, 962.) In any case, we deem his perfunctory appellate argument forfeited because it was presented without meaningful legal analysis and supporting legal authority and without any citation to the appellate record. (See United States v. Olano (1993) 507 U.S. 725, 731; People v. Stanley (1995) 10 Cal.4th 764, 793; Cal. Rules of Court, rule 8.204(a)(1)(B) & (C); see also Acuna, supra, 182 Cal.App.4th at p. 879; Nwosu, supra, 122 Cal.App.4th at p. 1246.)
"[A] party appearing in propria persona . . . 'is entitled to the same, but no greater, consideration than other litigants and attorneys.' [Citation.]" (Tanguilig v. Valdez (2019) 36 Cal.App.5th 514, 520; see Rappleyea, supra, 8 Cal.4th at pp. 984-985 [rules of civil procedure "apply equally" to self-represented litigants; "[a] doctrine generally requiring or permitting exceptional treatment of parties who represent themselves would lead to a quagmire in the trial courts, and would be unfair to the other parties to litigation"].)
Furthermore, Feldman has not shown by citation to the appellate record that the court abused its discretion in granting Sands' sanctions motion. Revenue and Taxation Code section 23301 provides in pertinent part that "[e]xcept for the purposes of filing an application for exempt status or amending the articles of incorporation as necessary either to perfect that application or to set forth a new name, . . . the exercise of the corporate powers, rights and privileges of a foreign taxpayer in this state may be forfeited" for failure to fully and timely pay certain taxes, penalties or interest or certain liabilities. (Rev. & Tax. Code, § 23301, subds. (a), (b), (c), italics added.) However, Revenue and Taxation Code section 23301 applies "to a foreign taxpayer only if the taxpayer is qualified to do business in California." (Id., § 23301.6, italics added; see Corp. Code, § 2105.)
Revenue and Taxation Code section 23301 says nothing about a failure to file tax returns. Revenue and Taxation Code section 23301.5, which Feldman did not explicitly mention at the hearing on Sands' sanctions motion, states in relevant part: "Except for the purposes of filing an application for exempt status or amending the articles of incorporation as necessary either to perfect that application or to set forth a new name, . . . the exercise of the corporate powers, rights, and privileges of a foreign taxpayer in this state may be forfeited, if a taxpayer fails to file a tax return required by this part." (Italics added.)
Revenue and Taxation Code section 23302 provides in part that "[f]orfeiture . . . of a taxpayer's powers, rights, and privileges pursuant to [s]ection 23301 [or] 23301.5 . . . shall occur and become effective only as expressly provided in this section." (Rev. & Tax. Code, § 23302, subd. (a).) Forfeiture requires both prior notice to the taxpayer pursuant to Revenue and Taxation Code section 21020 and the FTB's transmittal of the taxpayer's name to the Secretary of State. (Id., § 23302, subds. (a)-(c).) Thus, the forfeiture contemplated by Revenue and Taxation Code section 23302 is "not self-executing." (Mediterranean Exports, Inc. v. Superior Court (1981) 119 Cal.App.3d 605, 615.) "[A] foreign corporation which has qualified to do business does not forfeit its corporate powers merely because it has not paid its taxes" (United Medical Management, supra, 49 Cal.App.4th at p. 1741), and "the mere failure to pay taxes does not prevent a foreign corporation from bringing or defending an action." (Ibid.) "The forfeit[ure] of corporate powers occurs only at the time of the notice of forfeiture by the [FTB]. (Mediterranean Exports, Inc. v. Superior Court, supra, 119 Cal.App.3d at p. 617.)" (Ibid.)
In addition, a foreign taxpayer which has suffered forfeiture under Taxation and Revenue Code section 23301 et seq. may seek relief under Taxation and Revenue Code section 23305 and obtain a certificate of revivor under Taxation and Revenue Code section 23305a. "Corporate acts such as . . . appearing on and filing motions are validated by revivor. [Citations.]" (Benton v. County of Napa (1991) 226 Cal.App.3d 1485, 1490-1491.)
On appeal, Feldman has not demonstrated by specific citation to the record of the sanctions motion that he made an evidentiary showing that Sands' could not bring a sanctions motion because Sands' powers, rights and privileges were forfeited pursuant to Revenue and Corporations Code section 23301 et seq. at the time when his set-aside motion and Sands' sanctions motion were heard and decided. He has not carried his burden of showing that the trial court abused its discretion in awarding sanctions to Sands pursuant to section 128.5.
DISPOSITION
The challenged orders are affirmed. Appellant shall bear all costs on appeal.
/s/_________
ELIA, J. WE CONCUR: /s/_________
PREMO, Acting P.J. /s/_________
MIHARA, J.