Opinion
G045006 Super. Ct. No. 30-2009-00125029
01-24-2012
ANAHEIM DUCKS HOCKEY CLUB, LLC, Plaintiff and Appellant, v. PLATINUM CAPITAL GROUP, Defendant and Respondent.
HamptonHolley, George L. Hampton IV, Colin C. Holley and Jeremy T. Katz for Plaintiff and Appellant. No appearance for Defendant 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
Appeal from a default judgment of the Superior Court of Orange County, Kirk H. Nakamura, Judge. Default judgment reversed in its entirety.
HamptonHolley, George L. Hampton IV, Colin C. Holley and Jeremy T. Katz for Plaintiff and Appellant.
No appearance for Defendant and Respondent.
INTRODUCTION
Plaintiff Anaheim Ducks Hockey Club, LLC (ADHC), appeals following the entry of the default judgment in its favor and against defendant Platinum Capital Group on its complaint alleging a single claim for breach of contract. ADHC contends the trial court erred by refusing to include in the default judgment an award of attorney fees pursuant to an indemnity provision in that contract.
For reasons we explain in detail post, we reverse the entire default judgment. This lawsuit is based on a contract that was entered into by ADHC and defendant Mark D. Moses, not Platinum Capital Group. (Moses was named as a defendant in the complaint but settled with ADHC before the default judgment was entered.) The contract does not identify or even mention Platinum Capital Group. As Platinum Capital Group was not a party to the contract, it cannot be liable to ADHC for attorney fees that ADHC incurred in enforcing the contract, pursuant to the contract's indemnity provision.
Following the reasoning of the California Supreme Court's decision in Gonzales v. R. J. Novick Constr. Co. (1978) 20 Cal.3d 798, we reverse the entire default judgment because it was based on the same faulty premise as ADHC's single argument on appeal—that Platinum Capital Group was liable to ADHC under the contract entered into by ADHC and Moses.
Unfortunately, this is another case in which the trial court has entered a default judgment for a significant amount based on an insufficient record. (See Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267.)
BACKGROUND
In June 2009, ADHC filed a complaint against Platinum Capital Group and Moses, containing a single claim for breach of contract. The complaint alleged that in June 2006, ADHC (formerly known as Mighty Ducks Hockey Club, LLC), Anaheim Arena Management, LLC, and Moses entered into a written agreement entitled "Arena Club Seat License Agreement" (the contract), which granted Moses an exclusive license to use certain seats "during all 'events'" taking place at the Arrowhead Pond of Anaheim (now known as the Honda Center), from June 19, 2006 until June 18, 2011. In exchange, Moses agreed to pay ADHC (1) $39,600 upon execution of the contract for the time period beginning June 19, 2006 and ending June 18, 2007, (2) $39,600 by May 19, 2007 for the time period beginning June 19, 2007 and ending June 18, 2008, (3) $40,392 by May 19, 2008 for the time period beginning June 19, 2008 and ending June 18, 2009, (4) $41,200 by May 19, 2009 for the time period beginning June 19, 2009 and ending June 18, 2010, and (5) $42,024 by May 19, 2010 for the time period beginning June 19, 2010 and ending June 18, 2011.
The complaint further alleged that "ADHC is informed and believes and thereon alleges that at some point in time, Moses and Platinum Capital agreed that Platinum Capital would use the Seats and would pay ADHC the fees due under the [contract]." The complaint stated that "[a]t no time did ADHC or [Anaheim Arena Management, LLC,] release Moses from his obligations under the [contract]." The complaint stated Platinum Capital Group paid the first year fee, the second year fee, and $15,417 toward the third year fee, as well as a $15 shipping and handling fee. The complaint also alleged, however, that neither Moses nor Platinum Capital Group paid the outstanding balance of $108,214 due under the contract for the unpaid balance of the third year fee, the entire fourth year fee, and the entire fifth year fee.
A copy of the contract was attached to the complaint and incorporated into the complaint by reference. The contract states in part: "This ARENA CLUB SEAT LICENSE AGREEMENT (the 'Agreement') is entered into as of June 19, 2006 between ANAHEIM ARENA MANAGEMENT, LLC, a California limited liability company ('AAM'), MIGHTY DUCKS HOCKEY CLUB, LLC, a California limited liability company (the 'Team') and MARK MOSES, ('Seatholder'). AAM and the Team are sometimes collectively referred to as the 'Operator[.']" (Boldface & underscoring omitted.) The contract was signed by Moses, identified as "('Seatholder') [¶] MARK MOSES." (Boldface & underscoring omitted.) Platinum Capital Group is not mentioned in the contract.
Paragraph I of the "Standard Terms and Conditions" section of the contract contains an indemnity provision which states: "Seatholder shall indemnify and hold AAM, the Team, the City of Anaheim, Anaheim Public Improvement Corporation and each of their respective parent and affiliated companies and their respective directors, officers, members, owners, agents, employees, and servants (collectively, the 'Indemnitees') harmless from and indemnify same against any and all claims, suits, causes of action, damages, losses, liabilities, costs and expenses (including without limitation, reasonable attorneys' fees and court costs) of any kind whatsoever (collectively, 'Claims') arising out of or in connection with the Seatholder's or its agents', employees', guests', or any assigns' or transferees' of Seatholder not permitted pursuant to this Agreement, (i) use of the Seats, (ii) breach of this Agreement, or (iii) act or omission, neglect or wrongdoing, and Seatholder shall, at its sole cost and expense, defend (with counsel acceptable to the Indemnitees) the Indemnitees against any and all such Claims. Seatholder acknowledges that its obligations under this Paragraph I shall survive the termination of this Agreement."
The court clerk entered Platinum Capital Group's default in September 2009 and entered Moses's default in November 2009. ADHC entered into a confidential settlement agreement in which Moses agreed to pay ADHC $3,650 in exchange for a dismissal of the action against him with prejudice and a mutual release of all claims. The clerk thereafter entered a dismissal with prejudice as to Moses.
ADHC submitted a default judgment packet under Code of Civil Procedure section 585, subdivision (d) and requested that default judgment be entered against Platinum Capital Group in the total amount of $121,785.60 (consisting of the unpaid balance under the contract, interest, costs, and $5,337.50 in attorney fees ADHC claimed it incurred in pursuing its breach of contract claim).
The trial court denied ADHC's request for attorney fees. Default judgment was entered in favor of ADHC and against Platinum Capital Group in the amount of $112,798.10. ADHC appealed.
DISCUSSION
In its opening brief, ADHC states: "In this case, the indemnity clause in the Agreement states that the Platinum Capital shall indemnify the Anaheim Ducks for: [¶] 'Any and all claims, suits, causes of action, damages, losses, liabilities, costs and expenses (including without limitation, reasonable attorneys' fees and court costs) of any kind whatsoever . . . arising out of or in connection with the [Platinum Capital's] . . . breach of this Agreement.'" (Original bracketed text and ellipses.) This statement constitutes a material misrepresentation of the record before us.
The complaint, the contract itself, and the evidence ADHC submitted to the trial court in support of its application for default judgment establish that the contract was entered into between ADHC and Moses, not Platinum. The complaint does not allege Platinum Capital Group was a party to the contract. The contract itself defines the term "Seatholder" as Moses alone; Platinum Capital Group is not ever mentioned in the contract. Nevertheless, ADHC falsely asserts in its opening brief that the record shows Platinum Capital Group was a party to the contract.
Although the complaint alleges ADHC became aware that "at some point in time," Moses and Platinum Capital Group had agreed between themselves that Platinum Capital Group would use the reserved seats and pay the fees due under the contract, there is no evidence Platinum Capital Group entered into any agreement with ADHC, making such an agreement enforceable by ADHC. Indeed, the complaint alleged that "[a]t no time did ADHC or AAM release Moses from his obligations under the [contract]." Although the contract states that it may be modified in writing and signed by all the parties, the record does not suggest the contract was so modified.
It is axiomatic that a party must enter into an agreement before it is charged with a breach of that agreement. (Civ. Code, § 1550 [each party's consent "is essential to the existence of a contract"].) Nothing in the record shows Platinum Capital Group agreed to enter into the contract at all, much less agreed to the indemnity provision. The trial court, therefore, did not err by denying ADHC's request for attorney fees based on the contract's indemnity provision.
Although ADHC's appeal solely challenged the trial court's denial of attorney fees, the same reason ADHC was not entitled to an award of attorney fees— namely, that Platinum Capital Group was not a party to the contract—undermines the remainder of the default judgment against Platinum Capital Group in this breach of contract action. "[I]t is 'the general principle that an appeal from a distinct and independent part of a judgment does not bring up the other parts for review in the appellate court, and that a reversal of the part appealed from does not affect the portions not dependent thereon, but that they will stand as final adjudications.'" (Gonzales v. R. J. Novick Constr. Co., supra, 20 Cal.3d at p. 805.) "[A]n exception is made in cases involving judgments whose parts are not deemed to be severable. In such cases an appeal from a portion of the judgment brings up for review not only the portion appealed from but those other portions which are found to be 'interdependent upon' it. Thus, as we said in what has come to be regarded as the leading case on the subject: 'The test of whether a portion of a judgment appealed from is so interwoven with its other provisions as to preclude an independent examination of the part challenged by the appellant is whether the matters or issues embraced therein are the same as, or interdependent upon, the matters or issues which have not been attacked. [Citations.] "[I]n order to be severable, and therefore [separately] appealable, any determination of the issues so settled by the judgment . . . must not affect the determination of the remaining issues whether such judgment on appeal is reversed or affirmed. . . . Perhaps another way of saying it would be that the judgment is severable when the original determination of those issues by the trial court and reflected in the judgment or any determination which could be made as a result of an appeal cannot affect the determination of the remaining issues of the suit. . . ." [Citation.]'" (Id. at pp. 805-806, italics added.)
Here, ADHC is not entitled to an award of contractual attorney fees against Platinum Capital Group because Platinum Capital Group was not a party to the contract. That portion of the default judgment denying contractual attorney fees, on this record, cannot be severed from the remainder of the default judgment which is entirely dependent on the same issue—whether Platinum Capital Group can be liable to ADHC for breach of the contract. To affirm the trial court's denial of contractual attorney fees on the ground Platinum Capital Group was not a party to the contract, and also to affirm the remainder of the default judgment for breach of the contract against Platinum Capital Group, would constitute an indefensible result on this record. We conclude, therefore, this case falls within the exception set forth in Gonzales v. R. J. Novick Constr. Co., supra, 20 Cal.3d 798, 805-806, and reverse the entire default judgment against Platinum Capital Group.
In an order filed November 29, 2011, this court gave notice that it was considering imposing sanctions, including monetary sanctions not to exceed $5,000, against ADHC and its counsel HamptonHolley LLP and George L. Hampton IV, for material misrepresentations regarding Platinum Capital Group's purported entry into the contract, which were contained in the opening brief and for filing a frivolous appeal. Oral argument on the issue of sanctions was combined with oral argument on the merits of the appeal. (Cal. Rules of Court, rule 8.276(e).)
In response to our order, ADHC filed a supplemental brief, declarations, and exhibits. These documents fall into three categories. First, they make legal arguments challenging this court's jurisdiction to reverse the entire default judgment and supporting ADHC's position on the merits on appeal. For the reasons we have explained, this court has jurisdiction over the entire default judgment. Second, ADHC's argument on the merits in its supplemental brief does not withstand analysis: The reference to Moses as "CEO" in the contract without any reference to Platinum Capital Group is a nonstarter and the general allegation of agency is insufficient to bind Platinum Capital Group on this record.
The third category of these documents offers detailed explanations of additional circumstances and facts outside our record, which might be relevant to support a breach of contract claim by ADHC against Platinum Capital Group. As none of this evidence or argument was presented to the trial court, we do not consider them here.
Based on the content of their supplemental papers, however, ADHC and its counsel have satisfied us that sanctions are not warranted.
DISPOSITION
The default judgment entered against Platinum Capital Group is reversed in its entirety. Platinum Capital Group, however, remains in default. No party shall recover costs on appeal.
FYBEL, J.
WE CONCUR:
O'LEARY, ACTING P. J.
IKOLA, J.