Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC310589, Andrea K. Richey, Judge. Affirmed in part; dismissed in part.
Steven Elliot Machat in pro. per., for Defendant and Appellant.
Bret D. Lewis for Plaintiff and Respondent.
OPINION
TURNER, P. J.
I. Introduction
This is an appeal of two superior court orders arising from a legal malpractice, fraud, conversion and fiduciary breach action brought by plaintiff, DelMar Arnaud, against his former attorneys. Defendants are Steven Machat, Jonathan D. Freund, Thomas Brackey II, and the law firm, Freund & Brackey LLP. Mr. Machat is the only defendant who is a party to this appeal. Mr. Machat seeks reversal of an order setting aside a prior order compelling arbitration. Mr. Machat also appeals from an order finding that certain debts were not dischargeable through bankruptcy. We affirm the order setting aside the arbitration order. We dismiss the appeal from the March 1, 2006 order finding that certain debts were not dischargeable.
II. background
A. The Complaint and Arbitration Order
Mr. Arnaud filed the present malpractice based lawsuit on February 13, 2004. Mr. Arnaud alleged that he retained defendants to represent him in a royalty dispute in 2001 against various defendants in the case of Delmar Arnaud v. Death Row Records, LLC (Super. Ct. L.A. County, 2001, No, BC255215). On December 6, 2002, a default judgment was entered in Mr. Arnaud’s favor. The December 6, 2002 judgment in favor of Mr. Arnaud was in the sum of $25,497,847.71 and against: Death Row Records LLC; Suge Music, an entity of unknown designation; Marion H. Knight who is also known as Suge Knight; Death Row Records, Inc.; and THA Row, a corporation. The December 6, 2002 judgment also declared that Mr. Arnaud possessed ownership rights in 22 separate works and required royalty payments be made to him.
Defendants then hired an attorney to file an action in New York City to enforce Mr. Arnaud’s December 6, 2002 judgment. Defendants represented to Mr. Arnaud that an attorney, Kenneth A. Elan, had been engaged in New York. According to defendants, Mr. Elam had been retained to act on behalf of both Mr. Arnaud and Organized Crime Family, Inc. to enforce the December 6, 2002 judgment. On January 8, 2003, Mr. Elan filed a lawsuit in the Supreme Court of the State of New York, County of New York Index No. 03/100272 to recover assets belonging to “Death Row Records” in the possession of Koch Entertainment LLC. Defendants misrepresented that Mr. Elam had been retained to protect Mr. Arnaud’s interest. Rather, Mr. Elan was only representing the interests of Organized Crime Family, Inc. in the New York enforcement action. The New York enforcement action led to a settlement. As part of the settlement of the New York enforcement action, defendants advised Mr. Arnaud to sign a release agreement. Defendants failed to advise Mr. Arnaud that the release would, in fact, transfer all his rights in the judgment to Organized Crime Family, Inc. Under the terms of the settlement, Koch Entertainment agreed to pay and is continuing to pay substantial sums to Organized Crime Family, Inc. and the attorneys but no moneys are to be paid to Mr. Arnaud. Defendants have refused to disclose the specific amounts of payments to Mr. Arnaud.
It was further alleged that, unbeknownst to Mr. Arnaud, defendants were simultaneously representing an organization named Organized Crime Family Inc. in a federal action in United States District Court for the Central District of California entitled Afeni Shakur v. Delmar Arnaud, case No. 01-07400. In this action, the representative of the estate of Tupac Shakur sued Mr. Arnaud and Organized Crime Family Inc. The federal lawsuit involved plaintiff’s interest in certain of Mr. Shakur’s master recordings. Disputes over these master recordings were also the subject matter of the lawsuit which resulted in entry of the December 6, 2002 judgment.
On June 9, 2004, Mr. Machat filed a petition to compel arbitration of the claims in this action. The petition was joined by the other defendants. On August 30, 2004, the trial court entered an order which: granted the petition to compel arbitration; submitted the matter to arbitration with the American Arbitration Association; and stayed the action pending completion of the arbitration. On October 3, 2005, the arbitration panel issued an interim ruling concerning the failure to post the required arbitration fees: “In view of the fact that after repeated notice the parties have not made the required deposits, this matter is suspended. The panel and AAA shall retain jurisdiction. The Panel will not read or consider any submissions, including but not limited to any motions to dismiss, until all of the required deposits have been paid in full.”
B. The Order Setting Aside the Arbitration Order
On October 14, 2005, the trial court issued an order to show cause as to why Mr. Machat should not be held in contempt for willfully disobeying a court order to arbitrate the matter by refusing to pay his portion of arbitration fees. On November 8, 2005, Mr. Machat, who was now representing himself, filed a response to the order to show cause. Mr. Machat’s declaration states, “Although not personally involved, I understand Arnaud’s activities caused significant delays in the prosecution of this matter in arbitration.” Mr. Machat further declared that he could not afford to pay the $10,000 arbitration fees because he had petitioned for bankruptcy protection on December 22, 2003 under chapter 7 of title 11 of the United States Code. Attached to Mr. Machat’s declaration as exhibit B was a discharge order pursuant to title 11 of the United States Code section 727 from the United States Bankruptcy Court for the Central District of California dated March 1, 2004. Mr. Machat stated that he was uncertain of the effect of the discharge order in this case. But Mr. Machat declared he presumed the claims in this case were discharged by the bankruptcy court’s order. The discharge order makes no reference of the current dispute. Further, Mr. Arnaud submitted a copy of Mr. Machat’s schedule of debts for which he sought discharge. Mr. Machat’s debt schedule did not list Mr. Arnaud as a creditor.
On November 10, 2005, the trial court began a hearing on the contempt order to show cause. The matter was continued to November 23, 2005, for further briefing on the issues of whether the trial court had authority to either sever Mr. Machat from the arbitration or to immediately set the case for trial. Mr. Arnaud argued that the trial court lacked jurisdiction to issue an order on August 30, 2004 compelling Mr. Machat to arbitrate. According to Mr. Arnaud, Mr. Machat had filed a bankruptcy petition on November 17, 2003. Mr. Arnaud further argued Mr. Machat had acted improperly in filing the petition to compel arbitration without notifying the trial court or any other party of the existence of the bankruptcy action. Mr. Arnaud claimed he was prejudiced by Mr. Machat’s dilatory conduct because the arbitration had caused a delay in the proceedings. Mr. Arnaud could not obtain a default judgment in the arbitration proceeding. At the November 23, 2005 hearing, Mr. Arnaud’s counsel argued the trial court did not have jurisdiction to order the case to be arbitrated because Mr. Machat had filed the bankruptcy petition. The following then transpired: THE COURT: . . . So you’re telling me that you didn’t think I had jurisdiction to order the matter to arbitration. [¶] MR. LEWIS: That’s right.” The trial court then explained that both sides agreed that it had no jurisdiction to order the dispute be arbitrated.
The minute order from November 23, 2005, provides in part, “The Court orders the order made as to Machat to arbitrate hereby vacated based on counsel for [Mr. Arnaud’s] representation that the court had no jurisdiction to order Machat to arbitrate.” The trial court then ordered Mr. Arnaud’s counsel to provide the court with a statement regarding the status of the bankruptcy proceeding by January 10, 2005. On December 15, 2005, the trial court entered a signed order vacating the prior order compelling arbitration. That December 15, 2005 written order states in part, “The order compelling Machat to arbitration is void due to the filing of a personal bankruptcy by Machat prior to the date of the Court’s order to compel arbitration. . . .” On March 23, 2006, Mr. Machat filed a notice of appeal from the November 23, 2005 order.
C. The Bankruptcy Dischargeability Order
On January 10, 2005, Mr. Arnaud filed a motion requesting a determination that the claims in the complaint were not dischargeable. Mr. Arnaud provided the court with documents from Mr. Machat’s bankruptcy case which shows a discharge order dated March 1, 2004, and the case was a no-asset bankruptcy. Mr. Arnaud denied receiving notice of the bankruptcy action until November 2005. This was when Mr. Machat disclosed the existence of the bankruptcy proceeding.
Mr. Arnaud argued the trial court has concurrent jurisdiction over non-dischargeability actions. Because Mr. Arnaud was not listed as a creditor in the bankruptcy schedule (11 U.S.C. § 523(a)(3)), he contended that the discharge order was inapplicable. Mr. Arnaud further argued that because the claims were not scheduled (11 U.S.C. § 523(a)(3)), the complaint’s allegations for fraud, fiduciary breach, and conversions were within the exceptions to discharge as set forth in title 11 United States Code section 523(a)(2), (4), and (6).
Mr. Machat did not file written opposition to the motion requesting a determination that the claims were not dischargeable. Moreover, Mr. Machat did not appear at the March 1, 2006 hearing. The trial court granted the motion. The minute order states, “Motion seeking determination of non-dischargeability is unopposed and therefor[e] granted.” Mr. Machat filed a notice of appeal from the order determining the claims were not discharged on March 23, 2006. Mr. Machat did not designate the reporter’s transcript of the March 1, 2006 hearing as a part of the record on appeal.
III. discussion
A. The Appeal From The Arbitration Order Is Timely
Mr. Arnaud initially claims we lack jurisdiction to consider the appeal from the December 15, 2005 order vacating the prior order compelling arbitration. Mr. Arnaud reasons the notice of appeal was not timely filed. A timely appeal from an appealable order within the time periods of California Rules of Court, rule 8.104 is jurisdictional and a prerequisite to our power to hear this case. (Van Beurden Ins. Services, Inc. v. Customized Worldwide Weather Ins. Agency, Inc. (1997) 15 Cal.4th 51, 56; Hollister Convalescent Hosp. Inc. v. Rico (1975) 15 Cal.3d 660, 666-667, 674.) An order vacating a prior order compelling arbitration is in effect a denial of a petition to compel arbitration. (CPI Builders, Inc. v. Impco Technologies, Inc. (2001) 94 Cal.App.4th 1167, 1171.) An order denying a petition to compel arbitration is an appealable order. (Code Civ. Proc., § 1294, sub.(a); rule 8.104(f); Vivid Video, Inc. v. Playboy Entertainment Group, Inc. (2007) 147 Cal.App.4th 434, 446.)
All further references to rules are to the California Rules of Court. At the time the notice of appeal was filed the applicable rule was rule 2 which has been renumbered as rule 8.104 effective January 1, 2007. Former rule 2 and rule 8.104 are the same for purposes of this appeal.
Rule 8.104(a) sets forth the applicable time period: “[A] notice of appeal must be filed on or before the earliest of: “(1) 60 days after the superior court clerk mails the party filing the notice of appeal a document entitled ‘Notice of Entry’ of judgment or a file-stamped copy of the judgment, showing the date either was mailed; [¶] (2) 60 days after the party filing the notice of appeal serves or is served by a party with a document entitled ‘Notice of Entry’ of judgment or a file-stamped copy of the judgment, accompanied by proof of service; or [¶] (3) 180 days after entry of judgment.” Rule 8.104(d) provides: “For purposes of this rule: [¶] (1) The entry date of a judgment is the date the judgment is filed under Code of Civil Procedure section 668.5, or the date it is entered in the judgment book. [¶] (2) The entry date of an appealable order that is entered in the minutes is the date it is entered in the permanent minutes. But if the minute order directs that a written order be prepared, the entry date is the date the signed order is filed; a written order prepared under rule 3.1312 or similar local rule is not such an order prepared by direction of a minute order. [¶] (3) The entry date of an appealable order that is not entered in the minutes is the date the signed order is filed. [¶] (4) The entry date of a decree of distribution in a probate proceeding is the date it is entered at length in the judgment book or other permanent court record.” Code of Civil Procedure section 668.5 provides: “In those counties where the clerk of the court places individual judgments in the file of actions and either a microfilm copy of the individual judgment is made, or the judgment is entered in the register of actions, or into the court’s electronic data-processing system, prior to placement of the judgment in the file of actions, the clerk shall not be required to enter judgments in a judgment book, and the date of filing the judgment with the clerk shall constitute the date of its entry.”
Here, the trial court issued a minute order on November 23, 2005. The minute order provides that the prior order compelling arbitration is vacated and directs counsel for Mr. Arnaud to give notice of the ruling. The clerk’s transcript contains a document entitled “Notice of Minute Order” which was filed on January 4, 2006 by Mr. Arnaud’s counsel, Bret D. Lewis. Attached to this document is a proof of service stating that Mr. Lewis served a copy of the “Notice of Minute Order” on Mr. Machat on November 30, 2005. The proof of service was not, however, executed by Mr. Lewis until December 28, 2005. The clerk’s transcript also contains a signed order dated and entered on December 15, 2005, vacating the prior order compelling arbitration.
We disagree with Mr. Arnaud that the appeal from the order vacating the prior order is untimely. First, there is no notice of entry of judgment or order in the file concerning the December 15, 2005 order from either the clerk or Mr. Arnaud, which was required to trigger the 60-day time limit. (Rule 8.104(a)(1) & (2); Jade K. v. Viguri (1989) 210 Cal.App.3d 1459, 1469-1470; Sadler v. Turner (1986) 186 Cal.App.3d 245, 248.) No particular form is required to give notice that a judgment has been entered. (Delmonico v. Laidlaw Waste Systems, Inc. (1992) 5 Cal.App.4th 81, 85; National Advertising Co. v. City of Rohnert Park (1984) 160 Cal.App.3d 614, 618.) However, the trial court did not actually enter an order vacating the prior order until December 15, 2005. The judgment must be entered before it is effective or notice of entry of judgment can be given. (Code Civ. Proc., § 664; Delmonico v. Laidlaw Waste Systems, Inc., supra, 5 Cal.App.4th at p. 85; Estate of Crabtree (1992) 4 Cal.App.4th 1119, 1124.) Furthermore, as noted above, there is no evidence Mr. Machat was ever served with a “‘Notice of Entry’” of judgment as required by rule 8.104(a)(1) and (2), which is read literally. (Sunset Millennium Associates, LLC v. Le Songe, LLC (2006) 138 Cal.App.4th 256, 259-260; In re Marriage of Taschen (2005) 134 Cal.App.4th 681, 686; Estate of Crabtree, supra, 4 Cal.App.4th at pp. 1122-1123.) Mr. Arnaud’s service of notice of a minute order merely advising Mr. Machat that the prior order was vacated was not “written the notice of entry of judgment” required to trigger the 60-day time limit. (See Jade K. v. Viguri, supra, 210 Cal.App.3d at pp. 1469-1470; Sadler v. Turner, supra, 186 Cal.App.3d at p. 248; Call v. Los Angeles County Gen. Hosp. (1978) 77 Cal.App.3d 911, 915.) Mr. Machat’s notice of appeal which was filed on March 23, 2006 was filed within the 180-day time limit specified in rule 8.104(a)(3) and is therefore timely. (Annette F. v. Sharon S. (2005) 130 Cal.App.4th 1448, 1455; In re Marriage of Ebin-King & King (2000) 80 Cal.App.4th 92, 109.)
B. Arbitration
Mr. Arnaud argues the August 30, 2004 order compelling arbitration was void because Mr. Machat had filed a chapter 7 bankruptcy petition on January 14, 2004. The filing of the chapter 7 bankruptcy petition on January 14, 2004 automatically stayed the proceedings in this case. (11 U.S.C. § 362(a); In re Calder (10th Cir. 1990) 907 F.2d 953, 956 [automatic stay applies even in the absence of notice of the petition filing].) The trial court correctly ruled the entry of the March 1, 2006 bankruptcy discharge order rendered the August 30, 2004 order compelling arbitration void. (11 U.S.C. § 524(a) ; In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1082; In re Gurrola (9th Cir.BAP 2005) 328 B.R. 158, 175-176; In re Motley (Bankr. C.D.Cal. 2001) 268 B.R. 237, 241.)
Title 11 United States Code section 524(a) states in part: “A discharge in a case under this title-- . . . (2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived. . . .”
Mr. Machat argues the trial court erred in vacating the August 30, 2004 order compelling arbitration. According to Mr. Machat, the trial court lacked jurisdiction to vacate the August 30, 2004 order compelling arbitration. Mr. Machat argues the trial court had only “vestigial” power once the matter was ordered arbitrated and therefore lacked authority to set aside the August 30, 2004 order compelling arbitration. (Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44, 59; Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1795.) Decisions are not entirely consistent as to the trial court’s power once a matter has been ordered arbitrated. (Compare Bosworth v. Whitmore (2006) 135 Cal.App.4th 536, 545 [Code of Civil Procedure section 1283.8 authorizes a trial court to set an arbitration completion date]; Blake v. Ecker (2001) 93 Cal.App.4th 728, 738-739 & fn. 8 [once action stayed for arbitration process motion to dismiss for delay in prosecution must be brought in arbitration proceeding, however, there may be occasions when a party may petition the trial court to “aid in the prosecution of an arbitration”] disapproved on a different point in Le Francois v. Goel (2005) 35 Cal.4th 1094, 1107 fn. 5; Burgess v. Kaiser Foundation Hospitals (1993) 16 Cal.App.4th 1077, 1081 [court has power to issue order expediting arbitration process when delay caused by arbitrator]; Boutwell v. Kaiser Foundation Health Plan (1988) 206 Cal.App.3d 1371, 1374 [party may petition the superior court to assist in expediting arbitration process “by moving to appoint a neutral arbitrator, moving to set an arbitration date, moving to strike a defendant’s answer, or entering defendant’s default”]; Preston v. Kaiser Foundation Hospitals (1981) 126 Cal.App.3d 402, 407-408 [court retains power to consider petition “for judicial assistance in moving arbitration forward where the matter is foundering for reasons beyond plaintiffs’ control” or to entertain motion to dismiss for lack of diligence]; with Titan/Value Equities Group, Inc. v. Superior Court (1994) 29 Cal.App.4th 482, 488 [it is for “the arbitrator, and not the court, to grant relief for delay in bringing an arbitration to a resolution”]; Brock v. Kaiser Foundation Hospitals, supra, 10 Cal.App.4th at p. 1795 [court may entertain subsequent petitions by the parties however power is limited to confirming award].) In any event, there are authorities which support the conclusion that courts retain power to render appropriate orders when an arbitration proceeding is delayed by events such as a dispute over an arbitrator’s fees. (Burgess v. Kaiser Foundation Hospitals, supra, 16 Cal.App.4th at pp. 1079, 1081-1082 [when there is a dispute “between an arbitrator and one of the parties concerning the arbitrator’s fee, the remedy is to petition the court to resolve the dispute]”; see also Bosworth v. Whitmore, supra, 135 Cal.App.4th at pp. 545-550 [court has power even after arbitration is in progress to set an arbitration completion date]; Preston v. Kaiser Foundation Hospitals, Inc., supra, 126 Cal.App.3d at p. 407 [stating that a party may petition “for judicial assistance in moving the arbitration forward where the matter is foundering for reasons beyond [plaintiff’s] control”].)
But no decision holds that a trial court is divested of jurisdiction to set aside a void order to arbitrate. We conclude that a trial court retains the authority to vacate a void order. A void order may be set aside at any time. (Code Civ. Proc., § 473, subd. (d); Conservatorship of Harvey (1970) 3 Cal.3d 646, 649, fn. 1; Andrisani v. Saugus Colony Limited (1992) 8 Cal.App.4th 517, 523.) More importantly, the void order in this case takes its illegality from federal law which is controlling over state law limitations on judicial conduct. (U.S. Const., art. VI, cl. 2; Ross v. Universal Studios Credit Union (2002) 95 Cal.App.4th 537, 541; Saks v. Parilla, Hubbard & Militzok (1998) 67 Cal.App.4th 565, 570.) Thus, the trial court correctly set aside its August 30, 2004 order compelling arbitration.
C. The Dischargeability Determination
Mr. Machat purports to appeal from a March 1, 2006 order finding that certain debts were not dischargeable. When it appears we do not have jurisdiction over a case, we have a duty to raise the issue of appealability on our own motion. (Jennings v. Marralle (1994) 8 Cal.4th 121, 126; Olson v. Cory (1983) 35 Cal.3d 390, 398.) A finding that a debt is not dischargeable does not appear in Code of Civil Procedure section 904.1 or any other statute describing appellate jurisdiction and therefore does not appear to be separately appealable. (People v. Chi Ko Wong (1976) 18 Cal.3d 698, 709 disapproved on another point in People v. Green (1980) 27 Cal.3d 1, 33-34 [“a judgment or order is not appealable unless expressly made so by statute”]; Skaff v. Small Claims Court (1968) 68 Cal.2d 76, 78 [“a party possesses no right of appeal except as provided by statute”].) The appeal from the March 1, 2006 order finding that certain debts were not dischargeable is dismissed.
Mr. Machat argues that we should treat the present appeal as a writ petition. This option is reserved only for cases where “unusual circumstances” are present. (Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 744-747; Olson v. Cory, supra, 35 Cal.3d at pp. 400-401.) To act otherwise would contravene the jurisdictional limits on the right to secure appellate review. (Sears, Roebuck and Co. v. National Union Fire Ins. Co. of Pittsburgh (2005) 131 Cal.App.4th 1342, 1349; Mid-Wilshire Associates v. O’Leary (1992) 7 Cal.App.4th 1450, 1455.) There being no unusual circumstances present, we deny Mr. Machat’s request that we deem the present appeal to be an extraordinary writ proceeding.
IV. disposition
The order denying the petition to compel arbitration is affirmed. The appeal from the order determining certain claims were discharged is dismissed. Plaintiff, Delmar Arnaud, is to recover his costs incurred on appeal from defendant, Steven Machat.
We concur: MOSK, J., KRIEGLER, J.