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Baek v. A-Team Construction, Inc.

California Court of Appeals, Second District, Third Division
Apr 24, 2009
No. B199437 (Cal. Ct. App. Apr. 24, 2009)

Opinion

NOT TO BE PUBLISHED

APPEAL from orders of the Superior Court of Los Angeles County No. BC311056, William F. Fahey, Judge.

Franklin L. Ferguson, Jr. and Jong Lee for Defendant and Appellant.

Jacob D. Chang; John Eom for Plaintiff and Respondent.


KITCHING, J.

INTRODUCTION

Defendants’ attorneys appeal from orders vacating and setting aside a default judgment and denying reconsideration, which orders awarded attorney’s fees and costs to plaintiff’s attorney. We conclude that entry of the order awarding attorney’s fees and costs to plaintiff before the time limitation within which defense counsel were allowed to file a motion to strike or to tax costs violated California Rules of Court, rule 3.1700(b)(1). We also conclude that defense counsel’s motion for reconsideration of the order awarding attorney’s fees and costs was not untimely, and was based on new facts, circumstances, or law, and the trial court should have granted reconsideration and ruled on the merits of defense counsel’s motion. We reverse the order denying reconsideration and remand with directions that the trial court should grant the motion for reconsideration, and upon reconsideration, consider the merits of defense counsel’s motion to strike or to tax costs.

FACTUAL AND PROCEDURAL HISTORY

Plaintiff Seung Taek Baek alleged that on December 23, 2002, he contracted with defendant Keun Ho Koh dba A-Team Construction, a licensed general contractor, to repair Baek’s fire-damaged house. Baek alleged that he paid defendant, but defendant failed to provide any substantial construction services, removed the roof of the house, and then abandoned it during the rainy season without properly covering the exposed house and without notice to Baek, causing Baek’s house to suffer devastating rain damage. The City of Los Angeles condemned the house, which was later sold in a foreclosure sale. Baek sued Koh and A-Team Construction for breach of contract, breach of implied-in-law covenant of good faith and fair dealing, fraud, for a common count, and for disregard of corporate entity or alter ego theory.

The case was set for a February 1, 2006, trial date. On January 31, 2006, plaintiff’s counsel applied ex parte to continue the trial. Defense counsel did not appear at the ex parte hearing. The trial court denied plaintiff’s ex parte request and ordered plaintiff’s counsel, Jacob Chang, to give notice. When the case was called for trial on February 1, 2006, the trial court entered the default of A-Team Construction for its failure to appear.

On August 30, 2006, a judgment by default was entered in favor of plaintiff Baek and against Keun Ho Ko, dba A-Team Construction. Defendant was ordered to pay Baek $1,190,243 in damages, $119,024 in prejudgment interest, $27,075 in attorney fees, and $1,065 in costs, for a total of $1,337,407.

On January 31, 2007, defendant filed a motion to set aside the default judgment. The motion, filed pursuant to Code of Civil Procedure section 473, was made on the grounds that plaintiff Baek’s attorney deliberately misrepresented to the trial judge that he gave notice of the January 31, 2006, denial of Baek’s ex parte application to continue the trial date to defendant’s attorneys, and that Baek never served defendant with a notice of entry of default.

Unless otherwise specified, statutes in this opinion will refer to the Code of Civil Procedure.

After a hearing on March 8, 2007, the trial court allowed plaintiff’s attorney to file a supplemental declaration setting forth his hours and hourly rate for pursuing the default judgment and any other litigation matters, including his appearance at the scheduled February 1, 2006, trial date and later matters handled by plaintiff’s counsel. The trial court deferred ruling until plaintiff’s supplemental declaration was filed on March 15, 2007. Nothing was said about opposition from defense counsel.

Plaintiff filed an accounting of attorney’s fees and costs from January 31, 2006, through March 15, 2007, totaling $31,738.88.

On March 22, 2007, the trial court found that defendant made the motion to set aside the default judgment within six months of the August 30, 2006, default judgment, ordered the default and default judgment to be set aside, and ordered defense counsel to pay plaintiff’s attorney’s fees of $19,985 and costs of $112.88 incurred in preparing default judgment papers, attending court hearings, and opposing the motion to set aside the default judgment. The trial court ordered defense counsel Jong Lee and H. Nyree Abbott to pay those fees and costs to plaintiff’s counsel.

On April 9, 2007, defense counsel moved for reconsideration of the order directing defense counsel to pay Baek $20,097.88 in attorney’s fees and costs. Defendant’s motion was also a motion to tax plaintiff’s accounting of attorney’s fees and costs and a request that the court strike in substantial part the attorney’s fees and costs.

Plaintiff’s opposition argued that defendants’ motion for reconsideration was untimely filed 17 days after service of the March 22, 2007, court order, and defendant claimed no new or different facts, circumstances, or law warranting reconsideration of that order. The opposition also argued that the trial court had carefully reviewed plaintiff’s accounting, decreased requested attorney’s fees and costs from $31,738.88 to $20,097.88, and had determined that fees and costs awarded were reasonable. Plaintiff requested that the court order defendants to pay additional attorney’s fees and costs plaintiff incurred opposing the reconsideration motion, and to impose sanctions against defendants and their counsel for bringing that motion.

On May 7, 2007, the trial court denied the motion for reconsideration as untimely filed and as supported by no new facts (supported by competent evidence) or law. The trial court ordered the award of attorney’s fees and costs reduced by $1,200 because of plaintiff’s late-filed brief, which deprived defense counsel of the opportunity to file a reply brief, and ordered defense counsel Jong Lee and Nyree Gray to pay, jointly and severally, $18,897.88 to plaintiff’s counsel on or before May 21, 2007.

Although the parties have not addressed the differing names used in the orders, we assume that Nyree Gray and H. Nyree Abbott are the same person.

On May 16, 2007, the parties settled the case, with defendant paying $7,500 to Baek. The trial judge approved that settlement. The previously ordered payment of $18,897.88 in attorney’s fees, however, remained in force.

On May 21, 2007, defense counsel Lee filed a notice of appeal from the May 7, 2007, order denying reconsideration and from the March 22, 2007, order setting aside the default judgment and awarding attorney’s fees and costs, and attached copies of both orders to the notice of appeal.

ISSUES

Respondent, plaintiff’s counsel Chang, raises the following issues regarding the appeal by defense counsel Lee:

1. The notice of appeal was defective because each of three appellants (A-Team Construction, Jong Lee, and H. Nyree Abbott) were each required to pay a filing fee and deposit, and failed to do so;

2. The notice of appeal omitted the names of the persons appealing and the date of the judgment or order from which the appeal was taken;

3. Defendant Koh is the sole appellant in this appeal, and he cannot appeal because he is not an aggrieved party;

4. The May 7, 2007, order denying Lee’s motion for reconsideration was not an appealable order.

Appellant, defense counsel Lee, claims on appeal that:

1. The trial court’s March 22, 2007 order awarding attorney’s fees and costs deprived defense counsel of the time to file a motion to strike or to tax costs authorized by California Rules of Court, rule 3.1700;

2. The trial court erroneously denied Lee’s motion for reconsideration as untimely filed and as not supported by new facts, circumstances, or law;

3. The excessive nature of the cost memorandum justifies striking claimed costs or taxing them significantly so as to reflect reasonable legal fees and costs.

DISCUSSION

1. Issues Raised by Respondent Chang Relating to the Notice of Appeal and the Appealability of the Orders From Which the Appeal Was Taken

a. Only One Filing Fee and Deposit Were Required to Accompany the Notice of Appeal, and Baek Has Not Shown That the Notice of Appeal Was Defective

Baek claims that because there are three appellants (A-Team Construction, and attorneys Lee and H. Nyree Abbott), the notice of appeal was defective because each party filing a notice of appeal must pay filing fees and a deposit for preparing the clerk’s transcript, and only one filing fee and one deposit were paid. The authorities Baek cites do not support this claim. California Rules of Court, rule 8.100(b)(1) states that “the notice of appeal must be accompanied by a $655 filing fee under Government Code sections 68926 and 68926.1(b)[.]” Neither of these Government Code statutes requires all appellants individually to pay a filing fee and deposit. Baek has not shown that the notice of appeal was defective because the three appellants did not pay a filing fee and a deposit.

b. Liberally Construed, the Notice of Appeal Adequately Identifies the Persons Appealing and the Orders rrom Which the Appeal Is Taken

Baek claims he was prejudiced because the notice of appeal omitted the name of the persons appealing and omitted the date of the judgment or order being appealed.

A notice of appeal is to be construed liberally in favor of its sufficiency. (Cal. Rules of Court, rule 8.100(a)(2); Beltram v. Appellate Department (1977) 66 Cal.App.3d 711, 714.) Where no one is misled or prejudiced, the rule of liberal construction of the notice of appeal permits an amendment of additional parties to a notice of appeal, so as to further the policy of hearing legal disputes on their merits and to avoid a windfall for the opposing party resulting from appellant’s technical mistake. (Id. at p. 715-716.)

This notice of appeal identified two orders from which the appeal was taken: (1) “[a]n order of judgment under Code of Civil Procedure section 904.1(a)(3)-(13)”; and (2) “Other...: [¶] May 7, 2007 Denial of C.C.P. Section 1008 (Exhibit b).” The notice of appeal attached copies of the March 22, 2007, order and the May 7, 2007, order. Thus it was clear from which orders the appeal was taken.

Both orders appealed from included awards of attorney’s fees and costs. The March 22, 2007, order ordered defense counsel Lee and Abbott to pay $20,097.88 to plaintiff, through counsel. The May 7, 2007, order ordered defense counsel Lee and Abbott to pay $18,897.88 to plaintiff’s counsel. A liberal construction of the notice of appeal will include designation of all appellants who are subject to the March 22, 2007, and the May 7, 2007, orders. (Beltram v. Appellate Department, supra, 66 Cal.App.3d at p. 714; Boynton v. McKales (1956) 139 Cal.App.2d 777, 787-788.) Baek has made no showing that any ambiguity in the designation of the parties in the notice of appeal misled or prejudiced plaintiffs. (Luz v. Lopes (1960) 55 Cal.2d 54, 60.)

Plaintiff claims that the notice of appeal failed to identify the date of the “order of judgment under Code of Civil Procedure section 904.1(a)(3)-(13)” which is identified as an order from which the appeal is taken. An order granting a motion for relief from default and setting aside and vacating a default judgment is an appealable order. (Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 287.) It is therefore an appealable order made after judgment pursuant to section 904.1, subdivision (a)(2). The notice of appeal should have marked the box identifying “[a]n order after judgment under Code of Civil Procedure section 904.1(a)(2).” However, the notice of appeal attached a copy of the March 22, 2007, order, which is an appealable judgment and is the only other order as to which the notice of appeal would have been timely filed. Construing it liberally, the notice of appeal is properly taken from the March 22, 2007, order.

c. Defense Counsel Lee and Abbott Are Proper Parties To This Appeal

Baek argues that Koh is the sole appellant and he cannot appeal because he is not an aggrieved party. The parties subject to the March 22, 2007, order are defendants Keun Ho Ko dba A-Team Construction, as to whom the default judgment was entered on August 30, 2006. The March 22, 2007, order also orders defense counsel Lee and Abbott to pay $20,097.88 in attorney’s fees and costs, making them parties to an appeal from this order. Lee and Abbott are also subject to the May 7, 2007, order, which orders them to pay $18,897.88 to plaintiff’s counsel. Thus section 904.1, subdivision (a)(12) entitles Lee and Abbott to appeal both orders, as an order directing payment of monetary sanctions by an attorney is an appealable order if the amount exceeds $5,000.

d. Under the Circumstances of This Appeal, the Order Denying Reconsideration of the Order Vacating the Default Judgment Was an Appealable Order

Baek argues that the May 7, 2007, denial of the section 1008 motion for reconsideration is not appealable.

Baek relies on Morton v. Wagner (2007) 156 Cal.App.4th 963, stating that the majority of recent cases hold that orders denying motions for reconsideration are not appealable, because “ ‘Section 904.1... does not authorize appeals from such orders, and to hold otherwise would permit, in effect, two appeals for every appealable decision and promote the manipulation of the time allowed for an appeal.’ ” (Id. at p. 968.) Neither problem occurred here. Defendants timely filed a single notice of appeal from the order vacating the default judgment and imposing sanctions and from the later order denying reconsideration and imposing sanctions. Moreover, in Morton the defendant failed to appeal the judgment granting a petition for an injunction, and identified the order denying the reconsideration motion as the order from which the appeal was taken. (Id. at p. 967.) Here plaintiffs took their appeal both from the order vacating the default judgment and from the later order denying the motion for reconsideration.

Other authority holds that an order denying reconsideration of an appealable order is itself appealable. (Rabbitt v. Vincente (1987) 195 Cal.App.3d 170, 173-174; Annex British Cars, Inc. v. Parker-Rhodes (1988) 198 Cal.App.3d 788, 791.) Passavanti v. Williams (1990) 225 Cal.App.3d 1602 drew a distinction between a motion for reconsideration made after a final judgment and a motion for reconsideration made after an order which, although not a final judgment, was made appealable by statute. A trial court does not have power to rule on a motion for reconsideration made after entry of a final judgment. (Passavanti, at p. 1606.) A trial court could rule on an motion granting or denying reconsideration of an order which, although not a final judgment, was appealable. That is the case here, because the underlying order vacating the default judgment, although not a final judgment, was an appealable order. The order vacating the default judgment had the opposite effect of a final judgment; it vacated a previously entered default judgment and restored the case to the trial court’s active docket. Therefore the trial court did not lack power to rule on the motion for reconsideration, as compared with the trial court’s inability to rule on a motion for reconsideration after entry of judgment. (See Ramon v. Aerospace Corp. (1996) 50 Cal.App.4th 1233, 1236.) There was, moreover, no danger that the order denying reconsideration of the order vacating the default judgment would give plaintiffs either a second appeal from the same decision or an unwarranted extension of time within which to file an appeal (see Rojes v. Riverside General Hospital (1988) 203 Cal.App.3d 1151, 1161); here there was a single appeal, filed within 60 days of the order vacating the default judgment. In these circumstances, the reasoning underlying cases denying the appealability of a post-judgment order denying a motion for reconsideration does not apply to this appeal. We therefore conclude that under these circumstances, the order denying reconsideration of the order vacating the default judgment was appealable.

2. Entry of the Order Awarding Attorney’s Fees and Costs Before the Time Limitation Within Which Defense Counsel Were Allowed to File a Motion to Strike or to Tax Costs Violated California Rules of Court, Rule 3.1700(b)(1 )

Defendants claim that the March 22, 2007, order awarding attorney’s fees and costs to Baek deprived them of the opportunity to file a motion to strike or to tax costs within the time limit set by California Rules of Court, rule 3.1700.

Rule 3.1700(b)(1) states: “Any notice of motion to strike or to tax costs must be served and filed 15 days after service of the cost memorandum. If the cost memorandum was served by mail, the period is extended as provided in Code of Civil Procedure section 1013.” When authorized by statute, attorney’s fees are allowable as costs under Code of Civil Procedure section 1032. (§ 1033.5, subd. (a)(10)(B).)

In the March 8, 2007, hearing, the trial court ordered Chang to file a supplemental declaration setting forth attorney fees incurred pursuing the default judgment and subsequent litigation by March 15, 2007, at which time the matter would be deemed submitted and a ruling would follow. Plaintiff served that declaration by mail on March 15, 2007. Section 1013, subdivision (a) extended the time to serve a motion to strike or to tax costs by five days. Thus defendants had until April 4, 2007, to file their motion to strike or to tax costs. Plaintiff claims the March 22, 2007, order cut off their ability to file their motion to strike or to tax costs. They are correct.

Plaintiff argues that the trial court correctly determined that by filing a March 20, 2007, declaration containing no opposition to the award of attorney’s fees and costs, defense counsel Jong Lee did not object to or contest those fees. That determination in the March 22, 2007, order overlooks the fact that Lee’s declaration was not a motion to strike or to tax costs, and that rule 3.1700(b)(1) gave plaintiff until April 4, 2007, to file such a motion.

Plaintiff also argues that Lee’s statements in the March 8, 2007, hearing waived his right to file a motion to strike or to tax costs. The record does not show this waiver. Lee stated, in response to the trial court’s statement that Lee delayed filing a motion to vacate the default judgment: “If that is the case, I’m willing to accept responsibility as far as any type of court sanction, but I do not believe that my client should be harmed in any way as a result of this.” In response to the trial court’s statement that a grant of the motion to vacate the default would have to come with an award of attorney’s fees for plaintiffs, Lee stated: “I’m amenable to that, Your Honor.” At that time Chang had not yet filed a cost memorandum and the amount of attorney’s fees and costs Chang claimed was unknown. Neither statement by Lee waived his right or intention to object to a cost memorandum by filing a motion to strike or to tax costs.

3. The Reconsideration Motion Was Not Untimely, and Was Based on New Facts, Circumstances, or Law, and Therefore The Trial Court Should Have Granted Reconsideration and Ruled on the Merits

On April 9, 2007, Lee filed motions for reconsideration and to tax plaintiff’s accounting of attorney fees and costs. The trial court denied these motions on May 7, 2007. Lee claims on appeal that the denial of the motion for reconsideration, on the grounds that it was untimely filed and failed to present new or different facts, circumstances, or law, was error.

a. The Motion for Reconsideration Was Not Untimely Filed

Section 1008, subdivision (a) requires filing of a motion for reconsideration within 10 days after service of written notice of entry of the order. Service by mail extends the 10-day period five calendar days. (§ 1013, subd. (a).)

The superior court clerk served the March 22, 2007, order by mail on March 23, 2007. The 15-day period began the following day, March 24, 2007. (§ 12.) The 15th day thereafter was April 7, a Saturday. Sections 12a, subdivision (a), 12b, and 13 permitted filing the motion for reconsideration on Monday, April 9, 2007. Since Lee filed the motion for reconsideration on April 9, 2007, that motion was timely filed.

b. The Motion for Reconsideration Was Based on New Facts and Law

The trial court also found that no new facts (supported by competent evidence) or law supported the motion. The trial court cited Lee’s statement in the motion for reconsideration that he intended to address plaintiff’s counsel’s “padding” of attorney fees, but elected to first file his March 20, 2007, declaration. The trial court characterized this as a “tactical decision to delay in contesting [Mr. Chang’s] attorney’s fees request[.]” It is difficult to see how this tactical decision would have benefited Lee’s opposition to the attorney’s fee and cost award. Lee’s delay is more understandable if he believed that California Rules of Court, rule 3.1700(b) gave him 15 days from the March 15, 2007, filing of Chang’s accounting of attorney’s fees and costs to file his motion to strike or to tax costs. That also explains Lee’s failure to move to strike or to tax costs before the March 22, 2007, order. (Baldwin v. Home Savings of America (1997) 59 Cal.App.4th 1192, 1200.)

The motion for reconsideration also contained new facts and circumstances, in the form of challenges to Chang’s accounting of fees and costs. Defense counsel Lee challenged as excessive plaintiff’s counsel’s 37 hours and $12,950 to prepare a default package; called plaintiff’s counsel’s billing statement too vague to support the award of requested fees; stated that plaintiff’s counsel billed at $350 per hour for administrative tasks that should not be included in billable attorney hours; stated that plaintiff’s counsel recycled standardized documents but billed as if they were created from scratch; stated that some entries defied logic and common practice; and stated that plaintiff’s counsel offered no evidence to support costs claimed.

The motion for reconsideration also contained new law, arguing that imposing $19,985 in penalties exceeded section 473, subdivision (c)(1), which authorized no more than $1,000, and contravened the legislative policy favoring hearing cases on their merits.

c. Conclusion

The denial of the motion for reconsideration is reversed. On remand, the trial court should grant the motion for reconsideration, and upon reconsideration, should consider the merits of defense counsel Lee’s motion to strike or to tax costs.

DISPOSITION

The May 7, 2007, order is reversed and the matter is remanded with directions that the trial court grant defense counsel Jong Lee’s motion for reconsideration, and upon reconsideration, consider the merits of Lee’s motion to strike or to tax costs. The parties are ordered to bear their own costs on appeal.

We concur: KLEIN, P. J., CROSKEY, J.


Summaries of

Baek v. A-Team Construction, Inc.

California Court of Appeals, Second District, Third Division
Apr 24, 2009
No. B199437 (Cal. Ct. App. Apr. 24, 2009)
Case details for

Baek v. A-Team Construction, Inc.

Case Details

Full title:SEUNG TAEK BAEK, Plaintiff and Respondent, v. A-TEAM CONSTRUCTION, INC.…

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

Date published: Apr 24, 2009

Citations

No. B199437 (Cal. Ct. App. Apr. 24, 2009)