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Bernardino v. Granatelli Motor Sports, Inc.

California Court of Appeals, Second District, Fifth Division
Mar 7, 2008
No. B193379 (Cal. Ct. App. Mar. 7, 2008)

Opinion


RAFAEL BERNARDINO et al., Plaintiffs and Appellants, v. GRANATELLI MOTOR SPORTS, INC., et al., Defendants and Respondents. B193379 California Court of Appeal, Second District, Fifth Division March 7, 2008

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County, Los Angeles County Super. Ct. No. BC324482 Michael L. Stern, Judge.

Stanley L. Friedman for Plaintiffs and Appellants.

Lewitt, Hackman, Shapiro, Marshall & Harlan, David C. Gurnick and Jeremy M. Golan for Defendants and Respondents.

TURNER, P. J.

I. INTRODUCTION

Plaintiff, Rafael Bernardino, Jr., appeals from a judgment following a demurrer dismissal of a fraud cause of action and a court trial of an attorney fee dispute with defendants, Granatelli Motor Sports, Inc. and Joseph R. Granatelli. The disputed fees were incurred when plaintiff provided legal services in a matter entitled Granatelli Motor Sports v. Best Products, Inc., Los Angeles County Superior Court case No. BC294639 (the Best Products action). The trial court ruled plaintiff did not meet his burden of proof establishing that he is entitled to an additional payment of attorney fees on a quantum meruit theory and granted judgment in favor of defendants. Plaintiff contends the judgment must be set aside because: the trial court incorrectly sustained the demurrer to a fraud claim in the first amended complaint without leave to amend; the trial court failed to comply with Code of Civil Procedure section 632 and former rule 232 (renumbered with non-substantive changes as rule 3.1590 effective January 1, 2007) of the California Rules of Court by filing and entering a statement of decision rather than a tentative decision; the trial court acted in excess of its jurisdiction by issuing a statement of decision after the final judgment was entered and plaintiff filed a notice of appeal; and the trial court acted in excess of its jurisdiction by amending the judgment to add costs after the judgment was entered and the notice of appeal had been filed. We reverse the demurrer dismissal of plaintiff’s fraud claim but conclude the fraud issue need not be tried given the trial court’s factual findings on the quantum meruit causes of action.

All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

All further references to rules are to the California Rules of Court.

Rodolfo F. Ruiz, an attorney, appeals from an order imposing $1,500 in sanctions pursuant to section 177.5 for neglecting to advise plaintiff of the need to personally appear at a mediation. We reverse the sanctions order against Mr. Ruiz because the sanctions were imposed without compliance with section 177.5. We remand to permit the trial court to impose sanctions against Mr. Ruiz if it deems it appropriate to do so.

II. BACKGROUND

A. The Complaint, Amended Complaints, and Demurrers

On November 12, 2004, plaintiff filed a contract breach and fraud action against defendants. The complaint alleged that plaintiff was the assignee of the contract for attorney fees between Granatelli Motor Sports, Inc. and the law firm of Hornblower, Manning, Ward & Bernardino, P.C. (the Hornblower firm). The complaint further alleged alter ego, agency, joint venture, and conspiracy theories against defendants in connection with the fee arrangement. Defendants are alleged to have entered into a contract with the Hornblower firm to prosecute a complaint and defend a cross-complaint against defendants in the Best Products action. The complaint further alleged that since 1998 plaintiff had numerous attorney-client contracts with defendants. The contracts were oral and the compensation varied depending upon the complexity and urgency of the task.

Defendants allegedly agreed to pay plaintiff’s usual rate of $350 per hour to represent them in defending a cross-complaint in the Best Products action. There was existing insurance coverage on the cross-complaint in the Best Products action which provided for compensation of $175 per hour. Because the insurance company would not pay the full amount of the $350 per hour, defendants agreed to make up the difference. Defendants confirmed the agreement and partially performed by paying $25,200 of the difference for the defense of the cross-complaint.

Also as part of the fee agreement in the Best Products action, defendants allegedly offered to buy plaintiff a 2003 Mercedes C-320 automobile with a fair market value of $40,000 in return for all fees generated in prosecuting the complaint. However, rather than purchasing the Mercedes, defendants only leased the car without giving plaintiff title. The complaint alleged that the Hornblower firm performed all covenants, conditions, and promises under both the agreements by settling the complaint in the Best Products action against one defendant in the amount of $200,000. Also, the defendants in the Best Products action obtained no relief on the cross-complaint. The complaint further alleged, however, that after the settlement was reached, defendants and plaintiff disagreed over the prosecution of the action against one of the defendants in the Best Products action, who was not part of the settlement. The disagreement resulted in the Hornblower firm’s withdrawal from the action and substitution of different counsel for defendants. Plaintiff sought $83,443.17 for legal services at the rate of $350 per hour in defense of the cross-complaint in the amount of $256,563.15 less $108,643.17 paid by the insurance company and $25,200 paid by defendants. Plaintiff sought $69,171.41 for the prosecution of the complaint in the Best Products action.

Attached to the complaint was a letter dated July 31, 2003, from the law firm of Hornblower, Manning & Ward which stated: “Effective June 30, 2003, Hornblower, Manning & Ward Professional Corporation (doing business in California under the assumed name ‘Hornblower, Manning, Ward & Bernardino Professional Corporation’) has ceased practicing in California[] and maintaining offices in Los Angeles. In that connection, the Firm’s independent contractor relationship with Ralph A. Bernardino, Esq., has been discontinued and its interest in the remaining accounts receivable of the Firm’s Los Angeles office, including the referenced invoices, relinquished to Mr. Bernardino.” Also attached to the complaint were invoices from Rafael Bernardino, Jr., Inc.

In the fraud claim, plaintiff alleged that defendants falsely represented that they would purchase the Mercedes C-320 automobile. Defendants never actually purchased the Mercedes but only leased it. According to plaintiff, defendants concealed the fact that they intended to and did in fact retrieve the vehicle after the Best Products action. It was further alleged that defendants falsely represented that they would pay the usual $350 per hour rate because the insurance company would only provide $175 to defend the cross-complaint in the Best Products action. In reliance on defendant’s promises, plaintiff performed legal services on the complaint and cross-complaint for which he has not been fully compensated.

Defendants demurred to the complaint. Prior to the demurrer hearing, plaintiff filed a first amended complaint. The first amended complaint did not allege plaintiff was an assignee of an attorney fee contract. Rather, the first amended complaint alleged that plaintiff was an attorney duly licensed to practice in California. The first amended complaint alleged, “[A]t all times relevant in contractual privity with defendants and, at all times relevant, there existed an attorney-client relationship between [plaintiff] and defendants [regarding the Best Products action].” The first amended complaint further alleged that plaintiff practiced law as an individual using the fictitious business name of “‘Hornblower, Manning, Ward & Bernardino, P.C.,’” under an arrangement with the Hornblower firm. The Hornblower firm assigned the fees generated in the Best Products action and provided notice of such assignment to defendants. In addition, the first amended complaint alleged that defendants were not in contractual privity with the Hornblower firm, which did not participate in the Best Products action. Plaintiff never practiced law under name of his former business corporation, Rafael Bernardino, Jr., Inc. The fraud cause of action alleged, on or about July 27, 2003, Mr. Granatelli misrepresented to plaintiff that defendants would purchase the Mercedes in exchange for prosecution of the complaint in the Best Products action. On the same date, Mr. Granatelli also misrepresented that defendants would pay plaintiff’s fees at the usual rate of $350 per hour to defend the cross-complaint in the Best Products action.

Defendants demurred to the first amended complaint and requested judicial notice of documents regarding the suspension of Rafael Bernardino, Jr., Inc. as a corporation. The trial court sustained the demurrers to the contract cause of action on the grounds: Rafael Bernardino, Jr., Inc. was a suspended corporation; plaintiff, as an individual was suing but was not the legal corporation which billed defendants; and as to the Mercedes, the allegations are uncertain and contradictory. With respect to the fraud claim, the trial court sustained the demurrer on the ground plaintiff failed to allege specific facts to support a fraud claim.

The second amended complaint abandoned the contract breach claim. Instead plaintiff asserted quantum meruit (first) and fraud (second) claims for legal work performed in the Best Products action. The second amended complaint alleged: an attorney-client relationship between plaintiff and the defendants; Rafael Bernardino, Inc. was not a professional law corporation and plaintiff has never practiced law under that name; and the corporation’s name did not appear on any pleadings in the Best Products action. Plaintiff reiterated the allegations of nonpayment of fees.

In the second cause of action for fraud, plaintiff alleged that defendants made misrepresentations or suppressed material facts concerning the payment of fees to be earned prosecuting the complaint in the Best Products action. The second amended complaint specifically alleges that Mr. Granatelli was legally authorized to enter into contracts on behalf of Granatelli Motor Sports. Initially, plaintiff declined to represent defendants in the Best Products action. On or about June 12, 2003, Mr. Granatelli once again asked plaintiff to represent defendants. On this occasion, Mr. Granatelli offered to retain plaintiff at a straight hourly rate of $350 per hour. Plaintiff again declined to provide legal representation in the Best Products action, because of other pending professional obligations. Additionally, plaintiff explained to Mr. Granatelli that the Hornblower firm was in the process of dissolution. The fraud claim alleges: “[Mr. Granatelli] stated that [plaintiff] was both his most trusted confidant and adviser. [Mr. Granatelli] thereafter stated that he would pay [p]laintiff both his normal hourly rate of $350 per hour and a partial contingency if [p]laintiff was successful in prosecution of the Best Products Action.” (Original italics.) Plaintiff indicated he would consider the matter. At this point, there was no discussion of payment of attorney fees through insurance coverage.

On June 14, 2003, Mr. Granatelli offered to give plaintiff a 2003 Mercedes C-320 automobile to prosecute the Best Products action in lieu of the contingency bonus. Mr. Granatelli falsely stated that he had already purchased the Mercedes. The only thing Mr. Granatelli wanted to know was whether plaintiff wanted a black or silver Mercedes. Mr. Granatelli promised to be at plaintiff’s residence in a few minutes so they could go pick up the new Mercedes. Plaintiff indicated he would prefer a black Mercedes and finally agreed to represent defendants in the Best Products action. At the time the offer of the Mercedes was made, there was no expectation that there would be insurance coverage to defend the cross-complaint in the Best Products action. Mr. Granatelli angrily criticized the lawyers who were representing him in the Best Products action. Mr. Granatelli expressed regret for not retaining plaintiff earlier.

According to the second amended complaint, defendants’ offers and promises were false. Defendants had no intention of paying the reasonable value of plaintiff’s services, which was $350 per hour. Further, defendants intended to take back the Mercedes after the completion of the Best Products action. Moreover, defendants had no intention of ever providing clear title to the Mercedes to plaintiff. The second amended complaint alleges: “The true facts are that [d]efendants did not intend to pay the reasonable value of [p]laintiff’s services or transfer title of said automobile and in fact, [d]efendants did not pay the reasonable value of [p]laintiff’s services or transfer title of said automobile.” Defendants were alleged to have made the misrepresentations with the intention of inducing plaintiff to provide legal services for which they had no intention of paying.

Defendants demurred to the second amended complaint on the ground it contained the same defects as the original and first amended complaints. Defendants also requested judicial notice of what they viewed as inconsistent allegations concerning a purported attorney-client relationship with the Hornblower firm and plaintiff. The initial complaint alleged that defendants had an attorney-client relationship with the Hornblower firm. By contrast, according to defendants, the second amended complaint alleged such a relationship existed between plaintiff and them. Defendants reiterated that the invoices attached to the original and first amended complaints referenced Rafael Bernardino, Jr., Inc. which was a suspended corporation. Defendants also asserted that the fraud claim was not alleged with sufficient specificity.

Plaintiff opposed the demurrers to the second amended complaint arguing that the quantum meruit claim was sufficiently alleged and that the contract breach cause of action no longer existed. Plaintiff further argued that the fraud claim was alleged with sufficient particularity because it alleged Mr. Granatelli, the sole owner and president of Granatelli Motor Sports, Inc., had authority to make the representations to pay the fees and purchase the Mercedes.

The demurrer to the quantum meruit claim was overruled. The demurrer to the fraud cause of action was sustained without leave to amend on the ground plaintiff failed to allege facts to show that defendants had no intention to pay him or to provide the Mercedes at the time the promise was made. In ruling on the demurrer, the trial court ruled that fraud had not been alleged merely because plaintiff did not get paid or receive a Mercedes. The trial court stated, without facts to support a fraud theory, plaintiff had only alleged either a contract breach or quantum meruit claim.

B. The Sanctions Order

1. Background

On March 14, 2006, the parties and their lawyers were notified they were to attend a settlement conference at 8:30 a.m. on March 17, 2006, before Retired Superior Court Judge Lawrence Crispo. Mr. Ruiz represented plaintiff. On March 17, 2006, the trial court issued an order to show cause re monetary sanctions against plaintiff. The sanctions order to show cause only makes reference to the fact that plaintiff failed to appear at the March 17, 2006 settlement conference. The order to show cause makes no reference to any statutory or other authority for the imposition of sanctions. Nothing in the order to show cause indicates that sanctions could be imposed against Mr. Ruiz. The order to show cause was set for hearing on June 5, 2006. Defendants’ counsel, David Gurnick, filed a declaration requesting $1,862.50 in sanctions payable to defendants because plaintiff failed to appear at the scheduled mediation before Judge Crispo.

2. Plaintiff’s declaration

In response to the order to show cause, plaintiff admitted he did not appear at the March 17, 2006 settlement conference. Plaintiff declared that he was ready, willing, and able to pay any sanction that was ordered by the trial court. Plaintiff declared that he had a prior mandatory appearance in the Northeast District of the Los Angeles Superior Court in Pasadena in a probate matter. The prior appearance was originally ordered by the probate court on January 13, 2006, and had been calendared by his office for a period of three months. Plaintiff stated he was a sole practitioner and was required to appear for the hearing at 10 a.m. in Pasadena. Mr. Ruiz advised plaintiff about the scheduled May 17, 2006 settlement conference. Plaintiff explained he had the scheduled probate hearing at the same time in Pasadena. Plaintiff further explained he would only be intermittently available because of court policy limiting the use of cellular telephones.

The trial was originally scheduled to begin on March 13, 2006. But Mr. Ruiz informed plaintiff prior to March 13, 2006, that it did not appear that trial would actually begin that date. Plaintiff explained he would probably not be able to leave the Pasadena court before 11 a.m. or noon. Plaintiff was told he was not required to be in attendance at the conference. Plaintiff asked Mr. Ruiz to try to obtain a continuance of the scheduled settlement conference before Judge Crispo. However, plaintiff was told on March 16, 2006, that the conference would proceed without his attendance.

Mr. Ruiz declared this case had been scheduled to go to trial on March 13, 2006. Plaintiff declared, “Mr. Ruiz told me that I was not required to be in attendance at the [c]onference.” Plaintiff asked Mr. Ruiz to continue the conference if possible. Plaintiff declared: “[Mr.] Ruiz informed me that he had spoken with Judge Crispo’s office and that the [c]onference would proceed without my attendance. I conferred with [Mr.] Ruiz regarding my settlement positions for, and appeared, at the [h]earing [in the probate matter].”

3. Mr. Ruiz’s declaration

Mr. Ruiz reported to the trial court on March 13, 2006, the date of the final status conference, that settlement discussions had been unsuccessful. At the final status conference, defense counsel proposed that a further settlement conference be held before a judge in the courthouse. Mr. Ruiz agreed to the proposed settlement conference. Eventually, the trial court provided a panel of retired judges to conduct what Mr. Ruiz characterized as a “last-minute” settlement conference. According to Mr. Ruiz, the trial court never stated that plaintiff’s presence was required at the settlement conference. Defense counsel requested that plaintiff be present at the settlement conference. Defense counsel indicated that it would be wise to have “our clients” available. Mr. Ruiz stated, “No, I -- I really can’t speak for my client.” The following then occurred: “[Defense counsel]: We should have our clients here. [¶] Mr. Ruiz: He’s an active attorney. [¶] The court: Go down to Judge Williams on 4, Judge Kwong on 5. Check with each of them and see if they have a cancellation during this week or very soon after this week. We will find something for you, hopefully. [¶] Defense counsel: Okay. [¶] The court: Okay? [¶] [Defense counsel]: 8:30 Friday? [¶] The court: 8:30 Friday for the final status conference. [¶] The clerk: Notice? [¶] The court: Notice waived? [¶] [Defense counsel]: Yes, Your Honor. [¶] Mr. Ruiz: Yes, Your Honor. [¶] The court: See you then. Thank you. Unless you settle.”

Attached to Mr. Ruiz’s declaration are copies of letters and e-mail correspondence with defense counsel about plaintiff’s unavailability. The correspondence indicates that Mr. Ruiz initially stated that plaintiff had a pre-planned vacation. Mr. Ruiz declared, “I mistakenly advised opposing counsel [plaintiff] had a pre-planned vacation on the scheduled mediation date. I misunderstood my client on this point, who actually [had a] vacation . . . scheduled for that weekend.” However, when asked for documentation to support the vacation claim, Mr. Ruiz explained that plaintiff had to attend a court ordered conference in Pasadena. Mr. Ruiz advised Judge Crispo of the conflict in plaintiff’s schedule prior to the conference. In the March 10, 2006 letter to Judge Crispo, Mr. Ruiz stated: “My client . . . has a pre-planned vacation for Friday, March 17, 2006, and cannot be present for the mediation date. When Judge Stern recommended the use of the panel, he specifically declined to make the personal presence of the parties a requirement. Please let me know if you prefer the settlement conference be rescheduled.”

Also, Mr. Ruiz directed his assistant to contact Judge Crispo and verify if plaintiff’s presence was necessary. Mr. Ruiz interpreted the response of Judge Crispo’s staff as an indication that plaintiff need not be present at the scheduled settlement conference. That response was stated in the declaration of Maricela Gomez which is related below. Other factors led Mr. Ruiz to believe that plaintiff need not be personally present at the settlement conference before Judge Crispo. Mr. Ruiz relied upon: the absence of an order by the trial court that plaintiff be personally present; the trial court’s body language; and the fact that such short notice of the settlement conference was given to plaintiff, a practicing attorney. Based upon these factors, Mr. Ruiz declared, “I truly believed [plaintiff’s] appearance at the mediation scheduled for March 17, 2006 was optional.”

4. Ms. Gomez’s declaration

Mr. Ruiz’s assistant, Ms. Gomez, filed a declaration concerning a telephone conversation with an employee of ADR Services, Inc. regarding the settlement conference: “On March 16, 2006 at approximately 11:45 a.m., I spoke with Jennifer S. Burns, Senior Case Manager of ADR Services, Inc. regarding the status of the Mandatory Settlement Conference hearing and whether are not Judge Crispo wanted to proceed with the hearing set for March 17, 2006 with our client not being available to attend said hearing. Ms. Burns said Judge Crispo plans on going forward with the hearing as scheduled and the issue of our client not being available to attend the hearing would be discussed with Judge Crispo at the MSC. She requested our office fax a MSC Brief to Judge Crispo as soon as possible. [¶] [] I immediately contacted [Mr.] Ruiz and advised him the Mandatory Settlement Conference is going forward and a MSC Brief will need to be faxed to Judge Crispo.”

5. The order

On June 5, 2006, the trial court conducted a hearing and indicated it intended to impose sanctions under section 177.5 and former rule 222 (renumbered rule 3.1380 effective January 1, 2007). After the parties argued the issue, the trial court asked “Who’s going to fall on the sword?” To which Mr. Ruiz replied: “I’ll fall on it, Your Honor.” The trial court issued then following minute order: “ORDER TO SHOW CAUSE RE SANCTIONS AGAINST PLAINTIFF’S COUNSEL RUDOLFO RUIZ [¶] The order to show cause re monetary sanctions against plaintiff’s counsel is called. The court imposes $1500.00 in monetary sanctions against plaintiff’s [counsel] Rodolfo Ruiz pursuant to Code of Civil Procedure section 177.5 for failure to inform plaintiff of his personal appearance at mediation.”

C. The Four-Day Court Trial

1. Plaintiff’s evidence

At the trial, plaintiff testified about his credentials: he graduated from the University of Southern California law school in 1984; he clerked for a federal district court judge for one year; he worked in private practice; and he was an advisor to several United States Attorneys General. The Hornblower firm began operation in 1997. Between 1998 and 2004, plaintiff had a number of corporate clients. His hourly rate of compensation was between $250 and $350.

Plaintiff met Mr. Granatelli in 1998. Mr. Granatelli hired the Hornblower firm to represent him in a matter he called the Paxton case. Plaintiff was compensated at an hourly rate of $350 until the fall of 1999 when the Paxton litigation ended. Thereafter, plaintiff continued to represent Mr. Granatelli who was starting a new business Granatelli Motor Sports. Plaintiff charged Mr. Granatelli a rate as low as $125 to $150 an hour for writing letters and $250 an hour for subpoenas. Plaintiff and Mr. Granatelli would have breakfast together on most Sundays until sometime in 2004.

In the summer of 2003, Mr. Granatelli had the Central Coast Mustang case pending in Bakersfield, California and the Best Products action in Michigan. Plaintiff represented Mr. Granatelli in the Central Coast Mustang case. Plaintiff was unaware of the Michigan case until sometime after it was filed. It was plaintiff’s understanding the Michigan case was dismissed and the matter was to be pursued in the California. Mr. Granatelli was being represented by a California attorney, Michael Schiff, when the Best Products action was filed in this state. Mr. Schiff was being paid $300 an hour to prosecute a complaint for commissions due to Granatelli Motor Sports of about $282,000. Plaintiff learned about the Best Products litigation after a cross-complaint was filed against Granatelli Motor Sports for $2.5 million. There was an ex-employee of Granatelli Motor Sport, Richard Gutierrez, who had allegedly stolen products from the company and its client lists. Prior to plaintiff’s participation in the Best Products action, an injunction had been issued against Mr. Gutierrez and one of Granatelli Motor Sport’s competitors, D& D. Plaintiff signed a substitution of attorney in July of 2003 for the Best Products action and replaced Mr. Schiff.

Mr. Granatelli never met any of the Texas partners of the Hornblower firm. Plaintiff was always the contact person. Plaintiff identified exhibit 1, a letter dated July 31, 2003, describing that he was dissolving his relationship with the Hornblower firm. Plaintiff began billing Mr. Granatelli within a week after the July 31, 2003 letter was mailed. Prior to that time, Mr. Granatelli sent the checks to Texas.

After beginning work on the Best Products action, plaintiff raised the issue of insurance coverage with Mr. Granatelli. Two insurance companies, CNA and Golden Eagle, agreed to cover the defense of the Best Products action cross-complaint. CNA initially paid $350 an hour but after a month reduced the rate to $175 an hour. After Golden Eagle accepted a tender of defense, CNA reduced its rate to $87.50. Golden Eagle subsequently agreed to pay $87.50 an hour. The insurance coverage was only for defense of the cross-complaint. The insurance companies would not pay to prosecute the complaint.

In preparing bills, plaintiff itemized the complaint and cross-complaint costs. Prior to August 30, 2003, plaintiff and Mr. Granatelli had a conversation in which they discussed that the hourly rate would be $350. According to plaintiff, the two agreed that he would be paid $350 an hour to defend the cross-complaint. As to compensation for prosecuting the complaint, plaintiff testified, “175 an hour for prosecuting the complaint, and I would receive a half contingency.” Mr. Granatelli did not object to the rate. Mr. Granatelli was given bills and paid portions of the bill on behalf of Granatelli Motor Sports.

However, plaintiff never billed Mr. Granatelli for costs incurred in prosecuting the complaint. This was because plaintiff and Mr. Granatelli entered into a modified compensation agreement. The day after they agreed to the combination of an hourly and contingency payment for prosecuting the complaint, plaintiff and Mr. Granatelli modified their agreement. Plaintiff explained that no bill was sent to Mr. Granatelli for the following reason, “Because Mr. Granatelli at that time, at the time I sent this, I believe had paid in full a flat rate for prosecuting the complaint.” Plaintiff was asked what was the “flat rate” and he responded: “Mr. Granatelli gave - - what I believe at the time had purchased a Mercedes sedan for me. And that was to be paid in lieu of hourly payments or cash payments. It was a flat number - - the car was given as payment in full for prosecuting the complaint.” Plaintiff explained that payment with the Mercedes was not the initial understanding concerning compensation for prosecuting the complaint. The following testimony was presented by plaintiff: “Q And was that your initial understanding as to how you were to be paid in terms of prosecuting the complaint in the Best Products case? [¶] A That wasn’t the initial agreement, but that was what the understanding was before I started working on the case.” The modification of the billing arrangement was entered into on the day they agreed to the combination hourly and contingency compensation package. Plaintiff and Mr. Granatelli agreed to the arrangement concerning the Mercedes while driving back to the Los Angeles area from Bakersfield. Pursuant to Mr. Granatelli’s instructions, plaintiff went to a Mercedes dealership. Plaintiff gave the dealership staff his license and insurance card. However, plaintiff did not receive a pink slip or registration for the Mercedes. Plaintiff asked Mr. Granatelli about the “pink slip” at least four times between December 2003 and June or July 2004. Mr. Granatelli would say that he forgot it and would promise to bring it the next time they met. Mr. Granatelli never told plaintiff that the Mercedes had been leased rather than purchased. Mr. Granatelli never protested the amount of the bills for the cross-complaint.

Defendants paid $25,200 as fees for the entirety of the Best Products action. About $10,000 was paid prior to tendering the defense to the insurance companies. $15,000 was paid after the insurance companies agreed to contribute to the defense costs. In April 2004, a settlement was reached in the Best Products action. The cross-complaint was dismissed and defendants were paid $225,000 on the complaint. Mr. Granatelli wanted plaintiff to prosecute the complaint against Mr. Gutierrez. Plaintiff refused because Mr. Gutierrez was judgment proof. Plaintiff substituted out of the Best Products action on May 28, 2004. On October 1, 2004, Mr. Granatelli repossessed the Mercedes. However, Mr. Granatelli stated in e-mails that the vehicle was only leased for use by plaintiff during the Best Product action.

On cross-examination, plaintiff testified that two corporations were identified on the billing statements, “Raphael Bernardino, Jr. Inc.” and the Hornblower firm. Plaintiff testified about his relationship to the two corporations and the suspension of the Raphael Bernardino, Jr., Inc. professional corporation. The Hornblower firm was counsel of record but plaintiff appeared in court and did the work. Plaintiff billed 37 hours for a discovery motion in the Best Products action. In a sanctions request, plaintiff filed a declaration stating that he worked on the motion for nine hours. Plaintiff testified that he worked on a number of discovery motions which he billed at 30, 40, or 50 hours but would state in declarations to the court that he had worked on the motions for nine hours. Plaintiff would not accurately set forth the number of hours because he believed a court would not consider any more than nine hours to be reasonable. Plaintiff never represented that to the court that this was the entire amount that he had billed the client. Plaintiff believed that seeking reimbursement for more than nine hours would be considered unreasonable. While working in the Best Products action, plaintiff did not take any depositions, file a summary judgment or adjudication motion, or conduct a trial. Plaintiff testified that he negotiated and prepared the settlement agreement in the Best Products action.

Plaintiff had use of the Mercedes from July 2003 to October 2004. He assumed that the value of the use was $600 or $700 a month. Plaintiff estimated that about $69,000 was owed for the prosecution of the complaint. Plaintiff was paid $173,192.15 in total fees for defense of the cross-complaint. There was an outstanding balance of $152,614.58. Plaintiff denied sending an e-mail to Mr. Granatelli stating: “‘Rest easy, my friend. The insurance companies are paying for everything.’” According to plaintiff, he would not speak in such a manner.

Kevin Gerry testified for plaintiff concerning billing issues. Mr. Gerry was admitted to practice law in California in 1987, had worked in the public sector, and was a partner in his own law firm. Mr. Gerry testified the quantum meruit value of the services rendered by plaintiff on behalf of Granatelli Motor Sports in the case was $83,443 for defense of the cross-complaint and $69,171 for prosecution of the complaint. Mr. Gerry’s opinion was based on a $350 an hour rate for an attorney of plaintiff’s skill and experience.

2. Defense evidence

Mr. Granatelli testified in defense of the quantum meruit claim. Mr. Granatelli denied having a social relationship with plaintiff. Mr. Granatelli described the initial Michigan Best Products action as a distribution dispute where Best Products was the manufacturer of mass airflow sensors and Granatelli Motor Sports was the distributor. The Best Products action was subsequently litigated in California. Mr. Schiff originally represented Granatelli Motor Sports. Mr. Schiff obtained injunctive relief preventing Mr. Gutierrez, a former employee and a competitor, D&D, from communicating with the customers of Granatelli Motor Sports. According to Mr. Granatelli, there was a conspiracy between Mr. Gutierrez, the competitor, D&D, and Best Products to take business away from Granatelli Motor Sports.

Mr. Granatelli had to retain new counsel when a conflict of interest developed with Mr. Schiff. Plaintiff told Mr. Granatelli that Mr. Schiff had a conflict of interest. This was because Mr. Granatelli was a partner with Mr. Schiff in another business venture. Mr. Schiff had represented a partner in that business. Plaintiff told Mr. Granatelli that the matter was similar to the Paxton case and that there should be insurance coverage in the Best Products case as well. Plaintiff claimed to have an ongoing relationship with an unidentified insurance agent. Plaintiff represented that “he could easily get” an agreement to provide coverage. Plaintiff solicited Mr. Granatelli to have the Hornblower firm handle the Best Products action and asked to review the file.

Plaintiff did not provide Mr. Granatelli with a written fee agreement. But plaintiff stated that he would draft a fee agreement. Plaintiff told Mr. Granatelli that that the Best Products action would be covered by insurance and that it was no different than the Paxton case. Mr. Granatelli testified that plaintiff said the Hornblower firm had a relationship with the insurance company. Plaintiff said the insurance company would pay his normal fees. Plaintiff subsequently approached Mr. Granatelli about the Mercedes. The Mercedes was initially raised in the context of the Central Coast Mustang case that plaintiff was handling for Granatelli Motor Sports in Bakersfield. Plaintiff needed a reliable car to drive from the San Fernando Valley to Bakersfield every day. Mr. Granatelli leased the Mercedes for plaintiff to use in connection with the Central Coast Mustang case. As the Central Coast Mustang case came to a close, the Best Products action became more active so Mr. Granatelli allowed plaintiff to continue to use the Mercedes to get to court.

Plaintiff told Mr. Granatelli in an e-mail, “‘Rest easy, my friend . . . . You know, from this point on, the insurance company’s handling everything.’” Although defendants received statements, plaintiff said that there was coverage and the bills would be paid by the insurance company. Mr. Granatelli made payments to cover miscellaneous charges and advances which plaintiff said would be reimbursed by the insurance company. Plaintiff said he was getting pressure from his Hornblower firm partners because they were also handling the Central Coast Mustang case on a contingency basis. In January 2004, plaintiff approached Mr. Granatelli. Plaintiff indicated he needed a loan because he was having some personal problems “with his girlfriend” and he needed $15,000 to take care of her. Mr. Granatelli explained the reason for the 15,000 loan: “Well, I was reluctant, but I -- again, he -- he told me if I didn’t loan him the money, that he would have to do another case; that he would have to basically take some other work so he could get the money up. So I lent him the money.”

Mr. Granatelli testified as to the negotiations leading up to the agreement by the CNA and Golden Eagle insurance companies to partially fund the costs of defense of the cross-complaint. Mr. Granatelli was told that if he utilized the insurance company’s counsel, the law firm of Majeski & Roper, there would be full coverage for both the prosecution and defense of the Best Products action. An unidentified insurance company representative indicated that if the Hornblower firm was utilized, only $175 per hour would be paid and that would be only to defend the cross-complaint.

Eventually, a meeting was held with the insurance broker, William W. Holdren. At that meeting, the Hornblower firm agreed to the $175 per hour compensation rate. Plaintiff, who was still affiliated with the Hornblower firm, was present at the meeting with Mr. Holdren and Mr. Granatelli. Plaintiff said: ‘“You know that I’m your guy. I will take care of you. And that our firm will continue on his we have. And you will be covered. We will accept insurance payment in full.’”

The Best Products action ultimately settled. However, Mr. Granatelli testified that he essentially settled the case on his own. Mr. Granatelli and Jim Gonzalez, the Chief Executive Officer of Best Products, met and agreed to a handwritten settlement which they signed. The settlement called for defendants to receive $225,000. The next day the principals met with their respective attorneys and the settlement was transcribed. Best Products made a $25,000 payment on the settlement but subsequently defaulted on the remaining terms of the agreement. Plaintiff did not obtain a lien, a guarantee of Uniform Commercial Code-1 filing, to secure defendants’ interests in the event Best Products defaulted on the settlement agreement.

Mr. Granatelli also told plaintiff to depose Beth Gonzalez, who was the President of Best Products and Mr. Gonzalez’s daughter. Ms. Gonzalez was telling defendants how her father was handling the litigation. Mr. Granatelli denied ever paying $350 an hour to plaintiff or the Hornblower firm to represent defendants. On May 27, 2004, plaintiff spoke with Mr. Granatelli. Plaintiff explained that the insurance part of the Best Products actionhad settled. As a result, it was necessary for Mr. Granatelli to hire another lawyer. There was a status conference scheduled for the next day. Plaintiff said, “‘I recommend you bring somebody with you to take over this case.’”

Julius Grush testified that he substituted into the Best Products action as defendants’ attorney of record after the parties reached the partial settlement. However, Mr. Grush stated that the handwritten agreement was missing critical terms such as a payment schedule. The settlement agreement also did not include D&D and Mr. Gutierrez, who remained as defendants. Mr. Grush subsequently acted as trial counsel at a bench trial. However, it was very difficult because there was a lack of evidence and preparation. Mr. Grush described the file generated by plaintiff as “bizarre” because of the lack of the usable evidence. Mr. Grush testified that: there were no documents to show loss of income for unfair competition; “no expert testimony of forensic accountants”; and no party depositions had been taken. There was a huge document production motion “that went up on appeal” which had become moot and served no purpose. Prior to substituting into the case Mr. Grush asked plaintiff if any fees were owed. To which plaintiff responded, “‘No.’”

Andre Jardini, an attorney, testified concerning billing issues arising from the Best Products action. Using a lodestar method, he believed that at the low end of the rate scale $175 was an appropriate rate and at the high end was $230. This was based on evidence that: there was information suggesting that plaintiff had agreed to $175 which is the rate the insurance companies were paying; there was no written agreement; invoices from a different matter where plaintiff represented Mr. Granatelli showed a rate of $230 an hour in 2002; there were no invoices showing a rate of $350 an hour; the rates in different matters with clients ranged from $125 an hour up to $275 an hour; the Altman Weil survey for attorneys passing the bar in 1984 compared with firm size runs the range from $175 to $253 an hour; and the rate should be between $175 and $230 an hour.

Mr. Jardini examined invoices from August 2003 to July 2004 and found that plaintiff had billed for 925 hours for 11 months of work which is equivalent to 6 full-time months of attorney work. Mr. Jardini summarized the amount of activity that was billed as: two depositions (one of Mr. Gonzalez and one of Mr. Granatelli); nine routine court appearances (one status conference, four ex parte hearings to shorten time; three discovery motions; one motion to amend), and discovery disputes. Mr. Jardini examined the discovery disputes with some care because most of the time was devoted to these issues. Mr. Jardini believed that plaintiff’s discovery tactics led to the disputes. Mr. Jardini cited as an example a 183-page meet and confer letter which was drafted in response to a request by opposing counsel for additional time to respond to 50 contention interrogatories because Mr. Gonzalez was ill. According to Mr. Jardini, plaintiff billed 23 hours to write the letter and 42.8 hours to file a motion about 50 contention interrogatories. The whole value of the transaction had a reasonable rate of about nine hours. Four days after sending the 183-page letter, plaintiff sent a 192-page letter. Plaintiff sent 14 sets of form interrogatories and then wrote a 63-page meet and confer letter about the responses and objections. Plaintiff billed 45.7 hours to compose the letter and 29.7 hours to draft the motion to compel.

Mr. Jardini also described a 21.8 hour motion to compel based on a party’s failure to start out his response with “yes” or “no” before answering the subparts. Plaintiff submitted a 5-page opposition to a motion to compel for which he billed 36.4 hours. Mr. Jardini believed the opposition had about a four-hour value. Defendants were billed 27.5 hours to prepare Mr. Granatelli for his deposition. Also, defendants were billed 23.9 hours to prepare for Mr. Gonzalez’s deposition. Mr. Jardini noted that for all the motions, plaintiff claimed to have only spent nine hours litigating the disputes. In other words, plaintiff’s billed more hours to defendants than he stated he spent litigating the discovery disputes under oath to a court.

Mr. Jardini concluded: “As a result of my having reviewed those documents and those practices and seeing what was done, the level of activity over the limited period of time that the case was both prosecuted and defended . ., 40 hours per month was well sufficient to have done the things that should reasonably have been done during that written discovery phase. And that would be generous. And that’s times 11 months. So a total of 440 hours. [¶] And I would ascribe those rates that I mentioned before against the hours 440 hours. And at 175 that’s $77,000. And at $230 an hour, that’s $101,200. [¶] And so my ultimate conclusion on reasonable value of the services is somewhere in the range of $77,000 to $101,000. And I think . . . that’s fair compensation for a piece of a litigated case that involves so few events and was essentially exchanging written discovery in a couple of depositions. [¶ I have been advised that Mr. Bernardino has already been paid more than that. He’s been paid on about 173,000. And plus he had the use of a car, the value of which I’m told is something like $11,200 for 16 months at 600 or 700 a month. [¶] And I think that the amount paid to date well exceeds the reasonable value, and that there ought not to be any further amount paid. Especially under circumstances where at the end of the case he abandoned the client, and the client had to retain replacement counsel.” Mr. Jardini did not see any invoices where Mr. Granatelli paid $350 an hour.

Eric Schwarz testified that he is the general sales manager at Calabasas Mercedes. He began working there in March 2003 as a salesperson. Mr. Schwarz has leased three or four cars to Mr. Granatelli. But Mr. Schwarz never sold a car to Mr. Granatelli. Mr. Schwarz met plaintiff about three or four days before Mr. Granatelli leased the Mercedes in May 2003. Plaintiff came to the dealership to identify colors, features, and options. The meeting lasted about 15 to 20 minutes. Plaintiff came into the dealership a second time when the Mercedes arrived from another dealership. The parties discussed how many miles plaintiff expected to drive the Mercedes because that is one of the factors in setting the terms of the lease. Because the Mercedes was leased, Mr. Granatelli insured the vehicle and was listed as the lessor on Tele-Aid which is equivalent to ONSTAR. Plaintiff was listed as an additional insured.

In a third meeting, Mr. Schwarz went to plaintiff’s home to pick up the Mercedes for service and to install a compact disc changer. Plaintiff was given a loaner car. The dealership did not have plaintiff’s insurance information on file. Mr. Schwarz got plaintiff’s license and insurance information. This allowed plaintiff to use the loaner car.

Mr. Holdren testified he was formerly defendants’ insurance broker. Mr. Holdren attended the meeting at the Granatelli Motor Sports facility with Mr. Granatelli, Tony Truex, Olivia Garcia, and plaintiff. At the meeting, the subject of legal fees for the Best Products action was discussed. The meeting was initially about whether plaintiff had been receiving payments from the insurance companies. However, the parties also discussed that amount of compensation to be paid by the insurance companies. The companies agreed the compensation would be $175 an hour for legal fees. Plaintiff said that he was “‘worth a lot more money” than $175 per hour.

Mr. Holdren testified: “We continued the conversation and – back and forth, and at the end of that meeting, I distinctly recall that Mr. Bernardino agreed that whatever the insurance company was going to pay, he was going to represent . . . Mr. Granatelli and Granatelli Motor Sports . . . for the amount of money that the insurance companies were willing to pay. [¶] And the reason he was going to do that is . . . the insurance company made it very clear to me and to Mr. Granatelli, and I think to Mr. Bernardino, as well that they had another major law firm that was willing to step in and take care of this case from start to finish, from beginning until the end, for that kind of money . . . and no out-of-pocket moneys for Mr. Granatelli or Granatelli Motor Sports.”

After the meeting, plaintiff telephoned Mr. Holdren. Plaintiff asked Mr. Holdren “to please go back to the insurance company” and asked for more money. Mr. Holdren testified, “I made it very clear to Mr. Granatelli that this – they were going to stand firm on this $175 an hour.” In a January 22, 2004 letter to Mr. Granatelli, Mr. Holdren stated, “Any amount in excess of this rate is the responsibility of Granatelli to pay.”

Mr. Truex testified that he was previously a licensed attorney but resigned from the State Bar when he entered a guilty plea to federal bribery charges. He worked as a financial consultant at Granatelli Motor Sports. Mr. Truex was at the meeting with Mr. Holdren where the legal fees were discussed. Mr. Holdren was there to assist “in collecting the fees” billed by plaintiff. Mr. Truex testified, “[Plaintiff’s] agreement with [Mr. Granatelli] and Granatelli Motor Sports was that he was going to accept as payment for his legal services on their behalf the amounts that he was able to collect from the insurance companies.” Mr. Granatelli and plaintiff acknowledged “on numerous occasions” that this was the billing arrangement.

Ms. Garcia testified that she was formerly the controller for Granatelli Motor Sports for approximately 15 years. Ms. Garcia was at the meeting with Mr. Holdren where the legal fees were discussed. Plaintiff stated that, even though he did not agree with the hourly rate he was being paid, he wanted to take the case. After Ms. Garcia received several invoices about the Best Products action, she questioned plaintiff about them. Plaintiff responded: “‘Do not worry about those invoices. You know that the insurance company’s paying me.’” As a result Ms. Garcia filed the invoices away.

DeeDe-Ann Granatelli was Mr. Granatelli’s spouse. Mrs. Granatelli was present when Ms. Garcia asked plaintiff about the invoices. Plaintiff said: “‘Don’t worry about these invoices. I’m taking care of them.’” When Mrs. Granatelli probed plaintiff further on the issue he responded: “‘You have nothing to worry about. The insurance company is taking care of it, and I will take care of these.’”

3. Rebuttal

In rebuttal, plaintiff denied talking to Ms. Garcia or Mrs. Granatelli about the rates or payment of insurance money. Plaintiff denied that Mr. Schwarz delivered the loaner car. Rather, the loaner car was delivered by a Mercedes technician.

4. Post-testimony events

The parties submitted closing arguments by briefs. The trial court took the matter under submission. On July 31, 2006, the trial court ruled that plaintiff was to take nothing on the second amended complaint and that judgment be entered in favor of defendants. The trial court also awarded defendants their costs pursuant to a timely filed memorandum of costs. Also July 31, 2006, the trial court entered a judgment in accordance with its ruling.

On August 9, 2006, after the judgment was entered, defendants filed a request for statement of decision as to: “1. Whether Defendants breached any duty to [Mr. Bernardino] by repossessing Defendants’ Mercedes from [Mr. Bernardino.] [¶] 2. Whether Mr. Bernardino violated the Rules of Professional Conduct by permitting resigned attorney Mark Martinez to perform legal services for Defendants.” Defendants also filed a cost memorandum on August 9, 2006 in which they sought $15,617.44. Defendants served a proposed statement of decision on August 15, 2006. On August 24, 2006, plaintiff appealed from the judgment and the interim discovery and demurrer rulings. Mr. Ruiz filed a notice of appeal from the June 5, 2006 order sanctioning him $1500. On August 29, 2006, plaintiff filed a motion to tax costs. In addition, plaintiff filed objections to defendants’ proposed statement of decision. On August 31, 2006, the trial court issued its own statement of decision. On October 5, 2006, the trial court denied the motion to tax costs except as to item No. 11. The trial court granted the motion to tax costs as to item No. 11 in the sum of $485.40. The trial court ordered counsel to prepare an amended judgment. On October 24, 2006, plaintiff filed objections to the proposed amended judgment. On December 12, 2006, the trial court issued an amended judgment imposing costs.

III. DISCUSSION

A. The Demurrer

Plaintiff contends the judgment must be set aside because the trial court sustained a demurrer to a fraud claim without leave to amend. The Supreme Court has defined our task as follows, “‘Our only task in reviewing a ruling on a demurrer is to determine whether the complaint states a cause of action.’” (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300; Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) The reviewing court assumes the truth of allegations in the complaint which have been properly pleaded and gives it a reasonable interpretation by reading it as a whole and with all its parts in their context. (Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 558; People ex rel. Lungren v. Superior Court, supra, 14 Cal.4th at p. 300; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) The Supreme Court has held: “On appeal from a judgment of dismissal entered after a demurrer has been sustained without leave to amend, unless failure to grant leave to amend was an abuse of discretion, the appellate court must affirm the judgment if it is correct on any theory. [Citations.] If there is a reasonable possibility that the defect in a complaint can be cured by amendment, it is an abuse of discretion to sustain a demurrer without leave to amend. [Citation.] The burden is on the plaintiff, however, to demonstrate the manner in which the complaint might be amended. [Citation.]” (Hendy v. Losse (1991) 54 Cal.3d 723, 742; Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

To state a fraud claim, plaintiff was required to allege: misrepresentation (false representation, omission of facts by concealment or nondisclosure); defendants’ knowledge of the falsity; an intent to defraud; justifiable reliance on the misrepresentations; and resulting damage. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) General and conclusory allegations of fraud are insufficient; rather, each element of a fraud claim must be specifically alleged. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47; Lazar v. Superior Court, supra, 12 Cal.4th at p. 645; Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216-217.)

As noted earlier, the second cause of action explained in some detail how Mr. Granatelli allegedly attempted to induce plaintiff to provide representation in the Best Products action at a rate of $350 per hour and providing a new Mercedes automobile. As further noted, at the time these representations were made, there was no insurance proceeds available to defend against the cross-complaint. The second amended complaint explicitly alleges that defendants did not intend to pay the reasonable value of plaintiff’s services or convey title to the Mercedes. Moreover, the second amended complaint alleged that this was done in effort to convince plaintiff to provide representation in the Best Products action at a time when there was no intention to pay $350 per hour or convey title to the new Mercedes to him. This was sufficient to withstand a challenge to the allegations defendants did not intend to perform their promises at the demurrer stage. (Wennerholm v. Stanford Univ. Sch. Of Med. (1942) 20 Cal.2d 713, 716; Woodroof v. Howes (1891) 88 Cal. 184, 190; Hall v. Mitchell (1922) 59 Cal.App. 743, 748; Pepper v. Vedova (1915) 26 Cal.App. 406, 408.) We agree with defendants that a complaint which alleges nothing more than nonperformance of an oral promise is insufficient to state a cause of action for fraud. (Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30-31; Conrad v. Bank of America (1996) 45 Cal.App.4th 133, 156-157, disapproved on another point in Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 93.) However, as noted, more is alleged than a mere failure to comply with an oral promise.

The question remains as to whether the fraud issue must now be tried. Plaintiff asserts that a trial on the fraud cause of action must be held once the remittitur issues. Defendants assert that the trial court’s other findings prevent a trial on the fraud cause of action. At oral argument, we raised the issue of whether we should remand the matter to allow the trial court to determine whether its findings bar a retrial on the fraud cause of action based on res judicata or collateral estoppel principles.

We agree with defendants. The trial court found that plaintiff failed to prove he was given the Mercedes as a flat fee for his services or that he was underpaid. This resolves any issue concerning the promise to provide a Mercedes as part of a fee or any underpayment. (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896; Lucido v. Superior Court (1990) 51 Cal.3d 335, 341.) Thus, the demurrer ruling at issue does not warrant remand for limited trial on the fraud cause of action or any other proceeding.

B. The Entry of Judgment

1. Plaintiff’s contentions

Plaintiff contends that the circumstances surrounding the trial court’s entry of judgment in this case requires that it be reversed. Plaintiff argues in this regard: the trial court failed to comply with section 632 and former rule 232 by filing and entering a statement of decision rather than a tentative decision; the trial court acted in excess of its jurisdiction by issuing a statement of decision after the final judgment was entered and after plaintiff filed a notice of appeal; and the trial court lacked jurisdiction to amend the judgment to add costs after the judgment and the notice of appeal had been filed.

2. Compliance with section 632 and former rule 232

Plaintiff is correct that the trial court erroneously issued a statement of decision after the judgment was entered and the notice of appeal was filed. Once the judgment is entered, the trial court loses the unrestricted power to change it. (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1237; Craven v. Crout (1985) 163 Cal.App.3d 779, 782-783.) A trial court retains only the limited power once the judgment is entered to: correct clerical errors; entertain and rule upon a new trial motion; consider and rule upon a motion for judgment notwithstanding the verdict; rule on a motion to vacate a judgment and enter a different judgment under specified circumstances; and to grant relief from a judgment pursuant to section 473. (Rochin v. Pat Johnson Manufacturing Co., supra, 67 Cal.App.4th at p. 1237; Craven v. Crout, supra, 163 Cal.App.3d at p. 782-783.) Further, the trial court has only limited jurisdiction to take actions after the notice of appeal is filed. (§ 916; Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 191-196.)

The typical remedy for the failure to issue a statement of decision is to reverse and remand with instructions to prepare a statement of decision. (See Karlsen v. Superior Court (2006) 139 Cal.App.4th 1526, 1531.) However, the trial court has already issued a statement of decision: albeit outside of the framework of section 632 and former rule 232; after the entry of judgment; and after the notice of appeal was filed. The trial court’s departure from the procedural requirement of section 632 and former rule 232 is evaluated under the prejudicial error standards set forth in California Constitution, article VI, section 13 and section 475. (In re Marriage of Steiner and Hosseini (2004) 117 Cal.App.4th 519, 524 [former rule 232]; see Estate of Cooper (1970) 11 Cal.App.3d 1114, 1121 [no reversible error where party’s objections were not considered because the court did not follow the requirements of former rule 232].)

There is no reasonable possibility of a different result. We have set forth in great detail the evidence introduced by the parties at trial. The trial court made in depth and specific findings from the evidence received during the trial as to plaintiff’s quantum meruit claim. (§§ 632, 634; Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1125-1126; Lynch v. Cook (1983) 148 Cal.App.3d 1072, 1080; overruled on another point by In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1137.) However, after a careful and meticulous review of the evidence produced in this case, we have no doubt that on remand the trial court would simply reissue its former statement of decision. Thus, we need not remand the matter solely for the exercise of reissuing a statement of decision which has already been rendered. Mr. Bernardino’s failure to show prejudicial error in terms of the timing of the statement of decision under the circumstances of this case precludes us from reversing the judgment. (Cal. Const., art. VI, §13; § 475; Burkle v. Burkle (2006) 144 Cal.App.4th 387, 403; In re Marriage of Steiner and Hosseini, supra, 117 Cal.App.4th at p. 524.)

3. The amended judgment

Plaintiff contends the trial court erroneously amended the judgment to add costs after the notice of appeal was filed. Because the cost award was collateral to the judgment, the notice of appeal did not deprive the trial court of jurisdiction to award costs. (§ 916; Varian Medical Systems, Inc. v. Delfino, supra, 35 Cal.4th at p. 191 [appeals do not stay collateral matters]; Bankes v. Lucas (1992) 9 Cal.App.4th 365, 368; In re Marriage of Sherman (1984) 162 Cal.App.3d 1132, 1140.) Thus, there is no merit to the contention.

C. The Sanctions Order

Mr. Ruiz, appeals from an order imposing $1,500 in sanctions pursuant to section 177.5 for failure to inform plaintiff of the need to personally appear at the settlement conference scheduled before Judge Crispo. Mr. Ruiz contends the sanctions order must be reversed because the trial court only cited section 177.5 and former rule 222 at the order to show cause hearing. Further, Mr. Ruiz notes that the order to show cause was not directed to him. Rather, the order to show cause was only directed at plaintiff. Additionally, Mr. Ruiz argues that the trial court did not issue an order reciting in detail and justification for the sanctions order. Finally, he argues his due process rights were violated by the absence of notice to an opportunity to be heard.

Section 177.5 provides: “A judicial officer shall have the power to impose reasonable money sanctions, not to exceed fifteen hundred dollars ($1,500), notwithstanding any other provision of law, payable to the court, for any violation of a lawful court order by a person, done without good cause or substantial justification. This power shall not apply to advocacy of counsel before the court. For the purposes of this section, the term ‘person’ includes a witness, a party, a party’s attorney, or both. [¶] Sanctions pursuant to this section shall not be imposed except on notice contained in a party’s moving or responding papers; or on the court’s own motion, after notice and opportunity to be heard. An order imposing sanctions shall be in writing and shall recite in detail the conduct or circumstances justifying the order.” We agree with Mr. Ruiz that the failure of the order to show cause to advise him that he may be subject to sanctions requires reversal of the section 177.5 order. (Caldwell v. Samuels Jewelers (1990) 222 Cal.App.3d 970, 976; see also Bergman v. Rifkind & Sterling, Inc. (1991) 227 Cal.App.3d 1380, 1387.)

Upon issuance of the remittitur, the trial court is free to issue another order to show cause, if it deems such to be appropriate, and relitigate the matter. However, we would note that section 177.5 requires a violation of a lawful court order and the present record contains no order that Mr. Ruiz advise plaintiff of the necessity of being present at the scheduled settlement conference with Judge Crispo. Additionally, any order to show cause premised on violations of the court rules directed at Mr. Ruiz or any subsequent order must fully comply with the procedural requirements of current rule 2.30 and the substantive elements of rule 3.1380. Finally, there is no merit to the contention that the trial court is in any way biased against Mr. Ruiz or plaintiff.

IV. DISPOSITION

The judgment against plaintiff, Rafael Bernardino, Jr. is affirmed in all respects. Defendants, Granatelli Motor Sports, Inc. and Joseph R. Granatelli, are to recover their own costs on appeal from plaintiff. The order imposing sanctions against Rodolfo F. Ruiz is reversed. As to the appeal involving Mr. Ruiz, each side is to bear their own costs on appeal.

I concur: ARMSTRONG, J.

MOSK, J., Concurring

I concur in the judgment.

Because the statement of decision was a nullity, and there was no request for a statement of decision, we must therefore imply that the trial court found all facts necessary to support the judgment. The issue on appeal is whether the implied findings are supported by substantial evidence. (Michael U. v. Jamie B. (1985) 39 Cal.3d 787, 792-793, superseded on other grounds by statute as stated in In re Zacharia D. (1993) 6 Cal.4th 435, 448; Fladeboe v. American Isuzu Motors, Inc. (2007) 150 Cal.App.4th 42, 58.)

The trial court, by finding that plaintiff was not entitled to any amount for quantum meruit, necessarily concluded that plaintiff had received whatever attorney fees to which he was reasonably entitled. Plaintiff had factored the claim involving the automobile—the subject of the fraud claim—into the amount claimed by quantum meruit.

Attorneys may only charge “fair, reasonable and conscionable fees.” (Bird, Marella, Boxer & Wolpert v. Superior Court (2003) 106 Cal.App.4th 419, 431; see Rules of Professional Conduct, rule 4-200(A).) Thus, even if plaintiff could plead the fraud cause of action, and the court erred in sustaining the demurrer, any such error was harmless. The quantum meruit claim, a claim in equity (Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1419), can be tried before any legal claim. (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1241-1242.)

The court, having found that plaintiff was compensated reasonably, necessarily found plaintiff suffered no damages, and therefore plaintiff could not prevail on a fraud claim. Thus, any error by the trial court in sustaining the demurrer was harmless. Had the fraud claim survived the demurrer, it would have failed after trial. (See Cal. Const., art. VI, § 13; Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800; Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300, 1307; Curtis v. 20th Century-Fox Film Corp. (1956) 140 Cal.App.2d 461, 464-465.)

Accordingly, I would affirm the judgment except as to the sanction order.


Summaries of

Bernardino v. Granatelli Motor Sports, Inc.

California Court of Appeals, Second District, Fifth Division
Mar 7, 2008
No. B193379 (Cal. Ct. App. Mar. 7, 2008)
Case details for

Bernardino v. Granatelli Motor Sports, Inc.

Case Details

Full title:RAFAEL BERNARDINO et al., Plaintiffs and Appellants, v. GRANATELLI MOTOR…

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

Date published: Mar 7, 2008

Citations

No. B193379 (Cal. Ct. App. Mar. 7, 2008)