Opinion
E063922
09-14-2017
BERT G. COTTON, Plaintiff and Appellant, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. et al., Defendants and Respondents.
Law Offices of Douglas E. Klein and Douglas E. Klein for Plaintiff and Appellant. Parker Ibrahim & Berg, John M. Sorich, and Heather E. Stern for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RIC10011709) OPINION APPEAL from the Superior Court of Riverside County. David M. Chapman, Judge. Reversed and remanded with directions. Law Offices of Douglas E. Klein and Douglas E. Klein for Plaintiff and Appellant. Parker Ibrahim & Berg, John M. Sorich, and Heather E. Stern for Defendants and Respondents.
This is a wrongful foreclosure action. The trial court sustained a demurrer to the third amended complaint and dismissed the action. In a previous appeal, we reversed, holding that the trial court should have given plaintiff Bert G. Cotton at least one more chance to amend his complaint.
On remand, Cotton failed to file a timely amended complaint; the trial court therefore dismissed the action again. Cotton's first response was to file a second appeal; however, he abandoned it, and we dismissed it. His next response was to file a motion to vacate the judgment, supported by a declaration by his attorney admitting fault. The trial court denied the motion. It ruled that, due to our dismissal of the second appeal, the judgment had become final and could not be vacated.
We will hold that this was error; the trial court had jurisdiction to consider the motion to vacate. We find no other reason to deny the motion. Indeed, the trial court indicated that it would have granted the motion but for its concern that it lacked jurisdiction. Accordingly, we will reverse and remand with directions to grant the motion and to vacate the judgment.
I
PROCEDURAL BACKGROUND
In 2010, Cotton filed this action against JPMorgan Chase Bank, N.A., Mortgage Electronic Registration Systems, Inc., and California Reconveyance Company (collectively defendants).
In 2011, the trial court sustained multiple demurrers, without leave to amend, and entered a judgment of dismissal. Cotton appealed (Cotton I).
In 2014, we filed our opinion in Cotton I. (Cotton v. Mortgage Electronic Registration Systems, Inc. (Apr. 10, 2014, E054921) 2014 Cal. App. Unpub. LEXIS 2552 [nonpub. opn.].) In it, we held that Cotton had established a reasonable possibility that he could amend his complaint so as to state a cause of action. (Id. at pp. *10-*15, *19-*20.) Our disposition stated: "The judgment is reversed. The orders sustaining the demurrers . . . are modified so as to sustain the demurrers with (rather than without) leave to amend; any amended complaint must be filed within 30 days after the issuance of the remittitur." (Id. at p. *20, italics added.)
In June 2014, we issued our remittitur. However, Cotton did not file a timely amended complaint.
In October 2014, defendants filed an ex parte application to dismiss. Cotton's counsel did not file an opposition and did not appear at the ex parte hearing. The trial court granted the application, and on October 23, 2014, it entered a judgment of dismissal.
In December 2014, Cotton filed an ex parte application to vacate the judgment. In a declaration, his attorney stated, "[T]his declarant has prepared and is ready to file the Defendants' proposed motion, a true and correct copy of which is attached hereto as Exhibit 'A.'" The attached Exhibit A was actually a proposed opposition by Cotton to defendants' ex parte application to dismiss. It did not include a proposed amended complaint. The trial court denied the application without prejudice.
Later that day, Cotton filed an appeal from the judgment of dismissal (Cotton II). As time passed, however, he failed to make a deposit of costs and he failed to designate the record. Accordingly, in January 2015, we dismissed Cotton II, and on April 1, 2015, we issued our remittitur.
On April 7, 2015, Cotton filed a noticed motion to vacate the judgment of dismissal. He sought mandatory relief based on an attorney affidavit of fault. (Code Civ. Proc., § 473, subd. (b).) Once again, his attorney stated, "[T]his declarant has prepared and is ready to file the Defendants' proposed motion, a true and correct copy of which is attached as Exhibit 'A' together with the proposed . . . Amended Complaint." However, there was no Exhibit A attached.
In his brief, Cotton states five times that he filed a copy of his proposed amended complaint along with his motion to vacate. That is not true.
In their opposition, defendants argued, among other things, that because Cotton II — an appeal from the judgment — had been dismissed, the judgment had become final, and the trial court lacked jurisdiction to vacate it.
The trial court denied the motion. It explained, as pertinent here: "At first look this motion appears to be well taken because it is based upon an attorney affidavit of fault that explains the reasons for Plaintiff[']s attorney[']s failure to oppose the ex parte dismiss[a]l motion. However Plaintiff ignores the fact that after the motion to dismiss was granted Plaintiff filed . . . an appeal, which Plaintiff abandoned. The appeal was of 'the final judgment.' [Citation.] The order dismissing the appeal is now final. This court may not now revisit the judgment."
II
THE EFFECT OF THE FIRST APPEAL
Preliminarily, defendants argue that our directions in Cotton I required the trial court to deny the motion to vacate. They did not argue this below, and the trial court did not use this reasoning. However, they argue that we may sustain the denial on this ground.
Cotton seems confused about this. He states: "The trial court's determination that it lacked jurisdiction to adjudicate the . . . motion to vacate the dismissal was purportedly based upon its reading of the dispositional language in this Court's prior opinion (Cotton I)."
Not so. The trial court's ruling cited the effect of our decision in Cotton II, not Cotton I.
On remand, "[t]he trial court is empowered to act only in accordance with the direction of the reviewing court; action which does not conform to those directions is void. [Citations.]" (Hampton v. Superior Court (1952) 38 Cal.2d 652, 655.)
However, "[t]he appellate court need not expressly comment on every matter intended to be covered by the disposition. . . . 'It is unnecessary and inappropriate for an appellate court to attempt to envision and to set forth in detail the entire universe of matters prohibited [or permitted] by its directions on remand.' [Citation.]" (Ducoing Management Inc. v. Superior Court (2015) 234 Cal.App.4th 306, 313.)
"The disposition is construed according to the wording of its directions, as read with the appellate opinion as a whole. [Citation.]" (Ducoing Management Inc. v. Superior Court, supra, 234 Cal.App.4th at p. 313.) "Whether the trial court has correctly interpreted an appellate opinion is an issue of law subject to de novo review." (Ibid.)
Here, our direction that "any amended complaint must be filed within 30 days after the issuance of the remittitur" (Cotton I, supra, at p. *20) merely tracked Code of Civil Procedure section 472b. That section provides that "[w]hen an order sustaining a demurrer without leave to amend is reversed or otherwise remanded by any order issued by a reviewing court, any amended complaint shall be filed within 30 days after the clerk of the reviewing court mails notice of the issuance of the remittitur."
Code of Civil Procedure section 472b does not deprive the trial court of its inherent power to grant an extension of time. "[T]he general rule is that a court has inherent power to control the course of litigation before it. [Citations.] The court has authority to grant continuances at any stage of the proceeding upon a showing of good cause. [Citations.]" (Rapid Transit Advocates, Inc. v. Southern Cal. Rapid Transit Dist. (1986) 185 Cal.App.3d 996, 1003.) Nor does it deprive the trial court of its power to grant relief under Code of Civil Procedure section 473. (See, e.g., Pagarigan v. Aetna U.S. Healthcare of California, Inc. (2007) 158 Cal.App.4th 38, 42-46.)
Most important, our opinion did not indicate that we had any reason to prevent the trial court from exercising its ordinary powers. We simply held that Cotton was entitled to an opportunity to amend his complaint. If he failed to do so in a timely manner, we suggested no reason to treat him any better or any worse than any other litigant in the same position.
In our minds, we were simply trying to alert the parties to the need to file an amended complaint promptly on remand and to spare them from researching Code of Civil Procedure section 472b. We cannot help but be reminded of the adage that "No good deed goes unpunished."
Our disposition did not mislead the trial court. Moreover, evidently it did not mislead the parties. As already noted, defendants raised this argument for the first time in this appeal. For the reasons just stated, it lacks merit.
III
THE EFFECT OF THE SECOND APPEAL
Defendants also argue that the directions in our remittitur in Cotton II precluded the trial court from granting the motion to vacate. The trial court agreed with this reasoning. Cotton contends that it erred.
Subject to statutory exceptions, "'the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from . . . .' ([Code Civ. Proc.,] § 916, subd. (a).) Thus, generally, the taking of an appeal by the filing of the notice of appeal deprives the trial court of jurisdiction of the cause and vests jurisdiction with the appellate court until issuance of a remittitur by the reviewing court. [Citations.]" (Andrisani v. Saugus Colony Limited (1992) 8 Cal.App.4th 517, 523.)
The statute requires the "perfecting" of an appeal. (Code Civ. Proc., § 916, subd. (a).) "An appeal from a nonappealable order does not divest the trial court of jurisdiction. [Citations.]" (Holloway v. Quetel (2015) 242 Cal.App.4th 1425, 1431, fn. 6.) Cotton therefore argues that his appeal was from the denial of his ex parte application, which was nonappealable.
This misstates the record. The notice of appeal expressly stated that it was "from the final judgment." This was clearly not just a mistake, as it further recited that, in the appeal, Cotton intended to challenge the order that the action be dismissed, as well as the denial of a temporary restraining order to enjoin the foreclosure on his home. These issues could properly be raised in an appeal from the judgment; in an appeal from the denial of the ex parte application, however, they would be irrelevant.
The judgment of dismissal had been entered on October 23, 2014. Defendants served a notice of entry of judgment on October 28, 2014. Thus, Cotton's notice of appeal, filed on December 24, 2014, was still timely. (Cal. Rules of Court, rule 8.104(a)(1)(B).)
Cotton also argues that we should disregard his notice of appeal because it did not manifest an intent to appeal. The notice stated that Cotton "hereby appeals . . . from the final judgment in the above entitled action . . . ." If it was not intended to commence an appeal, we are at a loss to imagine what it was intended to do.
We do agree that the trial court erred, but for a more fundamental reason: We had dismissed the appeal and issued our remittitur. "When the remittitur issues, the jurisdiction of the appellate court terminates and the jurisdiction of the trial court reattaches. [Citation.]" (Andrisani v. Saugus Colony Limited, supra, 8 Cal.App.4th at p. 523.)
There is even a California Supreme Court case on point: Nuckolls v. Bank of California (1937) 10 Cal.2d 266. There, the trial court entered a judgment (id. at p. 269) adjudicating various persons' claims of interests in a trust. (Id. at pp. 268-269.) One of the claimants filed an appeal from this judgment, but his appeal was dismissed. (Id. at p. 269.) Meanwhile, another one of the claimants went bankrupt. His bankruptcy trustee filed a motion to vacate the judgment, which the trial court granted. (Id. at p. 270.)
Several claimants (see Nuckolls v. Bank of California, supra, 10 Cal.2d at pp. 270) appealed from the order granting the motion to vacate. (Id. at p. 271.) They argued "that the appeal from [the] judgment transferred the entire cause to the Supreme Court and that the order of the trial court vacating said judgment was void for that reason." (Id. at p. 271.) The Supreme Court disagreed and held that the superior court had jurisdiction to vacate the judgment. (Ibid.) It noted that the appeal had been dismissed and the remittitur had issued on July 12, 1935, whereas the motion to vacate had been filed on July 15, 1935 and granted on November 8, 1935. Thus, "the jurisdiction of the Supreme Court over the action had ceased and the same was revested in the trial court." (Ibid.)
Defendants rely on the principle, already mentioned in part II, ante, that "'[w]hen there has been a decision upon appeal, the trial court is reinvested with jurisdiction of the cause, but only such jurisdiction as is defined by the terms of the remittitur. The trial court is empowered to act only in accordance with the direction of the reviewing court; action which does not conform to those directions is void.' [Citations.]" (Bell v. Farmers Ins. Exchange (2006) 135 Cal.App.4th 1138, 1143.)
The order of dismissal and the remittitur in Cotton II, however, contained no directions to the trial court. The order of dismissal, as relevant here, merely said, "The appeal is dismissed . . . ." (Capitalization altered.) The remittitur, again as relevant here, said, "I . . . certify the attached is a true and correct copy of the original opinion or decision entered in the above entitled cause . . . , and this opinion or decision has now become final." The fact that our dismissal of the appeal was final had no bearing on whether the trial court could vacate the judgment.
The judgment itself was final even before the appeal in Cotton II, but that is irrelevant. A final judgment can be vacated under Code of Civil Procedure section 473. (Olivera v. Grace (1942) 19 Cal.2d 570, 573-574; Maxwell v. Cooltech, Inc. (1997) 57 Cal.App.4th 629, 632.)
We therefore conclude that the trial court's stated reason for denying the motion to vacate was erroneous.
IV
THE MERITS OF THE MOTION TO VACATE
Finally, defendants contend that the trial court did not err by denying the motion to vacate, because the motion failed to show good cause. They assert that it was deficient in five respects. We will discuss these seriatim.
First, defendants argue that the mandatory relief provision of Code of Civil Procedure section 473, subdivision (b) does not allow relief from the failure to file an amended pleading after a demurrer has been sustained with leave to amend. Admittedly, Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603 held that the mandatory relief provision does not allow for relief from "discretionary dismissals based on the failure to file an amended complaint after a demurrer has been sustained with leave to amend, at least where, as here, the dismissal was entered after a hearing on noticed motions which required the court to evaluate the reasons for delay in determining how to exercise its discretion." (Id. at p. 620, italics added.)
Younessi v. Woolf (2016) 244 Cal.App.4th 1137, however, distinguished Leader. It relied on the language that we have italicized, supra. It concluded that Leader did not apply, and mandatory relief was available, where "defendants did not file a motion to dismiss the case. Rather, the dismissal resulted from an order granting [a defendant's] ex parte application for entry of a dismissal, without any opposition from plaintiffs that would allow the trial court to evaluate why they had failed to timely file an amended complaint. Consequently, the dismissal was the procedural equivalent of a default judgment, and because it resulted from [plaintiffs' attorney's] inexcusable conduct, we conclude the mandatory attorney-fault provision applies in this case. For this reason, the trial court did not err in vacating the judgment of dismissal." (Id. at pp. 1148-1149.)
Here, as in Younessi, and unlike as in Leader, the action was dismissed on defendants' ex parte application. Cotton did not file an opposition; thus, the trial court had no opportunity to evaluate, at that time, his reasons for failing to file a timely amended complaint. Accordingly, Cotton was entitled to seek relief under the mandatory attorney fault provision.
Second, defendants quote Witkin to the effect that "[w]here the court finds that the 'mistake' is simply the result of professional incompetence, general ignorance of the law, or unjustifiable negligence in discovering the law, relief will be denied." (8 Witkin & Epstein, Cal. Procedure (5th ed. 2008) Attack on Judgment in Trial Court, § 155.) This is taken out of context. At that point, Witkin is talking about the discretionary relief provision. (See 8 Witkin & Epstein, supra, §§ 151-172.) Later, when Witkin is talking about the mandatory relief provision, he makes it clear that relief is available even where the attorney's neglect is inexcusable. (Id., §§ 160, 194; see generally Metropolitan Service Corp. v. Casa de Palms, Ltd. (1995) 31 Cal.App.4th 1481, 1487.)
Third, defendants argue that Cotton failed to submit a proposed amended complaint. Code of Civil Procedure section 473, subdivision (b) provides: "Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed . . . , otherwise the application shall not be granted . . . ." (Italics added.) This proposed pleading requirement applies to applications for both discretionary and mandatory relief. (Rodriguez v. Brill (2015) 234 Cal.App.4th 715, 728-729; Carmel, Ltd. v. Tavoussi (2009) 175 Cal.App.4th 393, 402.) Cotton's motion to vacate did not include a proposed amended complaint.
Defendants forfeited this contention, however, by failing to raise it in their memorandum in opposition to the motion. "As a general rule, 'issues not raised in the trial court cannot be raised for the first time on appeal.' [Citation.]" (Sea & Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 417.) "The purpose of the general doctrine of waiver is to encourage a [party] to bring errors to the attention of the trial court, so that they may be corrected or avoided and a fair trial had." (People v. Melton (1990) 218 Cal.App.3d 1406, 1409.) Here, if defendants had pointed out that Cotton had not yet submitted a proposed amended complaint, Cotton could have cured the defect by submitting one at or before the hearing. (Carmel, Ltd. v. Tavoussi (2009) 175 Cal.App.4th 393, 402-403; County of Stanislaus v. Johnson (1996) 43 Cal.App.4th 832, 838.)
In the interest of full disclosure, we note that at the hearing on the motion, defendants' counsel did argue (although only in a single sentence) that Cotton had failed to submit a proposed amended complaint. At that point, however, it was too late for Cotton to cure the defect. Arguably his counsel could have requested a continuance for this purpose. However, the trial court had already issued a tentative decision denying the motion for lack of jurisdiction. Absent some indication that the trial court had changed its mind, it would have been the height of futility to request a continuance solely to submit a proposed amended complaint. Hence, defendants' counsel's argument was too little, too late.
Fourth, defendants argue that Cotton's counsel's declaration was conclusory. Once again, they forfeited this argument by failing to raise it below. In addition, it lacks merit. Cotton's counsel stated that he inadvertently failed to oppose defendants' ex parte motion to dismiss, because it was heard on the eve of Yom Kippur and because he was completely absorbed in other cases, especially a "highly contested" unlawful detainer case. He further testified that the "inadvertence . . . in failing to . . . file any responsive pleading in this was my mistake and mine alone . . . ." This was sufficiently specific.
In any event, "an attorney affidavit of fault under the mandatory relief provisions of [Code of Civil Procedure] section 473, subdivision (b) need not include an explanation of the reasons for the attorney's mistake, inadvertence, surprise, or neglect." (Martin Potts & Associates, Inc. v. Corsair, LLC (2016) 244 Cal.App.4th 432, 443.) "[Code of Civil Procedure] section 473, subdivision (b) does not require an explication of reasons as a prerequisite to mandatory relief. . . . [W]hat must be attested to is the mistake, inadvertence, surprise, or neglect — not the reasons for it. [Citation.]" (Id. at p. 438.) Counsel specifically testified to his inadvertence.
Fifth, defendants argue that Cotton's counsel never explained why he failed to file a timely amended complaint; he only explained why he failed to oppose the ex parte application to dismiss. Yet again, they forfeited this argument by failing to raise it below. Also, Exhibit A included a subsidiary declaration in which Cotton's counsel stated, "I never received a copy of [the remittitur in Cotton I] and was surprised by the ex parte application to dismiss the application." He also stated that, ever since the issuance of the remittitur, he had been "overloaded" with other cases. Exhibit A was attached to the October 2014 ex parte application. It was supposed to be attached again to the April 2015 motion; it was not, apparently due to mistake, but it was already on file. Thus, Cotton's counsel did explain why he failed to file a timely amended complaint. Moreover, if defendants had raised this argument, he could have called the trial court's attention to his explanation.
In the fact section of their memorandum, they did state, "Plaintiff's counsel does not explain why he failed to file the fourth amended complaint within the time period prescribed by the court of appeals [sic]." However, they did not discuss the significance, if any, of this in the argument section of their memorandum; certainly they never asserted that it was an independent reason to deny the motion. --------
The trial court denied the motion to vacate on an erroneous ground; otherwise, it observed, the motion "appears to be well taken." We reject defendants' arguments that the motion had to be denied for various other reasons. Hence, we will remand with directions to grant the motion.
V
DISPOSITION
The order appealed from is reversed; the trial court is directed to grant Cotton's motion to vacate the judgment of dismissal. Cotton is awarded costs on appeal against defendants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RAMIREZ
P. J. We concur: McKINSTER
J. CODRINGTON
J.