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Delamare v. Hysell

Court of Appeals of California, Fifth Appellate District.
Nov 21, 2003
F039080 & F040533 (Cal. Ct. App. Nov. 21, 2003)

Opinion

F039080 & F040533.

11-21-2003

PHILLIP KIRK DELAMARE, Plaintiff and Appellant, v. WILLIAM B. HYSELL et al., Defendants; JAMES SADLER et al., Objectors and Respondents.

Law Offices of Tony J. Tanke, Tony J. Tanke; Jones, Cochrane, Hollenback, Nelson & Zumwalt, Frank T. Zumwalt; Machado Law Firm and John J. Machado for Plaintiff and Appellant. Hansen, Boyd, Culhane & Watson, Betsy S. Kimball, Daniel V. Kohls; Hansen, Culhane, Kohls, Jones & Sommer and Daniel V. Kohls for Objectors and Respondents.


Appellant Phillip Kirk DeLaMare sued defendants William B. Hysell, H. Stanley Thompson, Kent Hysell, Tom Holstrom (hereafter collectively Defendants), and Thompson-Hysell Engineering, Inc. alleging that, as a minority shareholder in Thompson-Hysell Engineering, Inc., he was deprived of the value of his stock by the actions of Defendants. After conducting discovery, DeLaMare attempted to add Thompson-Hysell Engineering, Inc.s attorney, real party in interest James L. Sadler, as a defendant by filing three petitions pursuant to Civil Code section 1714.10. The trial court denied each petition. DeLaMare appealed from two of the orders denying his petitions.

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

DeLaMares first appeal came after his second petition was denied. We reject this appeal because DeLaMare failed to present any admissible evidence to support his petition. He also waived the right to argue that section 1714.10 does not apply to this proceeding because he did not present the issue in the trial court.

DeLaMares second appeal came after the trial court denied his third petition. As we shall explain, the trial court erred in relying on Code of Civil Procedure sections 916 and 1008 to deny the petition without reaching its merits. This error will require that we remand the matter to the trial court for additional proceedings.

FACTUAL AND PROCEDURAL SUMMARY

The following is a summary of the allegations contained in the various complaints and motions filed in this action. We express no view on the truth of these allegations. This summary simply provides a framework for our analysis.

DeLaMare was employed by Thompson-Hysell Engineering, Inc. for over 10 years, working his way up the corporate ladder to various executive positions and a seat on the board of directors. He was given 1,000 shares of stock (10 percent of the outstanding stock) for his efforts on behalf of the company. Defendants owned the remainder of the outstanding stock.

DeLaMare was dismissed at the beginning of 1996 and shortly thereafter purchased a competing engineering firm. DeLaMare used his Thompson-Hysell Engineering, Inc. stock as collateral to obtain the loan with which he purchased the competing firm.

DeLaMares actions and the increased competition apparently upset Defendants. DeLaMare alleges Defendants, in an effort to render his Thompson-Hysell Engineering, Inc. shares worthless, transferred the assets of the Thompson-Hysell Engineering, Inc. to a dummy corporation wholly owned by Defendants. Sadler and the corporate accountant, John C. Bettencourt, allegedly assisted in the transfer.

Approximately one year later, Defendants approved a profitable sale of their engineering business to a third party. Since the dummy corporation held all the assets of the business, DeLaMare received nothing as a result of the sale.

DeLaMare commenced this action in August 1999 by filing a complaint against Thompson-Hysell Engineering, Inc. and Defendants alleging various breaches of fiduciary duty, seeking removal of the directors of the corporation (Defendants), and seeking an accounting. At some point DeLaMare amended the complaint to include a derivative action on behalf of Thompson-Hysell Engineering, Inc.

On May 16, 2001, DeLaMare filed a motion seeking leave of the court to file an amendment to the third amended complaint adding Sadler and Bettencourt as defendants. The motion cited as authority various code sections, including section 1714.10. The moving papers did not include a petition as required by section 1714.10, subdivision (a).

As pertinent to this appeal, the amendment inserted Sadlers and Bettencourts names into the derivative cause of action on behalf of the corporation for the allegedly fraudulent transfer of the assets of the corporation to the dummy corporation. The cause of action alleged there was a conspiracy among Sadler, Bettencourt and Defendants to cause this fraudulent transfer.

On June 11, 2001, the trial court issued a minute order continuing the motion to June 22, 2001. The minute order also stated, "Attorneys should review Civil Code Section 1714.10."

In response to the minute order, DeLaMare filed an amended notice of hearing on June 14, 2001, that included the petition required by section 1714.10. The amended notice set the hearing for June 25, 2001. The trial court denied the motion without prejudice because the petition was not filed in a timely manner. The minute order also stated, "Defendants objections to evidence are sustained."

On July 2, 2001, DeLaMare responded by filing another section 1714.10 petition seeking to add Sadler as a defendant and a motion to file a fourth amended complaint and a petition pursuant to section 1714.10. DeLaMare sought to add the same allegations as the prior motion and relied on essentially the same evidence and argument. To overcome Defendants objections to the lack of foundation to the documents submitted in the prior motion, DeLaMares counsel added to his declaration a statement that some of the documents supporting the motion were produced in a "records only" deposition of Bettencourt. Defendants and Sadler opposed the motion and objected to the supporting evidence submitted by DeLaMare.

At the hearing on July 30, 2001, the trial court again sustained all of Defendants objections to the evidence and denied the petition. The trial court denied DeLaMares request that the motion be denied without prejudice so that he could provide an appropriate foundation for the evidence on which he relied. The denial of this petition resulted in the first appeal. (§ 1714.10, subd. (d).)

DeLaMares motion to add Bettencourt as a defendant was granted since section 1714.10 does not apply to accountants.

DeLaMare filed a fifth amended complaint on November 14, 2001, that contained four causes of action. On January 25, 2002, DeLaMare filed a motion to amend the fifth amended complaint and a section 1714.10 petition, again seeking to add Sadler as a defendant. Defendants and Sadler opposed the motion and the petition.

At the February 15, 2002, hearing, the trial court noted that the case had been pending for over two and one-half years and trial was set for March 25, 2002. The trial court denied the motion to amend and the petition to add Sadler as a defendant because the prior appeal had divested it of jurisdiction (Code of Civ. Proc., § 916, subd. (a)) and, as an additional holding, DeLaMare had failed to comply with the requirements of Code of Civil Procedure section 1008.

DeLaMare filed his second appeal pursuant to section 1714.10, subdivision (d). We ordered the appeals consolidated.

We have received notice that all defendants have settled with DeLaMare, leaving Sadler as the only potential defendant.

DISCUSSION

Sadler has made a motion to strike or disregard various portions of DeLaMares opening brief. This request is the result of DeLaMare filing identical opening briefs in both appeals, despite the fact that in our order consolidating the two appeals we ordered briefing to be separate. By filing identical opening briefs, DeLaMare necessarily includes arguments that are irrelevant to the issues raised in a specific appeal. Our opinion separates the two appeals and analyzes the issues pertinent to each appeal separately. This task was made slightly more difficult by DeLaMares actions. Nonetheless, we deny Sadlers motion to strike.

DeLaMare contends the trial court erred in denying both petitions on which he bases his appeals. A variety of arguments are presented to support each contention. Since each argument is predicated on the application, or the inapplicability, of section 1714.10, we begin with the statute.

Section 1714.10 provides that a plaintiff must obtain permission of the trial court before he or she may file an action against an attorney alleging the attorney conspired with his or her client during any attempt to contest or compromise a claim or dispute. (§ 1714.10, subd. (a).) Court permission to file such a cause of action is obtained by filing a verified petition supported by affidavits stating the facts on which liability is based. (Ibid.) The attorney must be served and provided an opportunity to oppose the petition. (Ibid.) Failure to comply with these requirements provides the attorney with an affirmative defense to the action. (§ 1714.10, subd. (b).)

The trial court may grant the petition if it finds from the evidence that there is a reasonable probability the plaintiff will prevail on the action. (§ 1714.10, subd. (a).) A plaintiff establishes a reasonable probability of prevailing when the proposed pleading is legally sufficient and there is a sufficient showing of facts to sustain a favorable decision if the evidence submitted by the petitioner is credited. (Hung v. Wang (1992) 8 Cal.App.4th 908, 931.) An order made under this section that determines the rights of a petitioner or an attorney is appealable. (§ 1714.10, subd. (d).)

Section 1714.10 is a civil special proceeding. (§ 1714.10, subd. (d).) The parties in this case have, for the most part, failed to grasp the difference between an action and a civil special proceeding. A short review of the applicable statutes will assist in explaining our conclusions.

Every application to a court for a judgment or order seeks a judicial remedy. (Code of Civ. Proc., § 20.) Judicial remedies are classified as either actions or special proceedings. An action is defined as "an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense." (Code of Civ. Proc., § 22.) Actions include suits at law or equity, certain adversary proceedings in a probate, actions for declaratory relief, and marital dissolutions. (3 Witkin, Cal. Procedure (4th ed. 1996) Actions, § 11, pp. 64-65.) "Every other remedy is a special proceeding." (Code of Civ. Proc., § 23.)

A special proceeding may be filed as a separate, independent court proceeding, or it may be filed within a pending action. Obviously, when filed in a separate, independent court proceeding, all the parties treat it as such. A special proceeding filed in a pending action, however, also must be treated as independent from the underlying action.

We have amended the caption relied on by the parties to reflect this distinction.

In this case, DeLaMare sought court permission to amend his complaint and to add Sadler as a defendant in the same motion. Every party opposed both remedies sought by DeLaMare. But Sadler, who was not a defendant, had no standing to oppose the motion to amend the complaint, and Defendants had no standing to oppose the petition seeking the right to sue Sadler. This confusion increased the trial courts workload unnecessarily.

I. First Appeal

DeLaMare contends the trial court erred in denying this petition on July 30, 2001, because the cause of action alleged against Sadler is not one that arises out of an attempt to compromise a claim or dispute, and thus section 1714.10 is inapplicable. DeLaMare also claims Sadler owed him an independent duty, again rendering section 1714.10 inapplicable. (§ 1714.10, subd. (c).)

The hearing on July 30, 2001, was DeLaMares third attempt to add Sadler as a defendant. Although the first two attempts relied on section 1714.10 as authority, each was denied because DeLaMare did not comply with the procedural requirements of the statute. The moving papers for the July 30 hearing included a notice of hearing, points and authorities, a compendium of out-of-state authority (none of which is cited as authority in the memorandum of points and authorities), and a declaration from DeLaMares attorney.

DeLaMare did not file a petition in his first attempt. Thus, while this was his third attempt, it involved only his second petition.

DeLaMares attorney declared that the existing complaint was to be amended by adding Sadler to the caption and indicating in the body of the complaint that Sadler was the corporate attorney who conspired with Defendants. Sadler also was to be added as a defendant in the third cause of action by alleging that he was a coconspirator.

The proposed amended complaint adds additional information not included in the third amended complaint. In footnote 2, DeLaMare alleges that Sadler falsely represented that a shareholders meeting scheduled for December 4, 1998, would be continued and later drafted minutes for that meeting that included a transfer of all Thompson-Hysell Engineering, Inc.s assets. Paragraph 30 is also amended to allege that Defendants were able to transfer all of Thompson-Hysell Engineering, Inc.s assets, only with Sadlers assistance.

While the captions to the first two causes of actions include Sadler as a defendant, only the third cause of action contains allegations attributing wrongful conduct to Sadler. This cause of action is entitled a derivative suit for breach of fiduciary duty against Defendants, Sadler and Bettencourt and alleges that each Defendant conspired to defraud Thompson-Hysell Engineering, Inc. of its assets, contrary to the corporations best interests.

The other three causes of action in the proposed fourth amended complaint are an individual shareholders action for breach of directors fiduciary duty by directors, individual shareholders action for breach of fiduciary duty by majority shareholders, and for removal of the directors of the corporation.

The points and authorities argued that Defendants used Sadler to fabricate the legal documents to generate the appearance that the assets were sold to the dummy corporation in May 1997 and December 1998. DeLaMare argued that his complaint established a breach of fiduciary duty based upon the commission of constructive and actual fraud and the evidence established a conspiracy to commit fraud. Nowhere in his points and authorities does DeLaMare suggest that section 1714.10 is inapplicable to the facts of his proposed complaint.

Compliance with Section 1714.10

It is clear the trial court did not err in denying the petition if section 1714.10 applies. Section 1714.10 subdivision (a) requires the petitioner to present evidence to support his or her allegations. The trial court sustained Defendants and Sadlers objections to the evidence submitted by DeLaMare. This ruling was correct.

DeLaMares attorney submitted a declaration attempting to testify about what his investigation revealed. His observations and conclusions were inadmissible because he lacked personal knowledge of the events about which he sought to testify. (Evid. Code, § 702, subd. (a).) He was no more competent to testify in a declaration than he would be at trial. (Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1120.) Moreover, many of the documents he submitted in support of his conclusions did not stand for the proposition submitted.

For example, DeLaMare places great reliance on a claim that Sadler told him a board of directors meeting scheduled for December 4, 1998, would be continued to a later date. DeLaMare argues the meeting was not continued and the assets of the corporation were transferred at this meeting. The documents attached include a letter from DeLaMares attorney that (1) acknowledged receipt of the notice of the December 4, 1998, board of directors meeting, (2) advised that DeLaMare would not attend, and (3) advised DeLaMare was interested in selling his Thompson-Hysell Engineering, Inc. stock. The notice of the board of directors meeting advised that the meeting would include discussion of sale of corporate assets. On December 18, 1998, Sadler wrote to DeLaMares attorney stating that the board of directors meeting had been continued to December 22 to consider the purchase of DeLaMares shares in Thompson-Hysell Engineering, Inc. This letter referred to a conversation between the attorneys that occurred the preceding week, well after the board of directors meeting occurred. Nowhere is there any evidence that Sadler stated the December 4 meeting would not occur. Nor does DeLaMares attorneys declaration contradict these facts. Instead, this declaration apparently attempts to mislead the trial court by omitting the correspondence and omitting the dates of when the events occurred.

Finally, there was no foundation for the hundreds of pages of documents submitted. DeLaMare was required to establish the various writings were authentic. (Evid. Code, § 1401, subd. (a).) "Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law." (Evid. Code, § 1400.) There was no attempt to authenticate any document.

DeLaMares tactic in the trial court appeared to be to overwhelm the trial court with paper without regard to the rules of evidence. DeLaMares moving papers consume over 500 pages of the clerks transcript. Many of the submitted papers serve no conceivable purpose. Such tactics not only waste judicial resources but also client funds. DeLaMares interests would have been served better by a thorough research of the applicable law.

Simply stated, DeLaMare presented a petition that was doomed to fail. He was required to present competent, admissible evidence (Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 83), and failed to do so. He impliedly acknowledges this failure by failing to argue in his opening brief that this motion met the requirements of section 1714.10.

Therefore, the issues presented are whether court approval pursuant to section 1714.10 was required and, if not, has DeLaMare waived his right to argue otherwise by failing to raise the issue in the trial court?

Applicability of Section 1714.10

Section 1714.10 applies to a conspiracy between an attorney and client "arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorneys representation of the client ...." (§ 1714.10, subd. (a).) The limitation that the conspiracy must involve an attempt to contest or compromise a claim or dispute was added by amendment in 1991. (Stats. 1991, ch. 916, § 1, p. 4108.) Prior to that time, the statute applied to any conspiracy between an attorney and a client.

DeLaMare insists the conspiracy he alleged did not arise from an attempt to compromise a claim or dispute. Instead, he claims Defendants and Sadler conspired fraudulently to transfer the assets of the corporation and to conceal the transfer from the adversely affected minority shareholder. Our review, however, is not based on arguments in briefs but on the allegations proposed in the trial court.

There is little case law on the question of whether a conspiracy allegation arises out of an attempt to contest or compromise a claim or dispute. Our review indicates that the allegations present a very close call. We conclude, however, that DeLaMare was required to comply with section 1714.10.

The essence of this dispute is the value of DeLaMares stock in Thompson-Hysell Engineering, Inc. He contends that after his employment with Thompson-Hysell Engineering, Inc. was terminated, he was told he would never be given anything for his stock. DeLaMare alleges in his complaint that a conspiracy was formed to deprive him of the value of his stock between Defendants, Sadler and others. As DeLaMare stated in his memorandum of points and authorities, "The parties had a dispute then in March 1996 about the value of [DeLaMares] stock interest and whether Defendants would ever pay [DeLaMare] anything for it.... This dispute was never resolved." DeLaMare also alleges in various papers that as part of this conspiracy, Sadler offered to buy his stock on behalf of Thompson-Hysell Engineering, Inc. DeLaMare rejected the offer as insufficient. Thus, we have a claim or dispute — the value of DeLaMares Thompson-Hysell Engineering, Inc.s stock. We also have a conspiracy alleged to resolve the dispute by either purchasing DeLaMares stock or by rendering it valueless.

Our conclusion that section 1714.10 applies to this dispute is supported by DeLaMares actions in the trial court. DeLaMares first attempt to add Sadler as a defendant was a motion that stated it was being made pursuant to section 1714.10. In response to the trial courts suggestion that DeLaMare review section 1714.10, DeLaMare filed an amended notice of hearing with a petition pursuant to section 1714.10 and a new hearing date. When the petition was denied without prejudice because DeLaMare failed to serve the petition in a timely manner, DeLaMare filed the petition that is the subject of this appeal. Nowhere in his memorandum of points and authorities does DeLaMare suggest that section 1714.10 does not apply to this dispute. Therefore, it is clear that DeLaMare thought adding Sadler as a defendant required compliance with section 1714.10.

DeLaMares initial memorandum of points and authorities stated, "Civil Code Section 1714.10 is not applicable, but nevertheless the proposed Verified Amendment to the Complaint is a sufficient pleading with respect to Defendant SADLER, and the declaration filed in support of this motion establishes a prima facia case to support a finding that [DeLaMare] has shown a substantial probability of prevailing, in compliance with the code section if it was applicable." DeLaMare does not explain why section 1714.10 does not apply and cites no authority for this proposition. Therefore, we reject the contention that DeLaMare argued in the trial court that section 1714.10 did not apply to his motion to add Sadler as a defendant.

Waiver Even if we conclude that section 1714.10 does not apply, has DeLaMare waived any right to contest the applicability of section 1714.10 by not arguing the point in the trial court? DeLaMare ignores this issue in his opening brief and asserts in his reply brief that the issue was raised in the trial court.

As pointed out above, DeLaMare did not argue in the trial court that section 1714.10 did not apply to his attempt to sue Sadler. If DeLaMare believed section 1714.10 did not apply, he should have made this point in the trial court. Instead, DeLaMare led the trial court down the proverbial primrose path and now argues the trial court should not have followed. He is barred from making this argument because a theory not presented in the trial court may not be presented for the first time on appeal. (Santangelo v. Allstate Ins. Co. (1998) 65 Cal.App.4th 804, 811.)

Whether based on the principles of estoppel or waiver, the theory behind the above rule is that it is unfair to both the trial court and the opposing party to allow a litigant to proceed on one theory in the trial court and a different theory on appeal. (Richmond v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869, 874.) While the appellate court has discretion to apply the rule (ibid.), DeLaMare fails to present any compelling argument for not applying the rule and we see no reason not to do so. This was DeLaMares third attempt to add Sadler as a defendant. Despite being advised by the trial court that he should review the statute carefully after the first attempt, he filed additional papers in an attempt to comply with section 1714.10, without arguing that the section was not applicable to the facts of his case.

Unlike DeLaMare, we think he easily could have brought this argument to the trial courts attention. A motion to amend the complaint accompanied every petition he filed. DeLaMare could have informed the trial court in his memorandum of points and authorities that section 1714.10 did not apply and could have provided legal authority and competent argument for the proposition. DeLaMare could have continued by arguing, in the alternative, that if the trial court found that section 1714.10 was applicable, he complied with the requirements of that statute. Because he failed to follow these elementary steps, he is barred from arguing on appeal that section 1714.10 does not apply to this action.

II. Second Appeal

While the above appeal was pending, DeLaMare filed another petition to add Sadler as a defendant, again relying on section 1714.10. The trial court denied the petition finding that the first appeal deprived it of jurisdiction to hear this petition (Code of Civ. Proc., § 916), and because the petition failed to comply with the requirements for a motion for reconsideration. (Code of Civ. Proc., § 1008.) DeLaMare contends these "bogus" procedural requirements do not apply in this case because the petition was a special proceeding. While we agree with DeLaMares conclusion, we find nothing bogus about these procedural requirements.

Section 1714.10 is a special proceeding of a civil nature. (§ 1714.10, subd. (d).) That is why an order pursuant to section 1714.10, subdivisions (a), (b) and (c) are appealable as a final judgment. (§ 1714.10, subd. (d).) Special proceedings are not subject to the automatic stay of Code of Civil Procedure section 916 because Part 2 of the Code of Civil Procedure, of which section 916 is a part, applies only to civil actions, and not to special proceedings, unless a statutory provision provides otherwise. (Agricultural Labor Relations Bd. v. Tex-Cal Land Management, Inc. (1987) 43 Cal.3d 696, 707.)

Agricultural Labor Relations Bd. v. Tex-Cal Land Management, Inc., supra, 43 Cal.3d 696 cited Carpenter v. Pacific Mut. L. Ins. Co. (1939) 13 Cal.2d 306, 311 as authority for this proposition. Carpenter arose out of the seizure and liquidation of the assets of the defendant insurance company by the insurance commissioner. The appellants argued in the trial court and on appeal that their appeal from the rehabilitation plan stayed any further action on that order and thus precluded the trial court from entering its subsequent order of liquidation. "The answer to this contention is that the provisions of section 946 of the Code of Civil Procedure, and of the related section 949 of the same code,[] have no application to a special proceeding such as is here involved. The sections are found in part II of the code which deals only with civil actions. This part of the code has no application to special proceedings of this nature unless specifically made applicable thereto by statute.... The legislature has seen fit to make the provisions of part II of the code expressly applicable to many special proceedings. Its failure to do so in reference to proceedings under the Insurance Code must be held to have been intentional. We must presume that the legislature intended that upon appeal from orders or judgments made under the Insurance Code the supersedeas should not be automatic, but whether one should be granted should rest in the sound discretion of the court in the exercise of its power to grant supersedeas where no statutory stay exists." (Carpenter v. Pacific Mut. L. Ins. Co., supra, 13 Cal.2d at pp. 311-312.)

Code of Civil Procedure sections 946 and 949 pertained to automatic stays upon the perfection of an appeal. Legislation in 1968 repealed these sections (stats. 1968, ch. 385, § 1, p. 811) and replaced them with sections 916-923 (stats. 1968, ch. 385, § 2, pp. 816-820.)

This rather expansive language in Carpenter establishes that a Code of Civil Procedure section 916 automatic stay is inapplicable when an appeal is filed pursuant to section 1714.10, since the Legislature did not see fit to provide otherwise. This language also precludes reliance on Code of Civil Procedure section 1008 as a ground for denial of the second section 1714.10 petition. Code of Civil Procedure section 1008, which provides strict procedural requirements for motions for reconsideration, also is found in Part 2 of the Code of Civil Procedure. Carpenter precludes application of these requirements to special proceedings.

This conclusion compels denial of Sadlers motion to dismiss appeal No. F040533. This motion was made on the grounds that the order was not appealable because the trial court decided it did not have jurisdiction to hear the petition, rather than denying the petition on the merits. Since the trial court had jurisdiction to hear the matter, we must deny the motion to dismiss. Otherwise, DeLaMare would have no remedy to challenge the erroneous conclusion that the trial court lost jurisdiction because of the pendency of the first appeal. We conclude, under the unique circumstances of this case, that the trial courts denial falls within the appealability provisions of section 1714.10, subdivision (d).

With respect to Code of Civil Procedure section 1008, this result is proper because an order on a section 1714.10 petition is, in essence, a judgment. (See, e.g., § 1714.10, subd. (d).) Once the trial court enters an order, the special proceeding is completed unless an appeal is filed. After entry of judgment, the superior court does not have jurisdiction to entertain a motion for reconsideration. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 859, fn.29.)

An attorney who successfully defeats a section 1714.10 petition is not left without recourse if the plaintiff attempts to file another petition on the same allegations. Several remedies come to mind.

First, if the judgment on the first petition is not final, the attorney may request the trial court abate the second petition. (See generally 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, §§ 1064-1076, pp. 511-524.) Once the request is granted, the second special proceeding is abated until the first proceeding is final.

Application of this remedy here appears to be counterintuitive because there was only one action filed. Because a section 1714.10 petition is a special proceeding, however, DeLaMare could have filed each petition as a separate proceeding. Had he done so, application of the doctrine of abatement would be readily apparent. Simply because DeLaMare chose to file both petitions in the pending action does not change the fact that each petition is a special proceeding and permits the trial court to apply the doctrine of abatement.

Second, if the judgment on the first petition is final, the attorney may rely on the doctrine of res judicata codified in Code of Civil Procedure section 1908. The doctrine of res judicata, whether in the context of issue preclusion or claim preclusion, applies when (1) an issue decided in a prior action is identical to an issue presented in the pending action, (2) the prior action resulted in a final judgment on the merits, and (3) the action involves the same parties or those in privity with either party. (Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221, 1226.) Not only is Code of Civil Procedure section 1908 not included in Part 2 of the Code of Civil Procedure, it also is specifically made applicable to special proceedings. (Code of Civ. Proc., § 1908, subd. (a)(2).) Therefore, once the order denying a section 1714.10 petition becomes final, i.e., the appeal is decided or the time to appeal expires, a second petition may be defended on the basis that the issue already has been decided between the parties.

Third, if an appeal of denial of the first petition is pending when the second petition is filed, the attorney may seek a writ of supersedeas from the appellate court. (Carpenter v. Pacific Mut. L. Ins. Co., supra, 13 Cal.2d at p. 312.)

We are not suggesting that these are the only available remedies. We simply indicate some of the available remedies.

This brings us back to DeLaMares second appeal. The trial courts ruling that it lacked jurisdiction to rule on the petition because of the pending appeal was erroneous. Likewise, the trial courts conclusion that this was in essence a motion for reconsideration that failed to comply with the requirements of Code of Civil Procedure section 1008 also was erroneous.

Sadler did not argue the action should be abated because of the pending prior petition. Nor did he seek a writ of supersedeas from this court. Therefore, we feel compelled to reverse the order denying the petition and remand for further consideration of the second petition.

The parties urge us to consider the merits of the petition. We are unwilling to do so since the trial court never reached the merits of this petition, instead relying on procedural grounds to deny the petition.

DISPOSITION

The trial courts order dated July 30, 2001, denying DeLaMares petition, which is the subject of the first appeal (No. F039080), is affirmed. The trial courts order dated February 15, 2002, denying DeLaMares petition, which is the subject of the second appeal (No. F040533), is reversed and remanded to the trial court for further consideration of the petition. Each party is to bear their own costs on appeal.

WE CONCUR: DIBIASO, Acting P.J., VARTABEDIAN, J.


Summaries of

Delamare v. Hysell

Court of Appeals of California, Fifth Appellate District.
Nov 21, 2003
F039080 & F040533 (Cal. Ct. App. Nov. 21, 2003)
Case details for

Delamare v. Hysell

Case Details

Full title:PHILLIP KIRK DELAMARE, Plaintiff and Appellant, v. WILLIAM B. HYSELL et…

Court:Court of Appeals of California, Fifth Appellate District.

Date published: Nov 21, 2003

Citations

F039080 & F040533 (Cal. Ct. App. Nov. 21, 2003)