Opinion
D069188
06-29-2018
DISPATCH & TRACKING SOLUTIONS, LLC, Cross-complainant and Appellant, v. ORION COMMUNICATIONS, INC. et al., Cross-defendants and Respondents; SAMEIS HOLDINGS, LLC, Objector and Appellant.
ONE LLP, Peter R. Afrasiabi and Kathryn M. Davis for Cross-complainant and Appellant Dispatch & Tracking Solutions, LLC, and Objector and Appellant Sameis Holdings, LLC. Fitzgerald Knaier, Kenneth M. Fitzgerald, and Keith M. Cochran for Cross-defendants and Respondents Orion Communications, Inc. and Leslie Delatte. Moscone Emblidge Sater & Otis, G. Scott Emblidge, and Matthew K. Yan for Cross-defendant and Respondent Tegsco, LLC.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2009-00087082-CU-BT-CTL) APPEALS from postjudgment orders and amended judgment of the Superior Court of San Diego County, Timothy B. Taylor, Richard E. L. Strauss, Judges. Affirmed in part; reversed in part with directions. ONE LLP, Peter R. Afrasiabi and Kathryn M. Davis for Cross-complainant and Appellant Dispatch & Tracking Solutions, LLC, and Objector and Appellant Sameis Holdings, LLC. Fitzgerald Knaier, Kenneth M. Fitzgerald, and Keith M. Cochran for Cross-defendants and Respondents Orion Communications, Inc. and Leslie Delatte. Moscone Emblidge Sater & Otis, G. Scott Emblidge, and Matthew K. Yan for Cross-defendant and Respondent Tegsco, LLC.
Cross-complainant Dispatch & Tracking Solutions, LLC (DTS or DTS, LLC) and objector Sameis Holdings LLC (Sameis) (collectively appellants) appeal from orders granting two separate motions to amend the judgment to add Sameis as a judgment debtor with respect to the judgment's monetary awards against DTS and in favor of cross-defendants Orion Communications, Inc. and Leslie Delatte (collectively Orion), and cross-defendant TEGSCO, LLC, doing business as San Francisco AutoReturn (AutoReturn).
This case involves disputes among several business entities and the City of San Diego (City) regarding the City's decision to award a competitively bid contract for a computerized system for dispatching tow trucks. This is the third time this case has been on appeal. The primary issue now is whether the trial court had authority to reconsider and reverse a postjudgment order denying a motion to amend the judgment to add an alleged alter-ego judgment debtor after the time to appeal from such an order had lapsed with no appeal having been taken. We conclude the court lacked such authority and, therefore, affirm in part and reverse in part with directions.
FACTUAL AND PROCEDURAL BACKGROUND
The background regarding the parties and issues involved in the underlying litigation is from our prior opinion in this case filed April 8, 2016 (consolidated case Nos. D062426, D062927, D063855). We then set forth the relevant postjudgment events.
A. The Prior Appeal
"This litigation arises out of the decision of the City . . . to award a competitively bid contract to provide the City a computerized system for dispatching tow trucks (the towing contract) to . . . AutoReturn. . . . In providing similar services to other municipalities, AutoReturn used tow dispatching communications software provided by DTS known as Law Enforcement Towing System (LETS) and Towing Management System (TMS). AutoReturn's bid proposal to the City referenced AutoReturn's intended use of DTS's LETS/TMS software as a component of AutoReturn's own tow dispatch and impound management software package known as the AutoReturn Integrated Enterprise System (ARIES).
"Authorized City Towing and five towing companies it subcontracted with (together ACT) submitted a competing bid for the towing contract in which ACT also proposed using LETS/TMS. ACT had provided computerized tow dispatch services to the City using LETS/TMS before the City awarded the contract to AutoReturn. During the competitive bidding process for the towing contract, ACT informed the City and AutoReturn that it held an exclusive license to use LETS/TMS software in San Diego County. Because of ACT's exclusive license claim, after the City awarded the towing contract to AutoReturn, AutoReturn decided to replace DTS's LETS/TMS software with similar software provided by Orion Communications, Inc. (Orion). However, as a result of the present litigation, Orion decided not to work with AutoReturn in San Diego. After Orion withdrew, AutoReturn developed its own tow management software to replace the LETS/TMS component of its ARIES package.
"ACT sued the City, AutoReturn, DTS, Orion and related parties for—among other causes of action—breach of contract, intentional interference with contractual relations, intentional interference with prospective economic advantage, unfair business practices, and misappropriation of trade secrets arising out of its alleged exclusive license agreement with DTS and the City's award of the towing contract to AutoReturn. DTS filed a cross-complaint against ACT, the City, AutoReturn, and Orion. At issue in [the prior] appeal [were] DTS's cause of action under the California Uniform Trade Secrets Act (Civ. Code, § 3426 et seq.) ( . . . UTSA) against AutoReturn, the City, and Orion and Orion's chief executive officer, Leslie DeLatte, for misappropriation of trade secrets, and a cause of action against AutoReturn for breach of a joint venture agreement.
"The trial court entered judgment against ACT and in favor of AutoReturn on ACT's operative fourth amended complaint after granting AutoReturn's motion for summary judgment on that complaint. The court also entered judgment against DTS and in favor of AutoReturn, Orion, and the City on DTS's second amended cross-complaint after granting Orion's motion for summary judgment and AutoReturn and the City's motion for summary judgment on the second amended cross-complaint. The court granted a motion by Orion for attorney fees and costs against DTS under [Civil Code] section 3426.4 and awarded Orion fees of $120,000 based on its finding that DTS prosecuted its misappropriation of trade secrets claim against Orion in bad faith. AutoReturn and the City moved for attorney fees and costs under [Civil Code] section 3426.4 against both ACT and DTS. The court denied the motion as to ACT on the ground it lacked jurisdiction to award fees against ACT under [Civil Code] section 3426.4 because ACT had dismissed its trade secret cause of action. The court granted the motion as to DTS and awarded AutoReturn and the City attorney fees and costs against DTS in the amount of $450,000." (Fns. omitted.)
In the prior appeal, we affirmed the portion of the amended judgment entered on February 28, 2013, that dismissed with prejudice DTS's second amended cross-complaint (including DTS's cause of action for misappropriation of trade secrets) as to Orion and the City. As to AutoReturn, we reversed the portion of the amended judgment that dismissed DTS's second amended cross-complaint with prejudice and we directed the trial court to enter an order denying AutoReturn's motion for summary judgment and summary adjudication of DTS's cause of action for breach of joint venture agreement, but granting AutoReturn's motion for summary adjudication of DTS's cause of action for misappropriation of trade secrets. Having affirmed the judgment as to DTS's trade secret claims against Orion and AutoReturn, we also affirmed the orders and portion of the judgment awarding Orion's and AutoReturn's motions for attorney fees and costs under Civil Code section 3426.4.
The amended judgment entered on February 28, 2013, reflects the trial court's summary judgment rulings and awards of attorney fees and costs to Orion and AutoReturn.
B. Efforts to Enforce the Judgment
1. The relationship between DTS and Sameis
While the prior appeal was pending, Orion and AutoReturn attempted to enforce the judgment by executing on DTS's assets. In April 2013, Orion discovered that DTS was receiving payments from the Fresno Police Department (FPD) for using DTS's software. Orion filed a motion for an order assigning DTS's right to receive those payments to Orion, and an order restraining DTS "from encumbering, assigning, disposing or spending DTS['s] interest in those payments."
Opposing the motion, DTS claimed it had no contractual relationship with the FPD and, therefore, there was no right to payment to assign. DTS further argued that even if the FPD did owe it money, Sameis had priority repayment rights over Orion's rights as a judgment creditor. DTS represented that it became indebted to a bank (the bank) in 2008, several years before Orion obtained its judgment against DTS, and the bank had a perfected security interest in DTS's assets, including accounts receivable. In August 2010, Sameis "acquired all obligations DTS owed to [the bank]" as well as the bank's perfected security interest in DTS's assets. Consequently, DTS argued, Sameis had priority repayment rights over Orion.
In May 2013, Orion discovered that private Fresno tow operators, rather than the FPD, were paying DTS. Consequently, Orion withdrew its motion for an assignment of rights to payment from the FPD and obtained a hearing date for a new assignment motion.
Opposing Orion's second motion for an assignment order, DTS again argued, among other things, that Orion was not entitled to assignment of the payments from the tow operators because Sameis, rather than DTS, wholly owned the right to those payments. DTS explained: "[The bank] held a Promissory Note with a blanket security agreement relating to all of DTS'[s] and Compiled Logic's assets. [Citation.] Subsequently, Compiled Logic and DTS defaulted on the Promissory Note. [Citation.] In August of 2010, [the bank] foreclosed on the assets of DTS to satisfy the unpaid debt and subsequently sold its interest in DTS's assets to Sameis. [Citation.] Sameis now owns all of the assets that were once held in the name of DTS and/or Compiled Logic, including the rights to payment from the towers in Fresno and Orange County at issue herein. [Citation.] However, DTS retained the present lawsuit, which is not an asset."
The court granted Orion's motion for an assignment order and an order restraining DTS from assigning, encumbering, or otherwise disposing of its right to payment from the Fresno and Orange County tow operators. Regarding DTS's claim that Sameis owned all of DTS's former assets, the court stated: "If Sameis actually does have the rights and/or a superior claim to these payments, then it is up to Sameis to ensure that its rights are protected. DTS is not entitled to avoid paying a previously awarded judgment merely by claiming that all of its assets are owned by a third party, especially when the circumstances of that alleged transaction are unclear."
On August 1, 2013, Sameis filed a lawsuit in Texas seeking a declaration that Orion had no interest or a subordinate interest in DTS's assets, including rights to payment from the tow operators. Sameis also sought a temporary restraining order prohibiting Orion from seeking to collect payments from the tow operators. The Texas court denied Sameis's request for the temporary restraining order.
Meanwhile, in California, DTS filed a motion for a protective order relieving it from having to appear for a judgment debtor examination by AutoReturn, and an order quashing AutoReturn's subpoena requiring production of documents at the examination. DTS argued the judgment debtor examination and subpoena were unnecessarily burdensome, oppressive, and harassing. DTS's manager and Texas resident Morgan Hill filed a declaration claiming that DTS had no assets, employees, or revenue because Sameis had acquired all of its assets in August 2010 and, therefore, DTS was unable to pay for him to appear at a judgment debtor's examination in California.
The court denied DTS's motion for a protective order, stating: "AutoReturn . . . has provided evidence showing that DTS has a place of business within the 150 mile limitation. . . . The court finds DTS'[s] assertion that there are no directors, officers, or employees in California that could testify at a judgment debtor's exam disingenuous in light of the evidence presented by AutoReturn." (Citations omitted.) The court further stated that it "remain[ed] unconvinced that DTS is without assets, revenue, or employees." Regarding DTS's claim that Sameis had a superior claim to payments owing to DTS, the court repeated its prior ruling that DTS could not avoid paying a judgment by the bare claim that its assets were owned by a third party.
On October 18, 2013, DTS's general manager, Reba Hildebrand, testified for DTS at the judgment debtor examination. Asked if she was also employed by Sameis, she responded that was "very hard to answer" and "a lot of times I really don't know." DTS's attorney instructed Hildebrand to not answer questions about the relationship between DTS and Sameis. Hildebrand later testified she was "currently employed by Sameis, doing business as, DTS . . . ." However, DTS's counsel stated Hildebrand was "appointed today to represent DTS, LLC, in this judgment debtor exam and she is the only person that is available to testify. She has been prepared to testify on the assets and liabilities of DTS, LLC." DTS's counsel would not allow Hildebrand to testify about any aspect of the DTS entity that currently employed her.
In light of Hildebrand's testimony (and refusal to answer certain questions), AutoReturn asked the court to compel Hildebrand to answer questions regarding the relationship between DTS and Sameis. AutoReturn's counsel argued that DTS's judgment creditors were entitled to learn if Sameis was DTS's alter ego, if DTS fraudulently conveyed assets to Sameis, or if DTS falsely claimed to own the LETS/TMS intellectual property when it filed its 2011 cross-complaint. DTS's counsel responded that such topics were inappropriate in a judgment debtor's examination. When the court remarked, "It sounds like you want me to make them file a motion to add Sameis as a judgment debtor and then go through this process again," DTS's attorney responded, "That is exactly correct." The court ordered Hildebrand to answer questions about the relationship between DTS and Sameis.
At the resumed judgment debtor examination, Hildebrand testified that DTS, LLC, was sold to C:Logic and was later acquired by Sameis. Hildebrand testified that she became a Sameis employee at an unknown date. After Sameis acquired DTS, customers continued writing "DTS on their checks" and Hildebrand continued to sign her e-mails and letters as coming from DTS. However, asked whether DTS, LLC, was acquired by Sameis, Hildebrand answered, "I don't know."
AutoReturn's counsel showed Hildebrand a report on DTS issued by the Texas Secretary of State listing Hildebrand, Hill, and J. Victor Samuels as DTS officers or members. Hildebrand testified she had never seen that document and "was not aware of that." Asked if she was a DTS officer, Hildebrand answered, "Based on my knowledge and looking at this form, yes, but I don't think so." She later clarified that she did not know if the document was "true" and was unaware if she was a DTS officer or member. She testified that Sameis was presently doing business as DTS and "we did new contracts" with the former customers of DTS that were current customers of Sameis, doing business as DTS. However, she did not know whether Sameis, doing business as DTS, licensed LETS/TMS to any customers or had license agreements with tow companies or law enforcement agencies relating to LETS/TMS.
Hildebrand also testified that this lawsuit was DTS's only asset. She did not know how DTS "fit with Sameis Holdings as a whole[.]" She testified that Sameis, doing business as DTS, acquired and was servicing about 150 contracts that were previously serviced by DTS.
After the debtor examination, AutoReturn asked the court to allow Hildebrand to be questioned about Sameis's assets and liabilities, doing business as DTS. However, the court prohibited such questions unless and until Sameis was added as a judgment debtor.
2. Orion's motion to add Sameis as a judgment debtor
On October 15, 2013, before the next judgment debtor examination, Orion filed a motion to amend the judgment to add Sameis as a judgment debtor. Orion contended that Sameis was DTS's alter ego "and/or Sameis [was] a 'mere continuation' of DTS and liable as its successor, and/or adding Sameis as a judgment debtor [was] necessary to prevent injustice." Sameis's opposition was due on November 5, 2013.
3. Sameis's Challenge to Judge Taylor
On November 1, 2013, Sameis filed a peremptory challenge against Judge Taylor. Code of Civil Procedure section 170.6, subdivision (a)(4) limits peremptory challenges to "one motion for each side." Although DTS had previously exercised such a challenge in 2012, Sameis argued that its interests were adverse to DTS's interests and, therefore, Sameis was able to file its own challenge.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
The court (Judge Taylor) granted Sameis's peremptory challenge. However, after noting there was "no published appellate guidance" on whether a nonparty proposed to be added as a judgment debtor may exercise a section 170.6 challenge, Judge Taylor urged Orion to challenge his ruling by filing a writ petition. In the meantime, Orion's motion to amend the judgment was taken off calendar pending reassignment to another judge.
On November 21, 2013, Orion and AutoReturn filed a joint petition for writ of mandate in this court challenging the order granting Sameis's peremptory challenge.
4. Judge Strauss denies motion to add Sameis as a judgment debtor
While the writ petition was pending in this court, Orion filed in the trial court an amended motion to amend the judgment to add Sameis as a judgment debtor, to be heard by Judge Strauss on March 28, 2014. There, Orion repeated its previous arguments that Sameis was DTS's alter ego or a " 'mere continuation' " of DTS and liable as its successor, and that adding Sameis as a judgment debtor was necessary to prevent injustice.
Opposing the motion, Sameis argued there was no unity of interest between Sameis and DTS. Sameis noted it did not acquire DTS's assets directly from DTS; rather, it purchased the assets of C:Logic and DTS, including the DTS trade name, from the bank through an asset foreclosure sale. Sameis paid the bank $75,000, representing $37,500 for each company's respective assets. Sameis contended that after buying DTS's assets, it operated under DTS's name, but DTS was not involved. Sameis further contended that the instant lawsuit was a DTS liability, not asset, and Sameis did not purchase DTS's liabilities.
On March 28, 2014, Judge Strauss denied Orion's motion to amend the judgment, based largely on the finding that "Sameis purchased the assets of DTS and C:Logic at the sheriff's foreclosure sale, and there was compliance with the formalities of the sale." Judge Strauss also stated, "Orion is prejudiced by the transfer of DTS's assets to Sameis. However, the court cannot ignore that Orion would have had the opportunity to bid on the assets of DTS and C:Logic at the foreclosure sale. Notwithstanding that Orion may not be paid by DTS, the court is unable to find a unity of interests to hold Sameis liable for DTS'[s] judgment. The motion is denied at this time."
5. This court reverses the peremptory challenge to Judge Taylor
In May 2014, this court granted Orion and AutoReturn's writ petition, and directed the court to deny Sameis's challenge to Judge Taylor. (Orion Communications, Inc. v. Superior Court (2014) 226 Cal.App.4th 152, 162.)
6. Back to Judge Taylor for Orion's motion for attorney fees and costs
After this court granted the writ petition, Orion filed a memorandum of costs in the trial court, seeking $21,244.60 in attorney fees incurred in the writ proceeding from Sameis under Code of Civil Procedure section 685.040 and Civil Code section 3426.4.
Section 685.040 provides: "The judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment. Attorney's fees incurred in enforcing a judgment are not included in costs collectible under this title unless otherwise provided by law. Attorney's fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney's fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5."
Sameis filed a motion to tax costs, asserting that Orion was not entitled to attorney fees under the UTSA because Sameis was a nonparty and never brought a trade secret claim against Orion. Sameis further argued that Orion was not the prevailing party because Judge Strauss had determined Sameis was not DTS's alter ego.
On October 20, 2014, Judge Taylor granted Sameis's motion to tax costs, finding Orion was not entitled to attorney fees under Code of Civil Procedure section 685.040 because the costs Orion incurred in litigating Sameis's Code of Civil Procedure section 170.6 challenge were not reasonable and necessary to Orion's enforcement of its judgment against DTS. Judge Taylor further ruled that Orion was not entitled to attorney fees under Civil Code section 3426.4 because Sameis did not sue Orion for misappropriation of trade secrets "and Orion was unsuccessful in amending the judgment to make Sameis an alter ego of DTS."
In the same order, Judge Taylor granted Orion's motion for $15,310 in attorney fees and $2,782.62 in costs against DTS, as being reasonably and necessarily incurred in enforcing the judgment against DTS.
7. Renewal motions and related proceedings
On November 21, 2014, Orion filed a renewal motion under section 1008, subdivision (b) with respect to: (1) Judge Strauss's March 28, 2014 order denying Orion's motion to amend the judgment to add Sameis as a judgment debtor, and (2) Judge Taylor's October 20, 2014 order granting Sameis's motion to tax costs. Orion claimed it had obtained new evidence from recent depositions of Samuels and Hill in the Texas litigation of a successor and alter ego relationship between Sameis and DTS. Orion's counsel filed a declaration stating he had received these deposition transcripts on October 16, 2014, and they were not available when Orion filed its motion to amend the judgment. Orion asserted it could not have obtained this evidence earlier because discovery was closed in this case, and in the judgment debtor's examination, DTS's counsel instructed Hildebrand to not answer questions regarding the relationship between Sameis and DTS or Sameis's involvement in the instant litigation.
Appellants incorrectly contend that Orion's motion was actually a motion for reconsideration under subdivision (a) of section 1008 and that both Judge Taylor and Judge Strauss erred in construing it as a motion under subdivision (b). Orion's notice of motion and motion state it was bringing the motion under subdivision (b) of that statute.
Orion argued the newly discovered evidence showed that Sameis, through its owner Samuels, had been paying DTS's attorney fees and other legal expenses during this litigation. Additionally, Sameis had been paying DTS's taxes, was involved in the decision to sue Orion, and was effectively running this litigation. Orion also asserted that if DTS had prevailed, Sameis would have collected DTS's judgment. Moreover, Sameis wholly owned DTS, and Samuels testified he thought of Sameis and DTS as being "kind of twins," treated them as "the same thing," and operated them "like it's all one company."
Opposing Orion's renewal motion, Sameis argued, among other things, that the court had no authority to reconsider its prior ruling because it was a final order that Orion failed to appeal. Sameis also argued that Orion's new evidence was inadmissible hearsay and Orion's excuse for its delay in presenting it was "manufactured and without merit."
Judge Taylor declined to rule on Orion's motion, and instead transferred the motion to Judge Strauss, who had made the original rulings on these same issues.
On June 5, 2015, Judge Strauss granted Orion's renewal motion and ordered the judgment amended to add Sameis as a judgment debtor. The court found that Orion had "presented new facts and evidence it was unable to present at the time of the prior motion/hearing which supports that Sameis is the successor corporation to, and alter ego of, DTS, LLC."
Having now prevailed on the alter ego issue, Orion asked the court (Judge Taylor) to reconsider its prior order granting Sameis's motion to tax costs. In light of Judge Strauss's order adding Sameis as a judgment debtor to Orion, Judge Taylor granted Orion's motion to reconsider and now denied Sameis's motion to tax costs.
On July 2, 2015, AutoReturn filed its own motion to amend the judgment to add Sameis as a judgment debtor. On August 4, 2015, Orion filed a motion seeking $179,212.06 against Sameis for attorney fees and costs incurred in enforcing the judgment under Code of Civil Procedure section 685.040 and Civil Code section 3426.4. The court continued Orion's motion for attorney fees and costs to October 16, 2015, to be heard with AutoReturn's motion to amend the judgment.
On October 16, 2015, the court (Judge Taylor) granted AutoReturn's motion to amend the judgment, stating, "The reasoning in support of Judge Strauss's ruling likewise supports the determination that Sameis is the successor corporation to and alter ego of DTS."
The court also granted Orion's motion for $179,212.06 in attorney fees and costs because Orion incurred them as a result of DTS's and Sameis's efforts "to delay and defeat Orion's enforcement efforts. DTS did not voluntarily pay the judgment, whereas Sameis undertook efforts to prevent Orion from satisfying the judgment." The court directed counsel for AutoReturn and Orion "to present[ a third] amended judgment consistent with the foregoing . . . ."
Although the third amended judgment entered on October 21, 2015, includes the $179,212.06 award of attorney fees and costs to Orion, it does not reference Orion's motion seeking those fees and costs, AutoReturn's motion to amend the judgment, or the October 16, 2015 minute order setting forth the court's rulings on those motions.
DISCUSSION
I. Enforceability of Sanction Awards
Civil Code section 3426.4 provides that "[i]f a claim of misappropriation is made in bad faith" the trial court may award reasonable attorney fees and costs as a sanction. Under this statute, the trial court awarded Orion $120,000, and also awarded AutoReturn and the City $450,000. In the prior appeal, we affirmed both of these awards.
Appellants contend these awards should be vacated, or at a minimum, are not presently enforceable, because there is yet no "final judgment" resolving all claims of all parties. In a related argument, appellants also contend that because there is no final judgment in this sense, the order amending the judgment to add Sameis as a judgment debtor must be voided.
In the prior appeal, which is law of the case, we held that these attorney fee awards under Civil Code section 3426.4 " 'constitute[] a sanction' " and are a "sanction against DTS." Appellants' arguments fail, therefore, because an order imposing a monetary sanction has the force and effect of a money judgment, and is immediately enforceable through execution, unless and until stayed. (Newland v. Superior Court (1995) 40 Cal.App.4th 608, 615.)
II. Orion's Renewal Motion
A. Introduction
Appellants contend the trial court lacked authority to reconsider its order denying Orion's motion to amend the judgment because the order was an appealable postjudgment order, Orion did not appeal it, and the order was therefore final and unassailable. Appellants similarly contend the court lacked authority to reconsider the order granting Sameis's motion to tax costs because it was an appealable order that became final when the time for Orion to appeal it expired. At our request, the parties filed supplemental briefs addressing the effect, if any, of Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758 (Phillips) and Safaie v. Jacuzzi Whirlpool Bath, Inc. (2011) 192 Cal.App.4th 1160 (Safaie) on these contentions.
An order denying an order to amend a judgment to add a judgment debtor is appealable. (Misik v. D'Arco (2011) 197 Cal.App.4th 1065, 1071 (Misik).) A postjudgment order granting a motion to tax costs is also appealable. (Krikorian Premiere Theatres, LLC v. Westminster Central, LLC (2011) 193 Cal.App.4th 1075, 1085; Hilliger v. Golden (1980) 107 Cal.App.3d 394, 400.)
B. The Denial "At This Time"
At the outset, Orion contends it is unnecessary to consider this issue because the order denying its motion to add Sameis as a judgment debtor states, "The motion is denied at this time." Orion contends this means the court denied the motion without prejudice.
However, Orion has not cited, and our own independent research has not found any published authority stating that denying a motion "at this time" without also adding, "without prejudice" means a denial without prejudice. "The motion is denied at this time"—without anything more—is ambiguous. It may be reasonably construed as a formal way of saying "now"—e.g., the motion is denied now. However, it also may reasonably be construed as implying the court might reconsider its ruling at some other time in light of new or different facts, i.e., the motion is denied for lack of proof, but without prejudice to bringing the motion again based on new or different facts.
The meaning of an order or judgment is determined according to the rules governing the interpretation of writings generally. If an order or judgment is ambiguous, we may examine the entire record to determine its scope and effect, including the pleadings. (Rancho Pauma Mutual Water Company v. Yuima Municipal Water Dist. (2015) 239 Cal.App.4th 109, 115.)
Because an order denying a motion to add a judgment debtor under section 187 is ordinarily an appealable order, we begin with the commonsense assumption that a trial court would not ordinarily deny such a motion without prejudice absent a good reason, something taking a particular motion outside the norm. Usually, that good reason will be supplied by the moving party, who sensing possible defeat for lack of proof, seeks to make the best of an adverse situation by stating that if the court is inclined to deny relief, the denial be without prejudice if new or additional material facts arise or are discovered later.
Here, however, Orion did not ask for a without-prejudice ruling in the alternative. Rather, Orion unequivocally asserted, "The facts overwhelmingly establish that Sameis is a mere continuation of DTS." Orion's moving papers did not refer to any potential future factual development, nor did Orion suggest that if the court was inclined to deny the motion, it do so without prejudice. Orion's reply papers are also silent on these points. In sum, there is nothing in Orion's motion or reply indicating the court was even asked for a without-prejudice ruling.
Before the hearing, the court issued a tentative ruling adverse to Orion. At the hearing, knowing that defeat was imminent for lack of proof, Orion did not request a without-prejudice denial. The subject never came up at oral argument.
The court stated, ". . . I'm going to confirm the tentative ruling. I still think that's the right analysis and the information that I have. We'll go from there." Unfortunately, these comments suffer from the same ambiguity as the written order that denies relief "at this time."
We have similarly examined Orion's renewed motion for any indication that the court intended the denial "at this time" to be a without-prejudice denial. Opposing that motion, Sameis squarely framed the issue, asserting that "at this time" is ambiguous and if the court intended to convert what is ordinarily a final appealable order into a without-prejudice ruling, it would have expressly said so.
At the hearing, Sameis's lawyer spoke first, asserting that the court had no authority to hear the renewed motion because (1) the original ruling was an appealable order; (2) Orion never appealed; and (3) therefore, that original ruling was conclusive and binding. Sameis's lawyer argued, "[W]hat are you going to do with the prior order denying relief? I mean, we're entitled to rely on that. There is no appeal. It can't get stricken. . . . [T]he appeal was the way to go and they didn't do it." If the court intended its "at this time" denial to have been without prejudice to Orion's renewed motion, the short and correct reply to Sameis's lawyer would have been—"You were not entitled to rely on that order because I denied that motion without prejudice when I denied it 'at this time.' " But the court said no such thing. To the contrary, the court asked Sameis's lawyer for the citation to Misik, supra, 197 Cal.App.4th 1065, a case holding that an order denying a motion to add an alleged alter ego as a judgment debtor is an appealable order. (Id. at p. 1071.)
In response, Orion's attorney did not argue that the court could reconsider its prior ruling because the first motion was denied without prejudice. Rather, counsel argued that the prior order "like any number of orders that can be appealed, is subject to reconsideration, is subject to amendment if there are new or different facts under [section] . . . 1008." At the end of oral argument, the court confirmed its tentative ruling, stating "[t]here was nothing to appeal" because Orion did not have the additional information from the Texas litigation at that time.
On this record, we are compelled to conclude that the court's denial of Orion's original motion was with prejudice, and the phrase "at this time" was merely a formal way of stating, "now." Significantly, when the court denied the first motion, neither the parties nor the court anticipated new or different facts triggering another motion to add Sameis as a judgment debtor. Orion did not ask the court for a without-prejudice ruling for lack of proof as an alternative to an outright denial. We seriously doubt the court would on its own initiative intend to give Orion a without-prejudice ruling that Orion never requested. Moreover, at the second hearing, the court had ample opportunity to clarify the record and go directly to the merits by stating the first motion was denied without prejudice. However, the court said no such thing, but instead ruled that it could hear the renewal motion under section 1008.
C. Policy Concerns
Courts have long grappled with the question of a trial court's authority to correct or modify its prior orders. Part of the problem stems from tension between two public policies. One such policy is that " ' " '[m]iscarriage of justice results where a trial court is unable to correct its own perceived legal errors.' " ' " (Phillips, supra, 209 Cal.App.4th at p. 768.) However, at some point, orders and judgments must be deemed final in the trial court and not subject to reconsideration by that court to avoid the delays and inefficiencies associated with repeated examination and relitigation of the same facts and issues.
"The concept of finality 'rests upon the sound policy of limiting litigation by preventing a party who has had one fair adversary hearing on an issue from again drawing it into controversy and subjecting the other party to further expense in its reexamination.' " (People v. DeLouize (2004) 32 Cal.4th 1223, 1232 (DeLouize).) " '[E]ndless litigation, in which nothing was ever finally determined, would be worse than occasional miscarriages of justice . . . .' " (Ibid.)
Another difficulty comes from the various senses in which the word "final" is used with respect to an order or judgment. In one sense, all California state court judgments are final because finality is part of the definition of a judgment. (§ 577 ["A judgment is the final determination of the rights of the parties in an action or proceeding."].) But in another sense, no California judgment is ever final because a judgment can always be modified to correct clerical error or be vacated for extrinsic fraud. (See Olivera v. Grace (1942) 19 Cal.2d 570, 573-576.) In some contexts, "final" may simply mean that the order or judgment is immediately appealable. (See DeLouize, supra, 32 Cal.4th at p. 1232.) However, in other contexts, the same word—" 'final' "—means the order is immediately appealable and the time to appeal from it has lapsed. (See In re Marriage of Barthold (2008) 158 Cal.App.4th 1301, 1313, fn. 9 (Barthold).)
Moreover, a judgment may be final as to the trial court (once the trial court has lost jurisdiction to grant a new trial, a judgment notwithstanding the verdict, or a statutory motion to vacate) but not final as to the appellate courts. And a Court of Appeal decision may be final as to that court but not final as to the California Supreme Court. (See Manco Contracting Co. (W.L.L.) v. Bezdikian (2008) 45 Cal.4th 192, 212 (conc. & dis. opn. of Kennard, J.).) Adding to the potential confusion, a judgment may be "sufficiently final" for giving it issue-preclusion effect, but not sufficiently final for applying claim preclusion. (See Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1564.) Thus, labelling an order as being "final" is only the beginning, and not the end of the required analysis.
D. Analysis
Section 1008, subdivision (e) provides for reconsideration or renewal motions "whether the order deciding the previous matter or motion is interim or final." The difficulty in applying the statute here is the ambiguity in the word "final." To apply section 1008, subdivision (e) in the context of this appeal—involving reconsideration of a postjudgment appealable order to add an alleged alter ego judgment debtor, brought after the time to appeal from that order has lapsed—we examine case law involving reconsideration motions that arise in four distinct contexts: (1) interim (nonappealable) orders; (2) prejudgment appealable orders; (3) orders that are, in effect, final judgments; and (4) postjudgment appealable orders.
1. Reconsideration of nonappealable interim orders
In Le Francois v. Goel (2005) 35 Cal.4th 1094 (Le Francois), the defendant moved for summary judgment. A year after the trial court denied that motion, the defendant again moved for summary judgment on the same grounds. The trial court granted the second motion. (Le Francois, at p. 1096.) The plaintiffs opposed the motion on the merits, and also on the grounds the trial court had no authority to consider the motion again. (Id. at p. 1097.)
An order denying a motion for summary judgment is a nonappealable order. (Doran v. Magan (1999) 76 Cal.App.4th 1287, 1294.) Typically, nonappealable prejudgment orders are called "interim" orders. (See Robbins v. Los Angeles Unified School Dist. (1992) 3 Cal.App.4th 313, 317.)
The California Supreme Court concluded that a trial court has inherent authority to correct, at any time before final judgment, judicial error in its interim (nonappealable) orders, if the court gives the parties notice that it intends to reconsider its ruling and a reasonable opportunity to litigate the question. (Le Francois, supra, 35 Cal.4th at pp. 1096-1097.) However, in so holding, the Le Francois court cautioned, "What we say about the court's ability to reconsider interim orders does not necessarily apply to final orders, which present quite different concerns." (Id. at p. 1105, fn. 4.)
2. Reconsideration of (final) appealable order before judgment
Phillips addresses an issue the Le Francois court left open—does the trial court have authority to reconsider a prejudgment appealable order? Specifically, the order in Phillips was one denying a motion to compel arbitration. Thus, like Le Francois, the order was prejudgment, but unlike Le Francois was "final" in the sense that it was appealable, and also final in the sense that the time to appeal had lapsed when the defendant sought reconsideration.
The plaintiff in Phillips brought a putative consumer class action against Sprint PCS and a related entity (collectively, Sprint) alleging misrepresentation of cellular telephone rates, and Sprint filed a motion to compel arbitration under a provision in its customer agreement that mandated individual arbitration of disputes and precluded arbitration of disputes on a class-wide basis. (Phillips, supra, 209 Cal.App.4th at pp. 763-764.) The trial court denied that motion based on then-existing California Supreme Court authority holding that class-action waivers in consumer adhesion contracts are unenforceable under certain circumstances. (Id. at p. 764.) Although that order was immediately appealable, Sprint did not appeal. (Ibid.) Years later, after the United States Supreme Court abrogated the California rule and upheld the validity of class-action waivers in consumer contracts in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 (Concepcion), Sprint filed a renewed motion under section 1008, subdivision (b) to compel arbitration based on the change in law effected by Concepcion. (Phillips, at p. 765.)
After the trial court granted Sprint's renewed motion, plaintiffs appealed and asserted, among other arguments, that the trial court had no authority to reconsider the original order denying arbitration because it was an immediately appealable order that was never appealed. (Phillips, supra, 209 Cal.App.4th at pp. 770-771.) The appellate court rejected that argument, holding that when a trial court concludes there has been a change of law that warrants reconsideration of a prior order, it may do so "at any time prior to entry of judgment [citation]." (Id. at p. 768.)
3. Reconsideration of appealable orders having the effect of a final judgment
Under California law, an order denying class certification effectively terminates the action as to the class and, therefore, it is " 'tantamount to a dismissal of the action as to all members of the class other than plaintiff.' " (Stephen v. Enterprise Rent-A-Car (1991) 235 Cal.App.3d 806, 811 (Stephen).) Such an order "disposes of that [class] action and is an appealable final judgment." (Id. at p. 817, italics omitted.)
In Stephen, the trial court denied a motion for class certification based on insufficient evidence supporting necessary class elements. There was no appeal and the order became final (in the sense it was an immediately appealable order and the time to appeal expired). (Stephen, supra, 235 Cal.App.3d at p. 810.) Four months later, based on a claim of new facts, the plaintiff brought a second motion for class certification, which the trial court denied. (Ibid.) The plaintiff appealed from the order denying his renewed motion for class certification.
The Stephen court affirmed the denial of the renewal motion, concluding that a trial court lacks authority to hear a second motion for class certification after having earlier denied such a motion and the time to appeal from that first order having lapsed. (Stephen, supra, 235 Cal.App.3d at pp. 811-812.) A plaintiff who fails to appeal from such an order "loses forever the right to attack it. The order becomes final and binding." (Id. at p. 811.)
The Stephen court also held this bar cannot be circumvented by bringing a motion for reconsideration under section 1008. "If the law allowed both . . . appeals [from an order denying class certification] and successive motions to certify, we could have endless appeals violating the state's policy against piecemeal appellate litigation." (Stephen, supra, 235 Cal.App.3d at p. 814.) Moreover, the court noted that if renewed motions for class certification were allowed, "the disposition of the action would only be as to the particular state of facts presented when the prior motion was denied. New appealable orders could result each time new facts were offered. This would pose an intolerable expansion of the right to appeal . . . ." (Id. at p. 817.) Moreover, if renewed motions for class certification based on new facts were allowed, "[t]here would be little incentive for plaintiffs to marshal evidence efficiently if they could reopen the matter" later. (Ibid.)
In Safaie, this court considered whether Stephen's rationale also applied to a renewal motion where there was an intervening change in law. In Safaie, the trial court initially certified a class action, but later the defendant successfully moved to decertify the class, which was affirmed on appeal. (Safaie, supra, 192 Cal.App.4th at pp. 1165-1166.) Subsequently, the law changed, favorably for seeking class certification. The plaintiff moved for recertification of the class based on the change in law. (Id. at p. 1167.) The court construed that motion as a request to reconsider the court's prior order based on new law. (Id. at pp. 1168-1169.)
The defendant argued the court lacked authority to reopen the class certification issue after the decertification was affirmed on appeal. This court in Safaie agreed, finding Stephen's holding persuasive. (Safaie, supra, 192 Cal.App.4th at pp. 1170-1171.) In Safaie, we held that permitting a party to circumvent the binding nature of a final decertification order would allow continuous renewal motions and repetitive appeals, prolonging the uncertainty in the litigation and creating unnecessary expense to the parties and the court. "These consequences are inconsistent with the finality principles fundamental to our judicial system." (Id. at p. 1171.)
The Safaie court rejected the argument that Stephen was distinguishable because the plaintiff in Stephen brought a renewed certification motion based on new facts, whereas Safaie brought his renewed certification motion based on a change in the governing law. The Safaie court concluded, "the rationale underlying the bar to successive class certification motions—that the plaintiff does not have a second opportunity to litigate the class issue once it obtains a final ruling—governs regardless of the reasons motivating the second certification motion." (Safaie, supra, 192 Cal.App.4th at p. 1173.)
4. Reconsideration of postjudgment orders
Two relatively recent cases have considered whether the trial court has authority to reconsider postjudgment appealable orders before the time to appeal has lapsed. In Barthold, a marital dissolution case, the trial court denied a postjudgment motion filed by the wife, who promptly sought reconsideration. (Barthold, supra, 158 Cal.App.4th at p. 1303.) Before the time to appeal from the first order expired, the court reconsidered and reversed itself. (Id. at p. 1306.) Barthold holds that a trial court may reconsider an appealable postjudgment order as to which the time to appeal has not yet expired. (Barthold, at p. 1313, fn. 9.) In so holding, the court carefully noted that "this appeal does not present, and we therefore do not decide, the issue whether a trial court can reconsider an appealable order on its own motion after the time to appeal from that order has expired. This circumstance may well have been the issue the [California] Supreme Court had in mind when it indicated in Le Francois that '. . . final orders . . . present quite different concerns' from interim orders." (Ibid.)
The court filed its original order on July 19, 2006, and entered the new order less than 60 days later, on September 6, 2006. (Barthold, supra, 158 Cal.App.4th at pp. 1305-1306.)
D.R.S. Trading Co., Inc. v. Barnes (2009) 180 Cal.App.4th 815 (D.R.S.) presents an issue similar to that in Barthold. In D.R.S., the trial court entered a default judgment. (Id. at p. 817.) On September 25, 2008, the defendant moved from relief from default, which the court denied. (Id. at p. 818.) On or about October 1, the defendant filed a motion for reconsideration. (Ibid.) "[T]here was no appeal pending" when the defendant sought reconsideration. (Id. at p. 819.) The appellate court held the trial court had authority to reconsider the prior order, stating, " '[T]he fact that the order in this case was issued after judgment, and in that sense was "final" does not take it outside the ambit . . . of section 1008.' " (Id. at p. 821.)
The last case we consider is DeLouize. DeLouize is like Barthold and D.R.S. in that it involves reconsideration of a postjudgment appealable order—specifically, an order granting a motion for new trial. However, DeLouize differs from these other cases because reconsideration was sought after the time to appeal had lapsed with no appeal having been taken.
In DeLouize, a jury convicted the defendant of committing lewd acts on a minor. (DeLouize, supra, 32 Cal.4th at p. 1227.) However, the trial court granted defendant's motion for new trial on the ground that, based on a newly published Court of Appeal decision, the trial court had committed instructional error. (Ibid.) Although the prosecution could have appealed from the order granting a new trial, it did not do so. (Ibid.)
After the time to appeal from the order granting the new trial had lapsed, the prosecution made a motion for reconsideration on the grounds that a different Court of Appeal decision had concluded the challenged jury instruction was valid, the California Supreme Court had depublished the first Court of Appeal decision that had been the basis of the new trial order, and had itself issued a decision stating the jury instruction was adequate. (DeLouize, supra, 32 Cal.4th at p. 1227.) The trial court granted the prosecution's motion to reinstate the verdict. (Ibid.) The Court of Appeal affirmed, and the California Supreme Court granted review to consider whether the trial court retained "jurisdiction" to vacate its order granting the defendant's motion for new trial and to enter an order denying the motion. (Id. at p. 1228.)
The DeLouize court analyzed the issue by focusing on the effect of the order being reconsidered on principles of finality. "The concept of finality 'rests upon the sound policy of limiting litigation by preventing a party who has had one fair adversary hearing on an issue from again drawing it into controversy and subjecting the other party to further expense in its reexamination.' " (DeLouize, supra, 32 Cal.4th at p. 1232.) Endless litigation, in which nothing is ever finally determined " 'would be worse than occasional miscarriages of justice.' " (Ibid.)
The DeLouize court stated that an order granting a new trial "is not final in the sense of being a final resolution of the case or a final determination of the defendant's guilt or innocence. . . . Thus, an order granting a new trial is an interim order in the sense that it requires further proceedings before the case may be resolved and judgment may be pronounced." (DeLouize, supra, 32 Cal.4th at p. 1231, citations omitted.) The court noted that "new trials substantially prolong criminal proceedings . . . ." (Id. at p. 1232.)
Accordingly, the court in DeLouize concluded that allowing trial courts authority to reconsider and vacate an order granting a motion for new trial, even after the time to appeal from such an order has lapsed, "may lead to earlier resolution of the matter and thereby promote the interests underlying judicial finality rules." (DeLouize, supra, 32 Cal.4th at p. 1232.) The court added, "[R]econsideration of an erroneously granted new trial promotes confidence in the judicial system, conserves judicial resources, and spares the parties from the inconvenience and expense of a second trial. In short, recognizing the trial courts' authority to reconsider orders granting new trials will often result in less trial court litigation, not more, and an earlier rather than a later resolution of the case in the trial court." (Ibid., italics added.) Thus, the court concluded that "[i]n this unusual situation" (reconsideration of order granting a new trial where there has been a change in law undercutting the legal ground for initially granting the motion), the trial court had authority to reconsider its prior ruling because reconsideration would promote policies of finality of judgments. (Id. at p. 1233.)
Thus, the teaching from DeLouize is that in considering a trial court's authority to reconsider a postjudgment appealable order after the time to appeal has lapsed, it is not sufficient to simply label the order as being "final" or "interim," but rather a court must consider the impact of allowing reconsideration on principles of finality.
5. Application here
We conclude the trial court had no authority to reconsider the postjudgment order denying Orion's motion to add Sameis as a judgment debtor. That order was immediately appealable and the time to appeal from it had long-since lapsed when Orion brought its renewal motion. Accordingly, in determining whether the trial court had authority to reconsider and vacate its prior ruling, we must consider principles of finality. (DeLouize, supra, 32 Cal.4th at p. 1232.) In that respect, Le Francois and Phillips are both materially distinguishable because reconsideration in those cases did not impinge on principles of finality. Le Francois did not even involve an appealable order, and in Phillips, the motion for reconsideration was brought before judgment—in fact, the case was not even ready for trial. (Phillips, supra, 209 Cal.App.4th at p. 769.) Unlike the orders at issue in Le Francois, the order denying Orion's motion to add Sameis as an alter ego was a final appealable order and the time to appeal had passed. Although Orion could have appealed from the order, it did not do so.
Judge Strauss denied Orion's motion on March 28, 2014. The longest possible time to appeal from that order (180 days after entry) lapsed on September 24, 2014. Orion brought its renewal motion in November 2014, and the court did not grant that motion until June 2015.
Moreover, although Barthold and D.R.S. both involve appealable orders, they are also distinguishable because in both those cases, the court granted reconsideration before the time to appeal lapsed. Accordingly, reconsideration under those circumstances in the trial court avoided appellate litigation, promoted confidence in the judicial system, and conserved judicial resources. (See DeLouize, supra, 32 Cal.4th at p. 1232.)
Having determined what cases are distinguishable, we consider the cases that are closest on point—Stephen and Safaie. Both involve a motion asking the trial court to reconsider and modify what is effectively a judgment (of dismissal of class claims) after the time to appeal has lapsed. In Stephen, the plaintiff claimed reconsideration was appropriate because the facts had materially changed. (Stephen, supra, 235 Cal.App.4th at p. 810.) In Safaie, it was the law that changed. (Safaie, supra, 192 Cal.App.4th at p. 1173.) That distinction made no difference. The same rule applies in both instances. (Ibid.)
In Safaie, we held the trial court had no authority to reconsider an order decertifying a class, later affirmed on appeal, because permitting such reconsideration would allow continuous renewal motions and repetitive appeals, prolonging the uncertainty in litigation and creating unnecessary expense to the parties and to the court. "These consequences are inconsistent with the finality principles fundamental to our judicial system." (Safaie, supra, 192 Cal.App.4th at p. 1171.) In Stephen, the appellate court held a trial court has no authority to reconsider an order denying class certification after the time to appeal has lapsed because otherwise, "the disposition of the action would only be as to the particular state of facts presented when the prior motion was denied. New appealable orders could result each time new facts were offered. This would pose an intolerable expansion of the right to appeal . . . ." (Stephen, supra, 235 Cal.App.3d at p. 817.)
The rationale of Stephen and Safaie apply here. Orion's renewal motion, although it does not involve a putative class action, essentially seeks the same measure of relief as did the plaintiffs in Stephen and Safaie. After the time to appeal has lapsed, Orion seeks to modify an order declaring that Sameis has no liability. Orion seeks to have that order changed to include Sameis by name as a judgment debtor. Orion's renewal motion is, therefore, the functional equivalent of the motion seeking to undo the dismissal of (class) claims in Stephen and Safaie. If a trial court has authority to reconsider such orders after the time to appeal has lapsed, new appealable orders could result each time new facts were offered. There would seemingly be no end to litigation over alter ego issues under section 187. (Safaie, supra, 192 Cal.App.4th at p. 1170.)
Our conclusion that the trial court has no authority to reconsider an order denying a motion under section 187 after the time to appeal has lapsed finds further support in DeLouize. There, the California Supreme Court indicated that in determining whether a trial court has authority to reconsider a postjudgment appealable order after the time to appeal has lapsed, the driving consideration is whether reconsideration will promote "policies underlying the general concept of finality." (DeLouize, supra, 32 Cal.4th at p. 1232.) Here, the trial court's original order denied Orion's motion to add Sameis as a judgment debtor. At that point, the judgment precluded postjudgment litigation against Sameis. Issues involving Sameis were over. Allowing reconsideration of that order to now add Sameis as a judgment debtor contravenes principles of finality because it would subject Sameis to postjudgment enforcement proceedings, trial court orders, and potential appellate review of same. Allowing repeated examination and relitigation of alter ego issues under section 187 would result in more trial court litigation, not less, and a later rather than an earlier resolution of the case in the trial court. Such " '[e]ndless litigation, in which nothing was ever finally determined, would be worse than occasional miscarriages of justice . . . .' " (DeLouize, supra, 32 Cal.4th at p. 1232.)
Disagreeing with this conclusion, Orion contends that the Stephen/Safaie rule precluding reconsideration of an appealable order after the time to appeal the order has expired should not extend to ongoing judgment enforcement proceedings in which the trial court retains jurisdiction to make all orders necessary to effectuate its judgment. Orion argues that because judgment enforcement proceedings are by their nature ongoing and subject to serial orders, the principle of finality and the policy of preventing piecemeal appeals of interim orders are not implicated and there is no need for finality. Until the judgment is satisfied, Orion argues, judgment creditors must be permitted to present new information to obtain orders effectuating the judgment. Orion notes the general rule that " ' "a court may amend its judgment at any time so that the judgment will properly designate the real defendants." ' " (Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486, 508 (Greenspan), italics added.)
Similar concerns were addressed and rejected by this court in Safaie. The Safaie court noted that "[t]o ensure fairness to the class action plaintiff, trial courts are required to liberally grant continuances and ensure a plaintiff has the opportunity to make a complete record before the court rules on class certification." (Safaie, supra, 192 Cal.App.4th at p. 1171.) The trade-off is that once a plaintiff brings a class certification motion, a final order left unappealed is binding.
The ongoing nature of judgment enforcement proceedings and the ability of a judgment creditor to bring a motion to amend a judgment at any time to properly designate the real judgment debtor similarly affords a judgment creditor the opportunity to marshal evidence and make a complete record before bringing a motion to amend the judgment. A motion to add an alter ego judgment debtor under section 187 is an equitable procedure. (Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th 1181, 1188 (Carolina Casualty Ins. Co.).) Accordingly, Orion's motion was not subject to any arbitrary time limit or statute of limitations, but instead it would be time-barred only upon a showing of both an unreasonable delay in bringing the motion plus prejudice to Sameis resulting from the delay. (See Highland Springs Conference & Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 282 (Highland Springs).) That Orion made a tactical decision to bring its motion to add Sameis before having the Texas deposition testimony is not a sufficient reason to ignore well-settled principles of finality. (Safaie, supra, 192 Cal.App.4th at p. 1171.)
Orion also contends any error in granting its renewal motion was rendered harmless by Judge Taylor's later finding, in granting AutoReturn's motion to amend the judgment, that Sameis was the alter ego of and successor corporation to DTS. However, judgments recovered by several parties in a single action are several judgments. (Emery v. Pacific Employers Ins. Co. (1937) 8 Cal.2d 663, 666.) Each judgment creditor recovers upon its separate claim; no party has any interest in a monetary award to another party. (Ibid.) Accordingly, Orion's efforts to enforce its separate judgment against DTS, including its motion to amend the judgment to name Sameis as a judgment debtor, had no bearing on AutoReturn's efforts to enforce its own separate judgment against DTS (and vice versa), as AutoReturn implicitly recognized in bringing its own motion to amend the judgment to name Sameis as a judgment debtor after the court granted Orion's renewed motion to amend the judgment. While we acknowledge this yields the anomalous result that Sameis is a judgment debtor as to AutoReturn but not Orion, that result is compelled by Orion's own litigation strategy and timing of its section 187 motion.
Orion additionally argues that if the court erred in considering Orion's renewed motion to amend the judgment, the error was merely procedural error subject to a harmless error standard of review, and the error was harmless. Orion relies on Barthold, which agreed with People v. Edward D. Jones & Co. (2007) 154 Cal.App.4th 627, 634 (Jones) that procedural error is reviewed under a harmless error standard. In Jones, the State of California sued the defendant brokerage firm for failing to adequately disclose certain information to investors and potential investors. (Id. at pp. 629-630.) The defendant demurred, asserting the action was preempted by federal securities law, and the demurrer was overruled. (Id. at p. 631.) The defendant later filed a motion for judgment on the pleadings on the same grounds. (Id. at p. 632.) Opposing the motion, the state argued the action was not preempted and that defendant's motion improperly sought reconsideration of the order overruling the demurrer. (Ibid.) A different judge from the one that overruled the demurrer granted the defendant's motion for judgment on the pleadings on preemption grounds. (Id. at pp. 632-633.)
The Jones court found it unnecessary to decide whether the motion for judgment on the pleadings was an improper motion for reconsideration, explaining that "even if we assume for the sake of argument that it was error for [the second judge] to rule on [defendant's] motion for judgment on the pleadings and thereby effectively overrule [the first judge's] order on the demurrer, that error cannot be deemed reversible without reaching the merits of the preemption issue. In other words, even if the People are right in their assertion of procedural error, we cannot reverse the judgment unless the People are also correct on the substantive issue of preemption. Accordingly, we may resolve the case based on the substantive issue alone, and that is what we will do." (Jones, supra, 154 Cal.App.4th at p. 634.)
The Barthold court agreed with the reasoning in Jones, stating: "In our view, the California Constitution requires that in any case in which a trial judge reconsiders an erroneous order, and enters a new order that is substantively correct, the resulting ruling must be affirmed regardless of any procedural error committed along the way. Because section 1008 must be construed to be consistent with constitutional principles [citation], it cannot be interpreted to preclude this result." (Barthold, supra, 158 Cal.App.4th at p. 1313.)
Barthold addressed the trial court's jurisdiction to reconsider an appealable postjudgment order, when the time to appeal had not yet expired; the Barthold court did not consider the issue presented here—whether a trial court has authority to reconsider an appealable postjudgment order denying a motion to add an alleged alter ego judgment debtor after the time to appeal that order has expired. (Barthold, supra, 158 Cal.App.4th at pp. 1312-1313 & fn. 9.)
We reject Orion's harmless error argument because the court's error in reconsidering the section 187 motion was not merely a procedural error, but rather jurisdictional. Addressing a similar contention, the Safaie court rejected the view that the death knell doctrine (making orders denying class certification appealable) was " 'merely a procedural mechanism' for providing the immediate right to appellate review, and did not remove the court's jurisdiction to rule on the issues or its broad discretionary authority to certify a class." (Safaie, supra, 192 Cal.App.4th at p. 1173.) In Safaie, this court concluded that the rule prohibiting reconsideration of a final order denying class certification "is not merely 'procedural' ; it implements an important policy of jurisprudence in this state that a party has one opportunity to appeal from a final judgment or from a final [appealable] order . . . ." (Id. at pp. 1173-1174, italics added.) Similarly here, the trial court's error in reconsidering the final order denying Orion's motion under section 187 is a jurisdictional error not subject to a harmless error standard of review.
In Safaie, "final" is used in the sense that the order is appealable and the time to appeal has lapsed without an appeal. Our conclusion that such error is jurisdictional implements policies of finality expressed in DeLouize, supra, 32 Cal.4th at page 1232. It would be "inconsistent with the finality principles fundamental to our judicial system" (Safaie, supra, 192 Cal.App.4th at p. 1171) to hold that although a trial court lacks authority to reconsider a final order denying a motion under section 187, its error in doing so will be deemed harmless as long as its ruling on the merits is correct. "The concept of finality 'rests upon the sound policy of limiting litigation by preventing a party who has had one fair adversary hearing on an issue from again drawing it into controversy and subjecting the other party to further expense in its reexamination.' " (DeLouize, at p. 1232.)
Because Orion did not appeal the order denying its motion to amend the judgment to name Sameis as a judgment debtor, and the time to appeal from that order expired before Judge Strauss reconsidered it, the order granting Orion's renewed motion to amend the judgment constituted jurisdictional error. The same analysis applies to the order granting Orion's motion to reconsider the order granting Sameis's motion to tax Orion's claimed costs. Accordingly, we reverse both orders.
In light of this disposition, appellants' following contentions are moot: (1) the order granting Orion's motion to amend the judgment should be reversed because Orion's motion for reconsideration of an earlier order denying its motion to amend the judgment did not comply with section 1008, subdivision (a); (2) construed as a renewal motion under section 1008, subdivision (b), Orion's motion for reconsideration should have been denied because Orion did not provide new evidence or a satisfactory explanation of why it failed to provide the additional evidence sooner; (3) entry of judgment precluded the trial court from ruling on Orion's motion for reconsideration; (4) in ruling on Orion's renewed motion, the court was limited to considering Orion's new evidence and therefore erred in also considering evidence that Orion previously presented; (5) the court lacked authority to reconsider its order granting Sameis's motion to tax costs under section 1008, subdivision (b), because that subdivision is available only to the party who originally made the application for the order; and (6) the court erred in relying on its inherent authority to correct or modify prior rulings in reconsidering its previous order granting Sameis's motion to tax costs.
III. AutoReturn's Motion to Amend the Judgment
A. Introduction
Appellants contend the order granting AutoReturn's motion to add Sameis as a judgment debtor should be reversed because the court improperly (1) considered inadmissible hearsay, and (2) took judicial notice of deposition testimony.
B. Legal Principles and the Standard of Review
Section 187 grants every court the power and authority to carry its jurisdiction into effect. (Highland Springs, supra, 244 Cal.App.4th at p. 280.) "This includes the authority to amend a judgment to add an alter ego of an original judgment debtor, and thereby make the additional judgment debtor liable on the judgment." (Ibid.) Amending a judgment to add an alter ego is an equitable procedure based on the theory that the court is not amending the judgment to add a new defendant but is merely inserting the correct name of the real defendant. (Carolina Casualty Ins. Co., supra, 212 Cal.App.4th at p. 1188.) The court may exercise its authority to impose liability on an alter ego who had control of the litigation and was, therefore, represented in it. (Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd. (1996) 41 Cal.App.4th 1551, 1555.) In addition to finding the unity of interest and ownership that permits the piercing of the corporate veil, to satisfy due process a court must find that the alter ego had control of the litigation and thus had virtual representation through the named defendant on the issue of liability, and also find that an inequitable result will follow from failing to amend the judgment. (Highland Springs, at p. 280.)
"The decision to modify the judgment is consigned to the trial court's discretion. [Citation.] To the extent the exercise of that discretion relies on factual findings, we review those findings for the existence of substantial evidence." (Wolf Metals Inc. v. Rand Pacific Sales, Inc. (2016) 4 Cal.App.5th 698, 703.)
C. Hearsay Issue
Over appellants' hearsay objection, the court relied on Samuels's and Hill's deposition testimony from the Texas litigation in granting AutoReturn's motion to amend the judgment to add Sameis as a judgment debtor. Appellants contend that in so doing, the court abused its discretion because (1) Sameis was a nonparty and, therefore, the hearsay exception for a party admission does not apply; and (2) the court improperly took judicial notice of the deposition testimony.
We review the court's evidentiary ruling for abuse of discretion. (Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1078.) "The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason." (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.)
The court did not abuse its discretion in applying the party-admission exception to the hearsay rule. Evidence Code section 1220 provides: "Evidence of a statement is not made inadmissible by the hearsay rule when offered against the declarant in an action to which he is a party in either his individual or representative capacity, regardless of whether the statement was made in his individual or representative capacity." Evidence Code section 1222 provides: "Evidence of a statement offered against a party is not made inadmissible by the hearsay rule if: [¶] (a) The statement was made by a person authorized by the party to make a statement or statements for him concerning the subject matter of the statement; and [¶] (b) The evidence is offered either after admission of evidence sufficient to sustain finding of such authority or, in the court's discretion as to the order of proof, subject to the admission of such evidence." "The rationale underlying [the party admission] exception is that the party cannot object to the lack of the right to cross-examine the declarant since the party himself made the statement. Moreover, the party can cross-examine the witness who testifies to the party's statement and can explain or deny the purported admission." (Cal. Law Revision Com. com., 29B pt. 4 West's Ann. Evid. Code (2015 ed.) foll. § 1220, p. 112.)
"An admission is a statement made by a party to a proceeding suggesting an inference as to any fact in dispute or relevant to any such fact and to be admissible must tend to prove or have a material bearing on the issues in the case." (Legg v. United Benefit Life Ins. Co. (1951) 103 Cal.App.2d 228, 229, italics added.) Any oral or written statement made by a party opponent is admissible as to that party under the admission of a party opponent exception to the hearsay rule. (Greenspan, supra, 191 Cal.App.4th at pp. 523-524.) "That includes prior testimony, whether given in a deposition, during the arbitration hearing, in judgment debtor proceedings, or in another matter." (Id. at p. 524, italics added.) Statements made by a manager of a party are admissible against the party under the hearsay exceptions for party or authorized admissions. (Ibid.) The "hearsay rule does not exclude 'admissions made by an agent of a party when the agent's powers are broad enough to constitute him the general representative of the principal with broad managerial responsibilities[.]' " (Ibid.)
Sameis argues the party admission exception does not apply to it because it was not a party to this action. However, Sameis was a party to the motion proceedings by which Orion and AutoReturn sought to amend the judgment. Moreover, in light of evidence that Samuels and Hill were DTS's agents, the court could reasonably conclude their statements tending to prove that Sameis was the alter ego or successor corporation to DTS were authorized admissions made in their representative capacity and were, therefore, admissible under the admission by a party opponent exception to the hearsay rule.
AutoReturn presented the deposition testimony by asking the court to take judicial notice of an authenticating declaration and attached deposition testimony that Orion's attorney had filed in connection with Orion's renewed motion to amend the judgment. Appellants contend the court should not have granted AutoReturn's request for judicial notice, citing the rule that the trial court may " 'take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.' " (People v. Harbolt (1997) 61 Cal.App.4th 123, 126-127.)
The court properly took judicial notice of the deposition testimony because the attorney's declaration properly authenticated the documents and, as discussed ante, the content qualified as an exception to the hearsay rule. Requesting judicial notice of the declarations already on file was an efficient method for presenting the evidence.
D. Subtantial Evidence of Alter Ego
Appellants contend the order adding Sameis as a judgment debtor to AutoReturn's judgment should be reversed because no substantial evidence supports the court's finding that Sameis is DTS's alter ego. We disagree.
"Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the 'corporate veil' pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation. [Citation.] Under the alter ego doctrine, . . . when the corporate form is used to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, the courts will ignore the corporate entity and deem the corporation's acts to be those of the persons or organizations actually controlling the corporation, in most instances the equitable owners. [Citations.] The alter ego doctrine prevents individuals or other corporations from misusing the corporate laws by the device of a sham corporate entity formed for the purpose of committing fraud or other misdeeds. [Citation.]
"In California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone. [Citations.] 'Among the factors to be considered in applying the doctrine are commingling of funds and other assets of the two entities, the holding out by one entity that it is liable for the debts of the other, identical equitable ownership in the two entities, use of the same offices and employees, and use of one as a mere shell or conduit for the affairs of the other.' [Citations.] Other factors . . . include inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers. [Citations.] No one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied. [Citation.] Alter ego is an extreme remedy, sparingly used." (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538-539.)
" '[T]he conditions under which the corporate entity may be disregarded vary according to the circumstances in each case and the matter is particularly within the province of the trial court. [Citations.] This is because the determination of whether a corporation is an alter ego of an individual is ordinarily a question of fact.' " (Misik, supra, 197 Cal.App.4th at pp. 1071-1072.) Because the alter ego determination "is primarily one for the trial court and is not a question of law, the conclusion of the trier of fact will not be disturbed if it is supported by substantial evidence.' " (Id. at p. 1071.)
Substantial evidence supports the finding that Sameis was DTS's alter ego. The court found that DTS and Sameis shared the same owner and manager (Samuels), and Sameis and Samuels paid and continued to pay DTS's legal fees in its lawsuit against AutoReturn. The court also found that Sameis inherited DTS's contracts, accounts, and customer responsibilities, and Sameis has continued to service DTS's customers and run DTS's business using DTS's name. The court also found that DTS and Sameis share the same business addresses, and Sameis's owner Samuels was the only one permitted to bid on DTS's assets.
These findings are supported by substantial evidence. Hill testified that he and Samuels were the comanagers and "members" of both DTS and Sameis, and that when DTS sued Orion in April 2011, Sameis was "effectively running the California litigation . . . ." Samuels testified that he thought of DTS and Sameis as being "kind of twins" and treated them as being the "same thing." When asked if they could conceivably be different entities, he responded, "I don't have a feel for that." Hildebrand testified that after Sameis acquired DTS, her day-to-day operations and dealings with customers did not change except that she reported to a different person. In resisting enforcement of Orion's and AutoReturn's judgments, DTS effectively admitted it was a mere shell or conduit for Sameis's affairs. Hill's declaration claimed that DTS no longer had any assets, employees, or revenue because Sameis had acquired all of its assets in August 2010. In opposition to Orion's motion for an assignment order, DTS asserted that Sameis owned all of the assets that were once held by DTS or C:Logic.
Thus, the court's alter ego findings are supported by substantial evidence of a unity of interest and ownership between Sameis and DTS such that the separate existence of the two entities does not in reality exist. In addition to unity of interest and ownership between the two entities, the evidence showed Sameis's assumption of liability for the debts and expenses of DTS, identical equitable ownership and management of the two entities, use of the same offices and employees, and the use of DTS as a mere shell or conduit for the affairs of Sameis.
The requirement that there must be an inequitable result if Sameis were not found to be the alter ego of DTS was satisfied by DTS and Sameis's manifest intent to avoid paying AutoReturn's judgment. The court had awarded AutoReturn attorney fees and costs based on the finding that DTS's misappropriation of trade secret claims was in bad faith. The evidence showed that litigation of the bad faith trade secret claims was actually controlled by Sameis, not DTS.
E. Successor Liability
Although it is unnecessary to address the issue in light of our conclusion that the court reasonably found Sameis was DTS's alter ego, the court also properly determined that Sameis was the successor of DTS and amended the judgment on this alternative ground.
"Modification of a judgment may also be proper under the 'successor corporation' theory. [Citation.] According to that theory, when a corporation sells or transfers all of its assets to another corporation constituting its ' "mere continuation," ' the latter is also liable for the former's debts and liabilities. [Citation.] Generally, ' "California decisions holding that a corporation acquiring the assets of another corporation is the latter's mere continuation and therefore liable for its debts have imposed such liability only upon a showing of one or both of the following factual elements: (1) no adequate consideration was given for the predecessor corporation's assets and made available for meeting the claims of its unsecured creditors; (2) one or more persons were officers, directors, or stockholders of both corporations." ' " (Wolf Metals, supra, 4 Cal.App.5th at pp. 704-705.)
Under the successor corporation theory, " ' "corporations cannot escape liability by a mere change of name or a shift of assets when and where it is shown that the new corporation is, in reality, but a continuation of the old. Especially is this well settled when actual fraud or the rights of creditors are involved, under which circumstances the courts uniformly hold the new corporation liable for the debts of the former corporation." ' " (Wolf Metals, supra, 4 Cal.App.5th at p. 709, italics added.)
Given the evidence that DTS and Sameis were both owned by Samuels and comanaged by Samuels and Hill; that DTS sold and transferred all of its assets to Sameis; and that Sameis was a "mere continuation" of DTS, continuing to operate DTS's business under DTS's name, the court could reasonably find that Sameis was the successor of DTS and amend the judgment to name Sameis as a judgment debtor on that ground.
V. Award of Additional Attorney Fees and Costs to Orion After Satisfaction of the
Underlying Judgment
Section 685.040 provides that a "judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment[,]" and those costs include attorney fees if they are "provided by law." Section 685.080, subdivision (a) provides, in part: "The judgment creditor may claim costs authorized by Section 685.040 by noticed motion. The motion shall be made before the judgment is satisfied in full, but not later than two years after the costs have been incurred."
Orion obtained an assignment order in July 2013 and began collecting money from the towing companies under that order the next month. At some point, DTS demanded an acknowledgement of satisfaction of judgment. In April 2015, Orion served and filed a document entitled "ACKNOWLEDGMENT OF FULL SATISFACTION OF JUDGMENT; NOTICE OF FURTHER PROCEEDINGS TO AMEND JUDGMENT." In that document, Orion stated "satisfaction of the judgment is acknowledged as follows: [¶] The current judgment entered in favor of Orion . . . and against [DTS] on October 15, 2012, is satisfied in full. However, Orion . . . is seeking to amend the judgment through its pending motion to reconsider and modify or revoke 1) the Court's March 28, 2014 Minute Order Denying Orion['s] . . . Amended Motion to Amend the Judgment to Include Sameis . . . as a Judgment Debtor; and 2) the Court's October 20, 2014 Minute Order Granting Sameis['s] Motion to Tax Costs. Orion's motion is set to be heard on June 5, 2015 . . . . Granting of that motion in whole or in part could result in entry of an amended judgment requiring additional payment of monies to Orion."
The record does not directly show DTS's demand for acknowledgment of satisfaction of judgment. Orion states in its brief that it served the acknowledgement of satisfaction in response to a demand from DTS.
After Orion filed and served its acknowledgement of satisfaction of judgment, it filed a motion to recover "reasonable and necessary post-judgment attorneys' fees and costs in the amount of $179,212.06, against [DTS] and Sameis . . . ." The court granted the motion and awarded Orion attorney fees and costs in that amount. The court noted: "Orion incurred fees and costs due to the efforts by DTS and Sameis to delay and defeat Orion's enforcement efforts. DTS did not voluntarily pay the judgment, whereas Sameis undertook efforts to prevent Orion from satisfying the judgment." The court decided that section 685.080's requirement that a motion for postjudgment enforcement costs be filed before the judgment is satisfied did not preclude Orion from obtaining an award of fees and costs because "Orion did not obtain the right to name Sameis as judgment debtor until Judge Strauss on June 5, 2015 granted Orion's motion for reconsideration. . . . Also, Orion in the Acknowledgment of Satisfaction of Judgment stated it was seeking additional judgment enforcement costs including attorneys' fees."
Appellants contend the court erred in awarding Orion additional attorney fees and costs after Orion satisfied the underlying judgment. In light of our reversal of the order amending the judgment to name Sameis as a judgment debtor of Orion and the order denying Sameis's motion to tax costs, reversal of any award of costs that Orion incurred in obtaining those orders is appropriate. However, in its motion for judgment enforcement fees and costs, Orion sought certain costs that were not necessarily connected to its efforts to obtain an order amending the judgment or denying Sameis's motion to tax costs. Therefore, we address the merits of appellants' contention and conclude the court erred in awarding Orion additional attorney fees and costs after Orion satisfied the underlying judgment.
In its motion for additional attorney fees and costs incurred in enforcing its judgment, Orion sought fees for "1) responding to Sameis' improper peremptory challenge; 2) prosecuting the motion to amend the judgment to add Sameis as a judgment debtor; 3) collecting and accounting for monies paid by DTS's/Sameis' towing company customers to Orion, pursuant to this Court's assignment order; 4) mediating this dispute unsuccessfully, in an effort to avoid the costs now sought through this motion; 5) uncollected fees and costs incurred in prosecuting Orion's motions for post-judgment fees and costs; and 6) miscellaneous post-judgment Court proceedings."
Section 685.080, subdivision (a) provides that a "judgment creditor may claim costs authorized by Section 685.040 by noticed motion. The motion shall be made before the judgment is satisfied in full, but not later than two years after the costs have been incurred." (Italics added.) "Section 685.070 provides the judgment creditor with an alternative procedure: Certain costs and fees may be claimed by a memorandum of costs rather than by motion. The time limit is the same, however. The memorandum must be filed and served '[b]efore the judgment is fully satisfied but not later than two years after the costs have been incurred.' " (Conservatorship of McQueen (2014) 59 Cal.4th 602, 607, fn. 4 (McQueen), quoting § 685.070, subd. (b).)
To the extent our reversal of the order amending the judgment to add Sameis as a judgment debtor as to Orion does not preclude an award to Orion of enforcement fees and costs it incurred while seeking to so amend the judgment, the award must in any event be reversed because Orion filed its motion for additional fees after the original judgment was satisfied. Thus, the motion was untimely under section 685.080, subdivision (a). As the McQueen court noted, the language of section 685.080 is explicit and unambiguous, and does not authorize a court to invent and substitute a "reasonable time" rule. (McQueen, supra, 59 Cal.4th at p. 615.) Nor does the statute authorize a judgment creditor to seek enforcement fees after the judgment is satisfied by giving notice in an acknowledgment of satisfaction of its intent to seek such fees in the future if pending enforcement efforts are successful. We conclude the time limit of section 685.080, subdivision (a), must be strictly applied and does not permit a judgment creditor to recover judgment enforcement costs by claiming or moving for them after the judgment is satisfied. Accordingly, section 685.080, subdivision (a), precludes Orion from recovering attorney fees and costs it incurred or sought after its judgment against DTS was satisfied.
DISPOSITION
The June 5, 2015 order granting Orion's motion to amend the judgment to add Sameis as a judgment debtor; the August 7, 2015 order denying Sameis's motion to tax costs; and the October 16, 2015 order granting Orion's motion for additional attorney fees and costs are reversed. The third amended judgment entered on October 21, 2015, is modified to reflect the reversal of those orders. The October 16, 2015 order granting AutoReturn's motion to amend the judgment to add Sameis as a judgment debtor is affirmed. The third amended judgment is affirmed as modified. Appellants are awarded their costs of appeal against Orion. AutoReturn is awarded its costs on appeal against appellants.
NARES, J. WE CONCUR: BENKE, Acting P. J. IRION, J.