Opinion
B315381
10-27-2023
DONYA ENTERTAINMENT, INC., Plaintiff and Appellant, v. FARMERS INSURANCE EXCHANGE, Defendant and Respondent.
Amir Pasha Vafaei for Plaintiff and Appellant. Woolls Peer Dollinger &Scher, Gail S. Cooper, H. Douglas Galt for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. 20STCV17320, Teresa A. Beaudet, Judge. Affirmed.
Amir Pasha Vafaei for Plaintiff and Appellant.
Woolls Peer Dollinger &Scher, Gail S. Cooper, H. Douglas Galt for Defendant and Respondent.
CHANEY, J.
After appellant Donya Entertainment, Inc. noticed a "very significant . . . water intrusion" in a restaurant it had owned and operated for several months, Donya submitted a claim to its insurer, respondent Farmers Insurance Exchange. Farmers denied the claim, asserting it was not covered under Donya's policy. Donya then sued Farmers for tortious breach of the covenant of good faith and fair dealing, alleging Farmers insufficiently investigated the claim before denying it. Farmers moved for summary judgment, arguing that the policy excluded claims for water seepage that had been occurring for 14 days or more, and the undisputed evidence demonstrated the water seepage had been occurring for at least a year. The trial court granted Farmers' motion, holding there could be no liability for a defective investigation if there was no coverage under the policy.
On appeal, Donya contends the court erred because: (a) when Farmers initially submitted its separate statement of undisputed facts in support of its motion, Farmers mistakenly identified itself as "Fire Insurance Exchange" in the first undisputed fact; and (b) there were material disputes of fact as to whether the water intrusion originated from a "backed-up sewer," and whether it was caused by the negligent or intentional conduct of the parties who sold the restaurant to Donya. We conclude Donya suffered no prejudice from Farmers' typographical error-which was promptly corrected through a Notice of Errata-and that, in any case, Donya forfeited any claim of prejudice by failing to timely raise this issue before the trial court. We additionally conclude that Donya has forfeited the argument that the policy covered water intrusion originating from a backed-up sewer or due to the sellers' misconduct because they failed to raise either argument when opposing Farmers' summary judgment motion. We therefore affirm.
Donya also brought five motions before this court; Farmers brought one. As discussed below, we deny all the appellate motions. In Farmers' opposition to two of Donya's motions, Farmers requested sanctions, arguing the motions were frivolous. We agree and impose sanctions against Donya's counsel in the amount of $6,466.
Due to the lengthy and voluminous nature of the parties' appellate motions, we address first the appeal regarding the court's granting of Farmers' motion for summary judgment, then the appellate motions and sanctions thereon.
FACTUAL AND PROCEDURAL BACKGROUND
We limit our summary to the facts and procedural history relevant to the issues raised on appeal.
A. Donya Sues Farmers
In May 2020, Donya filed a verified complaint against Farmers, alleging that Donya operated a franchise restaurant in Rancho Cucamonga. Donya claimed it purchased the operation from Bacon-Up Corporation in July 2019. Donya alleged Bacon-Up had an insurance policy issued by Farmers when it operated the restaurant, and that Donya had also insured itself with Farmers "under policy number 0606749543," which "provided coverage for Donya with respect to losses caused by water intrusion."
Several months after Donya began operating the restaurant, "a very significant experience of water intrusion occurred[,] adversely affecting the kitchen and dining areas"; Donya submitted a claim to Farmers. Donya also alleged that "during this time," it learned the restaurant "had experienced similar water intrusion during the ownership and operation" of Bacon-Up, and that Bacon-Up "had made alterations to the physical structure of the flooring in relation to that previous water intrusion." Donya stated it was unsure whether the alterations were made to conceal or repair the problem-which problem was not disclosed to Donya-and so it also submitted a liability claim to Farmers under Bacon-Up's policy. Donya's complaint alleged a single count for tortious breach of the implied covenant of good faith and fair dealing, accusing Farmers of denying both claims without conducting a fair and complete investigation.
In July 2020, Farmers filed its verified answer. The signature block for the answer, signed by Farmers' counsel, was dated July 2, 2020. The verification page, signed by the "Field Claims Manager for Farmers Insurance Exchange," was dated June 30, 2020. Donya did not object to the differing dates.
B. Farmers Moves for Summary Judgment
In February 2021, Farmers moved for summary judgment. As to Donya's claim on its own insurance policy, Farmers contended "[t]here can be no tort liability in the absence of coverage" and "the undisputed material facts establish that no coverage exists under the Policy" for Donya's claim. Specifically, Farmers argued that Donya's policy excluded "damage caused by water that backs up from a sewer, continuous or repeated leakage of water that occurs for 14 days or more, seepage through a foundation, hidden or latent defect in the property, and fungus, wet rot, dry rot and bacteria" and the undisputed evidence "establish[ed] that the water leaking had been going on for at least a year before Plaintiff reported it." As to Donya's claim against Farmers on Bacon-Up's policy, Farmers argued that "a third-party claimant cannot sue the insurer of its litigation adversary for breach of contract or bad faith, or failure to properly investigate."
In June 2020, Donya had sued Bacon-Up (and several other defendants) in federal court over, among other things, concealing the plumbing defects of the restaurant.
In its memorandum of points and authorities, Farmers stated that Donya "submitted a claim under its own insurance policy with Farmers Insurance Exchange (FIE)" and referred to itself as "FIE" throughout the pleading. However, the first fact in its Separate Statement of Undisputed Facts stated: "Fire Insurance Exchange issued policy no. 60674-95-43 to Plaintiff Donya Entertainment, Inc." The supporting evidence for this fact was the "Declaration of Jeffrey Triplett, Exh. A." The first page of Exhibit A to the Declaration of Jeffrey Triplett had a header stating "Farmers Insurance Exchange," was titled "Common Policy Declarations," and listed a "Policy Number" of 60674-95-43 and a named insured of "DONYA ENTETRAINMENT INC." Exhibit A also included a "Businessowners Special Property Coverage Form." Section A of this form was entitled "Coverage" and detailed what coverage was provided under the policy. Section B was entitled "Exclusions"; subdivision 2 of that section stated, "We will not pay for loss or damage caused by or resulting from any of the following:" and listed several pages of exclusions from coverage. Both sections were modified by other provisions in the policy. Relevant here are the "Back Up of Sewers or Drains Coverage Endorsement" and the "Limited Coverage for Fungi, Wet Rot, Dry Rot and Bacteria." The former added coverage for "water that . . . backs up or overflows from your sewer or drain" and deleted a provision in the "Exclusions" section excluding such coverage. The latter added an exclusion for "Continuous or repeated seepage or leakage of water . . . that occurs over a period of 14 days or more."
The remainder of the Separate Statement also referenced "FIE."
Donya claims that Farmers' "forensics expert" confirmed that one source of contaminated water was" 'a back-up of a sewer/waste line.'" However, the portion of the record cited- page 2 of the "Damage Evaluation Report"-does not support this claim. Instead, it states "based on discussions with the Insured/Insured's Representatives, . . . on/or about February 15, 2020, a back-up of a sewer/waste line occurred."
Farmers also submitted declarations from three employees of the restaurant who had been employed when it was operated by Bacon-Up. Each of these employees attested that Bacon-Up had concealed from Donya "physical defects that existed at the franchise location, including a very serious water leak coming up from under the slab in the kitchen area going out to the first table in the dining area." These declarations corroborated allegations in Donya's federal complaint that, prior to Donya's purchase of the restaurant, the "restaurant building was contaminated from sewage spills through failing plumbing" and such defects were concealed from Donya.
Farmers asked the court to judicially notice this complaint in support of its motion for summary judgment.
In March 2021, Donya filed a "Demand for Immediate Withdrawal of the Defendant's Fraudulent Motion for Summary Judgment Due to That Motion's Constituting Criminal Malfeasance in Violation of California Penal Code Sections 118, 119, 125, 134, and 182." In its pleading, Donya admitted that the claim it submitted on its own policy "alleged that the previous owner of the restaurant location intentionally tampered with the subject restaurant location's plumbing . . . causing the dysfunction resulting in the loss suffered by Donya," but claimed this would be a "covered loss." Donya alleged its cause of action was not addressed by Farmer's contention that the loss was not covered under the policy, because "[t]he wrongful misconduct in tort . . . was committed by Farmers . . . well before that false determination," when "Farmers refused to conduct a full and fair investigation of the claim." Donya also claimed its cause of action "arises from Donya's first-party relationship with Farmers, and Donya does not assert a cause of action arising from a third-party relationship" (i.e., Donya's cause of action arose from Farmers' denial of the claim under its own policy, and not Farmers' denial of Donya's claim under Bacon-Up's policy).
These Penal Code sections relate to perjury, the suborning of perjury, falsifying evidence, and conspiracy.
In April 2021, Donya filed an opposition to the motion for summary judgment, setting forth two arguments. First, it argued that because the separate statement of undisputed facts referenced" 'Fire Insurance Exchange,'" "the moving Separate Statement of Undisputed Material Facts [wa]s utterly irrelevant and nonsense," each undisputed fact was "legally meaningless," and the court was required to deny the motion. Second, it argued that one of the declarations supporting the motion "assert[ed] a factual falsehood which was made under oath." Specifically, in the January 2021 declaration of Jeffrey Triplett supporting the motion, Triplett averred that" 'the determination whether coverage existed . . . did not depend upon whether Bacon-Up, or the mall, or the property manager knew about the problem, or when,'" but in April 2021, Triplett sent an e-mail stating:" 'We hope to obtain some additional information from the other parties for Victoria Gardens before we finalize our position.' "
Triplett was the "Special Commercial Property General Adjuster with Farmers Insurance Exchange." According to Farmers, the "Victoria Gardens shopping mall" is where Donya's restaurant was located.
Donya's response to each fact in Farmers' separate statement of undisputed facts was identical: "DISPUTED -Declaration of Martin Reiner and its Exhibits." Reiner declared that he was Donya's office manager, and that Donya's claim with Farmers "was a water intrusion problem for which there was a potential for coverage under the insurance policy, specifically -intentional tampering with the . . . subject plumbing by the immediate prior owner of the restaurant." Donya also asked the court to judicially notice the fact that "Fire Insurance Exchange" was not a party to the lawsuit.
Less than five hours after Donya filed its opposition, Farmers filed a "Notice of Errata," stating that in its separate statement of undisputed facts, "its name mistakenly appears as 'Fire Insurance Exchange'" and confirming that "[t]he abbreviation 'FIE' in the remainder of the Separate Statement refers to Farmers Insurance Exchange." The notice's proof of service states the notice was served on Donya. Donya did not object to the Notice of Errata or request leave to supplement its opposition.
Six days later, Farmers filed a reply, reiterating the points made in its moving papers and arguing the inadvertent use of "Fire Insurance Exchange" did not defeat its motion. As to Donya's claim that Triplett had been untruthful, Farmers accused Donya of "manipulation of evidence, including omitting seven lines of material content from" Triplett's declaration "to change the meaning of this statement," and of "misstatement and mischaracterization."
At the hearing for the motion, Donya made no mention of "Fire Insurance Exchange" and did not request leave to supplement its opposition in light of Farmers' Notice of Errata. Instead, it argued that Farmers failed to conduct a full investigation and that there was a triable issue of fact as to whether Bacon-Up's actions relating to the water intrusion were negligent or intentional.
The court granted Farmers' motion. It found Farmers' use of "Fire Insurance Exchange" was a "typographical error" that Farmers acknowledged and corrected, and "Plaintiff should not have been otherwise confused because the corrected name is what appears in the motion's memorandum of points and authorities . . . and Declaration of Jeffrey Triplett . . . and the annexed exhibits." It found "no proper disputes to the Undisputed material facts," concluding that Donya "cannot simply state 'Disputed - Declaration of Martin Reiner and its Exhibits' in response to each fact." It further found that the undisputed material facts demonstrated that "the water intrusion was caused by long-term seepage that predated Plaintiff's purchase of the Restaurant," and therefore Farmers denied the claim because it "was excluded under the Policy in part because of a continuous leakage of water that occurred for 14 days or more." The court concluded that Farmers met "its initial burden to show that Plaintiff's claim was excluded under the Policy," and Donya failed to show a triable issue of fact. As to the "falsehood" that Donya raised, the court found that Donya failed to "establish why these two statements [that" 'the determination whether coverage existed . . . did not depend upon whether Bacon-Up, or the mall, or the property manager knew about the problem, or when,'" and that Farmers hoped" 'to obtain some additional information from the other parties for Victoria Gardens before we finalize our position' "] cannot both be true. Moreover, the existence of the two statements does not establish the existence of coverage, nor does it negate Plaintiff's admission in the Opposition that Bacon-Up's conduct . . . caused the preexisting water damage." Finally, the court found Donya provided no evidence to support a claim against Farmers for denying its claim on Bacon-Up's policy.
C. Donya Appeals
The next day, Donya filed a "Notice of Intention to Make a Motion" under Code of Civil Procedure section 663 to set aside and vacate the "Court's Legally Null and Void April 27, 2021 Decision" to grant summary judgment. The intended motion had two alternative bases: (1) the court deprived Donya of a "meaningful opportunity to be heard" by allowing "a critical, outcome-determinative change to be made which corrected a defect in Farmers' moving Separate Statement of Undisputed Fact . . . after Donya had already filed and served its opposing papers . . . in reliance on the defective moving papers" and by refusing, at the hearing, "to provide Donya with an opportunity to address the critical, outcome-determinative change"; and (2) because the court had found that Donya's damages were caused by Bacon-Up, the court was required to find Farmers was liable to Donya under the policy Farmers issued to Bacon-Up. However, Donya's actual motion (filed two weeks later) offered only the first argument outlined in Donya's "Notice of Intention." Farmers opposed the motion and Donya replied.
In July 2021, the court denied Donya's motion. Initially, the court noted the motion was improperly brought under Code of Civil Procedure section 663 but, "in the interests of justice, the Court considers this motion as a motion for new trial." The court found Donya forfeited any objection to Farmers' Notice of Errata by not objecting either in writing or at oral argument. The court further found that Donya's rights "were not impaired by the name correction." The court declined to address the second basis delineated in Donya's "Notice of Intention" because Donya "did not raise [that issue] in the motion itself."
The court described the motion as a "four-page document that seems to combine a notice of motion and memorandum of points and authorities without any supporting declarations or evidence."
The court entered judgment in favor of Farmers. In September 2021, Donya timely appealed the judgment entered in this case, i.e., case number 20STCV17320 (the 17320 Case).
DISCUSSION RE SUMMARY JUDGMENT
"An insurer's failure to investigate . . . is not separately actionable if there is no coverage. If there is no coverage, then any failure . . . to properly investigate would not have caused [plaintiff] any damage." (Jordan v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1078.) In other words, if the undisputed facts demonstrated there was no coverage for Donya's water intrusion claim under the policy as a matter of law, then the trial court did not err in granting Farmers' motion.
Here, after rejecting Donya's argument that the court was required to disregard Farmers' separate statement because it referenced "Fire Insurance Exchange," the court found that Farmers had met its initial burden to demonstrate Donya's claim was not covered by the policy and that Donya "fails to rebut the shifted burden." On appeal, Donya contends the court erred because: (1) extrinsic fraud was perpetrated on the court; and (2) at least one source of contaminated water intrusion was covered under the policy because of an additional endorsement to the policy.
" 'We review the trial court's grant of summary judgment de novo and decide independently whether the parties have met their respective burdens and whether facts not subject to triable dispute warrant judgment for the moving party as a matter of law.'" (Magallanes de Valle v. Doctors Medical Center of Modesto (2022) 80 Cal.App.5th 914, 922.) We conclude the trial court did not err.
A. There Was No "Extrinsic Fraud"
Donya contends the court erred in granting Farmers' motion for summary judgment because "extrinsic fraud" was committed "upon the institution of the court" when Donya was "led and lulled into taking a position in the litigation in response to a firm position taken by" Farmers, and then Farmers "change[d] course," and the trial court "allow[ed] the lulled litigant to be deprived of notice and of having a meaningful opportunity to have been heard as to such changed course." The position that Donya had been "led and lulled" into taking was that "the moving papers were irrelevant due to their referencing a non-party." We reject Donya's argument.
First, it is not credible that Donya could have experienced more than a moment's confusion when Farmers' separate statement of undisputed facts stated that "Fire Insurance Exchange issued policy no. 60674-95-43 to Plaintiff Donya Entertainment, Inc." The supporting evidence for this undisputed fact was the "Declaration of Jeffrey Triplett, Exh. A." The first page of Exhibit A to the Declaration of Jeffrey Triplett was a "Common Policy Declarations" issued by "Farmers Insurance Exchange" with a "Policy Number" of 60674-95-43 and a named insured of "DONYA ENTETRAINMENT INC." Moreover, in its complaint, Donya alleged that it was insured with Farmers "under policy number 0606749543." In order to give credence to Donya's claim that it did not know whom "Fire Insurance Exchange" referred to, we would have to believe that even after Donya saw that the undisputed fact was supported by a policy issued by Farmers Insurance Exchange, and even after the policy number referenced in the undisputed fact matched both the policy number contained in the Farmers' policy and the policy number alleged in Donya's own complaint, Donya was still unable to conclude whether Farmers had made a typographical error, or whether Farmers had inexplicably referenced an entity that was not a part of the litigation, and who had never issued an insurance policy to Donya, let alone a policy with an identical policy number. Such a conclusion strains credulity.
Second, even had Donya truly been mystified by the reference to "Fire Insurance Exchange," Farmers dispelled the mystery by filing a Notice of Errata less than five hours after Donya filed its opposition professing its confusion. The notice, which was served on Donya, explained that Farmers' name "mistakenly appears as 'Fire Insurance Exchange'" and confirmed that "[t]he abbreviation 'FIE' in the remainder of the Separate Statement refers to Farmers Insurance Exchange." Donya did not object to the Notice of Errata. It did not file a request for leave to supplement its opposition. At the oral argument for the hearing on Farmers' motion, Donya never mentioned it needed or wanted to supplement its opposition now that it had learned "Fire Insurance Exchange" was a typographical error. On this record, Donya has forfeited any claim that the court erred in permitting Farmers to correct its separate statement of undisputed facts by filing a Notice of Errata, and in proceeding based on the corrected separate statement. (See Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 769 [" 'Appellate courts are loath to reverse a judgment on grounds that the opposing party did not have an opportunity to argue and the trial court did not have an opportunity to consider' "].)
Donya's citations to Aheroni v. Maxwell (1988) 205 Cal.App.3d 284 and Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228 are unavailing. As relevant to this case, Aheroni merely sets forth that a "vital question" in deciding whether to set aside a judgment due to the prevailing party's extrinsic fraud is" 'whether the successful party has by inequitable conduct, either direct or insidious in nature, lulled the other party into a state of false security, thus causing the latter to refrain from appearing in court or asserting legal rights.'" (Aheroni, at p. 291.) Rochin states that" 'a judgment, though final and on the merits, has no binding force and is subject to collateral attack . . . where it is obtained by extrinsic fraud.'" (Rochin, at pp. 1239-1240.) We have no quarrel with either statement of law, we conclude only that Donya has failed to demonstrate their applicability to this appeal.
While Donya did raise this issue in its motion for new trial (after the court granted summary judgment), the trial court denied that motion, and Donya has not argued the court erred in doing so.
B. Donya Forfeited Its Coverage Argument
Donya argues on appeal that "Farmers overlooked the fact that at least one of the sources of the contaminated water intrusion - the backed-up sewer - was in fact a covered loss by virtue of the additional endorsement (CT page 673) which modified the 'Exclusions' to provide coverage for losses from a backed-up sewer." Donya has forfeited this argument.
" 'Generally, the rules relating to the scope of appellate review apply to appellate review of summary judgments. [Citation.] An argument or theory will . . . not be considered if it is raised for the first time on appeal.'" (Expansion Pointe Properties Limited Partnership v. Procopio, Cory, Hargreaves &Savitch, LLP (2007) 152 Cal.App.4th 42, 54.)" '[P]ossible theories that were not fully developed or factually presented to the trial court cannot create a "triable issue" on appeal.'" (Ibid., italics removed.)" 'A party is not permitted to change his position and adopt a new and different theory on appeal. To permit him to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant.'" (Id. at pp. 5455.)
When opposing Farmers' motion for summary judgment, Donya did not argue that one source of the contaminated water intrusion was covered under the policy because of an additional endorsement. It argued only that Farmers' typographical error should fatally doom its motion, and that Farmers' testimony that coverage did not depend upon the knowledge of the sellers or others was contradicted by a later e-mail. As such, Donya is precluded from making such an argument here.
At oral argument, Donya argued that the 14-day exclusion did not apply to its claim of leakage from a backed-up sewer because leaking sewage was different than water seepage or leakage. Again, Donya failed to raise this argument in opposing summary judgment and we find it forfeited. (Expansion Pointe Properties Limited Partnership v. Procopio, Cory, Hargreaves & Savitch, supra, 152 Cal.App.4th at p. 54.)
APPELLATE MOTIONS
The parties filed several appellate motions, oppositions, and replies. Because many of the motions are convoluted and seek disparate relief, we discuss each in a separate subsection, in chronological order based on the filing date of the initial motion. We deny all motions and impose sanctions in the amount of $6,466 against Donya's counsel only. On our own motion, we take judicial notice of a transcript from Los Angeles Superior Court case number 22STCV24750 (the 24750 Case), with which Farmers attempted to augment the record in this appeal.
A. Donya's Motion to Enter Judgment in the 24750 Case and for That Case to "Remain" Part of This Appeal
1. Donya's Motion and Supplemental Motion
According to documents attached to Donya's motion, in August 2022, Donya and non-party Zia Abhari (Donya's owner and operator) filed a verified complaint in Los Angeles Superior Court against Farmers and non-parties Farmers Underwriters Association, Truck Insurance Exchange, Truck Underwriters Association, and Farmers Group, Inc. In September 2022, Frieda Swedelson was substituted in for defendant Doe 1. This action is the 24750 Case. Three separate verified answers were filed on behalf of the defendants. In all the answers, the verification pages were signed one or two days before the date next to the signature block of the answers themselves. We are unaware of a notice of appeal or writ petition being filed in the 24750 Case. The notice of appeal in this case made no mention of the 24750 Case.
On May 3, 2023, Donya filed-in this appeal-a "Motion in the Underlying [24750 Case] for an Order Entering Immediate Judgment in Favor of the Plaintiffs." In it, Donya asked us to "immediately enter judgment on the pleadings as to [the 24750 Case], which is a component of case number B315381" because the verified answers the defendants filed in the 24750 Case "are each a sham, and forbidden by law to be treated as valid." Specifically, Donya argued that, because the verification pages appeared to have been signed before the answers were signed, the verifications constituted "the criminal malfeasance of perjury," which is "legally intolerable," and entitled "the Plaintiffs to judgment on the pleadings" in the amount of $4,056,968.94 in favor of Donya and $1,971,060.00 in favor of Abhari. Donya also claimed that the person who verified the answer for the corporate defendants admitted she "undertook no verification effort as to the content of either 'Answer,'" and that many of the denials contained therein were "obscenely frivolous, evasive, and a fraudulent sham." Donya recognized the trial court judge had imposed a stay in the 24750 Case, but argued the stay was "wrongful." Donya concluded that, under Code of Civil Procedure section 43, the appellate court has "both the jurisdiction, and the duty, to enter judgment forthwith" against the defendants in the 24750 Case.
As part of the "background" in this motion, Donya claimed that "the location where the restaurant was located had an extremely serious defect - water, which was contaminated with fecal matter and urine, and the bacteria that accompanies such waste, coming from a backed-up sewer, as well as leaks from the restaurant restrooms, which intruded through the flooring and into the kitchen food-preparation area and the dining area. The seller of the restaurant, rather than correct the defect, instead deceitfully concealed the defect as a part of the effort to sell the restaurant to Abhari and Donya."
On May 8, 2023, Donya filed a "Supplemental Motion for [the 24750 Case] Remaining a Component of Court of Appeal Case Number B315381 Due to [the 17320 Case] and [the 24750 Case] Having Been Consolidated." The "motion" simply claimed to provide "a true and correct copy of the previous Los Angeles Superior Court September 29, 2022 Notice of Consolidation of case number 20STCV17320 and 22STCV24750, in support of case number 22STCV24750 remaining a component part of the Court of Appeal case number B315381." Contrary to Donya's assertion, attached to this motion was a September 2022 "Notice of Order Granting Motion to Coordinate Cases." (Italics added.)
2. Farmers' Opposition
On May 10, 2023, Farmers filed an opposition to the initial and supplemental motions, arguing both were frivolous because, among other reasons, the trial court stayed all action in the 24750 Case, the 24750 Case was not before us, it was not our function to enter a judgment in the first instance as Donya requested, the motion to enter judgment was made both by and against parties not before us, the motion was based on misrepresentations of facts, and the motion lacked merit. Farmers requested sanctions in the amount of $4,452 against Donya's counsel for filing a "clearly frivolous" motion in violation of the trial court's stay. A declaration, explaining that the amount represented a total of 16.8 attorney hours worked at $265 per hour, was filed concurrently.
3. Donya's Reply
On May 17, 2023, Donya filed a reply, arguing that its motion was appropriate because, according to Donya, Farmers had admitted Donya's loss was covered by the insurance policy it issued, which would affect the 24750 Case. Donya also argued its motion did not violate the trial court's stay because the appellate court was not bound by that stay. Finally, Donya claimed that the verified answers filed in both the 24750 Case and the 17320 Case were "legally prohibited deceitful sham[s]."
4. Analysis
Though no notice of appeal has been filed in the 24750 Case, Donya asks that we enter judgment in that case. We cannot.
First, we lack jurisdiction to take any action in the 24750 Case." 'The right to appeal in California is wholly governed by statute and appellate courts have no jurisdiction to entertain appeals except as provided by the Legislature.'" (In re Marriage of Griffin (1993) 15 Cal.App.4th 685, 687.) "A timely notice of appeal vests jurisdiction in the Court of Appeal." (Adoption of Alexander S. (1988) 44 Cal.3d 857, 864.) Without such a notice, "the appellate court has no power to entertain the appeal." (Van Beurden Ins. Servs. v. Customized Worldwide Weather Ins. Agency (1997) 15 Cal.4th 51, 56.) No notice of appeal has been filed in the 24750 Case.
We also reject Donya's request that the 24750 Case "remain" part of this appeal. That case was never part of this appeal, and thus cannot "remain" part of this appeal.
Second, even if we had jurisdiction in the 24750 Case, we could not enter judgment therein. There is no dispute that the trial court has yet to enter a judgment in the 24750 Case. Donya argues that Code of Civil Procedure section 43 grants us both the "jurisdiction" and the "duty" to enter judgment nevertheless.But section 43 does not empower us to enter a judgment in the first instance. As our Supreme Court held over 130 years ago, "[N]o appeal could be taken to this court until after the entry of the judgment in the trial court; and it has been uniformly held here that an appeal taken before such entry is premature." (Brady v. Burke (1891) 90 Cal. 1, 5.) Donya provides no authority to the contrary. Therefore, we deny Donya's motion to enter judgment in the 24750 Case.
(Code Civ. Proc., § 43 ["The Supreme Court, and the courts of appeal, may affirm, reverse, or modify any judgment or order appealed from, and may direct the proper judgment or order to be entered, or direct a new trial or further proceedings to be had. In giving its decision, if a new trial be granted, the court shall pass upon and determine all the questions of law involved in the case, presented upon such appeal, and necessary to the final determination of the case. Its judgment in appealed cases shall be remitted to the court from which the appeal was taken"].)
B. Donya's Motion to Strike Farmers' Verified Answer and Respondent's Brief in This Case
1. Donya's Motion, Farmers' Opposition, and Donya's Reply
On May 9, 2023, Donya filed a "Motion to Strike," in which it demanded we strike Farmers' verified answer as well as its appellate brief in this case, because it was "premised upon a sham 'verification' . . . which was executed on June 30, 2020, two days before the 'Answer' came into existence on July 2, 2020."
On May 23, 2023, Farmers filed an opposition to this motion, arguing there was nothing improper about the verification page being signed prior to the answer being signed. Farmers contended additionally that Donya had forfeited any objection to the verified answer by failing to raise the issue below, that striking the answer was not a function of this court, and that even if the answer were improper, the remedy would be to permit an amendment of the answer, not to strike it.
On May 25, 2023, Donya filed a reply, insisting Farmers' verified answer was impermissible and that it had raised this issue before the trial court, and arguing that we had the power to strike the answer. Donya characterized Farmers' actions in this appeal as "pure evil" and "a mockery of the administration of justice, by which FIE and its counsel seek to have the institution of the Court of Appeal defiled."
Donya claimed, "It is utterly dishonest and despicable of FIE's counsel to make the false assertion that Donya did not raise the dishonest, sham, and criminal malfeasance of FIE's defense of the lawsuit in case number 20STCV17320 in the trial court, as it was so raised by Donya (Clerk's Transcript pages 486 - 492)." However, those pages of the clerk's transcript are a pleading entitled "Plaintiff's Demand for the Immediate Withdrawal of the Defendant's Fraudulent Motion for Summary Judgment Due to That Motion's Constituting Criminal Malfeasance in Violation of California Penal Code Sections 118, 119, 125, 134, and 182." That pleading makes no mention of Farmers' supposedly invalid answer.
2. Analysis
Donya alleges that because the verification was signed before the answer itself, the answer is a" 'sham'" that we must strike. We disagree.
First, we find Donya has forfeited this argument by failing to raise it in the proceedings below. Although it claims it did raise the issue, the portion of the record it cites to support this claim does not do so." 'Appellate courts are loath to reverse a judgment on grounds that the opposing party did not have an opportunity to argue and the trial court did not have an opportunity to consider.'" (Mendoza v. Trans Valley Transport, supra, 75 Cal.App.5th at p. 769.)
Second, Donya cites no authority that holds that an attorney who drafts a verified answer and a party who verifies it must both sign the document on the same day. Common sense suggests that an attorney who drafts a verified answer would send a copy to their client to review. The client would then review it and sign the verification page, attesting to the truth of the facts stated therein. After receiving the client's signed verification page, the attorney would sign the verified answer and file it. This process conceivably might take several days. We can think of no reason the latter events must occur on the same day. If they occurred on different days, then the dates of the documents would differ.
Donya's citation to Drociak v. State Bar (1991) 52 Cal.3d 1085 is inapposite. There, an attorney had a practice of having his clients "sign a number of undated, blank verification forms." (Id. at p. 1087.) When the attorney was unable to get a hold of a client to respond to discovery, the attorney drafted the responses himself and then served the responses along with one of the previously signed verification pages. (Ibid.) The State Bar found that his actions constituted moral turpitude and violated an attorney's duty to only employ methods" 'consistent with truth.'" (Id. at p. 1088.) Here, by contrast, nothing in the record indicates Farmers' attorney had a Farmers' representative pre-sign a blank verification form. Instead, the record suggests that the representative reviewed and approved of the verified answer two days before Farmers' counsel signed it. Donya's other citations are equally unavailing. We therefore deny Donya's request to strike Farmers' answer in this case.
(Beatty v. Pacific States Sav. & Loan Co. (1935) 4 Cal.App.2d 692, 697 ["where the truth of a fact is directly averred in any part of a verified complaint, and in another part of the same pleading the same fact is directly controverted or denied, the party verifying it is guilty of perjury"]-here, no fact in the verification of the answer was directly controverted or denied in that verification; Manti v. Gunari (1970) 5 Cal.App.3d 442, 449 ["To verify inconsistent facts alleged in a complaint indicates perjury in the matter"]-Donya fails to demonstrate what inconsistent fact was verified; Dobbins v. Hardister (1966) 242 Cal.App.2d 787, 793 [when all details in defendant's answer "were either on information and belief or for want of information and belief," trial court found facts were "presumptively within the knowledge of the defendant" and held that the" 'implication that the defendant has no positive knowledge [of the facts] . . . is not to be tolerated for a moment' "]-here, nothing suggests Farmers professed ignorance to facts within its knowledge; DeCamp v. First Kensington Corp. (1978) 83 Cal.App.3d 268, 275 ["' "The object of the verification is to insure good faith in the averments of the party. [Citation.] . . . To sanction a transparent circumvention of the purpose of verification would totally negate the effect of the requirement, and we must decline to do so"' "]- we do not believe Farmers engaged in a transparent circumvention of the purpose of verification, and we certainly would not condone such an action.)
C. Donya's Request for Judicial Notice
1. Donya's Request and Farmers' Opposition
Also on May 9, 2023, Donya asked us to judicially notice "the Notice of the Order, and Order, Consolidating Los Angeles Superior Court case numbers 20STCV17320 and 22STCV24750, a true and correct copy of which is attached as Exhibit 1 to this Motion." Exhibit 1 is a September 2022 "Notice of Order Granting Motion to Coordinate Cases." The notice states that the 17320 Case and the 24750 Case are "related," not consolidated. The court's September 2022 order, which is attached to the Notice, concluded that those two cases, and a third case filed in San Bernardino Superior Court were related, and that the San Bernardino Superior Court case should be transferred to Los Angeles so that all three cases could be coordinated.
Donya also requested we judicially notice several "facts" about the pleadings in both this case and the 24750 Case, specifically that the verification for the answer in 17320 Case "pre-dates the date that the Answer came into legal existence"; that the verifications for the answers in the 24750 Case "pre-date[] the date of [those Answers] coming into legal existence"; that the "Evidence" filed by Farmers in the 17320 Case admitted two sources of water intrusion; that Farmers' respondent's brief admitted that the policy provided coverage; that Donya raised the issue of coverage in opposing summary judgment; and that Farmers denied the claim "in defiance of the coverage afforded by the endorsement that provided claim coverage."
On May 23, 2023, Farmers opposed the request for judicial notice. Farmers argued the request was procedurally defective because it failed to meet the requirements of Evidence Code sections 451 and 452, failed to include copies of the matters to be judicially noticed, and lacked a proposed order. Farmers argued the request should also be denied because the documents and matters to be noticed were irrelevant to this appeal and sought to have us judicially notice argument, not fact.
Farmers argued Donya's request did not comply with California Rules of Court, rule 8.809. Rule 8.809 governs only matters before the appellate division of the superior court. (Cal. Rules of Court, rule 8.800.) We are governed by rule 8.252. (Cal. Rules of Court, rule 8.4.) However, the substantive portions of rule 8.809 are contained within rule 8.252.
2. Analysis
We deny Donya's request to judicially notice "the Notice of the Order, and Order, Consolidating Los Angeles Superior Court case numbers 20STCV17320 and 22STCV24750," because the document attached as Exhibit 1 is not a notice of an order consolidating those cases. We deny the remainder of the request because the "facts" Donya asks us to judicially notice are not facts, but arguments.
D. Farmers' Motion to Augment Record
1. Farmers' Motion and Donya's Opposition
On June 12, 2023, Farmers moved to augment the record with an April 5, 2023 hearing transcript from the 24750 Case, in which Donya's counsel represented to Judge Maurice Leiter that, on March 23, 2023, (i.e., before any appellate motion was filed), Judge Michelle Williams Court had ordered the 17320 Case "unrelated" to the 24750 Case.
On June 26, 2023, Donya filed an opposition to the motion to augment the record. Donya stated the "main reason" it opposed the motion was because Farmers lacked standing to participate in the appeal due to its "sham" answer on file. Donya advanced no other reason.
On June 27, 2023, Farmers objected to Donya's opposition, arguing it was not actually an opposition, but rather "an improper supplemental brief on the merits of the appeal as well as on Donya's various motions previously filed in this Court."
2. Analysis
We deny Farmers' motion to augment the record. Donya's sole objection-that Farmers lacked standing to participate in the appeal due to its "sham" answer-is rejected for the reasons stated above. However, Farmers makes its motion under rules 8.155(a)(1)(B) and (a)(2) of the California Rules of Court. Rule 8.155(a)(1)(B) permits a party to augment the record with "[a] certified transcript-or agreed or settled statement-of oral proceedings not designated under rule 8.130." We do not believe rule 8.155 contemplated the designation of reporter's transcripts from cases not on appeal, such as the 24750 Case. Rule 8.155(a)(1)(A) permits the augmentation of the record to include "[a]ny document filed or lodged in the case in superior court." Though "oral proceedings" in rule 8.155(a)(1)(B) does not include the same qualifier "in the case in superior court," we believe the same limitation applies-the record can be augmented only with documents or transcripts from the case on appeal.
California Rules of Court, rule 8.130 describes the procedures for the initial designation of reporter's transcripts for the record. Rule 8.155(a)(2) requires the party to attach a copy "of any document or transcript that it wants added to the record."
However, there is no such limitation to the statutes permitting judicial notice. Therefore, on our own motion, we take judicial notice of the reporter's transcript with which Farmers attempted to augment the record.
E. Donya's Motion to Dismiss Trial Court's OSC re Contempt and Impose Terminating Sanction
1. Donya's Motion, Farmers' Opposition, and Donya's Reply
According to a document attached to Donya's motion, in June 2023, Farmers filed a motion for an order to show cause re: contempt in the 24750 Case, arguing the plaintiffs in that case violated the stay the trial court had imposed. The motion was to be heard on August 1, 2023.
On June 13, 2023, Donya filed a motion "for an Order Which (1) Orders the Dismissal of the August 1, 2023 Order to Show Cause re Contempt, and (2) Imposes a Terminating Sanction . . . at Least as to Los Angeles Superior Court Case Number 20STCV17320." Donya alleged Farmers' motion was "clearly a form of extortion which Farmers has issued to cast intimidating fear upon Donya, Abhari, and me, Pasha Vafaei, as counsel for Donya and Abhari, by the use of extrinsic fraud upon the institution of the courts, to corruptly hinder and obtain through extortionate menace the withdrawal of the extremely important point in advocacy that has been raised." Donya also argued that the trial court's stay order in the 24750 Case encompassed only actions taken in the superior court, not in the appellate court. Donya additionally requested we strike the answer filed in this case (the 17320 Case) "forthwith" and immediately enter judgment in Donya's favor "in the amount of $4,056,968.94, and for the matter to be promptly returned to the Los Angeles Superior Court for the determination and imposition of punitive Damages." Donya also requested we order the trial court in the 24750 Case to take the OSC re Contempt off-calendar.
On June 16, 2023, Donya filed a "Notice of Further Extortion," notifying us that Farmers had filed a supplemental motion for an order to show cause re contempt in the 24750 Case. Donya claimed that in Farmers' supplemental motion, "on its page 3, at lines 12-14, Farmers calls upon the Los Angeles Superior Court Judge, the Honorable Maurice Leiter, to order the Division One Justices of the California Second District Court of Appeal to cease and desist from considering the advocacy of that important point [about the answers' verifications] in the litigation of case number B315381."
Lines 12 to 14 of page 3 of the supplemental motion set forth Farmers' request that the trial court "should enter an order directing that Plaintiffs and [their counsel] Vafaei are prohibited from further violating the Stay Order by attempting to litigate the merits of this case in the Court of Appeal." The order requested by Farmers would be directed to plaintiffs and their counsel, not this appellate court.
On June 16, 2023, Farmers filed an opposition to the initial motion, arguing it was frivolous and requesting monetary sanctions of $2,014 against Donya and its counsel. A declaration, explaining that the amount represented a total of 7.6 attorney hours worked at $265 per hour, was filed concurrently.
On June 22, 2023, Donya filed a reply. Donya pointed out that Farmers failed to include, in its opposition, "a remorseful apology" for five separate wrongs it allegedly committed. Donya then argued that its conduct did not violate the court's stay order, that the stay order was in any case wrongly issued, and that we should enter judgment in Donya's favor in this appeal because "Farmers does not have a valid answer on file" and "has admitted the facts proving that Farmers has committed the tort of breach of the Implied Covenant of Good Faith and Fair Dealing, maliciously, fraudulently, and despicably, and that Farmers has no argument to make, certainly not a reasonable one, and it would be an unwarranted delay of justice to require an oral argument session to be conducted" in this appeal.
Specifically, Donya complained Farmers failed to offer "a remorseful apology for Farmers having utilized falsehood, under penalty of perjury, in its 'answer'" in the 17320 Case; for "having obtained a fraudulent grant of its summary judgment motion . . . by deceitfully putting 'Fire Insurance Exchange'" in the separate statement of undisputed facts; for "employing a sham 'verification' for its sham 'answer' "; for "employing the further dishonesty" in asking us to "affirm the falsehood that Donya's subject insurance policy does not provide coverage for at least the subject sewer back-up contaminated water intrusion event"; and for "employing malicious extortion tactics to try to intimidate Donya into withdrawing the crucial and righteous point" about the "sham" answers.
2. Analysis
We deny Donya's request to order the trial court in the 24750 Case to take off-calendar the OSC re Contempt that was set. First, as discussed above, we lack jurisdiction to take any action in the 24750 Case. Second, the motion is now moot, as the date set for the hearing on the OSC re Contempt has already passed. Third, Donya failed to support its request with any reasoned argument or authority. While Donya strenuously contends it has not violated the trial court's stay order, that was an argument to be made to the trial court, not to us. If the trial court acted in a manner Donya believed to be inappropriate or erroneous, Donya could request review of that alleged impropriety or error through a proper invocation of our jurisdiction. Donya proffered no legitimate reason that required our intervention to prevent the OSC from even being heard.
Moreover, an order setting an OSC is not directly appealable, and Donya has not petitioned for writ review. (Code Civ. Proc., § 904.1, subd. (a).)
We deny Donya's request to strike Farmers' answer in this case for the reasons discussed above. We deny Donya's request to enter judgment in its favor both because Farmers has a viable answer on file, and because we disagree that Farmers has admitted that any of Donya's claim was covered by the policy.
F. Sanctions
1. The Parties' View on Sanctions
As stated above, in its May 10, 2023 opposition to Donya's motion to enter judgment in the 24750 Case, Farmers requested the imposition of $4,452 in sanctions against Donya's counsel and in its June 16, 2023 opposition to Donya's motion to dismiss the August 1, 2023 Order to Show Cause re Contempt and to impose a terminating sanction, Farmers requested the imposition of $2,014 in sanctions against both Donya and its counsel. On July 25, 2023, pursuant to rule 8.276 of the California Rules of Court, we issued a notice to the parties that we were considering imposing sanctions.
On August 4, 2023, Donya filed a response, arguing that the imposition of sanctions "would constitute unethical entrapment and violate Donya's federal constitutional 14th Amendment right of Procedural Due Process." Specifically, it protested that our court's docket reflected that this appeal "was comprised of two consolidated LASC cases," the 17320 Case and the 24750 Case. Moreover, in an order we issued on April 28, 2023, we listed both the 17320 Case and the 24750 Case under "B315381," the appellate court case number of this appeal. Donya claimed it was not until July 26, 2023, that we removed the 24750 Case from the appellate court docket. Therefore, Donya concluded, it would be "entrapment" were we to sanction Donya.
Accompanying its response, Donya filed a request for judicial notice, asking us to notice the statement of damages it filed in the trial court, and a declaration by Farmers' counsel filed in the same court. We deny this request because the documents are irrelevant to any issue decided in this opinion.
Donya also argued we should deny Farmers' request for sanctions because it lacked standing to request them because of its "sham . . . Answer." Finally, Donya again reiterated it was "immediately entitled to judgment adverse to Farmers" in this case, without oral argument, and that we were required to immediately remand this case to the trial court for a determination of punitive damages.
On August 7, 2023, Famers filed a reply, arguing that Donya knew the 17320 Case and 24750 Case were not consolidated or related (as evidenced by the statements made by Donya's counsel to Judge Leiter more than a month before filing the May 3 motion, in which Donya claimed the two cases were related), and that, regardless of whether we had jurisdiction to consider Donya's requests, the requests themselves were frivolous because they were "outside the function of this Court."
2. Analysis
"On motion of a party or its own motion, a Court of Appeal may impose sanctions, including the award or denial of costs under rule 8.278, on a party or an attorney for: [¶] . . . [¶] (3) Filing a frivolous motion." (Cal. Rules of Court, rule 8.276(a); see also Dana Commercial Credit Corp. v. Ferns &Ferns (2001) 90 Cal.App.4th 142, 147 [appellate court "has the inherent authority to impose sanctions for the filing of a frivolous motion on appeal, and will exercise its discretion to do so upon an appropriate showing"].) A motion is frivolous if any reasonable attorney would agree it is totally devoid of merit. (See Workman v. Colichman (2019) 33 Cal.App.5th 1039, 1062 [frivolous appeal]; L.A. Taxi Cooperative, Inc. v. The Independent Taxi Owners Assn. of Los Angeles (2015) 239 Cal.App.4th 918, 932 [frivolous anti-SLAPP motion]; see also In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 [appeal frivolous "when it indisputably has no merit-when any reasonable attorney would agree that the appeal is totally and completely without merit"].)
In its response to our July 25, 2023 order, Donya argued that any imposition of sanctions would constitute "entrapment," because an order that we issued contained both trial court case numbers, and because, until recently, our docket reflected that this appeal was comprised of both the 17320 Case and the 24750 Case. We reject this argument.
" 'Appellate jurisdiction is solely within the province of our Legislature, since the right to appeal is not conferred by our Constitution but by statute. [Citation.] This court is without power to bestow jurisdiction on itself, nor may the parties create jurisdiction by consent, waiver, or estoppel.'" (Sy First Family Ltd. Partnership v. Cheung (1999) 70 Cal.App.4th 1334, 13441345.) There is no statute or constitutional provision that provides appellate court jurisdiction is created when an appellate court order or docket contains a trial court case number. And Donya's counsel does not claim to have mistakenly believed he filed a notice of appeal in the 24750 Case. In such a circumstance, no reasonable attorney could have believed we had jurisdiction over the 24750 Case even when that case number appeared on one of our orders or in our docket.
Even setting aside whether Donya's counsel was misled by our order and docket as he claims, we find both motions completely frivolous on the merits as well. The May 3, 2023 motion is completely frivolous because it asks us to enter a judgment in a case in which no judgment has yet to be entered in the trial court-no reasonable attorney would conclude we had the power to do so. The June 13, 2023 motion is completely frivolous because Donya provides no legitimate basis for us to order the trial court to set aside an OSC hearing, and because there is likewise no basis for us to strike Farmers' answer or enter immediate judgment in Donya's favor. No reasonable attorney could think such requests were meritorious either.
Moreover, in the caption of its May 3, 2023 motion, Donya represented the 17320 Case was "Related" to the 24750 Case. However, one month before Donya filed that motion, Donya's counsel represented to Judge Maurice Leiter that on March 23, 2023, Judge Michelle Williams Court had ordered the 17320 Case "unrelated" to the 24750 Case. In the May 8, 2023 supplemental motion, and in the May 9, 2023 Request for Judicial Notice, Donya has gone even further to claim the two cases were consolidated. In a May 25, 2023 reply, Donya claimed it had raised the issue of the dates in Farmers' verified answer in the proceedings below, but the portion of the record Donya cited did not support its claim (nor have we found any such support in our independent examination of the record). In a June 16, 2023 "Notice of Further Extortion," Donya claimed that Farmers had asked the trial court to order us to cease and desist from considering an issue, but the portion of the record cited requested no such thing. Donya has not explained these apparent misrepresentations.
We find that both Donya's May 3, 2023 "Motion in the Underlying [24750 Case] for an Order Entering Immediate Judgment in Favor of the Plaintiffs" and its June 13, 2023 motion "for an Order Which (1) Orders the Dismissal of the August 1, 2023 Order to Show Cause re Contempt, and (2) Imposes a Terminating Sanction . . . at Least as to [the 17320 Case]" are completely frivolous. We therefore award the requested combined sanctions of $6,466 against Donya's counsel.
While Farmers also requested that $2,014 in sanctions be imposed against appellant Donya Entertainment itself, we reject that request. Clients often rely on their attorney's advice regarding what is permissible in litigation, and, without further evidence that Donya understood the motions being brought were frivolous, we decline to impose sanctions upon it.
DISPOSITION
The judgment is affirmed. Respondent is awarded its costs on appeal. Respondent is additionally awarded $6,466 in sanctions against Donya's counsel, Amir Pasha Vafaei, only.
We concur: ROTHSCHILD, P. J., BENDIX, J.