Opinion
G052868 c/w G053452
03-19-2018
MOISEY FRIDMAN et al., Plaintiffs and Appellants, v. BEACH CREST VILLAS HOMEOWNERS ASSOCIATION, Defendant and Respondent.
Darling & Risbrough, Robert C. Risbrough and Ronald E. Darling for Plaintiffs and Appellants. Gates, O'Doherty, Gonter & Guy, K. Robert Gonter, Jr., Nathan Malone and Thomas A. Scutti for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. Nos. 30-2010-00424435 & 07CC09589) OPINION Appeal from a judgment and a postjudgment order of the Superior Court of Orange County, Deborah C. Servino, Judge. Judgment affirmed. Postjudgment order reversed with directions. Darling & Risbrough, Robert C. Risbrough and Ronald E. Darling for Plaintiffs and Appellants. Gates, O'Doherty, Gonter & Guy, K. Robert Gonter, Jr., Nathan Malone and Thomas A. Scutti for Defendant and Respondent.
* * *
INTRODUCTION
Moisey Fridman and Rosa Fridman (the Fridmans) filed a claim for breach of contract against their homeowners association, Beach Crest Villas Homeowners Association (Beach Crest), based on Beach Crest's improper fines for an air conditioning unit. An award of attorney fees to the Fridmans and against Beach Crest was reduced to a judgment in the Fridmans' favor. More than 11 years have passed since the Fridmans first filed their lawsuit, and the judgment remains unsatisfied due to Beach Crest's dilatory behavior.
The Fridmans filed a petition for a writ of mandate to compel Beach Crest to levy an assessment on the homeowners other than the Fridmans to pay the judgment. As explained in a prior unpublished opinion, a special assessment is the only way for Beach Crest to satisfy the judgment. The trial court denied the petition. The Fridmans no longer have a legal or equitable interest in the judgment, having assigned it to their attorneys of record, Darling & Risbrough. The trial court correctly found that the Fridmans lack a clear, present, and beneficial interest in the relief sought by the writ petition. Therefore, we affirm that judgment. As was true of the trial court's judgment, our ruling is without prejudice to Darling & Risbrough pursuing its own remedies against Beach Crest.
In a separate case, the trial court granted a motion to equitably offset the Fridmans' judgment against a judgment obtained by Beach Crest's board president and assigned to Beach Crest. We reverse this postjudgment order. On balance, the equities favor denial of the offset.
APPEAL NO. G052868—APPEAL FROM THE DENIAL OF THE FRIDMANS' PETITION FOR A
WRIT OF MANDATE, SUPERIOR COURT CASE NO. 30-2010-00424435
STATEMENT OF FACTS AND PROCEDURAL HISTORY
"After filing the opening brief in this appeal, Mr. Fridman passed away. A California state court appointed the Fridmans' son Val Fridman as personal representative of Mr. Fridman's estate." (In re Fridman (9th Cir. BAP, July 15, 2016, No. CC-15-1151-FKiKu) 2016 Bankr. Lexis 2608, *6.) No party advised this court of Mr. Fridman's death.
A. Fridman I
This case returns to this court for the third time. The factual background of the matter was set forth in our earlier opinion, Fridman v. Beach Crest Villas Homeowners Association (Aug. 4, 2010, G042757) (Fridman I) [nonpub. opn.], and is quoted here:
"In 1999, the Fridmans installed an air conditioning unit in their Beach Crest Villas condominium. In 2006, the Beach Crest board voted to compel the Fridmans to remove the air conditioning unit because it had been installed without board approval. The Fridmans refused, contending they had properly applied for and received permission to install the unit. Beach Crest began fining the Fridmans on a weekly basis; the Fridmans refused to pay the fines.
"On September 5, 2007, the Fridmans filed a complaint against Beach Crest for negligence, breach of fiduciary duty, intentional infliction of emotional distress, violation of fair housing laws, and breach of contract—the Declaration of Restrictions for Beach Crest Villas Condominiums (the Declaration). Beach Crest filed a cross-complaint against the Fridmans for breach of the Declaration, breach of Beach Crest's rules and regulations, private nuisance, defamation, conversion, and declaratory relief.
"In September 2008, the parties stipulated to binding arbitration, pursuant to Code of Civil Procedure section 1281 et seq., of the Fridmans' fifth cause of action for breach of contract and the entirety of Beach Crest's cross-complaint.
"The arbitration hearing was conducted in March 2009, and the arbitrator issued an award in May 2009. The arbitrator found Beach Crest had breached its fiduciary duties to the Fridmans, and awarded $100 in emotional distress damages. He also found Beach Crest failed to prove any of its causes of action against the Fridmans. The arbitrator determined the Fridmans to be the prevailing party, and awarded them $110,000 in attorney fees.
"By letter, Beach Crest requested the arbitrator amend the award. In response, the arbitrator issued a corrected award, in which he found Beach Crest had breached the Declaration, but the Fridmans had suffered no monetary damages as a result of that breach. The corrected award therefore eliminated the reference to emotional distress damages. The arbitrator again found Beach Crest had failed to prove any of its causes of action, and the Fridmans were the prevailing party and entitled to recover $110,000 in attorney fees.
"On July 9, 2009, the Fridmans filed a petition to confirm the arbitration award. On July 15, Beach Crest filed a petition to correct or vacate the arbitrator's award. The trial court heard both petitions together, confirmed the arbitration award, and entered judgment in favor of the Fridmans. Beach Crest appealed."
We dismissed that appeal on the ground that Beach Crest had waived the right to appeal from the judgment through the stipulation to arbitrate, and awarded the Fridmans their costs incurred on appeal. (Fridman I, supra, G042757.) The trial court later determined the Fridmans had incurred $20,729 in fees and costs in the Fridman I appeal.
B. Fridman II
Beach Crest refused to pay the judgment, and the Fridmans filed a petition for a writ of mandate asking the trial court to compel Beach Crest to levy a special assessment to satisfy the underlying judgment. A notice of related case was filed by Beach Crest in the writ proceeding (but not the arbitration proceeding). Beach Crest demurred to the petition; the trial court sustained the demurrer without leave to amend. The Fridmans appealed from the minute order sustaining the demurrer. (Fridman v. Beach Crest Villas Homeowners Association (Sept. 6, 2011, G044704) (Fridman II) [nonpub. opn.].) We reversed the trial court's order and again ordered that the Fridmans should recover their costs on appeal. In Fridman II, we noted that, as a homeowners association, Beach Crest has no assets, and cannot pay the judgment from its regular assessments. Therefore, the only means for the Fridmans to enforce their judgment against Beach Crest was to obtain a writ ordering Beach Crest to levy a special assessment against the members of the homeowners association, excluding the Fridmans.
C. Avetoom v. Fridman Judgment
While the Fridman II appeal was pending, Beach Crest's board president, Karl Avetoom, sued the Fridmans. A jury awarded Avetoom $600,000 in compensatory damages against the Fridmans, and $200,000 in punitive damages against each of them. Avetoom later agreed to a reduction in punitive damages to $25,000 from each of the Fridmans. (In re Fridman, supra, 2016 Bankr. Lexis 2608 at p. *2.) Avetoom then assigned to Beach Crest $190,000 plus interest from his judgment.
D. The Assignment by the Fridmans
In April 2011, after the judgment was entered in the Avetoom case, the Fridmans assigned to the law firm of Darling & Risbrough their judgment against Beach Crest: "We hereby transfer and assign all title rights and interest in the entire judgment, including additional attorneys' fees and interest to [Darling & Risbrough]." (Italics added.) The assignment was filed with the court in November 2011. Later that month, the trial court in the Avetoom case entered a preliminary injunction restraining the Fridmans from assigning or otherwise transferring their right to payment to any third party.
E. The Fridmans' Bankruptcy Proceedings
The Fridmans filed for Chapter 13 bankruptcy protection in February 2012; the matter was later converted to a Chapter 7 proceeding. In May 2012, their motion for relief from the automatic stay to prosecute the appeal of the Avetoom judgment was granted pursuant to section 362(d)(1) of title 11 to the United States Code. In September 2013, after the case had been converted to a Chapter 7 bankruptcy, the bankruptcy court determined that the appeal of the Avetoom judgment was the property of the bankruptcy estate and subject to the trustee's exclusive control. The court also stayed the prosecution of that appeal pursuant to section 727 of title 11 to the United States Code.
Beach Crest filed a return to the Fridmans' petition for a writ of mandate in which it raised equitable offset as one of its affirmative defenses. Beach Crest claimed the partial assignment of Avetoom's judgment against the Fridmans would offset the Fridmans' judgment for attorney fees against Beach Crest. After the Fridmans filed for bankruptcy protection, Beach Crest sought a stay of the writ proceeding, claiming the bankruptcy automatically stayed the proceedings. The Fridmans objected. The trial court granted the stay.
In January 2013, the bankruptcy court granted the Fridmans' motion for relief from stay of the writ proceeding because "the Judgment itself . . . is not property of the Debtor's bankruptcy estate as the assignment of the Judgment to Darling & Risbrough was executed prior to the bankruptcy filing and appears valid." In April 2013, the trial court stayed hearing on the petition for a writ of mandate until the appeal of the Avetoom case was final, because the issue of offset could not be determined.
In July 2014, Avetoom filed a motion in the bankruptcy court, seeking clarification of the order releasing the writ petition proceedings from the stay; Beach Crest joined the motion. The bankruptcy court issued the following order on August 8, 2014:
"1. In January 17, 2013 Darling & Risbrough ('D&R') obtained limited relief from this Court lifting the 11 U.S.C. § 362 Stay to proceed with a State Court action based solely on the Court's finding that the judgment had been assigned prepetition and, therefore, was not property of the estate. The Court made its ruling based upon a document submitted purportedly transferring ownership to D&R by assignment.
"2. If Darling & Risbrough ('D&R') are asserting a lien interest in state court, they currently do not have relief from Stay from the Bankruptcy Court to pursue the lien claim.
"3. The court agrees with Movant that the lien interest alleged by Darling & Risbrough, by definition, would indicate the [Fridmans'], and therefore, the estate's continuing ownership interest in the judgement.
"4. Pursuit of a lien claim in State Court by Darling & Ri[s]brough would be a violation of the Section 362 Stay, as Darling & Risbrough did not obtain relief from Stay from the Bankruptcy Court to take action against any property of the estate.
"5. This Court's January 2013 partial granting of Darling & Risbrough's Relief motion was not based on this court's finding that D&R was both owner and lienholder of the judgment."
At the hearing on the motion, the bankruptcy court stated: "I mean I think I said pretty clearly that they don't have relief from stay to assert a lien interest, because that really kind of—that changes things—[¶] . . . [¶]—considerably."
On September 12, 2014 the trial court took notice of the bankruptcy court's August 8, 2014 order and again stayed ruling on Darling & Risbrough's lien claim in the writ proceeding.
On November 3, 2015 the bankruptcy court reiterated: "The court has always based its orders (including granting relief from stay) on its finding of a prepetition transfer of [the Fridmans'] interest in the judgement. None of the court's rulings was ever based on a finding that the attorneys merely held a lien and not an ownership interest in the judgment. If [the Fridmans'] attorneys have been arguing both theories in state court (that they held both a lien and an ownership interest or that [the Fridmans] retain some ownership interest in the judgment), they have apparently paid the consequences of the same in state court."
The bankruptcy court stated that Darling & Risbrough could not have both a lien against and outright ownership of the judgment, as a lien would simply be a lien against the Fridmans' property, creating an interest in the bankruptcy estate.
The bankruptcy court concluded that the argument that the Fridmans retained an equitable interest in the judgment was a new claim never presented to the bankruptcy court, which created an estoppel issue. The Fridmans retaining an "equitable" interest in the judgment would have made the judgment part of the Fridmans' bankruptcy estate when the writ petition was heard in September 2015.
F. The Trial Court's Ruling on the Fridmans' Petition
In September 2015, the trial court denied the Fridmans' petition for a writ of mandate on the ground that the Fridmans' assignment of their judgment in the underlying action meant that they no longer had a clear, present, and beneficial right to the relief sought in the writ proceeding. The trial court refused to consider either Beach Crest's request for equitable offset of the judgments or the Fridmans' claim that their attorneys had a charging lien that took priority over any judgment assigned to Beach Crest by Avetoom.
Judgment was entered against the Fridmans and in favor of Beach Crest. The Fridmans filed a notice of appeal from the judgment denying the petition for a writ of mandate (appeal No. G052868).
STANDARD OF REVIEW
A writ of mandate will issue to "compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station" (Code Civ. Proc., § 1085, subd. (a)), "where there is not a plain, speedy, and adequate remedy, in the ordinary course of law" (Id., § 1086).
"In reviewing the trial court's denial of the writ, we must determine whether its findings and judgment are supported by substantial evidence. However, where the facts are undisputed and a question of law is involved, we may exercise our independent judgment." (Riverside Sheriff's Assn. v. County of Riverside (2003) 106 Cal.App.4th 1285, 1289.)
The trial court denied the petition for a writ of mandate on the ground the Fridmans had failed to establish a clear, present, and beneficial right to the levying of a special assessment on all other members of the homeowners association because they had assigned their rights to the attorney fees award to Darling & Risbrough. The facts underlying the trial court's finding are undisputed, and we therefore review the matter de novo.
DISCUSSION
In Fridman II, we held the Fridmans had alleged a "clear, present, and beneficial right in the levying of a special assessment by Beach Crest." (Fridman II, supra, G044704.) In denying the writ petition, the trial court found the Fridmans "lost their clear and substantial beneficial interest to obtain the writ" by assigning the underlying judgment to Darling & Risbrough. The question before us is whether the Fridmans' assignment of the judgment is inconsistent with their right to obtain a writ of mandate. We conclude it is.
The trial court succinctly set forth the law regarding what a petitioner must show to establish a beneficial right to a writ of mandate. "The petitioner must have a 'clear, present and beneficial right' to the performance of the duty allegedly owed by the respondent. (Ellena v. Dept of Insurance (2014) 230 Cal.App.4th 198, 205.) To establish a beneficial interest, the petitioner must show he or she has some special interest to be served or some particular right to be preserved or protected through issuance of the writ. (Carsten v. Psychology Examining Committee (1980) 27 Cal.3d 793, 796.) The writ must be denied if the petitioner will gain no direct benefit from its issuance and suffer no direct detriment if it is denied. (Ibid.) 'The petitioner's interest in the outcome of the proceedings must be substantial, i.e., a writ will not issue to enforce a technical abstract or moot right.' (Braude v. City of Los Angeles (1990) 226 Cal.App.3d 83, 87.) If circumstances change during the pendency of a mandate proceeding such that the petitioner no longer has a beneficial interest in the outcome, the superior court will deny writ relief. (County of San Luis Obispo v. Superior Court (2001) 90 Cal.App.4th 288, 293-295 [petitioner suffered foreclosure before the court ruled on challenge to adverse administrative decision and consequently lost beneficial interest to obtain writ].)"
Pursuant to a written contingent fee agreement, Darling & Risbrough held an equitable lien on the judgment. The assignment by the Fridmans transferred the legal right in the judgment to Darling & Risbrough. "'[I]t is well established that an assignment of a chose in action for collection vests the legal title in the assignee whether or not any consideration is paid therefor. In such case the assignee may maintain a suit thereon in his own name, even though the assignor retains an equitable interest in the thing assigned.'" (Fink v. Shemtov (2012) 210 Cal.App.4th 599, 610; see Harrison v. Adams (1942) 20 Cal.2d 646, 650 ["An assignment for collection vests legal title in the assignee which is sufficient to enable him to maintain an action in his own name, but the assignor retains the equitable interest in the thing assigned."].)
"A lien is extinguished by merger when a lienholder acquires ownership of the property." (Strike v. Trans-West Discount Corp. (1979) 92 Cal.App.3d 735, 742; see Ralph C. Sutro Co. v. Paramount Plastering, Inc. (1963) 216 Cal.App.2d 433, 438.) Darling & Risbrough actually represented to the bankruptcy court that the Fridmans no longer had a legal or an equitable interest in the judgment. As a creditor in the Fridmans' chapter 7 bankruptcy proceeding, Darling & Risbrough sought an order (1) determining that the bankruptcy proceedings did not stay the writ of mandate proceedings in the state court, (2) granting relief from any automatic stay, or (3) compelling abandonment of the judgment by the Fridmans. Darling & Risbrough's argument included the following: "Despite firmly believing that the attorneys' fees and costs awarded in the Judgment [following the arbitration] belong to it, as a precaution against the [Fridman]s' age and failing health, Darling & Risbrough asked the [Fridmans] to execute the Assignment, which they did on April 11, 2011. Pursuant to the Assignment, the [Fridmans] transferred any rights and interest they may have had in the Judgment to Darling & Risbrough, including the right to liquidate and collect the fees awarded in the Judgment. As such, the [Fridmans] had no legal or equitable interest in the Judgment as of the petition date and it is not property of the estate."
The Fridmans' loss of any legal or equitable interest in the judgment leads to a determination that the Fridmans also lost their beneficial right to pursue a writ of mandate. In County of San Luis Obispo v. Superior Court, supra, 90 Cal.App.4th 288, a property owner applied to the county for certificates of compliance in order to subdivide and develop his property. (Id. at p. 290.) The county denied the application, and the property owner filed a petition for a writ of mandate. (Id. at pp. 290-291.) While the petition was pending, the property owner lost the property in a foreclosure sale. (Id. at p, 291.) The trial court nevertheless issued the requested writ of mandate to the original property owner (ibid.); the appellate court reversed. "[A] mortgage foreclosure divested [the property owner] of all interest in the property prior to completion of judicial review of the administrative action. This makes it impossible for [the property owner] to receive relief." (Id. at p. 292.) "[M]andamus can only bring appropriate relief to someone who has an interest in the land subject to the certificates. Because loss of the property by foreclosure prevents the trial court from granting [the property owner] any relief by administrative mandate, [the property owner] has no standing to maintain his mandamus action." (Id. at p. 295; see Goldman v. County of Santa Barbara (1962) 203 Cal.App.2d 454, 456-457 [appeal from judgment of dismissal of petition for writ of mandate was itself dismissed when the petitioner/appellants sold the property in question during pendency of the appeal].)
The Fridmans contend that Code of Civil Procedure section 368.5 permits them to continue the writ proceeding in their name, despite the assignment of all of their rights in the judgment to Darling & Risbrough. "An action or proceeding does not abate by the transfer of an interest in the action or proceeding or by any other transfer of an interest. The action or proceeding may be continued in the name of the original party, or the court may allow the person to whom the transfer is made to be substituted in the action or proceeding." (Ibid.) This does not, however, prevail over the requirement of a writ proceeding that the party allege a clear, present, and beneficial interest in the proceeding, which the Fridmans no longer have.
The trial court correctly found that the assignment of the judgment from the Fridmans to Darling & Risbrough transferred all of the Fridmans' interest in the judgment, and caused them to lose their legal and beneficial interest in the relief sought by the petition for a writ of mandate. Therefore, the court did not err in entering judgment denying the writ petition.
APPEAL NO. G053452—APPEAL FROM THE ORDER OFFSETTING JUDGMENTS,
SUPERIOR COURT CASE NO. 07CC09589
STATEMENT OF FACTS AND PROCEDURAL HISTORY
During the pendency of appeal No. G052868, Beach Crest filed a motion in the trial court for a set off of the judgment in the underlying case against Avetoom's judgment. The Fridmans filed an objection and an opposition. The trial court granted Beach Crest's motion for set off of judgments. The trial court found that Beach Crest had established it acquired a partial assignment of Avetoom's judgment against the Fridmans, and that the Fridmans were insolvent. The court further found that the Fridmans had not established that their attorneys had a charging lien, or that the equities were against an offset.
On April 21, 2016, the Fridmans filed a notice of appeal of the order granting the motion for set off of judgments. On May 25, 2016 this court granted Beach Crest's request to consolidate the appeals in case Nos. G052868 and G053452.
STANDARD OF REVIEW
"The relative priority of the parties' claims is a legal issue that we review de novo." (Pou Chen Corp. v. MTS Products (2010) 183 Cal.App.4th 188, 192; Brienza v. Tepper (1995) 35 Cal.App.4th 1839, 1843.)
Beach Crest contends that the appropriate standard of review is abuse of discretion. Even under that standard, the result would be the same. "[W]hen a trial court's decision rests on an error of law, that decision is an abuse of discretion." (People v. Superior Court (Humberto S.) (2008) 43 Cal.4th 737, 746.) As explained post, the trial court made an error of law by equitably offsetting the judgments.
DISCUSSION
"[E]quitable offset is a means by which a debtor may satisfy in whole or in part a judgment or claim held against him out of a judgment or claim which he has subsequently acquired against his judgment creditor. The right exists independently of statute and rests upon the inherent power of the court to do justice to the parties before it." (Salaman v. Bolt (1977) 74 Cal.App.3d 907, 918.) "[I]t is well settled that a court of equity will compel a set-off when mutual demands are held under such circumstances that one of them should be applied against the other and only the balance recovered. The insolvency of the party against whom the relief is sought affords sufficient ground for invoking this equitable principle. [Citations.] And a judgment debtor who has, by assignment or otherwise, become the owner of a judgment or claim against his judgment creditor, may go into the court in which the judgment against him was rendered and have his judgment offset against the first judgment." (Harrison v. Adams, supra, 20 Cal.2d at pp. 648-649.)
A lien for attorney's fees created pursuant to a contingent fee retainer agreement has priority over a judgment lien, making an offset of the judgment against the attorney fees lien improper. (Crasnick v. Marquez (2016) 248 Cal.App.4th Supp. 1, 3-4.) "[A]n attorney's contractual lien over the proceeds of litigation must have priority until the litigation is finally resolved, and all related fees have been billed and paid. Few attorneys would take the risk of a contingent fee if they could not be assured that their attorney's fee liens were applicable to all potential proceeds they might recover until such time as they have been paid in full for their services." (Pangborn Plumbing Corp. v. Carruthers & Skiffington (2002) 97 Cal.App.4th 1039, 1055.)
As the court noted in Brienza v. Tepper, supra, 35 Cal.App.4th 1839, public policy supports this result. "[P]ublic policy reasons should provide priority to an attorney's contingency fee contractual lien over a subsequently acquired right of offset from a third party judgment creditor. Brienza argues that if an attorney's contractual lien for fees cannot prevail over a subsequently acquired right of offset, attorneys would be far less willing to represent clients with meritorious cases. In Cetenko v. United California Bank (1982) 30 Cal.3d 528, 535-536 . . . , where an attorney's prior contractual lien for fees was given priority over a subsequent statutory lien, our Supreme Court expressed this public policy by stating: 'Public policy favors the conclusion we reach in this case. If an attorney's claim for a lien on the judgment based on a contract for fees earned prior to and in the action cannot prevail over the lien of a subsequent judgment creditor, persons with meritorious claims might well be deprived of legal representation because of their inability to pay legal fees or to assure that such fees will be paid out of the sum recovered in the latest lawsuit. . . . ' [¶] We believe the same public policy reasons equally apply in according priority to an attorney's contractual lien over a subsequently assigned right of offset from a third party judgment creditor." (Id. at p. 1850, fn. omitted.)
In this case, Darling & Risbrough has a legal interest in the judgment, not merely an equitable lien. A leading treatise on the subject of judgments makes clear that equitable offset is even less permissible here. "[T]he court may doubtless exercise its discretion in the allowance of a set-off to protect an attorney's lien, under proper circumstances[.] And the general rule is that while an attorney's lien is subordinate to the rights of the adverse party to offset judgments in the same action or in actions based upon the same transaction, it is nevertheless superior to any right to offset judgments obtained in wholly independent actions, though, of course, a lien would not in any case prevent a set-off as to the balance of the judgment. And clearly where the lien has attached to the judgment upon its rendition, it cannot be defeated by a subsequent right of set-off. So where, by virtue of his contract with his client, an attorney becomes the legal or equitable owner of a portion of or interest in the judgment, his rights are superior to the right to set off against such judgment a judgment recovered or obtained after the contract was made." (Freeman on Judgments (5th ed. 1925) § 1148, pp. 2393-2394, fns. omitted.)
Even if the use of equitable offset was proper in this matter, the equities would preclude the offset of judgments. The Fridmans obtained their judgment against Beach Crest more than eight years ago. Rather than paying the judgment, Beach Crest embarked on a lengthy and costly legal battle in which it improperly appealed from the judgment affirming the Fridmans' arbitration award, despite clear language in their arbitration agreement barring such an appeal. The petition for a writ of mandate was necessarily filed by the Fridmans to force Beach Crest to levy an assessment on the other homeowners when Beach Crest refused to voluntarily take this necessary step to satisfy the judgment against it. Beach Crest then took every possible means to delay the trial court's ruling on the writ petition, including but not limited to arguing the matter was stayed due to the Fridmans' bankruptcy proceedings. The Fridmans lost the beneficial right to pursue the writ petition because Beach Crest's dilatory tactics resulted in the need for the Fridmans to assign the judgment to their attorneys.
In the meantime, Beach Crest undertook the Avetoom action in order to delay execution on the Fridmans' judgment, and ultimately to set the stage for the offset motion at issue here. Avetoom's assignment of the portion of his own judgment that would cover the amount of the Fridmans' judgment against Beach Crest supports our conclusion regarding the collaboration of Beach Crest and Avetoom. Having forced the Fridmans into bankruptcy through the lawsuit against them, Avetoom then bought the appeal rights from the bankruptcy trustee, and dismissed the Fridmans' appeal, ensuring their ability to pursue the offset.
Beach Crest obtained the right to seek offset through an assignment by Avetoom in an unrelated matter. As the court concluded in Brienza v. Tepper, supra, 35 Cal.App.4th at page 1848, "we cannot accord it the same weight in equity as a true equitable offset between the parties where judgment is obtained by filing suit, expending time and incurring fees and costs."
CONCLUDING THOUGHTS
We have no reason to believe that this opinion is the end of the disputes between these parties. Two different courts have already cautioned the parties and their counsel regarding the unprofessional behavior exhibited throughout the pendency of the many legal proceedings between them. The Ninth Circuit's Bankruptcy Appellate Panel explained: "We make this determination [that there was no clear error in the bankruptcy court's findings that Avetoom purchased the appeal rights in his own case from the bankruptcy trustee in order to dismiss the appeal] with some unease. The amount of energy which the parties have devoted to this litigation, and the extraordinary degree of venom they have poured on each other, make it clear that this case is more of a personal vendetta than a rational attempt by the parties to protect their legitimate interests. To say that either of these parties is acting in 'good faith' stretches the common meaning of that phrase to the breaking point. But the case law ascribes a special meaning to the phrase in the context of § 363(m). Given that definition, we cannot say that the bankruptcy court erred." (In re Fridman, supra, 2016 Bankr. Lexis 2608 at p. *12.)
In the set off order, the trial court stated: "Finally, this Court notes the lack of professional civility and courtesy displayed by counsel in this action. The Motion, Opposition, and Reply are replete with harsh accusations, personal attacks, and unsupported tirades. Such attacks have no place in litigation. 'We close this discussion with a reminder to counsel—all counsel, regardless of practice, regardless of age—that zealous advocacy does not equate with 'attack dog' or 'scorched earth'; nor does it mean lack of civility . . . . Zeal and vigor in the representation of clients are commendable. So are civility, courtesy, and cooperation. They are not mutually exclusive.' (In re Marriage of Davenport (2011) 194 Cal.App.4th 1507, 1537.)"
We strongly urge all sides to quickly and civilly resolve the litigation between them before even more attorney fees are expended.
DISPOSITION
The judgment in case No. 30-2010-00424435 (appeal No. G052868) is affirmed. The postjudgment order in case No. 07CC09589 (appeal No. G053452) is reversed with directions to the trial court to deny Beach Crest's motion for a set off. In the interests of justice, because both parties prevailed in part, neither party shall recover costs on appeal.
FYBEL, J. WE CONCUR: O'LEARY, P. J. ARONSON, J.