Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. KC046741, Abraham A. Khan, Judge.
Law Offices of Daniel J. Doonan, Inc., D. Scott Doonan and Lynne Rasmusssen for Plaintiff and Appellant.
Craton & Switzer, Robert E. Tokar and Curt R. Craton for Defendants and Respondents.
WILLHITE, J.
INTRODUCTION
Civil Code section 1714.10 prohibits the unauthorized filing of a cause of action against an attorney for conspiring with a client, based on conduct arising from any attempt to contest or compromise a claim or dispute. If a plaintiff desires to file such a claim, the statute creates a procedure by which the plaintiff must first seek judicial authorization to pursue it. (§ 1714.10, subd. (a).), In addition, the statute sets forth two exceptions to the general provision prohibiting conspiracy claims against counsel absent prior judicial approval. (§ 1714.10, subd. (c)(1) & (2).)
All undesignated statutory references are to the Civil Code.
Section 1714.10, subdivision (a) reads: “No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action. The court may allow the filing of a pleading claiming liability based upon such a civil conspiracy following the filing of a verified petition therefor accompanied by the proposed pleading and supporting affidavits stating the facts upon which the liability is based. The court shall order service of the petition upon the party against whom the action is proposed to be filed and permit that party to submit opposing affidavits prior to making its determination. The filing of the petition, proposed pleading, and accompanying affidavits shall toll the running of any applicable statute of limitations until the final determination of the matter, which ruling, if favorable to the petitioning party, shall permit the proposed pleading to be filed.”
Section 1714.10, subdivision (c) provides: “This section shall not apply to a cause of action against an attorney for a civil conspiracy with his or her client, where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney’s financial gain.”
In this case, plaintiff Gloria Fuertes moved for and received leave to file an amended pleading. The new pleading added the codefendants’ defense counsel as defendants to a cause of action for conspiracy to commit fraud and named them as defendants in the other causes of action. Thereafter, the attorney defendants filed a demurrer, asserting that plaintiff had failed to comply with section 1714.10. The trial court sustained the demurrer with leave to amend. Plaintiff thereafter filed an amended pleading deleting the attorney defendants. She appeals from the order sustaining the demurrer with leave to amend, contending that section 1714.10 does not apply to her particular allegations against defense counsel. We do not reach the merits of her contention because we conclude that there is no appealable order. We therefore shall dismiss the purported appeal.
Section 1714.10, subdivision (b) provides: “Failure to obtain a court order where required by subdivision (a) shall be a defense to any action for civil conspiracy filed in violation thereof. The defense shall be raised by the attorney charged with civil conspiracy upon that attorney’s first appearance by demurrer, motion to strike, or such other motion or application as may be appropriate. Failure to timely raise the defense shall constitute a waiver thereof.”
Pursuant to Government Code section 68081, we requested and received letter briefs on whether there is an appealable order.
FACTUAL AND PROCEDURAL BACKGROUND
According to the allegations in plaintiff’s complaint, her lawsuit arises from the following circumstances. Plaintiff became delinquent in the mortgage payments on her residence. A notice of default and sale was recorded. Unsolicited, one of the defendants contacted her, offering to provide assistance to help her retain her home. Plaintiff went to the office of an escrow company (one of the named defendants) where she signed documents represented to be loan documents. She was told that by taking out the loan, she would receive cash to help her cure her default. In fact, she unknowingly signed a deed of trust, grant deed, and rental agreement for her home. Defendants then used these documents to obtain fraudulent loans against her property for $281,000, money which they embezzled. Defendants never cured plaintiff’s mortgage delinquency.
Plaintiff filed her action in August 2005. Two months later, she filed a first amended complaint.
In June 2006, plaintiff moved for leave to file a second amended complaint. The proposed pleading added as defendants the law firm of Craton & Switzer LLP and attorney Curt R. Craton, counsel for many of the defendants already named in the action.
In addition, the pleading sought to add a cause of action for violating federal law (18 U.S.C. § 1961, et seq., commonly referred to as Civil RICO) based upon the claim that defendants had engaged in an on-going enterprise to defraud numerous homeowners of their homes or equity therein. The complaint contained the general allegation that each defendant had acted as an agent or co-conspirator of the other defendants and the specific allegation that each had “conspired with one another to defraud” plaintiff. In particular, plaintiff alleged that the defendant attorneys had been “instrumental” in the incorporation of two of the entities that had participated in the fraudulent scheme and they had “abused the processes of the court . . . for an improper collateral purpose . . . to force and intimidate Plaintiff . . . to withdraw” her claim. The pleading included examples of defense counsel’s alleged abuse of process, including falsely accusing plaintiff of criminal conduct.
Insofar as the attorney defendants were concerned, the second amended complaint alleged causes of action against them for: (1) violation of 18 United States Code section 1961, et seq.; (2) fraud and conspiracy to commit fraud; (3) conversion; (4) violation of the Mortgage Foreclosure Consultants Act (§ 2945, et seq.); (5) violation of the Home Equity Sales Contracts Act (§ 1695, et seq.); (6) constructive trust; (7) unlawful or fraudulent business practices (Bus. & Prof. Code, § 17200); and (8) slander of title.
The defense opposed plaintiff’s request for leave to file the second amended complaint, primarily attacking the proposed pleading on its merits. In particular, the defense argued that the new complaint failed to state any claim, including a RICO claim, against defense counsel because it alleged nothing more than “the rendition of legal services for a client.” The defense also claimed that the specific allegations included conduct absolutely privileged under section 47, subdivision (b). The opposition did not include any reference to section 1714.10.
The trial court granted plaintiff’s motion to file the second amended complaint.
Defendants filed a demurrer to the second amended complaint, raising multiple grounds. To the extent that plaintiff’s new pleading alleged that defense counsel had conspired with the other defendants (their clients), defendants correctly noted that plaintiff had failed to comply with the procedures set forth in section 1714.10 to obtain a court order before filing those causes of action. On that basis, defendants requested that the trial court sustain the demurrer without leave to amend.
Plaintiff’s opposition to the demurrer argued that she had obtained the necessary judicial approval to sue defense counsel because the trial court had granted her motion for leave to file the second amended complaint which included the allegations against counsel. In addition, plaintiff argued that her allegations fell within one of the statutory exceptions to section 1714.10’s requirement for pre-filing approval: a claim that “the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney’s financial gain.” (§ 1714.10, subd. (c)(2).) Plaintiff asked the court to overrule the demurrer but concluded “if the Court is inclined to grant the Demurrer, Plaintiff requests leave to amend her Second Amended Complaint.”
At the beginning of the November 16, 2006 hearing on the motion, the trial court stated: “With regard to the demurrer, it’s sustained on the grounds that plaintiff failed, had failed to obtain a court order before filing a cause of action against an attorney for civil conspiracy as required by Civil Code 1714.10(a).” Plaintiff’s counsel responded: “On the demurrer, there was a motion brought to file a second amended complaint and the proposed pleading was in there and it contained all the allegations that are in there now concerning [defense counsel] and the court granted that motion. And I believe, even though it wasn’t brought specifically under 1714.10(a), I think it was, that by default the court is approving the entry of those new defendants into the lawsuit.” The trial court disagreed. It explained: “You can’t expect the court to address a prerequisite issue, a threshold issue, just because [it] gave you leave to amend the complaint. It doesn’t squarely bring that issue before the court’s attention as is required by [section] 1714[.10].” When the court began to set the date for the case management conference (CMC), plaintiff’s counsel interrupted and said: “I’m sure there’s going to be a motion under 1714.10(a), Your Honor, to properly put it before the court. So maybe the C.M.C. should be continued out so we can get the pleadings in order.” The attorney representing defense counsel stated: “There will be that motion, there will be an opposition, and then I suppose there is going to be another demurrer.” The court then set the date for the CMC.
The court’s minute order states, in relevant part: “Demurrer is sustained on the grounds that plaintiff failed to obtain a court order before filing a cause of action against an attorney for civil conspiracy, as required by CC1714.10(a).”
Thereafter, plaintiff did not, as had been represented at the hearing, file a petition for judicial approval to sue defense counsel. Instead, on December 26, she filed a third amended complaint which omitted defense counsel as defendants (but did continue to allege civil RICO violations) and, on December 28, filed a notice of appeal “from the order dated November 16, 2006, sustaining the Demurrer of Defendants Curt Craton and Craton & Switzer, LLP pursuant to Civil Code § 1714.10.” (Capitalization omitted.)
It appears that the third amended complaint was also a response to a December 7th ruling in which the trial court sustained with leave to amend a demurrer brought by three other defendants.
On January 5, 2007, the attorney defendants filed an application for entry of judgment of dismissal as to them. They reasoned as follows. On November 16, 2006 the trial court had sustained their demurrer with leave to amend. The time in which plaintiff could file or seek leave to file an amended complaint including them had expired. Code of Civil Procedure section 581, subdivision (f)(2) permits a trial court, upon motion, to dismiss a complaint after a demurrer has been sustained with leave to amend and the plaintiff fails to file an amended complaint. Therefore, citing Cano v. Glover (2006) 143 Cal.App.4th 326, 329-330, they requested a dismissal with prejudice. Plaintiff filed no opposition to the application. The trial court issued a minute order reading: “It has been brought to the Court’s attention that the case is up on appeal. Therefore, the Court can neither grant or deny said application.”
On our own motion, we have augmented the record on appeal to include the superior court file. (Cal. Rules of Court, rule 8.155(a)(1)(A).) We take judicial notice of its contents. (Evid. Code, §§ 452, subd. (d)(1) and 459, subd. (a).)
Plaintiff’s letter brief (see fn. 5, ante) incorrectly states “No Notice of Ruling or Minute Order is in the record to elucidate” the trial court’s response to the attorney defendants’ request for dismissal.
DISCUSSION
Plaintiff contends that the trial court erred in sustaining the demurrer because section 1714.10 does not apply to her allegations against defense counsel. She offers several arguments to support that claim. Defendants do not address her contention on the merits but, instead, urge that plaintiff, by filing a third amended complaint that omitted the attorney defendants, has waived any error the trial court may have committed in sustaining defense counsel’s demurrer.
Two principles are potentially implicated by this fact pattern.
The first principle is that by filing a third amended complaint omitting defendants, plaintiff has waived any claim that the trial court erred in sustaining the demurrer brought by those defendants. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966, fn. 2; Van de Kamp v. Bank of America (1988) 204 Cal.App.3d 819, 866; and Sheehy v. Roman Catholic Archbishop (1942) 49 Cal.App.2d 537, 540.) That is, by filing a new pleading, plaintiff admitted that the demurrer’s assertion that she had failed to comply with section 1714.10 was well-founded and that she could not cure that defect. (Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th 1089, 1094.)
The second principle is that the filing of an amended complaint which omits previously named defendants operates as a dismissal of those defendants. (Lamoreux v. San Diego etc. Ry. Co. (1957) 48 Cal.2d 617, 627-628; Boonyarit v. Payless Shoesource, Inc. (2006) 145 Cal.App.4th 1188, 1193; Schlake v. MacConnell (1924) 69 Cal.App. 207, 209.) In effect, plaintiff acquiesced to the trial court’s ruling because, although she was given the opportunity to amend her allegations against the attorney defendants, she chose not to do so and instead filed a complaint deleting them from her lawsuit.
When a dismissal is effected by the plaintiff’s action of filing an amended complaint omitting a previously named party, the dismissal is without prejudice (Kuperman v. Great Republic Life Ins. Co. (1987) 195 Cal.App.3d 943, 947), but that “point is irrelevant” to this appeal. (Fireman’s Fund Ins. Co. v. Sparks Construction, Inc. (2004) 114 Cal.App.4th 1135, 1143.)
Application of either of the above two principles to this case would preclude plaintiff from contending on this appeal that the trial court’s November 16 ruling was error. However, such a conclusion presupposes that there is even an appealable order. As we now explain, there is not. We therefore will dismiss the purported appeal.
Contrary to what plaintiff states in her reply brief and her letter brief submitted pursuant to our request (fn. 5, ante), the trial court did not sustain defense counsel’s demurrer without leave to amend. The trial court simply sustained the demurrer based on plaintiff’s failure to comply with section 1714.10. Nothing in either the trial court’s remarks at the hearing or its minute order (see fn. 6, ante) suggested, let alone stated, that plaintiff would have no opportunity to amend. Hence, it is assumed leave to amend was granted. (Cal. Rules of Court, rule 3.1320(g); B.F.G. Builders v. Weisner & Coover Co. (1962) 206 Cal.App.2d 752, 758.) Clearly, plaintiff’s counsel understood that he had the opportunity to amend; his opposition to the demurrer had requested leave to amend if the court agreed with defense counsel and, at the hearing on the motion, he stated that plaintiff intended to cure the defect by filing a petition pursuant to section 1714.10. The attorney defendants also recognized that fact because their subsequent request for dismissal was based upon plaintiff’s failure to amend within the required time. Consequently, plaintiff’s failure to avail herself of the option given to her by the trial court to file an amended complaint vis-à-vis the attorney defendants does not result in an appealable order. “An order sustaining a demurrer with leave to amend is not a final judgment and therefore not itself appealable. [Citation.]” (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 457.)
Rule 3.1320(g) provides, in relevant part: “Following a ruling on a demurrer, unless otherwise ordered, leave to . . . amend within 10 days is deemed granted.”
One leading practice guide sets forth the options available to a plaintiff when a demurrer is sustained with leave to amend. The options include: (1) petition the appellate court for an extraordinary writ; (2) amend the complaint; (3) dismiss without prejudice and refile the complaint; and (4) refuse to amend and allow the trial court to enter a judgment of dismissal and appeal from that judgment. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2006) ¶¶ 7:146 to 7:150.1, pp. 7-54 to 7-56 (rev. #1 2006).) Plaintiff did none of these.
Plaintiff’s argument that an appealable order is present is not persuasive. She relies upon subdivision (d) of section 1714.10. It reads: “This section [1714.10] establishes a special proceeding of a civil nature. Any order made under subdivision (a), (b), or (c) which determines the rights of a petitioner or an attorney against whom a pleading has been or is proposed to be filed, shall be appealable as a final judgment in a civil action.” However, application of that statutory provision permitting appeal of what would otherwise be an interlocutory order presupposes that the ruling constituted a determination on the application of section 1714.10 to the complaint’s allegations. Here, the trial court’s November 16th ruling was not the functional equivalent of an order denying a section 1714.10 petition because, as explained above, plaintiff was given leave to amend.
Plaintiff relies upon Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802 to support a contrary conclusion. The case is distinguishable. There, the appellate court essentially concluded that a plaintiff’s motion to amend a complaint to include conspiracy allegations against the defendant’s attorney was the equivalent of a section 1714.10 petition because the motion had been supported by evidentiary matter and the defense opposition had argued that the plaintiff had failed to comply with section 1714.10 or to meets its burden under that statute. In that particular context, the reviewing court concluded that the trial court’s order granting the plaintiff leave to amend had determined the rights of an attorney vis-à-vis section 1714.10. Hence, the defense counsel could, pursuant to subdivision (d) of section 1714.10, prosecute an appeal from that order. (Id. at pp. 818-820.) Here, on the other hand, the trial court’s November 16th order did not constitute a determination about plaintiff’s ability to add conspiracy allegations against defense counsel because she was given the opportunity to amend her complaint, an opportunity she simply chose not to not pursue. (Compare Hung v. Wang (1992) 8 Cal.App.4th 908, 935 [adjudication of a petition under section 1714.10 results in a final, appealable order] and Castro v. Higaki (1994) 31 Cal.App.4th 350, 356-357 (including fn. 7), & 359 [trial court’s denial of plaintiff’s section 1714.10 petition constituted a denial on the merits and therefore was an appealable order because the court had found that none of plaintiff’s theories was viable].)
Lastly, plaintiff requests that we order nunc pro tunc the entry of a judgment of dismissal of the attorney defendants and construe her notice of appeal to refer to such judgment. We decline to do so. That procedure is appropriate only when it is clear that an appealable judgment should have been but was not entered. (ABF Capital Corp. v. Grove Properties Co. (2005) 126 Cal.App.4th 204, 213.) That principle does not apply to this case. Because the trial court sustained the demurrer with leave to amend, it did not make a final determination about plaintiff’s ability to sue the attorney defendants. Hence, its ruling did not create an appealable judgment that should have been but was not entered. That circumstance distinguishes this matter from the cases plaintiff cites. In each of them, the trial court made a ruling that could be construed as a final determination on the merits but did not thereafter enter a judgment of dismissal.
Vibert v. Berger (1966) 64 Cal.2d 65 [the plaintiff files a notice of appeal from the trial court’s order sustaining without leave to amend a demurrer before a judgment of dismissal is entered]; Coe v. City of Los Angeles (1994) 24 Cal.App.4th 88, 91, fn. 3 [the trial court, through a minute order, dismissed the plaintiff’s lawsuit for failure to bring it to trial within five years but did not enter a signed order of dismissal]; and Donohue v. State of California (1986) 178 Cal.App.3d 795, 800 [the trial court granted the defendant’s motion for judgment on the pleadings but entered no judgment dismissing the action].
DISPOSITION
The purported appeal from the order of November 16, 2006 is dismissed. The parties to bear their own costs on appeal. (Cal. Rules of Court, rule 8.276(a)(4).)
We concur: EPSTEIN, P. J. MANELLA, J.