Opinion
G051757
01-31-2017
EDWARD GILLIAM, Plaintiff and Appellant, v. MINION MILLER et al., Defendants and Respondents; STEVEN J. DONELL, as Receiver, etc. Movant and Respondent.
Edward Gilliam, in pro. per., for Plaintiff and Appellant. No appearance for Defendants and Respondents. Ervin Cohen & Jessup, Byron Z. Moldo and Alexandra C. Gilinsky, for Movant 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. No. 30-2012-00565634) OPINION Appeal from orders of the Superior Court of Orange County, Kirk H. Nakamura, Judge. Affirmed in part and dismissed in part. Edward Gilliam, in pro. per., for Plaintiff and Appellant. No appearance for Defendants and Respondents. Ervin Cohen & Jessup, Byron Z. Moldo and Alexandra C. Gilinsky, for Movant and Respondent.
INTRODUCTION
This is the first of two appeals by Edward Gilliam, both of which deal with the same set of facts. Representing himself, Gilliam filed suit against 10 defendants, among which were Minon Miller (Miller) and her limited liability company Nonim, LLC. Miller, Nonim, and some of the other defendants defaulted, and Gilliam obtained a default judgment but only against Miller and Nonim.
The second appeal is Gilliam v. Donell (Jan. 31, 2017, G052026) [nonpub. opn.].
The default judgment was the high point. Things went downhill from there, in the superior court at least. Gilliam insisted on having his chosen receiver, Stephen Donell, appointed to go after Miller's and Nonim's assets, despite the court's warning that he might find himself paying for these services. Donell was duly appointed, but could obtain only minimal assets. With expenses exceeding recovery, he asked to be discharged. The court granted his motion and surcharged Gilliam for the approximately $64,000 Donell and his lawyers had spent trying to recover something to satisfy Gilliam's default judgment against Miller and Nonim. This is one of the orders from which Gilliam appealed.
Gilliam, meanwhile, had had the idea of adding more judgment debtors to the default judgment. But the time for doing this had long passed. He had succeeded in proving his right to a default judgment only against Miller and Nonim; as to the other defendants, he had made no showing.
The default judgment as originally entered, however, did not explicitly address the outcome as to the other defendants. After being alerted by Gilliam's motion to this oversight, the trial court entered an order nunc pro tunc correcting the judgment to remedy it. Gilliam also appealed from this order.
Finally, Gilliam asked the court to impose "terminating sanctions" against Miller and Nonim for their refusal to respond to the receiver's efforts to obtain documents from them. Since Gilliam already had a default judgment against these parties, it is not clear what sort of "termination" he had in mind. The record does not contain a ruling on this motion.
We affirm the order surcharging Gilliam for the receivership fees and expenses. The court has wide discretion to allocate a receiver's fees and expenses. It was clear that no funds would be forthcoming from the receivership estate, and since Gilliam insisted on Donell's appointment, the court was within its discretion to decide Gilliam should pay.
As for the nunc pro tunc order, Gilliam's appeal from this order is untimely and must be dismissed. The order merely corrected an oversight in the original default judgment. It did not change Gilliam's rights. He never had a default judgment against anyone except Miller and Nonim; judgment should have been entered in favor of the other defendants, against whom Gilliam had failed to make a case. The nunc pro tunc order merely made that reality plain. Gilliam did not timely appeal from either the default judgment or the nunc pro tunc order.
Finally, we affirm the denial of Gilliam's motion for sanctions. The ruling itself is not part of the record. In the face of an inadequate and incomplete record, we must assume the trial court ruled correctly.
FACTS
Gilliam sued Miller, Nadia Miller, Lee Frazier, Edell Deas, Felancia Ford, "Father Miller" (aka John Leonard Deas), Minon Miller MTD Tax Service, Minon Miller Income Tax Service, Accessories by Minon, and Nonim on April 30, 2012, for fraudulent transfers and malicious prosecution. On August 17, Gilliam dismissed Felancia Ford, Accessories by Minon, "Father Miller," and John Deas. The rest of the defendants defaulted, and Gilliam filed a prove-up package for a default judgment. The default judgment, entered on December 17, 2012, in the amount of $53,555, was solely against Miller and Nonim; it did not mention the remaining defendants.
We assume "Father Miller" and John Deas are the same person. Gilliam alleged that John Deas was Miller's father.
I. The Receiver
As part of the default judgment, the court allowed Gilliam to apply to have a receiver appointed. Gilliam applied ex parte for Donell's appointment as receiver on January 28, 2013, but the court denied the application and ordered Gilliam to file a regularly noticed motion. Gilliam filed a memorandum of points and authorities and some exhibits on February 8, 2013. The court heard the matter on February 28 and took it off calendar because of numerous procedural and substantive omissions and errors. Gilliam was allowed to try again, and he did on March 25 and 26. This motion was heard on May 16, 2013, and denied with prejudice.
"The court grants plaintiff's request for the appointment of a receiver as needed." Gilliam appears to be under the impression that the trial court actually appointed a receiver on December 17. The judgment merely permitted a receiver if Gilliam needed one. The actual appointment had to follow the statutory procedure. (See Code Civ. Proc., §§ 564 et seq.)
Gilliam had the habit of filing multiple versions of the same papers. In this instance, he filed a 90-page motion to appoint the receiver on March 25 and a 100-page "amended" motion to appoint the receiver on March 26. The effect on the trial court's file and on the record need not be explained.
Gilliam filed an ex parte application for reconsideration of the court's May 16 order on May 24. This ex parte application was evidently denied, and a motion for reconsideration was set for regular hearing on June 20. On June 20, the court continued the hearing to July 18. The June 20 minute order warned Gilliam, "[I]f the estate is insufficient to pay [the receiver's fees], [Gilliam] must do so." (Italics added.)
He filed an amended application for reconsideration on May 28.
Donell was appointed receiver on July 22 "in aid of execution of [Gilliam's] outstanding judgments against Miller and Nonim." The receiver was specifically authorized to investigate whether "Miller and Nonim have fraudulently transferred or conveyed any assets, and if grounds exist [Donell and his lawyers] are authorized to commence any and all actions to recover any assets that were improperly transferred."
There was, of course, an amended order appointing the receiver, filed on August 6.
Donell tried to recover funds for the receivership estate, but was unsuccessful. The bank accounts had minimal deposits. The office furniture was worth almost nothing. Nonim's lease was abandoned because the rent was in arrears. Donell strongly suspected that Miller had fraudulently transferred assets from herself and Nonim, but the receivership estate did not have the funds to finance fraudulent transfer lawsuits. Donell reported that Miller refused to turn over pertinent books and records to him and would not respond to discovery demands.
Miller filed for bankruptcy protection on October 15, 2013. Gilliam then began litigating against Miller in bankruptcy court.
Finally, Donell gave up. He obtained permission from the bankruptcy court to file his final account "and request for order approving compensation and reimbursement of costs and expenses in accordance with non-bankruptcy law requirements, provided no relief is sought against the Trustee, Debtor [i.e., Miller], or the bankruptcy estate." The receiver reported to the trial court on October 24, 2014, that he had been able to recover only a minimal amount to satisfy Gilliam's judgment, and he moved to be discharged. He requested $64,055 in fees for himself and his lawyers.
On March 19, 2015, the court issued an order granting Donell's motion for discharge and surcharging Gilliam for the receiver's fees. This is one of the orders from which Gilliam appeals.
Gilliam waited to argue that the trial court could not rule on Donell's fee motion because the bankruptcy court had exclusive jurisdiction until he filed a reply (December 15, 2015) to respondents' supplemental briefs (November 24 and December 3, 2015) responding to his supplemental brief (November 13, 2015). We allowed this supplemental briefing after Gilliam filed a request in September 2015 for judicial notice of four documents from Miller's bankruptcy. Gilliam expatiated on this theme of exclusive bankruptcy court jurisdiction in his reply brief for the second of the two appeals.
Ignoring the bankruptcy court's express permission to file the receiver's motion for discharge and compensation in state court, Gilliam supported this belated argument with cases regarding state court efforts to appoint a receiver for or to impose receiver fees on a debtor. (See, e.g., Gross v. Irving Trust Co. (1933) 289 U.S. 342, 345 [state court's power to compensate receiver from debtor's estate ended when petition filed]; Moore v. Garraguez (9th Cir. 1936) 83 F.2d 139, 141 [state court has no power to make orders affecting estate after petition filed]; Silberberg v. Ray Chain Stores, Inc. (3d Cir. 1932) 58 F.2d 766 [compensation for debtor's receiver from bankruptcy estate fixed by bankruptcy court, not district court]; see also In re Diamond's Estate (6th Cir. 1919) 259 F. 70, 7374 [compensation of receiver from debtor's estate determined by bankruptcy court].)
The trial court's compensation order did no such thing. Neither Gilliam nor the receiver was subject to the exclusive jurisdiction of the bankruptcy court, and the superior court could determine an issue affecting them alone. The court did not order Donell's compensation to come from the bankruptcy estate.
II. The Nunc Pro Tunc Order
Gilliam asked the court on September 3, 2013, to issue an order to show cause (OSC) re contempt and to add Nadia Miller (a defaulting defendant) as a judgment debtor to the default judgment against Miller and Nonim. The theory underlying this motion was that Miller and Nonim had refused to cooperate with the receiver's document demands and Nadia Miller was also responsible for this defiance as a managing member of Nonim. Therefore she should be added to the judgment as a judgment debtor.
Gilliam's motion was not one to amend the default judgment on an alter ego theory, which would, in any event, have been denied. (See Motores de Mexicali v. Superior Court (1958) 51 Cal.2d 172, 176.) The focus of Gilliam's motion was persuading the court to issue an OSC re contempt against Miller, Nonim, and Nadia Miller.
The court denied the motion on October 17. On October 23, 2013, Gilliam filed a motion for reconsideration. The subject of the motion was the ruling of October 17, in which the court held, inter alia, that Nadia Miller could not be added to the default judgment of December 17, 2012, as a judgment debtor.
At this hearing, Miller represented that she had filed for bankruptcy protection. Contrary to Gilliam's frequent assertions, the trial court did not order the action stayed as to all defendants. The court merely ordered Miller to file a notice of stay, and she did so on October 24.
There was, naturally, an amended motion for reconsideration, filed October 28.
Gilliam's motion for reconsideration addressed many issues. The one that matters here is his contention that Nadia Miller, one of the defaulting defendants, was still in the case. This contention prompted the trial court to review the now-voluminous file and to recall that Gilliam had not proved up his default case against Nadia Miller or against the other defaulting defendants for that matter (except Miller and Nonim). The default judgment, however, did not include any disposition as to the other defendants. As a result, on December 5, 2013, the court amended the default judgment of December 17, 2012, nunc pro tunc to read: "[Gilliam] failed to prove his claims against defaulted defendants Nadia Miller, Edell Deas, Lee Frazier, Minon Miller Income Tax Service and Minon Miller MTD Tax Service; therefore judgment is entered in favor of these defendants. [¶] Should [Gilliam] have claims of fraudulent transfers by or to these persons and/or entities that occurred after the events encompassed in the 12/17/12 judgment, his remedy is to file another lawsuit that is limited to those transfers." Gilliam contends on appeal that this amended judgment is void, because the default judgment of December 17, 2012, was final and incapable of amendment. III. Terminating Sanctions
Gilliam attributed a nefarious motive to this amendment. He claimed the judge issued it to cover up his mistake in staying the action on October 17 as to all defendants when only Miller was in bankruptcy. This argument ignores the fact that the trial court did not stay anything on October 17; it ordered Miller to file a notice of bankruptcy stay.
We will assume without deciding that Gilliam's motion for terminating sanctions was a "matter embraced in the action and not affected by the judgment or order [appealed from]." (Code Civ. Proc., § 916, subd. (a).)
Gilliam filed several requests for sanctions in the course of this action, but the one he appears to have identified for our review was a motion "to issue terminating sanctions, issue sanctions, discovery sanctions and monetary sanctions against defendants," filed on February 23, 2015, along with the motion to reconsider the imposition of the receiver's fees on him. He filed an amended motion for issue, evidence, and terminating sanctions on March 2. The basis of these motions was Miller's refusal to cooperate with the receiver regarding document production. The record does not contain any ruling on these motions.
Gilliam filed another motion for sanctions on February 6, 2015, but this motion did not request terminating, etc., sanctions. Although the motion discussed discovery sanctions, it was mainly focused on getting the court to charge the receiver's fees to Miller and Nonim.
Gilliam filed his notice of appeal on March 24, 2015.
DISCUSSION
Gilliam spends a considerable amount of time on the details of Miller's conduct, but her iniquities are not implicated in the issues before this court. Although Gilliam's opening brief, on which we rely to define the issues on appeal (see Cal. Rules of Court, rule 8.204(a)(1)(B)), covers a great deal of ground, we think we have identified the issues on which Gilliam seeks our review: the order surcharging Gilliam for the receiver's fees; the nunc pro tunc order of December 5, 2013; and the court's refusal to impose terminating sanctions for discovery misuse. We address each in turn.
I. The Surcharge Order
The granting of Gilliam's motion to appoint a receiver is a textbook example of a Pyrrhic victory. Gilliam insisted that the court appoint a receiver. He even picked the receiver - Donell. The court obliged him after his repeated requests. Before it finally did so, however, the court warned Gilliam that he could be liable for the receiver's fees if the estate could not pay them. Gilliam forged ahead regardless.
Receivers and their counsel do not work for free. That is why a respected treatise on civil procedure before trial counsels caution before asking for one.
"A receivership is a harsh, time-consuming, expensive and potentially unjust remedy and thus is available only where a more 'delicate' alternative remedy . . . is inadequate. In other words, it should not be requested unless absolutely essential because no other remedy will do the job. [Citation.] [¶] . . . Receiverships are very expensive - often to both parties, since the costs are normally paid out of an estate in which both parties typically have an interest." (Weil & Brown, Cal. Practice Guide: Civil Procedure before Trial (The Rutter Group 2016) §§ 9:743-9:744, pp. 9(II)-82 to 9(II)-83.)
The trial court has wide discretion to allocate the fees and expenses incurred by a receiver. (City of Chula Vista v. Gutierrez (2012) 207 Cal.App.4th 681, 685-686.) Although these costs are generally paid out of the receivership estate (id. at p. 685), this is not an invariable rule. Nor is there a rule that the plaintiff pays the receiver's costs only if the plaintiff has misbehaved in some way. Instead, the trial court looks at the circumstances of each case. (Id. at p. 686; see also Stanton v. Pratt (1941) 18 Cal.2d 599, 603 [party for whose benefit receivership was created may be charged with fees]; Andrade v. Andrade (1932) 216 Cal. 108, 110 [insufficiency of estate basis for charging plaintiff who sought appointment of receiver].) "Each case of this kind must, of necessity, rest upon its own facts." (Baldwin v. Baldwin (1947) 82 Cal.App.2d 851, 856.)
In the present case, the receivership estate was insolvent. If there were assets, Miller had successfully transferred them beyond the receiver's reach and had declared bankruptcy. State court enforcement procedures against her were therefore costly, useless, and, after her petition was filed, impossible. The only way the receiver could hope to retrieve the assets was a fraudulent transfer action against the transferees, an action Gilliam was unwilling or unable to finance. Likewise, Gilliam was waging his own war against Miller in the bankruptcy court after Miller filed for bankruptcy protection in October 2013 and was therefore presumably unwilling to pay Donell to join the fray.
Although the receiver was not able to secure any cash out of the receivership estate, he must be paid. Donell worked diligently at Gilliam's request to try to recover assets so that he could satisfy his judgment. Who should foot the bill for this work as between Gilliam and Donell is not a hard choice. The trial court did not abuse its discretion in placing the responsibility for the fees on Gilliam. II. The Nunc Pro Tunc Order (December 5, 2013)
Gilliam turned on Donell - his own choice for receiver - in his reply brief, claiming that Donell "duped" him, "conducted a sting operation," engaged in a "rip-off scheme," and acted unethically, unprofessionally, and illegally. Gilliam waited to make these charges until after Donell had provided pro-Gilliam testimony in Miller's bankruptcy, testimony that was instrumental in Gilliam's obtaining a dismissal of Miller's bankruptcy with prejudice for bad faith. Thus, Gilliam's argument that he derived no benefit from the receiver's efforts is contrary to fact.
The trial court entered the nunc pro tunc order on December 5, 2013. Assuming Gilliam's notice of appeal encompassed this order, he did not file the notice until March 24, 2015. The maximum time for appealing from a judgment or an appealable order is 180 days from its entry. (Cal. Rules of Court, rule 8.104(a)(1)(C); Garcia v. City etc. of San Francisco (1967) 250 Cal.App.2d 767, 770 fn. 1.) If the nunc pro tunc order had actually modified the December 2012 judgment, Gilliam could have appealed from it, counting the time to appeal from the date of its entry. (See In re Estate of Potter (1903) 141 Cal. 424, 425) But he had to appeal in a timely manner. He did not.
Gilliam argues that the nunc pro tunc order was void and therefore subject to collateral attack at any time. Appellate jurisdiction, however, depends on filing a timely notice of appeal from a judgment or an appealable order. Void or not, unless a timely notice of appeal from an appealable order is filed, we cannot consider it. (See Conservatorship of Romo (1987) 190 Cal.App.3d 279, 283.)
In fact, however, the nunc pro tunc order did not modify the December 2012 default judgment. It merely clarified or corrected it. Code of Civil Procedure section 473, subdivision (d) provides: "The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order."
"That a court of general jurisdiction has the power to correct clerical error in its judgment so that the judgment will conform to and speak the truth, regardless of the lapse of time and whether made by the clerk, counsel or the court itself, is a principle so established as to be beyond argument. [Citations.]" (Bowden v. Green (1982) 128 Cal.App.3d 65, 71.) "'The distinction between a clerical error and a judicial error does not depend so much on the person making it as on whether it was the deliberate result of judicial reasoning and determination.' [Citation.] . . . 'The term "clerical error" covers all errors, mistakes, or omissions which are not the result of the exercise of the judicial function. If an error, mistake, or omission is the result of inadvertence, but for which a different judgment would have been rendered, the error is clerical and the judgment may be corrected to correspond with what it would have been but for the inadvertence. [Citations]'" (Makovsky v. Makovsky (1958) 158 Cal.App.2d 738, 742-743, quoting George v. Bekins Van & Storage Co. (1948) 83 Cal.App.2d 478, 480-481.)
A court can correct a clerical error at any time, including after the judgment or order has become final and the appeal period is past - even long past. (See In re Estate of Goldberg (1938) 10 Cal.2d 709, 716-717 [clerical error corrected nunc pro tunc in decree of final distribution after 35 years]; see also Carter v. J. W. Silver Trucking Co. (1935) 4 Cal.2d 198, 204 [power to correct records not suspended by appeal].) But the error corrected must be a clerical error, not a judicial one.
The December 5 nunc pro tunc order corrected a clerical error; it changed nothing. Gilliam never obtained a default judgment against anyone but Miller and Nonim. The appointment order, drafted by Gilliam, explicitly limited Donell's authority to the assets of Miller and Nonim. Gilliam tried to get a judgment against the other defaulting defendants, but he failed. A receiver acting under the default judgment could not have collected their assets. As the court pointed out, Gilliam's remedy against the other defendants was a separate action for fraudulent transfers. But the receivership estate could not finance any such action, and, according to Donell, Gilliam was unwilling to put up the money to pay for it.
The December 5 order simply made explicit what was implicit in the original default judgment: it was not against anyone but Miller and Nonim. Gilliam's failure to obtain default judgments against the other defendants meant they should have been dismissed in December of 2012. (See Taliaferro v. Hoogs (1963) 219 Cal.App.2d 559, 559-560.) The order of December 5, 2013, merely made that plain. It did not deprive Gilliam of any rights he had against these defendants as a result of his lawsuit. Having failed to obtain judgments against them, he had no such rights.
If Gilliam wanted to keep the defendants other than Miller and Nonim in the case, his remedy was to appeal the judgment of December 2012, on the ground that he had presented sufficient evidence to warrant a default judgment against all of them. He did not do so, and the time for Gilliam to appeal the December 2012 judgment is long past. Therefore we cannot consider his arguments regarding the purported deficiencies of December 2012 judgment, such as the court's refusal to extend the judgment to Nadia Miller and Lee Frazier. Gilliam's appeal from this judgment or the nunc pro tunc order correcting it must be dismissed.
III. Terminating Sanctions
Gilliam contends that the court erred by not imposing various discovery sanctions - issue sanctions, evidence sanctions, terminating sanctions - on Miller and Nonim for not responding to the receiver's document demands. Although the motion and the amended motion to impose sanctions are part of the record, the ruling on them is not. A trial court's ruling is presumed correct, and the appellant must, when claiming error, present an adequate record. An appellate court must indulge all intendments and presumptions to support the order on matters where the record is silent. (Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447.)
Gilliam appears not to understand what these sanctions do. Imposing an issue sanction or an evidence sanction means that the person who has defied discovery on some issue cannot argue that issue - which is taken as established - or introduce certain evidence. (Code Civ. Proc., § 2023.030, subds. (b), (c).) In truly egregious cases, the court can refuse to consider any evidence or issues at all - a terminating sanction - resulting in dismissal of the lawsuit if the plaintiff is the offender or judgment in the plaintiff's favor if the defendant is the one refusing to cooperate. (Code Civ. Proc., § 2023.030, subds. (d)(3), (d)(4).) But Miller and Nonim already had judgments entered against them. They were already as terminated as the discovery statute allowed. The only procedure in which evidence or issues could play a part - the default prove-up - had already happened. A terminating sanction for discovery misuse would have done nothing to improve Gilliam's position. The court could not have abused its discretion by denying a motion for these pointless sanctions.
Gilliam referred at one point to having "to proceed to trial without the benefit of the bargained-for evidence." The only "trial" in the superior court was the default prove-up, which was over long before the receiver was appointed and trying to get documents. --------
DISPOSITION
The order surcharging Gilliam for the receiver's fees is affirmed. The denial of Gilliam's motion for discovery sanctions is affirmed. Gilliam's appeal from the nunc pro tunc order clarifying the December 17, 2012, default judgment is dismissed as untimely. Gilliam's request for judicial notice filed September 18, 2015, is granted as to Exhibits 1 and 4 and denied as to the other exhibits. Gilliam's request for judicial notice filed November 16, 2015, is denied. The temporary stay is dissolved. The petition for writ of supersedeas is denied as moot. Respondent Stephen Donell is to recover his costs on appeal.
BEDSWORTH, J. WE CONCUR: O'LEARY, P. J. FYBEL, J.