Opinion
NOT TO BE PUBLISHED
APPEAL from an order and a judgment of the Superior Court of Los Angeles County, No. BC351794, Michael L. Stern, Judge.
Schuler, Brown & Ekizian, Sam D. Ekizian and Jack M. Schuler for Plaintiff and Appellant.
Daniel S. Klein for Defendant and Respondent.
PERLUSS, P. J.
A judgment after bench trial was entered on September 28, 2007 in favor of Saman Mehdizadeh on his causes of action against Behrouz Azizi for breach of fiduciary duty and an accounting. Notice of entry of judgment was served by the clerk on October 1, 2007. On December 15, 2008, over a year later, the trial court granted Azizi’s motion for a new trial. Mehdizadeh appeals, contending the trial court lacked jurisdiction to grant Azizi’s motion more than 60 days after the mailing of the notice of entry of judgment by the clerk of the court (Code Civ. Proc., § 660, 3d par.) and the court further erred in failing to specify the grounds upon which the motion was granted or the reasons for granting the new trial upon each ground stated (§ 657). We reverse the order for a new trial.
Statutory references are to the Code of Civil Procedure.
FACTUAL AND PROCEDURAL BACKGROUND
After meeting socially, Mehdizadeh and Azizi decided to go into business together importing inexpensive knickknacks and other general merchandise and distributing those goods at the wholesale level (primarily to retail stores selling items for one dollar or less). They incorporated their business as Mega USA, Inc., but failed to agree on bylaws, issued no stock, elected no officers and did not comply with other corporate formalities. Both Mehdizadeh and Azizi characterized their venture as a “partnership.”
The business was troubled from the outset. Azizi contributed capital to the enterprise (initially $250,000; ultimately, according to Azizi, nearly $350,000). Mehdizadeh and Azizi disagreed whether Mehdizadeh was to contribute an equal amount of money to the venture or only supply his personal services (“sweat equity”). Mehdizadeh complained Azizi was domineering and self-dealing and claimed Azizi made business decisions unilaterally and refused to grant him access to the venture’s books and financial records. For his part, Azizi asserted Mehdizadeh failed to devote sufficient energy to their endeavor, operating his own business while he should have been working for the partnership. Azizi also criticized Mehdizadeh for his lack of experience and skill in selecting and negotiating for the business’s inventory.
Mehdizadeh ultimately sued Azizi for breach of oral contract, breach of fiduciary duty, fraud and an accounting, accusing Azizi of usurping corporate funds and converting the profits earned by the venture for his own personal use. Azizi filed a cross-complaint against Mehdizadeh for declaratory relief and breach of oral contract, alleging there was no partnership or joint venture and Mehdizadeh had no interest in Mega USA, Inc. Azizi also asserted a claim for defamation against Mehdizadeh and his mother, Rosa Mehdizadeh, alleging they had made false and slanderous accusations about Azizi, impugning his professional integrity, to business associates and a family member.
The court conducted a bench trial, which lasted less than eight hours, and on September 28, 2007 issued its judgment after bench trial. With respect to the competing claims for breach of contract, the court ruled against both Mehdizadeh and Azizi, concluding neither parties’ claim was more meritorious than the other. The court explained, “[T]o be enforceable, contracts require sufficient definitiveness.” Yet, “the parties to this oral ‘partnership’ left most of the essential terms open and uncertain. The intended corporate entity was never properly formed nor were the parties’ interests and responsibilities defined.... The parties’ oral contract was as good as the proverbial paper on which it was written.” In a footnote the court found, as an alternative ground for its decision, that Mehdizadeh and Azizi had each committed material breaches of any contractual relationship between them “to such an extent that neither is entitled to judgment for breach of oral contract.” According to the court, Azizi usurped complete control of the enterprise while Mehdizadeh failed to use his best efforts as a participant.
Although rejecting both parties’ contract claims, the court found Azizi had breached his fiduciary duties to his partner, Mehdizadeh, by excluding him from the fruits of the partnership and unilaterally terminating the relationship and, as a result, was liable to him for damages: “As a fiduciary he was prohibited from self-dealing in any way, shape or form. [Citation.] Indeed, a partner who seeks a business advantage over his partner bears the burden of showing complete good faith and fairness to the other. [Citation.] That is exactly what Azizi failed to do in this instance.” The court ordered “a full accounting of all transactions, purchases, sales, assets, liabilities and profits or losses of Mega USA, Inc. and the relationship between plaintiff and defendant. It will be conducted by an independent accounting firm to be mutually agreed by the parties.”
The court ruled there was insufficient proof of an intent to defraud to support Mehdizadeh’s fraud claim against Azizi.
As to Azizi’s defamation claim, based on allegations Saman and Rosa Mehdizadeh had called Azizi a thief and a cheat, the court concluded Azizi had failed to prove a prima facie case for slander against Saman Mehdizadeh, noting Saman Mehdizadeh’s good faith belief he had been cheated by Azizi and citing the lack of any evidence of malice or harm to Azizi from the alleged statements. However, the court found Rosa Mehdizadeh’s statements about Azizi “were neither privileged nor appropriate,” explaining, “[w]hile it is understandable that a mother should feel compelled to come to the aid of her son by speaking up for his interests, she had no business making disparaging remarks about cross-complainant Azizi.” The court awarded no compensatory damages and one dollar in punitive damages.
In the concluding section of its judgment after bench trial, captioned “Disposition and Judgment,” the court stated it was retaining continuing jurisdiction over the case “in order to supervise the accounting and any award [of] monetary damages.” The clerk of the court served and filed a notice of entry of judgment on October 1, 2007.
On October 15, 2007 Azizi filed a notice of intent to move for new trial and on October 25, 2007 a memorandum of points and authorities and declaration in support of his motion for a new trial. A November 27, 2007 hearing date was calendared for the motion. Azizi’s motion cited as grounds for the new trial motion irregularity in the proceedings, inadequate damages, insufficiency of the evidence to justify the court’s decision and error in law. Specifically, Azizi argued he and Mehdizadeh should share equally in the losses of Mega USA, Inc., he should be repaid his “advances” to Mega USA, Inc. (with interest), the damages awarded for the defamation cause of action were insufficient, Mehdizadeh’s distrust for Azizi should constitute a defense to the breach of fiduciary duty claim and Mega USA, Inc. was an indispensable party to the action. Mehdizadeh filed opposition papers on November 9, 2007. The motion was argued to the court on November 27, 2007. No decision was made, and the court continued the matter to January 23, 2008.
More than 10 subsequent status conferences and order-to-show-cause hearings were held, addressing the parties’ unsuccessful efforts to agree to the selection of an independent accounting firm to conduct the court-ordered accounting. Not surprisingly in view of their history, Mehdizadeh and Azizi each blamed the other for their mutual inability to comply with the court’s order. Azizi’s new trial motion was also continued from hearing date to hearing date. Finally on December 15, 2008, apparently frustrated by the lack of agreement on an independent accountant, the court discharged its previously issued order to show cause re selection of an accountant and granted Azizi’s motion for a new trial. The minute order states no grounds or reasons for the order, providing only, “Defendant’s motion for new trial is called and granted.” At the hearing itself, the court stated merely, “The motion for new trial is granted. Let’s pick a trial date. We will try this case over again. It doesn’t bother me at all. I’ve got the time if you have got the witnesses.” A new court trial was scheduled for February 9, 2009.
Mehdizadeh moved for reconsideration of the court’s order and requested a specification of grounds and reasons for granting the new trial. The motion was scheduled to be heard on February 9, 2009, the same day the new trial was to begin. Mehdizadeh filed an ex parte application to allow his motion to be heard in advance of the trial date. Azizi opposed the request. Two court days before the motion hearing date/trial date Mehdizadeh filed a notice of appeal from the order granting a new trial.
DISCUSSION
1. Governing Law
“The authority of a trial court in this state to grant a new trial is established and circumscribed by statute.” (Oakland Raiders v. National Football League (2007) 41 Cal.4th 624, 633 (Oakland Raiders).) Section 657 identifies only seven grounds for a new trial motion: irregularity in the proceedings, jury misconduct, accident or surprise, newly discovered evidence, excessive or inadequate damages, insufficiency of the evidence and error in law. Sections 659 and 659a prescribe precise time limits for filing a notice of intention to move for new trial and supporting and opposition papers. Section 661 specifies when and how the hearing, if any, on the motion may be set.
Section 660 limits the power of the court to rule on a motion for a new trial to a 60-day period commencing with the filing of the notice of entry of judgment. “After the court is presented with a motion for a new trial, its power to rule on the motion expires at the end of the 60-day period provided by section 660.... If no determination is made within the 60-day period, the motion is deemed to have been denied.” (Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 899.)
If the trial court grants a new trial motion, “additional requirements are imposed by statute. In pertinent part, section 657 provides that whenever the motion is granted ‘the court shall specify the ground or grounds upon which it is granted and the court’s reason or reasons for granting the new trial....’ The section goes on, however, to distinguish between grounds and reasons. While the order passing upon and determining the motion ‘must state the ground or grounds relied upon by the court,’ the order ‘may contain the specification of reasons.’ (Italics added.) If the order stating the grounds does not also specify the reasons for the new trial, then ‘the court must, within 10 days after filing such order, prepare, sign and file such specification of reasons in writing with the clerk.’ Thus, under section 657, the grounds for the new trial must be stated in the order. The reasons may also be stated in the order, but the trial court has the option of filing a statement of the reasons at a later time.” (Sanchez-Corea v. Bank of America, supra, 38 Cal.3d at p. 899.) Although the court may include wording from the moving party’s memorandum of points and authorities in specifying its reasoning, “‘the specification of reasons must be the product of the judge’s own mental processes and not that of the attorney for the moving party.’” (Eltolad Music, Inc. v. April Music, Inc. (1983) 139 Cal.App.3d 697, 707; see Mercer v. Perez (1968) 68 Cal.2d 104, 113 [objective of “promot[ing] judicial deliberation before judicial action, and thereby ‘discourag[ing] hasty or ill-considered orders for new trial’” furthered by requirement judge prepare specification of reasons]; see § 657 [“court shall not direct the attorney for a party to prepare either or both said order [granting a motion for a new trial] and said specification of reasons”].)
“California courts have consistently required strict compliance with section 657.... Substantial compliance with the statute is not sufficient.” (Oakland Raiders, supra, 41 Cal.4th at p. 634; accord, Linhart v. Nelson (1976) 18 Cal.3d 641, 644 [“‘[a]s the motion for a new trial finds both its source and its limitations in the statutes [citation], the procedural steps prescribed by law for making and determining such a motion are mandatory and must be strictly followed’”]; Neal v. Montgomery Elevator Co. (1992) 7 Cal.App.4th 1194, 1198 [“motion for new trial is a creature of statute; accordingly, if the trial court grants such relief without conforming to the statutory procedures, the order will be void as in excess of jurisdiction”].)
2. The Trial Court’s Delay in Ruling and Its Failure To Specify the Grounds or Reasons for Granting Azizi’s New Trial Motion Require Reversal of the Order and Reinstatement of the Original Judgment
The trial court’s power to rule on Azizi’s new trial motion expired on November 30, 2007—the final day of the 60-day period mandated by section 660. (See Sanchez-Corea v. Bank of America, supra, 38 Cal.3d at p. 899.) “The time limits of section 660 are mandatory and jurisdictional, and an order made after the 60-day period purporting to rule on a motion for new trial is in excess of the court’s jurisdiction and void.” (Siegal v. Superior Court (1968) 68 Cal.2d 97, 101; see also Westrec Marina Management, Inc. v. Jardine Ins. Brokers Orange County, Inc. (2000) 85 Cal.App.4th 1042, 1048 [no jurisdiction to grant a new trial 61 days after service of notice of entry of judgment]; In re Marriage of Liu (1987) 197 Cal.App.3d 143, 150-151 [when notice of entry of judgment not served, trial court lacked jurisdiction to grant new trial 78 days after notice of intention to move for new trial filed].) Because the 60-day time limit is jurisdictional, it cannot be extended at the discretion of the trial court. (Jones v. Sieve (1988) 203 Cal.App.3d 359, 369.) Otherwise, “the purpose and effect of section 660 would be nullified and the power of the court to rule on a motion for a new trial would be extended indefinitely.” (Id. at p. 370.) For the same reason, the 60-day time limit “may not be changed by consent, waiver, agreement, or acquiescence.” (Meskell v. Culver City Unified School Dist. (1970) 12 Cal.App.3d 815, 825; see Tabor v. Superior Court (1946) 28 Cal.2d 505, 507 [“it is not within the power of the litigants to invest the court with jurisdiction to hear and determine the motion for a new trial by consent, waiver, agreement or acquiescence”]; Fong Chuck v. Chin Po Foon (1947) 29 Cal.2d 552, 554 [same].)
Azizi’s reliance on Hibernia Savings & Loan Society v. Moore (1885) 68 Cal. 156 to argue Mehdizadeh’s failure to object to the court’s delay in ruling on the new trial motion waived this jurisdictional defect is woefully misplaced. It may be that certain procedural irregularities in connection with a new trial motion are forfeited by a failure to object. For example, in Hibernia Savings itself—a case decided nearly 125 years ago and not cited in a published decision in this state for 100 years—the notice of intent to move for a new trial stated the motion would be based, in part, on affidavits, as well as an agreed statement of the case. In fact, only a statement of the case, and no affidavits, were submitted in support of the motion. The Supreme Court held, in light of the responding party’s failure to object, this purposed defect in the form of the notice itself could not be raised for the first time on appeal. (Id. at p. 158; but see Linhart v. Nelson, supra, 18 Cal.3d at p. 644 [procedural steps required by the Legislature for making and determining new trial motions “must be strictly followed”]; Oakland Raiders, supra, 41 Cal.4th at p. 634 [same]; Mercer v. Perez, supra, 68 Cal.2d at p. 118 [same].) However, the case law with respect to the 60-day period provided by section 660, as discussed in the text, is unambiguous and emphatic: Once the statutory period has run, the trial court has no jurisdiction to grant a new trial motion; and the failure of the opposing party to raise the issue does not—and cannot—extend the court’s time for decision.
In short, because the 60-day period had run without a ruling by the trial court, Azizi’s motion “was denied by operation of law, and the court lacked jurisdiction to act on it.” (Westrec Marina Management v. Jardine Ins. Brokers Orange County, Inc., supra, 85 Cal.App.4th at p. 1048; accord, Dodge v. Superior Court (2000) 77 Cal.App.4th 513, 517-518.) In addition, even if the order itself were timely, the trial court’s failure to state either the grounds or its reasons for granting the motion within the statutorily prescribed periods would require reversal of the order for a new trial and reinstatement of the original judgment. (See Sanchez-Corea v. Bank of America, supra, 38 Cal.3d at pp. 899-900.)
In La Manna v. Stewart (1975) 13 Cal.3d 413, as here, the trial court granted a motion for new trial but did not state the ground for the motion and failed to file a timely specification of reasons. The Court “reluctantly” held the error in failing to state the ground was “cured by the fact that the motion for new trial was predicated solely on alleged insufficiency of the evidence; inasmuch as a new trial can be granted only on a ground specified in the motion, the order in the case at bar must be deemed to have been based on a finding of such insufficiency.” (Id. at p. 418.) The Supreme Court in Sanchez-Corea v. Bank of America, supra, 38 Cal.3d at page 903 emphasized the limited nature of the cure recognized in La Manna: “In La Manna the motion for new trial was made solely on one ground—insufficiency of the evidence. Here, the Bank alleged six grounds for a new trial and there is no way for this court to infer which ground or grounds were relied on in the initial order granting the new trial. Reliance on the second order stating the ground of insufficient evidence would conflict with the statutory requirement that the initial order state the ground or grounds, subject only to the trial court’s power to make a specification of reasons—but not a statement of ground or grounds—at a later date.” Similarly, Azizi’s motion alleged four separate grounds for a new trial; like the Supreme Court in Sanchez-Corea, we are unable to infer which ground or grounds (if any) were relied upon by the trial court in granting the new trial. The new trial order, therefore, was fatally defective for this reason as well.
Finally, even if were we able to infer from the proceedings in the trial court the ground for granting the motion, the reasons supporting any of the asserted grounds are nowhere specified in, or reasonably inferable from, any court-prepared document. (See Scala v. Jerry Witt & Sons, Inc. (1970) 3 Cal.3d 359, 366-367 [specification of reasons must do more than simply restate the ground on which the order granting the new trial motion is based]; Mercer v. Perez, supra, 68 Cal.2d at p. 112 [same].) “Inasmuch as no reasons whatever were timely specified in the case at bar, the order cannot be sustained on this ground and must therefore be reversed.” (La Manna v. Stewart, supra, 13 Cal.3d at p. 425; see Sanchez-Corea v. Bank of America, supra, 38 Cal.3d at pp. 904-905.) Accordingly, the judgment in favor of Mehdizadeh must be reinstated.
DISPOSITION
The order granting Azizi’s motion for a new trial is reversed, and the original judgment is reinstated. Mehdizadeh is to recover his costs on appeal.
We concur: WOODS, J.JACKSON, J.