Opinion
H035290
05-31-2018
ANTHONY MERLO, Plaintiff and Appellant, v. CITY OF PALO ALTO, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 107CV089468)
The underlying dispute that is the subject of this appeal began in 2005 when appellant Anthony Merlo filed the first of three lawsuits against the City of Palo Alto (City). Merlo alleged that City violated election procedures for the approval of an increase in storm drain fees for property owners in Palo Alto.
Since its origin in 2005, this dispute has resulted in Merlo being designated a vexatious litigant pursuant to Code of Civil Procedure section 391, and having a judgment entered against him for contempt and sanctions in the amount of $45,304.66.
All further statutory references are to the Code of Civil Procedure.
On November 2, 2007, the trial court designated Merlo to be a vexatious litigant in Santa Clara County Superior Court No. 07-CV-089468. When the present appeal was filed in 2010, Merlo was represented by counsel, and as a result, he was not subject to the prefiling requirement of section 391.7, subdivision (a). Subsequently, Merlo's counsel moved to withdrew as attorney of record. The motion is now moot because Merlo's counsel is no longer an active member of the California State Bar.
In this appeal, Merlo, proceeding in propria persona, argues that the judgment of contempt and sanctions is void, because the trial court proceedings during which the judgment was entered were automatically stayed pursuant to section 916 by another pending appeal.
We find that the judgment is not void, and affirm.
I. STATEMENT OF THE CASE
Merlo filed his first complaint against City in October 2005 asserting that City did not comply with balloting procedures required by the California Constitution Article XIII D for its proposed increase in storm drain fees for property owners in Palo Alto. In April 2006, after several rounds of demurrers and amended complaints, the trial court sustained City's demurrer to the third amended complaint without leave to amend. This court affirmed the judgment of the trial court in July 2007. (Merlo v. City of Palo Alto (July 26, 2007, H030443) [nonpub. opn.] (Merlo I).)
Merlo filed his second lawsuit against City in March 2006 seeking access to the ballots from the storm drain fee election under Government Code section 6253. (Merlo v. City of Palo Alto (Super. Ct. Santa Clara County, 2007, No. 06-CV-060038) (Merlo II).) The trial court sustained City's demurrer without leave to amend, and Merlo dismissed the action.
Merlo's third lawsuit against City was filed in July 2007. (Merlo v. City of Palo Alto (Jan. 9, 2009, H033565) [dismissal order] (Merlo III).) On October 2, 2007, City filed a motion requesting that Merlo be designated a vexatious litigant pursuant to section 391, subdivision (d). City also requested that the court impose sanctions against Merlo.
On November 2, 2007, the trial court granted City's motion, and designated Merlo to be a vexatious litigant. The court imposed a prefiling requirement pursuant to section 391.7, and stayed the action pursuant to section 391.6, pending the posting of a bond in the amount of $150,000. On the same day that the court designated Merlo to be a vexatious litigant, Merlo filed a notice of appeal seeking reversal of the order. Ultimately, on June 19, 2008, this court denied Merlo's request to file new litigation by a vexatious litigant and dismissed the appeal. (Merlo v. City of Palo Alto (June 19, 2008, H032239) [dismissal order].)
While Merlo's appeal of the order designating him a vexatious litigant was pending, on November 7, 2007, the trial court granted City's request for sanctions against Merlo in the amount of $5,910. The next day, Merlo assigned three bank accounts worth $234,000 to the court, "in lieu of a surety bond to stay enforcement of Sanctions Order and Vexatious Litigant Order."
After the court designated Merlo to be a vexatious litigant and ordered sanctions against him, on November 9, 2007, the trial court sustained City's demurrer to Merlo's First Amended Complaint without leave to amend (Merlo III). The court stated: "On July 26, 2007, the [C]ourt of [A]ppeal affirmed the order of the trial court, holding that the storm drainage fee alleged in the complaint did not constitute an 'assessment' pursuant to article XIII D of the California Constitution. (See [Merlo I].) On September 25, 2007, the [C]ourt of [A]ppeal's decision became final. [Citations.] The present complaint is based upon the assertion that the storm drainage fee at issue in [Merlo I] is an assessment. The facts alleged in the First Amended Complaint are not materially different from those alleged in [Merlo I]. Therefore, the doctrine of res judicata applies and [Merlo] is barred from raising the same claims in this action. [Citations.] Leave to amend is denied because [Merlo] has not identified how he could amend the complaint to state a cause of action. [Citations.]"
On November 19, 2007, following the assignment of his bank accounts, Merlo filed a "Notice of Stay of Proceedings" to stay the vexatious litigant designation and sanctions order until the "appeal is perfected (H032239)."
On October 24, 2008, Merlo requested a dismissal of Merlo III with prejudice. The trial court granted the request, and the matter was dismissed. Subsequently, on November 7, 2008 Merlo filed a notice of appeal of his dismissal of Merlo III. On January 9, 2009, this court denied Merlo's request to file new litigation and dismissed the appeal of Merlo III.
Prior to this court's dismissal of the appeal of Merlo III, on December 2, 2008, City filed a motion for contempt and sanctions against Merlo in the trial court. City's motion was based on allegations that Merlo had ignored and violated the vexatious litigant prefiling order and had failed to pay the $5,910 in sanctions that were ordered on November 7, 2007.
On January 9, 2009, the trial court granted City's motion, stating: "[w]hat is obvious from a review of what has been presented by [City] to me is [Merlo] has participated in a continuous pattern of abuse of process, both as it relates to the superior court, not to mention the Sixth District. . . . There have been violations of court orders, ignoring the findings of courts to the point where the conduct is absolutely egregious, the conduct which has been described by [City]." The court awarded City $40,889 in sanctions. On February 11, 2009, the trial court entered a judgment directing payment of the sanction award.
In addition to Merlo's numerous filings in the trial court, he has filed 17 separate matters in this court, including notices of appeal, writ petitions, and requests to file new litigation by a vexatious litigant.
On July 20, 2009, Merlo filed a motion to set aside a void judgment pursuant to section 473, subdivision (d). The motion sought to set aside the judgment of contempt and sanctions on the ground that the proceedings were stayed by his pending appeal in Merlo III.
On July 21, 2009, the trial court granted City's request to modify the existing judgment to include an additional $4,415.66 in attorney's fees that were incurred in responding to subsequent litigation filed by Merlo. The total amount of sanctions was increased to $45,304.66.
The trial court denied Merlo's motion to set aside a void judgment on September 23, 2009.
A. The Instant Appeal
On February 18, 2010, Merlo, who at the time was represented by counsel, filed a notice of appeal of the order denying his motion to set aside a void judgment.
The order on appeal is the denial of Merlo's motion to set aside a void judgment. In his briefs, however, Merlo also challenges the trial court's 2007 order designating him to be a vexatious litigant. We do not consider these arguments because this court dismissed Merlo's prior appeal of the vexatious litigant order in 2007.
On March 30, 2010, City filed a notice of Merlo's vexatious litigant status with this court. City also requested dismissal of the appeal and an award of sanctions against Merlo. Then-Administrative Presiding Justice Conrad L. Rushing suspended briefing pending ruling on City's motion to dismiss. On March 29, 2017, Justice Rushing denied City's motion to dismiss the appeal, and the matter proceeded with briefing.
We deferred City's request for sanctions for consideration with the appeal. The request is denied. City provides no legal authority in support of its request for sanctions.
Merlo filed two requests for judicial notice that we deferred for consideration with the appeal. The first was filed on July 28, 2014 and is now moot, because it relates to City's motion to dismiss that this court denied. The second was filed on July 27, 2017 and is denied, because it contains additional arguments and authorities that are not relevant to the issues on appeal. --------
II. DISCUSSION
Merlo appeals the trial court's denial of his motion to set aside a void judgment pursuant to section 473, subdivision (d). He argues that the judgment of contempt and sanctions is void because the trial court lacked jurisdiction to consider City's motion due to an automatic stay of the proceedings while his appeal in Merlo III was pending.
Section 473, subdivision (d), provides that a trial court "may, on motion of either party after notice to the other party, set aside any void judgment or order." "[I]nclusion of the word 'may' in the language of section 473, subdivision (d) makes it clear that a trial court retains discretion to grant or deny a motion to set aside a void judgment [or order]." (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495.) However, the trial court "has no statutory power under section 473, subdivision (d) to set aside a judgment [or order] that is not void . . . ." (Id. at pp. 495-496.) Thus, the reviewing court "generally faces two separate determinations when considering an appeal based on section 473, subdivision (d): whether the order or judgment is void and, if so, whether the trial court properly exercised its discretion in setting it aside." (Nixon Peabody LLP v. Superior Court (2014) 230 Cal.App.4th 818, 822.) The trial court's determination whether an order is void is reviewed de novo; its decision whether to set aside a void order is reviewed for abuse of discretion. (Ibid.) Here, in denying Merlo's motion, the trial court determined that the judgment of contempt and sanctions was not void. Therefore, we review the court's finding de novo.
The judgment of contempt and sanctions is void if the trial court lacked jurisdiction at the time it was entered due to the pending appeal in Merlo III. Section 916, subdivision (a) provides that the perfecting of an appeal "stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby." The purpose of the automatic stay "is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided." (Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629.) "In determining whether a proceeding is embraced in or affected by the appeal, we must consider the appeal and its possible outcomes in relation to the proceeding and its possible results." (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189 (Varian).) "[I]f the proceeding could or would have occurred regardless of the outcome of the appeal," it is ancillary or collateral to the appeal and it is not stayed. (Id. at p. 191.)
There is nothing about the judgment of contempt and sanctions in this case that was "embraced" or "affected" by the appeal in Merlo III. The appeal in Merlo III was of Merlo's dismissal of his complaint in the third lawsuit he had brought against City. The judgment of contempt and sanctions was not related in any way to the appeal in Merlo III; rather, the judgment was based on Merlo's violation of the vexatious litigant prefiling order that was made on November 2, 2007, and his failure to pay $5,910 in sanctions that were ordered on November 7, 2007. The motion for contempt and sanctions "could . . . have occurred regardless of the outcome of the appeal" in Merlo III. (See Varian, supra, 35 Cal.4th at p. 191.) As a result, the trial court proceedings were not stayed by the pending appeal in Merlo III, and the judgment of contempt and sanctions is not void.
III. DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to City.
/s/_________
Greenwood, P.J. WE CONCUR: /s/_________
Bamattre-Manoukian, J. /s/_________
Grover, J.