Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC321324, John Shepard Wiley, Jr., Judge.
Zelig & Associates and Steven L. Zelig for Defendant and Appellant.
Morris Polich & Purdy, Gary A. Hamblet and Mark E. Hellenkamp for Plaintiff and Respondent.
DOI TODD, J.
This is the third appeal filed by appellant Steven L. Zelig (Zelig) in this malicious prosecution case against his sole proprietorship, The Law Offices of Steven L. Zelig (Law Offices). Law Offices settled the case with respondent Scottsdale Insurance Company (Scottsdale), but failed to pay the settlement amount. The trial court then entered a judgment against Law Offices, which was amended to add Zelig’s name as a judgment debtor. Zelig contends the amendment was error. We affirm. We also find this appeal to be as frivolous as the earlier appeals and impose sanctions against Zelig.
FACTUAL AND PROCEDURAL BACKGROUND
In 2004 Scottsdale filed a complaint for malicious prosecution against “The Law Offices of Steven L. Zelig, an entity of unknown form,” among others. Zelig appeared as counsel of record for Law Offices and filed an anti-SLAPP motion to strike Scottsdale’s complaint. In his supporting declaration, Zelig acknowledged that Scottsdale’s complaint was essentially against him: “Shortly after I issued these communications Scottsdale began its retaliation which of course included naming me in the present action.” (Emphasis added.) The motion was denied, Zelig filed an appeal on Law Offices’ behalf, and we affirmed on May 2, 2006 in an unpublished opinion (case No. B181761).
Meanwhile, both Law Offices and Zelig filed separate cross-complaints against parties other than Scottsdale, one of whom answered. Following the issuance of our prior opinion and pending the remittitur, the trial court held a case management conference and set various dates, including a deadline for dismissal of “Does” and “Roes” and a trial date eight months later. After the case management conference and without seeking leave of court, Law Offices and Zelig jointly filed another cross-complaint, naming Scottsdale and others. Two of the other cross-defendants filed motions to strike this cross-complaint, which the trial court granted. Zelig appealed this ruling. We dismissed his appeal and imposed sanctions of $7,500 for filing a frivolous appeal (case No. B195229).
In October 2006, shortly before the second appeal was filed, Scottsdale deposed Zelig in connection with a motion for summary judgment filed by Law Offices. During the court-supervised deposition, Zelig testified to the following: Law Offices was a sole proprietorship, he was the sole proprietor, he used the Law Offices name to identify his occupation (“to signal what I do, law as opposed to being a gardener or a painter, I say Law Offices”), and Law Offices was not an entity. The summary judgment motion was eventually denied.
On January 29, 2007, Scottsdale, Law Offices and another defendant attended a mandatory settlement conference before the trial court. A settlement was reached and placed on the record. Law Offices agreed to pay Scottsdale $45,000 within 45 days “in exchange for a dismissal with prejudice and a complete release of all liability,” and the parties agreed to a “release of the liability of all parties, their attorneys, their agents, their assigns, their corporations and every entity and person of any form, shape, size whatsoever.” Zelig represented that he was authorized to settle on behalf of Law Offices. When the trial court asked Zelig how he was connected to Law Offices, Zelig replied, “I am the principal. Law Offices no longer exist[s].”
When no settlement payment was made, Scottsdale filed a motion for entry of judgment pursuant to Code of Civil Procedure section 664.6. The trial court granted the motion and entered judgment against Law Offices in the amount of $45,000 on April 3, 2007.
On April 13, 2007, Scottsdale filed a motion to amend the judgment to add Zelig as a judgment debtor pursuant to Code of Civil Procedure section 187, on the ground that Zelig and Law Offices were one and the same. Zelig and Law Offices opposed the motion. The trial court granted the motion and entered an amended judgment on May 16, 2007 against Law Offices and Zelig, jointly and severally, in the amount of $45,000. This appeal followed.
DISCUSSION
I. Amendment of Judgment
A. Standard of Review
We review a trial court’s order amending a judgment by naming an additional judgment debtor under the substantial evidence standard. (McClellan v. Northridge Park Townhome Owners Assn. (2001) 89 Cal.App.4th 746, 751.) In doing so, we must view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.) “We must accept as true all evidence and all reasonable inferences from the evidence tending to establish the correctness of the trial court’s findings and decision, resolving every conflict in favor of the judgment.” (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631.)
Without citing any authority, Zelig asserts that the standard of review is de novo. Not only has Zelig, the appealing party who is also an attorney, failed to cite the correct standard of review, he has also failed to present a fair statement of the evidence in his opening brief. “[A]ppellants who challenge the decision of the trial court based upon the absence of substantial evidence to support it ‘“are required to set forth in their brief all the material evidence on the point and not merely their own evidence. Unless this is done the error is deemed waived.” [Citations.]’” (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246.)
Zelig’s opening brief contains a 31-page statement of facts that consists largely of a chronology of his own pleadings, which he summarizes and quotes at length. But it is apparent from both Scottsdale’s brief and the record that a substantial amount of evidence was received on Scottsdale’s behalf which supports the trial court’s order amending the judgment. Because Zelig has failed to include this evidence in his brief, he has waived the issue of whether the trial court’s order amending the judgment to add him as a judgment debtor was supported by substantial evidence. Even if this issue were not waived, his challenge is completely without merit, as discussed below.
B. Section 187
Code of Civil Procedure section 187 (section 187) grants to every court the power to use all means to carry its jurisdiction into effect, even if those processes are not set out in the code. (NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772, 778 (NEC Electronics).) Pursuant to section 187, a trial court has authority to amend a judgment to add additional judgment debtors. (Id.; McClellan v. Northridge Park Townhome Owners Assn., supra, 89 Cal.App.4th at p. 752.)
Section 187 states: “When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this code.”
Such equitable power is based on the theory that the court is not amending the judgment to add a new defendant, but is merely inserting the correct name of the real defendant. (NEC Electronics, supra, 208 Cal.App.3d at p. 778; Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd. (1996) 41 Cal.App.4th 1551, 1554.) Thus, it is proper under section 187 to add the alter ego of a defendant to a judgment where the alter ego controlled the litigation. (NEC Electronics, supra, at pp. 778–779; Dow Jones Co. v. Avenel (1984) 151 Cal.App.3d 144, 148.) It is also proper to add a corporate successor to a judgment. (McClellan v. Northridge Park Townhome Owners Assn., supra, 89 Cal.App.4th at pp. 754–755; Thomson v. L. C. Roney & Co. (1952) 112 Cal.App.2d 420, 423–429.)
C. Substantial Evidence Supports the Trial Court’s Order Naming Zelig as Judgment Debtor
The evidence which Zelig ignores shows that he testified that Law Offices was a sole proprietorship, that he was the sole proprietor, that he used the Law Offices name to identify his occupation, and that Law Offices was not an entity. “An individual who owns the assets of a sole proprietorship is personally liable for all debts and responsibilities incurred by the business.” (Century Surety Co. v. Polisso (2006) 139 Cal.App.4th 922, 943.) A sole proprietorship is not a legal entity, but the term refers to the natural person who owns the business. (Providence Washington Ins. Co. v. Valley Forge Ins. Co. (1996) 42 Cal.App.4th 1194, 1199.) “‘“Doing business under another name does not create an entity distinct from the person operating the business.”’” (Pinkerton’s, Inc. v. Superior Court (1996) 49 Cal.App.4th 1342, 1348, italics omitted.) Zelig also admitted that Scottsdale’s complaint was against him personally. And he represented at the mandatory settlement conference that Law Offices no longer existed. It is not clear to us why neither the trial court nor the parties sought to clarify who should actually be named in the settlement agreement at that time. Nevertheless, the evidence supports the conclusion that Zelig and Law Offices were actually one and the same and that Zelig simply used the Law Offices name to identify his occupation.
Furthermore, there can be no serious doubt that Zelig controlled the litigation on behalf of Law Offices. Zelig appeared throughout the case as attorney of record for Law Offices. At the mandatory settlement conference, Zelig represented that he was the principal of Law Offices and that he was authorized to settle on behalf of Law Offices. Under these circumstances, we have little trouble concluding that Zelig was properly named as a judgment debtor. Accordingly, and for the additional reasons discussed below, we find each of Zelig’s challenges to the amendment to be without merit.
1. Due Process
Zelig argues that his due process rights were violated because he was never served with Scottsdale’s complaint. He relies on Motores De Mexicali v. Superior Court (1958) 51 Cal.2d 172 as the “controlling” case, but his reliance is misplaced. There, the plaintiff obtained a default judgment against a corporation that later went into bankruptcy; the plaintiff then obtained an amended judgment adding three individuals as alter egos of the corporation. The appellate court reversed, finding that the three individuals “in no way participated in the defense of the basic action” (id. at p. 175), did not hire attorneys to defend the action and did not have an opportunity to litigate any issues other than alter ego status (id. at p. 176). By contrast, there is substantial evidence here that Zelig controlled the defense and that he had complete involvement in the case from its inception through settlement. “Such involvement satisfies the elements of a fair trial as required by due process of law.” (Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 46.)
2. Release of Zelig
Zelig also argues that he cannot be added to the judgment because he was released by the settlement agreement. Here again, Zelig ignores the evidence favorable to the trial court’s ruling. The parties’ settlement agreement, as reflected on the record, specifically provided that the release of liability was conditioned on the payment of $45,000 by Law Offices, Zelig’s sole proprietorship. Since the payment condition was never satisfied, Zelig cannot claim to have been released. To countenance Zelig’s argument—that a settlement releases a party even though the monetary consideration was never paid—would render settlement agreements meaningless.
3. Laches
Without explanation, Zelig simply argues that Scottsdale engaged in laches. As Scottsdale points out, laches consists of both an unreasonable delay in asserting an equitable right and resulting prejudice to the adverse party. (Piscioneri v. City of Ontario (2002) 95 Cal.App.4th 1037, 1046.) Prejudice is never presumed, but must be affirmatively demonstrated. (Miller v. Eisenhower Medical Center (1980) 27 Cal.3d 614, 624.) Zelig has made no attempt to demonstrate how he has been prejudiced by any delay on Scottsdale’s part, nor has he presented any evidence that he would have done anything differently in terms of the defense or settlement had he been named earlier as a defendant. Although he complains elsewhere in his brief that he was not allowed to file a cross-complaint against Scottsdale, he does not explain why he could not have filed a separate action. His argument lacks merit.
4. “Doe” Dismissal
Zelig also appears to argue that because the trial court had earlier dismissed all “Doe” defendants from Scottsdale’s complaint, he could not be added to the judgment. But he cites to no authority that a court’s dismissal of “Doe” defendants from a complaint prevents the court from later correcting a judgment to add the correct name of a defendant. To the contrary, a court may amend a judgment at any time to properly designate the real defendant. (Dow Jones Co. v. Avenel, supra, 151 Cal.App.3d at p. 149; Alexander v. Abbey of the Chimes, supra, 104 Cal.App.3d at p. 45.)
We conclude that all of Zelig’s arguments are completely without merit.
II. Zelig’s Remaining Challenges
Zelig also challenges the case management orders the trial court made pending the remittitur of the first appeal and the trial court’s later order striking his cross-complaint. As Scottsdale pointed out in connection with Zelig’s second appeal, and which Zelig once again ignores here, these issues have become moot in light of the parties’ settlement. It is well established that a settlement terminates all issues relating to the litigation. (Rancho Solano Master Assn. v. Amos & Andrews, Inc. (2002) 97 Cal.App.4th 681, 688; Ebensteiner Co., Inc. v. Chadmar Group (2006) 143 Cal.App.4th 1174, 1178–79 [appeal from demurrer dismissal rendered moot by parties’ settlement]; County of Fresno v. Shelton (1998) 66 Cal.App.4th 996, 1005 [parties’ settlement of dispute commonly results in mootness of appeal]; Muccianti v. Willow Creek Care Center (2003) 108 Cal.App.4th 13, 24 [same].)
The instant case settled on January 29, 2007. Zelig, as the “principal” of Law Offices, agreed to the settlement and the obligation to pay Scottsdale within 45 days in exchange for a release of liability of all parties. The trial court’s case management orders and order striking his cross-complaint were made months before the settlement. Thus, any challenge to the propriety of those orders was extinguished by the settlement and Zelig has no right to challenge them now.
III. Scottsdale’s Motion for Sanctions
Scottsdale has filed a motion for sanctions against Zelig for the filing of a frivolous appeal. Scottsdale seeks sanctions of $8,250, the amount of attorney fees it has incurred in defending the appeal. We invited Zelig to file opposition. Zelig filed an opposition to the motion and the matter was argued. We grant the motion.
A court of appeal may impose monetary sanctions when it determines an appeal is frivolous. (Code Civ. Proc., § 907; Cal. Rules of Court, rule 8.276(e); In re Marriage of Flaherty (1982) 31 Cal.3d 637; National Secretarial Service, Inc. v. Froehlich (1989) 210 Cal.App.3d 510, 524–527.) An appeal is frivolous “when it is prosecuted for an improper motive—to harass the respondent or delay the effect of an adverse judgment—or when it indisputably has no merit—when any reasonable attorney would agree that the appeal is totally and completely without merit.” (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 650.) Sanctions may be imposed even where an appeal raises some meritorious issues if one or more frivolous issues constitute a significant and material part of the appeal. (Pollock v. University of Southern California (2003) 112 Cal.App.4th 1416, 1432.)
We have little trouble finding that the instant appeal is frivolous. It appears to have been filed for the improper purpose of delaying the effect of the judgment adverse to Zelig and of avoiding and delaying payment of a settlement obligation agreed to by Zelig in a judicially supervised settlement. It further appears to be part of a continuing pattern of conduct throughout this case in which Zelig has abused the legal system through delay and obstruction. This appeal also indisputably has no merit. Indeed, in his reply brief Zelig makes no attempt to counter any of Scottsdale’s arguments.
This appeal also involves an attempt by Zelig to challenge the trial court’s order striking his cross-complaint, which was the subject of his second appeal. Scottsdale pointed out in connection with that earlier appeal that Zelig was prohibited from appealing the order in light of the parties’ subsequent settlement. And even though Zelig was sanctioned for bringing a frivolous appeal at that time, he has persisted in raising the issue once again.
The amount of attorney fees incurred by the respondent in defending the appeal is an appropriate measure in determining the amount of sanctions to be imposed. (See Millennium Corporate Solutions v. Peckinpaugh (2005) 126 Cal.App.4th 352, 362–363.) Scottsdale’s attorney has included a declaration averring that Scottsdale has incurred attorney fees of $8,250 in defending this appeal. We are satisfied that this is a reasonable and appropriate amount and assess sanctions of $8,250 against Zelig and in favor of Scottsdale.
DISPOSITION
The judgment is affirmed. Scottsdale shall recover its costs on appeal. In addition, Zelig is directed to pay Scottsdale the additional sum of $8,250 as a sanction for prosecuting a frivolous appeal. The sanctions imposed are to be paid within 30 days after the issuance of the remittitur.
We concur: BOREN, P. J., CHAVEZ, J.