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Simmon v. Kirby

California Court of Appeals, Fourth District, Third Division
Jul 24, 2008
No. G039119 (Cal. Ct. App. Jul. 24, 2008)

Opinion

NOT TO BE PUBLISHED

Appeal from post judgment orders of the Superior Court of Orange County No. 06CC04711, Gregory Munoz, Judge.

Silverstein & Huston, and Steven A. Silverstein, Mark W. Huston, and Robert I. Cohen for Plaintiff and Appellant.

Lanza & Goolsby, and Anthony L. Lanza for Defendant and Respondent.


OPINION

IKOLA, J.

Plaintiff Vincent F. Simmon appeals from an order granting a new trial and simultaneously staying the entire action after he had prevailed at trial on his breach of contract action against defendant Kimberly Kirby. The court concluded it had committed legal error in exercising jurisdiction over the case, ruling that plaintiff was required to proceed against defendant in a marital dissolution action then pending between plaintiff and defendant’s mother. We disagree with the court’s reasons for making the order. The other grounds urged as a basis for a new trial are without merit. Accordingly, we reverse the order granting a new trial and staying the proceeding and remand with directions to vacate said order and to enter a new order denying the motions for new trial and for a stay of the proceeding.

FACTS

Plaintiff’s motions requesting we take judicial notice of the docket in the family law proceeding between plaintiff and defendant’s mother and for the taking of additional evidence consisting of a partial transcript of one hearing in the family law matter are both denied. These materials were not before the trial court in the instant action.

The Trial

According to plaintiff’s testimony at trial, he entered into an oral contract with defendant by which he loaned her $125,000. Plaintiff funded the loan by drawing on a home equity line of credit against a home he owned before his August 1998 marriage to defendant’s mother. Defendant’s mother also signed as an obligor on the home equity line of credit. Defendant was to repay the loan in monthly installments, in amounts equal to the monthly payments due on the home equity line of credit. Payment was to be made by electronic transfer to a joint checking account maintained by plaintiff and defendant’s mother.

Defendant testified the funds were advanced to her in August 2000, Plaintiff testified the loan was funded in April 1999, but acknowledged he “may be wrong on that date.” The parties have not provided the trial exhibits to us which may have clarified the date.

Defendant performed her part of the bargain for some time, although payment by check later became the mode of payment, and defendant began missing some payments. According to plaintiff’s testimony, a payment made by defendant in June 2003, was her last. Defendant made no further payments. Perhaps not coincidentally, plaintiff separated from defendant’s mother on July 30, 2003.

In July 2004, plaintiff sold the home which had collateralized the home equity line of credit, and paid off the line of credit in the amount of $109,700.61. In addition to the payoff amount, plaintiff had paid an additional $14,559.13 on the line of credit to cover the payments defendant had missed.

Anticipating a statute of limitations defense, plaintiff also testified that less than two years before he filed the complaint, defendant had orally reaffirmed her obligation under the loan agreement, and had agreed the loan would be repaid in full when plaintiff’s property subject to the home equity line of credit was either sold, or the property distributed in family law proceedings that had been commenced between plaintiff and his wife, defendant’s mother.

At trial, defendant essentially confirmed the terms of the original deal. But, contrary to plaintiff’s testimony, defendant testified she had paid off the loan by paying her mother with a combination of cash (currency), check, or legal services. When asked whether she had documentary proof of having made full payment to her mother, defendant stated, “I don’t have it with me. [Plaintiff’s counsel] didn’t request it.”

The Judgment

Neither party requested a statement of decision. The court entered judgment in favor of plaintiff and against defendant in the principal amount of $124,259.74, with prejudgment interest at 10 percent per annum from July 1, 2003 to April 14, 2007 in the amount of $30,567.90, for a total judgment of $154,827.64.

We calculate simple interest at 10 percent per annum for three years and 288 days to be $47,081.43. But plaintiff does not challenge that aspect of the judgment, and the record does not reflect any other basis for the calculation of prejudgment interest. We presume the amount has been correctly determined on some other basis.

The New Trial and Stay Motions

Defendant moved for a new trial, contending: (1) The court failed to require the parties to comply with the Superior Court of Orange County, Local Rules, rule 450 (rule 450) and, to remedy the problem, the court should either have prohibited the introduction of plaintiff’s evidence or granted a continuance; (2) plaintiff’s testimony about the reaffirmation of the debt was a surprise which ordinary prudence could not have avoided; (3) the damages were excessive; (4) the evidence was insufficient to support the judgment; and (5) the loan was the subject of a pending marital dissolution proceeding giving the family law court “priority of jurisdiction.” Five days later, defendant filed a motion to stay enforcement of the judgment pursuant to Code of Civil Procedure, sections 918 and 918.5. Both motions were set for hearing at the same time.

All further undesignated statutory references are to the Code of Civil Procedure.

The court granted the motion for new trial, concluding it had committed an error of law by allowing the case to “proceed to trial at a time when jurisdiction was already in the Family Court where the issue of the nature of the $109,000 debt was already pending.” Reasoning that although defendant was not a party to the family court matter, “she could and should rightfully be joined in that action,” the court explained, “Under the principle of priority of jurisdiction the issue in question should be determined by the Family Court.” The court also stayed all proceedings in the civil action “pending a resolution of Simmon v. Simmon in the Family Court.”

DISCUSSION

The Pending Marital Dissolution Proceeding Was Not an Impediment to the Trial of This Action; The Court Erred in Granting a New Trial on This Ground

When this action went to trial, there was no evidence defendant was ever made a party to the pending marital dissolution proceeding between her mother and plaintiff. Whether she could have been made a party is beside the point. There was no showing she had been made a party and, accordingly, the family law court lacked any jurisdiction to adjudicate the amount, if any, owed by defendant, either to plaintiff separately, to plaintiff on behalf of the community, or jointly to plaintiff and defendant’s mother. The joinder of defendant in the marital dissolution proceedings was not mandatory; at best she could have been joined at the discretion of the family law court. The doctrine of priority of jurisdiction comes into play when one court attempts to exercise jurisdiction over a dispute over which another court has already assumed jurisdiction. Here, the family law court never assumed or acquired jurisdiction to determine the amount owed by defendant on the loan.

Family Code section 2021 allows a court to “order that a person who claims an interest in the proceeding be joined as a party to the proceeding in accordance with rules adopted by the Judicial Council . . . .” Pursuant to this authorization, the Judicial Council adopted rules 5.150 et seq. of the California Rules of Court. Rule 5.158(b) grants the family law court discretion to join “a party to the proceeding if the court finds that it would be appropriate to determine the particular issue in the proceeding and that the person to be joined as a party is either indispensable to a determination of that issue or necessary to the enforcement of any judgment rendered on that issue.” The rule requires the court to “consider its effect upon the proceeding” when determining whether it is appropriate to determine the issue in the family court. The rule lists four factors the court must consider in determining whether to exercise its discretion to join a third party. Thus, the family law court presumably could have decided it was “appropriate to determine” the amount owed by defendant, and had it done so, defendant would clearly have been an indispensable party to that determination and would necessarily have been joined as a party. But there is no evidence the family court ever determined it would be appropriate to exercise jurisdiction over defendant or that defendant was ever joined as a party to the marital case.

Mandatory joinder of third parties in a marital dissolution proceeding is narrowly limited. “The court must order joined as a party to the proceeding any person the court discovers has physical custody or claims custody or visitation rights with respect to any minor child of the marriage.” (Cal. Rules of Court, rule 5.158(a), italics added.)

We note there are also circumstances under which the family court may have found it not appropriate to join defendant as a third party in the family law proceeding to determine the breach of contract issue. Had either party to the contract demanded a jury trial, the simple lack of a physical jury box in the family law court would most likely have resulted in a ruling that the issue be decided in a civil trial court.

As relevant here, the doctrine of “priority of jurisdiction” invoked by defendant, and relied upon by the trial court, is, quite simply, the means by which “conflicting adjudications of the same subject-matter by different departments of [a superior court]” are avoided. (Williams v. Superior Court (1939) 14 Cal.2d 656, 662.) Thus, “where a proceeding has been duly assigned for hearing and determination to one department of the superior court by the presiding judge of said court in conformity with the rules thereof, and the proceeding so assigned has not been finally disposed of therein or legally removed therefrom, it is beyond the jurisdictional authority of another department of the same court to interfere with the exercise of the power of the department to which the proceeding has been so assigned.” (Ibid.)

Here, application of the doctrine of “priority of jurisdiction” points directly to the civil court as the court having priority to determine the breach of contract issue, not the family court. The family court never asserted jurisdiction, nor was it asked to assert jurisdiction, to determine whether defendant breached the contract, and, if so, how much she owed. Of course, Family Code section 2550 “commands the family law court to ‘divide the community estate of the parties equally.’ Under [Family Code] section 2551, the court must characterize liabilities as either community or separate while [Family Code] section 2552 requires that the court value the community’s assets and liabilities. [Citation.] ‘The court may make any orders the court considers necessary to carry out the purposes of this division.’ [Citation.] The court presiding over a marital dissolution action has jurisdiction to inquire into and render any judgment and make orders that are appropriate concerning the ‘settlement of the property rights of the parties’ [citation], a provision which presumably applies to properly joined third persons.” (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1452 (Glade).) But where, as here, defendant was never joined as a party to the marital dissolution proceeding, the family court lacked the power to adjudicate her liability. While the family court had acquired priority of jurisdiction to characterize the loan asset as community or separate, and to assign or divide that asset between the parties to the dissolution, it lacked the power to make a determination binding on defendant as to the value of the asset (the amount owing) or to enter a judgment binding on defendant. As to those issues, the civil court had acquired priority of jurisdiction when plaintiff served defendant with his complaint.

The cases defendant relies upon so heavily, Askew v. Askew (1994) 22 Cal.App.4th 942 (Askew), and Glade, supra, 38 Cal.App.4th 1441, do not compel a different result.

In Askew, the parties to a marital dissolution action were also parties to a civil action. The marital action was commenced five months before the civil action, and the wife had asserted in the marital proceeding that each of five parcels of real property “were items of community property subject to division by the family law court.” (Askew, supra, 22 Cal.App.4th at p. 961.) The family law court thereby acquired jurisdiction to characterize, value, and divide that property. In the later filed civil action, the husband sought to impose a constructive or resulting trust over the wife’s interest in those same five parcels, thereby adjudicating the property as his separate property. The Askew court properly held, inter alia, that “[b]y imposing trusts on [wife’s] ostensible interests in the five properties, the civil court was removing from the family law court the power to characterize and divide those properties as community. Given that the family law court already had subject matter jurisdiction to divide the community property, the civil trial court had no jurisdiction to act.” (Id. at p. 962.) Here, the opposite obtains. The civil trial court was the first to acquire jurisdiction over the breach of contract suit. Unlike Askew, the defendant in the civil suit was not a party to the marital proceeding.

Similarly, in Glade, the family law court granted a motion joining creditors of the community estate as parties to the marital dissolution action and staying a pending foreclosure action. The next day, in a civil foreclosure action, the court, being unaware of the previous day’s orders in the family court, granted summary judgment in favor of the foreclosing parties. The Court of Appeal correctly found that the family court had acquired priority of jurisdiction when it joined the foreclosing parties and enjoined further prosecution of the foreclosure action. (Glade, supra, 38 Cal.App.4th at p. 1450.) Again, the opposite obtains here. The civil trial court was the first to acquire jurisdiction over the breach of contract suit. The family court never did acquire jurisdiction over plaintiff’s claim against defendant. Without personal jurisdiction over defendant, the family court could not act.

Accordingly, the court erred in granting a new trial on the ground of priority of jurisdiction. With the amount of defendant’s liability to plaintiff established, the family law court remains able to determine whether the judgment held by plaintiff is community property or separate property. And if defendant’s mother wishes to acknowledge her receipt of all or some of the amount owed by defendant (despite the lack of persuasive evidence of that receipt in the civil action) in the marital dissolution, she may certainly do so and be charged with that receipt accordingly in connection with the division of the community assets or as a charge for having received plaintiff’s separate property as the case may be.

Defendant’s Other Asserted Grounds for a New Trial Lack Merit

Defendant contends the court had other “compelling reasons for granting a new trial,” and argues that “[s]o long as a reasonable or even fairly debatable justification under the law is shown for the order granting the new trial, the order will not be set aside.” (Sandco American, Inc. v. Nortrica (1990) 216 Cal.App.3d 1495, 1506.) But there is an important exception, apt to this case. “Although generally a new trial order will be affirmed if it should have been granted on any ground stated in the notice of intention [to move for new trial], where ‘a trial court in granting a new trial based its order exclusively upon an erroneous concept of legal principles applicable to the cause, its order will be reversed.’” (Maher v. Saad (2000) 82 Cal.App.4th 1317, 1323, quoting Conner v. Southern Pacific Co. (1952) 38 Cal.2d 633, 637; see also Rickley v. County of Los Angeles (2004) 114 Cal.App.4th 1002, 1008-1009; Neal v. Montgomery Elevator Co. (1992) 7 Cal.App.4th 1199-1200.) Here, the trial court based its order exclusively upon an erroneous concept of the doctrine of priority of jurisdiction. As we have shown, as a matter of law, where the family court had not exercised any jurisdiction whatsoever to determine the amount owed by defendant, and its exercise of jurisdiction over the third party is not mandatory, it could not be accorded priority of jurisdiction.

Although we could reverse the new trial order on this basis without further comment, we will also address, on the merits, the other stated grounds for a new trial. We do so recognizing the above-stated exception to the general rule of appellate review is judicially created. Section 657 contains two statutory exceptions to the general rule allowing the reviewing court to consider any ground stated in the new trial motion. The California Supreme Court recently paraphrased the appellate review portion of section 657 and the statutory exceptions to the general rule. “‘On appeal from an order granting a new trial the order shall be affirmed if it should have been granted upon any ground stated in the motion, whether or not specified in the order or specification of reasons . . . .’ There are two exceptions: Orders may not be affirmed on the ground of insufficiency of the evidence or on the ground of excessive or inadequate damages unless that ground is specified in the order.” (Oakland Raiders v. National Football League (2007) 41 Cal.4th 624, 634.)

In addition to defendant’s asserted legal error based on priority of jurisdiction, she stated the following grounds in her motion for new trial: (1) Irregularities in the proceeding which prevented a fair trial (§ 657, subd. (1)); (2) Surprise which ordinary prudence could not have guarded against (§ 657, subd. (3)); (3) Excessive damages (§ 657, subd. (5)); and (4) Insufficiency of the evidence (§ 657, subd. (6)). Since the trial court did not specify excessive damages or insufficiency of the evidence as a ground for granting a new trial, under section 657 we may not affirm on those grounds. Accordingly we determine whether we may affirm based on defendant’s contentions that there were irregularities in the proceedings or that defendant was unavoidably taken by surprise. (See Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 905.) As discussed below, the new trial order cannot be affirmed on either ground.

1. There Were No Irregularities in the Proceeding That Prevented a Fair Trial

Defendant’s sole argument regarding “irregularity in the proceedings” is that “the parties did not engage in mandated pretrial disclosures required pursuant to rule 450.” Rule 450 requires the parties to conduct an “issue conference” “at least 10 days prior to trial, at which time counsel are to meet and confer and execute necessary documents as listed” in the rule. At the conference, the parties are required to exchange exhibits, stipulate to all facts amenable to stipulation, prepare a “Joint Statement of the Case,” prepare a “Joint Witness List, excluding impeachment or rebuttal witnesses,” prepare a “Joint List of Controverted Issues,” exchange motions in limine, prepare questions for the court to include in its voir dire of the potential jurors, and execute a “Statement of Compliance.” The statement of compliance must be filed in the trial courtroom “no later than noon of the Friday before trial.”

Counsel did not comply with the rule – at least no statement of compliance was filed. Counsel could not even agree as to whether they had engaged in the “issue conference.” After both counsel announced “ready” for trial, defendant’s counsel made an oral motion “to exclude all witnesses and all evidence. [O]n that basis [he] move[d] for nonsuit.” Defendant’s counsel explained: “My motion is simply to exclude all witnesses and all evidence for failure to comply with local rule 450. [¶] There’s been no meet and confer. There’s been no attempt to do anything that’s required of the attorneys prior to time of trial. [¶] There’s been nothing submitted to the court along these lines. [¶] There’s been no witness statement or list of witnesses provided to me. [¶] There’s been no statement of proposed exhibits or of intended exhibits sent to me. [¶] There’s been no attempt to do anything in those regards. [¶] I think for failure to abide by that local rule that [plaintiff’s counsel] is precluded from introducing any witnesses or evidence at this proceeding other than the testimony of his client who is the party and the plaintiff.”

The court inquired of plaintiff’s counsel: “Was there any effort to meet and confer at least by phone concerning the issues of this case?” Plaintiff’s counsel responded: “There was, your honor.” “I told him exactly who the witnesses were going to be, exactly what the evidence was going to be. [¶] I told him it was stupid to go to trial on this thing. [¶] That’s when we got involved in the settlement discussions, and you saw what happened. [¶] There was supposedly a resolution. Then it went sideways. That’s it.” Defense counsel shot back: “Your honor, there has been no discussion about witnesses or evidence. . . .” To which the court inquired of defendant’s counsel: “Did you send him a list of your witnesses?” To which defendant’s counsel answered: “No. We never — there was — none of this was ever.”

The court cut the dialogue short: “We are going to proceed. Your motion is denied.”

The clear purpose of rule 450 is to streamline the trial – to require counsel to work together to resolve routine matters without taking court time. Much of the rule is directed to matters relevant only to a jury trial, e.g., the joint statement of the case (used to introduce the venire to the basic subject matter of the case), the joint witness list (used to inquire of potential jurors whether they know the witnesses), motions in limine (used to preclude certain matters from ever being heard by the jury), and voir dire questions (used to screen potential jurors). Contrary to defendant’s suggestion, the purpose of the rule is not to discover the other party’s evidence. Discovery as a matter of right must be completed 30 days before the initial date set for trial, 20 days before the mandated issue conference. (§ 2024.020, subd. (a).) In this short bench trial, six exhibits were offered by plaintiff and received in evidence, four exhibits were offered by defendant and received in evidence, and only three witnesses testified. Under these circumstances, the court acted well within its discretion to waive compliance with rule 450. An issue conference would have done little, if anything, to streamline the trial. Although neither counsel is to be commended for their failure to comply with the rule, the court did not abuse its discretion in proceeding with trial without requiring completion of an issue conference.

2. There Was No Unavoidable Surprise

Defendant claims she was surprised at trial, a “surprise, which ordinary prudence could not have guarded against.” (§ 657, subd. (3).) She claims she “had no way of knowing [plaintiff] and his counsel would allege reaffirmation of a debt based on a conversation in a courthouse hallway.” Nonsense. The operative complaint alleged an oral reaffirmation of the debt. Defendant’s failure to know the basis of the alleged oral reaffirmation was the result of her failure to pursue discovery. In her new trial motion, she produced evidence of having sent out written discovery requests and averred plaintiff had failed to respond. But at trial, defendant acknowledged she had never moved to compel responses to the written discovery. Ordinary prudence would suggest completing discovery before answering “ready” for trial. “[T]he burden is on the propounding party to enforce discovery. Otherwise, no penalty attaches either for the responding party’s failure to respond or responding inadequately.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) ¶ 8:1136, p. 8F-59.) Any surprise could easily have been avoided.

DISPOSITION

The order granting a new trial and staying the proceeding is reversed and remanded with directions to vacate said order and enter a new order denying the motions for new trial and for stay of the proceeding. The judgment is reinstated. Plaintiff shall recover his costs on appeal.

WE CONCUR: RYLAARSDAM, ACTING P. J., O’LEARY, J.


Summaries of

Simmon v. Kirby

California Court of Appeals, Fourth District, Third Division
Jul 24, 2008
No. G039119 (Cal. Ct. App. Jul. 24, 2008)
Case details for

Simmon v. Kirby

Case Details

Full title:VINCENT F. SIMMON, Plaintiff and Appellant, v. KIMBERLY KIRBY, Defendant…

Court:California Court of Appeals, Fourth District, Third Division

Date published: Jul 24, 2008

Citations

No. G039119 (Cal. Ct. App. Jul. 24, 2008)