Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County, Super.Ct.No. INC024182. Lawrence W. Fry, Judge.
Paul Bloom for Defendants and Appellants.
Wendell W. Faile for Plaintiffs and Respondents.
OPINION
RICHLI, J.
Lakshman Wickremesinghe and Chrisanthie Wickremesinghe (plaintiffs) sued Walter Jayasinghe and Aesha Jayasinghe (defendants) for damages suffered from defendants’ failure to comply with Code of Civil Procedure section 724.050. In a prior lawsuit resolved in 1989, defendants were granted a judgment against plaintiffs, and plaintiffs and defendants were found jointly and severally liable to third parties also involved in the lawsuit. Plaintiffs were to indemnify defendants for any amounts paid by them to the third parties. In June 2000, defendants filed abstracts of judgment against plaintiffs’ properties in three counties for the judgment owed to them (that they later admitted had already been paid) and for the indemnification amounts, although they had never been asked to make any payments to the third parties.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
Plaintiffs demanded (pursuant to section 724.050) that defendants sign an acknowledgment of satisfaction of judgment to remove the abstracts of judgment filed against their properties. Defendants refused, claiming that, although they had never been asked by any third party to pay on the judgment for which they were jointly liable with plaintiffs, they did not want to lose their right of indemnification by signing an acknowledgment of satisfaction of judgment.
The trial court granted plaintiffs’ motion for summary judgment, rejecting defendants’ affirmative defense that they had “just cause” (based on their belief that they would be losing their right of indemnification) within the meaning of section 724.050 to refuse to file an acknowledgment of satisfaction of judgment. A court trial was conducted on the remaining issue of the amount of damages owed to plaintiffs based on defendants’ refusal to file the acknowledgment. Plaintiffs were awarded damages and attorney fees.
Defendants have appealed the grant of plaintiffs’ summary judgment motion on the ground that the question of whether they had just cause to refuse to file an acknowledgment of satisfaction of judgment presented a triable issue of fact. We find that the trial court properly granted plaintiffs’ motion for summary judgment.
I
FACTUAL AND PROCEDURAL BACKGROUND
We accept all facts listed in plaintiffs’ separate statement of undisputed material facts that defendants did not dispute. We also accept all facts listed in defendants’ separate statement that plaintiffs did dispute, to the extent that (1) there is evidence to support them (§ 437c, subd. (b)(1)), and (2) there is no evidence to support the dispute (id., subd. (b)(3)). Finally, we accept all facts listed in defendants’ separate statement, to the extent that there is evidence to support them. (Ibid.) We disregard any evidence not called to the trial court’s attention in the separate statement of one side or the other, except as necessary to provide nondispositive background, color, or continuity. (See San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 314-316.)
On November 26, 1991, plaintiffs received a judgment against them from a lawsuit involving the sale of a Montessori preschool in Orange County. Under the terms of the judgment, plaintiffs owed other parties to the lawsuit — Kenneth and Sally Perrie (the Perrie judgment) and Arnold and Sirimathi Hathotuwegama (the Hathotuwegama judgment) — $36,903.10, plus $851.50 in costs, plus interest, and $16,296.73, plus $1,343 in costs, plus interest, respectively. Plaintiffs were also ordered to pay defendants $14,311.12, plus interest. Defendants were found to be jointly and severally liable with plaintiffs on the Perrie and Hathotuwegama judgments, but plaintiffs were ordered to indemnify defendants on those judgments should they pay any money directly on those judgments.
Plaintiffs paid all the money that they owed directly to defendants by January 31, 1992. On February 28, 1992, the Hathotuwegamas accepted $15,000 from plaintiffs as full satisfaction of the Hathotuwegama judgment. Sometime prior to September 2000, defendants were sent a copy of the letter prepared by the Hathotuwegamas’ attorney stating that they had accepted plaintiffs’ payment of $15,000 as full satisfaction of the obligations referred to in paragraphs 2 and 5 of the judgment entered on November 26, 1991.
As stated by defendants, although plaintiffs contended in their separate statement of undisputed facts that the depositions of both parties support this material fact, the citations only relate to social encounters between defendants and the Hathotuwegamas. However, defendants did not dispute that they had received the letter before September 2000. Moreover, on appeal, defendants are only concerned with the Perrie judgment and do not dispute the Hathotuwegama judgment.
Despite the above, in August 2000, defendants filed abstracts of judgment each in the amount of $68,362.45 in three counties where plaintiffs owned property. Plaintiffs soon discovered that the abstracts of judgment had been filed and sent letters to defendants asking them to immediately record an acknowledgment of full satisfaction of judgment. Defendants refused and responded by requesting that plaintiffs provide proof that the Hathotuwegama and Perrie judgments had been satisfied, but plaintiffs did not provide any documentary evidence. Plaintiffs then sent a formal demand to defendants pursuant to section 724.050 that they file an acknowledgment of satisfaction of judgment. Defendants failed to file the acknowledgment by October 26, 2000, the 15-day statutory period.
In August 2001, plaintiffs filed their first complaint. On September 30, 2002, plaintiffs filed their second amended complaint for statutory damages against defendants under the authority of section 724.050, subdivision (e). Plaintiffs requested damages and attorney fees incurred due to defendants filing the abstracts of judgment and refusing to provide an acknowledgement of satisfaction of judgment. Attached to plaintiffs’ second amended complaint, they provided acknowledgments of satisfaction of judgment, both filed on March 23, 2001, for the Perrie judgment and the Hathotuwegama judgment.
On December 17, 2002, defendants filed an answer to the complaint raising numerous defenses. Specifically, they responded in their 19th affirmative defense that they had “just cause” to refuse to file the acknowledgment of satisfaction of judgment.
On February 6, 2004, plaintiffs filed a motion for summary adjudication and/or summary judgment. They claimed to have properly complied with the requirements of section 724.050. Plaintiffs argued that defendants did not have just cause to refuse to file the acknowledgement of satisfaction of judgment, and therefore the motion for summary judgment should be granted.
According to depositions taken in preparation for trial, defendants admitted that they kept no records as to, nor did they investigate, whether the money owed by plaintiffs on the Perrie and Hathotuwegama judgments, or even to them directly, had in fact been paid. Defendants had never received demand for payment on the Perrie and Hathotuwegama judgments. On October 9, 2001, defendants filed the acknowledgement of full satisfaction of judgment in favor of plaintiffs.
On April 28, 2004, defendants filed their own motion for summary judgment claiming that since they had just cause to refuse to file the acknowledgement of satisfaction of judgment, the case should be dismissed. Plaintiffs filed opposition. Defendants then filed a reply.
A hearing on plaintiffs’ motion for summary judgment was held on May 14, 2004, and the trial court issued a tentative ruling. The trial court initially stated that it believed that a lien could only be filed against property “for the amount required to satisfy the judgment.” The trial court concluded, “I don’t find that the defendants had any just cause to believe that the $14,311.12 due to him [sic] was not paid. Defendants acknowledge receipt of the payments. They admit to making no efforts to determine what had been paid and what remain unpaid. [¶] The other sums for indemnification were not money judgments. They do not accrue until Perrie or Hathotuwegama made demands for payment on Jayasinghe. They cannot be part of a money judgment. The amount does not even become fixed until Jayashinghe tenders payment.”
The trial court also relied upon Civil Code section 2778 in its tentative ruling, which it indicated states, “upon an indemnity against claims or demands or damages or cause expressly or in other equivalent terms, the person indemnified is not entitled to recover without payment thereof.” The trial court stated, “It appears to me that the defendants made a mistake of law here thinking that the fact that they would be indemnified by plaintiffs meant that they shouldn’t sign . . . a satisfaction of judgment.” The trial court admonished counsel, “And you’ve given me no authority, counsel, that a mistake of law would give them relief here, and I don’t think it would.” The trial court concluded, “So I don’t find that there was any good cause to believe that the plaintiff still owed the defendants money as — and I think that the summary judgment motion — or summary adjudication motion, excuse me, of the 19th affirmative defense is in order.”
After further argument, the trial court took the matter under submission. On June 10, 2004, the trial court granted plaintiffs’ motion for summary adjudication on defendants’ 19th affirmative defense, on the grounds that defendants did not have just cause to refuse to timely file an acknowledgement of satisfaction of judgment. It did not rule on defendants’ other defenses and ordered that the trial proceed on damages only. The trial court relied upon the evidence presented in the plaintiffs’ separate statement of undisputed facts Nos. 1-3, 5-11, 13-16, 18, 21, and 23.
The trial court only addressed the 19th affirmative defense in its tentative ruling even though there were several other affirmative defenses raised by defendants. At the time of trial, defendants objected that the trial court’s written ruling indicated that the trial was only going to address damages and not the other affirmative defenses to liability. The trial court admitted its ruling in court that only went to the 19th affirmative defense was, in essence, a grant of summary adjudication on that issue. However, it noted that its written ruling granted summary judgment, and defendants failed to object to that order. The trial court concluded that defendants had waived any objection that the trial court’s ruling was merely summary adjudication of the 19th affirmative defense. Defendants do not raise any issue in this appeal as to the trial court’s waiver ruling.
On July 16, 2004, a brief hearing was held on defendants’ motion for summary judgment. The trial court denied defendants’ motion for summary judgment. On August 9, 2004, defendants filed a petition for writ of mandate or prohibition in this court based on the denial of their motion for summary judgment. It was summarily denied.
Although both defendants and plaintiffs reference the filing of a petition for writ of mandate or prohibition in this court, they have not asked this court to take judicial notice of the file. We take judicial notice of the file in case No. E036388 on our own motion. (Evid. Code, § 459.) We note that both defendants and plaintiffs wrongfully claim that the writ was filed by defendants based on the grant of plaintiffs’ summary judgment motion; it was in fact based on the denial of defendants’ summary judgment motion.
After a court trial on the damages, plaintiffs were awarded total damages, attorney fees, and costs in the amount of $588,636.25. Defendants do not appeal the award of damages.
II
ANALYSIS
Defendants contend that the trial court’s ruling was incorrect because a triable issue of material fact existed as to whether they had “just cause” to refuse to comply with plaintiffs’ demand that they file an acknowledgment of satisfaction of judgment pursuant to section 724.050.
A. Standard of Review
“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. . . . [¶] [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . [¶] [H]ow the parties moving for, and opposing, summary judgment may each carry their burden of persuasion and/or production depends on which would bear what burden of proof at trial.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, fns. omitted; accord, Colores v. Board of Trustees (2003) 105 Cal.App.4th 1293, 1303-1304.) [“[a]s the party moving for summary judgment, the university bore an initial burden of production of a prima facie showing that there is no triable issue of material fact in this case and it is entitled to judgment as a matter of law. Only if the university carried that burden was plaintiff faced with a burden of production of her own — to make a prima facie showing of the existence of a triable issue of material fact”].)
After a motion for summary judgment has been granted, this court “examine[s] the record de novo and independently determine[s] whether [the] decision is correct. [Citation.]” (Colarossi v. Coty US Inc. (2002) 97 Cal.App.4th 1142, 1149.) In doing so, we use the same three-step process employed by the trial court. First, we identify the issues raised by the pleadings. Second, we determine whether the moving party’s showing establishes facts sufficient to negate the opposing party’s claims and to justify judgment in the moving party’s favor. If so, we then determine whether the opposing party has raised a triable material issue of fact. (Dawson v. Toledano (2003) 109 Cal.App.4th 387, 392; Ojavan Investors, Inc. v. California Coastal Com. (1997) 54 Cal.App.4th 373, 385.)
“On review of a summary judgment, the appellant has the burden of showing error, even if he did not bear the burden in the trial court. [Citation.] ‘The fact that we review de novo a grant of summary judgment does not mean that the trial court is a potted plant in that process.’ [Citation.] ‘[D]e novo review does not obligate us to cull the record for the benefit of the appellant in order to attempt to uncover the requisite triable issues. As with an appeal from any judgment, it is the appellant’s responsibility to affirmatively demonstrate error and, therefore, to point out the triable issues the appellant claims are present by citation to the record . . . .” (Claudio v. Regents of University of California (2005) 134 Cal.App.4th 224, 230.)
B. Analysis
Plaintiffs brought their lawsuit under section 724.050. Subdivision (a) of that statute provides, “If a money judgment has been satisfied, the judgment debtor, the owner of real or personal property subject to a judgment lien created under the judgment, or a person having a security interest in or a lien on personal property subject to a judgment created under the judgment may serve personally or by mail on the judgment creditor a demand in writing that the judgment creditor . . . [¶] . . . [f]ile an acknowledgment of satisfaction of judgment with the court.” A person being served with such demand has 15 days within which to comply with the demand. (§ 724.050, subd. (c).) If the debt has been paid, and the person served with the demand fails to file an acknowledgment of satisfaction of judgment, the judgment creditor can make a motion with the court for compliance with the statute and sue for damages. (§ 724.050, subd. (e).)
It does not appear from the record that plaintiffs ever filed a motion under subdivision (e) of section 724.050, asking the court to require defendants to comply; however, defendants do not claim in this appeal that such motion was necessary in order for plaintiffs to file suit for damages.
Here, defendants claim they did not file the acknowledgment of satisfaction of judgment after they received the demand from plaintiffs because they had just cause to refuse based on the fact that they (1) were never advised whether the Perrie judgment had been paid; (2) they believed that the indemnifications were money judgments to which they were entitled to file abstracts of judgment; and (3) they did not want to sign an acknowledgment of satisfaction of judgment because they would lose their indemnification rights.
As noted above, the trial court rejected defendants’ premise, finding that the indemnifications were not due and payable as money judgments at the time that the abstracts of judgment were filed. Defendants had no right to file the abstracts of judgment in the first place, because they had been paid, and plaintiffs were not liable on the indemnifications; accordingly, defendants could not have just cause to refuse to file the acknowledgment of satisfaction of judgment. We agree with the trial court’s ruling.
Code of Civil Procedure section 680.270 defines “money judgment” as “that part of a judgment that requires the payment of money.” However, indemnity is defined in Civil Code section 2778. Subdivision 1 of that section provides, “Upon an indemnity against liability, expressly, or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable.” Subdivision 2 provides, “Upon an indemnity against claims, or demands, or damages, or costs, expressly, or in other equivalent terms, the person indemnified is not entitled to recover without payment thereof . . . .” Indemnity has been defined as an “‘obligation resting on one party to make good a loss or damage another has incurred’ . . . .” (E.L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 506, quoting Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.)
The rules of statutory interpretation provide that the court’s “‘first task in construing a statute is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, a court must look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible to every word, phrase and sentence in pursuance of the legislative purpose. A construction making some words surplusage is to be avoided. The words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible. Where uncertainty exists consideration should be given to the consequences that will flow from a particular interpretation.’” (Steinfeld v. Foote-Goldman Proctologic Medical Group, Inc. (1997) 60 Cal.App.4th 13, 17, quoting Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1386-1387.)
Under the plain terms of Civil Code section 2778, an indemnification is not due and payable until there has been a payment on the indemnity agreement. A right of indemnification is not a money judgment, but rather is a contractual obligation that may or may not ever result in the payment of money. We agree that if a person makes a payment on a judgment and then seeks indemnification from another party, at that time, money is due and payable to the possessor of the indemnification right, and therefore constitutes a money judgment. (See E.L. White, Inc. v. City of Huntington Beach, supra, 21 Cal.3d at p. 506 [a cause of action for indemnity does not accrue until the indemnitee makes payment to the creditor].) Defendants are wrong in concluding that an indemnification right constitutes a money judgment before any payment has been made.
On June 12, 2007, defendants filed a request for judicial notice pursuant to Evidence Code section 459, and we reserved our ruling until resolution of the appeal. Specifically, defendants asked us to take judicial notice of the California Law Revision Commission’s final report regarding the Enforcement of Judgments Law, found at 16 California Law Revision Commission Report (1982), pages 1011 and 1201. After reviewing the materials, we find that the materials are not dispositive to the resolution of this appeal, and we therefore deny the request to take judicial notice of the materials.
Defendants filed abstracts of judgment in the amount of $68,362.45 in counties where plaintiffs owned property. Defendants admitted that prior to that time they had been paid in full by plaintiffs on the money owed directly to them. In addition, at the time the abstracts of judgment were filed, defendants had not been asked to pay on the Perrie judgment, and therefore plaintiffs were not liable to defendants on the indemnification agreements. No cause of action on the indemnity agreement existed. (E.L. White, Inc. v. City of Huntington Beach, supra, 21 Cal.3d at p. 506.) In fact, defendants will never become liable on the Perrie judgment, as the record supports that the judgments have been paid in full.
Based on the foregoing, defendants had absolutely no claim for money against plaintiffs under the indemnification agreements or on the amount of money owed to them on the judgment. Liens on property can only be filed for the amount required to satisfy the money judgment. (§ 697.010.) Defendants had no basis upon which to file the abstracts of judgment.
Since we conclude that the defendants had no right to file abstracts of judgment against plaintiffs’ property, it follows as a matter of law that they could not have just cause to refuse to file an acknowledgement of satisfaction of judgment in order to remove the improper liens from plaintiffs’ property. We need not resolve the proper standard for “just cause” as that term appears in section 724.050, because under any standard (defendants’ “fair and honest reasons” or plaintiffs’ “‘must be based on reasonable grounds, and there must be a fair and honest cause or good reason, regulated by good faith’”) defendants could not refuse to remove liens from plaintiffs’ property that they had absolutely no right to file in the first place.
Additionally, we need not resolve whether there was a duty of inquiry on the part of defendants to determine whether the Perrie judgment had been paid once the plaintiffs filed a demand for acknowledgment of satisfaction of judgment. Regardless of whether the judgment had been paid or not, the defendants only possessed a right of indemnification against plaintiffs at the time they filed the abstracts of judgment. They had not paid anything on the Perrie judgment and had not been requested to make such payments. As noted above, since no payment had been made by defendants, plaintiffs were not liable on the indemnification agreements. Regardless of whether plaintiffs had paid the Perrie judgment, until defendants paid on the Perrie judgment, no abstract of judgment could be filed on the indemnification agreements, as no liability under the agreement existed.
Defendants argue that, had they filed an acknowledgement of satisfaction of judgment, they would have been giving up their rights of indemnification. This is simply not the case. Liability on the indemnity agreements would not arise until defendants paid on the Perrie judgment. At the time that defendants were required to file the acknowledgment of satisfaction of judgment, there had been no payment by the defendants and therefore no liability on plaintiffs’ part. Defendants could not possibly be giving up their right to indemnity from plaintiffs since no liability on the agreements was in effect at the time a demand for acknowledgement of satisfaction of judgment was made.
To the extent that defendants now argue there was a triable issue of fact as to whether they made a mistake of law by considering the indemnifications as money judgments that were due and payable, they never raised this issue as a defense in the trial court. Although defendants now suggest that they were surprised by the trial court’s determination that they had made a mistake of law, they did not pursue the matter when the case came to trial. There was an extensive discussion regarding what issues would be brought at trial, and at no time did defendants ask that the trial court consider this defense. As such, the claim is simply not reviewable in this court. Regardless, defendants failed to meet their burden of proving that a mistake of law constitutes just cause under section 724.050. (Claudio v. Regents of University of California, supra, 134 Cal.App.4th at p. 230.)
There is simply no valid explanation for why defendants filed the abstracts of judgment in this case. Defendants had already been paid in full, and they had never been asked to pay one cent on the Perrie judgment. Defendants had no justification for such wanton, reckless behavior, which resulted in real damage to plaintiffs’ credit. Defendants further exacerbated the problem by refusing to file acknowledgments of satisfaction of judgment in order to remove the baseless liens from plaintiffs’ property. The refusal to file such acknowledgments could not be justified under any standard. Accordingly, we find that summary judgment in favor of plaintiffs was proper.
III
DISPOSITION
The judgment is affirmed. Plaintiffs shall recover costs on appeal.
We concur: McKINSTER, Acting P.J. MILLER, J.