Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from an order of the Superior Court of San Diego County Ct. No. GIC841009, Louis R. Hanoian, Judge. Appeal dismissed; Respondents' request for sanctions granted.
AARON, J.
I.
INTRODUCTION
Harry Haubert appeals from an order of the Appellate Division of the Superior Court of San Diego County (appellate division). In its order, the appellate division affirmed the trial court's denial of Haubert's claim of exemption for certain bank trust accounts, and imposed sanctions against Haubert for filing a frivolous appeal to that body.
Ellen Evans and Christina Turpela (Respondents) filed a motion to dismiss Haubert's appeal in this court for lack of jurisdiction, and also moved for sanctions against Haubert for pursuing another frivolous appeal. We grant Respondents' motion, and dismiss Haubert's appeal. We also award sanctions in a total amount of $15,460 to compensate Respondents and this court for having to respond to and process Haubert's frivolous appeal.
II.
FACTUAL AND PROCEDURAL BACKGROUND
A. Proceedings in the trial court
In June 2004, the trial court entered judgment in the amount of $7,977.15 in favor of Respondents, after they sued Haubert for failing to pay them in accordance with a settlement agreement in an underlying case in which Respondents had sued Haubert. Respondents served a notice of levy on Haubert's bank. In the notice of levy, Respondents specified that the levy did not cover any accounts in which Haubert held funds in trust for others. Haubert filed a claim of exemption in the trial court, arguing that the exemption was necessary to protect any trust accounts he held at the bank. The trial court denied Haubert's claim of exemption, concluding that Haubert failed "to identify the accounts and provide evidence of the trust nature of the accounts in question."
B. The procedural history of the case in the appellate division
Haubert appealed the denial of his claim of exemption to the appellate division. Respondents filed a motion requesting sanctions on the ground that Haubert's appeal was frivolous and was taken solely for the purpose of harassment and delay. Haubert did not oppose Respondents' motion for sanctions. The court clerk advised the parties that the appellate division would consider Respondents' sanctions motion at the hearing on Haubert's appeal.
On August 19, 2005, the appellate division heard argument from the parties regarding the merits of Haubert's appeal and Respondents' motion for sanctions.
On September 6, 2005, the appellate division filed an order affirming the trial court's order denying Haubert's claim of exemption. The appellate division also found that Haubert's appeal was wholly without merit and that Haubert had pursued the appeal to harass Respondents and to delay the effect of the underlying judgment. The appellate division ordered Haubert to pay sanctions in the amount of $2,860, which was the amount of attorney fees Respondents had incurred in responding to Haubert's appeal. The appellate division concluded that Haubert's conduct in the litigation was "equally reprehensible [to the sanctionable conduct of a defendant licensed to practice law in a published case] and cannot be tolerated." The appellate division went on to state that the sanctions award was "nominal given Appellant's repeated misuse of the legal system in this case."
C. The procedural history of the case in this court
Haubert, acting as his own attorney, filed a notice of appeal from the order of the appellate division on October 13, 2005. Haubert did not specify the sanction award of the appellate division in his notice of appeal.
On October 19, 2005, this court requested that the parties file letter briefs addressing appellate jurisdiction over Haubert's purported appeal:
"The order identified in defendant Harry L. Haubert's notice of appeal is a decision of the Appellate Division [o]f [t]he Superior Court. The available procedures for obtaining review of a decision of the Appellate Division are transfer under Code of Civil Procedure section 911 and California Rules of Court, rule 61 et seq. and, under certain circumstances, extraordinary writ. [Citation.] The court requests that within 10 days of the date of this letter, the parties submit letter briefs addressing the issue of whether this court has jurisdiction to hear defendant's appeal. In particular, the court requests the parties to address the appealability of the Appellate Division's award of monetary sanctions against defendant on the grounds his appeal was frivolous and prosecuted for an improper purpose."
Both parties filed briefs regarding the issue of this court's jurisdiction to review an order of the appellate division. Respondents also requested monetary sanctions against Haubert.
In addition to addressing the question of this court's jurisdiction to review the appellate division's order, Haubert also included in his brief arguments related to the merits of his purported appeal from that order.
In the meantime, on October 13, 2005, Haubert filed a bankruptcy petition. This court stayed all proceedings in the appellate court, pursuant to the required stay under section 362 of the Bankruptcy Code. The stay remained in effect until December 2007, when this court was notified that the bankruptcy court had issued a judgment denying a discharge of Haubert's debt to Respondents. The stay was vacated on December 26. In the order vacating the stay, this court informed the parties that we would consider Respondents' request for sanctions, as well as the question of this court's jurisdiction to hear Haubert's appeal, as issues in the appeal.
Haubert filed his opening brief on May 2, 2008.
On May 28, 2008, Respondents filed a motion to dismiss Haubert's appeal and for sanctions. On June 12, Haubert filed an opposition to Respondents' motion to dismiss the appeal and for sanctions. On June 17, this court issued a letter to the parties, stating:
"This court's December 26, 2007 order stated that respondents' request for sanctions and the briefed issue of whether this court has jurisdiction to hear this appeal from a decision of the appellate division of the superior court would be considered as issues in the appeal. Accordingly, respondents' opposed motion to dismiss the appeal and for sanctions will be heard with the appeal. Respondents' brief is due 30 days from the date of this order."
Respondents filed their respondents' brief on July 17, 2008. On August 6, 2008, Haubert filed his reply brief.
On August 14, Respondents filed a "supplemental" request for sanctions against Haubert, in which they argued that Haubert had "committed numerous unreasonable violations of the rules governing appeals" in his appellate briefing. This court informed the parties that the court would consider Respondents' supplemental motion for sanctions with the appeal, and gave Haubert 10 days to file an opposition to Respondents' supplemental motion for sanctions. On September 3, Haubert filed his opposition to Plaintiff's supplemental motion for sanctions.
III.
DISCUSSION
A. This court does not have jurisdiction to consider Haubert's appeal
The appellate division's order involved two rulings. First, the order affirmed the decision of the trial court denying Haubert's claim of exemption. Second, the order imposed new sanctions against Haubert for prosecuting a frivolous appeal for an improper purpose. We conclude that this court does not have jurisdiction to review either portion of the appellate division's order.
An appellate court does not have jurisdiction to review decisions of the appellate division by way of direct appeal. (See Anchor Marine Repair Co. v. Magnan (2001) 93 Cal.App.4th 525, 528 (Anchor Marine) ["the general statute conferring jurisdiction on the Court of Appeal expressly excludes appeals in limited civil cases"], citing Code Civ. Proc., § 904.1, subd. (a).) "There are only two procedures that permit us to review decisions of the appellate division under certain circumstances: certification and extraordinary writ." (Anchor Marine, supra, 93 Cal.App.4th at p. 528.)
Under California Rules of Court, rule 8.1005 (formerly rule 63), the appellate division may certify a case for transfer to the Court of Appeal, either on its own motion or on the motion of a party. The appellate division's certification must "[b]riefly describe any conflict of decision ─ citing the decisions creating the conflict ─ or important question of law to be settled . . . ." (Cal. Rules of Court, rule 8.1005(e)(1).) Similarly, the "Court of Appeal may order a case transferred to it for hearing and decision if the appellate division certifies under rule 8.1005—or the Court of Appeal determines under rule 8.1008—that transfer is necessary to secure uniformity of decision or to settle an important question of law." (Cal. Rules of Court, rule 8.1002, formerly rule 62.) "The Court of Appeal may order transfer of a case on its own motion or on a party's petition to transfer." (Cal. Rules of Court, rule 8.1008, formerly rule 64.)
Neither of these transfer processes applies here. The appellate division did not certify the case for transfer, and this court did not order transfer of the case. Further, Haubert never petitioned to have the case transferred, and never made any showing, either to this court or to the appellate division, that transfer of the case to this court would be necessary.
There are additional limited circumstances in which the Court of Appeal may review a decision of the appellate division, even where the appellate division has denied a motion for certification and transfer. (Anchor Marine, supra, 93 Cal.App.4th at p. 528.) Specifically, the Court of Appeal can review an order of the appellate division on a petition for writ of mandate or other extraordinary writ. (Ibid.) However, Haubert did not petition for an extraordinary writ, and has made no attempt to show that writ relief would be proper in this circumstance.
"'We may [nevertheless] treat an improper appeal as a petition for an extraordinary writ . . . where the matter presents an issue of first impression, the issue has been thoroughly briefed and our determination is purely one of law.' [Citation.]" (Anchor Marine, supra, 93 Cal.App.4th at p. 530.) The appellate division's affirmance of the trial court's denial of Haubert's claim of exemption does not present an issue of first impression, nor does it require a determination that is purely one of law. We therefore decline to treat Haubert's improper appeal as a petition for writ relief.
We reach the same result with regard to that portion of the appellate division's order imposing sanctions against Haubert. Haubert has failed to provide any legal authority or reasoned argument suggesting that this court has jurisdiction to review any portion of an appellate division's order ─ even that portion awarding new sanctions ─ by way of direct appeal from the appellate division's order. We conclude that this court does not have the authority to review the sanctions award made by the appellate division, absent one of the two special circumstances under which this court may normally review decisions of the appellate division, i.e., certification for transfer or extraordinary writ.
Again, neither of the transfer processes applies here. The appellate division did not certify the case for transfer on its own motion, and Haubert never requested that it do so, even with regard to the sanctions award. In addition, this court did not order the case transferred, and Haubert never petitioned this court to do so in order to obtain review the appellate division's sanctions award. Further, Haubert has made no showing that a transfer to this court is required in order to settle a conflict in the law or to maintain uniformity of the law.
Haubert similarly has not sought review of the sanctions order by way of a petition for writ of mandate or other extraordinary writ. Although, as discussed above, we may treat an improper appeal as a petition for an extraordinary writ if the circumstances so require, Haubert has not shown that such circumstances exist with regard to the appellate division's sanctions order. The propriety of the imposition of sanctions by a panel of the appellate division is not an issue of first impression. Further, review of the appellate division's imposition of sanctions would require more than simply a legal determination, since the appellate division made findings regarding the improper purposes underlying Haubert's appeal to that body. We therefore decline to treat Haubert's improper appeal from the portion of the appellate division's order awarding sanctions as a petition for an extraordinary writ.
Consequently, Haubert's appeal must be dismissed.
B. Additional sanctions are appropriate
Respondents request that this court impose sanctions on Haubert because, they maintain, his appeal to this court is frivolous and is taken solely for the purpose of delay and harassment, and also because Haubert violated a number of procedural rules in proceeding with his appeal. Haubert opposes the request for sanctions. This court informed the parties that the court intended to consider Respondents' sanctions motion with the appeal.
A reviewing court "may add to the costs on appeal such damages as may be just" when that court determines that an appeal "was frivolous or taken solely for delay." (Code Civ. Proc., § 907.) "An appeal is frivolous 'only 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. [Citation.]' [Citation.]" (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1422.) "We impose a penalty for a frivolous appeal for two basic reasons: to discourage further frivolous appeals, and to compensate for the loss that results from the delay. [Citation.]" (Pierotti v. Torian (2000) 81 Cal.App.4th 17, 33 (Pierotti).)
The record before this court demonstrates that Haubert has filed a wholly frivolous appeal, and that he continued to pursue this appeal for the purpose of delay and to further harass Respondents. Haubert's conduct with regard to the judgment against him ─ a judgment that was originally less than $8,000 (and which started out in late 2002 as a $6,000 attorney fee award) ─ has been reprehensible. The original judgment against Haubert was entered only because Haubert failed to pay the amount that he had agreed to pay Respondents pursuant to a settlement agreement. Once the trial court entered judgment in Respondents' favor, Haubert avoided satisfying the judgment debt, and instead left Respondents to attempt to enforce the judgment by serving a notice of levy on Haubert's personal bank accounts. However, Haubert had already closed his personal accounts. Haubert then filed his claim of exemption for trust accounts that Respondents never sought to levy. In the face of the court's denial of his claim of exemption of trust accounts that were never levied upon, Haubert appealed to the appellate division.
After losing his appeal in the appellate division, Haubert filed an appeal with this court, and also filed for bankruptcy protection, thereby further delaying Respondents' ability to enforce the judgment against him.
Through these machinations, Haubert has managed to avoid paying Respondents the original amount owed pursuant to a settlement agreement for approximately six years. He has avoided paying the current judgment against him for more than four and a half years, and has avoided paying the sanctions he owes for more than three years.
Haubert's continued prosecution of frivolous appeals has not only unfairly delayed the satisfaction of this judgment for years on end, but has also caused an unnecessary expenditure of significant time, energy and resources of the judicial system. He has repeatedly misrepresented the facts and the law, and in doing so has made a mockery of the legal system. Virtually every court that has dealt with Haubert in relation to this matter has both noted and condemned his dishonorable conduct. The appellate division commented that Haubert's "bad faith [as both appellant and counsel] is notable." The appellate division found that "[h]is intent, viewed subjectively, is clearly in bad faith." That court noted that Haubert "plays 'fast and loose' with the facts regarding his ability to pay court costs," and that "[j]ust as [he] refuses to pay [Respondents], he refuses to pay court costs." According to the appellate division, "The disproportion between the limited amount of the judgment and the elaborate, protracted, and unfounded opposition by H[aubert] strongly suggests that this litigation is based on spite and vindictiveness rather than any legitimate purpose." The court continued, "H[aubert] is using his position as an attorney to force his creditors and the court to expend time and money needlessly."
More than a year after the appellate division made the above observations, the bankruptcy court's comments demonstrated that Haubert had not changed his ways. In denying the discharge of Haubert's debt to Respondents, the bankruptcy court noted that Haubert was "very evasive in his answers" and that he "refused to provide any meaningful information concerning the trusts with which he was involved." In addition, the bankruptcy court found that Haubert repeatedly omitted and mischaracterized information concerning his income and employment, as well as a number of trusts with which he was involved, and he completely omitted the existence of other assets. The bankruptcy court found Haubert not credible, and concluded that he "has structured his affairs for years to make it difficult to trace his income and assets." The bankruptcy court further found that Haubert's "testimony was not directed to providing the truth, but to continue his attempts to remain judgment proof." Ultimately, the bankruptcy court denied discharge of Haubert's judgment debt because of Haubert's "concealing assets, concealing or failing to maintain adequate records, and making false oaths in connection with this Chapter 7 with the intent to hinder or delay the Plaintiffs."
In this court, Haubert has maintained his dilatory tactics. He has continued not only to misrepresent the facts and law relevant to this case, but also attempts to blame Respondents for the lengthy delay they have endured, asserting, "Respondents can look to no one other than themselves for this delay or any other efforts expended in the collection of their judgment, not any activity of Appellant." Haubert goes so far as to argue that the court should impose sanctions on Respondents, not him. Haubert clearly has not received the message that he must cease his abuse of the court system. For this reason we conclude that additional sanctions are warranted.
The fact that this court offered the parties the opportunity to brief the issue of whether this court is authorized to review the Appellant Division's sanctions order does not alter our analysis with regard to the imposition of sanctions. Although our request for briefing gave Haubert an opportunity to salvage his appeal, not only did he fail to identify any relevant legal authority, but he continued to argue the merits of his case, repeatedly offering the same specious arguments that the appellate division clearly rejected. Thus, even if this court did possess jurisdiction to determine Haubert's appeal, any reasonable attorney would agree that Haubert's appeal is totally and completely without merit. There is clearly substantial evidence to support the trial court's order and the record fully supports the appellate division's award of sanctions as well. Haubert's claims to the contrary appear to be nothing more than his continued attempt to avoid paying Respondents. Given the state of this record, we are convinced that Haubert's appeal to this court is also subjectively frivolous, and that Haubert prosecuted it solely for the purpose of delay.
In our view, this case is one in which monetary sanctions, payable to both Respondents and the clerk of this court, are appropriate. The factors that a court is to consider in determining the dollar amount of sanctions to be awarded a party who was forced to respond to a frivolous appeal include "the amount of respondent's attorney fees on appeal; the amount of the judgment against appellant; the degree of objective frivolousness and delay; and the need for discouragement of like conduct in the future. [Citation.]" (Pierotti, supra, 81 Cal.App.4th at pp. 33–34.) Respondents have provided the declaration of their attorney establishing that they have incurred approximately $7,460 in attorney fees. The additional factors of the degree of frivolousness and delay, as well as the need to discourage this type of conduct in the future, weigh in favor of imposition of a sanction award in a greater amount. "[A]n abuse of the legal system for no other purpose than to avoid paying a legitimate claim simply can no longer be tolerated. It is not fair to the opposing litigant who is victimized by such tactics and it is not fair to the greatly overworked judicial system itself and those citizens with legitimate disputes waiting patiently to use it. In those cases where such abuse is present, an award of substantial sanctions is proper." (National Secretarial Service, Inc. v. Froehlich (1989) 210 Cal.App.3d 510, 526, fn. omitted.) Although Respondents do not request a specific amount of sanctions beyond their attorney fees and expenses, they have indicated a desire for additional sanctions, particularly in light of the fact that Haubert was not deterred by the prior sanction award. We conclude that sanctions in the amount of $2,000, plus $7,460 in attorney fees payable to Respondents, are appropriate.
We also impose sanctions to be paid directly to the clerk of this court. "'"Other appellate parties, many of whom wait years for a resolution of bona fide disputes, are prejudiced by the useless diversion of this court's attention. [Citation.] In the same vein, the appellate system and the taxpayers of this state are damaged by what amounts to a waste of this court's time and resources. [Citations.] Accordingly, an appropriate measure of sanctions should . . . compensate the government for its expense in processing, reviewing and deciding a frivolous appeal. [Citations.]" [Citation.]'" (Pollock v. University of Southern California (2003) 112 Cal.App.4th 1416, 1433; see also Pierotti, supra, 81 Cal.App.4th at p. 35 [because a frivolous appeal harms the court, not just the respondent, additional award of sanctions payable directly to the court clerk to compensate the state for the cost of processing such appeals is appropriate].)
In determining an appropriate amount of sanctions to compensate the state for the cost of processing Haubert's appeal, we take guidance from the court's analysis in In re Marriage of Gong & Kwong (2008) 163 Cal.App.4th 510, 520. That court explained:
"A number of Court of Appeal decisions have adopted figures of $5,900 to $6,000 as a conservative estimate of the costs of processing an average appeal, basing those figures on a calculation made in 1992. [Citations.] A current cost analysis undertaken by the clerk's office for the Second Appellate District, using the same general methodology, indicates the cost of processing an appeal that results in an opinion by the court to be approximately $8,500, while the cost for processing a case that is resolved without opinion (for example, by dismissal for lack of an appealable order) to be approximately $1,750. We are dismissing the appeal here, but the nature of the case and of Mr. Kwong's arguments have caused us to effectively issue an opinion. However, we also recognize the legal issues involved are not at all complex. We conclude that sanctions of $6,000, payable to the clerk of this court, are appropriate."
Haubert's arguments have caused this court to effectively issue an opinion, although, as in In re Marriage of Gong & Kwong, the legal issues are not complex. In light of the monetary sanctions we have imposed payable to Respondents, we conclude that sanctions of $6,000, payable to the clerk of this court, are appropriate in this case.
IV.
DISPOSITION
The motion to dismiss the appeal is granted. Respondents are awarded sanctions of $9,460, in addition to their costs on appeal. Further, Haubert is to pay sanctions of $6,000 to the clerk of this court. All sanctions are to be paid no later than 30 days after the remittitur has issued.
Upon return of the remittitur, the Clerk of the Court of Appeal is to forward a copy of this opinion to the State Bar of California, pursuant to Business and Professions Code section 6086.7, subdivision (a)(3).
The relevant portions of section 6086.7 of the Business and Professions Code provide: "(a) A court shall notify the State Bar of any of the following: [¶] . . . [¶] (3) The imposition of any judicial sanctions against an attorney, except sanctions for failure to make discovery or monetary sanctions of less than one thousand dollars ($1,000)."
WE CONCUR: HUFFMAN, Acting P. J., IRION, J.