Opinion
G053456
10-03-2017
JOHN C. HEINL et al., Plaintiffs and Respondents, v. MARK S. ADAMS, Defendant and Appellant.
California Receivership Group, Mark S. Adams and Andrew F. Adams for Defendant and Appellant. Theodore A. Anderson Law Corporation, Theodore A. Anderson and Matthew R. Anderson for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2011-00526006) OPINION Appeal from a judgment of the Superior Court of Orange County, Gregory H. Lewis, Judge. Affirmed. California Receivership Group, Mark S. Adams and Andrew F. Adams for Defendant and Appellant. Theodore A. Anderson Law Corporation, Theodore A. Anderson and Matthew R. Anderson for Plaintiffs and Respondents.
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INTRODUCTION
The trial court appointed Mark S. Adams as the receiver of an illegal business alleged to be a public nuisance. John C. Heinl and Kathy A. Heinl, the owners of the property in which the illegal business had been located (the Heinls), sued Adams individually and in his official capacity, and the receivership business he owns, for abusing the receivership process and slandering the title to their property. The court found in favor of the Heinls, but the judgment did not specify that it was rendered against Adams both as an individual and in his official capacity.
When Adams refused to provide personal financial information at a judgment debtor's examination, the parties appeared before the trial court. From the bench, on its own motion the court amended the judgment to name Adams as an individual in addition to naming him in his official capacity.
Adams argues the court did not have the authority to amend the judgment to specifically name him as an individual. We disagree. The court explicitly found that the judgment's failure to name Adams as an individual was a clerical error, which could be corrected at any time.
Adams also argues the trial court erred in awarding the Heinls their attorney fees as damages on the slander of title claim. Again, we disagree. The court's award of damages is consistent with California law and with the Restatement Second of Torts.
Finally, Adams argues that the trial court erred in amending the judgment to add a new judgment debtor. This issue is not before us. Adams filed a separate notice of appeal from the order adding the new judgment debtor; that appeal was dismissed.
Therefore, we affirm the judgment.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
In March 2011, the City of Brea (the City) obtained a preliminary injunction against JMB Alternative, Inc. (JMB), a provider of medical marijuana, prohibiting JMB from selling marijuana within the City limits. When JMB continued its business operations, the City successfully obtained an order of contempt against JMB.
JMB then abandoned its business location, and signed a commercial lease with the Heinls for another property in the City. The City requested an order appointing a receiver. The trial court appointed Mark Adams as the receiver. Adams is the president and founder of California Receivership Group (CRG). Adams immediately shut down JMB's business and took possession of its assets and inventory.
The Heinls originally sued Adams only in his capacity as receiver, as well as CRG, for abuse of process, trespass, violation of Code of Civil Procedure section 567, and for declaratory relief. (All further statutory references are to the Code of Civil Procedure.) The gravamen of the Heinls' claims was that Adams had overstepped the bounds of his appointment by refusing to relinquish the property back to the Heinls and by attempting to obtain his receivership fees from them without grounds or justification. The second amended complaint, which is the operative complaint, names Adams in his official capacity as receiver and as an individual, along with CRG, and asserts claims for abuse of process and slander of title. The slander of title claim was based on a mechanic's lien recorded against the property by CRG in January 2012. Adams, in his official capacity, and CRG filed a cross-complaint against the Heinls asserting claims for receivership costs, nuisance, negligence, unjust enrichment, and judicial foreclosure.
A claim for violation of section 567 against American Indemnity was dismissed.
Adams argued in a demurrer to the first amended complaint, which named him in his individual as well as his official capacity, that all causes of action failed against him as an individual based on judicial immunity. The notice of ruling on the demurrer does not mention whether the court addressed this argument. Because the demurrer to one of the causes of action was overruled, it is fair to infer that the trial court did not consider the complaint against Adams as an individual improper per se.
Following a bench trial, the court issued a tentative statement of decision. The court found in favor of the Heinls on both causes of action against Adams and CRG. The court awarded the Heinls $100,000 in damages for attorney fees incurred, but denied all other claims for damages by the Heinls. The court found in favor of the Heinls and against Adams and CRG on all causes of action in the cross-complaint. The court also struck the mechanic's lien and ordered the return to the Heinls of their mechanic's lien bond.
After the trial, the Heinls sought the discharge of the receiver. A final order discharging the receiver and terminating the receivership was entered in April 2015. In relevant part, the order provided that JMB was liable to pay the receiver's fees and costs, and that the receiver was not to recover fees or costs from the property or the Heinls. The order also provided that the receiver was liable for the judgment on the Heinls' complaint.
Judgment on the Heinls' complaint was entered in February 2015. The Heinls conducted a judgment debtor's examination of Adams in March 2016. Adams provided information regarding CRG, but refused to provide information regarding himself personally.
Sua sponte, the trial court concluded that the judgment's failure to refer to Adams as an individual in addition to his official capacity was a clerical error that could be corrected under section 473, subdivision (d). The court noted that, at trial, it intended to enter judgment against Adams in both capacities; the statement of decision had been against Adams without distinguishing between his two different capacities; and Adams had objected to the statement of decision and those objections had been overruled. An amended judgment was filed in April 2016. A notice of appeal was filed by Adams as an individual only.
In May 2016, the Heinls filed a motion to amend the judgment to add as a judgment debtor California Receivership Group, a Public Benefit Corporation. The court granted the motion in June 2016. A notice of appeal was filed in July 2016 by California Receivership Group, a Public Benefit Corporation and by Adams, as an individual. That appeal, case No. G053779, was dismissed and is not part of this appeal.
DISCUSSION
I.
AMENDMENT TO ADD ADAMS AS AN INDIVIDUAL TO THE JUDGMENT
The court has the authority to correct clerical errors in a judgment pursuant to section 473, subdivision (d). "Clerical error, unlike judicial error, is correctable at any time. [Citations.] When a signed judgment does not reflect the express judicial intention of the court, the signing of the judgment involves clerical rather than judicial error." (In re Marriage of Kaufman (1980) 101 Cal.App.3d 147, 151.)
It is the intent of the court, not the significance of the change in the judgment, that determines whether an amendment is clerical or judicial. "'[S]ome corrections of clerical errors will substantially change the judgment. Also, all insubstantial changes to judgments do not necessarily involve the correction of clerical errors.'" (Ellis v. Ellis (2015) 235 Cal.App.4th 837, 842-843.)
The trial court's own findings on whether an error it is correcting is clerical or judicial are entitled to great weight. In Bastajian v. Brown (1941) 19 Cal.2d 209, 211, in amending a judgment, the court noted it had intended to pronounce judgment in favor of the defendants on all issues, but the judgment "'inadvertently and erroneously contained findings against said defendants and in favor of the plaintiff.'" (Id. at p. 211.)
Despite the fact the amended judgment changed the identity of the prevailing party, the appellate court concluded it was an amendment to correct a clerical error. "We are satisfied that the error of the court was not a judicial one. The judge's solemn declaration and finding in the order vacating the judgment was that the findings and judgment 'do not conform to and set forth the true judgment rendered by the court, in that the court intended to pronounce judgment . . . in favor of the defendants upon all the issues presented. . . .' That declaration cannot be wholly disregarded nor lightly brushed aside. It was a declaration of a fact that was concealed in the mind of the judge, and no one was in a better position than he to state his true intent. He may have failed to read the findings and judgment before signing them. He may have supposed they were in favor of defendants. His declaration may be construed to so indicate. Under such circumstances it is obvious that the findings and judgment would not in fact be the decision actually intended to be rendered by him, or that he in the exercise of judicial authority arrived at. . . . The declaration in the order vacating the judgment has a direct bearing on the existence of such error. [Citations.] The record is not lacking in evidentiary support of the judge's declaration." (Bastajian v. Brown, supra, 19 Cal.2d at pp. 214-215.)
In the present case, Adams was named in the second amended complaint both as an individual and in his official capacity. The statement of decision did not specify just one capacity in which the judgment would be entered against him. When the judgment was entered, it referred to Adams "in his officially capacity."
At the March 2016 hearing at which the court considered whether it intended to render judgment against Adams in both capacities, the following colloquy occurred among counsel and the court:
"[Heinls' counsel]: [The judgment] shall be against Mark Adams individually and in his official capacity and California Receivership Group, LLC.
"The Court: All right. For the record . . . I intend to make that change and the correction of a clerical mistake in the judgment. [¶] . . . [¶]
"[Adams' counsel]: . . . [¶] I would say that changing that is not some sort of clerical error just made inadvertently. What they are asking for, your honor, and what the court appears to be going along with is that we are taking a judgment that took ten-plus days of trial, almost a month of this court's time—it was briefed four times; that in the original tentative statement of decision, there was no discussion of capacity. [¶] So we filed an objection. [¶] Both sides filed motions, post statement of decision. [¶] The Court then added this specific language. [¶] What the plaintiffs are asking and what the court seems to be saying now is that, quote, 'in his officially capacity' does not mean 'in his official capacity.' What that actually means is individually and also in his official capacity.
"The Court: That is correct.
"[Adams' counsel]: . . . [¶] . . . [¶] We take extreme umbrage to that, your honor, because it changes the judgment that's now over a year and a half old.
"The Court: It doesn't change the intent of this statement of decision or the intent of the judgment. [¶] Mr. Adams is culpable, individually, and in his official capacity. [¶] . . . [¶]
"[Adams' counsel]: This now changes the judgment to the point that it is a materially different judgment. It was before a judgment against an LLC that was already
"The Court: No, sir, it was not. It was against . . . Mr. Adams, in his official capacity, individually, and in his official capacity. [¶] . . . [¶]
"[Adams' counsel]: Please indulge me on this. [¶] But the changing of this judgment is going to
"The Court: The correction.
"[Adams' counsel]: —materially alter the course and nature of this judgment. [¶] Whether or not that is a correction, it materially changes
"The Court: I'm saying it's a correction that I'm exercising under CCP 473(d)."
The trial court clearly expressed its intent to find Adams liable, both as an individual and in his official capacity. The failure of the judgment to so reflect was a clerical error, not a judicial error. The court did not err in amending the judgment to add Adams as an individual bound by the judgment.
Adams argues on appeal, as he did in the trial court, that the Heinls were only granted permission to sue him in his official capacity. The Heinls only needed permission of the court to sue Adams in his official capacity; they did not need to seek such permission to sue him individually. (See Chiesur v. Superior Court (1946) 76 Cal.App.2d 198, 201-202 [permission to sue receiver in his official capacity must be obtained from trial court when receiver is charged with improperly performing his duties; receiver can be liable as an individual when he acts in excess of his jurisdiction].)
II.
ATTORNEY FEES AS DAMAGES
The trial court awarded the Heinls the attorney fees they incurred prosecuting their slander of title and abuse of process claims against Adams. Adams argues the court erred in awarding the Heinls their attorney fees because there was no contractual or statutory basis to do so. (See § 1021; Trope v. Katz (1995) 11 Cal.4th 274, 278-279 [except as otherwise provided by contract or statute, each party in litigation must bear their own attorney fees].)
This issue is appealable by Adams in his individual capacity only. The general rule is that a correction of a clerical error in a judgment does not extend the time to appeal from the judgment. (Stone v. Regents of University of California (1999) 77 Cal.App.4th 736, 743-744.) However, an amendment to a judgment that changes the name of the losing party is a substantial modification of the judgment that restarts the appeal period. (CC-California Plaza Associates v. Paller & Goldstein (1996) 51 Cal.App.4th 1042, 1048-1049 [judgment against party that had granted its indemnity rights to another party; amendment naming correct plaintiff was substantive].) Adams, in his official capacity, and CRG, against whom the judgment was initially entered, did not timely appeal from the judgment, and may not do so now.
Under California law, "it is well established that attorney fees and litigation costs are recoverable as pecuniary damages in slander of title causes of action when, as expressed in subdivision (1)(b) of section 633 of the Restatement, litigation is necessary 'to remove the doubt cast' upon the vendibility or value of a plaintiff's property." (Sumner Hill Homeowners' Assn., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, 1030.) That the Heinls' did not recover any other damages is irrelevant: "[A]t least in cases such as this one where title was disparaged in a recorded instrument, attorney fees and costs necessary to clear title or remove the doubt cast on it by defendant's falsehood are, by themselves, sufficient pecuniary damages for purposes of a cause of action for slander of title." (Id. at p. 1031.)
"The pecuniary loss for which a publisher of injurious falsehood is subject to liability is restricted to [¶] (a) the pecuniary loss that results directly and immediately from the effect of the conduct of third persons, including impairment of vendibility or value caused by disparagement, and [¶] (b) the expense of measures reasonably necessary to counteract the publication, including litigation to remove the doubt cast upon vendibility or value by disparagement." (Rest.2d Torts, § 633, subd. (1).)
Adams does not address Sumner Hill or the Restatement Second of Torts in his appellate briefs. Rather, he argues that two other cases cited by the trial court do not support the award of attorney fees here. The trial court cited Spellens v. Spellens (1957) 49 Cal.2d 210, 231, which quoted the Restatement for the rather unassailable conclusion that "'"'[o]ne who uses legal process, whether criminal or civil, against another to accomplish a purpose for which it is not designed is liable to the other for the pecuniary loss caused thereby.'"'" The trial court noted that the Spellens court did not consider much less award attorney fees.
The trial court also cited Brandt v. Superior Court (1985) 37 Cal.3d 813, 817-818 for the proposition that attorney fees may be recoverable as damages in a case against an insurer arising from its unreasonable failure to pay benefits owed on a group disability insurance policy. The Brandt court held: "When an insurer's tortious conduct reasonably compels the insured to retain an attorney to obtain the benefits due under a policy, it follows that the insurer should be liable in a tort action for that expense." (Id. at p. 817.) The trial court's citations to Spellens and Brandt were for purposes of stating general legal principles; the court did not rely on those cases for its holding regarding the Heinls' attorney fees. The case the trial court did rely on—Sumner Hill—is nowhere addressed by Adams.
The trial court did not err in awarding the Heinls their attorney fees as damages against Adams in connection with the slander of title claim.
III.
AMENDMENT TO ADD CALIFORNIA RECEIVERSHIP GROUP, A PUBLIC BENEFIT CORPORATION,
AS A JUDGMENT DEBTOR
Adams argues that the trial court erred by amending the judgment on June 20, 2016 to add California Receivership Group, a Public Benefit Corporation, as a judgment debtor.
On July 15, 2016, Adams and California Receivership Group, a Public Benefit Corporation, filed a separate appeal from the June 20, 2016 amendment to the judgment. That appeal was dismissed pursuant to California Rules of Court, rule 8.140(b)(1), for failure to timely designate a record. Adams cannot argue in the present appeal regarding issues that were properly a part of a separate, dismissed appeal.
Pursuant to California Rules of Court, rule 8.252, on its own motion, this court took judicial notice of the appellate record in Adams v. Heinl, G053779. The parties were given an opportunity to object; none did. --------
DISPOSITION
The judgment is affirmed. Respondents to recover costs on appeal.
FYBEL, J. WE CONCUR: MOORE, ACTING P. J. ARONSON, J.