Opinion
D071753
05-21-2018
ENRIQUE MEDINA, Plaintiff and Respondent, v. GHANI KOTHAWALA et al., Defendants and Appellants.
Raymond D. Mortier for Defendants and Appellants. Shoecraft Burton and Devin T. Shoecraft for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2015-00030173-CU-FR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Timothy B. Taylor, Judge. Affirmed. Raymond D. Mortier for Defendants and Appellants. Shoecraft Burton and Devin T. Shoecraft for Plaintiff and Respondent.
Ghani Kothawala, a used car dealer, defrauded Enrique Medina into buying a 2003 vehicle with an odometer that had been rolled back from 267,000 to 88,000 miles. After a bench trial, the court entered judgment against Kothawala and his corporate entity, Dormouse Enterprises, Inc., (collectively Kothawala) for $14,536.80 plus costs and attorney fees.
Kothawala appeals from the judgment, asserting the court (1) was biased against him, (2) ignored written evidence, and (3) erroneously imposed personal liability for the corporate entity's conduct. There is no reporter's transcript and no settled or agreed statement. Kothawala has not transmitted to this court any trial exhibits, and his brief cites no legal authorities and contains no citations to facts in the record. We affirm the judgment. We also grant Medina's motion for sanctions because this appeal is frivolous.
All references to Kothawala's brief are to the opening brief; he did not file a reply.
FACTUAL AND PROCEDURAL BACKGROUND
The facts are derived from the statement of decision because this is the only source of facts in the record. In September 2013 Kothawala sold used cars under the fictitious name World Auto Sales. Medina was interested in purchasing a used 2003 Honda Pilot. Kothawala told Medina the vehicle had "low mileage"; the odometer showed 88,062 miles. Kothawala advertised the vehicle on his Web site as having that mileage. Although Kothawala knew that the odometer had been rolled back, he did not tell Medina that the odometer was inaccurate.
The court's tentative decision states it will be the statement of decision unless either party requested a statement of decision, and neither party did so. (See Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 181, 185, 187-188 (Foust) [using statement of decision for facts when no reporter's transcript].)
Although Kothawala denied making false representations about the vehicle's mileage, the court did not believe his trial testimony.
Medina paid Kothawala $9,995 for the vehicle. With financing, the actual cost was $14,000. When Medina sought to trade in the vehicle, a Honda dealer informed him that the odometer had been rolled back from over 267,000 miles. At retail, the vehicle is worth no more than $5,000.
A federal regulation provides that a person selling a vehicle over 10 years old need not disclose the odometer mileage. At trial, Kothawala argued this meant he was free to "say whatever [he] want[s] about mileage." The trial court rejected this absurd argument, noting that although Kothawala may have had no duty to say anything about the mileage, the federal regulation did not immunize fraud.
Title 49 of the Code of Federal Regulations states in relevant part: "(a) A transferor or a lessee of any of the following motor vehicles need not disclose the vehicle's odometer mileage: [¶] . . . [¶] (3) A vehicle that was manufactured in a model year beginning at least ten years before January 1 of the calendar year in which the transfer occurs." (49 C.F.R. § 580.17(a)(3).)
The court awarded Medina $10,401.80 in compensatory damages plus $4,000 punitive damages. The court also awarded Medina $3,851.90 in costs and $55,095 in attorney fees.
Hudson Insurance Company and GEK Enterprises, LLC, are also judgment debtors; however, they are not parties to this appeal.
DISCUSSION
I. NO JUDICIAL BIAS
Kothawala contends the judgment should be reversed because during closing arguments, the court stated it had "already made up its mind" against him when the case began. This argument fails for at least two reasons. First, Kothawala cites nothing in the record showing that the court made any such statement or exhibited bias in any other manner. The trial was not reported. In Kothawala's notice designating the record on appeal, the box is checked stating, "I understand that without a record of the oral proceedings in the superior court, the Court of Appeal will not be able to consider what was said during those proceedings in determining whether an error was made in the superior court proceedings." Kothawala also elected to not obtain a substitute for a reporter's transcript, such as an agreed statement under California Rules of Court, rule 8.134 or a settled statement under rule 8.137.
References to rules are to the California Rules of Court.
For a discussion of these alternatives to a reporter's transcript, see generally Randall v. Mousseau (2016) 2 Cal.App.5th 929, 933-934; Eisenberg, California Practice Guide: Civil Appeals and Writs (The Rutter Group 2017) ¶¶ 4:227-4:258, pp. 4-58 to 4-64.
The Court of Appeal "'will not consider facts having no support in the record; and will disregard statements of such facts set forth in a brief.'" (Mitchell v. City of Indio (1987) 196 Cal.App.3d 881, 890.) "In numerous situations, appellate courts have refused to reach the merits of an appellant's claims because no reporter's transcript of a pertinent proceeding or a suitable substitute was provided. [Citations.] [¶] The reason for this follows from the cardinal rule of appellate review that a judgment or order of the trial court is presumed correct and prejudicial error must be affirmatively shown. [Citation.] 'In the absence of a contrary showing in the record, all presumptions in favor of the trial court's action will be made by the appellate court. "[I]f any matters could have been presented to the court below which would have authorized the order complained of, it will be presumed that such matters were presented."' [Citation.] . . . '"A necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed."' [Citation.] 'Consequently, [appellant] has the burden of providing an adequate record. [Citation.] Failure to provide an adequate record on an issue requires that the issue be resolved against [appellant].'" (Foust, supra, 198 Cal.App.4th at pp. 186-187.)
Without a reporter's transcript or substitute showing the court was biased against Kothawala, we cannot review his contention. By failing to provide an adequate record, Kothawala cannot meet his burden to show error and we must resolve the issue against him. (Hotels Nevada, LLC v. L.A. Pacific Center, Inc. (2012) 203 Cal.App.4th 336, 348.) Kothawala, who was represented by counsel at trial and is represented by the same lawyer here, was self-represented when designating the record for appeal. However, that status does not exempt him from the rules of appellate procedure or relieve him of his burden on appeal. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984-985.)
Moreover, Kothawala's contention also fails because his brief has no citations to any legal authority. (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 154.) Points asserted without "'adequate . . . legal analysis'" are deemed forfeited. (Singh v. Lipworth (2014) 227 Cal.App.4th 813, 817 (Singh).)
II. WITHOUT A REPORTER'S TRANSCRIPT, KOTHAWALA CANNOT CHALLENGE
THE SUFFICIENCY OF THE EVIDENCE
Kothawala makes two arguments challenging the sufficiency of the evidence. First, he contends the judgment should be reversed because the court "did not properly consider the written evidence before it." Second, he contends the court imposed personal liability "although proper documentation existed to show the business was operated under a corporate entity." In a related argument, he also complains that the "defendants [sic] attorney used unfair tactics to defame the defendant by bringing up unrelated and irrelevant evidence to misdirect the court."
Kothawala's failure to have the trial reported, together with his failure to designate an adequate substitute for a reporter's transcript is fatal to these contentions. Where "no reporter's transcript has been provided and no error is apparent on the face of the existing appellate record, the judgment must be conclusively presumed correct as to all evidentiary matters. To put it another way, it is presumed that the unreported trial testimony would demonstrate the absence of error. [Citation.] The effect of this rule is that an appellant who attacks a judgment but supplies no reporter's transcript will be precluded from raising an argument as to the sufficiency of the evidence." (Estate of Fain (1999) 75 Cal.App.4th 973, 992.)
Moreover, although the clerk's transcript indicates certain exhibits were offered and received in evidence, the exhibits were returned to counsel after trial and Kothawala has not transmitted any of them to this court. Where exhibits are not provided, "we will not presume they would undermine the judgment." (See Western Aggregates, Inc. v. County of Yuba (2002) 101 Cal.App.4th 278, 291.)
Moreover, Kothawala's assertions also fail because he essentially asks us to reweigh the evidence and make credibility determinations different from those of the trial court. However, when reviewing a judgment, the appellate court does not reweigh the evidence, make its own factual inferences that contradict those of the trial court, nor second guess the trial court's credibility determinations. (Citizens Business Bank v. Gevorgian (2013) 218 Cal.App.4th 602, 613.)
Last, Kothawala cites no legal authority and presents no legal analysis to support his contentions and, therefore, the argument is forfeited. (Singh, supra, 227 Cal.App.4th at p. 817.)
III. SANCTIONS
Medina has moved for sanctions for filing a frivolous appeal. Kothawala opposes the motion. We ordered that the motion would be considered with the merits of the appeal and notified Kothawala and his attorney that we were considering imposing sanctions. (Rule 8.276(c).)
A. Legal Standards
Code of Civil Procedure section 907 provides: "When it appears to the reviewing court that the appeal was frivolous or taken solely for delay, it may add to the costs on appeal such damages as may be just." Sanctions may be imposed when an appeal is prosecuted for an improper motive, such as to harass the respondent or delay finality, or when the appeal indisputably has no merit—when any reasonable attorney would agree that the appeal is totally and completely without merit. (Kleveland v. Siegel & Wolensky, LLP (2013) 215 Cal.App.4th 534, 556 (Kleveland); see also rule 8.276(a)(1).)
"In determining whether an appeal indisputably has no merit, California cases have applied both subjective and objective standards. The subjective standard looks to the motives of the appealing party and his or her attorney, while the objective standard looks at the merits of the appeal from a reasonable person's perspective." (Kleveland, supra, 215 Cal.App.4th at p. 556.) Whether the party or attorney acted in an honest belief there were grounds for appeal is irrelevant "if any reasonable person would agree the grounds for appeal were totally and completely devoid of merit." (Id. at pp. 556-557.) The objective and subjective standards "are often used together, with one providing evidence of the other. Thus, the total lack of merit of an appeal is viewed as evidence that appellant must have intended it only for delay." (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 649 (Flaherty).)
In determining whether an appeal is frivolous, courts recognize that counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will prevail on appeal. (Flaherty, supra, 31 Cal.3d at p. 650.) "An appeal that is simply without merit is not by definition frivolous and should not incur sanctions." (Ibid., italics omitted.)
B. Analysis
This appeal is so utterly devoid of merit as to be frivolous. "When practicing appellate law, there are at least three immutable rules: first, take great care to prepare a complete record; second, if it is not in the record, it did not happen; and third, when in doubt, refer back to rules one and two." (Protect Our Water v. County of Merced (2003) 110 Cal.App.4th 362, 364.) Here, because of the lack of an adequate record for demonstrating prejudicial error, a reasonable attorney could not possibly have expected this appeal to succeed. (Kunza v. Gaskell (1979) 91 Cal.App.3d 201, 211 [sanctions imposed where appellant "could not conceivably have anticipated a successful appeal"].) For example, Kothawala asserts the trial judge "expressed a bias at the outset of the case." But with no record of what the trial judge said or did during trial, no reasonable attorney could have expected this argument to ever succeed on appeal. Kothawala also challenges the sufficiency of the evidence of fraud and for imposing personal liability. However, with no reporter's transcript, no agreed or settled statement, and no trial exhibits before us, an appeal challenging the sufficiency of the evidence indisputably lacks merit.
Moreover, not only are factual assertions in Kothawala's brief unsupported by the record, but he also misrepresents key facts. For example, Kothawala's brief states that Medina's wife admitted signing documents that "clearly stated" the vehicle's odometer exceeded mechanical limits and was "mileage exempt." However, the statement of decision states Medina's wife testified that the "exceeds mechanical limits" box was not checked on the disclosure document. She also testified that the handwritten words "mileage exempt" were not on the form when Medina signed it. The trial court found this testimony to be "very solid and credible." Every reasonable attorney would know that the appellate court does not second guess the trier of fact's credibility determinations. (Estate of Teel (1944) 25 Cal.2d 520, 526 [trier of fact is sole judge of the credibility and weight of the evidence].) Kothawala's brief also asserts that he told Medina that the odometer was inaccurate. However, the court stated it disbelieved Kothawala's testimony on that specific point, and on all other significant issues too, stating, "Kothawala's [trial] testimony was not credible on most of the critical points." (Kleveland, supra, 215 Cal.App.4th at p. 557 [imposing sanctions where counsel "brazenly misrepresented the record and/or obscured facts"].)
In addition to distorting the factual basis for the judgment, Kothawala's brief also cites no legal authorities. None. Not a single case, statute, or secondary source. No reasonable attorney could believe that an opening brief citing no facts from the record and no law could possibly succeed. The essence of this appeal is that based on Kothawala's self-serving recital of evidence favorable to himself (for which there are no record cites), this court should ignore all the contrary evidence, disagree with the trial court's credibility determinations, and find in his favor. We could do so only by violating the most fundamental principles of appellate review.
The court in Foust, supra, 198 Cal.App.4th 181 confronted a similar appeal taken on a grossly inadequate record. There, the appellant proceeded on appeal without a reporter's transcript and with only a few documents from the clerk's transcript. (Id. at pp. 188-189.) The court concluded that record "failed to present a colorable claim that the trial court erred." (Id. at p. 188.) The court further concluded that this lack of objective merit was evidence of an improper purpose—harassment. "[T]he fact that an appeal is objectively without any merit is often an indication that the appellant filed it for an improper purpose." (Id. at p. 189.)
Opposing sanctions, Kothawala contends the appeal is not frivolous because he did the best he could with "the evidence available . . . since there was no transcript of the proceedings." Of course, there is no record of trial because Kothawala did not procure or designate one. Thus, his assertion is reminiscent of the story of the man who, having killed his father and mother, throws himself on the mercy of the court because he is an orphan.
Kothawala's lawyer also asserts that sanctions are unwarranted because he honestly believes the appeal has merit and he filed the brief "in good faith." However, even assuming these assertions are true, the test is not whether Kothawala's lawyer thinks the issues are arguable, but instead whether any reasonable attorney would believe that this appeal is totally and completely devoid of merit. (Flaherty, supra, 31 Cal.3d at p. 649.)
Sanctions are also warranted based on Kothawala's attorney's conduct with respect to oral argument in this court. On February 26, 2018, this court notified counsel that the case would be heard on April 10, 2018 at 9 a.m. However, with no advance notice to the court nor opposing counsel, when the case was called on April 10, Kothawala's attorney of record, Raymond David Mortier, did not appear. Instead, attorney Russell L. Bolin came forward, stating he was making a "special appearance" for Mortier, who was in Thailand, and requested one minute for oral argument. Because neither Mortier nor Bolin had filed an association of counsel, we continued oral argument to the afternoon session to enable an association of counsel form to be signed and filed.
A "special appearance" is one for the limited purpose of challenging an assertion of personal jurisdiction. However, we employ it here in its colloquial usage to denote an appearance at a hearing by one attorney at the request and in the place of the attorney of record. (See Streit v. Covington & Crowe (2000) 82 Cal.App.4th 441, 444, fn. 2 (Streit).)
Upon returning to court that afternoon, Bolin represented that he had no written association of counsel; however, he stated that Mortier had orally given him authorization to associate into the appeal. Determining Bolin could not represent appellants under these circumstances, on our own motion we continued oral argument to the May 2018 calendar.
When a party is represented by an attorney of record, no other attorney has authority to appear on the party's behalf unless the attorney making the appearance is associated with the attorney of record. (Streit, supra, 82 Cal.App.4th at p. 445.) The fact that an association is limited to a single court appearance is a distinction only of degree, not of kind. (Id. at p. 445.) Indeed, by making a "special appearance," an attorney enters into an attorney-client relationship with the litigant whose interests he or she represents. (Id. at p. 446.) Associating into a case is serious business, and we expect it to be undertaken in writing.
See Sycamore Ridge Apartments, LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1407 ("By associating into the case as cocounsel, the . . . [attorneys] became the proponents of all of [client's] claims . . . .")
Even in the trial court, "a formal association of counsel is technically required" before counsel may make a special appearance. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (2017) § 9:371.1, p. 9(I)-168.) The practice guide warns, "Some courts are strict in enforcing this requirement . . . ." (Ibid.)
Mortier's failure to timely file an association of counsel or seek a continuance of oral argument in a timely manner had at least two impacts, beyond the obvious inconvenience to this court. First, it resulted in further unnecessary delay in affording Medina the finality he is entitled to. Second, it required Medina's attorney to waste his time and his client's money in appearing for an oral argument that never happened—twice on the same day.
"Having concluded sanctions are warranted, we must determine the appropriate amount." (Kleveland, supra, 215 Cal.App.4th at p. 558.) Relevant factors include "'"the amount of the respondent's attorney fees on appeal; the amount of the judgment against appellant; the degree of objective frivolousness and delay; and the need [to discourage] like conduct in the future."'" (Ibid.)
Medina's attorney filed a declaration, together with supporting invoices, stating his client incurred $14,712 in attorney fees in defending this appeal and in bringing the sanctions motion. Kothawala asserts the claimed fees are "outrageous", but he does not specifically challenge the reasonableness of any particular billing. Although under these circumstances we could award the entire amount, we have independently reviewed the invoices and find that $378 in paralegal charges are unwarranted, which we will deduct from the $14,712 sought.
Kothawala's opposition to the sanctions motion does not assert that attorney fees incurred in bringing the motion cannot be awarded; therefore, we assume without deciding that such fees may be included.
We deduct the following (all dates are in 2017): 4/7, review notice of completion of the record on appeal ($18); 4/13 review register of actions ($18); 4/19, review register of actions ($18); 4/20, review and manage change of address and notice of entry of judgment with attorney fees ($27); 5/15, review time extension ($60); 7/20, review notice of default ($60); 8/8, review register of actions ($18); 9/22, review notice of default ($18); 10/18, review register of actions ($18); 11/28, "miscellaneous" ($45); 12/8, review and complete oral argument request ($60); 12/12, review endorsed request for oral argument ($18).
Additionally, Medina incurred $600 in attorney fees attending the two oral argument sessions on April 10, 2018. That $600 is also properly imposed, but only against Mortier, who alone bears responsibility for making himself unavailable for oral argument and not properly associating in other counsel, making arrangements to appear by telephone, or requesting a continuance in advance of the hearing date.
Mortier contends he should not be sanctioned because (1) he was "out of the [c]ountry" and, therefore, unable to sign an association of counsel "in time"; and (2) he did not know that his "approval in writing was necessary" to associate counsel for oral argument. We reject these contentions because Mortier does not explain why, before leaving the country, he failed to file the appropriate association of counsel document, seek a continuance of oral argument, or make arrangements to appear by telephone.
"'An appeal taken despite the fact that no reasonable attorney could have thought it meritorious ties up judicial resources and diverts attention from the already burdensome volume of work at the appellate courts.'" (In re Reno (2012) 55 Cal.4th 428, 513.) In prosecuting this frivolous appeal, Kothawala and his attorney have also harmed the appellate system and taxpayers. (Kleveland, supra, 215 Cal.App.4th at p. 559.) Accordingly, "'an appropriate measure of sanctions should also compensate the government for its expense in processing [this] frivolous appeal.'" (Ibid.)
As of 2008 the cost of processing an appeal that results in an opinion by the court was estimated to be $8,500. (Kleveland, supra, 215 Cal.App.4th at p. 560.) Although costs now are undoubtedly higher than they were 10 years ago, this appeal is considerably less complex than the norm. We find that 20 percent of $8,500, which is $1,700, is reasonable under the totality of the circumstances.
We also deem it appropriate to hold appellants' attorney, Raymond D. Mortier, jointly and severally liable for paying these sanctions. (In re Marriage of Schnabel (1994) 30 Cal.App.4th 747, 756 [sanctions may be imposed "against a lawyer who, because the appeal was so totally lacking in merit, had a professional obligation not to pursue it"].)
DISPOSITION
The judgment is affirmed. Additionally, this court awards sanctions jointly and severally against attorney Raymond D. Mortier, Ghani Kothawala, and Dormouse Enterprises, Inc., in the amount of $14,334 payable to Medina, and $1,700 payable to the clerk of this court. The court also awards additional sanctions against Mortier alone in the amount of $600 (such that the total amount of sanctions against Mortier is $16,634 [$14,334 + $1,700 + $600]). All sanctions are ordered to be paid no later than 30 days after the remittitur is filed. The clerk of this court is directed to deposit the $1,700 in the general fund. (See Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 196.)
Mortier and the clerk of this court are each directed to send a copy of this opinion to the State Bar of California upon issuance of the remittitur. (Bus. & Prof. Code, §§ 6086.7, subd. (a)(3), 6068, subd. (o)(3).)
Medina shall recover his costs on appeal.
NARES, J. WE CONCUR: BENKE, Acting P. J. AARON, J.