Opinion
C078797
08-24-2018
RAY RANCIATO, Plaintiff, Cross-defendant and Respondent, v. KEN MCKNIGHT et al., Defendants, Cross-complainants and Appellants.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 34201200131884CUBCGDS)
In this action arising from cleaning and storage of personal property after a residential fire, defendants and cross-complainants Ken and Judi McKnight appeal from a judgment insofar as it denies relief on their cross-complaint for conversion against plaintiff and cross-defendant Ray Ranciato dba American Fire Recovery (AFR). The McKnights contend the trial court erred in concluding that Civil Code section 3051 gave Ranciato the right, through a possessory lien, to hold all of appellants' property until services were paid in full. (Further statutory references are to the Civil Code unless otherwise indicated.) Appellants contend the statute does not apply in this case but, even if it does, Ranciato had an obligation to return a portion of the property when the McKnights paid a portion of the bill. We agree with the trial court.
The opening brief on appeal asserts Ken McKnight passed away after the notice of appeal was filed, and Judi McKnight is pursuing the appeal for herself and as his surviving spouse. Death does not abate a pending proceeding if the cause of action survives. (Code Civ. Proc., § 377.21.) While formalities for continuation do not appear to have been followed (id. at §§ 377.20-377.43), Ranciato raises no objection.
We affirm the judgment.
FACTS AND PROCEEDINGS
On September 5, 2011, the McKnights' home and its contents were damaged in a fire. They notified their two insurance carriers. The McKnights came into contact with Ranciato dba AFR -- a contractor in the business of cleaning and remediating smoke and water damage to personal property.
The McKnights signed an Emergency Service Authorization (ESA), "authoriz[ing] [AFR] to bill my homeowner's insurance company directly for services rendered to protect my personal household property from further damage caused by fire, water, mold, smoke, collapse, or theft" and "to work on my behalf in making decisions toward recovery of my household contents . . . [that] may be contrary to the wishes of my insurance company . . . ." The ESA did not specify an amount or an estimate but said, "In the event that my loss is not properly covered, I acknowledge that [AFR] will have to limit services to those determined to be most important and covered by policy limits."
Nevertheless, AFR performed services in excess of what the insurers ultimately agreed to pay.
AFR catalogued, boxed, transported, cleaned, re-boxed, and stored the McKnights' household items in hundreds of storage boxes. AFR presented its bill for $76,344 (later updated), listing cleaning, packing, and storage charges.
The insurers, who are not parties to this litigation, determined the bill was excessive and paid only part of it. AFR received a check for $10,170 and a check for $40,000. The McKnights assert the smaller check was for laundry and dry cleaning, and the larger check was for other personal property but AFR misallocated it to moving, storage, and other labor charges. At that point, Ranciato returned the McKnights' dry cleaning to them and allowed them to take a few specific items. Ranciato retained the rest of the property pending payment in full.
AFR filed a complaint against the McKnights for the remainder of the (updated) bill, which was over $40,000. The McKnights have not included that complaint in the record on appeal.
In December 2012, the McKnights filed their cross-complaint for conversion and other claims not at issue on appeal (fraud, breach of fiduciary duty, breach of contract, conversion, unfair business practices, and declaratory relief). The McKnights alleged AFR received "reasonable" payments but refused to return any of the property until paid in full.
Ranciato asserted its possession of the property was lawful because it has a statutory lien under section 3051.
The McKnights filed a motion to compel discovery because AFR would not provide lien amounts for each item of property so that the McKnights could determine whether the lien claimed on each item of property was reasonable. AFR opposed the motion, arguing it could claim a lien on the entire lot without itemizing the cost of services provided for each item. The law and motion judge ruled that AFR had to itemize (which the McKnights do not claim was binding on the trial court or the appellate court). But AFR was unable to comply, having followed industry custom of billing by the box rather than by item. According to AFR, it had 500 boxes and had performed work for the McKnights on over 7,200 pieces of personal property.
After an unreported bench trial, the trial court issued a tentative decision, to which the McKnights filed objections.
The court then issued its statement of decision, noting the insurers were not parties to the litigation and summarizing: "Defendants [McKnights] have aligned themselves with their insurance carriers in contending that portions of Plaintiff's billings are illegitimate. Conversely, Plaintiff contends that Defendants' aim is misplaced and that Defendants have been victimized by their own insurance carriers, who in turn enlisted the willing assistance of Plaintiff's competitors to call Plaintiff's billings into question."
The court concluded the ESA was not a contract, but AFR was entitled to recover under the common counts alleged in its complaint because AFR clearly supplied goods and performed services as to which the McKnights expected to and did benefit.
On appeal, the McKnights say it is "unfortunate" the trial court determined that AFR's charges were reasonable and owed by the McKnights, but they "understand that they must live with that factual determination on appeal."
With respect to the section 3051 lien, the statement of decision noted the McKnights contended the lien attaches only on an item-by-item basis, and AFR contended the lien attached to the entire "lot" of items until it received payment in full. The court concluded section 3051 makes no provision for partial remediation or cancellation of the lien, and there was no reason to construe the statute as providing for the return of some items in an undifferentiated lot when a partial payment has been made. The plain meaning of the statute was that a lien exists until the debt has been paid in full.
The trial court rejected the McKnights' further protests and entered judgment that Ranciato dba AFR shall recover from the McKnights $43,942.95, plus interest and costs.
DISCUSSION
I
Standard of Review
This appeal presents issues of statutory interpretation that are questions of law, which we review de novo. (Bruns v. E-Commerce Exchange, Inc. (2011) 51 Cal.4th 717, 724.)
II
Section 3051 Applies
No one disputes that a valid statutory lien under section 3051 is a defense to a conversion claim. (Plummer v. Day/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 45 [elements of conversion are the plaintiff's ownership or right to possession of the property, the defendant's conversion by wrongful act, and resulting damages].)
The McKnights make arguments that section 3051 does not apply at all, arguments which do not appear to have been made in the trial court. Ordinarily, an appellate court will not consider arguments not asserted in the trial court. (Perez v. Grajales (2008) 169 Cal.App.4th 580, 591.) We may consider new arguments if they present pure questions of law. (Dietz v. Meisenheimer & Herron (2009) 177 Cal.App.4th 771, 800.) To the extent appellants raise questions of law, they fail to show grounds for reversal.
"A lien is a charge imposed in some mode other than by a transfer in trust upon specific property by which it is made security for the performance of an act." (§ 2872.) A lien may be created by contract or by operation of law. (§ 2881.)
Section 3051 provides in part:
"Every person who, while lawfully in possession of an article of personal property, renders any service to the owner thereof, by labor or skill, employed for the protection, improvement, safekeeping, or carriage thereof, has a special lien thereon, dependent on possession, for the compensation, if any, which is due to him from the owner for such service; a person who makes, alters, or repairs any article of personal property, at the request of the owner, or legal possessor of the property, has a lien on the same for his reasonable charges for the balance due for such work done and materials furnished, and may retain possession of the same until the charges are paid; . . . ." (Italics added.)
The statute was enacted in 1872; the second clause was added in 1907. (Stats. 1907, ch. 66, § 1, p. 85.) The remainder of the run-on sentence speaks of foundry proprietors; plastic fabricators; laundry and drycleaning proprietors; and veterinary proprietors. A final paragraph excludes specified vehicles and vessels.
Although the statute refers to "an article" and "any article" of personal property (§ 3051), "the singular number includes the plural" (§ 14).
In their closing brief in the trial court, the McKnights argued section 3051 "if it applies at all" requires AFR to identify the lien amount claimed for each item of property. The only basis on which the McKnights argued the statute might not apply at all was that they found no published court opinion applying the statute where the party claiming the lien had possession of thousands of items and could not itemize the lien "per item."
However, such published court opinions do exist for application of section 3051 to possession of property not susceptible to individual itemization. Section 3051 has been applied, for example, where parties received, stored, cleaned, processed, and packed fruit for a charge per ton or per box. (People v. Photo (1941) 45 Cal.App.2d 345, 351-354; Golden State Orchards v. Harter (1928) 93 Cal.App. 390, 398.) Photo was a criminal prosecution for grand theft of 398 boxes of oranges from the possession of someone who claimed entitlement as a lienholder because she had contracted to wash the fruit for one dollar per box. (Id. at p. 354.) "If [she] had and maintained a valid lien on the fruit, her possessory right was to all the oranges and not merely those of a value to the extent of the lien." (Id. at pp. 351-352.) The appellate court concluded, however, that she had already extinguished the lien by allowing the fruit to be loaded onto the truck before the defendant took it. (Id. at pp. 354-355.) Golden State Orchards held a fruit packer who agreed to process and pack fruit for $30 per ton was entitled to a lien on the fruit and possession thereof until payment of charges. (Id. at p. 399.) Additionally, Doot v. Skirving Warehouse Co. (1927) 202 Cal. 75, held a laborer employed by the occupant of land to harvest (thresh, sack, and deliver) a crop of grain had a section 3051 lien upon the harvested grain in his possession. (Id. at pp. 78-79.)
Accordingly, insofar as the McKnights interpret section 3051 as requiring that the lienholder identify an amount owed for each item rather than the entire lot, we disagree and do so without having to rely only on the dictum cited to the trial court and challenged by the McKnights. (Golden State Portland Cement Co. v. Ward Motor Car Co. (1921) 185 Cal. 402, 404 ["It may possibly be that under some circumstances where work is done on several different articles for the same person under the same arrangement, the different articles will be considered as but one as between the parties, so that a single lien for all the work covering all the articles will arise"].)
The McKnights make arguments for the first time on appeal distinguishing between the first clause of section 3051 (protect, improve, store, transport property) and the second clause (make, alter, or repair property). The two clauses are separated by a semicolon. A semicolon is a punctuation mark "used chiefly in a coordinating function between major sentence elements (as independent clauses of a compound sentence)." (Merriam-Webster's Collegiate Dictionary (11th ed. 2006) p. 1130.)
In interpreting a statute, we begin with the statutory language, construed in accordance with its usual, ordinary meaning, and, in the absence of ambiguity, the plain meaning controls. (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103; People v. Snook (1997) 16 Cal.4th 1210, 1215.)
Many of the McKnights' arguments turn on their unsupported assumption that this case involves only the first clause of section 3051 (protection, improvement, safekeeping, or transporting). They then try to exploit perceived differences between the first clause and the second clause (make, alter, or repair property). For example, they argue that, because section 3051 expressly allows the lienholder to "retain possession . . . until the charges are paid" only in the second clause of the statute (make, alter, or repair property), a party who provides services under the first clause is not entitled to retain possession until charges are paid. They argue that, because the first clause specifies "special lien," and because the definition of special lien refers to performance of a "particular act" (§ 2875 ["special lien is one which the holder thereof can enforce only as security for the performance of a particular act or obligation, and of such obligations as may be incidental thereto"]) and because AFR could not show a direct correlation between a particular item of property and a particular act, then no lien was created by operation of law. They trace amendments to section 3051 over the years and try to impute legislative intent on that basis alone, without providing any cognizable legislative history.
While these arguments are dubious on their merits, we need not address them, because the McKnights fail to show this case involves only the first clause of section 3051. They did not raise or litigate this factual issue in the trial court. The trial court cited the second clause (repairs) in its statement of decision as a basis for finding a lien. On appeal, the McKnights fail to show error on this point but instead maintain that AFR does not claim it made "repairs" -- a point disputed by AFR in its respondent's brief that says the "repairs" clause is directly pertinent to this case. It seems reasonable to conclude that both clauses applied ("improvement" in the first clause and "repair" in the second clause), since the property was damaged by fire and water, and AFR took on the task of remediating the fire and water damage. The McKnights argue that, to the extent the cleaning of items by AFR/Ranciato could be construed as "repairs," the labor charges are for "various, nebulous and estimated 'boxes,' " and not for any particular item of personal property. But they fail to show that itemization was required.
On appeal, the McKnights ask how a lien could arise by operation of law when they were not told there would be a lien or exactly what AFR was going to do with the property or what services may have been directly related to any specific item of property. However, the McKnights offer no supporting authority for such prerequisites. In the trial court, the McKnights alleged AFR's invocation of section 3051 was a "sham" because another statute (§ 3051a) required AFR to give actual notice of a potential lien before doing any work or providing any services. However, section 3051a applies only when the service is performed "at the request of any person other than the holder of the legal title." In such case, the party providing the service must give notice to the holder of legal title to the property, if known. (§ 3051a.) Section 3051a does not apply here, because the McKnights were the legal title holders and authorized AFR to do the work on their behalf.
We conclude Ranciato/AFR has a valid section 3051 lien.
III
Partial Payment
The McKnights argue their partial payment of 60 percent of the charges entitled them to immediate return of 60 percent of the property. However, they cite no supporting authority.
They argue the trial court improperly relied on dictum in Golden State Portland Cement Company v. Ward Motorcar Company, supra, 185 Cal. 402, to conclude that the lien attached to the entire lot. The cited case did not involve a lot but rather a single vehicle repaired by a mechanic. When the plaintiff/owner sought to pay his bill and get his car, the mechanic insisted he could hold the car until he was also paid for work he did on other vehicles for the vendor who had sold the car to the plaintiff. (Id. at p. 403.) The Supreme Court said the defendant had a section 3051 lien for doing repairs "at the request of the owner," but the lien extended only to the work done on the plaintiff's car and was discharged by the plaintiff's payment of his bill. (Id. at pp. 404-405.) The Supreme Court then said in dictum that it may be possible for multiple articles to be considered as one where work is done on multiple articles for the same person under the same arrangement. (Id. at p. 404.)
The McKnights complain this dictum was "the most significant legal authority" for the trial court's determination that all of their property was part of an undifferentiated lot that did not have to be divided if partial payment was made. We disagree. The trial court relied on the plain language of the statute, section 3051, which says nothing about partial discharge or partial return of items and which instead broadly allows lienholders to retain possession until charges are paid.
In any event, the McKnights offer no legal authority demonstrating trial court error. "[T]he trial court's judgment is presumed to be correct, and the appellant has the burden to prove otherwise by presenting legal authority on each point made and factual analysis, supported by appropriate citations to the material facts in the record. . . ." (Keyes v. Bowen (2010) 189 Cal.App.4th 647, 655-656.)
The McKnights maintain it was easy to distinguish what was owed for cleaning various categories of property, because AFR's bills broke it down, e.g. $667 to clean electronics, $117 to clean appliances, and $3,540 to clean "hard furniture." The McKnights argue these amounts had to be covered by the $40,000 payment that AFR already received.
However, AFR had a lien not only for its repair services, but also for its services in protecting, transporting, and storing the property under section 3051. Were the McKnights to prevail, AFR forecasts a "logistical nightmare[]" of lienholders and debtors fighting over the value of each of numerous items and which items should be returned for each partial payment.
We conclude the McKnights have failed to meet their burden on appeal to show grounds for reversal of the judgment.
DISPOSITION
The judgment is affirmed. Ranciato dba American Fire Recovery shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a).)
HULL, Acting P. J. We concur: MAURO, J. MURRAY, J.