Burlison v. Parthenia Park Villas, 2011 WL 3251384 (Cal.App. 2 Dist., Unpublished, Aug. 1, 2011).
Not Officially Published (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115). California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts.
Court of Appeal, Second District, Division 4, California.
Robert C. BURLISON, Jr., Plaintiff and Appellant,
PARTHENIA PARK VILLAS, Defendant;
Phoenix Homeowners Association, Objector and Respondent.
(Los Angeles County Super. Ct. No. PC013745).
Aug. 1, 2011.
APPEAL from an order of the Superior Court of Los Angeles County, Margaret L. Oldendorf, Judge. Affirmed.
Burlison Law Group and Robert C. Burlison, Jr., for Plaintiff and Appellant.
Swedelson & Gottlieb, David C. Swedelson, and Joan E. Lewis–Heard for Objector and Respondent.
*1 Appellant Robert C. Burlison, Jr. (Burlison) appeals the denial of his motion to amend a 2001 default judgment against Parthenia Park Villas Homeowners Association (Parthenia) to add respondent Phoenix Homeowners Association (Phoenix) as a judgment creditor. We conclude that the trial court properly denied the motion, and thus we affirm.
FACTUAL AND PROCEDURAL HISTORY
I. Parthenia's Bankruptcy and Cardet's Default Judgment
Sandra Cardet (Cardet) is a licensed contractor. Following the 1994 Northridge earthquake, Parthenia, an association of condominium owners, hired Cardet to repair the Parthenia Park Villas condominium project located at 21040 Parthenia Street, Canoga Park, California (the condominium project). Parthenia failed to pay Cardet for much of her work, owing her $497,000 at the completion of the project.
On June 7, 1996, Cardet filed a mechanic's lien against the condominium project, and on September 5, 1996, she sued Parthenia to recover the unpaid debt and to foreclose on the mechanic's lien. On September 18, 1996, she retained Burlison to represent her in that action.
On September 1, 1999, the individual homeowners who had been members of Parthenia formed respondent Phoenix. They filed and recorded a "First Amended and Restated Declaration of Covenants, Conditions and Restrictions for The Phoenix Homeowners Association" on October 8, 1999.
On or about December 10, 1999, Parthenia filed a voluntary chapter 7 petition for bankruptcy with the United States Bankruptcy Court. Parthenia's bankruptcy filing stated that it had liabilities of $486,213, including a $253,000 claim by Sandra Cardet Design & Construction Services, and assets of $5,040, including $4,951 in unpaid delinquent homeowner's dues. It identified Cardet's suit against Parthenia and noted that the suit remained pending. Cardet was served with the bankruptcy filing through her attorney, Burlison. On April 26, 2000, Parthenia's bankruptcy was closed.
On January 12, 2001, the court entered a default judgment against Parthenia and in favor of Cardet for the principal sum of $497,000, plus prejudgment interest, for a total of $797,532.43. It also awarded Cardet the right to foreclose on her mechanic's lien against the property.
II. The First Motion to Amend the Judgment
In 2001, Cardet moved to amend the judgment to include Phoenix as a judgment debtor. The court denied that motion on December 3, 2001, finding in part as follows.
"[A]lthough it is not disputed that Phoenix is the new HOA [homeowners association] formed by the individual homeowners who once went by the name Parthenia, [plaintiff] has no evidence that Phoenix is the alter ego of Parthenia or that Phoenix controlled the litigation. [Citation.] [Plaintiff] admits she is not even aware of the actual name of the new corporation. Moreover, McClellan [v. Northridge Park Townhome Owners Assn. (2001) 89 Cal.App.4th 746 ( McClellan ) ] cited by [moving party] is distinguishable.... In this case ... Parthenia sought bankruptcy prior to the formation of the new HOA. Further, the Report of Trustee in Ch. 7 No Asset Case ( [plaintiff's] Ex. B) establishes that Parthenia had no assets to transfer or to misuse to create a unity of interest between the corporations. Upon dissolution of Parthenia, the new HOA was formed in order to comply with the Civil Code. (Thus, this case is also distinguishable from Blank [v. Olcovich Shoe Corp. (1937) 20 Cal.App.2d 456], cited by McClellan, wherein the old company transferred its assets to the new company during the bankruptcy proceedings.)
*2 "As argued by [responding party], it would be impossible for a HOA to relieve itself of its debts if the new HOA, which is required to exist by law, was always considered the 'successor in interest' despite the existence of a bankruptcy proceeding which extinguishes the former HOA's debts.
"Additionally, the mechanic's lien is invalid and unenforceable [because] Parthenia did not own the real estate or the improvements. At the hearing on 10/4, [plaintiff's attorney] represented to the court that the former Parthenia HOA owned the building at 21040 Parthenia and the owners merely owned the air space within their units. [Plaintiff ] has provided no evidence to support this position. This contention is legally and factually incorrect. [Plaintiff's] mechanic's lien states that Parthenia is the owner of the property. As this is not correct, the lien is worthless. [Civil Code] 1351(f) and sec. 1.14 of Parthenia's CC & Rs define condominium as consisting of 'an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit....' Further, the CC & Rs provide that '[t]he Owner of each Unit shall own, as a tenant-in-common with all other Owners of Units, an undivided Percentage Interest in the Common Area, the quantum of which with respect to each Unit is more particularly set forth in the Percentage Interest Schedule[ ] attached hereto as Exhibit "A." ' (See Ex. 1.) Further, Ex. 2 is a copy of the recorded deed for Unit 17 of the Phoenix that shows the property and all improvements are owned by the owners and not the HOA. Accordingly, Parthenia did not own the real property nor did it have an ownership interest in the improvements. It was merely a corporation founded by the developer to manage this common interest development.
"Even if the mechanic's lien were valid, enforcing it against Phoenix would be improper because Parthenia had no assets at the time of the bankruptcy. Parthenia filed a Ch. 7 bankruptcy and the Trustee issued a 'no asset report.' [Plaintiff] asks this Court to believe that the Trustee abandoned assets, including the building. However, there is no proof of this. [Plaintiff] did not provide a deed showing a transfer of ownership and the Court must assume one does not exist. As confirmed by the Trustee's report, Parthenia had no assets at the time of the bankruptcy."
Cardet did not seek reconsideration or appeal the denial of the motion to amend the judgment.
III. Cardet's Malpractice Action Against Burlison
In 2002, Cardet retained new counsel, and on August 2, 2004, she filed a malpractice action against Burlison's law firm, Burlison & Luostari, asserting that the mechanic's lien against Parthenia had not been properly recorded or enforced. She obtained a judgment against Burlison, which was affirmed on appeal. ( Cardet v. Burlison (Dec. 17, 2008, B198625) [nonpub. opn.].)
Following entry of judgment, Cardet assigned to Burlison the judgment against Parthenia.
IV. The Second Motion to Amend the Judgment
*3 On April 16, 2010, Burlison, as Cardet's assignee, filed a second motion to amend the judgment to add Phoenix as a judgment debtor. In that motion, Burlison contended that Phoenix was Parthenia's successor-in-interest, which had received Parthenia's "most substantial asset," the right to Parthenia's member dues, without compensation. Further, he urged that Phoenix "has the exact same assets, membership, Board of Directors, rules, and business functions as Parthenia." And, he contended that Phoenix effected a de facto merger with Parthenia. Accordingly, he asked that Phoenix be held liable for Parthenia's obligations.
Phoenix opposed the motion. It contended: (1) Burlison was improperly seeking reconsideration of the earlier motion to amend without presenting any new evidence or new facts; (2) the present case is distinguishable from McClellan, because in that case the homeowners association had not received a bankruptcy discharge; and (3) Phoenix had not been properly served with the motion.
The trial court denied the motion to amend on May 27, 2010, finding as follows.
"This is a case that had previously been handled by a prior Judge, Judge Wiatt, who has since passed away. Judge Wiatt heard a Motion to Amend the Judgment on a similar basis in 2001, and it was denied at that time. It is this Judge's conclusion after reading the papers, reviewing the case of McClellan [, supra,] 89 Cal.App.4th 746[,] that there are no new facts or items of evidence that have been presented in connection with this motion that were not before Judge Wiatt back in 2001. It is this Court's view that the instant Motion is essentially a Motion for Reconsideration, and not only would such a motion be untimely, but there are no new facts or evidence that support a different conclusion some eight and a half to nine years later.
"For example, there is no evidence, new or otherwise, that indicates an asset transfer occurred between Parthenia Park Villas Homeowners Association ('Parthenia')[,] the former homeowners association, and The Phoenix Homeowners Association ('Phoenix'). There is no evidence, new or otherwise, from Parthenia or Phoenix's bank, evidencing a transfer of funds. The only thing that was present before this court at the hearing of this motion on May 14, 2010, seems to be the same thing that was before Judge Wiatt ... back in 2001 which is the fact that subsequent to, or around the same time as Parthenia's bankruptcy, Phoenix was formed in order to be the Homeowners' Association for this complex and they started to collect homeowners dues. Judge Wiatt prepared and set out a very detailed and well reasoned order back in 2001 and this Court currently does not see anything new that would depart from Judge Wiatt's previous [ ] ruling.
"The Court in reviewing the Declaration of Mr. Burlison submitted in support of the motion, found it lacking in foundation and lacking in personal knowledge regarding some of the assertions contained in it, particularly statements that Parthenia effectively transferred its operational income stream to Phoenix when Parthenia ceased operation and closed its bank account with American International Bank.
*4 "The Court at this time, further finds that the passage of time operates to prejudice Phoenix. Additionally, Mr. Burlison recently becoming the Assignee of the Judgment presents no excuse for the eight and a half to nine year delay. The Assignee or Successor to Plaintiff Sandra Cardet is not new to this litigation, having been attorney of record for fourteen years, and stands in Plaintiff's/Judgment Creditor's shoes. Thus, there is no excuse for a[n] eight and a half to nine year delay in re-bringing this motion.
"Further, in the context of homeowners associations, which are required by state law to have a properly formed homeowners association, that entity is required to incorporate, has to exist, has to be funded and hence the fact that a subsequent homeowners association was formed by the people who live in that same complex, which would have to be those people and cannot be anyone else; that in and of itself, cannot create an inference of alter ego or successor liability for purposes of collecting a debt of a former homeowners association which filed a Chapter 7 Bankruptcy, as a result of having no assets. Further, there is no evidence before this court as to the Judgment Creditor making any motions or objections in connection with the Chapter 7 Bankruptcy of Parthenia.
"Further, while this court believes Judge Wiatt's original ruling on these issues was correct, the moving parties' argument that Judge Wiatt's prior ruling was wrong is untimely, as Judge Wiatt's former order was a final order, to which an appeal could have been, but no appeal was ... taken.
"The court further denies moving part[y's] sua sponte request to issue subpoenas and discovery orders, as such would be inappropriate, and in particular, the delay for such request would be prejudicial to Phoenix. Further, the request for post judgment discovery orders being first raised in the reply brief and at oral argument, makes such requests not properly before this court."
Burlison appealed the denial of the motion to amend on July 16, 2010.
Burlison contends that a trial court has inherent power under Code of Civil Procedure section 187 to amend a judgment to add judgment debtors so that the judgment may be enforced.FN1 He urges that such an amendment is appropriate where, as here, the third party to be added is a successor corporation that has the same officers, directors, or shareholders and has acquired the former corporation's assets without adequate consideration.
FN1. All further undesignated statutory references are to the Code of Civil Procedure.
Phoenix does not dispute the trial court's inherent power to amend a judgment under section 187. It urges, however, that because in the present case a motion to amend was earlier brought and denied, the trial court correctly treated the motion to amend as a motion for reconsideration under section 1008. Because Burlison failed to demonstrate any new facts or law that could not have been presented previously, Phoenix contends that the trial court did not abuse its discretion in denying the motion.
*5 We agree with Phoenix that the trial court properly treated Burlison's motion as a motion for reconsideration under section 1008. That section provides in relevant part: "(b) A party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown." (Italics added.)
Section 1008 "specifies the court's jurisdiction with regard to applications for reconsideration of its orders and renewals of previous motions, and applies to all applications to reconsider any order of a judge or court, or for the renewal of a previous motion, whether the order deciding the previous matter or motion is interim or final." (sec. 1008, subd. (e).) Further, " [n]o application to reconsider any order or for the renewal of a previous motion may be considered by any judge or court unless made according to this section." ( Ibid., italics added.) Accordingly, although Burlison did not identify his motion as a motion for reconsideration or a renewed motion under section 1008, the trial court properly treated it as such. (See Sole Energy Co. v. Petrominerals Corp. (2005) 128 Cal.App.4th 187, 193 [" 'The nature of a motion is determined by the nature of the relief sought, not by the label attached to it....' The principle that a trial court may consider a motion regardless of the label placed on it by a party is consistent with the court's inherent authority to manage and control its docket."].)
As the present appeal thus is from the denial of a section 1008 motion, there is a significant question as to appealability. The appellate courts are split as to whether an order denying a section 1008 motion is appealable: "Some courts allow the appeal if the underlying order was appealable and the motion for reconsideration was based on new or different facts. (See Rabbitt v. Vincente (1987) 195 Cal.App.3d 170, 174.) Other courts deem orders denying reconsideration analogous to nonappealable orders denying new trials and, thus, treat them as nonappealable. ( Rojes v. Riverside General Hospital (1988) 203 Cal.App.3d 1151, 1160–1161, disapproved on another point in Passavanti v. Williams (1990) 225 Cal.App.3d 1602, 1605; Hayter Trucking, Inc. v. Shell Western E & P, Inc. (1993) 18 Cal.App.4th 1, 5, fn. 1; see also Gill v. Hughes (1991) 227 Cal.App.3d 1299, 1310, fn. 3.)" ( Alioto Fish Co. v. Alioto (1994) 27 Cal.App.4th 1669, 1679.) FN2 The majority of recent cases have concluded that orders denying motions for reconsideration are not appealable, even where based on new facts or law. ( Annette F. v. Sharon S. (2005) 130 Cal.App.4th 1448, 1458–1459; see also In re Marriage of Burgard (1999) 72 Cal.App.4th 74, 80–81.)
FN2. "The relatively recent enactment of rule 8.108(d) did not resolve this split of authority. The Advisory Committee comment to rule 8.108(d) of the California Rules of Court states that the revised rule takes no position on 'whether an order denying a motion to reconsider is itself appealable (compare Santee v. Santa Clara County Office of Education (1990) 220 Cal.App.3d 702, 710–711 [order appealable if motion based on new facts] with Rojes v. Riverside General Hospital [, supra,] 203 Cal.App.3d [at pp.] 1160–1161 [order not appealable under any circumstances] ).' The Advisory Committee comment states that whether such an order is separately appealable is a 'legislative matter[ ].' (Advisory Com. com., Cal. Rules of Court, rule 8.108(d).) The Legislature has yet to take a position on whether an order from a motion to reconsider is separately appealable." ( Morton v. Wagner (2007) 156 Cal.App.4th 963, 968–969.)
*6 We need not resolve the appealability issue because even if the order is appealable, there was no abuse of discretion. As we have said, to prevail under section 1008, the moving party must "show[ ] by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown." (sec. 1008, subd. (b.) Burlison has wholly failed to comply with these requirements. Although his motion referred to the earlier motion to amend, his declaration neither identified the grounds on which the prior motion was made nor attached the moving papers or order denying the motion.
Moreover, Burlison did not identify any "new or different facts, circumstances, or law." Indeed, the only relevant "facts" asserted in Burlison's declaration are the following: "On or about September 21, 1999, Parthenia's members and Board of Directors filed articles of incorporation for The Phoenix Homeowners' Association ('Phoenix') with the California Secretary of State and formally incorporated Phoenix as a California common interest development corporation[.] [See Exhibit A.] On September 30, 1999 Phoenix became the legally operative homeowners' association for the Parthenia Park Villa Condominiums. On that same day, I am informed and believe, that Parthenia effectively ceased operation and closed its bank account with American International Bank in Tarzana, CA. Then, Parthenia effectively transferred its operational income stream to Phoenix. It is not known if the transfer was formalized or if Phoenix paid any money to obtain the income stream. However, Parthenia and Phoenix have the exact same members, Board of Directors, property management company, and income."
These "facts" are not "new": Burlison asserted these very same facts in support of the 2001 motion to amend he filed for Cardet.
For all of these reasons, the trial court did not abuse its discretion in denying the motion to amend.
The order denying the motion to amend the judgment is affirmed. Phoenix shall recover its costs on appeal.
We concur: WILLHITE, Acting P.J., and MANELLA, J.
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