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 Post subject: 2008 -- Lauer v. Schaefer -- Unpublished
PostPosted: Fri Nov 13, 2009 6:04 pm 
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Lauer v. Schaefer, 2008 WL 699064 (Cal.App. 4 Dist.) (unpublished)

California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts.

Court of Appeal, Fourth District, Division 1, California.

Robert LAUER et al., Plaintiffs and Respondents,

v.

J. Michael SCHAEFER, Defendant and Appellant.

No. D049875.

(Super.Ct.No. GIC762340).

March 17, 2008.

APPEAL from a postjudgment order of the Superior Court of San Diego County,Linda B. Quinn, Judge. Affirmed.

Bryan D. Sampson, Sampson & Associates, San Diego, CA, for Plaintiffs and Respondents.

J. Michael Schaefer, Pro Per.

AARON, J.

I.

INTRODUCTION

*1 Defendant J. Michael Schaefer appeals from a postjudgment order (enforcement order) of the trial court enforcing a prior postjudgment order (assignment order) in which the trial court assigned to plaintiffs Lauer and ECommerceHotel.com (jointly Lauer), judgment creditors in this case, money that third party Schaefer-Nevada, Inc. owed to Schaefer, the judgment debtor. Schaefer failed to satisfy the judgment against him for a number of years and repeatedly claimed to be financially unable to do so. After Lauer learned that third party Schaefer-Nevada, Inc. had been paying Schaefer $2,000 a month, Lauer asked the trial court to enter an order assigning those payments to Lauer, pursuant to Code of Civil Procedure section 708.510,FN1 which authorizes the court to order a judgment debtor to assign to a judgment creditor all or part of a right to payment due or expected to become due. FN2 The trial court entered an order requiring Schaefer to assign his rights to the $2,000 payments from Schaefer-Nevada, Inc. to Lauer and ordered Schaefer-Nevada, Inc. to make the payments directly to Lauer.

FN1. Further statutory references are to the Code of Civil Procedure unless otherwise specified.

FN2. Section 708.510 provides:

“(a) Except as otherwise provided by law, upon application of the judgment creditor on noticed motion, the court may order the judgment debtor to assign to the judgment creditor or to a receiver appointed pursuant to Article 7 (commencing with Section 708.610) all or part of a right to payment due or to become due, whether or not the right is conditioned on future developments, including but not limited to the following types of payments:

“(1) Wages due from the federal government that are not subject to withholding under an earnings withholding order.

“(2) Rents.

“(3) Commissions.

“(4) Royalties.

“(5) Payments due from a patent or copyright.

“(6) Insurance policy loan value.

“(b) The notice of the motion shall be served on the judgment debtor. Service shall be made personally or by mail.

“(c) Subject to subdivisions (d), (e), and (f), in determining whether to order an assignment or the amount of an assignment pursuant to subdivision (a), the court may take into consideration all relevant factors, including the following:

“(1) The reasonable requirements of a judgment debtor who is a natural person and of persons supported in whole or in part by the judgment debtor.

“(2) Payments the judgment debtor is required to make or that are deducted in satisfaction of other judgments and wage assignments, including earnings assignment orders for support.

“(3) The amount remaining due on the money judgment.

“(4) The amount being or to be received in satisfaction of the right to payment that may be assigned.

“(d) A right to payment may be assigned pursuant to this article only to the extent necessary to satisfy the money judgment.

“(e) When earnings or periodic payments pursuant to a pension or retirement plan are assigned pursuant to subdivision (a), the amount of the earnings or the periodic payments assigned shall not exceed the amount that may be withheld from a like amount of earnings under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law).

“(f) Where a specific amount of the payment or payments to be assigned is exempt by another statutory provision, the amount of the payment or payments to be assigned pursuant to subdivision (a) shall not exceed the amount by which the payment or payments exceed the exempt amount.”

After two months passed during which Lauer received no payments from Schaefer-Nevada, Inc., Lauer moved the court for an order to enforce theassignment order. Specifically, Lauer requested that the court order Schaefer-Nevada, Inc. to pay Lauer the amount due at that time, as well as to reimburse him for his attorney fees related to the motion. The trial court granted Lauer's motion to enforce the order assigning payments to Lauer, and awarded Lauer attorney fees. The court also informed Schaefer that he could not appear on behalf of Schaefer-Nevada, Inc., because corporations are required to be represented by counsel. Schaefer moved for reconsideration, and the court denied his request.

On appeal, Schaefer asserts (1) that a stipulation the parties entered into in a Nevada court bars the trial court's order on res judicata grounds; (2) that the trial court should have permitted an assignment of only 25 percent of his earnings, pursuant to statute; and (3) that the trial court's orders are overly broad and therefore unconstitutional. Schaefer also asserts that he has standing to litigate Schaefer-Nevada, Inc.'s interests because, he claims, Schaefer-Nevada assigned those interests to him. Lauer challenges Schaefer's standing to pursue this appeal and to appear on behalf of Schaefer-Nevada, Inc., in general.

We conclude that Schaefer may not represent Schaefer-Nevada, Inc.'s interests, either as its representative or its assignee. However, this does not deprive Schaefer of standing to appeal a postjudgment order to the extent that he is personally aggrieved by that order.

In addition, Schaefer appears to be challenging the entry of the order that assigns to Lauer Schaefer's right to payment, not the order enforcing theassignment order. Schaefer did not appeal from the order that assigned Schaefer's rights to Lauer. That order is thus final and Schaefer may not challenge it by way of an appeal from a later order. Schaefer's arguments are untimely. To the extent that Schaefer may have intended his arguments to apply to the enforcement order from which he has appealed, we conclude that he offers no basis for reversing the trial court's order enforcing its prior order regarding Schaefer-Nevada, Inc. We therefore affirm the trial court's order enforcing the order assigning payments to Lauer.

II.

FACTUAL AND PROCEDURAL BACKGROUND

*2 Lauer filed an action against Schaefer for breach of contract and intentional interference with prospective economic advantage. A jury found in Lauer's favor and awarded him $1,450,000. The trial court entered judgment in favor of Lauer in that amount on December 13, 2001.

In January 2002, Lauer recorded an abstract of judgment and sought an order requiring Schaefer to appear for a judgment debtor examination. The trial court ordered Schaefer to appear for the examination and issued a restraining order to prevent Schaefer and a third party partnership in which Schaefer was involved from transferring or otherwise interfering with Lauer's rights as a judgment creditor.

In February 2002, the trial court entered another order granting Lauer's motion to assign to Lauer a $2,000,000 note that Schaefer held, “to the extent necessary to pay the Judgment.” Because of Lauer's concern that Schaefer had transferred his interest in the note to the third party partnership, the trial court also “prospectively grant[ed]” Lauer's motion for a charging order on the third party in the event it was later determined the Note had been transferred to the partnership.

Schaefer appealed from this judgment in March 2002.FN3

FN3. We take judicial notice of the record in Lauer v. Schaefer, Case No. D039675. This court affirmed the judgment of the trial court on November 20, 2003.

After what Lauer asserts were additional attempts by Schaefer to transfer assets to the partnership or to Schaefer's sons, the trial court issued another postjudgment order in May 2002, granting Lauer's motion to “foreclose and sell [Schaefer]'s interest in [the] partnership.” The trial court also sanctioned Schaefer in the amount of $2,423 for “misuse of discovery process.”

Schaefer filed for bankruptcy in Nevada in July 2002. Because of the bankruptcy filing, this court issued an order staying Schaefer's appeal. The stay order was vacated in December 2002, after Lauer's attorney notified this court that Schaefer's bankruptcy case had been dismissed.

On February 22, 2005, the trial court granted Lauer's motion to extend the judgment debtor examination lien against Schaefer for another year.

At some point Lauer discovered that Schaefer was receiving $2,000 a month from Schaefer-Nevada, Inc., a third party corporation.FN4 Lauer moved for an order assigning to Lauer any money due to Schaefer from Schaefer-Nevada, Inc. Schaefer, through counsel, opposed Lauer's motion for an assignment order. On June 2, 2006, the trial court issued an order assigning Schaefer's rights to payment from Schaefer-Nevada, Inc. to Lauer. That order stated, “This assignment ordercovers any and all rights to any interest or payment now due or to become due in the future to, or to any third party for the benefits of, Judgment Debtor J. Michael Schaefer from Schaefer-Nevada, Inc.” The assignment order also notified Schaefer and third party Schaefer-Nevada, Inc. that Schaefer and/or the third party corporation could be held in contempt of court if they failed to comply with the court's order. Schaefer did not appeal from the assignment order.

FN4. The record discloses that Schaefer alone, filed the incorporating documents for Schaefer-Nevada, Inc., and that Schaefer is identified in those documents as the sole member of the corporation's board of directors, the corporation's resident agent and incorporator, and the president, secretary, treasurer and director of the company.

*3 On August 22, 2006, Lauer filed a motion to enforce the assignment order. In the motion, Lauer requested that the court enforce the assignment order as to third party Schaefer-Nevada, Inc. Lauer informed the court that he had received no payments from either Schaefer or third party Schaefer-Nevada, Inc. in the two months since the trial court entered the assignment order. Lauer sought $8,000, which was equal to $2,000 per month for the two months of noncompliance and an an additional $4,000 that apparently had been due to Schaefer at the time the court entered the assignment order, and also sought attorney fees in the amount of $1,590, from third party Schaefer-Nevada, Inc. for its failure to comply with the court's assignment order.

Schaefer, appearing in pro per, opposed Lauer's motion to enforce theassignment order. Schaefer-Nevada, Inc. did not appear. Schaefer submitted his personal declaration, and attached a document entitled “CORPORATION MINUTES.” The document, dated June 1, 2006 and signed by Schaefer as both president and secretary, purported to change the payment arrangement between Schaefer and Schaefer-Nevada, Inc. by eliminating the $2,000 per month payments Schaefer had been receiving and provide him instead with “use or occupancy of a residential condominium ... and a 1993 Honda Del Sol vehicle, both owned by the Corporation.”

On September 29, 2006, the trial court issued an order enforcing theassignment order. The court found that both Schaefer and Schaefer-Nevada, Inc. had been personally served with the assignment order on June 7, 2006. The court “disregard[ed]” as untimely a “ ‘supplemental opposition’ “ Schaefer had filed, and granted Lauer's motion to enforce the assignment order. The court found third party Schaefer-Nevada, Inc. liable to Lauer in the amount of $8,000, and also awarded Lauer $1,590 in attorney fees and costs. In addition, the court “direct[ed] that defendant-judgment debtor Schaefer cannot appear in this action on behalf of third party Schaefer-Nevada, Inc.,” explaining that “[a] corporation cannot represent itself in a court of record either in propria persona or through an officer or agent who is not an attorney.”

Schaefer moved for reconsideration of the enforcement order contending, among other things, that Schaefer-Nevada, Inc.'s interests in the proceeding had been assigned to Schaefer, thereby permitting Schaefer to represent those interests on his own behalf, and that the court erred in failing to limit the “garnishment” of his income to 25 percent of $900, which was Schaefer's estimation of the value of his use of the corporation's apartment and car. Lauer opposed the motion on the grounds that the motion was procedurally defective because it failed to conform to the requirements of section 1008, subdivision (a), and that Schaefer had not raised any new facts or law that would merit reconsideration.

Schaefer thereafter filed a document entitled, “REQUEST FOR JUDICIAL NOTICE, SUPPLEMENTAL POINT [ sic ] & AUTHORITY” in which he requested that the court take judicial notice of a pleading filed in federal district court in Nevada. Schaefer asserted that the document at issue established that the parties had entered into an agreement, which had been filed in district court, that required Schaefer to pay Lauer $500 a month from the $2,000 he received from Schaefer-Nevada, Inc. Schaefer argued that in view of this agreement, Lauer should be collaterally estopped from seeking a different order from the trial court in this case.

*4 The trial court denied Schaefer's motion for reconsideration, noting that the motion was defective in that it did not fulfill the statutory requirements of section 1008, subdivision (a). The court also disregarded Schaefer's tardy declaration on the basis that it was filed too late and did not include any reasonable explanation for Schaefer's failure to raise the issues identified in the declaration at an earlier time.

Schaefer filed a timely appeal from the enforcement order and the order denying his motion for reconsideration of the enforcement order.

III.

DISCUSSION

Schaefer raises a number of arguments challenging the enforcement order and the court's decision not to reconsider that order. Schaefer contends that (1) res judicata precludes the trial court's order; (2) the trial court should have limited the amount to be assigned to Lauer to 25 percent of the $2,000 Schaefer had been paid monthly; and (3) the order is overly broad and therefore unconstitutional. Lauer challenges Schaefer's authority to bring this appeal, noting that Schaefer is appealing on behalf of Schaefer-Nevada, Inc., and that Schaefer may not properly appear on behalf of the corporation. (See Merco Constr. Engineers, Inc. v. Municipal Court (1978) 21 Cal.3d 724, 729-732 [upholding rule that corporation cannot represent itself in court in propria persona or through an officer or agent who is not an attorney].)

A. Schaefer's standing to bring this appeal

As an initial matter, Lauer asserts that Schaefer should not be permitted to appear on behalf of Schaefer-Nevada, Inc. in this proceeding, and suggests that Schaefer's appeal should therefore be dismissed. Schaefer insists that “[t]his Court can decide the rights of Creditor Lauer and Debtor Schaefer without regard to Schaefer-Nevada, Inc., it appearing that Lauer has brought said Nevada corporation into these proceedings to somehow prove that the corporation belongs to Debtor Schaefer and not to the shareholders thereof....” Schaefer further asserts that the trial court had a duty to “stay[ ] any attack on the Corporation, sua sponte” and to “ignore[ ] Lauer's having added the corporations as a party to the action without some showing that it is a fictitious entity, or is one and the same as debtor Schaefer.” Schaefer also claims that he is appearing in this action as an assignee of Schaefer-Nevada, Inc.'s rights and obligations in the underlying litigation.

We agree with Lauer that Schaefer may not represent Schaefer-Nevada, Inc. on appeal, because an individual who is not an attorney may not represent a corporation in court. Schaefer is also precluded from representing Schaefer-Nevada, Inc.'s interests as an assignee of those interests. Although there may be additional reasons why such an arrangement would be impermissible, Schaefer cannot establish the existence of a valid assignment on this record.FN5 Thus, to the extent that Schaefer purports to appeal the postjudgment orders on behalf of Schaefer-Nevada, Inc., either as a representative or as an assignee of the corporation, we conclude that he may not do so.

FN5. Although there is a document in the appellate record that purports to be a document assigning Schaefer-Nevada, Inc.'s rights and obligations in this litigation to Schaefer, there is no indication in the record that this evidence was authenticated in the trial court, or that the court considered or accepted it. The document simply appears in the Appellant's Appendix without context, and is neither attached to, nor identified in, a declaration or other pleading that was filed in the trial court.

*5 Nevertheless, it appears that Schaefer has standing to appeal the orders of the trial court to the extent that he is aggrieved by the orders. (See § 902 [“Any party aggrieved may appeal in the cases prescribed in this title”].) In examining the arguments Schaefer raises on appeal, it is apparent that his claims relate to his personal interests, and not necessarily to those of Schaefer-Nevada, Inc., in that the substance of Schaefer's complaints on appeal challenge the trial court's decision to order a third party to pay Lauer money that would otherwise have been paid to Schaefer. If this court were to agree with any of Schaefer's assertions on appeal, Schaefer might be able to continue to receive at least some portion of the money owed him by Schaefer-Nevada, Inc. Although the trial court's orders involve third party Schaefer-Nevada, Inc., Schaefer also has a personal interest in those orders. To the extent Schaefer appeals on the basis that he is aggrieved by the trial court's orders, he has standing to, and may, represent himself.

B. Schaefer may not challenge the entry of the assignment order in this appeal

Schaefer purports to appeal from the trial court's enforcement order and/or the court's order denying his motion for reconsideration of the enforcement order.FN6However, the arguments Schaefer raises in this appeal relate to the validity of theassignment order, from which Schaefer did not appeal. Schaefer is not challenging the trial court's authority to enter an order enforcing the assignment order, nor is he arguing that in its enforcement order, the trial court directed Schaefer-Nevada to pay Lauer an amount greater than the amount owed under the assignmentorder. Rather, all of Schaefer's arguments challenge the appropriateness of theassignment order, i.e., whether the trial court erred in requiring Schaefer-Nevada, Inc. to pay Lauer $2,000 a month. Schaefer may not challenge the assignmentorder in an appeal from a separately appealable order that simply requires the third party to comply with the terms of an earlier order. The assignment order is final. Having not taken an appeal from that order, Schaefer has forfeited his opportunity to challenge the correctness of that order. (See § 906; see also In re Marriage of Lloyd (1997) 55 Cal.App.4th 216, 219 [“If a party fails to appeal an appealable order within the prescribed time, this court is without jurisdiction to review that order on a subsequent appeal”]; Kinoshita v. Horio (1986) 186 Cal.App.3d 959, 967 [“If [a] ruling is appealable, the aggrieved party must appeal or the right to contest it is lost”].).

FN6. There is split of authority as to whether an order denying a motion for reconsideration is independently appealable. (See Marriage of Burgard(1999) 72 Cal.App.4th 74, 80-81.) “ ‘Some courts allow the appeal if the underlying order was appealable and the motion for reconsideration was based on new or different facts. [Citation.] Other courts deem orders denying reconsideration analogous to nonappealable orders denying a new trial and, thus, treat them as nonappealable. [Citations.]’ [Citation.]” ( Ibid.) “The relatively recent enactment of rule 8.108(d) did not resolve this split of authority” and “[t]he majority of recent cases have concluded that orders denying motions for reconsideration are notappealable, even where based on new facts or law. [Citations.]” ( Morton v. Wagner (2007) 156 Cal.App.4th 963, 968.)

Here, the trial court denied Schaefer's motion for reconsideration both because he failed to meet the procedural requirements of section 1005, subdivision (b), and because Schaefer had not shown the existence of new facts or law that he could not have presented at an earlier time. Because the motion to reconsider was not based on new facts or law, we conclude that the order denying the motion is not independently appealable.

C. To the extent Schaefer's arguments apply to the trial court's enforcement order, Schaefer's arguments fail

Even if this court were to interpret Schaefer's arguments as challenging the court's enforcement order, we would reject them. There is simply no basis for Schaefer's assertion that the trial court's enforcement order is overly broad and therefore unconstitutional. The minimally relevant and nonbinding legal authority Schaefer offers in support of this argument is merely a generic statement by the Supreme Court of Arizona to the effect that a statute is “overbroad when its language, given its normal meaning, is so broad that the sanctions may apply to conduct which the state is not entitled to regulate.” ( State ex rel. Purcell v.. Superior Court (1975) 111 Ariz. 582, 584.) Schaefer provides no substantive argument as to the ways in which the trial court's enforcement order purports to regulate conduct that the state may not permissibly regulate. Because Schaefer fails to offer any relevant authority or sufficient legal argument, we treat as waived his argument that the trial court's order was overbroad. (See Trinkle v. California State Lottery (2003) 105 Cal.App.4th 1401, 1413 [“unless a party's brief contains a legal argument with citation authorities on the point made, the court may treat it as waived and pass on it without consideration”].)

*6 Schaefer also argues that the court should not have assigned Lauer more than 25 percent of his earnings, because a statutory provision permits a judgment debtor to claim an exemption of 75 percent of his or her earnings from levy. (See § 704.070, subd. (b)(2) [“Seventy-five percent of the paid earnings that are levied upon or otherwise sought to be subjected to the enforcement of a money judgment are exempt if prior to payment to the employee they were not subject to an earnings withholding order or an earnings assignment order for support”].) However, Schaefer has not established that the funds the court assigned to Lauer were “earnings,” or that Schaefer ever applied for the exemption, as required by statute. Although “exemptions ‘apply to all procedures for enforcement of a money judgment’ ....with few exceptions, the debtor must raise the claim of exemption or it is waived.” ( Imperial Bank v. Pim Electric (1995) 33 Cal.App.4th 540, 548-549,citing §§ 703.010, 703.030.)

Finally, Schaefer's contention that the doctrine of res judicata bars the trial court's order also fails, because the document on which Schaefer relies, which appears to be a stipulation between the parties regarding payment terms filed in a Nevada district court, was rejected by the trial court as untimely, and was attached to a procedurally flawed declaration. The trial court thus disregarded any evidence of a stipulation between the parties. Schaefer does not challenge the trial court's decision to disregard his declaration. Therefore, the court's decision to exclude evidence of the stipulation is final, and this court must disregard the document as not within the scope of our review.FN7 As a result, there is no evidence to support Schaefer's argument on appeal that a stipulation between the parties bars Lauer from seeking to enforce the judgment in a California court.

FN7. Documents that were not before the trial court are generally disregarded as beyond the scope of appellate review. ( Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1.) Consequently, the appellate court usually disregards arguments that rely on facts that are outside the record or that have been improperly included in the record. ( Kendall v. Barker (1988) 197 Cal.App.3d 619, 625; see alsoKnapp v. City of Newport Beach (1960) 186 Cal.App.2d 669, 679[“Statements of alleged fact in the briefs on appeal which are not contained in the record and were never called to the attention of the trial court will be disregarded by this court on appeal”].)

IV.

DISPOSITION

The order of the trial court enforcing its prior assignment order is affirmed. Costs are awarded to respondents.

WE CONCUR: HUFFMAN, Acting P.J., and NARES, J.

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