Opinion
G056462
02-20-2020
D. SCOTT ABERNETHY, Plaintiff and Respondent, v. WAYNE A. HAGENDORF, Individually and as Trustee, etc. Defendant and Appellant.
Hagendorf Law Firm and Wayne A. Hagendorf for Defendant and Appellant. Centauri Law Group, Steven Lewis Rader, Katherine Ann Porter; Law Offices of Steven L Rader and Steven Lewis Rader 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2017-00940100) OPINION Appeal from an order of the Superior Court of Orange County, Thomas A. Delaney, Judge. Affirmed. Hagendorf Law Firm and Wayne A. Hagendorf for Defendant and Appellant. Centauri Law Group, Steven Lewis Rader, Katherine Ann Porter; Law Offices of Steven L Rader and Steven Lewis Rader for Plaintiff and Respondent.
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Defendant Wayne A. Hagendorf appeals the court's order denying his ex parte application to vacate or set aside a writ of attachment that allowed the prejudgment attachment of proceeds from a judgment entered in another case. Defendant contends the court erred by granting the writ of attachment in favor of plaintiff D. Scott Abernethy for several reasons. First, he claims plaintiff did not establish the probable validity of his claim. Second, he argues the amount of plaintiff's claim was not fixed or readily ascertainable. Third, he contends his due process rights were violated because the court ordered an ex parte writ of attachment and did not provide defendant with a reasonable opportunity to be heard. Finally, he argues the court failed to require plaintiff to post an undertaking.
We do not reach the merits of defendant's arguments. Instead, we affirm the order denying his ex parte application because he failed to demonstrate "irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte." (Cal. Rules of Court, rule 3.1202(c).) Absent exigent circumstances, defendant was required to proceed by way of a noticed motion to set aside the writ of attachment. (Code Civ. Proc., § 485.240, subd. (a) [application to set aside writ of attachment must ordinarily be made by noticed motion].) Defendant failed to demonstrate exigent circumstances justifying ex parte relief. Accordingly, we affirm the order denying defendant's ex parte application.
All further statutory references are to the Code of Civil Procedure.
FACTS
The Complaint
Plaintiff filed the operative first amended complaint against defendant and the Law Offices of Hagendorf & Abernethy (the Law Firm). The complaint alleges plaintiff and defendant were partners at the Law Firm which was formed in 1996 but has been in the process of winding down since 1998. Under the partners' oral agreement, the partners each kept the fees generated by their own work and on matters where they worked together a fee split "was worked out." Office expenses were "generally split between the partners." From 1992 through 1995 defendant had rendered legal services for a client named Zanetos. Zanetos failed to pay defendant's fees. After years of litigation over the fees, a plan emerged from the bankruptcy court providing for quarterly payments to defendant over an eight-year period from 2006 to 2014. Defendant subsequently assigned his judgment to his trust, the "Butch Trust." But Zenetos defaulted on a final balloon payment due defendant in October 2014. According to the complaint, after Zanetos defaulted plaintiff and another attorney, Richard Radcliffe, provided further legal services to the Butch Trust in an effort to collect the judgment owed to defendant.
The complaint further alleges that plaintiff and Radcliffe filed a motion for attorney fees in the Zanetos collection proceedings. Plaintiff sought to recover $48,965 based on 139.9 hours of time billed at the rate of $350 per hour. Radcliffe sought to recover $15,330 based on 43.8 hours of time billed at the rate of $350 per hour.
After the motion for attorney fees was filed, the complaint alleges defendant only intended to pay plaintiff "$125 per hour for [plaintiff's] time in the Fee Motion, intending to keep the other $225 per hour for himself." Plaintiff and defendant eventually agreed that defendant "would pay [plaintiff] at the rate of $250/hour for whatever time the court awarded on the Fee Motion, but [plaintiff] would have to wait until the money was actually collected." The complaint also alleges "[i]t was further agreed that if the court reduced the fees sought in the Fee Motion by specifically referencing work done by [plaintiff], then [plaintiff] would bear the brunt of the reduction individually." "However, if the court merely made a blanket reduction in fees without defining which specific fees were being denied or reduced, the reduction would be applied pro-rata between [plaintiff's] time and Radcliffe's time." The complaint refers to this agreement as the "Fee Dispute Agreement."
Pursuant to the Fee Dispute Agreement, the complaint alleges defendant owed $32,529 to plaintiff and provides a calculation to support this figure. The complaint first notes the court in the Zanetos collection proceedings awarded $59,920 in attorney fees. The complaint then explains: "At $350/hour, the award equated to 171.2 hours, a reduction of just over 12 hours of time from what was sought in the motion. Per the Fee Dispute Agreement, the decrease would be applied pro-rata, and [plaintiff's] time comprised 76% of the fees sought in the Fee Motion. 76% of the $59,920 in attorneys' fees awarded equals $45,540. Reduced from $350/hour to $250/hour, the portion of that award that was to be paid to [plaintiff] per the Fee Dispute Agreement was $32,529." The complaint asserts defendant ultimately refused to pay plaintiff and alleges causes of action for breach of contract, breach of fiduciary duty, theft, breach of the covenant of good faith and fair dealing, conversion, money had and received, and quantum meruit.
The Writ of Attachment
Before defendant responded to the complaint, plaintiff filed an ex parte application for a right to attach order seeking to attach defendant's property in the amount of $32,529. In support of the application, plaintiff submitted his declaration stating he and defendant had entered into the Fee Dispute Agreement. He further explained the $32,529 amount could be calculated by referencing the Fee Dispute Agreement and the court's attorney fee award in the Zanetos case. Finally, he declared defendant breached the Fee Dispute Agreement by refusing to pay him.
Plaintiff attempted to give notice of the ex parte application by calling defendant and left a voice message with someone who answered the telephone. Defendant, who resided outside of California, did not appear at the hearing the next day. The court granted the ex parte application and issued a writ of attachment allowing the prejudgment attachment of all proceeds from the judgment rendered in the Zanetos case up to $32,529.
Defendant's Ex Parte Application to Set Aside the Writ of Attachment
About four months later, defendant filed an ex parte application to vacate or set aside the writ of attachment. Among other things, he argued plaintiff's claim was to recover for legal services rendered but California law prohibits the issuance of writs of attachment for services rendered. Defendant also argued the writ was improperly issued because plaintiff failed to prove the probable validity of his claim or to post an undertaking. The next day, the court denied the ex parte application in a minute order that did not detail the court's reasoning. Defendant appeals from that order.
DISCUSSION
Defendant contends the court erred by denying his ex parte application to vacate or set aside the writ of attachment. First, he argues plaintiff did not establish the probable validity of his claim upon which the attachment was made. Second, he claims the amount of plaintiff's claim for money was not fixed or readily ascertainable. Third, he contends his due process rights were violated because the writ of attachment was issued on an ex parte basis. Finally, he claims plaintiff failed to post an undertaking. But defendant failed to raise these arguments in a noticed motion, as required by statute, or to demonstrate any exigent circumstance which would justify ex parte relief. The court accordingly did not err by denying his ex parte application.
Defendant filed a request for judicial notice asking that we take judicial notice of the court's ruling on defendant's demurrer for uncertainty to the second amended complaint. We deny the request. The ruling on the demurrer was not before the court at the time it ruled on the order from which this appeal is taken, nor was the alleged uncertainty of the second amended complaint asserted as a ground for the requested ex parte relief.
The Court's Order Is Appealable
Before addressing the court's order, we note that plaintiff argues the order denying defendant's ex parte application is not appealable. According to plaintiff, defendant had to appeal from the court's order granting the writ of attachment and could not appeal from the subsequent order denying his ex parte application. But section 904.1, subdivision (a)(5) provides that an order "refusing to discharge an attachment or granting a right to attach order" is appealable. Here, defendant sought to discharge the writ of attachment by filing an ex parte application seeking to vacate or set aside the attachment. The order refusing to set aside the attachment was accordingly appealable.
Taliaferro v. Davis (1963) 216 Cal.App.2d 860 (Taliaferro), which plaintiff cites, is distinguishable. In Taliaferro, the court found an order denying the appellant's motion to vacate a prior order setting aside default was not appealable because the order setting aside default was itself appealable. (Id. at p. 863.) It did not address section 904.1, subdivision (a)(5), which allows an appeal from an order refusing to discharge an attachment. The instant case accordingly bears little resemblance to Taliaferro.
The Court Properly Denied Defendant's Ex Parte Application
Although the court's order does not explain why the court denied defendant's ex parte application, "[t]he doctrine of implied findings requires the appellate court to infer the trial court made all factual findings necessary to support the judgment." (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58.) "The doctrine is a natural and logical corollary to three fundamental principles of appellate review: (1) a judgment is presumed correct; (2) all intendments and presumptions are indulged in favor of correctness; and (3) the appellant bears the burden of providing an adequate record affirmatively proving error." (Ibid.) As plaintiff correctly argues, the court did not err by denying the ex parte application because defendant failed to file a noticed motion, and defendant failed to provide any evidence of an exigent circumstance otherwise justifying ex parte relief.
Section 485.240, subdivision (a) provides: "Any defendant whose property has been attached pursuant to a writ issued under this chapter may apply for an order (1) that the right to attach order be set aside, the writ of attachment quashed, and any property levied upon pursuant to the writ be released . . . . Such application shall be made by filing with the court and serving on the plaintiff a notice of motion." (Italics added.) The motion must "state the grounds on which the motion is based and [must] be accompanied by an affidavit supporting any factual issues raised and points and authorities supporting any legal issues raised." (Id., subd. (b).)
In Western Steel & Ship Repair, Inc. v. RMI, Inc. (1986) 176 Cal.App.3d 1108, the court elaborated upon the statutory requirement of a noticed motion. The court explained, "An ex parte remedy is provided to vacate a specialized form of attachment, the temporary protective order [citation], but the Legislature provided no corresponding remedy for the debtor subjected to a general prejudgment attachment." (Id. at p. 1116.) The court further acknowledged, "It could be argued (although the parties have not done so) that a certain unfairness results from this lack of mutuality which permits the creditor, but not the debtor, to obtain ex parte relief in the general attachment situation, and which somewhat inconsistently permits the debtor to obtain ex parte relief when the less onerous burden of a temporary protective order is involved." (Ibid.) But despite the "lack of specific statutory authority for immediate ex parte relief to the debtor," the court noted "the superior court clearly has the power to shorten time on the debtor's noticed motion to quash . . . ." (Ibid.) The court also acknowledged "the inherent power of the superior court, in a proper case, to vacate an improvidently issued ex parte attachment on an ex parte, but clear and convincing, showing by the debtor." (Ibid.)
It is clear, however, that "[a] court will not grant ex parte relief 'in any but the plainest and most certain of cases.' [Citations] For this reason, the rules governing ex parte applications in civil cases require that '[a]n applicant . . . make an affirmative factual showing . . . of irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte.' [Citations.] A trial court should deny an ex parte application absent the requisite showing. [Citations.] We review a trial court's ruling on an ex parte application for abuse of discretion." (People ex rel. Allstate Ins. Co. v. Suh (2019) 37 Cal.App.5th 253, 257.)
California Rules of Court, rule 3.1202(c) requires "an affirmative factual showing in a declaration containing competent testimony based on personal knowledge of irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte." An often cited treatise offers this practice tip for counsel. "[D]on't ask a judge for an ex parte order unless its is clear that such relief is proper. If there are any serious factual issues involved, don't expect the court to resolve them ex parte. You'll save a lot of time and effort by avoiding ex parte applications and filing a noticed motion." (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2019) ¶ 9:346 p. 9(l)-156)
Here, defendant did not file a noticed motion, nor did he attempt to show the need, much less make a "clear and convincing" showing of the need, for immediate ex parte relief. Instead, defendant filed an ex parte application to vacate or set aside the writ of attachment several months after it was issued, and with no showing that relief was needed that day, rather than after the statutory notice period. Thus, defendant's ex parte application did not comply with the well-established requirement for the granting of ex parte relief, namely, "an affirmative factual showing in a declaration containing competent testimony based on personal knowledge of irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte." (Cal. Rules of Court, rule 3.1202(c).) While defendant submitted a declaration in support of his ex parte application, he did not provide any showing of "irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte." (Ibid.) Defendant's attempt to cut into the line and go ahead of other litigants patiently waiting for their motions to be heard on notice was properly rejected by the court.
Given that defendant failed to comply with the requirements for ex parte relief and we must presume the order was correct, we conclude the court did not abuse its discretion by denying the ex parte application.
We acknowledge the court may have erred at the outset by issuing a right to attach order without requiring plaintiff to post an undertaking. (§ 489.210 ["Before issuance of a writ of attachment . . . the plaintiff shall file an undertaking"].) But defendant is required to raise this issue in a noticed motion, not an ex parte application filed months after the writ was issued.
DISPOSITION
The order is affirmed. Plaintiff shall recover his costs incurred on appeal.
IKOLA, J. WE CONCUR: ARONSON, ACTING P. J. GOETHALS, J.