Opinion
C097849
10-18-2024
ERIC ALCORN, Plaintiff and Appellant, v. TIEN CHIN YU MACHINERY CO., LTD, Defendant and Respondent; DAVID FINDLING, Objector and Appellant.
NOT TO BE PUBLISHED
Super. Ct. No. C220566
MESIWALA, J.
Plaintiff Eric Alcorn entered a Michigan judgment in a California court under the Sister State Money Judgments Act (Code Civ. Proc., § 1710.10 et seq.; the act). The Michigan judgment named Tien Chin Yu Machinery Manufacturing Co., Ltd., a Taiwanese corporation (TCY Taiwan), as the judgment debtor, but the entered judgment named respondent Tien Chin Yu Machinery Co., Ltd., a Samoan corporation (TCY Samoa).
TCY Samoa obtained an order vacating the entry of judgment. The order also released a lien on TCY Samoa's real property in Chino, California (the Chino property) under Code of Civil Procedure section 697.410 and imposed attorney fees jointly and severally against plaintiff and his counsel (counsel). Both plaintiff and counsel appeal.
Plaintiff admits he misnamed TCY Samoa as the judgment debtor when he entered the Michigan judgment but contends the trial court nevertheless erred in vacating entry of the judgment. Counsel contends the trial court erred by making him bear joint and several liability with plaintiff for the attorney fee award. We agree with counsel as to the fee award but otherwise affirm. Undesignated statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTUAL AND PROCEDURAL BACKGROUND
In 2014, plaintiff obtained a default judgment in a Michigan court against TCY Taiwan after plaintiff's hand was pulled into a cardboard folding machine that TCY Taiwan designed, manufactured, and produced.
In April 2022, plaintiff entered the judgment in California pursuant to the act but named the judgment debtor as TCY Samoa. The following month, plaintiff requested that the court serve the notice of entry of judgment on the Secretary of State on behalf of TCY Samoa but used the address of TCY Taiwan for the service address. The application stated that TCY Samoa owned the Chino property and attached a deed in the name of TCY Samoa. The court approved the request and required the Secretary of State to (1) accept service of the notice of entry of judgment on behalf of TCY Samoa and (2) give notice to TCY Samoa but at the address for TCY Taiwan. The court also required plaintiff to serve a copy of the notice of entry of judgment to the address of TCY Taiwan via Federal Express and to the owner of TCY Samoa via email. TCY Taiwan's address was served on July 1, 2022, and Ken Hsiao, the purported owner of TCY Taiwan, was served on June 30, 2022.
The parties do not dispute that the deed named TCY Samoa although it misspelled the first word as "Tein" instead of "Tien."
Plaintiff also filed a writ of execution and an abstract of judgment, both naming TCY Samoa as the judgment debtor, along with an affidavit of identity declaring seven other aliases for TCY Samoa, including TCY Taiwan. (§ 680.135) The court issued an order requiring that the seven aliases also be considered the judgment debtor. In June 2022, plaintiff recorded the abstract of judgment in San Bernardino County, thereby creating a judgment lien on the Chino property. (§ 697.310, subd. (a).) Plaintiff then caused a notice of intended sale of the Chino property to be served on TCY Taiwan and the San Bernardino Sheriff's Office.
On October 5, 2022, TCY Samoa moved to vacate entry of the sister state judgment (§ 1710.40) and release the judgment lien (§ 697.410) on the grounds that plaintiff incorrectly identified TCY Samoa as the judgment debtor. TCY Samoa argued it was a separate company from TCY Taiwan and plaintiff obtained entry against TCY Samoa by "consciously" omitting the word "manufacturing" from the name of the judgment debtor in various court filings. In support of the motion, the director of TCY Samoa, Hao-Wen Hsaio, declared that TCY Samoa was incorporated in Samoa in 2011, was co-owned by himself and Ming-Hong Hsaio, and had never been a party to a legal proceeding in the United States. He further declared that TCY Samoa owned the Chino property, having purchased it in early 2022. TCY Samoa also sought attorney fees under section 697.410, subdivision (d).
On October 7, 2022, counsel filed an affidavit in support of an examination of TCY Samoa under section 708.120. He declared that TCY Samoa's shareholders, Ming-Hong Hsiao and Hao-Wen Hsiao, individually entered into a purchase agreement for the Chino property in July 2021. The following month, counsel attended a cardboard trade show where TCY Taiwan presented an exhibit that displayed a photo of its new warehouse, the same warehouse as the Chino property. At the exhibit, counsel spoke with Ken Hsiao, the sole owner of TCY Taiwan, and asked him how he intended to satisfy plaintiff's judgment. A few months later, TCY Samoa's shareholders executed an addendum to the Chino property purchase agreement replacing TCY Samoa as the buyer. "Upon [counsel's] information and belief, payment [for the Chino property] was not tendered by TCY Samoa," but rather by wire transfer from TCY Taiwan's bank.
On October 25, 2022, TCY Samoa filed a closing brief in support of its motion to vacate, noting that no opposition had been filed by the October 19 deadline. TCY Samoa's attorney also filed a declaration asserting, among other things, that plaintiff "ha[d] apparently already collected the full amount of the judgment."
On October 26, 2022, plaintiff filed a response and objections to TCY Samoa's motion. He admitted that TCY Samoa was not the judgment debtor and asserted that, as a result, TCY Samoa lacked standing to vacate entry of the judgment. He further asserted that TCY Samoa could not seek relief from the court because it was not registered with the Secretary of State to do business in California. And he claimed that TCY Samoa's shareholders were employees of TCY Taiwan, that one of them is the son of TCY Taiwan's owner, and that TCY Taiwan held beneficial title to the Chino property.
During oral argument on the motion, plaintiff again admitted that TCY Samoa is not TCY Taiwan or the judgment debtor. The trial court spent most of the hearing addressing its concerns that plaintiff may have already fully recovered his judgment. Both plaintiff and TCY Samoa explained that any double recovery issue would be resolved in Michigan.
Following the hearing, the court signed TCY Samoa's proposed order. The order vacated the sister state judgment entry, quashed the writ of execution issued on the judgment, and vacated the abstract of judgment recorded in San Bernardino County, thereby releasing the lien on the Chino property.
The following month, TCY Samoa filed a motion for attorney fees under section 697.410, subdivision (d) against plaintiff and counsel, jointly and severally. Plaintiff opposed the motion, claiming that the fees sought were unreasonable and outside the scope of section 697.410. The court awarded attorney fees in the amount of $90,000 from and against plaintiff and counsel, jointly and severally.
Plaintiff and counsel timely appealed. Plaintiff contends the trial court erred by vacating the entry of judgment, while counsel contends the trial court erred by making counsel liable for attorney fees. We begin with plaintiff's contention.
TCY Samoa requests that we take judicial notice of certain orders made by the Michigan court after this appeal was filed. Because those orders are immaterial to our resolution of the appeal, the request is denied. (Goodwin v. Comerica Bank, N.A. (2021) 72 Cal.App.5th 858, 864 fn. 5.)
To the extent plaintiff seeks to challenge the portions of the trial court's order quashing the writ of execution or releasing the Chino property lien, those challenges are forfeited due to improper presentation and inadequate development. In two footnotes in his opening brief, plaintiff appears to question whether TCY Samoa explicitly sought relief from the writ of execution, but plaintiff never asserts any trial court error on this point. We decline to make such an assertion on his behalf. (Ables v. A. Ghazale Brothers, Inc. (2022) 74 Cal.App.5th 823, 828-829; see also People v. Carroll (2014) 222 Cal.App.4th 1406, 1412, fn. 5 [appellate court may disregard points raised under a footnote].) Similarly, although plaintiff makes a passing reference in his opening brief to section 697.410 and suggests that TCY Samoa failed to satisfy the conditions needed to obtain relief under that section, plaintiff does not argue that the court erred by releasing the lien. He waits until his reply brief to contend that attorney fees should not have been awarded due to TCY Samoa's failure to satisfy section 697.410. Because this contention was never adequately raised until plaintiff's reply brief, we treat it as forfeited. (Aerotek, Inc. v. Johnson Group Staffing Co., Inc. (2020) 54 Cal.App.5th 670, 685.)
DISCUSSION
I
Vacation of Entry of Michigan Judgment
Plaintiff challenges the court's order vacating entry in California of the Michigan judgment on five grounds: (1) standing, (2) timeliness, (3) clerical error, (4) determination of Chino property ownership; and (5) full faith and credit. As explained below, we find no merit to these challenges.
A. Standing
First, plaintiff contends TCY Samoa lacked standing to vacate the entry of judgment for two reasons: (1) TCY Samoa was not a party because it was not the judgment debtor and it failed to file a motion to intervene and (2) TCY Samoa was not qualified with the Secretary of State to do business in California. Plaintiff is mistaken.
" 'A stranger to an action who is aggrieved by a void judgment may move to vacate the judgment.'" (Plaza Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal.App.4th 1, 15.) Such a motion provides a means by which a nonparty may become a party to the litigation without the need to formally intervene. (Henry M. Lee Law Corp. v. Superior Court (2012) 204 Cal.App.4th 1375, 1382.) Here, TCY Samoa moved to vacate the judgment's entry on the grounds that it was a stranger to the Michigan judgment and was aggrieved by that judgment because plaintiff used the judgment's entry in California to obtain a lien on TCY Samoa's property. (See Lee v. An (2008) 168 Cal.App.4th 558, 563 ["When a court lacks jurisdiction in a fundamental sense, an ensuing judgment is void"].) Based on the foregoing principles, we conclude TCY Samoa had standing to make such a motion.
Plaintiff's concern with TCY Samoa's qualification to do business in California relates to the issue of capacity rather than standing. (See Color-Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1603-1604 [distinguishing standing from capacity].) But this concern also lacks merit. While Corporations Code section 2203 prohibits certain unqualified foreign corporations from maintaining an action in California, it does not prevent them from defending an action brought against them. (United Medical Management Ltd. v. Gatto (1996) 49 Cal.App.4th 1732, 1739.) In our view, this means Corporations Code section 2203 does not prevent such a corporation from defending itself against judgment enforcement efforts. As a result, Corporations Code section 2203 poses no barrier to TCY Samoa's motion to vacate.
B. Timeliness
Second, according to plaintiff, TCY Samoa's motion to vacate was untimely because it was filed more than 30 days after service of the notice of entry of judgment. Plaintiff is mistaken. The judgment debtor generally has 30 days following service of notice of entry of the judgment to challenge the entry. (§ 1710.40, subd. (b).) But that deadline does not apply where the defendant challenges lack of personal jurisdiction. (Airlines Reporting Corp. v. Renda (2009) 177 Cal.App.4th 14, 20.) Here, TCY Samoa's motion to vacate the entry of judgment was grounded on such lack of jurisdiction, and the record also indicates that the notice of entry of judgment was served only on TCY Taiwan, not TCY Samoa. Plaintiff's timeliness contentions are meritless.
C. Correction of Clerical Error
Third, plaintiff contends the trial court erred by not simply correcting its "clerical error" and changing the name of TCY Samoa to TCY Taiwan. Plaintiff misunderstands the nature of a clerical error.
"The test which distinguishes clerical error from possible judicial error is simply whether the challenged portion of the judgment was entered inadvertently (which is clerical error) versus advertently (which might be judicial error, but is not clerical error). [Citation.] Unless the challenged portion of the judgment was entered inadvertently, it cannot be changed post judgment under the guise of correction of clerical error." (Tokio Marine &Fire Ins. Corp. v. Western Pacific Roofing Corp. (1999) 75 Cal.App.4th 110, 117.)
Here, the record supports the conclusion that plaintiff's identification of TCY Samoa was intentional. Plaintiff named TCY Samoa when he entered the judgment and then separately identified TCY Taiwan as the judgment debtor in his affidavit of identity. And plaintiff pursued property with a deed in TCY Samoa's name in direct satisfaction of the judgment. (See Estate of Harris (1962) 200 Cal.App.2d 578, 586 ["Where there is conflicting evidence as to whether the error was clerical, the reviewing court will probably accept the conclusion of the trial court"].) Based on this record, we see no reason to disturb the trial court's decision to vacate the judgment rather than simply correct the name of the judgment debtor.
D. Chino Property Ownership
Fourth, plaintiff contends the trial court erred by granting the motion to vacate entry of judgment because the court should have given him an opportunity to prove that TCY Taiwan was the true owner of the Chino property. Specifically, plaintiff contends the trial court should have allowed him to pursue a claim under the Uniform Voidable Transactions Act (Civ. Code, § 3439 et seq.) or to examine TCY Samoa under section 708.120. Plaintiff fails to demonstrate error.
Plaintiff never asserted a claim under the Uniform Voidable Transactions Act in the trial court. Such a new claim is forfeited on appeal. (Newton v. Clemons (2003) 110 Cal.App.4th 1, 11.) And neither that claim nor plaintiff's application under section 708.120 had any bearing on TCY Samoa's motion to vacate. The voidable transaction claim can be pursued when the creditor alleges that the judgment debtor has conveyed property with the intent to defraud the creditor. (Civ. Code., § 3439.04.) Such a claim was not a response to TCY Samoa's motion contending that it was not the judgment debtor. And an application under Code of Civil Procedure section 708.120 allows the court to require a third party to appear if the judgment creditor can prove that the third person has possession or control of property in which the judgment debtor has an interest. (Code Civ. Proc. § 708.120, subd. (a).) It does not require a misnamed judgment debtor to remain in an action. In sum, the voidable transaction claim and the application are not procedures to determine whether the court has personal jurisdiction over an entity misnamed as the judgment debtor, which was the basis of TCY Samoa's motion.
E. Full Faith and Credit
And fifth, plaintiff contends the trial court violated the full faith and credit clause of the United States Constitution (U.S. Const., art. IV, § 1) by vacating the entry of judgment based on the court's concerns with a double recovery. We disagree.
"[A] judge's comments in oral argument may never be used to impeach the final order, however valuable to illustrate the court's theory they might be under some circumstances." (Silverado Modjeska Recreation &Park Dist. v. County of Orange (2011) 197 Cal.App.4th 282, 300.) Here, while the trial court expressed concerns with double recovery during oral argument, it ordered the entry of judgment vacated on the ground of lack of personal jurisdiction over TCY Samoa. So we disregard "the comments the court made during oral argument on the motion [to vacate] . . . and consider only the trial court's final order on the motion." (Id. at pp. 300-301.) That order made no mention of any concerns with double recovery and plaintiff has not demonstrated that it otherwise violated the full faith and credit clause.
II
Counsel's Liability for Attorney Fees
Counsel contends the trial court erred by awarding attorney fees against him under section 697.410. Although counsel did not raise this contention in the trial court, we exercise our discretion to consider it because it raises a question of law based on undisputed facts. (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 24.) Applying de novo review, we conclude counsel is correct. (Suarez v. City of Corona (2014) 229 Cal.App.4th 325, 332-333 (Suarez).)
In a section 697.410 proceeding, the court is required to award "reasonable [attorney fees] to the prevailing party." (§ 697.410, subd. (d).) Section 697.410 is silent as to who owes the fee award, and TCY Samoa contends we should construe that silence as giving the court discretion to charge those fees against a party's counsel. We reject this contention.
Case law instructs that (1) "silence on whether attorney fees may be assessed against counsel does not constitute statutory authority for sanctions against counsel" (Suarez, supra, 229 Cal.App.4th at p. 334); and (2) if the Legislature intends to make the losing party's attorney liable for an attorney fee award, it knows how to say so. (Moore v. Kaufman (2010) 189 Cal.App.4th 604, 615 (Moore); Doyle v. Superior Court (1991) 226 Cal.App.3d 1355, 1359 (Doyle).)
TCY Samoa's effort to distinguish the relevant case law is unpersuasive. Contrary to TCY Samoa's view, the permissive nature of the fee award in Doyle had no bearing on the court's conclusion that the statute did not authorize the imposition of fees against the losing party's attorney. (Doyle, supra, 226 Cal.App.3d at pp. 1358-1359.) In Suarez, the fact that the statute described the fee award as a "judgment" merely bolstered the court's conclusion that it was not free to rewrite the statute to make a party's attorney liable for attorney fees. (Suarez, supra, 229 Cal.App.4th at pp. 333-334.) And in Moore, the court refused to rewrite a statute to provide for an attorney fee award against a plaintiff's counsel because of the statute's silence, the lack of authority supporting such an interpretation, and the "standard practice" that fee-shifting provisions do not allow fee awards against attorneys. (Moore, supra, 189 Cal.App.4th at pp. 614-615.) The Moore court's passing citation to a statement in a California Supreme Court case on a different issue regarding the purpose of the statute's attorney fee language was not determinative of Moore's conclusion. (Id. at p. 614; Styne v. Stevens (2001) 26 Cal.4th 42, 57 ["An opinion is not authority for a point not raised, considered, or resolved therein"].)
Furthermore, the cases on which TCY Samoa relies are inapposite. Manzetti v. Superior Court (1993) 21 Cal.App.4th 373, 381 involved the imposition of sanctions, not the award of cost-shifting attorney fees. The court in Carroll v. State of California (1990) 217 Cal.App.3d 134 did not specifically consider whether the statute at issue authorized an award of fees against counsel and thus does not serve as authority for that point. (Id. at pp. 140-143; Suarez, supra, 229 Cal.App.4th at p. 334.) And Crowley v. Katleman (1994) 8 Cal.4th 666 considered the availability of malicious prosecution actions against attorneys as an alternative to sanctions against attorneys under section 128.5, neither of which are at issue here. (Id. at pp. 687-689.)
TCY Samoa also contends that that the legislative history of section 697.410 supports its view. We disagree for two reasons. First, TCY Samoa does not cite the legislative history of the measure that added section 697.410, instead citing to the measure that codified an affidavit of identity process. (Stats. 2000, ch. 639.) And second, although we take judicial notice of the legislative history of chapter 639 (Evid. Code, § 452, subd. (c)), as TCY Samoa requests, that history does not support TCY Samoa's position. Chapter 639 allowed a judgment creditor to identify the aliases of a judgment debtor through an affidavit of identity and to have any abstract of judgment or writ of execution extend to those aliases. (§§ 680.135, 674, subd. (c); 699.510, subd. (c).) The legislative history that TCY Samoa cites describes the text of section 699.510, subdivision (e), which entitles a person misidentified in an affidavit of identity to "the recovery of reasonable attorney's fees and costs from the judgment creditor" incurred in releasing the person's property from a writ of execution. The phrase "from the judgment creditor" makes clear that the attorney fees were intended to be chargeable against the creditor, not creditor's counsel.
Finally, TCY Samoa contends that counsel "should be held responsible" because he "personally abuse[d] the system" and "refused to accept facts, law, and reality at any time, putting TCY Samoa to the unfair burden of defending itself against his tactics." But TCY Samoa offers no authority to persuade us that section 697.410 allows a court to hold a party's attorney responsible for its actions through the statute's fee award language. Moreover, TCY Samoa did not move for sanctions against counsel and nothing in the record suggests that the trial court intended to impose sanctions against counsel. (See Doyle, supra, 226 Cal.App.3d at p. 1360.)
DISPOSITION
The judgment is reversed as to counsel with directions to the trial court to strike the references to counsel being obligated, jointly and severally, to pay attorney fees. In all other respects, the judgment is affirmed. In the interest of justice, plaintiff, counsel, and TCY Samoa shall each bear their own costs on appeal. (Cal Rules of Court, rule 8.278(a)(5).)
We concur: DUARTE, Acting P. J. KRAUSE, J.