Opinion
B303809
01-21-2022
MEHRAN JAVAHERIAN, Plaintiff and Appellant, v. FARID MORADI et al., Defendants and Appellants.
Krishel Law Firm and Daniel L. Krishel for Plaintiff and Appellant. Ervin Cohen & Jessup, Geoffrey M. Gold, Banu S. Naraghi; Benedon & Serlin, Gerald M. Serlin and Wendy S. Albers for Defendants and Appellants.
NOT TO BE PUBLISHED
APPEALS from a judgment and an order of the Superior Court of Los Angeles County No. SC128455, Elaine W. Mandel, Judge. Appeals dismissed.
Krishel Law Firm and Daniel L. Krishel for Plaintiff and Appellant.
Ervin Cohen & Jessup, Geoffrey M. Gold, Banu S. Naraghi; Benedon & Serlin, Gerald M. Serlin and Wendy S. Albers for Defendants and Appellants.
BENDIX, J.
This appeal has a complex procedural history, which we summarize in our introduction to assist the reader in following our legal analysis of arguably esoteric procedure in our Discussion, post.
Defendant/appellant Farid Moradi was an owner and principal of a corporation that was the general partner in two limited partnerships. Plaintiff/appellant Mehran Javaherian invested a total of $987,500 in the two limited partnerships. Javaherian subsequently agreed to lend Farid Moradi and his wife, defendant/appellant Leeora Moradi, certain additional funds in exchange for a guaranty securing repayment of Javaherian's initial investment in the limited partnerships.
For the sake of clarity, and meaning no disrespect, when we refer to Farid Moradi and Leeora Moradi individually, we use their first names. We refer to them collectively as "the Moradis."
Several years after this transaction, Javaherian filed suit against the Moradis for breach of the guaranty. The trial court granted summary judgment in favor of Javaherian and against the Moradis on this cause of action on the ground that Javaherian provided the Moradis with the additional funding required by the guaranty-i.e., $150,000-and yet the Moradis had not repaid Javaherian's initial investment in the two limited partnerships. In the course of granting summary judgment, the court found the guaranty did not provide that repayment of Javaherian's initial investment was contingent on him supplying the Moradis with another $300,000 in "capital call" funding. The court subsequently entered judgment for Javaherian in accordance with its ruling on his summary judgment motion.
The Moradis moved for a new trial, arguing, inter alia, that Javaherian had asserted for the first time in his reply to their opposition to the summary judgment motion that providing the $300,000 in capital call funding was not a condition precedent to repayment of Javaherian's initial investment under the guaranty. Upon hearing the new trial motion, the trial court issued a ruling that purported to grant the motion, while simultaneously continuing the hearing thereon. The court stated although the Moradis had not requested leave to brief the capital call issue upon reviewing the court's tentative ruling in advance of the summary judgment hearing, the court would exercise its discretion to allow the Moradis to brief that issue at that late stage of the proceedings. In response, the Moradis filed a notice of appeal of this ruling on their new trial motion and the underlying judgment. The trial court thereafter took the continued hearing off calendar, and Javaherian cross-appealed from the ruling on the new trial motion.
Javaherian moves to dismiss the Moradis' appeal of the ruling on their new trial motion. He maintains the ruling is not an appealable order because the trial court impliedly denied the motion for a new trial and exercised its discretion under Code of Civil Procedure section 662 to reopen the matter for further proceedings. We agree.
Undesignated statutory citations are to the Code of Civil Procedure.
Fairly construed, the trial court's ruling on the new trial motion is a nonappealable order under section 662. Hence, we grant Javaherian's motion to dismiss the Moradis' appeal of that ruling and, for that same reason, we dismiss Javaherian's corresponding cross-appeal. We dismiss as moot the remainder of the Moradis' appeal because the trial court's ruling on the new trial motion impliedly vacated the underlying judgment. Because the parties' appeals did not deprive the trial court of jurisdiction over the proceedings, the parties may continue to litigate their dispute in that forum.
FACTUAL AND PROCEDURAL BACKGROUND
Our factual and procedural background is derived in part from undisputed aspects of the trial court's orders and the parties' filings. (See Baxter v. State Teachers' Retirement System (2017) 18 Cal.App.5th 340, 349, fn. 2 [utilizing the summary of facts provided in the trial court's ruling]; Artal v. Allen (2003) 111 Cal.App.4th 273, 275, fn. 2 [" '[B]riefs and argument . . . are reliable indications of a party's position on the facts as well as the law, and a reviewing court may make use of statements therein as admissions against the party. [Citations.]' [Citations.]"].)
We summarize only those facts that are relevant to our disposition of the instant appeals and cross-appeal.
Farid was an owner and principal of Pacific Bancorp, Inc. (PBI). PBI was the general partner of PBI Arizona Mint, LP (Mint) and PBI Arizona Gold Rush, LP (Gold Rush). Javaherian invested $493,500 with Gold Rush and $494,000 with Mint, thus Javaherian's total initial investment in the LPs was $987,500 (the LP investment).
We refer to Mint and Gold Rush collectively as "the LPs."
On December 9, 2010, Javaherian agreed to lend the Moradis additional funding of $150,000, plus $300,000 (capital call funding)" 'as reasonably necessary and justified by [the Moradis], and as long as all other members of the respective LLCs [sic] are similarly required to make capital call payments[.]'" In connection with this transaction, the Moradis executed a promissory note with an initial principal balance of $150,000, along with a guaranty securing repayment of the LP investment and the amount due on the promissory note.
In December 2017, Javaherian brought the instant suit against the Moradis. On June 18, 2018, Javaherian filed the first amended complaint, alleging two causes of action for breach of contract: (1) breach of the promissory note, and (2) breach of the guaranty. The parties do not dispute that at some point before Javaherian moved for summary judgment but after Farid had repaid the balance due on the promissory note, the first cause of action for breach of the promissory note was dismissed.
On July 17, 2019, Javaherian moved for summary judgment on his remaining cause of action for breach of the guaranty, or, in the alternative, for summary adjudication of certain issues. The Moradis opposed the motion, and Javaherian thereafter filed a reply to their opposition.
On October 15, 2019, the trial court heard the motion, and the following day, the court granted summary judgment on Javaherian's second cause of action for breach of the guaranty.The trial court reasoned that the Moradis "admit[ted] they have not fully repaid [Javaharian's] investment," and "[s]ince [Javaherian] unquestionably provided the $150,000, which is the only 'additional funding' required by the Guaranty Agreement, the sole condition precedent to [the Moradis'] repayment of the LP investment is met." On November 19, 2019, the trial court entered judgment in favor of Javaherian and against the Moradis in the amount of $1,826,875 pursuant to the court's ruling on Javaherian's summary judgment motion.
Although the trial court's ruling on the motion states the court granted "[s]ummary adjudication," the court later clarified that it had in fact "granted summary judgment in favor of [Javaherian] as to the second cause of action for breach of contract . . . ."
On December 13, 2019, the Moradis filed a motion for a new trial. The Moradis' primary contention was that the trial "court should not have granted summary judgment based on a finding that the capital call funding was not a condition precedent for payment of the LP investment, as this argument was raised for the first time in [Javaherian's] reply."
After the Moradis' new trial motion was fully briefed, the trial court heard the motion on January 14, 2020. In its ruling issued later that day, the trial court agreed with the Moradis that they "did not have an opportunity to brief" whether "the capital call funding was . . . a condition precedent for payment of the LP investment . . . ." The court also "note[d] that at the hearing" on Javaherian's summary judgment motion, the Moradis "did not request leave to brief this issue, though the court's tentative ruling (published the day prior to oral argument) put [the Moradis] on notice of the court's intended ruling."
Notwithstanding the Moradis' failure to request leave to brief that issue, "in the interest of justice, the court . . . exercise[d] its discretion to allow [the Moradis] to brief this issue only." The court announced that it "GRANTED" the Moradis' motion "as to the capital call payment issue only," set a briefing schedule for the Moradis' and Javaherian's respective supplemental briefs "on the issue of whether the capital call funding was a condition precedent to [the Moradis'] obligations under the guaranty agreement," and "continued" "the Hearing on Motion for New Trial . . . re: additional briefing" to March 2, 2020.
In issuing this decision, the trial court rejected the Moradis' arguments that "summary judgment was improper because evidence creates material issues as to excuse, enforceability of the agreement, damages, accord and satisfaction, laches and unclean hands." The court reasoned that the Moradis had "failed to present any such evidence in opposition to the summary judgment motion" or explain why "this evidence was newly discovered." This aspect of the trial court's ruling has no bearing on our disposition of the instant appeals and cross-appeal.
On January 21, 2020, the Moradis filed a notice of appeal, wherein they sought review of the trial court's judgment and the January 14, 2020 ruling on their new trial motion. On January 29, 2020, the trial court took the March 2, 2020 hearing off calendar on the ground that the court "lost jurisdiction" because the Moradis had filed an appeal. On March 11, 2020, Javaherian filed a notice of cross-appeal, seeking review of the January 14, 2020 ruling on the motion for a new trial.
DISCUSSION
Javaherian moves to dismiss the Moradis' appeal of the ruling on their new trial motion. He contends the ruling is not an appealable order because the trial court, in effect, denied the Moradis' new trial motion and reopened the matter for further proceedings. Javaherian also seems to argue that insofar as we reject his claim that the trial court denied the new trial motion, the Moradis' appeal of the order on that motion is not ripe because no "final ruling . . . was . . . entered by the court." The Moradis oppose the motion.
For the reasons discussed below, we dismiss the Moradis' appeal of the trial court's order on their motion for a new trial because we construe the trial court's order as not granting a new trial, but instead, granting alternative relief under section 662. So construed, the order is not appealable.
Because appealability implicates our jurisdiction, we must dismiss (a) the Moradis' appeal of the ruling on their new trial motion, and (b) Javaherian's corresponding cross-appeal of that ruling, even though neither party asserts that we lack jurisdiction over the cross-appeal. (See Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 436 ["None of the parties to this appeal raised the threshold issue of whether the judgment is appealable. Nevertheless, 'since the question of appealability goes to our jurisdiction, we are dutybound to consider it on our own motion.' [Citation.]"].)
We may address whether Javaherian's cross-appeal is subject to dismissal because that issue is fairly included within the parties' briefing, wherein they discuss whether the ruling on the new trial motion is an appealable order. (See Save Laurel Way v. City of Redwood City (2017) 14 Cal.App.5th 1005, 1015- 1016, fn. 9 (Save Laurel Way) [" '[T]he parties need only have been given an opportunity to brief the issue decided by the court, and the fact that a party does not address an issue, mode of analysis, or authority that is raised or fairly included within the issues raised does not [establish that the parties are entitled to submit supplemental briefing thereon, ]'" italics added].)
Additionally, we conclude that the trial court's ruling on the new trial motion impliedly vacated the judgment. Because the vacatur of the judgment moots the Moradis' appeal arising from that former judgment, we dismiss that appeal on our own motion. (See Graylee v. Castro (2020) 52 Cal.App.5th 1107, 1113 (Graylee) ["Because the trial court vacated the . . . judgment, we find the appeal of that judgment to be moot."]; City of Hollister v. Monterey Ins. Co. (2008) 165 Cal.App.4th 455, 479 (City of Hollister) ["Ordinarily, a moot appeal will be dismissed. [Citation.] Although the parties have not raised the question of mootness, the court may examine a suggestion of mootness on its own motion. [Citations.]"].)
We also observe that the Moradis argued in their reply/cross-respondents' brief that their appeal from the judgment must be dismissed if we agree with Javaherian that the trial court issued its ruling on the new trial motion pursuant to section 662, and that Javaherian had an opportunity to address that issue in his reply to that brief. Accordingly, the potential mootness of the Moradis' appeal of the judgment was fairly included within the issues briefed by the parties. (See Save Laurel Way, supra, 15 Cal.App.5th at pp. 1015-1016, fn. 9.)
A. Section 662
"Section 662 provides: 'In ruling on [a new trial motion], in a cause tried without a jury, the court may, on such terms as may be just, change or add to the statement of decision, modify the judgment, in whole or in part, vacate the judgment, in whole or in part, and grant a new trial on all or part of the issues, or, in lieu of granting a new trial, may vacate and set aside the statement of decision and judgment and reopen the case for further proceedings and the introduction of additional evidence with the same effect as if the case had been reopened after the submission thereof and before a decision had been filed or judgment rendered. Any judgment thereafter entered shall be subject to the provisions of sections 657 and 659.'" (Concerned Citizens Coalition of Stockton v. City of Stockton (2005) 128 Cal.App.4th 70, 77 (Concerned Citizens Coalition of Stockton), quoting § 662.)
In his motion to dismiss, Javaherian argues the instant case involves "a cause tried without a jury" for the purposes of section 662 because the trial court entered judgment upon granting Javaherian's summary judgment motion. By failing to dispute that contention in their opposition to the motion, the Moradis tacitly agree with Javaherian on that point. (Cf. Cal. Rules of Court, rule 8.54(c) ["A failure to oppose a motion may be deemed a consent to the granting of the motion."]; Rudick v. State Bd. of Optometry (2019) 41 Cal.App.5th 77, 89-90 [concluding that the appellants made an implicit concession by "failing to respond in their reply brief to the [respondent's] argument on th[at] point"]; see also Scott v. Farrar (1983) 139 Cal.App.3d 462, 467 ["Because resolution of a summary judgment motion involves the trial of an issue of law, a decision granting a motion for summary judgment may be challenged by a motion for new trial," italics added].)
"By its terms, section 662 gives the trial court discretion, in ruling on a new trial motion in a nonjury case, to vacate the judgment and reopen the case for further proceedings." (Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at p. 77.) "If [a] trial court[, ] . . . in substance, grant[s] alternative relief under section 662 rather than a new trial, then the trial court's order cannot be deemed an order granting a new trial, but instead must be deemed an order denying a new trial. Such orders are not directly appealable." (Id. at p. 78.)
B. The Trial Court's Ruling, Properly Construed, Was
One for Alternative Relief Under Section 662, and Not a Grant of a New Trial Motion
Javaherian claims that although the trial court's ruling purported to grant in part the Moradis' motion for a new trial, the court actually granted "alternative relief" under section 662. Conversely, the Moradis argue that we should construe the trial court's ruling as an order granting in part their new trial motion because the court "improperly granted summary judgment on a ground not asserted in [Javaherian's] moving papers in violation of [the Moradis'] due process rights." We agree with Javaherian that the trial court exercised its discretion to grant alternative relief under section 662.
Although a ruling granting a partial new trial is an appealable order (see Cobb v. University of So. California (1995) 32 Cal.App.4th 798, 802 ["The California Supreme Court has held that an order granting a partial new trial is appealable pursuant to section 904.1. [Citation.]"]), we must assess the "true nature" of the trial court's order to determine whether we have jurisdiction to review it (see Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at p. 77)." 'The true measure of an order . . . is not an isolated phrase appearing therein, but its effect when considered as a whole. [Citations.] In construing orders they must always be considered in their entirety, and the same rules of interpretation will apply in ascertaining the meaning of a court's order as in ascertaining the meaning of any other writing. If the language of the order be in any degree uncertain, then reference may be had to the circumstances surrounding, and the court's intention in the making of the same.' [Citation.]" (Ibid.)
"While one of the statutory grounds for a new trial [identified in section 657] must exist for the trial court to grant a new trial motion, such a ground does not have to exist for the court to grant alternative relief under section 662." (See Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at p. 79.) Section 657 provides that a new trial may be ordered "for any of the following causes": "1. Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial. [¶] 2. Misconduct of the jury . . . . [¶] 3. Accident or surprise, which ordinary prudence could not have guarded against. [¶] 4. Newly discovered evidence . . . . [¶] 5. Excessive or inadequate damages. [¶] 6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law. [¶] 7. Error in law, occurring at the trial and excepted to by the party making the application." (See § 657.)
The Moradis seem to contend that the alleged violation of their due process rights arising from the trial court's grant of summary judgment on a ground purportedly absent from Javaherian's moving papers amounts to an irregularity in the proceedings, an abuse of discretion, unfair surprise, a decision that is against the law, and/or an error in law for the purposes of section 657. (See § 657, subds. (1), (3), (6), & (7).) Irrespective of whether the Moradis' claim has any merit, the order on their new trial motion was not premised on a finding that the grant of summary judgment violated due process. Instead, the trial court stated that, notwithstanding the Moradis' failure to "request leave to brief" the capital call issue upon having advance notice of the court's tentative ruling on the summary judgment motion, "in the interest of justice, the court will exercise its discretion to allow [the Moradis] to brief . . . [¶] . . . [¶] . . . the capital call payment issue only." Thus, it is apparent that the court was exercising its "discretion to reopen the case for further proceedings under section 662" (see Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at p. 83), and it was not invoking a statutory ground for granting a new trial (cf. id. at pp. 74-79 [construing an order purporting to grant a new trial motion and allow further briefing on a possible error of law as a nonappealable order granting alternative relief under section 662]).
Admittedly, the trial court's minute order purported to continue the hearing on the motion for a new trial and did not explicitly vacate the judgment. These provisions of the order are arguably inconsistent with an intention to reopen the case under section 662 because, in the course of granting such alternative relief, a trial court denies a new trial motion and vacates the underlying the judgment. (See Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at pp. 77-78.) Yet, interpreting the trial court's ruling as simply an order requiring further briefing on a pending new trial motion rather than an invocation of the court's discretion under section 662 would yield an absurd result.
At oral argument, the Moradis' counsel contended that the trial court did not continue the hearing on the motion for new trial to March 2, 2020, but rather set March 2, 2020 as the beginning of a partial new trial. Yet, the trial court could not have scheduled March 2, 2020 as the commencement of a partial new trial because, as discussed earlier in this section, the court did not invoke any of the statutory grounds for a new trial identified in section 657. Instead, the trial court merely allowed the Moradis to brief the capital call issue.
Section 660, subdivision (c) imposes a 75-day time limit on "the power of the court to rule on a motion for a new trial . . . ." (See § 660, subd. (c).) That 75-day period commences no later than upon "the filing of the first notice of intention to move for a new trial." (See ibid.) Because it is undisputed that the Moradis filed their motion for a new trial on December 13, 2019, the trial court could not rule on the motion after February 26, 2020.
The trial court, however, set the next hearing for March 2, 2020. Because the trial court's order indicates that the court sought to reassess its summary judgment ruling on the capital call issue, we do not believe the court intended to delay ruling on the new trial motion until a date on which the court would have already lost the power to do so. (Cf. Burien, LLC v. Wiley (2014) 230 Cal.App.4th 1039, 1044 [" 'An interpretation that renders related provisions [of a statute] nugatory must be avoided [citation] . . . .' [Citation.]"]; see also Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at p. 77 [" '[T]he same rules of interpretation will apply in ascertaining the meaning of a court's order as in ascertaining the meaning of any other writing.' "].)
The Moradis claim that the last day the trial court could have ruled on the new trial motion was February 3, 2020, i.e., 75 days after they assert the notice of entry of judgment was served upon them. (See § 660, subd. (c) ["[T]he power of the court to rule on a motion for a new trial shall expire 75 days after the mailing of notice of entry of judgment by the clerk of the court pursuant to Section 664.5 or 75 days after service on the moving party by any party of written notice of entry of judgment, whichever is earlier, or if that notice has not been given, 75 days after the filing of the first notice of intention to move for a new trial."].) We need not decide whether the Moradis have correctly identified the date on which the 75-day period expired because, regardless of whether that period ended on February 3, 2019 or February 26, 2019, the trial court would have lost the power to rule on the motion prior to the continued hearing date.
Rather, construing the trial court's ruling as an order reopening the matter under section 662 is consistent with the court's apparent objective of revisiting its summary judgment decision after considering the parties' forthcoming supplemental briefing on the capital call issue. (See Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at p. 80 ["[S]ection 662 expressly provides that when the trial court vacates a judgment and reopens the case for further proceedings in lieu of granting a new trial, that order has 'the same effect as if the case had been reopened after the submission thereof and before a decision had been filed or judgment rendered.' "].)
The Moradis insist that they did not ask the trial court to grant alternative relief under section 662. Nothing in the statutory text suggests that the trial court's authority thereunder is contingent on a party's request for such relief. (See § 662 ["In ruling on such motion, in a cause tried without a jury, the court[, ] . . . in lieu of granting a new trial, may vacate and set aside the statement of decision and judgment and reopen the case for further proceedings . . . ."].) In any event, the Moradis' notice of motion left open the possibility that the court would grant alternative relief, given that they "move[d] the Court for a new trial and to set aside the grant of summary judgment, or issue other appropriate relief in the interest of justice." (Italics added.)
Furthermore, although "the trial court did not expressly order the vacation of the judgment[ ]," we may "deem the trial court to have impliedly vacated" the judgment if the court "clearly intended" that outcome. (See Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1443.) For the reasons discussed above, granting alternative relief under section 662 is the only apparent means by which the trial court could have exercised its discretion to reevaluate the capital call issue after the expiration of section 660, subdivision (c)'s 75-day deadline. Accordingly, we find the court "clearly intended" to vacate the underlying judgment. (See Dill, at p. 1443.)
In sum, we conclude the trial court's January 14, 2020 ruling had the effect of denying the Moradis' new trial motion, granting the Moradis alternative relief under section 662, and vacating the judgment entered in favor of Javaherian. We thus grant Javaherian's motion to dismiss the Moradis' appeal of that nonappealable order. (See Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at pp. 74, 78.) On our own motion, we likewise dismiss Javaherian's cross-appeal from that ruling. (See Hill v. City of Long Beach (1995) 33 Cal.App.4th 1684, 1695-1696 [dismissing a cross-appeal from nonappealable orders].) Additionally, we dismiss as moot the Moradis' appeal of the vacated judgment. (See Graylee, supra, 52 Cal.App.5th at p. 1113; City of Hollister, supra, 165 Cal.App.4th at p. 479.) Consequently, we have no occasion to reach the merits of the parties' respective appeals.
Moreover, the parties do not ask us to exercise our discretion to deem their appeals to be writ petitions, and we decline to do so sua sponte. (See Concerned Citizens Coalition of Stockton, supra, 128 Cal.App.4th at p. 82 [" 'Under unusual circumstances, we may decide to treat an improper appeal as a petition for an extraordinary writ.' [Citation.]"].)
C. The Parties' Appeals of the Nonappealable Order and the Vacated Judgment Did Not Deprive the Trial Court of Jurisdiction
We acknowledge that the trial court took the March 2, 2020 hearing off calendar on the ground that the Moradis' appeals had deprived the court of jurisdiction. The trial court, however, did not lose jurisdiction because the parties sought review of a nonappealable order and a vacated judgment. (See Hearn Pacific Corp. v. Second Generation Roofing, Inc. (2016) 247 Cal.App.4th 117, 146 ["Since [the] appeal was invalid, it did not affect the trial court's jurisdiction to proceed."].) Upon the issuance of our remittitur, the parties may ask the trial court to reset the briefing and hearing schedule in light of our conclusion that the court never lost jurisdiction over the matter. (See In re Marriage of Spector (2018) 24 Cal.App.5th 201, 215 [" 'If a court believes one of its prior interim orders was erroneous, it should be able to correct that error no matter how it came to acquire that belief.' [Citation.]"].)
DISPOSITION
We grant Mehran Javaherian's motion to dismiss Farid Moradi's and Leeora Moradi's (collectively, the Moradis') appeal of the trial court's January 14, 2020 ruling on their new trial motion. On our own motion, we dismiss Javaherian's cross-appeal of the trial court's January 14, 2020 ruling on the new trial motion. We dismiss the Moradis' appeal of the now vacated judgment entered on November 19, 2019 as moot.
Each side is to bear its own costs.
We concur: ROTHSCHILD, P. J. CHANEY, J.