Opinion
D071624
05-18-2018
PAMELA LACHER et al., Plaintiffs and Appellants, v. EAST COUNTY INVESTIGATIONS et al., Defendants and Respondents.
Pamela G. Lacher, in pro. per., and for Plaintiff and Appellant Roslyn Lacher. Bryan Sampson for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. GIC791012) APPEAL from an order of the Superior Court of San Diego County, Randa Trapp, Judge. Affirmed as modified. Pamela G. Lacher, in pro. per., and for Plaintiff and Appellant Roslyn Lacher. Bryan Sampson for Defendants and Respondents.
Pamela Lacher and Roslyn Lacher (the Lachers) appeal from a postjudgment order compelling additional interrogatory responses and imposing a constructive trust and accounting requirements in connection with a prior assignment order entered in favor of East County Investigations and its owners, Jon and Sue Lane (collectively East County). We deny East County's motion to dismiss the appeal, affirm the order as modified, and grant in part East County's motion for sanctions and attorney fees.
BACKGROUND
The dispute between the parties has a long history, involving several prior appeals. In 2001, East County obtained a judgment of $2,793.85 plus $85 in costs and $150 in attorney fees in a small claims action against Pamela Lacher. Ms. Lacher responded by filing suit against East County; East County successfully demurred and moved to strike that lawsuit under Code of Civil Procedure section 425.16 (commonly known as the "anti-SLAPP" statute), obtaining a judgment against Pamela and Roslyn Lacher of $7,687.90 in attorney fees and costs. On appeal from the judgment, we affirmed and imposed costs and additional sanctions for filing a frivolous appeal. In a separate appeal, we affirmed the fee and costs award issued below and awarded East County attorney fees incurred on appeal, remanding to the trial court to determine the amount of fees.
We take judicial notice of the briefs, records, and unpublished opinions in Lacher v. East County Investigations, et al. (Dec. 15, 2004, D042004), Lacher v. East County Investigations, et al. (Dec. 15, 2004, D042732), Lacher et al. v. East County Investigations, et al. (Dec. 17, 2007, D048386), and Lacher et al. v. East County Investigations, et al. (Nov. 10, 2016, D071428). (Evid. Code, §§ 452, subd. (d), 459.)
All statutory references are to the Code of Civil Procedure, unless otherwise specified.
In a subsequent appeal in 2007, we reversed a superior court order that directed partial satisfaction of the judgment, including all amounts owed by Roslyn Lacher; we found the partial satisfaction order was not authorized under the circumstances and noted that the joint nature of the judgment entered against the Lachers precluded apportionment. We awarded East County additional attorney fees and costs in that appeal.
In 2014, East County obtained an order that assigned the rights to 50 percent of payments made to Pamela Lacher from her clients and 50 percent of all payments made from Pamela Lacher to Roslyn Lacher. The assignment order stated that the rights to payment were assigned "until such time as the judgment herein is fully satisfied or this order is amended."
The parties continued to wrangle over collection efforts. By mid-2016, the Lachers' attempts to thwart East County's collection of the original judgment caused the total debt to grow to nearly $100,000.
In March 2016, in response to a postjudgment discovery dispute between the parties, the superior court issued an order compelling the Lachers to provide additional interrogatory responses and documents in response to the discovery requests.
In October, on East County's motion, the superior court entered an order compelling additional discovery responses and issuing sanctions for failure to comply with the March order.
On November 4, East County moved to compel responses to a different set of postjudgment interrogatories, which had been propounded in September.
On November 8, East County moved to enforce the 2014 assignment order, arguing that, because the Lachers had failed to pay anything under the assignment order, the order should be amended to impose a constructive trust and accounting requirements.
On November 10, the Lachers filed a notice of appeal from the October order. That appeal was dismissed in December because the Lachers failed to pay appellate filing fees.
The discovery and assignment order motions were heard together in December 2016. After the hearing, the court entered an order compelling additional interrogatory responses and amending the assignment order to impose a constructive trust and accounting requirements. The Lachers filed a notice of appeal from the "December[] 2016 Discovery Order."
DISCUSSION
I. East County's Motion to Dismiss this Appeal
East County moved to dismiss the appeal; we deny the motion.
In support of their argument for dismissal, East County contends the appeal should at least be restricted to a challenge of the order compelling interrogatory responses, not the amendment of the assignment order, because the Lachers' notice of appeal purported to appeal from the "December[] 2016 Discovery Order." We are required to construe the notice of appeal liberally. (Cal. Rules of Court, rule 8.100(a)(2).) Under this rule, " 'the notice can be interpreted to apply to an existing appealable order or judgment, if no prejudice would accrue to the respondent.' " (Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 20.)
The superior court heard East County's motions to compel additional interrogatory responses and to amend the assignment order on the same day. Following the hearing, the court entered a single minute order granting both motions. The Lachers' notice of appeal purported to appeal from the "Discovery Order" entered that day and attached the executed minute order issued after hearing that granted both the motion to compel interrogatory responses and the motion to enforce the assignment order. The Lachers' notice designating the record on appeal included the briefing on both motions. The Lachers subsequently filed a Civil Case Information Statement as required under California Rules of Court, rule 8.100 (e)(1), indicating the appeal was taken from a postjudgment order entered on December 2, 2016; the Lachers attached to this statement a copy of an unsigned, proposed order amending the assignment order. These documents provided East County sufficient notice that the Lachers intended to appeal both the discovery and assignment order aspects of the December order. Indeed, in their briefing, East County responded to all substantive issues raised on appeal. Accordingly, we cannot find that prejudice would result if we interpreted the Lachers' notice of appeal from the "December[] 2016 Discovery Order" to apply to both issues encompassed in the December order. We will construe the notice of appeal broadly to encompass both issues addressed in the order entered that day.
We emphasize, however, that the appeal is limited to the December order. We will not permit the Lachers to bootstrap arguments relating to the merits of prior discovery orders or the underlying assignment order, which were not timely appealed. (§ 906; People v. Ramirez (2008) 159 Cal.App.4th 1412, 1421 (Ramirez) ["an appealable order that is not appealed becomes final and binding and may not subsequently be attacked on an appeal from a later appealable order or judgment"].)
East County next argues that Pamela Lacher lacks standing to appeal. This argument is based on our dismissal of Ms. Lacher's appeal on April 24, 2017, due to her failure to pay appellate filing fees. We reinstated Ms. Lacher's appeal on May 24, 2017, but, as a result of clerical error, we failed to file the order reinstating Ms. Lacher's appeal into the record or serve it on the parties. Because the appeal was reinstated, its prior dismissal no longer forms the basis to challenge Ms. Lacher's standing.
Finally, East County contends we should dismiss the present appeal under the disentitlement doctrine, which our Supreme Court has described as "the general principle that one who flagrantly and persistently defies a court order is not entitled to maintain an action and to ask the aid and assistance of a court while standing in contempt." (Moffatt v. Moffatt (1980) 27 Cal.3d 645 652.) The Lachers have continued to frustrate and evade the judgment collection process after filing a baseless lawsuit, which itself appeared to have been merely a ploy to harass East County. The current record indicates that the Lachers have continued to engage in sanctionable conduct, but it does not appear that they have been held in contempt of court. While we recognize our discretion to dismiss under this theory does not require a prior contempt order (see In re Claudia S. (2005) 131 Cal.App.4th 236, 244), we nonetheless decline to exercise our discretion to dismiss this appeal under the disentitlement doctrine. As further discussed in section III, below, however, we note our strong disapproval of what we perceive to be Pamela Lacher's unprofessional conduct and abuse of the judicial process.
II. The Lachers' Arguments on Appeal
A. The Superior Court Had Jurisdiction to Entertain the Motions and Issue the Order.
The Lachers contend the December orders are void because the superior court lacked jurisdiction to rule on the motions during the pendency of the prior appeal from the October discovery order, which, the Lachers claim, should have stayed trial court proceedings. No stay was effected here, and the superior court did not act in excess of its jurisdiction.
As a general rule, "the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order." (§ 916, subd. (a).) "The perfection of an appeal is complete when the formalities prescribed by the Rules on Appeal are complied with . . . ." (Navarro v. Lippold (1948) 86 Cal.App.2d 677, 679.) However, "[u]nless an undertaking is given, the perfecting of an appeal shall not stay enforcement of the . . . order in the trial court if the . . . order is for . . . [¶] the payment of money . . . ." (§ 917.1, subd. (a)(1).)
As an initial matter, it is unclear from the record whether the Lachers perfected their prior appeal. Although they filed a notice of appeal, they did not pay the required filing fees. (Cal. Rules of Court, rule 8.100 (a)-(d).) Their failure to remedy this defect resulted in the appeal's dismissal.
Even if the Lachers perfected their prior appeal, still these proceedings would not have been automatically stayed for two independent reasons. First, an appeal does not divest the trial court of jurisdiction to determine ancillary or collateral matters that do not affect the appealed order. (Betz v. Pankow (1993) 16 Cal.App.4th 931, 938.) The matters involved in the December order (the subject of the present appeal) are collateral to those at issue in the previously appealed October order; they involve separate and distinct sets of postjudgment discovery. That the Lachers asserted similar privacy objections in response to both sets of discovery does not change the analysis.
Second, because the October order directed the Lachers to pay sanctions, the Lachers were required to post a bond or undertaking to obtain a stay pending appeal. (See Banks v. Manos (1991) 232 Cal.App.3d 123, 129 [holding a sanctions award issued under § 128.5 is akin to a money judgment which must be bonded to impose a stay on appeal].) Thus, even if the Lachers had perfected their appeal from the October order, and even if the matters in the October and December orders were not collateral, in the absence of an undertaking, the earlier appeal would not have stayed proceedings. Consequently, the Lachers' earlier appeal from the October order did not deprive the superior court of jurisdiction to enter the December order.
B. The Superior Court Did Not Abuse its Discretion in Entering the Order.
Having determined the court had jurisdiction to enter the order, we next consider whether the order was within the court's discretion. We conclude the court did not abuse its discretion in amending the assignment order or in compelling discovery.
1. The Assignment Order
The Lachers contend the court abused its discretion in amending the assignment order to impose a constructive trust and certain quarterly accounting requirements. The trial court has broad discretion in determining whether to order an assignment and in fixing the amount. (Ahart, Cal. Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2017) ¶ 6:1440.) In exercising that discretion, the court may consider a variety of factors including the reasonable requirements of the judgment debtors and those they support and the amount remaining due on the judgment. (§ 708.510, subd. (c).) "The court shall make an order modifying . . . the assignment order upon a showing that there has been a material change in circumstances since the time of the previous hearing on the assignment order." (§ 708.560, subd. (b).)
We reject the Lachers' initial contention that failure to personally serve the assignment order on Roslyn Lacher in 2014 precluded it from ever taking effect against her. According to the Lachers, section 708.520, subdivision (d) requires personal service of assignment orders issued under section 708.510. Not so. The personal service requirement in section 708.520 relates to a restraining order issued in connection with an assignment order, not the assignment order itself, and thus is inapplicable. (§ 708.520, subd. (d).)
We similarly reject the Lachers' contention that section 708.540's notice requirements were not met. Section 708.540 provides:
"The rights of an obligor are not affected by an order assigning the right to payment until notice of the order is received by the obligor. For the purpose of this section, 'obligor' means the person who is
obligated to make payments to the judgment debtor or who may become obligated to make payments to the judgment debtor depending upon future developments."Under the plain language of this provision, the notice requirement applies to obligors, not judgment debtors like the Lachers. Moreover, the Lachers acknowledge they had actual notice of the assignment order, and they admit it was personally served on Pamela Lacher, who is both a party to this action and Roslyn Lacher's attorney of record herein.
(§ 708.540.)
The Lachers next contend there was no basis to modify the 2014 assignment order because such a modification requires "a material change in circumstances since the time of the previous hearing on the assignment order." (§ 708.560, subd. (b).) There is no merit to this argument. East County's motion to modify the assignment order requested imposition of a constructive trust and accounting requirements because, nearly two years after entry of the assignment order, the Lachers still had made no payments under it and continued to evade East County's legitimate collection efforts. The court below explicitly found that "there has been a material change in circumstances under [section] 708.560, such that the assignment order can be modified." The Lachers' continued refusal to pay the debt owed and to comply with the assignment order nearly two years after its entry certainly constitute changed circumstances that justify amendment of the assignment order to impose a constructive trust and accounting requirements.
Finally, the Lachers contend that the assignment order should have been modified in their favor or vacated. They claim the modified assignment order is "contrary to law" because it has "no end" and because it was "not based on a review of ability to pay." They further argue that, as a matter of law, an attorney's right to payment from her client cannot be assigned. We reject each of these arguments.
First, the express language of the modification order is limited temporally "until the judgment is satisfied or further order of the court."
Second, the Lachers did not raise any argument regarding their ability of pay or present any evidence to support this claim in their opposition to modification of the assignment order at the trial court level. Having failed to assert it in the trial court, the argument has been waived. (Parker v. City of Fountain Valley (1981) 127 Cal.App.3d 99, 117 (Parker).) Moreover, to the extent this argument addresses the merits of the original 2014 assignment order, not the 2016 modification thereto, we will not permit the Lachers to use the instant appeal from the modification order to press arguments against the underlying order, which is now final. (§ 906; Ramirez, supra, 159 Cal.App.4th at p. 1421 ["an appealable order that is not appealed becomes final and binding and may not subsequently be attacked on an appeal from a later appealable order or judgment"].)
Finally, we reject the Lachers' main argument against the assignment order: that income received from attorney Pamela Lacher's clients is unassignable because the underlying attorney-client contract, which is personal in nature, is not assignable. To the extent this argument goes to the merits of the original assignment order, we will not entertain it (see Ramirez, supra, 159 Cal.App.4th at p. 1421); however, to the extent it is directed to the modified assignment order, we conclude the argument is fundamentally flawed. Assignability of the underlying attorney-client contract is irrelevant: the assignment order does not purport to assign the attorney-client contract; it assigns only the right to payment when it comes due. The right to payment under the attorney-client contract is not personal in nature, and the Lachers cite no authority that payments made to an attorney cannot be assigned under section 708.510, subdivision (a), which broadly empowers the court to "order the judgment debtor to assign to the judgment creditor . . . all or part of a right to payment due or to become due . . . ." Rather, to support their argument, the Lachers cite case law concerning the non-assignability of a client's action for legal malpractice against his attorney; these cases have no application here. We find no merit in Ms. Lacher's theory that she can avoid paying her debt because she receives payments from legal clients.
The Lachers make no direct challenges to the constructive trust or accounting requirements imposed by the superior court's modification of the assignment order, and we find the superior court properly exercised its discretion in making those modifications.
2. The Discovery Order
The Lachers' final charge of error relates to the order compelling additional interrogatory responses. In September, more than 120 days after Pamela Lacher had last responded to previous postjudgment discovery requests, East County served interrogatories seeking information relating to Ms. Lacher's bank accounts and income under sections 708.020 et seq. and 2030.010 et seq. Relying primarily on relevancy and privilege objections, Ms. Lacher refused to provide any meaningful responses. East County moved to compel.
Ms. Lacher asserted only four arguments in response to East County's motion to compel: (1) East County failed to make reasonable good faith efforts to meet and confer; (2) the discovery was not authorized under section 708.020, subdivision (b); (3) the court should defer ruling on the motion to compel because of the pending (subsequently dismissed) appeal in D071428; and (4) the motion to compel was filed to harass.
The court found the interrogatories were authorized under section 708.020 and had been properly propounded. The court further found that East County's meet and confer efforts were sufficient and the motion to compel complied with procedural requirements. The court overruled Ms. Lacher's relevancy and privacy objections, found that one interrogatory had not been adequately answered and the remaining three had not been answered at all, and compelled "judgment debtors" to provide verified responses.
On appeal, the Lachers assert two errors. First, the Lachers contend "the trial court erred . . . in denying them the right to assert taxpayor [sic] privilege to questions relating to identifying their income and to requests for production of documents showing their income." Second, Lachers contend "the trial court abused its discretion in granting the motion to compel against [Roslyn Lacher]."
The December order addressed only interrogatory responses, it did not compel the production of documents. To the extent the Lachers' arguments are directed at prior discovery orders, we reiterate that prior orders from which the Lachers failed to take appeal have become final. (Ramirez, supra, 159 Cal.App.4th at p. 1421 ["an appealable order that is not appealed becomes final and binding and may not subsequently be attacked on an appeal from a later appealable order or judgment"].)
Neither of these arguments was raised below in connection with the present discovery dispute; consequently, the arguments have been waived. (Parker v. City of Fountain Valley, supra, 127 Cal.App.3d at p. 117.)
Even if they were not waived, still they lack merit. The statutory privilege against disclosing tax returns is not absolute. (Schnable v. Superior Court (1993) 5 Cal.4th 704, 721.) In certain circumstances, disclosure of privileged tax returns is warranted. (See, e.g., Li v. Yan (2016) 247 Cal.App.4th 56, 67 [trial court acted within its direction in compelling judgment debtor attorney to disclose his tax returns in judgment debtor examination], Weingarten v. Superior Court (2002) 102 Cal.App.4th 268, 275 [trial court acted within its discretion in compelling production of tax returns of defendant who acted with malice and fraud, had sole control of her financial records, and refused to produce relevant nonprivileged documents].) The order here does not go so far. It merely compels Pamela Lacher to disclose information related to bank accounts and income, which is directly relevant to the legitimate, ongoing collection efforts against her. The trial court acted within its discretion.
The Lachers' next argument, that the trial court abused its discretion in granting the motion to compel against Roslyn Lacher, is somewhat disingenuous. Nothing in the record indicates that the court intended to compel interrogatory responses from Roslyn Lacher. There is no dispute that the interrogatories were propounded only on Pamela Lacher. The order's reference to "judgment debtors," in the plural, appears to be a mere clerical mistake, and there is no indication that the Lachers sought to have this oversight corrected below.
Minor clerical mistakes such as these are subject to correction at the trial court level. (See, e.g., Tokio Marine & Fire Ins. Corp. v. Western Pacific Roofing Corp. (1999) 75 Cal.App.4th 110, 118 ["postjudgment alteration is appropriate to correct mistakes made in naming a party or in failing to name a party inadvertently omitted"].) This minor mistake does not amount to prejudicial, reversible error. Nonetheless, to avoid subjecting East County to further delay or expense, we will exercise our authority under section 906 to modify that portion of the December order granting East County's motion to compel responses to interrogatories so that the term "judgment debtors" (plural) is replaced with "judgment debtor" (singular). (See, e.g., Sagadin v. Ripper (1985) 175 Cal.App.3d 1141, 1170 ["Whenever an appellate court may make a final determination of the rights of the parties from the record on appeal, it may, in order to avoid subjecting the parties to any further delay or expense, modify the judgment and affirm it"].) We will affirm the order as modified.
III. East County's Motion for Sanctions
On appeal, East County moved for sanctions and requested an award of attorney fees and costs. The Lachers requested and received multiple extensions of time to file a response in opposition to the sanctions motion; nonetheless, they did not file an opposition. We recognize, however, that failure to file an opposition to a request for sanctions does not constitute consent to sanctions. (Cal. Rules of Court, rule 8.276 (d).)
The Lachers similarly requested and received multiple extensions of time to file a reply brief on appeal. Despite this, the Lachers did not file a reply brief.
Attorney fees incurred in the enforcement of an anti-SLAPP attorney fee award are recoverable costs. (York v. Strong (2015) 234 Cal.App.4th 1471, 1478.) We will therefore award East County attorney fees and costs on appeal. (Cal. Rules of Court, rule 8.278 (a)(1).)
"When it appears to the reviewing court that the appeal was frivolous or taken solely for delay, it may add to the costs on appeal such damages as may be just." (§ 907.) Additionally, this court may impose sanctions on a party or an attorney for "[t]aking a frivolous appeal or appealing solely to cause delay." (Cal. Rules of Court, rule 8.276 (a)(1).) An appeal is frivolous "only when it is prosecuted for an improper motive—to harass the respondent or delay the effect of an adverse judgment—or when it indisputably has no merit—when any reasonable attorney would agree that the appeal is totally and completely without merit. [Citation.]" (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.)
A review of the record indicates a strong argument can be made that this appeal is frivolous under both tests. Although we direct the modification of a portion of the order to correct a minor clerical mistake—one that easily could have been fixed in the trial court had the Lachers sought relief there—the substantive points raised on appeal are devoid of merit. The Lachers sought and obtained multiple requests for extensions of time to file papers that were never filed. This appeal appears to have been taken as yet another tactic to delay paying the substantial debt the Lachers have incurred.
We recognize two factors, however, that counterbalance our inclination to award additional sanctions here. First, it appears that monetary sanctions have failed to curb the Lachers' abuse of judicial processes, and the addition of some modest sanction to what this court anticipates will already be a sizable fee and cost award is unlikely to remedy this failure; and second, the procedural steps this court would be required to take prior to imposing sanctions would only further delay these proceedings, which may actually play in Ms. Lacher's favor, as it appears her primary motive in these proceedings is an attempt to further delay collection efforts. Consequently, we decline to award additional sanctions.
(See Cal. Rules of Court, rule 8.276 (c)-(e) (requiring prior written notice the court is considering imposing sanctions, the opportunity to oppose the imposition of sanctions, and a hearing).)
While we stop short of imposing sanctions, however, we express our strong disapproval of what we perceive to be Pamela Lacher's unprofessional conduct and abuse of the judicial process. Even though she is acting, at least in part, as a private litigant in this action, as a licensed member of the California State Bar, Ms. Lacher is not absolved of her duties as an officer of the court, including her duty of candor. (Cal. Rules of Prof. Conduct, rule 5-200 (a member of the State Bar shall not seek to mislead a judicial officer); Bus. & Prof. Code, § 6068, subd. (d) (an attorney shall employ means "only as are consistent with truth, and never to seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law").) Ms. Lacher's repeated requests for additional time to file briefs and papers never filed evidences dishonesty, delay, and an abuse of process that wastes judicial resources and undermines judicial efficiencies. A copy of this opinion shall be sent to the State Bar to ensure the State Bar is aware of our disapproval of Ms. Lacher's conduct.
DISPOSITION
The portion of the December order granting the judgment creditors' motion to compel responses to interrogatories is modified so that "judgment debtors" (plural) is replaced with "judgment debtor" (singular). As modified, the order is affirmed. East County's motion to dismiss the appeal is denied; its motion for sanctions and attorney fees is granted in part. Appellants are directed to pay attorney fees and costs on appeal. We remand to the trial court to determine the amount of attorney fees and costs East County reasonably incurred in litigating this appeal. Pamela Lacher and the clerk of this court are each ordered to send a copy of this opinion to the State Bar of California upon return of the remittitur.
IRION, J. WE CONCUR: HUFFMAN, Acting P. J. O'ROURKE, J.