Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of San Diego County Super. Ct. No. GIC849243, Charles S. Wickersham, Judge.
O'ROURKE, J.
Donald Gravalec appeals from an order awarding Antonia Conrad monetary sanctions under Code of Civil Procedure section 128.7. The trial court issued its sanctions order after denying Gravalec's motion for reconsideration of a previous order sustaining Conrad's demurrer, finding the reconsideration motion improper and frivolous in part because the trial court had lost jurisdiction over the matter. Gravalec contends the trial court erred in ordering sanctions against him because he had argued theories that would have permitted the court to exercise jurisdiction to consider the reconsideration motion even after entry of judgment, and thus the motion was not clearly legally or factually frivolous. Gravalec further contends the court's $4,753.85 sanctions order was excessive and arbitrary in that it is not based on the applicable criteria under section 128.7. We reject these contentions and affirm the order.
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTUAL AND PROCEDURAL BACKGROUND
In 2005, Conrad and Gravalec, who are neighbors, filed suit against each other after an incident resulted in the death of one of Conrad's dogs. In his complaint, Gravalec, who is an attorney representing himself, asserted causes of action for public and private nuisance, intentional and negligent infliction of emotional distress, libel and slander. He also sought injunctive relief. Conrad filed general and special demurrers to Gravalec's complaint; Gravalec did not file any opposition. On August 19, 2005, the court sustained Conrad's general demurrers as to all causes of action and entered judgment in Conrad's favor. In part, the court's order states, "This ruling completely disposes of this action and defendant is entitled to a judgment in her favor. As this motion is unopposed no oral argument will be permitted, and this ruling constitutes the final order of the court." That day, Conrad's counsel, James Miller, signed a proof of service for a notice of entry of the court's ruling to be served on Gravalec. Miller also faxed and mailed to Gravalec a proposed order sustaining Conrad's demurrer, asking Gravalec to notify him within five days of any objections under rule 391 of the California Rules of Court (subsequent rule references are to the California Rules of Court).
Conrad filed her action in small claims court against Gravalec and Ann Ridyard in February 2005; several months later, Gravalec filed his action against Conrad on behalf of himself and Ridyard in San Diego Superior Court. Thereafter, Conrad's action was transferred to San Diego Superior Court and consolidated with Gravalec's action. Ridyard is not a party to this appeal.
Miller later explained to the court that his notice of entry "missed the pickup service for the attorney service on Friday [August 19, 2005]. So it went out on Monday [August 22, 2005]." The notice of entry bears a file stamp of August 23, 2005.
On September 6, 2005, Miller and Gravalec had a telephone conversation in which Gravalec stated he would be filing an amended complaint and a motion for reconsideration of the court's order. Miller responded that the motion would be frivolous and sanctionable given the absence of any new facts or law. Miller also faxed Gravalec papers in support of Conrad's ex parte request to remand her case back to the small claims division, including a copy of the notice of entry of the ruling on Conrad's demurrer, attached as Exhibit 16.
The next day, the parties appeared ex parte on Conrad's request. At the hearing, Gravalec asked the court for leave to amend his complaint under rule 325, which, he asserted, granted him 10 days leave to amend after notice of the court's ruling on the demurrer. Finding its ruling had completely disposed of the action, the court stated rule 325 did not apply. The court also pointed out, in response to Gravalec's assertion that he did not have a notice of ruling signed by the court, that Conrad had served a notice of the ruling, which the court did not need to sign. The court denied Gravalec's ex parte request to entertain a motion for reconsideration under section 1008, stating "we need to see if there is going to be a timely application for a rehearing and if it has substance enough to be granted."
On September 16, 2005, Gravalec filed a motion for reconsideration of the court's demurrer ruling. He argued Rains v. Superior Court (1984) 150 Cal.App.3d 933 and Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371 authorized him to submit a proposed first amended complaint via a motion for reconsideration. In part, Gravalec asserted his first amended pleading "alleg[es] additional facts necessary to state a cause of action, . . . add[s] a plaintiff, Erica A. Gravalec, a minor, who was referred to in the first complaint as having suffered injury, demonstrate[s] both a duty created under the doctrine of negligence per se, as well as state[s] a cause of action based upon strict liability." He argued the court retained jurisdiction to consider the motion on the theory that the judgment had been obtained through extrinsic fraud, namely, Miller's intentional concealment of the fact that he never mailed a notice of ruling on the court's demurrer ruling and falsification of the proof of service, and that as a result, Gravalec was prevented from filing a timely reconsideration motion. Gravalec asserted that, in view of his and Ridyard's sworn declarations that they never received the notice, the court had the ability to make a factual finding as to whether the document was in fact served. He asked that the court permit him to file the proposed first amended complaint.
On September 27, 2005, the court entered judgment in Conrad's favor. On October 6, 2005, Miller wrote to Gravalec and requested that he not proceed with the reconsideration motion because of its frivolous nature. Miller advised Gravalec he would seek sanctions if the motion were to proceed. The next day, Conrad filed her opposition to the reconsideration motion arguing (1) the court lacked jurisdiction to consider the motion because judgment had been entered; (2) the motion was untimely; (3) the motion did not set out any new facts or law; and (4) the proposed amended complaint submitted by Gravalec in any event failed to state a cause of action.
Thereafter, Conrad obtained a hearing date and filed a motion for sanctions under section 128.7, arguing Gravalec's reconsideration motion was without any supportable basis; that the motion lacked legal contentions that were valid under existing law or a good faith extension of the law. Pointing to Gravalec's repeated requests for continuances in her small claims matter, Conrad also argued the reconsideration motion was brought for an improper purpose; namely a desire to delay and cause unnecessary expense. She sought sanctions in the amount of $4,753.85 for attorney fees and costs associated with Gravalec's violation of section 128.7.
At oral argument on the motion, Gravalec advanced another theory for the court's authority to consider his reconsideration motion: that the court could elect to treat the motion as one for a new trial. Ruling it lacked jurisdiction to consider the motion, the court denied Gravalec's motion for reconsideration. It also found there was no evidence the judgment was obtained via extrinsic fraud or mistake. The court granted Conrad's motion for monetary sanctions in the requested amount, finding (1) Gravalec's reconsideration motion was improper and frivolous in view of case law holding such a motion was "not proper unless and until the judgment has been vacated"; (2) Gravalec's arguments as to extrinsic fraud or mistake were "simply false"; and (3) Conrad had complied with the so-called safe harbor requirements of section 128.7, subdivision (c)(1).
In reaching its decision, the court emphasized that after Conrad filed and served the proposed judgment, Gravalec did nothing to object or otherwise attempt to set it aside: "A proposed judgment is filed and served on you. Object to it. We never sign a judgment immediately. I always wait roughly 20 days before I sign a judgment. I am waiting to see is there an objection to the judgment. You know, you could have done that. There are so many steps along the way where you could have stepped in and said stop this process, I want to amend. At not any one of those intervals did you do that. I signed a judgment. I lost jurisdiction. The only basis upon which I can – the basis as served by you upon which I could correct the judgment is extrinsic fraud. There isn't extrinsic fraud because you were on notice. So in terms of the ruling on the motion for reconsideration, absolutely I'm not going to change my position. [¶] With regard to the sanction, the ruling on the motion for sanctions, that's a tough one. But then again, you should have objected to the judgment. You should have made some motion to set aside the judgment. There is a judgment. I can't then go on with the motion for reconsideration because I have lost jurisdiction. And that's just a basic process. So I am going to confirm the telephonic ruling on both motions."
Gravalec filed the present appeal.
Gravalec originally appealed from both the judgment of dismissal as well as the sanctions order. As to the judgment of dismissal, we granted Conrad's motion to dismiss the appeal as untimely. We directed Gravalec to limit his briefing on appeal to the January 17, 2006, sanctions order.
DISCUSSION
I. Section 128.7 and Appellate Standard of Review
"Code of Civil Procedure section 128.7 provides that the filing of a pleading certifies that, to the attorney or unrepresented party's 'knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,' the pleading is not being presented 'primarily for an improper purpose,' the claims, defenses and other legal contentions therein are 'warranted,' and the allegations and other factual contentions 'have evidentiary support.' [Citation.] If these standards are violated, the court can impose an appropriate sanction sufficient to deter future misconduct, including a monetary sanction." (Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 575, citing section 128.7, subds. (b), (c), (d), superceded by statute on other grounds in Californians For Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223.) To recover sanctions under section 128.7, the movant need only show the challenged conduct is " 'objectively unreasonable' "; there is no requirement to show subjective bad faith. (Guillemin v. Stein (2002) 104 Cal.App.4th 156, 167.)
We review the trial court's section 128.7 sanctions order for abuse of discretion. (Day v. Collingwood (2006) 144 Cal.App.4th 1116, 1130; Guillemin v. Stein, supra, 104 Cal.App.4th at p. 167.) To the extent the appeal raises address questions as to the trial court's jurisdiction and authority to consider Gravalec's reconsideration motion, we consider those issues as a matter of law. (See Day v. Collingwood, at pp. 1123-1124.)
Where Gravalec challenges the factual underpinnings of the trial court's ruling, we assess the record for substantial evidence supporting the court's express or implied findings. (West Coast Development v. Reed (1992) 2 Cal.App.4th 693, 697-698.) In West Coast,this court addressed the proper standard of appellate review where the appellants attacked the factual conclusions on which an order for section 128.5 sanctions was premised. We stated: "The principal contention . . . appears to be that the facts surrounding the litigation and plaintiff's tactics related thereto do not constitute the bad faith tactics calculated to harass an opposing party which are required, under section 128.5, in order to assess sanctions. This is, then, principally a review of the evidence supporting the trial judge's determination. Thus, we search for 'substantial' evidence in support of the court's implied findings. [Citation.] Assuming some evidence exists in support of the factual findings, the trial court's exercise of discretion will not be disturbed unless it exceeds the bounds of reason. [Citation.] [¶] In reviewing the facts [that] led the trial court to impose sanctions, we must accept the version thereof [that] supports the trial court's determination, and must indulge in the inferences [that] favor its findings." (West Coast, at pp. 697-698.) In view of these standards, we conclude if there is substantial evidence to support the trial court's factual findings, we will not disturb its decision as to 128.7 sanctions unless it otherwise so exceeded the bounds of reason that it constitutes a prejudicial abuse of discretion.
II. The Court Did Not Clearly Abuse its Discretion in Awarding Sanctions Based Upon Absence of Jurisdiction Over The Reconsideration Motion
Gravalec contends the court erred in awarding sanctions against him because his actions in filing his reconsideration motion were not taken for an improper motive, and the motion was not clearly legally or factually frivolous or without legal foundation. Specifically, he maintains he had advanced two nonfrivolous theories that would have permitted the court to exercise jurisdiction over the motion: (1) that the court could exercise jurisdiction under equity due to the presence of extrinsic fraud or mistake; and (2) the court could have construed the reconsideration motion as a new trial motion. We address each of these theories in turn, assessing whether Gravalec has shown – in keeping with the applicable abuse of discretion review standard – that under no possible theory could his conduct in proceeding with his reconsideration motion be found to be " 'objectively unreasonable' " (Guillemin v. Stein, supra, 104 Cal.App.4th at p. 167) to warrant section 128.7 sanctions.
A. Equitable Relief from Judgment Based On Extrinsic Fraud or Mistake
Gravalec argues that his motion for reconsideration was "not without legal support" under Olivera v. Grace (1942) 19 Cal.2d 570, 576 (Olivera), which he claims gave the trial court authority to grant relief from the judgment and hear his reconsideration motion due to extrinsic fraud or mistake, namely, Miller's assertedly deceptive conduct with respect to service of the notice of ruling on demurrer. Gravalec argues there was evidentiary support for his claim of extrinsic fraud or mistake; as we understand his somewhat disjointed arguments, Gravalec seems to assert Miller's deception (presumably in misleading Gravalec by falsifying or lying about the proof of service) prevented him from filing an amended complaint or a timely reconsideration motion, and ultimately gave rise to Gravalec's belief that the trial court would not enter the proposed judgment submitted by Conrad, but would retain jurisdiction until resolution of the outstanding issues.
These arguments fail for several reasons. There is no doubt a court has equitable jurisdiction to set aside a judgment on the basis of extrinsic fraud. (Olivera, supra, 19 Cal.2d at p. 575; In re Marriage of Park (1980) 27 Cal.3d 337, 342; Bloniarz v. Roloson (1969) 70 Cal.2d 143, 146; Weitz v. Yankosky (1966) 63 Cal.2d 849, 855; Hallett v. Slaughter (1943) 22 Cal.2d 552, 557; Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1300; see Carroll v. Abbott Laboratories, Inc. (1982) 32 Cal.3d 892, 901, fn. 8.) However, Olivera and the above-cited authorities involve requests for equitable relief via postjudgment motions to vacate or set aside a judgment. We have found no decision extending Olivera's application to a request for relief from a judgment via a motion that is clearly styled as one for reconsideration under section 1008 and brought before entry of judgment. Indeed, that was largely the basis of the trial court's ruling, which cited APRI Inc. Co. v. Superior Court (1999) 76 Cal.App.4th 176: " 'A court may reconsider its order granting or denying a motion and may even reconsider or alter its judgment so long as judgment as not yet been entered. Once judgment has been entered, however, the court may not reconsider it and loses its restricted power to change the judgment. It may correct judicial error only through certain limited procedures such as motions for new trial and motions to vacate the judgment.' " (Id. at p. 181, italics added, quoting Passavanti v. Williams (1990) 225 Cal.App.3d 1602, 1606; see also Ramon v. Aerospace Corp. (1996) 50 Cal.App.4th 1233, 1238 [" 'After judgment a trial court cannot correct judicial error except in accordance with statutory proceedings. . . . A motion for reconsideration is not such a motion"].) At no point after entry of judgment did Gravalec ask the court to construe his reconsideration motion as one to set aside or vacate the judgment. Gravalec was never prevented from filing such a motion. Under the circumstances, it was not an abuse of discretion for the court to conclude that Gravalec's decision to proceed with his reconsideration motion was objectively unreasonable, as was the basis for the reconsideration motion.
Further, Gravalec ignores the trial court's finding that there was no evidence demonstrating the judgment was obtained by extrinsic fraud or mistake. On appeal, Gravalec improperly focuses only on the evidence favoring his assertion of extrinsic fraud, as opposed to the evidence (or inferences from the evidence) tending to preclude application of that doctrine, in order to convince U.S. to hold that his theory of extrinsic fraud had evidentiary support sufficient to preclude sanctions under section 128.7. On our review for substantial evidence, however, it is not the role of this court to independently weigh the evidence and make findings different from those of the trial court. (See Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 630-631.) As in all substantial evidence challenges, our power of review " 'begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted,' to support the findings below." (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.)
The trial court's finding with regard to extrinsic fraud was specifically that Gravalec had knowledge or notice of the proposed judgment and its entry ("Plaintiffs do not contend that they did not receive service of the proposed judgment"). "Fraud . . . is extrinsic when it deprives the unsuccessful party of an opportunity to present his case to the court . . . . A party who has been given proper notice of an action, however, and who has not been prevented from full participation therein, has had an opportunity to present his case to the court and to protect himself from any fraud attempted by his adversary. . . . Fraud perpetrated under such circumstances is intrinsic, even [if] the unsuccessful party does not avail himself of his opportunity to appear before the court. . . ." (Westphal v. Westphal (1942) 20 Cal.2d 393, 397; see also 8 Witkin, Cal. Procedure (4th ed. 1997) Attack On Judgment in Trial Court, § 223, p. 727 ["essential characteristic" of extrinsic fraud is an act that "has the effect of preventing a fair adversary hearing, the aggrieved party being deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense"]; Gibble v. Car-Lene Research, Inc. (1998) 67 Cal.App.4th 295, 314-315 (Gibble); City and County of San Francisco v. Cartagena (1995) 35 Cal.App.4th 1061, 1067). One who challenges a judgment on the basis of extrinsic fraud must show that by virtue of the fraud he was "deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense." (Parage v. Couedel (1997) 60 Cal.App.4th 1037, 1044.) " 'Fraud is intrinsic and not a valid ground for setting aside a judgment when the party has been given notice of the action and has had an opportunity to present his case and to protect himself from any mistake or fraud of his adversary, but has unreasonably neglected to do so. [Citation.] Such a claim of fraud goes to the merits of the prior proceeding which the moving party should have guarded against at the time.' " (Gibble, at p. 315, quoting In re Marriage of Varner (1997) 55 Cal.App.4th 128, 139-140, superceded by statute on other grounds as noted in Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1144, fn. 7, & In re Marriage of Melton (1994) 28 Cal.App.4th 931, 937-938.) California courts have generally held that a party's introduction of perjured testimony or false documents is intrinsic fraud, as is the concealment or suppression of material evidence in a fully litigated case. (E.g., Parsons v. Tickner (1995) 31 Cal.App.4th 1513, 1532; Kachig v. Boothe (1971) 22 Cal.App.3d 626, 634.)
The circumstances here do not present a case of extrinsic fraud. Gravalec does not dispute he received notice of entry of the September 27, 2004 judgment, nor does he contend he did not have a full and fair opportunity to attack the judgment's entry. Rather, Gravalec points to Conrad's notice of entry of the court's ruling on the demurrer and the declarations provided by Gravalec and his codefendant in which they claim they did not receive that notice. The record, however, contains a proof of service of that notice on Gravalec, signed by Miller under penalty of perjury, and it shows Miller also faxed Gravalec a copy of the notice of entry as an exhibit to his papers filed in support of Conrad's September 7, 2004 ex parte hearing. The trial court plainly weighed the evidence before it and concluded that Miller's sworn statement was more credible than Gravalec and Ridyard's declarations. The proof of service constitutes credible evidence of solid value supporting the trial court's determination. Deference to the trial court's findings of fact applies with equal force regardless of whether the issues were determined upon affidavits or upon live testimony. (Bolkiah v. Superior Court (1999) 74 Cal.App.4th 984, 1000.) Gravalec's claim that judgment was obtained as a result of Miller's falsification of the proof of service is akin to a claim that judgment was procured by perjured testimony or false evidence. At all times, Gravalec had notice of the proceedings, and a full opportunity to take appropriate action, but did not. The trial court did not abuse its discretion in concluding that Gravalec's theory was legally and factually frivolous for purposes of section 128.7.
B. Reconsideration Motion Deemed a New Trial Motion
Gravalec points out he alternatively urged the trial court to construe the motion as a motion for new trial. He maintains that while the court had the discretion to reject the request, it was error for it to have deemed the argument frivolous for purposes of imposing sanctions under section 128.7. We disagree.
It is significant that Gravalec advanced this theory only for the first time at oral argument on his reconsideration motion. For purposes of assessing the propriety of sanctions, the trial court could well consider the fact Conrad had still been forced to incur expense in filing papers in response to a reconsideration motion containing frivolous arguments. Faced with the fact that Conrad was given no meaningful opportunity to respond to the point, and having no developed argument before it on the question, the trial court was well within its discretion to disregard the issue. Under these circumstances, Gravalec has not shown the trial court clearly abused its discretion in concluding Gravalec's reconsideration motion, as it was filed, warranted section 128.7 sanctions.
III. Amount of Award
Relying on federal authorities involving sanctions under the Federal Rules of Civil Procedure (FRCP), rule 11 (FRCP 11), Gravalec contends the $4,753.85 sanctions award is excessive and arbitrary because it does not appear to be based on any of the "applicable criteria" in fashioning a sanction under section 128.7. Specifically, he argues (1) the amount is not the minimum that would serve to adequately deter the undesirable behavior; (2) an essentially fee-shifting sanctions award is justified only under "unusual circumstances," such as conduct undertaken for an improper purpose and when other sanctions would not likely deter similar future conduct; and (3) the court failed to take into account numerous other factors set forth in Eastway Construction Corp. v. City of New York (2nd Cir. 1985) 762 F.2d 243, 254.
Section 128.7, subdivision (d) provides: "A sanction imposed for violation of subdivision (b) shall be limited to what is sufficient to deter repetition of this conduct or comparable conduct by others similarly situated . . . [and] may consist of . . . an order directing payment to the movant of some or all of the reasonable attorney's fees and other expenses incurred as a direct result of the violation." When a court exercises its discretion in determining the amount necessary to deter a party and others from misconduct, it is not bound by a strict accounting requirement in deciding the amount of the sanction (In re Marriage of Quinlan (1989) 209 Cal.App.3d 1417, 1421, fn. 1), and we will not reverse its determinations absent an abuse of discretion. (Harris v. Rudin, Richman & Appel (2002) 95 Cal.App.4th 1332, 1343.)
Gravalec does not argue that the sanctions award went beyond fees incurred "as a direct result of the violation," i.e., Conrad's attorney fees and costs incurred in connection with the reconsideration motion. (§ 128.7, subd. (d).) Rather, relying on the Federal Rules Decisions (FRD) on Amendments to the Federal Rules of Civil Procedure (146 FRD 401, 577-578, Dec. 1, 1993), he asserts an award of fees and costs should only be made under "unusual circumstances," which he contends is a finding that pleadings were presented for an improper purpose. We do not read the Federal Rules comments in such a way. The comment states: "Since the purpose of [FRCP] 11 sanctions is to deter rather than to compensate, the rule provides that, ifa monetary sanction is imposed, it should ordinarily be paid into court as a penalty. However, under unusual circumstances, particularly for (b)(1) violations [for matters "being presented for any improper purpose"], deterrence may be ineffective unless the sanction not only requires the person violating the rule to make a monetary payment, but also directs that some or all of this payment be made to those injured by the violation. Accordingly, the rule authorizes the court, if requested in a motion and if so warranted, to award attorney's fees to another party. Any such award to another party, however, should not exceed the expenses and attorneys' fees for the services directly and unavoidably caused by the violation of the certification requirement." (146 FRD at pp. 587-588.) FRCP 11 does not restrict an award of attorney fees and costs to the circumstances set forth in FRCP 11, subdivision (b)(1). Rather, as indicated, the rule expressly permits the trial court to award fees and costs related to the misconduct as a sanction if "requested in a motion and so warranted . . . ." (FRCP 11, subd. (b)(1).) Such is the case here, and we are presented with nothing demonstrating a clear abuse of discretion with regard to the amount of the trial court's sanctions order.
Nor are we persuaded to reduce the sanctions award by Eastway Construction Corp. v. City of New York, supra, 762 F.2d 243. There, the court recognized the proper standard to apply in assessing fees: "[S]anctions shall be imposed against an attorney and/or his client when it appears that a pleading has been interposed for any improper purpose, or where, after reasonable inquiry, a competent attorney could not form a reasonable belief that the pleading is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law." (Id. at p. 254, italics omitted.) Further, the Eastway court recognized that "district courts retain broad discretion in fashioning sanctions, and apportioning fees between attorney and client. The commentary to FRCP 11 sets forth a number of the factors that will be examined in arriving at an appropriate award, and in determining by whom any costs will be borne. In reviewing the specifics of an award of attorneys' fees, therefore, we shall continue to adhere to the 'abuse of discretion' standard." (Eastway, 762 F.2d at p. 254, fn. 7.)
Gravalec has not shown any abuse of discretion in the trial court's conclusion that the latter "reasonable belief" standard was met here. Gravalec has simply not carried his burden of establishing that the trial court acted arbitrarily or capriciously when it determined that $4,783.85 was the amount of the reasonable fees and costs incurred by Conrad in opposing his motion for reconsideration.
DISPOSITION
The order is affirmed.
WE CONCUR: NARES, Acting P. J., HALLER, J.