Opinion
G053468
05-11-2018
DEBORAH RESTAINO, Plaintiff and Appellant, v. JOHN M. RESTAINO, JR., Defendant and Respondent.
Law Offices of Michael Leight and Michael Leight for Plaintiff and Appellant. Frank Sims & Stolper, Scott H. Sims; Yuhl Carr and Colin A. Yuhl for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2013-00684243) OPINION Appeal from a judgment of the Superior Court of Orange County, Kirk H. Nakamura, Judge. Affirmed. Law Offices of Michael Leight and Michael Leight for Plaintiff and Appellant. Frank Sims & Stolper, Scott H. Sims; Yuhl Carr and Colin A. Yuhl for Defendant and Respondent.
* * *
This is the third appeal related to the parties' ongoing divorce that began when plaintiff and appellant Deborah Restaino filed a petition for dissolution of marriage in 2005. In 2013, Deborah filed a civil complaint against John M. Restaino, Jr., alleging causes of action for breach of fiduciary duty and fraudulent concealment related to the distribution of community assets. Specifically, Deborah alleged that John negotiated an agreement for the buyout of his shares in his former law firm to fraudulently conceal material information from her about his community property interest in the firm and the value thereof. Deborah appeals from the court's judgment of dismissal following its sustaining of John's demurrer to her second amended complaint (SAC).
Because the parties share their surname, for purposes of clarity we will refer to them by their first names. We intend no disrespect.
The court concluded it lacked jurisdiction because Deborah failed to bring a timely motion to set aside the family law judgment on reserved issues under Family Code section 2122. We agree with the court's analysis. The civil complaint seeks to undo portions of the judgment on reserved issues in the family law case. That judgment was appealed. We reversed a portion of the judgment on reserved issues, and otherwise affirmed. We held that "except for the sums designated as [John's] postseparation salary and independent contractor compensation, the payments awarded to him under the confidential settlement and release constitute his equity interest in [his former firm] and the trial court erred in characterizing these sums based on when [John] began work on each case." (In re Marriage of Restaino (Jan. 13, 2012, G043194) [nonpub.opn.]) (Restaino I). We remanded that portion of the judgment with "directions to equally divide between the parties all nonsalary proceeds received by [John] under the settlement agreement." (Ibid.)
All further statutory references are to the Family Code unless otherwise stated.
The "trial court is bound by the directions given and has no authority to retry any other issue or to make any other findings [regarding the judgment on reserved issues]. Its authority is limited wholly and solely to following the directions of the reviewing court." (Rice v. Schmid (1944) 25 Cal.2d 259, 263.) Moreover, "[r]es judicata bars not only issues that were raised in the prior suit but related issues that could have been raised." (Villacres v. ABM Industries Inc. (2010) 189 Cal.App.4th 562, 569.) Section 2122 provides an exception to the bar of res judicata and is the exclusive means by which the judgment on reserved issues may be set aside. But an action or a motion under section 2122 to set aside the judgment on grounds of nondisclosure or concealment must be filed within one year of the date on which the complaining party either discovered or should have discovered the fraud or nondisclosure. That time had expired before the civil action was filed. Accordingly, we affirm the judgment of dismissal.
FACTS
In reciting the facts, we apply the usual standard of review of a sustained demurrer, accepting as true the facts stated in the SAC, and taking judicial notice of our two prior opinions, Restaino I, supra, G043194 and In re Marriage of Restaino (May 16, 2013, G045429) [nonpub.opn.]) (Restaino II). We also take judicial notice of the same documents the trial court judicially noticed when ruling on Deborah's demurrer.
Deborah argues our prior opinions "cannot be cited or relied upon as authority" pursuant to California Rules of Court rule 8.1115(a), which prohibits citation to unpublished opinions. But we are not taking judicial notice of the truth of anything we said in the opinions. We cite them only to review what issues the opinions considered, not whether our opinions were correct. A review of those opinions places the present case in context and allows us to explain what issues were considered and decided in the family law case. (See Cal. Rules of Court, rule 8.1115(b)(1) [unpublished opinion may be cited when relevant under doctrine of law of the case, res judicata, or collateral estoppel.)
The Marital Litigation in the Family Law Court and the Subsequent Appeals
The parties separated in November 2004, after a 21-year marriage. In February 2005, Deborah filed a marital dissolution petition. Shortly thereafter, the parties entered into a stipulation concerning temporary support, a division of the proceeds from the sale of the family home, and the handling of several bank and securities accounts. Without objection, John obtained a judgment terminating the parties' marital status in July 2006. John, an attorney, filed a response to the petition with a schedule of assets that listed his "[e]quity share" in the Law Firm of Lopez, Hodes, Restaino, Milman & Skikos (Lopez Hodes) as a community asset. (Restaino I, supra, G043194.)
Lopez Hodes was a plaintiff-oriented firm that handled mass tort lawsuits involving the pharmaceutical industry. In 2005, Lopez Hodes began to encounter financial problems. The shareholders agreed to dissolve the firm under the supervision of an arbitrator. In late 2006, John signed a confidential settlement and release with Lopez Hodes (settlement agreement). The settlement agreement's "recitals declared Lopez Hodes was 'in the process of winding down' and would 'cease operations . . . upon the conclusion of its existing projects . . . .' The recitals also identified John as 'an employee and a shareholder' of Lopez Hodes, acknowledged '[v]arious claims have been . . . or could have been asserted by and against [John], [Lopez Hodes] and certain individual shareholders,' which the firm and its shareholders agreed to arbitrate 'to assist . . . in resolving any and all past, present and future disputes, claims and controversies that concern or affect [John] and [Lopez Hodes],' and that '[a]ny remaining claims [John] has or might have against [Lopez Hodes] or any of the individual shareholders . . . are being fully resolved by this Agreement.'" (Restaino I, supra, G043194.)
"In December 2006, [John] filed an order to show cause to modify spousal support. [John's] supporting declaration stated Lopez Hodes was 'winding down' 'under the supervision of' an arbitrator, and that he had 'entered into a [confidential] agreement with Lopez Hodes with respect to the termination of my interest.'" (Restaino I, supra, G043194.)
In April 2007 Deborah filed her declaration in the family court in support of a pending order to show cause. In that declaration, Deborah stated, "Lopez Hodes is involved in a wind-down of the firm. The firm is utilizing [Hon.] Justice [John K.] Trotter (JAMS) to arbitrate the wind-down, which includes buying-out [John's] interest in the firm. [John] and the firm, with Justice Trotter's assistance, arrived [at] a buy-out amount. [John] unilaterally negotiated the buy-out amount (approximately $3.3 million, with additional contingency fees tied to pending litigation) from the firm. I was provided with the offers made between [John] and Lopez Hodes, but was not provided with the supporting information that detailed the calculation of the offers. The supporting information is necessary to determine how the settlement figure was determined. I am informed and believe that [John's] interest was significantly reduced because of civil lawsuits filed against [John] and/or the firm. . . . My counsel requested this information from [John], but he has not provided same. To that end, my attorney prepared an Authorization regarding the release of information from JAMS and provided it to [John's] counsel (at the last hearing on March 13, 2007), who indicated that he would need to discuss the matter with Justice Trotter. As of this date, my attorney has not received the executed Authorization or a response. My attorney has since issued a Deposition Subpoena to JAMS to obtain the information; the documents are to be served on April 16, 2007 (see Declaration of Michael J. Haapala)."
In preparation for trial in the family law case, Deborah filed a trial brief. The brief addressed numerous issues, including the settlement agreement, as to which Deborah stated, "It will be made available to the court at trial." She wrote, "The court's order concerning equal division of the Lopez Hodes funds should include provisions that require full disclosure, so that [Deborah] is assured she is receiving her portion of all distributions."
The original family law trial took place over many days, and after one more session in mid-January 2009, the court issued a tentative decision in February 2009. The court issued a final statement of decision and entered judgment on the reserved issues in December 2009.
Deborah appealed the resulting judgment on reserved issues contending the trial court erred in its quantification of the parties' marital standard of living and in its characterization and division of John's interest in Lopez Hodes. On January 13, 2012, we issued our opinion in Restaino I, supra, G043194, affirming in part and reversing in part the judgment. We rejected Deborah's first contention but agreed with her second, concluding the court erred by construing the agreement and merely distributing John's compensation for his continued handling of some of the firm's ongoing case work. In our view, the interest constituted a community asset. We stated except for the sums designated as John's postseparation salary and independent contractor compensation, the payments awarded to him under the settlement agreement constituted his equity interest in Lopez Hodes and the trial court erred in characterizing these sums based on when John began work on each case. We reversed as to the ruling on the extent of John's interest in Lopez Hodes and remanded for further proceedings with directions to "equally divide between the parties all nonsalary proceeds received by [John] under the settlement agreement." (Restaino I, supra, G043194.) The remittitur issued in Restaino I on March 14, 2012.
While the appeal in Restaino I was pending, the trial court conducted a hearing on several issues: (1) accountings for both pretrial law firm distributions divided between the parties and spousal support arrearages; (2) motions for attorney fees; and (3) requests for sanctions. In May 2011 the trial court entered a judgment on further reserved issues on these matters. Both parties appealed the judgment resulting in our decision in Restaino II, supra, G045429.
In Restaino II, we reversed several paragraphs in the judgment on further reserved issues and remanded to the trial court for a determination, in light of our prior reversal in Restaino I, supra, G043194, the amount of spousal support arrearages, if any, John owed to Deborah and her motion for attorney fees. In all other respects, we affirmed. (Restaino II, supra, G045429.)
The Present Civil Action
Deborah initiated the instant case on October 29, 2013 by filing a complaint against John for damages for breach of fiduciary duty and fraudulent concealment. John demurred.
The parties have not supplied us with the minute order reflecting the court's ruling. We assume the demurrer was sustained with leave to amend.
In February 2015 Deborah filed a request for order (RFO) in the family law case seeking "other" orders including (1) that the complaint in the instant case "be deemed a first amendment to the Petition in this case filed over 10 years ago on February 2, 2005 and that the issues in the Complaint be tried and resolved in this case;" (2) that the complaint be deemed filed retroactive to its actual filing date, October 29, 2013, that John be required to file a responsive pleading within 30 days; and (3) if the court is uncertain about the intent of the order made in civil court, that the family law court request clarification directly from the civil trial judge, the Honorable Kirk Nakamura, "so that the claims that [Deborah] made in the civil case are not left in a 'legal limbo.'" The family court denied Deborah's request.
In response, in May 2015 Deborah filed a petition for writ of mandate in this court. Deborah sought a peremptory writ of mandate in the first instance commanding the family court to grant her RFO or issue an alternative writ demanding the family court to either grant the RFO or to show cause why it should not do so. In August 2015 we summarily denied Deborah's petition.
Meanwhile Deborah filed a first amended complaint in May 2015. John again demurred. The operative second amended complaint (SAC) filed in October 2015 is at issue in this appeal. The SAC alleges causes of action for breach of fiduciary duty and fraudulent concealment.
Again, the record does not reflect the outcome of the demurrer hearing, but we assume it was sustained with leave to amend.
The SAC alleges John had and has a fiduciary duty to Deborah under sections 721 and 1100. It alleges in 2006, without her prior knowledge or consent, John and the members of Lopez Hodes entered into the settlement agreement. The settlement agreement purported to give the exclusive power to resolve all disputes between the members of Lopez Hodes, to value Lopez Hodes, to distribute its assets and income, and to pay its debts to a private dispute resolution service by purporting to appoint an arbitrator with binding and nonappealable powers. The settlement agreement purported to give the arbitrator, without her prior knowledge or consent, the power to decide the value of her community property without giving her information about how the value of the community property interest was calculated or the basis for determining how and when the value would be paid. She alleges although the settlement agreement contains a provision stating that "nothing in this [a]greement shall preclude John . . . from sharing this [a]greement or sharing any information with Deborah . . . or her lawyers regarding [Lopez Hodes] as required by law," John, Lopez Hodes, and the arbitrator used the agreement to hide and withhold from Deborah information to which she was and is entitled under California law.
The SAC alleges during the pendency of the dissolution of marriage case Deborah personally and through counsel repeatedly requested material information about the assets, obligations and value of the community property interest in Lopez Hodes from John and Lopez Hodes. She requested information about the manner in which the value of the community property interest in Lopez Hodes was calculated and information about whether there was any reduction in value because of John's alleged misconduct. John, Lopez Hodes, and the arbitrator refused to provide the information.
The SAC alleges John breached his fiduciary duty to Deborah by signing the agreement which was designed to fraudulently conceal material information from Deborah; intentionally withholding information from Deborah about the value of the community property interest in Lopez Hodes; transferring the community interest in Lopez Hodes for less than its true value; and intentionally causing Deborah to incur substantial attorney fees. It alleges Deborah did not discover the facts of John's breach until 2012 when she hired an investigator who advised her he had seen e-mails from Lopez Hodes which referred to facts constituting the breach of fiduciary duty and fraudulent concealment.
Deborah attached as an exhibit to the SAC an e-mail string from June 2005. It begins with several proposals by John for his separating from Lopez Hodes. The e-mail referenced the need to relieve John of his partner shares immediately. John also proposed as follows: "Within whatever parameters [my attorney] feels will be necessary to avoid us from being accused of fraudulent concealment, my 'equity' shares in the firm, post-Zyprexa as you mentioned, be 'frozen' for a period of time, perhaps two years. Monie, I don't know how we could do that vis-à-vis Deborah and the [Internal Revenue Service] and it may be that my 'net-net' after paying both entities will need to be deposited into an interest-bearing trust account not to be withdrawn for two years or the passage of any SOL, whichever comes sooner. If, during the applicable SOL period of time, a formal complaint IS made with a suit filed then these funds would be available to negotiate an early settlement, avoiding exposure to both the firm and the partners."
Deborah attached as another exhibit to the SAC an unsigned "Separation Agreement and Specific Release," which appears to be some version of the settlement agreement. The SAC alleges Deborah did not know if the settlement agreement became effective in the form attached as an exhibit.
The SAC alleges there is no final judgment adjudicating any claim made or issue raised in the SAC. The SAC alleges the family law case is still pending and under the doctrine of equitable tolling, any otherwise applicable statute of limitations is tolled. It alleges in the family law case, John was provided with timely notice "about the remedies sought here" and there is no prejudice to John in preparing for the instant case.
The fraudulent concealment cause of action alleges that in addition to the fiduciary duties under sections 721 and 1100, John has duties under Corporations Code section 16403, subdivision (c)(1), requiring him to provide information to Deborah concerning the community's business and affairs and under Corporations Code section 16404 to hold as trustee any property, profit, or benefit derived from the community property and to refrain from dealing with the community property "in the conduct of the winding up of its affairs as or on behalf of a party having an adverse interest such as [Lopez Hodes] and members of [Lopez Hodes]." The SAC alleges John, aided and abetted by Lopez Hodes and the arbitrator, actively and fraudulently concealed information and purported to transfer the community property interest in Lopez Hodes without Deborah's knowledge or consent for less than its fair value.
It appears neither Lopez Hodes nor any member other than John, nor Justice Trotter, was named as a defendant.
Deborah prays for (1) the court to declare the settlement agreement null and void as it pertains to Deborah, and that John, Lopez Hodes and its members be ordered to disclose all information "to which [Deborah] is entitled under California law;" (2) the court to set aside any decision made by the arbitrator to the extent it affects, determines, or values the community property interest in Lopez Hodes; (3) the court award 100 percent of the actual value of the community property interest in Lopez Hodes to Deborah and order John to pay her attorney fees; and (4) the court declare all monies received by John for the value of the community property interest in Lopez Hodes be held by him as a trustee for Deborah, and that he disgorge those funds to her with interest.
As he had with prior versions, in November 2015 John filed a demurrer to the SAC. He argued the SAC is barred by the statute of limitations, res judicata and collateral estoppel, and because there is no civil jurisdiction over this family law matter. John requested judicial notice of (1) a November 8, 2010 ruling in the family law case; (2) an April 18, 2007 declaration of Deborah in the family law case; (3) Deborah's November 2007 trial brief in the family law case; and (4) the family law court's March 2015 final ruling on Deborah's motion to amend the petition. Deborah opposed the demurrer and John's request for judicial notice.
In February 2016 the court sustained the demurrer to the SAC without leave to amend. The court granted John's request for judicial notice but not as to the truth of any factual matters alleged therein, with the exception of any facts in Deborah's declaration which were inconsistent with the allegations of the pleading before the court. The court found the issue of the dissolution of Lopez Hodes, and distribution of its assets to John, were both disclosed to Deborah and addressed in the underlying family law case, and that Deborah failed to bring a timely motion under section 2122 thereby depriving the court of jurisdiction under In re Marriage of Georgiou & Leslie (2013) 218 Cal.App.4th 561, 568 (Georgiou). The court did not rule on John's other arguments. Judgment of dismissal was entered in March 2016.
As relevant here, section 2122, subdivision (a) provides that "[a]n action or motion [to set aside a judgment] based on fraud shall be brought within one year after the date on which the complaining party either did discover, or should have discovered, the fraud." Section 2122, subdivision (f) provides that "[a]n action or motion [to set aside a judgment] based on failure to comply with the disclosure requirements shall be brought within one year after the date on which the complaining party either discovered, or should have discovered, the failure to comply."
Deborah timely appealed from the judgment of dismissal.
DISCUSSION
The SAC alleges breach of fiduciary duty under sections 721 and 1100. Section 721 places upon each spouse a confidential fiduciary relationship imposing a duty of the highest good faith and fair dealing; it also prohibits a spouse from taking any unfair advantage of the other. (Id., subd. (b).) Section 1100 imposes fiduciary duties upon a spouse managing community property. (See Id., subd. (e).) The SAC also alleges fraudulent concealment, relying on section 721 and Corporations Code sections 16403, subdivision (c) and 16404. Corporations Code section 16403, subdivision (c)(1) provides, "Each partner and the partnership shall furnish to a partner, and to the legal representative of a deceased partner or partner under legal disability, both of the following, which may be transmitted by electronic transmission by the partnership (subdivision (4) of Section 16101): [¶] (1) Without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this chapter." Corporations Code section 16404 governs fiduciary duties between partners.
Section 721, subdivision (b), incorporates the duties specified in Corporations Code sections 16403, 16404, and 16503 as applicable to the fiduciary duties of a spouse.
As relevant here, a demurrer is properly sustained when the complaint "does not state facts sufficient to constitute a cause of action." (Code Civ. Proc., § 430.10, subd. (e).) "In determining whether plaintiffs properly stated a claim for relief, our standard of review is clear: '"We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed." [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.'" (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
The court found the issue of the dissolution of Lopez Hodes, and distribution of its assets to John were both disclosed to Deborah and addressed in the underlying family law case, and that Deborah failed to bring a timely motion to set aside the judgment under section 2122, thereby depriving the court of jurisdiction. Deborah contends the judgment of dismissal should be reversed because the trial court had jurisdiction over the claims in the SAC. She argues that section 2122 does not apply to this case because there is not yet a final judgment to set aside under section 2122. Deborah is wrong.
The December 2009 Judgment on Reserved Issues is Final
The judgment on reserved issues, entered in December 2009, became a final judgment as to all issues that were actually litigated, or which could have been litigated. The characterization and division of all previously unadjudicated property was placed at issue in the trial, including the community property interest in the buyout of John's interest in his former firm. Deborah's trial brief asked that the proceeds of the settlement agreement be divided equally, but also requested that the judgment include provisions that would require full disclosure by John. A party is not permitted to present their case in a piecemeal fashion as Deborah attempts to do here. "Res judicata bars not only issues that were raised in the prior suit but related issues that could have been raised." (Villacres v. ABM Industries Inc., (2010) 189 Cal.App.4th 562, 569.) "'"The doctrine of res judicata rests upon the ground that the party to be affected , . . . has litigated, or had an opportunity to litigate the same matter in a former action in a court of competent jurisdiction, and should not be permitted to litigate it again to the harassment and vexation of his opponent. Public policy and the interest of litigants alike require that there be an end to litigation."' [Citation.] '[R]es judicata benefits both the parties and the courts because it "seeks to curtail multiple litigation causing vexation and expense to the parties and wasted effort and expense in judicial administration."'" (Id. at p. 575.) "'"'If the matter was within the scope of the action, related to the subject-matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it . . . . The reason for this is manifest. A party cannot by negligence or design withhold issues and litigate them in consecutive actions. Hence the rule is that the prior judgment is res judicata on matters which were raised or could have been raised on matters litigated or litigable . . . .'"'" (Id. at p. 576.)
Here, the issues of the amount and characterization of the money owed to John for his interest in Lopez Hodes was squarely litigated in Restaino I, supra, G043194. If Deborah wished to challenge the validity of the settlement agreement, and the amounts and characterization of the monies to be paid out under it, she was obligated to do so then.
Deborah's Claims Were Cognizable in the Family Law Trial
John's interest in his former firm, the validity of the settlement agreement and the amounts and characterization of the payments made thereunder were clearly cognizable in the family law trial. Section 1101, subdivision (a) provides that "[a] spouse has a claim against the other spouse for any breach of the fiduciary duty that results in impairment to the claimant spouse's present undivided one-half interest in the community estate, including, but not limited to, a single transaction or a pattern or series of transactions, which transaction or transactions have caused or will cause a detrimental impact to the claimant spouse's undivided one-half interest in the community estate." Generally, section 1101, subdivision (d)(1) imposes a time limitation: "Except as provided in paragraph (2), an action under subdivision (a) shall be commenced within three years of the date a petitioning spouse had actual knowledge that the transaction or event for which the remedy is being sought occurred." (Ibid.) But that time limit does not apply while issues are being litigated in the dissolution of marriage action. "An action may be commenced under [section 1101] . . . in conjunction with an action for . . . dissolution of marriage . . . without regard to the time limitations set forth in paragraph (1)." (Id., subd. (d)(2).) Thus, until the judgment on reserved issues was entered, Deborah was free to litigate the validity of the settlement agreement in the family law trial without regard to the three-year limitation period. Because an appeal was taken, the automatic stay under Code of Civil Procedure section 916, subdivision (a) precluded any further challenge to the judgment on reserved issues during the pendency of the appeal. But upon issuance of the remittitur in Restaino I, supra, G043194 on March 14, 2012, the legal landscape changed.
Trial Court Must Follow Appellate Court's Directions
Following issuance of the remittitur, "the trial court is bound by the directions given and has no authority to retry any other issue or to make any other findings. Its authority is limited wholly and solely to following the directions of the reviewing court." (Rice v. Schmid, supra, 25 Cal.2d 259, 263.) Thus, unless the judgment on appeal in Restaino I, supra, G043194 is set aside, no court has the authority to change our directions to the trial court.
We directed the court to "equally divide between the parties all nonsalary proceeds received by [John] under the settlement agreement." (Restaino I, supra, G043194.) In other words, determine the payments made to John under the settlement agreement, determine whether the payments were nonsalary payments, and, if so, divide them equally between John and Deborah. In her SAC, Deborah prays for relief that is starkly at odds with the limited authority granted the trial court in Restaino I. Deborah asked the court (1) to declare the settlement agreement "null and void as it pertains to [her]," (2) to "set aside any decision made by the Arbitrator," whose decisions resulted in the settlement agreement, (3) that she be awarded "100% of the actual value of the community property interest in [Lopez Hodes]," and (4) that John be ordered to disgorge all sums received by him under the settlement agreement. None of that relief is available to Deborah unless she is able to set aside the final judgment in Restaino I. The trial court would manifestly be unable both to divide equally the nonsalary proceeds received by John under the settlement agreement and to set aside the very agreement which was the source of those proceeds, or to require John to disgorge all sums received by him under the settlement agreement.
Section 2122 is the Only Vehicle by Which the Judgment May be Set Aside
Section 2120 et seq. is the only potential avenue for setting aside the judgment. Normally, a judgment final on appeal is res judicata as to the claims which were made or could have been made in the underlying trial. But "[t]he statutory scheme [of section 2120 et seq.] creates an exception to res judicata, based on the recognition that 'the public policy of assuring finality of judgments must be balanced against the public interest in ensuring proper division of marital property, in ensuring sufficient support awards, and in deterring misconduct.'" (Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1144; § 2120, subd. (c).) The Legislature "adopted section 2122 to govern the time within which to bring an action to set aside a dissolution judgment based on fraud, perjury" (Rubenstein, at p. 1146), duress, mental incapacity, mistake, and failure to disclose. "[S]ection 2122 governs this matter in its entirety, irrespective of the various legal theories [Deborah] has pled in her [SAC]." (Ibid.)
See discussion of res judicata, ante.
Thus, "'[s]ection 2122 sets out the exclusive grounds and time limits for an action or motion to set aside a marital dissolution judgment.' [Citation.] 'Unlike traditional equitable set-aside law where "laches" is the only time limit on relief . . . , [section] 2120 et seq. accommodates the public policy interest in putting an end to litigation and ensuring the "finality" of family law judgments by setting absolute deadlines on obtaining a post-[judgment] set-aside. Once the statutorily-prescribed period expires ([§ 2122]), set-aside relief is not available and the judgment is effectively final for all purposes.'" (Georgiou, supra, 218 Cal.App.4th at p. 571.)
"Under section 2122, there are six grounds to set aside a judgment, or portion thereof, including actual fraud, perjury, duress, mental incapacity, mistake, and the failure to fully disclose the value of assets under section 2100 et seq." (Georgiou, supra, 218 Cal.App.4th at p. 571.) "An action or motion based on fraud shall be brought within one year after the date on which the complaining party either did discover, or should have discovered, the fraud. (§ 2122, subd. (a).) "An action or motion based on failure to comply with the disclosure requirements shall be brought within one year after the date on which the complaining party either discovered, or should have discovered, the failure to comply." (§ 2122, subd. (f).)
The One-year Statute Under Section 2122 Expired Before the Civil Action Was Filed
Deborah insists she did not discover her cause of action until an unspecified date in 2012. "Section 2122 is analogous to Code of Civil Procedure [section] 338, subdivision (d), pertaining to the statute of limitations for fraud." (Rubenstein, supra, 81 Cal.App.4th at p. 1149.) A statute of limitations does not begin to run until the cause of action accrues, that is, "'"until the party owning it is entitled to begin and prosecute an action thereon."'" (Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487; see Code of Civ. Proc., § 312 ["Civil actions, without exception, can only be commenced within the periods prescribed in this title, after the cause of action shall have accrued, unless where, in special cases, a different limitation is prescribed by statute"].) "Under the discovery rule, suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period." (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) "The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action." (Ibid.)
Here the SAC alleges that in 2006, without her prior knowledge or consent, John and the members of Lopez Hodes entered into the settlement agreement, which purported to give the exclusive power to resolve all disputes between the members of Lopez Hodes, to value John's interest in Lopez Hodes, to distribute its assets and income, and to pay its debts to a private dispute resolution service by purporting to appoint an arbitrator with binding and nonappealable powers. Deborah alleges that during the pendency of the dissolution of marriage case, she personally and through counsel repeatedly requested material information about the assets, obligations, and value of the community property interest in Lopez Hodes from John and Lopez Hodes, but that John, Lopez Hodes, and the arbitrator refused to provide the information. Thus, on the face of the SAC, Deborah pleads she was on inquiry notice of a breach of fiduciary duty. All of Deborah's allegations in the instant action relate to John's conduct surrounding the settlement agreement, which had been finalized by the time the family law trial occurred in 2009. The most damaging evidence appears in Deborah's own declaration filed on April 18, 2007. The court correctly took judicial notice of the declaration. There, she acknowledged she was provided with the offers made between John and Lopez Hodes and that she believed John's interest was significantly reduced because of civil lawsuits surrounding John's alleged misconduct. She declares she was seeking additional disclosures from John at that time. And, in her trial brief she argued the court should include provisions that require full disclosure in its order. Hence, Deborah was clearly on notice further investigation was required to cull through her suspicions John may have been breaching the fiduciary duty he owed to her.
Deborah argues judicial notice of the declaration is improper. We disagree. The trial court granted John's request for judicial notice specifically stating it was not granting judicial notice as to the truth of any factual matters except the facts in Deborah's declaration which were inconsistent with the allegations of the pleading before the court. (See Evid. Code, § 452, subd. (d) [court may judicially notice records of any court of this state]; see Pang v. Beverly Hospital, Inc. (2000) 79 Cal.App.4th 986, 989-990 [court can take judicial notice of party's admissions or concessions which cannot reasonably be controverted].) Deborah cannot escape the consequences of her declaration under penalty of perjury. --------
Notwithstanding Deborah's declaration, and the inquiry notice which she plainly pleads in the SAC, the SAC alleges she did not discover the facts of John's breach until 2012 when she hired an investigator who advised her he had seen e-mails from Lopez Hodes. Deborah attached an e-mail string to the SAC. What Deborah misses is that she could have discovered the e-mails earlier had she diligently pursued her suspicions back in 2007 and asserted breach of fiduciary duty during the trial phase of the dissolution, or if not then, within one year after the issuance of the remittitur in Restaino I, supra, G043194. "[T]he plaintiff discovers the cause of action when he at least suspects a factual basis, as opposed to a legal theory, for its elements, even if he lacks knowledge thereof — when, simply put, he at least "suspects . . . that someone has done something wrong" to him [citation], "wrong" being used, not in any technical sense, but rather in accordance with its "lay understanding." [Citation.] He has reason to discover the cause of action when he has reason to suspect a factual basis for its elements. [Citation.] He has reason to suspect when he has "'"'notice or information of circumstances to put a reasonable person on inquiry'"'" [citation]; he need not know the "specific 'facts' necessary to establish" the cause of action; rather, he may seek to learn such facts through the "process contemplated by pretrial discovery"; but, within the applicable limitations period, he must indeed seek to learn the facts necessary to bring the cause of action in the first place — he "cannot wait for" them "to find" him and "sit on" his "rights"; he "must go find" them himself if he can and "file suit" if he does [citation]." (Unruh-Haxton v. Regents of University of California (2008) 162 Cal.App.4th 343, 358-359, italics added.)
Because, as explained above, Deborah was free to assert her claims at any time during the pendency of the dissolution trial, without regard to the time limitation of section 1101, subdivision (d)(2), and during the pendency of the appeal in Restaino I, supra, G043194 she was precluded from attacking the judgment, the section 2122 statute of limitations commenced running on the date the remittitur issued, March 14, 2012. Well before that date, Deborah knew she had not received the underlying information she desired and had even complained during the dissolution trial that her requests for the information were not being honored. Deborah's initial complaint in the civil action was filed on October 29, 2013, about seven months late.
Other Arguments Are Waived
Deborah made some other arguments in the trial court, but does not pursue them on appeal. Thus the additional arguments made in the trial court are waived on appeal. (See Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852 [appellant's failure to support contention with meaningful legal analysis waives issue on appeal].)
DISPOSITION
The judgment is affirmed. John shall recover his costs on appeal.
IKOLA, J. WE CONCUR: BEDSWORTH, ACTING P. J. THOMPSON, J.