APPEALS from judgments of the Superior Court of Los Angeles County. Teresa Sanchez-Gordon, Judge. Judgment in B211932 reversed with directions; judgment in B214302 affirmed in part and reversed in part with directions. (L.A.Super.Ct. No. BC 363843 c/w BC 366214 & BC 366214 c/w BC 363843).
The opinion of the court was delivered by: Rothschild, Acting P. J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
In the first of these consolidated appeals, Joseph L. Shalant challenges the dismissal of his complaint against Thomas V. Girardi and Nation Union Fire Insurance Company. The superior court dismissed the complaint on the ground that Shalant, a vexatious litigant, was in violation of the prefiling order that had been entered against him pursuant to Code of Civil Procedure section 391.7.*fn2 In the published portion of our opinion, we conclude that because Shalant was initially represented by counsel, who filed the complaint on Shalant's behalf, Shalant did not violate the prefiling order by later appearing in the case in propria persona. Accordingly, we reverse the dismissal.
In the second appeal, Shalant challenges the judgment entered against him on Jose Castro's complaint in a related action. In the unpublished portion of our opinion, we conclude that the judgment against Shalant is not supported by substantial evidence and must be reversed as well.
In a prior action in 2002, the superior court entered an order declaring Shalant to be a vexatious litigant within the meaning of section 391. On that basis the court entered a "prefiling order" pursuant to section 391.7. The prefiling order provides that Shalant "is prohibited from filing any new litigation in propria persona in the courts of California without approval of the presiding judge of the court in which the action is to be filed." In 2004, on appeal from the final judgment in that action, the Court of Appeal affirmed the trial court's determination that Shalant is a vexatious litigant. (Shalant v. Deutsch (Feb. 4, 2004, B157103) [nonpub. opn.].)
On December 22, 2006, Shalant, represented by counsel, filed the instant action against Girardi, Continental Casualty Company, and National Union. The complaint alleges that Shalant and Girardi jointly represented Castro and his wife as the plaintiffs in a personal injury matter, in which Continental and National Union were the defendants' insurers. According to Shalant's complaint, when the Castros' matter settled Continental and National Union issued the settlement payment to the Castros and Girardi alone, without including Shalant as a payee or giving him notice, despite Continental and National Union's awareness of his attorney's fees lien on the settlement proceeds. Thereafter, the complaint alleges, Girardi paid Shalant $745,000 of the proceeds as attorney's fees but refused to pay an additional $27,745.34 to which Shalant was entitled "as the balance of his fee interest and as reimbursement of costs." Shalant alleged claims for breach of contract, breach of the covenant of good faith and fair dealing, an accounting, and intentional and negligent interference with prospective economic advantage.*fn3 Shalant sought to recover actual damages in the amount of $27,745.34 and punitive damages in the amount of $5,000,000.
On January 22, 2006, Girardi filed a cross-complaint against Shalant. Girardi alleged that Shalant was disbarred on May 18, 2005, before entering into the contract that formed the basis for Shalant's complaint, and that Shalant had misrepresented his bar status to Girardi and the Castros to induce them to enter into the contract. Girardi sought to recover actual damages in the amount of $745,000 and punitive damages in the amount of $7,000,000. Shalant's state bar records (introduced by Girardi) indicate that the actual chronology differs from the allegations of the cross-complaint. Shalant was involuntarily "enrolled inactive" by the state bar on May 18, 2005, effective no later than May 21, 2005. On December 14, 2005, the Supreme Court filed an order disbarring Shalant, effective January 13, 2006. (See Cal. Rules of Court, rule 9.18(a).)
On February 13, 2007, Castro filed a complaint against Shalant. Castro's operative second amended complaint alleges claims for fraud, concealment, negligent misrepresentation, and breach of fiduciary duty. The pleading alleges that Shalant either misrepresented or failed to disclose various facts about his impending discipline by the bar (e.g., Shalant allegedly told Castro that he "had a minor infraction with the California [s]tate [b]ar" that would likely lead to nothing more than a suspension of at most 90 days), and that as a result Castro entered into a joint-representation and fee-splitting agreement with Shalant and Girardi that contained "less favorable terms regarding fees and costs than [Castro] was entitled to." In his action against Shalant, Castro (represented by Girardi) sought to recover actual damages in the amount of $745,000 and punitive damages in the amount of $7,000,000.
On September 4, 2007, National Union filed a cross-complaint against the Castros for indemnity and related claims.
In May 2007, new counsel for Shalant substituted into the case, replacing the attorney who had filed the complaint on Shalant's behalf. Seven months later, Shalant substituted in as his own attorney on Girardi's cross-complaint. The following month Shalant substituted in as his own attorney on his complaint as well. Two months after that, Shalant's original counsel substituted back into the case, replacing Shalant. Three months later, however, Shalant's attorney filed an ex parte application to be relieved as counsel. On July 15, 2008, the trial court granted counsel's application, leaving Shalant self- represented once again.
On July 29, 2008, Girardi filed a notice of Shalant's status as a vexatious litigant subject to a prefiling order. On July 30, 2008, National Union filed a motion to dismiss Shalant's complaint for failure to comply with section 391.7.
Shalant filed an application for permission to proceed in propria persona, but the application is not part of the record on appeal. The record does, however, include the presiding judge's minute order dated August 12, 2008, denying Shalant's application on the ground that "no proof of service is attached to establish that notice was given to all parties." On the same day and in response to the court's order, Shalant submitted a handwritten letter to the presiding judge. In it, Shalant contended that the relevant statutory provisions and case law do not require him to serve his application on opposing parties. He asked the court to inform him if the court disagreed, and he said he would be "happy" to serve the other parties and would do so "immediately" if the court was of the opinion that service was required.
On August 13, 2008, Girardi filed an ex parte application to dismiss Shalant's complaint pursuant to section 391.7 or, in the alternative, for an order shortening time to hear a motion to dismiss on that ground. On August 14, 2008, the court calendared National Union's and Girardi's motions to dismiss for hearing on September 18, 2008, and the court ordered Shalant "to request permission from the presiding [j]udge to proceed in this matter." Also on August 14, the presiding judge entered a minute order noting receipt of Shalant's handwritten letter of August 12, which the court considered to be an "improper ex- parte communication" because it was not served on defendants. The court returned the letter to Shalant without further comment.
At some subsequent date, Shalant filed and served a new application for permission to proceed in propria persona. The copy of the application in the record on appeal bears no file stamp, but Shalant states in his opening brief that the application was filed on August 18. The proof of service is dated August 18. The trial court calendared Shalant's application for hearing on ...