IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT
February 2, 2011
BHIKHABHAI MORARBHAI PATEL, PLAINTIFF AND APPELLANT,
ZHANYUN YANG, DEFENDANT AND RESPONDENT.
Super. Ct. No. 07AS01718
Patel v. Yang CA3
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
Code of Civil Procedure section 663a provides that a party intending to make a motion to vacate a judgment (§ 663) must file and serve a notice of such intention either before the entry of judgment, or within 15 days of the mailing by the clerk of the notice of entry of judgment, or in any event within 180 days after the entry of judgment. The plaintiff, Patel, did not do any of these things and now seeks to escape the rule on equitable grounds. They are unavailing.
In March 2009 the trial court entered an order granting plaintiff Bhikhabhai Patel's motion to enforce a written settlement agreement with defendant Zhanyun Yang. (Code Civ. Proc., § 664.6)*fn1 More than six months later, in December 2009, Patel moved to vacate the judgment. The court denied the motion on the ground that it was untimely under section 663a.
Patel appeals from the order denying his motion. (8 Witkin, Cal. Procedure (5th ed. 2008), Attack on Judgment in Trial Court, § 143(2), p. 735.) He contends he came within an exception to the time limits of section 663a, under which a trial court in equity may modify a judgment in aid of its enforcement. He relies on the general proposition that a trial court rendering an equitable decree retains jurisdiction to enforce its provisions without mentioning its limitation to procedural matters. Accordingly, none of his supporting authority involves a motion to vacate an equitable decree in order to change its substantive provisions. We shall affirm the order.
In settlement of a disputed 2005 transaction involving the sale of a motel on Folsom Boulevard in unincorporated Sacramento County (the merits of which are irrelevant to this appeal), the parties executed a handwritten settlement agreement in June 2008 undoing the sale. It provided for forbearance of Patel's obligation to make interest payments on a promissory note held by Yang involving the sale of the Folsom Boulevard property. The agreement "contemplated" the drafting of a more formal version. When the parties were unable to agree on its terms, Patel filed a motion to enforce the agreement, which Yang opposed on the ground a handwritten agreement is not binding.
The trial court ruled in December 2008 in Patel's favor. It said that the handwritten agreement "contains all necessary material terms[,] and . . . is clear and unambiguous on its face. It is a global settlement that disposes of all issues . . . ." The court directed plaintiff Patel to prepare a formal order and judgment.
The parties submitted competing forms of judgment. Neither contains an express provision for interest accruing on the note. Yang objected to Patel's proposed judgment, asked the court to defer extinction of the note until the close of escrow on the property and asserted that the note bears "interest accruing thereon according to its terms until the[n]." (Italics added.) Patel's attorney did not respond to the assertion.
The trial court issued an order which said it had "considered the dueling judgments [and] determined that neither party's proposed judgment properly reflects the stipulation reached by the parties upon which judgment may be entered. [¶] Accordingly, the Court will not sign either of the proposed judgments. Instead, [it] will issue an order and judgment that properly incorporates the parties' stipulation as soon as its busy schedule permits."
In March 2009 the trial court entered an order that granted Patel's motion to enforce the handwritten settlement agreement. Although it said the note "shall be . . . canceled" at the time of the close of escrow, the order did not expressly provide for the accrual of interest on the note. The court "retain[ed] jurisdiction for purposes of enforcement of this order and judgment." The order did not direct the clerk to mail notice of entry of the order. Nonetheless, the clerk served a copy of the order on the parties in April 2009.
In September 2009, Yang filed a motion to enforce the judgment, citing difficulties with bringing the escrow to a close. Yang asserted that Patel had ceased making interest payments on the note in August 2008. Patel refused to close the escrow if Yang was credited with accrued interest. In a supporting declaration, counsel asserted that Patel was entitled under the agreement to stop making interest payments.
Relying on the "contemplation" in the settlement agreement that escrow would close no later than November 2008, Patel argued that the agreement to suspend interest payments was based on the understanding that the accrual of interest would cease as well. Counsel's supporting declaration did not assert there was such an understanding at the time the agreement was made (although Patel made an assertion to this effect in his September 19, 2009, letter to opposing counsel).
In a November 2009 order the trial court ruled that although the parties agreed on the suspension of interest payments, the nature of any agreement beyond that was not expressly incorporated in the order enforcing the settlement, "and the court cannot find terms and conditions in the settlement not explicitly stated in the [order]. Thus, the court declines to rule that interest on the note stopped accruing . . . ."
Patel thereafter filed the motion at issue in this appeal, invoking the time limitations of section 663. He sought to vacate the March 2009 order and the issuance of a new order providing that the accrual of interest on the note ended in September 2008. Counsel argued that in light of the interpretation given the March order by the trial court in its November 2009 order, the earlier order needed to be corrected on the issue of interest.
Yang opposed the motion as untimely under section 663a under any of that statute's measures. She also argued that even if interpreted as a motion for reconsideration (§ 1008), it was untimely and did not set forth new facts or law.
In his reply, plaintiff Patel disavowed any reliance on section 1008. Instead, he asserted for the first time that the motion was timely because the March 2009 order had retained jurisdiction to enforce it.
In its January 2010 order, the court denied the motion to vacate as untimely (declining to decide whether the court clerk had properly given notice of the March 2009 judgment under section 664.5 for purposes of the shorter deadline under section 663a, subd. 2). The court did not expressly address the plaintiff's argument regarding the retention of jurisdiction to enforce the judgment. It also found, in an apparent abundance of caution, that plaintiff Patel had not satisfied the requirements under section 1008 of setting forth new and different facts, law, or other circumstances that would warrant reconsideration.
Section 663a provides that a motion to vacate a judgment shall be made "[w]ithin 15 days of the date of mailing of notice of entry of judgment by the clerk of the court pursuant to Section 664.5, or service upon him by any party of written notice of entry of judgment, or within 180 days after the entry of judgment, whichever is earliest." Section 664.5 provides that the clerk shall mail notice of the entry of judgment "[u]pon order of the court . . . ."
The judgment (order granting the motion to enforce the written agreement) was entered in March 2009 and the motion to vacate the judgment was filed in December 2009. Accordingly, the motion to vacate the judgment was untimely even under the longer six-month period that runs from the entry of the order. Thus, we turn to plaintiff Patel's novel assertion that the time limit to vacate the March 2009 order did not begin to run until the entry of the November 2009 order allowing for accrual of interest.
Plaintiff cites several cases for the undisputed general proposition that a trial court rendering an equitable decree may retain jurisdiction over the matter to render any order that is necessary to enforce its provisions, which includes adjusting the interests of the parties. (City of Pasadena v. City of Alhambra (1949) 33 Cal.2d 908, 937 [after declaration of water rights, court may reserve jurisdiction to adjust entitlements pro tanto on basis of changed conditions]; Allen v. California Water & Tel. Co. (1946) 29 Cal.2d 466, 488 [after declaration of water rights and reservation of jurisdiction, court permitted to determine effects of added source of water]; Lord v. Superior Court (1946) 27 Cal.2d 855, 857-858 [jurisdiction to determine disposition of funds held in custodia legis in accord with a stipulation after dismissal of case]; Day v. Sharp (1975) 50 Cal.App.3d 904, 912-913 [after imposing constructive trust on an estate, court has continuing jurisdiction to adjust amount of damages upon settling of estate].)
However, none of these cases involved a motion to vacate an underlying equitable decree, either pursuant to section 663 or a reservation of jurisdiction in the decree, in order to change its substantive provisions. Rather, in each instance the court applied a previously adjudicated substantive entitlement in light of subsequent circumstances. What plaintiff Patel omits in invoking this principle is the qualification: a court is empowered "to modify procedural provisions, not to materially change the adjudication of substantial issues." (7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 80, p. 616 [italics added].)
Thus, in Orban Lumber Co. v. Fearrien (1966) 240 Cal.App.2d 853 (Orban), which both the treatise and defendant Yang cite, a judgment extended a contractual 10-year entitlement to harvest lumber in order to offset a period in which an injunction had prevented the harvester from exercising its rights, and reserved the court's jurisdiction over the matter. The harvester later moved for another extension for delays in obtaining necessary permits and rights of way. On appeal from the denial of the motion, Orban affirmed because the request for an extension did not relate to any delay related to procedures involved in the judgment; rather, it stemmed from contingencies unrelated to enforcement of the judgment, and involved a material change in a substantive right determined in the judgment. (Id. at pp. 856, 858-859.) This was unlike cases in which the modification of a time period did not involve a substantive right, but was related instead to the time period in which a party was to comply with the terms of a decree. (Id. at p. 856-857.)
Plaintiff Patel has thus failed to identify any precedent under which a court has the authority to modify the substantive terms of a previously rendered ruling under section 663 where the jurisdictional time limit has expired. This should not come as any surprise. It is a fundamental tenet of jurisprudence that any judicial error in a judgment "can only be rectified by the regular procedures for attack on judgment: motion for a new trial, motion to vacate judgment, appeal, or an independent action in equity." (7 Witkin, op. cit. supra, Judgment, § 65, p. 600.)
The actual error plaintiff Patel seeks to assert is not the failure of the original order to note expressly that interest was not to accrue on the note during the period of time that plaintiff Patel was permitted to suspend payments under the handwritten settlement agreement's provisions. Rather, it is the trial court's subsequent interpretation of this order in November 2009 as allowing for the accrual of interest. His remedy was an appeal from that latter order,*fn2 not a belated attempt to alter the substantive terms of the original order. As plaintiff Patel's motion to vacate the March 2009 order was untimely, we do not have occasion to consider the merits of the underlying argument.
The order denying the motion to vacate is affirmed.
BLEASE , J.
RAYE , P.J.
MAURO , J.