Trial Court: Santa Clara County Superior Court Superior Court No.: CV075255 Trial Judge: The Honorable Kevin J. Murphy
The opinion of the court was delivered by: Rushing, P.J.
CERTIFIED FOR PUBLICATION
(Santa Clara County Super. Ct. No. CV075255)
Respondent Hopkins & Carley (H&C) secured an arbitration award against appellant Timothy Gens on a debt for unpaid bills for legal services. Gens moved unsuccessfully to vacate the award, and judgment was duly entered against him. Six months later, he brought a motion to set aside the judgment under Code of Civil Procedure section 473, subdivision (b) (§ 473(b)). Although the motion included perfunctory assertions that the judgment was the result of mistake, inadvertence, surprise, or excusable neglect, Gens made no attempt to substantiate them. The real gist of the motion was that he had now discovered a defense to the underlying claim, namely, that H&C had committed ethical violations in providing the legal services on which the arbitration award rested. The trial court denied the motion for relief from the judgment and granted H&C's motion for sanctions. Because Gens offered no coherent explanation for his failure to raise the supposed defense sooner, we affirm both orders as to him. In a related appeal, No. H032780, we affirm the sanctions order as it affected his present attorneys.
Gens is a patent attorney licensed in Illinois, but not in California. In 2002 he engaged H&C on behalf of an entity, L-Tech, which he co-owned with one Gary Ferrell. Gens sought legal assistance in connection with the sale of L-Tech, or its assets, to SEZ Holdings (SEZ), an Austrian entity. This engagement apparently ended when the deal culminated with SEZ hiring Gens and Ferrell and absorbing L-Tech by merger.
In March 2004, Gens again engaged H&C, this time on his own behalf, to advise and represent him in a dispute with Ferrell, and perhaps with SEZ, arising from the arrangement. H&C's engagement was embodied in a written agreement including an undertaking to submit any disputes to mandatory arbitration, subject to the client's right to arbitrate the dispute "under the attorney fee arbitration procedure that exists under California law." (See Bus. & Prof. Code, §§ 6200 et seq. [Mandatory Fee Arbitration Act] (MFAA).)
Although the precise nature of the dispute between Gens and Ferrell is not apparent, Gens apparently claimed that Ferrell had made some sort of "secret deal," apparently with SEZ, in breach of some duty to Gens. In any event, H&C brought an action against Ferrell on behalf of Gens in San Mateo Superior Court. Ferrell cross-complained alleging, among other things, that Gens had engaged in the unauthorized practice of law.
By May 2006, H&C's outstanding bills in the Ferrell matter had risen to some $415,000, which Gens refused to pay, claiming that H&C had exceeded a supposed budget without his authorization. According to proofs of service in the present record, H&C sent Gens a letter on July 20, 2006, enclosing a notice of his rights under the MFAA, as required by Business and Professions Code section 6201, subdivision (a). On September 6, 2006, H&C formally demanded arbitration before the American Arbitration Association (AAA) as provided in the professional services agreement. Gens did not respond to this demand or to the many ensuing notices and communications directed to him by H&C and the case administrator over the next four months. In his absence, an arbitrator was appointed and a hearing on the merits was scheduled for January 16, 2007.
On January 13, 2007, Gens wrote to AAA demanding that it "cease and desist any proceedings . . . immediately." He denied that the matter had been "properly served and noticed," stating, "If any such service and notice has been filed with the Association, it is false and will be proven so at the appropriate opportunity." Apparently alluding to his rights under the MFAA, he wrote that a "Request for Arbitration of a Fee Dispute has been prepared and will be filed with the California State Bar at 9 am on Tuesday, January 16, 2007"--one-half hour before the time set for the AAA hearing.*fn1 Gens also asserted in the letter that he would be "meeting with counsel" on the morning of the hearing "to specifically address this Association case."
The arbitrator went forward with the hearing on January 16. Gens did not attend. On January 23, 2007, the arbitrator entered an award in H&C's favor in the amount of $474,061.56, plus $6,950.00 in fees and expenses.
Acting in propria persona, Gens filed a petition to vacate the arbitration award. H&C countered with a petition to confirm the award and enter judgment. In support of his petition, and opposition to H&C's, Gens contended that he had not received proper notice, or perhaps any notice, of relevant matters, particularly the required notice of his rights under the MFAA. He implied that mail delivered to his Palo Alto residence might not have reached him, suggesting among things that he had "sold" that home after moving to Wisconsin.*fn2 However, in January he had made similar claims in an attempt to prevent H&C from obtaining a right to attach order and writ of attachment. The trial court then concluded, after reviewing voluminous evidence of attempts to serve Gens with relevant documents, that he "did have proper notice." The court further observed, "I can't recall ever seeing more evidence indicating an attempt to avoid service of process by an individual than what I have seen in reviewing this file. It appears to me that you were ducking process for a long period of time." The court granted the application and issued the requested right to attach order and writ of attachment. Gens appealed, and this court ultimately affirmed, finding ample evidentiary basis for the trial court's findings. (Hopkins & Carley v. Gens (Mar. 26, 2009, H031383) [nonpub. opn.] (Gens I).)
Meanwhile, on June 5, 2007, the trial court granted H&C's petition to confirm the award, and entered a judgment for H&C. On June 19, the court denied the motion to vacate the award. Gens took two successive appeals "from the 'Judgment' entered June 5, 2007 and the Order entered June 19, 2007 denying Timothy Gens' 'Petition to Vacate.' " On July 17, 2007, we dismissed the first appeal, , H031731 (Gens II), for default in the payment of fees. Gens filed the second appeal, Hopkins & Carley v. Gens H031934 (Gens III), on August 17. H&C moved to dismiss it, in part, on the ground that it was filed more than 60 days after H&C had mailed notice of entry of judgment to Gens. Gens opposed the motion, stating that the appeal was not taken from the judgment but from the order of June 5, 2007, denying his motion to vacate the arbitration award. He also represented to this court, in the opposition and by separate letter, that he and H&C were "negotiating a potential settlement."
As a result of these maneuvers the appeal in Gens III was still pending on December 4, 2007, when Gens filed a motion in the trial court "for relief from judgment, pursuant to Code of Civil Procedure § 473" (the section 473 motion). Now represented by counsel--J. Michael Matthews of Matthews, Popik & White (MP&W)--Gens asserted in the notice of motion that "the judgment was entered against Mr. Gens through mistake, inadvertence, or excusable neglect." The supporting memorandum suggested that Gens had only belatedly discovered certain defenses to H&C's claim for fees, including that recovery was barred by H&C's having represented conflicting interests, without the clients' informed consent, by entering into the 2004 engagement. Gens also asserted that the judgment was "based on an impermissible ex parte default award," and reprised his previous claim that H&C had failed to provide the notice required by the MFAA.
H&C filed opposition to the motion for relief from the judgment and moved separately for sanctions under section Code of Civil Procedure section 128.7 (§ 128.7). It asserted that the relief sought by Gens was procedurally barred by (1) the pending appeal; (2) the lapse of more than six months from the claimed "mistake, inadvertence, or excusable neglect" on which the motion rested; and (3) the lapse of too much time from the arbitration award, which Gens sought in effect to vacate. H&C further argued that Gens had failed to identify any substantive basis for relief. It asserted that Gens had made a "strategic decision" and "tactical choice" by absenting himself from the arbitration proceedings and in choosing his arguments against confirmation of the arbitration award, and that relief was not available in such circumstances. It also contested the facts on which Gens based his claim for relief.
After hearing argument, the trial court announced that it was denying the section 473 motion "for two reasons. [¶] Number one, I do believe [the motion] is procedurally barred. [¶] Assuming I'm incorrect with that conclusion, even if we reach the factual merits, I believe there is no basis for that." It also granted the motion for sanctions, stating, "I do intend to impose sanctions against Mr. Gens in this matter, however not in the amount being requested. [¶] Sanctions in the amount of 9,000 dollars will be ordered." The court thereafter signed formal orders denying the motion for relief and granting the motion for sanctions as to both Gens and his attorneys.
On March 28, 2008, Gens appealed from the order denying relief from the judgment and the order awarding sanctions. On the same date, Matthews and CP&W filed a notice of appeal from the sanction order.*fn3
I. Denial of Relief from ...