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Paul Lewow v. Surfside Iii Condominium Owners' Assn.

February 2, 2012

PAUL LEWOW, PLAINTIFF AND APPELLANT,
v.
SURFSIDE III CONDOMINIUM OWNERS' ASSN., INC. , DEFENDANTS AND RESPONDENTS.



Henry Walsh, Judge Superior Court County of Ventura (Super. Ct. No. 56-2008-00313595-CU-BC-VTA)

The opinion of the court was delivered by: Yegan, Acting P.J.

CERTIFIED FOR PUBLICATION

(Ventura County)

Paul Lewow unsuccessfully appeals from a $292, 205.50 attorney fees order in favor of Surfside III Condominium Owners' Association. (Association). He contends that Association's motion for attorney fees was not timely filed. While the trial court's articulated rationale concerning a bankruptcy stay was erroneous, it reached the correct result. The trial court's use of an unsound course of reasoning is not determinative as long as the result reached is correct. (E.g., Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216.) We conclude that there was good cause to extend the time for filing the attorney fees motion. We will affirm.

Factual and Procedural Background

On February 3, 2010, judgment was entered in favor of Association on appellant's complaint for failure to perform its duties. On February 10, 2010, notice of entry of judgment was mailed to appellant. That same day, appellant filed for relief under Chapter 13 of the United States Bankruptcy Code.

Association's counsel prepared a motion for attorney fees pursuant to Civil Code section 1354, subdivision (c). The statute provides: "In an action to enforce the governing documents" of a common interest development, "the prevailing party shall be awarded reasonable attorney's fees and costs." But counsel delayed filing the motion because counsel believed that "any proceedings in the trial court were stayed by the automatic bankruptcy stay."

On July 23, 2010, the bankruptcy proceedings were dismissed. On July 25, 2010, notice of the dismissal was mailed to Association.

Association filed its motion for attorney fees on August 26, 2010, 32 days after the mailing of notice of the bankruptcy dismissal. Appellant objected that the motion was not timely filed. He noted that rule 3.1702(b) of the California Rules of Court provides: "A notice of motion to claim attorney's fees . . . must be served and filed within the time for filing a notice of appeal . . . ."*fn1 A notice of appeal must be filed no later than 60 days after the party filing the notice has been served with notice of entry of judgment. (Rule 8.104 (a).) Since notice of entry of judgment was served on appellant on February 10, 2010, Association had 60 days from that date - until April 11, 2010 - to file its motion for attorney fees. But Association waited until August 26, 2010. Association, on the other hand, argued that the motion was timely filed because "the time to file the motion . . . was tolled during the pendency of the bankruptcy stay."

The trial court accepted Association's argument that the 60-day statutory period was tolled by the bankruptcy stay. The court noted that, "[e]xcluding the time that [appellant's] bankruptcy was pending," the motion was filed within the statutory deadline. Appellant's counsel protested: "There is nothing in the automatic stay that tolls any period, whether it's statutory, whether it's under rules of court, whatever the source of that time frame is." The court awarded Association attorney fees of $292,205.50.

Discussion

Pursuant to section 362(a)(1) of title 11 of the United States Code, the filing of a bankruptcy petition operates as an automatic stay of "the commencement or continuation . . . of a judicial . . . proceeding against the debtor that was or could have been commenced before the commencement of the [bankruptcy action] . . . ." (Ibid.) But the automatic bankruptcy stay does not toll the running of the 60-day statutory period. "The filing of a bankruptcy petition operates as an automatic stay of 'the commencement or continuation . . . of a judicial . . . proceeding . . . .' (11 U.S.C. § 362(a)(1).) The running of a statutory time period does not constitute the commencement or continuation of a judicial proceeding within the meaning of this section. [Citation.]" (ECC Construction, Inc. v. Oak Park Calabasas Homeowners Ass'n (2004) 118 Cal.App.4th 1031, 1036-1037 (EEC Construction).) In ECC Construction the appellate court concluded that, "under section 362(a)(1), the filing of the bankruptcy petition and the imposition of the automatic stay did not toll the running of the period of time in which defendant was required to file its notice of appeal. [Citation.]" (Id., at p. 1037, fn. omitted.) Likewise, the automatic stay here did not toll the running of the period of time in which Association was required to file its motion for attorney fees. (See rule 3.1702(b) ["A notice of motion to claim attorney's fees . . . must be served and filed within the time for filing a notice of appeal"]; March et al., Cal. Practice Guide: Bankruptcy (The Rutter Group 2010) ¶ 3:175, p. 3-22 ["The automatic stay does not toll or suspend the running of statutes of limitations on creditor claims against the debtor"].) Association relies on Code of Civil Procedure section 356. This reliance is misplaced. Section 356 provides: "When the commencement of an action is stayed by injunction or statutory prohibition, the time of the continuance of the injunction or prohibition is not part of the time limited for the commencement of the action." " 'A bankruptcy stay has been held to be a 'stautory prohibition' within the meaning of . . . section 356. [Citation.] [¶] . . . Under . . . section 356 . . . the period of time of the automatic stay should not be counted as part of limitation time.' [Citation.]" (Kertesz v. Ostrovsky (2004) 115 Cal.App.4th 369, 378, quoting from Schumacher v. Worcester (1997) 55 Cal.App.4th 376, 380.) Kertesz concerned a 10-year statute of limitations for the commencement of an action to enforce a judgment. Schumacher concerned a 4-year statute of limitations for the commencement of an action to foreclose a street improvement bond. Here, in contrast, section 356 is inapplicable because Association's motion for attorney fees was not "the commencement of an action" within the meaning of that section. " 'A statutory fee motion "does not create a new cause of action . . ." [citation], much less a new 'action.' It is a collateral matter, ancillary to the main cause. [Citations.] It seeks what is due because of the judgment . . . .' [Citations.]" (Serrano v. Unruh (1982) 32 Cal.3d 621, 636-637; see also Bankes v. Lucas (1992) 9 Cal.App.4th 365, 369 ["an award of attorney fees as costs is a collateral matter which is embraced in the action [brought by the plaintiff]"].)

Furthermore, section 356 is not "applicable to statutory time limits other than statutes of limitation. Statutes of limitation, which fix the time within which a suit must be commenced, are to be distinguished from other procedural statutes fixing times to do acts or seek relief. [Citation.]" (Napue v. Gor-Mey West, Inc. (1985) 175 Cal.App.3d 608, 616.) Rule 3.1702(b), which fixes the time for filing a motion for attorney fees, falls within the category of "other procedural statutes."*fn2

The effect of the automatic bankruptcy stay is set forth in 11 United States Code section 108(c) (section 108(c)), which provides: "[I]f applicable non-bankruptcy law . . . fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor, . . . and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of-- [ΒΆ] (1) the end of such period, including any suspension of such period occurring on or after the commencement of ...


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