(Super. Ct. No. PC20060324)
The opinion of the court was delivered by: Butz , J.
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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
This appeal challenges the trial court's postjudgment order, which granted a judgment creditor's motion for damages against a third party for a violation of its garnishee duties with regard to a writ of execution and notice of levy. We agree the trial court erred and shall reverse and remand.
Lemoin Brewer and Michael Palmer, partners in Snows Quarry Products (collectively Snows Quarry), obtained a judgment of nearly $1.5 million against L. W. Hall Company, Inc., which formerly did business under the name of Cobalt Crushing (hereafter Hall Inc.), for breach of a lease agreement. In enforcement of this judgment, Snows Quarry served a writ of execution and notice of levy on J. F. Shea Construction, Inc., in February 2010.*fn1 Snows Quarry brought the instant motion for damages against Shea for the latter's violation of its garnishee duties, contending Shea had issued three checks in excess of $100,000 to Hall Inc. without good cause after service of the writ of execution and notice of levy. (Code Civ. Proc., §§ 701.010 & 701.020;*fn2 see 2 Ahart, Cal. Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2012) ¶ 6:577, pp. 6D-62 to 6D-63 (rev. #1, 2012) [judgment creditor may determine garnishee liability by means of motion in underlying action]; see also Ilshin Investment Co., Ltd. v. Buena Vista Home Entertainment, Inc. (2011) 195 Cal.App.4th 612, 628-630 [distinguishing right to recover legal fees in claim in underlying action for breach of garnishee duties (§ 701.020) from independent creditor's suit (§ 708.210)].) After holding an evidentiary hearing, the trial court granted the motion and entered a "judgment" in favor of Snows Quarry.*fn3 Shea filed a timely notice of appeal.
Shea contends the trial court erroneously concluded that Shea must have been doing business with Hall Inc., rather than with its president, Lee W. Hall (hereafter Lee Hall), as an individual doing business under the name of L. W. Hall/Cobalt Crushing (hereafter Hall/Cobalt), because Lee Hall did not have the necessary contractor's license for the work for which Shea made payment. Shea also argues the evidence does not support the judgment because it ignored Shea's claim that Hall Inc. had an outstanding debt to Shea that would have offset any debt for the work performed. Finally, it argues the finding of Shea's lack of a good faith belief that it was making payment to Lee Hall as an individual is not supported by substantial evidence. Snows Quarry has moved for sanctions and requested attorney fees for a frivolous appeal.
We agree that the legal premise of the trial court's ruling with respect to Lee Hall's need for a contractor's license to crush rock foreclosed the trial court in its evaluation of the evidence from finding that Shea had in fact contracted with Lee Hall (in which case it did not violate any duty regarding garnisheed Hall Inc. funds in its possession).*fn4 While we would ordinarily remand for the trial court to redecide the motion on the present evidence and briefing free of this legal misconception, we find the evidence entitles Shea as a matter of law to denial of the motion, and in the interest of justice we will direct the trial court to do so. Snows Quarry's motion for sanctions and request for attorney fees is consequently without merit and is therefore denied.
FACTUAL AND PROCEDURAL BACKGROUND
Ordinarily we would limit our account of the facts to those favoring the trial court's ruling. Given the error of law in the trial court's ruling, we instead will provide an account of all the evidence at trial. We note the facts are for the most part not in dispute, merely the legal significance one should draw from them.
In the underlying action, the trial court determined that Snows Quarry should not take anything on any cause of action against Lee Hall as an individual. It accordingly entered judgment in January 2010 in his favor.
With the million-dollar judgment pending against Hall Inc., Lee Hall consulted with counsel about starting over. In December 2009, he obtained a new taxpayer identification number (TIN) for the new business, Hall/Cobalt. He did not surrender the existing fictitious name that Hall Inc. held that would expire in 2011, and did not file a fictitious name certificate for his sole proprietorship. (Bus. & Prof. Code, § 17900, subd. (b)(1) [individual including own name in business title not within definition of fictitious business name].) He opened new bank accounts for the business. Believing that he had a secured interest in the Hall Inc. equipment in excess of its value, he effected the defunct (but not dissolved) corporation's surrender of the equipment to him under a writ of execution, and began to seek work.
Shea was soliciting bids to crush rock in one of its quarries for Shea to use in the manufacture of the asphalt aggregate it used in highway and other public work projects. Shea had used Hall Inc. frequently in the past because it was obligated to its union to contract with union businesses if possible and Hall Inc. was one of two in the county. There had also been litigation initiated in 2007 under the corporate name of Hall Inc. against Shea, which ...