California Court of Appeals, Second District, Fourth Division
GREGORY A. COLE, Plaintiff and Respondent,
v.
BETTY HAMMOND et al., Defendants and Appellants.
CERTIFIED
FOR PARTIAL PUBLICATION [*]
APPEAL
from an order of the Superior Court of Los Angeles County No.
BC466925, Maria E. Stratton, Judge. Reversed and remanded
with instructions.
Solomon T. Harris for Defendants and Appellants.
Gieleghem Law Office and Neil Gieleghem for Plaintiff and
Respondent
COLLINS, J.
INTRODUCTION
In a
prior action, Neil Gieleghem and respondent Gregory Cole,
both attorneys, obtained a $500, 000 judgment against Anthony
Sheen, a landlord, based on unpaid fees for legal services
they rendered to Sheen. In satisfaction of that judgment,
Cole and Gieleghem obtained an assignment of rent from Sheen
for a residential property.
Appellants
Betty and Ruth Hammond (the Hammonds) were Sheen's
tenants. Cole and Gieleghem demanded that the Hammonds pay
their rent directly to them pursuant to the assignment. The
Hammonds refused, and Cole sued, alleging breach of contract
and related claims. Gieleghem appeared as Cole's attorney
in the lawsuit.
A few
months after the initiation of the lawsuit in 2011, the
Hammonds began paying their rent to Cole and Gieleghem. After
the parties conducted some initial discovery, the case
languished for several years. In January 2018, the Hammonds
moved for mandatory dismissal of the action for failure to
bring the case to trial within five years, pursuant to Code
of Civil Procedure section 583.360.[1] A mandatory dismissal
would be considered a determination on the merits entitling
the prevailing party to attorney fees under Civil Code,
section 1717. However, at the hearing on the motion, Cole
sought to voluntarily dismiss the case without prejudice
pursuant to section 581, subdivision (b)(1). The court
granted Cole's oral motion and dismissed the case. The
court subsequently denied the Hammonds' motion to vacate
the dismissal. This appeal followed.
The
parties dispute whether this appeal is timely. We conclude
that it is. Substantively, the Hammonds contend the trial
court erred in granting Cole's motion for voluntary
dismissal, arguing that they had the right to a mandatory
dismissal and the resulting attorney fees. We agree and
therefore reverse and remand for further proceedings.
FACTUAL
AND PROCEDURAL HISTORY
I.
Underlying Dispute
The
Hammonds are elderly sisters who rented a residence on South
Spaulding Avenue in Los Angeles, California (the Spaulding
property). They originally signed a monthly rental agreement
in 2001 with owner Dolores Quinlock Sheen. After she died,
the Spaulding property became an asset of a trust (the Sheen
trust), for which Anthony Sheen served as the trustee.
As
trustee, Sheen was involved in multiple probate lawsuits that
arose out of disputes related to the trust estate. Cole and
Gieleghem provided legal services to Sheen in connection with
the probate litigation. In January 2009, Cole and Gieleghem
sued Sheen for unpaid attorney fees. That matter, Cole v.
Sheen (LASC Case No. LC084204) (the fees action),
resulted in a judgment against Sheen and in favor of Cole and
Gieleghem for almost $500, 000.
On July
26, 2011, the court in the fees action granted an ex parte
application submitted by Cole and Gieleghem ordering Sheen to
“assign immediately to Judgment Creditors any and all
interest the Judgment Debtor has in, and any payments made in
connection with, the following assets of the Sheen Trust to
the extent necessary to satisfy” the judgment against
Sheen (the assignment order). As relevant here, the court
ordered Sheen to assign “[a]ll rents from the
tenants” of the Spaulding property, starting July 1,
2011.
Gieleghem
notified the Hammonds of the assignment order in a letter
dated July 26, 2011. He further stated that under the
assignment order, the Hammonds were “legally required
to pay all rents... to Judgment Creditors, rather than to the
Trustee/landlord.” The Hammonds contend they responded
by asking Cole and Gieleghem for verification of their right
to receive the rent, but that request was refused. The
Hammonds also contacted Sheen and his attorney for
instructions on how to proceed.
The
parties do not dispute that at the end of July 2011, the
Hammonds paid their August rent of $1, 400 to Wells Fargo (as
a purported superior lienholder) at the direction of
Sheen's attorney. The following two months, the Hammonds
paid their rent to the Sheen trust, at Sheen's direction.
From November 2011 onward, they paid their rent to Cole and
Gieleghem.
II.
Cole's Lawsuit Against the Hammonds
After
the Hammonds failed to pay their August 2011 rent to Cole and
Gieleghem, Cole filed the instant lawsuit on August 4, 2011,
alleging claims against the Hammonds for breach of contract
and common counts. Gieleghem appeared on the complaint as the
attorney of record for Cole, not as a party.[2] In the
complaint, Cole alleged that the rents on the Spaulding
property were assigned to him pursuant to the assignment
order, that the Hammonds were given notice of that order at
the time, but they “failed and refused to pay said
rents to Cole.” He alleged damages of $495, 025, the
full amount of the judgment against Sheen in the fees action.
The
Hammonds, in propria persona, filed a general denial,
contending that their “contract is with the landlord,
” and “[u]nless Court tells us otherwise payment
goes to landlord.”
In
September 2011, Cole filed a notice of related case, listing
the fees action as potentially related to the instant case.
The court issued a minute order relating the cases on
November 3, 2011. The court noted that the fees action was
previously related to the probate case, with the latter
designated as the lead case. The court found that the current
case against the Hammonds was “an action to enforce the
same order” at issue in the fees action. Thus, the
court concluded that the cases were related within the
meaning of California Rules of Court, rule 3.300,
[3]
“since the claims arise out of an order issued by the
probate court and concern the same claim against Trust
property.”
The
parties began discovery. Cole deposed the Hammonds in late
2011 and conducted a physical inspection of their unit in
April 2012.[4] In January 2013, Cole filed a
substitution of attorney, stating that he would represent
himself. Cole took no further action in this matter until
2018, after the Hammonds filed the motion giving rise to the
instant appeal.
III.
Motion to Dismiss
In
January 2018, the Hammonds filed a motion to dismiss for
failure to bring the matter to trial within five years,
pursuant to section 583.360. They pointed out that the case
had been pending since August 2011, no actions had been taken
since early 2013, and no trial date was set. They also
declared that the parties had not stipulated to extend the
five-year deadline, and the case had never been stayed. The
Hammonds therefore argued that dismissal was mandatory under
section 583.360. The motion was set for hearing on March 28,
2018.
On
March 15, 2018, Cole filed an opposition to the motion to
dismiss, with Gieleghem purporting to act as Cole's
attorney. In the opposition, Cole argued that appeals filed
in the related cases operated to stay all of the cases
related to the Sheen trust, including this case. Cole's
motion included a list of nine appeals, “at least four
(4)” of which “were pending during part of the
time period at issue on Defendants' Motion.” The
four purportedly relevant appeals listed by Cole included one
from the fees action and three from the probate litigation.
Cole asserted that stays in those cases operated to toll the
expiration of the five-year period in this case.
The
Hammonds filed their reply on March 21, 2018. They objected
that the opposition was untimely and that Gieleghem was no
longer counsel of record. They also argued that none of the
appeals operated to stay their case. Moreover, they noted
that only one of the listed appeals was even
“superficially related” to ...