3123 SMB LLC v. Horn

CourtCalifornia Court of Appeals
Decision Date14 December 2021
Docket NumberB309412
Parties3123 SMB LLC et al., Plaintiffs and Appellants, v. STEVEN J. HORN, Defendant and Respondent.

3123 SMB LLC et al., Plaintiffs and Appellants,

STEVEN J. HORN, Defendant and Respondent.


California Court of Appeals, Second District, Seventh Division

December 14, 2021


APPEAL from an amended judgment of the Superior Court of Los Angeles County No. BC682318, David Sotelo, Judge. Reversed.

Law Office of David Knieriem and David Knieriem; Kling Law Firm and Anthony N. Kling for Plaintiffs and Appellants.

Skane Mills and Jonathan Belaga; Valerie F. Horn & Associates and Valerie F. Horn; and Law Offices of Steven J. Horn and Steven J. Horn for Defendant and Respondent.




Steven J. Horn obtained a judgment confirming an arbitration award against Anthony Kling (Kling) and Mary J. Kling. Kling appealed from the judgment. (Kling v. Horn (Dec. 14, 2021, B305967) [nonpub. opn.] (Kling I).) While that appeal was pending, the trial court granted a motion by Horn to amend the judgment to add three entities as judgment debtors: 3123 SMB LLC, Lincoln Corporation, and Kling Corporation (the Kling Entities). The court ruled the entities were alter egos of the Klings and amended the judgment. The Kling Entities appealed from the amended judgment-the subject of this appeal (Kling II). But because Kling had already filed a notice of appeal from the original judgment, the trial court did not have jurisdiction to amend the judgment. One judgment, two appeals: What to do? We affirm in Kling I and reverse in Kling II.


As discussed in more detail in our opinion in Kling I, supra, B305967, this action arises from a fee dispute between Horn, an attorney, and the Klings, his former clients.[1] (Kling is also an attorney.) In September 2014 Horn initiated an arbitration with the American Arbitration Association (AAA) against the Klings. An arbitrator eventually issued an award in September 2018 in


favor of Horn and against the Klings and the Kling Entities. Horn filed a petition to confirm the award, and the Klings filed a petition to vacate the award. The trial court granted Horn's petition to confirm the award against the Klings (but not against the Kling Entities), denied the Klings' petition to vacate the award, and in March 2020, entered judgment in favor of Horn and against the Klings.

Shortly after the court entered the judgment, Horn filed a motion to amend the judgment to add the Kling Entities as judgment debtors (although not as alter egos of Kling). Before the trial court ruled on the motion, Kling filed a notice of appeal from the judgment. The Klings then opposed Horn's motion to amend the judgment, arguing (among other things) the trial court did not have jurisdiction to amend the judgment while the appeal was pending.

The trial court granted Horn's motion. The court ruled that it retained jurisdiction to amend the judgment under Code of Civil Procedure section 917.1, subdivision (a)(1), which provides that, "[u]nless an undertaking is given, the perfecting of an appeal shall not stay enforcement of the judgment or order in the trial court if the judgment or order is for . . . [¶] . . . [m]oney or the payment of money . . . ."[2] The court also ruled each of the Kling Entities was an alter ego of the Klings and "had the opportunity to 'litigate' the matter." The court entered an amended judgment, from which the Kling Entities timely filed this appeal.



We asked the parties under Government Code section 68081 to brief whether the trial court had jurisdiction to amend the judgment to add the Kling Entities after Kling filed his notice of appeal from the judgment. Horn argues the trial court had jurisdiction to add judgment debtors to the judgment while the judgment was on appeal "because it ensured that justice would be done and there was no undertaking posted [to] stay enforcement of the judgment pending appeal." Kling asserts the "lone reported case to address this issue" ultimately "declined to specifically address" it. We conclude that, because the trial court did not have jurisdiction, the amended judgment is void and must be reversed.[3]

A. Section 916 Deprived the Trial Court of Jurisdiction To Amend the Judgment

Section 916 provides that, unless a listed exception applies, "the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order." "[S]ection 916, as a matter of logic and


policy, divests the trial court of jurisdiction over the subject matter on appeal-i.e., jurisdiction in its fundamental sense." (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 198 (Varian); see Vosburg v. Vosburg (1902) 137 Cal. 493, 496; Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1409; Davis v. Thayer (1980) 113 Cal.App.3d 892, 912.) The "filing of a notice of appeal deprives the trial court of jurisdiction of the cause and vests jurisdiction with the appellate court until the reviewing court issues a remittitur." (In re Anna S. (2010) 180 Cal.App.4th 1489, 1499.) "The purpose of the automatic stay . . . 'is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided'" and to "'prevent[ ] the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.'" (Varian, at p. 189; accord, LAOSD Asbestos Cases (2018) 28 Cal.App.5th 862, 872; Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629.)

"When triggered, [section 916] bars all proceedings" in the trial court "that 'directly or indirectly seek to "enforce, vacate or modify [the] appealed judgment"'" (LAOSD Asbestos Cases, supra, 28 Cal.App.5th at p. 872; see Varian, supra, 35 Cal.4th at p. 189), and generally divests the trial court of the "'power to amend or correct its judgment . . . .'" (Vosburg v. Vosburg, supra, 137 Cal. at p. 496; accord, Davis v. Thayer, supra, 113 Cal.App.3d at p. 912; Estate of Hirschberg (1964) 224 Cal.App.2d 449, 466-467; Huskey v. Berini (1955) 135 Cal.App.2d 613, 617; Linstead v. Superior Court (1936) 17 Cal.App.2d 9, 12; see Pazderka v. Caballeros Dimas Alang, Inc. (1998) 62 Cal.App.4th 658, 666 ["an appeal from a judgment order strips the trial court of any authority to rule on the judgment"].) There is little dispute here


that, absent an applicable exception, section 916 precluded the trial court from amending the judgment while that judgment was under review in this court.

It is true, as Kling (for some reason) suggests, the court may correct a "clerical error" in a judgment, even after a party perfects an appeal, "when the mistake is obvious from the other parts of the record and the proper correction can be made therefrom." (Crawford v. Meadows (1921) 55 Cal.App. 4, 11; see Lang v. Superior Court (1961) 198 Cal.App.2d 16, 17-18; Lewis v. Firestone (1959) 170 Cal.App.2d 129, 139-140.) And the trial court's amendment to the judgment adding the Kling Entities as judgment debtors was a correction of sorts. The court's authority to amend a judgment "'"'to add additional judgment debtors on the ground that a person or entity is the alter ego of the original judgment debtor . . . "'is an equitable procedure based on the theory that the court is . . . inserting the correct name of the real defendant.'"'"'" (Favila v. Pasquarella (2021) 65 Cal.App.5th 934, 942; accord, Rubio v. CIA Wheel Group (2021) 63 Cal.App.5th 82, 101; Lopez v. Escamilla (2020) 48 Cal.App.5th 763, 766.) But it was not a correction of a mere clerical error.

"Clerical error . . . is to be distinguished from judicial error which [generally] cannot be corrected by amendment." (In re Candelario (1970) 3 Cal.3d 702, 705; accord, Aspen Internat. Capital Corp. v. Marsch (1991) 235 Cal.App.3d 1199, 1204; Pettigrew v. Grand Rent-A-Car (1984) 154 Cal.App.3d 204, 210.) "'The difference between judicial and clerical error rests . . . on whether [the alleged error] was the deliberate result of judicial reasoning and determination'" and on "'whether the error was made in rendering the judgment, or in recording the judgment


rendered.'" (Machado v. Myers (2019) 39 Cal.App.5th 779, 797; see Candelario, at p. 705; Aspen, at p. 1204.)

Here, the trial court initially decided to confirm the AAA arbitration award and enter judgment against the Klings but not the Kling Entities because none of the Kling Entities had signed an arbitration agreement with Horn and some of the entities did not exist at the time Horn provided legal services to the Klings. That ruling was an intentional decision based on the trial court's understanding of...

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