Basinger v. Rogers & Wells

• Decision Date: 08 May 1990
• Docket Number: No. D009842,D009842
• Citation: 220 Cal.App.3d 16,269 Cal.Rptr. 332
• Parties: Robert G. BASINGER et al., Plaintiff and Respondent, v. ROGERS & WELLS, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

Page 332

269 Cal.Rptr. 332

220 Cal.App.3d 16

Robert G. BASINGER et al., Plaintiff and Respondent, v. ROGERS & WELLS, Defendant and Appellant.

No. D009842.

Court of Appeal, Fourth District, Division 1, California.

May 8, 1990.

Certified for Partial Publication ¹

Munger, Tolles & Olson and Dennis E. Kinnaird, and Jeffer, Mangels, Butler &amp Peter P. Gamer, Del Mar, for plaintiff and respondent.

Marmaro and Jeffrey K. Riffer, Los Angeles, for defendant and appellant.

NARES, Associate Justice.

Rogers & Wells appeals from an order vacating voluntary dismissals and ordering entry of judgment nunc pro tunc to enforce a settlement agreement and award plaintiffs interest on tardy payment of settlement money. Rogers & Wells contends the order must be reversed because the court lacked jurisdiction once dismissals had been filed. Alternatively, on the merits Rogers & Wells contends it did not pay late because the condition precedent to its obligation to pay--Robert G. Basinger's general release--had not been furnished, and in any event the settlement agreement does not provide for interest.

We determine the court had jurisdiction to vacate the dismissals, but reverse because (1) Respondents made an insufficient showing to justify vacating the dismissals; and (2) on the undisputed facts, Rogers & Wells did not owe Respondents interest. ²

I FACTS AND PROCEDURE

Respondents are 70 plaintiffs who sued Rogers & Wells for damages arising out of the J. David Dominelli (J. David) ponzi scheme. Robert G. Basinger (Basinger) is one of the 70 plaintiffs.

Respondents and Rogers & Wells settled. Under the settlement agreement (Agreement), Rogers & Wells agreed to pay Respondents (collectively) approximately $2.5 million. In exchange, each plaintiff agreed to dismiss the action with prejudice and to execute a general release discharging Rogers & Wells from "all rights, claims ... and causes of action of every nature, whether known or unknown, ... which Releasor either had or now has or may claim to have by reason of any matter or thing whatsoever, from the beginning of time through and including the date of this Release." (Emphasis added.)

The Agreement provides Rogers & Wells would send each plaintiff his respective money within 20 business days after the "conditions to payment" had been met. These conditions required each plaintiff to execute the general release quoted above and deliver to Rogers & Wells a dismissal with prejudice and a declaration attesting to their having disclosed all dealings with J. David. The Agreement provides, "No payment shall be made to any Settling Plaintiff ... until all Settling Plaintiffs have delivered signed General Releases." The Agreement also provides, "No payment shall be made to any Settling Plaintiff ... until all Settling Plaintiffs have delivered dismissals with prejudice.... The dismissals may be filed with the Court as soon as the checks ... have been sent."

Thus, the Agreement contemplates each plaintiff sending his release and dismissal (among other documents) to Rogers & Wells. Within 20 business days after receiving all such documents, Rogers & Wells was required to send each plaintiff a check and was only then entitled to file the dismissals.

The parties agree that by April 8, 1988, all of the required documents except Basinger's general release had been delivered to Rogers & Wells. Basinger had filed Chapter 7 bankruptcy in July 1987 and his bankruptcy trustee (Trustee) obtained bankruptcy court approval to enter into the proposed settlement with Rogers & Wells and execute the release. Despite Rogers & Wells's requests, Basinger himself refused to sign the general release, instead insisting his Trustee had the sole power to execute the release and any personal release would be void and unlawful.

Notwithstanding the dispute about Basinger's release, Rogers & Wells sent settlement checks to 68 of the 70 plaintiffs on June 29, 1988, and a check to another on July 15, 1988. (20 business days from April 8 is May 9.) Rogers & Wells refused to send Basinger his check, asserting only On June 30, 1988, Rogers & Wells filed all the dismissals except for Basinger's. On August 16, 1988, Rogers & Wells filed Basinger's dismissal. Both at the trial court and on appeal, Rogers & Wells admits its filing Basinger's dismissal was premature (because it had not paid him) and should be vacated.

Basinger could release any claims arising after he filed his Chapter 7 petition and without such a release it had no obligation to pay under the Agreement.

On August 16, 1988, the Respondents filed a motion "for order entering judgment nunc pro tunc" under Code of Civil Procedure section 664.6. ³ Respondents sought to vacate their dismissals and "enforce" the Agreement by obtaining interest based on Rogers & Wells's alleged 50-day delay in sending their checks. ⁴ Respondents asserted only the Trustee could lawfully release Basinger's claims against Rogers & Wells, including those first accruing after Basinger commenced his bankruptcy, and in any event, even if the Trustee lacked such authority, the bankruptcy court approved the compromise and release, collaterally estopping the parties from denying the validity of the general release. Accordingly, Respondents asserted the Trustee's release satisfied the Agreement and triggered Rogers & Wells's obligation to pay on April 8. Supporting their motion, Respondents filed a declaration by William Smelko, a bankruptcy attorney, purporting to inform the trial court about bankruptcy law.

The court granted Respondents' motion, vacating the dismissals and determining the Trustee's release, approved by the bankruptcy court, estopped the parties from denying Basinger had released all claims against Rogers & Wells. Respondents assured the court this bankruptcy court order approving the release of claims arising even after Basinger filed for bankruptcy, even if incorrect, was not a jurisdictional error and was now final. ⁵ After vacating the dismissals, the court ordered entry of judgment nunc pro tunc to May 9, 1988, under the terms of the Agreement and awarded Respondents approximately $35,000 in interest.

II DISCUSSION

A. Appealability

Rogers & Wells purports to appeal from the "Order For Entry of Judgment Nunc Pro Tunc." The clerk's transcript contains a copy of this order but not any ensuing judgment. California Rules of Court, rule 13, requires the opening brief to "contain either a statement that the appeal is from a judgment that finally disposes of all issues between the parties or a statement explaining why the order ... is appealable." (Emphasis added.) Although appealing from an order, Rogers & Wells has ignored rule 13 and Respondents raise no jurisdictional barrier to the appeal.

As discussed above, the "Order" contains separate orders, one of which vacates judgments of dismissal and one of which orders judgment be entered nunc pro tunc. The order vacating the previously filed dismissals is appealable. (9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 108, p. 127.) However, the order directing judgment be entered nunc pro tunc is not directly appealable. The appeal lies from the judgment itself. (Id. at § 90, pp. 111-112.) The record does not contain a judgment. However, because the only impediment to

appealability is the parties' oversight in failing to ensure the court entered judgment pursuant to its order, we deem the Order For Entry of Judgment Nunc Pro Tunc to include an appealable judgment and treat the appeal as from the judgment. (See Munoz v. Davis (1983) 141 Cal.App.3d 420, 431, 190 Cal.Rptr. 400 [order sustaining demurrer]; Avila v. Standard Oil Co. (1985) 167 Cal.App.3d 441, 445, 213 Cal.Rptr. 314 [order granting summary judgment].)

B. Jurisdiction to Vacate Voluntary Dismissal

To effectuate the settlement, Respondents executed voluntary dismissals and delivered them to Rogers & Wells. Rogers & Wells filed these dismissals before Respondents filed their motion to enforce the Agreement. ⁶ Asserting the trial court lacks subject matter jurisdiction once a voluntary dismissal is filed, Rogers & Wells contends the judgment should be reversed.

Numerous cases categorically state the trial court " 'is without jurisdiction to act further in the action' (citation)" once a voluntary dismissal is filed. (Aetna Casualty & Surety Co. v. Humboldt Loaders, Inc. (1988) 202 Cal.App.3d 921, 931, 249 Cal.Rptr. 175; Associated Convalescent Enterprises v. Carl Marks & Co., Inc. (1973) 33 Cal.App.3d 116, 120, 108 Cal.Rptr. 782 ["Following entry of such dismissal, the trial court is without jurisdiction to act further in the action."]; Egly v. Superior Court (1970) 6 Cal.App.3d 476, 483, 86 Cal.Rptr. 18 [" 'It is a well-settled proposition of law that where a plaintiff has filed a voluntary dismissal of an action ... the court is without jurisdiction to act further.' (Citations.)" [Citation omitted.]].) However, like most legal principles stated so unequivocally, this one is inaccurate unless qualified.

Even after a voluntary dismissal with prejudice has been filed, the trial court has jurisdiction to vacate the judgment of dismissal under CODE OF CIVIL PROCEDURE SECTION 473⁷ where it has been entered as a result of the plaintiff's "mistake, inadvertence, surprise, or excusable neglect." ⁸ (Biggs v. Biggs (1951) 103 Cal.App.2d 741, 230 P.2d 32.) For example, in Palace Hardware Co. v. Smith (1901) 134 Cal. 381, 66 P. 474, the plaintiff settled for $330 and gave defendant an executed dismissal with prejudice. After the dismissal was filed, the plaintiff realized he had forgotten about another $105 claim against this defendant. Plaintiff brought a motion under section 473 to vacate the dismissal, asserting it was obtained " 'under a mistake and misconception of the amount due the plaintiff.' " (Id. at p. 383, 66 P. 474.) Opposing the motion, the defendant asserted " 'the entry of a judgment of dismissal on the order of the plaintiff is final, and the...