Corzo v. Bellehumeur
| Decision Date | 15 July 2022 |
| Docket Number | B312676 |
| Parties | RENATO CORZO, Plaintiff and Appellant, v. ALEX BELLEHUMEUR et al., Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC636124 Barbara M. Scheper, Judge. Affirmed.
Catanzarite Law Corporation, Kenneth J. Catanzarite and Tim James O'Keefe for Plaintiff and Appellant.
Kinley Law Practice and Matthew L. Kinley for Defendants and Respondents.
This appeal arises out of the dissolution of a partnership formed by Renato Corzo and State-Wide Developers, Inc. (SWD). After extensive litigation regarding the parties' obligations and an accounting before a referee, the trial court entered judgment, partially adopting the referee's findings. Corzo appeals, and respondents have moved for sanctions for filing a frivolous appeal.[1]
We conclude the appellate record is insufficient to adequately assess most of Corzo's claims. Where the record permits review, Corzo's arguments lack merit. We therefore affirm.
In 1978, Corzo and SWD formed the Corbell partnership for the purpose of operating a public equestrian facility. Alex Bellehumeur, husband of Linda Bellehumeur,[2] served as SWD's president. The partnership agreement specified a profit sharing arrangement in which SWD would receive 60 percent and Corzo would receive 40 percent. SWD and the Bellehumeurs controlled the books, records, and bank accounts.
In 2012, Corzo filed a complaint against SWD and the Bellehumeurs for fraud, breach of fiduciary duty, breach of contract, conversion, unjust enrichment, usury, and accounting.
The dispute was arbitrated, and the resulting award was confirmed in August 2016. The arbitrator did not issue any award as to Corbell, stating that it lacked jurisdiction because Corbell was not a named party.
In October 2016, Corzo filed the instant action.[3] Corzo's attorney, claiming to represent Corbell, included Corbell as a joint plaintiff. The parties posted jury fees.
SWD moved to disqualify Corzo's counsel from representing Corbell and the trial court granted that motion. After the parties could not agree on jointly retaining an attorney Corzo filed a second amended complaint, alleging causes of action similar to those alleged in the 2012 complaint and naming Corbell as a nominal defendant.
The complaint acknowledged that, upon reviewing partnership tax returns in April 2012, Corzo discovered alleged advances by Corbell to SWD in the amount of $106,498 and by Corbell to Col-Belle in the amount of $40,000.[4] Nonetheless, Corzo claimed that his diligence in pursuing "identical or . . . similar" claims in the 2012 action warranted equitable tolling. The complaint also alleged conversion of Corzo's capital account and sought punitive damages.
After the Bellehumeurs and SWD demurred, the trial court held that the causes of action premised upon misappropriations that Corzo discovered in 2012 were time-barred because those discoveries occurred more than four years prior to the filing of the instant action. The court denied equitable tolling, reasoning that this was not a case where Corzo "possessed several legal remedies and reasonably and in good faith pursued one in order to lessen the extent of damages," warranting tolling as to those other remedies. Rather, the 2012 complaint was defective because it failed to include Corbell as a party. The court announced that it "would try the equitable claims first, and impanel a jury thereafter, if needed."
In December 2017, a cross-complaint was filed.[5] The Bellehumeurs and SWD moved for summary adjudication, and the trial court partially granted that motion, resulting in non- partner Col-Belle's dismissal from the accounting claim because it lacked a partnership relationship with the other parties.
At a December 2018 final status conference, Corzo's counsel concurred with the court's statement that the "sole[ ]" remaining issue was the accounting. Corzo's counsel agreed that Corbell owed Linda approximately $89,000 with interest arising out of a 1985 proof of claim. The trial court discussed the reference protocol and counsel for Corzo indicated his understanding. The parties, after conferring, agreed upon the issues to be submitted to the referee.
The trial court thereafter adopted an order-drafted by Corzo's counsel-appointing a referee, under Code of Civil Procedure section 639, to opine "on the merits of any disputed issue" and resolve all fact issues related to the dissolution and winding up of Corbell, including 15 specific instructions. Several of the alleged debts and Corzo's rights to his capital account were among the listed instructions.
In March 2020, the referee filed a report. According to the report, 1990 tax returns reflected that Corbell advanced $106,498 to SWD and $40,000 to Col-Belle. With interest, Col-Belle owed $160,000 and SWD owed $428,236. Regarding Corbell's debt on a 1979 $20,000 promissory note to Alex, the referee had no evidence of those funds being deposited into Corbell's bank accounts, but decades of financials and subsequent monthly repayments of $250 from 2016 to 2018 obliged Corbell to repay $94,358 with interest. Citing Corbell's 2017 to 2018 repayments of $250 to Linda on her 1985 proof of claim, the referee recognized Linda's proof of claim, totaling $322,450 with interest.[6] Finally, the referee recognized that Corzo was entitled to a capital account in the amount of $99,078.
The parties submitted briefs regarding the report. SWD and the Bellehumeurs sought to eliminate the referee's recognition of Corbell's claim for advances to SWD and Col-Belle as violative of the demurrer ruling that the statute of limitations barred claims relevant to that debt. At a hearing, the trial court issued tentative rulings and adjourned the case for additional briefing.
In a written submission, Corzo added that because Corbell-not Corzo-had a $146,498 claim against Col-Belle and SWD, and because Corbell was not a party to the 2012 action, Corzo's 2012 complaint did not trigger the statute of limitations. Further, Corbell's 2017 tax returns, signed by Alex, acknowledged the debts that SWD and Col-Belle owed to Corbell. Corzo also objected to upholding the Bellehumeurs' claims against Corbell from 1979 and 1985, stating that recent payments to them were sham attempts to overcome the statute of limitations. Corzo demanded a jury trial for the conversion claim. At the same time, Corzo filed a handful of motions, an additional lawsuit, and demanded an arbitration, activities which prompted the trial court to award sanctions.[7] At the next appearance, the trial court adhered to its tentative rulings, thereby eliminating the $40,000 and $106,498 awards. Corzo countered that, even if the statute of limitations barred Corbell's claim, Corbell was entitled to a set-off against funds owed to the partners. The trial court responded that such an argument was a defense, and Corzo's counsel was representing Corzo, not defending Corbell on a cross-complaint. SWD and the Bellehumeurs noted that Col-Belle was dismissed as a party at the summary adjudication stage, obviating the need to consider that alleged debt.
After the referee revised his report to conform to the trial court's rulings, the court again heard the parties' objections to entering judgment. Corzo reiterated that the debt to Corbell should be recognized because the 2017 tax return-produced to Corzo on June 25, 2018-acknowledged the debt, and the court's demurrer ruling predated the existence of that document. Corzo again sought a jury trial on his conversion claim, which had included a claim for punitive damages. The court indicated that the referee's report resolved the issue of conversion, and one cannot only have a trial on punitive damages. The court set an order to show cause hearing for April 23, 2021 regarding receipt of the proposed judgment.
On April 20, SWD, Alex, and Linda filed and served an amended proposed judgment incorporating the referee's revisions. At the April 23 appearance, which Corzo and his counsel chose not to attend, the trial court entered the judgment and, at SWD, Linda, and Alex's request, dismissed their cross-complaint. On April 26, the signed judgment was mailed to Corzo.
On April 30, Corzo filed objections, reiterating his prior arguments and stating that he did not have 10 days to object to the proposed judgment under California Rules of Court, rule 3.1590(j). The trial court held that the rule that Corzo cited applied only to statements of decision and judgments thereon, and therefore did not apply to the proposed judgment in this case. Because the proposed judgment was served on Corzo on April 20, and no objections were received, and Corzo failed to appear at the April 23 appearance, any objections were deemed waived.
Corzo timely appealed. After he retained counsel for Corbell and that attorney filed a notice of appeal on Corbell's behalf, SWD moved to disqualify counsel. In June 2021, we granted that motion and dismissed Corbell's notice of appeal.
Corzo's appeal centers upon four primary areas of contention. With respect to the referee's report, Corzo alleges that the trial court erred by deleting SWD's alleged debt to Corbell, and then again by upholding Corbell's debts to the Bellehumeurs. Corzo further claims that, after prevailing on his conversion claim before the referee, the court erroneously denied him a jury trial regarding conversion and punitive damages. Finally, the court erred by executing the proposed judgment before the time for objections had passed. SWD and the Bellehumeurs, for their part, have sought sanctions against Corzo for filing a frivolous...
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