Dougherty v. Karton

• Decision Date: 11 October 2012
• Docket Number: B230074
• Parties: WILLIAM RUSSELL DOUGHERTY, Plaintiff and Respondent, v. DAVID S. KARTON, A LAW CORPORATION, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

WILLIAM RUSSELL DOUGHERTY, Plaintiff and Respondent, v. DAVID S. KARTON, A LAW CORPORATION, Defendant and Appellant.

B230074

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION EIGHT

Dated: October 11, 2012

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County

Super. Ct. No. BC336672)

APPEAL from an order of the Superior Court of Los Angeles County. Ruth Ann Kwan, Judge. Affirmed.

Law Offices of Robert S. Gerstein, Robert S. Gerstein; The David Firm and Henry Stuart David for Defendant and Appellant.

Law Offices of James T. Duff, James T. Duff; Musick, Peeler & Garrett and Cheryl A. Orr for Plaintiff and Respondent.

The trial court ruled that a judgment was void, and, on that basis, entered an order setting aside the judgment. We affirm the trial court's order.

FACTS

The First Round of Litigation, Part 1

In March 1999, David S. Karton, a lawyer, sued William Russell Dougherty.¹ Karton's complaint alleged that Dougherty failed to pay for legal services provided in a divorce case. The complaint alleged that Dougherty owed Karton the sum of $65,246.63, plus interest. On August 11, 1999, the trial court entered a default judgment in favor of Karton and against Dougherty in the principal amount of $65,246.63, plus $18,224.82 in accrued prejudgment interest, plus costs of $679.50 and attorney fees of $2,525.93, for a total judgment of $86,676.88. (David S. Karton, A Law Corp. v. Dougherty (2009) 171 Cal.App.4th 133, 136-139 (Karton).) By October 1999, Karton had collected roughly $56,000 on the default judgment (id. at p. 139), leaving Dougherty owing Karton about $30,000. As we detail below, Karton subsequently claimed he spent more than $1.2 million over a course of ensuing years, in actual out-of-pocket expenses and value of legal services, in efforts to protect and collect the $30,000 remaining owed under the 1999 default judgment.

The First Round of Litigation, Part 2

Following entry of the 1999 default judgment described above, Dougherty pursued a number of unsuccessful procedural routes challenging the judgment. Karton defended the judgment, and also pursued further collection efforts against Dougherty in California, Pennsylvania and Tennessee. (Karton, supra, 171 Cal.App.4th at pp. 136-139.) In April 2003, Karton applied to the trial court for an award of supplemental attorney fees, costs and interest which he claimed he was due as a result of his efforts to beat back Dougherty's challenges to the 1999 default judgment, and to collect the unpaid portion of the judgment. In July 2003, the trial court entered an order increasing the principal amount of the 1999 default judgment to nearly $350,000, plus interest of approximately$40,000. (Id. at pp. 141-142.) In February 2007, Karton again applied to the trial court for an award of supplemental attorney fees, costs and interest which he claimed he was due as a result of his ongoing efforts to defend and enforce payment on the 1999 default judgment. Karton asserted he was owed more than $1.2 million. (Id. at p. 144.) On February 23, 2007, the court granted Karton's fee request, increasing the amount of the 1999 default judgment to a total of roughly $1.3 million, and instructing the clerk to issue a writ of execution upon Karton's request. (Ibid.)

The First Round of Litigation, Part 3

In May 2007, Dougherty filed a motion to vacate the 1999 default judgment in the Karton first round of litigation, including the series of ensuing orders that had morphed it into a $1.3 million award in favor of Karton. The motion argued a variety of grounds for vacating the judgment based upon Code of Civil Procedure section 473, subdivisions (b) and (d), and the trial court's inherent equitable powers. (Karton, supra, 171 Cal.App.4th at pp. 144-145.) In August 2007, the trial court entered an order denying Dougherty's motion. Dougherty appealed.

In February 2009, Division One of our court reversed the 1999 default judgment, in all its subsequent incarnations, ruling it was "void on the face of the record" because it had granted relief exceeding what was demanded in the complaint. (Karton, supra, 171 Cal.App.4th at pp. 149-151.)

Division One's disposition reads: "The superior court's order of August 8, 2007, is reversed, and the superior court is directed to enter a new and different order both (1) granting Dougherty's motion for relief and (2) vacating the superior court's February 23, 2007, order on Karton's application for a second award of supplemental attorney fees and costs. The superior court is further directed to enter an order vacating and setting aside, nunc pro tunc, the default judgment entered on August 11, 1999." (Karton, supra, 171 Cal.App.4th at p. 152.) The Supreme Court denied Karton's petition for review. (Ibid.)

The Second Round of Litigation Giving Rise to the Current Appeal

In July 2005, in the midst of the events unfolding in the Karton first round of litigation summarized above -- and before Division One's decision in Karton, supra, 171 Cal.App.4th 133 was issued -- Dougherty filed a new and separate civil action against Karton, asserting a collateral attack on the 1999 default judgment entered in the Karton first round of litigation. Dougherty's "collateral attack complaint" alleged that the 1999 default judgment entered was "void" for a variety of reasons, including that the relief it granted exceeded the relief demanded in the complaint, and that the trial court had not obtained personal jurisdiction over Dougherty.

Karton filed a demurrer to Dougherty's collateral attack complaint. The demurrer argued that the 1999 default judgment entered in the Karton first round of litigation was long-final, which meant that the doctrines of res judicata and collateral estoppel barred Dougherty's collateral attack complaint.

In January 2006, the trial court entered an order sustaining Karton's demurrer to Dougherty's collateral attack complaint. On February 23, 2006, the trial court entered judgment in favor of Karton and against Dougherty, including an award of attorney fees. In April 2006, the court entered an order fixing the amount of attorney fees at roughly $96,000.

Dougherty filed an appeal. In May 2006, our court dismissed the appeal pursuant to Code of Civil Procedure section 1030 because Dougherty did not post a bond on appeal. Karton thereafter filed a motion in the trial court for attorney fees incurred on appeal. In October 2006, the trial court entered an order awarding further attorney fees to Karton in the amount of roughly $19,000. In sum, as a result of the second round of litigation, Dougherty owed a judgment debt of roughly $120,000 to Karton. The judgment in the second round of litigation became final sometime in late 2006.

The Setup for the Current Appeal Arising from the Second Round of Litigation

Roughly two years after the 2006 judgment in the second round of litigation on Dougherty's collateral attack complaint became final, Division One of our court issued its opinion in Karton, supra, 171 Cal.App.4th 133. By its opinion, Division One vacated the 1999 default judgment entered in the Karton first round of litigation. Thus, by mid-2009 or so, Dougherty was free from the $1.3 million default judgment from 1999 in the Karton first round of litigation, but still owed $120,000 (plus accumulating interest) by virtue of the judgment for attorneys fees entered in 2006 in his collateral attack action against the 1999 default judgment.

In April 2010, Dougherty filed a motion for relief from the 2006 judgment on his collateral attack complaint in the second round of litigation, including the $120,000 attorney fee award. The trial court thereafter held a number of hearings to address the issues raised by Dougherty's motion. Eventually, the court directed the parties to address the issue of the court's jurisdiction to vacate the 2006 judgment in Dougherty's collateral attack action.

By way of rounds of briefing and a series of hearings from September through November 2010, the parties presented their respective positions to the trial court on the issue of vacating the 2006 judgment on Dougherty's collateral attack complaint. On December 22, 2010, the court issued an order granting Dougherty's motion to vacate the 2006 judgment on his collateral attack complaint. The court set aside the 2006 judgment for the following stated reasons:

"[B]oth parties agree that the judgment in this case is final. [Citations.] However, the parties disagree as to whether the Court has jurisdiction to set aside the Judgment and Orders in this case. [¶] Karton argues that an unqualified affirmance ends the litigation, with limited exceptions. The only real exception at issue in this case is the one dealing with a collateral attack on a void judgment. . . . Karton contends that this case is one involving 'judicial error,' which is not an exception to the unqualified affirmance. In contrast, [Dougherty] argues that this case involves a void judgment . . . . [¶] The Courtfinds that it has jurisdiction to hear Dougherty's motion for relief from [the] Judgment and related Orders.

"An unqualified affirmance ends the litigation except as to a collateral attack on a void judgment or order (since affirmance of a void judgment or order is itself void). [Citations.] . . . A void order may be 'set aside at any time' and may be 'attacked at any time, directly or collaterally.' See [Hager v. Hager (1962) 199 Cal.App.2d 259,] 261 (' a void judgment or order may properly be attacked at any time, directly or collaterally') (emphasis added.) . . . Since affirmance of a void judgment or order is itself void, the Court finds that a an unqualified affirmance ends the...