Greenlake Capital, LLC v. Bingo Invs., LCC

• Decision Date: 22 July 2013
• Docket Number: B243360
• Parties: GREENLAKE CAPITAL, LLC, Plaintiff, Cross-defendant and Appellant, v. BINGO INVESTMENTS, LCC, Defendant, Cross-complainant and Respondent.
• Court: California Court of Appeals Court of Appeals

GREENLAKE CAPITAL, LLC, Plaintiff, Cross-defendant and Appellant, v. BINGO INVESTMENTS, LCC, Defendant, Cross-complainant and Respondent.

B243360

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

Filed: July 22, 2013

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC375204)

APPEAL from a judgment of the Superior Court of Los Angeles County, Amy D. Hogue. Dismissed.

Law Offices of John Belcher, John A. Belcher and Nicholas W. Song, for Plaintiff, Cross-defendant and Appellant.

Johnston Lawyers, Bruce Johnston, Emanuel F. Jacobowitz; Law Offices of Max J. Sprecher and Max J. Sprecher, for Defendant, Cross-complainant and Respondent.

Following a three-day bench trial the court entered judgment in favor of Bingo Investments, LLC on GreenLake Capital, LLC's complaint for breach of contract and unjust enrichment and in favor of GreenLake on Bingo's cross-complaint for breach of fiduciary duty and fraud. Although GreenLake formally appeals from the June 18, 2012 judgment, its briefs on appeal challenge only the trial court's order of November 1, 2011 vacating an earlier $3,866,625 judgment in favor of GreenLake entered after a trial at which Bingo failed to appear. Because the November 1, 2011 order is not reviewable in this appeal and GreenLake has raised no other issues, we dismiss the appeal.

FACTUAL AND PROCEDURAL BACGROUND

As discussed in more detail in our prior opinion in this case, GreenLake Capital, LLC v. Bingo Investments, LLC (2010) 185 Cal.App.4th 731, in November 2006 Bingo retained GreenLake to assist in raising financing to support its business activities. In mid-2007 GreenLake claimed it was entitled under the parties' letter agreement to a $3 million fee for identifying and procuring a $150 million credit facility in favor of Bingo, secured at least in part by Bingo's liens on real property. Bingo made partial payments totaling $300,000 but insisted no further fees were due until an affiliated entity began to draw down on the credit facility. GreenLake filed this lawsuit.¹

Bingo and codefendant Centurion Financial Group, LLC successfully moved for summary judgment, arguing GreenLake had forfeited its right to recover the agreed-upon $3 million fee because the financing negotiated by GreenLake was secured directly or collaterally by interests in real property and GreenLake did not hold a California real estate broker's license. (See Bus. & Prof. Code, § 10131.) We reversed, holding a disputed issue of fact existed as to whether any of the services provided by GreenLake fell within the scope of the Business and Professions Code provisions concerning unlicensed brokerage activities and, if so, whether the letter agreement should beenforced to the extent it was not barred by those provisions. (GreenLake Capital, LLC v. Bingo Investments, LLC, supra, 185 Cal.App.4th at p. 740.)

Shortly after the case returned to the trial court, Bingo's attorneys moved to withdraw. (Counsel also moved to withdraw from their representation of codefendant Centurion Financial.) The moving papers identified a registered agent for service on Bingo, a Washington State limited liability company, in Seattle, Washington.² The motion was granted on October 7, 2010. At the same time the court scheduled a status and trial setting conference for November 12, 2010. Former counsel for Bingo sent a copy of the signed order granting the motion to be relieved as counsel and notice of the November 2010 conference to the registered agent in Seattle.

Bingo did not appear at the November 12, 2010 conference, and no new counsel was identified. The court continued the hearing to January 26, 2011 and set an order to show cause re imposition of sanctions for failure to appear. Bingo again made no appearance at the continued hearing on January 26, 2011. The court imposed $1,000 in sanctions, set a trial date of March 21, 2011 and noted "defendants appear to have abandoned defense." GreenLake gave notice of the trial date to Bingo at the address provided by Bingo's former lawyers.

A bench trial was held on March 21, 2011. Bingo did not appear. GreenLake presented testimony and documentary evidence. A judgment was entered on April 19, 2011 against Bingo and Centurion Financial for $3,866,625.

On April 30, 2011 Bingo changed its official registered agent for service of process in the Washington Secretary of State's office. GreenLake registered its judgment in the State of Washington in early May 2011 and gave notice of this entry of foreign judgment to both the agent whose address it had been using since the withdrawal of Bingo's litigation counsel and Bingo's newly named agent for service of process atBingo's business address in Bellevue, Washington. Upon receipt of this notice Bingo moved for a new trial or to vacate the judgment in Washington. That motion was denied on June 15, 2011 "without prejudice to the parties reapplying should the L.A. County court amend or vacate the underlying California judgment."

On September 21, 2011 Bingo moved to vacate the judgment pursuant to Code of Civil Procedure section 473, subdivision (b), arguing it had relied on its codefendant and "mendacious former business manager," Centurion Financial, to manage its defense. According to Bingo, Centurion Financial had abandoned Bingo after this court reversed the summary judgment; and the registered agent, Centurion Financial's lawyer, failed to advise Bingo of any of the notices he had received from the court or GreenLake, including the notice of the March 21, 2011 trial date.

GreenLake opposed the motion, emphasizing there was no contention it had not sent all the required notices to the address for Bingo's registered agent provided by Bingo's former attorneys or that the registered agent had not actually received the notices: "It is difficult to believe that Foster, an attorney licensed in Washington, failed to send to Bingo any of the dozen or so notices he received. The absence of a declaration from Cameron Foster speaks volumes about the credibility of Bingo's assertion it received no notices." GreenLake argued Bingo had failed to show excusable neglect or to demonstrate reasonable diligence in seeking relief.

The trial court granted Bingo's motion on November 1, 2011 after taking the matter under submission. The court found Bingo's former counsel had erred under Washington law when he designated the address for Bingo's agent for service of process and Bingo had demonstrated diligence by moving promptly to vacate the judgment in Washington state court once it had received actual notice. "Although Bingo could have been more diligent monitoring this action and should have filed this motion to vacate more promptly, the court finds that under the circumstances of this case, denying the motion would effect an injustice." The court vacated the April 19, 2011 judgment as toBingo (not Centurion Financial) and reset the matter for trial on March 19, 2012. Notice of the court's order was served by mail on November 3, 2011.

A three-day bench trial was held March 20-22, 2012 at which the court heard testimony, including expert testimony, and received several hundred pages of documents in evidence. The court issued a detailed, 13-page statement of decision and entered its final judgment on June 18, 2012, finding against GreenLake on its claims for breach of contract and unjust enrichment and against Bingo on its cross-complaint for breach of fiduciary duty, fraud and unjust enrichment. GreenLake filed a notice of appeal on August 15, 2012 from "the [j]udgment entered on June 18, 2012."

DISCUSSION

The trial court's order vacating the April 19, 2011 judgment against Bingo for $3,866,625 was directly appealable. (Code Civ. Proc., § 904.1, subd. (a)(2) [appeal may be taken from an order made after an appealable judgment]; see Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1137 [a postjudgment grant or denial of relief from judgment after default "is a special order after judgment on a statutory motion to set aside the judgment, and as such is appealable"]; Baldwin v. Home Savings of America (1997) 59 Cal.App.4th 1192, 1195 ["[t]he posttrial order granting reconsideration and vacating a portion of an appealable judgment is itself appealable"]; Elsea v. Saberi (1992) 4 Cal.App.4th 625, 628 ["[i]t is well established that a direct appeal may be taken from an order granting a statutory motion to set aside a default judgment [citation] so long as the underlying judgment sought to be vacated is an appealable final judgment [citation] and is not conditioned on a second order unconditionally vacating the judgment"]; see generally 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 194, p. 271 ["If the court grants a motion to vacate under either [Code Civ. Proc., §§] 473 or 663 [citation], the prior judgment is nullified, and the only way to review the vacating order is by a direct appeal from it. Hence, it is treated as an order after final judgment, and is appealable."].)

The order vacating the April 19, 2011 judgment was entered on November 1, 2011. Notice of the court's order was served by mail on November 3, 2011. The timefor GreenLake to appeal from that order had long since expired when GreenLake filed its notice of appeal on August 15, 2012. (Cal. Rules of Court, rule 8.104(a)(2) [limiting time to appeal after party serves notice of entry of judgment (or appealable order) to 60 days].) Thus, we have no jurisdiction to consider an appeal from the November 1, 2011 order vacating the April 19, 2011 judgment. (Van Beurden Ins. Services, Inc. v. Customized Worldwide Weather Ins. Agency, Inc. (1997) 15 Cal.4th 51, 56 ["[t]he time...