Guttman v. Guttman

• Decision Date: 02 December 2021
• Docket Number: B307048
• Citation: 72 Cal.App.5th 396,287 Cal.Rptr.3d 296
• Parties: Bruce J. GUTTMAN, Plaintiff and Appellant, v. Phillip GUTTMAN et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

72 Cal.App.5th 396

287 Cal.Rptr.3d 296

Bruce J. GUTTMAN, Plaintiff and Appellant,

v.Phillip GUTTMAN et al., Defendants and Respondents.

B307048

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

Filed December 2, 2021

Harrison Law and Mediation and Susan L. Harrison, Rolling Hills Estates, for Plaintiff and Appellant.

Thompson Coburn and Mitchell B. Stein, Los Angeles, for Defendants and Respondents.

ROTHSCHILD, P. J.

Bruce J. Guttman (Bruce), Phillip Guttman (Phillip), and Judith Douglas (Judith) are siblings and co-equal general partners of the Guttman Family Limited Partnership (the partnership), which owns certain real estate in Los Angeles County.¹ Bruce sued to dissolve the partnership. In response, Phillip and Judith initiated a statutory procedure to buy out Bruce's interest in the partnership. Pursuant to this procedure, court-appointed appraisers submitted to the court their valuations of the partnership's properties. Bruce, believing the appraisals undervalued the properties, dismissed his complaint without prejudice. The court then granted Phillip and Judith's motion to vacate the dismissal. Bruce appealed.

We treat the appeal, which is from a nonappealable order, as a petition for writ of mandate. Because the court did not err in granting the motion to vacate Bruce's dismissal of his complaint, we deny the petition.

FACTUAL AND PROCEDURAL SUMMARY

On September 25, 2018, Bruce filed a verified complaint against Phillip and Judith alleging causes of action for breach of fiduciary duty, waste, and dissolution of the partnership.² In the dissolution cause of action, Bruce alleged that Phillip and Judith refused to allow Bruce to act as a general partner, breached fiduciary duties owed to him, committed waste on the partnership's real property, and spent excessive amounts of partnership funds on projects and services that damaged the partnership. He further alleged that, as a result, "it is not reasonably practicable to continue to carry on the affairs of the [p]artnership." Bruce sought an order that the partnership be dissolved and its affairs wound up pursuant to Corporations Code section 15908.02, subdivision (a).³

On November 2, 2018, Phillip and Judith filed a verified answer to the complaint.

On February 11, 2019, Phillip and Judith filed a motion invoking a statutory limited partnership buyout procedure under section 15908.02, subdivision (b) (the buyout motion). They stated that they agreed with Bruce that "it is not reasonably practicable to carry on the activities of the [p]artnership in conformity with the [p]artnership agreement" and that they have "elect[ed] to purchase the [p]artnership interest owned by [Bruce]."

On August 16, 2019, the court issued its order on the buyout motion. The order recites that Bruce seeks dissolution of the partnership and Phillip and Judith "agree that it is not reasonably practicable to carry on the activities of the [p]artnership in conformity with the [p]artnership agreement." The order provides that the "dissolution action shall be stayed ... so long as [Phillip and Judith] keep in full force and effect, a bond in the amount of [$125,000]." The court identified three appraisers to appraise the fair market value of the partnership properties as of September 25, 2018—the date Bruce commenced the dissolution action. The court further established protocols regarding the appraisals, set a deadline of November 29, 2019 for the submission of the appraisals to the court, established a timetable for briefs, and set a hearing to be held on December 27, 2019 "for confirmation of an award and entry of a decree that shall provide in the alternative for winding up and dissolution of the [p]artnership unless payment is made for [Bruce's] [p]artnership interest within ninety (90) calendar days from entry of the decree." The cost of the appraisals "shall be borne by the [p]artnership."

On November 29, 2019, the parties lodged the appraisals with the court.⁴ One appraiser concluded that the value of the partnership properties was $37,180,000; a second appraiser established the value at $38,300,000; and the third at $39,037,000.

In an ex parte application filed on December 23, 2019, Phillip and Judith took the position that section 15908.02 and the court's August 16, 2019 order require at least two of the appraisers reach a consensus as to the valuation.⁵ Because no such consensus had been reached, they argued that the appraisers’ work "is not done," and the appraisers should determine if the required consensus can be reached. Bruce disagreed, and argued that a consensus among the appraisers is not required and that "it is the Court which is to ‘ascertain and fix the fair market value of [Bruce's] partnership interest,’ " not the appraisers.

In response to the ex parte application, the court vacated the December 27, 2019 hearing date and set a status conference and case management conference for January 15, 2020.

At the January 15, 2020 conference, the court indicated that it agreed with Bruce that the buyout procedure did not require a consensus among the appraisers, or among two of them, and that the court "can come up with numbers that are different from what the appraisers themselves came up with." The court explained, however, that it may also conduct "some additional fact finding," which could include "asking the appraisers if they could reach a consensus." The court then, over Bruce's objection, directed Phillip and Judith's counsel to ascertain whether the appraisers were willing to meet in order to reach a consensus valuation and to report their response to the court. The court set a further hearing "to potentially confirm the award" for March 18, 2020. "If a consensus or majority cannot be reached by the appraisers, then the hearing will proceed with evidence by briefing."

During the status conference, Bruce's counsel referred to what she described as "flaws" in the "lowball appraisals," and asserted that the valuations of approximately $38 million "should be closer to $58 million."

The next day, Bruce filed a request for dismissal of the entire action without prejudice. The court clerk entered the dismissal on January 22, 2020.

On January 28, 2020, Phillip and Judith filed an ex parte application to vacate the dismissal. The court set a hearing on the matter to be held on February 18, 2020. Bruce filed a written opposition and Phillip and Judith filed a reply.

After a hearing, the court granted the motion to vacate the dismissal and "reinstated" its August 16, 2019 order, stating that the dismissal "was improperly entered." The court reasoned, in part, that allowing a plaintiff who has received "the valuations given by the agreed upon appraisers ... to dismiss the action and ‘start over’ because he is unhappy with the valuations received seems terribly inefficient and a waste of resources of the parties and the court. In addition, for the statutory procedure to be effective according to its terms, there should not be a procedure available for one party to unilaterally ‘overrule’ the appraisers’ valuations."

Plaintiff filed a notice of appeal on June 7, 2020.

DISCUSSION

A. Appealability

Although Phillip and Judith have not challenged the ability of Bruce to appeal from the order granting their motion to vacate the entry of dismissal, we must consider the issue when, as here, "a doubt exists as to whether the trial court has entered a[n] ... order or judgment made appealable by Code of Civil Procedure section 904.1." ( Jennings v. Marralle (1994) 8 Cal.4th 121, 126, 32 Cal.Rptr.2d 275, 876 P.2d 1074 ; see Estate of Sapp (2019) 36 Cal.App.5th 86, 98, 248 Cal.Rptr.3d 244 ["[b]ecause appealability goes to the question of this court's jurisdiction, we must address that threshold question before addressing the merits of [the] appeal"].)

The " ‘right to appeal is strictly statutory, and a judgment or order is not appealable unless made so by statute.’ " ( Warwick California Corp. v. Applied Underwriters, Inc. (2020) 44 Cal.App.5th 67, 72, 257 Cal.Rptr.3d 322.) In addressing appealability in his opening brief, Bruce does not refer us to any statute authorizing the appeal, and we have found none. Instead, Bruce relies on Basinger v. Rogers & Wells (1990) 220 Cal.App.3d 16, 269 Cal.Rptr. 332 ( Basinger ). The Basinger court, citing a section of Witkin's treatise on California Procedure, stated, without analysis, that an "order vacating ... previously filed dismissals is appealable." ( Id. at p. 21, 269 Cal.Rptr. 332, citing 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 108, p. 127.)

In H. D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 118 Cal.Rptr.2d 71 ( H. D. Arnaiz ), the Court of Appeal disagreed with Basinger and criticized its reliance on Witkin for the general principle that "a vacating order is generally appealable," because "[t]he very next paragraph in Witkin ... qualifies the general rule of appealability" by stating that " ‘[a] vacating order is not appealable unless it vacates a prior appealable judgment. [Citation.]’ " ( Id . at p. 1365, 118 Cal.Rptr.2d 71, quoting 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 149, p. 215; accord, 9 Witkin, Cal. Procedure (5th ed. 2020) Appeal, § 195.) The court in H. D. Arnaiz further stated that the Basinger court "ignores the requirement of a statutory basis for finding an order appealable and the requirement that a vacating order is appealable only if it vacates an appealable judgment." ( H. D. Arnaiz , supra , 96 Cal.App.4th at p. 1366, 118 Cal.Rptr.2d 71 ; see also Mesa Shopping Center-East, LLC v. O Hill (2014) 232 Cal.App.4th 890, 898, 181 Cal.Rptr.3d 791 [agreeing "that an order granting a motion to vacate a voluntary dismissal is not appealable as such"].) We agree with H. D. Arnaiz and decline to follow Basinger on this point and, finding no statutory authority for an appeal from an order vacating a voluntary dismissal, conclude that the order is not appealable.

We requested that the parties...