National Secretarial Service, Inc. v. Froehlich

• Decision Date: 15 May 1989
• Citation: 258 Cal.Rptr. 506,210 Cal.App.3d 510
• Parties: NATIONAL SECRETARIAL SERVICE, INC., Plaintiff and Respondent, v. Kent FROEHLICH and Kent Froehlich, a Professional Corporation, Defendants and Appellants. Kent FROEHLICH and Kent Froehlich, a Professional Corporation, Cross-Complainants, v. NATIONAL SECRETARIAL SERVICE, INC., et al., Cross-Defendants. Civ. B035465.
• Court: California Court of Appeals Court of Appeals

Page 506

258 Cal.Rptr. 506

210 Cal.App.3d 510

NATIONAL SECRETARIAL SERVICE, INC., Plaintiff and Respondent, v. Kent FROEHLICH and Kent Froehlich, a Professional Corporation, Defendants and Appellants.

Kent FROEHLICH and Kent Froehlich, a Professional Corporation, Cross-Complainants, v. NATIONAL SECRETARIAL SERVICE, INC., et al., Cross-Defendants.

Civ. B035465.

Court of Appeal, Second District, Division 3, California.

May 15, 1989.

As Modified June 13, 1989.

Kent Froehlich, Beverly Hills, for defendants and appellants

Naomi Tsuda, for plaintiff and respondent.

CROSKEY, Associate Justice.

The defendants are attorney Kent Froehlich ("Froehlich") and Kent Froehlich, a professional corporation, ("Corporation"; hereinafter collectively "defendants"). They appeal from a judgment entered in an action originally filed by plaintiff National Secretarial Service, Inc. ("National"). National filed suit in municipal court and sought to recover approximately $6,448 as the unpaid amount due for secretarial services rendered over a five-year period. While not disputing that valuable services were performed, defendants responded with a number of technical and procedural defenses and, ultimately, a cross-complaint seeking in excess of $5 million in compensatory and punitive damages. This forced the case to the more congested and expensive venue of the superior court. Following a bench trial, the court found in favor of National on both its complaint and defendants' cross-complaint. We will affirm that judgment and, in addition, award sanctions against defendants for the prosecution of a frivolous appeal. ¹

FACTUAL AND PROCEDURAL BACKGROUND

One cannot review this record without reaching the conclusion that defendants raised every possible technical defense and asserted every possible procedural motion in order to defeat, or at least delay, the day of reckoning on a rather modest billing for what were, without any dispute, valuable secretarial services provided to defendants' law practice. We here summarize this rather unfortunate procedural history.

National first filed a complaint in the Beverly Hills Municipal Court against defendant Froehlich, an attorney, on February 15, 1983 alleging breach of contract and common counts for failure to pay for secretarial services. National alleged damages in the amount of $6,448.87. ² On March 22, 1983, National filed both a first amended complaint expressly naming both defendants and an amendment to the complaint pursuant to Code of Civil Procedure section 474 adding the defendant Corporation as Doe I. Defendants demurred on March 28, 1983. However, the motion was taken off calendar and National subsequently filed a Second Amended Complaint for common counts again naming both Froehlich and Corporation and adding a cause of action for breach of an implied-in-fact contract by Froehlich. Defendants again demurred but it was overruled. Defendants filed a motion for reconsideration which was granted and the court "readopted and affirmed" its prior ruling.

Defendants then filed an answer and a verified cross-complaint for breach of contract, constructive trust, conspiracy, money had and received, fraud and conversion and requesting money damages in excess of $5 million. ³ Defendants also made a motion to transfer the case to the superior court which, as required by law, was granted. ⁴

National filed its second at-issue memorandum on May 6, 1987, and defendants promptly filed a counter at-issue memorandum on May 14, 1987. ⁵ On November 13, 1987, National filed a motion to set the case for early trial. ⁶ Defendants opposed the motion. At the hearing on December 3, 1987, the court, on its own motion, set the case for a status conference on December 23, 1987. A mandatory settlement conference was scheduled for January 19, 1988, at which time the parties were ordered to appear for trial on January 25, 1988. Defendants then sought to continue the trial and stay all further proceedings on the asserted ground that National then had pending a bankruptcy proceeding. This motion was denied.

When the case was called for trial on January 27, 1988 defendants renewed their motions to dismiss the case and to strike the second amended complaint. ⁷ These motions were again denied.

At the conclusion of a three-day trial, the court granted National's motion, under Code of Civil Procedure section 631.8, for judgment on the cross-complaint, denied defendants' motion for judgment and found for National and against both defendants Froehlich and Corporation. The court found that defendants owed National $6,270.44, plus interest and costs. Counsel for National was ordered to prepare the judgment, and a proposed judgment was served by mail on defendants on February 10, 1988. Defendants filed a request for a statement of decision and counsel for defendants was ordered to prepare it by February 17, 1988. Counsel for defendants filed a response stating he was unable to do so because he did not know "the Court's factual and legal basis for its decision." The court then ordered National to prepare the statement of decision. A proposed statement of decision was served by mail on March 8, 1988. After the judgment and statement of decision was signed and filed by the court, defendants filed their objections thereto. The court considered Two days later defendants filed their notice of motion for new trial and motion to vacate judgment. Amended supplementary objections to the statement of decision and judgment were also filed. These were denied by the court and on May 23, 1988 a new judgment was filed. National then filed its memorandum of costs which defendants moved to strike and tax. After a hearing thereon, that motion was denied. Defendants then prosecuted this appeal.

                defendants' objections, found them not to be well taken and issued the proposed statement of decision "as its own."   In addition, the court vacated the judgment that had been prematurely signed and ordered National to prepare a new judgment for signature and filing
                

CONTENTIONS ON APPEAL

Defendants assert a number of contentions each of which we find to be without merit. Defendants argue that (1) the court erred (a) in overruling defendants' demurrer to National's second amended complaint for alleged failure to state a cause of action and (b) in refusing to dismiss the case on the same ground at the outset of trial; (2) the court erred in denying defendants' oral motion to continue the trial and to stay and abate the proceedings based upon the ground that National was the subject of a bankruptcy proceeding; (3) the court erred in denying the order setting the case for trial after the three-year statute of limitations had run and just before the five-year statute of limitations was about to run; (4) the judgment can not stand against Froehlich as (a) there was no cause of action stated against him, (b) there was no evidence that he was personally liable to National, and (c) the court improperly admitted oral evidence at trial regarding the contents of certain writings; (5) defendants' were denied due process when the trial court executed National's original proposed judgment and statement of decision without giving defendants proper advance notice and, in any event, the statement of decision was improper; (6) the court erred in denying defendants' motion to strike National's memorandum of costs and to tax costs, and (7) the court erred in denying defendants' motion for a new trial.

DISCUSSION

1. Defendants' Attacks Upon National's Pleadings Were Properly Rejected

Contrary to defendants' contention, the court did not err when it overruled the demurrer and denied the motion to strike; nor was it in error when it refused to dismiss the case upon the grounds that the complaint did not state a cause of action against either defendant.

Defendants first argue that it was error to allow National to name Corporation as a party to the second amended complaint as Doe "I" because the original complaint did not contain any allegation that National was ignorant of the true name of Corporation; indeed, National had actual, if not constructive knowledge, of Corporation's name and existence at the time of the filing of the original complaint.

This argument must fail for one simple and compelling reason. Under Code of Civil Procedure section 472, a plaintiff may amend the complaint as a matter "of course" without leave of court if such amended pleading is filed before the answer or a hearing is held on a demurrer. Such amendments may add new parties to the action. (Gross v. Department of Transportation (1986) 180 Cal.App.3d 1102, 1105, 226 Cal.Rptr. 49.) That is precisely what happened here. National filed its original complaint on February 15, 1983, naming only Froehlich as a defendant. On March 22, 1983, prior to the filing of any answer or demurrer by Froehlich, National filed a first amended complaint naming both Froehlich and Corporation as defendants. Thus, the Corporation was properly added as a party at the very outset of this case and before any pleading of any kind had been filed by Froehlich.

The defendants next contend that (1) only Corporation, if anyone, can be held liable, because National's contract was with Corporation and not with Froehlich individually and (2) the corporate entity Here, the second amended complaint, which is the one on which the case went to trial, is against both defendants and alleged two common counts (open book account and account stated) in addition to breach of an implied-in-fact contract by Froehlich. It also alleged that the true names and capacities of defendants sued as Does are unknown to plaintiff, except Doe I. ⁸ The pleading clearly stated causes of action against both defendants and was sufficient on its face. There is no showing from the record that the court erred in rejecting this argument regarding improper parties defendant.

cannot be pierced and Froehlich cannot be the alter ego of Corporation...