Niederer v. Ferreira
Decision Date | 09 February 1987 |
Citation | 189 Cal.App.3d 1485,234 Cal.Rptr. 779 |
Court | California Court of Appeals Court of Appeals |
Parties | Monica NIEDERER, Plaintiff and Respondent, v. Frank E. FERREIRA, Defendant, Cross-complainant and Appellant; B.A. Paine and Barbara Paine, Cross-defendants and Respondents. Civ. B013661. |
Wyman, Bautzer, Kuchel & Silbert, and Kathryn Tschopik, Los Angeles, for plaintiff and respondent.
No appearance for cross-defendants and respondents.
Defendant Frank E. Ferreira appeals from a judgment in favor of plaintiff Monica Niederer, including an interlocutory order specifying issues without substantial controversy. He also appeals from a judgment in favor of the Paines, cross-defendants.
In 1974, plaintiff and the Paines negotiated the sale of the assets and name of Barnard Instruments, Inc. to Paine Instruments, Inc. Plaintiff owned 60 percent and her four children owned 40 percent of Barnard Instruments, Inc.; plaintiff also was president of the corporation. The Paines owned 49 percent of Paine Instruments, Inc.; defendant, some of his family and friends owned 51 percent.
As part of its payment, Paine Instruments, Inc. executed a promissory note; the note included a guaranty signed by defendant and the Paines. Plaintiff required the guaranty as security before she would agree to accept the note.
Following the sale, Barnard Instruments, Inc. changed its name to Niederer Instruments, Inc.; Paine Instruments, Inc. changed its name to Barnard Instruments, Inc. Niederer Instruments, Inc. subsequently liquidated and dissolved. Plaintiff executed an assignment of the promissory note on behalf of Niederer Instruments, Inc. and pursuant to the corporation's plan of liquidation; the assignment was to her individually and as custodian of her then-minor children.
Barnard Instruments, Inc. made monthly payments on the note to plaintiff through October 1978. Additional payments totalling $10,646.07 were made in March 1979. No further payments were made, although close to $10,000 still was owing on the note. Pursuant to the terms of the note, which provided all unpaid principal and interest would become immediately due in event of default, plaintiff demanded full payment from defendant and the Paines; they failed to make any payment. Barnard Instruments, Inc. subsequently was adjudged a bankrupt, with no assets available for distribution.
Defendant contends the trial court lacked jurisdiction to proceed in the absence of plaintiff's children, who were indispensable parties.
Defendant also contends plaintiff violated court rules for conduct of proceedings, in that she filed her motion for summary judgment on the last permissible day.
Defendant asserts plaintiff's motion for summary judgment or, in the alternative, an order specifying issues without substantial controversy should have been denied as to the following triable issues of fact:
1. Whether plaintiff's children were indispensable parties;
2. Whether defendant's "guaranty" included the obligation to make payment in the event of default on the note;
3. If so, whether the obligation extended to plaintiff; and
4. Whether the assignment of the note was genuine.
Defendant also asserts plaintiff failed to give consideration for the guaranty.
Defendant avers the trial court erred in awarding attorneys' fees to plaintiff.
Defendant further avers the award of attorneys' fees in the amount of $10,000 is excessive and unreasonable.
Defendant finally contends the judgment for cross-defendants B.A. and Barbara Paine is unsupported by the evidence and contrary to law.
Defendant contends the trial court lacked jurisdiction to proceed in the absence of plaintiff's children, who were indispensable parties. We disagree.
Code of Civil Procedure section 389, subdivision (a), provides:
However, (Sierra Club, Inc. v. California Coastal Com. (1979) 95 Cal.App.3d 495, 500, 157 Cal.Rptr. 190; Kraus v. Willow Park Public Golf Course (1977) 73 Cal.App.3d 354, 364, 140 Cal.Rptr. 744; accord, Strauss v. Summerhays (1984) 157 Cal.App.3d 806, 814, 204 Cal.Rptr. 227.) "[T]he decision whether to proceed with the action in the absence of a particular party is one within the court's discretion, as governed by the various factors enumerated in subdivision (b) of section 389, Code of Civil Procedure." (Sierra Club, Inc., supra, 95 Cal.App.3d at p. 500, 157 Cal.Rptr. 190.)
An indispensable party is one whose interest in the subject matter of the litigation would be injured or affected if he was not joined and the plaintiff was granted the affirmative relief sought. (Bank of California v. Superior Court (1940) 16 Cal.2d 516, 522, 106 P.2d 879; Sierra Club, Inc. v. California Coastal Com., supra, 95 Cal.App.3d at p. 501, 157 Cal.Rptr. 190.) This may occur (Bank of California, supra, 16 Cal.2d at p. 521, 106 P.2d 879.)
Based on the above principle, defendant asserts plaintiff's four children are indispensable parties, in that they owned 40 percent of Niederer Instruments, Inc. and its interest in the promissory note; thus, the appropriate allocation of any recovery on the note requires that the children be party to the action. Moreover, if he were required to make payment solely to plaintiff, he "conceivably could be subjected to further legal action brought by the four children or any one or more of them." Defendant also asserts plaintiff is not entitled to recover her children's share of the payment on the note in their behalf as their "custodian."
The assignment of the promissory note reads: "FOR VALUE RECEIVED, pursuant to plan of liquidation adopted by NIEDERER INSTRUMENTS, INC., formerly named BARNARD INSTRUMENTS, INC., the holder hereof, NIEDERER INSTRUMENTS, INC., does hereby sell, assign and transfer to MONICA NIEDERER as to two-fifths (2/5) as Custodian for ANN MARIE NIEDERER, MONA CLAIRE NIEDERER, JOHN WALTER NIEDERER and PAUL ERNEST NIEDERER, Minors, as to three-fifths (3/5) to MONICA NIEDERER, individually, all of its right, title and interest in and to the within Note." The allocation of the interest between plaintiff and the children is clearly defined; thus, this is not a case "where a number of persons have undetermined interests in the same property" and one seeks to recover a share in it to the potential detriment of the others. (Bank of California, supra, at p. 521, 106 P.2d 879.) Additionally, the risk of multiple liability which creates an indispensable party must be substantial, i.e., "more than a theoretical possibility of the absent party's asserting a claim that would result in multiple liability." Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 21, 201 Cal.Rptr. 580, 679 P.2d 14.) Defendant presented no more than a theoretical possibility he could be subject to further liability for the children's interest in the proceeds of the note.
Moreover, there was no showing the children themselves had a right to payment under the note or its guaranty. The note contains a promise "to pay to BARNARD INSTRUMENTS, INC., or order," the specified amount. Barnard Instruments, Inc. became Niederer Instruments, Inc., which then assigned its interest in the note to plaintiff, individually and as custodian for her children. Payments on the note were...
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