Sole Energy Co. v. Petrominerals Corp.

• Decision Date: 05 April 2005
• Docket Number: No. G030091.,G030091.
• Citation: 26 Cal.Rptr.3d 790,128 Cal.App.4th 187
• Court: California Court of Appeals Court of Appeals
• Parties: SOLE ENERGY COMPANY, Plaintiff and Respondent, v. PETROMINERALS CORPORATION et al., Defendants and Appellants.

26 Cal.Rptr.3d 790

128 Cal.App.4th 187

SOLE ENERGY COMPANY, Plaintiff and Respondent, v. PETROMINERALS CORPORATION et al., Defendants and Appellants.

No. G030091.

Court of Appeal, Fourth District, Division 3.

April 5, 2005.

Review Denied June 22, 2005.

Payne & Fears, Daniel L. Rasmussen; Mazda Butler and Mark N. Mazda, Irvine, for Defendants and Appellants Petrominerals Corporation and Daniel H. Silverman.

Blumberg Law Corporation and Ave Buchwald, Long Beach, for Defendants and Appellants Morris V. Hodges, Hillcrest Beverly Oil Corporation, Kaymor Petroleum Products, and Nevadacor Energy, Inc.

Brady, Vorwerck & Ryder, James Brady, Walnut Creek, and Ravi Sudan, Glendora, for Defendants and Appellants Morris V. Hodges, Hillcrest Beverly Oil Corporation and Kaymor Petroleum Products.

Law Offices of Norman Rasmussen and Norman Rasmussen for Defendant and Appellant Nevadacor Energy, Inc.

Hornberger & Brewer, Nicholas W. Hornberger and James F. Lindsay, Los Angeles, for Plaintiff and Respondent.

OPINION

FYBEL, J.

INTRODUCTION

Defendants Petrominerals Corporation (Petrominerals), Morris V. Hodges, Daniel H. Silverman, Kaymor Petroleum Products (Kaymor), Nevadacor Energy, Inc. (Nevadacor), and Hillcrest Beverly Oil Corporation (HBOC) (collectively defendants) moved for summary judgment on the ground plaintiff Sole Energy Company, a Texas corporation (Sole Energy Corporation), lacked standing to sue. The trial court granted the motion, and judgment was entered.

On the day the order granting summary judgment and the judgment were entered, Sole Energy Corporation filed a motion for reconsideration. At Sole Energy Corporation's request, the trial court deemed the motion for reconsideration to be a motion for a new trial, and granted it. On appeal, defendants challenge the order granting Sole Energy Corporation's motion for a new trial.

We hold: (1) the trial court had the discretion to treat the motion for reconsideration as a motion for a new trial, and (2) the trial court did not abuse its discretion in granting the motion for a new trial. The court's order granting Sole Energy Corporation leave to amend the complaint to add new plaintiffs is not an appealable order. Therefore, we do not address defendants' challenge to it or whether Sole Energy Corporation has standing to assert the claims presented in its complaint.

STATEMENT OF FACTS

On May 25, 2000, Sole Energy Corporation filed a verified complaint for intentional interference with contractual relations, intentional interference with prospective economic advantage, fraud, and breach of contract. The basis for the complaint was a letter of intent dated December 16, 1999, from Sole Energy Company, LLC, to Nevadacor. (Sole Energy Company, LLC, was a precursor to Sole Energy Corporation, and was never formed as a limited liability company.)

In the letter of intent, Sole Energy Corporation submitted a proposal for the purchase of the outstanding capital stock of HBOC from Nevadacor, and the assets associated with HBOC's oil and gas properties. The letter included the following language regarding expiration and termination: "This letter of intent shall expire on December 17, 1999, 5:00 CST. Any party may terminate this letter of intent after January 31, 2000, upon written notice to the other parties, or at any time by all parties with their mutual written consent."

The letter of intent was countersigned by Nevadacor, Kaymor, and HBOC. Hodges signed on behalf of Kaymor and HBOC. Sole Energy Corporation alleged that Hodges, who was also an officer, director and shareholder of Petrominerals, advised Petrominerals of the letter of intent.

On February 25, 2000, Nevadacor and Kaymor informed Sole Energy Corporation in writing that "they wish[ed] to terminate the negotiations and the Letter of Intent dated December 16, 1999." Sole Energy Corporation alleged Petrominerals wanted to buy HBOC's stock and the other assets that were the subject of the letter of intent, and therefore induced Kaymor, Nevadacor, and HBOC to abandon the letter of intent.

Defendants answered the verified complaint. In response to HBOC's form interrogatories, Sole Energy Corporation admitted it was incorporated in Texas on December 30, 1999—after the letter of intent was signed.

On August 9, 2001, Hodges, HBOC, Kaymor, and Nevadacor moved for summary judgment or, alternatively, summary adjudication. They argued, in part, that Sole Energy Corporation lacked standing to prosecute any of the causes of action asserted in the verified complaint because it did not legally exist as of December 16, 1999 (the date Sole Energy Company, LLC, signed the letter of intent) and therefore could not have been a party to the agreement. Petrominerals and Silverman filed a notice of joinder in the other defendants' motion.

Sole Energy Corporation opposed the motion filed by Hodges, HBOC, Kaymor, and Nevadacor, arguing it had standing to sue because it ratified the letter of intent and accepted its benefits and burdens.

On September 6, 2001, the trial court orally granted the motions for summary judgment, ruling that Sole Energy Corporation lacked standing to pursue the case. On September 19, the trial court entered a written order granting the motions. Judgment was entered on the same day.

Also on September 19, 2001, Sole Energy Corporation filed a motion for reconsideration of the order granting summary judgment. On September 20, Sole Energy Corporation filed a motion for leave to file an amended complaint, requesting to "substitute as Plaintiffs[ the] additional individuals and entities who are real parties in interest." Defendants opposed the motions for reconsideration and for leave to amend, arguing: (1) entry of judgment divested the court of jurisdiction to rule on the motions; (2) amendment would have been proper only if defendants had moved for judgment on the pleadings, but not where defendants had moved for summary judgment; and (3) a copy of the proposed amended complaint was not served with the motion. In its reply brief on the motion for reconsideration, Sole Energy Corporation asked the trial court to construe the motion as a motion for a new trial to avoid loss of jurisdiction.

On October 30, 2001, Hodges, HBOC, and Kaymor filed a rebuttal brief. They argued there was no "extreme[ly] good cause" to treat Sole Energy Corporation's motion for reconsideration as a motion for a new trial because the trial court made no misrepresentations as to the appropriate procedure to use to challenge the order granting summary judgment. Hodges, HBOC, and Kaymor did not argue the motion for reconsideration failed to meet the procedural requirements for a motion for a new trial. Petrominerals and Silverman did not file written opposition to treating the motion for reconsideration as a motion for a new trial. (In their later opposition to the motion for leave to file an amended complaint, Petrominerals and Silverman argued strict compliance with the motion for a new trial statute was required, but limited their discussion of that topic to the timing of the filing of such a motion.)

On November 1, 2001, the trial court deemed the motion for reconsideration to be a motion for a new trial, and granted it. In a written order, the court issued the following statement of reasons: "The Court made an error and misapplied the law when it granted Defendants' Motions for Summary Judgment upon the grounds that the Plaintiff lacked Standing. This challenge by Defendants was in substance an attack on the pleadings. The Motions should have been treated as Motions for Judgment on the Pleadings, and Plaintiff granted leave to amend the Complaint. [Citations.] [¶] The facts of the amended pleading would not be wholly different after amendment, and if the Complaint was filed by a party without standing, it may be amended to substitute in the real party in interest, and such amendment will `relate back' to the date of the filing of the original Complaint. [Citation.] In this case, the Plaintiff's pleadings demonstrated that at least some Plaintiff has standing, and Plaintiff assured the Court at the Motion hearing that it could amend the Complaint to substitute a Plaintiff with standing. Plaintiff is entitled to an opportunity to do so."

Defendants opposed the motion for leave to file an amended complaint, contending: (1) the court lacked jurisdiction to vacate the judgment; (2) the amended complaint was a sham; and (3) the new plaintiffs to be added to the complaint lacked standing. On December 6, 2001, the court granted Sole Energy Corporation's motion for leave to amend, and the first amended complaint was deemed filed and served that day.

DISCUSSION

I. THE TRIAL COURT HAD DISCRETION TO TREAT THE MOTION FOR RECONSIDERATION AS A MOTION FOR A NEW TRIAL.

After a trial court issues an order, whether interim or final, the losing party may ask the court to reconsider its decision and enter a different order. (Code Civ. Proc., § 1008, subd. (a).) A trial court may not rule on a motion for reconsideration after entry of judgment. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 859, 107 Cal.Rptr.2d 841, 24 P.3d 493.)

Here, the judgment was entered the same day Sole Energy Corporation's motion for reconsideration was filed on September 19, 2001. The trial court, however, deemed the motion for reconsideration to be a motion for a new trial. Defendants raise several arguments that the court lacked the discretion to do so. We reject each, as explained below.

Defendants argue a motion for reconsideration may only be construed as a motion for a new trial if there is extremely good cause. In support of that argument, defendants cite 20th Century Ins. Co. v. Superior Court (2001) 90 Cal.App.4th 1247, 1261, 109 Cal.Rptr.2d 611; Pollak v. State Personnel Bd. (2001) 88 Cal.App.4th 1394, 1408, 107 Cal.Rptr.2d 39; APRI Ins. Co. v. Superior Court (1999) 76 Cal.App.4th 176, 184, 90 Cal.Rptr.2d 171; and Passavanti v. Williams...