Tim M. Belnap, D.D.S., Inc. v. Connie L. Pierce, D.D.S., Inc.
| Decision Date | 26 October 2018 |
| Docket Number | D071245 |
| Court | California Court of Appeals |
| Parties | TIM M. BELNAP, D.D.S., INC., et al., Plaintiffs and Appellants, v. CONNIE L. PIERCE, D.D.S., INC., et al., Defendants and Respondents. |
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 37-2014-00004430-CU-FR-CTL)
APPEAL from a judgment of the Superior Court of San Diego County, Judith F. Hayes, Judge. Affirmed; motion to dismiss denied.
Catanzarite Law Corporation and Kenneth Joseph Catanzarite, Brandon E. Woodward for Plaintiffs and Appellants.
Angelo Luigi Rosa for Defendants and Respondents.
Plaintiff and appellant Tim M. Belnap, D.D.S., Inc. appeals from a summary judgment in favor of defendants and respondents Connie L. Pierce, D.D.S. and Connie L. Pierce, D.D.S., Inc. (collectively Pierce) on plaintiff's San Diego County Superior Court complaint for fraud, breach of fiduciary duty and other causes of action arising out of a failed partnership between the parties, the dissolution of which was the subject of a 2013 arbitration resulting in an award favorable to Pierce. The trial court granted Pierce's summary judgment motion, ruling Pierce had demonstrated there were no triable issues of material fact as to plaintiff's claims, which due to the arbitrator's decision were barred by the doctrines of res judicata and collateral estoppel. Plaintiff contends the court erred by granting summary judgment, by denying its request for a continuance for additional discovery, and by assertedly disregarding its supplemental brief on the applicability of Bucur v. Ahmad (2016) 244 Cal.App.4th 175, decided after submission of briefing in connection with Pierce's summary judgment motion.
Pierce moves to dismiss the present appeal under the so-called doctrine of disentitlement, based on what she claims is the willful disobedience of court orders or obstructive tactics of Tim Belnap, the individual defendant who is no longer a party to this appeal.1 She alternatively contends the appeal is moot or "not appealable" based on the doctrines of res judicata and collateral estoppel. Pierce argues we should dismiss the appeal based on counsel's pursuit of it for his own personal interests. We decline to apply the doctrine of disentitlement in part because plaintiff already suffered the consequences of Belnap's misconduct, and reject Pierce's other contentions.
On the merits, we conclude Pierce met her initial summary judgment burden to show prima facie that res judicata and collateral estoppel barred the present action, which presents the same primary rights and identical issues that were, or could have been, litigated in the arbitration. Plaintiff has not demonstrated the existence of triable issues of material fact justifying denial of Pierce's motion. Accordingly, we affirm the judgment.
In setting out the background facts, we view the evidence in the light most favorable to plaintiff as the losing party, liberally construing its evidentiary submissions while strictly scrutinizing Pierce's showing, and resolving evidentiary doubts or ambiguities in plaintiff's favor. (Elk Hills Power, LLC v. Board of Equalization (2013) 57 Cal.4th 593, 606; County of San Diego v. Superior Court (2015) 242 Cal.App.4th 460, 467; Code Civ. Proc., § 437c, subd. (c).)
Plaintiff is a corporation solely owned by Timothy M. Belnap, D.D.S. In 1988, Belnap acquired a dental practice. Beginning in about 1994, Connie Pierce worked there as an associate dentist. About ten years later in February 2004, Belnap and Pierce engaged a consultant to advise them about forming a partnership. They reviewed and approved preliminary documents, including a June 2004 "transition scenario" that allocated patients on a percentage basis (63 percent to Belnap and 37 percent to Pierce), and decided to proceed to form their partnership effective January 2005 as outlined in those documents. Belnap and Pierce assigned Belnap to handle the partnership's business aspects, and gave Pierce the responsibility to jointly engage a law firm to conform thedraft partnership documents to California law. In the meantime, Belnap and Pierce operated the partnership under an oral agreement under which they would retain ownership and control over their pre-partnership patient lists, divide their income in a particular way, and retain their respective patient lists on the partnership's dissolution. The consultant prepared a purchase agreement and a form partnership agreement, labeled "Schedule B," which was to be the framework for the practice's governance, management and operations. At some point, Pierce informed Belnap that she had retained attorney Aaron Roberts and his then law firm to represent them both on partnership matters.
In March 2005, Pierce gave Belnap a transition and purchase agreement as well as a general partnership agreement, explaining that they had been conformed to California law. Without reading them, Belnap signed the documents, which formed the partnership effective January 1, 2005. According to Belnap, unbeknownst to him, Pierce had instructed the attorneys to change Schedule B to make "subtle [but] material" changes as to the patient allocations and exit provisions that would permit Pierce to take Belnap's patients on the partnership's dissolution.
Several years later, Pierce sought to dissolve the partnership and initiated binding arbitration, which took place over the course of nine days in May 2013. At issue, among other things, were the parties' claims for breach of contract, breach of fiduciary duty, fraud, conversion, and interference with prospective economic advantage. The parties presented, and the arbitrator considered, both oral and written evidence in deciding the issues.
Belnap learned of Pierce's changes to the partnership documents during the arbitration. He had not known that attorney Roberts told Pierce he could not represent them both. The arbitrator permitted attorney Roberts to testify at the arbitration about matters from the time he first received a request to prepare documents to the time the March 2005 partnership documents were signed.2 She declined to permit any claim that no contract or partnership was ever created, and that the partnership should be rescinded. Thereafter, Belnap moved to amend his counter claims in the arbitration to add the affirmative defenses of mutual or unilateral mistake, in part based on the parties' arbitration testimony that they believed attorney Roberts and his law firm mutually represented them. Attorney Roberts in the meantime testified at the arbitration that he had explained to Pierce that he could only represent her; he could not represent both her and Belnap because they had adverse interests; and he had never been engaged by the partnership, met Belnap or spoke with him.3
The arbitrator ultimately denied Belnap's motion to amend. In his closing arbitration brief, Belnap nevertheless argued that Pierce's misrepresentations caused mutual or unilateral mistake allowing the March 2005 partnership documents to be rescinded or reformed. He also argued those documents were void "under the doctrines of equitable estoppel and unclean hands given Dr. Pierce's misrepresentations." He asked the arbitrator to find Pierce had breached fiduciary duties to him in part by intentionally misrepresenting that attorney Roberts represented them both and not disclosing changes to the partnership documents, and he had not committed such a breach. He asserted he reasonably expected that attorney Roberts represented both he and Pierce, and Pierce never advised him to the contrary. Belnap asserted Pierce admitted she knew attorney Roberts had made changes to the drafts but did not tell him.
The arbitrator issued an interim award in February 2014. In addition to determining whether the respective professional corporations of Belnap and Pierce were parties to the arbitration, the arbitrator addressed what operating documents governed the partnership; whether the partnership should be dissolved and the terms of dissolution; whether any party breached the operating documents; and whether any party breached fiduciary duties, committed fraud, interfered with the other's economic advantage, orconverted partnership assets. In detailed findings, the arbitrator determined that the March 2005 transition and purchase agreement and general partnership agreement made up the original partnership documents governing the partnership; that the parties had jointly engaged attorney Roberts to prepare them, and both parties signed them. The arbitrator rejected Belnap's arguments that the partnership documents included the "long form Schedule B" or the transition scenario: she found both parties testified they had not seen that Schedule B until after the arbitration and "there was no credible evidence to support a finding that Belnap was induced to enter into the Partnership Agreement based on the [transition scenario] or its contents" but "[o]n the contrary, . . . Belnap acknowledged that he was not relying on other Transition Documents or the Transition 'other than the express representations and warranties made by such other Party in this Agreement or the other Transition Documents.' " The arbitrator made clear her decision was "an effort to explain the 'reasoned' basis for this Interim Award and Order" and not an attempt to reference all operative facts, all evidence introduced during the hearing, or all evidence supporting any specific finding or ultimate determination. The arbitrator's decision states: "The failure to refer to all the theories advanced, or authorities cited, does not mean that they were...
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