United Grand Corp. v. Malibu Hillbillies, LLC

• Decision Date: 22 May 2019
• Docket Number: B283833
• Parties: UNITED GRAND CORPORATION, Plaintiff and Appellant, v. MALIBU HILLBILLIES, LLC, et al., Defendants and Respondents; Cyrus Sanai, Objector and Appellant.
• Court: California Court of Appeals Court of Appeals

36 Cal.App.5th 142

248 Cal.Rptr.3d 294

UNITED GRAND CORPORATION, Plaintiff and Appellant,

v.MALIBU HILLBILLIES, LLC, et al., Defendants and Respondents; Cyrus Sanai, Objector and Appellant.

B283833

Court of Appeal, Second District, Division 8, California.

Filed May 22, 2019

Cyrus Sanai, Beverly Hills, for Plaintiff and Appellant.

Cyrus Sanai, Beverly Hills, in. pro. per., for Objector and Appellant.

Cozen O'Connor, Erik L. Jackson, and Nathan Dooley, Los Angeles, for Defendants and Respondents.

D. Joshua Staub, Santa Monica, in. pro. per., for Real Party in Interest.

STRATTON, J.

INTRODUCTION

This is the fifth and presumably final appeal in a lawsuit which began in August 2014 as a garden variety commercial rent dispute. In brief, Malibu Hillbillies LLC did not pay rent to its landlord, appellant United Grand Corporation. United Grand filed a civil action to recover the overdue rent from Malibu Hillbillies and its guarantor, respondent Marcie Stollof. Although appellant United Grand Corporation sought less than $ 50,000 in unpaid rent and quickly obtained default judgments against its tenant, Malibu Hillbillies LLC, and guarantor Stollof, in the year and a half following the default judgment, United Grand sought almost $ 2 million in attorney fees for its efforts to enforce the judgment against respondent Marcie Stollof.

Early on in the life of this lawsuit, the trial court vacated the default judgment against Stollof only and set the matter for trial as to Stollof only. Nonetheless, while awaiting trial on the complaint against her, she deposited the unpaid rent and accrued interest with the Los Angeles Superior Court. United Grand took the money. Upon learning of the payment, the trial court vacated the trial date, found that United Grand had engaged in extensive misconduct throughout the duration of this action and imposed a terminating sanction striking from the complaint United Grand's prayer for attorney fees. This was, however, only a partial sanction, as the trial court also entered judgment in favor of United Grand and against Stollof in the amount of the unpaid rent and accrued interest she had already paid and United Grand had already received.

United Grand and its attorney Cyrus Sanai appeal from the judgment striking the prayer for attorney fees. They also state they are appealing from an order dissolving an injunction, sanctions orders against Sanai of less than $ 5000 and an order denying attorney fees on appeal. While United Grand's statement of appealability is clear and supported by relevant legal citations, the same cannot be said for its discussion of those issues.

"In order to demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record." ( City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 286–287, 149 Cal.Rptr.3d 491.) United Grand has failed to meet this requirement for most of the issues it raises. As set out below, many of its claims are forfeited. ( Ibid. ) The few cognizable isolated claims of error are meritless. We affirm the judgment of dismissal, the order dissolving the injunction and the order denying attorney fees on appeal.

The sanctions identified in the statement of appealability are owed by United Grand's attorney Cyrus Sanai to Stollof's counsel Joshua Staub. Staub, who is a real party in interest as to the sanctions orders, has moved to dismiss the appeal from the sanctions orders under the disentitlement doctrine, as Sanai has been found in contempt of court for failing to pay those sanctions and he is the subject of an outstanding bench warrant. We dismiss the appeal from the sanctions orders.

BACKGROUND

In August 2014, United Grand began this action by filing a form complaint alleging Malibu Hillbillies breached its commercial lease with United Grand and Stollof breached her guaranty agreement. United Grand sought unpaid rent in the amount of $ 46,395.86, attorney fees, and costs. United Grand quickly obtained default judgments against Malibu Hillbillies and Stollof. On April 13, 2015, Judge Rosenblatt entered judgment in the amount of $ 67,852.55 against Malibu Hillbillies and Stollof "jointly and severally." The total amount of the amended judgment filed May 6, 2015, included $ 21,120 in attorney fees through February 11, 2015 and $ 955.00 in costs.

The next three years of this action involved four appeals and one petition for writ of habeas corpus, but little discovery and no trial. Rather, almost all the proceedings involved disputes over attorney fees in one form or another.

After entry of judgment United Grand focused its collection efforts on Stollof, who resided in Maryland. Despite the essentially uncontested nature of the case, United Grand's attorney Cyrus Sanai continued to generate a large amount of attorney fees on the case. On April 29, 2015, United Grand executed a Memorandum of Costs seeking $ 25,380 for post-judgment attorney fees from February 11 to April 29, 2015.

United Grand enrolled its judgment in Maryland on May 29, 2015.

In a second memorandum of costs filed June 2, 2015, United Grand sought an additional $ 41,030.20 in attorney fees for a one-month period. Thus, within six weeks of the April 13 judgment, United Grand sought $ 66,410.20 in post-judgment attorney fees for enforcement of a $ 67,852.55 judgment.

In July 2015, Stollof tried to settle the case by offering to pay the amount of the April 13, 2015 judgment. United Grand refused the offer. United Grand's attorney Sanai explained his view of the litigation in the letter refusing the offer: "What your client did not realize was that once judgment was entered, unopposed requests for post-judgment attorney fees would be rubber-stamped, and that myself and Maryland counsel could, if we took post-judgment fees on contingency, obtain a multiplier on our lodestone rates." United Grand's counter-proposal was that Stollof pay $ 255,318.59.

Concurrently with United Grand's July 2015 settlement proposal, United Grand served a third memorandum of costs seeking $ 107,768.95 in attorney fees for the period June 3 through July 14, 2015. Thus, in less than a year after filing this essentially uncontested lawsuit, United Grand sought $ 195,299.15 in attorney fees, which totaled four times the amount of the unpaid rent which the lawsuit has been brought to recover.

Faced with this disproportionately large demand for attorney fees, Stollof elected to move to set aside the default judgment against her. While her motion was pending, Stollof also moved to tax costs. By the time she filed the motion on August 13, 2015, United Grand had filed a fourth memorandum of costs seeking $ 159,939.27 for a total of $ 355,238.42 in attorney fees for more than 125 hours of work. In November 2015, Judge Borenstein awarded reduced attorney fees of $ 7,000 for 14.5 hours of work and costs of $ 240.

United Grand also pressed on with some post-judgment discovery, and in October 2015 it obtained discovery sanctions against Stollof in the amount of $ 2,500. Stollof promptly paid the sanctions.

On December 24, 2015, Judge Rosenblatt granted Stollof's motion to set aside the default judgment against her. Malibu Hillbillies also moved to set aside the default judgment against it, but that motion was denied. United Grand appealed the trial court's order granting Stollof's motion and Malibu Hillbillies appealed the order denying its motion. (B268544 & B270076) Neither appeal was successful. The next step should have been to try the action against Stollof and to enforce the default judgment against Malibu Hillbillies.

By March 2016, United Grand had not filed a "code compliant" acknowledgement of satisfaction of judgment for the discovery sanctions Stollof had paid in October 2015. Stollof filed a motion to compel United Grand to file such an acknowledgement. The trial court granted the motion and ordered United Grand to file a "code compliant" acknowledgement by May 6, 2016. The court also ordered United Grand's attorney Sanai to pay Stollof's counsel Joshua Staub attorney fees in the amount of $ 500 by June 1, 2016. This order was later amended nunc pro tunc to require United Grand, not Sanai, to pay the fees.

On May 4, 2016, United Grand filed a noncompliant acknowledgement. Stollof filed a request to show cause initiating indirect contempt proceedings against United Grand. On May 24, United Grand again filed a noncompliant acknowledgement. The court signed the order to show cause (OSC) and directed United Grand to explain why it should not be adjudged in contempt of court for failing to file a code-compliant acknowledgement.

While the dispute over the acknowledgement dragged on, Stollof again attempted to resolve the dispute with United Grand. Among other options, Stollof suggested transferring the funds she had deposited in the Maryland Court to the Los Angeles Superior Court. United Grand rejected Stollof's April 2016 and May 2016 offers. On August 1, 2016, Stollof filed a motion to deposit $ 56,705, representing the full amount of unpaid rent plus interest through May 2016, with the Los Angeles Superior Court. The court granted the motion and Stollof deposited the funds.

United Grand remained focused on the contempt proceedings for the noncompliant acknowledgement. On August 15, 2016, United Grand filed a motion to vacate the OSC re contempt and dismiss the contempt proceedings. The trial court denied the motion and set a trial date on the OSC of January 18, 2017. On October 7, United Grand filed a notice of appeal in case No. B279215 purporting to appeal from the various orders related to the filing of the acknowledgement of satisfaction. Relying on the pendency of its appeal, United Grand filed a series of unsuccessful applications for stays of pending contempt proceedings in the trial court.¹ On December 1, 2016, Judge Borenstein granted a stay of the contempt proceedings until January 5, 2017, to permit Stollof and Staub to seek dismissal of United Grand's...