Van Sickle v. Gilbert

• Decision Date: 29 June 2011
• Docket Number: No. C062657.,C062657.
• Citation: 11 Cal. Daily Op. Serv. 8270,196 Cal.App.4th 1495,127 Cal.Rptr.3d 542,2011 Daily Journal D.A.R. 9763
• Court: California Court of Appeals Court of Appeals
• Parties: Beth VAN SICKLE, Plaintiff and Respondent, v. Gregory GILBERT, Defendant and Appellant; Vickilyn Gilbert, Movant and Appellant.

196 Cal.App.4th 1495

127 Cal.Rptr.3d 542

11 Cal. Daily Op. Serv. 8270

2011 Daily Journal D.A.R. 9763

Beth VAN SICKLE, Plaintiff and Respondent,

v.Gregory GILBERT, Defendant and Appellant;

Vickilyn Gilbert, Movant and Appellant.

No. C062657.

Court of Appeal, Third District, California.

June 29, 2011.

Gregory F. Gilbert for Defendant and Appellant and Movant and Appellant.

Law Offices of Thomas J. Feeley and Thomas J. Feeley, Los Angeles, for Plaintiff and Respondent.

ROBIE, J.

In this action, plaintiff Beth Van Sickle filed a complaint against her former attorney, defendant Gregory F. Gilbert, arising out of his alleged mismanagement, years earlier, of certain properties Van Sickle had received in a divorce in which Gilbert had represented her. Van Sickle included in her complaint a cause of action for an accounting, and, as is generally true in accounting cases, she did not include in her complaint a demand for a specific amount of money from Gilbert in connection with that cause of action. (See Ely v. Gray (1990) 224 Cal.App.3d 1257, 1261–1262, 274 Cal.Rptr. 536.) She also included in her complaint a cause of action for breach of fiduciary duty, in which she likewise failed to include a prayer for a specific amount of damages. There is also no evidence Van Sickle ever served Gilbert with a statement identifying the amount she sought to recover from him in this action, whether as damages or otherwise.

When Gilbert failed to comply with an order compelling him to answer Van Sickle's special interrogatories and respond to her demands for production of documents, the trial court granted Van Sickle's request for a terminating sanction and ordered Gilbert's answer stricken. Van Sickle thereafter took Gilbert's default and obtained a default judgment against him for more than $2 million, half of which consisted of punitive damages.

On Gilbert's appeal, we conclude that while the trial court did not abuse its discretion in imposing a terminating sanction on Gilbert, the default judgment and the default must be set aside because Van Sickle could not take Gilbert's default until she put him on notice of the amount of money she sought in the action, which she failed to do. Accordingly, we will reverse the judgment against Gilbert and direct the trial court to set aside his default and allow Van Sickle to amend her complaint to allege specifically the amount of money she is seeking to recover from him.

On the separate appeal of Vickilyn Gilbert from the trial court's refusal to allow her to intervene in the action, we conclude that appeal is untimely and will therefore dismiss it.¹

FACTUAL AND PROCEDURAL BACKGROUND

IThe Underlying Facts²

In 1965, Van Sickle filed for divorce from her husband of 10 years, Jack Van Sickle.³ In July 1968, Van Sickle retained Anthony Scalora to represent her in a divorce proceeding on a contingency basis because Van Sickle told Scalora she had no money but felt she was entitled to some of Jack's extensive property at Lake Tahoe. Under the terms of the contingency agreement, Van Sickle agreed to pay Scalora 10 percent of the first $100,000 recovered and 30 percent of any amount recovered in excess of $100,000, plus costs not to exceed $10,000.

In 1981, Van Sickle entered into a new contingency fee agreement with Scalora and Gilbert, who had apparently been assisting Scalora with Van Sickle's representation. The new agreement recited that the property under dispute was subject to long-term leases and that attorney fees would be paid out of an assignment of proceeds from those leases. Upon termination of the leases or distribution of the property, the entire amount of attorney fees would be paid. At some later point, apparently, it was determined and/or agreed that Scalora and Gilbert would divide their 30 percent interest under the fee agreement with 12 percent going to Scalora and 18 percent going to Gilbert.

In 1984, Van Sickle, Scalora, and Gilbert agreed to modify the fee agreement because of a settlement proposal under which Van Sickle would receive certain properties that were subject to leases ranging from 20 to 50 years. If Van Sickle were required to pay the attorney fees in a lump sum, it would destroy the value of the properties; accordingly, Van Sickle and her attorneys agreed to payment of the 30 percent fee in installment payments over the life of the leases, with a lump sum due only if the properties were sold.

According to the allegations of the complaint in this action, “[i]n 1985, ... Gilbert marshaled, gathered, and took possession of the properties that were transferred [to Van Sickle] pursuant to the final judgment of the divorce,” and “[b]etween 1985 and 1992, ... Gilbert managed the properties, distributed certain sums of money as and for attorney fees, expended certain sums of money and delivered certain sums of money to [Van Sickle].” According to Van Sickle, Gilbert also used money from the properties to pay himself and Scalora for Gilbert's defense of a tax audit, as well as paying himself attorney fees for handling tenant litigation. Also according to Van Sickle, “Gilbert so mismanaged the properties, that the taxes were not paid, delinquencies were filed, and [Van Sickle] ha[d] no way of determining the amounts of money previously paid under the contingency fee contract.”

In 1992 Scalora assisted Van Sickle in obtaining management of the properties from Gilbert. That same year, Scalora died. He and his wife had previously assigned all interest under the fee agreement to a family trust.⁴

In 1994, Van Sickle sued Gilbert and the trust to rescind the fee agreement, alleging it was void as against public policy and obtained by undue influence. The trial court granted summary judgment in favor of Gilbert and the trust on the merits. On Van Sickle's appeal, this court affirmed the judgment on the ground her action was barred by the statute of limitations.

According to Van Sickle, in April 2003—11 years after Gilbert's management of the properties had ended—she requested “a complete accounting ... from ... Gilbert for the time he managed the properties as well as [for] the monies received under the contingency fee agreement and additional attorney fees paid to him above the contingency fee agreement.” Gilbert did not respond to that request or to several others over the following year and did not provide the requested accounting.

IIThe Pleadings

In June 2004, after her requests for an accounting went unheeded, Van Sickle filed a complaint for accounting, declaratory relief, constructive trust, and breach of fiduciary duty against Gilbert and the trust. Van Sickle alleged that without an accounting from Gilbert for the period he managed the properties she could not properly distribute money she was holding in trust from the condemnation of certain of the properties. Van Sickle also sought declaratory relief on whether Gilbert and the trust were entitled to 30 percent of the value of the properties she received in 1985, minus whatever payments they had already received (as she contended), or whether they were entitled to 30 percent of the value of the properties without such an offset (as they contended). In her constructive trust claim, Van Sickle alleged that Gilbert had wrongfully withheld “certain assets of the divorce settlement,” consisting of stock in a certain corporation. Finally, Van Sickle alleged that Gilbert had “failed to present an accounting, ... failed to turn over all of the assets, and ... failed to protect [her] from adverse tax consequences, all to the detriment of [Van Sickle] for damages in an amount unascertained at this time, to be presented at trial, and in excess of the jurisdictional amount of this Court.” Van Sickle also alleged that “Gilbert's actions were intentional, wrongful and deliberate and should allow the award of punitive or exemplary damages.” Nowhere in the complaint did Van Sickle demand a particular amount of damages, either compensatory or punitive.

Gilbert was served with the complaint on July 13, 2004, but he did not timely file an answer, so Van Sickle took his default on September 15, 2004. In November 2004, Van Sickle agreed to set aside Gilbert's default. A stipulation and order setting aside the default, filed on January 27, 2005, provided that Gilbert would have five court days to file an answer, but it was not until March 22, 2005, that Gilbert finally answered the complaint with a general denial and 24 affirmative defenses.

IIIDiscovery History

AAppointment Of The Accountant

In April 2005, the court (Judge Suzanne Kingsbury) continued a previously scheduled settlement conference and trial on Van Sickle's motion because there was insufficient time to complete an accounting beforehand; at the same time the court ordered an accounting to be completed by an agreed-upon accountant. The parties were unable to agree on an accountant, so in August 2005 the court (visiting Judge Arjuna Saraydarian) appointed Kerry David, a certified public accountant, to perform the accounting.⁵

BVan Sickle's Discovery Requests

Meanwhile, on June 30, 2005, Van Sickle served Gilbert by mail with 23 requests for admissions, 128 special interrogatories, and 42 demands for production of documents.⁶ After three prefatory questions asking for Gilbert's name, address, and the identity of anyone who helped him in answering the interrogatories, the next 72 special interrogatories asked Gilbert to state the facts on which he based each of his affirmative defenses and to identify all persons and all documents that would support those facts. The following 31 interrogatories asked Gilbert to list the properties he marshaled for Van Sickle, to list all payments he received and all expenses he paid in connection with certain specific properties and assets, and to identify all persons and all documents that would support his answers to the previous interrogatories. The remaining 22 interrogatories sought various other information.

Forty-one of the...