County of Monterey v. Life Foundation Monterey, LLC, et al.

1 All statutory references are to the Code of Civil Procedure. 1

Defendants’ motion is timely. Furthermore, the Court had not yet ruled on the sanctions issue; it had only made findings of contempt. When a court issues contempt findings but separates the proceedings by continuing the case specifically to address sanctions, the contempt ruling is not considered final. In Orange County Dept. of Child Support Services v. Superior Court (2005) 129 Cal.App.4th 798, 807, the appellate court noted that a sanctions hearing after a contempt finding is separate from the initial contempt hearing, requiring its own notice and resulting in a distinct appealable order, though it relies on the record from the contempt case.

This implies the entire process, including the sanctions decision, constitutes the full adjudication. Additionally, in In re Blaze (1969) 271 Cal.App.2d 210, 212, the court stated that void contempt orders due to jurisdictional issues can be vacated even after they are initially entered, as courts have inherent authority to correct such orders.

In this case, the Court continued the matter for further sanctions proceedings rather than issuing a final judgment. Therefore, the Court retained jurisdiction to reconsider the contempt findings themselves, especially if those findings were procedurally flawed or if the court identified new facts warranting review under section 1008. Defendants have thus demonstrated new or different facts and circumstances sufficient to justify reconsideration. Specifically, since the Order After Hearing was filed, the parties have entered into a comprehensive settlement agreement, agreed to stay the litigation, and Plaintiff has agreed not to oppose the current motion or pursue further contempt relief. These circumstances did not exist at the time of the May 8, 2026, hearing and are properly considered under section 1008.

While Plaintiff agreed not to oppose the instant motion, it does not appear that Plaintiff agreed to withdraw or dismiss its OSC, or this action in its entirety. Neither the motion nor the parties’ stipulation indicates that Plaintiff agrees that the contempt findings were incorrect. Indeed, defense counsel attests that he “makes no representation that Plaintiff has conceded that the finding of contempt was erroneous; I represent only that Plaintiff has agreed not to oppose this Motion.” [Gorman Decl. at ¶ 9.]

Likewise, the stipulation merely recites that Defendants desire to file a reconsideration motion and that Plaintiff will not oppose it because of the settlement. [Stipulation, filed 6/5/26, at 2:17-19.] There does not appear to be a stipulation that the findings should be vacated.

Accordingly, the motion for reconsideration is GRANTED IN PART such that the Court will reconsider whether its contempt findings are appropriate. To be clear, while the Court may find that Defendants have demonstrated new or different facts and circumstances, that alone does not determine that the findings should be vacated.

B. Contempt Proceedings.

1. Mr. Davis’ personal appearance and testimony were not required.

Defendants suggest that the Court may have based its findings on the fact that Mr. Davis was not present at the OSC hearing and did not testify. Defendants ask the Court to clarify whether Mr. Davis’ absence “neither lightened the Plaintiff’s burden nor supplied any element of it, and [Mr. Davis’ silence could not be used against him.” [Motion at 8.]

A party ordered to show cause why they should not face contempt can appear through an attorney and is not required to attend in person. In In re Claasen (1939) 36 Cal.App.2d 155, 156, the court ruled that when a husband responded through counsel to an order to show cause for contempt due to unpaid alimony, it lacked jurisdiction to find him in contempt solely because he did not appear personally. This was based on the established rule that anyone summoned to show cause regarding potential contempt may be represented by an attorney, and personal appearance is not mandatory.

The order to show cause primarily functions as notice of the proceeding’s nature and schedule, not as a subpoena demanding physical attendance [Cedars-Sinai Imaging Medical Group v. Superior Court (2000) 83 Cal.App.4th 1281, 1286.] Moreover, as understood by the Court, an alleged contemnor cannot be compelled to testify. [Farace v. Superior Court (1983) 148 Cal.App.3d 915, 917.]

Here, Defendants suggest that the Court’s findings may have been based on the lack of appearance by and live testimony from Mr. Davis. [See Motion at 3:21-22 (stating “the finding...was reached notwithstanding the accused, Mr. Davis, was neither required to attend the May 8, 2026, hearing nor subject to being compelled to testify there.”).] However, Defendants recognize there is no requirement for Mr. Davis to appear or testify; it appears that Mr. Davis chose to appear through counsel rather than in person at these proceedings. Additionally, as Defendants acknowledge, the Court explicitly stated that Mr. Davis’s presence was not necessary for the proceedings to continue. Therefore, these reasons do not warrant the Court vacating its findings.

2. Findings of Contempt Based on Declarations and Exhibits Alone.

Defendants argue that Plaintiff relied solely on its written declaration and exhibits and chose not to present live testimony, suggesting that submitting only papers was an improper procedure for a quasi-criminal contempt proceeding.

Contempt proceedings establish factual issues through the parties’ declarations, with allegations in the moving party’s declaration considered admitted if not contested in the defense declaration [Crittenden v. Superior Court (1964) 225 Cal.App.2d 101, 107.] A hearing is only necessary if there are disputed issues. [Id.] The initial declaration serves as a complaint for contempt and may also be used as evidence at the hearing, provided it is accepted by the court [Collins v. Superior Court (1957) 150 Cal.App.2d 354, 364.]

There are, however, important procedural requirements. The declaration initiating the contempt proceeding must be formally offered and received into evidence by the court; it does not automatically constitute evidence by being filed with the order to show cause. [Collins, 150 Cal.App.2d at 364.] Once offered, the accused has the right to object to any matter stated in the

declaration on grounds of relevancy or competency, and if the declaration is received as evidence, the accused has the right to cross-examine the declarant. [Ibid.]

While oral testimony is allowed by law in contempt proceedings, courts have the discretion to admit or exclude such testimony when it aims to clarify or challenge the declarations submitted by the parties. [Reifler v. Superior Court (1974) 39 Cal.App.3d 479, 483.] If the issues are contested and the defense properly disputes the moving party’s declaration, a hearing with live testimony might be required to settle the factual disputes.

On April 28, 2026, Defendants filed the declaration of their counsel, Alexander Gorman, in opposition to the OSC set for May 8, 2026. Mr. Gorman’s declaration details the procedural history and background of the case. It does not include direct statements or evidence contradicting the alleged transfers. Instead, it emphasizes issues such as inadequate notice of the May 8 hearing, lack of service of court orders since Mr. Gorman’s appearance, reliance on nonexistent or off-docket orders, ambiguity in the November 2025 order, dependence on an oral court order, and extraneous case history in the declaration of Plaintiff’s counsel, Henry Bluestone Smith.

Defendants’ counsel also attached several supporting exhibits, including the 2016 Closing Memorandum for the Bonds, to illustrate that the agreement was a comprehensive, sophisticated pact addressing nearly all issues before the Court, as well as risks and obligations recognized at the time of contract formation.

Notwithstanding the foregoing, the Court permitted the parties to both present arguments and evidence in support of and opposition to the OSC. At the hearing, Defendants did not crossexamine any party, nor did they submit additional oral testimony to challenge the evidence submitted by the Plaintiff. Therefore, the fact that the Court based its ruling solely on the declarations and exhibits submitted as evidence does not require vacating its findings of contempt, and the Court need not vacate those findings on this ground.

Indeed, Defendants received notice of the evidence, filed written objections (and orally objected to the evidence at the hearing), were heard at the OSC hearing, the Court explicitly ruled on the objections, and the Court considered the declarations and exhibits as the evidentiary record for the OSC.

Accordingly, the Court DENIES IN PART Defendants’ motion to the extent that it requests the Court vacate its contempt findings. Nonetheless, the Court finds that the parties’ settlement materially alters the posture of the contempt proceeding. At the time of the Court’s May 8, 2026 ruling, the Court expressly reserved the issues of sanctions, attorney’s fees and other relief under section 1218 for further briefing and hearing. No final contempt judgment had been entered. Based on the parties resolving the underlying litigation, Plaintiff’s non-opposition to the reconsideration motion, and Plaintiff not seeking further contempt relief, the Court finds that further contempt proceedings are unnecessary. The purposes served by additional litigation regarding sanctions have been substantially eliminated by the settlement and resolution of the dispute.

Conclusion.

Based on the foregoing, the motion is GRANTED IN PART AND DENIED IN PART. The OSC is DISCHARGED, and no additional contempt proceedings are needed.

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