hearing on his restitution claim. Under settled law, Lowell was entitled to a restitution
hearing even without filing a cross-complaint. We reverse the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In June 2005, Lowell entered into a written agreement to lease a residence for five
years for $1,200 per month with three automatic five-year renewals. On August 2010,
Beach Break acquired the property at a foreclosure sale and recorded a trustee's deed
upon sale. Shortly after, Beach Break filed an unlawful detainer action against Lowell.
2 Under Code of Civil Procedure section 581d, the dismissal order constitutes the judgment in this action. All further statutory references are to the Code of Civil Procedure unless otherwise stated. 2
In March 2011, the trial court entered an order granting Beach Break's summary
adjudication motion for possession. Lowell appealed to the appellate division. While the
appeal was pending, Beach Break evicted Lowell and sold the property to a third party.
In November 2013, the appellate division reversed the possession order, finding
triable issues of fact existed on several matters related to Beach Break's claimed
possession right.3 The appellate division remanded the matter to the trial court for
further proceedings consistent with its opinion, "including appropriate restitution
hearings and orders to restore [Lowell] 'so far as possible to the position [he] occupied
before the enforcement or execution of the judgment.' (Code Civ. Proc.,
§ 908; see also Munoz v. MacMillan (2011) 195 Cal.App.4th 648.)" (Fn. omitted.)
During the next 14 months, the parties engaged in various procedural
maneuverings, including Beach Break's unsuccessful attempt to dismiss the case.
In April 2015, Beach Break filed a second amended complaint converting the
unlawful detainer action to an unlimited action seeking damages for unpaid rent while
Lowell was in possession of the premises. Lowell moved for summary judgment
contending that he was entitled to the court-ordered restitution hearing. The trial court
(Superior Court Judge Gary Kreep) denied the motion on procedural grounds.
3 The appellate division determined there were triable factual issues on several matters including whether Beach Break had notice of Lowell's lease; whether Lowell was a bona fide tenant entitled to notice under applicable statutes; and whether Beach Break was a bona fide purchaser.
3
In September 2015, Beach Break filed a motion to dismiss its second amended
complaint, arguing it had an absolute right to voluntarily dismiss its own action even if
the dismissal would eliminate Lowell's restitution. The court (Judge Kreep) denied the
dismissal motion on procedural grounds. A trial was scheduled for the next month.
At the outset of the trial, Beach Break filed a motion in limine seeking to exclude
Lowell's evidence regarding restitution. Beach Break argued that Lowell was not entitled
to restitution in this action because he had not filed either a cross-complaint or an
affirmative defense seeking restitution. Lowell opposed the motion, arguing that a tenant
who has obtained reversal of an unlawful detainer action is entitled to seek restitution
without filing a separate claim.
After a hearing, the court (Superior Court Judge Joel Pressman) ruled that Lowell
waived any right to restitution because he had not filed an affirmative pleading requesting
this form of relief. After the ruling, Beach Break moved to dismiss its entire case with
prejudice. The court granted the motion. Lowell filed written objections. After
considering Lowell's objections, the court signed a written order of dismissal. Lowell
filed a timely notice of appeal in this court.
DISCUSSION
Both sides agree the sole issue on appeal is whether a party who has obtained a
reversal of a judgment in an unlawful detainer case must file a cross-complaint seeking
restitution to obtain this form of relief. Because this is a question of law, we review the
trial court's determination de novo. (Cho v. Superior Court (1995) 39 Cal.App.4th 113,
119.)
4
I. Legal Principles
As a general rule, when a judgment is reversed on appeal, the appellant is entitled
to restitution for all things lost by reason of the judgment. (Levy v. Drew (1935) 4 Cal.2d
456, 459.) This principle is embodied in California statutory law and settled equitable
1065 (Gunderson); Rogers v. Bill & Vince's, Inc. (1963) 219 Cal.App.2d 322, 324
(Rogers); 9 Witkin, Cal. Procedure (5th ed. 2008), Appeal, § 900, p. 964.) " 'The
fundamental rule guiding the court in [such] proceeding[s] [i]s, so far as possible, to place
the parties in as favorable a position as they could have been in had the judgments not
5
been enforced pending appeal.' [Citation.]" (Gunderson, at p. 1065.) A person whose
property has been taken under a judgment is entitled to restitution as a matter of right if
the judgment is reversed or set aside, unless restitution would be inequitable. (Id. at
p. 1064; Stockton Theatres, Inc. v. Palermo (1953) 121 Cal.App.2d 616, 619 (Stockton
Theatres).)
Numerous courts have applied these principles in the unlawful detainer context.
(See Shubert, supra, 30 Cal.2d at p. 789; Munoz, supra, 195 Cal.App.4th at p. 658;
Stockton Theatres, supra, 121 Cal.App.2d at p. 619; Erickson v. Boothe (1954) 127
Cal.App.2d 644, 648.) When a landlord who has secured a writ of possession evicts a
tenant before the appellate rights of the tenant have been exhausted, the landlord assumes
the risk it will be subject to a full accounting and restitution if the judgment granting the
writ of possession is reversed on appeal. (Erickson v. Boothe, supra, 127 Cal.App.2d at
p. 649.) The Munoz court explained that after a reversal in an unlawful detainer action,
"restitution can be recovered in the underlying unlawful detainer action when a judgment
for the landlord is reversed or in a separate [breach of contract] action instituted to
recover losses incurred as a result of a reversed judgment."4 (Munoz, at p. 658.)
Whether a party is entitled to restitution following reversal presents a question
calling for judicial discretion. (Gunderson, supra, 196 Cal.App.4th at p. 1065; Munoz,
4 Practically speaking, the restitution remedy does not differ greatly from the breach of contract remedy. (Munoz, supra, 195 Cal.App.4th at p. 659, fn.7.) The Munoz court stated that after prevailing on appeal, the tenant's "most straightforward remedy [is] to seek restitution in the underlying unlawful detainer action, not to bring a subsequent action for breach of contract." (Id. at p. 650.) 6
supra, 195 Cal.App.4th at pp. 655-656.) The trial court's ruling will not be disturbed in
the absence of a showing of manifest abuse of discretion. (Munoz, at p. 662.)
II. Analysis
In this case, the trial court declined to exercise its discretion and instead ruled that
Lowell was not entitled to restitution as a matter of law because he did not file a cross-
complaint seeking this relief. This ruling was erroneous for two reasons.
First, citing section 908 (which authorizes an appellate court to order restitution
after a reversal) and Munoz (which expressly recognized the restitution right), the
appellate division ordered that Lowell be provided an "appropriate restitution hearing[]"
to restore him "so far as possible to the position [he] occupied before the enforcement . . .
of the judgment." Under settled appellate principles, this order was binding on the trial
court and the court had the affirmative obligation to follow the mandatory direction. (See
Rice v. Schmid (1944) 25 Cal.2d 259, 263 ["Where a reviewing court reverses a judgment
with directions . . . the trial court is bound by the directions given."]; Butler v. Superior
Court (2002) 104 Cal.App.4th 979, 982 [trial court is not authorized to materially depart
from appellate directions on remand]; see also People v. Dutra (2006) 145 Cal.App.4th
1359, 1365-1367.)
Second, even without an order from the reviewing court, the party prevailing on
appeal may seek restitutionary relief through a motion in the remanded matter, rather than
by filing a new cross-complaint or filing an independent action. (Gunderson, supra, 196
Cal.App.4th at p. 1065 ["Following reversal, a party may seek restitution from the trial
court by a motion ' "in the original action itself . . . , or . . . in a separate action instituted
7
for that purpose," ' " italics added]; 9 Witkin, Cal. Procedure, supra, Appeal, § 900, p.
965 ["successful appellant may make a motion in the trial court, and obtain restitution in
this summary proceeding"]; accord Ward v. Sherman (1909) 155 Cal. 287, 291; Rogers,
supra, 219 Cal.App.2d at pp. 324-326; Stockton Theatres, supra, 121 Cal.App.2d at p.
620.) The party entitled to seek restitution is not required to file additional pleadings
because the power to restore benefits lost exists by virtue of section 908 and the trial
court's equitable powers. (Schubert, supra, 30 Cal.2d at p. 789 [referring to section 957,
the former version of section 908]5; see Rogers, supra, 219 Cal.App.2d at pp. 324-326.)
Further, " 'the fact that [a] judgment was merely set aside and that no final
judgment was entered . . . does not prevent restitution.' " (Stockton Theatres, supra, 121
Cal.App.2d at p. 623.) If the appellate court vacates the judgment and orders a new trial,
a person who has satisfied the judgment may be entitled to restitution depending on the
circumstances. (See Rodgers v. Bill & Vince's, Inc., supra, 219 Cal.App.2d at pp. 324-
326; see also Shubert, supra, 30 Cal.2d at p. 788; Stockton Theatres, at p. 623; 9 Witkin,
Cal. Procedure, supra, Appeal, § 903, p. 966.)
Additionally, a party cannot defeat the opposing party's right to a restitution
hearing by dismissing the action before the opposing party has had the opportunity to
seek restitution. (Schubert, supra, 30 Cal.2d at pp. 789-790; 9 Witkin, Cal. Procedure,
supra, Appeal, § 903, p. 966.) "[W]hile the plaintiff has the right to dismiss the action
before trial, where no counterclaim or request for affirmative relief has been filed, that
5 Former section 957, enacted in 1872, was repealed and replaced without material change by section 908 in 1968. (Stats. 1968, c. 385, § 2, p. 814.) 8
right, after a trial and reversal of the judgment, is subject to the right of the defendant to
restoration of benefits lost by virtue of the erroneous judgment. The court has inherent
power to enforce that right, unaffected by the right of the plaintiff to dismiss the action.
The existence of the power to restore benefits after reversal flows from the rule that upon
reversal the action is as though it had never been tried, and the court will, where justice
requires it, place the parties as nearly as may be in the condition in which they stood
previously." (Shubert, at pp. 789-790.)
This principle is consistent with the rule that a party facing an adverse ruling on a
dispositive motion in a trial court cannot avoid the impact of an impending adverse
ruling by dismissing the case. (See Cravens v. Bd. of Equalization (1997) 52 Cal.App.4th
253, 257-258; see also Hartbrodt v. Burke (1996) 42 Cal.App.4th 168, 175.) A party is
not permitted to dismiss to avoid a trial court's " ' determinative adjudication' " in an
attempt to "unfairly 'wipe the slate clean.' " (Cravens, at pp. 256-257.) A fortiori, a party
cannot escape an adverse appellate court ruling by simply dismissing the underlying
case.
III. Conclusion
Lowell was entitled to a restitution hearing. The court erred in ruling he was
precluded from seeking this relief because he had not filed an affirmative pleading for
restitution. In reaching this conclusion, we do not intend to suggest any opinion on the
merits of Lowell's restitution claim, including whether he is entitled to any monetary
recovery. The reversal of the dismissal judgment is without prejudice to Beach Break's
right to pursue the claims alleged in its second amended complaint. Both parties retain
9
the right to seek affirmative relief for their claims and/or to seek offsets from the other
party's recovery.
DISPOSITION
The judgment is reversed. The court is ordered to conduct a restitution hearing
under section 908. The reversal of the judgment is without prejudice to Beach Break's
right to renew the claims it attempted to dismiss. Lowell is awarded costs on appeal.
PRAGER, J.*
WE CONCUR:
McCONNELL, P. J.
IRION, J.
* Judge of the San Diego Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 10
Filed 12/14/16
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
BEACH BREAK EQUITIES, LLC, D069313
Plaintiff and Respondent, (Super. Ct. No. 37-2010-0031619- CL- UD-SC) v.
ORDER GRANTING PUBLICATION MARTIN LOWELL,
Defendant and Appellant.
THE COURT: The opinion in this case filed November 22, 2016 was not certified for publication. It appearing the opinion meets the standards for publication specified in California Rules of Court, rule 8.1105(c) the request pursuant to California Rules of Court, rule 8.1120(a) for publication is granted. IT IS HEREBY CERTIFIED that the opinion meets the standards for publication specified in California Rules of Court, rule 8.1105(c); and ORDERED that the words "Not to Be Published in the Official Reports" appearing on page one of said opinion be deleted and the opinion herein be published in the Official Reports.
McCONNELL, P. J. Copies to: All parties
AI Brief
AI-generated · verify before citing
Holding. A party who has obtained a reversal of a judgment in an unlawful detainer action is entitled to a restitution hearing to recover losses caused by the erroneous judgment without the necessity of filing a cross-complaint.
Issues
Whether a party must file a cross-complaint to seek restitution after a judgment reversal in an unlawful detainer action.
Whether a landlord can defeat a tenant's right to a restitution hearing by voluntarily dismissing the underlying action.
Disposition. reversed
Quotations verified verbatim against the opinion
“Under settled law, Lowell was entitled to a restitution hearing even without filing a cross-complaint.”
“The party entitled to seek restitution is not required to file additional pleadings because the power to restore benefits lost exists by virtue of section 908 and the trial court's equitable powers.”
“A party cannot defeat the opposing party's right to a restitution hearing by dismissing the action before the opposing party has had the opportunity to seek restitution.”