California Capitalism Associates v. Marston CA4/2 (2024) · DecisionDepot
California Capitalism Associates v. Marston CA4/2
California Court of Appeal Jun 13, 2024 No. E078759Unpublished
Filed 6/13/24 California Capitalism Associates v. Marston CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
CALIFORNIA CAPITALISM ASSOCIATES, LLC et al., E078759, E079357 Plaintiffs and Appellants, (Super.Ct.No. CIVSB2121814) v. OPINION LESTER MARSTON et al.,
Defendants and Appellants.
APPEAL from the Superior Court of San Bernardino County. Donald R. Alvarez,
Judge. Affirmed in part; reversed in part and remanded with directions.
Ravi R. Bendapudi, in pro. per. and for Plaintiffs and Appellants California
Capitalism Associates. LLC.
Law Office of Frank Lawrence and Frank Lawrence for Defendants and
Appellants.
Plaintiffs California Capitalism Associates, LLC and Ravi Bendapudi (collectively
plaintiffs) approached the Chemehuevi Indian Tribe (the Tribe) about establishing a legal
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cannabis agricultural and industrial complex on the Tribe’s reservation in San Bernardino
County. Plaintiffs allege they retained Lester J. Marston and his law firm Rapport &
Marston to advise and assist them in drafting a joint services agreement (JVA) with the
Tribe. When the Tribe terminated the JVA based on plaintiffs’ breach of the agreement,
plaintiffs filed this lawsuit in San Bernardino against their attorneys Marston, David J.
Even though a change of venue order no longer automatically divests the
transferor court of jurisdiction, the transferor court’s authority to act until the case is fully
transferred remains limited. (Moore, supra, 70 Cal.App.3d at p. 587.) And defendants
cite no authority whatsoever for the unspoken assumption to their argument, to wit, that
an order granting a motion to quash/dismiss is the type of limited relief the transferor
court may grant during that interim. An order granting a motion to quash/dismiss based
on Tribal sovereign immunity is hardly a matter incidental to or ancillary to the change of
venue order. Instead, defendants defend the order by pointing to the trial court’s authority
to reconsider or vacate interim orders. (Citing Moore, at p. 587 & Le Francois v. Goel
(2005) 35 Cal.4th 1094, 1096-1097.) True, the trial court could have reconsidered and
vacated the change of venue order before it ruled on the motion to quash/dismiss, but that
is patently not what occurred here. This was error.
Defendants also contend that, as a matter of policy, the transferor court should
retain jurisdiction to address emergency matters and prevent irreparable harm to the
parties until the case is fully transferred. We wholeheartedly agree. As the authors of a
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respected treatise on California civil procedure suggest, arguably there is a “jurisdictional
‘hiatus’ during the inevitable delay between the time a transfer is ordered and the time the
case file is actually received by the transferee court (perhaps many weeks).” (Weil &
Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2023) ¶
3:588.1, p. 3-177.) During that interval, the interests of justice counsel that the transferor
court may, on its own motion or on the motion of a party, either set aside or reconsider
the change of venue order for the limited purpose of ruling on requests for temporary
restraining orders and other emergency ex parte matters. (Ibid.) But this does not help
defendants either. The motion to quash/dismiss was not an emergency or ex parte matter,
and, to repeat, the trial court did not vacate or reconsider the change of venue order
beforehand.
Normally, procedural error is reversible only if it resulted in a miscarriage of
justice. (Cal. Const., art VI, § 13; Code Civ. Proc., § 475.) “This general rule, however,
is inapplicable if the trial court has acted in excess of its jurisdiction in granting the relief
being challenged: If jurisdictional error has occurred, the resulting judgment or order is
‘voidable and reversible on appeal even where, as here, it is clear from the record [that no
prejudice resulted].’” (In re Marriage of Jackson (2006) 136 Cal.App.4th 980, 997.)
Because the trial court’s order granting the motion to quash/dismiss was “an act in
violation of a clear restriction or limitation on the court’s power to act and not merely an
error of law” (ibid.), it is reversible notwithstanding any prejudice to the plaintiffs.
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Considering our conclusion, we do not address the parties’ arguments regarding the
merits of the order granting the motion to quash/dismiss. Defendants may refile their
motion in the transferee court. (See § 399, subd. (c).)
B. The Trial Court Correctly Ruled Defendants Were Entitled to
Attorney Fees and Costs as The Prevailing Parties on the Change of Venue Motion.
Plaintiffs argue the trial court erred by granting the motion for attorney fees
because they acted in good faith when they filed the lawsuit in San Bernardino as
opposed to Mendocino County.2 An order finding that the prevailing party on a change
of venue motion is entitled to attorney fees and costs under section 396b “will be
reversed only if there has been a prejudicial abuse of discretion.” (Mission Imports, Inc.
v. Superior Court (1982) 31 Cal.3d 921, 932.) A trial court abuses its discretion by
awarding attorney fees “‘only where its action is clearly wrong and without reasonable
basis.’” (Powell v. Tagami (2018) 26 Cal.App.5th 219, 236-237.) The trial court’s
2 On appeal, plaintiffs no longer argue the trial court lacked jurisdiction to hear the fee motion. The clear statutory authority to award attorney fees and costs under section 396b, subdivision (b), is necessarily an additional component of the transferor court’s otherwise limited authority to act after the change of venue motion has been granted. (Cf. Shisler v. Sanfer Sports Cars, Inc. (2008) 167 Cal.App.4th 1, 6-9 [after granting motion to quash summons for lack of personal jurisdiction, trial court retains jurisdiction to rule on ancillary, statutorily authorized motion for attorney fees].) In their cross-appeal, defendants argue plaintiffs now “concede[] that [an] award of attorney’s fees [is] warranted.” Not so. In their respondent’s brief filed in the cross- appeal—which concerns the trial court’s calculation of fees and not whether any fees are warranted—plaintiffs state they maintain their position that the court erred by finding the original choice of venue was made in bad faith and that no fees were warranted but will not repeat those arguments in the context of defendants’ appeal. Instead, for purposes of addressing defendants’ arguments about the amount of fees and the trial court’s selection of the appropriate attorney hourly rate, plaintiffs stated they would merely assume defendants were entitled to fees.
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factual findings in support of an award of attorney fees are reviewed for substantial
evidence. (Farnum v. Iris Biotechnologies Inc. (2022) 86 Cal.App.5th 602, 609.) “‘“We
look at the evidence in support of the trial court’s finding, resolve all conflicts in favor of
the respondent and indulge in all legitimate and reasonable inferences to uphold the
finding.”’” (Jones v. Goodman (2020) 57 Cal.App.5th 521, 533.) We conclude
substantial evidence supports the trial court’s finding that no reasonable attorney would
conclude San Bernardino was the correct venue, and we find no abuse of discretion
either.
The trial court may award attorney fees and costs to the prevailing party on a
change of venue motion. “In its discretion, the court may order the payment to the
prevailing party of reasonable expenses and attorney’s fees incurred in making or
resisting the motion to transfer whether or not that party is otherwise entitled to recover
his or her costs of action. In determining whether that order for expenses and fees shall
be made, the court shall take into consideration (1) whether an offer to stipulate to change
of venue was reasonably made and rejected, and (2) whether the motion or selection of
venue was made in good faith given the facts and law the party making the motion or
selecting the venue knew or should have known. As between the party and his or her
attorney, those expenses and fees shall be the personal liability of the attorney not
chargeable to the party. Sanctions shall not be imposed pursuant to this subdivision
except on notice contained in a party’s papers, or on the court’s own noticed motion, and
after opportunity to be heard.” (§ 396b, subd. (b).)
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“The statute requires the court to assess whether the attorney acted in good faith
after having first skillfully evaluated the facts and reviewed applicable statutes and case
law. The phrase ‘good faith’ is ordinarily used to describe that state of mind denoting
honesty of purpose, freedom from intention to defraud, and, generally speaking, means
being faithful to one’s duty or obligation. [Citation.] Thus, if, after reviewing the factual
and legal presentation made by the losing party, the court finds that no reasonable
attorney would have honestly chosen such a forum, and that the forum appears to have
been selected to impair defendant’s right to defend, an award of attorney fees would be
212, 220-223.) On remand, the trial court shall determine whether the fees associated
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with the work performed by Marston for his codefendants was reasonable and how to
apportion them.
Finally, we agree the trial court erred by ruling defendants could not recover fees
for the work performed by Nicholas Marston, who is not a party to this litigation and
who performed legal research in support of the change of venue motion as Lester
Marston’s law clerk. An attorney fees award should include compensation for the work
of legal assistants when the “prevailing practice . . . is to bill separately for paralegal
service time at a reasonable market value rate”—in other words, when the cost of
paralegal work is not included as overhead in the rates charged for attorney work.
(Guinn v. Dotson (1994) 23 Cal.App.4th 262, 269.) Under those circumstances, “[a]n
award of attorney fees which does not compensate for paralegal service time would not
fully compensate the attorney.” (Ibid.; see Roe v. Halbig (2018) 29 Cal.App.5th 286,
312 [“paralegal fees may be awarded as attorney fees if the trial court deems it
appropriate”]; Gorman v. Tassajara Development Corp., supra, 178 Cal.App.4th at
p. 96.) The billing records submitted with the fee motion demonstrate the work
performed by Nicholas was billed separately. On remand, the trial court shall determine
whether the request for fees related to the work performed by Nicholas was reasonable.
III.
DISPOSITION
The February 7, 2022, order granting defendants’ motion to quash/dismiss is
reversed. The reversal shall be without prejudice to defendants refiling their motion to
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quash/dismiss in the Superior Court of Mendocino County once the matter is fully
transferred there after payment of all transfer fees. (See § 399, subds. (a), (c).)
The May 9, 2022, order granting defendants’ motion for attorney fees is reversed
in part and remanded for further proceedings consistent with this decision.
The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule
8.278(a)(3), (5).)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER J.
We concur:
RAMIREZ P. J.
RAPHAEL J.
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AI Brief
AI-generated · verify before citing
Holding. The court held that a transferor court exceeds its jurisdiction by ruling on a motion to quash/dismiss after it has already granted a motion to change venue. Additionally, the court held that while a self-represented attorney cannot recover fees for their own work, their codefendants may recover fees for work that attorney performed on their behalf.
Issues
Whether a trial court retains jurisdiction to rule on a motion to quash/dismiss after granting a motion to change venue.
Whether a trial court may award attorney fees to codefendants for legal work performed by a self-represented attorney defendant.
Whether a trial court may award attorney fees for work performed by a law clerk of a self-represented attorney defendant.
Disposition. Affirmed in part; reversed in part and remanded.
Quotations verified verbatim against the opinion
“We agree with plaintiffs that, once the trial court granted the motion to change venue, it retained very limited jurisdiction to act in the case and exceeded that jurisdiction by ruling on the motion to quash/dismiss.”
“Because for purposes of preparing the change of venue motion he was functionally self-represented, the trial court correctly ruled he cannot recover for his own attorney fees.”