RENE S. YUMUL et al Plaintiffs and Appellants, v. BELEN TABARANZA et al Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
Pursuant to a settlement agreement the superior court entered a judgment requiring plaintiffs and appellants Rene S. Yumul and Maria Lilia C. Yumul to pay defendants and respondents Belen Tabaranza (Belen) and Rogelio Tabaranza (Rogelio), as successor trustee of the The Belen A. Tabaranza Living Trust, UTD, November 4, 2004 (the Trust) and as guardian ad litem for Belen, $247,435.42 in exchange for the transfer of defendants' interest in the real property located at 14004 to 14006 Roscoe Boulevard in Panorama City (the property). Plaintiffs appeal an order denying their motion to vacate the judgment.
The essential issue on appeal is whether the judgment is void. If the judgment is void, so too is the order denying plaintiffs' motion to vacate the judgment. We shall conclude that the part of the judgment awarding defendants prejudgment interest was void, and that the remainder of the judgment was not void. Accordingly, we reverse the order denying plaintiffs' motion to vacate the judgment and remand the matter with directions to the trial court to enter a new order and judgment consistent with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND
1. Plaintiffs' Complaint
Prior to the commencement of this action, plaintiffs had an undivided 50 percent interest the property, and Belen, as trustee of the Trust, had a 50 percent in the property. On April 25, 2007, plaintiffs filed a complaint in the superior court against Belen, individually and in her capacity as trustee of the Trust. In the complaint plaintiffs sought, inter alia, a “partition by sale of the property.” Plaintiffs also stated in the complaint that they “may be willing, for a fair and reasonable amount, to purchase the share of the defendants who own the other1/212 interest on the subject real property.” (Italics omitted.)
2. Appointment of Rogelio as Guardian Ad Litem
On July 10, 2007, Belen's son Rogelio filed an ex parte application to be appointed Belen's guardian ad litem. Attached to the application was a letter from a physician which stated that Belen suffered from vascular dementia. The superior court granted the application and appointed Rogelio as Belen's guardian ad litem.
3. Defendants' Answers
On July 11, 2007, Belen filed an answer to the complaint by and through Rogelio, as successor trustee of the Trust and Belen's guardian ad litem. Two days later plaintiffs named Rogelio, in his capacity as successor trustee of the Trust, as defendant “Doe 1.” 1 Rogelio, in his capacity as Doe 1, subsequently filed an answer to the complaint. Defendants did not file cross-complaints seeking affirmative relief and did not request an award of prejudgment interest in their pleadings.
4. The Transfer of the Property to Belen
On July 25, 2007, Rogelio, as successor trustee and guardian ad litem, executed a quitclaim deed for the property to Belen. The record does not indicate the purpose of this transaction.
5. Case Management Conference
On January 10, 2008, the superior court held a case management conference. At that conference defendants' attorney represented to the court that Belen was at times competent and at times not competent. Plaintiffs' counsel Tonisito M.C. Umali claimed that Belen was incompetent.
The court asked whether the parties could settle the case. Although the parties had reached an agreement on the amount plaintiffs would pay defendants for their interest in the property, Umali stated that he was concerned about defendants' ability to convey the property. Specifically, Umali stated that he learned that after the action was commenced, Rogelio, as successor trustee and guardian ad litem, executed a quitclaim deed for the property to Belen. The court and Umali had the following dialogue regarding the matter:
“The Court: To whom [was the transfer of the property made]?
“Mr. Umali: To the incompetent person, your honor, Belen Tabaranza, which is the very, very -
“The Court: So what?
“Mr. Umali: How can he [Rogelio] do that, your honor?
“The Court: Sir, I don't give much stock at this point to what he could or could not do if, in fact, everybody is willing to undo whatever was improper and record another quitclaim deed that gets it all straight. I don't see why you're wasting everybody's time and money. That should be a very forthright thing. Everybody wants to accomplish the same thing.”
The court then ordered the parties to attend a mandatory settlement conference on January 28, 2008.
6. Settlement Agreement
On January 28, 2008, the parties executed a document entitled “Settlement Agreement and General Release” (settlement agreement). The settlement agreement was signed by plaintiffs and Rogelio, in his capacity as successor trustee of the Trust. It was also signed by Belen, by and through her guardian ad litem and successor trustee, Rogelio. The parties dispute whether the settlement agreement was also personally signed by Belen. Defendants claim that Belen signed the agreement “in the presence of” Judge Rowen, the judicial officer who conducted the mandatory settlement conference. Plaintiffs contend that “[t]here are wavy lines above the date line adjacent the place for Belen to sign, but her signature line is blank.” It is undisputed that Belen was present in court when the settlement agreement was executed.
The settlement agreement provided that plaintiffs shall pay defendants 2 $223,250 in two payments. The first payment in the amount of $111,625 was due no later than March 31, 2008. The second payment in the amount of $111,625 was due no later than April 30, 2008. Plaintiffs were also required to dismiss the lawsuit upon making their payments. In return, defendants were required to “relinquish and deliver possession of” the property to plaintiffs “in good, clean and habitable condition, and free from any claims, liens, and encumbrances by any third party - private or governmental, or hold-over tenant, no later than April 30, 2008.” The settlement agreement further provided that it may be enforced pursuant to Code of Civil Procedure section 664.6.
7. Plaintiffs' Alleged Difficulty Closing Escrow
On February 1, 2008, plaintiffs opened an escrow for the transfer of the subject property pursuant to the settlement agreement. In March 2008, however, the escrow company declined to close escrow in light of concerns raised by a title company. In particular, plaintiffs contend that the escrow company would not close escrow without a court order appointing a conservator for Belen.
On July 24, 2008, plaintiffs filed the settlement agreement in the trial court.
8. Plaintiffs' Motion to Enforce the Settlement Agreement
On November 12, 2008, plaintiffs filed a “motion to enforce settlement,” which sought to enforce the terms settlement agreement but with a reduction in the purchase price of the property. Plaintiffs alleged that the market value of the property decreased since the settlement. Plaintiffs also alleged that defendants could not perform their obligation to transfer their interest in the property because plaintiffs' escrow company refused to transfer title unless a conservator was appointed for Belen, and defendants refused to agree to a conservator. Plaintiffs thus sought an order requiring Rogelio to perform all acts necessary to enforce the terms of the settlement, including the commencement of a conservatorship action on behalf of Belen, and an order reducing the purchase price from $223,250 “to an amount that is equal to1/212 of the equity considering the present market value of the subject property.”
Defendants opposed this motion. They contended that a conservator for Belen was not necessary because Belen was competent at the time the settlement agreement was executed and continued to be competent. Defendants also argued that a conservator was unnecessary because Rogelio had the capacity to act on behalf of Belen. In addition, defendants contended that the amount plaintiffs agreed to pay defendants under the settlement agreement could not be revised.
On January 30, 2009, the superior court denied plaintiffs' motion to enforce settlement without prejudice. The record does not indicate whether the trial court found that Belen was competent at the time the settlement agreement was executed.
9. Defendants' Motion to Enter Judgment
On April 13, 2009, defendants filed a motion to enter judgment pursuant to the terms of the settlement agreement. The motion was based on Code of Civil Procedure section 664.6. On May 12, 2009, the motion was granted.
On June 3, 2009, the superior court entered judgment. The judgment provided that plaintiffs were required to pay defendants $223,250, plus $24,185.42 in prejudgment interest, for a total of $247,435.42. In addition, the judgment stated: “Defendants shall execute a Quitclaim Deed in favor of and deliver possession of the subject Property to, Plaintiffs.”
11. Plaintiffs' Motion to Vacate the Judgment
On October 30, 2009, plaintiffs filed a “Motion To Set Aside and/or Declare as Null and Void the Settlement Agreement Dated January 28, 2008 and Motion to Vacate and Set Aside the Judgment Dated June 3, 2009.” We shall refer to this motion as plaintiffs' motion to vacate the judgment.
With respect to the settlement agreement, plaintiffs argued that it should be set aside because it was “impossible” to enforce in light of defendants' refusal to seek a conservator. Plaintiffs also argued that the settlement agreement should be set aside pursuant to Code of Civil Procedure section 473 because Belen was and continues to be incompetent.3
With respect to the judgment, plaintiffs argued that it should be vacated pursuant to Code of Civil Procedure sections 473 and 657 because it erroneously awarded defendants prejudgment interest, and was not drafted by defendants in good faith.
On November 23, 2009, Belen passed away.
On January 26, 2010, a hearing was held on plaintiffs' motion to vacate the judgment. The court denied the motion. In so doing, the court noted: “These issues have been raised unsuccessfully, apparently, on numerous occasions. And now there's the new added wrinkle that the party has passed away; so this court has no intention of granting the motion. [¶] And if you wish to push this thing on, it sounds to me like it's a probate court matter from this point on.” 4
Plaintiffs filed a timely appeal of the superior court's order denying their motion to vacate the judgment.
What we have labeled as plaintiffs' motion to vacate the judgment really consisted of two motions. Plaintiffs moved to (1) set aside the settlement agreement and (2) vacate the judgment. On appeal, plaintiffs argue that the settlement agreement was “void” but do not expressly contend that it should be “set aside.” We shall address the validity of the settlement agreement and the authority of the trial court to enforce its terms in our discussion of whether the judgment should be vacated or set aside.
Code of Civil Procedure section 473, subdivision (d) provides: “The court may ․ on motion of either party after notice to the other party, set aside any void judgment or order.” The superior court also has the inherent nonstatutory power to vacate void judgments. (Plaza Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal.App.4th 1, 15.)
As a general rule, an order denying a motion to vacate a judgment is not appealable. (311 South Spring Street Co. v. Department of General Services (2009) 178 Cal.App.4th 1009, 1014 (311 South Spring Street ).) An exception to this general rule is that a party may appeal an order denying a motion to vacate a judgment on the grounds that the judgment is void and thus the order too is void. (Ibid.; accord Carlson v. Eassa (1997) 54 Cal.App.4th 684, 691 (Carlson ).)
A judgment is void if the court rendering it lacked subject matter or personal jurisdiction or if the court lacked jurisdiction because it granted relief which it had no power or authority to grant. (Armstrong v. Armstrong (1976) 15 Cal.3d 942, 950 (Armstrong ); Carlson, supra, 54 Cal.App.4th at pp. 691-692; Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 1004, 1009 (Doppes ).) Non-jurisdictional errors, however, that are simply erroneous are not subject to collateral attack by a motion to vacate the judgment. (Jones v. World Life Research Institute (1976) 60 Cal.App.3d 836, 840 (Jones ); Armstrong, at p. 950.)
“We review de novo a trial court's determination that a judgment is void.” (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 496.) The issue on appeal therefore is whether the judgment dated June 3, 2009, is void. If so, then the order denying plaintiffs' motion to vacate the judgment must be reversed.
1. The Judgment is Void Because the Trial Court Did Not Have the Power or Authority to Award Prejudgment Interest
Plaintiffs contend that the trial court did not have the power or authority to award defendants prejudgment interest. We agree.
The judgment was entered by the trial court pursuant to Code of Civil Procedure section 664.6, which provides in part: “If the parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.” (Italics added.)
“Section 664.6 permits the trial court judge to enter judgment on a settlement agreement without the need for a new lawsuit. [Citation.] It is for the trial court to determine in the first instance whether the parties have entered into an enforceable settlement. [Citation.] In making that determination, ‘the trial court acts as the trier of fact, determining whether the parties entered into a valid and binding settlement. [Citation.]’ “ (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1360 (Osumi ).)
“ ‘Although a judge hearing a section 664.6 motion may receive evidence, determine disputed facts and enter the terms of a settlement agreement as a judgment [citations], nothing in section 664.6 authorizes a judge to create the material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon.’ “ (Osumi, supra, 151 Cal.App.4th at p. 1360.)
In Jones, the court addressed a challenge to an award of interest in a judgment entered pursuant to a stipulation under circumstances similar to this case. There, the plaintiffs sued the defendants for breach of contract. The parties entered into a written stipulation providing that the defendants would pay the plaintiffs the principal sum of $34,506.56, plus prejudgment interest for the period of January 1, 1969, to April 18, 1972, in the sum of $9,178.66. (Jones, supra, 60 Cal.App.3d at p. 838.) More than a year later, the trial court entered judgment in the amount of $34,506.56, together with interest in the sum of $9,178.66. In addition, the judgment provided that the defendants were required to pay the plaintiffs the sum of $3,205.84 in interest “ ‘on said judgment.’ “ (Ibid.) This sum was for the interest due on the principal amount from April 19, 1972, to the date of the judgment. (Ibid.) After the judgment, the trial court denied defendants' motion to quash execution, to vacate the levy of execution and to declare the judgment void. (Ibid.)
The defendants appealed the trial court's order denying their post-judgment motion on the grounds that judgment was void because the trial court did not have the authority to award the plaintiffs $3,205.84 in interest. The Court of Appeal stated: “The question we must decide ․ is whether a judgment which awards greater relief than that to which the parties have agreed by their written stipulation, renders the judgment void as being beyond the jurisdiction of the court, or simply erroneous but not beyond the jurisdiction of the court.” (Jones, supra, 60 Cal.App.3d at p. 840.) The court held that the judgment was void. (Id. at p. 848.)
In so holding, the Jones court stated: “[T]he trial court is under a duty to render a judgment that is in exact conformity with an agreement or stipulation of the parties. ‘If interpretation of a stipulation is in order the rules applied are those applied to the interpretation of contracts. [Citations.] It is not the province of the court to add to the provisions thereof [citations]; to insert a term not found therein [citations]; or to make a new stipulation for the parties. [Citations.]’ “ (Jones, supra, 60 Cal.App.3d at p. 840.) The Court of Appeal thus concluded that the judgment was void because, inter alia, it was not in conformity with the stipulation of the parties.5 (Jones, at p. 848.)
Likewise, in this case, the settlement agreement did not provide for any prejudgment interest. Rather, it simply stated that plaintiffs were to pay defendants $223,250 in two installments, on specified dates, in return for defendants' conveyance of their interest in the property. By awarding prejudgment interest the trial court was not entering a judgment in conformity with the settlement agreement pursuant to Code of Civil Procedure section 664.6; it was adding a material term that was not part of the settlement. The trial court therefore was without authority or power to award defendants prejudgment interest. Accordingly, the judgment was void insofar as it included such an award.
Defendants argue that the trial court had the power and authority to award prejudgment interest pursuant to Civil Code 3287, subdivision (b), which provides: “Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed.” (Italics added). The judgment in this case, however, was not based upon a cause of action in contract. Instead, the judgment was entered pursuant to a settlement agreement. The settlement agreement was not an adjudication on the merits of plaintiffs' cause of action for partition or a cause of action asserted by defendants. Indeed, defendants did not assert a cause of action in this action. Defendants therefore are not entitled prejudgment interest pursuant to Civil Code section 3287, subdivision (b).
Defendants contend that Civil Code section 3287 should be interpreted broadly to provide them compensation for loss of use of money during the prejudgment period. They do not, however, cite any case that holds a trial court has the power and authority to award prejudgment interest under Civil Code section 3287 on a judgment entered pursuant to a settlement agreement.
In Jones, the trial court had the power and authority to award the plaintiffs $9,178.66 in prejudgment interest because the parties agreed to such an award in their settlement agreement. The trial court, however, did not have the power and authority to award plaintiffs additional interest pursuant to Civil Code section 3287 or any other statute. The trial court lacked this power and authority even though the plaintiffs were not compensated for the loss of use of the principal sum of the settlement for a period of 16 months prior to the entry of the judgment. (Jones, supra, 60 Cal.App.3d at p. 848.) Jones thus does not support defendants' position.
2. Apart from the Award of Prejudgment Interest, the Judgment is Not Void
Plaintiffs assert numerous arguments challenging the validity of the settlement agreement and, on that basis, contend that the judgment should be vacated. They contend that Rogelio's “actual authority to act for Belen was unclear and perhaps nonexistent.” According to plaintiffs, there were “notarial irregularities” in Rogelio's affidavit of assumption of duties as trustee, and thus “it is currently unclear if Rogelio ever actually formally accepted those duties at any time.” 6
Plaintiffs also claim that “Belen may have actually been incompetent at all material times.” In plaintiffs' view, “[t]he only reasonable and legal way to determine [Belen's] competence to enter into an agreement for the sale of her interest in the property was for a conservator to be appointed over her estate.”
Plaintiffs further argue that the settlement agreement was void because performance by defendants was impossible in light of plaintiffs' escrow company's alleged refusal to close escrow without the appointment of a conservator for Belen.
All of these arguments are based on alleged non-jurisdictional errors of the trial court. These errors, however, are not subject to collateral attack by a motion to vacate the judgment. (Jones, supra, 60 Cal.App.3d at p. 840; Armstrong, supra, 15 Cal.3d at p. 950.) We therefore would affirm the judgment apart from the award of prejudgment interest even assuming the trial court erroneously entered the judgment for the reasons plaintiffs contend.7
Moreover, even assuming that plaintiffs' arguments related to jurisdictional errors, we would reject them. In their motion to vacate the judgment, plaintiffs did not argue that Rogelio lacked authority to act on Belen's behalf. Plaintiffs therefore forfeited this issue on appeal. (City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668, 685.)
With respect to plaintiffs' contention that Belen was incompetent and their related argument that Belen's interest in the property could not be conveyed to plaintiffs unless a conservator was appointed, these arguments are moot because Belen passed away. In any case, assuming the arguments are not moot, we reject them on the merits. As Belen's guardian ad litem, Rogelio had the power to enter into a settlement, stipulate to a judgment, and to satisfy any judgment against Belen on her behalf. (Code Civ. Proc., § 372, subd. (a).) Thus, even assuming Belen was incompetent, the settlement agreement and judgment are still valid.
The record indicates that on or about July 20, 2007, Rogelio, as Belen's guardian ad litem and successor trustee, transferred Belen's interest in the property, as trustee of the Trust, to Belen, as an individual. Assuming this transfer occurred, it does not change our analysis. Whether Belen owned an interest in the property as trustee of the Trust, or as an individual, Rogelio had the authority to transfer Belen's interest to plaintiffs.
The order denying plaintiffs' motion to vacate the judgment is reversed and the matter is remanded to the trial court with directions to enter a new order. The new order shall grant the motion and vacate the judgment. The trial court is also directed to enter a new and different judgment requiring plaintiffs to pay defendants $223,250 without any prejudgment interest. In all other material respects, the new judgment shall be the same as the judgment entered on June 3, 2009. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
FN1. The record does not clearly indicate when Rogelio became the successor trustee of the Trust. In a declaration dated January 19, 2009, defendants' counsel attached a copy of a document entitled “Affidavit of Assumption of Duties as Trustee.” The affidavit states that it was executed by Rogelio on January 23, 2008. It further states: “I am a Co-Successor Trustee of [the Trust] and I have accepted and assumed the duties and powers as such Co-Successor Trustee in lieu and stead of Belen A. Tabaranza, Settlor/Trustee.” Attached to the affidavit was an acknowledgment by a notary stating that Rogelio signed the affidavit on April 9, 2008.. FN1. The record does not clearly indicate when Rogelio became the successor trustee of the Trust. In a declaration dated January 19, 2009, defendants' counsel attached a copy of a document entitled “Affidavit of Assumption of Duties as Trustee.” The affidavit states that it was executed by Rogelio on January 23, 2008. It further states: “I am a Co-Successor Trustee of [the Trust] and I have accepted and assumed the duties and powers as such Co-Successor Trustee in lieu and stead of Belen A. Tabaranza, Settlor/Trustee.” Attached to the affidavit was an acknowledgment by a notary stating that Rogelio signed the affidavit on April 9, 2008.
FN2. The settlement agreement defined “defendants” as Belen, by and through her guardian ad litem and successor trustee, Rogelio, and Rogelio, in his capacity as the successor trustee of the Trust.. FN2. The settlement agreement defined “defendants” as Belen, by and through her guardian ad litem and successor trustee, Rogelio, and Rogelio, in his capacity as the successor trustee of the Trust.
FN3. Code of Civil Procedure section 473, subdivision (d) provides that the court may set side “any void judgment or order.” The statute does not grant the court the authority to set aside a settlement agreement.. FN3. Code of Civil Procedure section 473, subdivision (d) provides that the court may set side “any void judgment or order.” The statute does not grant the court the authority to set aside a settlement agreement.
FN4. Plaintiffs' first argument on appeal is that the probate court “can only enforce, not vacate or set aside, the existing Civil Judgment.” Because this matter has not been transferred to the probate department of the superior court, we need not reach this issue.. FN4. Plaintiffs' first argument on appeal is that the probate court “can only enforce, not vacate or set aside, the existing Civil Judgment.” Because this matter has not been transferred to the probate department of the superior court, we need not reach this issue.
FN5. In addition, the court held that the judgment was void because “[t]here can be no interest on a judgment prior to its rendition and entry.” (Jones, supra, 60 Cal.App.3d at p. 848; see also Doppes, supra, 174 Cal.App.4th at p. 1010 [discussing two reasons in Jones that the judgment was void].) This defect in the judgment is not present in the case at bar.. FN5. In addition, the court held that the judgment was void because “[t]here can be no interest on a judgment prior to its rendition and entry.” (Jones, supra, 60 Cal.App.3d at p. 848; see also Doppes, supra, 174 Cal.App.4th at p. 1010 [discussing two reasons in Jones that the judgment was void].) This defect in the judgment is not present in the case at bar.
FN6. See footnote 1, ante.. FN6. See footnote 1, ante.
FN7. To the extent plaintiffs appeal the order denying their motion to vacate the judgment on non-jurisdictional grounds, the order is not appealable. (311 South Spring Street, supra, 178 Cal.App.4th at p. 1014; Carlson, supra, 54 Cal.App.4th at p. 691.). FN7. To the extent plaintiffs appeal the order denying their motion to vacate the judgment on non-jurisdictional grounds, the order is not appealable. (311 South Spring Street, supra, 178 Cal.App.4th at p. 1014; Carlson, supra, 54 Cal.App.4th at p. 691.)
KLEIN, P. J. ALDRICH, J.