California Appeals Court

Whispering Ridge Homeowners Association v. Chaudry

WHISPERING RIDGE HOMEOWNERS ASSOCIATION, Plaintiff and Respondent,

v.

A. WAHEED CHAUDRY, Defendant and Appellant.

D050631, D052506.

Court of Appeals of California, Fourth Appellate District, Division One

April 20, 2009

Not to be Published in Official Reports

HALLER, Acting P. J.

This case arises from protracted litigation between Whispering Ridge Homeowners Association (the Association) and A. Waheed Chaudry concerning a lawsuit brought by the Association to enforce landscaping requirements in the CC&R's governing the residential development where Chaudry owns property. The matter currently before us involves the Association's efforts to pursue writs of execution to enforce four judgments for attorney fees and costs awarded to the Association during the course of the litigation at trial and appellate levels. We hold the trial court properly declined to apply res judicata principles to recall the writs of execution and strike interest declarations secured by the Association to enforce the first three awards, and that a procedural deficiency identified by the trial court in the writs of execution for the third and fourth awards may be corrected by the Association. We also direct the trial court to strike the interest declarations filed by the Association for the third and fourth awards, without prejudice to the filing of new interest declarations.

Overview

Over the course of the litigation four separate awards for attorney fees and costs were issued in favor of the Association. The amounts for the first and second awards were determined by the trial court, and the amounts for the third and fourth awards were determined by our court on appeal. After the determination of these awards, the Association filed four declarations of accrued interest and obtained four writs of execution to collect on each of the four awards. Representing himself at both the trial and appellate levels, Chaudry opposed these enforcement efforts.

In 2005, the trial court recalled the writs of execution obtained by the Association for the first three awards based on its factual finding that the Association had earlier stated its intent to waive its rights to obtain the recovery sought in these writs. The Association did not appeal the waiver order. In 2006, after the time to appeal the waiver order had expired, the Association obtained a second set of writs of execution and filed interest declarations for the four awards. Chaudry moved to strike the interest declarations and to recall the writs, arguing that enforcement of the first three awards was barred under res judicata principles based on the trial court's waiver order recalling the first set of writs, and that the enforcement efforts for the third and fourth awards were procedurally defective.

The trial court declined to apply a res judicata bar, ruling that its waiver order had been factually incorrect and concluding that it had the inherent authority to correct its mistake. On appeal, Chaudry argues the trial court had no authority to modify its original order finding the Association had waived its rights to obtain the recovery sought in the writs for the first three awards. We agree. Because the waiver order was an appealable order, the trial court had no authority to correct it after the time for appeal had passed. However, we conclude the trial court properly declined to apply the waiver order as a res judicata bar to the Association's second set of writs of execution and the interest declarations for the first three awards. Because the court's ruling was legally correct, there is no basis for reversal of this ruling.

Distinct from its ruling concerning the waiver order, the trial court recalled the writs of execution for the third and fourth awards, without prejudice to the issuance of new writs, based on a finding that the Association had not shown entry of judgment on the appellate court remittiturs for these awards. We reject Chaudry's contention that the Association may not correct this procedural deficiency. Further, based on a concession by the Association, we direct the trial court to strike the interest declarations for the third and fourth awards without prejudice to the Association's right to file new interest declarations upon entry of judgments for these awards.

BACKGROUND

The Four Awards

Four awards underlie the dispute currently before us, consisting of two trial court awards and two appellate court awards. The first of these awards was made following an appellate affirmance of the original judgment in the Association's declaratory relief action to enforce the CC&R's. In that appellate decision, we ruled the Association was entitled to attorney fees and costs on appeal. On remand, the trial court determined the amount of appellate costs and fees to be $17,693.90, and on July 19, 2002, the trial court entered judgment for this amount (the first award).

The second award arose from contempt proceedings pursued by the Association because of Chaudry's failure to comply with the declaratory relief judgment ordering him to comply with the landscaping provisions in the CC&R's. Based on this additional litigation, on October 1, 2002, the trial court entered a judgment requiring Chaudry to pay $5,245.20 in attorney fees and costs (the second award).

The third award was made in conjunction with Chaudry's separate appeal of the attorney fees award made by the trial court at the original declaratory relief trial. In that appeal, we affirmed the trial court's award for the fees and costs incurred at trial, and we also allowed the Association to submit its request for attorney fees on appeal to us for resolution. On October 20, 2003, we issued a remittitur awarding the Association $9,884 for its appellate fees (the third award).

The fourth award was made in conjunction with Chaudry's appeals of the first and second trial court awards. We affirmed these two fee awards, and again permitted the Association to submit its request for attorney fees and costs to us for resolution. On August 16, 2004, we issued a remittitur awarding the Association $12,713.85 in appellate costs and fees (the fourth award).

The Association's First Round of Enforcement Efforts

In August 2004, the Association filed a memorandum of costs before the trial court setting forth the amount of fees and costs it sought to collect based on the fourth award. The cost memorandum stated that the Association's fees and costs were $12,783.86, whereas our appellate court remittitur specified a slighter lesser amount of $12,713.85. Chaudry filed a motion to strike this cost memorandum and/or to tax costs. In its opposition, the Association stated that upon further research it discovered that it did not need to file a cost memorandum because the appellate court's award was a final adjudication of the amount of the award, and stated it was not seeking any amounts beyond the $12,713.85 set by the appellate court. Persuaded by the Association's argument, the trial court struck the Association's cost memorandum as surplusage and declined to consider Chaudry's substantive arguments challenging the cost memorandum.

Chaudry filed an appeal challenging the trial court's refusal to consider his substantive challenges to the cost memorandum for the fourth award. Meanwhile, during the pendency of that appeal, in November 2004, the Association obtained four writs of execution to collect the amounts in the four awards. Chaudry filed a motion to recall these writs of execution. He argued (1) the Association had waived its right to collect the first three awards because in its opposition to his motion to strike the cost memorandum for the fourth award, the Association stated it was only seeking to recover the amount in the fourth award, and (2) the Association's efforts to collect on the third and fourth awards were procedurally defective because judgment had not been entered on the appellate remittiturs for these awards.

In a ruling on June 17, 2005, the trial court agreed with Chaudry's waiver argument. The court found the Association had "waived its rights as to the recovery sought in [the] writs" for the first three awards, and based on that finding the court recalled the November 2004 writs of execution for these awards. The court noted that a person may waive the advantage of the law intended for the person's benefit and there did not appear to be any law prohibiting a waiver of the right to recover costs. The court found the Association had shown its intent to waive all but the fourth award by its statement during the previous proceedings that "`service of this Opposition shall serve to notify CHAUDRY of the ASSOCIATION's intent to enforce onlythe fees and costs allowed in the Court of Appeal's Judgment of $12,713.85.'" The Association did not file an appeal challenging the trial court's June 2005 order recalling the November 2004 writs of execution for the first three awards based on the waiver finding.⁴

The Association's Second Round of Enforcement Efforts

In October 2006, the Association filed interest declarations declaring the amount of postjudgment interest that had accrued on the four awards, and obtained a second set of writs of execution for the four awards. Chaudry filed motions to strike the interest declarations and to recall the new writs of execution. To support his motions, Chaudry argued that under res judicata principles the 2005 waiver order recalling the first set of writs of execution for the first three awards (which order had not been appealed) established that the Association could not collect on the first three awards. He also reiterated his procedural challenge to recovery of the two appellate court awards based on a claim of lack of entry of judgment.

In a series of rulings on January 12, September 21, and December 21, 2007, the trial court denied Chaudry's motions to the extent they were based on its earlier waiver order. In these rulings, the trial court changed its 2005 waiver order and concluded the Association had not waived its rights to collect the amounts in the first three awards. The court explained that it now recognized that at the 2004 cost memorandum proceeding for the fourth award the Association had only waived any fees or costs in the cost memorandum exceeding the amount set forth in the appellate court remittitur for the fourth award, and the Association had not waived its rights to collect the other three prior awards which were not even at issue in the 2004 cost memorandum proceeding.

The court also concluded the second set of writs of execution for the third and fourth awards were procedurally defective because these writs were based on the appellate court remittiturs and no entry of judgment by the trial court had been shown. The court stated the Association was not precluded from correcting the procedural deficiency associated with the writs for these two awards.

Based on these rulings, the trial court denied Chaudry's motion to strike the interest declarations; denied his motion to recall the second set of writs of execution for the first and second (trial court) awards; and granted his motion to recall the second set of writs of execution for the third and fourth (appellate court) awards without prejudice.

DISCUSSION

I. The Effect of the Waiver Order on the First Three Awards

Chaudry argues the trial court had no authority to modify its 2005 waiver order finding the Association had waived its right to collect the amounts in the first three awards. He asserts that because the waiver order was an appealable order that was not appealed, it was a final order that could not be changed by the trial court. Further, he contends the waiver order recalling the first set of writs of execution for the first three awards operated as a res judicata bar to the second set of writs of execution (and the interest declarations) for these awards.

Because the 2005 waiver order was an appealable order and the time to appeal had passed, we agree that the trial court had no authority to correct it. However, for reasons we shall explain, we conclude the court's decision not to apply the waiver order as a res judicata bar to the Association's subsequent enforcement efforts was legally correct.

A. The Trial Court Had No Authority to Correct its Waiver Order

The courts have long grappled with the question of the parameters of a trial court's authority to correct or modify its prior orders, and the results have not always been consistent. In two recent cases, the California Supreme Court and an appellate court addressed this issue and set forth principles that provide guidance in this area.

In Le Francois v. Goel (2005) 35 Cal.4th 1094, the California Supreme Court concluded that a trial court has the inherent authority to correct, at any time, judicial error in its interim orders, if the court gives the parties notice that it intends to reconsider its ruling and a reasonable opportunity to litigate the question. (Id. at pp. 1096-1097, 1105 & fn. 4, 1107-1108 [more than one year after order denying summary judgment motion, trial court could change the order and grant summary judgment].) However, the California Supreme Court noted that its holding "[did] not necessarily apply to final orders, which present quite different concerns." (Id. at p. 1105, fn. 4.)

In In re Marriage of Barthold (2008) 158 Cal.App.4th 1301 (Barthold), an appellate court addressed the question left open by the California Supreme Court in Le Francois—i.e., whether a trial court had the authority to correct judicial error in a final order. The order in Barthold could be characterized as "final" because, unlike the order in Le Francois, it was an appealable order. (Barthold, supra, at p. 1312.) The Barthold court concluded the trial court could correct the order, noting that although the order was final in the sense that it was appealable, it was not final in the sense that the time to appeal the order had not yet expired. (Id. at pp. 1312-1313, & fn. 9.) The court in Barthold cautioned, "[T]his appeal does not present, and we therefore do not decide, the issue whether a trial court can reconsider an appealable order on its own motion after the time to appeal from that order has expired. This circumstance may well have been the issue the Supreme Court had in mind when it indicated in Le Francois that `. . . final orders . . . present quite different concerns' from interim orders." (Id. at p. 1313, fn. 9, italics added.)

The 2005 waiver order at issue here is the type of final order the Barthold court suggested may no longer be correctable by a trial court. Unlike the orders at issue in Le Francois and Barthold, the 2005 waiver order recalling the first set of writs of execution for the first three awards based on the waiver finding was a final, appealable order (Lovret v. Seyfarth (1972) 22 Cal.App.3d 841, 853; Code Civ. Proc.,⁶ § 904.1, subd. (a)(2)), and the time to appeal had passed. Although the Association could have appealed the waiver order, it did not do so. Two years later, in 2007, after the Association had acquired new writs of execution, the trial court changed the waiver order. In doing so, the court erred.

It has long been established that a trial court generally may not correct judicial error in an appealable order or judgment after the time to appeal has passed. (San Diego v. Superior Court (1950) 36 Cal.2d 483, 487; Raisin Investment Co. v. Magginetti (1952) 109 Cal.App.2d 163, 164; see Hamilton v. Laine (1997) 57 Cal.App.4th 885, 890.) Although a court may correct clerical error (which occurs when a trial court inadvertently renders an order it did not intend to make) at any time, it does not have unrestricted authority to correct, as it did here, an order that it intended to make but later determines to be erroneous. (Bell v. Farmers Ins. Exchange (2006) 135 Cal.App.4th 1138, 1144.) The trial court's reliance on section 128, subdivision (a)(8), which permits a court to "amend and control its process and orders so as to make them conform to law and justice[,]" was misplaced as this statutory provision does not supersede the limits on a trial court's authority to correct judicial error in a final order. (People v. McGee (1991) 232 Cal.App.3d 620, 626.)

The general rule restricting a trial court's authority to correct judicial error in an appealable order after the time to appeal has passed is consistent with the manner in which finality is defined for res judicata purposes. (Estate of Keet (1940) 15 Cal.2d 328, 333; In re Daniel D. (1994) 24 Cal.App.4th 1823, 1833; National Union Fire Ins. Co. v. Stites Prof. Law Corp. (1991) 235 Cal.App.3d 1718, 1726; Sullivan v. Delta Air Lines, Inc. (1997) 15 Cal.4th 288, 303, & fn. 7.) Also, the rule is consistent with the need to promote "certainty in the finality of judgments occasioned by the lapse of the statutory time for the taking of an appeal." (Nave v. Taggart (1995) 34 Cal.App.4th 1173, 1177.) Although there are circumstances where an appealable order is not considered "final" because the matters at issue in the order are still pending before the trial court for further adjudication (see Montegani v. Johnson (2008) 162 Cal.App.4th 1231, 1237-1238; Nickolas F. v. Superior Court (2006) 144 Cal.App.4th 92, 114, fn. 18), the case before us does not fall into this category. Rather, after the court rendered its waiver order in 2005 and recalled the writs of execution for the first three awards, there was no further issue pending before the court as to the first three awards. The general rule precluding a trial court from correcting judicial error in an appealable order for which the time to appeal has passed applies here.

B. The Waiver Order Did Not Operate as a Res Judicata Bar to Subsequent Enforcement Proceedings

A ruling that is correct in law will not be disturbed on appeal merely because given for a wrong reason. (Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, 610.) Here, the trial court's decision was legally correct. Although the waiver order was final because it was an appealable order for which the time to appeal had passed (Estate of Keet, supra, 15 Cal.2d at p. 333), the record does not show it was a determination on the merits for purposes of triggering application of the res judicata bar in subsequent enforcement proceedings.

The doctrine of res judicata "is intended to preserve the integrity of the judicial system, promote judicial economy, and protect litigants from harassment by vexatious litigation." (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829.) The courts examine these policies when deciding if application of the doctrine in a particular case "`would be fair to the parties and constitutes sound judicial policy.'" (People v. Barragan (2004) 32 Cal.4th 236, 256.) To invoke the doctrine, the claim or issue in the present action must be identical to the one litigated in a prior proceeding; the prior proceeding must have resulted in a final judgment or order; the judgment or order must be on the merits; and the party against whom the doctrine is being asserted must have been a party or in privity with a party to the prior proceeding. (People v. Barragan, supra, 32 Cal.4th at p. 253; Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 531; see Estate of Keet, supra, 15 Cal.2d at p. 333.) The party invoking the res judicata doctrine has the burden to prove that the requirements are satisfied. (Ferraro, supra, at pp. 529-530.)

The Association's second set of writs of execution involved the same claim and the same parties as the first set of writs of execution. Further, the waiver order was final because it was appealable but was not appealed. However, the waiver order—which was made to support the recall of the first set of writs without extinguishing the judgments—cannot be construed as a determination on the merits for res judicata purposes.

A judgment or order is on the merits "`if the substance of the claim is tried and determined . . . .'" (Beverly Hills Nat. Bank v. Glynn (1971) 16 Cal.App.3d 274, 286.) Here, the substance of the claim at the writ of execution proceedings was the Association's right to enforce the attorney fees and costs awards, each of which was enforceable as a money judgment. Money judgments remain enforceable for 10 years and may be renewed to permit a longer enforcement period. (§§ 683.020, 683.110.) A writ of execution, which allows for levies upon a debtor's property, is a means to enforce a money judgment. (§ 699.010, et seq.) A judgment creditor may obtain successive writs of execution to collect on a money judgment until the judgment is satisfied. (§ 699.510, subd. (a).) A final money judgment remains viable unless it has expired, is deemed satisfied (and hence extinguished), or is set aside for extrinsic fraud or mistake. (See 8 Witkin, Cal. Procedure (5th ed. 2008) Enforcement of Judgment, § 34, p. 74, § 507, p. 546; Estate of Beard (1999) 71 Cal.App.4th 753, 774.) When a judgment has been satisfied, the debtor has a right to an entry of satisfaction of judgment from the court. (§ 724.020.)

When the Association obtained the second set of writs of execution, the money judgments had not expired, been deemed satisfied, or been set aside. Thus, although the waiver order adjudicated the Association's right to recover under the judgments, the waiver finding did not impact the existence of the money judgments themselves. (See Ivy v. Pacific Automobile Ins. Co. (1958) 156 Cal.App.2d 652, 662 [covenant not to execute on judgment does not automatically extinguish judgment].) That is, notwithstanding the waiver finding, the money judgments still existed as judgments that had not been extinguished.

Even absent an express ruling extinguishing a judgment, res judicata principles have been applied to bar a second attempt to execute on a judgment where an earlier recall of execution involved matters concerning the unenforceability of the judgment itself. (See, e.g., Creditors Adjustment Co. v. Newman (1921) 185 Cal. 509, 511-513 [res judicata applied to bar second execution after first execution disallowed for failure to enforce judgment in timely fashion]; Helvey v. Castles (1946) 73 Cal.App.2d 667, 670-671 [same]; see also Zagoren v. Hall (1932) 122 Cal.App. 460, 462, 465 [res judicata applied to bar second execution seeking fees for probating estate after first execution quashed because there was no property in estate upon which to execute].) However, the court's waiver order here was not based on unenforceability of the judgments themselves, but consisted solely of a determination that the Association had, in effect, stated it did not intend to enforce the otherwise enforceable and legally valid judgments.

When a writ of execution is recalled because the judgment itself is unenforceable, it is reasonable to construe the judgment as implicitly extinguished so as to support application of res judicata principles should the judgment creditor again try to enforce the judgment. However, when a writ of execution is recalled based merely on the judgment creditor's statement of intent not to enforce the judgment while the judgment itself remains viable, it is not reasonable to construe the judgment as implicitly extinguished. The Legislature has enacted precise statutory rules governing the duration, enforcement, and satisfaction of money judgments, and the courts have formulated narrow judicial rules governing the vacation of final judgments. Thus, final money judgments are imbued with a level of protection that should not readily be discarded, and res judicata principles should not apply to bar renewed enforcement efforts where the judgment itself is still viable.

In sum, the court's waiver order did not concern the enforceability of the judgments themselves, and thus did not impliedly extinguish the judgments. Further, there has been no adjudication expressly extinguishing the judgments. The trial court's decision to recall the writs based on a finding that the Association had stated its intent not to seek recovery of the first three awards had nothing to do with the enforceability of the judgments themselves and did not address the issue of permanent removal of the judgments. For res judicata purposes, this was not a sufficient adjudication of the Association's right to enforce the judgments to constitute a determination on the merits. Accordingly, the trial court properly declined to apply the waiver order as a res judicata bar to the second set of writs of execution and the interest declarations.

II. The Procedural Deficiencies in the Third and Fourth Awards May Be Corrected

The Association does not challenge the trial court's recall of the writs of execution for the third and fourth awards based on a finding that there had been no showing of entry of judgment by the trial court on the remittiturs from the appellate court. Because the Association has not challenged the trial court's ruling on this procedural issue, we need not evaluate it.

Chaudry asserts the trial court erred in ruling that the Association could correct the procedural deficiency found by the trial court. He fails to explain why the Association should be precluded from obtaining new writs of execution that satisfy the procedural requirements as interpreted by the trial court. The trial court's recall of the writs of execution for the third and fourth awards was not an adjudication on the merits of the right to execute on the judgments, but a mere finding of a procedural deficiency in the writs of execution. Chaudry's contention that the procedural deficiency cannot be corrected is unavailing. (See 30 Cal.Jur. 3d (2005) Enforcement of Judgments, § 101, p. 140.)

Chaudry also asserts that a cost memorandum must be filed with the trial court to enforce the third and fourth awards. We have already rejected this assertion in our opinion filed in a previous appeal in this case. (Whispering Ridge Homeowners Association v. Chaudry, supra, D045676.)

In its briefing on appeal, the Association states that it agrees that interest has not accrued on the appellate court remittiturs for the third and fourth awards. Based on this concession, we direct the trial court to strike the interest declarations for the third and fourth awards, without prejudice to the Association's right to file new declarations setting forth the interest accrued after entry of judgment. (§ 685.020, subd. (a) [interest commences to accrue on the date of entry of judgment].)

DISPOSITION

The orders are affirmed, except the trial court is directed to strike the October 2006 declarations of accrued interest for the third and fourth awards without prejudice to the Association's right to file new interest declarations upon entry of judgment.

The parties shall bear their own costs on appeal.

WE CONCUR:

O'ROURKE, J.

IRION, J.

Footnotes

1. There are two appeals before us, which we have consolidated. The first appeal concerns the trial court's order denying Chaudry's motion to strike the declarations of accrued interest, and the second appeal concerns the trial court's subsequent order partially denying Chaudry's motion to recall the writs of execution. In his first appeal, Chaudry filed a request for judicial notice of the court's subsequent ruling denying recall of the writs. Because we have consolidated the two appeals, his request for judicial notice is moot.

2. A summary of the proceedings underlying these awards is set forth in Whispering Ridge Homeowners Association v. Chaudry (Feb. 24, 2006) D045676 [nonpub. op.].

3. This is the statement that would later provide the basis for Chaudry's argument, and the trial court's ruling, that the Association had waived its rights to obtain the recovery sought in the writs for all the awards except the fourth award. The Association stated in its opposition to the motion to strike the cost memorandum for the fourth award: "The ASSOCIATION does not intend to seek enforcement of any amounts over that awarded in the Memorandum of Costs on Appeal. Since a Memorandum of Costs on Appeal is not required after an award of costs by the Court of Appeal, service of this Opposition shall serve to notify CHAUDRY of the ASSOCIATION's intent to enforce only the fees and costs allowed in the Court of Appeal's Judgment of $12,713.85." (Italics added.)

4. In February 2006, we issued our decision in Chaudry's appeal of the court's ruling pertaining to the cost memorandum for the fourth award. We held the trial court's ruling was correct because the trial court had no jurisdiction to retry the issue of the propriety of the $12,713.85 amount that we had resolved in our decision. (Whispering Ridge Homeowners Association v. Chaudry, supra, D045676.)

5. For convenience, we shall at times refer to the trial court's decisions not to recall the writs of execution and not to strike the interest declarations collectively as a decision not to recall the writs.

6. Subsequent statutory references are to the Code of Civil Procedure.

7. The res judicata doctrine encompasses two components. The primary aspect, referred to as claim preclusion, bars relitigation of the same claim or cause of action. The secondary component, referred to as collateral estoppel, bars relitigation of the same issue raised in a different cause of action. (People v. Barragan, supra, 32 Cal.4th at pp. 252-253.)

8. We note that although the third award had not yet been entered as a judgment, this was a technical deficiency that arose from the unique circumstance that we determined the amount of the award on appeal rather than following the normal procedure of allowing this matter to be resolved before the trial court. The prior absence of entry of judgment for the third award does not affect the ultimate enforceability of this award. For convenience, we shall refer to the third award as a judgment.