Judge David S. Cunningham, Case Number: BC591206, Date: 2023-06-29 Tentative Ruling

Opposing Party: Department of Fair Employment and Housing (the “Department”)

The second amended complaint (“SAC”) alleges that M&N Financing Corp. (“M&N”) and Nasiry “operated a business that purchased retail installment sales contracts [] from used car dealerships.” (Department of Fair Employment and Housing v. M&N Financing Corp. (2021) 69 Cal.App.5^th 434, 437 (“M&N”).)[1] “In deciding how much to pay for the contracts, defendants used a formula that considered the gender of the car purchaser.” (Id. at 437-438.) “[D]efendants would pay more for a contract with a male purchaser than for a contract with a female purchaser or female coborrower[.]” (Id. at 438.)

In late September 2021, following summary adjudication and judgment on the pleadings, the Court of Appeal reinstated the Department’s fifth cause of action. (See ibid.) It was the only cause of action that the Court of Appeal revived. (See ibid.; see also id. at 443-444, 446.)

On August 31, 2023, the Department dismissed the fifth cause of action without prejudice.

On September 19, 2023, Nasiry’s motion to order the Department to join him to the fifth cause of action as an indispensable party came on for hearing. The Court held that it did not have jurisdiction to hear the motion. (See 9/19/23 Minute Order, p. 1.)

On November 3, 2023, the Court heard Nasiry’s motion for judgment on the pleadings. The Court found the motion moot and/or denied it in full.

On December 1, 2023, the Court entered the final amended judgment (“FAJ”) in the Department’s favor.

“the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.” [Citation.] The purpose of the automatic stay provision of [Code of Civil Procedure] section 916, subdivision (a) “is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided. The [automatic stay] prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.” [Citation.]

(Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4^th 180, 189 (“Varian”).)

the [section] 916(a) “stay” means that, upon timely filing of a notice of appeal, the trial court is divested of power to act on matters “embraced in” or “affected by” the appealed judgment or order: Jurisdiction over the appealed matters shifts to the court of appeal and is terminated in the trial court; and the trial court's power to enforce, vacate or modify the appealed judgment or order is suspended while the appeal is pending. [Citations.]

(Eisenberg, et al., Cal. Practice Guide: Civ. Appeals and Writs (The Rutter Group December 2023 Update) ¶ 7:2, emphasis in original.) Indeed, “[f]urther trial court proceedings in contravention of the [section] 916 stay are in excess of the court’s jurisdiction in its “fundamental sense” and thus void[.]” (Ibid., emphasis in original.)

“[W]hether a matter is ‘embraced’ in or ‘affected’ by a judgment within the meaning of section 916 depends upon whether postjudgment trial court proceedings on the particular matter would have any impact on the ‘effectiveness’ of the appeal.” (In re Marriage of Varner (1998) 68 Cal.App.4^th 932, 936.) “If so, the proceedings are stayed; if not, the proceedings are permitted.” (Ibid.)

“The fact that the postjudgment or postorder proceeding may render the appeal moot is not, by itself, enough to establish that the proceeding affects the effectiveness of the appeal and should be stayed under section 916.” (Varian, supra, 35 Cal.4^th at 189.) “[S]omething more is needed. For example, the trial court proceeding must directly or indirectly seek to ‘enforce, vacate or modify [the] appealed judgment or order.’” (Ibid., emphasis added; see also Eisenberg, supra, at ¶ 7:9.1 [same].) It is well settled that “[t]he trial court’s power to enforce, vacate or modify an appealed judgment or order is suspended while the appeal is pending.” (Elsea v. Saberi (1992) 4 Cal.App.4^th 625, 629 [finding that the trial court violated section 916 and exceeded its jurisdiction by deciding an intervening insurer’s Code of Civil Procedure section 473 motion to vacate default judgment during the appeal], emphasis added.)

Nevertheless, “a judgment or order which is void on its face, because its infirmity is determinable from an inspection of the judgment roll or the record, may be set aside on motion at any time after its entry by the court which rendered the judgment or made the order.” (Andrisani v. Saugus Colony Limited (1992) 8 Cal.App.4^th 517, 523, emphasis added.) In other words, “[t]rial courts retain jurisdiction to set aside a void judgment or order at any time[.]” (Eisenberg, supra, at ¶ 7:42, emphasis in original; see also Andrisani, supra, 8 Cal.App.4^th at 523 [“An appeal will not prevent the court from at any time lopping off what has been termed a dead limb on the judicial tree – a void order.”].)

“On the other hand, trial courts do not retain jurisdiction pending appeal to set aside a judgment that is merely voidable rather than void.” (Eisenberg, supra, at ¶ 7:42.2, emphasis in original.)

“A judgment is void if the trial court lacks jurisdiction in a fundamental sense, as where it lacked subject matter jurisdiction, lacked personal jurisdiction over the defendant, or granted relief the court had no power to grant.” (W. Bradley Electric, Inc. v. Mitchell Engineering (2024) 318 Cal.Rptr.3d 747, 756-757 (“Bradley”).) “To prove that the judgment is void, the party challenging the judgment is limited to the judgment roll, i.e., no extrinsic evidence is allowed.” (OC Interior Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5^th 1318, 1327.)

“If the court has fundamental jurisdiction but exceeds its jurisdiction by acting contrary to its statutory duties, the judgment is merely voidable, not void.” (Bradley, supra, 318 Cal.Rptr.3d at 757.)

Nasiry’s motion is a motion to vacate; however, to get around the automatic stay, he argues that the FAJ is void. He contends several acts by the Department stripped the Court of subject matter jurisdiction to enter the FAJ. He claims the Department:

(1) withdrew its standing when it voluntarily dismissed the fifth cause of action (see Motion, p. 5; see also Reply, pp. 7-8 [asserting that the Department needed to “retain a legitimate” real party in interest, other than the Department, throughout the duration of the case to maintain standing]);

(2) never received a verified pre-suit complaint (see Motion, pp. 5-7; see also Reply, pp. 8-9]);

(3) failed to name Khayyam Etemadi and certain car dealerships as indispensable parties (see Motion, pp. 7-13, 14-15; see also Reply, pp. 4-7); and

(4) violated due process by failing to name Nasiry in the fifth cause of action and Etemadi and the dealerships in the first and second causes of action (see Motion, pp. 13-14; see also Reply, pp. 9-10).

Points (1) and (2) fail. In the appeal of the original judgment, the Court of Appeal upheld the trial court’s findings against M&N and Nasiry as to the first and second causes of action. The Court of Appeal found that the Department possessed standing to sue M&N and Nasiry and did not need to receive a verified pre-suit complaint prior to filing the lawsuit. (See 12/1/23 FAJ, Ex. D, pp. 8-9.) The Department’s post-appeal voluntary dismissal of the fifth cause of action, which it had the right to do (see 11/3/23 Ruling Re: Motion for Judgment on the Pleadings, p. 2), did not undo the Department’s standing vis-à-vis the first and second causes of action and the rest of the case. Moreover, upon receiving the remittitur, this Court had jurisdiction – and the obligation – to enter the FAJ pursuant to the Court of Appeal’s decision. (See id. at p. 3.) Indeed, the Court acted within its jurisdiction and authority.

Points (3) and (4) also fail. “Failure to join an ‘indispensable’ party is not ‘a jurisdictional defect’ in the fundamental sense; even in the absence of an ‘indispensable’ party, the court still has the power to render a decision as to the parties before it which will stand.” (Tracy Press, Inc. v. Superior Court (2008) 164 Cal.App.4^th 1290, 1298.)[2] As for due process, Nasiry’s argument is moot as to the fifth cause of action given that the Department voluntarily dismissed it (see, e.g., 11/3/23 Ruling Re: Motion for Judgment on the Pleadings, pp. 2-3), and he lacks standing to assert violations on behalf of either Etemadi or the dealerships as to the first and second causes of action. In addition, the purported violations do not appear on the face of the FAJ and would likely necessitate consideration of extrinsic evidence to resolve.

Contrary to Nasiry’s wordplay, points (1), (2), (3), and (4) do not concern the Court’s jurisdiction in the fundamental sense. None of them establishes that the FAJ is void. They go to whether the FAJ is voidable, not void, so the motion to vacate is denied.

Nasiry’s arguments regarding the Model Rules of Professional Conduct, class certification, and excessive fines do not change the result. (See Motion, pp. 1, 2.) The Court agrees with the Department that they constitute voidable arguments. (See, e.g., Opposition, pp. 7-8.) Also, the Court of Appeal already determined that the fines are not excessive. (See 12/1/23 FAJ, Ex. D, pp. 13-15.)

[1] Nasiry is M&N’s chief executive officer. He is representing himself.

[2] The Court declines to analyze whether, in fact, Etemadi and the dealerships qualify as indispensable parties.