Judge: Jon R. Takasugi, Case: BC705147, Date: 2023-10-04 Tentative Ruling

Case Number: BC705147    Hearing Date: April 2, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

The Court GRANTS the motion for reconsideration pursuant to 473(d).

            Brief Background

On May 4, 2018, the Department filed its first complaint in this Court thereby initiating Case No. BC705147. The Complaint named (i) Golden Day Schools, Inc. (Golden Day) and (ii) Clark Parker. It is the operative complaint in that civil action. (Heyn Decl. ¶ 3.)

On April 10, 2019, the Department filed a second complaint in this Court initiating Case No. 19STCV12595. On November 5, 2019, the Department filed the operative First Amended Complaint in Case No. 19STCV12595. (Heyn Decl. ¶ 4; Ex. 2.) Like the initial complaint in that case, the First Amended Complaint named as defendants (i) Golden Day, (ii) Clark Parker, and (iii) Clark Parker and Jeanette Parker as Trustees of the Parker Trust. (Ex. 2 at p. 1.) The Department alleged that Clark Parker, and Clark Parker and Jeanette Parker as Trustees of the Parker Trust had alter ego liability for the debts of Golden Day.

Clark Parker (as an individual) and Clark Parker and Jeanette Parker as Trustees of the Parker Trust appeared and answered the First Amended Complaint in Case No. 19STCV12595. Case No. BC705147 and Case No. 19STCV12595 were then consolidated by Court order. (Heyn Decl. ¶ 6.)

The Court ordered bifurcated trials in the newly consolidated cases. (Heyn Decl. ¶ 6.) In January and February 2022, the Court held a consolidated Phase I trial to determine the alter ego issues. Following 15 days of testimony, the Court found that “Clark Parker, in his individual capacity, and Clark and Jeanette Parker, as trustees, are alter egos of Golden Day Schools” and ruled that they were liable for Golden Day’s debts to the Department. (Heyn Decl. ¶ 6; Ex. 3.) Under the Court’s bifurcation order, remaining issues of fact – if any – in the consolidated cases were to be resolved in a Phase II trial. (Heyn Decl. ¶ 6.)

On September 27, 2023, the Department filed and served a proposed judgment in this matter. (Heyn Decl. ¶ 9.) On October 10, 2023, the Parkers filed and served their objections to this first proposed judgment.

On October 16, 2023, Clark Parker filed a petition for bankruptcy, which automatically stayed all action against him. On January 8, 2024, the bankruptcy court presiding over his bankruptcy case entered its order lifting the automatic stay so that this civil action could proceed. (Heyn Decl. ¶ 10.)

Because of the significant time that has elapsed since the Department filed and served its [Amended Proposed] Judgment in October, over $400,000 of pre-judgment interest has accrued on the Department’s breach of contracts causes of action. (Heyn Decl. ¶ 10.) In order to capture this significant pre-judgment interest, on January 25, 2024, the Department served a [Second Amended Proposed] Judgment (Ex. E.), which substantially conforms to the [Amended Proposed] Judgment (as to which the Parkers have filed no objections), but inserts blanks for the total amount owed as of the date the judgment is entered. (Heyn Decl. ¶ 11.)

On February 27, 2024, the Court entered its Minute Order to decide Plaintiff’s Motion for Entry of Judgment (Ex. 1.) In the Minute Order, the Court stated: [I]n oral argument, it was brought to the attention of the Court that Plaintiff’s Complaint only seeks a finding of alter-ego liability as to Dr. Parker alone. A review of the Complaint corroborates this. . . . Plaintiff is bound by the scope of liability sought within the four corners of the Complaint. As such, the Court now sustains Defendants’ objection to Plaintiff’s Proposed Judgment to the extent that it seeks imposition of personal liability beyond Dr. Parker alone. The finding of personal liability as a result of alter-ego liability is limited to Dr. Parker alone. (Heyn Decl. ¶ 16; Ex. 1 at p. 3.)

On March 6, 2024, Plaintiff filed this motion for reconsideration.   

On March 19, 2024, Defendants Clark E. Parker individually, and Clark E. Parker and Jeanette E. Parker, in their capacities as Trustees of the Parker Trust Dated June 15, 2006 filed their limited opposition. 

On March 25, 2024, Plaintiff filed its reply.

            Party’s Request

Plaintiff California Department of Education (the Department) moves this Court for an order of reconsideration of this Court’s February 27, 2004 Order on the Department’s Motion for Entry of Judgment (“Minute Order”) or, in the alternative, amendment of the judgment in this matter to conform to the pleadings and the facts at trial in this case.

First, Moving Party requests that the Court reconsider its ruling that Defendants Clark Parker and Jeannette Parker, as Trustees of the Parker Trust, be stricken from the judgment because the Court incorrectly concluded that they were not sued.

Second, by the Motion for Reconsideration, the Department requests the Court reconsider excluding postbankruptcy interest from the judgment because (i) only Clark Parker filed for bankruptcy and (ii) the Department is a secured creditor entitled to post-bankruptcy interest against Parker under United States v. Ron Pair Enterprises, Inc. (1989) 489 U.S. 235, 241.

Legal Standard

Under Code of Civil Procedure Section 1008, subdivision (a), “When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order.  The party making the application shall state by affidavit what application was made before, when and to what judge, what order to decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.”   

Section 1008 is “the clear legislative intent to restrict motions to reconsider to circumstances where a party offers the court some fact or authority that was not previously considered by it” and could not have been considered by it. (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500.)  Section 1008 is the exclusive means for modifying, amending or revoking an order.  That limitation is expressly jurisdictional.”  (Id. at p. 1499.)   

“The burden under section 1008 is comparable to that of a party seeking a new trial on the ground of newly discovered evidence: the information must be such that the moving party could not, with reasonable diligence, have discovered or produced it at the trial.”  (New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212-13.)  There is a strict requirement or diligence on the moving party; the moving party must present a satisfactory explanation for failing to provide the evidence or different facts earlier.  (Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 690.)  Evidence obtained after a summary judgment hearing is not ground for reconsideration where there was no showing why evidence could not have been obtained earlier.  (Jones v. P.S. Develop. Co., Inc. (2008) 166 Cal.App.4th 707, 725, overruled on other grounds in Reid v. Google, Inc. (2010) 50 Cal.4th 512, 530.)   

Alternatively, Plaintiff requests for relief under Code of Civil Procedure Section 473(d). Section 473 (d) provides, “[t]he court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.”

Alternatively, Plaintiff requests for relief under Code of Civil Procedure Section 187.  Code of Civil Procedure Section 187 states “[w]hen jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.” Under section 187, the trial court is authorized to amend a judgment to add additional judgment debtors. (Dow Jones Co. v. Avenel (1984) 151 Cal.App.3d 144, 148.) Generally, “a court may amend its judgment at any time so that the judgment will properly designate the real defendants.” (Id. p. 149, quoting Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 45.) “Such a procedure is an appropriate and complete method by which to bind new ... defendants where it can be demonstrated that in their capacity as alter ego of the corporation they in fact had control of the previous litigation, and thus were virtually represented in the lawsuit.” (Carr v. Barnabey's Hotel Corp. (1994) 23 Cal.App.4th 14, 20-21.)

Discussion

Plaintiff requests relief under Code of Civil Procedure Section 1008(a), or, in the alternative, under Code of Civil Procedure Section 473(d), or Code of Civil Procedure, section 187, from the Court’s February 27, 2024 minute order which directed that Defendants Clark Parker and Jeannette Parkers as Trustees of the Parker Trust be stricken from the judgment and conceded that post-bankruptcy interest should be excluded from the judgment.

Plaintiff argues that the Court mistakenly made the determination that Clark Parker and Jeanette Parker as Trustees of the Parker Trust were not sued in these consolidated proceedings without giving Plaintiff a fair opportunity to respond to this incorrect suggestion at oral argument. (Mot. for Reconsideration p.10.) Further, Plaintiff was unaware of the Court’s assumption that there was only one operative complaint in the consolidated proceedings. (Id.)

Defendants argue that the February 27, 2024 minute order should stand for the following reasons. Defendants concede that Plaintiff alleged claims in its operative First Amended Complaint against Clark E. Parker and Jeanette E. Parker, in their capacities as trustees of a trust. (Opp. p.2.) However, Defendants argue that it is unclear that the allegations in the First Amended Complaint pertain to “the Parker Trust Dated June 15, 2006,” because no evidence was presented at the evidentiary hearing regarding alter ego liability specifically as to that trust. (Opp. p.2.) Moreover, to the extent the Court does modify its ruling further to find any liability as to Jeanette Parker, Defendants request that the Court confirm that any such ruling as to Jeanette Parker, solely be in her capacity as trustee of “the Parker Trust,” and not individually.

In reply, Plaintiff states that Defendants do not argue against Plaintiff’s rights for post-bankruptcy interest and therefore submit a declaration with a re-calculation of the interest through the hearing date on this motion. (Reply p. 2.) Moreover, Plaintiff argues that at the 15 day trial in this matter, Plaintiff put into evidence the trust agreement for the Parker Trust dated June 15, 2006 and showed that the properties that Golden Day Schools operated on were properties held by that trust. At trial, Clark Parker and Jeanette Parker (who previously appeared as “Trustees of the Parker Trust” and now appear as “Trustees of the Parker Trust Dated June 15, 2006”) conceded that they were trustees and beneficiaries of that trust and the Court found that Golden Day paid the trust millions to operate at its locations. (Reply p. 2.) Therefore, Plaintiff argues that judgment should accurately state the name of the Parker’s trust to ensure that the judgment can be enforced against the Parkers’ property. Plaintiff further requests that the Court should fill in the total amounts owed and enter the [Second Proposed] Judgment as Plaintiff electronically submitted it on January 25, 2024.

Motion for Reconsideration 

Under CCP § 1008(a), a motion for reconsideration can be granted based on “new or different facts, circumstances, or law….” Here, new facts do not exist because these facts were previously available. For instance, Plaintiff could have pointed to the Court’s records which show that there are two operative complaints and that Clark Parker and Jeanette Parker as Trustees of the Parker Trust, have been named defendants in Case No. 19STCV12595 since 2019.

However, Plaintiff’s reliance on In re Marriage of Barthold is instructive. In that marital dissolution case, a wife’s postjudgment motion was denied, she filed a motion for reconsideration, asserting that she had new evidence. (In re Marriage of Barthold (2008) 158 Cal.App.4th 1301, 1303.) The trial judge determined that the motion did not in fact meet the requirements of section 1008, but also that his earlier ruling had been erroneous. (In re Marriage of Barthold (2008) 158 Cal.App.4th 1301, 1313.) “The Court of Appeal affirmed, holding that a trial court has inherent authority to correct its errors even when prompted to reconsider its prior ruling by a motion filed in violation of § 1008. Case law simply requires that a trial court reconsider a prior ruling based on its own realization that the ruling was erroneous, rather than on a determination that the motion to reconsider should itself be granted on its merits.” (In re Marriage of Barthold (2008) 158 Cal.App.4th 1301, 1302.)

"The California Constitution requires that in any case in which a trial judge reconsiders an erroneous order, and enters a new order that is substantively correct, the resulting ruling must be affirmed regardless of any procedural error committed along the way.” “In addition, [the court stressed] that in order to grant reconsideration on its own motion, the trial court must conclude that its earlier ruling was wrong, and change that ruling based on the evidence originally submitted. Thus, [their] ruling does not permit parties to obtain reconsideration relying on evidence that could and should have been, but was not, presented to the court in connection with the original motion.” (In re Marriage of Barthold (2008) 158 Cal.App.4th 1301, 1314.) (emphasis added.)

Here, Plaintiff did not provide facts showing that the information regarding the two operative complaints and that Clark Parker and Jeanette Parker as Trustees of the Parker Trust, had been named defendants in Case No. 19STCV12595 since 2019 was included in the evidence originally submitted. Instead Plaintiff only states that it would have "pointed to the Court's records."

Therefore, the motion for reconsideration pursuant to CCP § 1008(a), is DENIED. 

Code of Civil Procedure Section 473 

However, the Court finds that Code of Civil Procedure Section 473 provides relief. Plaintiff argues that "the exclusion of Clark Parker and Jeanette Parker as Trustees from the judgment in this matter does not reflect a “judicial” determination that they should not not have alter ego liability. Rather it is based on the Courts incomplete review of the complicated dockets in Case No. BC705147 and Case No. 19STCV12595. This is a clerical mistake [which] can and should be corrected. Holding Clark Parker liable, but not his trust, might mean that the judgment in this matter is uncollectable.” (Mot. for Reconsideration p. 10.) Defendants argue that this Court never found that “the Parker Trust Dated June 15, 2006,” specifically, was liable for Golden Day School’s debts in connection with the alter ego evidentiary hearing. Nor did it find that the Parker Trust Dated June 15, 2006 was formed “for holding Golden Day’s operating assets” or that it did in fact hold any of Golden Day’s assets. Plaintiff responds that at trial, Clark Parker and Jeanette Parker (who previously appeared as “Trustees of the Parker Trust” and now appear as “Trustees of the Parker Trust Dated June 15, 2006”) conceded that they were trustees and beneficiaries of that trust and the court found that Golden Day paid the trust millions to operate at its locations. (Reply - Exhibit 6.) Therefore, Plaintiff argues that the judgment should accurately state the name of the Parker’s trust to ensure that the judgment can be enforced against the Parkers’ property.

Section 473 (d) provides, “[t]he court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.” “[C]ourts have an inherent power to correct judgments where there has been a clerical error by the clerk or by the judge himself. There is no time limit to make this correction. A party can correct the mistake by ex parte motion or without notice. The only important limitation upon the power is that it must be used to correct 'clerical' errors, and cannot be used for 'judicial' errors.” (Lane v. Superior Ct. in & for Siskiyou Cnty. (1950) 98 Cal. App. 2d 165, 168.)

Here, Plaintiff presented the trust agreement as evidence at the 15 day trial for the Parker Trust dated June 15, 2006 and showed that the properties that Golden Day Schools operated on were properties held by that trust. Therefore relief will be granted GRANTED pursuant to 473(d). Since, the court found 473(d) applicable, the court will not analyze Code of Civil Procedure, section 187.

The court will sign Plaintiff’s Second Amended Proposed Judgment filed on January 25, 2024. 

Dated:  April 2, 2024

Hon. Jon R. Takasugi

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.