Judge: Michael P. Linfield, Case: BC697147, Date: 2022-09-22 Tentative Ruling

Case Number: BC697147    Hearing Date: September 22, 2022    Dept: 34

SUBJECT:                 Motion to Enforce/ Exhaust the Appeal Bond in the Amount of $122,801.24 Pursuant to CCP § 996.460 et seq.

Moving Party:          Intervenor and Respondent Bow Tie Realty & Investment, Inc. (“Bowtie”)

Resp. Party:             Plaintiff Caroline S. Lee (“Lee”)

Intervenor and Respondent Bow Tie Realty & Investment, Inc.'s Motion to Enforce/ Exhaust the Appeal Bond is GRANTED in the amount of $122,801.24.

I.           BACKGROUND

On March 7, 2018, Plaintiff Caroline S. Lee filed a complaint against Defendants Jong Han Lee; Bow Tie Realty and Investment. Inc.; Tracy Ko; United Escrow Co. to allege the following causes of action:

1.           Breach of Contract and Resulting Trust

2.           General Negligence

3.           Intentional Tort: Breach of Fiduciary Duty

4.           Intentional Tort: Breach of Fiduciary Duty

5.           Breach of Contract

6.           General Negligence

7.           Intentional Tort: Breach of Fiduciary Duty

8.           Intentional Tort: Breach of Fiduciary Duty

On March 21, 2022, Judge David Sotelo issued an order relating cases BC697147 and 22STCV05772. (Minute Order, filed April 4, 2022, p. 1.)

On April 1, 2020, Judge David Sotelo issued an order accepting a Peremptory Challenge filed in case 22STCV05772 by Plaintiff, Caroline S. Lee and transferring both related cases to Department 1 for review and reassignment. (Minute Order, filed April 4, 2022, p. 1.)

On April 4, 2022, Judge David J. Cowan determined that cases shall remain related and reassigned the matter to Judge Michael P. Linfield in Department 34 at Stanley Mosk Courthouse for all purposes.

On April 25, 2022, Defendant United Escrow Co. and Intervenor Bow Tie Realty & Investment, Inc. separately moved for attorney’s fees incurred on appeal No. B308739. United requests $24,075.00 in attorney’s fees; Bowtie seeks $65,737.50 in attorney’s fees.

On May 24, 2022, the Court granted Defendant United Escrow Co.’s Motion for Attorney’s Fees on Appeal in the amount of $24,570.65. The Court also granted Intervenor Bow Tie Realty & Investment, Inc.’s Motion for Attorney’s Fees on Appeal in the amount of $66,598.15.

On June 7, 2022, Plaintiff Caroline S. Lee moved the Court for reconsideration of its two May 24, 2022 rulings on United Escrow and Bow Tie Realty and Investment, Inc. (Reconsideration Motion, filed June 7, 2022, p. 1:27—2:3.)

On July 29, 2022, Intervenor Bow Tie Realty & Investment, Inc. (“Bowtie”) and United Escrow Co. (“United”) moved the Court pursuant to Code of Civil Procedure § 128.7 for sanctions against Jack Karpeles, counsel for Plaintiff, Caroline Lee (“Plaintiff”) in the amount of $7,562. (Sanctions Motion, filed July 29, 2022, p. 1:22-25.)

On August 1, 2022, Bowtie and United opposed Lee’s motion for reconsideration.

On August 23, 2022, the Court denied Plaintiff Lee’s motion for reconsideration and granted Intervenor Bow Tie Realty & Investment, Inc., and United Escrow Co.’s Motion for Sanctions Pursuant to CCP § 128.7 in the amount of $3,810.00.

On August 17, 2022, Bowtie moved the Court “for an order enforcing the appeal bond and entering judgment against Plaintiff Caroline S. Lee (“Plaintiff”) and American Contractors Indemnity Company / Tokio Marine (“Surety”) for the amount of $122,801.24, which is the remaining balance of the surety bond / undertaking issued by the Surety on 6/4/2020, Bond No. 100500621 (the “Bond”).” (Motion, p. 1:23-27.)

On September 9, 2022, Plaintiff Caroline S. Lee opposed Bowtie’s motion.

On September 12, 2022, Bowtie replied to Lee’s opposition.

II.        ANALYSIS

A.          Legal Standard

A beneficiary can enforce the liability on a bond against both the principal and sureties. (CCP § 996.410(a).) If the beneficiary is a class of persons, any person in the class can enforce the liability on a bond in his or her own name, without assignment of the bond. (CCP § 996.410(b).) A beneficiary can enforce liability on a bond either through a motion in a pending action (CCP § 996.440.) or by filing an independent action. (CCP § 996.430.) In a civil action to enforce liability on a bond, the beneficiary must join both the principal and the sureties as parties. (CCP § 996.430(a).) The action must be brought within the applicable period of limitations. (Estate of Mason, (1st Dist. 1990) 224 Cal. App. 3d 634, 638.) The bond can contain a provision that shortens the period in which an action on a bond or a motion to enforce a bond can be made, but only if the parties all agree. (CCP § 996.450.) (§ 24:93. Enforcement of liability on bond, Cal. Civ. Ctrm. Hbook. & Desktop Ref. § 24:93 (2022 ed.).)

A judgment is the final determination of the rights of the parties, for purposes of appealability, when it terminates the litigation between the parties on the merits of the case and leaves nothing to be done but to enforce by execution what has been determined.  (Dana Point Safe Harbor Collective v. Superior Court (2010) 51 Cal.4th 1, 5 [cleaned up].)

"A judgment in favor of the beneficiary obligates the principal and sureties jointly and severally. (CCP § 996.460(a).) The judgment can be enforced as other money judgments. (CCP § 996.495.) The court determines the amount of the judgment. (CCP § 996.460(b).) A judgment that does not exhaust the full amount of the bond decreases but does not discharge the bond. The liability on the bond can be enforced from time to time until the amount of the bond is exhausted. (CCP § 996.460(c).) The beneficiary can enforce the judgment directly against the surety, although the sureties can compel the principal to satisfy the judgment or can enforce their right of subrogation, if any, against the principal. (CCP § 996.460(d).)" (§ 24:93. Enforcement of liability on bond, Cal. Civ. Ctrm. Hbook. & Desktop Ref. § 24:93 (2022 ed.).)

B.          Discussion

On June 17, 2022, the Court entered an order granting Bowtie’s initial motion to enforce the bond in the amount of $1,147,270.74. (Court Order, filed June 17, 2022, p. 1.) Pursuant to this Court Order, the Surety paid $1,147,270.74. (Biggins Decl., ¶ 2.) Bowtie notes that the Bond is in the amount of $1,270,071.98, and that $122,801.24 remains on the bond. (Biggins Decl., ¶¶ 1, 2, Ex. 1.) Bowtie’s counsel attests that Bowtie has not received further payments in satisfaction of the judgment, and that following payment of the bond the uncollected balance excluding additional accrued interest, fees, and costs, will be over $45,044.97. (Biggins Decl., ¶ 3.)

The surety company involved has not opposed the present motion. (Biggins Decl. (Reply), ¶ 1, Ex. A.)

III.     CONCLUSION

Intervenor and Respondent Bow Tie Realty & Investment, Inc.'s Motion to Enforce/ Exhaust the Appeal Bond in the Amount of $122,801.24 Pursuant to CCP § 996.460 et seq. is GRANTED in the amount of $122,801.24.