Judge: William D. Claster, Case: 10-00423544, Date: 2022-12-16 Tentative Ruling
Defendant and Cross-Complainant Palm Beach Park Association's Notice of Motion and Motion for New Trial ROA 2876
Defendant and Cross-Complainant Palm Beach Park Association moves for a new trial. For the reasons set forth below, the motion is DENIED.
The Association’s request for judicial notice is GRANTED.
I. Improper Motion for Reconsideration
This is the Association’s third motion for a new trial. On the first motion (ROA 2791), the Court agreed with the Association that it had committed an error of law in its calculation of interest. Because this matter was tried to the Court instead of a jury, the Court exercised its power under CCP § 662 to modify the judgment rather than ordering a new trial. The motion was denied in all other respects. (ROA 2795)
In the second motion, captioned a “Motion to Correct Clerical Error, to Vacate Judgment, and/or Motion for a New Trial,” the Association mainly sought to clarify the nature of the modified judgment for purposes of appeal, because it contended the Court had committed a clerical error in describing the modified judgment. (ROA 2818) However, it also raised perfunctory arguments at pages 10-11 of the second motion (ROA 2818), largely unsupported by citation to the record or case law, that the modified judgment itself was improper, and a new trial was warranted. Rather than consider the new trial arguments, the Court invited the parties to meet and confer on how to correct the asserted clerical error. The parties did so, and following the submission of a proposed judgment and objections thereto, the Court entered the current amended judgment on October 5, 2022. (ROA 2860.)
The Association then filed the present motion for a new trial. It raises arguments that either (1) the Court already rejected in denying the original new trial motion or (2) the Association could have raised in the original new trial motion. The present motion is simply a motion for reconsideration, made well after the 10-day limit of CCP § 1008(a), and without any showing of “new or different facts, circumstances, or law.”
The Court recognizes that if, following a bench trial, a court exercises its authority under CCP § 662 to “reopen the case for further proceedings and the introduction of additional evidence,” the subsequent judgment may be subject to a successive new trial motion. (See Wegner, et al., Cal. Practice Guide: Civil Trials & Evidence (The Rutter Group 2022) ¶ 18:463.) But in this case, the Court simply modified the judgment twice—first to correct the calculation of interest, and second to correct what the Association contended was a clerical error. At no point has the Court reopened proceedings for the introduction of new evidence. As a result, the Association’s motion is an improper motion for reconsideration. On that basis, it is denied.
II. Merits of Motion
Even if the Court were to consider the merits of the Association’s motion, the motion would be denied for the reasons discussed below.
A. Failure to Return Consideration
The Association contends Plaintiffs are not entitled to restitution on their TILA claim because they failed to return the consideration provided. This argument fails for the reasons set forth in the Court’s ruling on the first new trial motion, which are incorporated by reference here.
In addition to those reasons, the Court notes this argument is ultimately a claim that there is insufficient evidence that Plaintiffs returned the consideration they received. “A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, nor upon the ground of excessive or inadequate damages, unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should have reached a different verdict or decision.” (CCP § 657.) In order to prevail on this point, the Association must point to evidence in the record that “clearly” justifies a different outcome. It has not done so.
The Association contends that in order to receive restitution under TILA, “plaintiffs were required to return all consideration received, consisting of the spaces, their memberships in the Association, and their member leases for the spaces at Palm Beach Park which their units occupied.” (Memo. at p. 7.) It is undisputed that Plaintiffs continued to live in their spaces at the park without surrendering their memberships (and without paying monthly rent). But the TILA claim sought rescission of loans made by the Association to Plaintiffs. The Association identifies no evidence suggesting that spaces, Association memberships, and leases were consideration given as part of the loan transaction. Rather, Plaintiffs were members of the Association paying monthly rent to live at the park well before they signed the loan documents. The only evidence the Association points to on this point, trial exhibit 508, is Plaintiffs’ TILA rescission letter. That letter states Plaintiffs seek “rescission of the supposed loan made under the $200,000 Secured Promissory Note and related documents.” It says nothing about whether the spaces, memberships, leases, etc. were consideration given as part of the loan transaction.
The Association’s authorities are not to the contrary. Paxon v. Margulis-Stulman Co. (1932) 127 Cal.App. 94 holds that a person seeking rescission must restore or offer to restore “everything of value which he has received [from the other party] under the contract.” (Id., at p. 96.) Again, the Association identifies no evidence that under the loan contract, Plaintiffs received spaces, memberships, leases, etc. Runyan v. Pacific Air Industries, Inc. (1970) 2 Cal.3d 304 surveys decisions explaining that when a contract for the sale of property is rescinded after the would-be buyer has taken possession, the would-be buyer must pay the would-be seller for the use of the property while he was in possession. (Id., at p. 315.) But the transaction here was a loan transaction, not a contract for the sale or use of property. The Association identifies no evidence Plaintiffs received their spaces, memberships, etc. as part of the transaction they seek to rescind.
Absent evidence that the spaces, memberships and leases were consideration given as part of the loan transaction, Plaintiffs had no obligation to return them as a condition of TILA restitution. A new trial on this ground is unwarranted.
B. Unjust Enrichment
The Association contends the Court failed to consider the unjust enrichment exception to the rule against enforcement of illegal contracts. This argument fails for the reasons set forth in the Court’s ruling on the first new trial motion, which are incorporated by reference here.
C. Unclean Hands
The Association contends Plaintiffs’ unclean hands (i.e., that they stayed in their spaces for years without paying) requires a new trial on the restitution issue. This argument fails for the reasons set forth in the Court’s ruling on the first new trial motion, which are incorporated by reference here.
D. Failure to Prove All Elements of “Mobilehome”
The Association contends Plaintiffs, who bore the burden of proof on whether their homes were “mobilehomes” within the meaning of Civil Code § 18008(a), failed to prove all the statutory elements for their homes. This argument fails for the reasons set forth in the Court’s ruling on the first new trial motion, which are incorporated by reference here.
E. Failure to Allege Restitution
The Association contends Plaintiffs are barred from recovering restitution under TILA because they failed to pray specifically for restitution. This argument fails for the reasons set forth in the Court’s ruling on the first new trial motion, which are incorporated by reference here.
F. Application of Wrong Standard for In Pari Delicto Exception
The Association contends the Court applied the wrong standard to determine whether the in pari delicto exception applies. This argument fails for the reasons set forth in the Court’s ruling on the first new trial motion, which are incorporated by reference here.
G. Plaintiffs Were in Fact In Pari Delicto
Separate from the issue of the proper standard, the Association contends the evidence shows Plaintiffs were in fact in pari delicto, so the exception applies. This argument fails for the reasons set forth in the Court’s ruling on the first new trial motion, which are incorporated by reference here.
H. Prevailing Party Issue
The Association contends that the current amended judgment is erroneous in that the Court has postponed making a ruling on who is the prevailing party until it decides any motions to award attorneys’ fees and costs. (The Court’s prior judgments at ROA 2776 and 2797 contained identical language, yet the Association failed to raise this argument in either of its first two new trial motions.) The argument is as follows: First, Judge Moss’s April 2016 judgment adjudged the Association the prevailing party on all claims and cross-claims. (See ROA 2322.) Second, on appeal of this judgment, the Court of Appeal’s disposition provided:
The judgment is reversed to the extent it provides that the appellants owe any money to PBPA. The matter is remanded to the trial court to determine whether appellants’ various units are “mobilehomes” within the meaning of section 18008, i.e., whether those units exceed 320 square feet. . . . Assuming appellants prevail on the illegality issue, the trial court is to calculate how much each appellant paid PBPA by way of payments on the $200,000 loans made by PBPA in violation of TILA, and to enter a new judgment providing for the reimbursement of those monies to each appellant. In all other respects the judgment is affirmed. (Chodosh v. Palm Beach Park Association (2018) 2018 WL 6599824, at *13 [emphasis added].)
The Association argues that because the Court of Appeal affirmed Judge Moss’s judgment “in all other respects” except the illegality/mobilehomes issue, this Court lacked jurisdiction to make any prevailing party determination other than reaffirming that the Association is the prevailing party in all respects. In support of this contention, the Association relies on Karlsen v. Superior Court (2006) 139 Cal.App.4th 1526.
In Karlsen, the underlying litigation involved a bench trial between Karlsen and Cannonball. Cannonball prevailed. Karlsen requested a statement of decision, which the trial court asked Cannonball to prepare. Cannonball never prepared a statement of decision. Over Karlsen’s objection, the trial court proceeded to enter judgment in favor of Cannonball without a statement of decision. Karlsen appealed, and the Court of Appeal reversed. It directed the trial court to prepare the requested statement of decision and enter judgment accordingly. (Id., at pp. 1528-29.)
On remand, Cannonball prepared a proposed statement of decision for the trial court. In response, rather than file objections, Karlsen filed a § 170.6 challenge, which the trial court granted over Cannonball’s objection. When the matter was reassigned to a new judge, the new judge simply signed the proposed statement of decision Cannonball had already filed. Karlsen then sought writ relief, asking the Court of Appeal to set the matter for retrial before a jury. (Id., at p. 1529.)
The Court of Appeal held the original trial judge lacked jurisdiction to grant the § 170.6 challenge. While a § 170.6 challenge may be filed if the appellate court reverses and remands for a new trial, the Court of Appeal hadn’t done that. Instead, it had reversed and remanded for preparation of a statement of decision to complete the original trial. “Where there has been a decision upon appeal, the trial court is reinvested with jurisdiction of the cause, but only such jurisdiction as is defined by the terms of the remittitur. The trial court is empowered to act only in accordance with the direction of the reviewing court; action which does not conform to those directions is void. [Citations.]” (Id., at p. 1530 [emphasis original].)
Karlsen is inapposite. The appellate court there remanded the case not for the taking of new evidence, but for the preparation of a statement of decision that would explain the trial court’s reasons for the original judgment. Here, on the other hand, the Court of Appeal reversed “the judgment against appellants for unpaid rent” and “remanded for an evidentiary hearing” to determine whether Plaintiffs’ units exceeded 320 square feet. (Chodosh, 2018 WL 6599824, at *10.) Unlike Karlsen, the disposition expressly contemplated the possibility that at the end of the day, PBPA would owe Plaintiffs money, unlike Judge Moss’s judgment. (See id., at *13 [“Assuming appellants prevail on the illegality issue, the trial court is to calculate how much each appellant paid PBPA by way of payments on the $200,000 loans made by PBPA in violation of TILA, and to enter a new judgment providing for the reimbursement of those monies to each appellant.”].)
“‘Prevailing party’ includes the party with a net monetary recovery.” (CCP § 1032(a)(4).) Because the Court of Appeal’s opinion allowed for the possibility that the party with a net monetary recovery might change following remand, it also allowed for the possibility that the prevailing party might change. The Court did not err by postponing determination of prevailing party status until motions for attorney’s fees and costs are filed. (See also ibid. [listing factors other than net monetary recovery to be considered when determining prevailing party status].)
I. Arguments Raised in Reply
Plaintiffs filed a one-page opposition to this motion that cites no law other than a brief reference to CCP § 659. The Association responded with an eight-page reply memorandum that, rather than simply responding to Plaintiffs’ barebones opposition, raises new grounds for granting a new trial. “Points raised for the first time on reply brief need not be considered by [a court] unless good reason is shown for the failure to present them on opening brief.” (Peoples v. Tautfest (1969) 274 Cal.App.2d 630, 634, fn. 4.) The Association has “made no effort to show such reason” here. (Ibid.) The Court will not consider these arguments, raised for the very first time in the reply to the third new trial motion.
But even if it did, these arguments would be without merit. In arguing the evidence compels a finding that Plaintiffs are more blameworthy than the Association (meaning equity requires an offset), the Association gives short shrift to its failure to fulfill its duty under regulation 1102(d), which “requires park operators to ascertain proper installation.” (Chodosh, supra, 2018 WL 6599824, at *7 [emphasis added].) As the Court of Appeal observed, “On this record, it appears that the PBPA . . . allowed units to be both installed and maintained without installation permits.” (Id., at *8 [emphasis added].) The evidence does not “clearly” require a different outcome. (CCP § 657.)
The Association’s reliance on cases from the 1950s and 1960s regarding offsets and former Civil Code § 2892 is misplaced. As the California Supreme Court explained in City Lincoln-Mercury Co. v. Lindsey (1959) 52 Cal.2d 267, offsets were only available under former § 2892 for some statutory violations. (See id., at pp. 275-76 [allowing offset for claim brought under former subdivision (a), but explaining offsets were not permitted for claims brought under former subdivisions (c) or (d)].) Whether offsets were available under the former statutory language of a provision of the Civil Code governing automobile sales contracts says nothing about whether the Association is entitled to an offset here.