Southern California Gas Co. v. Flannery
B268298M
| Cal. Ct. App. | Dec 13, 2016Background
- Southern California Gas Company deposited $2,450,000 in court and filed an interpleader naming Flannery, his counsel Daneshrad, Tepper (and his firm), and Murray as claimants to the settlement proceeds from the 2008 Sesnon wildfire litigation.
- Murray separately sued Flannery in a palimony action and obtained a judgment declaring her 50% owner of the property and directing $1,225,000 be disbursed to her from the interpleader funds (subject to fees/costs). Flannery appealed that judgment.
- The interpleader case was assigned to the Sesnon judge (Wiley); the judge discharged the Gas Co., denied Flannery’s anti-SLAPP motion, and the matter was stayed pending appeal; remittitur issued April 30, 2015.
- After remittitur, the Gas Co., Murray, and Tepper moved for payment from the interpleader fund. Judge Wiley awarded $169,983.13 to the Gas Co., $1,225,000 to Murray, and $512,295 to Tepper; remaining balance was directed to Flannery and Daneshrad. Flannery and Daneshrad appealed.
- Appellants failed to provide a reporter’s transcript or settled statement for the lengthy hearing; many factual disputes were resolved on declarations and exhibits. The Court of Appeal affirms the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appeal record is inadequate (no reporter’s transcript) | Not applicable (appellants bear burden) | Appellants contend denial of transcript prevents review | Appellants bear burden; in absence of transcript, appellate court presumes trial court correctness and reviews accordingly |
| Authority to award post-discharge attorney fees to interpleader plaintiff (Gas Co.) | Gas Co.: section 386.6 allows fees for defense of subsequent motions/writs/appeals | Flannery: statute only permits fees when party is discharged; no fees for post-discharge work | Court: section 386.6 authorizes fees until fully and finally discharged, including fees defending post-discharge challenges; award upheld |
| Whether Palimony Judgment was stayed on appeal so interpleader court could not pay Murray | Murray: judgment for money/personal property not stayed absent undertaking; Flannery failed to post bond | Flannery: appeal stayed judgment; no bond needed because funds were in court custody (McCallion) | Court: Palimony Judgment governed by modern §917.2; because Flannery did not obtain an undertaking or court order fixing bond, the judgment was not stayed; payment to Murray proper |
| Validity/enforceability of Tepper’s attorney lien and whether interpleader was proper forum to adjudicate it | Tepper: interpleader action (with Flannery as party) is an independent proceeding to determine lien and enforce it against funds on deposit | Flannery: Tepper needed a separate independent suit against Flannery (per Mojtahedi) to establish lien | Court: Interpleader (where Flannery was a party and Tepper asserted his claim) satisfied the separate-independent-action requirement; award to Tepper upheld |
Key Cases Cited
- Sanowicz v. Bacal, 234 Cal.App.4th 1027 (discusses appellant's burden to provide reporter's transcript)
- Chodos v. Cole, 210 Cal.App.4th 692 (transcript not required for de novo review)
- Ballard v. Uribe, 41 Cal.3d 564 (need for record to review discretionary rulings)
- Canal Ins. Co. v. Tackett, 117 Cal.App.4th 239 (limits on fee awards after discharge in distinguishable factual context)
- Serrano v. Unruh, 32 Cal.3d 621 (fees recoverable for services at trial and on appeal)
- Cetenko v. United California Bank, 30 Cal.3d 528 (attorney's lien principles)
- Mojtahedi v. Vargas, 228 Cal.App.4th 974 (former-attorney must assert lien in separate action naming client)
- Brown v. Superior Court, 116 Cal.App.4th 320 (trial court in underlying action lacks jurisdiction to decide validity of attorney's lien)
- McCallion v. Hibernia etc. Society, 98 Cal. 442 (historical rule regarding funds in court custody and stay; discussed and limited by later statutory changes)