The Judgment, the Whole Judgment, and Nothing But the Judgment

Sometimes, a judgment is a mixed bag. That’s how all the parties must have viewed the judgment in Satchmed Plaza Owners Assn. v. UWMC Hospital Corp., case no. G038119 (4th Dist. Oct. 23, 2008). The judgment enforced Satchmed’s right of first refusal with respect to 22 owned medical office units by requiring UWMC to offer them to Satchmed at a certain price. But the judgment did not require such an offer on 12 other units, which were leased. Unsurprisingly, perhaps, the judgment stated that there was no prevailing party.

Mixed bags create competing incentives. Here, one incentive got the best of Satchmed.

UWMC complied with the judgment by offering the 22 offices to Satchmed, which decided to purchase them. But those other 12 units. . . well, Satchmed just couldn’t let go. And those guys at Satchmed must have thought, “Hey, if you think about it, we won on 22 of 34 units, so aren’t we the prevailing party?” So Satchmed appealed, challenging those portions of the judgment regarding the 12 units and the prevailing party determination.

Under the established doctrine that a party’s voluntary acceptance of the benefits of a judgment — or even a portion of them — precludes an appeal by that party, Satchmed’s appeal is dismissed on the ground that it waived its right to appeal by purchasing the 22 units. Satchmed claimed the doctrine did not apply because of two equally established equitable exceptions. The court not only rejected the arguments, but noted that Satchmed’s conduct was manipulative.

First, Satchmed claimed that its acceptance of the benefits was compelled, rather than voluntary, because it risked losing its right to purchase the 22 units if it appealed the judgment. After noting that Satchmed could have appealed “without fear that its right to accept UWMC’s offer would evaporate by the simple act of filing” because matters relating to enforcement of the judgment would have been automatically stayed by the appeal, the court points out the lack of any real compulsion:

The judgment did not put Satchmed at risk of losing any property it already owned. Furthermore, Satchmed was not at risk of forfeiting monies to which it was entitled by statute if it chose to prosecute an appeal. Satchmed just wanted to aggrandize its award without risk. It simply had to choose whether it wanted to file an appeal in pursuit of an even greater award than the judgment provided to it, which would entail risking a reversal of the favorable portion of the judgment, or whether it wanted to simply accept the benefit of the favorable portion of the judgment, and thereby waive the right to appeal from the unfavorable portions. Having to make a choice of this nature does not make the chosen avenue involuntary.

Second, Satchmed contended the judgment was severable, but the court find that the only facts that Satchmed relied on were created by it after the judgment, and points out that a party may not make a nonseverable judgment severable by its post-judgment actions:

[T]he portions of the judgment pertaining to the 12 leased units and the prevailing party status are not severable. Satchmed attempts to use clever timing to convert a nonseverable judgment into a severable one. We look here at the judgment at the time it was entered, before any party appealed therefrom. At that point in time, it is clear that the judgment was not severable. A ruling pertaining to the 12 leased units easily could have affected the 22 owned units, and vice versa. But Satchmed seized the portion of the judgment beneficial to itself, and took title to the 22 owned units. It then said that no ruling on the 12 leased units could possibly affect the status of the 22 owned units. In other words, it had then put the 22 owned units beyond the reach of UWMC’s attack and beyond the purview of this court. Satchmed’s claim that the judgment was then severable is essentially a claim that the judgment had become severable because Satchmed had made it so. It does not work that way. Satchmed cannot have its cake and eat it too. Having accepted the benefits of the portion of the judgment making title to the 22 owned units available to it, it cannot now attack the portion of the judgment making title to the 12 leased units unavailable to it.

In short: a judgment is either severable when entered or not. One cannot convert a severable judgment into a severable one.

Are you tempted by the juicy part of a judgment, but tempted to appeal the rest? Think it over carefully before you decide what to do, and especially think twice about maneuvering to make the facts fit within an exception to the “acceptance equals waiver” rule. It won’t pay off.

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Are Stipulated Judgments Appealable?

Well . . . yes and no. Or better yet, mostly no, and occasionally yes. And to discover the difference between those that are and those that aren’t, an excellent starting point is yesterday’s decision in Harrington-Wisely v. State of California, case no. B190431 (2d Dist. Nov. 20, 2007).

Plaintiffs in this case alleged 10 causes of action for damages and one for injunctive relief, alleging that their constitutional rights were violated by overly intrusive x-ray technology (more about that later) used by the California Department of Corrections to search visitors at certain state penitentiaries. The CDC successfully moved for summary adjudication on the class damages claims on the ground that damages were unavailable, leaving only the injunctive relief claim. The court then issued a sua sponte reconsideration order specifying that the summary adjudication order only barred plaintiffs’ class claims to the extent they sought damages. Thus, all claims remained active to the extent they sought injunctive or declaratory relief.

The parties then entered into a stipulated judgment that entered judgment on the claims insofar as they sought damages but, rather than dismiss, enter an injunction, or otherwise finally dispose of the equitable claims, merely referred to the parties’ agreement concerning them. Among other things, the CDC agreed to curtail use of the machines and not to reinstitute use without giving notice that would provide plaintiffs an opportunity to move for a preliminary injunction first.

The stipulated judgment set forth 16 issues for potential adjudication and provided that the court retained jurisdiction “to enforce the terms of the agreement.” It also stated that it was “only appealable as stipulated.”

Plaintiffs appealed on the basis that summary adjudication on the damages claims was improperly granted. The appeal was clearly contemplated by both sides when they entered into the stipulation.

Nonetheless, the court dismisses the appeal for lack of jurisdiction because the stipulated judgment is not an appealable final judgment. A judgment is “the final determination of the rights of the parties in an action or proceeding.” (Code Civ. Proc. § 577.) The failure of the stipulated judgment to determine the parties’ rights on the equitable claims, either by an injunction to perform as agreed, by dismissal, or otherwise, prevents it from being an appealable judgment for purposes of Code of Civil Procedure section 904.1, subdivision (a)(1). Regardless of the parties’ intent in drafting the stipulated judgment in this way, and regardless of their obvious intent to allow appeal on the damages claims, the court lacks jurisdiction as a result of this missing element.

The court goes on to address and reject several arguments raised by plaintiffs.

First, the appeal cannot be “saved” by liberally construing of the notice of appeal. To do so, there must be another appealable order or judgment from which the appeal can be deemed to have been taken. Here, there is no such appealable order or judgment.

Second, plaintiffs could not invoke the exception to the general rule against appealability of stipulated judgments. Recognizing that most stipulated judgments are not appealable, the court concludes that this one does not fall within the exception for judgments entered into to facilitate appeal after an adverse determination of a critical issue. While the summary adjudication on the class damages claims was indeed critical, the failure of the stipulated judgment to dispose of all claims prevents the exception from applying. In other words, even the exception applies only to stipulated judgments that are final. Had plaintiffs, for example, dismissed their equitable claims as part of the stipulated judgment, thereby disposing of all claims, they could have invoked this exception.

Finally, plaintiffs unsuccessfully argued that the 16 issues for potential adjudication anticipated nothing more than proceedings to enforce the stipulation. The court finds these were complex questions of constitutional and statutory law that related to litigation of the equitable claims, not enforcement.

Now, about that technology. The x-ray machines were so sophisticated that they produced “a spectral-like computer image of the body, including an outline of breasts, genitalia and folds of skin.”

This juicy fact led to some great, funny posts. The post at Legal Pad includes a photograph that demonstrates the imaging capability of the x-ray machine (quite amazing) and made me chuckle. The post at California Appellate Report had me laughing out loud.

And I write about appellate jurisdiction. I am such a geek.

UPDATE (11/23/07):   My Dad was looking at this post (thanks for the traffic, Dad!) and told me that the links in the post at California Appellate Report are a bit . . . racy.  You might want to avoid them.  What I found so funny about the post was in the post itself.  Wrote Professor Martin: “I mean, sure, if I enter a prison, and am carrying a package, you can x-ray my package. But x-raying — and looking at the shape and size — of my package?! Crikey!”

Enforcing a Foreign Judgment

You don’t always get three positions advocated on a single issue in a single appeal. On the subject of the statute of limitations for enforcing a foreign money judgment, that’s exactly what the Court of Appeal heard in Guimaraes v. Northrup Grumman, case no. B194205 (2d Dist. Oct. 30, 2007).

For the position that the “catch-all” limitations period of Code of Civil Procedure section 343 applies, Northrup relied on a 116-year-old California Supreme Court case. Not usually a good sign. And despite prevailing in the trial court, Northrup loses on appeal. The court adopts Guimaraes’s position that the intervening enactment of the Uniform Foreign Money-Judgments Recognition Act (Code Civ. Proc., §§ 1713-1713.8) results in a 10-year limitations period because section 1713.3 makes foreign judgments “enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit,” and such sister state judgments are subject to a 10-year limitations period. (Code Civ. Proc., § 337.5, subd. 3.)

A third position was advocated in an amicus brief from a law firm that frequently represents clients seeking to enforce foreign money judgments in California courts. That firm contended that a foreign judgment may be enforced so long as it is enforceable in the country where it was rendered. The Court of Appeal did not reach that contention.

The court notes that significant questions regarding foreign judgment enforcement that it need not consider are under consideration in a case under review by the California Supreme Court. (Manco Contracting Co. v. Bezdikian, review granted Aug. 22, 2007, S154076.) According to the case summary page at the Supreme Court’s website,though, Manco appears to pose the exact question at issue in this case: the statute of limitations applicable to the enforcement of foreign money judgments. If that apparent equivalence of issues is real, then Guimaraes is an excellent candidate for “grant and hold” review by the Supreme Court, whereby the Supreme Court can grant review but hold the case until it decides Manco.