Tacherra
v. Tacherra

 

 

 

 

 

 

 

 

 

 

Filed 9/12/12  Tacherra v. Tacherra CA1/2

 

 

 

 

 

 

 

NOT TO BE PUBLISHED IN
OFFICIAL REPORTS

 

 

California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b).  This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115>.

 

 

 

 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

 

FIRST APPELLATE DISTRICT

 

DIVISION TWO

 

 
>

JAMES M. TACHERRA,             Plaintiff and Respondent, v. ERNEST J. TACHERRA,             Defendant and Appellant.

A133677       (Marin County Super. Ct.        No. CIV 061492)

 

            Defendant Ernest J. Tacherra appeals
from the trial court’s statement of decision and href="http://www.fearnotlaw.com/">interlocutory judgment (judgment) after a
bench trial regarding the causes of action brought against him by his brother,
plaintiff James M. Tacherra, in an action for partition and other causes of
action related to their partnership.  The
trial court found that defendant violated his partnership responsibilities in
various ways and exercised its equitable powers to partition partnership real
properties via sale, establish the partnership assets due to each partner, and
issued related orders and relief. 
Defendant argues the trial court made various errors of law in doing
so.  Plaintiff opposes defendant’s
arguments for the most part, agreeing only that the trial court made a
mathematical error of $5,060 dollars that should be corrected.  We agree with plaintiff.

BACKGROUND

We note at the onset
that defendant’s appendix and briefing are lacking.  According to plaintiff, there was no court
reporter present during the first two days of trial, when plaintiff and the
court-appointed receiver testified. 
Their testimony is not in the record before us.  Appellant’s appendix also does not contain
the testimony of Meg Gould and defendant, nor any of the exhibits submitted by
the parties at trial, and in particular does not include the receiver’s reports
to the court, which are plainly relevant to this appeal; plaintiff has provided
some exhibits and documents in respondent’s appendix.  Also, defendant’s appellate briefing repeatedly
does not provide sufficient citations to relevant law and the record. 

As we shall discuss,
defendant does not help his cause by these omissions.  We may disregard arguments not supported by
citations to law or the record.  (>People v. Stanley (1995) 10 Cal.4th 764,
793 (Stanley); Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361,
1379 (Grant-Burton); >Nwosu v. Uba (2004) 122 Cal.App.4th
1229, 1246.)  Also, appellant has the
burden to affirmatively establish error. 
(Denham v. Superior Court (1970) 2 Cal.3d 557, 564 (Denham).)  The most fundamental principle of appellate
review is that “ ‘[a] judgment or order of the lower court is >presumed correct.  All intendments and presumptions are indulged
to support it on matters as to which the record is silent, and error must be affirmatively shown.’ â€  (Ibid.)
 

            The following background facts are
taken from the trial court’s statement of decision and reports by the
court-appointed receiver.  Plaintiff and
defendant were two of four siblings who were heirs in essentially equal parts
to their father’s estate, which included significant real property holdings,
when he passed away in 1998.  The heirs
agreed that that plaintiff and defendant would purchase all of the rights,
title, and interest of their other two siblings to the estate.  To do so, plaintiff and defendant borrowed
substantial sums; one sibling was paid in full and the other was given a down
payment and a promissory note that required monthly payments.

            Plaintiff and defendant, in addition
to the estate properties they acquired from their siblings, also jointly
acquired other properties.  Their
purchases were subject to mortgages on various properties, and they also
incurred loan obligations to pay their siblings, with various properties serving
as security for these loans.  Among their
holdings was a sizeable ranch in Bolinas, California, known as the “Home
Ranch.”  The receiver, who was legal
counsel to both plaintiff and defendant before his appointment, reported to the
court about subsequent events:

            “Thereafter, the two brothers
commenced to co-own the various properties and manage their affairs, including
trying to make payments on the accumulated debt.  The brothers had an informal division of
responsibility for the management of their properties and the ranch
operation.  Although not based on clearly
drawn lines, it appeared that as a general proposition, [plaintiff] took
responsibility for the ranch operations including maintaining a small herd of
cattle along with hogs, goats, chickens, and geese; which he maintained, fed and
sold products therefrom to local restaurants and markets.  [Defendant], on the other hand, managed the
real estate holdings by renting homes and units, collecting rents on
properties, make mortgage payments, and periodically refinancing properties and
utilizing the funds as he saw fit.

            “Over time, defendant, in his
management of the properties, succeeded in having most of the non-ranch
properties held in his name alone, without plaintiff being on title.  In addition, some of the ranch properties were
also held solely in the name of defendant, without the benefit of plaintiff
being on title. . . . 

            “It appeared to have been generally
understood and agreed to by the two brothers that all of the properties . . . ,
regardless of the record title owner, were jointly owned properties and that
each brother owned an undivided one half interest in the various
properties.  Indeed, title to the Home
Ranch rests solely in the names of plaintiff and Susan Tacherra to facilitate their
attaining the $1 million loan on the property in order to raise the money that
was necessary to be paid to [the siblings] for their interest in the estate
property.”

            According to the receiver, plaintiff
and defendant tried to negotiate, but could not agree on the terms of a written
co-ownership agreement.  From early 2000
to early 2006, they attempted to cooperatively own and manage properties in
which they both had an interest, but were not successful.  The receiver reported:

            “Most of the rental properties were
operated on a negative cash flow basis. 
As a result, the properties went in and out of href="http://www.mcmillanlaw.com/">foreclosure proceedings necessitating
refinancing efforts, sometimes at high and above market rates because of the
poor credit of defendant who was the record owner of most of the properties,
and further because the properties did not have positive cash flows and could
not support the financing that was being obtained. . . .  [N]umerous refinances of the various
properties occurred, all performed by defendant, according to plaintiff, with
little or no knowledge or input from him. 
Over that period of time, the economic stresses of the situation
contributed to numerous arguments and disagreements between the brothers and
suspicions and issues of distrust developed between them.  Arguments occurred and questions were raised
about how monies were being handled and failures on the part of one or the
other brothers to account to the other for their handling of monies produced
from the properties, including but not limited to, the numerous refinances
there were undertaken by defendant.”

            In 2006, plaintiff filed his action
for partition, accounting, appointment of a receiver, quiet title, declaratory
relief, and damages for conversion; the receiver was appointed by the court
soon thereafter and served in that capacity throughout the action.  After a three-day bench trial, the trial
court issued a statement of decision.  It
found that plaintiff’s credibility was “very high” and that defendant’s
credibility was “challenged”; that defendant did not inform plaintiff or seek
his consent regarding some of defendant’s activities in managing the
partnership assets and debts, refused to provide accounting, did not follow
orders of the receiver, did not stop using partnership assets for his personal
use, among other breaches of duty, and negligently or improperly used specific
assets from the partnership properties. 
Based on its findings, the court ruled that defendant was to pay the
partnership account various sums of money totaling approximately $415,000.

The trial court granted partition via sale of
the properties, quieted title, judicially determined the parties’ rights and
obligations, awarded 65 percent of the equity of the Home Ranch to plaintiff’s
share of partnership assets and 35 percent to defendant based on defendant’s
conversion, ordered the winding up and dissolution of the partnership, and
appointed the receiver as referee for the winding up.  The court issued an interlocutory judgment
consistent with its statement of decision.

Defendant filed a timely notice of appeal,
appealing from the judgment and an interlocutory order denying defendant’s
request for $28,760 in attorney fees.

During the pendency of this appeal, plaintiff
filed a motion to augment the record with a July 6, 2012 order following
hearing, which relates to the “Franklin Judgment” issue discussed further
herein pursuant to California Rules of Court, rule 8.155(a)(1).  The rule provides in relevant part that we
may order the record to be augmented with any document filed in the case in the
superior court.  (Cal. Rules of Court,
rule 8.155(a)(1)(A).)  Defendant opposes
the motion because the order relates to arguments by Franklin that were not
before the trial court at the time of trial and the augmentation does not add
anything useful.  We hereby grant the
motion.

DISCUSSION

I.  The
Court’s Rulings Regarding the Home Ranch

            Defendant argues that the trial
court erred when, as relief for defendant’s conversion of partnership assets,
it awarded 65 percent, rather than 50 percent, of the equity of the Home Ranch
to plaintiff’s share of partnership assets and 35 percent, rather than 50
percent, to defendant.  Defendant also
argues that the trial court erred by giving plaintiff the option to purchase
the Home Ranch at its appraised market value. 


A.  The
Proceedings Below

            The
trial court made several findings regarding defendant’s conversion.  First, defendant did not keep plaintiff
informed of his activities, comingled his and partnership property, failed to
file partnership tax returns, and used partnership rents and loan proceeds for
his personal use.  He unreasonably did
not keep an accounting, provide information, or comply with the receiver’s
orders, and breached his duty not to take advantage for himself at the expense
of the partnership.

            Second, plaintiff had partnership
income that was used by defendant, and also by the receiver, to pay the
mortgage and property taxes for the Home Ranch.

            Third, plaintiff physically worked
“24/7” on the ranch property.

            Fourth, defendant’s conduct
increased the costs of the receivership and caused greater detriment to the
partnership. 

            Fifth, defendant had converted
partnership funds to his own use and benefit. 
The court stated, “Where the amount converted was able to be computed to
a sum certain, the court has ruled that those sums were to be repaid by
defendant to the partnership account. 
However, in other instances, defendant’s lack of an accounting has
resulted in the court being unable to determine the actual amount of damages
for conversion.  Accordingly, based on
equitable and fair relief, the court orders that sixty-five percent (65%) of
the equity in the Home Ranch be awarded to plaintiff’s share of the partnership
assets and thirty-five percent (35%) of said equity be awarded to defendant’s
share of the partnership assets.” 

            The trial court ordered that
plaintiff was to continue to reside at the Home Ranch until it was sold, unless
circumstances required the referee to do otherwise.  Upon the completion of certain events and
transactions, the referee was to have the Home Ranch appraised at its fair
market value and offer the property for sale, “with plaintiff having the option
to purchase it at that value.” 

B.  Defendant’s
Appellate Arguments

            1.  >The Allocation of Equity in the Home Ranch

            Defendant makes several arguments in
support of his claim that the court should not have allocated the equity 65/35
percent in plaintiff’s favor, rather than 50-50, in the Home Ranch.  His arguments are made in shotgun fashion
with conclusory references, if any, to legal authority, and are unpersuasive.

First, defendant argues that the trial court had
an adequate legal remedy in money damages and, therefore, should not have
ordered an equitable remedy, based on “the oft-stated rule that an adequate
legal remedy precludes equitable relief is one of the most firmly established
principles in equitable jurisprudence.” 
(Wilkison v. Wiederkehr (2002)
101 Cal.App.4th 822, 835.)  He argues,
without further citation to legal authority, that to the extent that the court
considered it difficult to ascertain exact damages, “judges simply do the best
they can and specify a particular amount.” 
By not doing so, he contends, the trial court erred, and also wrongly
changed his oral agreement with plaintiff that they were 50-50 partners in the
Home Ranch. 

            Defendant also argues that the trial
court, by not explaining how it arrived at its determination that plaintiff was
entitled to 65 percent of the Home Ranch equity, chose an arbitrary figure and
committed a possible miscarriage of justice because plaintiff potentially
gained a windfall based on the possible future appreciation of the
property.  Defendant contends, without
citation to legal authority, that “[i]n order to avoid such a miscarriage of
justice, the judge would have to form an opinion of the value of defendant’s
interest and the sum total of the hard-to-calculate amounts converted.  The judge would then have to ascertain what
portion of defendant’s interest corresponded to that number.” 

            Defendant further argues, without
citation to legal authority, that the court’s ruling was “fundamentally unfair”
because it deprives him of the benefit of any increase in the property’s value
in the future, which, he baldly contends, “bears no relationship whatsoever to
the amounts converted.”  He claims the
order is a penalty more than an order of restitution, and is contrary to public
policy. 

            Defendant also argues the court’s
order violated Corporations Code section 16504, which governs the remedies
available to a judgment creditor of a partner, without explaining the statute’s
application to the present circumstances. 


Defendant further contends, again without
evidentiary or legal support, that the history of his participation on the
farm, his age and family obligations, and the fact that he put all of his
inheritance in the farm make the court’s order a “miscarriage of justice.”  He states, “The brothers began on an equal
footing, and all considerations of fairness, compassion, and equity require
that they end the same way.” 

            2.  Plaintiff’s
Option to Purchase the Home Ranch

            Defendant argues that the trial court’s
order that the referee give plaintiff the option to purchase the Home Ranch is
unfair and inequitable because it discriminates against him, should he be
willing to also buy the property at the appraised market value, and deprives
the partnership of extra funds should defendant be willing to purchase the
ranch at a price above market value. 

Defendant also argues that the court’s 65/35
percent allocation of the Home Ranch equity allows plaintiff to submit what in
effect is a “credit bid” for 65 percent of the ranch, rather than 50 percent,
reducing his cash payment to well below that required of defendant.  Defendant appears to argue that this violates
California law regarding credit bids because the two partners must be put on
equal footing, quoting a long passage from Owen
v. Cohen (1941) 19 Cal.2d 147, 153-155 without explaining its relevance to
the present circumstances. 

            Defendant concedes that Code of Civil
Procedure section 872.140 provided the trial court with the authority “ ‘to
order allowance, accounting, contribution, or other compensatory adjustment
among the parties according to the principles of equity.’ â€  He nonetheless asserts that the trial court
“did not have the power to change those
shares [in the Home Ranch equity] from the 50-50 basis [plaintiff and
defendant] had agreed to,” which were limited by contract. 

C.  Analysis

            “ ‘[E]very brief should contain a legal argument with citation of
authorities on the points made.  If none
is furnished on a particular point, the court may treat it as waived, and pass
it without consideration.’ ”  (>Stanley, supra, 10 Cal.4th at p. 793.) 
Accordingly, we disregard defendant’s arguments that we have identified
as not supported by citations to legal authority, or as relying on authority
without an explanation of its application to the present circumstances.

As for the remainder of
defendant’s arguments, he has not met his burden to affirmatively establish
error.  (Denham, supra,
2 Cal.3d at p. 564.)  As plaintiff
points out, his complaint is primarily a suit for partition of the assets of
their partnership.  “Real and personal
property may be partitioned in one action.” 
(Code Civ. Proc., § 872.240.) 
Furthermore, “[t]he interests of the parties . . . may be put in issue,
tried, and determined in the action.” 
(Code Civ. Proc., § 872.610.) 
“The court may, in all cases, order . . . compensatory
adjustment among the parties according to the principles of equity.”  (Code Civ. Proc., § 872.140.)  Furthermore, “[w]here division cannot be made
equally among the parties according to their interests without prejudice to the
rights of some, compensation may be required to be made by one party to another
to correct the inequality.”  (Code Civ.
Proc., § 873.250, subd. (a).)  In a
partition suit, the court has broad equitable powers and comparatively
unlimited discretion to do equity
without being bound by any strict rules of procedure.  (Richmond
v. Dofflemyer (1980) 105 Cal.App.3d 745, 766.) 

Thus, in >Cosler v. Norwood (1950) 97 Cal.App.2d
665, a partition action, the appellate court upheld the trial court’s finding
that two persons who owned a property as joint tenants nonetheless held 25
percent and 75 percent interests in the property.  The appellate court, after noting that the
parties had paid for the property in these percentages, concluded there was “no
merit in plaintiff’s contention that since the title to the real property was
taken in the names of the parties as joint tenants defendant is estopped to
claim that she has more than one-half interest in the property.  Plaintiff by seeking a partition and an
accounting put in issue the interest of each of the parties to the real
property in question.  Therefore the deed
of joint tenancy was only one item of evidence to be considered by the court in
connection with other probative facts produced by plaintiff and defendant.”  (Id.
at p. 666.)

Pursuant to this
statutory and case authority, plaintiff argues the court could order a
compensatory adjustment between him and defendant regarding the equity in the
Home Ranch, as well as that he have the option to purchase the Home Ranch at
its appraised market value; and defendant provides us with no reason to
disagree.  Indeed, defendant does not
respond to this argument, providing no explanation why the court ruling in a
partition action cannot not award damages for conversion by adjusting the
parties’ shares of partnership assets, such as by adjusting the allocation of
equity in the Home Ranch regardless of their partnership agreement, or order
that plaintiff have the option to purchase the Home Ranch at the appraised
market value upon its sale. 

Instead, defendant
argues the court’s order somehow changed the parties’ contractual agreement
regarding the Home Ranch.  We disagree
with this characterization of the court’s order.  The court’s ruling makes no mention of the
parties’ agreement to co-own the Home Ranch. 
Instead, the court states what equity each of the parties were entitled
to receive regarding the Home Ranch in the division of their partnership
assets.  Again, defendant provides no
persuasive explanation as to why the court was not entitled to do so pursuant
to its broad equitable powers in partition actions.

Defendant argues that >Cosler does not apply because it did not
involve “the creation of any options to buy or other href="http://www.mcmillanlaw.com/">discriminatory treatment in favor of one
partner and against the other “simply involved the interpretation of an oral
partnership agreement, with no attempt made to rewrite it or favor one party
over another.”  These arguments are
unpersuasive because they ignore the Cosler
court’s equitable adjustment of the interests of the parties to the
partition action notwithstanding their joint tenancy agreement, which is
directly analogous to the present circumstances.

            We also reject defendant’s argument
that the trial court was required to come up with a more complete explanation
of its calculation of the damages caused to plaintiff by defendant’s
conversion.  The court’s calculation was
obvious—it
determined that the damages were equivalent to approximately 15 percent of the
total equity value of the Home Ranch.  Defendant
does not establish that the court’s calculation was improper, provided any
actual or potential windfall to plaintiff, amounted to a penalty, or was a
miscarriage of justice.

            As for defendant’s argument that the
court’s order violated Corporations Code section 16504, which governs the
remedies available to a judgment creditor of a partner, defendant does not
establish that this provision applies to an order regarding the allocation of
partnership assets between partners in a partition action, or trumps the
court’s equitable powers in a partition action.

            Accordingly, we affirm the trial
court’s 65/35 percent allocation of the Home Ranch equity to the parties’
respective shares of partnership assets and its order that plaintiff be given
the option to purchase the Home Ranch at the appraised market value.

II.  Defendant’s
Contribution to the Mortgage of 24 Wharf Road

A.  The
Proceedings Below

            In its
statement of decision, the court stated about the partnership’s 24 Wharf Road
property that defendant, while paying the mortgage in full and collecting the
rent income, did not pay the property tax nor inform plaintiff of this, causing
the receiver to pay the tax of $23,618.68. 
The court found that defendant “did not account for the amount he
collected in rents from this property nor did he account for his use of the
partnership rental income,” and concluded that defendant owed the partnership
$23, 618,68 “due to his failure to use rent he collected to pay the property
tax.” 

            The
court also made findings regarding a $700,000 loan obtained by defendant, which
was secured by four properties, including three partnership properties.  The court, after noting that plaintiff
provided unrefuted testimony that he was not informed of, nor did he consent
to, defendant’s action, also found that defendant did not provide testimony
that the transaction benefitted the partnership properties, provide any
accounting, or any testimony or documents regarding the allocation of this loan
to partnership properties.  Furthermore,
the court noted, around the time of the loan, the partnership properties were
in distress and defendant and his wife purchased a $1.4 million property,
paying a $504,593.18 down payment for 1,800 acres that generated rental income,
and which was later foreclosed. 

            The trial court found that the loan
transaction was a breach of defendant’s duties to the partnership, and an
unwarranted comingling of partnership assets and obligations with defendant’s
separate property.  The court then stated
that, while defendant used $140,000 of his separate property to pay the
mortgage of the 24 Wharf Road property and testified that over a period of some
14 months, he paid one-half of the amount, $70,000, back to himself, “the
partnership does not owe defendant any money arising from these
transactions.” 

B.  Analysis

            Defendant argues the trial court
“inexplicably” ruled that the partnership did not owe him $70,000 of the
$140,000 he paid on the mortgage of the 24 Wharf Road property, and that the
court made a “mathematical error.” 
Defendant contends that, given that he is to compensate the partnership
for the property tax paid on the property, which he does not contest, he is
entitled to a net credit of $46,381.32. 

            The court’s findings indicate that
it concluded defendant, as a result of his improper obtaining of a $700,000
loan with the use of partnership properties, breached his partnership duties
and improperly comingled partnership assets and obligations with his separate
property and, therefore, was not owed any further repayment of the $140,000 he
used to pay the mortgage on the 24 Wharf Road property.  Defendant does not contest the court’s
ruling, choosing instead to ignore it in his argument of “mathematical error.”  Accordingly, he has not met his burden of
affirmatively showing error.  (>Denham, supra,
2 Cal.3d at p. 564.)  Therefore,
we affirm the court’s ruling.

III.  Defendant’s
Payment for Discovery Sanctions

A.  The
Proceedings Below

            In the course of the action,
defendant was held in contempt of a court order that he provide an accounting
and was ordered to pay plaintiff fees in the amount of $2,540.  Subsequently, the court granted plaintiff’s
motion for an order compelling defendant’s attendance at deposition and to
produce documents, and sanctioned defendant again, ordering him to pay
plaintiff reasonable expenses and attorney fees in the amount of $2,540 within
10 days. 

            The court later ruled on a petition
for instructions by the receiver.  This
included its order that the receiver distribute $2,540 to plaintiff’s attorney
as a monetary sanction imposed against defendant from defendant’s share of
partnership assets. 

            Subsequently, the receiver filed an
accounting of funds with the court, including a statement of profit and loss by
class for the period from June 21, 2008, through June 30, 2010.  This statement, contained in respondent’s
appendix, lists sanctions as an expense under professional fees in the amount
of $5,080.  The trial court, by order on
August 11, 2010, approved and accepted this statement and approved and ratified
all actions taken by the receiver since the last interim report. 

            In its statement of decision, the
court stated, “The $5,080 in court ordered sanctions to be paid by defendant
were paid by the partnership.  Defendant
owes the partnership a total of $5,080, as reimbursement[.]” 

 

B.  Defendant’s
Appellate Arguments

            Defendant contends that plaintiff
“had” the receiver pay him the $5,080 from partnership funds, although it was
not a partnership obligation.  Thus, he
argues, plaintiff improperly diverted partnership funds in violation of
Corporations Code sections 16501 and 16502 and he should reimburse the
partnership, not defendant.  He also
argues that the trial court erred in ruling that he should reimburse the
partnership. 

            Defendant fails to cite any
evidentiary support for his assertion that plaintiff somehow engaged in
improper actions regarding partnership funds as a result of the court’s
sanction orders.  “ ‘ “It is the duty of
a party to support the arguments in its briefs by appropriate reference to the
record, which includes providing exact page citations.” â€™ â€  [Citation.] 
Because ‘[t]here is no duty on this court to search the record for
evidence’ [citation], an appellate court may
disregard any factual contention not supported by a proper citation to the
record [citation].”  (>Grant-Burton, supra, 99 Cal.App.4th at p. 1379; see also Nwosu v. Uba, supra, 122
Cal.App.4th at p. 1246 [noting that the Cal. Rules of Court require factual
assertions to be supported by citations to the record].)  His claim fails for this reason alone.

            Defendant also does not explain why
the court’s orders involved an error of law, particularly in light of its broad
equitable powers in partition actions, which we have discussed.  In other words, he does not affirmatively
establish error.  (Denham, supra, 2 Cal.3d
at p. 564.)  His appellate claim fails
for this reason as well. 

IV.  The
Grade Loan

A.  The
Proceedings Below

In its statement of decision,
the trial court found:  “It is undisputed
that plaintiff and defendant borrowed $100,000 from J. Sobel, and that Margaret
Grade guaranteed that loan.  When the
loan to Sobel was not paid when due, Grade paid it and the parties became
indebted to her in that amount.  [¶]  Thereafter, the partnership paid Grade
$40,000, leaving a balance due of $60,000. 
Plaintiff has assumed the loan and has been paying it off monthly.  The court orders that plaintiff satisfy this
obligation on behalf of the partnership, and finds that defendant owes the partnership
account $30,000 as his share of this obligation.” 

B.  Analysis

Defendant argues the trial
court erred in ordering him to pay $30,000 to the partnership for his share of
the Grade loan because plaintiff “has been paying down the $60,000 balance with
fire wood, eggs, and other products of the partnership, which Grade sells in
her country store.”  Thus, defendant
contends, plaintiff is acting on behalf of the partnership to pay off a
partnership debt with partnership assets. 
Therefore, the court’s ruling is erroneous as a matter of law. 

            Defendant’s argument reargues the
evidence, regardless of his claim of legal error.  In doing so, he makes evidentiary contentions
without citation to supporting evidence in the record, rendering his argument
unpersuasive.  He contends plaintiff is
paying down the Grade loan with “fire wood, eggs, and other products of the
partnership.”  However, he does not
provide evidentiary support for his assertion that these are partnership
products.  Plaintiff, while he acknowledges
that he “has supplied [Grade] with meat, eggs and firewood for years,” contends
that his payments to Grade are being paid by him from his own assets and
labor.  He cites to his 2007 filing of a
statement of profit or loss from farming with his tax returns, which indicates
that he incurred various farm expenses, including $20,685 for feed. 

            The court’s order specifically found
that “plaintiff has assumed the loan and has been paying it off monthly.”  From this, it can be reasonably inferred that
the court found plaintiff is paying the Grade loan with his separate assets,
rather than with partnership products. 
Also, we must indulge all intendments and presumptions to support the
court’s judgment on matters as to which the record is silent.  (Denham,
supra, 2 Cal.3d at p. 564.)  Defendant, by not citing any evidence to the
contrary, has not met his burden to affirmatively establish error.  (Id. at p. 564.)  Therefore, we
reject his appellate claim.

V.  The
Franklin Judgment

            Defendant acknowledges that he
borrowed $20,000 from a third party, Susan Franklin, and failed to repay the
loan.  He does not contest that Franklin
subsequently recorded a judgment against him as a lien against partnership
properties. However, he argues that the trial court erred in ruling that, “as
this is defendant’s separate obligation, at such time as the lien is satisfied,
all amounts paid by the partnership shall be credited towards plaintiff’s
equalization of the partnership assets.” 


            Plaintiff, in his motion to augment
the record, contends that the court’s denial in its July 6, 2012 order of
Franklin’s alternative application for an order enforcing her judgment lien
against partnership assets renders this appellate claim moot.  We disagree. 
The court’s tentative ruling, attached to, and incorporated into, the
order, indicates the trial court determined that Franklin cannot assert her
judgment against partnership assets. 
However, plaintiff does not establish that this ruling is final and not
subject to further challenge or appeal by Franklin and defendant has not
withdrawn the claim.  Therefore, we
proceed to the merits of the issue.

            According to defendant, the court’s
ruling was a declaratory judgment that “was erroneous due to lack of a
justiciable controversy.”  Essentially,
he argues that the properties involved, even if they were “nominally” in
defendant’s name, were equitably owned by the partnership.  Therefore, he argues, Franklin cannot levy on
the properties because, he argues, citing various Corporations Code provisions,
a partner is not a co-owner of partnership property, which is owned by the
partnership, not by partners individually. 
(See Corp. Code, §§ 16501, 16203.)

            Furthermore, defendant contends,
“[t]he parties agree that Franklin has never attempted to levy on partnership
assets and that plaintiff has never attempted to join her as a party to the
instant action.  Under such
circumstances, declaratory relief is inappropriate, because there is no bona
fide dispute as to whether the ownership of the property or Franklin’s rights
as a judgment creditor.  The partnership
is not liable on the judgment, and there is no evidence in the record
suggesting that Franklin will attempt to collect her judgment from anyone other
than the judgment debtor.  Plaintiff had
the burden of proof on this issue, and since he failed to meet it, he is not
entitled to declaratory relief.” 

            However, plaintiff does not agree
that Franklin never attempted to levy on partnership assets, and states that
“the [r]eceiver had to pay Franklin $1,000 towards that lien before she would
release the lien on a lot he was selling.” He cites a receiver report in July
2010 so indicating.  Defendant responds
that this $1,000 payment was for a “nonexistent lien” and that a lien is not a
levy. 

            Defendant does not cite any law or
facts in support of his declaratory relief claim, which is neither undisputed
as to the facts nor apparent as to the law in light of the undisputed existence
of the judgment lien asserted by Franklin on partnership properties and the
receiver’s payment.  Therefore, we
disregard his arguments.  (>Stanley, supra, 10 Cal.4th at p. 793; >Grant-Burton, supra, 99 Cal.App.4th at
p. 1379.)  Furthermore, were we to
consider their merits, defendant fails to affirmatively establish error.  (Denham,
supra, 2 Cal.3d at p. 564).  Therefore, we reject his appellate claim.

VI.  The
$144,000 Tax Lien

A.  The
Proceedings Below

In its statement of
decision, the trial court found that defendant did not file partnership tax
returns, notwithstanding evidence that the receiver and counsel made efforts
for him to do so, and that plaintiff “must have been aware” of defendant’s
failure to file tax returns since 2000.

            The
court further found that, because no tax returns had been filed by the
partnership, income was imputed to the partnership by the Franchise Tax Board
(FTB), taxes assessed thereon, and monies from escrow on two properties that
were sold and separate tax liens were collected by the FTB totaling
approximately $78,500.  The FTB asserted
a lien against plaintiff individually for $144,000 in unpaid taxes, which the
receiver paid from partnership funds. 

            The
trial court “urged” defendant to prepare and file tax returns for the subject
years because, the court stated, the actual amount due would appear to be
fairly modest given the partnership income and expenses.  The court ordered the referee to monitor
these matters until they were resolved and that whatever amounts were
ultimately retained by the taxing entities would be charged against defendant’s
interest in the partnership assets. 

B.  Defendant’s
Argument

            Defendant argues, without citation
to facts or law, that the receiver acted as plaintiff’s “agent” in paying the
$144,000 tax lien from partnership funds, a diversion that the trial court
should have seen as a conversion.  He
further argues that, since the court ruled that plaintiff “must have been
aware” of defendant’s failure to file partnership tax returns since 2000, which
was reasonable since plaintiff would need a copy of the partnership tax returns
to prepare his own, and given that partners, not partnerships, pay tax,
plaintiff and defendant were “in pari
delicto when it comes to the failure to file tax returns.”href="#_ftn1" name="_ftnref1" title="">[1]  Accordingly, the court should have left the
parties where it found them, citing without further explanation >Bank of Orland v. Harlan (1922) 188 Cal.
413, 421 and Bacciocco v. Transamerica
Corp. (1934) 2 Cal.App.2d 595, 597. 
Therefore, “[i]t was wrong for the trial judge to charge 100% of the
taxes to defendant’s share of the partnership assets upon dissolution.  Both men were equally foolish, and the trial
judge should have left them where she found them, sharing their partnership
losses equally and bearing their individual losses separately.” 

C.  Analysis

            Defendant
again attempts to relitigate the facts rather than argue legal error.  He also bases his argument on contentions
that he does not establish, that being that the receiver acted as plaintiff’s
agent and that plaintiff and defendant were equally at fault regarding the
failure to file partnership tax returns and the subsequent actions by the
FTB.  That the receiver paid the taxes
does not establish agency, and that plaintiff knew that defendant did not file
tax returns does not establish equal culpability.  Indeed, the court’s finding that >defendant did not file the returns
indicates it considered them his responsibility, a finding defendant does not
directly challenge. 

            We again are presented with an
argument so sparsely supported by citations to facts or relevant law that we
may disregard it.  (Stanley, supra, 10 Cal.4th at p. 793; Grant-Burton, supra,> 99 Cal.App.4th at p. 1379.)  We do so. 
Furthermore, even if we were to consider its merits, defendant does not
affirmatively establish error.  (>Denham, supra, 2 Cal.3d at p. 564). 
Therefore, we reject his appellate claim.

VII.  The 174
Elm Road Property

In its statement
of decision, the trial court found that the 174 Elm Road property was
rented for $925 per month, which was more than its monthly mortgage payment,
and that defendant collected $5,500 in rent that he converted for his own
benefit.  Also, in April 2008, the
receiver paid $6,430.08 to the lender to prevent foreclosure and reinstate the
loan on the property. The court found that defendant owed a total of $11,930.08
to the partnership account. 

Defendant argues the trial court’s order
that he pay $11,930.08 was a mathematical error, since if defendant had paid
the partnership the $5,500 he converted, that money would have been applied to
the mortgage payments, leaving the receiver with only an additional $930.08 to
cure the loan default.  Therefore, the
court should have ordered him to pay $6,430.08, and he asks this court to
modify the judgment accordingly. 
Plaintiff agrees, as do we.

“It is well settled that
clerical errors in a judgment, where they are shown by the
record, may be corrected at any time. 
[Citation.] . . .  [A]n appellate
court may correct a judgment containing an obvious clerical error or other
defect resulting from inadvertence by modifying the judgment.”  (Hennefer v. Butcher (1986) 182 Cal.App.3d 492, 506-507.)  Pursuant to our authority, we modify the
judgment to show that defendant owes $6,430.08 to the partnership account,
rather than $11,903.08 ordered by the court, regarding the 174 Elm Road
property. 

 

 

 

 

>VIII. 
Order Denying Defendant’s Attorney
Fees of $28,760.50

A.  The
Proceedings Below

            The record before us on the issue is
incomplete, but it appears that defendant filed a motion before trial in late
2009 or early 2010, for an order directing the receiver to pay $28,760.50 to
his attorney for fees. 

As part of his opposition to this motion,
plaintiff filed a declaration from the receiver.  The receiver declared that he had previously
distributed $50,000 to plaintiff’s attorney and $32,500 to two of defendant’s
attorneys.  The receiver further stated
that he disbursed $15,000 to one of defendant’s attorneys, Robert Sprague,
based on the attorney’s representation that he was representing defendant with
regard to the merits and substance of the action, and would be actively
involved in settlement or trial.  In
September 2009, the receiver was informed by Sprague that the $15,000 was for
the limited purpose of obtaining a continuance of the trial, filing a motion to
dismiss causes of action in the complaint for delay in prosecution, and seeking
to remove plaintiff’s attorney of record. 
The receiver stated that if he had known this, he would have required
the consent of plaintiff or an order of the court before making the $15,000
disbursement.

Thereafter, the receiver stated, when
Sprague requested an additional $30,000 in fees, with a comparable amount to
plaintiff’s counsel, the receiver declined the request because he did not
believe the partnership could afford such distribution and still be able to
carry out the steps needed to effectuate a settlement or judgment of
partition.  The receiver also stated that
defendant may have exhausted his interest in the partnership funds based on his
failure to account for partnership funds presumably received and in his
possession as well as prior distributions on his behalf, and that plaintiff
refused to consent to such distribution. 


In March 2010, the court denied without
prejudice defendant’s motion for an order directing the receiver to pay
$28,760.50 for defendant’s attorney’s fees. 


B.  Analysis

Defendant argues that the trial court erred
in denying his motion for pretrial attorney fees of $28,760.50 because of the
disparity in payments by the receiver of the parties’ attorney’s fees.  Defendant claims without citation to the
record that this disparity resulted in plaintiff having the same attorney for
six years, while defendant was unable to keep any attorney for very long due to
nonpayment and had an attorney substituted into the case on the first day of
trial.  He also contends, based on the
court’s denial of his motion without prejudice, that the court did not object
to the nature or amount of the fees, but simply did not want them paid in the
midst of settlement negotiations, and that the court had no way of knowing that
the settlement would fall apart after the retirement of the judge presiding.

Essentially, defendant
argues that the trial court’s denial was unfair and disadvantageous to him
without citing any legal authority, and based on unsubstantiated facts, such as
that he was unable to keep an attorney for any length of time due to nonpayment
or that the court’s denial of his motion without prejudice indicated the court
did not object to his request for fees. 

            We reject defendant’s claim on three
grounds.  First, we are again presented
with an argument insufficiently supported by citations to facts or relevant law
that we are entitled to disregard.  (>Stanley, supra, 10 Cal.4th at p. 793; >Grant-Burton, supra, 99 Cal.App.4th at
p. 1379.)  We do so.  Also, although plaintiff provided his
opposition of defendant’s motion for $28,760.50 in attorney’s fees, defendant
has not included his motion or the record of the parties’ arguments at hearing.
 We cannot meaningfully review his appellate
claim without considering the full record regarding the motion.  “[I]f the record is inadequate for
meaningful review, the appellant defaults and the decision of the trial
court should be affirmed.”  (Mountain Lion Coalition v. Fish &
Game Com. (1989) 214
Cal.App.3d 1043, 1051, fn. 9.)  Finally,
even if we were to consider the merits of defendant’s claim, he fails to
affirmatively establish error.  (>Denham, supra, 2 Cal.3d at p. 564.)
clear=all >


 

DISPOSITION

We affirm the judgment,
with the modification that defendant owes the amount of $6,430.08, rather than
the $11,930.08 calculated by the trial court, to the partnership account
regarding the 174 Elm Road property.

                                                                                    _________________________

                                                                                    Lambden,
J.

 

 

We concur:

 

 

_________________________

Haerle,
Acting P.J.

 

 

_________________________

Richman,
J.