Filed 6/17/14 Gildelatorre v. Bay Vista Methodist Heights CA4/1
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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA



ALEJANDRO GILDELATORRE, SR.,                                        D063616

         Plaintiff and Appellant,

         v.                                                         (Super. Ct. No. 37-2011-00100606-
                                                                     CU-OE-CTL )
BAY VISTA METHODIST HEIGHTS,
INC.,

         Defendant and Respondent.


         APPEAL from a judgment of the Superior Court of San Diego County, Frederic L.

Link, Judge. The motion to dismiss the cross-appeal and the motion for sanctions are

granted.

         Burkhardt & Larson and Philip Burkhardt for Plaintiff and Appellant.

         North County Law Firm, Dena M. Acosta; Kilpatrick Townsend & Stockton,

Maureen A. Sheehy and Gregory P. Farnham for Defendant and Respondent.

         Bay Vista Methodist Heights, Inc. (Bay Vista) appealed a monetary judgment in

favor of Alejandro Gildelatorre, Sr. Gildelatorre filed a cross-appeal, contending the jury

did not award all of the damages supported by the uncontroverted evidence. After notice
of the appeal and cross-appeal were filed, the parties engaged in settlement discussions.

Although they did not reach a settlement, Bay Vista paid an agreed upon amount to

satisfy the entire judgment, and an acknowledgment of satisfaction of judgment was filed.

Bay Vista abandoned its appeal, but Gildelatorre did not.

       After Gildelatorre filed his opening brief, Bay Vista, in addition to filing a

respondent's brief, moved to dismiss the cross-appeal on the grounds that

(1) Gildelatorre's execution of a satisfaction of judgment waived his appellate rights;

(2) the cross-appeal is moot; and (3) Gildelatorre is equitably estopped from pursing his

cross-appeal. Finding merit in Bay Vista's first argument, we grant the motion to dismiss

the appeal.

       Bay Vista also brings a motion for sanctions, claiming Gildelatorre's appeal was

frivolous. We agree and are particularly troubled by Gildelatorre's attorney's posttrial

actions. Thus, we grant the motion.

                   FACTUAL AND PROCEDURAL BACKGROUND

       Gildelatorre brought suit against Bay Vista regarding an employment dispute. The

matter went to trial where one of the primary issues was whether Bay Vista entered into a

written employment agreement with Gildelatorre. Gildelatorre argued, under the written

employment agreement, Bay Vista was required to pay him an annual salary of $110,000

with a performance bonus of about $10,000. He also maintained he was owed severance

pay, vacation pay, and the value of his health benefits as well as waiting time penalties

under Labor Code section 203.



                                              2
       Among other contentions, Bay Vista asserted the written employment agreement

was void and its board had approved an annual salary of $72,000 for Gildelatorre.

       The jury found in favor of Gildelatorre and awarded him $83,865.12 plus penalties

under Labor Code section 203. As part of the damages awarded, the jury determined that

Gildelatorre was entitled to two months of salary totaling $12,000. It also awarded

damages for vacation and severance pay. It calculated the penalties under Labor Code

section 203 using an annual salary of $72,000. The jury, however, did not award

damages based on any bonus or health insurance owed Gildelatorre.

       Bay Vista appealed the judgment, and Gildelatorre filed a cross-appeal arguing his

damages should be increased to conform to the evidence. Bay Vista also posted a

$164,670 bond to stay enforcement of the judgment.

       Although Bay Vista filed an appeal and Gildelatorre a cross-appeal, the parties

engaged in settlement negotiations. These efforts intensified after Gildelatorre moved to

increase the amount of the bond Bay Vista posted. Gildelatorre's motion proved

successful, resulting in the court increasing the bond amount by $117,630.68 to account

for attorney fees owed Gildelatorre's attorney. After the hearing on Gildelatorre's motion,

Gildelatorre's attorney (Philip Burkhardt) approached Bay Vista's attorney (Dena Acosta)

to further discuss settlement, noting that the parties were only $40,000 apart. Burkhardt

represented that his client would be willing to settle the matter for a $170,000 one-time

payment or payments totaling $180,000 over a six-month period, which would include

interest. This demand included a mutual release of all claims and dismissal of the appeal

and cross-appeal.

                                             3
       Four days later, Burkhardt sent an email to Acosta stating, among other things,

"[a]re we settling this case are [sic] not?" In response to Burkhardt's email, Acosta asked

Burkhardt for, as an alternative to settlement, a calculation of the amount Bay Vista

would need to pay to satisfy the judgment as of June 1, 2013. In addition, Acosta asked

for an upcoming hearing to be continued to allow Bay Vista to get its bond released,

which would allow Bay Vista to pay the judgment if the parties agreed to that resolution.

Acosta ended her email by stating: "This seems reasonable as you & your client would

get an additional $25K, i.e., full value, there'd be no need to haggle over settlement terms

and of course the appeal would be dismissed."

       Within 90 minutes of receiving Acosta's email, Burkhardt provided the calculation

to satisfy the judgment on June 1, 2013. His email contained only his calculations.

       Three days later, the parties appeared in court to request the court issue an order

releasing Bay Vista's bond. Acosta represented to the court that the parties had reached a

settlement and Bay Vista needed the funds from the bond to pay a portion of the

judgment. Burkhardt offered no comment and remained silent when Acosta stated the

parties had settled the matter. A stipulation and order releasing the bond was filed with

the court that day.

       The parties made arrangements for Bay Vista to pay the judgment on June 5, 2013.

Prior to that date, Acosta sent Burkhardt an email with her calculation that Bay Vista

owed $195,470.65 to satisfy the judgment as of June 5. In response, Burkhardt sent a

reply email stating, "Close enough."



                                             4
       Acosta along with another attorney representing Bay Vista, Kandace Watson, met

with Burkhardt on June 5 in his office. Acosta brought a check made payable to

Gildelatorre in the amount of $195,470.65, an acknowledgement of satisfaction of

judgment, and a demand for acknowledgement of satisfaction of judgment pursuant to

Code of Civil Procedure section 724.050. Acosta stated she brought the demand as a

"formality and precaution."

       According to Acosta and Watson, at the June 5 meeting, Burkhardt argued that

there were additional sums due for postjudgment attorney fees. Acosta and Watson

disagreed, asserting that Gildelatorre would receive $25,000 more than what he

previously demanded to settle the case. Watson then took the check and left the room.

       According to Acosta, she and Burkhardt continued to discuss the dispute for an

additional 20 or 30 minutes. After Watson left, Burkhardt again raised his preference for

a mutual release, but did not ultimately demand one. Instead, their discussion focused on

whether Gildelatorre was entitled to additional attorney fees and costs for postjudgment

activities. Acosta reiterated that Bay Vista was paying Gildelatorre $25,000 more than

his last settlement demand. Acosta then left the room.

       Watson later returned to Burkhardt's office with the check and another individual

who served as a witness. According to Watson, Burkhardt ceased his demand for

additional attorney fees. Watson insisted that Burkhardt sign documents acknowledging

that the payment constituted full satisfaction of judgment. Burkhardt agreed to file the

acknowledgment of satisfaction of judgment with the court and signed as "received" on

"6/5/13" a record of the check, which bore the legend "FULL SATISFACTION OF

                                             5
JUDGMENT." The witness signed the record as well and dated his own signature

"6/5/13." Watson then gave Burkhardt the check that stated on its face "FULL

SATISFACTION OF JUDGMENT."

       According to Burkhardt, during the June 5 meeting, he refused to sign the

acknowledgement of satisfaction of judgment because he was not sure the tender was

sufficient to support the demand under Code of Civil Procedure section 724.050. He

claims to have received the check unconditionally.

       Burkhardt made the following notation on the back of the check prior to cashing it:

"Protest per CCP 1526(a)." Burkhardt stated he made this notation to ensure that the

cashing of the check was not treated as an accord and satisfaction.

       Burkhardt did not sign the acknowledgement of satisfaction of judgment until

June 11, 2013. He spent the time after the June 5 meeting until he signed the

acknowledgement researching his obligations under the "particular factual context of this

case, including the pendency of appeals by both parties."

       The acknowledgment of satisfaction of judgment was filed on June 14, 2013.

Three days later, Bay Vista abandoned its appeal.

       Gildelatorre did not abandon his cross-appeal and served his opening brief almost

four months later. In addition to filing a respondent's brief, Bay Vista moved to dismiss

the cross-appeal and for sanctions.

                                      DISCUSSION

       Bay Vista contends Gildelatorre waived his right to appeal the judgment here

because his attorney executed a satisfaction of judgment. In general, it is inconsistent to

                                             6
accept the benefits of a judgment and prosecute an appeal from that judgment. Accepting

the benefits of a judgment will waive an appeal unless an exception applies. (Lee v.

Brown (1976) 18 Cal.3d 110, 114.) One such exception is when the "appellant is

concededly entitled to the accepted benefits, and his right to them is unaffected by the

outcome of the case on appeal." (Id. at p. 115.) Another exception occurs when "the

appellant is simply attempting to augment the judgment and the relief sought would not

jeopardize the amount already collected." (Heacock v. Ivorette-Texas, Inc. (1993)

20 Cal.App.4h 1665, 1670 (Heacock).)

       Gildelatorre contends the instant matter is the same as Heacock, supra,

20 Cal.App.4th 1665. In Heacock, the plaintiff was awarded $1 in compensatory

damages and over $435,000 in punitive damages. The trial court reduced the punitive

damage award to $150,000. Even though the plaintiff executed on the judgment and filed

a satisfaction of judgment, the plaintiff appealed. (Id. at p. 1669.) We held that although

a party cannot accept the benefits of a judgment and also challenge it on appeal, the

plaintiff was attempting to augment the judgment and the relief she was seeking would

not jeopardize the amount already awarded. (Id. at p. 1670.)

       The plaintiff in Heacock was not asking for a retrial on the punitive damages. She

merely challenged the trial court's reduction of the jury's punitive damage award.

(Heacock, supra, 20 Cal.App.4th at p. 1670.) In addition, the plaintiff maintained the

trial court erred in directing a verdict limiting her to a nominal amount of compensatory

damages. (Ibid.) We noted that the jury found the plaintiff had satisfied "all the

predicates for recovery of compensatory damages so that a retrial on the amount of

                                             7
damages would result in at least the award of the nominal sum she already received." (Id.

at p. 1671.)

       Here, Gildelatorre asserts he is not asking for a new trial. Instead, he frames the

issue as a mere mathematical error by the jury. Gildelatorre contends he is requesting

this court to increase the amount to conform to the evidence. He insists the evidence

supporting his position is uncontroverted.

       The foundation of Gildelatorre's argument is his claim that the jury found he and

Bay Vista entered into a written employment agreement. He points out that the jury

answered the first special verdict question in the affirmative: "Did Alejandro

Gildelatorre and Bay Vista Methodist Heights enter into a valid employment contract that

specified a length of time for which Alejandro Gildelatorre would remain employed?"

Gildelatorre maintains the only employment agreement discussed at trial that was to exist

for a specified length of time was the written agreement he claimed governed his

employment with Bay Vista. He also notes that the jury awarded him damages for

vacation and severance pay based on the written employment agreement. Gildelatorre

thus concludes that the jury's failure to award him additional damages under the written

contract for his bonus and health insurance as well as the calculation of his unpaid salary

and penalties under the Labor Code was the result of calculation errors. In other words,

Gildelatorre asserts there was no evidence in the record on which the jury could have

concluded he was not entitled to the additional damages. We are not persuaded. On the

record before us, the difference between Gildelatorre's asserted damages and the damages

the jury awarded him are not necessarily mere calculation errors.

                                             8
       Gildelatorre claims that the written employment agreement, containing his annual

salary of $110,000, took effect on April 9, 2008. However, it is undisputed that

Gildelatorre never received the equivalent of a $110,000 annual salary while employed

by Bay Vista. Instead, beginning in 2009 through the length of his employment with Bay

Vista, Gildelatorre received a monthly salary of $6,000, reflecting an annual salary of

$72,000.1 Further, he testified that he was aware that Bay Vista's board approved his

salary at $6,000. He attempted to explain away the discrepancy between his actual pay

and the pay he claimed to be entitled to under the written employment agreement by

asserting he had agreed to defer some of his salary to allow Bay Vista to invest in more

properties. He testified that there was an expected source of funds that would pay the

difference in his salary. In addition, he claimed that two other employees also agreed to

defer their salaries. Nevertheless, other than his own testimony, Gildelatorre points to no

evidence in the record that supports his position. He does not argue that the other two

employees testified that they agreed to defer their respective salaries. And Gildelatorre

ignores the possibility that the jury simply did not believe his testimony as to the deferral

issue. On this record, it can reasonably be inferred that the jury found that Gildelatorre

and Bay Vista agreed that Gildelatorre's annual salary would be $72,000 not the $110,000

from the written employment agreement.

       We also note the jury was not asked to specifically decide whether Bay Vista and

Gildelatorre entered into the written employment agreement dated April 9, 2008. Instead,



1      Gildelatorre received an additional $2,000 in 2009.
                                              9
the jury was asked if they entered into a valid employment agreement for a specific

period of time. Gildelatorre insists the only inference that can be drawn from the jury's

affirmative response to this question is that it found the written employment agreement

valid. Yet, the jury's damage award belies this conclusion. The jury appears to have

awarded some damages under the written employment agreement (severance and

vacation pay), rejected other requested damages under that same agreement (bonus and

health insurance) and awarded damages per Bay Vista's contention that Gildelatorre's

annual salary was $72,000. There was conflicting evidence regarding the validity of the

written employment agreement as well as the amount of Gildelatorre's annual salary. On

this record, we cannot say that the jury's award simply is the result of a mathematical

mistake or that the evidence is uncontroverted on this issue.

       Here, unlike the plaintiff in Heacock, supra, 20 Cal.App.4th 1665, Gildelatorre's

claim that he is entitled to an increase in the amount of damages would require a new trial

because the resolution of the issue involves conflicting evidence and the credibility of

witnesses. Further, because the jury's verdict raises questions regarding the validity of at

least a portion of the written employment agreement, a new trial could result in a

reduction in the amount of damages. Therefore, Gildelatorre's execution of the

acknowledgement of satisfaction of judgment waived his right to appeal the judgment.

(Lee v. Brown, supra, 18 Cal.3d at p. 114.) Moreover, the conflicting evidence and the

necessity of making credibility determinations to resolve the issue presented by

Gildelatorre underscores the requirement that Gildelatorre move for a new trial on the

grounds of inadequate damages before he could raise the same issue on appeal. (See

                                             10
County of Los Angeles v. Southern California Edison Co. (2003) 112 Cal.App.4th 1108,

1121 (County of Los Angeles) ["Failure to move for a new trial on the ground of

excessive or inadequate damages precludes a challenge on appeal to the amount of

damages if the challenge turns on the credibility of witnesses, conflicting evidence, or

other factual questions."].)

         We next turn to Bay Vista's motion for sanctions. Bay Vista has filed a motion for

sanctions, i.e., attorney fees in the amount of $25,000, which it has incurred in defending

this appeal. As we discuss above, we determine Gildelatorre waived his right to appeal

by executing the acknowledgement of satisfaction of judgment. Moreover, even had we

not granted the motion to dismiss, we would not have reached the merits of Gildelatorre's

appeal. Here, Gildelatorre's contentions require a weighing of the evidence and making

credibility determinations. "A trial court ruling on a new trial motion on the ground of

excessive or inadequate damages must weigh the evidence and acts as an independent

trier of fact." (County of Los Angeles, supra, 112 Cal.App.4th at p. 1121.) The trial court

thus is in a much better position than the Court of Appeal to evaluate the amount of

damages awarded in light of the evidence presented at trial. (Lane v. Hughes Aircraft Co.

(2000) 22 Cal.4th 405, 412.) Accordingly, because Gildelatorre did not bring a motion

for new trial, he forfeited his right to challenge the adequacy of the damages on appeal.

(County of Los Angeles, supra, at pp. 1121-1122.) Thus, Gildelatorre's appeal is without

merit.

         The question remains whether the appeal is "indisputably" without merit, i.e.,

whether "any reasonable attorney would agree that the appeal is totally and completely

                                              11
without merit." (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 (Flaherty).) In

determining whether an appeal indisputably has no merit, California cases have applied

both subjective and objective standards. The subjective standard looks to the motives of

the appealing party and his or her attorney, while the objective standard looks at the

merits of the appeal from a reasonable person's perspective. (See Flaherty, supra,

31 Cal.3d at pp. 649-650.) Whether the party or attorney acted in an honest belief there

were grounds for appeal makes no difference if any reasonable person would agree the

grounds for appeal were totally and completely devoid of merit. (Estate of Walters

(1950) 99 Cal.App.2d 552, 558.)

       The objective and subjective standards "are often used together, with one

providing evidence of the other. Thus, the total lack of merit of an appeal is viewed as

evidence that appellant must have intended it only for delay." (Flaherty, supra, 31

Cal.3d at pp. 649-650.) An unsuccessful appeal, however, " 'should not be penalized as

frivolous if it presents a unique issue which is not indisputably without merit, or involves

facts which are not amenable to easy analysis in terms of existing law, or makes a

reasoned argument for the extension, modification, or reversal of existing law.' " (Dodge,

Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1422.)

       Although we recognize sanctions should be used sparingly to deter only the most

egregious conduct (Flaherty, supra, 31 Cal.3d at pp. 649-650), we find them warranted

here against Gildelatorre's counsel, Burkhardt. The frivolousness of this appeal is a

product of Burkhardt's posttrial actions. The record indicates that Acosta believed her

client would satisfy the judgment in lieu of settlement. Burkhardt did nothing to disabuse

                                             12
her of this notion. Indeed, Burkhardt's conduct can be reasonably interpreted as

supporting Acosta's belief. For example, in response to an email from Burkhardt

inquiring about the status of settlement, Acosta requested Burkhardt provide the amount

required to satisfy the judgment as of June 1, 2013 as an "alternative" to settlement.

Burkhardt provided the requested amount within 90 minutes of receiving Acosta's email.

Burkhardt knew that Acosta viewed a payment of the judgment as a substitute of

settlement. He did not reject the idea, but merely provided a calculation of the judgment

due by a certain date. Burkhardt's email appears to have been intentionally cagey.

       Further, Burkhardt did nothing to correct the record at the hearing when Acosta

represented to the superior court that the matter had settled. He attempts to explain away

his silence by claiming he interpreted Acosta's statement as "meaning only that the issues

before the court at that hearing were resolved." We find Burkhardt's explanation

implausible. He had been attempting to negotiate a settlement with Acosta. He knew

Acosta proposed the satisfaction of judgment as an alternative to settlement. By way of

satisfying the judgment, Bay Vista would be paying Gildelatorre more than what he was

demanding to settle the matter. Burkhardt agreed with Acosta that the bond should be

released to provide Bay Vista with funds it could use to pay the judgment. The purpose

of the hearing was to convince the superior court to issue an order releasing the bond.

Clearly, Acosta believed that the funds from the bond would be necessary to pay the

judgment and appeared before the court to obtain the bond funds to satisfy the judgment

and resolve the matter instead of entering into a settlement. The only reasonable

interpretation of Acosta's statement to the court that the parties reached a settlement is

                                             13
that Acosta was referring to the entire matter. Burkhardt's post hoc attempt to justify his

silence is not convincing.

       Simply put, Burkhardt's posttrial actions easily crossed the line from zealous

advocacy to indefensible artifice. Although he had numerous opportunities to make sure

Acosta and the court understood his belief regarding the status of the matter, he did

nothing. Moreover, any action he did take tended to support Acosta's position: The

matter was being completely resolved through the payment of the judgment.

       We do not take our decision to sanction lightly. However, we believe a failure to

issue sanctions here would serve as tacit approval of Burkhardt's tactics.2 Burkhardt's

stratagem here ultimately caused Gildelatorre's appeal to be meritless. As such, after

thoroughly reviewing the record and listening to oral argument, we are convinced by

clear and convincing evidence (San Bernardino Community Hospital v. Meeks (1986)

187 Cal.App.3d 457, 470) that any reasonable attorney would agree the grounds

advanced by Burkhardt here completely lacked merit and would not have pursued this

appeal. (Flaherty, supra, 31 Cal.3d at pp. 649-650.)

       Having concluded sanctions are warranted, we must determine an appropriate

amount. "Factors relevant to determining the amount of sanctions to be awarded a party

responding to a frivolous appeal include 'the amount of respondent's attorney fees on

appeal; the amount of the judgment against appellant; the degree of objective



2      Although we conclude sanctions are appropriate, we encourage Bay Vista's
attorney to exercise more diligence in the future to ensure a matter is completely
resolved.
                                             14
frivolousness and delay; and the need for discouragement of like conduct in the future.' "

(In re Marriage of Gong & Kwong (2008) 163 Cal.App.4th 510, 519; Pollock v.

University of Southern California (2003) 112 Cal.App.4th 1416, 1434 [one goal of

sanctions is to deter future frivolous litigation].)

       As to the first factor, Bay Vista has told us it incurred more than $25,000 in

attorney fees and costs related to this appeal. We find this requested amount reasonable

and thus award it to Bay Vista.

       Since there is no monetary judgment against Gildelatorre, the second factor is not

relevant to our analysis.

       In this case, the degree of objective frivolousness is very high. Burkhardt's

posttrial deceptions led to the lack of merit in this appeal, and we conclude that "[n]o

competent attorney could conceivably believe in good faith" the appeal had any merit.

(Cf. Papadakis v. Zelis (1992) 8 Cal.App.4th 1146, 1149.) Thus, the case is not a close

one. (See Pierotti v. Torian (2000) 81 Cal.App.4th 17, 34.)

       It also should be obvious there is a great need to deter conduct of this nature in the

future. In working to resolve a matter, an attorney should not engage in such blatant

obfuscation. It is more prudent and professional to deal with opposing counsel with

civility and honesty instead of gamesmanship that only leads to confusion, unnecessary

filings, and additional attorney fees. We cannot ignore Burkhardt's actions here. "It is

critical to both the bench and the bar that we be able to rely on the honesty of counsel.

The term 'officer of the court,' with all the assumptions of honor and integrity that append



                                               15
to it, must not be allowed to lose its significance." (Kim v. Westmoore Partners, Inc.

(2011) 201 Cal.App.4th 267, 292.)

                                     DISPOSITION

       The motion to dismiss the cross-appeal is granted. The motion for sanctions is

granted. As sanctions for a frivolous appeal, Burkhardt & Larson shall pay Bay Vista the

amount of $25,000. Bay Vista also is awarded its costs in connection with the cross-

appeal.




                                                                 HUFFMAN, Acting P. J.

WE CONCUR:


                  McDONALD, J.


                   McINTYRE, J.




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