Defendant Dismissed Appeal Of First Order On Set Aside/Vacate Motion Before Filing Second Set Aside/Vacate Motion
In TAT Capital Partners v. Feldman, Case No. H044004 (6th Dist., June 12, 2020) (unpublished), a self-represented defendant appealed from a second trial court order denying his motion to set aside and vacate a 2010 judgment against him, and from the $8,025 section 128.5 sanctions against him.
Defendant’s first motion to set aside and vacate the 2010 judgment was heard on January 24, 2014 and denied. Defendant (along with other defendants) appealed the trial court’s order, but requested that the appeal be dismissed. Then, more than two years later, defendant (without other defendants) filed a second motion to set aside and vacate the 2010 judgment, which was, again, denied – with the trial court concluding defendant’s motion constituted a motion to reconsider its prior rulings and that defendant had not satisfied the requirements for bringing a motion for reconsideration. Additionally, the trial court found defendant – as a matter of law – barred from raising challenges to rulings that had been subject to judicial review. Finally, in finding defendant’s motion frivolous, meritless, unreasonable, and brought in bad faith for purposes of harassing, the trial court issued section 128.5 sanctions against defendant in the amount of $8,075. Defendant again appealed, but the Sixth District found neither error nor abuse of discretion and affirmed.
Defendant argued that the trial court erred in imposing the sanctions because plaintiff had become a forfeited entity in 2014 for failure to file tax returns. Therefore, defendant claimed – based on Revenue and Taxation Code section 19719(a) – plaintiff lacked capacity in 2016 to oppose his motion and move for sanctions. Based on the same premise, Defendant also raised Revenue and Taxation Code sections 2301 and 2301.5 for the first time in his reply brief. However, the Sixth District found that defendant had not adequately presented this to the trial court and as such could not argue it on appeal. Nonetheless, the appellate panel found none of defendant’s arguments related to plaintiff’s capacity under the cited Revenue and Taxation Code sections helpful to plaintiff. Section 19719(a) relates to the criminal penalty for a prohibited exercise of corporate powers and rights after suspension or forfeiture, section 23301 applies to a foreign taxpayer only if the taxpayer is qualified to do business in California, and – pursuant to United Medical Management Ltd. v. Gatto, 49 Cal.App.4th 1732, 1741 (1996) – failure to pay its taxes does not prevent a foreign corporation from bringing or defending actions, nor forfeit its corporate powers.