Second District, Division 2 Overturns Set Aside Order, But Does Not Pass on Validity of Lien.
A defense judgment involving a costs award is usually automatically stayed without bond pending an appeal by the impacted party, such that execution efforts cannot go forward until the appeal is final. (Vadas v. Sosnowski, 210 Cal.App.3d 471, 475 (1989).) The next case involved an appellate writ petition, with the panel finding Vadas to be dispositive.
In Stites v. Superior Court, Case No. B213360 (2d Dist., Div. 2 Jan. 15, 2009) (unpublished), defendants/real parties (Hilton) won a costs award against petitioner after winning summary judgment. Hilton filed a costs memorandum, seeking $14,750.32 in routine costs. Petitioner reached a settlement with other defendants, with Hilton filing a notice of lien based on the costs award in the litigation. Hilton also filed a motion to direct payment of the settlement funds to it, with petitioner appealing the summary judgment order. The trial court ordered the settlement funds frozen in a joint account to be maintained until there was a ruling on petitioner’s appeal. Petitioner sought mandate.
Petitioner was successful. The Second District, Division Two found that a defense judgment for costs alone is subject to the automatic stay on appeal, based on Vadas. The perfecting of appeal stayed proceedings in the trial court, including the subsequent orders directing a freeze of settlement funds.
However, real parties argued that the freeze orders were nothing more than a necessary adjunct to preserve Hilton’s notice of lien already filed in the pending litigation, based on Code of Civil Procedure section 708.410(a). The Court of Appeal rejected this argument. “Section 708.410 sets forth the procedure for the filing of a judgment lien. We find nothing in the language of the statute authorizing a trial court to issue an order after a lien is filed directing settling defendants to withhold funds in the amount of a costs judgment pending the judgment debtor’s appeal.” (Slip Opn., at p. 6.)
That did not quite end the matter, though. Section 708.410(b) indicated that the lien could be enforced after the appeal becomes final. So, how did this subdivision impact things?
It didn’t, the panel decided. The trial court’s order directing retention of settlement funds was a step in the enforcement of a judgment and thereby barred by the automatic stay provisions of section 916(a). “We do not mean to suggest that the filing of a notice of appeal nullifies a valid notice of lien. We merely conclude that ‘freezing’ settlement funds and directing that they be held in trust for the benefit of a particular defendant should that defendant prevail in connection with an appeal filed by the plaintiff is an order designed to ensure that monies will be available to satisfy a particular lien. Accordingly, it is an order of enforcement.” (Slip Opn., at p. 7.)