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Court of Appeal:
No Jurisdiction to Order Dismissal After Transferring Case
Opinion Says While Attorney-Defendant Cannot Recover for Self-Representation, Codefendants May Be Awarded Fees Based on That Lawyer’s Services
By Kimber Cooley, Staff Writer
Although a court retains limited power to hear incidental matters after granting a motion to change venue before the case file is fully transferred, it lacks jurisdiction to rule on a motion to quash/dismiss, Div. Two of the Fourth District Court of Appeal held yesterday.
The dispute arose in a case brought against attorneys—who asserted sovereign immunity due to their status as officers of a Native American tribe—over a failed attempt to establish a cannabis complex on reservation lands.
The court also held that one of the defendants, who performed services on the motion to change venue, could not recover for his own attorney fees, but his co-defendants were entitled to fees based on his work.
Justice Art W. McKinster authored the unpublished opinion reversing a dismissal order by San Bernardino Superior Court Judge Donald R. Alvarez and reversing, in part, the order on attorney fees. Presiding Justice Manuel A. Ramirez and Justice Michael J. Raphael joined in the opinion.
Joint Venture
Plaintiffs California Capitalism Associates, LLC and its principal, Ravi R. Bendapudi, approached the Chemehuevi Indian Tribe in 2017 with a proposal to create a joint venture to develop what is described in the complaint as “the world’s first purpose-built cannabis agricultural-industrial park” on reservation lands in San Bernardino County.
The plaintiffs allege that they retained attorney Lester J. Marston and his law firm of Rapport & Marston to advise and assist them in drafting the joint venture agreement (“JVA”), knowing that the attorneys were representing the tribe, as they believed that their interests were aligned due to the joint venture.
The attorneys, specialists in tribal law, deny any attorney-client relationship with, or performing any legal services for, California Capitalism or Bendapudi.
Breach of Contract
After the JVA was terminated by the tribe for breach of the agreement, the plaintiffs sued attorneys Marston, David J. Rapport, Kostan Lathoruis, and the firm for breach of oral contract and professional negligence, among other causes of action. Each defendant resides and does business in Mendocino County, except for Lathoruis, who lives in Nevada.
After the plaintiffs declined to stipulate to a transfer of the case from San Bernardino County to Mendocino County, the defendants filed a change of venue motion.
On Jan. 5, 2022, Alvarez granted the motion to change venue and ordered the case transferred to the Mendocino Superior Court. Plaintiffs paid the transfer fees and did not challenge the order.
The judge then granted the defendant’s motion to dismiss on Feb. 7, 2022, concluding the court lacked subject matter jurisdiction given the sovereign immunity afforded to the tribe. The plaintiffs appealed the dismissal and a Feb. 4, 2022 order granting attorney fees related to the litigation of the change of venue motion.
The defendants filed a cross-appeal on the attorney fee order.
Jurisdictional Constraint
Plaintiffs do not challenge the order transferring the case to Mendocino County but argue that the court lacked authority to rule on the defendant’s motion to quash/dismiss the case after granting the change in venue.
Citing California Code of Civil Procedure §399, McKinster agreed with their assertion, writing:
“Under the current statutory scheme, the order granting defendants’ change of venue motion did not automatically vest the transferee court with jurisdiction over the case or completely divest the transferor court of jurisdiction.
“Even though a change of venue order no longer automatically divests the transferor court of jurisdiction, the transferor court’s authority to act until the case is fully transferred remains limited.”
He continued:
“An order granting a motion to quash/dismiss based on Tribal sovereign immunity is hardly a matter incidental to or ancillary to the change of venue order. Instead, defendants defend the order by pointing to the trial court’s authority to reconsider or vacate interim orders…. True, the trial court could have reconsidered and vacated the change of venue order before it ruled on the motion to quash/dismiss, but that is patently not what occurred here. This was error.”
Public Policy
The defendants contend that the transferor court, as a matter of policy, should retain jurisdiction to address emergency matters to prevent irreparable harm to the parties before the case is fully transferred.
Sympathetic with the sentiment, McKinster said “[w]e wholeheartedly agree” and noted that “the interests of justice counsel that the transferor court may, on its own motion or on the motion of a party, either set aside or reconsider the change of venue order for the limited purpose of ruling on requests for temporary restraining orders and other emergency ex parte matters.”
However, the jurist remarked:
“But this does not help defendants either. The motion to quash/dismiss was not an emergency or ex parte matter, and, to repeat, the trial court did not vacate or reconsider the change of venue order beforehand.”
Attorney Fees
Code of Civil Procedure §396b authorizes the award of attorney fees to the prevailing party on a change in venue motion upon a consideration of two factors—whether an offer to stipulate to the change of venue was reasonably made and rejected, and whether the motion or selection of venue was made in good faith.
McKinster pointed out that if the court finds that no reasonable attorney would have honestly chosen the forum and the selection appears to have been made to interfere with a defendant’s right to defend, attorney fees are proper.
The justice said:
“[T]he trial court found plaintiffs did not act in good faith when they filed the lawsuit in San Bernardino because Marston and his firm performed all their legal services from their Mendocino County office, and not in San Bernardino. That finding is amply supported by the record.”
He added:
“Plaintiffs provided no persuasive evidence, other than Bendapudi’s declaration, to demonstrate the parties had orally agreed the alleged legal representation would be performed in San Bernardino County. The primary role for which plaintiffs allegedly retained defendants was to negotiate and draft the JVA, and the evidence demonstrates that work was performed by defendants entirely in their office located in Mendocino County.”
Fees for Self-Representation
McKinster pointed out that “it is well settled that a self-represented attorney litigant who represents no other parties in the litigation cannot recover his or her attorney fees.” Marston argues that he was not self-represented because another lawyer acted as the attorney of record and Marston merely assisted in the motion to change venue due to a time-crunch with the filing.
Rejecting that technical argument, he said:
“[T]he billing records submitted in support of the fee motion indicate Marston performed the lion’s share of the legal research and drafting work on the motion. Marston’s decision to take the lead and prepare the change of venue motion himself may have been practical under the circumstances, but we cannot say the trial court abused its discretion by treating him like any other self-represented attorney who cannot recover fees for his own work.”
However, he said that the rule “does not preclude Marston’s codefendants from recovering their attorney fees for the work Marston performed on their behalf when drafting the change of venue motion.”
The case is California Capitalism Associates, LLC v. Marston, E078759.
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