Filed 10/21/19 Clean Battery Recycling Inc. v. Akkuser Oy CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

CLEAN BATTERY RECYCLING, INC., ET AL.,

Plaintiffs and Appellants,

v.

AKKUSER OY, ET AL.,

Defendants and Respondents.

A156170

(Alameda County

Super. Ct. No. RG12645044)

Clean Battery Recycling, Inc. (Clean Battery) and Lawrence B. Landman (Landman) appeal from a judgment and a post-judgment order denying their motion to vacate the judgment. They contend their motion to vacate the judgment was brought pursuant to Code of Civil Procedure sections 473 and 1286.2 and the inherent power of the court (§ 187), so the court erred in ruling that the motion was in substance an untimely motion for reconsideration (§ 1008, subd. (a)). We will affirm the post-judgment order and conclude that any challenge to the judgment itself is untimely.

I. FACTS AND PROCEDURAL HISTORY

Respondent Akkuser Oy (Akkuser) is a battery recycling company in Finland. Respondent Jarmo Pudas (Pudas) is a former officer of Akkuser.

In December 2008, Pudas (on behalf of Akkuser) and appellant Landman (doing business as The Interagan Technology Group) signed two agreements related to the establishment of Clean Battery. A shareholders agreement provided that Akkuser and Landman would each own one-half of Clean Battery, and Pudas and Landman would share board and management positions. A license agreement granted Clean Battery “an exclusive license to use the Intellectual Property relating to [Akkuser’s] Battery Technology” (Technology) in a defined “Territory,” in exchange for a royalty payment to Akkuser. Essentially, Landman was to obtain third-party funding for Clean Battery, which would exploit Akkuser’s Technology in North America and parts of Europe.

The shareholders agreement and license agreement (Agreements) provided that they would be construed according to Finnish law and any dispute relating to either agreement would be settled by arbitration conducted by the Arbitration Institute of the Central Chamber of Commerce of Finland.

A. Landman and Clean Battery’s Complaint

In August 2012, individually and on behalf of Clean Battery, Landman filed a complaint in the superior court against Akkuser and Pudas for breach of fiduciary duty, constructive fraud, fraud, deceit, and usurpation of corporate opportunity.

Landman alleged that he had attempted to persuade the Rechargeable Battery Recycling Associations of the United States and Canada (RBRC) and two associated companies, Inmetco and Wistron, to adopt Akkuser’s Technology. As his efforts neared fruition, however, Akkuser allegedly breached the Agreements by negotiating directly with RBRC, Inmetco, and Wistron for the use of the Technology. In addition, Landman claimed to have engaged in years of discussions about the Technology with Gemeinsames Rücknahme System (GRS), a German battery collection association, before GRS entered into a contract directly with Akkuser in October 2011. Landman further alleged that he had similar discussions with battery collection associations in other countries, and Akkuser tried to make direct agreements with those associations as well.

Landman complained to Pudas about the GRS agreement, and Akkuser wrote the following to Landman in a June 29, 2012 letter: “The [Agreements] have never been put to [sic] force. None of the parties have conducted [sic] according to the agreements. [¶] The agreements are invalid and therefore we see that all the parties are free from any terms and conditions of the agreements which means that none of the parties may have any demands due to the agreements.”

B. Arbitration Award (February 2014)

In December 2012, the court ordered the matter to arbitration pursuant to the arbitration provision in the Agreements.

On February 5, 2014, the arbitrator issued his Final Award. He dismissed the claims against Pudas, finding that Pudas was not a party to the Agreements. He then ruled for Akkuser on the merits.

The arbitrator found that, as a pre-condition for any substantial use of the rights granted by the Agreements, Clean Battery had to obtain third-party funding to set up and conduct a battery recycling business. Clean Battery did not obtain any third-party funding or engage in any operational activities of substance, and, the arbitrator found, there was no persuasive evidence that investors could be expected to provide funding to Clean Battery in the near future. Due to Landman’s failure to secure outside funding for Clean Battery, the Agreements were unenforceable at the time of Akkuser’s June 2012 letter. Because the Agreements had not granted Landman or Clean Battery a right to sublicense the Technology, Akkuser had maintained the sole right to negotiate with third parties for the use of it, and neither the GRS agreement nor Akkuser’s other actions breached the Agreements or Akkuser’s fiduciary duty as a Clean Battery shareholder.

The arbitrator declared Akkuser the prevailing party and ordered Landman and Clean Battery to pay Akkuser 50,000 euros in legal costs with interest, plus 15,000 euros in arbitration fees.

C. Confirmation Proceedings and Superior Court Judgment

1. Court Confirms Arbitration Award (June 2014)

In May 2014, Akkuser petitioned to confirm the Final Award of the arbitrator and enter judgment. Landman and Clean Battery opposed the petition, arguing the arbitration award had been “procured by corruption, fraud or other undue means” within the meaning of section 1286.2, subdivision (a)(1), because Akkuser withheld evidence that Wistron was interested in investing in Clean Battery in 2013 and falsely told the arbitrator that Clean Battery had no prospect of obtaining third-party financing.

In addition, Landman and Clean Battery filed a motion to “Confirm Arbitration Award and Partially Vacate Order Compelling Arbitration,” asking the court to confirm an interim arbitration award that had dismissed Pudas as a party to the arbitration and to vacate the portion of the court’s order that had compelled arbitration of the claims against Pudas. Landman and Clean Battery also filed a motion to “Partially Confirm and Partially Correct Arbitration Award.”

All motions were set for hearing, and the court issued tentative rulings that the parties did not contest. On June 26, 2014, the court confirmed the tentative rulings in written orders that (1) granted Akkuser’s petition to confirm the Final Award of the arbitrator, finding specifically that Landman and Clean Battery had not shown the arbitration award should be vacated or modified under sections 1286.2 and 1286.6 due to corruption, fraud or other undue means; (2) denied Landman and Clean Battery’s motion to confirm the interim arbitration award and vacate the order compelling arbitration; and (3) denied Landman and Clean Battery’s motion to partially confirm and partially correct the arbitration award “for the reasons set forth in the court’s order granting the defendants’ Petition to Confirm Arbitration Award in full.” The court clerk served notice of the orders on June 27, 2014.

2. Appellants’ First Appeal

In July 2014, Landman appealed from the December 2012 order compelling arbitration and all three June 2014 orders. In October 2015, this court dismissed the appeal because the orders were not immediately appealable and no final judgment had been entered.

3. Judgment for Akkuser (April 2016)

In April 2016, the trial court entered judgment “for [Akkuser and Pudas] in conformity with the arbitration award” and provided that Akkuser and Pudas “shall jointly and severally recover from [Clean Battery and Landman] the sum of EUR 50,000.00 together with interest.”

4. Order Denying Appellants’ Motion to Vacate Judgment (June 2016)

In May 2016, Landman and Clean Battery filed a motion to vacate the judgment pursuant to sections 187 and 663. As relevant here, they renewed their arguments that Akkuser committed fraud during the arbitration by withholding discovery and making false statements, and further contended that respondents lied in court filings to cover it up.

On June 28, 2016, the court (Judge Pulido) denied the motion because it was “in essence a Motion for Reconsideration of the orders of the Judge John M. True, III, dated June 26, 2014. See CCP 1008(a).” The court stated: “In order to request reconsideration, Plaintiffs are required to show that the earlier rulings are called into question because of ‘new or different facts, circumstances or law.’ See Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 691. Plaintiffs[’] arguments presented in their papers filed on May 26, 2016 are the same as those advanced in their earlier motions filed on April 18, 2014 and May 12, 2014.” The court clerk served notice of the order on June 30, 2016.

5. Second Appeal: Affirmance of Judgment and Orders (March 2017)

In July 2016, Clean Battery and Landman appealed from the April 2016 judgment and the June 2016 order denying their motion to vacate the judgment (appeal number A148862). They argued, among other things, that the arbitration award was “procured by corruption, fraud or other undue means” (§ 1286.2, subd. (a)(1)), such as discovery abuse and false statements by Akkuser and Pudas. They also argued that the judgment should be reversed as to Pudas, because the arbitrator had not resolved the claims against him on the merits.

On March 16, 2017, we rejected the argument that the arbitration award was procured by fraud and that the motion to vacate should have been granted, affirming the judgment in favor of Akkuser. (We reversed the judgment as to Pudas, because the claims against him had not been adjudicated.) As relevant here, we concluded as follows.

a. Arbitration Award Not Procured by Fraud

As they had argued in opposition to respondents’ petition to confirm the award, Landman and Clean Battery insisted that Akkuser withheld documents in discovery and falsely told the arbitrator that Landman never found companies interested in investing in Clean Battery. Because the arbitrator had not ordered respondents to produce the documents, however, there was no discovery abuse. Furthermore, appellants failed to show they were unable to obtain the documents during the arbitration or that withholding the documents materially affected the proceedings. (See Pour Le Bebe, Inc. v. Guess? Inc. (2003) 112 Cal.App.4th 810, 830 (Pour Le Bebe).)

Landman and Clean Battery further contended that Pudas had submitted a sworn witness statement to the arbitrator that “it became clear that [Clean Battery] would not get financing and starting the business was totally impossible.” They contended that a withheld document showed this statement was false, but we disagreed. They also contended that Akkuser’s attorney had falsely told the arbitrator that Akkuser had no documents related to Wistron, but the attorney had actually stated merely that there were no documents regarding other agreements.

b. Motion to Vacate the Judgment Meritless

Landman and Clean Battery argued that the judgment should have been vacated because Akkuser did not produce a document responsive to another discovery request. We concluded the request was ambiguous, and the failure to produce the document was not the sort of immoral or illegal behavior encompassed by section 1286.2, subdivision (a)(1). We therefore upheld the trial court’s rejection of the fraud argument appellants had made in their motion to vacate the judgment.

D. Subsequent Proceedings

The remittitur in appeal number A148862 issued in May 2017. Over a year later, Landman and Clean Battery filed another motion to vacate the judgment, which is the subject of this appeal.

1. Order Denying Renewed Motion to Vacate Judgment (November 2018)

On or about August 15, 2018, Landman and Clean Battery filed a “Notice of Motion to Vacate Judgment,” purportedly under section 473, section 1286.2, and the trial court’s “general equitable powers, see e.g. CCP § 187 and Slater v. Shell Oil Co., 39 Cal.App.2d 535, 103 P.2d 1043 (1940).” They claimed that Akkuser committed fraud upon the trial court and this court by failing to disclose the interest of Inmetco, Wistron, and the RBRC.

Essentially, appellants contended that the arbitrator, in finding that Landman failed to achieve the purpose of the Agreements and the Agreements were thus unenforceable, had relied on Pudas’s sworn witness statement, in which he stated that in June 2012 Landman had failed in his efforts to get funding for Clean Battery. Further, Akkuser had told the arbitrator that there was “a permanent force majeure situation” such that Clean Battery could never get funding. After the March 2017 appellate decision allowed the action to proceed against Pudas, Landman and Clean Battery obtained discovery supposedly showing that Wistron, Inmetco and RBRC were interested in Clean Battery’s “intellectual property” in June 2012, due to Landman’s efforts. This, appellants believe, proved that in June 2012 Landman had not “failed,” and Pudas’s statement was therefore untrue.

The court (Judge Pulido) denied Landman and Clean Battery’s motion to vacate the judgment on November 8, 2018: “Plaintiffs’ motion is denied because it is in essence a Motion for Reconsideration of the orders of the Court, dated June 26, 2014 and June 28, 2016. In order to request reconsideration, Plaintiffs are required to show that the earlier rulings are called into question because of ‘new or different[] facts, circumstances or law.’ Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 691 (party must also show why the arguments could not have been made prior to the entry of judgment). Plaintiffs have not timely made their required showing. See CCP § 1008(a).”

The court continued: “In addition, Plaintiffs’ Motion to Vacate must be denied because the Court’s June 18, 2016 order denying Plaintiffs’ earlier Motion to Vacate was considered by the Court of Appeal and affirmed on March 16, 2017. The Court takes judicial notice of the opinion of the Court of Appeal. See Evidence Code §§ 452 and 453; and Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264–266. The portion of the opinion addressing Plaintiffs’ argument that the arbitration award was obtained by fraud committed by Akkuser Oy and Jarmo Pudas appears on pages 15 to 19 of the opinion.”

2. Current Appeal

Landman and Clean Battery filed a notice of appeal, purporting to appeal from the post-judgment order of November 8, 2018 and from the “Judgment of April 21, 2016.”

II. DISCUSSION

A. Appellants’ Appeal from the Judgment

Appellants purport to appeal from the April 2016 judgment. They previously appealed from that judgment, which this court affirmed as to Akkuser in March 2017. Appellants do not provide any legal authority for a second appeal from the judgment.

In any event, appellants’ notice of appeal from the judgment is untimely. The judgment was entered on April 21, 2016. The notice of appeal was due no later than 180 days after entry, namely, October 18, 2016. (Cal. Rules of Court, rule 8.104.) Appellants’ current notice of appeal was filed on January 7, 2019.

In light of the foregoing, we will strike the notice of appeal to the extent it purports to challenge the April 2016 judgment.

B. Appellants’ Appeal from Post-Judgment Order of November 2018

As mentioned, the court’s November 2018 order denied appellants’ August 2018 motion to vacate the judgment, concluding that it was really a motion for reconsideration (§ 1008, subd. (a)) that was not timely filed. Appellants complain that they brought the motion under section 473, section 187 and the inherent power of the court, and section 1286.2. We consider each of the possibilities.

1. Motion for Reconsideration (§ 1008)

Section 1008, subdivision (a) limits the extent to which a party may request reconsideration of an order. It provides: “When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Italics added.)

Section 1008 is “the exclusive means for modifying, amending or revoking an order” and is jurisdictional. (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1499; see Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 838–840.) As subdivision (e) of section 1008 states: “This section specifies the court’s jurisdiction with regard to applications for reconsideration of its orders and renewals of previous motions, and applies to all applications to reconsider any order of a judge or court, or for the renewal of a previous motion, whether the order deciding the previous matter or motion is interim or final. No application to reconsider any order or for the renewal of a previous motion may be considered by any judge or court unless made according to this section.” (Italics added.)

a. Appellants’ Motion Was Subject to Section 1008

The court did not err in concluding that the August 2018 motion was in substance a motion for reconsideration under section 1008, subdivision (a). Appellants’ motion contended that the judgment should be vacated because the award was obtained by fraud. This is the same relief appellants sought in their May 2016 motion to vacate the judgment, which was denied by the June 2016 order. Moreover, it was the same general argument that appellants made in their opposition to respondents’ motion to confirm the arbitration award, which the court rejected in June 2014, and it requested the same relief appellants sought in their petitions filed during the proceedings to confirm the arbitration award, which the court denied in June 2014. Therefore, appellants’ August 2018 motion sought in substance to “modify, amend or revoke” the June 2016 and June 2014 orders. (§ 1008, subd. (a).) Indeed, in their August 2018 motion, appellants represented: “The accusations Plaintiffs make in the current motion—that Pudas lied in this ‘Written Witness Statement’—are identical to the ones Plaintiffs made when opposing [Akkuser’s] motion to confirm the arbitration award.”

The August 2018 motion was thus subject to section 1008 and could not have been brought under any other statute. (Gilberd, supra, 32 Cal.App.4th at p. 1501; see Powell v. County of Orange (2011) 197 Cal.App.4th 1573, 1577 [“The name of a motion is not controlling and, regardless of the name, a motion asking the trial court to decide the same matter previously ruled on is a motion for reconsideration under [§] 1008.”]; Lennar Homes of California, Inc. v. Stephens (2014) 232 Cal.App.4th 673, 681–682 [motion for clarification of order deemed a motion for reconsideration because it was “largely a vehicle for rehashing and expanding arguments previously made, and citing authority that either was, or could have been, presented to the trial court previously”].)

Appellants insist they were not seeking to vacate any order, but seeking to vacate the April 2016 judgment. But by seeking to vacate the April 2016 judgment on the ground of fraud—the same ground and relief the court rejected in its June 2014 and June 2016 orders—they were in effect seeking to “modify, amend, or revoke” those orders, thus falling within the ambit of section 1008, subdivision (a).

Appellants further urge that a court has no jurisdiction to entertain a motion for reconsideration after a judgment has been entered. (Sole Energy Co. v. Petrominerals Corp. (2005) 128 Cal.App.4th 187, 192-194.) The argument is twice flawed. First, that rule bars reconsideration of orders made before the judgment. (D.R.S. Trading Co., Inc. v. Barnes (2009) 180 Cal.App.4th 815, 820.) Here, appellants’ August 2018 motion to vacate the judgment sought reconsideration of, in part, the June 2016 post-judgment motion to vacate the judgment. The court may reconsider a post-judgment motion after the judgment. (Id. at pp. 820–821.) Second, whether or not a court lacks jurisdiction to grant reconsideration after it enters judgment, the fact remains that appellants’ August 2018 motion requested in substance that the court do just that.

b. No Appeal Lies from the Order Denying Reconsideration

Because the August 2018 motion to vacate was in substance a motion for reconsideration, the court’s November 2018 order denying the motion is not independently appealable. (§ 1008, subd. (g); Annette F. v. Sharon S. (2005) 130 Cal.App.4th 1448, 1459; Tate v. Wilburn (2010) 184 Cal.App.4th 150, 159.)

It is true that, if “the order that was the subject of a motion for reconsideration is appealable, the denial of the motion for reconsideration is reviewable as part of an appeal from that order.” (§ 1008, subd. (g).) But here, the subject of appellants’ August 2018 motion for reconsideration was the June 2016 order denying the earlier motion to vacate the judgment and the 2014 orders pertaining to the confirmation of the arbitration award. None of those orders is currently appealable.

c. The Motion Was Properly Denied Under Section 1008

Even if appellants could obtain review of the November 2018 order, they would lose on the merits: the trial court was plainly correct that their motion was untimely under section 1008. A motion for reconsideration must be brought within 10 days after entry of the order that the party wants reconsidered. (§ 1008, subd. (a).) Here, appellants filed their motion in August 2018, which was far beyond the statutory deadline of “10 days after service upon the party of written notice of entry of the order[s]” in 2014 and 2016. (§ 1008, subd. (a).)

The trial court did not err.

2. Appellants Have No Right to Relief Under Other Sections

Appellants’ attempts to assert a different statutory or equitable basis for their motion are untenable.

a. Statutory Motion to Vacate Judgment (§ 473)

Section 473, subdivision (b) provides: “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Italics added.)

Here, appellants claim their August 2018 motion sought to vacate the judgment that was entered in April 2016. However, the deadline to bring a motion under section 473 was in October 2016, six months after entry of the judgment.

Appellants refer us to County of Los Angeles v. Navarro (2004) 120 Cal.App.4th 246 (Navarro), where the court provided relief even though a motion was not timely under section 473. Navarro, however, did not alter the deadline for filing a section 473 motion; to the extent it provided relief notwithstanding the untimeliness of the motion, it did so pursuant to the court’s inherent power to do equity, which we address next. (Id. at pp. 248–250.)

b. Inherent Power of the Court (§ 187)

Section 187 states: “When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.” Appellants do not provide any legal authority suggesting that the trial court was obliged to vacate the judgment pursuant to section 187 specifically.

Appellants rely more generally on Slater v. Shell Oil Co. (1940) 39 Cal.App.2d 535 to support their argument that a court has “general equitable powers” to grant the relief they seek. Their reliance is misplaced. The court in Slater reversed a judgment of dismissal, not pursuant to the court’s equitable powers, but because (1) a public entity’s transfer of a right-of-way was invalid pursuant to a statute and (2) the trial court in a separate proceeding had erred in transferring the dissolved public utility corporation’s property, which was devoted to public use, to a private corporation that would devote the property to a private use. (Id. at pp. 546–548.) Slater did mention that the corporation’s failure to tell the court (in the other case) that the property was devoted to public use was a “fraud” subjecting the judgment in the other proceeding to collateral attack. (Id. at

p. 548.) Here, however, there is no such issue, since appellants launched a direct appeal from the denial of their motion to vacate the judgment.

Also distinguishable is Navarro, supra, 120 Cal.App.4th 246. There, a default judgment established the defendant’s paternity and required him to pay monthly child support. He filed a motion to vacate the judgment, representing that he never received the complaint and submitting evidence that a blood test indisputably proved he was not the child’s father. The trial court denied the motion as untimely. The appellate court reversed: although the time had passed for relief under section 473, the judgment could not stand because of public policy specific to child support matters and the clear legislative directive that child support agencies not pursue mistaken child support actions. (Id. at p. 249.) Navarro has been superseded by statute. (County of Fresno v. Sanchez (2005) 135 Cal.App.4th 15, 20 [referring to the “amorphous equitable considerations and general policies relied on in Navarro”].) In any event, the situation Navarro addressed bears no comparison to the matter at hand.

c. Arbitration Award Obtained by Fraud (§ 1286.2)

Appellants again argue that the court should have vacated the judgment because the arbitrator’s Final Award was obtained by “corruption, fraud or other undue means” under section 1286.2, subdivision (a)(l). Specifically, they claim that Akkuser made false statements to the arbitrator, which led the arbitrator to believe Landman had failed to obtain funding for Clean Battery, and Akkuser withheld evidence from the arbitrator relating to the interest of third parties in Clean Battery.

Appellants’ reliance on section 1286.2 is misguided. Section 1286.2 sets forth the grounds that may be asserted in a petition to vacate an arbitration award under section 1285. Appellants’ August 2018 motion did not purport to be a section 1285 petition or meet the requirements for such a petition. (See §§ 1285, 1285.4, 1286.4.) Moreover, a section 1285 petition must be filed no later than 100 days after the service of the signed copy of the award on the petitioner. (§ 1288.) Since the Final Award was issued in February 2014, their August 2018 motion was apparently filed years past the deadline for a section 1285 petition, and appellants do not show otherwise.

III. DISPOSITION

The November 2018 order is affirmed. The notice of appeal is stricken to the extent it purports to challenge the April 2016 judgment.

NEEDHAM, J.

We concur.

JONES, P.J.

BURNS, J.

Clean Battery Recycling Inc. v. Oy / A156170