Filed 11/7/19 Mitchell v. Buehler Family Bakersfield, LLC CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIFTH APPELLATE DISTRICT

DENNIS MITCHELL et al.,

Plaintiffs, Cross-defendants

and Appellants,

v.

BUEHLER FAMILY BAKERSFIELD,

LLC et al.,

Defendants, Cross-complainants

and Respondents;

DONNE RECOVERY, LLC,

Respondent.

F074897

(Super. Ct. No. S1500CV278034)

OPINION

THE COURT*

APPEAL from a judgment of the Superior Court of Kern County. Lorna H. Brumfield, Judge.

Darling & Wilson, Joshua G. Wilson and David A. Cole for Plaintiffs, Cross-defendants and Appellants.

Jean M. Pledger for Defendants, Cross-complainants and Respondents Buehler Family Bakersfield, LLC and Florene Dix Blackwelder.

Chora Young, Paul P. Young, Joseph Chora and Armen Manasserian for Respondent Donne Recovery, LLC.

-ooOoo-

This matter comes before the court following this court’s order granting appellants Dennis and Antoinette Mitchell (the Mitchells) an opportunity to demonstrate they are in or have come into compliance with the requirements of the agreement they entered into with Donne Recovery, LLC (Donne) to settle several actions previously pending between the parties. This court’s December 12, 2018 order detailed the various actions between the parties and the Mitchells’ subsequent actions to thwart not only the initial claims, but also Donne’s efforts to collect the judgment ultimately entered against them. The factual and legal discussion from this court’s prior order is adopted and incorporated as if fully set forth herein.

FACTUAL AND PROCEDURAL BACKGROUND

Previously, this court concluded “that the Mitchells have, in fact, been engaging in obstructive tactics designed to thwart enforcement of what was previously a potential future and is now a pending judgment.” In line with that finding, this court concluded the pending matter was one of those rare instances where the disentitlement doctrine could be appropriately invoked against the Mitchells. While initially hesitant to grant such relief, because the Mitchells had entered into a settlement agreement with Donne that, on its face, provided adequate security for this appeal, this court noted that Donne had already alleged breach of that agreement and recognized that should “the Mitchells fail to demonstrate compliance [with the settlement agreement] their appeal shall be dismissed.”

On January 14, 2019, the Mitchells filed their “proof of compliance” with the settlement order. The Mitchells alleged they had made the monetary payments required by the settlement, all parties had dismissed the actions between them aside from the underlying appeal in this matter, and that nine deeds of trust had been recorded securing the balance of the judgment. The Mitchells attached numerous documents supporting their claim. However, the Mitchells also identified several ongoing disputes between the parties and wrote that their agent “signed all nine deeds of trust and delivered them to First American Title for recording on January 7, 2019.” The Mitchells also stated that their agent “has also pledge[d] to put up an additional $2 million from the sale of a separate piece of property to be deposited into escrow for Donne’s benefit … to satisfy any ongoing concerns about the adequacy of the security.”

Donne responded on January 25, 2019, submitting its own series of exhibits and declarations, a request for judicial notice, and objections to the Mitchells’ submissions. Donne raised a litany of complaints with the Mitchells’ compliance claim. These included assertions that the Mitchells were in complete breach under the express terms of the agreement as far back as July 22, 2018, evidence that the Mitchells admitted to being out of compliance with the agreement at a hearing occurring while this court was considering the motion to dismiss under the disentitlement doctrine, and a large number of factual disputes concerning the Mitchells’ calculations regarding the value of the properties now allegedly securing the judgment. Finally, Donne raised what it saw as additional misrepresentations and attempts at avoiding judgment.

DISCUSSION

This court has reviewed the submissions and arguments from both sides. Notably and unsurprisingly, there are many factual disputes between the parties regarding compliance. The Mitchells have clearly taken some steps toward satisfaction and securement of the judgment, but Donne is properly cautious that the various flaws uncovered and missteps along the way are consistent with the Mitchells’ well-documented practices of pursuing all avenues to avoid judgment. This court is cautious about delving into substantial factual disputes regarding compliance with a settlement agreement enforceable by a different court. Accordingly, this court will not attempt to resolve many of the factual disputes raised by Donne.

Looking at the evidence submitted, however, the court agrees with Donne that the Mitchells could not claim any form of compliance with the settlement agreement prior to the date they recorded the deeds called for in the agreement, January 7, 2019. The court further agrees the Mitchells failed to provide sufficient evidence regarding the appraised value of several of the properties offered to satisfy the judgment, evidence needed to demonstrate they had secured the more than $7 million required. Notably, in response, Donne submitted appraisal reports for seven properties where the Mitchells did not submit evidence. These documents show that the total value secured (exclusive of any remaining mortgages or liens, over which there are several disputes regarding validity) is $6,595,000, a number below that required by the settlement agreement. The Mitchells’ own briefing appears to recognize the nine properties do not adequately meet their obligations, as shown by their desire to include another $2 million in value from an undisclosed proposed property sale to satisfy their duty.

Accordingly, the Mitchells have failed to prove that they have provided sufficient security for the judgment against them. Donne’s response and the Mitchells’ own submissions show they were not in compliance by this court’s deadline. The Mitchells’ long standing and well-documented refusal to comply with the judicial process left them properly facing dismissal of their suit under the disentitlement doctrine. Only by demonstrating they had fully changed their course of conduct in the time between the filing of the motion to dismiss under the disentitlement doctrine and the deadline in this court’s prior order—a period in which the settlement agreement was entered into and should have been fully completed—could they potentially tip the equitable balance back toward hearing their appeal on the merits. Incomplete attempts at compliance only after being told by this court that their conduct warranted dismissal is not sufficient to return the equitable balance to their side.

The Mitchells have failed to demonstrate compliance with the terms of the settlement agreement from United States Bankruptcy Court, District of Nevada, case No. 17-12318, requiring them to pay certain funds and provide real estate as security for the judgment against them in the California trial court case No. S1500CV278034. For the reasons set forth in this court’s prior order, the disentitlement doctrine bars the Mitchells’ appeal.

DISPOSITION

IT IS HEREBY ORDERED that Donne’s March 1, 2018 motion to dismiss under the disentitlement doctrine is GRANTED with respect to appellants Dennis and Antoinette Mitchell and DENIED, without prejudice, with respect to appellants Mitchell Oil and Dennis Mitchell Oil. The previously ordered stay is lifted. Any opening brief shall be filed 30 days from the filing date of this opinion.