Mayer v. C.W. Driver

120 Cal. Rptr. 2d 535, 98 Cal. App. 4th 48, 2002 Daily Journal DAR 4789, 2002 Cal. Daily Op. Serv. 3813, 2002 Cal. App. LEXIS 4043
CourtCalifornia Court of Appeal
DecidedMay 1, 2002
DocketB114327
StatusPublished
Cited by38 cases

This text of 120 Cal. Rptr. 2d 535 (Mayer v. C.W. Driver) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mayer v. C.W. Driver, 120 Cal. Rptr. 2d 535, 98 Cal. App. 4th 48, 2002 Daily Journal DAR 4789, 2002 Cal. Daily Op. Serv. 3813, 2002 Cal. App. LEXIS 4043 (Cal. Ct. App. 2002).

Opinion

*52 Opinion

VOGEL (C. S.), P. J.

Introduction

In 1984 and 1985, respondents C.W. Driver, a partnership, and C.W. Driver, Inc., a corporation (collectively Driver) constructed an apartment building in Orange County for Huntington Breakers Apartments, Ltd., a limited partnership (HBAL). At the time, appellant Joseph Mayer III (Mr. . Mayer) was a general partner of HBAL, and appellant Eleanor C. Mayer, his wife (Mrs. Mayer), was-a limited partner. In 1985 Driver stopped work and sued HBAL and Mr. Mayer individually as general partner for payment of money due and foreclosure of a mechanic’s lien (the Driver action). HBAL, the Mayers, and other partners cross-complained for construction defects. In 1986 HBAL assigned its rights in “the lawsuit” (the then pending Driver action) “and all successor and replacement actions and suits” to the individual partners, but in the same document those individual partners appointed another entity, Huntington Breakers Managing Partnership (HBMP), irrevocably and coupled with an interest, as their attomey-in-fact having authority to take all actions in connection with “the lawsuit.”

The dispute was submitted to arbitration under the terms of the construction contract. Driver obtained an award against HBAL and Mr. Mayer as general partner; HBAL, through HBMP, settled with Driver over Mr. Mayer’s objection; the Mayers attempted to continue prosecuting their cross-complaint in the Driver action in their own names. Ultimately, Driver obtained a judgment against HBAL and Mr. Mayer as general partner consistent with the settlement agreement and a judgment against the Mayers on their cross-complaint in the Driver action.

In 1995 the Mayers as individuals filed the present action, purportedly as assignees of HBAL, for latent construction defects discovered in the preceding three years, against Driver and others. By nonjury bifurcated trial on Driver’s affirmative defense, the court found that the Mayers have no standing to bring the present action. The court found (1) the Mayers have no standing as partners of HBAL, (2) they did not prove an oral assignment, and (3) although , the present action is a “successor and replacement action” within the meaning of the 1986 assignment of HBAL’s interest in the Driver action, the Mayers are bound by their appointment of HBMP, irrevocably and coupled with an interest, as their attomey-in-fact for the purpose of pursuing or not pursuing this action.

The Mayers appeal from the judgment. Relying on the 1986 assignment to them of HBAL’s interests in the Driver action and successor actions, they *53 contend that the present action is a successor and replacement action to the Driver action, but that their appointment of HBMP as their attomey-in-fact was not binding. They assert that the appointment was not irrevocable or coupled with an interest, or that they revoked this appointment, or that they have standing even if bringing the present action violated their agreement to such appointment. They also contend they have standing independent of the 1986 assignment. Driver cross-appeals from postjudgment orders denying Driver’s motions to change one of the findings in the statement of decision and for an award of contractual attorney fees. Driver contends the trial court should have found the present action is not a successor to the Driver action, or, if the present action is a successor action, the court should have awarded Driver contractual attorney fees.

We affirm the judgment. The present action is not a successor and replacement of the Driver action. Although the trial court erroneously concluded it is a successor action, the trial court reached the correct result that the Mayers lack standing under the 1986 assignment or any other basis; therefore, the trial court’s judgment will be affirmed. The trial court also reached the correct conclusion Driver is not entitled to attorney fees in the present action.

Factual and Procedural Background

HBAL was formed in 1983 for the purpose of developing real property. The general partners were Mr. Mayer and Wilmore City Development, Inc., a corporation, of which Steven Semingson was president. The limited partners were Mrs. Mayer, Rose Marie Semingson, and Daniel Young.

In May 1984, HBAL contracted with Driver for construction of a 342-unit apartment complex. A certain guarantee and indemnity agreement in favor of Driver was executed by Mr. Mayer, Steven Semingson, and Daniel Young, each individually and on behalf of HBAL, and by Mrs. Mayer and Rose Marie Semingson, each individually.

In August 1985, a first amended and restated agreement of limited partnership added a new limited partner, Pacifica, reformulated the percentage interests of various partners, and named HBMP to function as the managing general partner. 1 HBMP as managing general partner had exclusive control of the day-to-day business affairs of the partnership and exclusive rights and powers of a general partner. HBMP obtained a 1 percent ownership interest.

In October 1985 Driver filed a mechanic’s lien claim, and in December 1985 filed the Driver action, a complaint against HBAL and its partners and *54 guarantors to foreclose a mechanic’s lien and to compel arbitration pursuant to the arbitration agreement in the construction contract. HBAL and its partners and guarantors filed a cross-complaint, essentially for breach of contract and defective construction. The Driver action was in arbitration between March 1986 and October 1990. The arbitration award was in favor of Driver on its claim and against the cross-claimants.

During proceedings to confirm the arbitration award, a settlement was reached by parties other than the Mayers, in which Driver would obtain judgment against HBAL, and the others would dismiss their cross-complaint in the Driver action. HBMP agreed to the settlement over Mr. Mayer’s dissenting vote. Driver moved to enforce the settlement agreement and obtained judgment thereon in December 1993. The Mayers refused to dismiss their cross-complaint in the Driver action, and in August 1994 the Orange County Superior Court ordered summary judgment in favor of Driver on the cross-complaint as to the Mayers. The Mayers appealed the judgments enforcing the settlement agreement and against them on their cross-complaint. Ultimately, in June 1997, these judgments were affirmed on appeal by the Court of Appeal for the Fourth Appellate District, Division Three.

While the Driver action was in arbitration, HBAL was reorganized in order to bring in capital and a new partner, the August Income/Growth Fund VIU (August), pursuant to the second amended and restated agreement of limited partnership of December 31, 1986. August became the managing general partner with exclusive control of the day-to-day affairs of HBAL. August did not wish to become involved in the Driver action. To meet August’s requirements, an assignment of HBAL’s interest in the Driver action was concurrently executed on December 31, 1986. This is the assignment on which the Mayers primarily rely on this appeal.

The December 31, 1986 assignment provides as follows: The assignment is by HBAL as assignor, to the following assignees: Wilmore City Development, Inc., Mr. Mayer, Mrs.

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120 Cal. Rptr. 2d 535, 98 Cal. App. 4th 48, 2002 Daily Journal DAR 4789, 2002 Cal. Daily Op. Serv. 3813, 2002 Cal. App. LEXIS 4043, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mayer-v-cw-driver-calctapp-2002.