Unreported / Non-Citable
Background
Karl Lowry and Hope and Trust Trading, Inc. and Seyedjalil Firoozabadi, collectively Trading, disputed liens involving a Temecula property owned by Anke Ciling and two agricultural parcels. Trading alleged that Lowry and the Cilings used deeds of trust and transfers to shell entities to conceal equity and obstruct collection of a Los Angeles judgment exceeding $2.6 million. Lowry sought reinstatement and priority for two deeds of trust, while Trading's amended cross-complaint sought declarations that those and other deeds were void, damages, and punitive damages. The opinion recounts these as allegations and procedural history, not findings that fraud occurred.
On July 17, 2025, Ultim8 Equities, LLC applied ex parte to intervene, relying on a contract under which Blue Vibe, LLC promised cash-secured deeds of trust as part of a larger transaction. Judge Frederick Paul Horn denied the application at a July 18, 2025 hearing, and Ultim8 appealed in E086596. While that appeal was pending, Judge Raquel Marquez entered on August 12, 2025 a stipulated judgment resolving matters between Lowry and Trading and a default judgment against Sammy Ciling, Anke Ciling, and Tekfur, LLC. The default judgment declared void Wife's homestead exemption on the Property, awarded Firoozabadi the titles to the Land Properties including any crops, ordered a $950,000 payment credit on the Los Angeles judgment, and made a specific finding that Ultim8's claims were without merit. The Cilings and Tekfur appealed that judgment in E086740.
The Court’s Holding
The court affirmed the intervention ruling without choosing between de novo and abuse-of-discretion review. Ultim8 bore the burden to establish an interest supporting mandatory intervention under Code of Civil Procedure section 387. Its contract showed Blue Vibe's promise to provide security, and its chief executive described an interest, but neither the declaration nor the appendix established that Blue Vibe actually assigned the deeds of trust. The evidentiary gap defeated intervention under either standard. The court also denied Trading's request for attorney's fees as a frivolous-appeal sanction because Trading did not explain why the appeal was frivolous, and it did not decide mootness after rejecting the appeal on the merits.
The court nevertheless reversed the default judgment in E086740. Trading's mootness argument implied that the later judgment had undermined Ultim8's appeal, prompting the court to examine section 916's automatic stay. The default judgment concluded that Ultim8's claims lacked merit and transferred the Land Properties to Firoozabadi, which would have prevented that disposition from being effective if the intervention order had been reversed. The default judgment therefore embraced or affected the order appealed and is void. The appellate court did not reach the Cilings' and Tekfur's substantive challenges; its jurisdiction was limited to reversing the void acts. The reversal was not an unqualified reversal permitting the entire case to start over, but returns the parties to the status quo prior to the entry of the default judgment, with the defaulted parties still in default. Trading's new argument at oral argument that the intervention order was nonappealable was rejected as untimely.
Key Takeaways
- A proposed intervenor must prove the interest on which mandatory intervention depends, not merely produce a contract promising a future assignment.
- The court resolved the intervention appeal without settling the disputed standard of review because the evidence failed under either standard.
- A default judgment that restricts the appellate court's ability to grant effective relief in a pending related appeal can violate section 916 and be void.
- Reversal returns the parties to the status quo prior to the default judgment, leaving the defaulted parties still in default rather than reopening the entire case.
- The court denied sanctions, declined to decide mootness, and refused to consider Trading's appealability theory raised for the first time at oral argument.
Why It Matters
The decision separates the merits of intervention from the protective effect of an appeal: Ultim8 lost its request to intervene, yet its pending appeal still limited the trial court's power to enter a judgment affecting the same claimed interests. The disposition awarded respondents costs in E086596 and appellants costs in E086740. It left the merits of the default-judgment challenges unresolved and did not disturb the stipulated judgment through its express disposition.
The ruling illustrates how section 916's automatic stay operates even when the underlying appeal ultimately fails on the merits. The trial court's entry of a default judgment that resolved the very interests at stake in the pending intervention appeal deprived the appellate court of the ability to grant effective relief, rendering that judgment void. The court's limited reversal returns the parties to the status quo prior to the default judgment, leaving the defaulted cross-defendants still in default and preserving the stipulated judgment between Lowry and Trading.