Stan Lee Entertainment v. Lee CA2/5

Filed 1/18/22 Stan Lee Entertainment v. Lee CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Calif ornia Rules of Court, rule 8.1115(a), prohibits courts and parties f rom citing or relying on opinions not
certif ied f or publication or ordered published, except as specif ied by rule 8.1115(b). This opinion has not been
certif ied f or publication or ordered published f or purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

STAN LEE ENTERTAINMENT, B309080
INC.,
(Los Angeles County
Plaintiff, Super. Ct. No. 19STCV37703)

v.

JOAN CELIA LEE, as Trustee,
etc.,

Defendant and Respondent;

POW! ENTERTAINMENT, INC.,

Movant and Appellant.

APPEAL from orders of the Superior Court of Los Angeles
County, Gregory Wilson Alarcon, Judge. Reversed.
Hamrick & Evans, A. Raymond Hamrick, III, Charles C.
Rainey and Jamie A. Shepard for Movant and Appellant.
 Freund Legal PC, Jonathan D. Freund and Craig A. Huber
for Defendant and Respondent.
____________________________________

Appellant POW! Entertainment, Inc. (POW!) appeals the
trial court’s orders denying its motion for leave to intervene (Code
Civ. Pro., § 387),1 and its motion to vacate and set aside the
stipulated judgment (§§ 663, 473, subd. (d)) between plaintiff
Stan Lee Entertainment, Inc. (SLE) and defendant and
respondent, Joan Celia Lee (Trustee), as trustee for the Lee
Family Survivor’s Trust “A”, dated June 12, 1985 (the Trust).2
SLE brought suit against the Trust, seeking to compel the
Trust to defend SLE’s intellectual property rights, which the late
renowned comic book creator, Stan Lee, assigned to SLE’s
predecessor in an employment agreement made in 1998 (the 1998
Agreement). SLE and the Trustee agreed to a stipulated
judgment decreeing that SLE owned the intellectual property
rights at issue, and that the Trust had a duty to defend SLE’s
intellectual property rights under the 1998 Agreement.
POW! sought to intervene and set aside the judgment,
claiming that, over the last two decades, multiple federal courts
have held the 1998 Agreement is no longer enforceable. POW!
argued that it is the owner of the intellectual property rights at
issue, which Stan Lee properly assigned to it.
We conclude that POW! is entitled to intervene as of right
pursuant to section 387, subdivision (d)(1)(B), and that POW! has

1 All further
statutory references are to the Code of Civil
Procedure unless otherwise indicated.

2 SLE is not a party to this appeal.

2
demonstrated that the judgment should be vacated and set aside
pursuant to section 473, subdivision (d). The trial court’s orders
are reversed. The trial court is directed to enter an order
granting POW! leave to intervene and to vacate and set aside the
stipulated judgment.

FACTS AND PROCEDURAL HISTORY

Background

In 1998, Stan Lee co-founded SLE and entered into the
1998 Agreement, under which he agreed to assign SLE extensive
rights over existing and future intellectual property, and serve as
chairman, publisher, and chief creative officer of SLE for the
duration of his lifetime. In exchange, Stan Lee was to receive an
annual salary of $250,000, plus bonuses and benefits.3

3 Under the 1998 Agreement, Stan Lee agreed to “assign,
convey and grant to [SLE] forever, all right, title and interest I
may have or control, now or in the future, in the following: Any
and all ideas, names, titles, characters, symbols, logos, designs,
likenesses, visual representation, artwork, stories, plots, scripts,
episodes, literary property, and the conceptual universe related
thereto, including my name and likeness . . . which will or have
been in whole or in part disclosed in writing to, published,
merchandised, advertised, and/or licensed by [SLE], its affiliates
and successors in interests and licensees (which by agreement
inures to [SLE’s] benefit) or any of them and any copyrights,
trademarks, statutory rights, common law, goodwill, moral rights
and any other rights whatsoever in the Property in any and all
media and/or fields, including all rights to renewal or extensions
of copyright and make applications or institute suits therefor . . .
.”

3
 Soon after SLE was formed, it became Stan Lee Media, Inc.
(SLMI). In January 2001, Stan Lee notified SLMI that he was
terminating the 1998 Agreement because SLMI had breached
several provisions, including, but not limited to, failing to provide
him with the salary and benefits he was owed. SLMI declared
bankruptcy on February 16, 2001.
On November 8, 2001, Stan Lee partnered with others to
form POW! Entertainment, LLC, the wholly owned subsidiary of
POW!. Over the next 17 years, Stan Lee assigned rights in his
name and likeness to POW! on multiple occasions. In 2006, 2007,
2008, and 2011, Stan Lee executed multiple consents of use filed
with the United States Trademark and Patent Office, granting
POW! the right to use his name and signature as registered
trademarks.4 Stan Lee also assigned intellectual property rights
to other companies between 2001 and his death in 2018.

Prior Litigation

On January 26, 2009, SLMI shareholders Jose Abadin and
Christopher Ballad, acting on behalf of SLMI, brought suit
against Stan Lee, Marvel Entertainment, Inc. (Marvel), and
others, alleging that Stan Lee violated the terms of the 1998
Agreement by selling intellectual property to Marvel. (Abadin v.
Marvel Entertainment, Inc. (S.D.N.Y., Mar. 31, 2010, No.
09CIV.0715(PAC) [nonpub. opn.] 2010 WL 1257519 at *1
(Abadin).) The court dismissed the case on two bases: (1) Stan
Lee’s obligations were statutorily terminated in 2005 because

4 The trial courttook judicial notice of the filed trademarks
and prior court decisions discussed herein.

4
California law limits personal service contracts to seven years
(Cal. Labor Code, § 2855a), and (2) SLMI’s claims were barred by
the statutory limit of four years, laches, and estoppel, because
Stan Lee wrote to SLMI terminating the 1998 Agreement for
breach of contract in January 2001 and had been using his own
characters since 1999; SLMI could not wait a decade to enforce
its alleged rights. (Id. at *6.)
Notwithstanding the Abadin court’s statement that “[t]here
can be no attempt to enforce this contract beyond the statutory
term,” (Abadin, supra, 2010 WL 1257519 at *6), SLMI attempted
to litigate the issue in multiple federal courts. Subsequent
decisions were in agreement that Abadin precluded SLMI from
re-litigating the same alleged intellectual property claims. (See
Lee v. Marvel Enterprises, Inc. (S.D.N.Y. 2011) 765 F.Supp.2d
440, 456 [denying SLMI’s motions to intervene, vacate dismissal
order, and amend complaint]; Stan Lee Media Inc. v. Lee (C.D.
Cal., Aug. 23, 2012, No. 2:07-CV-00225-SVW) [nonpub. opn.] 2012
WL 4048871, at *3–*4 [granting Stan Lee’s motion to dismiss];
Stan Lee Media, Inc. v. Walt Disney Co. (D. Colo., Sept. 5, 2013,
No. 12-CV-2663-WJM-KMT) [nonpub. opn.] 2013 WL 4776026, at
*5 [dismissing SLMI’s amended complaint with prejudice];
Disney Enterprises, Inc. v. Entertainment Theatre Group (E.D.
Pa., Oct. 30, 2014, No. CIV.A. 13-5570) [nonpub. opn.] 2014 WL
5483487, at *1 [dismissing SLMI’s intervenor complaint with
prejudice].)
In September 2019, approximately four months before the
parties entered into the stipulated judgment in the present case,
the Trust filed suit against POW! in the U.S. District Court for
the Central District of California (the Federal Action). (Lee v.
POW! Entertainment, Inc. (C.D. Cal. 2020) 468 F.Supp.3d 1220.)

5
As relevant here, the Trust sought declaratory judgments stating
that the Trust was the owner of the intellectual property rights
under the 1998 Agreement and that POW! had no right to utilize
the intellectual property. It also sought to enjoin POW! from
claiming an interest in the intellectual property rights or
otherwise exploiting them subject to the action. The district
court dismissed the Trust’s action, holding that res judicata
barred its claims, and imposed sanctions on the Trust and
counsel for filing a frivolous lawsuit. (Id. at 1227–1235.)

The Present Lawsuit

On October 18, 2019, approximately one month after the
Trust filed the Federal Action against POW!, SLE filed its
complaint against the Trust in the present case, alleging breach
of the 1998 Agreement and seeking a declaratory judgment that
(1) SLE “is the owner of the intellectual property and publicity
rights” of Stan Lee; and (2) the Trust has “a duty and obligation
to ensure [SLE] may exercise and [sic] unfettered right to those
assets.” SLE also sought an affirmative injunction ordering the
Trust to “take further action to reclaim and clear title to the
intellectual property rights subject to this action [as required
under the 1998 Agreement].” The complaint alleged that POW!
was created for the purpose of looting SLE’s intellectual property,
and that the Trust had “a duty to vindicate the rights under [the
1998 Agreement] and undertake to stop others, including POW!,
from falsely claiming and exploiting the same.”
Prior to the initial case management conference, the Trust
entered into a stipulated judgment with SLE. On January 29,

6
2020, the trial court entered the stipulated judgment, which
included the following statements:
“From October 15, 1998 through the date of this order,
Plaintiff [SLE] has been the uninterrupted owner of all rights
assigned [by the 1998 Agreement] including all rights to Stan
Lee’s name and likeness as provided under California law.”
“Defendants shall comply with its [sic] contractual
obligations under the [1998 Agreement] and shall cause any third
parties who Defendants have reason to know are falsely and
erroneously claiming rights now owned by Plaintiff under the
[1998 Agreement], to cease and desist from infringing on
Plaintiff’s rights.”
“Defendants shall perform the duties and obligations that
they have assumed under the [1998 Agreement] and use all legal
means available to it [sic] to cause any and all third parties to act
in a manner that is consistent with Plaintiff’s quiet enjoyment of
the Rights and Property as defined in the [1998 Agreement].”
“This Order shall confirm that the rights, title and interest
to Stan Lee’s name and likeness, as well as any other present or
future Rights contained within the [1998 Agreement], are now
(and have been since October 15, 1998) the exclusive property of
Plaintiff.”

POW!’s Motion to Intervene

On March 25, 2020, Appellant POW! filed its motion for
leave to intervene.5 POW! sought mandatory intervention

5 POW! moved to intervene and vacate the stipulated
judgment in a single motion. The trial court ruled that the
motion constituted two separate motions and was over the page

7
pursuant to section 387(d)(1)(B), and argued that it was an
indispensable party to the action pursuant to section 389.
Alternatively, POW! sought intervention pursuant to the trial
court’s discretion under section 387, subdivision (d)(2). The
motion stated that Stan Lee had assigned intellectual property
rights to POW! as early as 2006, and had executed multiple
consents of use to be filed with the U.S. Trademark and Patent
Office. The motion also set forth numerous federal court cases, in
which SLMI had unsuccessfully attempted to enforce its rights
under the 1998 Agreement. The motion to intervene advised that
the Trust had recently filed suit against POW! in the Federal
Action on the basis of the 1998 Agreement, and that the District
Court had dismissed the case and imposed sanctions. POW!
expressed concern that the Trust would attempt to wield the
stipulated judgment against it in the Federal Action (despite the
fact that it was not a judgment on the merits), as evidenced by
statements in the first amended complaint in the Federal Action.
POW! argued that SLE and the Trust had interests that were
adverse to POW! as reflected in the stipulated judgment, such
that POW! could not be adequately represented in the case.
POW! asserted the motion was timely, as it first became aware of
the stipulated judgment on February 14, 2020, when the Trust
referenced it in its first amended complaint in the Federal Action.
On July 9, 2020, the Trust filed the declaration of Jonathan
D. Freund, counsel of record for the Trust, in opposition to the
motion to intervene.6 Freund declared that the stipulated

limit. The trial court declined to consider the excess pages,
without prejudice to POW! bringing a separate motion to vacate
the judgment.
6 SLE did not oppose the motion to intervene.

8
judgment was only binding on SLE and the Trust. Freund
posited: “To be sure, if these parties decided to stipulate as
between them that the sky is green and the grass is blue and that
agreed upon assertion finally satisfied their dispute, of what
moment is that stipulation to anyone else unless and until these
parties tried to assert that someone else claiming otherwise was
wrong and cited the stipulation as proof?” Freund continued,
“POW!’s request is moot because [the Federal Action] cited by
POW! as the basis for its request to intervene has been dismissed
by the Federal Court.” Freund conceded a relationship between
the settlement of this action and the filing of the Federal Action,
stating, “[a]s part of her perceived obligations, which she
assumed under the terms of the Stipulated Settlement in this
case, JC filed the Federal Action against [POW!].” Freund
continued, “[t]hough [the Trustee] referenced in the First
Amended Complaint [of the Federal Action] that she had joined
forces with [SLE] pursuant to the Stipulated Settlement
Agreement, the premise in her Complaint against POW! was to
assert rights . . . which [the Trustee] believed were not addressed
by prior litigation.” 7 Freund stated that POW!’s concerns that “it
should be allowed to intervene because it has a ‘direct and
immediate interest in this action’ in that [the Trustee] ‘seeks to
use the Stipulated Judgment entered in this case to prop up her
claims against POW! in the [Federal Action]’ that might in turn

7The stipulated agreement states: “This Order shall
confirm that the rights, title and interest to Stan Lee’s name and
likeness, as well as any other present or future Rights contained
within the [1998 Agreement], are now (and have been since
October 15, 1998) the exclusive property of Plaintiff.”

9
‘undermine thereby POW!’s rights in its own intellectual
property’” were no longer of consequence. “The case is over. No
one is seeking to enforce the Stipulated Judgment and it
certainly is not being wielded by [the Trust] as a ‘potential
weapon’ in the Federal Action that has now been dismissed with
prejudice.” 8
On July 10, 2020, POW! filed the declaration of counsel for
POW!, Charles C. Rainey, stating that the Trust had been
sanctioned in the amount of $1,000,000 in the Federal Action for
arguing the same facts contained in the stipulated judgment, and
that Freund and his law firm had been held jointly and severally
liable for $250,000. Rainey declared that the stipulated
judgment likely would be used against POW! in the Federal
Action. The stipulated judgment placed a cloud over POW!’s title
to the intellectual property and set forth facts that directly
contradicted the judgments, orders, and opinions of multiple
other courts. The parties and counsel should be sanctioned.
Following a hearing, the trial court entered an order
denying the motion to intervene on September 11, 2020. The
trial court found that POW!’s application to intervene was timely.
With respect to mandatory intervention under section 387,
subdivision (d)(2), the court found POW! had an interest in the
subject matter of the litigation, as the actual owner of the
intellectual property rights it received from Stan Lee. It further
found that POW!’s assertions “that the 1998 Agreement is not

8 After theTrust filed counsel’s declaration representing
that the Federal Action was “over,” the Trust appealed the order
dismissing the Federal Action to the Ninth Circuit Court of
Appeals, on September 4, 2020.

10
operative is supported by an extensive history of litigation
provided by POW! in a line of cases.” However, the trial court
found that POW! had not met the requirements for mandatory
intervention, as POW! “has not provided support that disposition
of this action as a practical matter would impair or impede its
ability to protect its interests with respect to mandatory relief;
POW! has not brought arguments that its joinder could be
ordered under Code of Civil Procedure section 389.”
With respect to discretionary intervention under section
387, subdivision (d)(2), the court found that POW! had followed
the proper procedures and had a direct and immediate interest in
the action—i.e. POW! “‘will either lose or gain by the direct legal
operation and effect of the judgment’”—because the Trust
signaled it would appeal the Federal Action and “the cloud placed
on this title would directly affect POW!’s ability to obtain
remuneration from intellectual property.” However, the court
denied discretionary intervention, finding that POW!’s
intervention would enlarge the issues in the case because it
would require reopening the case for POW! to present evidence of
its entitlement to the intellectual property rights, and would
require consideration of different defenses, notably res judicata.

POW!’s Motion to Vacate

Following the trial court’s ruling that POW!’s initial filing
improperly contained two motions (and prior to the trial court’s
ruling on the motion to intervene), POW! filed its separate motion
to vacate and set aside the stipulated judgment pursuant to
sections 663 and 473, subdivision (d), or under its inherent power
“to correct [its] records so as to make them speak the truth.”

11
POW! argued that SLE and the Trustee conspired to have the
trial court enter a stipulated judgment that contradicted the
prior rulings of multiple courts.
On October 1, 2020, the Trust filed an opposition to the
motion to vacate the stipulated judgment.9 In the opposition, the
Trust asserted that section 663 did not apply to stipulated
judgments by its terms and that POW! could not demonstrate
that it was an “aggrieved party” threatened by the stipulated
judgment with an injury that was “immediate, pecuniary, and
substantial.” The Trust argued the same reasons barred POW!
from seeking to vacate the judgment under section 473,
subdivision (d). A non-party is not authorized to move to vacate a
judgment under section 473, unless the non-party can show it
was aggrieved by a judgment that is void on its face, which the
stipulated judgment was not. The Trust noted the judgment roll
did not indicate that the judgment was void and argued the court
was not compelled to look beyond it.
POW! replied on October 7, 2020. POW! argued that SLE
and the Trust had committed a fraud upon the court by entering
into a stipulated judgment that they knew contained false
findings of fact contradicted by multiple court rulings, and for the
purpose of adversely affecting POW!’s property rights. POW!
noted that the Trust’s arguments were solely procedural and that
the Trust did not address the substantive allegations of fraud.
POW! argued that the Trust failed to address the court’s inherent
authority to correct the record, and the Trust did not claim that
the statements contained in the stipulated judgment were true.

9SLE did not oppose the motion to vacate and set aside the
stipulated judgment.

12
POW! argued that section 663 applied to the stipulated judgment
in this case because the stipulated judgment was entered by the
court on an erroneous legal basis. Moreover, POW! was an
“aggrieved party” under section 663, as its interest was not
nominal, remote, or speculative. The stipulated judgment cast a
cloud over POW!’s intellectual property interests, which the court
previously found “‘would directly affect POW!’s ability to obtain
remuneration from intellectual property.’” POW! asserted that
section 473, subdivision (d), applied because the stipulated
judgment was void on its face based on the extrinsic fraud of the
settling parties. The Trust’s claim that the court’s consideration
was limited to the judgment roll was incorrect. Under California
law, collusive judgments may be set aside on the basis of
extrinsic evidence. POW! was clearly an aggrieved party with a
direct interest in the intellectual property at issue.
On October 21, 2020, following a hearing on the matter, the
trial court denied POW!’s motion to vacate and set aside the
judgment without prejudice to POW! bringing a separate
equitable action on the same grounds. The trial court found that
the stipulated judgment could not be vacated pursuant to section
663 because that section does not apply to stipulated judgments.
The trial court also denied the motion to vacate the stipulated
judgment pursuant to section 473, subdivision (d), because the
court had previously denied POW!’s motion to intervene; as a
non-party, POW! was not eligible to seek relief under section 473,
subdivision (d). The trial court did not address whether the
stipulated judgment should be vacated pursuant to its inherent
authority, but noted that a proposed intervenor may bring a
separate equitable action to vacate the judgment. SLE
specifically identified POW! as a threat to its intellectual

13
property rights against which the Trust must defend. POW!
asserts ownership of the same intellectual property rights, and,
at the time the instant lawsuit was filed, it was embroiled in the
Federal Action, in which the Trust sought to invalidate POW!’s
claims to those rights. Section 387, subdivision (d)(1)(B), requires
that the person seeking intervention be “so situated that the
disposition of the action may impair or impede that person’s
ability to protect that interest.” (Italics added.) The statute does
not employ the words would or did impair. It is the potential for
impairment or impediment that triggers entitlement to
intervention as of right. Further, section 387 permits
intervention even after the entry of judgment; yet nothing in the
statute suggests that the timing of intervention alters the
standard of potential impairment. Indeed, it would be
inequitable to allow SLE and the Trust to benefit from the fact
that they quickly settled their action between them, and did not
seek to join POW!, when they undoubtedly knew POW! was an
indispensable party.
Nor are we persuaded by the argument that the disposition
agreed to by SLE and the Trust is not as detrimental to POW! as
the disposition may have been if the trial court had addressed the
merits. Evaluating the issue in light of the actual disposition, it
is clear that POW!’s ability to protect its interests may be
impaired or impeded by the stipulated judgment. Although, as
the trial court recognized, the stipulated judgment should
ultimately have no legal effect on POW!—a nonparty who is not
in privity with either of the parties to the lawsuit—the existence
of the stipulated judgment can be used to cloud POW!’s title to
the intellectual property and places it in a position in which it
may be forced to defend that title. (See Ferraro v. Camarlinghi

14
(2008) 161 Cal.App.4th 509, 541–542 [a non-party may not be
bound by a stipulated judgment].) This possibility places POW!
in a situation in which the disposition of the action may impair or
impede its ability to defend its claimed intellectual property
rights.
SLE has a long, well-documented history of attempts to
secure rights under the 1998 Agreement, despite the fact that the
agreement has been deemed unenforceable by multiple federal
courts. It is reasonable to conclude that SLE and the Trust, with
which SLE has “joined forces . . . pursuant to the [stipulated
judgment]”, may attempt to use the stipulated judgment against
POW! in the same fashion, despite the fact that the stipulated
judgment should have no preclusive effect as to POW!.
Presumably, the purpose of SLE’s action was to secure the
Trust’s duty to defend its intellectual property rights, so that it
would defend SLE against challengers such as POW!. Regardless
of whether the stipulated judgment would enable SLE to secure
those intellectual property rights as a legal matter, POW! could
be forced to defend against use of the stipulated judgment in the
Federal Action. In fact, events that occurred during the instant
lawsuit suggest a likelihood of future misconduct. The
declaration of counsel for the Trust, filed on July 9, 2020, stated
that the Federal Action had been dismissed with prejudice; it
proclaimed that the Federal Action was “over” and intimated that
POW! could not be threatened by it. The trial court heard
argument on the motion to intervene on August 24, 2020. Two
weeks later, on September 4, 2020, the Trust appealed the
adverse ruling dismissing the Federal Action. The Trust did not
inform the court of this fact prior to the court entering its order
denying POW!’s motion for leave to intervene on September 11,

15
2020—only one week later—although this fact severely
undermined one of its key representations to the trial court in
opposition to POW!’s motion.
The trial court did not reach the issue of whether POW!
was adequately represented by SLE or the Trust under section
387, subdivision (d)(1)(B), although POW! argued that its claims
were adverse to both parties. In the complaint, SLE sought a
declaratory judgment that it was the sole owner of the
intellectual property at issue, and stated that the Trust had “an
actual, present, adverse and antagonistic interest to the property
in question.” It is beyond question that both parties to the
lawsuit had purported interests in the intellectual property that
were adverse to POW!’s interests, and could not adequately
represent POW’s interests in the action.
We conclude that POW! is entitled to intervene as of right.
We reverse the trial court’s order denying its motion for leave to
intervene and direct it to enter an order granting POW! leave to
intervene.

The Stipulated Judgment Must Be Vacated and Set Aside
(§ 473, Subd. (d))

POW! moved to vacate and set aside the stipulated
judgment under sections 663 and 473, subdivision (d), and
pursuant to the court’s inherent power to set aside a judgment
based on extrinsic fraud or mistake. We conclude that the
judgment should be vacated and set aside pursuant to section
473, subdivision (d). Having reached this conclusion, we need not
address the applicability of section 663 or the trial court’s failure

16
to determine whether to exercise its inherent authority to vacate
and set aside the stipulated judgment.
“Section 473, subdivision (d), provides a trial court ‘may, on
motion of either party after notice to the other party, set aside
any void judgment or order.’ ‘[I]nclusion of the word “may” in the
language of section 473, subdivision (d) makes it clear that a trial
court retains discretion to grant or deny a motion to set aside a
void judgment [or order].’ [Citation.] However, the trial court
‘has no statutory power under section 473, subdivision (d) to set
aside a judgment [or order] that is not void . . . .’ [Citation.]
Thus, the reviewing court ‘generally faces two separate
determinations when considering an appeal based on section 473,
subdivision (d): whether the order or judgment is void and, if so,
whether the trial court properly exercised its discretion in setting
it aside.’ [Citation.] The trial court’s determination whether an
order is void is reviewed de novo; its decision whether to set aside
a void order is reviewed for abuse of discretion. [Citation.]”
(Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th
1009, 1020.)
Here, the trial court, having denied POW!’s motion for
leave to intervene, found that POW! was a non-party, and for
that reason could not seek to vacate and set aside the judgment
under section 473, subdivision (d). In light of our determination
that POW! is entitled to intervene as of right, the trial court’s
reliance on its status as a non-party to deny relief under this
section was error.
Our independent review of the record leads us to conclude
that the stipulated judgment was obtained by fraud and is void.
POW! requested, and the trial court granted, judicial notice of
multiple federal cases holding that the 1998 Agreement was

17
unenforceable and that SLE was barred from pursuing an action
based upon the 1998 Agreement by the doctrine of res judicata.
That both SLE and the Trust were aware of this precedent is
beyond question, yet SLE sought to enforce its alleged rights
under the 1998 Agreement, and the Trust stipulated to a
judgment entirely in SLE’s favor, on the basis of the 1998
Agreement, without so much as filing an answer.
The unavoidable inference to be drawn from these facts is
that there was never a justiciable controversy between SLE and
the Trust—who were purportedly at odds over the import of a
contract that both knew to be legally unenforceable—and that the
parties colluded for the purpose of manipulating the trial court
into entering the stipulated judgment. 10 “‘“To invoke the
jurisdiction of a court of justice, it is primarily essential that
there be involved a genuine and existing controversy, calling for
present adjudication as involving present rights.”’ [Citation.]”
(Housing Group v. United Nat. Ins. Co. (2001) 90 Cal.App.4th
1106, 1111.) Through their collusion, SLE and the Trust falsely
led the trial court to believe that it had obtained subject matter
jurisdiction over the case, but in the absence of a justiciable
controversy, it had not. Its entry of the stipulated judgment was
void. (See Id. at p. 1115 [stipulated judgment void where there is
no justiciable controversy and therefore no subject matter
jurisdiction].)
Having determined that POW! is entitled to intervene as of
right and become a party to the action, and that the stipulated

10 Atoral argument, when asked whether this court should
reach the motion to vacate as opposed to remanding the matter,
respondent conceded this court could decide that issue based on
the current record.

18
judgment was void (and obtained by fraud upon the court), we
conclude that the trial court abused its discretion when it denied
POW!’s motion to vacate and set aside the judgment. We reverse
the trial court’s order and direct it to vacate and set aside the
stipulated judgment.
DISPOSITION

The trial court’s orders denying POW!’s motion for leave to
intervene and motion to set aside and vacate the stipulated
judgment are reversed. The trial court is directed to enter an
order granting POW! leave to intervene, and to vacate and set
aside the stipulated judgment. POW! shall recover its costs on
appeal.

MOOR, J.

We concur:

BAKER, Acting P.J.

KIM, J.

19