NATURE OF PROCEEDINGS: Hearing on Defendant’s Motion to Set Aside and Vacate

 

Defendant’s Motion to Set Aside and Vacate is granted.

 

BACKGROUND

On November 1, 2012, Plaintiff Kings of L.A. Entertainment, Inc. (Plaintiff) filed a petition to confirm an arbitration award against Eldra Patrick DeBarge (Defendant). Because the Defendant failed to respond, under Code of Civil Procedure section 1290, the allegations of the petition were deemed to be admitted. On May 8, 2013, this Court entered a judgment in favor of the Plaintiff.

Defendant filed a Motion to Set Aside and Vacate. Plaintiff filed an Opposition.

 

LEGAL STANDARD

 Code of Civil Procedure section 473, subdivision (d) provides in relevant part that a court “may … on motion of either party after notice to the other party, set aside any void judgment or order.” “A judgment is ‘void’ only when the court entering that judgment ‘lack[ed] jurisdiction in a fundamental sense’ due to the ‘entire absence of power to hear or determine the case’ resulting from the ‘absence of authority over the subject matter or the parties.’” People v. The North River Ins. Co. (2020) 48 Cal.App.5th 226, 233 (quoting People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 660) (citations omitted) (internal quotation marks omitted). “Service of process, under longstanding tradition in our system of justice, is fundamental to any procedural imposition on a named defendant.” AO Alfa-Bank v. Yakovlev (2018) 21 Cal.App.5th 189, (citation omitted) (internal quotation marks omitted). “[C]ompliance with the statutory procedures for service of process is essential to establish personal jurisdiction.... Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void.” American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 387 (quoting, Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444) (internal quotations omitted).

A judgment void for improper service must be set aside regardless of the merits of the underlying case or the defendant’s delay in rectifying it. See Peralta v. Heights Med. Ctr., Inc. (1988) 485 US 80, 86-87 (“Where a person has been deprived of property in a manner contrary to the most basic tenets of due process, it is no answer to say that in his particular case due process of law would have led to the same result because he had no adequate defense upon the merits.” [citation omitted] [internal quotation marks omitted]); Los Angeles v. Morgan (1951) 105 Cal.App.2d 726, 731 (“[I]n the absence of service of process upon such a party there is no duty on his part even though he has actual knowledge to take any affirmative action at any time thereafter to preserve his right to challenge the judgment. What is initially void is ever void and life may not be breathed into it by lapse of time.”).

The burden of proof is on the party seeking relief from default to show that service was improper. See Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495 (“Although a trial court has discretion to vacate the entry of a default or subsequent judgment, this discretion may be exercised only after the party seeking relief has shown that there is a proper ground for relief….”).

 

EVIDENTIARY OBJECTIONS

The Court rules on Defendant’s Objections to the Declaration of Kyle P. Kelley as follows:

1. Overruled

2. Overruled

The Court rules on Defendant’s Objections to the Declaration of Pete Farmer as follows:

1. Overruled

2. Sustained. Lacks personal knowledge. See Evid. Code § 702.

 

ANALYSIS

I. Manner of Service

Defendant contends that Plaintiff failed to properly serve him with the petition to confirm the arbitration award and therefore, the judgment is void.

“Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award. The petition shall name as respondents all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.” Code Civ. Proc., § 1285. “Proper service of process of a petition or complaint is the means by which a court obtains personal jurisdiction over a party.” Abers v. Rohrs (2013) 217 Cal.App.4th 1199, 1206 (Abers). “Even undisputed actual notice of a proceeding does not substitute for proper service of the petition or complaint.” Ibid.

The manner of service required for a petition to confirm an arbitration award depends on whether the arbitration agreement specifies a manner and whether the party to be served has previously appeared in the proceeding. Under Code of Civil Procedure section 1209.4 (a), if the arbitration agreement specifies a manner of service, the petition must be served in that manner. Alternatively, “[i]f the arbitration agreement does not provide the manner in which such service shall be made and the person upon whom service is to be made has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision: [¶] (1) Service within this State shall be made in the manner provided by law for the service of summons in an action.” Code Civ. Proc., § 1290.4, subd. (b)(1). However, “[if] the person on whom service is to be made has previously appeared in the proceeding or has previously been served in accordance with subdivision (b) of this section, service shall be made in the manner provided in Chapter 5 (commencing with Section 1010) of Title 14 of Part 2 of this code.” Code Civ. Proc., § 1290.4, subd. (c).

Here, the arbitration agreement does not specify a manner of service. Schecter Decl. Ex. 1. Therefore, Plaintiff was required to serve Defendant in the same manner as a service of summons, unless Plaintiff “previously appeared in the proceeding.”

Plaintiff argues that Defendant’s appearance in the underlying arbitration satisfies this requirement. The Court disagrees. The reference to “the proceeding” in Code of Civil Procedure section 1290.4, subdivision (c) means the proceeding to confirm the arbitration award. See Code Civ. Proc., § 1290 (“A proceeding under this title in the courts of this State is commenced by filing a petition.”).

In Abers, supra, 217 Cal.App.4th at p. 1208, the court held that Code of Civil Procedure section 1290.4, subdivision (c) did not apply where the plaintiffs commenced an action for declaratory relief, subsequently arbitrated their claim, and then filed a petition to vacate the arbitration award as a separate action. As the court explained, “[b]ecause the homeowners chose to file their petition to vacate as a separate action, rather than as part of the existing declaratory relief case in which the trustees had previously appeared,” section 1290.4, subdivision (c) did not apply. Abers 217 Cal.App.4th 1199, 1207, 1208.

Just as the petition to vacate in Abers commenced a distinct proceeding from the declaratory relief case, so too Plaintiff’s petition to confirm the arbitration award commenced a distinct proceeding from the arbitration. Because Defendant never appeared in the proceeding to confirm the arbitration award, Plaintiff was required to serve the petition in the same manner as a summons.

II. Service by Mail and Acknowledgement of Receipt

Defendant argues that Plaintiff failed to effectuate service by mail properly.

Under Code of Civil Procedure section 415.30, subdivision (a), “[a] summons may be served by mail as provided in this section. A copy of the summons and of the complaint shall be mailed (by first-class mail or airmail, postage prepaid) to the person to be served, together with two copies of the notice and acknowledgment provided for in subdivision (b) and a return envelope, postage prepaid, addressed to the sender.” “Service of a summons pursuant to this section is deemed complete on the date a written acknowledgment of receipt of summons is executed, if such acknowledgment thereafter is returned to the sender.” Code Civ. Proc., § 415.30, subd. (c).

The proof of service of the petition filed with the Court, dated November 1, 2012, reflects that it was served on Defendant by first-class mail to 18543 Devonshire Street, Suite 323, Northridge, CA 91324 and by email to eldebargemusic@q.com. Schecter Decl. ¶ 4, Ex. 3 at p. 27. No acknowledgment of receipt is included in the proof of service, filed with the Petition to Confirm Arbitral Award filed November 1, 2012. Because the November 1 proof of service does not include Defendant’s acknowledgment of receipt, service was not complete. See Code Civ. Proc., § 415.30, subd. (c). Moreover, email is not an accepted manner of service

However, on November 7, 2012, Plaintiff filed an amended proof of service. Tintner Decl., Ex. T. A party may amend a proof of service to show facts exist that give a court jurisdiction. See Morrissey v. Gray (1911) 160 Cal. 390, 395 (“It is the fact of proper service, and not the proof of the fact, which gives to a court jurisdiction. Therefore, when the facts conferring jurisdiction exist, but the record of them by way of return is defective, great liberality is allowed by the courts in permitting amended returns to be filed.” [citation omitted]). The amended proof of service includes a PS Form 3811, “Domestic Return Receipt,” signed by someone who checked the “Agent” box rather than the “Addressee” box.

Code of Civil Procedure section 415.30, subdivision (c) is written in the passive voice and does not specify who may return the acknowledgment to the sender. Code Civ. Proc., § 415.30, subd. (c) (“Service of a summons … is deemed complete … if such acknowledgment thereafter is returned to the sender.”). However, the Judicial Comment Code of Civil Procedure section 415.30 explains “one copy of th[e] form [of notice and acknowledgment of receipt specified in subdivision (b)] must be executed and returned to the sender by the person to whom it was mailed, or by his agent, if service is to be made on him as an individual.” Judicial Council Comment to Code Civ. Proc., § 415.30 (emphasis added). Code of Civil Procedure section 416.90 states, “[a] summons may be served on a person not otherwise specified in this article by delivering a copy of the summons and of the complaint to such person or to a person authorized by him to receive service of process.” The Judicial Council Comment to that section provides, “[i]f process is delivered to an agent of defendant, such agent must be one who is authorized by law or by appointment to receive service of process, and the agent of an individual for other purposes is not necessarily authorized to receive such process.” “Every person receiving private mailbox receiving service from a CMRA [commercial mail receiving agency] in this state shall be required to sign an agreement, along with a USPS Form 1583, which authorizes the CMRA owner or operator to act as agent for service of process for the mail receiving service customer.” Bus. & Prof. Code, § 17538.5

Defendant states in his declaration that “18543 Devonshire Street, Suite 323, Northridge, CA 91324. … is a P.O. box that the Farmers and DeBarge had equal access to.” DeBarge Decl. ¶ 21. Defendant’s motion goes further, asserting “[i]t is a post office box at mail center — a post office box owned by KLA and/or its owner, Peter Farmer (‘Farmer’).” However, the motion does not cite any declaration or other evidence in support. See In re Marriage of Pasco (2019) 42 Cal.App.5th 585, 591 (“A trial brief is not evidence, it is argument.”). Farmer testifies, “DeBarge had been receiving his mail at a private mailbox located at 18543 Devonshire Street, PMB 323, Northridge CA, 91324. I did not establish this private mailbox for him, and I did not have access to it, nor did I ever access it.” Farmer Dec. ¶ 3.

Even assuming, for the sake of argument, that Defendant authorized the CMRA as his agent for service, the Domestic Return Receipt does not satisfy the notice and acknowledgment requirements provided for in Code of Civil Procedure section 415.30, subdivision (b). In Tandy Corp. v. Superior Court (1981) 117 Cal.App.3d 911 (Tandy), the Court held that service by mail and acknowledgement to the defendant’s agent for service was not effective, where “the acknowledgement was not executed and returned by the agent, hence service was not completed.” Tandy, supra,117 Cal.App.3d at p. 913 (citing Code Civ. Proc., § 415.30, subd. (c)). “The postal service return receipt does not suffice as a substitute for an executed acknowledgement of receipt of summons.” Ibid. Accordingly, Plaintiff failed to effectuate service by mail and acknowledgement under Code of Civil Procedure section 415.30.

III. Substituted Service

Next, the Court considers whether service was proper as substitute service under Code of Civil Procedure section 415.20.

“Section 415.20, subdivisions (a) and (b) authorize substitute service in lieu of personal delivery. ‘If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served, ... a summons may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. Service of a summons in this manner is deemed complete on the 10th day after the mailing.’” Kremerman v. White (2021) 71 Cal.App.5th 358, 372 (Kremerman) (quoting Code Civ. Proc., § 415.20, subd. (b)).

Under Code of Civil Procedure section 415.20, subdivision (c), “[n]otwithstanding subdivision (b) [of section 415.20], if the only address reasonably known for the person to be served is a private mailbox obtained through a commercial mail receiving agency, service of process may be effected on the first delivery attempt by leaving a copy of the summons and complaint with the commercial mail receiving agency in the manner described in subdivision (d) of Section 1758.5 of the Business and Professions Code.”

“Per Business and Professions Code section 17538.5, subdivision (d)(1), ‘[u]pon receipt of any process for any mailbox service customer, the [CMRA] owner or operator shall (A) within 48 hours after receipt of any process, place a copy of the documents... into the customer’s mailbox ..., and (B) within five days after receipt, send all documents by first-class mail, to the last known home or personal address of the mail receiving service customer.... Service of process upon the mail receiving service customer shall then be deemed perfected 10 days after the date of mailing.’” Kremerman , supra, 71 Cal.App.5th at p. 372 (quoting Bus. & Prof. Code, § 17538.5, subd. (d)(1)).

Here, there is no declaration of diligence explaining what attempts Plaintiff made to personally serve Defendant. Substituted service on a CMRA address is authorized only when it is “the only address reasonably known.” Code Civ. Proc., § 415.20, subd. (c). Yet, Farmer testifies that, “[i]n 2011, after the management agreement …was terminated, I learned that DeBarge was living and working with Hardin Fultcher, II, a renowned figure in the music industry in Stockton, California … my attorney at the time communicated with DeBarge through Mr. Fultcher.” Farmer Decl. ¶ 4. Based on this declaration, the Court concludes that the CMRA address was not the only address “reasonably known” to Plaintiff, who either knew or could have reasonably obtained the Stockton address.

Additionally, “California law requires the CMRA to place a notice or copy of the documents in the customer’s mailbox within 48 hours and to send the documents by first-class mail within five days after receipt to the customer’s address.” Kremerman, supra, (2021) 71 Cal.App.5th at p. 373 (citing Bus. & Prof. Code, § 17538.5, subd. (d)(1) and Code Civ. Proc., § 415.20, subd. (c)). Plaintiff fails to offer any evidence that this requirement was met. See id. at pp. 373-374 (“There is no evidence in the judgment roll that indicates whether the referenced statutory requirements were met…. Thus, we find the trial court erred when it concluded service was proper.”) Therefore, Plaintiff failed to effectuate substitute service under Code of Civil Procedure section 415.20.

III. Code Civ. Proc., § 1293

Finally, Plaintiff argues that under Code of Civil Procedure section 1293, by agreeing to arbitrate in California, Defendant agreed to the jurisdiction of its courts, notwithstanding the improper service of the petition.

“Personal jurisdiction over a nonresident defendant depends upon the existence of essentially two criteria: first, a basis for jurisdiction must exist due to defendant’s minimum contacts with the forum state; second, given that basis for jurisdiction, jurisdiction must be acquired by service of process in strict compliance with the requirements of our service statutes.” Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1229 (Ziller).

“[F]ormal service of process involves two aspects: service as a method of obtaining personal jurisdiction over a defendant and formalized notification of court proceedings to allow a party to appear and defend against the action.” Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd. (2020) 9 Cal.5th 125, 143. (Rockefeller).

“The making of an agreement in this State providing for arbitration to be had within this State shall be deemed a consent of the parties thereto to the jurisdiction of the courts of this State to enforce such agreement by the making of any orders provided for in this title and by entering of judgment on an award under the agreement.” Code Civ. Proc., § 1293.

“When parties agree to California arbitration, they consent to submit to the personal jurisdiction of California courts to enforce the agreement and any judgment under section 1293. When the agreement also specifies the manner in which the parties ‘shall be served,’ consistent with section 1290.4, subdivision (a), that agreement supplants statutory service requirements and constitutes a waiver of formal service in favor of the agreed-upon method of notification. If an arbitration agreement fails to specify a method of service, the statutory service requirements of section 1290.4, subdivision (b) or (c) would apply, and those statutory requirements would constitute formal service of process.” Rockefeller, supra, 9 Cal.5th at pp. 144-145.

“‘Service of process is the means by which a court having jurisdiction over the subject matter asserts its jurisdiction over the party and brings home to him reasonable notice of the action.’” Rockefeller, supra, (2020) 9 Cal.5th 125, 139 (quoting Kappel v. Bartlett (1988) 200 Cal.App.3d 1457, 1464) (internal quotation marks omitted). “[F]ormal service of process performs two important functions. From the court’s perspective, service of process asserts jurisdiction over the person…. From the defendant’s perspective, ‘[d]ue notice to the defendant is essential to the jurisdiction of all courts, as sufficiently appears from the well-known legal maxim, that no one shall be condemned in his person or property without notice, and an opportunity to be heard in his defence [sic].’” Ibid (quoting Earle et al. v. McVeigh (1875) 91 U.S. 503, 503–504). “‘Agreeing to resolve a particular dispute in a specific jurisdiction, for example, is one means of expressing consent to personal jurisdiction of courts in the forum state for purposes of that dispute.’” Ibid (quoting Szynalski v. Superior Court (2009) 172 Cal.App.4th 1, 7–8).

Here, the parties’ agreement to arbitrate provides that “judgment on the award rendered be entered in any court having jurisdiction” and that “any arbitration or mediation hereunder shall be in Los Angeles County in the State of California.” Shecter Decl. Ex. 3 ¶ 11. This serves as a contractual basis for personal jurisdiction. However, because the agreement does not proscribe a manner of service, “given that basis for jurisdiction, jurisdiction must be acquired by service of process in strict compliance with the requirements of our service statutes.” Ziller, supra, 206 Cal.App.3d at p. 1229. Because Plaintiff failed to comply with the statutory service requirements, the Court never acquired personal jurisdiction over Plaintiff. Accordingly, the judgment is void.

CONCLUSION

Defendant’s Motion to Set Aside and Vacate is granted.