Judge: Colin Leis, Case: BC697314, Date: 2023-01-20 Tentative Ruling

Case Number: BC697314    Hearing Date: January 20, 2023    Dept: 74

Superior Court of California

County of Los Angeles – CENTRAL District

Department 74

MOVING PARTIES: Plaintiff/Cross-Defendant Rafael David Miranda

RESPONDING PARTY: Defendant/Cross-Complainant Andres Contreras              

Plaintiff/Cross-Defendant’s Demurrer to Cross Complaint

The court considered the moving and opposing papers filed in connection with this motion. No reply was filed.

BACKGROUND

            On March 9, 2018 Plaintiff Rafael David Miranda (“Plaintiff”) filed a Complaint.

            On July 30, 2018, Plaintiff filed a first Amended Complaint (“FAC”) against several defendants, including Defendant Andres Contreras (“Defendant”).  The FAC alleged causes of action for: (1) Wrongful Eviction; (2) Breach of Oral Agreement; (3) Declaratory Relief; (4) Negligence; (5) Policy of Insurance for the Satisfaction of a Judgment Up To Policy Limits; (6) Breach Of Written Contract; (7) Intentional Interference with Contract; (8) Negligent Interference with Contract; (9) Fraud for Intentional Misrepresentation; (10) Negligent Misrepresentation; (11) Breach of Fiduciary Duty; (12) Constructive Fraud; (13) Alter Ego; (14) Fraud for Intentional Concealment and Nondisclosure of Material Facts; (15) Imposition of a Resulting Trust; (16) Imposition of a Constructive Trust; (17) Unjust Enrichment - Imposition of an Equitable Lien; (18) Specific Performance; (19) Equitable Subrogation; (20) Quiet Title; (21) Conspiracy To Commit Fraud; (22) Tort Of Another; (23) Intentional Infliction of Emotional Distress; and (24) Negligent Infliction of Emotional Distress. 

            On March 22, 2021, Plaintiff filed the operative Second Amended Complaint (“SAC”) against the same Defendants named within Plaintiff’s First Amended Complaint.  The SAC alleges the same twenty-four causes of action as the FAC, and further, adds a twenty-fifth cause of action for Retaliation in Violation of Public Policy, and a twenty-sixth cause of action for Money Had and Received. 

            On September 7, 2022, Defendant filed a Cross-Complaint against Plaintiff. The Cross-Complaint alleges causes of action for (1) breach of contract, (2) fraud in the inducement, (3) accounting, (4) unfair business practices, and (5) indemnity.  Also, on September 7, 2022, Defendant answered the SAC.

            On October 10, 2022, Plaintiff filed a demurrer as to Defendant’s Cross-Complaint.  On December 7, 2022, Defendant filed an opposition.  No reply has been filed.

LEGAL STANDARD

            A demurrer for sufficiency tests whether the complaint states a cause of action.¿¿(Hahn v.¿Mirda¿(2007) 147 Cal.App.4th 740, 747.)¿¿When considering demurrers, courts read the allegations liberally and in context.¿¿(Taylor v. City of Los Angeles Dept. of Water and Power¿(2006) 144 Cal.App.4th 1216, 1228.)¿¿In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿¿(Donabedian v. Mercury Ins. Co.¿(2004) 116 Cal.App.4th 968, 994.)¿¿“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.¿¿Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.”¿¿(SKF Farms v. Superior Court¿(1984) 153 Cal.App.3d 902, 905.)¿¿“The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.”¿¿(Hahn,¿supra,¿147 Cal.App.4th at¿p.¿747.)¿

DISCUSSION

            Procedural Deficiencies

            As a preliminary matter, Plaintiff failed to file a proof of service of the Demurrer, and show that the Demurrer was served on Defendant, as required by Code of Civil Procedure section 1005.  (See Code Civ. Proc., § 1005(b).)  In fact, Defendant represents in his opposition that Plaintiff never served the Demurrer on Defendant, and Defendant only discovered that the Demurrer was filed by diligently monitoring the Courts online docket.  (See Fine Decl., ¶¶ 2-5.)

            In addition,  Plaintiff failed to file a declaration attesting to his meet and confer efforts prior to filing the demurrer, as required by Code of Civil Procedure section 430.41.

             Notwithstanding, since Defendant filed a substantive opposition, and to avoid wasting judicial resources, the Court will consider the Demurrer on the merits.

            Demurrer

            Plaintiff contends that Defendant failed to allege sufficient facts to allege the five causes of action in the Cross-Complaint because Defendant failed to include facts specifying the “contract” was between Plaintiff and Defendant.

            “A written contract may be pleaded by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect.”  (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)  “In order to plead a contract by its legal effect, plaintiff must allege the substance of its relevant terms.”  (Id.)

            Contrary to Plaintiff’s contention, a review of the Cross-Complaint reveals that Defendant has alleged the substance of the relevant terms of the agreement between Plaintiff and Defendant.  The Cross-Complaint alleges, in relevant part, that in 2010, Plaintiff and Defendant entered into an Agreement, whereby Defendant agreed to loan Plaintiff money (the “Agreement”).  (Cross-Compl., ¶ 13.).  The Agreement provided in relevant part that Defendant would buy the home that Plaintiff was living in, and, in turn, Plaintiff agreed to repurchase the home sometime in the future at the price that Defendant paid for it, plus twenty thousand dollars.  (Id.).  It was also agreed that Plaintiff would be able to live in the home if he paid the mortgage, and improved the property.  (Id.). Plaintiff breached the agreement sometime in 2015 by failing to pay the mortgage, and failing to make improvements to the property.  (Id. at ¶¶ 14-15.)

            In addition, the Court notes that Plaintiff’s notice of the demurrer states that Plaintiff demurs on the ground that the Cross-Complaint is time barred by the four-year statute of limitations, but he failed to include the required discussion regarding the Cross-Complaint being time-barred in his memorandum of points and authorities.  (See Cal. Rules Ct., rule 3.1113(b).)  Notwithstanding, the Court finds that the Cross-Complaint is not time barred, as Plaintiff’s Complaint, which was filed on March 9, 2018, was, in part, based on the same Agreement on which the Cross-Complaint is based.  (See Compl., ¶¶ 27-28.). The alleged breach of the Agreement in the Cross-Complaint occurred sometime in 2015, so as long as Plaintiff filed his complaint before 2019, Defendant’s Cross-Complaint will be considered timely because it relates back to the Complaint.  (See Code Civ. Proc., § 337(1) [Breach of written contract claims are subject to a four-year statute of limitations.])

            “Although ordinarily the statute of limitations will bar a cross-complaint in the same fashion as if the defendant had brought an independent action, the rule is different when the original complaint was filed before the statute of limitations on the cross-complaint had elapsed.  Such a cross-complaint need only be subject-matter related to the plaintiff's complaint—i.e. arise out of the same occurrence—to relate back to the date of filing the complaint for statute of limitation purposes. . . . The courts have fashioned a rule that a statute of limitations is suspended or tolled as to a defendant's then unbarred causes of action against the plaintiff arising out of the same transaction by the filing of the plaintiff's complaint.”  (Sidney v. Superior Court (1988) 198 Cal.App.3d 710, 714-715 (citations and quotations omitted).)

Here, Defendant properly filed his Cross-Complaint on September 7, 2022, at the same time as his answer, in accordance with Code of Civil Procedure section 428.50.  (Code Civ. Proc., § 428.50 [“a party shall file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint.”).  As set forth above, the Cross-Complaint arises from the same set of facts that were alleged in the Complaint, and, accordingly, the Cross-Complaint relates back to the date of the filing of the Complaint.  (See Moseley v. Abrams (1985) 170 Cal.App.3d 355, 359 [“A demurrer on the grounds of the bar of the statute of limitations will not lie where the action may be, but is not necessarily barred”].)

            Thus, Plaintiff’s Demurrer to Defendant’s Cross-Complaint is OVERRULED.

CONCLUSION

Plaintiff’s Demurrer to Defendant’s Cross-Complaint is OVERRULED.

Plaintiff are ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  January 20, 2023

_____________________________

Colin Leis

Judge of the Superior Court

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Superior Court of California

County of Los Angeles – CENTRAL District

Department 74

MOVING PARTIES: (1) Defendant Frank Soto Jr.

(2) Defendant Gloria Soto

(3) Nicolas A. Quezada         

(4) Maria I. Quezada

RESPONDING PARTY: (1-4) Plaintiff Rafael David Miranda         

Motions to Set Aside Default Judgments

The court considered the moving and opposing papers filed in connection with these motions. No reply papers were filed.

BACKGROUND

            On March 9, 2018 Plaintiff Rafael David Miranda (“Plaintiff”) filed a Complaint. 

            On July 30, 2018, Plaintiff filed a first Amended Complaint (“FAC”) against several defendants, including Frank Soto, Jr. (“Frank”), Gloria Soto (“Gloria”), Maria I. Quezada (“Maria”), and Nicolas A. Quezada (“Nicolas”) (collectively referred to as “Defendants”).  The FAC alleged causes of action for: (1) Wrongful Eviction; (2) Breach of Oral Agreement; (3) Declaratory Relief; (4) Negligence; (5) Policy of Insurance for the Satisfaction of a Judgment Up To Policy Limits; (6) Breach Of Written Contract; (7) Intentional Interference with Contract; (8) Negligent Interference with Contract; (9) Fraud for Intentional Misrepresentation; (10) Negligent Misrepresentation; (11) Breach of Fiduciary Duty; (12) Constructive Fraud; (13) Alter Ego; (14) Fraud for Intentional Concealment and Nondisclosure of Material Facts; (15) Imposition of a Resulting Trust; (16) Imposition of a Constructive Trust; (17) Unjust Enrichment - Imposition of an Equitable Lien; (18) Specific Performance; (19) Equitable Subrogation; (20) Quiet Title; (21) Conspiracy To Commit Fraud; (22) Tort Of Another; (23) Intentional Infliction of Emotional Distress; and (24) Negligent Infliction of Emotional Distress. 

            On May 14, 2019, the Court’s clerk entered default against Nicolas and Maria as to the FAC.

            On February 27, 2020, the Court’s clerk entered default against Gloria as to FAC.

On March 27, 2020, the Court’s clerk entered default against Frank as to the FAC.

            On March 22, 2021, Plaintiff filed the operative Second Amended Complaint (“SAC”) against the same Defendants in the FAC, and alleged the same twenty-four causes of action as the FAC, and further, added a twenty-fifth cause of action for Retaliation in Violation of Public Policy, and a twenty-sixth cause of action for Money Had and Received. 

            On February 17, 2022, the Court entered Default Judgment against Defendants (the “Default Judgment”).

On June 28, 2022, Frank and Gloria moved to set aside the Default Judgment.  On June 29, 2022 Nicolas and Maria moved to set aside the Default Judgment.

On August 1, 2022, Plaintiff filed a proof of electronic service of the SAC on Defendants attesting Plaintiff had served the SAC on Frank, Gloria, Maria, and Nicolas on July 29, 2022 – more than five months after entry of the Default Judgment.

REQUEST FOR JUDICIAL NOTICE

Plaintiff's Requests for Judicial Notice Nos. 1-13 are GRANTED.

LEGAL STANDARD

            Code of Civil Procedure section 473(d) provides, “The court . . . may, on motion of either party after notice to the other party, set aside any void judgment or order.”  (Code Civ. Proc., § 473(d).)  “There is no time limit to attach a judgment [which is] void on its face.”  (Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th 1009, 1021.)  An order is considered “void on its face” where “the invalidity is apparent from an inspection of the judgment roll or court record without consideration of extrinsic evidence.”  (Ibid.; see OC Interior Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th 1318, 1327 [“[t]o prove that the judgment is void [on its face[, the party challenging the judgment is limited to the judgment roll, i.e., no extrinsic evidence is allowed”].)  Alternatively, where an order is not “void on its face”, the challenging party must challenge the order “within the six-month time limit prescribed by section 473[(b)], or by an independent action in equity.”  (Ibid.)  An order will not be “void on its face” where the invalidity “can be shown only through consideration of extrinsic evidence, such as declarations or testimony”.  (Ibid.) 

DISCUSSION

            Defendants move for an order setting aside and vacating the Default Judgment entered on February 17, 2022.  First, Defendants argue that the Court must set aside the Default Judgment because it is void.  Second, Defendants argue that the Court must set aside the default judgment entered on February 17, 2022, because Defendants were not served with the FAC.[1]

            As a preliminary matter, in opposition, Plaintiff contends that the motions are “time-barred,” but the Court is unpersuaded as Plaintiff fails to cite any statutory authority for such a proposition.  In addition, as set forth above, there is no time limit to set aside a judgment that is void on its face.  Furthermore, Defendants filed their motions within the six-months after default judgment was entered against them.

“After a defendant’s default has been entered, if ‘ “a complaint is amended in matter of substance as distinguished from mere matter of form, the amendment opens the default, and unless the amended pleading be served on the defaulting defendant, no judgment can properly be entered on the default” ’ and any judgment is thus void.”  (Paterra v. Hansen (2021) 64 Cal.App.5th 507, 529.)  “ ‘ “The reason for this rule is plain. A defendant is entitled to [an] opportunity to be heard upon the allegations of the complaint on which judgment is sought against him. His default on the original complaint is limited in its effect to that complaint, and if by amendment a matter of substance is added, he should be given the opportunity to contest the same before any judgment is given against him on account thereof. The law, therefore, requires that the amended pleading shall be served on all the adverse parties, including defaulting defendants.” ’ [Citation.]”  (Ibid.)  “ ‘When a complaint is served, the defendant faces the decision to contest the action (perhaps seeking to negotiate a settlement at the same time) or to remain aloof and risk the entry of default. If the defendant fails to appear in the action after valid service of process, it is reasonable to assume the latter course has been chosen. Thereafter, if the complaint is amended in a way which would materially affect the defendant's decision not to contest the action, this new circumstance should be brought home to the defendant with the same force as the notification of the original action.’ [Citation.]”  (Ibid.)  “The required notice is the formal notice embodied on the service of the new pleading, and is not met even if the defendant had actual notice from other sources.”  (Id. at p. 530.) 

            Following a review of the arguments and evidence proffered by the Parties, the Court finds the default judgment entered against Defendants on February 17, 2022 should be vacated, as that judgment is void.  As set forth above, default was entered against Defendants.  Following the entry of default against Defendants, Plaintiff filed an amended pleading, specifically the SAC, on March 22, 2021.  The SAC constitutes a “substantive” amendment from the FAC, as Plaintiff’s Second Amended Complaint substantially increases the alleged damages against Defendants from approximately $108,099 to $188,399.  (See FAC ¶¶ 96-98; and cf. SAC ¶¶ 106-108.)  It follows, as the SAC includes “substantive” amendments to the causes of action alleged against Defendants, and, as this Court entered default against Defendants before Plaintiff filed the SAC, “ ‘ “no judgment can properly be entered on the default” ’ ” unless Defendants were served with the SAC.  (Paterra, supra, 64 Cal.App.5th at p. 529.)  A review of this Court’s docket reveals that Defendants were not served with the SAC until July 29, 2022, which is after the Default Judgment was entered on Defendants.  Accordingly, the Default Judgment against Defendants is void because the SAC had not been served on Defendants when the Default Judgment was entered.

Thus, Defendants’ Motion to Set Aside the Court’s February 27, 2022, Default Judgment is GRANTED.

CONCLUSION

Based on the foregoing, the Court GRANTS Defendants’ Motions to Set Aside the Court’s February 27, 2022, Default Judgment as to Defendants.

The Court orders that the Default Judgments entered against Frank Soto Jr., Gloria Soto, Nicolas A. Quezada, and Maria I. Quezada are hereby vacated.

Defendants are ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  January 20, 2023

_____________________________

Colin Leis

Judge of the Superior Court