Judge Margaret L. Oldendorf, Case 20STCV40537 2023-02-06 Tentative Ruling

Judge: Margaret L. Oldendorf, Case: 20STCV40537, Date: 2023-02-06 Tentative Ruling

In this personal injury action, Plaintiff Leonor Barbieri alleges she was injured while descending the external stairs of a home she was living in. The home is owned by Defendants Mark and Marie Payumo. Barbieri’s complaint alleges premises liability and negligence. The Payumos filed a cross-complaint against Juan Barbieri, Ms. Barbieri’s son; Mike Hemphill, a friend of theirs who performed property management tasks; and Roes 1-20. This motion concerns the Payumo Cross-Complaint.

The Cross-Complaint alleges that the lease agreement was entered into between the Payumos and Juan Barbieri, even though Leonor Barbieri was the tenant. The Cross-Complaint alleges a first cause of action for breach of contract against Juan Barbieri (and “Does” 1-5) based on the written rental agreement. The second and third causes of action for breach of fiduciary duty and negligence are alleged against Hemphill (and “Does” 6-10). A 4^th cause of action for equitable indemnity and 5^th for declaratory relief are alleged against all cross-defendants.

For ease of reference, all of the Roe cross-defendants are referred to herein as “Cooley” or “the Cooley defendants.”

Assuming that the Payumos intended for the allegations in the first cause of action against “Does 1-5” to actually apply to these Roe defendants, they have sued Cooley for breach of the lease agreement. These Roe defendants are also named in the 4^th and 5^th causes of action.

Neither the Cross-Complaint nor the papers filed in connection with this motion specifically explain Cooley’s connection to the property or the incident. However, based on an exhibit to the opposition brief it appears that Cooley is a business that performs home inspections, and that it performed an inspection for the Payumos at some point in time.

The Cross-Complaint was served on Cooley at a private mailbox used by Cooley as a business address. When no answer was filed, default was entered. Cooley now seeks relief from that default. More than six months have expired since default was entered. Consequently, relief under Code Civ. Proc. §437(b) is unavailable. In light of this fact, Cooley bases his motion on other grounds: (1) the default is void for lack of personal jurisdiction; (2) equitable relief is appropriate based on extrinsic fraud. Cooley has not established grounds for relief on either basis. However, as the Cross-Complaint does not contain any specific factual allegations against the Cooley defendants, default judgments against them would likely be impossible to obtain.

Code Civ. Proc. §473(d) provides that a court may set aside any void judgment or order. This section has been used to set aside default judgment where the evidence demonstrates a judgment is void on its face. While no case setting aside a void default (rather than default judgment) has been cited by Cooley, relief under the statute is nevertheless considered and analyzed below.

“ ‘ “A judgment or order is said to be void on its face when the invalidity is apparent upon an inspection of the judgment-roll.” ’ (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1441, 29 Cal.Rptr.2d 746 (Dill).) This inquiry, however, ‘does not hinge on evidence: A void judgment’s invalidity appears on the face of the record.’ (Trackman v. Kenney (2010) 187 Cal.App.4th 175, 181, 114 Cal.Rptr.3d 619.)” Kremerman v. White (2021) 71 Cal.App.5th 358, 370 (Kremerman).

Equitable relief from default judgment is available where extrinsic fraud or extrinsic mistake is shown. “After six months from entry of default, a trial court may still vacate a default on equitable grounds even if statutory relief is unavailable. (Olivera v. Grace (1942) 19 Cal.2d 570, 575–576 [140 A.L.R. 1328], 122 P.2d 564.)” Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.

Evaluation of Cooley’s argument that the default is void for lack of personal jurisdiction is limited to an examination of the “judgment roll.” As is explained in the Kremerman case, this means looking at the face of the records themselves.

According to the judgment roll here, each of the Cooley defendants was served by substituted service at a UPS Store. Code Civ. Proc. §415.20(b) authorizes substituted service at a person’s “usual mailing address” other than a United States Postal Service post office box. Hearn v. Howard (2009) 177 Cal.App.4th 1193 (Hearn); Ellard v. Conway (2001) 94 Cal.App.4th 540 (Ellard).

Proofs of service were filed April 5, 2022. The proofs of service indicate that each of the Cooley defendants was served by substituted service at 981 W. Arrow Hwy #127, San Dimas, on March 4, 2022.

According to the declaration of registered California process server Javier Sanchez that was submitted with the proofs of service, his due diligence efforts included the following:

- On January 27, 2022, Sanchez went to 981 W. Arrow Hwy #127, San Dimas, a UPS Store, and left the papers with employee Alex Gomez, who confirmed that Cooley receives mail there;

-After being supplied with a copy of Cooley’s driver’s license, on February 27, 2022, Sanchez went to the address listed on it (384 Conestoga Rd., San Dimas) to attempt service; an Hispanic couple living at that address informed Sanchez that Cooley does not reside there;

- Sanchez returned to the UPS Store at 11:30 a.m. on February 27, 2022, but it was closed;

- Sanchez returned to the UPS Store February 28, 2022, March 2, 2022, and March 4, 2022, and was told each time that Cooley receives mail there. On the last occasion Sanchez left the papers with manager Ramin Mirage.

The required “Declaration of Mailing” also accompanies each proof of service. Counsel for the Payumos, Henry Yekikian, avers that on March 7, 2022 he also mailed copies of the summons and complaint to each of the Cooley defendants at 981 W. Arrow Hwy #127, San Dimas.

Based upon these facts, there is no apparent defect on the face of the judgment roll. Therefore, the defaults are not “void.”

While determination of a void judgment or order is limited to a review of the judgment roll, “[w]hen a judgment or order is obtained based on a false return of service, the court has the inherent power to set it aside.” County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1229. A false return of service was shown in the Gorham case, because the proof of service indicated personal service on the defendant on a date and at an address where he could not possibly have been, because he was incarcerated.

Here, there is no evidence of a falsified return of service. Moreover, because Cooley had actual notice prior to entry of default, the law is broadly construed to find that service was valid. “Statutes governing substitute service shall be ‘liberally construed to effectuate service and uphold jurisdiction if actual notice has been received by the defendant.... [Citation.]’ (Citation.)” Ellard, supra, 94 Cal.App.4th at 544.

Specifically, in this case the evidence reflects that after receiving the summons and complaint, Cooley mailed the documents back to Mr. Yekikian, along with a cover letter. Declaration of Henry Yekikian, ¶4 and Exhibit 3; Reply Declaration of Cooley, ¶4. Cooley states he returned the documents because he did not believe service was proper (and he did not believe he was responsible for anything concerning the case). This evidence establishes that Cooley obviously received actual notice.

The Court has considered Cooley’s evidence and argument here in further detail. However, none of it supports setting aside the defaults.

Cooley declares that the business address at which he was purportedly served (981 W. Arrow Hwy #127, San Dimas) is not his business address. Cooley Declaration, ¶3. This argument lacks merit because this is the address Cooley has made customers aware of. According to the Yekikian Declaration and exhibits attached thereto (and not refuted by Cooley in his reply declaration), this Arrow Highway address is used by Cooley in a number of communications, including the following: (a) on the inspection report Cooley prepared for the Payumos; (b) on the business’s website; (c) on the business’s profile with the Better Business Bureau; (d) on Yelp searches; (e) on Google searches; and (f) on the business’s Facebook page. Like the defendant in Hearn v. Howard (2009) 177 Cal.App.4th 1193, which involved an attorney who used a private mailbox for her business address, Cooley cannot hold this address out as his business address and then disavow it when he is served with process at that address. The evidence demonstrates this is the business’s “usual mailing address.”

Cooley argues that service at a private mailbox is not authorized where personal service can be made with reasonable diligence. This argument lacks merit under the facts of this case. Substituted service at a private mailbox is specifically provided for in Section 415.20(b). All that needs to be shown is that two or three attempts at service were made at that location. “Ordinarily, two or three attempts at personal service at a proper place and with correct pleadings should fully satisfy the requirement of reasonable diligence and allow substituted service to be made. (Bein v. Brechtel-Jochim Group, Inc. (1992) 6 Cal.App.4th 1387, 1391–1392, 8 Cal.Rptr.2d 351.)” Kremerman, supra, 71 Cal.App.5th at 373. In this case, Mr. Sanchez’ declarations of diligence demonstrate that this requirement was satisfied. Thus, substitute service was appropriate.

Cooley attempts to distinguish Hearn and Ellard by arguing that in those cases, no “better” address was available. Hearn and Ellard in turn distinguish the federal case of Bonita Packing Co. v. O’Sullivan (C.D. Cal. 1995) 165 F.R.D. 610. In that case, the District Court refused to permit service at a private mailbox under federal law despite what Section 415.20(b) provides. Bonita notes that the federal rules are more limited regarding locations where substitute service is permitted and that, although seemingly permitted by Section 415.20, service was insufficient because a better method (service on an attorney of record, which is permitted by federal law) was available.

In Ellard, the court found the private mailbox was the defendants’ usual mailing address and that “no facts suggest personal or substitute service was available at any other address.” Ellard, supra, 94 Cal.App.4th at 546. Hearn contains a similar result: “Here, as in Ellard, there was no indication that a better method of service was available to plaintiffs.” Hearn, supra, 177 Cal.App.4th at 1203.

The same thing is true here. Cooley does not support this motion with evidence that there was a better method of service available to the Payumos. Instead, he argues that they should have tried to find his personal address. In light of the multiple ways that Cooley has represented that the Arrow Highway address is his business address, this argument is unpersuasive.

Cooley urges that the defaults should be set aside because it was procured by “extrinsic fraud.” The essence of extrinsic fraud in this context is conduct that prevents a party from either knowing about the litigation, or that convinces a party there is need to respond to it:

“ ‘ “Extrinsic fraud occurs when a party is deprived of the opportunity to present his claim or defense to the court; where he was kept ignorant or, other than from his own negligence, fraudulently prevented from fully participating in the proceeding. [Citation.] ... The essence of extrinsic fraud is one party’s preventing the other from having his day in court.” ’ [Citations.] Extrinsic fraud only arises when one party has in some way fraudulently been prevented from presenting his or her claim or defense.’ (Citation).)” Kramer v. Traditional Escrow, Inc. (2020) 56 Cal.App.5th 13, 36.

Cooley argues that extrinsic fraud exists here because he did not receive proper service of the summons and complaint, and therefore that he was denied an adversarial hearing. (Motion at 7:17-21.) However, Cooley’s claim of lack of notice is disproven by the fact that Mr. Cooley mailed the summons and complaint back to Yekikian prior to the entry of default.

Even if facts showed some form of extrinsic fraud, relief is not available where a party “has been given notice of an action and has not been prevented from participating therein.” Kulchar v. Kulchar (1969) 1 Cal.3d 467, 472; Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 503. “‘Relief on the ground of extrinsic fraud or mistake is not available to a party if that party has been given notice of an action yet fails to appear, without having been prevented from participating in the action.’ (Citation.)” Kramer, supra, 56 Cal.App.5th at 36.

Here, the facts do not establish extrinsic fraud -- but even if they did, relief would not be available because Cooley had notice of the action and was not prevented from participating.

“Generally, a defendant in default ‘confesses the material allegations of the complaint. [Citation.]’ (Taliaferro v. Davis (1963) 216 Cal.App.2d 398, 408–409, 31 Cal.Rptr. 164.) Nonetheless, the trial court may not enter a default judgment when the complaint’s allegations do not state a cause of action. (Id. at pp. 408–414, 31 Cal.Rptr. 164; Taliaferro v. Taliaferro (1959) 171 Cal.App.2d 1, 3–9, 339 P.2d 594.) No judgment can rest on such a complaint, as a defendant in default “ ‘ “admits only facts that are well pleaded.” ’ ” (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 829, 26 Cal.Rptr.3d 104, quoting 6 Witkin, Cal. Procedure (4th ed. 1997) Proceedings Without Trial, § 160, p. 574; see Buck v. Morrossis (1952) 114 Cal.App.2d 461, 466, 250 P.2d 270.) . . . [¶]

“[T]he absence of essential factual allegations is fatal to a judgment against the defendant. (See Falahati v. Kondo, supra, 127 Cal.App.4th at p. 830, 26 Cal.Rptr.3d 104 [complaint contained no factual allegations regarding defaulting defendant, who was mentioned only in caption].)” Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 392-393.

The Payumo Cross-Complaint does not contain any specific factual allegations against the Cooley Cross-Defendants. The allegation in ¶4 that all Cross-Defendants were agents and/or employees of one another, and that they were acting in the scope of such agency or employment is likely insufficient in the absence of other charging allegations. Falahati v. Kondo (2005) 127 Cal.App.4th 823, 829. Consequently, although there are no grounds for setting aside the defaults against the Cooley Cross-Defendants, default judgments likely cannot be entered against them based upon the current allegations.[1]

If the Payumos end up filing an amended Cross-Complaint that contains additional factual allegations, this will of course “open” the defaults, and the Cooley Cross-Defendants may at that stage be provided an opportunity to respond.

The motion by the Cooley Cross-Defendants for relief from the defaults entered against them is denied.

[1] In addition, as noted in the Introduction, there is a disconnect between the language in the description of the individual causes of action in the Cross-Complaint and the amendments: the claims reference “Does,” while the amendments identify the Cooley Cross-Defendants as “Roes.”