Judge: Martha K. Gooding, Case: 2021-01228676, Date: 2022-09-19 Tentative Ruling

Motion to Set Aside/Vacate Default

The Court DENIES the Motion by Defendant Sidney Sadeghi (“Defendant”) to vacate default and default judgment entered on Plaintiff Angizeh Sadeghi’s Complaint for breach of contract.

Specifically, Defendant asks the court to vacate the default and default Judgment entered on 2/2/22 and 3/29/22, respectively, pursuant to Civ. Proc. § 473(d). Defendant argues the Judgment is void because this Court lacks subject matter jurisdiction over the breach of contract claim because of a marital dissolution proceeding between Defendants that is pending in the Superior Court’s family law court.

Here, a default judgment was entered in favor of Plaintiff, a third-party creditor, against Defendants Arman Sadeghi and Sidney Sadeghi, jointly and severally. (ROA 23.)  The parties do not dispute that the debt at issue in Plaintiff’s Complaint is a community debt.

The family law case was filed in January of 2020. This case was filed on 10/28/21. (ROA 2.)  Thus, Defendant argues the family law proceeding has “first in time” priority.

First, Defendant argues the issue in this case is the division of community property and the family law court therefore has exclusive jurisdiction:

“The simple facts also show that the Angizeh Sadeghi Loan Agreement must be community property and therefore at issue in the marital dissolution case, because the loan was created during the marriage with the contributions of both marital partners and for the benefit of the marriage.” (Motion, p. 5:12-15)

The superior court's jurisdiction over Family Code proceedings is, of course, exclusive. Family Code proceedings must be commenced in the superior court. (Fam. C. § 200; see Marriage of Lackey (1983) 143 CA3d 698, 703, 707—small claims court judgment of support arrearages void for lack of jurisdiction.)

Moreover, the civil trial department cannot improperly “usurp” the family law court's power and obligation to determine various community property claims in a pending dissolution action.  (See, e.g., McMillin v. Eare (2021) 70 CA5th 893, 903, 919-922.)

But this is a third-party creditor’s claim for a breach of contract based on a loan agreement entered into with both Defendants.  By entering default judgment in favor of the creditor, this Court did not usurp the family court’s exclusive jurisdiction by characterizing, valuing, or dividing the parties’ community property.  It simply determined, in the wake of Defendants’ default on the Complaint, that the Plaintiff had proved the amount of damages owed to her by Defendants on the outstanding loan.

Defendant argues that “in a case virtually on point” the court in Askew v. Askew (1994) 22 Cal.App.4th 942, held that a civil trial court lacked jurisdiction to consider a husband's civil suit regarding alleged community real property because a marital dissolution action had already been filed by the wife. Askew held “it is very clear that the trial court had no jurisdiction to consider it [i.e. the husband’s civil action].” Id. at 961. Askew further explained that “[a]fter a family law court acquires jurisdiction to divide community property in a dissolution action, no other department of a superior court may make an order adversely affecting that division.” Id. at 961.

But Askew involved a husband suing his wife for the characterization and division of properties acquired after marriage. These are not our facts. Here, we have a third-party suing for breach of a loan agreement that the parties concede is a community debt.

Second, Defendant argues the family law court is the court “first in time" to exercise concurrent jurisdiction and it therefore must hear this matter.

After a family law court acquires jurisdiction in a dissolution action to characterize, value and divide the parties’ community property, no other department of the superior court may entertain proceedings or make an order adversely affecting the family court's property division jurisdiction. (Askew v. Askew (1994) 22 CA4th 942, 961-962; Glade v. Glade (1995) 38 CA4th 1441, 1454-1455; see also McMillin v. Eare (2021) 70 CA5th 893.) The court in which process is first served acquires exclusive jurisdiction. (Mungia v. Superior Court (1964) 225 CA2d 280, 283.)

None of Defendant’s cases are on point. Plaintiff relies heavily on Glade v. Glade (1995) 38 Cal.App.4th 1441 on reply. There, the trustee of a revocable family trust filed an action on behalf of the trust seeking to foreclose on the community property residence of a couple who were in dissolution proceedings in the family court. Although the family court issued a stay of the foreclosure proceedings, the trial court granted summary judgment for the trust in the foreclosure action, and denied the wife’s motion for reconsideration.

In Glade, the civil court was actually making a determination as to what was community property. Again, that is not an issue in this case.

In entering default judgment, jointly and severally, against Angizeh and Sidney Sadeghi on Plaintiff’s breach of contract claim, this Court did not usurp the family court’s exclusive jurisdiction by characterizing, valuing, or dividing the parties’ community property.  It simply determined, following Defendants’ default, that Plaintiff had proved the amount of damages for which Angizeh and Sidney Sadeghi are liable for breaching the loan agreement.  How that debt (which the parties concede is a community debt) is ultimately divided or allotted as between the Angizeh Sadeghi and Sidney Sadeghi remains an issue for the family law court.

The Court finds that Defendant has not shown that the Judgment entered in this case is void. The Motion is denied.

Plaintiff is ordered to give notice.