Conseco Mktg., LLC v. Ifa & Ins. Servs., Inc.

• Decision Date: 22 November 2013
• Docket Number: B244444
• Citation: 221 Cal.App.4th 831,164 Cal.Rptr.3d 788
• Court: California Court of Appeals Court of Appeals
• Parties: CONSECO MARKETING, LLC, Plaintiff and Respondent, v. IFA AND INSURANCE SERVICES, INC., et al., Defendants and Appellants.

221 Cal.App.4th 831

164 Cal.Rptr.3d 788

CONSECO MARKETING, LLC, Plaintiff and Respondent,

v.IFA AND INSURANCE SERVICES, INC., et al., Defendants and Appellants.

B244444

Court of Appeal,

Second District, Division 1, California.

Filed November 22, 2013

See 8 Witkin, Cal. Procedure (5th ed. 2008) Enforcement of Judgment, § 449 et seq.

APPEAL from an order of the Superior Court of Los Angeles County, Matthew St. George, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed. (No. BS130398)

Kenneth D. Sisco, Long Beach, for Defendants and Appellants.

Adam D. Cotter; Anderson, McPharlin & Conners and Richard P. Tricker, Los Angeles, for Plaintiff and Respondent.

MALLANO, P.J.

Conseco Marketing, LLC (judgment creditor), obtained a judgment based on a sister state judgment pursuant to the Sister State and Foreign Money—Judgments Act (SSFMJA) (Code Civ. Proc., § 1710.10 et seq.) against IFA and Insurance Services, Inc. (IFA) and Retiring America and Insurance Services, Inc. (RA; collectively, judgment debtors). (Undesignated section references are to the Code of Civil Procedure.) Judgment debtors appeal from the order denying their motion to set aside default and vacate the judgment. (All references to judgment are to the judgment entered pursuant to the SSFMJA.)

Judgment debtors contend judgment creditor lacks standing to apply for entry of the sister state judgment because judgment creditor is not qualified to do business in California. They argue their motion is timely under the SSFMJA because they were not served with notice of entry of the judgment and only had belated “actual notice” of such entry. They maintain their motion is timely under section 473.5 and should have been granted under section 473.5 because they were deprived of an opportunity to defend in view of a lack of service of process and their belated “actual notice” of the sister state action.

This appeal presents these issues: Is a judgment creditor which is a foreign limited liability company required to qualify to do business in California as a precondition to applying for entry of a sister state judgment under the SSFMJA? Is the 30–day limit to make a motion to vacate the judgment triggered by service on a corporate judgment debtor's designated agent for service, without regard to when the judgment debtor obtained “actual notice” of entry of the sister state judgment under the SSFMJA? Is section 473.5 applicable to the SSFMJA?

We affirm the order. A judgment creditor which is a foreign limited liability company does not have to qualify to do business in California in order to enforce a sister state judgment under the SSFMJA. Substantial evidence supports the trial court's findings judgment debtors were served properly with process in the sister state action and with notice of entry of the judgment through their designated agent for service in California. Such service on the designated agent, not a judgment debtor's “actual notice,” triggers the 30–day limit for making a motion to vacate the judgment, so long as the judgment debtor was effectively served with process in the sister state action. Section 473.5, which is a procedural remedy regarding relief from a default or default judgment, is inapplicable to a judgment entered under the SSFMJA.

BACKGROUND

1. The Indiana or Sister State Action

On August 20, 2010, in an Indiana state court, judgment creditor filed a complaint for breach of contract against judgment debtors. On August 26, 2010, the clerk served a copy of the summons and complaint by certified mail with return receipt requested to each of the judgment debtors in care of Executive on the Go, Inc. (Executive), their designated agent for service. On August 30, 2010, Angela Cole of Executive signed the return receipts in California.

On October 6, 2010, judgment creditor filed a motion for entry of default judgment. On October 14, 2010, the Indiana court entered a default against judgment debtors. On December 6, 2010, a hearing was set on the damages issue. On December 7, 2010, the court entered judgment in favor of judgment creditor and against judgment debtors for $675,256.45.

2. The California Full Faith and Credit Judgment

On February 15, 2011, in the Los Angeles Superior Court, judgment creditor filed its application for entry of judgment on sister state judgment pursuant to the SSFMJA. On February 25, 2011, the clerk entered the sister state judgment. On March 7, 2011, a registered California process server personally served a copy of the notice of entry of judgment on sister state judgment on Sandra Sisneros, a “Person Authorized By The Corporation[, namely, Executive,] to Receive Service of Process” on behalf of IFA and RA. Proofs of service were filed on March 11, 2011.

3. Denial of Motion to Set Aside Default and Vacate Judgment

On August 22, 2012, seventeen months after personal service of the notice of entry of the sister state judgment, judgment debtors filed a motion to vacate judgment. Judgment creditor filed opposition and objections to certain declarations.

The superior court denied the motion as untimely. This appeal is taken from that order.

DISCUSSION

1. Enforcement of Sister State Judgment in California through SSFMJA

a. Sister State Judgment Entitled to Full Faith and Credit

“Article IV, section 1 of the United States Constitution provides that ‘[f]ull Faith and Credit shall be given in each State to the public Acts, Records and judicial Proceedings of every other State.’ ‘It has long been the law that “the judgment of a state court should have the same credit, validity, and effect in every other court in the United States, which it had in the state where it was pronounced.” [Citations.]’ [Citation.] ‘Therefore, under California law, the judgment of a sister state must be given full faith and credit if that sister state had jurisdiction over the parties and the subject matter, and all interested parties were given reasonable notice and opportunity to be heard. [Citation.]’ [Citation.]” (Liquidator of Integrity Ins. Co. v. Hendrix (1997) 54 Cal.App.4th 971, 975, 63 Cal.Rptr.2d 240 (Liquidator ).)

b. Application for Enforcement of Sister State Judgment

“[A] sister state judgment is not, by itself, enforceable in California. It is only after the sister state judgment has been made a California judgment that any form of execution or enforcement can be had.” (Epps v. Russell (1976) 62 Cal.App.3d 201, 204, 133 Cal.Rptr. 30.)

“In response to the constitutional mandate of full faith and credit, the California Legislature enacted [the SSFMJA, which sets forth] several statutory provisions that provide economical and expeditious registration procedures for enforcing sister state money judgments in California. [Citation.] A California judgment can be obtained simply by registering a sister state judgment with the superior court, thereby avoiding the necessity of bringing a completely independent action here. [Citations.] With certain exceptions, the new judgment has the same effect as an original California money judgment and may be enforced or satisfied in like manner.' [Citation.]” (Liquidator, supra, 54 Cal.App.4th at p. 975, 63 Cal.Rptr.2d 240.)

In California, pursuant to the SSFMJA, in a special proceeding “[a] judgment creditor may apply for the entry of a judgment based on a sister state judgment by filing an application pursuant to Section 1710.20.” (§ 1710.15, subd. (a).) “An application for entry of a judgment based on a sister state judgment shall be filed in a superior court.” (§ 1710.20, subd. (a).) “[T]he clerk shall enter a judgment based upon the application for the total of the following amounts as shown therein: [¶] (1) The amount remaining unpaid under the sister state judgment. [¶] (2) The amount of interest accrued on the sister state judgment (computed at the rate of interest applicable to the judgment under the law of the sister state). [¶] (3) The amount of the fee for filing the application for entry of the sister state judgment.” (§ 1710.25, subd. (a).)

As this court previously explained, the entry of a sister state judgment by the clerk is a ministerial, not a judicial, act, and the SSFMJA “simply permits the registration of a sister state judgment so it may be enforced against property located in this state. [Citation.]” (Bank One Texas v. Pollack (1994) 24 Cal.App.4th 973, 978–979, 29 Cal.Rptr.2d 510.) An application for entry of a sister state judgment under the SSFMJA is not the exclusive means to enforce the sister state judgment in California. As an alternative, such enforcement may be sought through a traditional lawsuit. (§ 1710.60.)

c. Thirty Days to Make Motion to Vacate Judgment Upon Notice

The omission of the SSFMJA to provide for notice and hearing before entry of the sister state judgment by the clerk does not render such judgment unconstitutional. After notice of entry of that judgment, the judgment debtor may make a motion to vacate the judgment. (Liebow v. Superior Court (1981) 120 Cal.App.3d 573, 576, 175 Cal.Rptr. 26.)

“Notice of entry of judgment shall be served promptly by the judgment creditor upon the judgment debtor in the manner provided for service of summons.... Notice shall ... inform the judgment debtor that the judgment debtor has 30 days within which to make a motion to vacate the judgment.” (§ 1710.30, subd. (a).) “Not later than 30 days after service of notice of entry of judgment pursuant to Section 1710.30 ... the judgment debtor, on written notice to the judgment creditor, may make a motion to vacate the judgment under this section.” (§ 1710.40, subd. (b).)

The judgment is subject to challenge on a variety of grounds, including failure to serve or defective service of the notice of entry of judgment. The 30–day limit does not apply where the judgment debtor was not served properly with process in the sister state action. (Airlines Reporting Corp. v. Renda (2009) 177 Cal.App.4th 14, 20, 99 Cal.Rptr.3d 66 [30–day limit does not apply where sis...