Grappo v. McMills

Decision Date23 May 2017
Docket NumberA147522
Citation11 Cal.App.5th 996,240 Cal.Rptr.3d 164
CourtCalifornia Court of Appeals Court of Appeals
Parties Donald T. GRAPPO, Plaintiff and Appellant, v. Heather MCMILLS et al., Defendants and Respondents.

Law Office of Kathleen Aberegg, Kathleen Aberegg, San Francisco, for Plaintiff and Appellant.

Hartog, Baer & Hand, Ryan J. Szczepanik, for Defendants and Respondents.

Richman, Acting P.J.Representing himself, appellant Donald T. Grappo filed a complaint purporting to allege 10 causes of action. Seven of the causes of action were set forth in one paragraph, the other three ranging from two paragraphs to five—a complaint, we note, that as framed could not have withstood a demurrer. Grappo had the complaint served on Kenneth McKean, a man named in the caption but not identified in the complaint—and who from all indications had no relationship with Grappo. Six months after such service—and without warning to anyone—Grappo filed a request for default against McKean and his firm (McKean & McMills), seeking a default judgment for $9,982,308.83, with a claimed itemization of damages referring to numbers nowhere found in the complaint. The clerk entered the default on July 1, 2014, but the court refused to enter judgment, entering an order listing seven specific reasons why.

On November 23, 2014 McKean died, a death of which Grappo was aware. Two weeks later, Grappo filed another request for default and court judgment, a request "not mailed" to anyone because McKean was "now deceased." This request sought a judgment in the amount of $12,012,818.88, once again with numbers found nowhere in the complaint. This time, however, Grappo filled in the declaration portion in the request referring to "$60,000," an amount in the prayer for the claimed value of personal property referred to in the eighth cause of action "belonging to some of the heirs of the Michael A. Grappo 2003 Trust." Apparently based on that, the court entered judgment for Grappo and against McKean and McKean & McMills for $60,000 plus costs of $750.

Respondent Aubrey Cambra, the trustee of McKean’s trust, learned of the default judgment when a creditor’s claim was made in McKean’s estate, and filed a motion to vacate and set aside the default judgment. Grappo, now represented by counsel, opposed the motion asserting, however falsely, that at "the time of the entry of judgment [Grappo] was unaware" McKean had died. The trustee filed a reply, and the matter came on for hearing before the same trial court which had entered the judgment. Following a lengthy hearing, the trial court entered a comprehensive order vacating the judgment as to McKean.

Grappo appeals from that order, an appeal we reject as the trial court was right. And we publish the opinion, to remind trial courts that however burdened they be, they must vigilantly attend to their duty in connection with the default process, " ‘to act as gatekeeper, ensuring that only the appropriate claims get through.’ " ( Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 691, 84 Cal.Rptr.3d 351 ( Fasuyi ); Kim v. Westmoore Partners, Inc . (2011) 201 Cal.App.4th 267, 272–273, 133 Cal.Rptr.3d 774 ( Kim ).) Grappo’s claim here should not have gotten through, the default judgment never entered in the first place.

THE PROCEEDINGS BELOW

On November 8, 2013, "[s]elf [r]epresented" Grappo filed a complaint. The complaint names five defendants, two entities and three individuals, not one of which or whom is described or identified. Indeed, Grappo does not even identify himself, or describe any claimed connection or relationship with any of the defendants, his complaint beginning as follows: "COMES NOW the Plaintiff, Donald T. Grappo and says that: on or about April 28, 2009 and continuing through the year 2012, Defendants, and each of them did willfully and with malice aforethought misappropriate funds belonging to the Michael A. Grappo 2003 Trust."

We digress momentarily from a description of the complaint to note that Grappo cannot be a proper plaintiff as to claims held by a trust. The proper plaintiff is the trustee. ( Code Civ. Proc., § 369, subd. (a)1 ; O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1062, 9 Cal.Rptr.3d 286.) In short, the complaint as pled shows that Grappo has no standing. It also shows that no cause of action is properly pled.

The complaint states on the front page that it is for "fraud, breach of fiduciary duty, gross negligence, misappropriation of funds." However, the complaint itself purports to allege many more causes of action, 10 to be exact, the first seven of which are each alleged in one paragraph. The complaint refers to only four amounts of money: a claimed abstract of judgment held by another Grappo in the amount of $3,477,259.08 (set forth in the third cause of action), and three small amounts leading to a $1,000 per month claimed overpayment causing the Michael A. Grappo 2003 Trust to lose money. The latter references are in the first paragraph of the eighth cause of action, for "gross negligence and defalcation," which also includes this second paragraph: "9. Defendant McKean further removed or authorized the removal of items of personal property belonging to some of the heirs of the Michael A. Grappo 2003 Trust without prior notification to said property owners and without ever notifying said property owners of the disposal of these items of personal property which were being stored at the Piedmont property site."

The prayer of the complaint sought this:

"2. All excessive attorney’s fees returned to the heirs of the Michael A. Grappo 2003 Trust;

"3. All excessive Trustees fees charged the Trust by Trustees returned to the heirs of the Michael A. Grappo 2003 Trust;

"4. Punitive damages for loss of revenue to the trust determined and said amounts be returned to the heirs of the Michael A. Grappo 2003 Trust;

"5. Punitive damages for failed [sic ] to renew Abstract of Judgment in the sum of $3,477,259.08 plus interest thereon;

"6. The sum of $60,000.00 which is the value of property removed from the Piedmont property site and disposed of without notification to the owner of said property."

On December 30, 2013, McKean was served at his home in Piedmont.

On June 30, 2014, Grappo filed a request for entry of default against McKean and McKean & McMills, LP. Item 2 in the request, "Judgment to be entered," read as follows:

"2. Judgment to be entered.        Amount Credits Balance
                acknowledged
                "a. Demand of complaint         $                      $                    $0.00
                "b. Statement of damages
                "(1) Special                    $9,981.558.83          $            $9,981,558.83
                "(2) General                    $                      $                    $0.00
                "c. Interest                    $                      $                    $0.00
                "d. Costs (see reverse)         $750.00                $                  $750.00
                "e. Attorney fees               $                      $                    $0.00
                "f. TOTALS                      $9,982,308.83        $0.00         $9,982,308.83"
                

(Fn. and bold type omitted.)

Item 6, the declaration of mailing required under Code of Civil Procedure section 587, represented that the request was served on two law firms and on "Ken McKean, McKean & McMills LP, 28 Lorita Ave, Piedmont, CA 94611." Interestingly, one of the law firms, Cooper, White & Cooper, LLP, had on April 18, 2014 substituted in as counsel for Heather McMills, apparently the other principal of McKean & McMills.

On July 1, the clerk entered the default. However, the court entered an order denying the request for default judgment, indicating that it was "NOT ENTERED" for the following reasons, listing seven.

On November 23, McKean died, a death that obviously became known to Grappo. Two weeks later, on December 8, Grappo filed another request for default2 and court judgment. Item 2 of this request read as follows:

"2. Judgment to be entered.        Amount Credits Balance
                acknowledged
                "a. Demand of complaint         $2,000,000.00          $-0-          $2,000,000.00
                "b. Statement of damages
                "(1) Special                    $3,477,259.08          $-0-          $3,477,259.08
                "(2) General                    $                      $             $
                "c. Interest                    $6,504,309.80          $-0-          $6,504,309.80
                "d. Costs (see reverse)         $750.00                $-0-                $750.00
                "e. Attorney fees               $30,500.00             $-0-             $30,500.00
                "f. TOTALS                      $12,012,818.88         $-0-         $12,012,818.88
                
g. Daily damages were demanded in complaint at the rate of $10% per annum per day beginning (date): 11/08/2000. (Fn. & boldface omitted.)

In item 6, the declaration of mailing, Grappo checked the box that a copy of the request was "not mailed to the following defendants," going on to state that "Defendant Ken McKean and Ken McKean as owner of McKean & McMills, LP, is now deceased and could not be served." No service was made on McMills, apparently the other "owner" of "McKean & McMills" who was still alive—indeed, as noted, represented by counsel.

Grappo also filed a five-paragraph declaration in the request, which declaration read in its substantive entirety as follows:

"A complaint was filed in the above entitled matter on November 6, 2013. This Plaintiff affirms that the value of property which was removed without notice from the garage at the Piedmont Avenue property belonging to Declarant Donald T. Grappo is approximately $60,000.00. This Declarant cannot provide receipts for any of said property in that any and all information in connection with said property was also stored at the Piedmont Avenue property and was destroyed along with the property itself.

"I attach a copy of an email sent to me from attorney Brittain Habegger on March 21, 2011 which states in pertinent part ‘... It is my understanding that having given you and other family members several years to collect from the garage those things ...’

"At no time was there...

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  • Sass v. Cohen
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    ..."act as gatekeeper[s]" in default situations, "ensuring that only the appropriate claims get through"]; Grappo v. McMills (2017) 11 Cal.App.5th 996, 1013–1014, 240 Cal.Rptr.3d 164 ...
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    ...by the record, and thus in violation of the gatekeeper function required of the trial court. In Grappo v. McMills (2017) 11 Cal.App.5th 996, 240 Cal.Rptr.3d 164 ( Grappo ) we affirmed a trial court order granting relief from a default judgment because it was not supported by the record ther......
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    ...doubts in applying section 473 must be resolved in favor of the party seeking relief from default ....’ " ( Grappo v. McMills (2017) 11 Cal.App.5th 996, 1005, 240 Cal.Rptr.3d 164.) Aside from section 473, subdivision (b), "courts have the inherent authority to vacate a default and default j......
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