Hearn v. Howard

• Decision Date: 01 September 2009
• Docket Number: No. B208782.,B208782.
• Citation: 99 Cal. Rptr. 3d 642,177 Cal.App.4th 1193
• Court: California Court of Appeals Court of Appeals
• Parties: BARBARA HEARN et al., Plaintiffs and Respondents, v. LISA M. HOWARD, Defendant and Appellant.

177 Cal.App.4th 1193

99 Cal. Rptr. 3d 642

BARBARA HEARN et al., Plaintiffs and Respondents, v. LISA M. HOWARD, Defendant and Appellant.

No. B208782.

Court of Appeals of California, Second District, Division Two.

September 1, 2009.

Lisa M. Howard, in pro. per., for Defendant and Appellant.

Parker Shumaker Mills and Howard M. Fields for Plaintiffs and Respondents.

OPINION

DOI TODD, Acting P. J.

Defendant and appellant Lisa M. Howard appeals following the denial of her motion to vacate entry of default and a default judgment against her on the complaint filed by plaintiffs and respondents Barbara Hearn and Thierry Didelot (plaintiffs). She contends the trial court abused its discretion by determining that she was properly served by substituted service and declining to find that entry of default was the result of mistake, surprise, inadvertence or excusable neglect. Finding no basis to conclude the trial court abused its discretion, we affirm, though we modify the judgment to omit $15,000 in attorney fees because that amount was not specified in the complaint.

FACTUAL AND PROCEDURAL BACKGROUND

On May 14, 2007, plaintiffs filed a complaint for damages against appellant, Sunitha Anjilvel and Stewart Richlin, alleging a claim for legal malpractice arising from their negligent representation of plaintiffs in a prior action which precluded plaintiffs from collecting a judgment and setting aside a fraudulent conveyance.

The following day, May 15, 2007, plaintiffs' counsel sent a notice and acknowledgement of receipt to all three defendants which enclosed the summons and complaint and, in order to avoid service of process, requested in a cover letter that each of them sign and return the notice and acknowledgement in a provided envelope. Defendants Anjilvel and Richlin contacted plaintiffs' counsel in response to the request; plaintiffs ultimately dismissed Anjilvel and entered into a nominal settlement with Richlin. Approximately one month later, appellant sent plaintiffs' counsel a nine-page letter in which she requested a settlement of the action comprised of plaintiffs' dismissal. She indicated that she would revoke the settlement offer if forced to file a responsive pleading. The balance of the letter addressed the merits of the action. Plaintiffs' counsel immediately responded, refuting appellant's assertions and rejecting the proposed settlement.

Having received no response from appellant, on July 11, 2007, plaintiffs' counsel sent a letter to appellant, which stated in part: "Please let me know if you will voluntarily appear by the filing of whatever pleading you wish or if I should just send out a process server." After appellant neither responded by letter nor filed a responsive pleading, plaintiffs arranged for service of process at 1247 Lincoln Boulevard, Suite 343 in Santa Monica, which was the address on appellant's letterhead and the one that appears for her on the California State Bar's Web site.

According to a declaration of due diligence submitted by registered California process server Isaac Villarreal, he made three attempts to personally serve appellant on July 27, July 30 and August 2, 2007. During the first attempt, Villarreal learned that the address was a post office box rental store. During each attempt, the store clerk declined to confirm that appellant rented a post office box there. During the third attempt, Villarreal left the documents—including the summons and complaint—with the store clerk, identified as "`John Doe' (Caucasian male; 5'5"; 40's; 170 lbs; wearing baseball cap)." Also on August 2, 2007, Villarreal mailed copies of the documents to appellant at the same address. According to a proof of service of summons filed on August 29, 2007, Villarreal averred that he effected substituted service by these means.

Appellant did not file a responsive pleading and, on September 18, 2007, plaintiffs served on her by mail a request for entry of default. The trial court filed the request and entered default on September 20, 2007. In between those dates, on September 19, 2007, appellant wrote a letter to plaintiffs' counsel contending that the August 29, 2007 proof of service was false and fraudulent, and denying that she had been served in any "authorized fashion." Plaintiffs' counsel responded via e-mail on September 19, 2007, indicating that substituted serviced as authorized by Code of Civil Procedure section 415.20¹ was effectuated on August 2, 2007, and service was deemed complete 10 days thereafter. Counsel also advised that a request to enter default had been submitted but not yet entered.

Appellant did nothing until she appeared in court on November 19, 2007, at the default prove-up hearing. After some colloquy between the trial court and appellant, plaintiffs' counsel provided appellant with a copy of the complaint. Thereafter, plaintiffs filed a second proof of service indicating that appellant had been personally served with the complaint on November 19, 2007. The trial court then reset the default prove-up hearing. Appellant and plaintiffs' counsel engaged in another series of correspondence regarding both service and the merits of the lawsuit.

Appellant again appeared in court at the continued default prove-up hearing on December 20, 2007. She participated in the hearing for some portion of time, but was ultimately escorted from counsel table to the jury box by one or two bailiffs. The trial court heard testimony from plaintiffs concerning the facts of the underlying litigation and from their new attorney who opined both that appellant failed to comply with the applicable standard of care and that plaintiffs would have prevailed in the underlying action had appellant's representation met the standard of care. Plaintiffs presented documentary evidence supporting their damages request, comprised of $245,000 for the original uncollected judgment, $176,090 in interest and $15,000 for attorney fees paid to appellant. At the conclusion of the hearing, the trial court entered judgment in favor of plaintiffs and against appellant in the amount of $436,090 plus costs in the amount of $320.

On February 28, 2008, appellant moved to vacate the default and the default judgment pursuant to section 473. Appellant asserted that default was improperly entered because she was not properly served until November 2007 and that the December 2007 default judgment was therefore prematurely and fraudulently entered. Concurrently with the motion to vacate, appellant submitted a proposed motion to strike and proposed demurrer. Plaintiffs opposed the motion to vacate on the grounds that the motion was untimely; the motion did not include the exhibits and declarations referenced therein; and there was no surprise, mistake or excusable neglect warranting relief.

Following a hearing on April 18, 2008, the trial court denied the motion to vacate. This appeal followed.

DISCUSSION

Appellant contends that in denying her motion to set aside the entry of default and the default judgment, the trial court abused its discretion because she adequately demonstrated that substituted service of the summons and complaint did not comply with the statutory requirements. She further contends that she showed the default judgment was the result of mistake, surprise, inadvertence or excusable neglect in that it was entered just 30 days after she was personally served with the complaint in court. Finally, she contends the default judgment was improperly entered because no amount of damages was specified in the complaint. We find no merit to any of these contentions.

I. The Trial Court Properly Exercised Its Discretion in Denying Appellant's Motion to Vacate Entry of Default and the Default Judgment Pursuant to Code of Civil Procedure Section 473

(1) Appellant sought relief under two separate provisions of section 473, a statute which provides a procedural basis for obtaining relief from a default judgment according to specified grounds. First, she contended she was improperly served with the summons and complaint. As explained in Ellard v. Conway (2001) 94 Cal.App.4th 540, 544 : "`[A] default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void. [Citation.]' [Citation.] Under section 473, subdivision (d), the court may set aside a default judgment which is valid on its face, but void, as a matter of law, due to improper service. [Citations.]" (Accord, Sakaguchi v. Sakaguchi (2009) 173 Cal.App.4th 852, 858 .) Where the question on appeal is whether the entry of default and the default judgment were void for lack of proper service of process, we review the trial court's determination de novo. (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495-496 .)

Alternatively, appellant contended she was entitled to relief pursuant to section 473, subdivision (b), which states that a court "may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect." Appellant correctly observes that a trial court order denying relief under section 473, subdivision (b) is "`scrutinized more carefully than an order permitting trial on the merits.'" (H. D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 1368 .) "Because the law favors disposing of cases on their merits, `any doubts in applying section 473 must be resolved in favor of the party seeking relief from default [citations].'" (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 [35 Cal.Rptr.2d 669, 884 P.2d 126].) But that said, "[a] motion to vacate a default and set aside judgment (§ 473) `is addressed to the sound discretion of the trial court, and in the absence of a clear showing of abuse ... the exercise of that discretion will not be disturbed on appeal.' [Citations.] Moreover, all presumptions will be made in...