People ex rel. Interinsurance Exch. of Auto. Club of S. Cal. v. Mirsky

Decision Date21 September 2021
Docket NumberB297321
PartiesPEOPLE OF THE STATE OF CALIFORNIA, ex rel. INTERINSURANCE EXCHANGE OF THE AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA, Plaintiff and Respondent, v. ALEX SEMYON MIRSKY, Defendant and Appellant.
CourtCalifornia Court of Appeals Court of Appeals

PEOPLE OF THE STATE OF CALIFORNIA, ex rel. INTERINSURANCE EXCHANGE OF THE AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA, Plaintiff and Respondent,
v.

ALEX SEMYON MIRSKY, Defendant and Appellant.

B297321

California Court of Appeals, Second District, Seventh Division

September 21, 2021


NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County No. BC211613, Edward B. Moreton, Jr., Judge. Affirmed.

Law Offices of John T. Schreiber and John T. Schreiber for Defendant and Appellant.

Wallin & Russell, Michael A. Wallin and John C. Russell for Plaintiff and Respondent.

FEUER, J.

Alex Semyon Mirsky appeals from the superior court's denial of a motion to vacate a 2013 renewal of a default judgment and the underlying default judgment. In 2003 the superior court entered a default judgment of over $7.8 million against Mirsky. Interinsurance Exchange of the Automobile Club of Southern California (Interinsurance Exchange) renewed the judgment in 2013, and in 2018 it mailed notice of the renewal to Mirsky at an address Interinsurance Exchange claimed was Mirsky's last known address. On January 22, 2019 Mirsky filed a motion to vacate the renewal of judgment, or, in the alterative, vacate the default judgment under Code of Civil Procedure section 473, subdivision (d).[1] The trial court denied the motion, concluding Mirsky's motion to vacate the renewal of judgment was untimely and Mirsky failed to meet his burden to show the default judgment was void.

On appeal, Mirsky contends the trial court abused its discretion in denying his motion to vacate. Mirsky argues the notice of renewal of judgment was sent to the wrong address and the default judgment was void because Interinsurance Exchange failed to personally serve him with the second amended complaint in light of substantive changes from the prior complaints. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Criminal Actions for Fraud and Conspiracy

In 1998 Mirsky was charged in an information filed in federal court with three counts of mail fraud and conspiracy “to defraud and to obtain money and property from various insurance carriers by means of false and fraudulent pretenses, representations and promises.” The information alleged Mirsky invested in a Texas law office and used the office “to prepare and submit fraudulent medical and property damage insurance claims made by individuals who engaged in staged or fabricated automobile accidents. Also in furtherance of the scheme to defraud, defendant Mirsky recruited personal injury cases from cappers and other individuals who conducted staged and fabricated automobile accidents and referred them to the medical clinic and law offices in exchange for 50% or more of the fraudulent legal and medical payments.”

In 1999 Mirsky was charged in a felony complaint filed in the Los Angeles Superior Court with insurance fraud (Pen. Code, § 550, subd. (a)(1)) and conspiracy to commit the crime of capping (Pen. Code, § 182, subd. (a)(1); Ins. Code, § 750.)[2] The complaint alleged Mirsky “did unlawfully and knowingly present and cause to be presented a false and fraudulent claim for the payment of a loss and payment of a loss under a contract of insurance” and “did unlawfully conspire... to commit the crime of capping.”

Mirsky entered into a negotiated plea of guilty to the charges in the federal and state actions. On July 13, 1999 the superior court sentenced Mirsky to five years formal probation on the condition he serve a year in state prison (to run concurrent with his federal prison sentence) and to pay $20, 000 in restitution. On July 12, 1999 the federal court sentenced Mirsky to 21 months in federal prison.

B. The Civil Action and Default Judgment

On June 8, 1999 Interinsurance Exchange filed a qui tam action on behalf of the State of California against Mirsky and 26 other defendants for violation of the Insurance Fraud Prevention Act (Ins. Code, § 1871.7).[3] The complaint also asserted claims for constructive trust, equitable lien, restitution, and unfair business practices. The complaint alleged Mirsky operated a ring of law offices, attorneys, medical doctors, and medical billers who would stage automobile accidents for the purpose of making fraudulent insurance claims. Further, “[t]he ring knowingly and intentionally caused approximately 475 alleged automobile collisions to be reported to The Exchange as incidents which caused bodily injury. These collisions involved approximately 855 separate claimants. On information and belief each of these claimants was referred to one or more of the ‘law office defendants' and ‘medical defendants' in return for a fee, constituting capping.” Interinsurance Exchange sought damages “in an amount equal to three times the amount of each claim for compensation by the defendants, plus a civil penalty of $10, 000 for each violation of California Insurance Code § 1871.1.” Interinsurance Exchange filed a statement of damages seeking $15, 674, 374.50 from Mirsky.

On August 9, 1999 the complaint, summons, and statement of damages were served on Mirsky by substituted service on Mirsky's mother at Mirsky's home address at 1411 Fuller Avenue, Apartment 206, in Hollywood, California, with a copy mailed to the same address. Mirsky did not respond to the complaint. According to Mirsky's opening brief, Mirsky surrendered himself one month after service of the complaint to federal authorities to begin his 21-month federal prison sentence.

On January 10, 2000 the trial court sustained a demurrer brought by a codefendant as to the claims alleging fraud (and the related remedies), allowing “leave to amend with a representative sample of the facts underlying the accidents and claimants... From the complaint in this case, it doesn't seem possible for the defendant to know what he is accused of having done. A complaint must at least give some notice as to this.” The court overruled the demurrer as to the unfair competition claim, as to which “[a] valid claim under Business & Professions Code Section 17200 is stated.”

On May 9, 2000 Interinsurance Exchange filed its first amended complaint. Mirsky was served with the first amended complaint by mail at the Fuller Avenue address. On July 21, 2000 Interinsurance Exchange filed a second amended complaint, which generally contained the same allegations and prayer for relief, but it attached 27 exhibits identifying each of “the claims submitted to the Exchange for which a defendant is individually liable to the Exchange.” As to Mirsky, Exhibit A identified 318 separate claims for which Interinsurance Exchange sought $15, 674, 374.50.[4] The second amended complaint was also served by mail on Mirsky at his Fuller Avenue address.

On February 15, 2001 Interinsurance Exchange filed a request for entry of default. Interinsurance Exchange served Mirsky by mail at the federal prison in Nevada. On February 20, 2001 the superior court clerk entered Mirsky's default.

On March 12, 2001 Mirsky, representing himself, filed and served Interinsurance Exchange with an application for order extending time to answer.[5] He listed his address on the application as “1411 N. Fuller” in Los Angeles. In his application, Mirsky stated he “was served with the ‘second amended complaint' on December 14th 2000 while [he] was incarcerated at United States Prison Camp Nellis, Nevada, ” and he has “not willfully failed to file a responsive pleading as the [p]laintiff in this case [as] alleged in their ‘[r]equest for [e]ntry of [d]efault.' Unfortunately, because of my incarceration, I was unable to timely respond.” Mirsky requested “[a]n extension of 30 days... in order to prepare and file the answer and to avoid a default.”

On August 31, 2001 Interinsurance Exchange took Mirsky's deposition in this action in Los Angeles.[6] Mirsky invoked his Fifth Amendment privilege against self-incrimination as to all questions.

C. Entry of Default Judgment

On January 9, 2003 Interinsurance Exchange filed a request for default judgment against Mirsky. Interinsurance Exchange served Mirsky with the request, supporting declarations, and a supplemental memorandum by first-class mail at the Fuller Avenue address. Daniel Brogdon, the assistant group manager for Interinsurance Exchange, stated in his declaration that “Mirsky's total statutory liability is $8, 997, 548.99. The liability amounts are calculated pursuant to the factors established by Insurance Code section 1871.1.... With a total of 176 claims submitted by Mirsky, and an aggregate amount of the claims at $2, 412, 516.33, Mirsky is liable to the Exchange for not less than $8, 997, 548.99.”

After a hearing on January 29, 2003, the trial court (Judge Carolyn B. Kuhl) granted Interinsurance Exchange's request for a default judgment against Mirsky and others. Mirsky did not appear at the hearing. On February 20 the court entered a default judgment against Mirsky in the amount of $7, 131, 333.99 in penalties under Insurance Code section 1871.7, plus attorneys' fees of $739, 223.90, for a total of $7, 870, 557.89. On April 9, 2003 Interinsurance Exchange served Mirsky with notice of entry of court judgment by first-class mail at his Fuller Avenue address.

D. Renewal of Court Judgment

On February 15, 2013 Interinsurance Exchange filed an application for and renewal of judgment against Mirsky. The application listed Mirsky's “last known address” as 3336 Dona Rosa Drive in Studio City, California. Interinsurance Exchange requested $15, 728, 207.88, including postjudgment interest. The same day the superior court entered the renewal and issued a notice of renewal of judgment, which provided: “1. This renewal extends the period of enforceability of the judgment until 10 years from the date the application for renewal was filed. [¶] 2. If you object to this renewal, you may make a motion to vacate or modify the renewal with this court. [¶] 3. You must make...

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