Summers v. McClanahan

• Decision Date: 12 June 2006
• Docket Number: No. B182869.,B182869.
• Citation: 44 Cal.Rptr.3d 338,140 Cal.App.4th 403
• Court: California Court of Appeals Court of Appeals
• Parties: Dirk SUMMERS, Plaintiff and Respondent, v. Rue McCLANAHAN, Defendant and Appellant.

44 Cal.Rptr.3d 338

140 Cal.App.4th 403

Dirk SUMMERS, Plaintiff and Respondent, v. Rue McCLANAHAN, Defendant and Appellant.

No. B182869.

Court of Appeal, Second District, Division 7.

June 12, 2006.

Haight Brown & Bonesteel, William Baumgaertner, Rita Gunasekaran, Los Angeles; The Law Offices of John C. Edwards and John C. Edwards for Defendant and Appellant.

Eugene Paolino, Moorpark, for Plaintiff and Respondent.

JOHNSON, Acting P.J.

The trial court awarded plaintiff Dirk Summers a $3.7 million dollar default judgment. Defendant Rue McClanahan appeals from the judgment and the trial court's orders denying her motions to set aside her default and vacate the judgment. Because we conclude plaintiff's attempted service of process did not substantially comply with the requirements of Code of Civil Procedure section 416.90, we reverse the first trial court order and remand the cause to the trial court with directions to set aside defendant's default, vacate the default judgment and set a reasonable time for defendant to file and serve such motions or responsive pleadings as she deems appropriate.

FACTS AND PROCEEDINGS BELOW

The essential facts are undisputed.¹

Summers filed this action against McClanahan for slander, libel and intentional infliction of emotional distress growing out of a failed joint business venture. The complaint seeks damages on each cause of action "in an amount exceeding $10,000,000 according to proof at the time of trial" and "an award of punitive and exemplary damages against defendant McClanahan according to proof at the time of trial."

Plaintiff's counsel, Eugene Paolino, declared he served the summons and complaint in this action on McClanahan on June 6, 2003 by leaving copies with Barbara Lawrence, McClanahan's "authorized agent," at Lawrence's office in Los Angeles and mailing copies to Lawrence at her office address. Included with the summons and complaint were letters from Paolino to Lawrence and McClanahan, a notice of deposition directed to McClanahan and deposition subpoenas directed to four other persons. Lawrence testified she "immediately" forwarded the documents to "John Edwards, Ms. McClanahan's attorney." Edwards currently represented McClanahan in another action involving Summers.

Edwards wrote to Paolino a few weeks after receiving the documents from Lawrence. Edwards complained Paolino's attempt to directly communicate with McClanahan "knowing full well that she is represented by counsel" constituted a violation of Rule 2-100 of the Rules of Professional Conduct. He also objected to the deposition notice and subpoenas and informed Paolino that unless he took the depositions off calendar "a motion to stay the depositions and to quash the notice and subpoenas will be made and sanctions requested[.]" Edwards did not contend the summons and complaint had been improperly served on McClanahan. Paolino did not reply to Edwards' letter.

On November 7, 2003 Paolino mailed a copy of a request for entry of default and court judgment to McClanahan in care of Lawrence at the same address he had used for the summons and complaint. The request for court judgment stated the amounts of general and special damages were "to be proved." Lawrence testified she never received this document. When McClanahan still did not respond to the complaint Paolino filed the request for entry of default and court judgment, along with a proof of service of the summons and a due diligence declaration.

At the default prove-up hearing Summers submitted an 11-page declaration summarizing his case against McClanahan and his professional background as a television writer and producer. He stated as a result of McClanahan's defamatory statements about him he had been unable to obtain work and sought damages for past and future lost earnings in the amount of $1.75 million, damages for loss of reputation in the amount of $1 million and punitive damages in the amount of $1 million. Summers made no attempt to serve McClanahan with this declaration or a statement of damages under Code of Civil Procedure section 425.11 or a statement of punitive damages under Code of Civil Procedure section 425.115.

The trial court entered a default judgment in favor of Summers and against McClanahan in the sum of $3.75 million.

Six days after entry of the judgment McClanahan filed a motion to set aside the default and default judgment on the grounds of improper service of the summons and extrinsic fraud or mistake.

The trial court denied this motion. The court agreed Lawrence was not authorized by McClanahan to accept service of process on her behalf. It also found, however, Lawrence forwarded the summons and complaint to Edwards who admitted to being McClanahan's counsel. Because the documents "found [their] way to the defendant by admitted receipt of counsel for defendant" the trial court concluded service was effective under Code of Civil Procedure section 416.90 which authorizes service of the summons and complaint on a person "authorized by [the defendant] to receive service of process."²

McClanahan filed a second motion to set aside the default and default judgment accompanied by a demurrer to the complaint. This time she based her motion on attorney fault under section 473, subdivision (b). In his declaration accompanying the motion Edwards stated at the time he received the complaint from Lawrence he did not believe McClanahan had been properly served. Accordingly he advised McClanahan she had been sued but that she had not been served and "she did not have to respond to the complaint until she was served." "Therefore," Edwards declared, "the decision to not file a response was entirely mine and was not the fault of Ms. McClanahan."

The trial court denied this motion too. The court ruled the second motion was a subsequent application for the same order it had previously denied and as such was barred by section 1008, subdivision (b) because it was not based on any new or different facts, circumstances or law; only on a different theory for relief. The court further ruled the motion was premature because Edward's "fault" was in concluding McClanahan had not properly been served but an appellate court might conclude Edwards was correct.

McClanahan filed a timely notice of appeal from the default judgment and the orders denying her motions to set aside the default and default judgment.

DISCUSSION

For the reasons discussed below we conclude the trial court erred in denying McClanahan's first motion to vacate the default and set aside the judgment based on Summers' failure to properly serve the summons and complaint.

A. Historical Background Of Section 416.90.

In 1969 the California Legislature enacted a comprehensive revision of the laws governing service of process.³ The Legislature based this revision on recommendations contained in a report by a joint committee representing the Judicial Council and the State Bar⁴ and these recommendations were adopted as the legislative history of the statute.⁵

Prior to the 1969 amendments many courts had required "strict and exact compliance" with the statutory requirements for service of process.⁶ In adopting a "liberal construction" of the new law our Supreme Court relied on its understanding of the statutes' legislative history and its well considered view of public policy.⁷ Although the court was misled as to the legislative history, its public policy analysis was clearly correct.⁸

At the time California enacted its new statutes many other jurisdictions had adopted a liberal, practical approach to service of process issues.

Karlsson v. Rabinowitz⁹ is illustrative of cases viewing service of process issues from a practical standpoint. Service of process on Rabinowitz was effected by leaving a copy of the summons and complaint with his spouse at their Maryland home three weeks after Rabinowitz had preceded his family to Arizona where he took a new job and bought a home intending never to return to Maryland. Ms. Rabinowitz remained in Maryland to complete moving arrangements and the sale of their home before joining her husband in Arizona. It was undisputed Ms. Rabinowitz promptly notified her husband of this service of process.¹⁰ The issue before the Court of Appeals was whether substituted personal service on Ms. Rabinowitz satisfied Rule 4, subdivision (d)(1) of the Federal Rules of Civil Procedure which provides for substituted service on a person at "his dwelling house or usual place of abode[.]"¹¹ In resolving this issue the court declined to choose between or attempt to reconcile cases "in hopeless and irreconcilable conflict" over the meaning of "dwelling house" and "usual place of abode."¹² Instead the court concluded insofar as a person's abode or dwelling depended on the person's intention to return or not return to his living quarters such an intent is not the test for effective service in itself but is "some indication as to whether or not it is likely in a particular case that the one served will actually receive notice of the commencement of the action and thus be advised of his duty to defend."¹³ The court went on to state: "To the extent that there is any rule or guide to be followed by the federal courts in such a case it is that where actual notice of the commencement of the action and the duty to defend has been received by the one served, the provisions of Rule 4(d)(1) should be liberally construed to effectuate service and uphold jurisdiction of the court, thus insuring the opportunity for a trial on the merits."¹⁴

The Karlsson court distinguished the facts in the case before it from those in Williams v. Capital Transit Co.¹⁵ In Williams, process was served on a defendant's ex-wife at the home they had once shared in Washington, D.C. At the time of service on the ex-wife she and the defendant had been separated three years and defendant had remarried and moved to Salt Lake City.¹⁶ Defendant's former spouse did not inform him she had been served...