Opinion
D072208
06-14-2018
HOWARD ADLER, AS SETTLOR AND SOLE TRUSTEE FOR THE HOWARD ADLER 1999 TRUST, Plaintiff and Appellant, v. CITY OF NATIONAL CITY, Defendant and Respondent.
Law Offices of Brian H. Erickson and Brian H. Erickson for Plaintiff and Appellant. Daley & Heft and Lee H. Roistacher, Mitchell D. Dean, Heather E. Paradis for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2016-00038651-CU-MC-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Judith F. Hayes, Judge. Affirmed. Law Offices of Brian H. Erickson and Brian H. Erickson for Plaintiff and Appellant. Daley & Heft and Lee H. Roistacher, Mitchell D. Dean, Heather E. Paradis for Defendant and Respondent.
Plaintiff and appellant Howard Adler, in his capacity as settlor and sole trustee of the Howard Adler 1999 Trust, sued in equity to set aside and vacate a stipulated judgment and a later amendment to the judgment that he claimed had been obtained without his knowledge or consent in an action filed by defendant and respondent City of National City (City). He appeals a judgment of dismissal entered after the trial court granted City's motion for judgment on the pleadings. Adler contends he stated an equitable cause of action to set aside the stipulated judgment and the amendment as void on their face because (1) a trust cannot sue or be sued, nor can it be a judgment debtor and (2) the underlying stipulation did not qualify for the expedited procedure (Code Civ. Proc., § 664.6) used to enter judgment. He further contends his complaint adequately alleges extrinsic fraud and mistake warranting an order setting aside the judgments, and that the court erred in other respects. He finally contends the court abused its discretion by denying him leave to amend.
References to Adler are to appellant Howard Adler.
Undesignated statutory references are to the Code of Civil Procedure.
We affirm the judgment. City argues this court has authority to amend the judgment to add Adler as a defendant under section 187, which inquiry requires a factual finding that Adler's interests were adequately represented, as well as an exercise of discretion. We decline that request for the reasons stated below.
FACTUAL AND PROCEDURAL BACKGROUND
Because a motion for judgment on the pleadings is similar to a general demurrer (Estate of Dayan (2016) 5 Cal.App.5th 29, 39-40), we apply the same principles when we state the background facts. That is, we accept as true all material allegations of Adler's complaint, but not the truth of contentions, deductions or conclusions of law. (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512; see also T.H. v. Novartis Pharmaceuticals Corporation (2017) 4 Cal.5th 145, 156-157.) We may consider evidence outside the pleadings that the court considered without objection. (Estate of Dayan, at p. 40.) In connection with City's motion, the trial court judicially noticed several documents. This court granted City's request for judicial notice of those same documents. City has asked that we take judicial notice of several other documents that were not before the trial court; we address that aspect of City's motion in part II of this opinion, post.
Proceedings Leading Up to the Stipulated Judgment and Amended Stipulated Judgment
The Howard Adler 1999 Trust (the Trust) owns property located at 105 East 8th Street in City on which there is a bar and restaurant. The restaurant is operated by a corporation, McDini's Inc., whose officers are Ben Adler and Charleton Adler. As of at least July 2008, a conditional use permit (CUP) permitted live music, entertainment and dancing on the premises. City required the McDini's owners to apply for a new CUP in 2009.
In 2010, City brought a nuisance abatement action in San Diego County Superior Court against Ben Adler, Charleton Adler, McDini's, and the Trust, identified in that pleading as the "Adler Howard Trust 11-23-99." (People v. Adler (Super. Ct. San Diego County, 2012, No. 37-2010-00092488-CU-MC-CTL (the Abatement Action).) City's proof of service indicates that Ben Adler on behalf of the Trust was served in June 2010 at the 105 East 8th Street address. The Abatement Action was based, in part, on the defendants' failure to comply with the CUP pertaining to live entertainment and other conditions.
On December 17, 2010, the court in the Abatement Action entered a stipulated judgment in the matter signed by Ben Adler, Arthur Sloan as the "Attorney for Defendants," and Charleton Adler, who signed in his individual capacity, as the Trust's "Representative," and as the representative of McDini's Restaurant Corp. The stipulated judgment required McDini's to immediately cease all operations, but was stayed on condition, among others, that McDini's apply for a new CUP within 60 days and in the interim cease all live entertainment. It authorized City to enforce the stipulated judgment if the defendants did not comply with its terms.
In March 2012, the defendants in the Abatement Action appeared via counsel, attorney Lawrence Frankel, at an ex parte hearing to modify the stipulated judgment. About a week later, the court filed an amendment to the stipulated judgment signed by Frankel as the attorney for the defendants, Ben Adler, Charleton Adler, McDinis, Inc. and some individual on the Trust's behalf. The amendment permitted McDini's to present live entertainment under a new CUP as long as the defendants complied with all laws and conditions of any permit approvals.
The signature block does not identify a person, but is simply for the "Adler Howard [sic] Trust 11-23-99." The signature itself is indecipherable, but appears to be similar to that of Ben Adler.
The Trust Subsequently Files Various Motions and Legal Proceedings, Including to Rescind or Vacate the Stipulated Judgment
In September 2013, defendants in the Abatement Action, including the Trust, through attorney Frankel who was "specially appearing for all [four] defendants," unsuccessfully applied for emergency injunctive and declaratory relief. Thereafter, City successfully applied to reinstate the prohibition of live entertainment at McDini's. The related orders indicate that Ben Adler, Charleton Adler, McDini's Inc. and the Trust appeared at the hearing on the matter through attorney Frankel.
The trial court ruled it had no jurisdiction over the issues raised and relief sought. The minute order on that ex parte request indicates that defendants' application anticipated a petition for writ of administrative mandamus, which had not yet been filed. Ben Adler later filed such a petition, as to which City successfully moved for judgment on the pleadings. That order was the subject of an earlier appeal in which this court affirmed the judgment entered by the superior court following its order. (Benjamin Adler v. City of National City (Apr. 21, 2016, D067885) [nonpub. opn.].)
In September 2014, Adler, the Trust, Ben Adler and Charleton Adler, represented by attorney Donald Beury, filed suit in federal district court challenging City's revocation of the CUP on various constitutional grounds. In part, the district court complaint alleges that City "has made unreasonable demands and ultimately has insisted that the Plaintiff's [sic] cease presenting live music." Adler and the Trust alleged City's "prohibitions on entertainment, music and dancing have effectively reduced, diminished and destroyed the value of the property known as 'McDini's[.]' " Adler, the Trust and the other plaintiffs sought injunctive relief permitting them to present live music and dancing at the restaurant. On August 4, 2015, the district court entered judgment for City.
As we explain in part II, post, the September 2014 complaint is judicially noticeable as a court record, and we may also take judicial notice of the fact the Trust was a party to that proceeding represented by counsel. (Evid. Code, § 452, subd. (d); see Kimco Staffing Services, Inc. v. State (2015) 236 Cal.App.4th 875, 881, fn. 6; Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 754.) We likewise take judicial notice of other court filings involving the Trust as specified below.
In mid-August 2015, attorney Beury on behalf of the Trust and other defendants in the Abatement Action moved to rescind or vacate the stipulated judgment on grounds (1) the CUP was an inappropriate device to authorize live entertainment, rather, based on newly discovered evidence, a police permit was the exclusive method for such activities; (2) the court's order was only temporary, and defendants had a procedural due process right to a full hearing with sworn testimony; (3) the CUP was issued solely for the purpose of serving alcoholic beverages, as to which defendants were not in violation; and (4) the amendment to the stipulated judgment was issued against a non-entity, McDini's Inc., which was a "non-existent corporation . . . ." The court voided the filing for the defendants' failure to pay a filing fee, but ruled it would deny the motion were it to consider it on the merits.
In October 2015, the Trust filed a claim for damages against City, claiming the restaurant building exterior had been damaged. The Trust also sued City and others in small claims court for various reasons. In June 2016, the Trust and Ben Adler, representing themselves, filed suit against the Internal Revenue Service in federal district court.
Adler Alleges He Learns of the Stipulated Judgment
In August 2016, McDini's approached Adler to renegotiate the lease terms for the property. It sought a sizable reduction in rent paid to the Trust, as the business was no longer sustainable at the present market rate due to the loss of revenue related to the CUP's revocation and absent the ability to present live entertainment. Adler alleges that during these discussion in August 2016, he first learned of the stipulated judgment and the court order against McDini's and the Trust.
The Present Proceedings and City's Motion for Judgment on the Pleadings
In November 2016, Adler on behalf of the Trust, represented by attorney Beury, filed what he characterized as "an independent action in equity" seeking to vacate the stipulated judgment. He asserted two causes of action to set aside and vacate the judgment, the first based on lack of personal jurisdiction due to a "defective and invalid" proof of service, the second based on extrinsic fraud and mistake. In part, Adler alleged he in his capacity as trustee of the Trust was never served with the City's nuisance abatement action, he was never a party to that action, and he only first became aware of the judgment in August 2016. He alleged he never signed the stipulated judgment or its amendment. Adler alleged that the court approved the judgment mistakenly believing the settlement was signed by "all parties" that is, Ben Adler, Charleton Adler, McDini's Inc., and the Trust. Adler alleged the judgment was obtained by extrinsic fraud or mistake as the "alleged service on plaintiffs by defendants in the prior action was defective and invalid as defendants knew from their own personal knowledge that the . . . Trust, as a 'Trust' could not receive service of process, and that . . . Adler, Settlor and Sole Trustee of the Howard Adler 1999 Trust was not a signatory to the stipulated judgment." The complaint alleges the extrinsic fraud or mistake had "also prevented the Plaintiff from obtaining a fair adversary hearing . . . ." Adler's complaint includes a sworn declaration of attorney Beury, attaching, among other documents, the June 6, 2010 proof of service of City's 2010 complaint, the September 2010 and March 2012 judgments, and the September 2013 order reinstating the prohibition of live entertainment.
City moved for judgment on the pleadings, arguing the Trust had waived any personal jurisdiction challenge by appearing in the action, and that it could not set aside the judgment for extrinsic mistake because, assuming someone other than Howard Adler had signed the judgment on behalf of the Trust, any invalid, forged or fraudulent signature constituted intrinsic mistake for which there was no relief in equity.
In opposition, Adler argued the stipulated and amended judgments were void on their face because the stipulation, which he did not sign, did not meet the requirements for use of the expedited procedure of section 664.6 and the Trust could not be sued or have judgment taken against it. Adler argued his complaint adequately stated causes of action for extrinsic fraud and mistake.
In reply, City pointed out in part that equity precluded Adler's argument because the Trust had appeared in the Abatement Action, the Trust's capacity to be sued was never raised, and the Trust had previously moved to vacate the judgment without raising that issue.
The trial court granted City's motion. It ruled the complaint's allegations were "belied by judicially noticeable documents filed by the . . . Trust in the underlying 2010 action," explaining: "Because the Trust appeared in the 2010 action, and authorized the subject settlement agreement through its purported representative, the Trust waived any issues concerning jurisdiction in that matter." The court further ruled that intrinsic fraud or mistake in obtaining the stipulated judgment, assuming the existence of such circumstances, would not serve as a basis to set aside the judgment. The court suggested the complaint did not state an actionable claim because Adler had not asserted any such defense in the original action; it pointed out Adler was represented by the same counsel as in 2015 when Adler sought to set aside the same judgment but did not make the same arguments, which the court considered waived. Finally, the court denied Adler leave to amend to allege the Trust did not appear in the 2010 action and he lacked knowledge or involvement in that case until August 2016. Pointing out extrinsic fraud occurred where a party was deprived of the opportunity to present their claim or defense to the court other than by its own conduct, it ruled Adler did not assert he could allege his conduct did not contribute to the claimed lack of opportunity to participate.
Adler filed this appeal from the ensuing judgment of dismissal.
DISCUSSION
I. Standard of Review
"A motion for judgment on the pleadings presents the question of whether 'the plaintiff's complaint state[s] facts sufficient to constitute a cause of action against the defendant.' [Citation.] The trial court generally considers only the allegations of the complaint, but may also consider matters that are subject to judicial notice. [Citation.] ' "Moreover, the allegations must be liberally construed with a view to attaining substantial justice among the parties." [Citation.] "Our primary task is to determine whether the facts alleged provide the basis for a cause of action against defendants under any theory." ' [Citation.] 'An appellate court independently reviews a trial court's order on such a motion.' " (Jacks v. City of Santa Barbara (2017) 3 Cal.5th 248, 272.) If the order is correct on any theory of law applicable to the case, we will affirm it regardless of the considerations used by the superior court to reach its conclusion. (Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216; see Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034 [ruling on a demurrer].)
II. City's Request for Judicial Notice of Documents Not Before the Trial Court
City asks this court to take judicial notice of documents that were not before the trial court, consisting of certain court filings; a statement of information filed with the Secretary of State; planning committee resolutions; appeals of city actions; and a recorded notice of restriction on the McDini's property filed by Ben Adler. City argues the documents are judicially noticeable as either court records (Evid. Code, § 452, subd. (d)), official city records (Evid. Code, § 452, subd. (b)), or records of government sources or recorded documents (Evid. Code, § 452, subd. (c)). In an accompanying declaration, City's counsel avers: "When the request for judicial notice was made in the trial court, I did not realize that these documents would be necessary. I did not realize these documents would be relevant until preparing the respondent's brief and formulating the arguments in response. None of this material relates to post-judgment matters." He also states the material is "relevant to this appeal because it relates to the arguments [Adler] is making in his effort to vacate the judgment, and the City's position on why the judgment should remain."
City also suggests judicial notice of these documents is proper under subdivision (h) of Evidence Code section 452, which gives courts discretion to take judicial notice of "[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy." Because the documents are not "[f]acts and propositions" and City does not otherwise explain what facts and propositions we should draw from these documents or why they are relevant, this ground lacks merit.
Adler responds that judicial notice is not a substitute for formal proof. He argues the documents are irrelevant, disputed and constitute inadmissible hearsay, in part because none of the documents "refers to Howard Adler in his capacity as Trustee, where the Complaint [in this case] states that he is and was the sole trustee of the trust and thus the only person who could sue or be sued regarding the trust." He maintains City cannot prove via these documents that the Trust was a party or that it had been represented by counsel in the past in other cases.
" ' "Judicial notice is the recognition and acceptance by the court, for use by the trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an issue in the action without requiring formal proof of the matter." [Citation.]' [Citation.] ' "Judicial notice may not be taken of any matter unless authorized or required by law." (Evid. Code, § 450.) . . . A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute. [Citation.] Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable.' " (Unruh-Hazton v. Regents of University of California (2008) 162 Cal.App.4th 343, 364-365; accord, StorMedia Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9; C.R. v. Tenet Healthcare Corp. (2009) 169 Cal.App.4th 1094, 1103-1104.) "Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning. . . . The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable." (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) " '[J]udicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.' " (Id. at p. 375.) However, "[w]here . . . judicial notice is requested of a legally operative document . . . the court may take notice not only of the fact of the document and its recording or publication, but also facts that clearly derive from its legal effect." (Scott v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at p. 754.) Thus, " '[c]ourts have taken judicial notice not only of the existence and recordation of recorded documents but also a variety of matters that can be deduced from the documents.' " (Ibid.) " 'When a court is asked to take judicial notice of a document, the propriety of the court's action depends upon the nature of the facts of which the court takes notice from the document . . . . [Appellate court] decisions . . . establish that a court may take judicial notice of the fact of a document's recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document's legally operative language, assuming there is no genuine dispute regarding the document's authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.' " (Scott, at p. 755, quoting Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, disapproved on other grounds in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939, fn. 13; see Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117 [trial court properly took judicial notice of the parties, dates, and legal consequences of a series of recorded documents relating to a real estate transaction].)
Here, "[b]ecause we review the judgment of the trial court, and the question posed is whether the trial court erred in sustaining the demurrer to the complaint, we ordinarily look only to the record made in the trial court." (Verizon California Inc. v. Board of Equalization (2014) 230 Cal.App.4th 666, 674, fn. 2, citing Brosterhous v. State Bar (1995) 12 Cal.4th 315, 325.) Where a matter was not before the trial court, a reviewing court may take judicial notice but need not do so, and often will not where there is no explanation for the requesting party's failure to request judicial notice in the trial court. (Brosterhous, at p. 325; Doers v. Golden Gate Bridge, etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1.) Here, counsel's explanation—that he did not realize in the trial court that these documents would be necessary or relevant, and that the documents are relevant because they "relate[]" to the parties' arguments—lacks sufficient detail to permit us to take judicial notice of any document other than the court records (Exs. A, C, D, and E to City's request) and the Trust's tort claim filed with City (Ex. D to City's request). As to the court records, we will exercise our discretion to take judicial notice of the fact that the Trust purported to appear or sue as a party to court proceedings, was represented by counsel in most of them, and that it made certain allegations as reflected in those documents. (Evid. Code, §§ 452, subd. (d)(1), 459, subd. (a); Falcon v. Long Beach Genetics, Inc. (2014) 224 Cal.App.4th 1263, 1273 [proper to take judicial notice of existence and pendency of court proceedings].) As to the tort claim, we may take judicial notice of its filing and contents, but not its truth. (Evid. Code, § 452, subd. (c); Gong v. City of Rosemead (2014) 226 Cal.App.4th 363, 368, fn. 1.) The Trust's appearance and representation by counsel, or the resulting legal effect, is neither hearsay, nor is it irrelevant to the issues presented by City's motion for judgment on the pleadings, which asserted in part that the Trust had forfeited a personal jurisdiction challenge by generally appearing in the 2010 action. Adler's assertions to the contrary are unsupported by authority.
III. First Cause of Action to Set Aside Judgment for Lack of Personal Jurisdiction
On appeal, Adler does not squarely challenge the trial court's ruling as to his first cause of action that he waived or forfeited issues of personal jurisdiction over the Trust, based on the Trust's appearance in the 2010 action. Rather than address the adequacy of his complaint's allegations in accordance with the proper review standard, he argues the merits of his claim that the stipulated and amended judgments are void as a matter of law for various reasons, primarily that the Trust could not be a party or judgment debtor, the Trust was not actually a party to the action, and the judgments did not comply with section 664.6 in that Adler as the trustee did not sign the stipulation.
These arguments do not cause us to question entry of judgment on the pleadings on the first cause of action premised on the absence of personal jurisdiction, which the court acquires over a defendant via a summons. (Mannesmann Demag, Ltd. v. Superior Court (1985) 172 Cal.App.3d 1118, 1122-1123 [" 'A summons is the process by which a court acquires personal jurisdiction over a defendant in a civil action' "].) The trial court took judicial notice of both the stipulated judgment and amended judgment, as well as City's complaint in the 2010 action, which named the Trust as a defendant and was purportedly served on the Trust. Both the stipulated and amended judgments reflect the Trust's appearance and signature by either Charleton or Ben Adler on the Trust's behalf, as well as its representation by counsel. That the Trust purported to appear in the action via either Ben or Charleton and represented by counsel without any objection on personal jurisdiction grounds, prevents Adler from stating a claim for equitable relief to set aside the judgments on that stated ground. (See In re R.L. (2016) 4 Cal.App.5th 125, 148 [" 'A general appearance occurs when the defendant takes part in the action and "in some manner recognizes the authority of the court to proceed" ' "; "a general appearance constitutes consent to the court's personal jurisdiction regardless of any prior defect in notice"]; Falcon v. Long Beach Genetics, Inc., supra, 224 Cal.App.4th at p. 1279 [execution of stipulation constituted general appearance in lawsuit, operating as a consent to jurisdiction].)
We recognize that City's proof of service of the 2010 action does not reflect service on Howard Adler as the trustee of the Trust. However, it reflects personal service on Ben Adler as the Trust's "authorized agent." Though a falsified proof of service can establish extrinsic fraud (see Trackman v. Kenny (2010) 187 Cal.App.4th 175, 181), Adler does not allege that Ben Adler was not actually served, and thus he has not alleged the process server lied, or that the proof of service was false. Further, even accepting Adler's allegation that City had personal knowledge that the Trust could not receive service of process, the summons and complaint was not served on merely the Trust as an entity but on Ben Adler individually on the Trust's behalf. As a matter of law, Adler as trustee had power to delegate management functions to an agent. (Prob. Code, § 16052.) The allegation thus does not establish a claim against City for extrinsic fraud for a falsified proof of service, and is not evidence of City's fraud or deception. This is not a matter where the Trust thereafter failed to appear in the action; in subsequent proceedings either Ben Adler or Charleton Adler, represented by counsel, purported to represent the Trust and signed the stipulated judgment on its behalf, giving City no reason to believe the Trust was not a proper party. In 2013, the Trust purported to appear via counsel to seek injunctive and declaratory relief in the Abatement Action. In 2014, Adler and the Trust brought the federal district court case against City challenging City's action in barring live entertainment. In 2015, the Trust as a named party, represented by attorney Beury (the same attorney who filed the present 2016 equitable action on Adler's behalf), moved to rescind the stipulated judgment without challenging its capacity to be sued, appear as a party, or knowledge of the 2010 Abatement Action. Nothing suggests that a falsified proof of service prevented the Trust from "presenting its case" (see Olivera v. Grace (1942) 19 Cal.2d 570, 575; In re Marriage of Park (1980) 27 Cal.3d 337, 342) in the Abatement Action or elsewhere, so as to warrant equitable relief against City. (County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1229 ["When a judgment . . . is obtained based on a false return of service, the court has the inherent power to set it aside [citation], and a motion brought to do so may be made on such ground even though the statutory period has run"].) Adler's conclusory allegation to the contrary does not suffice.
Finally, the filing of a proof of personal service meeting the statutory standards under section 417.10 creates a rebuttable presumption that service was proper. (See Dill v. Berquist Const. Co. (1994) 24 Cal.App.4th 1426, 1441-1442.) Adler cannot allege circumstances suggesting the proof of service did not so comply, and he has not alleged that Ben Adler had not actually been personally served. These circumstances—properly the subject of judicial notice (Conservatorship of Forsythe (1987) 192 Cal.App.3d 1406, 1410 [proofs of service are exempt from the hearsay rule]; People v. Jimenez (1995) 38 Cal.App.4th 795, 802, fn. 11 [same])—compel a conclusion the stipulated judgment was not void due to a noncomplying service of process. (See Sakaguchi v. Sakaguchi (2009) 173 Cal.App.4th 852, 858-859 [whether a judgment is void due to improper service is a question of law that a reviewing court decides de novo; service meeting the statutory procedures for service of process requires a conclusion that a judgment was not void].)
IV. Equitable Relief Due to Other Facts Suggesting Extrinsic Fraud, Extrinsic Mistake,
or Other Grounds Rendering the Judgment Void
We proceed to decide whether Adler can state an equitable cause of action to set aside or vacate the judgment on any other basis, including from the existence of extrinsic fraud or extrinsic mistake or other facts demonstrating the judgment is void. (See Sakaguchi v. Sakaguchi, supra, 173 Cal.App.4th at p. 862.) A. Extrinsic Fraud
Adler contends he adequately states an equitable cause of action on grounds of extrinsic fraud because he alleges "City . . . knew that sole trustee Howard Adler did not sign the Stipulated Judgment" and City also "knew that a trust itself could not be served" but "fraudulently claimed that the trust had been served . . . ." He argues the complaint adequately alleges that the City's "fraudulent acts . . . deliberately denied [him] a fair adversary hearing." The allegations that City acted "fraudulently" with regard to service of the summons and the allegation as to denial of a fair adversary hearing are mere conclusions that we disregard on our review. (Estate of Dayan, supra, 5 Cal.App.5th at p. 40.)
"Fraud . . . is extrinsic when it deprives the unsuccessful party of an opportunity to present his case to the court." (Westphal v. Westphal (1942) 20 Cal.2d 393, 397; Estate of Sanders (1985) 40 Cal.3d 607, 614 [" '[extrinsic] fraud is a broad concept that "tend[s] to encompass almost any set of extrinsic circumstances which deprive a party of a fair adversary hearing" ' "].) One who challenges a judgment on the basis of extrinsic fraud must show that by virtue of the fraud he was " ' "deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense." ' " (F.E. V. v. City of Anaheim (2017) 15 Cal.App.5th 462, 471-472.) Examples of extrinsic fraud are a party's failure to give notice of the action to the other party, and convincing the other party not to obtain counsel because the matter will not proceed, but it does proceed. (In re Marriage of Varner (1997) 55 Cal.App.4th 128, 140.) " 'To be entitled to relief from a judgment on the ground of extrinsic fraud, a party must show he or she had a meritorious defense, which would have been raised but for the other party's wrongful conduct [citations], and also must establish all of the elements of fraud [citations], which include an intentional or reckless misrepresentation and justifiable reliance on the misrepresentation by the aggrieved party.' " (Kimball Avenue v. Franco (2008) 162 Cal.App.4th 1224, 1229; see also Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th 1009, 1025; In re David H. (1995) 33 Cal.App.4th 368, 381.)
Adler's complaint does not make out a showing of extrinsic fraud by City. As we have pointed out, even accepting the allegation that City knew Adler did not sign the stipulated judgment and was aware that a trust cannot be served with process, the judicially noticeable documents reflect that City personally served Ben Adler as the Trust's "authorized representative," which as we have explained above does not establish deliberate wrongdoing, fraud or concealment on City's behalf. The proof of service does not suggest City made any representations, let alone intentional misrepresentations, since any assertions made in that document were the process server's. This is fatal to Adler's claim of extrinsic fraud. (Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471 [extrinsic fraud or deception preventing a party from putting on his case must be "practiced on him by his opponent . . ."].) The Trust thereafter purported to appear and participate in the action, with either Ben or Charleton Adler signing for it; to the extent the signatures were invalid to bind the Trust, such actions by a party would be more akin to perjured testimony or circumstances constituting intrinsic fraud, which is not a valid ground for setting aside a judgment. (In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1069-1070; e.g., Parsons v. Tickner (1995) 31 Cal.App.4th 1513, 1532 ["Intrinsic fraud . . . involves the introduction of perjured testimony or false documents or the concealment or suppression of material evidence in a fully litigated case"].) There is no allegation that City compelled or encouraged other individual defendants to sign on the Trust's behalf, nor does Adler allege City procured the invalid signatures. Such allegations would be inconsistent in any event with the judicially noticeable fact that the defendants in the Abatement Action were represented by counsel at the time they signed the stipulated judgment and its amendment. "When a party was represented by counsel, absent concealment, any fraud will usually be intrinsic." (In re Marriage of Stevenot, at p. 1070.) Adler's fraud claim is, at best, a claim of intrinsic fraud that "goes to an issue involving the merits of the prior proceeding which [Adler] should have guarded against at that time." (Id. at p. 1069.)
Finally, Adler's complaint contains no allegations suggesting the Trust had a meritorious defense to the Abatement Action such that a different result would follow if the judgment were set aside. Adler argues this requirement does not apply where a judgment is void on its face. Even assuming that to be the case, as we explain below, the stipulated judgment and its amendment are not facially void. B. Extrinsic Mistake
Adler contends he can make out a claim for extrinsic mistake because "not having been directly served, . . . [he] could potentially be seen to exercise excusable neglect in failing to appear or present his claim or defense."
"The right to [equitable] relief [from judgment] has . . . been extended to cases involving extrinsic mistake," caused by the excusable neglect of a party. (Kulchar v. Kulchar, supra, 1 Cal.3d at p. 471.) A court should not vacate a judgment where the party requesting equitable relief has been guilty of inexcusable neglect. (In re Marriage of Stevenot, supra, 154 Cal.App.3d 1051, 1075.) Further, like extrinsic fraud, extrinsic mistake "deprives the unsuccessful party of an opportunity to present his case to the court." (Ibid.; Westphal v. Westphal, supra, 20 Cal.2d at p. 397.) And, as in cases of extrinsic fraud, this ground requires Adler to demonstrate he and the Trust have a meritorious defense to the underlying Abatement Action. (See Rappleyea v. Campbell (1994) 8 Cal.4th 975, 982; Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 290-291.)
Adler's claim of excusable neglect is rebutted by the fact that the Trust was represented by counsel in entering into the stipulated judgment, as well as the fact he and the Trust, represented by the counsel who filed the complaint in the present case, sought in 2014 to challenge City's action in barring live entertainment in federal district court, well after entry of the stipulated judgment and its amendment. The documents contradict any allegation that some mistake kept Adler in ignorance of the circumstances, or fraudulently prevented him from presenting a claim; rather, it shows any nonparticipation was due to his own failure to act diligently. It suggests that the incompetence of the Trust's counsel contributed to or caused entry of the judgment. "Equity will not grant relief against a judgment at law, where such judgment was obtained in consequence of the neglect, inattention, mistake or incompetence of [an] attorney, unless caused by the opposite party." (Greenwood v. Greenwood (1931) 112 Cal.App. 691, 696.) Additionally, having failed to include allegations that there is a potentially meritorious defense, we reject Adler's contention based on extrinsic mistake. C. Adler Cannot Allege the Stipulated Judgment or the Amendment Are Facially Void
As Adler acknowledges, a judgment is facially void when the invalidity is apparent from an inspection of the judgment roll or court record without considering extrinsic evidence. (Pittman v. Beck Park Apartments Ltd., supra, 20 Cal.App.5th at p. 1021; Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 496.) "If the invalidity can be shown only through consideration of extrinsic evidence, such as declarations or testimony, the order is not void on its face." (Pittman, at p. 1021.) This court reviews de novo whether a judgment is facially void. (Ibid.; Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1441, fn. 5.)
Adler contends the stipulated judgment and its amendment are void on their face because (1) a trust cannot be sued, but both were "taken against the Trust itself," not the trustee and he was never a party to the action; and (2) the stipulated judgment did not meet the standard for use of section 664.6, as he as the sole trustee did not sign the documents.
Adler's first claim lacks merit, and does not establish the complaint states a claim for equitable relief, because both the stipulated judgment and the amendment reflect that the Trust was in fact represented by an individual—Ben, Charleton or counsel—who signed on its behalf. The fact that a trust cannot sue or be sued but must do so via the trustee (Portico Management Group LLC v. Harrison (2011) 202 Cal.App.4th 464, 473) or that the complaint alleges Adler was the "sole trustee," does not establish the judgments are facially void, as trustees are not precluded from authorizing others to represent the trust or act as their agent. Because extrinsic evidence would be necessary to establish that either Ben, Charleton or counsel were not authorized to act for the Trust, the judgments are not facially void on this ground.
Nor are the judgments void for any purported noncompliance with section 664.6. That section provides: "If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement." The law provides a "summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit." (Weddington Production, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809.) It is settled that section 664.6 requires that the litigants sign personally, not via counsel. (Levy v. Superior Court (1995) 10 Cal.4th 578, 583.) And, as long as an authorized representative signs for an entity that has power to appoint such a representative, a settlement will comply with the law. (See Provost v. Regents of University of Cal. (2011) 201 Cal.App.4th 1289, 1296 [settlement signed by authorized representative of the Regents met requirements of and was subject to enforcement under section 664.6].)
The circumstances here do not implicate section 664.6, as the parties' signatures here appear on the judgments, not a writing independent from the judgment in which the parties agreed to a settlement. Nor is this a situation where any party sought to enforce a settlement agreement by invoking the section 664.6 summary procedure to obtain a judgment reflecting the settlement terms. A stipulated judgment is different: "A party to an action may allow judgment to be rendered against him without opposition by express consent or stipulation to entry of a particular judgment in a pending action, before or during trial." (6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 113, p. 542.) Indeed, a judgment entered by a stipulation has the same effect as if the action were tried on the merits. (Avery v. Avery (1970) 10 Cal.App.3d 525, 529.) Section 664.6 does not govern where the parties have already agreed to reduce the terms of a stipulation to a judgment. Once the judgment was entered, it was only subject to challenge on grounds applicable to judgments. (See Stevens v. Stevens (1968) 268 Cal.App.2d 426, 435; see California State Auto. Association. Inter-Ins. Bureau v. Superior Court (1990) 50 Cal.3d 658, 663-664 [stipulated judgments bear the earmarks of judgments entered after litigation].)
Even assuming section 664.6's summary procedure was somehow invoked and violated here by the absence of Adler's signature, the entry of a judgment that fails to comply with its requirements is not void. A judgment is void when the "court lacks jurisdiction in a fundamental sense . . . ." (People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 660.) Lack of jurisdiction in a fundamental sense means " 'an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties . . . .' " (Ibid.; see also Kabran v. Sharp Memorial Hospital (2017) 2 Cal.5th 330, 339.) On the other hand, when a court violates procedural requirements, orders relief that is unauthorized by statute or common law, or otherwise fails to conduct itself in the manner prescribed by law, it has acted " 'in excess of jurisdiction.' " (Kabran v. Sharp Memorial Hospital, supra, 2 Cal.5th at pp. 339-340; American Contractors, supra, 33 Cal.4th at p. 661.) "Because a court that acts in excess of jurisdiction still has 'jurisdiction over the subject matter and the parties in the fundamental sense' [citation], any such act is 'valid until set aside, and parties may be precluded from setting it aside by such things as waiver, estoppel, or the passage of time.' [Citation.] In contrast to errors concerning a court's fundamental jurisdiction, '[e]rrors which are merely in excess of jurisdiction should be challenged directly . . . and are generally not subject to collateral attack once the judgment is final . . . .' " (Kabran, at p. 340.) Under the foregoing principles, the stipulated judgment and amended judgments, assuming noncompliance with section 664.6, would not be void, but merely "in excess of the court's jurisdiction" (Davidson v. Superior Court (1999) 70 Cal.App.4th 514, 529) and such an act is voidable until Adler demonstrates grounds to set it aside such as extrinsic fraud or mistake. As we have explained, he has not done so here.
Levy v. Superior Court, supra, 10 Cal.4th 578, relied upon by Adler, does not assist him. There, attorneys for two individual parties negotiated a settlement of an action; the litigants were not involved in the discussions. When one litigant refused to sign the formal settlement agreement presented by his attorney, the other moved for judgment under section 664.6. (Id. at pp. 580-581.) The trial court denied the motion and the appellate court denied a writ petition, but the California Supreme Court reversed. It held the term "parties" in section 664.6 meant the litigants themselves, not their attorneys of record. (Id. at p. 586.) Because the party litigant had not signed the settlement agreement, it was not enforceable by means of the expedited procedure under that statute. (Ibid.) Levy does not involve a stipulated judgment, much less a judgment that was apparently signed by party representatives. Its narrow holding applies only where a party seeks to obtain a judgment under the provisions of section 664.6 based on a settlement not signed by all party litigants. Indeed, the court observed that there were other means by which the parties could enforce the settlement, indicating that the parties' agreement was not void for the absence of party signatures. Levy does not help Adler.
V. Denial of Leave to Amend
Adler contends the trial court abused its discretion by denying him leave to amend his complaint in the face of his proffer of facts in opposition to City's motion and at oral argument below. He does not specify on appeal the allegations he would add or change to correct any defect, or what additional facts he could allege that would support an equitable cause of action to set aside the judgments. The portion of the record he cites, the conclusion of his opposing points and authorities in the trial court, states only: "Even if the motion is granted, plaintiff seeks leave of court to amend the Complaint to correct any deficiencies identified in the Court's ruling." In reply, Adler points to his counsel's statements at oral argument, in which counsel stated he would allege that the trustee "had no knowledge, had no involvement in the 2010 case at any time except as already pled in the complaint that he was advised of the existence of that judgment only months ago" and "that [neither] the trust nor the trustee [was] represented by counsel at any time in the 2010 case." The latter allegation is contradicted by the judicially noticeable documents in the Abatement Action showing counsel represented the Trust, and the allegation as to Adler's involvement or knowledge is merely duplicative of other allegations ("Adler . . . was never served or notified . . . of any actions related to the Stipulated Judgment"). The burden is on Adler to affirmatively demonstrate how the complaint can be amended and how the amendment will cure the deficiencies (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 994), but he has not done so.
VI. City's Request to Amend the Judgment on Appeal
City contends that under section 187, this court has authority to amend the judgment to add Adler in his capacity as trustee of the Trust as the correct defendant. Section 187 is a general statute that "grants every court the power and authority to carry its jurisdiction into effect." (Highland Springs Conference and Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 280.) Courts hold that such power "includes the authority to amend a judgment" to insert the correct name of the real defendant. (Ibid.; see Carr v. Barnabey's Hotel Corp. (1994) 23 Cal.App.4th 14, 21, 23 [posttrial amendment under section 187 approved to include correct name in judgment so as not to work an "injustice" even though alter ego elements were not established]; Wolf Metals Inc. v. Rand Pacific Sales, Inc. (2016) 4 Cal.App.5th 698, 709-711 [upholding trial court's amendment to judgment to add defendant as a "successor corporation"].) But the procedure contemplates a noticed motion, with an evidentiary hearing or alternatively submission of declarations and other written evidence, and an exercise of discretion, in part to determine whether the proposed defendant's interests were adequately represented by the other defendants in the action. (Highland Springs, at p. 280; Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th at p. 1189; see NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772, 778-779.) Though the statute "has been interpreted to allow flexibility in proceedings, it has never been construed to allow imposition of liability on an entity which was never a party to the action. . . . Adding the . . . entity after judgment, therefore, amounted to little more than correcting a misnomer in naming the defendant." (Triplett v. Farmers Ins. Exchange (1994) 24 Cal.App.4th 1415, 1420.) Thus, the ability to amend a judgment to add a defendant under section 187 requires a showing that the "new party had controlled the litigation, thereby having had the opportunity to litigate, in order to satisfy due process concerns." (Id. at p. 1421.)
No case cited by City involved the taking of evidence or exercise of discretion under section 187 by an appellate court, nor do any of City's cited cases hold that a reviewing court has such power. (See Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conference Ctr. Bd. (1996) 41 Cal.App.4th 1551, 1554 ["Under section 187, the trial court is authorized to amend a judgment to add additional judgment debtors"; italics added]; Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP, supra, 212 Cal.App.4th at p. 1188 [same, quoting Hall]; Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 508 [same]; NEC Electronics Inc. v. Hurt, supra, 208 Cal.App.3d at p. 774 [trial court granted motion to amend judgment]; Misik v. D'Arco (2011) 197 Cal.App.4th 1065, 1068 [trial court denied motion to amend judgment; appellate court reversed and remanded with directions that trial court conduct new proceedings and make factual determinations as to whether alter ego elements satisfied and rule on the motion].) Indeed, if the rationale as City points out is that courts must have "inherent authority . . . to make its records speak the truth" (Greenspan v. LADT, LLC, at p. 509, italics added), this court would not have such authority because the judgment was that of the trial court.
We need not resolve the matter. Though appellate courts are authorized to make findings of fact on appeal, " ' "the authority should be exercised sparingly. [Citation.] Absent exceptional circumstances, no such findings should be made." ' " (Diaz v. Professional Community Management, Inc. (2017) 16 Cal.App.5th 1190, 1213, quoting In re Zeth S. (2003) 31 Cal.4th 396, 405; see also Morgan v. Imperial Irrigation District (2014) 223 Cal.App.4th 892, 912 [" 'Trial courts . . . are better situated to resolve questions of fact . . .' "].) City has not demonstrated such exceptional circumstances, and we leave it to the trial court in the first instance to take evidence and exercise its discretion should City file a motion to amend the judgment under section 187 below.
DISPOSITION
The judgment is affirmed.
O'ROURKE, J. WE CONCUR: McCONNELL, P. J. NARES, J.