Opinion
B231130
12-21-2011
FARID AZOURI, Plaintiff and Respondent, v. REGINA BATUGO, et al., Defendants and Appellants.
Bunagan, Marapao & Associates, Abe Marapao and J. Flores Valdez for Defendants and Appellants. Farid Azouri, in pro. per., for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. PC044470)
APPEAL from an order of the Superior Court of Los Angeles County. Melvin D. Sandvig, Judge. Reversed and remanded.
Bunagan, Marapao & Associates, Abe Marapao and J. Flores Valdez for Defendants and Appellants.
Farid Azouri, in pro. per., for Plaintiff and Respondent.
Defendants and appellants Regina Batugo (Batugo), Mark Mondala (Mark), and Michael Mondala (Michael) appeal the denial of their motion to set aside and vacate the default judgment entered against them. They contend they never received service of process or actual notice of the action. We conclude defendants' motion should have been granted and therefore reverse and remand for further proceedings.
We use first names for ease of reference in light of the common surname and mean no disrespect to the parties by the informality.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff and respondent Farid Azouri (Azouri) filed an action against Batugo, Mark and Michael on January 15, 2009. Azouri sought damages from defendants arising from an alleged failure to pay money due under a promissory note and deed of trust executed in Azouri's favor. Azouri had worked as a real estate agent with Batugo and her two sons, Mark and Michael, for a number of years, considered Batugo a friend, and believed she took advantage of that relationship in obtaining money from him and then refusing to repay it.
In February 2009, Azouri filed proof of service declarations with the court showing service of the summons and complaint on Batugo, Mark and Michael by Gamil Sabbagh. Mr. Sabbagh, who was not a registered process server, attested he personally served Batugo and Mark on January 18, 2009, at a residence located at 17620 Lahey Street in Granada Hills, California. The third proof of service declaration executed by Mr. Sabbagh indicated he effectuated substituted service on Michael the same day by serving Batugo with a second set of papers and mail-serving copies to Michael at the 17620 Lahey Street address. Defendants did not timely appear in the action.
Defaults were entered against Mark and Michael on April 29, 2009, and against Batugo on March 24, 2010. (Apparently, entry of default was delayed against Batugo because of then-pending bankruptcy proceedings.) Azouri requested entry of a default judgment by the court against all three defendants based on his declaration pursuant to Code of Civil Procedure, section 585, subdivision (d). The court entered a default judgment against Batugo in the amount of $147,575 on July 29, 2010, and against Mark and Michael as additional defendants on August 12, 2010. Thereafter, Azouri sought to enforce his judgment, apparently serving Batugo, in October 2010, with a notice to appear for a judgment-debtor examination.
All further undesignated section references are to the Code of Civil Procedure.
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On October 29, 2010, defendants filed their motion to set aside the defaults, asserting they had never been served with process and that service of the October 2010 notice to appear on Batugo was their first notice of the action. The motion contained a sworn declaration from each of the defendants and argued that relief was warranted pursuant to sections 473.5 and 473, subdivision (b). Defendants each attested to never having received service of the summons and complaint. They also listed all of their addresses during the relevant time period. The list did not include 17620 Lahey Street in Granada Hills, the address identified in the proof of service declarations filed by Azouri. Defendants also stated that most or all of the alleged debt had been repaid.
In opposing the motion, Azouri submitted his own declaration as well as the declaration of Nancy Norris, his former attorney who had represented him in the action up through the time of obtaining the default judgment. He did not submit any declaration from Mr. Sabbagh attesting to any additional facts concerning his alleged service on the three defendants. Azouri argued that defendants' declarations denying service were not credible. He stated it was clear defendants had been duly served in January 2009, because Batugo filed for bankruptcy within one month thereafter and identified him as a creditor, serving his attorney (Norris) with a copy of the petition.
At the motion hearing, Azouri, who was representing himself in propria persona, argued he had been "hiding" in the car when Mr. Sabbagh personally served Batugo and Mark at the Lahey street address, and sub-served Michael, and therefore could verify that Mr. Sabbagh's service declarations were accurate. These alleged facts were not contained in his opposition declaration or otherwise presented as admissible evidence.
After taking the matter under submission, the court issued its order denying defendants' motion. Defendants timely appealed.
DISCUSSION
The contested issue below was whether or not defendants were served with the summons and complaint or otherwise received actual notice of the action in time to defend. When there has been no service of the summons and complaint in accordance with the statutory requirements sufficient to support the court's exercise of personal jurisdiction over a defendant, any judgment taken against that defendant is void. (County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1226-1227; Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1250; Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1443-1444 (Dill).) Such a judgment is properly set aside pursuant to subdivision (d) of section 473, which provides, in relevant part, that a trial court "may . . . set aside any void judgment or order."
In requesting relief, defendants cited only sections 473.5 and 473, subdivision (b), which ordinarily apply when service of process has been effectuated (generally through substituted service or service by publication), but such service either failed to result in actual notice to the defendant, or the defendant failed to timely appear due to excusable neglect. However, the factual and legal issue fully briefed by the parties below was whether or not Azouri served defendants with the summons and complaint or whether defendants otherwise received the requisite notice of the action in time to defend. In substance, the parties briefed and argued the issues pertinent to a motion for relief under section 473, subdivision (d). We may resolve the purely legal question whether section 473, subdivision (d) affords relief based on the existing factual record, irrespective of defendants' failure to cite the correct subdivision. (See Ward v. Taggart (1959) 51 Cal.2d 736, 742 [reviewing court may resolve new theory involving pure question of law "'presented on the facts appearing in the record'"]; accord, Mito v. Temple Recycling Center Corp. (2010) 187 Cal.App.4th 276, 279; see also Dill, supra, 24 Cal.App.4th at p. 1444.)
Whether a default judgment is void due to failure to effectuate valid service of process is a question of law subject to de novo review. (Trackman v. Kenney (2010) 187 Cal.App.4th 175, 182; accord, Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1200; Sakaguchi v. Sakaguchi (2009) 173 Cal.App.4th 852, 858.) A court's denial of a motion to vacate a default judgment is reviewed for an abuse of discretion.(Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981; Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495-496.) We conclude the record does not support a finding defendants were served with the summons and complaint. The resulting defaults and default judgment were therefore void, and the court abused its discretion in denying defendants' timely motion for relief.
In reviewing the record, we are mindful that "'"[t]he provisions of section 473 of the Code of Civil Procedure are to be liberally construed and sound policy favors the determination of actions on their merits." [Citation.]' [Citation.] '[B]ecause the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.' [Citation.]" (Maynard v. Brandon (2005) 36 Cal.4th 364, 371-372, italics added; accord, Elston v. City of Turlock (1985) 38 Cal.3d 227, 233.) "'An order denying relief [from default] . . . is subject to closer appellate scrutiny than one granting relief, and doubts will be resolved in favor of the party attempting to get to trial [on the merits].' [Citation.]" (Lovato v. Santa Fe Internat. Corp. (1984) 151 Cal.App.3d 549, 554.)
Defendants attested they were never served with the summons and complaint in this action. Each defendant listed the residences at which they had lived from May 2002 through October 2010. Defendants explained they lost multiple homes through foreclosure due to financial difficulties and kept moving around until all of their properties were eventually lost (they were living in a rental at the time the motion was filed). Defendants stated that from November 2008 through March 2009 they did live on Lahey Street, but the address was 17260 Lahey Street, and not 17620 Lahey Street. Batugo also stated in her declaration that she always left forwarding addresses when they moved and that she personally told Azouri of each new address after a move, so there was no reason he would not have known the correct address at which she and her sons could be contacted or served with process.
There is no evidence in the record rebutting defendants' declarations as to their residential addresses during the relevant period or their unequivocal statements they never received service of the summons and complaint. Azouri relied only on the original proof of service declarations executed by Mr. Sabbagh stating he served defendants at an address that Azouri now concedes is inaccurate. Azouri did not present a supplemental declaration from Mr. Sabbagh explaining that the incorrect address in the proof of service declarations was a drafting error on his part, or otherwise attesting to any additional facts bolstering his original service declarations.
Moreover, Azouri did not offer any admissible evidence based on his own personal knowledge about service having been duly effectuated. He attempted to argue during the hearing that he witnessed the service taking place while hiding in the car, but those statements were not presented as sworn testimony. No explanation is offered for why, if that actually occurred, such information was not presented to the court in a sworn declaration so that it could have been considered. And, in briefing before this court, Azouri conceded the service address of 17620 Lahey Street was an error. He argued the error, repeated in all the documents filed with the court, was merely a typographical error but failed to provide any evidence that defendants were actually served at 17260 Lahey Street. The declaration of Azouri's former lawyer stated only "on information and belief" that service was effectuated on defendants by Mr. Sabbagh.
"'[C]ompliance with the statutory procedures for service of process is essential to establish personal jurisdiction. [Citation.] Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void. [Citation.]' [Citation.]" (Ellard v. Conway (2001) 94 Cal.App.4th 540, 544.) Without competent evidence showing the court acquired personal jurisdiction over defendants, the entry of defaults and the subsequent default judgment entered against them are therefore void.
We are not persuaded by Azouri's argument that defendants must have had actual notice of the action because Batugo filed for bankruptcy within a month after Azouri filed this action, and she listed Azouri as a creditor and served papers on Azouri's former counsel in this action. First, actual notice of an action from another source does not supplant the constitutional requirement to effectuate some recognized form of service of process in substantial compliance with the service statutes. Anyway, the record does not support the inference that Batugo knew to list Azouri as a creditor and to serve his former counsel in this action with bankruptcy filings because she had been served with summons and the complaint in this action. It is more likely that Batugo knew Azouri claimed to be a creditor and learned the name and address of Azouri's former lawyer because the lawyer wrote demand letters to each defendant a month before this lawsuit was filed. Additionally, since Mark and Michael were not parties to their mother's bankruptcy proceeding, there is no basis to claim they obtained constructive notice of this action from those proceedings.
Azouri also argues Batugo, through counsel, opposed his motion in the bankruptcy proceeding to lift the automatic stay so he could prosecute this action. The efforts of Batugo's counsel to oppose the lifting of the stay as to Azouri's civil action demonstrate Batugo knew Azouri had a pending claim in another court. However, Batugo was under no obligation to respond to a civil action in which she had not been formally served while the lawful bankruptcy stay in her favor was still in effect. (See Olvera v. Olvera (1991) 232 Cal.App.3d 32, 41.)
Finally, Azouri argues that defendants' motion was properly denied because it was not served on him, but rather, was served on his former counsel at her prior address of record. Azouri has forfeited this argument on appeal. "'It is well settled that the appearance of a party at the hearing of a motion and his or her opposition to the motion on its merits is a waiver of any defects or irregularities in the notice of motion. [Citations.] This rule applies even when no notice was given at all. [Citations.] Accordingly, a party who appears and contests a motion in the court below cannot object on appeal . . . that he had no notice of the motion or that the notice was insufficient or defective.' [Citations.]" (Carlton v. Quint (2000) 77 Cal.App.4th 690, 697.) In his opposition, Azouri made a brief reference to the purported defective service, but he nevertheless responded to the motion on its merits, did not request a continuance of the hearing and did not show any prejudice from the allegedly defective service. The argument was therefore forfeited.
We also need not address defendants' alleged failure to lodge a proposed answer with their motion. A motion for relief from a default judgment void for lack of personal jurisdiction need not contain a proposed pleading. (§ 473, subd. (d).)
DISPOSITION
The trial court's order of January 24, 2011, denying defendants' motion to set aside default is reversed and the action remanded for further proceedings. The court is directed to vacate the March 24, 2010 entry of default and the July 29, 2010 default judgment entered against Regina Batugo. The court is also directed to vacate the April 29, 2009 entry of defaults and the August 12, 2010 default judgment entered against Mark Mondala and Michael Mondala.
Defendants shall recover their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
GRIMES, J.
WE CONCUR:
BIGELOW, P. J.
RUBIN, J.