Opinion
A150365
09-21-2017
DARRELL K. HARRIS, Plaintiff and Respondent, v. MARK OTTOVICH, et al., Defendants; KAREN E. RAYL Third Party Claimant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County Super. Ct. No. HG03112816)
A 2008 judgment (judgment) awarded Darrell K. Harris $111,534 against his former landlords, Harvey and Mark Ottovich (collectively defendants). In 2016, defendants' sister, Karen E. Rayl, moved to vacate the judgment based on extrinsic mistake and/or fraud. The trial court denied the motion.
Rayl appeals, contending the court erred by denying the motion to vacate. We affirm.
Harris did not file a brief. We have "decide[d] the appeal on the record, the opening brief, and . . . oral argument by [Rayl]." (Cal. Rules of Court, rule 8.220(a)(2).)
FACTUAL AND PROCEDURAL BACKGROUND
This case has a lengthy procedural history. We provide an overview, summarizing only those facts relevant to the issue raised on appeal. We incorporate by reference our factual and procedural summary in a consolidated prior appeal filed by defendants and Rayl, Harris v. Ottovich (June 2, 2015), A139146, A139720, A139722, A139723) [nonpub. opn].)
Harris filed a lawsuit against defendants for wrongful eviction. Defendants answered the complaint, but did not respond to discovery. In 2007, the court ordered Harris's requests for admission deemed admitted. Defendants were served with notice of trial but did not appear. The court heard "oral and documentary" evidence at trial; in November 2008, the court issued a $111,534 judgment for Harris. To satisfy the judgment, Harris sought the sale of defendants' property on Mission Boulevard in Fremont (property).
Post-judgment Motions
In 2011, defendants moved to vacate the judgment on the ground of extrinsic fraud. The court denied the motion, concluding defendants "failed to present competent evidence showing that the Judgment [wa]s void based on extrinsic fraud." The court also denied defendants' motion for reconsideration.
In 2013, when the property was scheduled to be sold to satisfy the judgment, Rayl filed a third party claim alleging she held an interest in the property that took priority over the judgment. Rayl claimed she loaned defendants $450,000 in 2001 and that the loan was "evidenced by a promissory note" and "collateralized" by the property. According to Rayl, the promissory note was "to be paid in one balloon payment upon the sale of the property." The claim was denied. In 2013, Rayl also filed a motion objecting to the undertaking provided by Harris. The court denied the motion and the property was sold.
Rayl appealed; her appeal was consolidated with defendants' appeal from various post-trial orders. --------
Rayl's Motion to Vacate the Judgment
In 2016, Rayl moved to vacate the judgment, claiming it "was in excess of th[e] court's jurisdiction and was entered as a result of extrinsic fraud and/or mistake." Rayl alleged she had "standing to intervene" as a creditor of defendants, and that the judgment was "void for lack of jurisdiction" because defendants did not have notice of trial. She also claimed the judgment was based on extrinsic mistake and/or fraud because: (1) defendants did not have "actual knowledge of the trial date"; (2) defendants had a meritorious defense to the lawsuit; and (3) she demonstrated diligence in seeking to vacate the judgment. Rayl offered supporting declarations from defendants, and a declaration from defendants' former attorney. Rayl's supporting declaration described her loan to defendants and her attempt to prevent the sale of the property. Rayl claimed she "began to investigate whether [she] had a basis to challenge the . . . judgment" in 2015, after her appeal "was denied."
Harris's opposition argued defendants "engaged in a fraudulent scheme" with Rayl "to attempt to create an appearance of a prior debt between the siblings . . . to thwart or delay collections in this matter." Harris urged the court to deny the motion because Rayl lacked "authority" to bring the motion, and because the court had previously concluded the judgment was untainted by fraud. Finally, Harris contended there was no evidence of extrinsic fraud and Rayl had not shown diligence in seeking relief.
The court denied the motion, concluding Rayl did not have standing to challenge the validity of the judgment, and that her motion was "barred" as "a procedurally defective" reconsideration motion. The court noted defendants had brought "the same motion on the same grounds" in 2011 and that motion, and a subsequent reconsideration motion, had been denied.
DISCUSSION
We review the denial of Rayl's motion to vacate the judgment for abuse of discretion. (Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 276 (Pulte Homes); Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981 (Rappleyea).) Under this standard, we "reverse only upon ' " 'a clear case of abuse' " ' and ' " 'a miscarriage of justice.' " ' " (Grappo v. McMills (2017) 11 Cal.App.5th 996, 1006.) "The most fundamental principle of appellate review is that '[a] judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.' [Citations.] And, of course, we will uphold the decision of the trial court if it is correct on any ground." (Ibid.; Muller v. Fresno Community Hospital & Medical Center (2009) 172 Cal.App.4th 887, 906-907 [appellate court reviews "the ruling, and not the reason for the ruling"].)
We assume for the sake of argument Rayl had standing to file the motion to vacate the judgment, but we reject her claim that the judgment is "void for lack of jurisdiction" over defendants. Code of Civil Procedure section 594, subdivision (a) authorizes a court to proceed to trial in the absence of the adverse party where that "adverse party" has had "notice of trial." The judgment states "[d]efendants were properly served with notice of trial" and we decline to revisit that finding eight years after the judgment.
We are not persuaded by Rayl's claim that the court should have vacated the judgment on equitable grounds. To qualify for equitable relief on the basis of extrinsic fraud or mistake, the defendant must demonstrate: (1) "a meritorious case"; (2) "a satisfactory excuse for not presenting a defense to the original action"; and (3) "diligence in seeking to set aside the default once the fraud [or mistake] had been discovered." (In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1071.) Even if Rayl "could satisfy the first two elements, she cannot meet the third": diligence in seeking relief from the judgment. (Lee v. An (2008) 168 Cal.App.4th 558, 566.) Evidence before the court demonstrated Rayl knew of the judgment no later than 2013, when she filed a third party claim regarding the property. She did not begin to "investigate whether [she] had a basis to challenge" the judgment until more than two years later, and she did not move to vacate the judgment until 2016.
Rayl has not demonstrated "the diligence necessary for equitable relief." (Lee v. An, supra, 168 Cal.App.4th at p. 566 [no diligence where defendant waited more than two years after learning of default judgment to file a motion to vacate]; Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 506 [unexplained delay of nine months demonstrates a lack of diligence]; Pulte Homes, supra, 2 Cal.App.5th at p. 277 [no diligence where moving party waited several months to file motion to vacate default judgment].) The cases in Rayl's brief do not alter our conclusion. We conclude the court did not abuse its discretion in denying Rayl's motion to vacate the judgment. (Rappleyea, supra, 8 Cal.4th at p. 981.)
DISPOSITION
The order denying Rayl's motion to vacate the judgment is affirmed. No costs are awarded because Harris has not made an appearance. (Cal. Rules of Court, rule 8.278(a)(5).)
/s/_________
Jones, P. J. We concur: /s/_________
Needham, J. /s/_________
Bruiniers, J.