Opinion
NOT TO BE PUBLISHED
San Francisco County Super. Ct. No. CGC-04-433753
Kline, P.J.
Introduction
In these consolidated appeals, defendants Alton and Loretta Perkins (husband and wife) appeal in propria persona from an order of the San Francisco Superior Court denying their motion to set aside their default (Code Civ. Proc., § 473 ) in an action against them and various corporate entities by plaintiff Intagio Trading Network, Inc. (No. A111128). Appellants also appeal the court’s later denial of their motion to vacate and set aside a void judgment (No. A112104). We shall affirm the order in A111128, and vacate the order in A112104, as the court exceeded its jurisdiction in entering that order while the appeal in A111128 was pending.
All statutory references are to the Code of Civil Procedure, unless otherwise indicated.
Facts and Procedural Background
Complaint Summary
On August 12, 2004, plaintiff filed a complaint in the San Francisco Superior Court alleging breach of contract, fraud, action on account and unjust enrichment against appellants individually and against several corporate defendants. In summary, plaintiff alleged that it operates a barter exchange trading system, through which its clients trade goods and services with each other, or with plaintiff, without the use of dollars as payment. For transactions between two Intagio clients, plaintiff serves as a third-party record-keeper and facilitator. Beginning in October 2001, appellants created sham out-of-state corporations to serve as their alter egos in contracting with third-parties and entered into contractual relationships with third-parties through plaintiff and with plaintiff itself. Appellants subsequently breached those agreements and defrauded plaintiff and other third parties. As a result of these actions, plaintiff was damaged in an amount exceeding $400,000.
Service of Process
As set forth in the affidavits of process server Jan Barefoot and investigator Roger D. Starcher, on August 24, 2004 at approximately 1:30 p.m., Starcher traveled to the Perkinses’ home at 120 North Cedar Street, in Charlotte, North Carolina, to serve them with copies of the summons, complaint, alternative dispute resolution package and notice of case management conference in the underlying matter. Upon arriving, Starcher used the building intercom located at the front door of the building to contact the Perkinses’ apartment. (Although the initial affidavits of Starcher and Barefoot identified the Perkinses’ apartment as apartment No. 118, a later affidavit by Barefoot clarified that the buzzer system located at the outside door of the building has the code number “118” listed next to the intercom button associated with the name “Blackstocks”—one of the corporate defendants—on the apartment directory. The Perkinses live in apartment No. 3809.) Starcher pressed the intercom for number “118” and spoke with a man who identified himself as an employee of the building. This person stated he would contact apartment No. 118. As described by Starcher, “[a]n older black female answered the intercom. I stated that I had a delivery for Alton and Loretta Perkins. The female, believed to be Loretta Perkins, asked me what company I was with. I stated that I was just a courier. Ms. Perkins asked me who the delivery was from. I stated that I did not know. Ms. Perkins stated ‘we’re not interested’ and did not allow me entry into the building.”
On August 31, 2004, at approximately 12:35 p.m., Barefoot gained entry to the building, traveled to the eighth floor, and approached the door of apartment No. 3809 (erroneously described in her initial affidavit and proofs of service as apartment No. 118). Barefoot knocked on the door and, as related by Barefoot, “[u]pon knocking on the door, a male came to the door without opening it. I stated, ‘Mr. Perkins?’ The male replied, ‘yes.’ I told him my name and that I had some documents for him. The male became very belligerent stating that he did not ‘know me from Adam’ and that I needed to get away from his door. He told me to leave the papers at his door. I attempted to explain to him what the papers were and he kept telling me to get away from his door. Mr. Perkins then stated, ‘I’ll tell you what, wait a minute.’ I then placed the papers at his door and departed the building. I left two complete sets of papers at Mr. Perkins’[s] door.”
A second affidavit by Barefoot explained: “It was an oversight on my part to list in the Affidavit of Service the apartment number where I served process on Defendant Alton Perkins as ‘Apartment Number 118,’ when in fact I served him by leaving process at the door for Apartment No. 3809 after speaking to Mr. Perkins through that apartment door.” She also averred that “Mr. Perkins’[s] statements through the door made it clear that he did not intend to open his door while I was standing outside it. I therefore informed him through the door that I was a private investigator and that the paperwork I had to deliver to him was a Summons, Complaint, and related papers in the case of Intagio Trading Network, Inc. v. Blackstocks Investments, Inc. Mr. Perkins then stated, ‘I’ll tell you what, wait right there.’ I then told Mr. Perkins that he had been served and that I would be leaving the paperwork at the base of his apartment door.”
On September 8, 2004, Barefoot “mailed a copy of these documents to Loretta Perkins, addressed to 120 North Cedar Street, Apartment 118, Charlotte, North Carolina 28202 via first class mail.” As of March 15, 2005, the documents had not been returned to Barefoot’s office by the post office.
Alton Perkins admitted having a conversation through his door with someone who knocked on the apartment door and said they had something for him. He claimed that if that person left documents outside the door, they were gone when he opened it some hours later. He also admitted that on or about September 6, 2004, he received notice of the suit through the mail from the registered agent for service of process for a corporate entity defendant, New Media, Inc.
Entry of Default
Appellants attempted to file a responsive pleading by UPS delivery on or about September 30, 2004. The clerk of the court rejected this filing on October 8, 2004, due to technical compliance issues and because defendants did not include the required filing fees.
On October 8, 2004, counsel for plaintiff sent a letter to Alton Perkins (to suite No. 3809), advising that the answer and attachment had not been filed and that plaintiff had initiated the process of obtaining the defendants’ default. Alton Perkins acknowledged receiving this letter.
On October 13, 2004, default was entered against defendants.
The Perkinses tried a second time to file an answer (shipped October 18, 2004), but that also was rejected by the clerk on October 25, 2004, again because the papers did not comply with rule 201 of the California Rules of Court, because the papers were not stapled or attached together, because no proof of service of the answer was included, and because the document did not list the parties submitting the answer or the name of the defendants.
Appellants’ third attempt to file an answer (shipped November 2, 2004) was rejected by the clerk on November 8, 2004, on the ground that default had been entered by the plaintiff.
Appellants retained counsel in California on or about November 24, 2004. On December 9, 2004, the trial court held a prove-up hearing on the default. It reviewed a proof of damages memorandum submitted by plaintiff Intagio, received testimony, and entered a judgment by default against all defendants in the amount of $249,129.85 (made up of $229,377.55 principal; attorney fees of $18,643; and costs of $1,109.30). Appellants’ California attorney did not attend the hearing. Neither did appellants, nor any other representative of the corporate defendants.
We note that “[e]ntry of a default terminates a defendant’s right to take further affirmative steps in the litigation until the default is set aside or a default judgment is entered.” (6 Witkin, Cal. Procedure (4th ed. 1997) § 147, p. 563.)
Two months later, on February 14, 2005, appellants and their corporate codefendants moved to set aside the entry of the default and judgment of default “on the grounds, encompassed by [section] 473[, subdivision] (b), that the entry of default was taken against defendants through mistake, inadvertence and surprise . . . .” Initially, appellants argued that the service was defective because Barefoot never saw Perkins, never identified the nature of the papers served, and left the papers in the hallway. Appellants argued that the allegedly defective service resulted in a void default judgment, but did not assert that they were seeking relief under section 473, subdivision (d). Rather, they argued that the mistake was in the defective attempts to answer based upon a mistake of law by Alton Perkins due to his unfamiliarity with California law. In a reply to plaintiff’s opposition, appellants for the first time relied upon the mistake regarding the apartment number reflected in the proofs of service. A hearing on the motion to set aside the default was held on March 16, 2005, at which counsel presented argument. After taking the matter under submission, the trial court denied the motion on May 6, 2005. On July 6, 2005, a timely notice of appeal was filed on behalf of all defendants, including the corporate defendants (No. A111128).
On August 23, 2005, appellants and their corporate entity codefendants, through a different California attorney, filed a motion for order vacating and setting aside void judgment. Appellants argued the court lacked personal jurisdiction over them and that it lacked subject matter jurisdiction because the contract between the parties required arbitration of disputes. Following a hearing held on October 3, 2005, the trial court denied the motion by an order filed on November 8, 2005, on the grounds that none of the arguments asserted in the motion warranted the granting of relief and that defendants had entered general appearances in the action before the October 3, 2005 hearing. Appellants filed a notice of appeal (No. A112104) on October 19, 2006, following the denial after the hearing, but before filing of the written order denying the motion on November 8, 2005.
Pursuant to stipulation by the parties, we ordered the two appeals consolidated. In an opinion filed August 28, 2006, we ordered the consolidated appeal dismissed as to the corporate defendants only on the ground that in California, a corporation cannot represent itself in a court of record either in propria persona or through an officer or agent who is not an attorney, and that only the individual defendants Alton and Loretta Perkins had filed an opening brief in propria persona.
Discussion
I.
Service of Process
“A court’s authority over the parties depends . . . on whether the court may exercise personal jurisdiction over the defendant and on whether the defendant has been properly served.” (Civil Procedure Before Trial (Cont.Ed.Bar 4th ed. 2007) § 6.60, p. 280.)
“In addition to any other ground for vacating a default judgment, the court has power to set aside a judgment that is void as a matter of law. [(Code Civ. Proc., § 473, subd. (d).)] [¶] . . . A judgment may be void as a matter of law for many reasons, including: [¶] Lack of subject matter jurisdiction. . . . [¶] Lack of personal jurisdiction. . . . [¶] Lack of actual or constructive notice of proceedings. . . . [¶] Lack of or improper service of summons. . . . [¶] However, substantial compliance with the service of summons statutes is sufficient to defeat a motion under [section] 473, [subdivision] (d). [Citations.]” (Weil et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) ¶¶ 5:484, 5:485, pp. 5-113 to 5-114, second italics added.)
On their first postjudgment motion, appellants moved to set aside their default pursuant to section 473, subdivision (b), on grounds of “mistake, inadvertence, surprise or excusable neglect,” not under subdivision (d) (i.e., a motion to set aside a void judgment). However, at the hearing on March 16, 2005, the trial court indicated it would consider first, whether service was defective under the statutes and then, if it found service was not defective, it would consider the motion for relief from default.
A. Substantial Compliance With Service of Process Statutes
“ ‘[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.]’ (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444.) Under section 473, subdivision (d), the court may set aside a default judgment which is valid on its face, but void, as a matter of law, due to improper service. [Citations.]” (Ellard v. Conway (2001) 94 Cal.App.4th 540, 544.)
In Pasadena Medi-Center v. Superior Court (1973) 9 Cal.3d 773, 778-779, the California Supreme Court rejected the old rule of strict construction and adopted a “liberal and practical approach to service of process.” (Summers v. McClanahan (2006) 140 Cal.App.4th 403, 410.) “The liberal and practical approach to service of process has been followed in subsequent Court of Appeal decisions. In Gibble v. Car-Lene Research, Inc. [(1998) 67 Cal.App.4th 295, 313], the court stated: ‘It is well settled that strict compliance with statutes governing service of process is not required. Rather, in deciding whether service was valid, the statutory provisions regarding service of process should be liberally construed to effectuate service and uphold the jurisdiction of the court if actual notice has been received by the defendant.’” (Summers v. McClanahan, supra, 140 Cal.App.4th at pp. 410-411, and fn. 24.)
“Gibble v. Car-Lene Research, Inc.[, supra,] 67 Cal.App.4th 295, 313; accord, Dill v. Berquist Construction Co.[, supra,] 24 Cal.App.4th 1426, 1436 (‘[S]trict compliance is not required.’); Bein v. Brechtel-Jochim Group, Inc. (1992) 6 Cal.App.4th 1387, 1392 (provisions of the service of process statutes ‘are now to be liberally construed to effectuate service and uphold jurisdiction if actual notice has been received by the defendant [.]’); Mannesmann DeMag, Ltd. v. Superior Court (1985) 172 Cal.App.3d 1118, 1122 (‘As a general rule . . . the provisions of the rules governing service of process are to be liberally construed.’).” (Summers v. McClanahan, supra, 140 Cal.App.4th at p. 411, fn. 24.)
Here, there is no dispute that appellants received actual notice of the action, as established by their attempt to answer the complaint before entry of default and by appellant Alton Perkins’s admission that he received a copy of the summons, complaint and related documents from one of the defendant corporate entities. Nevertheless, actual notice will not alone constitute substantial compliance with the statutes and if service was not valid, the judgment is void, despite a defendant’s actual notice of the action. (Summers v. McClanahan, supra, 140 Cal.App.4th at p. 415.)
The trial court found service was proper, no doubt based upon the second declaration of Barefoot, acknowledging and explaining the mistake she made in the proof of service by listing the number of the buzzer to appellants’ apartment, rather than the actual apartment number, but clarifying that she had spoken to Alton Perkins, who had identified himself, but refused to let her in to serve the papers. Barefoot also averred that she had identified herself as a private investigator, told Perkins that the paperwork she was delivering to him was a summons, complaint, and related papers in this case, and that she was leaving the paperwork at the foot of his door.
The refusal of Alton Perkins to open the door to receive process cannot defeat service. “ ‘Personal service usually contemplates actual delivery. But the person on whom service is sought may not, by merely declining to take the document offered, deny the personal service on the ground of lack of delivery, where under the circumstances it would be obvious to a reasonable person that a personal service was being attempted. In such a case the service may be made by merely depositing the process in some appropriate place where it would be most likely to come to the attention of the person being served.’ [Citation.]” (Crescendo Corp. v. Shelted, Inc. (1968) 267 Cal.App.2d 209, 212.)
Clearly, as to appellant Alton Perkins, personal service was effected through substantial compliance with section 415.10, which provides in relevant part: “A summons may be served by personal delivery of a copy of the summons and of the complaint to the person to be served. Service of a summons in this manner is deemed complete at the time of such delivery. . . .”
As to appellant Loretta Perkins, the question of service is somewhat closer. “Section 415.20, subdivisions (a) and (b) authorize substitute service of process in lieu of personal delivery. Statutes governing substitute service shall be ‘liberally construed to effectuate service and uphold jurisdiction if actual notice has been received by the defendant . . . [Citation.]’ [Citation.]” (Ellard v. Conway, supra, 94 Cal.App.4th at p. 544.) Section 415.20, subdivision (b) provides in relevant part: “If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served, as specified in Section . . . 416.90, a summons may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address . . ., at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. Service of a summons in this manner is deemed complete on the 10th day after the mailing.”
Substantial evidence supports the trial court’s implied finding that the two attempts to serve Loretta at the residence constituted “reasonable diligence” in the circumstances. By personally serving Alton Perkins at appellants’ apartment and informing him of the contents of the process, the process server substantially complied with the portion of the statute allowing service “by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode . . . .” (§ 415.20, subd. (b).) The only question is whether the numerical mistake on the apartment number prevented compliance with the balance of the statute which requires that service be completed by “mailing a copy of the summons and the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left.” (§ 415.20, subd. (b).)
The trial court could conclude on these facts that there was substantial compliance with the statute in these circumstances. Although the number 118 was not the actual apartment number, it was the number attached to the intercom for appellants’ apartment and the court reasonably could find that mail addressed to Loretta Perkins at “120 North Cedar Street, Apartment 118, Charlotte, North Carolina 28202,” would and, in fact, did reach her, particularly as there was no evidence there was any other number 118 at the apartment complex and as the mail was not returned by the post office as undeliverable. Nor did appellants contend they did not receive that mailing.
We conclude the trial court did not err in finding that appellant Alton Perkins was properly served through personal service on August 31, 2004, and that valid substituted service was obtained on appellant Loretta Perkins through personal service of process on her spouse Alton Perkins at their shared residence on that date and the subsequent mailing of papers to their shared address.
B. Personal Jurisdiction — Motion to Vacate and Set Aside a Void Judgment
(1) Minimum contacts claim waived
Appellants also appeal (No. A112104) the court’s later order filed November 8, 2005, denying their second postjudgment motion (the motion to vacate and set aside a void judgment). We conclude that appellants have waived their claim on appeal that the trial court never had personal jurisdiction over them because they lacked minimum contacts with the state and that the default judgment was therefore void. Although this claim was a basis for their second postjudgment motion in the trial court, appellants did not raise this argument in either their appellants’ opening brief on appeal or in their supplemental appellants’ opening brief. Rather, in those briefs appellants challenge the trial court’s denial of their motion to set aside the default as an abuse of discretion, arguing that they were improperly served because the proofs of service indicated that relevant documents were sent to the wrong address; defendants had tried to answer; and the clerk should not have returned their pleadings unfiled.
In their opening brief, the caption of appellants “Issue 7” states that the court erred in denying the second postjudgment motion to set aside a void judgment for lack of personal and subject matter jurisdiction. However, their argument is limited to the subject matter jurisdiction issue, arguing that they were not parties to the corporations’ contracts with plaintiff and that the contracts required the parties to arbitrate disputes. Nor does the supplemental opening brief raise this issue.
Appellants challenge the court’s denial of their second postjudgment motion to vacate and set aside a void judgment on the grounds that the court lacked subject matter jurisdiction because the agreements required arbitration of disputes. In their supplemental appellant’s opening brief, they attack the court’s award of attorney fees to plaintiff in connection with the default; argue the alleged alter ego theory was unsupported in the record (ignoring the fact that the judgment was by default and was therefore based on the allegations of the complaint); and again argue that the court lacked subject matter jurisdiction because the matter was required to be arbitrated. On appeal, the argument that the court lacked personal jurisdiction over them apart from their attack on service of process appears for the first time in their reply brief. Appellants have waived this claim. (Eisenberg et al., Cal. Practice Guide: Civil Appeals & Writs (The Rutter Group 2006) ¶¶ 9.78-9.78.2, pp. 9-24 to 9-25.)
(2) Pending appeal prevented court from determining issues presented on the motion to vacate
Moreover, we are convinced that the trial court lacked jurisdiction to determine the issue, which was raised only in the second postjudgment motion. Appellants’ pending appeal of the court’s denial of their motion to set aside entry of default and the default judgment pursuant to section 473, subdivision (b), stayed further action in connection with the appeal, rendering the trial court without power to grant the relief sought by appellants in their second postjudgment motion. (§ 916.)
“As a general rule, ‘the perfecting of an appeal stays [the] proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order . . . .’ (§ 916, subd. (a).) The trial court’s power to enforce, vacate or modify an appealed judgment or order is suspended while the appeal is pending. [Citations.] Further trial court proceedings in contravention of the section 916 stay are in excess of the court’s jurisdiction, including motions under section 473 to vacate default judgments. [Citation.] [¶] The purpose of the rule depriving the trial court of jurisdiction during the pending appeal is to protect the appellate court’s jurisdiction by preserving the status quo until the appeal is decided. The rule prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it. [Citation.] Accordingly, whether a matter is ‘embraced’ in or ‘affected’ by a judgment within the meaning of section 916 depends upon whether postjudgment trial court proceedings on the particular matter would have any impact on the ‘effectiveness’ of the appeal. If so, the proceedings are stayed; if not, the proceedings are permitted. (Ibid.)” (Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629, italics added; see Varian Medical Systems, Inc. v. Delfino. (2005) 35 Cal.4th 180, 189.) Because the trial court’s ruling on appellants’ second post-judgment motion affected enforcement of the default judgment, it impacted on the effectiveness of the pending appeal and therefore was in excess of the court’s jurisdiction. (Elsea v. Saberi, at p. 629.)
Were we to conclude that the claim was not waived on appeal and that the trial court action was not stayed by the appeal of the first postjudgment order, nevertheless we would agree with the trial court that appellants made a general appearance in connection with their first postjudgment motion for relief from default when they attacked only the service of process and failed to move to quash pursuant to section 418.10 or to raise the minimum contacts issue as a basis for their section 473 motion. (Roy v. Superior Court (2005) 127 Cal.App.4th 337, 341, 345.) A section 418.10 motion to quash is the exclusive procedure for challenging personal jurisdiction at the outset of litigation. (Id. at pp. 341, 345.) “Subdivision (e)(1) of section 418.10 protects a defendant who moves to quash by providing that ‘no act’ by that party shall constitute a general appearance. Nothing could be clearer: a defendant may move to quash coupled with any other action without being deemed to have submitted to the court’s jurisdiction. However, the motion to quash remains essential.” (Id. at p. 345, second italics added.)
The automatic stay applies to both issues raised at the second postjudgment motion to vacate: the personal jurisdiction question (to the extent it had not already been determined adversely to appellants on their first motion); and their claim that the court lacked subject matter jurisdiction over the action because the contract required arbitration of disputes.
We note that appellants have failed to cite any pertinent authority supporting their claim that the court lacks subject matter jurisdiction to enter a default judgment on a claim that is contractually required to be arbitrated. In any event, the claim is patently without merit and would result in the inability of a court to enter a default judgment in any action where the parties had agreed to arbitration.
II.
Discretionary Relief Under Section 473, Subdivision (b), For Mistake
Having rejected appellants’ challenges to service of process and to the court’s jurisdiction to enter the default judgments, the question remains whether the trial court abused its discretion in refusing to grant relief from default pursuant to section 473, subdivision (b).
The standard of review for the discretionary relief provision of section 473, subdivision (b), is abuse of discretion. Under this standard, the judgment of the trial court “shall not be disturbed on appeal absent a clear showing of abuse.’ [Citation.]” (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 257 (Zamora).) A court will only be found to have abused its discretion if it “exceeded the bounds of reason.” (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.) Moreover, a trial court’s factual findings are entitled to deference. (Solv-All v. Superior Court (2005) 131 Cal.App.4th 1003, 1007; cf. Lorenz v. Commercial Acceptance Ins. Co. (1995) 40 Cal.App.4th 981, 998 [discussing the trial court’s role in assessing the credibility of evidence under the mandatory provision of section 473].) “ ‘In reviewing the evidence in support of a section 473 motion, [a court] extend[s] all legitimate and reasonable inferences to uphold the judgment.’ ” (Yeap v. Leake (1997) 60 Cal.App.4th 591, 598, quoting In re Marriage of Connolly (1979) 23 Cal.3d 590, 597-598; see also Zamora, at p. 258.)
To obtain discretionary relief under section 473, subdivision (b), the moving party first must prove that the entry of default was “taken against him or her through his or her mistake, inadvertence, surprise or excusable neglect.” (§ 473, subd. (b).) “ ‘The burden of establishing excusable neglect is upon the party seeking relief who must prove it by a preponderance of the evidence.’ ” (Bonzer v. City of Huntington Park (1993) 20 Cal.App.4th 1474, 1478, quoting Iott v. Franklin (1988)206 Cal.App.3d 521, 528; see also Kendall v. Barker (1988) 197 Cal.App.3d 619, 623-624 (Kendall).) Then, the mistake must be one that “ ‘a reasonably prudent person under the same or similar circumstances’ might have made, [citation]” that is, a “ ‘mistake[] anyone could have made.’ [Citation.]” (Zamora, supra, 28 Cal.4th at p. 258.)
The court could determine that appellants had not proved by a preponderance of the evidence that the entry of default against them was caused by a mistake or excusable neglect on their part. At the initial postjudgment hearing, the trial court indicated that if service was good, it was inclined, nevertheless, to grant relief from default under section 473, subdivision (b), based upon appellant Alton Perkins’s declaration that he tried three times to file an answer, but that the clerk rejected it and that he “didn’t realize what was going on.” After reviewing the supplemental papers, including Barefoot’s second declaration, the court appears to have changed its view. In denying the motion, the court impliedly determined that appellants did know what was going on and, consistent with their attempts to avoid service, also purposely refused to comply with the requirements for filing an answer or other opposition, including paying the correct filing fees.
Plaintiff contends that the failure of appellants to pay filing fees, resulting in their default, cannot be remedied under section 473 and that the court had no jurisdiction to vacate the default given this failing. Plaintiff relies upon Hu v. Silgan Containers Corp. (1999) 70 Cal.App.4th 1261 (Hu). Hu held that the trial court lost jurisdiction to reinstate the plaintiff’s complaint after it was voided by the court clerk pursuant to section 411.20 for the plaintiff’s failure to pay the filing fees. Once plaintiff failed to pay the fee within the 20-day time limitation of that section, the court lost jurisdiction over the plaintiff’s complaint and could only void the complaint. Nor did the court have authority to reinstate the complaint under section 473, because that section cannot provide relief for jurisdictional errors such as the failure to timely pay filing fees pursuant to section 411.20. (Hu, at pp. 1269-1270.) The filing fee provisions of section 411.20 apply to the defendant, as well as to the plaintiff. “If an adverse party, or a person acting on behalf of the adverse party, tenders a check for a required filing fee that is later returned without payment, the procedures in subdivisions (a) and (b) shall apply.” (§ 411.20, subd. (d).) However, no case cited by the parties addresses the question of the court’s ability to grant relief under section 473, subdivision (b), where the defendant, rather than the plaintiff, fails to timely pay the filing fee. The plaintiff can, within the time limits of the statute of limitations, file a new action following the court’s voiding of the filing. A defendant is in a far different position where a default has been entered against it. We need not decide whether Hu would prevent the court from exercising its discretion to grant relief under section 473, subdivision (b) in this case, as the record in any event supports the exercise of the court’s discretion to deny relief.
Appellants also contended in the trial court that the default was improperly entered as to Loretta Perkins because it was entered prematurely by the clerk on October 13, 2004, in that she was served by substituted service on September 8, 2004 and her responsive pleading was not due until October 18, 2004, pursuant to section 415.20, subdivision (b), which provides that substituted service “is deemed complete on the 10th day after the mailing.” However, appellants did not raise this claim of error in either their appellants’ opening brief or in their supplemental opening brief on appeal. They waited until their reply brief. Consequently, they have waived this claim on appeal. (Eisenberg et al., Civil Appeals & Writs, supra, ¶¶ 9.78-9.78.2, pp. 9-24 to 9-25.)
We conclude that the trial court did not abuse its discretion in refusing to set aside the default judgment.
III.
Award of Attorney Fees In Connection With the Default Judgment
Appellants contend in their supplemental opening brief that the trial court erred in awarding attorney fees to plaintiff on the default judgment. The court apparently awarded attorney fees on the ground that the contract between the parties provided for them. Appellants contend that the agreement provided attorney fees only to the party who prevails in an arbitration. Because the matter was never arbitrated, appellants contend plaintiff was not entitled to fees under the agreement. Plaintiff Intagio has not responded to this argument.
In the trial court, plaintiff’s counsel filed a declaration in connection with plaintiff’s request for a default judgment by the court, in which he declared that “Defendants have failed to reimburse Intagio for any of Intagio’s costs or attorneys fees pursuant to Section 25.12 of the Intagio Client Agreement.” Paragraph 25.12 of that agreement does not refer to arbitration, but more broadly provides: “To the extent permitted by applicable law, Client agrees to pay all costs including, but not limited to, attorney fees, incurred by Intagio (i) through any process to recover any amounts due and payable . . . by the Client to Intagio, (ii) in reclaiming Intagio cards that have been revoked, in each case pursuant to this Agreement or (iii) in enforcing this Agreement against the Client.” Although other sections of the agreement refer to arbitration and to attorney fees recoverable therein, this particular provision is very broad and does not limit the recovery of attorney fees to those incurred in connection with arbitration. Appellants point to section 28.5 of the Intagio Client Agreement, which provides: “To the extent any Dispute is subject to arbitration pursuant to this Section: [¶] The arbitrator may determine how the costs and expenses (including the award of reasonable attorney’s fees) of any arbitration pursuant to this Section shall be allocated between the parties of such arbitration. . . .” However, this provision does not appear to limit the award of attorney fees to arbitration proceedings and appellants have not referred us to any other specific provision that expressly limits attorney fee recovery to arbitration.
The case is distinguishable from Kalai v. Gray (2003) 109 Cal.App.4th 768, in which the court concluded that the plaintiff had not waived his right to arbitrate the matter by filing a complaint in superior court and that the trial court had erred in granting the defendant attorney fees where defendant had prevailed on a summary judgment motion on the grounds that arbitration was required. The appellate court explained its reasoning that defendant was not entitled to attorney fees unless and until he prevailed in the arbitration: “The parties’ agreement allows for an award of fees only in favor of the ‘prevailing party to [the a]rbitration.’ Simply put, there has not yet been a prevailing party to the arbitration, because there has not been an arbitration. The clear intent of the parties’ provision is that the one who ultimately prevails in a final resolution of their dispute shall be entitled to recover his fees. When there is such a resolution—and if [the defendant] Gray prevails—he will be entitled to recover his fees.” (Id. at p. 777.)
Appellants have waived any right to arbitrate the disputes by failing to timely raise the arbitrability of the dispute, before entry of their default, such as by timely filing a petition to arbitrate pursuant to section 1281.2 “in lieu of filing an answer to the complaint. . . .” (§ 1281.7.) Moreover, unlike the contract in Kalai v. Gray, supra, 109 Cal.App.4th 768, we cannot say as a matter of law, that “[t]he parties’ agreement allows for an award of fees only in favor of the ‘prevailing party to [the a]rbitration.’ ” (Id. at p. 777, italics added.) To the contrary, as we have stated, section 25.12 of the Intagio Client Agreement does not reference arbitration in providing generally for the award of attorney fees. Moreover, the first clause of section 28.5 provides: “To the extent any Dispute is subject to arbitration pursuant to this Section . . .,” (italics added) indicating that some disputes may not be subject to arbitration. Read together, these two clauses indicate attorney fees may be awarded whether the dispute between the parties is arbitrated or not.
We conclude the court did not err in awarding plaintiff its attorney fees.
IV.
Alter Ego Allegations
Appellants contend in the supplement to their appellant’s opening brief that there was no substantial evidence supporting the determination that appellants were the alter egos of the corporate defendants. However, appellants ignore well-established law that “[a] default judgment is appealable only on the issues of jurisdiction and sufficiency of the pleadings [citation]; and, if proof of damages was required before entry of judgment, also on the issue of excessive damages [citation.].” (Eisenberg et al., Civil Appeals & Writs, supra, ¶ 2:115, pp. 2-66 to 2-67, citing Corona v. Lundigan (1984) 158 Cal.App.3d 764, 766-767 and Uva v. Evans (1978) 83 Cal.App.3d 356, 362-363.) In other words, “[T]he ‘ “sufficiency of the evidence cannot be reviewed on an appeal from a default judgment.” [Citation.]’ [Citation.] The default admits the allegations of the complaint.” (Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1303.) Here, the complaint contained sufficient alter ego allegations. Moreover, the request for a default judgment was supported by declarations and documentation that supported the alter ego allegations.
Disposition
We affirm the postjudgment order of May 6, 2005 denying appellants’ section 473 request for relief from default (appeal No. A111128). We vacate the order of November 8, 2005, denying appellants’ motion to vacate and set aside a void judgment, as it was entered in excess of the trial court’s jurisdiction and we dismiss the appeal from that order (No. A112104). Plaintiff is awarded its costs in connection with these appeals.
We concur: Haerle, J. Richman, J.
Plaintiff asserts that California counsel’s affidavit filed in support of defendants’ first motion to set aside the default states that counsel had reviewed the trial court docket and implies this had occurred before entry of the default judgment by the court on December 9, 2004. Although the declaration could be interpreted in such fashion, counsel never directly states that he reviewed the court’s case file before the December 9, 2004 default judgment by the court. Counsel does state that after being retained by defendants, he suffered a severe virus over a period of almost two months that forced him to work a reduced schedule and to delay preparation of the answer, cross-complaint and the motion to set aside the default.
Nor does Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, compel a different result. In that case, the appellate court held that a motion to set aside nonresident defendants’ section 473, subdivision (d) motion to vacate a default and set aside the judgment against them for lack of personal jurisdiction was properly granted despite the defendants’ failure to move to quash summons pursuant to section 418.10. (Id. at p. 1250.) There was no claim that the defendants had made a general appearance in the action. Rather, the plaintiffs argued only that defendants had waived the personal jurisdiction issue by failing to move to quash the summons. (Ibid.) The appellate court expressly acknowledged that the defendants had timely filed the motion to vacate the void default under section 473, had preserved the issue of personal jurisdiction (id. at p. 1250) and had “invoked the proper procedure of a direct attack on the default by motion under section 473, subdivision (d), which states: ‘The court may, . . . on motion of either party after notice to the other party, set aside any void judgment or order.’” (Id. at p. 1249.) Here, in contrast, appellants moved to set aside the default pursuant to section 473, subdivision (b)—not subdivision (d)—and never argued in that first postjudgment motion that the court lacked personal jurisdiction over them due to their lack of minimum contacts with California, but rather attacked only service of process, which the court found proper.
Plaintiff also argues that appellants could not obtain relief from default pursuant to section 473, subdivision (b), because appellants had failed to accompany their request for relief from default with an affidavit of merits or a verified pleading setting up a valid defense. Appellants had filed an unverified proposed answer with their motion. (See § 473, subd. (b).) In support of their assertion that relief was not available unless appellants filed a verified pleading setting up a valid defense, plaintiff cites Transit Ads, Inc. v. Tanner Motor Livery, Ltd. (1969) 270 Cal.App.2d 275, 288 and Weil et al., Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 5:473. Plaintiff is mistaken. Transit Ads was decided under an old standard for relief that required the moving party to also show a meritorious defense. That standard is no longer in force. (Uriarte v. United States Pipe & Foundry Co. (1996) 51 Cal.App.4th 780, 786-790 [1981 amendment to section 473 specifically provides that no affidavit or declaration of merits need be provided by a party moving for relief under section 473 within the six-months period]; accord, 8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, § 175, pp. 679-680; id., (2007 supp.) § 184, p. 220, “[standard of review of order granting relief is only abuse of discretion; there is no requirement that substantive position put forward by party granted relief have merit].”)