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Krause v. Moreno

California Court of Appeals, Second District, Seventh Division
May 19, 2011
No. B222101 (Cal. Ct. App. May. 19, 2011)

Opinion

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County No. VC051627 Raul A. Sahagun, Judge.

Politis, Nangano, & Politis and Thomas Y. Barclay for Plaintiff and Appellant.

No appearance for Defendant and Respondent.


PERLUSS, P. J.

Helen L. Krause sued Steven Moreno in his individual capacity and as trustee of The Steven Moreno Trust for allegedly delaying the settlement of Krause’s claims in a probate matter. Moreno was properly served with the summons and complaint. Six months later Krause amended the complaint to add Cal-Jems Irrevocable Trust (Cal-Jems) and Moreno, as trustee of Cal-Jems, as Doe defendants. Krause served the amendments on Moreno by mail but failed to attach a copy of the summons and complaint. The trial court granted Moreno’s motion to quash service on Cal-Jems and himself as trustee. We reverse.

During the pendency of this appeal the superior court issued an order purporting to dismiss the case due to the failure of plaintiff’s counsel to report on the status of the appeal and to appear at the hearing on the order to show cause re dismissal. That order is void as a matter of law (see Code Civ. Proc., § 916, subd. (a) [“the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby”]; Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 198 [any subsequent trial court proceedings on matters “‘embraced’ in or ‘affected’ by” the appeal are void]), and we vacate it accordingly.

FACTUAL AND PROCEDURAL BACKGROUND

The Original Complaint, the Doe Amendments and the Partial Settlement

Krause filed an unverified complaint for malicious prosecution, abuse of process, intentional interference with prospective business opportunity, negligence and negligent interference with an existing contract on August 25, 2008. The complaint named as defendants Steven Moreno, an individual; The Steven Moreno Trust, a trust; and Does 1 through 50. The summons and complaint were personally served on Moreno in his individual capacity and as trustee of The Steven Moreno Trust on September 16, 2008.

Under California law, a trust is not a legal entity. “‘“A... trust... is simply a collection of assets and liabilities. As such, it has no capacity to sue or be sued, or to defend an action.”’” (Stoltenberg v. Newman (2009) 179 Cal.App.4th 287, 293.) “[T]he proper procedure for one who wishes to ensure that trust property will be available to satisfy a judgment... [is to] sue the trustee in his or her representative capacity.” (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1349.)

Acting in propria persona, Moreno answered the complaint individually and on behalf of The Steven Moreno Trust on November 7, 2008. Moreno generally denied the allegations of the complaint and affirmatively alleged that the complaint failed to state facts sufficient to constitute a cause of action and that the answering defendants had prosecuted the claims complained of with probable cause. The answer contained no allegation or other information about The Steven Moreno Trust.

Krause contends The Steven Moreno Trust is fictitious. Moreno’s counsel, in a declaration filed in support of Moreno’s motion to dismiss the action for failure to prosecute, asserted the trust was “a nonexistent entity.” During argument on the motion to quash, however, Moreno’s counsel was more equivocal, stating, “[T]here is really no evidence whether a Moreno Trust exists or doesn’t exist.”

On February 25, 2009 Krause filed two amendments to the complaint, checking the box for “fictitious name” on the forms used, substituting Cal-Jems Irrevocable Trust for Doe 1 and Steven Moreno as Trustee for the Cal-Jems Irrevocable Trust for Doe 2. The two amendments were served by mail on Moreno. Krause did not include a copy of either a summons or the complaint with the service copies of the amendments.

The form used by counsel for Krause allows for an amendment to complaint to substitute a true name for a fictitious name or to substitute a true name for an incorrect name. Krause’s counsel did not indicate on the form Cal-Jems was the correct name for The Steven Moreno Trust.

On August 18, 2009 Krause entered into a partial settlement dismissing Moreno in his personal capacity and as trustee of The Steven Moreno Trust. As part of the settlement, Moreno requested the court bifurcate and hear a motion to quash service as to Cal-Jems and Moreno as trustee of Cal-Jems. The court agreed to hear the motion.

The Motion To Quash Service of the Summons and Complaint

Now represented by counsel, on October 19, 2009 Moreno, in his capacity as trustee of Cal-Jems, filed and served a motion to quash service of summons and a motion to dismiss for failure to prosecute the action in a timely manner. On December 2, 2009 Moreno’s counsel appeared to argue both motions. After the court explained that hearing the motion to dismiss might subject Moreno as trustee of Cal-Jems to the court’s general jurisdiction, Moreno withdrew the motion and characterized his appearance as a “special appearance.” The court granted the motion to quash, explaining, although Moreno had appeared in the case in his individual capacity and through his alleged status as trustee of a nonexistent trust, the Doe amendments naming a different trust and Moreno as trustee of that trust were substantive changes to the complaint, requiring personal service of a summons and the complaint itself, not simply mail service of the amendments. The motion to dismiss was denied.

CONTENTIONS

Krause contends Moreno generally appeared as trustee of Cal-Jems when he moved to dismiss the complaint concurrently with his motion to quash and, in any event, service by mail of the Doe amendments was sufficient under the circumstances of the case to confer jurisdiction over Moreno as trustee of Cal-Jems.

DISCUSSION

1. Standard of Review

An order granting a motion to quash service of summons is an appealable order. (Code Civ. Proc. § 904.1, subd. (a)(3); Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1248.) “Plaintiffs have the burden of establishing by a preponderance of the evidence that jurisdiction is proper. If that burden is satisfied, the burden shifts to the defendant to “‘“present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”...’ [Citation.] Where the jurisdictional facts are not in conflict, the appellate court is presented with a question of law and conducts review of the jurisdictional issue de novo.” (Simons v. Steverson (2001) 88 Cal.App.4th 693, 711.)

Statutory references are to the Code of Civil Procedure.

Moreno Did Not Make a General Appearance When He Filed a Motion To Dismiss Concurrently with His Motion To Quash Service of Summons

A general appearance is made when a defendant either enters an appearance in an action without limiting the purpose of the appearance or when the defendant asks for relief on the merits and thus recognizes the authority of the court to proceed. (See Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127, 1147.) A general appearance in an action waives any objection to personal jurisdiction, and the defendant submits to the jurisdiction of the court. (See, e.g., Greener v. Workers’ Comp. Appeals Bd. (1993) 6 Cal.4th 1028, 1036-1037.)

Krause contends Moreno made a general appearance and submitted to the jurisdiction of the court when he concurrently filed a motion to quash service of summons and a motion to dismiss the complaint. If a motion to quash service of summons is made in a timely manner, however, no act by the party making such motion, including filing an answer or demurrer to the complaint, constitutes a general appearance. (§ 418.10, subd. (e)(1); Roy v. Superior Court (2005) 127 Cal.App.4th 337, 345 [“a defendant may move to quash coupled with any other act without being deemed to have submitted to the court’s jurisdiction”].) Because Moreno filed his motion to dismiss simultaneously with his motion to quash, he did not make a general appearance.

The Court Erred in Granting the Motion To Quash Service of Summons; Krause Substantially Complied with the Statutory Requirements

The sufficiency of any service depends on its ability to inform the defendant of the potential adverse consequences of the lawsuit. (Greene v. Lindsey (1982) 456 U.S. 444, 451 [102 S.Ct. 1874, 72 L.Ed.2d 249].) All due process requires is a method reasonably likely to provide notice. (Id. at p. 456.) Even when the constitutional “notice” requirements are satisfied, however, service is not effective unless applicable statutory requirements are also met. (Renoir v. Redstar Corp. (2004) 123 Cal.App.4th 1145, 1152.) Unless a statute provides otherwise, notice of a claim against a defendant in a civil action is given by service of a summons and the complaint on the person. (§§ 413.10, 415.10; Renoir, at p. 1152.)

Nonetheless, service rules are to be liberally construed to uphold the jurisdiction of the court andensure the opportunity for a trial on the merits. (See, e.g., Summers v. McClanahan (2006) 140 Cal.App.4th 403, 408.) As long as the defendant receives actual notice of the lawsuit, substantial compliance with the statutory provisions governing service of summons will generally be held sufficient. (Id. at pp. 410-411; see also Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1436.)

These fundamental principles govern service of Doe amendments made under section 474, which authorizes plaintiffs ignorant of the name of a defendant to designate a party by a fictitious name in the original complaint and later amend the pleading to include the true name. (See, e.g., General Motors Corp. v. Superior Court (1996) 48 Cal.App.4th 580, 593 [“[w]hatever the judicial attitude toward section 474 might have been in the 19th Century, the Supreme Court and the Courts of Appeal of the 20th Century are uniform in their view that section 474 is to be liberally construed”].) When defective service of a Doe amendment can be easily cured with no prejudice to a defendant, the court should permit a plaintiff to do so. (See, e.g., Streicher v. Tommy’s Electric Co. (1985) 164 Cal.App.3d 876, 884-885 (Streicher) [trial court abused its discretion in denying plaintiff opportunity to correct defective handling of Doe amendment].)

Section 474 provides: “When the plaintiff is ignorant of the name of a defendant, he must state that fact in the complaint, or the affidavit if the action is commenced by affidavit, and such defendant may be designated in any pleading or proceeding by any name, and when his true name is discovered, the pleading or proceeding must be amended accordingly; provided no default or default judgment shall be entered against a defendant so designated, unless it appears that the copy of the summons or other process, or, if there be no summons or process, the copy of the first pleading or notice served upon such defendant bore on the face thereof a notice stating in substance: ‘To the person served: You are hereby served in the within action (or proceedings) as (or on behalf of) the person sued under the fictitious name of (designating it).’ The certificate or affidavit of service must state the fictitious name under which such defendant was served and the fact that notice of identity was given by endorsement upon the document served as required by this section. The foregoing requirements for entry of a default or default judgment shall be applicable only as to fictitious names designated pursuant to this section and not in the event the plaintiff has sued the defendant by an erroneous name and shall not be applicable to entry of a default or default judgment based upon service, in the manner otherwise provided by law, of an amended pleading, process or notice designating defendant by his true name.”

The defect in service in this case was technical, much like the error in Streicher. In Streicher the plaintiff had served a summons and complaint on several defendants but neglected to indicate in the summons the defendants were being sued as Doe defendants on claims originally filed two years earlier. (Streicher, supra, 164 Cal.App.3d at p. 880 & fn. 1.) The trial court sustained the defendants’ demurrer on the ground of untimeliness and denied the plaintiff’s request to amend the summons. The Court of Appeal reversed, holding the trial court had abused its discretion in dismissing the action without giving the plaintiff the opportunity to amend. “‘[A]n amendment substituting the true names of fictitious defendants is not a matter of substance because it does not change the cause of action nor affect the issues raised by the pleadings.’” (Id. at pp. 884-885.) Here, the Doe amendments plainly informed Moreno that Cal-Jems and Moreno himself in his capacity as trustee of Cal-Jems were being added as parties to the lawsuit previously served on Moreno. Krause’s only mistake was neglecting to attach another copy of the summons and complaint. As in Streicher, that defect in the handling of the Doe amendments does not affect the substance of Krause’s complaint. Moreno had proper notice of the lawsuit and each of its claims, and any technical defect in service was easily cured.

Relying on Engebretson & Co., Inc. v. Harrison (1981) 125 Cal.App.3d 436, 441 (Engebretson), the trial court concluded the Doe amendments constituted a substantive change in the pleading that required personal service of the summons and complaint. Unlike the case at bar, Engebretson involved entry of a default judgment, not simply initiation of litigation with defective service of a summons. The court vacated the default judgment because a substantive amendment to the original complaint had been improperly served by mail instead of by personal service on the defendant who had not yet appeared in the action. (Id. at p. 443.)

Section 474 itself recognizes the difference between sufficiency of service to support entry of a default judgment and sufficiency of service for other purposes. Section 474 contains specific requirements regarding the contents of the summons served on a defendant initially identified by a fictitious name before entry of a default or default judgment against that party is permitted. (See Carol Gilbert, Inc. v. Haller (2009) 179 Cal.App.4th 852, 858.) A Doe amendment merely substituting the true name of a defendant for a fictitious name, however, need not be accompanied by the same detailed notice because it is not considered an amendment of substance and does not change the cause of action or affect the issues raised by the pleadings. (See Drotleff v. Renshaw (1949) 34 Cal.2d 176, 181-182; accord, Streicher, supra, 164 Cal.App.3d at p. 884.)

Here, unlike in Engebretson and Carol Gilbert, Inc., Krause never sought to enter Moreno or Cal-Jems’s default. Moreno was already a party to the action who had been served with the summons and complaint, had answered the complaint and was served by mail with the Doe amendments naming Cal-Jems and himself as trustee of Cal-Jems as defendants. Indeed, Moreno filed a motion to dismiss on behalf of Cal-Jems concurrently with the motion to quash and was prepared to argue its merits on behalf of Cal-Jems. Thus, it was “highly probable” service of the Doe amendments on Moreno by mail, although technically defective, nonetheless imparted full notice that Cal-Jems was being sued as a Doe defendant on the original claims. (Cf. Warner Bros. Records, Inc. v. Golden West Music Sales (1974) 36 Cal.App.3d 1012, 1018 [“[t]he nature of the services performed by [their attorney] for defendants and the necessity for his repeated communication with them in performing those services, made it ‘highly probable’ that defendants would receive actual notice of the service of process on [him] upon their behalf”]; Summers v. McClanahan, supra, 140 Cal.App.4th at p. 414.) In sum, the omission of another copy of the summons and complaint should not have been considered fatal to Krause’s action. To the extent technical errors were made, Krause should have been given an opportunity to correct them. If, on remand, Moreno again contests whether Krause was entitled to add him as trustee of Cal-Jems as a Doe defendant, an evidentiary hearing may be held on that point. (See Woo v. Superior Court (1999) 75 Cal.App.4th 169, 177 [plaintiff must be actually ignorant of defendant’s identity, although § 474’s relation-back doctrine applies even if ignorance is result of negligence]; accord, Streicher, supra, 164 Cal.App.3d at pp. 882-883.)

DISPOSITION

The order granting defendant’s motion to quash service of summons is reversed. The March 2, 2011 superior court order dismissing the case is vacated, and the cause remanded for further proceedings not inconsistent with this opinion. Krause is to recover her costs on appeal.

We concur: ZELON, J.JACKSON, J.


Summaries of

Krause v. Moreno

California Court of Appeals, Second District, Seventh Division
May 19, 2011
No. B222101 (Cal. Ct. App. May. 19, 2011)
Case details for

Krause v. Moreno

Case Details

Full title:HELEN L. KRAUSE, Plaintiff and Appellant, v. STEVEN MORENO, Individually…

Court:California Court of Appeals, Second District, Seventh Division

Date published: May 19, 2011

Citations

No. B222101 (Cal. Ct. App. May. 19, 2011)