Opinion
A152540
12-14-2018
VENDINI, INC., Plaintiff and Respondent, v. JASON PERKINS et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco County Super. Ct. No. CGC-16-555224)
Defendants and appellants Jason Perkins (Perkins), Michael O'Connor (O'Connor), Soul Lounge, LLC (Soul Lounge), and Parish Mission Property, LLC (Parish Mission) (collectively, appellants), appeal following the denial of their motion to vacate an over $300,000 default judgment against them on a complaint filed by plaintiff and respondent Vendini, Inc. (Vendini). Appellants contend the trial court erred in concluding there was proper substitute service within the meaning of section 415.20 of the Code of Civil Procedure. We affirm.
Several other defendants named in the default judgment have not appealed.
All undesignated statutory references are to the Code of Civil Procedure.
BACKGROUND
Many of the facts in this background section are established by a declaration submitted by Vendini's Chief Revenue Officer in support of the request for default judgment, or by other evidence presented by Vendini. For purposes of the present appeal, appellants have not disputed the background facts as described in Vendini's brief on appeal.
Respondent Vendini provides a software platform that allows venues and promoters to sell tickets online. In December 2015, Vendini acquired CrowdTorch LLC, another online ticketing company, including all of the company's customer contracts. In September 2014, appellants, doing business as Parish Entertainment Group (PEG), had entered into a contract with CrowdTorch. The contract was "an exclusive agreement that require[d] PEG to only sell tickets through CrowdTorch during the four-year term of the [a]greement." CrowdTorch provided PEG a $350,000 "Recoupable Signing Bonus," and the contract also contained a "Service Fee Commitment" from PEG to CrowdTorch.
Appellants Perkins and O'Connor are the owners of PEG. PEG's website states that the company operates "a wide variety of venues in Oakland's burgeoning Uptown District as well as in San Francisco's desirable Mission and Hayes Valley neighborhoods," including the Brick & Mortar Music Hall (Brick & Mortar) in San Francisco.
According to Vendini, it learned in August 2016 that PEG had ceased selling tickets on the CrowdTorch software platform and was instead selling tickets on a competitor's platform. PEG owed Vendini a total of $301,476.12 under the terms of the contract with CrowdTorch. In November, Vendini filed a complaint and a first amended complaint, alleging breach of contract, conversion, and monies had and received. The complaint named eleven defendants, including Perkins, O'Connor, Soul Lounge, Parish Mission, and seven other entities that are not parties on appeal.
As described in the discussion portion of this decision, effecting service of process on appellants was challenging. After Vendini effected service, the propriety of which is the subject of the present appeal, appellants failed to answer the first amended complaint. In December 2016, Vendini obtained entry of default against Soul Lounge and Parish Mission. In February 2017, Vendini obtained entry of default against Perkins and O'Connor.
In March 2017, Vendini requested entry of judgment against appellants and moved for a "prove-up" hearing. In May, the trial court entered judgment against appellants and the other named defendants in the amount of $323,096.28, which includes prejudgment interest and costs.
In June 2017, appellants (but not the other named defendants) moved to set aside the default judgment. The motion was "on the grounds of lack of service and [s]ection 473." Appellants asserted they "never received proper notice of either the summons and complaint or the prove up hearing . . . ."
In July 2017, the trial court denied the motion to set aside the default judgment. The court reasoned that declarations submitted by Vendini "establish that all four moving defendants were properly served by substitute service. The declarations also strongly support the inference that all four moving defendants knew about the pendency of this case in sufficient time for them to respond to the Summons and First Amended Complaint, but chose not to do so, instead hoping that their conduct would somehow evade and avoid their obligation to respond. Even if the moving papers were not procedurally deficient, these declarations are more than sufficient to defeat any legal grounds for the setting aside of the Default and Default Judgment, either statutory or in equity."
In August 2017, appellants moved for reconsideration of their motion to set aside the default judgment, attaching various supporting declarations. Vendini expressed an intent to file a motion for sanctions if appellants refused to withdraw the motion. In September, appellants withdrew the motion for reconsideration.
Appellants' briefs on appeal reference many facts adduced in the declarations presented in support of their motion for reconsideration. As Vendini points out, because that motion was withdrawn, appellants may not rely on the content of the supporting declarations on appeal. (AREI II Cases (2014) 216 Cal.App.4th 1004, 1021 ["It is a fundamental rule of appellate procedure that our review is limited to the record before the trial court at the time it made the challenged ruling."].) Appellants do not argue to the contrary. In any event, the facts in the declarations, if considered by this court, would not change the outcome of the appeal.
DISCUSSION
" ' "[A] default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void. [Citation.]" [Citation.] 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.]' [Citation.] Where the question on appeal is whether the entry of default and the default judgment were void for lack of proper service of process, we review the trial court's determination de novo." (Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1200 (Hearn).)
The court in Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, suggested the abuse of discretion standard of review applies "where a plaintiff has contested a motion to vacate a default judgment by way of affidavits or other evidence that goes beyond the judgment roll . . . ." (Id. at pp. 1440-1441.) Because in the present case we affirm under even the de novo standard of review, we need not consider whether the reasoning of Ramos justifies a more deferential standard of review.
Before turning to the circumstances of the service of process in the present case, we observe that appellants do not claim on appeal that they lacked actual notice of Vendini's action. "Statutes governing substitute service shall be 'liberally construed to effectuate service and uphold jurisdiction if actual notice has been received by the defendant . . . .' " (Ellard v. Conway (2001) 94 Cal.App.4th 540, 544.) Furthermore, " 'a "defendant will not be permitted to defeat service by rendering physical service impossible." [Citation.] "The evident purpose of [] section 415.20 is to permit service to be completed upon a good faith attempt at physical service on a responsible person . . . ." [Citation.] Service must be made upon a person whose "relationship with the person to be served makes it more likely than not that they will deliver process to the named party." ' " (Hearn, supra, 177 Cal.App.4th at pp. 1202-1203.)
Counsel for Vendini attempted to contact appellants' counsel (who is also appellants' counsel on appeal) in order to ascertain whether he was authorized to accept service. Appellants' counsel never responded.
I. Substitute Service Was Properly Effected as to Perkins and O'Connor
Appellants Perkins and O'Connor contend the default judgment is void as to them because they were not properly served with the summons and complaint. The trial court concluded there was proper substitute service.
" 'Section 415.20, subdivisions (a) and (b) authorize substitute service of process in lieu of personal delivery.' " (Hearn, supra, 177 Cal.App.4th at p. 1201.) As relevant to service of individuals like Perkins and O'Connor, section 415.20, subdivision (b) provides: "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 416.60, 416.70, 416.80, or 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 other than a United States Postal Service post office box, 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."
In the present case, Vendini's process server averred he attempted to personally serve the FAC and summons on Perkins and O'Connor at their home addresses on six different occasions. Those attempts were sufficient to justify substitute service. (See Espindola v. Nunez (1988) 199 Cal.App.3d 1389, 1392 [" 'Ordinarily, . . . two or three attempts at personal service at a proper place should fully satisfy the requirement of reasonable diligence and allow substituted service to be made' "]; accord Hearn, supra, 177 Cal.App.4th at p. 1202.)
Thereafter, Vendini's process server sought to serve Perkins and O'Connor at the Brick & Mortar club, owned by PEG. The process server encountered an individual who identified himself as the General Manager and said his name was Charles P. The process server gave Charles P. the service of process documents and informed him of the contents. Shortly thereafter, the process server observed Charles P. exit the club and hand the documents to someone the process server believed to be O'Connor, based on pictures provided by Vendini's counsel.
On appeal, appellants dismiss the service of process at the Brick & Mortar club by asserting that Vendini "attempted to serve the individual defendants by dumping complaints on some unknown person outside a night club, rather than at the individual's homes . . . ." However, the process server averred he attempted to serve Perkins and O'Connor at their homes numerous times without success. Furthermore, Perkins and O'Connor do not deny owning the Brick & Mortar club and they cite no authority the club is not a "usual place of business" within the meaning of section 415.20, subdivision (b). In particular, appellants make no showing service to them at the club was not " 'reasonably calculated to give [them] actual notice of the proceedings and an opportunity to be heard.' " (Zirbes v. Stratton (1986) 187 Cal.App.3d 1407, 1416; see also Trackman v. Kenney (2010) 187 Cal.App.4th 175, 185 [approving substitute service where the plaintiff employed "a method of service reasonably calculated to achieve actual service, . . . whether or not actual service is accomplished on the facts of a given case"].) Finally, appellants cite no authority the process server could not rely on Charles P.'s assertion he was the "person apparently in charge" of the club, again within the meaning of section 415.20, subdivision (b).
Appellants also assert they could have been served at 11 Duboce Street, which they claim is their business address. Vendini points out that contention was made for the first time in appellants' withdrawn motion for reconsideration, which appellants do not dispute in their reply brief. Accordingly, we need not address appellants' claim they could have been served at 11 Duboce Street, and we need not consider the evidence Vendini proffered in opposition to the withdrawn motion that service at that address was not possible. --------
Appellants cite Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426 (Dill), in which the court of appeal concluded there had not been "substantial compliance" with the statutes specifying procedures for serving corporations where the plaintiff's summons was addressed to the corporation rather than one of the persons specified in section 416.10. (Dill, at p. 1439.) But service of process on Perkins and O'Connor does not involve a question of substantial compliance, because Vendini's showing satisfied the requirements of section 415.20, subdivision (b).
II. Substitute Service Was Properly Effected as to Soul Lounge and Parish Mission
Appellants Soul Lounge and Parish Mission contend the default judgment is void as to them because they were not properly served with the summons and complaint. The trial court concluded there was proper substitute service.
Vendini's process server averred he attempted to personally effectuate service of process on the person listed as the agent for service of process with the California Secretary of State—an M. Nadov Rosen at an address in Calpine, California. Calpine is a small, remote town in the Sierra Nevada Mountains. When the process server arrived at the listed address, he found a lodge but no occupants. He noticed a piece of paper attached near the front door containing a contact phone number. He called the number and the phone was answered by Greg Garrison, who "said that he was in charge of managing the Calpine property." Garrison said he was authorized to accept service on behalf of Mr. Rosen, and he directed the process server to meet him in Loyalton, California, a 20 mile drive away. The process server did so and gave Garrison the service of process documents and informed him of the contents. Garrison reviewed the documents and said he had previously accepted similar papers on behalf of Mr. Rosen.
Appellants assert that "[s]ervice on Mr. Gar[ris]on . . . was not service on the LLC defendants." However, the process server's declaration established that Mr. Garrison was the person "apparently in charge" of the address provided for Mr. Rosen, within the meaning of section 415.20, subdivision (a) (the substitute service statute applicable to corporations). Appellants do not argue the process server was insufficiently diligent in attempting to serve Mr. Rosen at the address in Calpine, and they do not argue it makes any difference under the statute that the process server had to travel to Loyalton to meet Mr. Garrison. And appellants' reliance on Dill, supra, 24 Cal.App.4th 1426, with respect to service on Soul Lounge and Parish Mission is unavailing for the same reason explained above with respect to Perkins and O'Connor: Vendini showed proper substitute service under section 415.20, subdivision (a), so there is no need for this court to consider whether Vendini also showed substantial compliance.
DISPOSITION
The trial court's order is affirmed. Costs on appeal are awarded to respondent.
/s/_________
SIMONS, J. We concur. /s/_________
JONES, P.J. /s/_________
NEEDHAM, J.