LaRue v. DeMarco

Filed 6/30/08 LaRue v. DeMarco CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

Defendant Joseph A. DeMarco appeals from an order denying his motion to vacate a default and default judgment entered in favor of plaintiff Carl L. LaRue. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Circumstances Leading to Entry of Default and Default Judgment

On August 14, 2005, plaintiff Carl L. LaRue, while riding a bicycle, was struck by a car driven by defendant Joseph A. DeMarco.[1] On October 7, 2005, LaRue filed an unverified complaint prepared on a Judicial Council form, alleging a cause of action for negligence against DeMarco. In addition to actual damages, an award of punitive damages was sought on the ground that DeMarco was guilty of malice as defined in Civil Code section 3294. As mandated by Code of Civil Procedure[2] section 425.10, subdivision (b), the complaint did not specify the amount of actual or punitive damages. Instead, pursuant to sections 425.11 and 425.115, LaRue set forth the nature and amount of damages being sought in a separate statement of damages prepared on a Judicial Council form. LaRue sought damages in the total sum of $3,500,650, consisting of general and special damages of $2,000,650, and punitive damages of $1.5 million.

On October 11, 2005 at 7:10 a.m., a process server left the summons, complaint and statement of damages, with or in the presence of Mrs. De-Marco-Wife at DeMarcos dwelling house or usual place of abode, and the documents were also mailed to DeMarco at the address of service on the same day.

DeMarco did not respond to the pleadings, and upon LaRues request, the court entered his default on December 29, 2005. After a prove-up hearing on damages, LaRue was awarded a judgment in the total sum of $2,350,000, consisting of general damages of $1,250,000 for pain, suffering, inconvenience, and emotional distress; $100,000 for specials; and $1 million for punitive damages. LaRues counsel sent DeMarco notice of entry of the February 28, 2006, default judgment by mail. DeMarco did not appeal from the judgment.

B. DeMarcos Motions for Relief from Default and Default Judgment

On July 25, 2006, more than six months after the entry of his default, DeMarco, represented by counsel, filed a motion to set aside the default judgment on two grounds: (1) lack of personal jurisdiction due to improper service of process and therefore the judgment was void as a matter of law ( 473, subd. (d)),[3] and (2) lack of actual notice of the proceedings in time to defend the action and therefore the judgment should be set aside and leave granted to defend the action ( 473.5).[4] As required by section 473.5, subdivision (b), DeMarco attached to his written motion a proposed answer to the complaint. LaRue opposed the motion on procedural and substantive grounds, but alternatively requested that if the court opened the default, DeMarco should be required to pay LaRues attorney fees and costs.

On September 11, 2006, the trial court granted DeMarcos motion and vacated both the default and default judgment. In its written order, the court directed DeMarco to pay LaRue and his counsel the sum of $4,726 on or before October 15, 2006. The proposed answer, which was unsigned, was not deemed filed. The court directed DeMarco to serve and file that answer by October 2, 2006. In the event DeMarco failed to make payment or serve and file the proposed answer, the court granted LaRue permission to apply ex parte to reinstate the default and default judgment.

In response to the September 11, 2006, order, DeMarco, representing himself, sent to LaRue and his counsel a check in the required amount of $4,726. Although DeMarco filed two documents with the court, he did not serve and file either the proposed answer that had been attached to his motion papers or any other appropriate answer.

On October 19, 2006, the trial court granted DeMarco additional time to file an appropriate answer. In its written order, the court explicitly stated the two documents, captioned  Answer to Order, and Affidavit,  that DeMarco had so far filed with the court did not constitute an adequate response to Plaintiffs Complaint, and did not place the case at issue. The court admonished DeMarco that he had until November 1, 2006 to file and serve his Proposed Answer, or another appropriate Answer. Otherwise, the court would grant LaRues application and reinstate the default and default judgment. The court sent a copy of its October 19, 2006 order to DeMarco by mail. On October 31, 2006, DeMarco filed a document titled, Defendants Answer to Motion to Vacate/Set Aside Judgment and Default, which he asked the court to accept as a reply to the courts request for an answer.

LaRue again applied to reinstate the default and default judgment, correctly contending that although the courts Domain System had identified DeMarcos October 31, 2006, document as [a]nswer to [c]omplaint filed for Joseph DeMarco, the document was not an appropriate answer because it failed to address the allegations in the complaint. On November 7, 2006, the trial court granted LaRues renewed request and reinstated, nunc pro tunc and in full force and effect, the default and default judgment. LaRues counsel sent a notice of entry of the November 7, 2006 order to DeMarco by mail. DeMarco did not appeal from either the November 7, 2006 order or the reinstated default judgment. Instead, he made two unsuccessful attempts to vacate the default and default judgment after reinstatement.

On December 19, 2006, while still representing himself, DeMarco filed his first motion seeking to vacate the reinstated default and default judgment. On January 29, 2007, the trial court denied the request, but sua sponte directed that $3,726 of the $4,726 that DeMarco had paid to vacate his default was to be credited to the outstanding default judgment. DeMarco did not appeal from this order.

On April 19, 2007, DeMarco, represented by new counsel, filed a second motion to vacate the reinstated default and default judgment. DeMarco argued that the default and default judgment were void ( 473, subd. (d)), because (1) the amount awarded exceeded the amount prayed for in the complaint, which actually contains no demand; (2) the amount awarded exceeded the amount stated in the request for default, which was $543.82; (3) defendant was never served with a statement of damages; and (4) the [j]udgment does not state that defendant was served with a statement of damages. LaRue opposed the motion on both procedural and substantive grounds. After a hearing, the court issued a written order filed on June 19, 2007, denying DeMarcos second motion to vacate the reinstated default and default judgment DeMarco timely appeals from the June 19, 2007, order.

DISCUSSION

The disposition of a motion to vacate a default and default judgment rests largely in the discretion of the trial court, and its decision will not be disturbed on appeal unless there has been a clear abuse of discretion. Although precise definition is difficult, it is generally accepted that the appropriate test of abuse of discretion is whether or not the trial court exceeded the bounds of reason, all of the circumstances before it being considered. [Citations.] (In re Marriage of Connolly (1979) 23 Cal.3d 590, 597-598.) We conclude that the record does not establish that the trial court abused its discretion in denying DeMarcos request for relief from the default and default judgment entered against him.

At issue are the statutory provisions governing defaults and default judgments. Sections 425.11 and 425.115 provide, in relevant part, that before entering a default in a case involving personal injury, the plaintiff must serve the defendant with a statement of the nature and amount of the damages sought for actual and punitive damages. ( 425.11, subds. (b), (c), (e); 425.115, subds. (e), (f).) And, section 580 provides that [t]he relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in . . . the statement required by Section 425.11, or in the statement provided for by Section 425.115 . . . . ( 580, subd. (a).)

DeMarco argues that the default judgment should be set aside because LaRue failed to comply with the statutory requirements for entry of a default and default judgment, and the record does not otherwise establish compliance with those statutory requirements. DeMarcos arguments are unavailing.

We reject DeMarcos argument that there is no substantial evidence that he was served with the statement of damages.[5] In opposing DeMarcos latest request for relief from his default, LaRue relied upon the proof of service of his process server indicating that the statement of damages was served on DeMarco by substituted service. That the process server did not attach to his proof of service a copy of the statement of damages he served upon DeMarco did not preclude the trial court from relying upon the proof of service. Although DeMarco submitted a declaration asserting he never received the statement of damages, the trial court explicitly stated it did not believe that DeMarco had not been served with the document. Contrary to DeMarcos contention, the trial court was free to reject his assertion of nonservice, even if it was uncontradicted. (Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1028.) Although there was no explicit finding on the issue of service, as an appellate court, we must presume the trial court found in favor of LaRue on this issue. (See Griffith Co. v. San Diego Col. for Women (1955) 45 Cal.2d 501, 507-508.)

Additionally, DeMarco does not dispute that at the prove-up hearing on damages LaRues counsel informed the trial court that DeMarco had been served with the summons, complaint, and statement of damages, that the information in the statement of damages was known to the trial court, or that the sums awarded in the default judgment did not exceed the amounts requested in the statement of damages. There are no statutory provisions requiring the record to show that a defendant has been served with a statement of damages. Section 670, subdivision (a) provides, in relevant part, that in the case the complaint is not answered by a defendant, the record includes only the following documents: the summons, with the affidavit or proof of service; the complaint; the request for entry of default with a memorandum indorsed thereon that the default of the defendant in not answering was entered, and a copy of the judgment . . . . Similarly, sections 425.11, 425.115, and 580, do not require the plaintiff to file in court a copy of the statement of damages. ( 425.11, 425.115, 580; see Scognamillo v. Herrick (2003) 106 Cal.App.4th 1139, 1147.) Finally, although the amount of damages awarded in a judgment shall be computed and stated in dollars and cents, rejecting fractions, ( 577.5), there is no statutory requirement that the judgment recite that a statement of damages has been served on a defendant.

We also reject DeMarcos argument that the default and default judgment should have been vacated because he was never put on notice that he was potentially subject to a judgment of more than two million dollars, or to any judgment in excess of the $543.82 in costs that LaRue listed in his initial request for default.

Sections 425.11, 425.115, and 580 are grounded upon considerations of due process. [Citations.] (Garamendi v. Golden Eagle Ins. Co. (2004) 116 Cal.App.4th 694, 705-706.) Reasoning that a default judgment that exceeds the demand [for damages] would effectively deny a fair hearing to the defaulting party, the Courts of Appeal have consistently read the code to mean that a default judgment greater than the amount specifically demanded is void as beyond the courts jurisdiction. [Citations.] (Greenup v. Rodman (1986) 42 Cal.3d 822, 826.) However, any purported error regarding the notice of damages does not render the entire judgment void, but only voids the amount that exceeds the known damages demanded by the plaintiff. (Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 495.) Thus, [i]f the eventual judgment exceeded the amount that [DeMarco] had been given notice was at risk in the litigation, the constitutional mandate of due process would void the excess, even if the Code of Civil Procedure section 580 did not. [Citation.] (Garamendi v. Golden Eagle Ins. Co., supra, 116 Cal.App.4th at p. 706.)

Contrary to DeMarcos contention, any purported deficiencies in notifying him regarding the amount of damages for which he would be liable if he failed to respond to the complaint before the initial entry of default are not dispositive. Notice deficiencies, if any, were cured when DeMarco admittedly received a copy of the default judgment, detailing the type and amount of damages that LaRue sought to recover in the action. Before the default and default judgment were reinstated, the trial court gave DeMarco several opportunities to exercise his right to choose . . . between (1) giving up his right to defend in exchange for the certainty that he cannot be held liable for more than a known amount, and (2) exercising his right to defend at the cost of exposing himself to greater liability. (Greenup v. Rodman, supra, 42 Cal.3d at p. 829, italics added.) Consequently, the purpose of sections 425.11 and 425.115which is to  give defendants one last clear chance to respond to allegations of complaints by providing them with actual notice of their exact potential liability . . .  was fully achieved as DeMarco received the notice due process requires before the court reinstated the default and default judgment. (Scognamillo v. Herrick, supra, 106 Cal.App.4th at p. 1147; see Greenup v. Rodman, supra, 42 Cal.3d at p. 829; Garamendi v. Golden Eagle Ins. Co., supra, 116 Cal.App.4th at pp. 706-707.)

We also are not persuaded by DeMarcos argument that the trial courts order under review constitutes a miscarriage of justice. In its orders of September 11, 2006, and October 19, 2006, the trial court used clear and understandable language when it gave DeMarco guidance as to the type of document that would meet the requirements of an appropriate answer and warned him that his failure to cure his default would result in the reinstatement of the default and default judgment. Neither at the trial court nor on appeal does DeMarco offer any valid reason for his failure to comply with the trial courts orders.

DeMarcos argument that the trial court did not have the authority to reinstate the default and default judgment after he failed to file an appropriate answer is also unavailing. Although jurisdiction to act beyond its authority cannot  be conferred on a court, . . . a party, by seeking certain action by the court, may be precluded from objection afterwards to the action taken. . . . [Citation.] There seems to be substantial authority for the proposition that a party who has invoked or consented to the exercise of jurisdiction beyond the courts authority may be precluded from challenging it afterwards, even on a direct attack by appeal. . . . The circumstances of a particular case may be such as to estop a person from setting up the invalidity of a judgment.  (Munns v. Stenman (1957) 152 Cal.App.2d 543, 558.) DeMarco did not raise any challenge to the trial courts September 11, 2006, order conditionally vacating the default and default judgment until his second motion to vacate the reinstated default and default judgment. Before that second motion, DeMarco had secured relief from the default and default judgment but then failed to file an appropriate answer despite being given several opportunities to do so. The court then reinstated the default and default judgment and had already refused to again vacate the default and default judgment. On this record, we conclude DeMarco is estopped from challenging the trial courts authority to rule on his latest request for relief from the default and default judgment after reinstatement.[6]

Because DeMarco has not filed a notice of appeal from the default judgment itself, his contentions relating to the sufficiency of the evidence supporting the default judgment or the excessiveness of the damages awarded to LaRue are not properly before us and we do not address those contentions. ( 906; see Armstrong v. Armstrong (1976) 15 Cal.3d 942, 950; see also Reisman v. Shahverdian (1984) 153 Cal.App.3d 1074, 1087.)

Given the procedural posture of this case, our decision should not be read as expressing any opinion as to whether DeMarco may be able to vacate the default and default judgment by an independent action in equity. (See Groves v. Peterson (2002) 100 Cal.App.4th 659, 667-671; Rose v. Fuqua (1962) 200 Cal.App.2d 719, 724). We conclude only that the trial court did not abuse its discretion in denying DeMarcos motion to set aside the default and default judgment.[7]

DISPOSITION

The June 19, 2007 order is affirmed. Plaintiff is awarded costs on this appeal.

_________________________

McGuiness, P.J.

We concur:

_________________________

Siggins, J.

_________________________

Jenkins, J.

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[1] East Bay Region Park District filed a complaint in intervention to collect for workers compensation on behalf of LaRue, a member of the East Bay Parks District Volunteer Patrols, for injuries he sustained as a consequence of the accident. That entity is not a party to this appeal.

[2] All further unspecified statutory references are to the Code of Civil Procedure.

[3] Section 473, subdivision (d), reads: The court . . . may, on motion of either party after notice to the other party, set aside any void judgment or order.

[4] Section 473.5 reads, in pertinent part: (a) When service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action.

[5] In granting DeMarcos initial request for relief from his default, the trial court was not necessarily required to resolve the validity of the service of the pleadings, which included the summons, complaint, and statement of damages, as noted in the process servers proof of service. Section 473.5, which was one of the statutory grounds for the successful earlier motion, permits a court to grant relief to a defaulting defendant even if the party has been validly served with process. (Olvera v. Olvera (1991) 232 Cal.App.3d 32, 40.) At the June 19, 2007, hearing, the trial court confirmed that it had not previously determined that DeMarco had not been served with the summons and complaint.

[6] In light of our resolution of DeMarcos arguments as noted above, we need not address his contentions that his latest motion was timely and not a motion for reconsideration.

[7] LaRue has moved for sanctions on the grounds that DeMarcos appeal is frivolous and was taken in bad faith and solely for the purpose of delay. DeMarco also has moved for sanctions on the ground that LaRues motion for sanctions is frivolous. [T]he punishment [of sanctions] should be used most sparingly to deter only the most egregious conduct. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 651.) Because we see no reason to grant sanctions to either party on this record, both motions are denied.