Rutan & Tucker v. Grabowski
Filed 2/24/12 Rutan & Tucker v. Grabowski CA4/3
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opinion has not been certified for publication or ordered published for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
FOURTH
APPELLATE DISTRICT
DIVISION
THREE
RUTAN & TUCKER,
Plaintiff and Respondent.
v.
LAURENCE L. GRABOWSKI,
Defendant and Appellant,
G044964
(Super. Ct. No. 05CC03732)
O P I N I O N
Appeal from a
postjudgment order of the Superior Court
of
County, Steven L. Perk, Judge.
Affirmed.
Larry R. Marshall (Pro
Hac Vice); Thomas Whitelaw & Tyler, Michael I. Katz and Carolyn N. Ko for
Defendant and Appellant.
Rutan & Tucker,
Stephen A. Ellis and Hanni Pichel for Plaintiff and Respondent.
Laurence L. Grabowski
(Grabowski) owes the law firm Rutan & Tucker (Rutan) legal fees for
litigation involving a family trust
dispute. After Grabowski failed to
make payments or honor his promissory note, Rutan filed a lawsuit against
Grabowski and obtained a default judgment.
Approximately five years later, Rutan learned Grabowski was going to
receive a large monetary settlement arising out of litigation involving a
family business dispute (hereafter Orange County Litigation). Rutan filed a notice of lien in the pending
action. After the court ordered the
parties to prepare a final judgment, Rutan filed a motion for order regarding
satisfaction of the lien. The court
granted the motion. A few months later,
Grabowski filed a motion to set aside the default and default judgment claiming
it was void because he was not properly served with the summons and complaint. The court denied Grabowski’s motion and deemed
the lien, based on the default judgment, to be valid. This appeal challenges the order denying
Grabowski’s motion to set aside the default and default judgment as void. Finding no error, we affirm the order.
I
Grabowski is a former
resident of
but has lived in Missouri for
over 10 years. In 2004, Grabowski owed
Rutan legal fees, and he executed an interest bearing promissory note in favor
of Rutan for $167,237.16. The note came
due in December 2004, and when Grabowski failed to make any payments, Rutan
filed a lawsuit for breach of the promissory note. The summons was filed with the court on March 3, 2005.
On March 14, 2005, Rutan served the
by mail to Grabowski. Rutan regularly
communicated with Grabowski in the family trust litigation using his Missouri
post office box mailing address (hereafter referred to as the Missouri
Address). Rutan sent one copy of the
summons and complaint by regular first class mail and another copy by certified
mail with a return receipt requested to the same Missouri Address.
Rutan never received a signed
return receipt from Grabowski. However,
the mail was not sent back or returned to Rutan. It did not receive a return receipt marked
“unclaimed.”
Grabowski failed to file
a response in the action. Rutan sought
entry of a default judgment. The court
initially rejected the request because Rutan had not submitted with its proof
of service the “‘original [g]reen “return receipt” mailed card.’” In response, Rutan submitted Stephen A.
Ellis’s declaration to support the request for a default judgment. In his declaration, Ellis provided evidence
proving Grabowski had actually received the service of the summons and
complaint.
Specifically, Ellis
explained that when Grabowski executed the note he was being represented by
Gary E. Shoffner in his family’s Orange County Litigation. The note was executed in February 2004 and
was due and payable in December 2004 because Grabowski and Rutan believed the
Orange County Litigation would be quickly resolved in Grabowski’s favor and he
would be able to pay off the note.
However, the lawsuit was delayed after it was sent to arbitration.
Ellis stated that during
Rutan’s representation of Grabowski in the trust litigation, the law firm
regularly communicated with Grabowski at his Missouri Address. He attested, “[Rutan] had numerous
conversations with . . . Grabowski regarding the documents that were sent to
the Missouri Address. These included
conversations about bills, pleadings and letters.” He explained Rutan served the summons and
complaint in the collection action by sending copies to the same Missouri
Address. One set was sent via first
class mail, and one set was sent via certified mail with a return receipt
requested.
Ellis declared Rutan did
not receive a signed return receipt card from Grabowski, however Ellis
explained he had been “in periodic contact with Mr. Shoffner regarding not only
the Orange County Litigation, but also regarding this matter. For example, on July 6, 2005, I sent an
e-mail to Mr. Shoffner in an attempt to resolve this matter, and informing Mr.
Shoffner that [Rutan] would have to seek entry of . . . Grabowski’s default if
progress in this matter was not made by the July 25, 2005 [c]ase [m]anagement
[c]onference. Acknowledging that [Rutan]
had filed suit against . . . Grabowski on the promissory note, Mr. Shoffner
replied, ‘I will try to get back to you no later than Monday.’ On July
12, 2005, Mr. Shoffner again replied to my July 6, 2005
and said, ‘call me to discuss how the [Rutan] lawsuit can be resolved.’”
declaration.
After considering
Ellis’s declaration, the court found there was sufficient evidence Grabowski
had actually been served and it granted Rutan’s application for a default
judgment. Rutan served and then filed
the notice of entry of the default judgment with the court at the end of
February 2006.
In July 2006, Rutan
filed a “notice of filing of foreign judgment” in the Missouri
state court to register its judgment.
Grabowski appeared and contested enforcement of the foreign
judgment. The Missouri
court refused to register the default judgment.
When Rutan learned the
Orange County Litigation had settled, and Grabowski was to receive payments
totaling over $2 million, it filed a notice of lien and a motion for an order
for satisfaction of the lien. On September 7, 2010, the court granted
the motion. Grabowski filed an appeal.
Five months later, on February 1, 2011, Grabowski filed a
motion to set aside the default and default judgment due to improper service. The court denied the motion. In its minute order the court ruled, “[T]he
‘other evidence’ before the court at the [time] the default judgment entered
was sufficient to show actual delivery to [Grabowski.] [(Code Civ. Proc., § 417.20, subd. (a).)
year[s] after entry the moving party must show that the judgment is void on its
face. [Grabowski] has not done that.”
II
“Generally, a party who
has not actually been served with summons has three avenues of relief from a
default judgment. [¶] First, . . . section 473.5,
subdivision
(a) provides: ‘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. [¶] . . . [S]uch motion must be made no later
than two years after entry of judgment, and the party must act with diligence
upon learning of the judgment.
(§ 473.5 . . .)
[Citations.]” (
Cal.App.4th 175, 180 (Trackman).) Because Grabowski’s motion was filed over two
years after the entry of judgment, section 473.5 does not offer him an avenue
for relief.
Section 473, subdivision
(d), also does not assist Grabowski. It
provides in pertinent part: “The court
may, . . on motion of either party after notice to the other party, set aside
any void judgment or order.” It is well
settled, “Where a party moves under section 473, subdivision (d) to set aside
‘a judgment that, though valid on its face, is void for lack of proper service,
the courts have adopted by analogy the statutory period for relief from a
default judgment’ provided by section 473.5, that is, the two-year outer
limit. [Citations.]” (Trackman,
supra, 187 Cal.App.4th at p. 180.)
Second, a “party can
show that extrinsic fraud or mistake
exists, such as a falsified proof of service, and such a motion may be made at
any time, provided the party acts with diligence upon learning of the relevant
facts. [Citations.]” (Trackman,
supra, 187 Cal.App.4th at p. 181.)
Grabowski does not allege extrinsic fraud or mistake occurred in this
case. Moreover, this equitable relief
would not be available because the record shows Grabowski did not act with
diligence. Grabowski certainly knew
about the default judgment by 2006 when he contested Rutan’s attempts to
enforce the foreign judgment in Missouri. Waiting approximately five years (until
February 2011), before moving to set aside the default was not acting
diligently.
“The third avenue of
relief is a motion to set aside the default judgment on the ground that it is
facially void. (§ 473, subd. (d) [‘The court may . . .
set aside any void judgment’]; [citation].)
‘A judgment or order that is invalid on the face of the record is
subject to collateral attack.
[Citation.] It follows that it
may be set aside on motion, with no limit on the time within which the motion
must be made.’ [Citation.] This does not hinge on evidence: A void judgment’s invalidity appears on the
of service. [Citations.]” (Trackman,
supra,187 Cal.App.4th
at
p. 181.)
Specifically,
“‘A judgment . . . is . . . void on its face when the invalidity is apparent
upon an inspection of the judgment-roll.
[Citation.]’” (
24 Cal.App.4th 1426, 1441 (Dill).) The judgment roll for a default judgment is
statutorily defined as “the summons, with the affidavit or proof of service;
the complaint; the request for entry of default . . . and a copy of the
judgment[.]” (§ 670, subd. (a).) The question of whether a judgment is void on
its face is a question of law that we review de novo. (See Cruz
v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 496.)
Grabowski alleges the
default and default judgment are void on their face because: (1) he was never personally served with the
summons and complaint; (2) he never appeared in the case; (3) he never entered
his appearance in the case; (4) his attorney never entered an appearance; (5)
the acknowledgement of receipt of summons was not returned or filed by Rutan;
(6) no signed return receipt was filed; and (7) Rutan’s other evidence (i.e.,
Ellis’s declaration) failed to establish actual service of the summons and
complaint.
The
first contention can be dealt with quickly.
Personal service was not required.
Section 415.40 provides, “A summons may be served on a person
outside this state in any manner provided by this article or by sending a copy
of the summons and of the complaint to the person to be served by first-class
mail, postage prepaid, requiring a return receipt. Service of a summons by this form of mail is
deemed complete on the 10th day after such mailing.” Thus, service by mail outside the state is
expressly authorized by statute.
The
rest of Grabowski’s contentions all relate to the sufficiency of Rutan’s proof of service. “It has been held that the filing of a proof
of service creates a rebuttable presumption that the service was proper. [Citations.]
However, that presumption arises only if the proof of service complies
with the statutory requirements regarding such proofs.”
supra, 24 Cal.App.4th at pp. 1441-1442.)
Section 417.20 requires that “if service is made by mail pursuant to
[s]ection 415.40, proof of service shall include evidence satisfactory to the
court establishing actual delivery to the person to be served, by signed return
receipt or other evidence.” (§ 417.20,
subd. (a).)
There is no dispute
Rutan did not possess a signed return receipt to establish actual delivery to
Grabowski. “Effective service on a
defendant within California
requires a signed receipt of the summons and complaint. (§ 415.30, subd. (c).) By contrast, with service by mail on a
defendant outside the state, no executed acknowledgment of receipt is
required. [Citations.]” (Bolkiah
v. Superior Court (1999) 74 Cal.App.4th 984, 1000.) However, evidence mail was refused or
returned to the sender “unclaimed” without a signed receipt is not sufficient
to establish service under section 415.40.
(See Stamps v. Superior Court
(1971) 14 Cal.App.3d 108, 110 [return receipt marked “unclaimed” will not
suffice as a valid proof of service].)
The court properly
relied on Rutan’s “other evidence” (§ 417.20, subd. (a)) establishing
actual delivery. The sufficiency of
“other evidence” under section 417.20 was considered in the case
Cal.App.3d 80, 82 (Tusinger). In that case, Gary Tusinger, residing in the
state of Arkansas, was sued for divorce by his former wife residing in
California. The summons and complaint
were mailed pursuant to section 415.40, but received and signed for by
Tusinger’s mother. The appellate court
took judicial notice of a letter from Tusinger’s attorney that stated, “I am
writing with reference to the divorce petition which Gary Tusinger received a
few days ago and which was initiated by his wife.” (Tusinger,
supra, 170 Cal.App.3d at pp.
82-83.) The court concluded Tusinger
never contradicted the inference he took the summons and petition to his
attorney. This “‘other evidence,’” the
court concluded, clearly established receipt sufficient to enable Tusinger to
answer and defend the suit. (
“‘Other
evidence’” of receipt has also been found where plaintiff served nonresident
defendants at addresses the parties previously used in their dealings. (Bolkiah
v. Superior Court (1999) 74 Cal.App.4th 984, 1001 (Bolkiah).) The court in
defendants at the address at which they previously sent correspondence. Moreover, defendants had directed plaintiff
to use the address to ensure that mail and merchandise would reach them. (Ibid.)
In
light of the above authority, we conclude Ellis’s declaration provided
sufficient “other evidence” establishing receipt. As in the Bolkiah
case, Ellis attested the summons and complaint were sent to the same
address the parties previously used in their dealings. When Rutan was actively representing
Grabowski in the trust case, Grabowski received correspondence, bills and
pleadings at this address and discussed their contents with his counsel at
Rutan. In addition, Ellis’s
conversations with Shoffner about the Rutan lawsuit further established receipt
of the summons. Although Shoffner was
hired to represent Grabowski in the Orange County Litigation, his discussion of
the Rutan lawsuit in e-mails to Ellis was highly probative because the two
actions were interrelated. Indeed,
Grabowski promised to pay Rutan’s promissory note once he prevailed in the
Orange County Litigation. In his e-mail
to Rutan, Shoffner stated he was optimistic the litigation would be resolved
soon and he sent Rutan a copy of the proposed settlement giving Grabowski the
funds he needed to pay Rutan’s legal bills.
Shoffner specifically stated he wished to discuss how “the Rutan
lawsuit” could be “resolved,” clearly indicating an awareness of it.
Finally, Ellis’s
declaration stated Rutan had not received a returned envelope, or anything
returned “unclaimed” to suggest Grabowski was not still receiving mail at the
Missouri Address. Grabowski’s
declaration stating the post office box was shared with other people and he
never received the summons is irrelevant because the only avenue of relief open
to him five years after the judgment was to show the proof of service was void
on its face. (Dill, supra, 24 Cal.App.4th at p. 1441 [“‘A judgment . . . is . . .
void on its face when the invalidity is apparent upon an inspection of the
judgment-roll.’”].) We conclude Rutan’s “other evidence” of
receipt was sufficient and the resulting default judgment was valid.
III
The order is
affirmed. Respondent shall recover its
costs on appeal.
O’LEARY,
P. J.
WE CONCUR:
BEDSWORTH, J.
ARONSON, J.
Grabowski sought to set aside the court’s order regarding satisfaction of the
judgment lien. (Grabowski v. Rutan & Tucker (February 24, 2012)
was void, and we ruled he was wrong for the same reasons as stated in this
opinion. Nevertheless, we reversed the
court order on the technical grounds the parties failed to comply with the
court’s order to actually prepare a final judgment to which the lien could
attach.
included information in the July 21 e-mail about the progress being made in the
Orange County Litigation. Shoffner offered
information about Grabowski’s interest in several properties involved in that
litigation. Shoffner sent Rutan a
proposed order he expected would soon resolve the lawsuit, after which Rutan
would be paid from the proceeds.
Shoffner stated the parties were motivated to resolve the case this
year. It can be inferred from Shoffner’s
e-mail that he believed Grabowski could soon have the means to pay the Rutan
bill and there was no need to enter Grabowsi’s default.
