Opinion
B310004
04-25-2022
SETH LEON, Plaintiff and Respondent, v. CHRISTOPHER PAUL RABALAIS, Defendant and Appellant.
Christopher Paul Rabalais in pro. per. for Defendant and Appellant. Blank Rome and Cheryl S. Chang for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. SC096638, Craig D. Karlan, Judge. Affirmed.
Christopher Paul Rabalais in pro. per. for Defendant and Appellant.
Blank Rome and Cheryl S. Chang for Plaintiff and Respondent.
MANELLA, P. J.
INTRODUCTION
Appellant Christopher Paul Rabalais was the president and chief executive officer of defendant AllSportsMarket, Inc., (ASM) which purported to be an investment platform on which investors could trade "fantasy shares" of college and professional sports teams. Defendant Soluciones Globales Optimas, S.A., (SGO) was the owner of ASM. Respondent Seth Leon, who invested $31,000 with ASM and alleged that he substantially increased the value of his ASM account, claimed that both Rabalais and ASM promised that investors could withdraw the money from their account at any time. But when Leon attempted to withdraw a significant portion of the money from his account, he received only a fraction of the funds he requested. Leon subsequently filed suit. Both Rabalais and ASM demurred to the initial complaint, but then failed to respond to the subsequent amended complaints. After their default was entered, they unsuccessfully moved to set aside the default. SGO answered the operative complaint, and in 2009, a court trial was held. No defendants appeared, and the court ultimately awarded a judgment of $379,346.14 in favor of Leon and against Rabalais, ASM, and SGO. The judgment was not appealed.
Rabalais is the only appellant.
In October 2019, Leon successfully applied to renew the judgment. Thereafter, Rabalais moved to vacate the renewed judgment. The court denied Rabalais's motion as untimely and unmeritorious. On appeal, Rabalais does not challenge the court's denial of his motion as untimely, but instead contends the court erred in denying his motion because it lacked jurisdiction to enter the original judgment, because the judgment was inequitable, and because Leon made inconsistent statements.
A money judgment is enforceable for 10 years after the date of entry. (Code Civ. Proc., § 683.020.)
Rabalais does not contend the court erred in denying his motion as untimely; accordingly, we may affirm on that basis alone. We additionally hold that by generally appearing in the action, Rabalais waived any objections to the court's jurisdiction to enter the original judgment. Finally, Rabalais provides no authority to support his contention that the court could have vacated the renewed judgment by finding it inequitable or based on purportedly inconsistent statements. We therefore affirm the court's order.
STATEMENT OF RELEVANT FACTS
A. Leon's Complaint
In January 2008, Leon filed a complaint against Rabalais and ASM, who demurred. After their demurrer was partially sustained, Leon filed a first amended complaint in May 2008. Two weeks later, Leon filed a second amended complaint (SAC), in which SGO was named as a defendant. Though the record contains no proof of service for either amended complaint, in 2020, the superior court found that both amended complaints "were served at the same address indicated on the initial proof of service."
The SAC alleged that ASM billed itself as "an online financial exchange . . . where . . . investors can buy and sell fantasy shares of college and professional sports teams." Rabalais was ASM's president and chief executive officer, and SGO owned ASM. Both Rabalais and ASM promised that investors could withdraw their money at any time. The gist of Leon's complaint was that he was an ASM investor who had attempted to withdraw money from his account, but had received only a fraction of the money he requested. When Leon complained, Rabalais personally "gave Leon a series of increasingly implausible explanations for the missing money," while continuing to promise the money was on its way. Leon also alleged that "ASM and Rabalais intentionally made . . . material misrepresentations . . . including that customers can withdraw their funds at any time, upon demand . . . . Furthermore, after contracting with Leon, ASM and Rabalais made repeated false promises that Leon's withdrawal requests would be honored . . . with no intention of performing." Based on these allegations, Leon alleged causes of action including conversion, breach of contract, and fraud.
B. Leon Obtains Judgment
Rabalais and ASM failed to respond to either amended complaint. In August 2008, the clerk entered their default, and in October 2008, they unsuccessfully moved to set aside the default. In December 2008, SGO answered the SAC.
A two-day court trial was held in October and November 2009. Though Rabalais, ASM, and SGO were notified of both dates, they appeared on neither. Leon, the sole witness, testified that he had invested $31,000 into his account at ASM and that the "value" of his account was over $400,000. He had requested to withdraw a total of $167,000 from his account, but received only $27,000. Excluding interest, Leon stated his expectation damages were $379,026.14, and his out-of-pocket loss was $4,000. At the conclusion of trial, the court remarked that it could not "figure out how [ASM] could exist" and that it seemed "like a Ponzi scheme or gambling or something other than a true investment platform." It indicated it would consider whether to award Leon his expectation damages or his out-of-pocket loss.
In January 2010, the court entered judgment in favor of Leon and against Rabalais, ASM, and SGO, for $379,026.14 in damages and $320 in costs. The judgment was not appealed.
C. Rabalais Moves to Vacate the Renewed Judgment
In October 2019, Leon applied for a renewal of the judgment, which was granted. The accompanying notice of renewal of judgment informed Rabalais that if he objected to the renewal, he could move to modify or vacate the judgment, but "must" do so within 30 days after service of the notice on him. The notice was served on Rabalais via first-class mail on October 25, 2019.
On December 6, 2019, Rabalais filed a motion arguing the renewed judgment should be vacated because: (1) the SAC was not served at the address he listed on his demurrer, which ultimately led to a default judgment against him; (2) Leon took inconsistent positions as to whether investing with ASM constituted gambling; and (3) the original $379,346 judgment and the renewed $737,594 judgment were inequitable when Leon allegedly lost only $4,000. Rabalais also informed the court that he had previously filed his motion on November 23, 2019 (i.e., within 30 days of October 25), but the motion had been rejected because he failed to pay the motion fee and had not reserved a hearing date through the court reservation system.
In October 2020, the court denied Rabalais's motion as untimely and unmeritorious. The court rejected Rabalais's jurisdictional argument, noting that Rabalais had filed a demurrer, constituting a general appearance. As to Rabalais's arguments regarding Leon's purported reversal of position on whether investing with ASM constituted gambling, the court noted both that these arguments were unsupported by evidence, and that "[a] motion to vacate renewal of judgment is not an opportunity to obtain a second bite at the proverbial apple, particularly where Defendant chose not to participate in the action to begin with." Finally, the court noted that California imposed an interest rate of 10 percent per annum for judgments, meaning that any judgment would double in a ten-year time span. Rabalais timely appealed the denial of his motion to vacate.
DISCUSSION
"Not later than 30 days after service of the notice of renewal pursuant to Section 683.160, the judgment debtor may apply by noticed motion under this section for an order of the court vacating the renewal of the judgment." (Code Civ. Proc., § 683.170, subd. (b).) "The renewal of a judgment pursuant to this article may be vacated on any ground that would be a defense to an action on the judgment . . . ." (Id., § 683.170, subd. (a).) "The judgment debtor bears the burden of proving, by a preponderance of the evidence, that he or she is entitled to relief under section 683.170. [Citations.] On appeal, we examine the evidence in a light most favorable to the order under review and the trial court's ruling for an abuse of discretion." (Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal.App.4th 195, 199.)
A. Rabalais Has Forfeited Any Challenge to the Court's Denial of His Motion as Untimely
Rabalais was required to file his motion to vacate the renewed judgment by December 2, 2019. In his December 6 motion, he contended his motion was timely because he had originally filed it on November 23, but the filing had been rejected for failure to pay a filing fee and for failure to use the court reservation system. The court presumably rejected this argument when it denied Rabalais's motion as untimely. On appeal, Rabalais does not contend the court erred in doing so, thus forfeiting any such argument. (See Browne v. County of Tehama (2013) 213 Cal.App.4th 704, 726 [failure to raise contention in opening brief constitutes forfeiture].) Because "'"[a] judgment or order of the lower court is presumed correct, "'" we affirm the court's order on the grounds that the motion was untimely and need not deal with Rabalais's other contentions. (Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447; see also Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th 495, 513 ["one good reason is sufficient to sustain the order from which the appeal was taken"].) Moreover, as discussed briefly below, even were we to exercise our discretion to consider Rabalais's arguments, they are without merit.
Leon served the notice of renewal of judgment via mail on October 25, 2019. Thirty days after October 25, 2019 was Sunday, November 24, 2019. "If the last day for the performance of any act provided or required by law to be performed within a specified period of time is a holiday, then that period is hereby extended to and including the next day that is not a holiday." (Code Civ. Proc., § 12a, subd. (a).) Both Saturdays and Sundays constitute holidays for purposes of the Code of Civil Procedure. (Code Civ. Proc., §§ 10, 12a, subd. (a).) Therefore, Rabalais had until Monday, November 25, 2019, to file his motion to vacate. That period was further extended by five days because Leon served Rabalais by mail. (Code Civ. Proc., § 1013, subd. (a) ["In case of service by mail, . . . any right or duty to do any act or make any response within any period or on a date certain after service of the document, which time period or date is prescribed by statute . . ., shall be extended five calendar days"].) Five calendar days after November 25 was Saturday, November 30, 2019; the deadline to file the motion was thus extended to Monday, December 2, 2019.
B. The Court Had Jurisdiction to Enter the Original Judgment
Rabalais argues the trial court lacked jurisdiction to enter the original judgment, both because the circumstances underlying Leon's claim lacked sufficient connection to California to establish jurisdiction, and because Leon signed a forum selection clause, consenting to the Netherlands and Costa Rica as the sole and exclusive forum for any action or proceeding arising out of ASM's terms and conditions.
As the trial court properly found, Rabalais waived any objections to the court's jurisdiction by filing a demurrer. "A defendant appears in an action when the defendant . . . demurs . . . ." (Code Civ. Proc., § 1014; see also Forbes v. Cameron Petroleums, Inc. (1978) 83 Cal.App.3d 257, 264 ["a demurrer filed by defendant after his default is taken constitutes a general appearance"].) "By generally appearing, a defendant relinquishes all objections based on lack of personal jurisdiction . . . ." (In re Marriage of Obrecht (2016) 245 Cal.App.4th 1, 8.)
In his reply brief, Rabalais argues that forum selection clauses are mandatory and enforceable. But whether the ASM forum selection clause was enforceable is irrelevant because Rabalais never tried to enforce it in the trial court. Rabalais cites no authority suggesting a forum selection clause may be enforced for the first time on appeal.Rabalais also argues in his reply brief that the question of personal jurisdiction can be raised at any time, and that regardless, the trial court erred in not investigating this issue sua sponte. Even had Rabalais provided any authority to support these contentions -- and he did not -- as explained above, Rabalais waived any objection to the court's jurisdiction by making a general appearance in the case.
Rabalais cites Yavuz v. 61 MM, Ltd. (10th Cir. 2009) 576 F.3d 1166, 1173 for the proposition that "'an objection on forum non conveniens grounds is not waived by a defendant failing to raise the issue in its first responsive pleading.'" (Italics omitted.) Yavuz is inapposite because a forum selection clause is different from the concept of forum non conveniens. In any event, the issue in Yavuz was whether the defendants had forfeited a forum non conveniens argument by failing to raise it in their first responsive pleading (id. at 1173); nothing in Yavuz addressed whether such an argument would be forfeited if raised for the first time on appeal more than ten years after entry of judgment.
C. The Court Did Not Err in Refusing to Vacate the Judgment as Inequitable
Rabalais contends the court erred in not vacating the judgment due to inequity, arguing it ignored facts that would have reduced Leon's damages. Specifically, Rabalais argues that: (1) a portion of Leon's account consisted of "stock" that was gifted to him; (2) a portion of the value of Leon's account derived from an estimated value of the "stocks" that Leon either purchased or were gifted to him, and there was no proof there was a market for those stocks; and (3) Rabalais should not be liable for the portion of the account that represented accessible cash to Leon, because it was "faulty market design and technological problems that resulted in an overstatement of all trader account values."
Rabalais's conclusory statements regarding Leon's account lack almost any citation to either the record or authority. Moreover, Rabalais was permitted to move to vacate the renewal of judgment only on "any ground that would be a defense to an action on the judgment" being renewed. (Code Civ. Proc., § 683.170, subd. (a).) "An action based on a judgment is an action based on contract. The judgment becomes a debt which the judgment debtor is obligated to pay and the law implies a contract on his part to pay it." (United States Capital Corp. v. Nickelberry (1981) 120 Cal.App.3d 864, 867.) Rabalais proffers no authority (and we have found none) permitting one to defend against an action on a judgment by claiming the underlying judgment was unfair. By failing to cite to authority or the record, Rabalais has forfeited this argument. (WFG National Title Ins. Co. v. Wells Fargo Bank, N.A. (2020) 51 Cal.App.5th 881, 894 ["In order to demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record. Rather than scour the record unguided, we may decide that the appellant has forfeited a point urged on appeal when it is not supported by accurate citations to the record"]; ibid. ["Similarly, we may disregard conclusory arguments that are not supported by pertinent legal authority"].)
The sole citation is to an attachment to a declaration submitted by Leon, showing his account held 25, 000 "ASMA1" shares, with a purported value of $125,000. Nothing in the document supports Rabalais's claim that these shares were gifted to Leon, or that there was no market for them.
Even were we to consider Rabalais's equity arguments, we would reject them. Rabalais fails to explain why equity would prevent Leon from realizing the value of shares gifted to him. Nor does he cite anything in the record to demonstrate that a market for the shares in Leon's account did not exist, or that there was any "faulty market design and technological problems" that resulted in an overvaluation of Leon's account.
D. The Court Did Not Err in Refusing to Vacate the Judgment Based on Allegedly Inconsistent Statements
Rabalais argues the court erred in entering and renewing the original judgment because Leon had made inconsistent statements about whether investing with ASM constituted gambling. Specifically, Rabalais argues that if investing with ASM constituted gambling, then Leon was not entitled to recover, and if it did not constitute gambling, then no fraud occurred.
Again, Rabalais cites no authority (and we have found none) that alleging a judgment was based on inconsistent statements is a valid defense to an action on a judgment. He has therefore forfeited this argument. (WFG National Title Ins. Co. v. Wells Fargo Bank, N.A., supra, 51 Cal.App.5th at 894.) As the trial court observed, Rabalais's motion to vacate sought "a second bite at the proverbial apple" to which he was not entitled.
In any case, we would reject the arguments were we to consider them. The SAC alleged that ASM and Rabalais made material misrepresentations regarding the ability of investors to withdraw their funds, not whether investing in ASM constituted gambling. Moreover, the court's statement at the end of trial that ASM seemed like "a Ponzi scheme or gambling or something other than a true investment platform" simply reflected the court's confusion as to how the ASM platform could operate as a legitimate investment platform; it did not indicate the court was basing any portion of its judgment on whether investing with ASM constituted gambling.
DISPOSITION
The court's order is affirmed. Leon is awarded his costs on appeal.
We concur: COLLINS, J., CURREY, J.