Opinion
F082969
09-16-2021
NORTH AMERICAN TITLE COMPANY, INC., Petitioner, v. THE SUPERIOR COURT OF FRESNO COUNTY, Respondent CALATLANTIC TITLE, INC. et al., Real Parties in Interest.
Gilmore Magness Janisse and David M. Gilmore for Petitioner. No appearance for Respondent. Wagner Jones Kopfman & Artenian, Lawrence M. Artenian, Andrew B. Jones; Wanger Jones Helsley, Patrick D. Toole, Oliver W. Wanger; Cornwell & Sample, Stephen R. Cornwell and Rene' Turner Sample for Real Parties in Interest.
NOT TO BE PUBLISHED
ORIGINAL PROCEEDINGS; petition for writ of mandate. Jeffrey Y. Hamilton, Jr., Judge. Super. Ct. No. 07CECG01169
Gilmore Magness Janisse and David M. Gilmore for Petitioner.
No appearance for Respondent.
Wagner Jones Kopfman & Artenian, Lawrence M. Artenian, Andrew B. Jones; Wanger Jones Helsley, Patrick D. Toole, Oliver W. Wanger; Cornwell & Sample, Stephen R. Cornwell and Rene' Turner Sample for Real Parties in Interest.
OPINION
THE COURT[*]
INTRODUCTION
In 2007, real parties in interest Carolyn Cortina and 12 other individuals (“class representatives”) filed a class action against their employer, then named North American Title Company, Inc. (Cal. Entity No. C1176494) (Former NATC). The matter remains pending in Fresno County Superior Court.
A series of business transactions occurred in which Former NATC sold the use of its name to a different company. On January 7, 2019, Former NATC filed amended articles of incorporation and changed its name to CalAtlantic Title, Inc. (CalAtlantic). On the same date, States Title FTS Title Company (petitioner) (Cal. Entity No. C4102990) filed amended articles of incorporation and adopted the name “North American Title Company, Inc.” On February 26, 2021, class representatives were granted the right to amend the complaint to change Former NATC's name to “CalAtlantic Title, Inc.” and to add petitioner as an additional defendant. Petitioner filed a motion to quash based on lack of service of summons. The motion was denied, and petitioner sought relief from this court by way of a petition for writ of mandate.
Even further corporate name changes have occurred since then but are not relevant to the facts of this instant petition.
Petitioner, as a separate and distinct legal entity, is entitled to service of process. Without proper service and notice, the superior court lacks jurisdiction to issue valid rulings or judgments against petitioner. Writ relief is warranted.
FACTS
The Underlying Litigation
In 2007, class representatives filed a class action against Former NATC for wage and hour law violations. The matter proceeded to trial in 2015 and the superior court issued a statement of decision as to liability in 2016, yet the matter has yet to reach a final judgment.
Relevant Corporate Transactions and Amendments
In 2018 and 2019, a series of corporate transactions occurred. Petitioner, formerly States Title FTS Title Company, a relatively new entity incorporated on January 23, 2018, obtained the right to use the name North American Title Company, Inc. from Former NATC's parent companies. On January 7, 2019, Former NATC filed amended articles of incorporation with the California Secretary of State, changing its name to CalAtlantic. On the same date, petitioner amended its articles and adopted the name North American Title Company, Inc. and continued to use that corporate name until May 12, 2021, when it again changed its name to Doma Title of California, Inc. Critical to the facts presented here, as of January 7, 2019, Former NATC was no longer known as “North American Title Company, Inc.”; rather, that name became the legal name of petitioner.
Amendments to the Complaint to Add Parties
On February 5, 2020, class representatives moved for leave to file a third amended complaint to add CalAtlantic and “North American Title Company, Inc.” as parties to the litigation. On February 19, 2020, Former NATC filed an opposition to the motion to amend. Former NATC did not object to the amendment adding CalAtlantic and for the sake of clarity, suggested the amended caption of the complaint state, “CalAtlantic Title, Inc. formerly known as North American Title Company, Inc.” instead. However, Former NATC did object to the amendment to add “North American Title Company, Inc.” to the extent the amendment was an attempt to add petitioner to the litigation. It explained after January 7, 2019, “North American Title Company, Inc.” was the name of petitioner, a distinct and different corporate entity from Former NATC, which did not exist until 2018, and to allow such an amendment would require service of the amended complaint on petitioner and the opportunity for petitioner to defend itself. Petitioner, having not been served, was not provided notice of the motion and therefore did not appear to defend itself against the motion to amend. On February 26, 2021, the superior court granted the motion to amend in its entirety.
To add additional confusion, class representatives misnamed Former NATC as “North American Title Company” rather than “North American Title Company, Inc.” in their first two complaints. Although no corporation operating in California is legally named “North American Title Company, ” class representatives remain convinced it is a properly named party and refuse to remove “North American Title Company” from the action.
On March 10, 2021, class representatives filed a third amended complaint adding petitioner as a party to the action. The complaint was not served on petitioner; rather, class representatives e-mailed a copy of the complaint to counsel for Former NATC. On April 8, 2021, petitioner specially appeared and moved to quash service of summons for lack of service of process. It explained it is a distinct and separate legal entity from Former NATC, it was incorporated in 2018 and therefore not in existence at the time the claims arose, and class representatives never attempted to serve it with the amended complaint.
Class representatives opposed the motion to quash. They offered no evidence they served or attempted to serve petitioner. Instead, class representatives argued the motion to quash was an improper attempt to seek reconsideration of the motion to amend. A hearing was held on June 18, 2021, and the superior court denied the motion to quash on the record. The superior court reasoned Former NATC and petitioner were engaged in a “name change shell game” and this was another attempt to avoid payment of the obligation from the judgment which has yet to issue. The superior court ordered petitioner to file a response within five days. Rather than generally appear and file a response, on June 25, 2021, petitioner filed the instant petition for writ of mandate with this court.
On July 22, 2021, we directed the parties to provide informal briefing specifically requesting class representatives to explain how the superior court can have personal jurisdiction over petitioner without formal service of process. The briefing order also notified the parties this court may elect to issue an order for peremptory relief in the first instance. (See Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171.) Briefing having been submitted, the matter stands ready for adjudication.
DISCUSSION
Law Regarding Review of Motions to Quash
Under Code of Civil Procedure section 418.10, subdivision (c), if a motion to quash service of summons “is denied by the trial court, the defendant, within 10 days after service upon him or her of a written notice of entry of an order of the court denying his or her motion … and before pleading, may petition an appropriate reviewing court for a writ of mandate to require the trial court to enter its order quashing the service of summons or staying or dismissing the action.” If the defendant provides notice of the writ petition to the superior court, the time to appear and file a responsive pleading is extended until 10 days after the writ petition is adjudicated. (Ibid.) “Section 418.10 protects the defendant's right to seek immediate appellate review in recognition of the California rule … that an objection to personal jurisdiction must be finally determined-including appellate review-before the defendant can litigate any defense on the merits.” (In re Marriage of Obrecht (2016) 245 Cal.App.4th 1, 17.)
Petitioner filed the petition for writ of mandate less than 10 days after the superior court's ruling and provided notice to the superior court of the filing. Accordingly, the writ petition was timely filed and automatically stays petitioner from being required to respond to the complaint until this petition is adjudicated.
Code of Civil Procedure section 416.10 governs service of process on corporations. It states a corporation may be served by delivering a copy of the summons and complaint on the person designated as agent for service of process, the president, chief executive officer, or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a general manager, or a person authorized by the corporation to receive service of process. (Code Civ. Proc., § 416.10, subds. (a-b).)
Service of process should be “ ‘ “ ‘liberally construed to effectuate service and uphold the jurisdiction of the court if actual notice has been received by the defendant.' ”' ” (American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 392.) “ ‘ “ ‘The provisions of this chapter should be liberally construed to effectuate service and uphold the jurisdiction of the court if actual notice has been received by the defendant, and in the last analysis the question of service should be resolved by considering each situation from a practical standpoint.…' The liberal construction rule, it is anticipated, will eliminate unnecessary, time-consuming, and costly disputes over legal technicalities, without prejudicing the right of defendants to proper notice of court proceedings.” [Citation.]' ” (Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1443, original italics), citing Pasadena Medi-Center Associates v. Superior Court of Los Angeles County (1973) 9 Cal.3d 773, 778.) “Thus, substantial compliance is sufficient.” (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1437.) “In general, substantial compliance with the code occurs when, although not properly identified in a proof of service, the person to be served in fact actually received the summons.” (Ramos, supra, 223 Cal.App.4th at p.1443, original italics.) However, “no California appellate court has gone so far as to uphold a service of process solely on the ground the defendant received actual notice when there has been a complete failure to comply with the statutory requirements for service.” (Summers v. McClanahan (2006) 140 Cal.App.4th 403, 414.)
Effect of Lack of Service of Process
“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.” (Code Civ. Proc., § 410.10; see Cal. Const., art. VI, § 10; Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd. (2020) 9 Cal.5th 125, 141 (Rockefeller Technology).) “Except as otherwise provided by statute, the court in which an action is pending has jurisdiction over a party from the time summons is served on him as provided by Chapter 4 (commencing with Section 413.10).” (Code Civ. Proc., § 410.50, subd. (a).) “ ‘ “Service of process is the means by which a court having jurisdiction over the subject matter asserts its jurisdiction over the party and brings home to him reasonable notice of the action.”' ” (Rockefeller Technology, supra, 9 Cal.5th at p. 139.) “From the defendant's perspective, ‘[d]ue notice to the defendant is essential to the jurisdiction of all courts, as sufficiently appears from the well-known legal maxim, that no one shall be condemned in his person or property without notice, and an opportunity to be heard in his defence.' ” (Ibid., citing Earle et al. v. McVeigh (1875) 91 U.S. 503, 503-504.)
“[I]n the ordinary civil action, unless there be other statutory authority, the issuance and service of summons is a prerequisite to acquisition of jurisdiction.” (Pousson v. Superior Court of San Diego County (1958) 165 Cal.App.2d 750, 752.) “Service of process thus protects a defendant's due process right to defend against an action by providing constitutionally adequate notice of the court proceeding.” (Rockefeller Technology, supra, 9 Cal.5th at p.139.)
Here, quite simply, there was no attempt made to serve petitioner. Class representatives instead assert service was not required because petitioner had effectively been a party to the litigation since its inception. As explained, such assertion conflicts with foundational rules of California corporation law.
Application of California Corporation Law
Class representatives make several legally unsupported claims in their informal response, asserting the Former NATC “now is simply divided into two entities, ” that they were not seeking “to add any new parties, ” and “[t]he separation of the existing Defendant into two different corporate entities did not turn either of the resulting entities into a new party to the litigation.” While it is true CalAtlantic had been a party to the litigation since its inception, the same does not hold true for petitioner.
Under the Corporations Code, the name of a corporation is set forth in the company's articles of incorporation, and the articles are required to be executed and filed with the Secretary of State. (Corp. Code, §§ 200, subd. (a), 202, subd. (a).) In the same manner, a corporation can change its name by filing amended articles of incorporation with the Secretary of State setting forth the new name. (Corp. Code, § 900.) In selecting a name, the name of a corporation shall be distinguishable in the records of the Secretary of State from the name of any corporation operating in California. (Corp. Code, § 201, subd. (b).)
“[A] copy of the articles of a corporation duly certified by the Secretary of State is conclusive evidence of the formation of the corporation and prima facie evidence of its corporate existence.” (Corp. Code, § 209, italics added.) “The existence of a corporation formed under the general corporation laws of this State is proved by its articles of association or incorporation, executed and filed in accordance with the statute.” (Spring Valley Water Works v. San Francisco (1863) 22 Cal. 434, 440.) The Secretary of State maintains an online database where filed corporate articles and statements of information are made available to the public. (Corp. Code. § 1502, subd. (h).)
Accordingly, the articles of incorporation filed with the Secretary of State are the best evidence of the legal name and existence of corporations licensed to operate in California. Petitioner provided copies of the relevant articles of incorporation and amended articles of incorporation for Former NATC and petitioner, and we granted the request for judicial notice of the documents in our July 22, 2021 order. Based on petitioner's filings, petitioner was incorporated on January 23, 2018, and assigned a different and distinct corporate entity number than Former NATC. Even though petitioner changed its name on January 7, 2019, to one previously used by Former NATC, it is a separate entity under California law from Former NATC with a different corporate entity number, different corporate officers, and different agents for service of process.
Under the Civil Code and the Code of Civil Procedure, corporations are treated in the same manner as natural persons. Both Civil Code section 14 and Code of Civil Procedure section 17 explain, “[T]he word person includes a corporation as well as a natural person.” (Civ. Code, § 14; Code Civ. Proc., § 17.) The Supreme Court “long ago recognized that ‘person' in the Civil Code may include ‘public or private corporations, or natural person[s].' ” (Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 716.)
Code of Civil Procedure section 413.10, subdivision (a), requires “a summons shall be served on a person [w]ithin this state, as provided in this chapter.” (Code Civ. Proc., § 413.10, italics added.) “After a summons has been served on a person, proof of service of the summons as provided in Section 417.10 or 417.20 shall be filed, unless the defendant has previously made a general appearance.” (Code Civ. Proc., § 417.30, italics added.) Accordingly, like a natural person, each and every named corporate defendant in a civil action is entitled to service. Without proper service, respondent superior court lacks jurisdiction over petitioner.
Class representatives present several arguments in their lengthy informal response which shall be briefly addressed here. First, they argue the superior court has subject matter jurisdiction over petitioner. That is not what is at issue here; rather, it is whether the court has jurisdiction over the party. “ ‘ “Service of process is the means by which a court having jurisdiction over the subject matter asserts its jurisdiction over the party and brings home to him reasonable notice of the action.”' ” (Rockefeller Technology, supra, 9 Cal.5th at p. 139.) Next, class representatives assert the superior court made legal and factual findings petitioner and Former NATC are the same legal entity, and therefore have been served and have already made a general appearance in the action.
To the extent the superior court made such determinations they cannot stand, regardless of the standard of review. As discussed above, petitioner was not incorporated until 2018. Class representatives have not made any representations it attempted to serve petitioner's agent for service of process, serve one of petitioner's officers, or otherwise perfect service against petitioner in a manner authorized under Code of Civil Procedure section 416.10. Finally, class representatives assert the superior court was authorized to add petitioner as a defendant to the action without service of process under its broad authority to fashion its own innovative procedural solutions under Code of Civil Procedure section 187. Section 187 states:
Ҥ 187. Means to carry jurisdiction into effect
“When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.” (Italics added.)
Code of Civil Procedure section 187 does not provide authority for the superior court to waive petitioner's jurisdictional challenge in this instance as “[b]y its terms … section 187 operates only where some other provision of law confers judicial authority in the first instance.” (People v. Gonzalez (1990) 51 Cal.3d 1179, 1257, original italics, superseded by statute on another ground as stated in In re Steele (2004) 32 Cal.4th 682, 691.) “Section 187 itself does not confer jurisdiction where such jurisdiction does not otherwise exist.” (Goodwin v. Superior Court (2001) 90 Cal.App.4th 215, 224.) The powers of the superior court to use its inherent powers to create innovative procedural solutions under Code of Civil Procedure section 187 does not allow it to assert jurisdiction over a party where jurisdiction is lacking.
Writ Relief Is Warranted
“The discretionary aspect of writ review comes into play primarily when the petitioner has another remedy by appeal and the issue is whether the alternative remedy is adequate.” (Powers v. City of Richmond (1995) 10 Cal.4th 85, 113-114.) “When an extraordinary writ proceeding is the only avenue of appellate review, a reviewing court's discretion is quite restricted.” (Ibid.) Where a petitioner has a “substantial right to protect or enforce, and this may be accomplished by such a writ, and there is no other plain, speedy and adequate remedy in the ordinary course of law, [petitioner] is entitled as a matter of right to the writ, or perhaps more correctly, in other words, it would be an abuse of discretion to refuse it.” (Ibid.) Filing a writ petition under Code of Civil Procedure section 418.10, subdivision (c) challenging the denial of a motion to quash for lack of jurisdiction is the exclusive method for appellate review; otherwise, the defendant must generally appear and waive the right to challenge the lack of jurisdiction. This court's ordinary authority to rely on discretionary reasons to decline review is therefore constrained.
We therefore direct the issuance of a peremptory writ in the first instance. (Palma v. U.S. Industrial Fasteners, Inc., supra, 36 Cal.3d at pp. 177-180.) The parties were properly notified a peremptory writ may issue. Further, petitioner's right to relief is obvious and no useful purpose would be served by issuance of an alternative writ, further briefing, and oral argument. (Ng v. Superior Court (1992) 4 Cal.4th 29, 35; see Lewis v. Superior Court (1999) 19 Cal.4th 1232, 1236-1237, 1240-1241; Brown, Winfield & Canzoneri, Inc. v. Superior Court (2010) 47 Cal.4th 1233, 1240-1244.) The superior court lacks jurisdiction over petitioner until and unless service is effectuated or waived. Petitioner's motion to quash must be granted.
DISPOSITION
Let a peremptory writ issue directing the Fresno County Superior Court in case No. 07CECG01169 to vacate its June 18, 2021 order denying petitioner's motion to quash service of summons and issue an order granting the motion to quash service of summons.
In the interests of justice and to prevent further delays, this decision shall be final as to this court immediately. (Cal. Rules of Court, rule 8.490(b)(2)(A).) The remittitur will issue immediately upon the finality of this opinion as to this court, should the parties so stipulate. (Cal. Rules of Court, rules 8.272(c)(1) & 8.490(d).)
As the prevailing party to this proceeding, petitioner is entitled to costs under California Rules of Court, rule 8.493.
[*] Before Levy, Acting P.J., Franson, J. and Peña, J.