Opinion
B323067
04-30-2024
EDWARD ROUPINIAN, Individually and as Trustee, etc., et al., Plaintiffs and Respondents, v. MARK ADAMS, Defendant and Appellant.
Tucker Ellis, Edward W. Racek, Zi C. Lin, Alexander J.L. Kaplan, Chad M. Eggspuehler; Murchison &Cumming, Richard A. Dongell and Darin Flagg for Defendant and Appellant. BDG Law Group, Richard A. Fond, Robert D. Bergman, O. Andrew Wheaton and Elina Antoniou for Plaintiffs and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order and judgment of the Superior Court of Los Angeles County, Super. Ct. Nos. BC404638, BC435712, BC430332, BC436001, NC054257 Steven J. Kleifield, Judge. The order is affirmed in part and reversed in part with directions. The judgment is vacated.
Tucker Ellis, Edward W. Racek, Zi C. Lin, Alexander J.L. Kaplan, Chad M. Eggspuehler; Murchison &Cumming, Richard A. Dongell and Darin Flagg for Defendant and Appellant.
BDG Law Group, Richard A. Fond, Robert D. Bergman, O. Andrew Wheaton and Elina Antoniou for Plaintiffs and Respondents.
ROTHSCHILD, P. J.
Defendant and appellant Mark Adams appeals from an order denying his motion to vacate the defaults and ensuing default judgments against him in two related actions brought by plaintiffs and respondents Edward Roupinian and Arlene Roupinian, Individually and as Trustees of the Roupinian Family Trust, dated January 5, 1987 (plaintiffs). We reject Adams's contention that the trial court erred in denying his motion under Code of Civil Procedure section 473.5, because substantial evidence supports that he received actual notice of the summons and complaints in these actions. We likewise find unpersuasive Adams's arguments that the court should have granted his motion because insufficient service of the complaints in these actions rendered the defaults and default judgments void on their face, or because of extrinsic fraud. We affirm the court's order.
All subsequent statutory references are to the Code of Civil Procedure.
Adams also appeals directly from the default judgment in one of these two related cases, Los Angeles Superior Court case No. BC436001, arguing that it is void because it granted relief exceeding what plaintiffs gave notice they were seeking before the court entered the default in that case. Because a void judgment may be challenged at any time, we entertain this untimely appeal, and agree with Adams. Accordingly, we vacate the default judgment-but not the entry of default-in case No. BC436001. Following remand, the trial court has two options for moving forward, as set forth in our opinion.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Complaints and the Defaults
Plaintiffs brought two actions against Mark Adams and others regarding a series of loans plaintiffs made. In case No. BC436001 (the fraud action), plaintiffs sued Adams for fraud in his loan application and requested $585,000 in damages, prejudgment interest, costs, and "such other and further relief as the court may deem just and proper." In case No. NC054257 (the guarantee action), plaintiffs sued Adams as the guarantor on a loan made to a codefendant and requested damages of $346,491.44. The fraud and guarantee actions, as well as several other related cases, were heard in consolidated proceedings before a single judicial officer.
The complaint in the guarantee action is not included in the record. Our description of the contents of the complaint and the prayer for relief is taken from plaintiff's memorandum to the trial court dated May 7, 2013, in support of the application for a default judgment in that action.
Plaintiffs filed proofs of service of the complaints and summonses in both actions. The proofs of service in both actions are virtually identical. Each contains an executed Judicial Council form POS-010 averring that the affiant process server served Adams with the summons, complaint and other documents by substitute service, namely by both: (1) "[leaving] . . . the documents . . . in the presence of . . . Marvin Paul," "a person at least 18 years of age apparently in charge at the office or usual place of business of [Adams]," 5746 East 2nd Street (East 2nd Street address) in Long Beach, California, at 10:00 a.m. on June 7, 2010; and (2) "thereafter mail[ing] . . . copies of the documents to [Adams] . . . at the place where the copies were left . . . on . . . [June 7, 2010]." Both proofs of service attached a form "due diligence declaration (for substituted legal service)" (capitalization &underscoring omitted), with handwritten entries listing: (1) two unsuccessful May 2010 attempts to personally serv[e] Adams at the East 2nd Street address, and (2) that the process server "subserved . . . Marvin Pool"-not "Marvin Paul," the name appearing on the proof of service form-on June 7, 2010 and mailed the papers to the same address on that date as well.
Adams did not respond to either complaint. According to the 2021 and 2010 declarations of Robert Schachter, an attorney representing plaintiffs, however, after the substitute service of the complaints, an attorney named Paul Violas contacted Schachter on Adams's behalf requesting an extension of time to respond to the complaints. The record includes letters dated August and September of 2010 from Schachter to Violas, referring to these conversations and warning Violas that Adams's default would be taken if Adams did not file a responsive pleading by the extended deadline. A declaration Violas filed in 2021 states that he never represented Adams in the fraud or guarantee actions, had no knowledge of the actions, did not recall ever communicating with Schachter, and did not have record of the letters Schachter declared he had written.
In 2011, plaintiffs requested entry of Adams's default in both cases, and mailed copies of the requests to Adams at the East 2nd Street address. Neither request indicated plaintiffs would be seeking attorney fees or punitive damages. The court granted these requests and entered defaults in January 2011 in the guarantee action and September 2011 in the fraud action.
In January 2012, plaintiffs filed a request for default judgment in the fraud action, which included a specified amount of punitive damages and attorney fees. Plaintiffs served Adams with a copy of the request by mailing it to him at the East 2nd Street address on January 5, 2012, and at an address on Wardlow Street in Long Beach on January 9, 2012. The record on appeal does not appear to contain a request for default judgment against Adams in the guarantee action.
This request was technically for entry of default and default judgment. As noted, however, default had already been entered in the fraud action when plaintiffs filed this 2012 request. The 2012 request employed a judicial council form containing boxes to check indicating the party is requesting a default and/or a default judgment. The 2011 requests resulting in the entries of default had employed this same form, checking only the box for a default; the 2012 request checks both boxes for both a default and judgment.
The record does include a request for default judgment against Duda Williams, Adams's codefendant in the guarantee action.
On April 4, 2012, plaintiffs also filed a supplemental pleading entitled "statement of punitive damages" in the fraud action asking the court to award $600,000 in punitive damages against Adams. (Boldface &capitalization omitted.) Plaintiffs filed a proof of service with the pleading indicating it had been personally served on Adams at a Lakewood mailbox facility, where, according to a declaration of the process server, the process server found Adams after learning Adams maintained a post office box there.
On November 14, 2012, at plaintiffs' request, the court set aside the default entered in the fraud action and instructed plaintiffs to give notice of the ruling. There is nothing in the record supporting that plaintiffs attempted to give, or that Adams received, notice of this ruling setting aside the September 2011 default. Nor have the parties identified any such support in response to this court's request for same.
The minute order reflecting this is included in a collection of documents filed with the trial court that is the subject of plaintiffs' February 16, 2024 motion to augment the record on appeal. We hereby grant the motion.
On December 21, 2012, plaintiffs again filed a request for entry of default against Adams that included a request for $650,000 in "special" damages but still did not identify any amount in the space provided for requested "attorney fees." (Capitalization omitted.) In the request, plaintiffs' attorneys also attested to causing a copy of the request to be mailed to Adams at the East 2nd Street address.
Plaintiffs moved on March 11, 2024 to augment the record with what purports to be a fictitious business name statement signed by Adams and filed with the Registrar-Recorder/County Clerk on July 23, 2013 that identifies Adams as the "owner" of a company doing business at the East 2nd Street address. Plaintiffs argue this document is relevant to establishing that service of the December 2012 request was valid. But we do not reach the issue of the validity of that service, given that, as we discuss below, we conclude that Adams did not receive notice of the November 14, 2012 order setting aside the September 2011 default. Nor is this Registrar-Recorder document relevant to whether Adams received notice of that order setting aside the default, given that nothing in the record supports notice thereof was sent to Adams at the East 2nd Street address (or any other address). We therefore deny the motion.
On April 10, 2013, the court entered a new default against Adams.
On May 7, 2013, the court entered two separate default judgments, one in the guarantee action and one in the fraud action. In the fraud action, the court entered judgment against Adams "for principal, interest, late charges and attorney's fees in the amount of $97,352.27"-a fraction of the amount plaintiffs had requested in compensatory damages-and "punitive damages in the amount of $600,000 for a total recovery of $697,352.27, together with costs in the amount of $1,114.16, for a total of $698,466.43." In the guarantee action the court entered judgment against Adams and a codefendant, with Adams individually liable for "damages and attorney's fees in the amount of $351,845.44."
B. Adams's Motion to Set Aside the Defaults and Default Judgments
On October 22, 2021 Adams filed a motion under section 473.5 to set aside the defaults and default judgments against him because "plaintiffs failed to provide any actual service of the summons and complaint upon [him]." (Capitalization omitted.) In an accompanying declaration, Adams asserted that he was never served with the summons and complaint in either action due to his being in a serious car accident in February 2009, in a residential alcohol abuse rehabilitation program from September 21, 2010 to December 29, 2010, and incarcerated from June 20, 2011 to December 21, 2011. A supporting declaration of his former landlord at the East 2nd Street address averred that Adams was not a tenant "in September 2011 or thereafter" at that address. Adams also filed a proposed answer, apparently responding to both complaints against him in the consolidated proceedings below, which consisted of a general denial and a series of affirmative defenses.
The motion was captioned as a motion to set aside default and default judgment (singular), although it at times refers to the defaults and default judgments against Adams in both the fraud action and the guarantee action. We shall liberally construe this motion as seeking to set aside the defaults and judgments in both cases.
Before the court heard the motion to vacate, Adams obtained the proofs of service of the summons and complaint in both actions, showing substitute service on "Marvin Paul"/"Marvin Pool" on June 7, 2010, and filed an amended motion incorporating this new information. In an amended declaration, Adams denied knowing this individual, denied that his business was a tenant at the East 2nd Street address on June 7, 2010, and further denied that he had been personally served with plaintiffs' statement of punitive damages in the fraud action in April 2012.
Plaintiffs opposed Adams's motion, arguing that service was valid and that Adams had actual notice of the pending actions long before October 2021. In support of their assertion that Adams had actual knowledge of the pending actions, plaintiffs submitted a detailed timeline including the letters sent by Schachter to Violas in August and September of 2010, the requests for entry of default served in both cases, and the statement of punitive damages personally served on Adams in April of 2012. Plaintiffs also pointed out that one of Adams's codefendants served him with a cross-complaint in March of 2011, followed by a request for entry of default the following May after Adams failed to respond to the cross-complaint. In support of the original substitute service, plaintiffs submitted copies of documents filed with the Secretary of State tending to show that Violas was counsel and agent for service of process for Adams's business, that the business was located at the East 2nd Street address, and that Adams was an officer of that business on June 7, 2010, the date plaintiffs effected substitute service. Plaintiffs also submitted a declaration of their process server, stating that he had personally "conducted a stakeout" of the location where, in April 2012, he served Adams personally with the statement of punitive damages.
C. Denial of Adams's Motion To Vacate and Motion for Reconsideration
The court denied Adams's amended motion to vacate. The order denying the motion states that "Adams did not meet his burden, and could not overcome plaintiffs' evidence-namely Robert Schachter's declarations of September 2, 2010 and October 28, 2021-indicating that Adams was served with process in a manner that resulted in his actual knowledge of the lawsuits against him that resulted in the defaults and default judgments in question." (Capitalization omitted.)
Adams has not furnished a reporter's transcript of the hearing on the motion that took place the same day, but the court's minute order states its decision was based on the parties' submissions and oral argument at the hearing. There is thus no indication that any testimony was offered at the hearing.
Following entry of the order denying relief, Adams engaged new counsel who filed a motion for reconsideration. Plaintiffs opposed the motion for reconsideration, arguing that Adams had not shown any new facts or evidence not already before the court at the earlier hearing. The trial court agreed and denied the motion for reconsideration.
D. Notice of Appeal
Adams filed a notice of appeal purporting to appeal from the court's June 20, 2022 order denying his motion to vacate the defaults and default judgments, as well as from a "default judgment." (Capitalization omitted.) The notice of appeal does not specify which default judgment it is referring to-that in the guarantee action or that in the fraud action. Nor does the notice of appeal otherwise identify a specific superior court case number for either of these actions (instead, it lists the lead superior court case number used to identify a larger group of consolidated actions, included in which are the fraud and guarantee action). Based on the arguments Adams raises in his appellate briefing, however, we understand the notice of appeal as appealing from the default judgment in the fraud action.
DISCUSSION
On appeal, Adams argues (1) the court erred in denying his motion to vacate the defaults and default judgments because he was not served with the summons and complaint, and (2) the default judgment in the fraud action is void because the plaintiffs did not give him notice of the amount of punitive damages they were seeking, or that they were seeking attorney fees, before requesting a default. We disagree with the first argument and agree with the second, for reasons set forth below.
A. Court's Denial of Motion To Vacate the Defaults and Default Judgments Based on Lack of Service
A party who contends that he was never served with the summons and complaint "has three avenues of relief from a default judgment." (Trackman v. Kenney (2010) 187 Cal.App.4th 175, 180 (Trackman).) First, as Adams did, he may move for relief under section 473.5, which provides relief in cases "[w]hen 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." (§ 473.5, subd. (a).) Second, a party may argue the judgment is void for lack of service and move for relief under section 473, subdivision (d), which provides that a court may "set aside any void judgment." Third, a party may show that the proof of service was procured by extrinsic fraud or mistake. (Trackman, supra, at p. 181.)
Adams attempts to rely on all three of these bases in challenging the court's denial of his motion to vacate. We conclude that none of them provides a basis for disturbing the court's ruling.
1. The court did not abuse its discretion in denying the motion to vacate under section 473.5, because substantial evidence supports that Adams had actual notice of the lawsuits
Section 473.5 imposes certain time limitations on when a party may seek relief thereunder, and the parties disagree on appeal as to whether Adams's motion was required to comply with these requirements. (§ 473.5, subd. (a) ["[t]he notice of motion shall be served and filed . . . in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered"].) But because we conclude substantial evidence supports the trial court's factual finding that Adams received actual notice of the suits, and thus Adams would not be entitled to relief under section 473.5 in any event, we need not resolve the parties' dispute about the timeliness of the motion in order to affirm the court's order denying it.
Adams's original and amended motions to vacate the defaults and default judgments were based on section 473.5. As noted, that section permits a court to grant relief from a default or default judgment in situations in which service of a summons, though valid, has not resulted in actual notice to a party in time for him to defend himself. (See § 473.5, subd. (a); Anastos v. Lee (2004) 118 Cal.App.4th 1314, 1319.) Under section 473.5, a trial court, in the exercise of its discretion, "may" set aside the default or default judgment-provided it makes certain findings of fact, including that the party requesting relief did not receive "actual notice" in time to defend himself; and that that party's lack of actual notice was "through no inexcusable fault of his own." (Judicial Council Com. 15 West's Ann. Code Civ. Proc. (2022 ed.) § 473.5, p. 239.)
Focusing on the use of the word "may" in subdivision (c) of section 473.5 and on the discretion it confers, some reviewing courts have stated broadly that a trial court's decision to grant or deny relief under section 473.5 is reviewed for an abuse of discretion. (See, e.g., Rios v. Singh (2021) 65 Cal.App.5th 871, 885 ["[w]e review a trial court's decision to grant or deny relief under section 473.5 for abuse of discretion"].) We believe it is more precise to say that the trial court's exercise of its discretion after the necessary factual findings have been made is to be reviewed for an abuse of discretion; that is, the factual findings themselves first must be reviewed under the substantial evidence standard, inasmuch as reviewing courts "[g]enerally . . . apply the substantial evidence standard to a superior court's findings of fact." (SFPP v. Burlington Northern &Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 461; see First American Title Ins. Co. v. Banerjee (2022) 87 Cal.App.5th 37, 42 ["When, as here, the trial court considers disputed evidence related to whether service was proper, our review is for abuse of discretion. [Citation.] Under that standard, we defer to factual findings on disputed evidence so long as those findings are supported by substantial evidence"].)
"Under the substantial evidence standard of review, 'the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the finding of fact.' [Citation.] We are required to accept all evidence that supports the successful party, disregard the contrary evidence, and draw all reasonable inferences to uphold the judgment." (Harley-Davidson, Inc. v. Franchise Tax Bd. (2015) 237 Cal.App.4th 193, 213.) The record here contains substantial evidence supporting the trial court's express finding that Adams received actual notice. For example, plaintiffs offered evidence that, if believed by the court, showed Schachter received a call from an attorney claiming to represent Adams regarding Adams's response to the complaints shortly after the process server left them at the East 2nd Street address. The record also contains evidence that, if believed by the trial court, showed the East 2nd Street address where the process server left the complaints was an address where Adams did business at the time of service. On substantial evidence review, we must defer to the trial court's implicit credibility findings regarding this evidence. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479; Betz v. Pankow (1993) 16 Cal.App.4th 919, 923 ["the applicable standards of appellate review of a judgment based on affidavits or declarations are the same as for a judgment following oral testimony"].)
Adams argues that "the trial court failed to consider . . . Adams's corroborated evidence showing that substitute service was invalid" and "failed to reconcile the inherent inconsistencies in the Schachter declarations and respondents' own judicially noticed documents, which deflate their entire service-of-process theory." (Capitalization omitted.) These arguments merely point to conflicting evidence and urge that we resolve the conflict differently than did the court below. That is beyond the scope of our review for substantial evidence. The trial court gave more credence to the proof of service and plaintiffs' evidence supporting it than to Adams's evidence challenging it, and we may not second-guess the trial court's decision in this regard.
Accordingly, we hold that the record supports the court's factual finding that Adams received actual notice of the summons and complaint. Because section 473.5 does not provide a basis for Adams to vacate defaults of which he received actual notice, the court did not abuse its discretion in denying Adams's motion to vacate under section 473.5.
2. The defaults and default judgments are not void on their face for lack of proper service
a. We may consider this argument for the first time on appeal
Adams suggests that we review the court's order as though Adams had sought relief based on the judgment being void under section 473, subdivision (d). Plaintiffs counter that Adams did not raise this issue below. Under certain circumstances, however, a party may raise this issue for the first time on appeal. Namely, a defendant may challenge a judgment as being void on its face at any time. (Trackman, supra, 187 Cal.App.4th at p. 182 [considering on appeal "the new, purely legal theory that the proof of service is void on its face"]; Petty v. Manpower, Inc. (1979) 94 Cal.App.3d 794, 798-799 [questions of the court's jurisdiction to enter a particular judgment "are never waived and may be raised for the first time on appeal"].) A judgment is void on its face "when the invalidity is apparent from an inspection of the judgment roll or court record without consideration of extrinsic evidence." (Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th 1009, 1021 (Pittman).) If the defendant has to resort to extrinsic evidence outside the judgment roll to argue the judgment is void, however, the defendant must do so within two years. (Trackman, supra, at p. 180.) Adams's argument that the judgment is void for improper service is based entirely on the face of the proofs of service, which, in a default case, are included in the judgment roll. (§ 670, subd. (a).) Therefore, we may consider this argument for the first time on appeal.
b. Service substantially complied with the applicable statutes and thus does not provide a basis to void the defaults and default judgments.
"To establish personal jurisdiction, compliance with statutory procedures for service of process is essential; if a default judgment was entered against a defendant who was not served with a summons as required by statute, the judgment is void, as the court lacked jurisdiction in a fundamental sense over the party and lacked authority to enter judgment." (Kremerman v. White (2021) 71 Cal.App.5th 358, 370.) When, as here, personal service on a person has been attempted but could not be effectuated with reasonable diligence, substituted service under section 415.20, subdivision (b) is the operative provision. (See Espindola v. Nunez (1988) 199 Cal.App.3d 1389, 1392 [" '[o]rdinarily, . . . 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' "].) Section 415.20, subdivision (b) authorizes substituted service "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 . . . 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 . . . 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 . . . to the person to be served at the place where a copy of the summons and complaint were left." The code further requires the process server to prepare an affidavit "showing the time, place, and manner of service and facts showing that the service was made in accordance with [the rules governing service]." (§ 417.10, subd. (a).)
Adams points to a discrepancy between the process server's handwritten statement of due diligence stating that the summons and complaint were left with "Marvin Pool" and the printed proof of service form stating that the summons and complaint were left with "Marvin Paul." He argues that, based on this discrepancy, service was not proper, meaning the court lacked personal jurisdiction over Adams and the default judgment the court issued against him is void.
We conclude this discrepancy does not render the proofs of substitute service insufficient to establish proper service. Because a party need only demonstrate substantial compliance with the statutes governing proof of service, "minor deficiencies will not be allowed to defeat service." (Trackman, supra, 187 Cal.App.4th at p. 184; see Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1442 ["[i]t is axiomatic that strict compliance with the code's provisions for service of process is not required"].) In Trackman, for example, the disputed proof of service stated that the summons and complaint had been left with" 'John Doe, co-resident'" at the defendant's home. (Trackman, supra, at p. 183.) The defendant contended that the use of a fictitious name rendered the proof of service facially void because it did not adequately identify the person with whom papers were left. (Ibid.) The appellate court rejected the defendant's argument, citing cases finding no infirmity where substitute service was made on persons identified by physical description, occupation ("gate guard"), or by a fictitious name. (Id. at pp. 183-185.) The court also cited Pasadena Medi-Center Associates v. Superior Court (1973) 9 Cal.3d 773, 778, for the proposition that the statutes governing proofs of service were to be "liberally construed" with an eye to eliminating " ' "unnecessary, time-consuming, and costly disputes over legal technicalities." '" (Trackman, supra, at p. 184.) Applying these principles, the court concluded that substitute service on a resident of the defendant's house was a method of service reasonably calculated to give the defendant actual notice of the lawsuits, and that "it would not be difficult for [the defendant] to determine who was living at the house he concededly owned on the relevant date, in order to contest service." (Ibid.)
Here, the sole purported facial deficiency to which Adams points is the portion of the process server's handwritten diligence declaration that apparently reads "Marvin Pool," rather than "Marvin Paul," the name on the printed proof of service form. This is a "minor deficiency" that does not require us to vacate Adams's defaults under the principles discussed in Trackman. "In deciding whether service was valid, the statutory procedures regarding 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.'" '" (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1436-1437.) As we conclude above, substantial evidence supports the court's express finding that Adams received actual notice. Moreover, the address used for substitute service was the registered office of a corporation of which Adams was an officer on the date of service. "Leaving papers with an apparent coresident at an address publicly registered by the defendant, as required by law, is a method of service reasonably calculated to achieve actual service, and is therefore facially valid, whether or not actual service is accomplished on the facts of a given case." (Trackman, supra, 187 Cal.App.4th at p. 185, italics omitted.) Because we are to liberally construe the statute to prevent technicalities-such as discrepancies potentially attributable to typographical errors, misspelling, or poor penmanship-from invalidating service reasonably calculated to give notice, the discrepancies Adams identifies do not render the proofs of service facially void. Section 473, subdivision (d) thus does not provide a basis on which the court could have vacated the defaults and default judgments as void.
As an additional ground to vacate the defaults and default judgments, Adams points to an order vacating the default and default judgment against his codefendant in the guarantee action. At Adams's request, we took judicial notice of this order, which was issued by a different bench officer than the bench officer who issued the order and judgment on appeal here. The order regarding the codefendant is based on a proof of service on that codefendant containing the same Marvin Paul/Marvin Pool discrepancy as appears in the proofs of service on Adams. The trial court concluded this discrepancy rendered service on the codefendant ineffective and the default judgment against the codefendant void. Based on our independent review of the issue, we reach a different conclusion above regarding the Paul/Pool discrepancy.
3. Adams has not shown extrinsic fraud
Adams next argues that the defaults should be set aside because they were procured by "false statements, mistakes, and ethical violations." (Boldface omitted.) To the extent Adams is arguing that the defaults should be vacated on the ground of extrinsic fraud or mistake, his argument fails. Equitable relief on the grounds of extrinsic fraud or mistake requires: (1) a meritorious defense; (2) a satisfactory excuse for not presenting a defense in the first place; and (3) diligence in seeking to set aside the order once discovered. (Pittman, supra, 20 Cal.App.5th at p. 1025.) Here, substantial evidence supports the court's finding that Adams had actual notice of the lawsuits, and Adams has made no colorable argument suggesting a satisfactory excuse for failing to respond despite this actual notice." 'Fraud is intrinsic and not a valid ground for setting aside a judgment when the party has been given notice of the action and has had an opportunity to present his case and to protect himself from any mistake or fraud of his adversary, but has unreasonably neglected to do so.'" (Gibble v. Car-Lene Research, Inc. (1998) 67 Cal.App.4th 295, 315.) This is fatal to Adams's extrinsic fraud contention.
B. Default Judgment in the Fraud Action Is Void Based on Its Award of Attorney Fees and Punitive Damages
Adams next argues that the default judgment in the fraud action (but not the underlying default) is void, because it awards relief plaintiffs did not give Adams proper notice they were seeking before they first requested default be entered. Our review of this issue is de novo. (Sass v. Cohen (2019) 32 Cal.App.5th 1032, 1039 (Sass), affd. (2020) 10 Cal.5th 861.)
1. Applicable procedures for seeking a default judgment containing punitive damages
To properly understand the parties' arguments on this issue, we provide a brief overview of the mechanics through which a plaintiff may obtain a default judgment containing punitive damages and the policies behind them.
When a defendant does not respond to a plaintiff's properly served complaint "within the time specified in the summons, or within further time as may be allowed" (§ 585, subd. (a)), "the plaintiff may seek the entry of default and, thereafter, a default judgment." (Sass, supra, 32 Cal.App.5th at pp. 1039-1040, citing § 585, subds. (a) &(b).) Until a plaintiff files a request for entry of default, courts have deemed the plaintiff to have in effect "allowed" the defendant" 'further time'" to respond. (Fiorentino v. City of Fresno (2007) 150 Cal.App.4th 596, 605, fn. 3 (Fiorentino), italics omitted; Goddard v. Pollock (1974) 37 Cal.App.3d 137, 141.) In practice, this means a defendant may still change his defaulting status by responding at any point before the plaintiff requests entry of default. (See Fiorentino, supra, at p. 605, fn. 3.) Once a plaintiff files a request for entry of default against such a defendant, however, the court must enter the default. (See § 585, subd. (a) [if no answer or other responsive pleading timely filed by defendant "the clerk . . . upon written application of the plaintiff . . . shall enter the default of the defendant," italics added]; W.A. Rose Co. v. Municipal Court (1959) 176 Cal.App.2d 67, 71 (W.A. Rose) [court clerk has no discretion to refuse a proper request for entry of default].) Indeed, as occurred in this matter with the 2011 request for default, the clerk can enter the default the same day the plaintiff files a properly served request for entry. Thus, the plaintiff's filing of a request for default instantaneously cuts off the defaulting defendant's ability to appear in the action. (See Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385-386 (Devlin).)
After the court enters a default against the defendant, under section 580, "[t]he 'relief granted' in the [resulting] default judgment 'cannot exceed' what the plaintiff 'demanded in the [operative] complaint.' (§ 580, subd. (a).) . . . [T]he operative complaint fixes 'a ceiling on recovery,' both in terms of the (1) type of relief and (2) the amount of relief. (Greenup v. Rodman (1986) 42 Cal.3d 822, 824 . . . (Greenup); [citations].) For these purposes, the operative complaint must allege the amount of 'relief' sought for damages." (Sass, supra, 32 Cal.App.5th at p. 1040, italics omitted.) If any attorney fees are to be awarded via a default judgment, the complaint must also set forth a demand for such fees (Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 495 (Becker) [attorney fees must be a type of relief sought in operative complaint]), although the complaint need not specify the amount of fees sought. (Simke, Chodos, Silberfeld &Anteau, Inc. v. Athans (2011) 195 Cal.App.4th 1275, 1287-1288, 1290.)
The "primary purpose of [section 580] is to guarantee defaulting parties adequate notice of the maximum judgment that may be assessed against them" if they fail to appear. (Greenup, supra, 42 Cal.3d at p. 826.) But "a plaintiff is statutorily prohibited from pleading the amount of [punitive damages] relief in her complaint" (Sass, supra, 32 Cal.App.5th at p. 1040, italics added; see § 425.10, subd. (b)), and thus from affording a defendant notice through his complaint of the maximum punitive damages if he defaults. To address this, section 425.115 allows a plaintiff to serve and file a supplemental pleading prior to entry of default, which gives the defendant notice of the amount of punitive damages the plaintiff is seeking. (See § 425.115, subd. (f) &§ 585, subd. (a); Sass, supra, at p. 1040.) After proper service of such a section 425.115 punitive damages statement, the defendant may respond to the complaint. If instead the defendant still fails to respond or otherwise appear before default is requested, a resulting default judgment against that defendant may award punitive damages up to the amount set forth in the statement-just as the amount of other types of damages are limited to what is set forth in the complaint. (See §§ 425.115, 585; Sass, supra, at p. 1040; Dhawan v. Biring (2015) 241 Cal.App.4th 963, 969 ["[t]he purpose of the statement of damages (under § 425.11 or § 425.115) is to notify a defendant of the amount of damages sought where the law prevents the plaintiff from including a specific amount in the complaint"].)
These statutory requirements are designed to give a defendant "notice . . . of the specific relief which is sought in the complaint served upon him. The logic underlying this principle is simple: a defendant who has been served with a lawsuit has the right, in view of the relief which the complainant is seeking from him, to decide not to appear and defend. However, a defendant is not in a position to make such a decision if he or she has not been given full notice." (In re Marriage of Lippel (1990) 51 Cal.3d 1160, 1166 (Lippel).) Put differently, "[i]f and only if a defendant receives advance notice of the type and amount of relief sought can he make a 'fair and informed' decision whether to fight the pending case (and, in so doing, risk the possibility of a judgment exceeding that relief) or to forego that fight (and, in so doing, accept a judgment against him up to, but not exceeding, that relief in an amount fixed by the trial court)." (Sass, supra, 32 Cal.App.5th at p. 1041.)
The timing of a section 425.115 punitive damages statement is thus crucial to its purpose in affording a defaulting defendant the opportunity to make the" 'fair and informed'" decision our state Supreme Court has concluded section 425.11 requires. (Greenup, supra, 42 Cal.3d at p. 829; see Sass, supra, 32 Cal.App.5th at p. 1041.) Namely, in order for that opportunity to be more than a theoretical one, the plaintiff must serve the statement at a time when the defendant still has the right to choose to appear in the action, as opposed to accepting the punitive damages exposure reflected in the statement. If the defendant does not receive that information until after the plaintiff requests entry of a default- which, as noted, cuts off the defendant's right to appear in the action-the statement cannot serve its sole purpose.
2. Plaintiffs' section 425.115 punitive damages statement did not comply with statutory requirements
Here, plaintiffs served Adams with a section 425.115 punitive damages statement in April 2012. Adams argues that plaintiff thus failed to notify him of the specific amount of punitive damages they were seeking before they first requested entry of default in 2011 and the court first entered default in September 2011. Plaintiffs counter that the court ultimately set aside the 2011 default resulting from that request, so the timing of the punitive damages statement vis-a-vis the 2011 request for entry of default is irrelevant. The operative default, they argue, is the one plaintiffs requested in approximately December 2012, after the 2011 default had been set aside. Plaintiffs argue that because service of the April 2012 statement of punitive damages predates both the operative December 2012 request for entry of default and the final entry of default in April 2013, they complied with section 425.115, and Adams cannot now challenge the default judgment based on the judgment's award of punitive damages.
Plaintiffs are correct that, as a result of the convoluted procedural history of this case, the April 2012 statement temporally complied with section 425.115. But the sole purpose of a section 425.115 statement-affording Adams the opportunity, upon learning the amount of punitive damages to which he might be exposing himself by defaulting, to change course and defend himself in the litigation (Greenup, supra, 42 Cal.3d at 829; Lippel, supra, 51 Cal.3d at p. 1166)-was, as a matter of law, impossible at the time Adams received the statement in April 2012. At that time, Adams no longer had the ability to appear in the action: plaintiffs had already requested, and the court had already entered, default against Adams (the 2011 default), and the court had not yet set aside that default. (See § 585, subd. (a); W.A. Rose, supra, 176 Cal.App.2d at p. 71; Devlin, supra, 155 Cal.App.3d at pp. 385-386.) Because Adams had no right to do anything in response to the April 2012 statement regarding punitive damages at the time he received it, it could not have facilitated a" 'fair and informed'" (Greenup, supra, at p. 829) decision as to how to proceed in response.
Of course, once the court set aside that default, this changed. Namely, between the date the court set aside the 2011 default and the date the plaintiffs again requested entry of default, Adams could have chosen to participate in the litigation, armed with the knowledge, via the April 2012 punitive damages statement, that plaintiffs were seeking punitive damages and in what amount. (See Fiorentino, supra, 150 Cal.App.4th at p. 605, fn. 3.) But nothing in the record suggests Adams was aware of this opportunity to respond, because he was not given notice, nor does the record suggest he was otherwise aware, that the 2011 default had been set aside. Although one might argue his receipt of yet another request for entry of default in December 2012 put Adams on inquiry notice that the 2011 default against him had been set aside, at the time he received that request, his window for taking any action based on that knowledge had closed, because the renewed request again cut off his ability to appear in the litigation. (See § 585, subd. (a); W.A. Rose, supra, 176 Cal.App.2d at p. 71.)
This is in stark contrast with the record regarding service of and notice regarding the complaint and summons or the April 2012 punitive damages statement. As discussed in the preceding section, although Adams denies having received these documents, evidence in the record supports that he did. But the record is devoid of anything supporting that Adams received, or even that plaintiffs served, notice of the court's order setting aside the default. And when asked to supplement the record to include such support, plaintiffs were unable to do so.
For this same reason, the fact that the December 2012 request for entry of default included a request for "special damages" of $650,000 also did not afford Adams the opportunity to which sections 425.115 and 580 entitle him.
Had Adams been informed of the court's ruling setting aside the default, he would have had an opportunity to change course and defend himself in the action, knowing that a failure to do so exposed him to $600,000 in punitive damages-an opportunity the applicable statutes require in order for the default judgment against him to contain such damages. Because Adams did not receive notice that the 2011 default had been set aside, Adams never received that opportunity. Thus, even though, as plaintiffs correctly point out, plaintiffs filed and served their April 2012 punitive damages statement prior to entry of default as required by section 425.115, the statement in no way accomplished the sole purpose of section 425.115. Accordingly, Adams only was served with notice of plaintiffs' punitive damages prayer at a time when, as a matter of law, there was nothing he could do about it. Based on the current record, plaintiffs did not satisfy the statutory-prescribed prerequisites, as they have been interpreted by our state Supreme Court, for the default judgment against Adams to include a punitive damages award.
Plaintiffs counter that Adams was not entitled to notice of the court's ruling setting aside the default judgment, and that this lack of notice therefore should not play any role in our analysis. To support their argument, they cite section 1014, which primarily identifies the ways in which a defendant makes an appearance in an action (for example, by seeking certain relief, or by defense counsel filing a notice of appearance). As a preliminary matter, whether Adams received the notice section 1014 requires is not the salient question. Rather, the question is whether plaintiffs complied with the procedures set forth in sections 425.115 and 580, as they must in order for a default judgment against Adams to include a punitive damages award.
In any event, plaintiffs' interpretation of section 1014 is incorrect. The portion thereof on which plaintiffs rely provides: "After appearance, a defendant or the defendant's attorney is entitled to notice of all subsequent proceedings of which notice is required to be given. Where a defendant has not appeared, service of notice or papers need not be made upon the defendant." (§ 1014.) When read in context, the final sentence of this section on which plaintiffs rely addresses whether notice of proceedings must be provided to a defendant who has not yet made an appearance- not whether a defendant who has not yet appeared is ever entitled to notice of any developments in litigation. Indeed, reading the section as plaintiffs suggest would mean that a plaintiff could request entry of default against a defendant who has not appeared without providing notice of this request. This is, of course, not the law.
3. The default judgment in the fraud action is void because Adams did not receive the notice sections 425.115 and 585 require for the judgment to award punitive damages and attorney fees
"[A] default judgment greater than the amount specifically demanded [in the complaint or a supplemental pleading conforming with section 425.115 or section 425.11] . . . is void as beyond the court's jurisdiction." (Greenup, supra, 42 Cal.3d at p. 826; see also Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 867 ["if punitive damages are to be awarded in a default judgment, the defendant must be notified of the specific amount sought prior to entry of the default, italics omitted"].) An exception to this rule is that a default judgment may award attorney fees, even if the plaintiff does not identify a specific amount of attorney fees in the complaint, as long as the complaint contained a prayer for attorney fees. (Becker, supra, 27 Cal.3d at p. 495.) If a "plaintiff[ ] fail[s] to set forth in [the] complaint a prayer for attorney's fees," however, "[u]nder section 580, the trial court exceeded its authority when it granted such relief" and the judgment is void. (Becker, supra, at p. 495.)
A default judgment that is void based on awarding relief beyond that properly noticed in the pleadings may be collaterally attacked at any time. (Becker, supra, 27 Cal.3d at p. 493.) "The remedy is to vacate and set aside the default judgment, not the precursor default." (Sass, supra, 32 Cal.App.5th at pp. 1041-1042, italics omitted, citing Greenup, supra, 42 Cal.3d at p. 830.)
Here, plaintiffs admit that they failed to pray for attorney fees in their complaint in the fraud action, yet the default judgment includes an award of attorney fees. On this basis alone, the default judgment in the fraud action is void and we must therefore vacate it under Greenup and Becker.
The default judgment in the fraud action is void and must be vacated based on its award of punitive damages as well because plaintiffs have not shown that they provided the type of notice the California Supreme Court has made clear sections 425.115 and 580 require. For this reason, although the April 2012 punitive damages statement predated the request or entry of the operative default, we conclude the same reasoning and policies the Supreme Court applied in Greenup apply to the default judgment in the fraud action. (See Greenup, supra, 42 Cal.3d at p. 829.)
Therefore, we vacate the default judgment in the fraud action, and instruct the trial court to conduct further proceedings consistent with the discussion of relief in Greenup, supra, 42 Cal.3d at page 830.
DISPOSITION
The default judgment in the fraud action, case No. BC436001, is vacated. The order denying Adams's motion to vacate is reversed to the extent it sought to vacate the default judgment in the fraud action. Following remand, the trial court is instructed to conduct further proceedings in the fraud action consistent with Greenup, supra, 42 Cal.3d at page 830.
In all other respects, including the court's denial of the motion to the extent it sought to vacate the default judgment in the guarantee action (case No. NC054257) and to vacate the default in either the guarantee or fraud action, we affirm.
The parties shall bear their own costs on appeal.
We concur: CHANEY, J. BENDIX, J.