Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. 2002073993
RIVERA, J.
Defendant Aamir Raees appeals a default judgment entered against him. We affirm.
I. Background
Tran brought this action against Raees and other defendants on November 27, 2002, seeking payment for legal services she had allegedly rendered to one of the defendants, Codify, Inc. (Codify). According to the complaint, Raees was a shareholder, officer, and director of Codify and, along with other defendants, was liable for Codify’s obligations under an alter ego theory. Tran, who appeared in propria persona, did not sign or date the complaint. A proof of service indicated that Raees was personally served with the summons, complaint, alternative dispute information package, and notice of right to arbitration on December 3, 2002.
Raees later stated in a declaration that he had “not receive[d] written notice from the Plaintiff of [his] right to have the issue of attorney’s fees arbitrated . . . prior to the commencement of this action, or at any time thereafter.”
One of the other defendants requested arbitration pursuant to Business and Professions Code section 6200 et seq. on January 28, 2003, and a stay of proceedings went into effect.
Business and Professions Code section 6200 et seq. establishes procedures for arbitration of disputes concerning attorney fees. Section 6201, subdivision (c) of the Business and Professions Code provides that when a request for arbitration has been filed and served, “the action or other proceeding shall be automatically stayed until the award of the arbitrators is issued or the arbitration is otherwise terminated.”
Raees did not answer the complaint and default was entered against him on March 26, 2003, at Tran’s request.
Tran filed a first amended complaint against Raees and other defendants on November 10, 2003. Raees was served with the amended complaint by mail on July 30, 2004, and by substituted service at his home on March 1, 2005. Tran made a request for entry of default and clerk’s judgment on August 2, 2004, “[o]n the complaint or cross-complaint filed [¶] . . . on November 27, 2002”—the date the original complaint was filed. Default was apparently entered on August 2, 2004.
Raees moved to quash service of process and to vacate the default on November 4, 2005. It appears that he attached to the motion a proposed answer to the first amended complaint. The court denied the motion, noting that Raees had not applied for relief from default as to the original complaint within six months of its entry, as required by Code of Civil Procedure section 473, subdivision (b), and that a request for relief from default as to the first amended complaint was premature because no default had been entered with respect to that complaint. The court also noted that Raees did not contend that the default had been entered through extrinsic mistake or that he had not been served with the summons or complaint.
All further statutory references are to the Code of Civil Procedure, unless otherwise indicated.
Tran requested a default judgment against Raees and another defendant, Codify, Inc., on the first amended complaint on March 2, 2006, the date for which a “Civil Uncontested” hearing had been set. Default was entered on the same date. Tran checked a box on the form request for entry of default indicating she had not mailed the request to Raees or his attorney, and typed onto the form the following: “Request for Entry of Default Judgment Only. No mailing is required.” In support of the request, Tran submitted a declaration and various attachments. Default judgment was entered on August 17, 2006.
The notice of the March 2, 2006 hearing had been served on Raees’s counsel. The court minutes for that date indicate that Raees did not appear and that the matter was referred to another department “for completion of the process re: Default Civil Judgment per order of the [c]ourt.” The record on appeal does not contain a reporter’s transcript of that or any other hearing.
II. Discussion
A. Default and Denial of Motion to Vacate Default
Raees contends Tran improperly failed to give him notice of the request for default judgment on the first amended complaint. Section 587 provides: “An application by a plaintiff for entry of default under subdivision (a), (b), or (c) of Section 585 or Section 586 shall include an affidavit stating that a copy of the application has been mailed to the defendant’s attorney of record or, if none, to the defendant at his or her last known address and the date on which the copy was mailed. If no such address of the defendant is known to the plaintiff or plaintiff’s attorney, the affidavit shall state that fact. [¶] No default under subdivision (a), (b), or (c) of Section 585 or Section 586 shall be entered, unless the affidavit is filed. The nonreceipt of the notice shall not invalidate or constitute ground for setting aside any judgment.”
The first amended complaint was the operative complaint at the time the trial court entered judgment. However, when the first amended complaint was filed, Raees’s default on the original complaint had already been entered. “A material amendment to the complaint opens a default because it permits the plaintiff to prove matters not in issue when the default is taken, which ‘would materially affect the defendant’s decision not to contest the action . . . .’ [Citation.] An amendment of the complaint is material if it subjects the defendant to increased damages.” (Ostling v. Loring (1994) 27 Cal.App.4th 1731, 1744.)
Raees was not named in the caption of the first amended complaint, which read “Victoria N. Tran, Plaintiff, vs. Codify, Inc., et. al. [sic], Defendants,” but he was named in the general allegations as “Defendant Aamir Raees,” and was named as a defendant in two causes of action.
The amendment here subjected Raees to no increased damages. Raees was named in the same two causes of action in the original and first amended complaints, and the amount of damages claimed was the same in each complaint. In the circumstances, the first amended complaint made no substantive changes as to Raees, and the original entry of default against him remained valid.
Each complaint named Raees in the causes of action for alter ego and mismanagement. Each sought $18,035.19 in damages, $2,171.67 in prejudgment interest, $500 in costs, and $45,000 in exemplary damages. The first amended complaint contains a new allegation in the cause of action for alter ego that Raees and two other defendants transferred a branch office of Codify to another company that Raees and the other defendants controlled for their own benefit and to shelter Codify’s assets from its creditors. This new allegation did not change the nature of the cause of action or the relief sought, and we see no reason to conclude it subjected Raees to any new liability.
Section 587 does not require service of a subsequent request for entry of judgment, but only of an “application for entry of default.” We conclude Tran’s request for a default judgment, filed long after Raees’s default was entered, falls within the general rule that: “No bill of exceptions, notice of appeal, or other notice or paper, other than amendments to the pleadings, or an amended pleading, need be served upon any party whose default has been duly entered or who has not appeared in the action or proceeding.” (§ 1010, italics added.)
Raees contends, however, that entry of the default was improper and should be voided because Tran did not sign the original complaint. Raees forfeited this argument by failing to make it below. (See § 128.7; People v. Stowell (2003) 31 Cal.4th 1107, 1114; North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 28-29 (North Coast Business Park).) In any case, it has no merit. Section 128.7, subdivision (a) provides in pertinent part: “An unsigned paper shall be stricken unless omission of the signature is corrected promptly after being called to the attention of the attorney or party.” (See Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 767-768.) There is no indication that the lack of a signature was brought to Tran’s attention before default was entered, or indeed at any point during the trial court proceedings.
Raees also contends the entry of default violated the automatic stay of Business and Professions Code section 6201, subdivision (c), and that there is insufficient evidence that he was given notice of his right to arbitrate. We need not consider whether the clerk could properly enter Raees’s default after another defendant filed a request for arbitration, because Raees failed to preserve the issue for appeal. Section 473, subdivision (b) allows the court to relieve a party from an action taken against it through his or her “mistake, inadvertence, surprise, or excusable neglect.” (See Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1299.) Raees’s motion to vacate the default did not demonstrate any mistake, inadvertence, surprise, or excusable neglect with respect to the original complaint, instead arguing that the first amended complaint did not adequately inform Raees that he was a party to the action. Nor did he argue below that the entry of default violated the automatic stay, instead contending that there was no evidence he had been notified of his right to arbitrate the attorney fees. In the circumstances, he may not challenge on appeal the propriety of the entry of default to the first amended complaint. (See People v. Stowell, supra, 31 Cal.4th at p. 1114; North Coast Business Park, supra, 17 Cal.App.4th at pp. 28-29.)
In fact, the clerk’s transcript contains a file-endorsed “Summons w/POS as to Codify, Inc., Aamir Raees, Rajesh Sharm,” filed on January 14, 2003. The proof of service as to Raees indicates he was served with an ADR information package and “notice of client’s right to arbitration.”
B. Evidence of Alter Ego
Raees contends there was no competent evidence to support a default judgment against him as Codify’s alter ego. According to Raees, the allegations of the complaint are insufficient to establish an alter ego theory, and the pertinent evidence submitted in support of the request for default judgment was inadmissible hearsay.
We reject Raees’s contention that he did not admit the truth of the alter ego theory by his default. By defaulting, a defendant admits the well-pleaded allegations in a complaint. (Vasey v. California Dance Co. (1977) 70 Cal.App.3d 742, 749-750.) The Court of Appeal in Vasey concluded a defendant had not admitted to being an alter ego of a corporation through his default where the complaint asserted only “a bare conclusory allegation that the individual and separate character of the corporation had ceased and that [the corporation] was the alter ego of the individual defendants.” (Id. at p. 749.) In reaching this conclusion, the court noted the rule that “ ‘ “[t]he allegation that a corporation is the alter ego of the individual stockholders is insufficient to justify the court in disregarding the corporate entity in the absence of allegations of facts from which it appears that justice cannot otherwise be accomplished.” ’ ” (Ibid., italics added.) Such allegations exist here. Far from containing only a “bare conclusory allegation” that any individuality and separateness between Codify and Raees had ceased, the complaint alleges that Raees had used assets of Codify for his personal uses; that he had caused assets of Codify to be transferred to him without adequate consideration; that he had withdrawn funds from Codify’s bank accounts for his personal use; that Codify had failed to observe corporate formalities, such as carrying out shareholders’ meetings, maintaining records or minutes, and obtaining approval before entering into personal transactions with Codify; and that adherence to the fiction of Codify’s separate existence would sanction fraud and promote injustice because Raees had caused funds to be withdrawn from Codify and distributed to him without consideration in order to prevent attachment and execution by Codify’s creditors, thus rendering Codify insolvent and unable to meet its obligations.
As to Raees’s objections to the sufficiency of the evidence to support the judgment, Raees’s default precludes that challenge. (Heathman v. Vant (1959) 172 Cal.App.2d 639, 644 [“ ‘[o]n an appeal from the judgment rendered on default a review of the sufficiency of the evidence is not available . . .’ ”].)
In the circumstances, we see no error in the entry of default judgment.
III. Disposition
The judgment is affirmed.
We concur: RUVOLO, P. J., SEPULVEDA, J.