Molica v. Suter

1

CODY MOLICA, Plaintiff and Appellant, v. PETER SUTER, Defendant and Respondent.

A166214

California Court of Appeals, First District, Second Division

August 25, 2023

NOT TO BE PUBLISHED

(San Francisco County Super. Ct. No. CGC22598463)

STEWART, P.J.

Plaintiff Eric McFadden procured a $25,000 default judgment against defendant Peter Suter on McFadden's complaint for claim and delivery. The dispute was based on allegations that Suter, a personal friend of McFadden's, had been storing McFadden's personal possessions in his home as a favor but then refused to return the property to McFadden after a romantic breakup between McFadden and Suter's sister. McFadden subsequently assigned all his claims to appellant Cody Molica.

About four months after the default judgment was entered, Suter moved to quash service of summons on the ground the court lacked personal jurisdiction over him because he had not been validly served or, in the alternative, "if the court determines it has jurisdiction over [him]," to set aside the default judgment under Code of Civil Procedure section 473.5.^[1]That statute authorizes the setting aside of a judgment if substituted service is valid but nonetheless does not result in actual notice to defendant of the lawsuit. (See 8 Witkin, Cal. Procedure (6th ed. 2021) Attack on Judgment in Trial Court, § 217, p. 811; Olvera v. Olvera (1991) 232 Cal.App.3d 32, 40.) It reflects the understanding that sometimes proper constructive service "might not result in actual notice, and a defendant with a meritorious case might never hear of the action." (Witkin, at p. 811.)

The undisputed evidence demonstrated that Suter, who is Caucasian, lived on 17th Avenue in San Francisco. He was never personally served.

Instead the summons and complaint were served on two other people: on an unidentified African-American man, at an address on Granada Ave. in San Francisco where Suter had never lived and that had no connection to Suter, and on someone identified in the proof of service as "Armando, friend to Peter Suter" at Suter's former address on Miramar Avenue in San Francisco, where Suter had not lived for nearly two years. Suter asserted in a sworn declaration that he told McFadden about a month before the lawsuit was filed (on January 29, 2022) that he had not lived at that address for two years (and thus could not assist McFadden to retrieve any personal possessions that still remained there).

In his declaration, Suter stated that he first learned of this lawsuit about four months after the default judgment was entered against him, when his wife was served with an order for his debtor's examination. Molica introduced conflicting evidence that the former roommate on Miramar Avenue who had been served with the complaint shared it with Suter a few days later.

Apart from a contention the motion was untimely, the sole basis of Molica's opposition to Suter's motion was that "the motion to vacate should be denied because although substitute service was in fact invalid, [Suter] had actual notice of the action in time to timely defend it."^[2]

The court granted Suter's motion on the ground he had not been properly served, and therefore vacated the entry of default and the default judgment. Molica now timely appeals. We reject his arguments and affirm the court's order.

DISCUSSION

An order vacating a default judgment is appealable as an order made after a final judgment. (Code Civ. Proc., § 904.1 subd. (a)(2); Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 287.)

"A ruling setting aside a default or default judgment is reviewed under the abuse of discretion standard, and an appellate court will reverse only upon '" 'a clear case of abuse'"' and '" 'a miscarriage of justice.'" '" (Grappo v. McMills (2017) 11 Cal.App.5th 996, 1006 (Grappo), disagreed with on other grounds, First American Title Ins. Co. v. Banerjee (2022) 87 Cal.App.5th 37, 46.) Because the law favors the determination of an action on its merits, the statutory grounds for vacating a default judgment must be liberally construed and any doubts resolved in favor of the party seeking relief. (See Grappo, at pp. 1009-1010.)

Here, the attempts at service were indisputably invalid. Substitute service in lieu of personal service must be effected by, among other requirements, "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 other than a United States Postal Service post office box," and "by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left." (Code Civ. Proc., § 415.20, subd. (b), italics added.) In the present case, however, there was no service on anyone at Suter's residence. Molica conceded in the trial court that "substitute service was in fact invalid" for that reason. (See fn. 2 ante, p. 2.) And on appeal, he concedes in his reply brief that "substitute service must be accomplished upon a co-resident of the defendant's normal place of abode, residence, or usual mailing address to meet the statutory definition of substitute service," which, again, he admitted did not happen here.

The general rule in California is that "[a] judgment against a party who was not properly served violates that party's procedural due process rights and the appropriate remedy is to set aside that judgment as void." (Ridec LLC v. Hinkle (2023) 92 Cal.App.5th 1182, 1202; accord, American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 387 (American Express) [because" 'compliance with the statutory procedures for service of process is essential to establish personal jurisdiction . . . [,] a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void' "]; see also OC Interior Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th 1318, 1330-1331.)

For the following reasons, Molica has not demonstrated any abuse of discretion by the trial court in setting aside the default judgment on this basis.

1. Substantial Compliance with the Service Statutes

First, Molica argues the motion was erroneously granted because there was constructive compliance with the statutory requirements of service. But he did not make this argument in the trial court. As noted, his only argument was that even though "substitute service was in fact invalid," Suter did have actual notice, yet "to prevail [he] must show he did not have actual notice of the action" in time to defend it." '[I]ssues not raised in the trial court cannot be raised for the first time on appeal.'" (Johnson v. Greenelsh (2009) 47 Cal.4th 598, 603.) Therefore, the constructive compliance theory has been forfeited.

Even if the issue had not been forfeited, we would reject it. Although some cases have suggested that substantial compliance with the statutory procedures for service might suffice if service results in actual notice (see generally American Express, supra, 199 Cal.App.4th at pp. 390-391 [questioning but citing authorities]), such a theory, assuming it is valid, requires proof of "partial or colorable compliance with the [service] requirement on which the objection is predicated." (Id. at p. 391.) The trial court would have been well within its discretion to conclude there had not been substantial compliance with the requirements of substitute service here, because there was never any attempt to serve anyone at Suter's home. (Cf. id. at pp. 391-393 [where defendant received a copy of summons and complaint left at his doorstep, jurisdiction to enter default judgment could not be upheld on theory of substantial compliance with requirements for valid personal service because plaintiff "served the wrong person (if it served anyone at all)"].)

2. Actual Notice

Next, Molica argues that Suter had actual notice of the lawsuit in time to defend it.

First, the factual premise of his argument is mistaken. As we have noted, there was conflicting evidence as to whether Suter knew about the lawsuit before the default judgment was entered against him. An appellate court must "infer that the trial court' "impliedly made every factual finding necessary to support its decision." '" (Gajanan Inc. v. City and County of San Francisco (2022) 77 Cal.App.5th 780, 792.) We also are required to view the evidence in the light most favorable to the party who prevailed in the trial court and presume that all factual conflicts were resolved against the party who lost. (See, e.g., Schmidt v. Superior Court (2020) 44 Cal.App.5th 570, 574.) Put simply, "[w]e accept all evidence supporting the trial court's order" and "completely disregard contrary evidence." (Id. at p. 581.) In considering the facts, "[o]ur job is only to see if substantial evidence exists to support the [order or judgment] in favor of the prevailing party, not to determine whether substantial evidence might support the losing party's version of events." (Id. at p. 582.) Because there is substantial evidence that Suter didn't know about the lawsuit before the judgment was entered against him, we must infer the court found against Molica on this issue.

Second although we agree with Molica that actual notice precludes relief under Code of Civil Procedure section 473.5, it does not cure invalid service of summons and thereby create personal jurisdiction where none exists. "[E]ven though the defendant may have knowledge of the action, there is no personal jurisdiction unless the statutory method of notification, i.e., the type of service, is sufficient, or unless the defendant appears generally in the action." (2 Witkin, Cal. Procedure (6th ed. 2021) Jurisdiction,...