Perkins Coie LLP v. Viacom, Inc.

PERKINS COIE LLP, Plaintiff and Appellant, v. VIACOM, INC., Defendant and Respondent.

B238420

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO

Filed: May 6, 2013

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County

Super. Ct. No. BC425223)

APPEAL from an order and judgment of the Superior Court of Los Angeles County. James R. Dunn, Judge. Reversed with directions.

Aires Law Firm, Timothy Carl Aires for Plaintiff and Appellant.

Kendall Brill & Klieger, Richard B. Kendall, Richard M. Simon for Defendant and Respondent.

In May 2010, defendant, already in default, learned that plaintiff was seeking a default judgment. Nevertheless, defendant did not move to vacate the default and default judgment until a full year later, in May 2011. The trial court granted the motion in part, modifying the original default judgment by deleting a monetary award in favor of plaintiff. We conclude that, because the original default judgment was not void and because defendant did not act with reasonable diligence, the trial court erred by modifying the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

In 2005, plaintiff and appellant Perkins Coie LLP (Perkins Coie), a law firm, obtained a judgment in the amount of $115,739.42 against the musician Percy Miller, also known as Master P. Perkins Coie subsequently obtained assignment orders for levy of payments due from third parties to Miller and Miller-owned entities. On November 2, 2009, Perkins Coie had three assignment orders served on defendant and respondent Viacom Inc. (Viacom).

The instant matter involves a lawsuit that was filed on November 3, 2009. Perkins Coie filed a complaint for "creditor's suit in aid of enforcement of judgment" against both Miller and Viacom. The complaint alleged that Miller had a business relationship with Viacom, that Miller had a right to payment of money due or to become due from Viacom, and that Viacom was liable in damages to Perkins Coie for money due or becoming due to Miller. In pertinent part, the complaint prayed for judgment against Viacom (i) "applying any debt owed by [Viacom] . . . to [Miller], or applying any property [of Miller's] that is in the possession, custody or control of [Viacom] . . . in satisfaction of the Judgment ($115,739.42, together with interest at the rate of $31.70 per day from January 25, 2005, plus costs of enforcement of judgment);" and (ii) for a money judgment against Viacom "pursuant to Code of Civil Procedure §708.280, for the value of [Miller's right to payment from Viacom] or the amount necessary to satisfy the Judgment ($115,739.42, together with interest at the rate of $31.70 per day from January 25, 2005, plus costs of enforcement of judgment), whichever is less."

Default and Default Judgment

On November 6, 2009, Viacom's registered agent for service of process was personally served with the summons and complaint. Viacom filed no answer or other responsive pleading, and on December 31, 2009, a request for entry of default was mail-served on the agent for service of process. Viacom's default was entered by the court clerk on January 5, 2010.

Viacom still did not take any action in the case. On May 6, 2010, Perkins Coie mail-served a request for entry of default judgment on Viacom's agent for service of process. Several hearings pertaining to the requested default judgment were held and then, on July 26, 2010, default judgment was entered in favor of Perkins Coie and against Viacom pursuant to Code of Civil Procedure section 708.280: (i) applying any debt owed by Viacom to Miller in satisfaction of Perkins Coie's judgment against Miller; (ii) applying any property of Miller's in the possession, custody, or control of Viacom in satisfaction of Perkins Coie's judgment against Miller; and (iii) in the sum of $115,739.42, together with interest of $61,117.60, less credits, for a total judgment, including costs of suit, of $148,885.66.

Motion to Set Aside Default and Default Judgment

Finally, on May 13, 2011, after Perkins Coie tried to levy on the judgment against Viacom, Viacom filed a motion to set aside the default and the default judgment. In its motion, Viacom contended that the default judgment exceeded the relief demanded in the complaint and was thus void; that Viacom did not have actual notice of the summons and complaint and was unaware of the default judgment; that counsel for Perkins Coie misrepresented to Viacom the nature of the action and induced it not to seek relief; that Viacom was not guilty of inexcusable neglect; and that Viacom had meritorious defenses to the action.

Along with its motion, Viacom submitted the declaration of Amy Dow, senior vice president for MTV Networks (a division of Viacom International Inc., which is a subsidiary of Viacom) and an in-house attorney. Dow's declaration stated that after Viacom received assignment orders in November, the internal legal affairs staffinvestigated and determined that Viacom did not owe money to Miller or his enterprises. Dow admitted that Viacom was served with the summons and complaint on November 6, 2009. She stated, however, that her department, the department responsible for responding to matters of the sort, did not receive a copy of the summons and complaint, "apparently due to a routing error."

Dow's declaration further stated that Viacom was served with the request for entry of default in January 2010, and when she received a copy she called Timothy Aires, counsel for Perkins Coie. According to Dow, Aires told her that he had been trying for years to recover a judgment from Miller, and that he thought Viacom might be making payments to Miller in connection with a television pilot. Aires said that he had filed the lawsuit against Viacom for the purposes of prompting a phone call from Viacom regarding the pilot. Dow stated that she told Aires she had not seen the complaint against Viacom and that Viacom did not owe any money to Miller. Dow's declaration read: "Mr. Aires then told me that he was not interested in litigating against Viacom but instead in finding out who was paying Master P and trying to learn Master P's business aliases. Aires cut the call short to attend to his dog, promising to call the next day to follow up on what information Viacom could offer. I sent him my contact information shortly after our phone call ended, but he never called. When Aires did not call back, I thought he had probably moved on to other collection efforts once he had learned that Viacom did not have anything owing to Master P to assign to his client."

Additionally, attached to Dow's declaration was a May 2010 e-mail exchange between her and Aires. On May 6, 2010, Aires had sent Dow an e-mail informing her that there was a hearing scheduled for the next day regarding the requested default judgment. Aires's e-mail stated: "If you have any opposition to entry of a default judgment being entered against Viacom Inc. for $115,739.42, together with prejudgment interest . . . plus costs of suit, I suggest you be in Court tomorrow to explain to Judge Dunn why you never sought relief from default and filed an answer to the complaint." Dow responded that she had not received notice of the hearing and had last heard from Aires in January, and thus assumed that Aires had decided not to pursue the matter. Shetold him she would not be able to attend the hearing. Aires responded the next day: "I am simply not responsible for your failure to follow up on an entered default. . . . Your client is not even entitled to notice once it's [sic] default was entered. . . . I contacted you as a courtesy."

The trial court considered Viacom's motion to set aside the default and default judgment on June 20 and July 7, 2011. The court declined to vacate the default, but it did modify the default judgment by deleting the monetary award in favor of Perkins Coie.

Perkins Coie timely appealed.

DISCUSSION

Generally, there are several methods available to vacate a default judgment. Code of Civil Procedure section 473, subdivision (b),¹ allows a trial court to relieve a defendant from an adverse judgment obtained because of the defendant's mistake, inadvertence, surprise, or excusable neglect. Such a motion, however, must be brought within six months of entry of judgment. (Ibid.) In some circumstances, a defendant may also attack a default judgment by filing a motion for new trial. (See §§ 657, 659; Misic v. Segars (1995) 37 Cal.App.4th 1149.) The motion is likewise time-limited, though, and in no case may be brought later than 180 days after entry of judgment. (§ 659, subd. (a)(2).) Alternatively, a defendant may appeal from a default judgment (Uva v. Evans (1978) 83 Cal.App.3d 356, 360), but, again, the appeal must be timely filed, and in no event later than 180 days after entry of judgment (Cal. Rules of Court, rule 8.104).

Because Viacom's motion for relief was filed more than nine months after the default judgment was entered, Viacom could not seek relief by any of the above procedures. Viacom instead sought to have the judgment vacated on three alternative grounds: (i) section 473, subdivision (d), which allows the court to set aside a void judgment, including for excessive damages; (ii) section 473.5, which applies when service of a summons has not resulted in "actual notice" to a defendant; and (iii) thecourt's inherent equitable authority, which may be exercised in cases involving extrinsic fraud or extrinsic mistake. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981-982; Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 290-291.)

All three of these latter grounds were discussed by the parties in their papers and at the trial court hearings, and the...