Opinion
F060339 Super. Ct. No. 626585
09-22-2011
MICHELLE BETTENCOURT, Plaintiff and Respondent, v. TROY DORMAN et al., Defendants and Appellants.
Law Offices of Russell J. Hanlon and Russell J. Hanlon for Defendants and Appellants. Fores-Macko and Michael J. Macko for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
APPEAL from a judgment of the Superior Court of Stanislaus County. Hurl W. Johnson, Judge.
Law Offices of Russell J. Hanlon and Russell J. Hanlon for Defendants and Appellants.
Fores-Macko and Michael J. Macko for Plaintiff and Respondent.
Defendants Troy Dorman and Elan Senior Living, Inc. appeal from a default judgment of $252,697.50 entered against them and in favor of plaintiff Michelle Bettencourt after the trial court denied defendants' motion to set aside their defaults under Code of Civil Procedure section 473. Defendants' motion was made on the ground they did not receive notice of the proceedings that led to their defaults because, among other things, they had moved to a new address and the moving papers were served at the old address. Plaintiff opposed the set-aside motion, arguing that defendants' failure to inform their own attorney of the change of address was inexcusable and that it was proper for plaintiff to serve her moving papers to the address set forth in the order granting defendants' attorney's motion to withdraw as attorney of record. The trial court agreed with plaintiff, denied defendants' motion for relief under section 473 and proceeded to enter the default judgment. Defendants appeal on several grounds, including that the address to which plaintiff served her dispositive motions was not only incorrect, but also legally invalid for purposes of service of notice on defendants. As explained hereafter, we agree with defendant on these points and accordingly reverse. Because notice of the dispositive motions was never given, the defaults were void and must be set aside along with the default judgment.
Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure.
FACTS AND PROCEDURAL HISTORY
Plaintiff filed a complaint for damages against defendants for alleged employment discrimination and harassment based on her sex. The complaint alleged that on August 29, 2006, plaintiff was hired by Elan Senior Living, Inc. as a bookkeeper and clerk. During plaintiff's brief period of employment, Dorman allegedly made a number of inappropriate sexual comments to plaintiff. Plaintiff repeatedly and firmly insisted that he stop making such comments. Soon after plaintiff again told Dorman to stop, and upon learning from plaintiff that she was pregnant, Dorman fired plaintiff from her employment on October 27, 2006, ostensibly on the ground that he did not trust her "'emotional stability.'"
Plaintiff initially alleged her employer was "The Living Center," based on the name appearing on her paychecks. However, the Living Center is a dba of Elan Senior Living, Inc. We therefore refer to the employer by that name. Dorman is the president of Elan Senior Living, Inc.
Defendants filed an answer on July 7, 2008, consisting of a general denial and numerous affirmative defenses. Both defendants were represented by the Modesto law firm of Curtis & Arata, including attorney Katherine Boyd of that law firm.
On July 29, 2008, plaintiff served a request for production of documents on defendants. The discovery request sought employment files, job performance evaluations, and other documentation related to plaintiff's work and termination from employment. Defendants' written response consisted solely of objections, including an objection that Elan Senior Living, Inc. was not plaintiff's employer. The latter objection was based on an assertion by defendants that plaintiff was actually employed by an employee leasing service called "Employer Solutions Group." In any event, after receiving defendants' written response, plaintiff's attorney sent a meet-and-confer letter to defense counsel arguing that the response was inadequate and the objections without merit. In the discussions that followed, it was agreed that plaintiff would have an extension of time to file a motion to compel further responses until December 15, 2008. During the same discussions, defendants' attorney, Ms. Boyd, informed plaintiff's attorney of her intention to withdraw from the case. Defendants did not respond further to plaintiff's discovery request; therefore, plaintiff proceeded to file her motion to compel further responses on December 15, 2008.
On November 14, 2008, Ms. Boyd filed, on behalf of the law firm of Curtis & Arata, separate motions to withdraw as attorney of record for defendants. In the moving papers, Boyd correctly stated that the last known address for defendants was "... Sherry Court, Modesto, California 95356." Boyd also provided a declaration showing that she had confirmed within the last 30 days that said address was "current." Specifically, she had sent a letter to defendants on October 9, 2008, and had received a response from defendants to that letter on October 21, 2008. The hearing date for the withdrawal motions was on December 31, 2008.
On December 19, 2008, Dorman moved from the Modesto address to a new address in Santa Cruz. He did not inform Ms. Boyd or the trial court of his new address. Dorman did instruct an employee to file a change of address form with the United States Postal Service, but he discovered months later that this instruction was not successfully carried out. He knew his attorney was withdrawing, but mistakenly assumed that was because further representation was not needed as he thought plaintiff's employment was with Employer Solutions Group.
On December 31, 2008, the trial court issued a minute order denying without prejudice the motions to withdraw as attorney of record. The motions were denied because the orders were not separately lodged with the trial court, but were filed as attachments to the moving papers.
On January 5, 2009, Ms. Boyd again filed separate motions to withdraw as defendants' attorney of record. In the January 5, 2009, motions to withdraw, Boyd again stated that the last known mailing address for defendants was "... Sherry Court, Modesto, California." Boyd also stated that she had confirmed within the last 30 days that defendants' last known address was the current address. The confirmation effort for the January 5, 2009, motions was that she sent correspondence to defendants on November 21, 2008, and on December 18, 2008, which "ha[d] not been returned."
On February 3, 2009, the trial court granted the motions filed by Ms. Boyd that the law firm of Curtis & Arata withdraw or be relieved as attorney of record for defendants. A written order was filed on March 10, 2009, granting the motion with respect to Elan Senior Living, Inc. A separate order granting the withdrawal motion with respect to Dorman was, for reasons unknown, not filed until September 23, 2009. Both orders carried forward the mistake in Boyd's declaration that defendants' current address was the Sherry Court address in Modesto, California. Both orders also contained an express condition that the particular order was effective "upon the filing of the proof of service of this signed order upon [defendants]." The record does not reflect that a proof of service showing service of the orders on defendants was ever filed.
On the same February 3, 2009, hearing date, the trial court issued a minute order granting plaintiff's motion to compel defendants' further responses to plaintiff's document requests. The minute order stated that further responses were due by February 13, 2009. A separate written order granting the discovery motion was filed as to each defendant. Notice of entry of said discovery orders was served on defendants by mail to Ms. Boyd and to defendants' former address in Modesto.
On March 17, 2009, plaintiff's attorney, Michael Macko, mailed a letter to Dorman at the Sherry Court address in Modesto, stating Macko's understanding "that your attorneys have now withdrawn from representing you in this matter, and therefore you are representing yourself." The letter advised Dorman that the motion to compel further responses had been granted. The letter further stated: "Since there is a question as to whether you received notice of this order, we are willing to allow you until March 31, 2009, in which to produce the records and comply with the court's order." Macko did not receive any response to that letter or any further discovery responses.
The Motions Resulting in Defendants' Defaults
On May 13, 2009, plaintiff filed a motion for terminating sanctions against both defendants based on their failure to comply with the trial court's order compelling further responses to plaintiff's document requests. Plaintiff served the moving papers to the Sherry Court address in Modesto. On May 13, 2009, plaintiff separately filed a motion to strike the answer filed by Elan Senior Living, Inc. on the ground that as said defendant was a corporation, it could not represent itself or appear in court without an attorney. The motion to strike was also served by mail to the Sherry Court address in Modesto. No opposition was filed to either motion. On June 17, 2009, the trial court issued its minute order granting both motions. On June 24, 2009, a formal written order was entered granting plaintiff's motion to strike the answer of Elan Senior Living, Inc. and entering its default. On July 14, 2009, a formal written order was entered granting plaintiff's request for terminating sanctions, striking the answers of both defendants, and entering their defaults. Thus, both defendants' defaults were entered pursuant to the trial court's order granting terminating sanctions, and, as to Elan Senior Living, Inc., an order striking the unrepresented corporation's answer.
In August of 2009, plaintiff's attorney learned of Dorman's new address in Santa Cruz. On August 18, 2009, plaintiff's attorney served notice of the order granting terminating sanctions to Dorman's Santa Cruz address.
Plaintiff's Request for Default Judgment
On November 19, 2009, plaintiff filed her request for entry of default judgment against defendants. She sought entry of a judgment in the amount of $405,500, consisting of $105,000 in asserted special damages, $300,000 in general damages, and $500 in costs. The request for entry of default judgment was served by mail on defendants at their Santa Cruz address. The day before the hearing on the request for default judgment, defendants filed their motion for relief from defaults. The trial court postponed consideration of the request for entry of default judgment until defendants' motion for relief from default could be heard.
Defendants' Section 473 Motion
On December 21, 2009, defendants filed their motion to set aside the defaults that were taken against them. The grounds for the motion were alleged excusable mistake, neglect or inadvertence under section 473, the defaults were void, and extrinsic mistake. In his supporting declarations, Dorman explained that in December of 2008 he moved from Modesto to Santa Cruz. Dorman did not notify his attorney of the new address. He knew that his attorney was in the process of withdrawing from representing him and he mistakenly assumed that the case against him was being dropped anyways because, he supposed, plaintiff's actual employer was Employer Solutions Group. Also, he had instructed an employee in January of 2009 to file a change of address form with the post office, but he did not realize that that was not done until many months later. As a result, defendants did not receive notice of any of the court proceedings in which their defaults were taken against them. According to Dorman, defendants had a viable defense to plaintiff's claims; namely, that plaintiff was fired because she was disruptive at work, yelled at her coworkers and her coworkers complained about her. Also, defendants claimed that plaintiff was actually an employee of Employer Solutions Group. In explaining the apparent delay in filing the motion, Dorman pointed out that when some papers arrived in August of 2009 from Mr. Macko's office, Dorman believed they related to a separate lawsuit he was involved in wherein Macko was representing the opposing party. He turned those papers over to an attorney handling that separate lawsuit without reviewing them, and did not learn until November of 2009 that the papers actually related to the present case.
Plaintiff opposed the motion, arguing that defendants failed to present adequate grounds or an excusable basis for setting aside the defaults.
The trial court denied defendants' motion to set aside defaults. In its written order filed on March 19, 2010, the trial court explained: "Defendants have failed to establish any grounds to set aside defaults entered. The record shows that all of the problems that Defendants complain of are due to their sole fault. The record shows that Defendants moved from Modesto to Santa Cruz without notifying their prior counsel of this change of address, and this failure resulted in everything the Defendants presently complain of." The trial court emphasized that "Defendants have offered no excuses whatsoever for their failure to inform their prior counsel of their change of address from Modesto to Santa Cruz ...." The trial court further explained that "[o]nce Curtis & Arata were removed as counsel of record, Plaintiffs properly relied upon the last known address of Defendants provided by Curtis & Arata in its motion to be relieved in serving Defendants with further documents and motions in this matter, including discovery, motions for terminating sanctions and requests for entry of default."
After denying the motion to set aside defaults, a default prove-up hearing was held. The trial court entered a default judgment against defendants in the total sum of $252,697.50. Defendants timely filed their notice of appeal.
DISCUSSION
A motion seeking relief under section 473 lies within the sound discretion of the trial court, and the trial court's decision will not be overturned absent an abuse of discretion. (Elston v. City of Turlock (1985) 38 Cal.3d 227, 233.) Section 473 is applied liberally if the party moves promptly in seeking relief and no prejudice will be suffered by the party opposing the motion if relief is granted. In such instances, only very slight evidence is needed to justify relief. (Ibid.; Rogalski v. Nabers Cadillac (1992) 11 Cal.App.4th 816, 819-820) Additionally, because the law favors trial on the merits, doubts are to be resolved in favor of the party seeking relief. As a result, a trial court order denying relief is more closely scrutinized on appeal than an order permitting trial on the merits. (Elston v. City of Turlock, supra, at p. 233.)
A motion for relief from default may be made on the ground that the default was taken as a result of the defendant's mistake, inadvertence, surprise or excusable neglect. (§ 473, subd. (b).) Additionally, the trial court may at any time set aside a void judgment or order. (Id., subd. (d).) A judgment or order is void if it was entered without adequate notice to the affected party. (Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 288-289 (Moghaddam) [incorrect address of service of notice—resulting order void]; Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1286 (Gamet); Reid v. Balter (1993) 14 Cal.App.4th 1186, 1193 [dismissal void where entered without notice to plaintiff].)
I. The Defendants' Defaults Must be Set Aside as Void
Defendants argue that plaintiff's service by mail of the dispositive motions to the incorrect address stated in the order granting defendants' attorney's motion to withdraw did not constitute adequate or valid service of notice. We agree.
We use this phrase at times to conveniently refer to the motions resulting in defendants' defaults.
Preliminarily, we note that what we have referred to as plaintiff's dispositive motions—i.e., the motion for terminating sanctions against both defendants as well as the motion to strike the answer of Elan Senior Living, Inc.—were both served by mail to defendants' former address in Modesto, California. Plaintiff mailed the moving papers to that address because it was the address set forth in defendants' attorney's motion to withdraw as attorney of record and in the trial court's order granting that motion. The order directed that "service on [defendants] must hereafter be made at that address."
In seeking to show the Modesto address was invalid for purposes of service of notice, defendants make the following two contentions: (1) On the face of defendants' attorney's motion to withdraw, no adequate facts were set forth to confirm that the address was still current, as required by California Rules of Court; and (2) the order granting the motion to withdraw never took effect. We now consider each of these contentions.
All further references to rules are to the California Rules of Court.
First, defendants point out that the address set forth in the withdrawal order was not properly confirmed by the withdrawing attorney to be "current" as required by rule 3.1362(d). Specifically, rule 3.1362(d) requires the attorney to submit a declaration stating facts showing either: "(1) The service address is the current address or business address of the client; or [¶] (2) The service address is the last known residence or business address of the client and the attorney has been unable to locate a more current address after making reasonable efforts to do so within 30 days before the filing of the motion to be relieved." The rule further specifies: "As used in this rule, 'current' means that the address was confirmed within 30 days before the filing of the motion to be relieved. Merely demonstrating that the notice was sent to the client's last known address and was not returned is not, by itself, sufficient to demonstrate that the address is current." (Ibid., italics added.)
Here, in support of her motion to withdraw filed on January 5, 2009, Ms. Boyd's declaration stated: "Correspondence was sent to [defendants'] last known address on October 9, 2008. A response was received from [defendants] by letter dated October 21, 2008. Mail continues to be sent to [defendants'] last known address from the office and has not been returned. Correspondence was sent on November 21, 2008 and December 18, 2008." Thus, the only event alluded to during the 30-day period prior to filing the motion was mailing a letter on December 18, 2008, which apparently was not returned. We believe that was inadequate on its face to confirm the address was current. The mere fact that a single letter was not returned within the 30-day period is virtually indistinguishable from a bare assertion that the notice of motion was not returned. Since the latter is expressly inadequate to confirm that an address is current under the terms of rule 3.1362(d), we believe the former falls short as well. Because the address confirmation requirement was not complied with, and the address was in fact incorrect, we agree that service to that incorrect address did not constitute valid service to defendants in this case. (See, e.g., Urethane Foam Experts, Inc. v. Latimer (1995) 31 Cal.App.4th 763, 765-767 [failure to follow mandatory rules of court that are for client's protection may provide grounds for setting aside resulting default judgment]; cf., Stuart Whitman, Inc. v. Cataldo (1986) 180 Cal.App.3d 1109, 1112 [compliance with former rule 376(d) renders the address set forth in the order to be the address for service of the party].)
Plaintiff has requested that we take judicial notice of a Web site page showing a 2010 document purportedly filed by defendant Elan Senior Living, Inc. with the California Secretary of State's office. We decline to do so because plaintiff failed to comply with the requirements of rule 8.252(a) for making a motion to obtain judicial notice in a reviewing court. Moreover, even if we were to judicially notice the existence of the Web site page, we would not take judicial notice of the truth of the contents thereof (see Searles Valley Minerals Operations, Inc. v. State Bd. of Equalization (2008) 160 Cal.App.4th 514, 519), and the issue of defendants' current address at the relevant time or times in question would remain factually disputable. That is, even if we were to take judicial notice of the Web site page, it would not alter our analysis or the outcome.
Second, defendants contend the order granting the attorney withdrawal motion could not be used as a basis for serving them at the obsolete Modesto address because that order never took effect. Defendants are correct. By its own terms, the order was not operative, since it plainly stated: "Attorney is relieved as counsel of record for [defendant] [¶] a. effective upon the filing of the proof of service of this signed order upon [defendant]." (Italics added.) It is undisputed that no such proof of service was ever filed in this case.
Although defendants raised this argument for the first time on appeal, we exercise our discretion to consider it because it is an issue of law based on undisputed facts (Matera v. McLeod (2006) 145 Cal.App.4th 44, 59), and because it sheds light on the critical issue of the validity of service and notice.
There is no evidence the orders were ever served on defendants at all.
This means that any notice to defendants should have been served by mail to defendants' attorney of record, the law firm of Curtis & Arata (i.e., to Katherine Boyd of that firm), who had not been effectively relieved. (See § 1015 [service must be on the attorney if party is represented]; rule 1.21(a) [same].) Rule 3.1362(e), provides: "After the order is signed, a copy of the signed order must be served on the client and on all parties that have appeared in the case. The court may delay the effective date of the order relieving counsel until proof of service of a copy of the signed order on the client has been filed with the court." The trial court did exactly that in this case, thereby making the order effective upon the filing of the proof of service. Since no proof of service of the order was filed, and there is no evidence the order was served on defendants, the order never became operative and it could not be used as a basis for defendants' service address.
In Gamet, supra, 91 Cal.App.4th at pages 1285-1286, the Court of Appeal observed in a similar situation as follows: "The language of the ... order relieving counsel mandated the filing of a proof of service on the clients before it had any effect. As no such proof of service is in the record or found in an independent search of the superior court file, it would appear the corporation's counsel ... was never actually relieved because the order never became operative." An additional factor considered by the Court of Appeal in Gamet was that "[e]ven assuming the attorneys had been relieved," the address used for service by mail on the affected party was faulty, with the result being that the party never received adequate notice and an opportunity to be heard. For these reasons, the Court of Appeal concluded the judgment or order was void because it was entered without notice. (Id. at p. 1286.)
The same result follows in the case before us. The order granting withdrawal of defendants' attorney never became operative and the address listed therein, which was used for service by mail of the dispositive motions, was both ineffective and erroneous. We conclude that the dispositive motions resulting in defendants' defaults were not validly served and defendants did not receive notice of those proceedings. Since a judgment or order is void where, as here, the affected party did not receive notice, the trial court erred in its failure to set aside the defaults in this case. (Moghaddam, supra, 142 Cal.App.4th at pp. 288-289 [order void due to incorrect address of service of notice]; Gamet, supra, 91 Cal.App.4th at p. 1286 [same].)
II. The Policy Favoring Trial on the Merits Should Have Been Followed
In its consideration of the section 473 motion in this case, the trial court had two distinct issues before it, which may be stated in the following questions: (1) Whether defendants' defaults should be set aside based on excusable mistake or neglect under section 473, subdivision (b)?; and (2) Whether defendants' defaults should be set aside as void under section 473, subdivision (d), due to lack of notice? If analyzed solely from the standpoint of whether defendants showed excusable mistake or neglect under section 473, subdivision (b), it would be difficult to conclude that any error was made in how the trial court ruled. As the trial court aptly noted, defendants could have avoided the entire problem with which they are now faced if they had timely informed their attorney of their change of address, and no satisfactory explanation for failure to do so was presented. At first glance, it would seem that defendants' fault and their failure to offer a reasonable excuse resolves this matter and that the judgment should be affirmed. The trial court so reasoned and went no further.
However, that was not the only ground upon which defendants sought relief. They also claimed their defaults should be set aside as void due to lack of notice of the dispositive motions. True, the asserted lack of notice was related to, and causally overlapped with, defendants' conduct of failing to inform their attorney of their move. But that is not the entire picture. There were other factors involved that substantially contributed to the incorrect address being utilized and to its legal invalidity as a service address for defendants, including the conspicuous lack of adequate attorney confirmation that the address was current within the past 30 days (before filing the motion) and the fact that the attorney withdrawal order never became operative. As we have explained above, defendants' appeal sufficiently demonstrated that they were not served with, and did not receive notice of, the dispositive motions, and therefore the lower court's orders striking defendants' answers and entering their defaults and default judgment must be set aside as void.
This holding also furthers the important judicial policy to favor trial on the merits. (See Shamblin v. Brattain (1988) 44 Cal.3d 474, 478 ["It is the policy of the law to favor, whenever possible, a hearing on the merits"].) To the extent there were any doubts in this case, we point out that the strong policy favoring trial on the merits requires that such doubts be resolved in favor of granting relief. (Waite v. Southern Pacific Co. (1923) 192 Cal. 467, 470-471 ["any doubts which may exist should be resolved in favor of the application, to the end of securing a trial upon the merits"]; Elston v. Turlock, supra, 38 Cal.3d at p. 233 ["because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default"].) Deference to that important policy was especially needful here, in view of the fundamental importance of notice and an opportunity to be heard. (See Gamet, supra, 91 Cal.App.4th at p. 1286). We conclude the trial court abused its discretion when it failed to set aside defendants' defaults as void due to lack of notice of the dispositive motions.
On remand, plaintiff may renew, upon proper notice, her motion for terminating sanctions and to strike the answer of Elan Senior Living, Inc., at which time defendants will have the opportunity to respond.
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DISPOSITION
The default judgment is reversed. The case is remanded to the trial court with instructions to set aside defendants' defaults and reinstate their answers, and for further proceedings consistent with this opinion. Costs on appeal are awarded to defendants.
Kane, J.
WE CONCUR:
Wiseman, Acting P.J.
Levy, J.