Opinion
E067128
05-08-2018
WILLIAM BLASSER, Plaintiff and Respondent, v. LARRY HUDACK, Defendant and Appellant.
Larry Hudack, in pro. per., for Defendant and Appellant. William Blasser, in pro. per.; Blasser Law and Lisa M. Blasser for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. MCC1500540) OPINION APPEAL from the Superior Court of Riverside County. Raquel A. Marquez, Judge. Affirmed. Larry Hudack, in pro. per., for Defendant and Appellant. William Blasser, in pro. per.; Blasser Law and Lisa M. Blasser for Plaintiff and Respondent.
I. INTRODUCTION
Plaintiff and respondent, William Blasser, is an attorney and sole practitioner who sued his former client, defendant and appellant, Larry Hudack, in this action for unpaid legal services rendered to Hudack, plus deposition and other costs Blasser incurred to third parties. Blasser obtained Hudack's default and later obtained a default judgment against Hudack for over $20,000. (Code Civ. Proc., § 585.)
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
Hudack claims his default and the default judgment are void and must be set aside for several reasons, principally because the clerk entered the default after Hudack filed a motion to stay the proceedings pursuant to section 404.5. We conclude the default was properly entered and that Hudack's additional grounds for challenging the judgment also lack merit. We affirm the default judgment, as the trial court ordered it amended to exclude $2,299.58 in authorized attorney fees.
II. FACTS AND PROCEDURE
In a complaint filed on December 23, 2015, and alleging a single cause of action for breach of contract, Blasser alleged Hudack owed Blasser $16,055.18 in attorney fees, plus $6,942.91 in deposition costs, plus $2,616.56 in copying and other charges pursuant to a written contract. Hudack was served with the summons and complaint on December 29, 2015, and the 30-day period for filing an answer or other response to the complaint expired on January 28, 2016. (§ 412.20, subd. (a)(3).)
Around early January 2016, Hudack advised Blasser in writing that he would be unable to file a timely response because, on January 24, 2016, he and his wife would be leaving the country on a vacation to allow his wife to recuperate from her health problems. Hudack claimed his wife, Mrs. Hudack, was age 77, had recently suffered a second heart attack, and her recovery was being complicated by her Parkinson's disease. Blasser agreed to allow Hudack a two-week extension to respond until February 11, 2016, but told Hudack that he was unable to agree to a further extension. (Cal. Rules of Court, rule 3.110(d) [parties may agree without leave of court "to one 15-day extension beyond the 30-day time period prescribed for the response after service of the initial complaint."].)
All references to rules are to the California Rules of Court.
In a letter dated January 7, Hudack told Blasser he would be filing a demurrer to the complaint on the grounds it was uncertain and did not state a cause of action. (§ 430.10, subds. (e), (f).) Hudack also proposed that he and Blasser meet and confer by telephone on January 11 or 12 to discuss the demurrer. (§ 430.41.) In the same letter, Hudack told Blasser he would be asking the court to stay the action pursuant to section 404.5, which provides: "Pending any determination of whether coordination is appropriate, the judge making that determination may stay any action being considered for, or affecting an action being considered for, coordination." Hudack explained to Blasser that he needed the stay because he would "not be available to effect any coordination" until after he returned from his vacation. Hudack also "suggest[ed]" he and Blasser "wait until the court has had an opportunity to rule on my request before determining when my response is due."
In a letter dated January 20, Blasser thanked Hudack for explaining the grounds for his proposed demurrer but explained that, in his view, there were no grounds for a demurrer or a motion to strike because the complaint was "not uncertain in the least" and "clearly" stated a cause of action for breach of contract.
Meanwhile, on January 13, Hudack filed a motion captioned "Defendant's Motion for Order Staying Proceedings Until March 20, 2016 Pursuant to Code of Civil Procedure [Section] 404.5," with his supporting declaration. In his motion, Hudack explained he understood his "responsive pleadings" had to be filed by January 29, but he and his wife would be out of the country for a "'once in a lifetime' extended vacation" from January 24 to March 5; they would not be returning home until March 10; and the vacation was necessary for his wife's health. Hudack also explained that he was unrepresented by counsel; he needed "sufficient time to analyze, understand, and properly respond" to the complaint; and while he was away he would "not have the resources to prepare and file responsive documents to whatever motions [Blasser] might file." Hudack expressly acknowledged that, without the stay, Blasser could seek a default judgment against him. On January 20, Blasser filed an opposition to the motion, and the motion was scheduled to be heard on March 21.
On February 16 or 17, while Hudack was out of the country on vacation, Blasser filed a request to enter Hudack's default. The request was returned to Blasser twice, on February 17 and 19. A February 19 minute order states: "The court is unable to process the [request]" because Hudack had filed a motion "for order staying proceeding" which was to be heard on March 21. Blasser then filed a document captioned, "Plaintiff's Memorandum of Points & Authorities in Support of Default Judgment," arguing that the clerk should enter Hudack's default because the time for him to respond had expired, and Hudack's motion to stay the action pursuant to section 404.5 was not listed in section 585 as a ground upon which the clerk could deny the request to enter the default. On February 22, the clerk entered Hudack's default.
On April 15, Hudack filed a motion to set aside his default pursuant to section 473, subdivision (b), along with a proposed demurrer and a motion to strike portions of the complaint. The motion was set for a May 16 hearing, but Hudack did not appear at that hearing. The court denied the motion, stating in its May 16 minute order that Hudack did not "provide evidence . . . demonstrating his mistake, inadvertence, surprise, or excusable neglect as required for discretionary relief from default under . . . [section] 473, subdivision (b)."
In this appeal, Hudack does not claim the court abused its discretion in denying his motion to set aside his default under section 473, subdivision (b). Instead, he only claims the default and default judgment are void.
Hudack then filed several additional motions or "requests," all asking the court to set aside his default. Specifically, on May 16, 2016, Hudack filed a motion for reconsideration of the court's May 16 order denying his motion to set aside his default. On May 31, Hudack filed a "Request for Declaratory Relief" arguing that the entry of his default was "void" and the complaint should be dismissed. On June 2, Hudack filed a cross-complaint against Blasser.
At a case management conference on June 20, both parties appeared, and the court said it did not understand why the cross-complaint had been accepted for filing given that Hudack's default had been entered. Blasser told the court he had recently attempted to "fax file" a "default packet" for the entry of a default judgment, but the default packet had been returned to him because the court did not allow such packets to be fax-filed, and he advised the court that he would be resubmitting the default packet on that day, June 20.
The "default packet" is not included in the appellant's appendix and was not otherwise made part of the record on appeal.
At the June 20 case management conference, the court set an order to show cause on July 20 why (1) the cross-complaint should not be stricken, and (2) Blasser should not be sanctioned $1,500 and his complaint dismissed due to his failure to timely file a default packet. On July 20, the court continued the order to show cause hearing to July 27, after noting that the case had become "a little bit more complicated" because Blasser had filed a motion to strike the cross-complaint, and a hearing on that motion had been scheduled for July 27. On July 27, the court struck the cross-complaint. On August 18, a default judgment by clerk was entered in favor of Blasser and against Hudack for the principal sum of $28,597.18, comprised of $25,614.65 in total damages, $2,299.58 in attorney fees, and $682.95 in costs. (§ 585, subd. (a).)
The record does not include a reporter's transcript of the July 27 hearing, but the appellants' appendix, which includes portions of the case report, shows the court granted Blasser's motion to strike Hudack's cross-complaint on July 27.
Meanwhile, on July 26, Hudack filed still another motion to set aside his default, again arguing the default was void and relying in part on section 663. On September 14, the court heard and denied the July 26 motion. At the hearing, Hudack argued the default was void on its face in part because the clerk acted outside the scope of her ministerial authority in considering Blasser's points and authorities concerning why the default should be entered, and also because Hudack's motion to stay the action pursuant to section 404.5 was filed and scheduled for a hearing at the time his default was entered.
At the September 14 hearing, the court told Hudack he had made the case "very, very difficult" for himself and the court by filing motions without requesting or noticing hearings on the motions or following other mandatory procedures, and cited Hudack's May 16 "request" for declaratory relief as an example.
On September 2, Hudack moved for a new trial. The motion was heard and denied on October 25, subject to the condition that the $2,299.58 in attorney fees awarded in the default judgment would be stricken. (Trope v. Katz (1995) 11 Cal.4th 274, 285-286.) The court directed Blasser to file an amended judgment striking the unauthorized attorney fees.
On October 27, 2016, Hudack appealed the August 18, 2016, default judgment. On February 3, 2017, an amended judgment was filed.
III. DISCUSSION
A. The Default Was Properly Entered and Is Not Void
Hudack principally claims the default and default judgment are "void" and must be set aside based on "extrinsic error," that is, because the clerk exceeded the scope of her ministerial authority and "assumed judicial authority" in entering the default. As we explain, the default was properly entered and is not void.
1. Applicable Law
"When a clerk manifestly acts beyond his or her statutorily conferred powers in entering a default, that action is void, as is any default judgment predicated on it." (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 99, fn. 7.) Section 585 limits the clerk's authority to enter a default and imposes upon the clerk a ministerial duty to enter a default when the statute's conditions have been met. (See Bae v. T.D. Service Co. of Arizona, supra, at p. 99 & fn. 7.)
Section 585, subdivision (a), provides, in pertinent part, that in an action arising upon a contract in which the defendant has been served other than by publication, the clerk, "upon written application of the plaintiff, and proof of the service of summons, shall enter the default of the defendant or defendants, so served, and immediately thereafter enter judgment for the principal amount demanded in the complaint," provided that "no answer, demurrer," or other response specified in section 585 has been filed "within the time specified in the summons, or within further time as may be allowed."
The clerk's duty to enter a default under section 585 is "purely . . . ministerial." (W.A. Rose Co. v. Municipal Court (1959) 176 Cal.App.2d 67, 71.) "The clerk merely has to look at the record and see if there is a demurrer or answer or [other permitted response] on file. Seeing none, [the clerk] must enter the default . . . ." (Ibid.; Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 534.)
2. Analysis
On January 16, 2016, within the 30-day period specified in the summons, Hudack filed a motion to stay the action "pursuant to" "section 404.5." The motion was not a response listed in section 585, subdivision (a), which, if timely filed by Hudack, would have precluded the clerk's entry of his default. Hudack does not dispute this, but argues instead that the clerk exceeded the scope of her ministerial authority and "assumed judicial authority" in determining, based on Blasser's filed memorandum of points and authorities and oral communications with the clerk, that the section 404.5 motion was not a response listed in section 585, subdivision (a).
Section 404 allows a party to a civil action sharing a common question of fact or law with a civil action pending in a different court, to petition the chairperson of the Judicial Council to coordinate the actions. The petition for coordination, or motion for permission to submit the petition, must be supported by a declaration showing, among other things, that the actions are "complex." (§ 404.) Hudack captioned his motion to stay this action as being made "pursuant to" section 404.5, which authorizes "the judge" tasked with determining whether coordination is appropriate, to "stay any action being considered for, or affecting an action being considered for, coordination."
Relying on and purporting to quote Stevens v. Torregano (1961) 192 Cal.App.2d 105, at pages 111 to 112, Hudack argues, "as long as [the response] appears to be one of the permissible responses . . . the clerk must refuse a request for default . . . ." (Italics added, bolding & underlining omitted.) This quoted language does not appear in Stevens and Stevens does not support this proposition. Rather, Stevens observed: "It is not the business of the clerk, whose duties in entering defaults are ministerial, to pass upon the question of the sufficiency or validity of a pleading which has been filed . . . ." (Id. at p. 112, italics added.) In Stevens, the defendant had timely filed "a general demurrer . . . , valid on its face," when the clerk entered the defendant's default. (Ibid.) Thus, the clerk in Stevens exceeded the scope of her ministerial authority, and "pass[ed] upon the question of the sufficiency or validity" of the demurrer, in determining that the demurrer was somehow insufficient and thus did not preclude the clerk's entry of the defendant's default.
Unlike the clerk in Stevens, the clerk in this case did not "pass upon the question of the sufficiency or validity" of Hudack's "section 404.5" motion in entering his default. On its face, the section 404.5 motion was not a response listed in section 585 which would have precluded the clerk's entry of his default. The only motion "to stay" an action listed in section 585 subdivision (a), is a motion "to stay or dismiss the action pursuant to [s]ection 418.10" on the ground of inconvenient forum. Hudack's motion was captioned, "Defendant's Motion for Order Staying Proceedings Until March 20, 2016 Pursuant to Code of Civil Procedure [Section] 404.5." (Italics added.) Based solely on the caption of the motion, it was apparent that the motion was not a motion to stay or dismiss the action pursuant to section 418.10. (§ 585, subd. (a).)
The record indicates that the clerk initially confused Hudack's section 404.5 motion with a motion to stay or dismiss the action pursuant to section 418.10. This appears to be why Blasser's request to enter the default was twice returned to Blasser, unentered by the clerk. But Blasser was within his rights to bring the clerk's ministerial error to the clerk's attention, both orally and in his memorandum of points and authorities. Blasser's communications with the clerk did not amount to "improper unnoticed ex parte legal discussions," as Hudack argues. There is no such thing as an improper ex parte communication with a clerk regarding a ministerial matter. Hudack has not shown he was not served with Blasser's memorandum of points and authorities or that Blasser engaged in any ex parte communications with the court. B. Hudack's Additional Claims Lack Merit
At oral argument, Hudack claimed Blasser violated rule 5-300 of the State Bar Rules of Professional Conduct by engaging in an ex parte communication with the clerk. The rule provides that a member of the State Bar "shall not directly or indirectly communicate with or argue to a judge or judicial officer upon the merits of a contested matter" and defines "judge" and "judicial officer" as including law clerks, research attorneys, "or other court personnel who participate in the decision-making process." (Rules Prof. Conduct, rule 5-300(B), (C), italics added.) Blasser did not violate rule 5-300 in communicating with the clerk concerning the entry of Hudack's default. As discussed, the clerk was required to enter Blasser's default under section 585. The clerk's entry of a default is a ministerial matter, and does not concern "the merits of a contested matter."
Also at oral argument, Hudack cited several cases supporting the general propositions that (1) the Court of Appeal has no authority to "alter" the trial court's records (e.g., Verdier v. Verdier (1953) 118 Cal.App.2d 279, 282 [court strongly condemned "practice of any clerk's office in placing on the record any date of entry [of a judgment] other than the actual date."]; cf. People v. Mitchell (2001) 26 Cal.4th 181, 186-188 [court has inherent authority to correct clerical errors in trial court records]) and (2) when an "event" or fact is not shown on the record of the trial court, it will be presumed not to exist (e.g., Keybers v. McComber (1885) 67 Cal. 395, 396-397).
These propositions and authorities do not assist Hudack's argument. As the appellant, it is Hudack's burden to affirmatively demonstrate error (Denham v. Superior Court (1970) 2 Cal.3d 557, 564) and Hudack has not shown that the clerk erred in entering his default. In sum, the record shows the clerk properly discharged his or her ministerial duty, under section 585, in entering Hudack's default.
Hudack claims the default judgment by clerk (§ 585, subd. (a)) is void on several additional grounds. As we explain, none of these claims has merit.
1. The Judgment Does Not Include an Excessive Damage Award
Hudack claims the default judgment includes an excessive damage award, namely, $2,299.58 in attorney fees. To be sure, the original default judgment was for the principal amount of $28,597.18 and included $2,299.58 in unauthorized attorney fees. (Trope v. Katz, supra, 11 Cal.4th at pp. 285-286 [under Civ. Code, § 1717, self-represented attorneys cannot recover attorney fees not incurred to third party attorneys in contract actions].) But as a condition of denying Hudack's motion for a new trial, the court ordered the $2,299.58 in unauthorized attorney fees stricken and directed Blasser to file an amended judgment omitting the attorney fees.
The record does not include a copy of the amended judgment, filed on February 3, 2017, but the record indicates the amended judgment was to be for the principal amount of $26,297.60. The $26,297.60 amount consists of solely the $25,614.65 in total contract damages sought in the complaint, plus $682.95 in costs. (§§ 585, subd. (a) [clerk to enter default judgment for "the principal amount demanded in the complaint."], 585, subd. (b) [plaintiff may apply to court "for the relief demanded in the complaint."], 1032, subd. (b) [prevailing party entitled to costs of suit].)
Although the original default judgment was a default judgment by clerk (§ 585, subd. (a)), the amended judgment effectively became a default judgment by court (§ 585, subd. (b)) because the amended judgment was directed to be filed after the court ordered the $2,299.58 in unauthorized attorney fees stricken from the judgment.
The $25,614.65 amount is comprised of the $16,055.18 in "actual damages" or the unpaid attorney fees Hudack owed Blasser, plus $6,942.91 that Blasser owed to Esquire Deposition Services for court reporting services that Blasser incurred on Hudack's behalf, plus $2,616.56 that Blasser owed to "DTI services" for "copying and other expenses associated with producing the exhibits and exhibit binders" also incurred by Blasser on Hudack's behalf. These contract damages and costs were properly included in the original and amended judgments. (§§ 585, subd. (b), 1032, subd. (b).)
2. Blasser Had Standing to Sue for the Costs Owed to Third Parties
Hudack claims Blasser lacked standing to sue for any deposition and copying costs owed to third parties. We disagree.
By his default, Hudack admitted all of the properly pleaded allegations of the complaint. (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 281.) The complaint alleged that, pursuant to "Contract 1" or the first of two written contracts entered between the parties, Hudack agreed to pay Blasser "Costs of Litgation/Arbitration." Contract 1 defined "Costs of Litigation/Arbitration" as including, without limitation, "filing fees, deposition costs, messenger services, witness fees, arbitration fees, etc." Thus, by his default, Hudack admitted that he agreed to pay Blasser the deposition and other copying costs demanded in the complaint. By necessary implication, Blasser was aggrieved by Hudack's failure to pay these third party costs and had standing to sue Hudack to recover these costs.
Hudack also claims the court "failed to perform the role of gatekeeper required by law." (Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 868 ["It is imperative in a default case [arising under section 585, subdivision (b),] that the trial court take the time to analyze the complaint at issue and ensure that the judgment sought is not in excess of or inconsistent with it."].) This claim fails because it is based solely on Hudack's claim that Blasser lacked standing to sue for costs owed to third parties. The court fully performed its role as "gatekeeper" in striking the unauthorized attorney fees and in approving the contract damages sued on.
3. Hudack Received Notice of His Arbitration Rights (Bus. & Prof. Code, § 6201)
Hudack claims the default judgment is void because Blasser did not comply with the Mandatory Fee Arbitration Act (Bus. & Prof. Code, § 6200 et seq.) which requires an attorney to give a client written notice of the client's right to arbitrate a fee dispute with the attorney—prior to or at the time the client is served with a summons or claim for the attorney fees. (Bus. & Prof. Code, § 6201.)
The Mandatory Fee Arbitration Act provides that an attorney's failure to give a client written notice of the client's right to arbitrate the attorney fee claim, "prior to or at the time of service of summons or claim in an action against the client . . . shall be a ground for the dismissal of the action. . . ." (Bus. & Prof. Code, § 6201, subd. (a), italics added.) But the dismissal of the attorney's action on this ground is discretionary, not mandatory. (Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347, 366.)
Here, the court implicitly concluded that the dismissal of Blasser's complaint was unwarranted, and no abuse of discretion appears. As Blasser points out, he gave Hudack written notice of Hudack's arbitration rights when he attached Contract 1 to the complaint. Paragraph 15 of Contract 1 states that if "Attorney [Blasser] files suit in any court other than small claims court, Client [Hudack] will have the right to stay that suit by timely electing to arbitrate the dispute under Business and Professions Code sections 6200-6206, in which event Attorney [Blasser] must submit the matter to such arbitration." Thus, Hudack was timely notified of his arbitration rights when he was served with the summons and complaint. (Bus. & Prof. Code, § 6201.)
4. Blasser Timely Requested the Entry of Hudack's Default
Hudack claims the default judgment is void because Blasser did not submit his request for the entry of Hudack's default within 10 days after Hudack's response to the summons and complaint was due. (Rule. 3.110(g).) Again, we disagree.
Under rule 3.110(g), the plaintiff is required to "file a request for entry of default within 10 days after the time for service has elapsed[,]" "[i]f a responsive pleading is not served within the time limits specified in this rule and no extension of time has been granted." Under rule 3.110(d), the parties "may stipulate without leave of court to one 15-day extension beyond the 30-day time period prescribed for the response after service of the initial complaint."
Hudack's response to the complaint was due no later than February 12, 2016, 30 days after the summons and complaint were served on December 29, 2015, plus the 15-day or two-week extension Blasser agreed to allow Hudack. (Rule 3.110(d).) Blasser filed his request for the entry of the default no later than February 17, less than 10 days after the response was due. (Rule 3.110(g).) Thus, the request for the entry of the default was timely. Hudack complains he did not have actual notice of the request because he was out of the country when it was served. But Hudack does not claim he was not served with the request by mail, and this was all that was required. (§ 587.)
5. Mrs. Hudack Was Not an Indispensable Party to the Complaint
Lastly, Hudack claims the complaint was required to be dismissed because Blasser failed to join an indispensable party, namely, Mrs. Hudack, who "was a party to the contracts" Blasser sued on, along with Hudack. Hudack maintains he was "not responsible" for legal fees incurred "on behalf" of Mrs. Hudack, "by Blasser acting [as] her attorney." We disagree.
Both Hudack and Mrs. Hudack were parties to the two contracts alleged in the complaint, and each contract provided that each client would be "liable, jointly and severally," for the obligations arising under the contracts. A joint and several obligor is not an indispensable party and may be sued separately. (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 820 ["It has long been settled that contracting parties who are severally liable, or subject to joint and several liability, may be sued in the same action or in separate actions at the plaintiff's option."].)
IV. DISPOSITION
The amended default judgment which excludes the $2,299.58 in unauthorized attorney fees is affirmed. Blasser shall recover his costs on appeal. (Rule 8.278.)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
FIELDS
J. We concur: RAMIREZ
P. J. SLOUGH
J.