Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County No. 07CC00627 Jane D. Myers, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.)
Roland Ervin, in pro. per., for Plaintiff and Appellant.
No appearance for Defendants and Respondents.
OPINION
SILLS, P. J.
I. SUMMARY
Roland Ervin, representing himself, obtained the default of two persons, William Little Jr. and the Estate of Johanna Little-Beck, in this action. We have serious doubts as to whether Ervin’s complaint is sufficient to apprise any defendant of the nature of the relief that Ervin is seeking. The first two pages of the complaint, filed January 16, 2007, consist of a Judicial Council form on which are written a barely legible hodgepodge of handwritten interlineations. But that’s not all; the form complaint appears to incorporate a previous, conventionally typed complaint, filed August 22, 2005. That previous complaint goes on for 335 pages. No doubt Ervin is trying hard to sound like an attorney, but the effect of his two-page form complaint filed in January 2007 apparently incorporating by reference an August 2005 335-page complaint provide a hard-to-follow scramble of confusing allegations. If our characterizations of what Ervin actually alleges in his complaint seems somewhat tentative, the confusing nature of the complaint is the reason.
For the moment, however, we may lay aside our doubts as to whether this complaint is sufficient to support a default judgment; the trial court did not grant a default judgment on it; rather, it dismissed the action with prejudice, and it is the order doing so that is before us now.
To explicate the case, we first identify the substantive claims which Ervin appears to be (or trying to be) asserting. Those claims may be grouped into three categories: (1) Claims against his former employers and their agents for personal injuries sustained while he was working as a caretaker and security guard at a property in Los Angeles in 1999; (2) claims against his former employers and their agents for unpaid wages; and (3) finally, claims against his employers and what appear to be their successors in interest for the fraudulent transfer of two properties, one the Los Angeles property where he worked as a guard, and the other in Garden Grove, made while Ervin was asserting claims (1) and (2). On line 10 of the form complaint (where the form calls for the amount of money sought in the judgment), Ervin lists his damages at about $2.4 million, most of which is attributable to the loss of his eye when he was attacked while working as a security guard.
In regard to claims (1) and (2), it is clear that they are the subject of prior pending litigation: Ervin brought a workers’ compensation proceeding in Los Angeles on his personal injuries (the loss of his eye), and a separate civil proceeding in Los Angeles for unpaid wages. He is represented by an attorney in the workers’ compensation proceeding; he represents himself in the Los Angeles civil action. Also, in an Orange County probate proceeding involving the Estate of Johanna Little-Beck, Ervin has filed creditor’s claims.
At the prove up hearing after Ervin took the default of the two defendants in this case, the trial judge not only refused to grant Ervin a default judgment, but dismissed his case with prejudice on the theory that it was precluded by collateral estoppel and res judicata, given the pendency of the workers’ compensation, Los Angeles civil, and Orange County probate proceedings.
Ervin now appeals the order of dismissal. Here is a summary of our analysis:
First, there is no question that Ervin’s personal injuries claims are precluded by workers’ compensation exclusivity (Lab. Code, § 3601). To the extent that his complaint asserts those claims (and they are easily the bulk of the monetary relief which Ervin seeks), the order of dismissal with prejudice is clearly correct.
Second, as to the claims for unpaid wages, the record contains no actual prior judgments on which to predicate the bar of collateral estoppel or res judicata. (The closest we have is an unpublished opinion from the Second District affirming an otherwise non-detailed judgment on the pleadings in favor of other persons). However, Ervin’s complaint does recognize that he has already asserted his claims for unpaid wages in a separate civil action in Los Angeles. So, to the extent that the within action asserts claims for unpaid wages, the proper disposition is a not an order of dismissal with prejudice, but a stay of proceedings pending the outcome of the Los Angeles civil case and Orange County probate proceeding. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 1983) ¶¶ 3:123.50-3:123.63, pp. 3-37 to 3-38, rev. #1, 2007.)
Third, to the degree that the within action presents claims based on the fraudulent transfer of property -- i.e., claims which Ervin has not made in any other action -- the salient fact is that, as currently framed, the complaint is incapable of supporting a default judgment in any event. Specifically, there are no allegations that the sellers “did not receive reasonably equivalent value” in exchange for the Los Angeles and Garden Grove properties (see Civ. Code, § 3439.05) or which otherwise implicate any of the items listed in Civil Code section 3439.04, subdivision (a).) Whether these defects might be cured by subsequent amendment to the complaint, we cannot say. However, instead of dismissing the claim with prejudice, the appropriate course was to refuse to enter default judgment, and allow Ervin a reasonable opportunity to amend his complaint (if he truthfully could). (See Gore v. Witt (1957) 149 Cal.App.2d 681, 686-687.)
As it turns out, we are able to tidy up the matters that are not subject to outright affirmance by modifying the order, as distinct from reversing it.
II. LITIGATION HISTORY
In the late 1990’s -- certainly by 1997 -- Roland Ervin served as caretaker and security guard at a property in Los Angeles on Cassil Place. In 1999, Ervin was attacked on the property (apparently by an unknown intruder) and suffered various injuries, the most significant being the loss of an eye. Those injuries eventually gave rise to a workers’ compensation action in Los Angeles (LAO 805 687), in which Ervin hired an attorney, Alexander J. Petale. The named employer in the workers’ compensation action was the Robert C. Beck Land Trust.
Also, sometime in 2003, Ervin, acting in propria persona, filed a civil action in Los Angeles regarding claims for unpaid wages and expenses. (Ervin v. Little-Beck (Super. Ct. Los Angeles County, No. BC 298526). The defendants included Johanna Little-Beck, The Cary Beck Land Trust, Robert C. Beck (Estate of), and Freda A. Wyckoff. Yeager Little and William Little were later added as defendants.
On our own motion, we take judicial notice of the unpublished disposition in the Los Angeles civil action, Ervin v. The Cary Beck Land Trust et al. (March 14, 2006, B179337) [nonpub. opn.].) In that action, the Land Trust, William Little, Wycoff and Yeager Little successfully moved for judgment on the pleadings, which was affirmed by our colleagues in Division Five of the Second District.
The Second District’s opinion does not provide the basis for the judgment on the pleadings; for all we know, it might have been the lapse of the statute of limitations. Indeed, the Second District’s opinion observes that the appellate court there could not discern the “state of the case” as to defendants Johanna Little-Beck and Estate of Robert Beck -- apparently its record was as confusing as the one we have before us here. The implication, though, is that defaults were entered as to the latter two persons. And, we must note, Ervin is no stranger to taking defaults. The Second District opinion notes that, “The record is replete with requests for entry of default.”
In early 2007, Ervin, again in propria persona, filed the action before us in Orange County, naming the Estate of Johanna Little-Beck and William D. Little, Jr., as defendants. In his opening brief, Ervin characterizes this action as one for fraudulent transfer, and, however otherwise confusing, that idea can indeed be extracted from both the face page of the January 2007 form complaint and the caption in the attached August 2005 conventional complaint, since both reference Civil Code sections 3439 through 3449, which deal with fraudulent transfers. As we have noted, though, the complaint (which is, to put it charitably, somewhat hard to follow) appears also to reassert Ervin’s claims based on the loss of his eye as a security guard, and for unpaid wages.
The fraudulent transfer claims revolve around two parcels of real property, one being the Cassil property in Los Angeles mentioned above, and the other being one on Stanford Avenue in Garden Grove. The Los Angeles property was allegedly sold in 2003 to the YMCA of Metropolitan Los Angeles. According to the exact words of the complaint, William D. Little, Jr. “is selling has entered [sic] into an agreement for the sale of” the Garden Grove property. Later (in an affidavit in connection with a default prove-up hearing) Ervin would claim that William Little Jr. had “sold off” his interest in the Garden Grove property.
In a third case -- this one an Orange County probate matter, the Estate of Johanna Little-Beck (case number BC 288526) -- Ervin appears to have reasserted his claims for unpaid wages by filing creditor claims.
The theory of the fraudulent transfer claims, insofar as we can make them out, is that both the Garden Grove and Los Angeles properties were sold (or were being sold) at a time when the seller (William D. Little, Jr.) knew about Ervin’s pending actions in Los Angeles for unpaid wages and for workers’ compensation, and when the seller knew about creditor claims made against the Estate of Johanna Little-Beck.
It also appears that Ervin has taken the default of both William D. Little Jr. and the Estate of Johanna Little-Beck. A default prove-up hearing took place on June 14, 2007.
Ervin did not appear at the hearing; the matter was submitted on declarations. The trial court took the matter under submission, and, about two weeks later, issued a minute order denying the requested default judgment. The court stated that the “matters raised in this proceeding are the subject of other lawsuits described in plaintiff’s complaint herein and in his affidavit in support of default judgment.” The minute order then stated: “Plaintiff has remedies for enforcement in Los Angeles County Superior Court Case No. BC 298526 and Orange County Superior Court Case No. A221155. The case is dismissed with prejudice by reason of collateral estoppel and res judicata.”
It is from this order of dismissal that Ervin timely filed this appeal.
III. ANALYSIS
A. Inapplicability of Res Judicata or Collateral Estoppel
Technically, the trial court erred in concluding that the within action is barred by the doctrines of res judicata or collateral estoppel. Both doctrines requires a prior final judgment (e.g., Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331, 1342 [final judgment among elements of res judicata]; California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 249 [collateral estoppel defined as the determination of an ultimate issue of fact by in a prior final judgment]), and here we have none. The closest we have is the unpublished opinion in Ervin v. The Cary Beck Land Trust et al., but the judgment on the pleadings referred to in that opinion does not include either defendant in this action, nor does the opinion provide the grounds on which the judgment on the pleadings was granted.
We leave for another day the issue of whether the defendants here were in such privity with the defendants in The Cary Beck Land Trust case that they would necessarily benefit from the application of the doctrine of collateral estoppel.
B. The Personal Injury Claims
However, the inapplicability of collateral estoppel or res judicata does not end the analysis. First, as mentioned above, to the degree that this action reasserts claims for the loss of the eye, it is on its face clearly barred by the exclusivity of the workers’ compensation system (see Lab. Code, § 3601; e.g., Caso v. Nimrod Productions, Inc. (2008) 163 Cal.App.4th 881, 888 [“Apart from certain exceptions not relevant to this case, the ‘exclusive remedy for injury or death of an employee against any other employee of the employer acting within the scope of his or her employment’ is benefits under the workers’ compensation laws.”].) To the extent that Ervin’s action here seeks redress for the loss of his eye, his remedy lies with the workers’ compensation case in Los Angeles, and the trial court’s order of dismissal with prejudice was clearly correct.
C. The Unpaid Wages Claims
Second, to the extent that this action reasserts claims for unpaid wages (previously asserted in the Los Angeles civil action and Orange County probate proceeding), further proceedings are clearly barred by the doctrine of exclusive concurrent jurisdiction. (See Levine v. Smith (2006) 145 Cal.App.4th 1131, 1135 [“Under the doctrine of priority of jurisdiction, the first superior court to assume and exercise jurisdiction in the case acquires exclusive jurisdiction until the matter is disposed of.”]; see also Code Civ. Proc., § 430.10, subd. (c) [grounds for demurrer include “another action pending between the same parties on the same cause of action”].)
While the defense of exclusive concurrent jurisdiction may be waived (People ex rel. Garamendi v. American Autoplan, Inc. (1993) 20 Cal.App.4th 760, 774 (Garamendi)), the trial court could not just close its eyes to the prior pending matters. The doctrine of exclusive concurrent jurisdiction is a common law policy rule developed to avoid the “unseemly conflicts between courts and to protect litigants from the expense and harassment of multiple litigation.” (Id. at p. 776 (conc. opn. of Armstrong, J.).)
Here, no less than two courts -- a civil court in Los Angeles and a probate court in Orange County -- have the question of the validity of any claims for unpaid wages before them. And Ervin’s own complaint provided sufficient notice of matters which the trial court could take judicial notice of in regard to those pending proceedings. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 1983) ¶ 3.123.60, p. 3-38, rev. #1, 2007.)
Though this was a default proceeding, the trial court was not obligated, zombie-like, to ignore the facial presence of two pending proceedings on the same claims. The trial court here was under no obligation, merely because of the defendants’ defaults, to render a judgment that might have been in conflict with one from the Los Angeles civil case or the Orange County probate proceeding. On the other hand, as noted, it could not dismiss the proceeding based on res judicata or collateral estoppel.
This is an unusual case in that it involves a hard-to-understand complaint that ultimately does not state a cause of action drafted by a party representing himself, plus a default by both defendants on top of that. The “course of proceeding” in such a situation does not appear to be “specifically” pointed out by the Code of Civil Procedure. In such instances, section 187 of that code provides courts with authority to fashion a “suitable process” that is “most conformable to the spirit” of the Code of Civil Procedure.
Here, an outright dismissal with prejudice does not appear to be the process “most conformable” with the spirit of the Code of Civil Procedure. However, we conclude that an interlocutory judgment effectively staying proceedings on the unpaid wage claims pending disposition of those claims in the prior proceedings is the “most conformable” process. We base this conclusion on the functional similarity between our situation here and the one that would control the situation, under section 597 of the Code of Civil Procedure, when a trial court sustains a demurrer based on the defense of a prior pending action. (See Code Civ. Proc., § 597 [“ . . . and where the defense of another action pending . . . is sustained (and no other special defense is sustained) an interlocutory judgment shall be entered in favor of the defendant pleading the same to the effect that no trial of other issues shall be had until the final determination of that other action . . . .”].)
D. The Fraudulent Transfer Claims
Finally, while the appellant’s opening brief is not exactly a model of clarity, it does manage to convey at least this one idea: Ervin’s claims based on fraudulent transfer are independent of the other cases and proceedings, specifically the workers’ compensation proceeding, the Los Angeles civil action, and the Orange County probate creditor’s claims. As such, the simple existence of prior pending actions is insufficient to support the dismissal of this action, with or without prejudice.
However, sections 3439.04 and 3439.05 of the Civil Code require certain elements for acts to come within the purview of “fraudulent transfer” and these elements are conspicuously lacking in this complaint.
For example, most conspicuously, there are no allegations that either William Little Jr. or the Estate of Johanna Little-Beck received less than reasonably equivalent value for either the Los Angeles or Garden Grove properties. (And in the case of the Los Angeles property on Cassil street, the complaint indicates that the buyer was a bona fide third party -- the YMCA of Los Angeles -- as distinct from someone not dealing at arms length.)
Under the well-pled complaint rule, a complaint must state a cause of action in order to support a default judgment. As the court said in Molen v. Friedman (1998) 64 Cal.App.4th 1149, 1153: “If the complaint fails to state a cause of action or the allegations do not support the demand for relief, the plaintiff is no more entitled to that relief by default judgment than if the defendant had expressly admitted all the allegations.”
Perhaps the complaint could have been amended, and if Ervin had asked for leave to amend, the court should have granted leave to amend. (See Gore, supra, 149 Cal.App.2d at pp. 686-687 [where “complaint on its face disclosed that it did not comply” with certain statute, court observed that “could have been amended, and it would have been an abuse of discretion to refuse leave to amend”].”) However, Ervin has not asked for such leave.
As this court recently observed about the possibility of amendment in another case: “While a plaintiff even on appeal can most certainly make a showing that an amendment to the complaint will change its legal effect (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 1983) ¶ 7:130, p. 7-50, rev. #1, 2007), it is the plaintiff -- not the court -- who has the burden of showing that an amendment will have such an effect. As the Rutter Practice Guide states: ‘It is not up to the judge to figure out how the complaint can be amended to state a cause of action. Rather, the burden is on the plaintiff to show in what manner he or she can amend the complaint, and how that amendment will change the legal effect of the pleading.’ (Ibid., italics added, italics in original deleted.) In Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 711, the court said: ‘While such a showing can be made for the first time to the reviewing court [citation], it must be made.’” (Medina v. Safe-Guard Products, Internat. Inc. (2008) ___ Cal.App.4th ___, ___, fn. 7 [___Cal.Rptr.3d ___] 2008 WL 2448020 at p. 4, fn. 7.)
Here, Ervin has made no showing that he can amend his complaint to state a cause of action. What to do? At this point we are again guided by Code of Civil Procedure section 187’s admonition to proceed in the “mode of proceeding . . . most conformable to the spirit” of the whole Code of Civil Procedure. Taking our cue from section 187, we note that in the normal course of litigation -- say, in response to a hypothetical demurrer brought by the defendants -- Ervin would have had the opportunity to cure the deficiencies in his complaint. From this we conclude that the proper course of action, given the default setting, was not outright dismissal with prejudice, but a stay, so as to allow Ervin a chance to amend his complaint.
An outright dismissal would most certainly work prejudice to Ervin because it would preclude any relation back argument as to the running of time in the interim. By staying the action, the court could at least avoid the prejudice to any subsequent refiling by Ervin from dismissal. On the other hand, this opinion should not be read as suggesting that Ervin will be able to successfully surmount any time bar (e.g., statute of limitations or laches) in the event he does amend. That issue can await another day.
IV. DISPOSITION
The question now arises as to the proper disposition of the case. It is a bit complicated, so we spell it out now:
(1) We affirm the trial court’s order to the extent that it dismisses all claims for personal injuries with prejudice.
(2) We modify the trial court’s order so that, instead of dismissing Ervin’s claims for unpaid wages with prejudice, the order now stays those claims, pending final disposition of the Los Angeles civil case and the Orange County probate case. At such time as both prior cases are final, Ervin may seek (if logically possible and consistent with those final dispositions) to amend his complaint in light of those dispositions. As so modified, the order is affirmed in that regard.
(3) We modify the trial court’s order so that, instead of dismissing Ervin’s fraudulent transfer claims with prejudice, the order now stays those claims pending an amendment filed within 10 days of the date of the remittitur to this decision. (See Cal. Rules of Court, rule 3.1320(g) [normal time to amend is 10 days from the ruling on a demurrer in which leave to amend is granted].) As so modified, the order is affirmed in that regard.
It must be noted at this point that Ervin’s failure to amend may be deemed an admission that his present case states his fraudulent transfer claims as strongly as he can. (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091.) In such a case, the trial court may, on its own motion, dismiss those claims with prejudice.
We also provide the following three observations for the benefit of the trial court in the future:
One, the trial court should not hesitate to examine any future amended complaints filed by Ervin to see if they genuinely apprise the defendant of the basis and nature of the relief sought. (Given the posture in this case, we did not have to reach that issue in this opinion.) Failure to so apprise will mean no default judgment should be entered.
Two, if Ervin does amend his complaint, there must be new service of the amended complaint on the defendants. Ervin cannot take the default of either defendant here based on their failure to answer any earlier complaint, including this one. (See Gore, supra, 149 Cal.App.2d at pp. 686-687 [“Apparently, the complaint can be amended to sufficiently state a cause of action but if such an amendment is hereafter made a new service on the defendant will be required and he will have an opportunity to defend the action on its merits.”].) Failure to serve the amended complaint will also mean that no default should be entered.
Three, assuming amendment with regard to the fraudulent transfer claims and subsequent default, the trial court should bear in mind that the relief afforded fraudulent transfer claims (as set out in section 3439.07 of the Civil Code) consist of a series of essentially equitable remedies which involve the exercise of the trial court’s discretion. (The word “may” figures prominently in subdivision (a) of the statute.) In any future default prove-up proceedings the trial court should not just automatically grant whatever relief might be requested, but use its discretion in light of the evidence presented -- particularly in light of any future disposition of the Los Angeles civil action or the Orange County probate proceeding -- to see whether any of the remedies available under section 3439.07 are appropriate. If no relief is appropriate under the facts presented, the mere fact that the case proceeds by default should not prevent the trial court from denying the requested relief.
The statute provides in its entirety:
In the interests of justice, Ervin will bear his own costs on appeal.
WE CONCUR: O’LEARY, J., IKOLA, J.
“a) In an action for relief against a transfer or obligation under this chapter, a creditor, subject to the limitations in Section 3439.08, may obtain:
“(1) Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim.
“(2) An attachment or other provisional remedy against the asset transferred or its proceeds in accordance with the procedures described in Title 6.5 (commencing with Section 481.010) of Part 2 of the Code of Civil Procedure.
“(3) Subject to applicable principles of equity and in accordance with applicable rules of civil procedure, the following:
“(A) An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or its proceeds.
“(B) Appointment of a receiver to take charge of the asset transferred or its proceeds.
“(C) Any other relief the circumstances may require.
“(b) If a creditor has commenced an action on a claim against the debtor, the creditor may attach the asset transferred or its proceeds if the remedy of attachment is available in the action under applicable law and the property is subject to attachment in the hands of the transferee under applicable law.
“(c) If a creditor has obtained a judgment on a claim against the debtor, the creditor may levy execution on the asset transferred or its proceeds.
“(d) A creditor who is an assignee of a general assignment for the benefit of creditors, as defined in Section 493.010 of the Code of Civil Procedure, may exercise any and all of the rights and remedies specified in this section if they are available to any one or more creditors of the assignor who are beneficiaries of the assignment, and, in that event (1) only to the extent the rights or remedies are so available and (2) only for the benefit of those creditors whose rights are asserted by the assignee.”