Opinion
E068426
10-31-2018
MARC GROSSMAN, Plaintiff and Appellant, v. LEONARD BACA, Defendant and Respondent.
Law Offices of Marc E. Grossman, Marc E. Grossman and Eva M. Hollands, for Plaintiff and Appellant. BWA Law Group and Christian F. Paul for Defendant 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. CIVDS1700093) OPINION APPEAL from the Superior Court of San Bernardino County. David Cohn, Judge. Affirmed. Law Offices of Marc E. Grossman, Marc E. Grossman and Eva M. Hollands, for Plaintiff and Appellant. BWA Law Group and Christian F. Paul for Defendant and Respondent.
This lawsuit is a collateral attack on a default judgment entered against plaintiff and appellant Marc Grossman in a small claims action brought by defendant and respondent Leonard Baca. Grossman appeals from the judgment of dismissal entered after the trial court sustained Baca's demurrer without leave to amend. Grossman contends that he adequately pleaded a cause of action for declaratory relief because the small claims judgment is void for lack of personal and subject matter jurisdiction, or he could plead such a cause of action if given leave to amend.
We find that the small claims court did not lack either personal or subject matter jurisdiction, and therefore affirm the judgment.
I. FACTUAL AND PROCEDURAL BACKGROUND
This lawsuit is the third in a chain of events, beginning with a civil case in which Grossman acted as a lawyer adverse to Baca. Baca's small claims lawsuit came next. Grossman then filed this lawsuit attacking the small claims judgment against him.
In the initial civil action, Baca was the defendant in Kramer v. Baca (San Bernardino County Superior Court case No. CIVDS1417620) (the underlying action). The plaintiff in the underlying action was represented by the Law Offices of Marc Grossman (the law firm), an "eight-attorney law firm bearing the name of its founder." The underlying action settled, with the parties stipulating that the plaintiff would dismiss his claims in exchange for a payment from Baca, and that "'[e]ach party will bear its own costs and legal fees.'"
The trial court in the underlying action set an Order to Show Cause (OSC) hearing regarding dismissal for July 8, 2016. The law firm filed a request for dismissal on July 6, 2016, and informed Baca's attorney by telephone that the request for dismissal "had been timely filed and that there would be no need to appear for the OSC hearing." The OSC hearing was not immediately taken off calendar, however, and Baca's attorney chose to attend. The trial court later entered the dismissal, backdating it to July 6, 2016.
Baca's attorney billed Baca $367.25 for attending the OSC hearing. On August 23, 2016, Baca wrote Grossman, requesting reimbursement for the $367.25. Grossman declined the request.
On August 29, 2016, Baca filed a small claims action (San Bernardino County Superior Court case No. SMCFS1607394) against "'Marc Grossman, Attorney at Law,'" listing the law firm's address and phone number as the defendant's. Baca claimed that he was owed $367.25, alleging as follows: "Mr. Grossman failed to dismiss the case, after settlement, in a timely manner which caused m[e] to have to keep contacting Mr. Grossman to avoid an OSC re dismissal. This caused additional attorney fees to me due to continued contact with Mr. Grossman and staff to close the case." An agent of the sheriff's department served process by substituted service, leaving a copy of the claim and order with the law firm's receptionist, and then mailing a copy of the documents.
On October 26, 2016, the law firm sent one of its attorneys, Michael De La Garza, to speak on its behalf at the trial of Baca's small claims action. The court did not allow De La Garza to appear, however, interpreting the action as being against Grossman as an individual, not the law firm as an entity. Grossman alleges that he called the court "to explain that De La Garza was not there as an attorney, but as a representative of the business entity, and that if the suit was against Grossman, the individual, then the Summons had not properly been served on Grossman," so Grossman requested a continuance to appear in person. (Some capitalization omitted.) The court did not grant a continuance, but instead proceeded to hear the case in Grossman's absence. The court awarded Baca a default judgment against Grossman in the amount of $437.25, consisting of the $367.25 claimed by Baca, plus $70 in costs. Notice of entry of judgment was filed and mailed on October 31, 2016.
On December 2, 2016, Grossman filed a motion to vacate the default judgment in the small claims action. The small claims court denied that motion on January 5, 2017, finding it "untimely." Grossman appealed the denial on January 13, 2017, arguing that because of the "obvious confusion of who exactly the defendant was" the small claims court should have continued the case rather than hearing the matter in Grossman's absence and entering a default judgment. Grossman's appeal also addressed the merits of the action, asserting that only the court in the underlying action had jurisdiction over Baca's claim, and that even if the small claims court had jurisdiction, Grossman was not liable for Baca's claimed attorney fees. Grossman further asserted that this lawsuit for declaratory relief, which he filed on January 3, 2017, "divests the small claims court of subject matter jurisdiction in favor of civil court." Appeals in small claims cases proceed to an individual superior court judge. (Code Civ. Proc., § 116.710, subd. (b).) On February 15, 2017, the superior court (Judge David A. Williams) rejected Grossman's appeal, affirming the denial of the motion to vacate.
Further undesignated statutory references are to the Code of Civil Procedure.
Grossman's complaint in this lawsuit asserts a cause of action for declaratory relief that is in essence a collateral attack on the small claims judgment. Grossman requests "a declaration that [Baca] agreed to bear all of his costs and legal fees stemming from [the underlying case], including his attorney's appearance at the July 8, 2016, OSC hearing." Baca demurred to the complaint. On March 14, 2017, the trial court (Judge David Cohn) sustained the demurrer without leave to amend.
II. DISCUSSION
A. Standard of Review
On appeal from a judgment based on an order sustaining a demurrer, we assume all the facts alleged in the complaint are true. (Pineda v. Williams-Sonoma Stores, Inc. (2011) 51 Cal.4th 524, 528.) In addition, we consider judicially noticed matters. (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) We accept all properly pleaded material facts but not contentions, deductions, or conclusions of fact or law. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.) We determine de novo whether the complaint alleges facts sufficient to state a cause of action under any legal theory. (Committee for Green Foothills, supra, at p. 42.) We read the complaint as a whole and its parts in their context to give the complaint a reasonable interpretation. (Evans, supra, at p. 6.)
When a trial court has sustained a demurrer without leave to amend, "we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) "[U]nless failure to grant leave to amend was an abuse of discretion, the appellate court must affirm the judgment if it is correct on any theory." (Hendy v. Losse (1991) 54 Cal.3d 723, 742.)
B. The Small Claims Court Did Not Lack Jurisdiction
Grossman contends that a collateral attack on the small claims judgment is permissible because the small claims court lacked jurisdiction over the case, so its judgment is void and may be "'"attacked anywhere, directly or collaterally whenever it presents itself . . . ."'" (OC Interior Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th 1318, 1330.) We find that the small claims court had both subject matter and personal jurisdiction over Baca's claim against Grossman.
We note that Grossman did not raise this contention to the trial court in opposition to Baca's demurrer. Moreover, the complaint does not expressly seek a declaration that the small claims court's judgment is void. Nevertheless, it is appropriate for us to consider Grossman's contentions on the merits, because he seeks to amend the complaint. (See San Diego City Firefighters, Local 145 v. Board of Administration, etc. (2012) 206 Cal.App.4th 594, 606 [plaintiff's showing that defects in complaint can be cured by amendment "'can be made for the first time to the reviewing court'"].) --------
1. Subject Matter Jurisdiction
Baca's claim in the small claims action was that Grossman failed to timely dismiss the underlying action as agreed, causing Baca to incur a $367.25 fee for Baca's attorney's appearance at an OSC hearing. Grossman contends that, pursuant to section 664.6, the court in the underlying action had exclusive jurisdiction over the claim asserted against him by Baca in the small claims action, so the default judgment is void for lack of subject matter jurisdiction. We disagree.
Grossman's argument that Baca's claim could be brought only in the underlying action fails for at least four reasons. First, Grossman has not adequately alleged that the stipulation for settlement of the underlying action even purports to allow that court to take jurisdiction over Baca's claim against Grossman. The complaint alleges that the parties' stipulation "included a provision stating that, '[e]ach party will bear its own costs and legal fees.'" But it does not allege that the parties requested that the court retain jurisdiction pursuant to section 664.6 in the stipulation for settlement, or that the court granted the request. (See Sayta v. Chu (2017) 17 Cal.App.5th 960, 967 ["The parties were required to present to the trial court a proper request to retain jurisdiction for purpose of section 664.6 motions."].) And neither the stipulation for settlement, nor the judgment entered in the underlying action, appears in our record.
Second, it is not apparent that the underlying action settlement language applies to the dispute between Grossman and Baca. Certainly, a provision in a stipulation for judgment that the parties are to bear their own costs and legal fees means the judgment should not include an award of fees or costs from one party to another. But such a provision does not, on its face, prohibit a party from seeking indemnification or reimbursement from a third party for any fees and costs incurred.
Third, a stipulation for settlement is a contract, and therefore is generally binding only among its parties. (See Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 36.) Grossman does not allege that he was a party to the stipulation for settlement in the underlying action; rather, his law firm was counsel to a party. As such, Grossman is not bound by the terms of the stipulation for settlement and, conversely, he is not entitled to enforce its terms, at least absent circumstances not apparently applicable here. (See Monster Energy Co. v. Schechter (2018) 26 Cal.App.5th 54, 70 [confidentiality provisions in settlement agreement not binding on attorneys who signed settlement agreement only in their capacity as party's attorney].)
Fourth, the power of the trial court under section 664.6 "'is extremely limited.'" (Howeth v. Coffelt (2017) 18 Cal.App.5th 126, 134, quoting Hernandez v. Board of Education (2004) 126 Cal.App.4th 1161, 1177.) More specifically, section 664.6 only authorizes a court to "retain jurisdiction" over the "parties to pending litigation" pursuant to a stipulation for judgment. (§ 664.6.) It does not authorize the trial court to take jurisdiction over a related dispute or enforce a related agreement between a party and nonparty. (See Tokio Marine & Fire Ins. Corp. v. Western Pacific Roofing Corp. (1999) 75 Cal.App.4th 110, 119 [section 664.6 did not authorize court to amend judgment to name nonparty insurers as additional judgment debtors under stipulated judgment because the insurers "were not parties to the litigation," even though the insurers "may have agreed to abide by the results of [the] litigation in certain respects"].)
In short, Grossman has not shown that the stipulation for judgment in the underlying action prohibits Baca from seeking indemnification or reimbursement for attorney fees and costs from Grossman. At a minimum, Grossman has not pleaded sufficient facts to demonstrate such an intention. And Grossman has failed even to adequately allege that the trial court retained jurisdiction to enforce the settlement of the underlying action pursuant to section 664.6. More fundamentally, nothing in section 664.6 authorizes a court to take jurisdiction over a claim by a party against a nonparty. The judgment entered in the underlying action, therefore, did not divest the small claims court of subject matter jurisdiction over the dispute between Grossman and Baca.
2. Personal Jurisdiction
Grossman contends that the small claims court's default judgment against him is void for lack of personal jurisdiction. He argues convincingly that he was not properly served with Baca's small claims lawsuit. Nevertheless, the allegations of the complaint and judicially noticeable documents establish that Grossman made a general appearance in that lawsuit. The small claims court therefore did not lack personal jurisdiction over him and the default judgment is not subject to collateral attack on that basis.
Baca served Grossman with his small claims lawsuit by leaving a copy with the law firm's receptionist and then mailing a copy of the documents to the law firm's address. This method of service would have been appropriate if the law firm were the defendant. (See § 116.340, subd. (a)(3) [service of small claims court claim and order]; § 415.20, subd. (a) [substituted service on corporate or noncorporate entities].) But Baca has consistently asserted that he intended to name in the small claims action "the man, Marc Grossman" as the defendant, and the small claims court treated the lawsuit as such, despite any arguable ambiguity in Baca's claim. Grossman, in his individual capacity, does not fall within the categories of persons—representatives of various corporate and noncorporate entities, described in sections 416.10 through 416.50—who are properly served pursuant to section 415.20, subdivision (a). (See § 415.20, subd. (a).) Substituted service of process on a natural person being sued in their individual capacity in a small claims lawsuit is permissible, but only by having the "sheriff or marshal . . . deliver a copy of the claim and order to any person authorized by the defendant to receive service . . . and thereafter mailing a copy of the claim and order to the defendant's usual mailing address." (§ 116.340, subd. (a)(3), italics added.) Nothing in the record establishes that the law firm's receptionist was authorized by Grossman to receive service for him in his individual capacity. We therefore accept Grossman's contention that Baca's attempt to serve process in the small claims lawsuit was defective.
It is well established, however, that "a general appearance is the equivalent of personal service of summons for jurisdictional purposes, dispensing with any need to effect such service and curing defective service or other lack of notice." (366-386 Geary St., L.P. v. Superior Court (1990) 219 Cal.App.3d 1186, 1193 (Geary Street).) "An appearance is general if the party contests the merits of the case or raises other than jurisdictional objections." (Ibid.)
Grossman could have sought to vacate the small claims court's default judgment pursuant to section 116.740, which describes the appropriate method for seeking such relief where the small claims defendant "was not properly served . . . and did not appear at the hearing in the small claims court." (§ 116.740, subd. (a).) He did not do so. His motion to vacate does not appear in our record. Nevertheless, we can deduce from the record that Grossman did not challenge service and instead made a general appearance.
In his motion to vacate, Grossman must have attempted to show "good cause" for relief from default under section 116.730, subdivision (c), rather than defective service pursuant to section 116.740. The record reflects that the small claims court denied Grossman's motion to vacate as "untimely," and Grossman did not challenge that finding in his appeal of that ruling. The motion was untimely under the limit set by section 116.730 of 30 days after the clerk has mailed notice of entry of judgment. (§ 116.730, subd. (a).) The motion would not have been untimely if Grossman had challenged service under section 116.740, which allows a motion "180 days after the defendant discovers or should have discovered that judgment was entered against the defendant." (§ 116.740, subd. (a).) Moreover, in Grossman's appeal of the denial of his motion to vacate, he raised various arguments regarding the scope of the small claims court's subject matter jurisdiction and the merits of Baca's claim, but he did not assert that he was not properly served or otherwise challenge the trial court's exercise of personal jurisdiction over him. Consequently, when Grossman appeared before the small claims court to bring his motion to vacate, he made a general appearance. (Geary Street, supra, 219 Cal.App.3d at p. 1193.) The small claims court therefore had personal jurisdiction over Grossman, regardless of any defects in Baca's attempt to serve Grossman with process.
C. The Trial Court Did Not Abuse Its Discretion by Denying Leave to Amend
Grossman argues on appeal that his complaint "could have been more artfully pled" to make clear he intended to seek a declaration that the small claims judgment is void for lack of subject matter and personal jurisdiction. He has made no showing, however, that he could successfully amend the complaint to plead around the defects in such a claim discussed above. He therefore failed to meet his burden of showing an abuse of discretion in the trial court's denial of leave to amend. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)
III. DISPOSITION
The judgment is affirmed. In the interests of justice, the parties shall each bear their own costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RAPHAEL
J. We concur: RAMIREZ
P. J. CODRINGTON
J.