Pan v. Huang

Full title: PING PAN, Plaintiff and Respondent, v. KERRY HUANG, Defendant and…

Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO

Date published: Sep 7, 2018

No. E068435 (Cal. Ct. App. Sep. 7, 2018)

Opinion

E068435

09-07-2018

PING PAN, Plaintiff and Respondent, v. KERRY HUANG, Defendant and Appellant.

Law Office of John A. Tkach and John A. Tkach for Defendant and Appellant. Reid & Hellyer and Michael G. Kerbs for Plaintiff and Respondent.

McKINSTER Acting P. J.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. CIVRS1201048) OPINION APPEAL from the Superior Court of San Bernardino County. Janet M. Frangie, Judge. Dismissed. Law Office of John A. Tkach and John A. Tkach for Defendant and Appellant. Reid & Hellyer and Michael G. Kerbs for Plaintiff and Respondent.

Defendant and appellant Kerry Huang (Huang) appeals from an amended judgment entered in favor plaintiff and respondent Ping Pan (Ping). (See fn. 1, post.) The trial court granted Ping's motion to amend the judgment to add Huang as an alter ego of defendant AC International, Inc. (ACI).¹ Huang argues the trial court erred by denying his motion to quash service of process because Ping did not exercise reasonable diligence in attempting to personally serve Huang with the motion to amend the judgment before effecting substitute service. Huang contends the trial court lacked personal jurisdiction over him and, therefore, the trial court had no authority to issue orders regarding notice of Ping's motion, and it lacked fundamental jurisdiction to enter an amended judgment naming Huang as a judgment debtor.

1 In a related appeal, Pan v. Skyline Technology HK Co., Ltd. (Sept. 7, 2018, E061100) [nonpub. opn.]), we refer to the plaintiff by his first name to avoid confusion with his son who is also discussed in that appeal. For the sake of consistency, and not out of disrespect, in this appeal we will again refer to plaintiff as Ping.

This is not the first time the trial court amended the judgment to add Huang as a defendant and not the first time Huang appealed from an order denying his motion to quash. In a prior appeal, this court concluded Huang was properly served with Ping's first motion to amend the judgment, and that the trial court did not err by denying Huang's first motion to quash. (Pan v. Huang (Aug. 27, 2015, E061462) [nonpub. opn.].) We nonetheless reversed the amended judgment because substitute service was not completed, and the trial court did not acquire jurisdiction over Huang, until after the court ordered Ping to serve the motion to amend the judgment by mail and directed Huang to file a substantive response. In addition, we concluded the trial court erred by hearing and granting Ping's first motion to amend the judgment during the safe harbor period when Huang was afforded the right to seek writ review of the order denying his first motion to quash before filing a substantive response to the motion to amend the judgment.

In supplemental briefs solicited by this court, the parties now agree that this court's holding that Huang was properly served is law of the case. Because the trial court had already acquired personal jurisdiction over Huang, and this court had already concluded the trial court properly denied Huang's first motion to quash, there was no need for Ping to once again attempt to personally serve Huang with its motion to amend the judgment. At that point, compliance with the rules for a noticed motion was sufficient. Likewise, Huang's second motion to quash, and his purported "special appearance" at the hearings on the second motion to amend the judgment, were legal nullities.

Given the unique circumstances of this case, in which the parties and the trial court were under the mistaken belief that the court had not yet acquired personal jurisdiction over Huang, and everyone involved acted under the assumption that Huang's second motion to quash was properly before the trial court, we would have reversed the amended judgment and remanded for the limited purpose of the trial court providing Huang with the opportunity to file a substantive response and to conduct a new hearing on the motion to amend the judgment. However, five days before this appeal was to be orally argued—after this court had already devoted valuable time and resources to review the record, research the legal issues, and draft a tentative decision that was mailed to the parties—the parties notified us that the case had been settled and they requested dismissal of the appeal. Dismissal is a matter of discretion, not of right. (Cal. Rules of Court, rule 8.244(c)(2).) Although we will grant the request for dismissal, in light of the tardiness of the request (see Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2017) ¶¶ 5:63-5:64, pp. 5-28 to 5-30), we will also express our views on the issues in this opinion. (See Lara v. Cadag (1993) 13 Cal.App.4th 1061, 1065-1066.)

I.

PROCEDURAL BACKGROUND

The factual and procedural background to the underlying judgment against ACI entered on March 25, 2014, is provided in the related appeal and will not be repeated here. (Pan v. Skyline, supra, E061100.) On April 23, Ping obtained an ex parte order shortening time on a motion to amend the judgment to add Huang as a judgment debtor. The motion was set for hearing on May 5. On April 25 and 28, a process server unsuccessfully attempted to personally serve Huang at his home with the motion to amend the judgment. On April 28, the process server served the motion on Huang's mother-in-law at Huang's home. The next day, the process server served the motion on Huang by mail. Huang opposed the motion and moved to quash service of process, arguing his mother-in-law—who spoke no English and was visiting from China—was not a member of the household or otherwise authorized to accept substitute service of process. (Pan v. Huang, supra, E061462.)

Huang made a special appearance on May 5, 2014, and contested the trial court's jurisdiction. The trial court continued the hearing, ordered Ping to complete service on Huang by May 9, and directed Huang to file a substantive opposition to the motion to amend the judgment no later than May 9. At the continued hearing held on May 14, the trial court denied Huang's motion to quash and granted Ping's motion to amend the judgment. Over Huang's objection that the trial court could not enter an amended judgment during the safe harbor period to challenge the order denying the motion to quash, on May 23 the trial court entered an amended judgment adding Huang as a judgment debtor based on the court's finding that Huang was ACI's alter ego. (Pan v. Huang, supra, E061462.)

Huang challenged the order denying his motion to quash by timely petitioning this court for a writ of mandate and requesting an immediate stay. We summarily denied the petition and the request for a stay. (Huang v. Superior Court (June 3, 2014, E061203).)

Huang then timely appealed from the amended judgment. (Pan v. Huang, supra, E061462.) In our opinion in the first appeal, we rejected Huang's argument that his mother-in-law was not a co-occupant of his home for purposes of substitute service. "[T]he evidence showed that a copy of plaintiff's motion was left with Li Ma at defendant's residence. Li Ma was defendant's mother-in-law. Although Li Ma stated she was merely a visitor at defendant's residence, the trial judge could reasonably infer from her declaration that she had been present at the residence for an extended period: she stated that she threw the papers in the trash because 'there are some people who drop all kinds of papers to the front yard all the time.' (Italics added.) It was undisputed that defendant had actual knowledge of plaintiff's motion." (Ibid.) Therefore, we held: "[T]he trial court did not err in finding that defendant was properly served. Such service was complete on May 9, [2014,] 10 days after the mailing of the motion. ([Code Civ. Proc.,] § 415.20, subd. (b).)" (Ibid.)

Although we held that Huang was properly served by Ping with the motion to amend the judgment, we nonetheless reversed the amended judgment. "[A]s noted above, service of plaintiff's motion was not complete until May 9[, 2014]; thus, the trial court did not acquire jurisdiction over defendant until that date. We agree with defendant that at the time of the hearing on May 5, the trial court had no jurisdiction to order defendant to file any opposition to plaintiff's motion on or before May 9." (Pan v. Huang, supra, E061462.) In addition, we concluded the trial court erred by entering the amended judgment because, after the trial court denied Huang's motion to quash, he was afforded the opportunity to challenge that order by petition for writ of mandate before filing a substantive opposition to the motion to amend the judgment. (Ibid.)

Just over a year after the remittitur issued in the first appeal, Ping filed his second motion to amend the judgment. A hearing was set for the motion on December 22, 2016. Perhaps this court should have been clearer in our holding regarding service of process or provided some directions for proceedings on remand, because Ping once again served Huang with the motion to amend the judgment by substitute service, Huang once again moved to quash service of process, and the trial court was once again under the impression that personal jurisdiction over Huang was at issue.

Huang opposed the notice of Ping's motion to amend the judgment, contending Ping's service of the motion on ACI's attorney, who purportedly did not represent Huang, was not proper substitute service. Ping responded that he merely mailed a courtesy copy of the motion to counsel. Instead, Ping argued his process server served Huang by substitute service by leaving the motion to amend the judgment with a co- occupant at Huang's residence on November 28, 2016, and serving Huang by mail on December 2. In his response, Ping expressed his mistaken belief that this court had reversed the amended judgment "on the basis that plaintiff never effectuated proper service on Kerry Huang."

Huang specially appeared at the December 22, 2016 hearing. The court's tentative ruling apparently suggested the court was prepared to rule that Ping did not properly serve Huang with the motion to amend the judgment, because Ping informed the court that he had been trying to serve Huang for three months and had spent thousands of dollars surveilling Huang.² The court clarified that its tentative ruling was that notice of the motion was not timely served. "I'm not saying you didn't properly serve him in the way you can serve somebody; it's not timely maybe. I should have put timely [in the tentative]." Ping therefore requested a continuance.

2 The transcript incorrectly refers to Huang as "Mr. Wong."

Counsel who appeared specially for Huang suggested the motion to amend the judgment should be taken off calendar "since there's no service, and he [Huang] isn't properly before the Court." The court disagreed that Huang was not properly served. "No, he was served, he was served, just wasn't in enough time." The court suggested a continuance was appropriate so Ping could provide timely notice of the hearing and provide Huang with the opportunity to respond to the merits of the motion to amend the judgment. Counsel for Huang responded that Huang had not, in fact, been properly served with the motion to amend the judgment by substitute service. "Your Honor, from the proof of service that I saw, it was delivered to an anonymously named person. I was not delivered to Mr. [Huang]." Although the trial court had apparently just expressed its belief that Huang had been properly served, the court stated Huang could contest service of process at the continued hearing date and that the court was only ruling that service was not timely. The court therefore continued the hearing to February 9, 2017.

Huang attempted to file a motion to quash, but the clerk of the superior court rejected the motion because counsel did not first reserve a hearing date. Ping's opposition to the motion to quash was also rejected, but for some reason the clerk filed Huang's reply. When asked by the trial court at the continued hearing what the basis of Huang's motion to quash was, counsel stated, "it was as to the original service." Although at the prior hearing the trial court expressly stated it was not making a ruling on whether Huang had been properly served, the court now stated the question of service of the motion to amend the judgment had already been resolved. "I think I resolve[d] that by allowing service by mail, and there was service by mail. And so I don't think there's a basis [for the motion to quash] unless there's some other basis for a motion to quash." The court directed the parties to brief whether the judgment enforcement proceedings were stayed by a pending bankruptcy and/or the pending appeal to this court from the underlying judgment. Counsel for Huang asked that the trial court also consider the motion to quash, so the court continued the hearing on Ping's motion and set Huang's motion to quash to be heard the same day.

Huang refiled his motion to quash, in which he argued Ping did not exercise reasonable diligence in attempting to personally serve Huang before resorting to substitute service on a Jane Doe at Huang's residence. In opposition, Ping argued he exercised reasonable diligence because his process server made nine unsuccessful attempts to personally serve Huang at his Corona residence before resorting to substitute service and service by mail.

Huang also filed a brief addressing the trial court's questions about the pending bankruptcy proceeding. After expressly stating he was not waiving his jurisdictional objection, Huang informed the court that he was added as a judgment debtor in the bankruptcy action and implied that the state court case was stayed. Huang also argued that, in the interests of judicial economy, the trial court should stay the proceedings until this court resolved the appeal of the underlying judgment. Ping responded that Huang was not added as a judgment debtor in the bankruptcy proceeding; Huang was merely a "designated debtor," meaning he was required to appear at a meeting of creditors as ACI's representative. In addition, Ping argued the appeal to this court of the underlying judgment did not automatically stay the judgment enforcement proceedings, and that the trial court should not exercise its discretion to enter a stay.

At the continued hearing on March 6, 2017, counsel for Huang again specially appeared and argued Huang was not properly served with the motion to amend the judgment and, therefore, the trial court lacked jurisdiction over Huang. The trial court stated it had previously concluded Huang had been properly served by substitute service and only continued the hearing on Ping's motion because the court concluded the notice of motion had not been timely served. "[T]here's a difference between proper service to acquire jurisdiction and proper service to hear a motion, and I continued it for the latter reason." Because the court was satisfied "that there was proper service upon him for the Court to acquire jurisdiction," the court denied Huang's motion to quash. Counsel for Huang requested that the trial court stay the proceedings and not rule on the motion to amend the judgment until Huang had an opportunity to challenge by writ the order denying his motion to quash. The trial court denied the request for a stay and, after further discussion of other issues, granted Ping's motion to amend the judgment.

On April 18, 2017, Huang petitioned this court for a writ of mandate, challenging the order denying his motion to quash and requesting an immediate stay. Two days later, the trial court entered an amended judgment naming Huang as a judgment debtor. Ping served and filed a notice of entry of judgment on May 1, 2017. This court summarily denied Huang's petition and request for a stay on May 15, 2017. (Huang v. Superior Court (May 15, 2017, E068139).)

Finally, Huang timely appealed from the amended judgment.

II.

DISCUSSION

In this appeal, Huang argues the trial court lacked personal jurisdiction over him because Ping did not properly serve him with the motion to amend the judgment. Specifically, Huang argues Ping did not exercise reasonable diligence in first attempting to personally serve the motion on Huang before resorting to substitute service. Because the trial court allegedly lacked jurisdiction over Huang, he challenges the trial court's orders continuing the hearing on the motion to amend the judgment and directing Ping to serve the motion by mail. As in the first appeal, Huang also argues the trial court erred by entering the amended judgment before Huang could exhaust his remedy of seeking writ review of the order denying his motion to quash.

The proceedings in the trial court following the first appeal were premised on the mistaken belief that the trial court lacked personal jurisdiction over Huang. As stated, Ping was under the impression that we reversed the amended judgment because he did not properly serve Huang. Huang was under the same mistaken impression, because when Ping served the motion to amend the judgment on Huang by substitute service, Huang objected, made a special appearance, and moved to quash service of process. The trial court was also under the same mistaken belief that personal jurisdiction was at issue because it concluded Ping's re-service of the motion was effective and vested the court with personal jurisdiction over Huang. In reality, Ping's efforts (and expense) to re-serve Huang and Huang's special appearances and motion to quash were all legal nullities.

To repeat, in the first appeal we agreed with Huang that service of Ping's first motion to amend the judgment was not perfected until after the court ordered Ping to serve the motion by mail and directed Huang to file a substantive response. "[S]ervice of plaintiff's motion was not complete until May 9, [2014]; thus, the trial court did not acquire jurisdiction over defendant until that date. We agree with defendant that at the time of the hearing on May 5, the trial court had no jurisdiction to order defendant to file any opposition to plaintiff's motion on or before May 9." (Pan v. Huang, supra, E061462, italics added.) We also agreed with Huang that the trial court erred by granting the motion during the safe harbor period set forth in Code of Civil Procedure section 418.10, subdivision (c), when Huang was afforded the right to challenge the denial of his motion to quash by writ petition before he was required to answer or file a responsive pleading. (Pan v. Huang, supra, E061462.) But we very clearly concluded Ping did, in fact, properly serve Huang. "We conclude the trial court did not err in finding that defendant was properly served. Such service was complete on May 9, [2014], 10 days after the mailing of the motion. ([Code Civ. Proc.,] § 415.20, subd. (b).)" (Ibid., italics added.)

"Except as otherwise provided by statute, the court in which an action is pending has jurisdiction over a party from the time summons is served on him . . . ." (Code Civ. Proc., § 410.50, subd. (a).) "Jurisdiction of the court over the parties and the subject matter of an action continues throughout subsequent proceedings in the action." (Id., subd. (b).) Once a party is properly served, "service of subsequent pleadings and papers can be by less formal means. [Fn. omitted.] [Citations.]" (In re Jennifer O. (2010) 184 Cal.App.4th 539, 547-548.) Although we reversed the amended judgment, our reversal in no way divested the trial court of personal jurisdiction over Huang and nothing in our opinion or disposition suggested that Ping was required to reattempt service.

In response to this court's invitation to submit supplemental briefs, the parties agree that our holding that Huang was properly served is law of the case. "'Under the doctrine of the law of the case, a principle or rule that a reviewing court states in an opinion and that is necessary to the reviewing court's decision must be applied throughout all later proceedings in the same case, both in the trial court and on a later appeal.' [Citations.]" (Water Replenishment Dist. of Southern California v. City of Cerritos (2012) 202 Cal.App.4th 1063, 1070-1071.)³ Because the trial court already had personal jurisdiction over Huang, the trial court properly denied Huang's second motion to quash. (See Cape Concord Homeowners Assn. v. City of Escondido (2017) 7 Cal.App.5th 180, 193 ["Generally, 'we will affirm a judgment or order if it is correct on any theory of law applicable to the case, even if it is right for the wrong reasons.'"].)

3 Because we resolve the jurisdictional issue based solely on the doctrine of law of the case, we need not address Ping's arguments regarding the propriety of this appeal or his argument that our summary denial of Huang's latest petition challenging the denial of his motion to quash is res judicata. Therefore, we deny as moot Ping's request for judicial notice that is tied to those arguments.

Huang nonetheless suggests application of law of the case to affirm the amended judgment would be unfair because Huang never had the opportunity to contest the merits of Ping's motion to amend the judgment. True, "the doctrine of law of the case which has been recognized as being harsh is merely a rule of procedure and does not go to the power of the court. It will not be adhered to where its application will result in an unjust decision. [Citations.]" (Clemente v. State of California (1985) 40 Cal.3d 202, 212.)

As noted, the parties and the trial court in this case acted under the assumption that personal jurisdiction over Huang was still at issue following the first appeal. Based on that mistaken assumption, Huang was careful not to make a general appearance by addressing the substantive merits of the motion to amend the judgment. In a normal case, where a defendant challenges service of summons and complaint, the trial court is not permitted to rule on the merits of the complaint immediately after denying a motion to quash. The defendant must first be permitted to file a responsive pleading. (McClatchy v. Coblentz, Patch, Duffy & Bass, LLP (2016) 247 Cal.App.4th 368, 375-376, citing Nelson v. Horvath (1970) 4 Cal.App.3d 1, 4-5.) The same applies here. Once the trial court denied Huang's second motion to quash, the trial court should not have proceeded to rule on Ping's motion to amend the judgment. Instead, the court should have permitted Huang the opportunity to file a substantive response to the motion to amend the judgment. By granting the motion to amend the judgment and entering an amended judgment without permitting Huang to first address the merits of Ping's motion, the trial court erred.⁴

4 Because Huang's second motion to quash was a nullity, we doubt whether its denial triggered the safe harbor period during which the denial may be challenged by writ petition. In any event, we need not address Huang's argument that the trial court erred by entering the amended judgment during that period.

As noted, but for the parties' settlement and request for dismissal of this and the related appeal, which we grant, we would have reversed and remanded for the trial court to permit Huang to submit a substantive response to Ping's motion to amend the judgment. Because the trial court already had personal jurisdiction over Huang, notice of the hearing would have been may be given in the manner for a noticed motion. (In re Jennifer O., supra, 184 Cal.App.4th at pp. 547-548.) "The trial court is not required to hold an evidentiary hearing. [Citation.] Evidence in the form of declarations or deposition testimony is sufficient." (Wells Fargo Bank, N.A. v. Weinberg (2014) 227 Cal.App.4th 1, 9.) And, Ping would have borne the burden of proving Huang's alter ego status by a preponderance of the evidence. (Evid. Code, § 115; Wollersheim v. Church of Scientology (1999) 69 Cal.App.4th 1012, 1014, 1015-1018.)

III.

DISPOSITION

The appeal is dismissed. In the interest of justice, the parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

McKINSTER

Acting P. J. We concur: MILLER

J. FIELDS

J.