Opinion
E063980
01-11-2017
RIVER CITY FINANCIAL, LLC., Plaintiff and Respondent, v. LUDIMA WELSHER, Defendant and Appellant.
Ludima Welsher, in pro. per., for Defendant and Appellant. Nelson & Kennard, Robert Scott Kennard and Scott Davidson Dyle 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. CIVDS1502039) OPINION APPEAL from the Superior Court of San Bernardino County. Michael A. Sachs, Judge. Affirmed. Ludima Welsher, in pro. per., for Defendant and Appellant. Nelson & Kennard, Robert Scott Kennard and Scott Davidson Dyle for Plaintiff and Respondent.
The trial court renewed River City Financial, LLC's (RCF) judgment against Ludima Welsher (Ludima). The trial court denied Ludima's motion to vacate renewal of the judgment. (Code Civ. Proc., § 683.170.) Ludima contends the trial court erred by denying her motion to vacate because (1) evidence does not support renewal of the judgment; (2) RCF did not establish compliance with the Fair Debt Collection Practices Act; (3) RCF perpetrated fraud upon the court; (4) San Bernardino County was the improper venue for the case; (5) the debt at issue was incurred by Ludima's former spouse, Marc Welsher (Marc); (6) Marc was not properly served with the complaint; (7) Ludima was coerced into signing the settlement agreement; (8) Ludima's rights of due process and equal protection were violated; and (9) the renewed judgment is an illegal penalty. We affirm the order denying the motion to vacate.
We use first names for the sake of clarity, due to two people with the last name of Welsher being involved in the facts of this case.
FACTUAL AND PROCEDURAL HISTORY
Ludima was an authorized user of Marc Welsher's (Marc) Discover credit card. Ludima and Marc divorced on June 22, 2000. As part of the divorce proceedings, Marc was ordered to pay "all the credit card debt owed to Discover."
In January 2001, Discover sold credit card accounts to New Vision Financial, LLC. In November 2002, New Vision Financial, LLC sold the accounts to RCF. On July 28, 2003, RCF sued Ludima and Marc for the principal amount of $14,372.37 plus 10 percent interest "per annum from 4/30/01." Ludima filed an answer in December 2003. In February 2004, a default judgment, without any damages listed, was entered against Marc.
In June 2004, Ludima settled with RCF. Ludima agreed she owed a total of $23,101.91, which was comprised of $14,372.37 of principal; $7,482.54 in interest; $247 for court costs; and $1,000 for attorney's fees. Ludima also agreed to pay interest at the rate of 10 percent per annum. The parties agreed a judgment would not be entered if Ludima paid the compromise sum of $10,000, plus interest, in the form of $1,000 due in June 2004, and $100 due monthly. The parties further agreed that if Ludima missed a monthly payment, then a judgment for the full amount owed, plus interest, could be immediately entered. An attorney for Ludima signed-off on the form, but not the content, of the settlement agreement. Ludima paid $1,500, but did not make a payment after October 2004.
In March 2005, RCF filed an ex parte application to have a judgment entered against Ludima because Ludima failed to make the agreed-upon monthly payments. RCF sought a judgment in the amount of $22,218.37. In April 2005, Marc was dismissed from RCF's lawsuit, and the trial court entered a judgment against Ludima for $22,218.37. In January 2009, Marc committed suicide.
In February 2015, RCF applied to the trial court to renew the judgment against Ludima. The trial court renewed the judgment in the amount of $43,757.81, with $22,024.62 for principal, $21,703.19 for interest, and $30 for costs. In March 2015, Ludima moved the trial court to vacate the judgment. Ludima asserted the judgment against her was void because (1) it violated the statute of limitations; (2) did not take into account her divorce from Marc; and (3) was not supported by evidence that Ludima owed the debt.
RCF opposed Ludima's motion. RCF asserted the renewed judgment resulted from Ludima defaulting under the terms of the settlement agreement, and Ludima had consented to the settlement agreement, so her arguments failed. Ludima filed a reply. Ludima asserted the trial court lacked subject matter jurisdiction, that Marc had not been properly served, that she was coerced and intimidated by RCF, that there was no evidence she owed the debt, and the statute of limitations had been exceeded.
On June 8, 2015, the trial court held a hearing on the motion to vacate. The trial court explained Ludima could argue why the judgment should not be renewed, but that it was too late to argue why the original judgment was incorrect. (Code Civ. Proc., § 683.170.) Ludima explained that years after her divorce from Marc she was sued by RCF. Ludima argued that the debt on the Discover card was incurred by Marc. Ludima explained that at the time RCF's complaint was filed, she believed she would go to jail and her four children would be removed from her custody if RCF obtained a judgment against her.
The trial court explained that Ludima consented to the settlement agreement, and the law permitted RCF to seek renewal of the judgment that resulted from Ludima's default under the settlement agreement. Ludima asserted she received no benefit from the settlement. The trial court said the benefit was that "the lawsuit went away." Ludima argued the lawsuit exceeded the statute of limitations. The trial court explained Ludima should have raised those issues when she was sued, and that she could not raise them 10 years after the lawsuit.
The trial court said, "And I'm denying that motion [to vacate]. It's too late. The arguments you're making now should have been raised a long time ago. You shouldn't have signed the judgment if you weren't sure about it. You should have talked to an attorney." The trial court referred Ludima to the bar association's attorney referral service to possibly receive pro bono legal help with "perhaps . . . get[ting] out from under this [judgment]."
DISCUSSION
A. LAW
Code of Civil Procedure section 683.170, subdivision (a), provides, "The renewal of a judgment pursuant to this article may be vacated on any ground that would be a defense to an action on the judgment, including the ground that the amount of the renewed judgment as entered pursuant to this article is incorrect, and shall be vacated if the application for renewal was filed within five years from the time the judgment was previously renewed under this article."
The foregoing subdivision has been explained as follows: "Section 683.170 . . . addresses renewed judgments. It allows a judgment debtor to oppose a renewed judgment by establishing a defense to an action on the judgment. [Citations.] A successful motion under section 683.170 vacates only the renewal of the judgment thereby precluding its extended enforceability under section 683.120." (Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal.App.4th 195, 203-204.) We review the trial court's ruling to determine if the court abused its discretion. (Id. at p. 199.)
B. LACK OF EVIDENCE
Ludima contends the trial court erred by renewing the judgment because no evidence was submitted establishing a contract had been formed. We interpret this argument as asserting evidence of the settlement agreement and/or other evidence showing the debt and new amount owed was not submitted in support of renewing the judgment.
The record on appeal does not include RCF's application for renewal of the judgment. The application for renewal of the judgment was filed on February 10, 2015, according to the register of actions. The record begins on March 2, 2015, with Ludima's motion to vacate the judgment. Because RCF's application is not in the record, we cannot determine if evidence was attached to the application. Due to the inadequate record, we must conclude the trial court did not err. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295-1296.)
C. FAIR DEBT COLLECTION PRACTICES ACT
Ludima contends the trial court erred by not requiring RCF to show compliance with the Fair Debt Collection Practices Act (FDCPA). "The FDCPA generally prohibits a 'debt collector' from 'us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt' (15 U.S.C. § 1692e) . . . ." (Alborzian v. JPMorgan Chase Bank, N.A. (2015) 235 Cal.App.4th 29, 36.)
As set forth ante, RCF's application is not included in the record. Therefore, to the extent RCF bears a burden of showing compliance with the FDCPA (see Crockett v. Rash Curtis & Associates (2013 N.D. Cal.) 929 F.Supp.2d 1030, 1033 [violation of FDCPA must be proven (as opposed to compliance)]), we cannot review the issue because the record is inadequate (Maria P. v. Riles, supra, 43 Cal.3d at pp. 1295-1296). Without the application we have no means of determining whether RCF established compliance with the FDCPA.
D. FRAUD ON THE COURT
Ludima contends her motion to vacate should have been granted because RCF perpetrated a fraud on the court by filing false declarations and not providing proof of the debt and judgment. Ludima provides only one record citation in support of her argument, which is to nearly all of RCF's filings contained in this record, as well as Ludima's own motion to vacate. Ludima does not specifically identify which portion of the filings are allegedly fraudulent. Without precise descriptions of the alleged fraud, this court cannot review the issue. (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 [fraud must be pled specifically]; see also Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 545-546 [appellate court will not search the record for errors].)
E. VENUE
Ludima contends San Bernardino County was the improper venue for the case. Ludima resides in Mentone. Mentone is within San Bernardino County. Because Ludima is a resident of San Bernardino County, venue in San Bernardino County is proper. (Code Civ. Proc., § 395, subd. (a) [superior court in the county where a defendant resides is the proper court to commence the action].)
On our own motion we take judicial notice of the fact that Mentone is located within San Bernardino County. (Evid. Code, § 452, subds. (g) & (h).) --------
F. SEPARATE PROPERTY
Ludima contends the debt at issue was incurred as Marc's separate property. Contrary to Ludima's position, the debt at issue was incurred when Ludima consented to the settlement agreement. The divorce was finalized in June 2000. The settlement agreement was signed in 2004. Given that the settlement agreement was created years after the divorce and signed only by Ludima, we are not persuaded that the debt resulting from the settlement agreement was Marc's separate property. (Fam. Code, § 770, subd. (a)(2) [separate property].)
G. SERVICE
Ludima contends the trial court erred by denying her 2015 motion to vacate because the 2003 complaint was not served on Marc. Marc was dismissed from the lawsuit in 2005. Ludima fails to explain how the lack of service on a defendant who was dismissed from the lawsuit means the trial court erred. Therefore, we conclude the trial court did not err. (See Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852 [appellant must provide an argument and legal authority to support her contentions].)
H. DURESS
Ludima contends she was coerced into signing the settlement agreement. Statutory duress consists of unlawful confinement or detention. (Civ. Code, § 1569.) "In addition to statutory duress, the law recognizes the concept of economic duress as a basis for vitiating a coerced party's consent to an agreement. [Citation.] Economic duress does not necessarily involve an unlawful act, but may arise from an act that is so coercive as to 'cause a reasonably prudent person, faced with no reasonable alternative, to agree to an unfavorable contract.'" (Tarpy v. County of San Diego (2003) 110 Cal.App.4th 267, 277.)
A party that entered into a contract under duress may seek to rescind the contract. (Civ. Code, § 1691.) When the party seeking to rescind is free from duress and aware of her right to rescind, she must promptly (1) give notice of rescission to the other contracting party, and (2) restore to the other party everything of value that has been received under the contract. (Civ. Code, § 1691.) There is nothing indicating Ludima has sought to rescind the settlement agreement. There is also a lack of facts indicating when Ludima realized that she would not be subject to jail or having her children removed if she failed to pay the credit card debt, i.e., when Ludima realized she had been coerced.
In sum, to the extent Ludima was coerced, it does not appear she has sought the remedy of rescission, and therefore, we conclude the trial court did not err by denying Ludima's motion to vacate renewal of the judgment.
I. DUE PROCESS AND EQUAL PROTECTION
Ludima contends her constitutional rights of due process and equal protection were violated when she was "intimidated and coerced" into signing the settlement agreement, thereby waiving her right to a trial. As explained ante, Ludima has not sought to rescind the settlement agreement. A settlement agreement is presumptively valid, and Ludima is bound by the agreement unless it is rescinded. (Village Northridge Homeowners Assn. v. State Farm Fire and Cas. Co. (2010) 50 Cal.4th 913, 930.) Thus, we must presume Ludima wanted to waive her right to a trial when she entered into the settlement agreement. Accordingly, we conclude the trial court did not err.
J. ILLEGAL PENALTY
Ludima contends the renewed judgment amount of $43,757.81 is an illegal penalty.
"[A] provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made." (Civ. Code, § 1671.)
"In interpreting this statute, our Supreme Court has noted: 'A liquidated damages clause will generally be considered unreasonable, and hence unenforceable under section 1671 [, subdivision] (b), if it bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach. The amount set as liquidated damages "must represent the result of reasonable endeavor by the parties to estimate a fair average compensation for any loss that may be sustained." [Citation.] In the absence of such relationship, a contractual clause purporting to predetermine damages "must be construed as a penalty."'" (Greentree Financial Group, Inc. v. Execute Sports, Inc. (2008) 163 Cal.App.4th 495, 499.) Whether a contract term should be treated as a liquidated damages provision or an unenforceable penalty is a question of law subject to de novo review. (Ibid.)
In 2003, RCF sued Ludima for $14,372.37 of principal, plus late charges, and interest at a rate of 10 percent per annum going back to April 30, 2001. In the settlement agreement, Ludima agreed she owed $23,101.91, which consisted of $14,372.37 of principal, $7,482.54 in interest, $247 in court costs, and $1,000 for attorney's fees. Ludima agreed that if she defaulted, then she would be liable for the full debt plus 10 percent per annum interest.
When Ludima defaulted, RCF gave Ludima credit for the $1,500 in payments she had made. RCF was granted a judgment in the amount of $22,218.37 in April 2005. In February 2015, when RCF sought renewal of the judgment, the amount owed was $43,757.81. We do not have RCF's application in the record, but we presume no payments have been made and the amount has increased due to interest and possibly late fees.
It appears from the record that the amount of money in the renewed judgment is directly tied to the principle and interest rate that Ludima agreed she owed. There is no speculation of damages. Ludima agreed she owed RCF a certain amount, and the interest has accrued on that amount while Ludima has been in default. Thus, there is a reasonable relationship between the amount owed and the damages that occurred. As a result, we conclude the renewed judgment is not an illegal penalty.
K. TYPOGRAPHICAL ERROR
As an aside, we note there may be a typographical error in the principal amount of the renewed judgment. When the judgment was renewed, the amount of principal was listed as $22,024.62 and the interest was listed as $21,703.19. Given the history of the case and debt, it seems the amount of principal is incorrect. In 2005, when the judgment of $22,218.37 was entered, it included the principal amount of $14,372.37 and approximately $7,000 in interest. Thus, we infer it is unlikely the principal is $22,024.62, rather, that amount includes both principal and interest. However, because the record does not include RCF's application for renewal of the judgment, we cannot assess whether this is an error or whether intervening events occurred in the past 10 years that caused the math to change. Thus, we note the possibility of the error, but do not direct any corrections to occur.
DISPOSITION
The order denying Ludima's motion to vacate is affirmed. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER
J. We concur: HOLLENHORST
Acting P. J. McKINSTER
J.