Snyder Trust Enterprises v. Fuchs

Filed 7/25/06 Snyder Trust Enterprises v. Fuchs CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

This is the second appeal arising from a cross-complaint for indemnity in an action brought by a third party to foreclose a mechanic's lien. The cross-complainants, Snyder Trust Enterprises, John Poppin, Margaret Anne Poppin, and 706 Sansome Properties (hereafter collectively Owners) were the owners of the underlying building. The cross-defendants included prospective tenants of the building, WorldPoint Interactive, Inc., a Delaware corporation (hereafter WorldPoint), and Massimo Fuchs, the president of WorldPoint (hereafter Fuchs). Both appeals concern an attempted service of the cross-complaint. In the earlier appeal[1], we reversed an order denying the motion of WorldPoint Interactive Inc., to quash service of summons and set aside a default judgment. Owners now appeal an order granting a similar motion, filed by Fuchs after the decision in the earlier appeal, to quash service of process against him individually and set aside the default judgment as it applies to him. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In 1999, Owners leased an unreenforced masonry building in San Francisco to WorldPoint for an eight-year term and entered into a contract with Eicon, Inc., for seismic upgrade of the building. The lease specified that the lease term would begin on the date when Owners would be able to deliver possession of the building. WorldPoint subsequently contracted with Eicon, Inc., for tenant improvements in the building. In April 2001, Eicon, Inc., filed suit in San Francisco Superior Court against Owners, WorldPoint, Fuchs and other parties to foreclose on its mechanic's lien and for associated damages.

In July 2001, Owners filed a cross-complaint for equitable indemnity and other causes of action against WorldPoint, Fuchs, and certain other parties. In proceedings not fully disclosed in the present record, Owners reached a settlement with Eicon, Inc., obligating Owners to pay $250,000 for work performed on the building as well as attorney fees of $42,509 and costs of $4,297. In January 2002, Owners requested entry of a default judgment on their cross-complaint against WorldPoint and Fuchs for $296,806, the amount of their settlement with Eicon, Inc. A default judgment in this amount was entered against WorldPoint and Fuchs on January 23, 2002.

In March 2002, WorldPoint was the subject of an involuntary petition for relief under Chapter 7 of the Bankruptcy Code. On October 14, 2003, the trustee in bankruptcy filed a motion to quash service of summons on the cross-complaint and set aside the default judgment against WorldPoint. The trial court denied the motion in an order that WorldPoint appealed by and through the trustee in bankruptcy. In our earlier decision filed September 30, 2004, we held that service of process on WorldPoint was invalid for failure to comply with the provisions of Code of Civil Procedure section 412.30 relating to service on a corporation.

On January 11, 2005, Fuchs moved to quash service of summons on him individually on the ground that service did not comply with Code of Civil Procedure section 412.30 and to set aside the default judgment against him. In an order filed February 25, 2005, the court granted the motion, quashed service of summons of the cross-complaint on Fuchs, and set aside the default judgment against Fuchs. Owners now appeal from this order.[2]

DISCUSSION

In the absence of a party's appearance, the service of a cross-complaint on the party must be â€