Alberts v. Etess

Filed 4/23/07 Alberts v. Etess CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from orders of the Superior Court of Orange County, Dennis S. Choate, Judge. Affirmed.

David E. Rosenbaum for Defendant and Appellant.

Edward H. Cummings and Law Offices of Edward H. Cummings for Plaintiffs and Respondents.

* * *

Genny Alberts and American Development Company filed complaints against M. Hank Etess and others for malicious prosecution, and obtained default judgments against Etess for $132,779. After more than 6 months had passed, Etess moved to set aside the default judgment, claiming the plaintiffs failed to serve a statement of damages and service of the summons and complaint was defective. The trial court granted Etesss motion. Subsequently, Alberts and ADC filed a motion for new trial, seeking to set aside the order setting aside the default on the grounds that the trial court had no power to change a default judgment after it became final. The trial court granted the motion, and Etess appeals. We affirm.

FACTS

Alberts and American Development Corporation each filed a complaint for malicious prosecution against the officers of National Foundation for Housing, Inc., Richard Kennedy, and Ted Mason; as well as its attorneys, David Rosenbaum, Hank Etess, Casey Yim, and Pivo, Halbreich, Cahill and Yim. Albertss complaint, filed on June 12, 2003, alleged Alberts had incurred costs, expenses and attorneys fees to defend herself in the sum of $115,000.00 and [she] has been damaged thereby. The prayer specifically requested $115,000 in damages and also requested unspecified awards of compensatory damages; damages for emotional distress, mental suffering, and damage to reputation; and punitive damages, all in amounts to be proved at trial. American Developments complaint, filed on September 5, 2003, alleged it had incurred costs, expenses and attorneys fees to defend itself in an amount in excess of $150,000.00, the exact amount to be proved at trial and [American Development] has been damaged thereby. The prayer requested damages in an amount in excess of $150,000.00, and also requested awards of compensatory and punitive damages in amounts to be proved at trial.

Both complaints were based on the previous filing and prosecution of a cross-complaint against Alberts and American Development by National Foundation for Housing, Inc., alleging, inter alia, fraud and racketeering. American Development successfully moved for summary judgment on the cross-complaint, and Alberts was dismissed.

On August 19, 2003, Alberts served Etess with her summons and complaint by leaving copies with the receptionist at Etesss office in South Pasadena. Copies were also mailed to Etess at the same address on August 20. Etess failed to answer the complaint, and his default was entered on October 3, 2003.

On January 6, 2004, American Development served its summons and complaint on Etess by personally delivering the copies to his residence in Pasadena. Etess failed to answer the complaint, and his default was entered on March 22, 2004.

In the meantime, Yim and Kennedy filed anti-SLAPP motions to strike the complaints under Code of Civil Procedure section 425.16,^[1]and Rosenbaum filed a request for joinder in the motions. The minute order granting the motions was dated January 29, 2004. In granting Rosenbaums motion for joinder, the court commented that the default of defendant David Rosenbaum [is] moot at this point due to the defendant being allowed to file a motion for joinder to motion by Yim . . . in this case. . . .  Request to have default of defendant David Rosenbaum stricken [is] granted. The formal order granting the motions was entered on March 15, 2004.

In April 2004, Etess was served with a Notice of Case Management Conference and Default Prove-up Hearings re: Defendants M. Hank Etess and Ted Mason at his Pasadena address. By this time, the Alberts and American Development cases were consolidated, and the request for default judgment was made on behalf of both plaintiffs. The declaration in support of the request for default judgment explained that the plaintiffs were asking for judgment in the amount of $115,000, based on an attorney fee award by Judge Derek Hunt in favor of American Development on the underlying cross-complaint in January 2003. Plaintiffs also requested prejudgment interest on the attorney fee award in the amount of $16,291.67, and costs in the amount of $1,487.68, for a total requested default judgment of $132,779.35. The trial court entered default judgment in the requested amount on June 15, 2004. Etess was sent a notice of entry of judgment on June 17.

On September 16, 2004, Etess moved to set aside the defaults and default judgments and to quash service of summons, contending that service of process on him was defective and that he had the same grounds to move to strike the complaints under Code of Civil Procedure  425.16 as did the other defendants . . . . His motion was denied without prejudice on December 2, 2004. In February 2005, Etess filed further motions to set aside the defaults and quash service of summons. On March 3, the trial court granted his motions based on its conclusion that the granting of the anti-SLAPP motions in favor of Etesss co-defendants inured to Etesss benefit, precluded the entry of a default judgment against him, and compelled judgment in Etesss favor. On April 12, 2005, the court entered an order that vacated the default and default judgment against Etess and entered judgment in favor of Etess against Alberts and American Development.

Alberts and American Development filed a timely motion to vacate the judgment setting aside the default judgment and for a new trial (Code Civ. Proc.,  663, 657), on the grounds that the trial court could not correct a judicial error by setting aside the default judgment after it had become final. On June 9, 2005, after being convinced that it could not revisit a judgment where the time for direct attack had passed, the court granted the motion for new trial and set aside the judgment setting aside the default judgment. Etess filed a timely appeal from the June 9 judgment.^[2]

DISCUSSION

Etess points out that the trial courts order of June 9, 2005, granting the motion for new trial, did not specify the grounds upon which it was granted, as required by Code of Civil Procedure section 657. While this omission by the trial court renders the order defective, it is not void. (Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 900; Thompson v. Friendly Hills Regional Medical Center (1999) 71 Cal.App.4th 544, 550.) On appeal, we will affirm the order if it should have been granted upon any ground stated in the motion, whether or not specified in the order . . . . (Code Civ. Proc.,  657.)

The motion for new trial stated that it was made on all the statutory grounds listed in section 657. The record supports the granting of a new trial on the grounds that the order was against law (Code Civ. Proc.,  657(6)).

As in the case of any other judgment, once a default judgment is entered, the trial court cannot change it other than to correct clerical error.^[3]Judicial error, i.e., an erroneous decision, can only be rectified by the regular procedures for attack on judgment: motion for a new trial, motion to vacate judgment, appeal, or an independent action in equity. [Citations.] (7 Witkin, Cal. Procedure (4th ed. 1997) Judgment,  67, pp. 594-595.) Once the time for such attacks has passed, the judgment, then final, is immune from direct attack. (McKee v. National Union Fire Ins. Co. (1993) 15 Cal.App.4th 282, 285.)

The default judgment against Etess was entered on June 15 and mailed on June 17, 2004. Three months passed before Etess even attempted to set aside the judgment; by that time, however, it was final. Both a motion for new trial and a motion to set aside the judgment must be made within 15 days of the date the clerk mails notice of entry of judgment. ( 659 & 663a.) An appeal must be filed within 60 days. (Cal. Rules of Court, rule 2.) Thus, the default judgment was final on August 16, 2004.

Etess contends the trial court had the power to set aside the default against him because it was entered through inadvertence, thus constituting clerical error. He argues the trial court overlooked the fact that his co-defendants had prevailed on the special motions to strike, then overlooked the case law holding that a judgment cannot be entered against a defaulting defendant where a jointly liable co-defendant asserts a defense that would exonerate the defaulting defendant. (Mirabile v. Smith (1953) 119 Cal.App.2d 685, 689.)

Etess confuses clerical error with judicial error. Clerical error is where the judge intends to render judgment in a particular way, but inadvertently does not. Judicial error is where the judge renders judgment as intended, but mistakenly reaches the wrong conclusion. The distinction between clerical error and judicial error is whether the error was made in rendering the judgment, or in recording the judgment rendered. [Citation.] (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1238.) If there was error in rendering the default judgment against Etess, it was most certainly judicial error rather than clerical. The trial court was aware of the successful anti-SLAPP motions by Etesss co-defendants, yet it intended to enter the default against Etess. If it was mistaken about the law relating to Etesss co-defendants, that is judicial error.

Etess argues the principle of finality of judgments does not apply to a judgment entered in the exercise of a discretionary power not based on the merits of the action. (Key System Transit Lines v. Superior Court (1950) 36 Cal.2d 184, 187.) He contends the default judgment against him was discretionary because he was one of several co-defendants. This argument fails.

Section 579 provides: In an action against several defendants, the Court may, in its discretion, render judgment against one or more of them, leaving the action to proceed against the others, whenever a several judgment is proper. This procedure applies where the defaulting defendant has a co-defendant who is still in the case. [T]he procedure under section 579 . . . is fitted to cases in which one defendant has defaulted, or the case as to him has been tried, and another has answered, and the case as to him has yet to be tried. (AMF Pinspotters, Inc. v. Peek (1970) 6 Cal.App.3d 443, 446.) The trial court here had no discretion, but was required to enter a default judgment after the prove-up hearing. (Code Civ. Proc.,  585, subd. (b).) Furthermore, unlike Key Transit Systems, the default judgment had become final long before the trial court attempted to set it aside.

Etess contends the default judgment could be set aside under section 473, subdivision (d), which authorizes the trial court to set aside any void judgment or order. He argues the default judgment was void because he was not served with a statement of damages as required by section 425.11.

Section 425.11 applies to an action for personal injuries or wrongful death and was passed concurrently with the amendment to section 425.10 that prohibits stating the amount demanded in the complaint filed in such an action. Section 425.11 was enacted to satisfy the due process requirement that defendants be apprised of their exposure before a default may be taken. (Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1302.) Etess insists that malicious prosecution is an action for personal injuries and falls within section 425.11; he points out that Alberts^[4]prayed for damages for emotional distress and mental suffering, and for damages to and loss of reputation, which are indisputably personal injuries.

A cause of action for malicious prosecution may include a prayer for damages to personal interests. In recognition of the wrong done the victim of such a tort, settled law permits him to recover the cost of defending the prior action including reasonable attorneys fees [citations], compensation for injury to his reputation or impairment of his social and business standing in the community [citations], and for mental or emotional distress [citations]. (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 51.) Alberts included a prayer for emotional distress damages and injury to her reputation, but the gist of her action was to recover the costs of defense. The Supreme Court has stated, Where an emotional distress claim is incidental to the cause of action, the cause of action will not be considered an action to recover damages for personal injury. [Citation.] (Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428, 432.)

Even if the complaint could be considered one for personal injuries, the default was not void because the amount of damages did not exceed the amount stated in Albertss complaint. In a personal injury case resulting from a dog bite, the complaint requested $30,000 in general damages; no statement of damages was served. (Uva v. Evans (1978) 83 Cal.App.3d 56, 359-360.) A default judgment was entered, awarding the requested amount. The court rejected the defendants claim that the failure to serve a statement of damages precluded an award of personal injury damages on a default. Right or wrong, the complaint filed and served herein did contain a recitation of the damages sought and the judgment did not exceed the amount requested. In this case, section 580 [setting forth the requirements to enter a default] was fully complied with. (Id. at p. 360-361.) Etess received notice that Alberts was seeking $115,000 for the cost of defending the cross-complaint. That is what she received in the default judgment.

Etesss final contention is that the default judgment could have been set aside under section 473.5, which allows a defaulted party to move to set aside the default [w]hen service of a summons has not resulted in actual notice . . . in time to defend the action . . . . ( 473.5, subd. (a).) The motion must be made within 180 days after service of the notice of entry of default.

Etess was served with a notice of entry of default on June 17, 2004. The motion to set aside the default was not filed until February 2005, two months too late. Furthermore, Etess did not make a showing of lack of actual notice. The trial court specifically found he had been served and had actual notice of the complaints.

DISPOSITION

The orders granting new trials and setting aside the judgments that had set aside the defaults are affirmed. Respondents are entitled to costs on appeal.

SILLS, P. J.

WE CONCUR:

ARONSON, J.

FYBEL, J.

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^[1] All statutory references are to the Code of Civil Procedure.

^[2] Etess also appeals from orders denying his motions for new trial, which challenged the June 9 order. But these orders are subsumed by the appeal from the order itself. (Code Civ. Proc., 906.)

^[3] A default judgment can be set aside within six months of its entry under section 473, subdivision (b), if the defendant shows the default was taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Etess did not move for relief from default on these grounds.

^[4] ADC could not recover emotional distress or mental suffering damages; it prayed for punitive damages in a sum to be proved at trial.