Pavich v. Shields

Filed 6/19/07 Pavich v. Shields CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court for the County of Los Angeles, Michael J. Farrell, Judge. Reversed and remanded.

Manning & Marder Kass, Ellrod, Ramirez, Donald R. Beck and Steven J. Renick for Defendant and Appellant.

Law Office of Donald E. Chadwick and Donald E. Chadwick for Plaintiff and Respondent.

_________________________________

Rex L. Shields appeals from the trial courts order denying his motion to vacate default and to set aside the default judgment for $98,637.16 entered in favor of Mike Pavich in this action for conversion. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Complaint for Conversion and Default Judgment

On October 25, 1995 Pavich, co-owner of an airplane with Shields, filed an action for conversion against Shields and Paul Ryan, alleging Shields sold the airplane to Ryan without Pavichs consent. Pavichs complaint included a prayer for damages [f]or conversion of property according to proof and [l]oss of use of aircraft according to proof and for punitive damages.

Shieldss default was entered on December 13, 1996. After a default prove-up hearing on May 5, 1997, judgment against Shields was entered in the amount of $55,310.56: $21,250 for special damages; $14,313.56 for 10 percent interest from the date of the sale of the aircraft (August 10, 1990); $21,250 for punitive damages; $497 for costs; and a credit to Shields of $2,000 for Pavichs settlement of the action against Ryan. On April 12, 2005 Pavich filed an application for renewal of judgment, including an additional sum for interest after judgment of $43,326.60, for a total renewed judgment of $98,637.16. Pavich also obtained a writ of execution.

2. The Trial Court Denies Shieldss Motion for an Order Vacating His Default
and Setting Aside the Default Judgment

On June 14, 2005 Shields filed a motion to vacate his default and set aside the default judgment entered against him. Shields argued he was never served with the summons and complaint, he did not have either actual or constructive notice of the action and the complaint failed to give notice of the amount of damages Pavich sought. According to Shields, he first learned of the action when he received documents on June 3, 2005 from F & A Federal Credit Union, including a notice of levy on his account. The trial court denied the motion on September 14, 2005.

DISCUSSION

Code of Civil Procedure section 580, subdivision (a) provides, The relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint . . . .[1] The goal of section 580, which has been strictly construed by the courts, is to ensure that a defendant who declines to contest an action does not thereby subject himself to open-ended liability. (Greenup v. Rodman (1986) 42 Cal.3d 822, 826.) The notice requirement of section 580 was designed to insure fundamental fairness. Surely, this would be undermined if the door were opened to speculation, no matter how reasonable it might appear in a particular case, that a prayer for damages according to proof provided adequate notice of a defaulting defendants potential liability. (Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 494.) Thus, a default judgment greater than the amount specifically demanded is void as beyond the courts jurisdiction. (Greenup, at p. 826.) Where no amount of damages is demanded any amount awarded is by definition greater than the amount demanded. (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 830-831.)

As we explained in Finney v. Gomez (2003) 111 Cal.App.4th 527, 534, courts have consistently held section 580 is an unqualified limit on the jurisdiction of courts entering default judgments. A challenge to a default judgment that is void on the face of the record when entered is subject to challenge at any time irrespective of lack of diligence in seeking to set it aside within the six-month period of section 473. (Plotitsa v. Superior Court (1983) 140 Cal.App.3d 755, 761.)[2]

Citing Cassel v. Sullivan, Roche & Johnson (1999) 76 Cal.App.4th 1157, 1163 (Cassel), Pavich contends the default judgment is not void notwithstanding the complaints failure to specify the damages sought because Shields, as a co-owner of the airplane, was as capable as Pavich of calculating the amount of Pavichs interest in the airplane.[3] In Cassel Division Three of the First Appellate District held that in an action seeking to account for and value a former partners partnership interest and for payment of that interest, the complaint need only specify the type of relief requested, and not the specific dollar amounts sought. (Id. at p. 1163.) The Cassel courts holding was an extension of the Supreme Courts decision in In re Marriage of Lippel (1990) 51 Cal.3d 1160, 1169-1170, in which the Court found checking or not checking boxes indicating the type of remedy or relief requested on the mandatory standard form petition for dissolution of marriage, [c]oupled with the requirement that the respondent be served with a copy of the petition . . . informs and puts the respondent on notice of what specific relief petitioner is, or is not, seeking. The Cassel court foresaw no danger that defaulting defendants will be taken by surprise by judgments entered against them, because, like spouses facing property division, they will be in possession of the essential information necessary to calculate their potential exposure. (Cassel, at p. 1164.)

In Finney v. Gomez, supra, 111 Cal.App.4th at pages 541-542, this court decline[d] to follow the Cassel court by extending the reasoning of Lippel to reach relief afforded in an action for partition, finding the rationale of Cassel runs counter to the primary purpose of section 580 of ensuring notice and fundamental fairness. As we explained, An extension of the reasoning in Lippel beyond the unique circumstances of marital dissolution actions entails a departure from the fundamental fairness section 580 was intended to protect. Some individual cases of partition may involve a defendant possessing from the outset, all the information necessary to assess the ultimate judgment. However, in order to protect notice and fundamental fairness in all cases, such individual cases cannot lessen the requirements of section 580. Additionally, allowing damages in a default judgment to run beyond the specific amount requested places an unfair burden on defendants who do not necessarily have all the information required to calculate the risk of defaulting. (Id. at p. 541.)

The holding and analysis in Finney are equally applicable to Pavichs claim for conversion. Moreover, even were we to find an exception to section 580 is warranted when the defendant has all of the information necessary to calculate damages, this is not such a case. Pavich sought damages for, among other things, loss of use of the aircraft according to proof, an amount Shields would have no basis to calculate. Because Pavichs complaint failed to specify the damages he sought, the default judgment entered against Shields is void.[4]

DISPOSITION

The order denying Rex L. Shieldss motion to vacate his default and to set aside the judgment against him is reversed, and the cause is remanded to the trial court with directions to enter a new and different order vacating the default and setting aside the judgment and to conduct any further proceedings not inconsistent with this opinion. Rex L. Shields is to recover his costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

PERLUSS, P. J.

We concur:

JOHNSON, J.

WOODS , J.

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[1] Statutory references are to the Code of Civil Procedure.

[2] Pavich contends Shields has forfeited his argument, based on section 580, that the default judgment is void because the complaint fails to specify any amount of damages because it was not raised in the trial court. Although Shields did not cite section 580 in his moving papers, he did argue [f]ailure to properly serve and give formal statutory notice to Defendant of the amount of money damages plaintiff is seeking is a basis to set aside default, and cited in support of that proposition Schwabv. Southern California Gas Co. (2004) 114 Cal.App.4th 1308. The Schwab court, in turn, held [s]ection 580 is to be interpreted, in accordance with its plain language, to deprive a trial court of jurisdiction to enter a judgment against a defaulting defendant which awards greater relief than that sought in the plaintiffs complaint. (Id. at p. 1325.) This was sufficient to apprise Pavich and the trial court of Shieldss argument. Moreover, even if Shields had not raised the argument below, questions of jurisdiction are never waived and may be raised for the first time on appeal . . . . (Falahati v. Kondo, supra, 127 Cal.App.4th at p. 831, fn. 18.)

[3] Section 425.115, subdivisions (b) and (f), require a plaintiff who seeks punitive damages on a default judgment to serve a notice specifying the amount of punitive damages that will be requested before entry of the default. Pavich concedes no such statement was served on Shields and acknowledges the punitive damages portion of the default judgment is improper and may be stricken.

[4] Because it is unnecessary for us to reach Shieldss argument substituted service of the summons and complaint on him was invalid, his request for judicial notice ‑‑ which relates only to that issue ‑‑ is denied.