Richardson v. Wcislo

Filed 3/14/07 Richardson v. Wcislo CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION ONE

Appellant seeks reversal of an order of the trial court that set aside a default judgment due to lack of valid service of process upon respondents by publication. We find that the service of process was invalid and rendered the subsequent default judgment void for lack of jurisdiction. We therefore affirm the trial courts order that set aside the default judgment.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

Plaintiff and appellant Ronald Richardson purchased a yacht from defendant Robert Wcislo[1] in August of 1990. Respondent Rex Martin (Martin) was the broker for the transaction, and then vice-president of the yacht brokerage firm of Lampe & Martin Yachts, Ltd., (Lampe & Martin), located at 3300 Powell Street in Emeryville.[2] The yacht was repossessed in November of 1990, allegedly without a return of appellants deposit or personal possessions. In November of 1991, appellant filed the present action against respondents and Wcislo for breach of the contract for the sale of a yacht, fraud associated with the transaction, intentional infliction of emotional distress, conversion, negligence, and related causes of action.

In December of 1992, appellant filed an ex parte application for an order permitting service on respondents by publication. In support of the request for service by publication appellant recited in affidavits and exhibits the efforts undertaken to locate respondents and effectuate service of process in person or by mail.[3] First, on February 3, 1992, a process server discovered that the listed business address for Lampe & Martin at 330 Powell Street in Emeryville,[4] appeared to be vacant. A neighboring business consulted by the process server stated that Lampe & Martin had vacated the premises a week before and left no forwarding information. According to the process server, all cross directories and 411 were checked, without any alternate address listed for respondents. Others associated with the yacht transaction and acquaintances of Martin were contacted by the process server. Wcislos ex-wife advised the process server that he was currently living in Florida at an unknown address.

On April 4, 1992, appellants investigator searched for respondents without success at 1155 Embarcadero Road in Alameda, which was a prior address for Mike Lampe Yachts, Inc.[5] On the same day the investigator twice visited the business premises at 3300 Powell Street in Emeryville, but the Lampe & Martin business was not found. The investigator reported that the new resident of the premises indicated respondents business had folded and Martin had moved to Florida.

Appellants attorney Bruce Zelis contacted the California Department of Boating and Waterways the state agency that issued and monitored Martins brokers license on July 6, 1992.[6] He was given a telephone number and last known address for Martin: 3480 Buskirk Avenue, Suite 325, Pleasant Hill (the Buskirk address), the office of Martins accountant Stanley Douglas. Zelis called the telephone number provided to him by the California Department of Boating and Waterways and reached the office of Douglas.[7] Early in 1992, while Martin traveled outside the state, he arranged to have his mail forwarded to the office of his accountant Stanley Douglas at the Buskirk address, which was open during weekday office hours and regularly staffed. As instructed by Martin, Douglas regularly received mail addressed to respondents at the Buskirk address and passed it on to Martin. Martin also advised the harbor master of the Emery Cove Marina at 3300 Powell Street in Emeryville that the Buskirk address was his temporary business address, and that his home address was 3360 Sweet Drive, in Lafayette.

When Zelis called Douglass office he reached an answering service. He was told by the operator that Martin was not there, and the Buskirk address might just be a letter drop. Based upon the information he received from the answering service, appellants attorney represented in his affidavit in support of his application for service by publication that respondents were not physically located at the Buskirk address.

The order for service by publication was issued by the trial court on December 7, 1992. Appellant then published the notices in the Oakland Tribune newspaper on April 28, and May 5, 12, and 19, 1993. Proof of publication was filed on June 11, 1993.

On September 14, 1993, appellant filed a request for entry of default against all named defendants in the case. Service of the request for entry of default upon the defendants was by mail at the Buskirk address. The default was entered on September 14, 1993. Following a prove-up hearing, a default judgment was entered on October 21, 1993, in favor of appellant and against the defendants, jointly and severally, in the amounts of $20,894.98 on the contract cause of action, $45,894.98 on the tort causes of action, and $8,837.50 for attorney fees. Martin has claimed that he never received the notice of entry of default.

Nearly 10 years passed before further proceedings occurred in the case, when on October 17, 2003, appellant filed an application for renewal of the judgment. Due to the purportedly unknown residence and business addresses of the defendants, service of the renewed judgment was made upon the clerk of the court.

After the judgment was renewed, appellants attorney hired an outside service to conduct another search for the defendants. A residence address of 3360 Sweet Drive in Lafayette (the Lafayette address) was uncovered for a Bernard Rex Martin. Martin had lived continuously at the Lafayette address since 1989. He was registered to vote at that address, and his home telephone number and address were listed in the telephone directory.

After the Lafayette address was discovered, appellants attorney issued and recorded an abstract of judgment and lien notice in January of 2004, which was mailed to Martins residence by the Contra Costa County Recorders Office. Martin received the lien notice and abstract of judgment at the Lafayette address on January 15, 2004, his first notification of the present action. On February 5, 2004, an attorney named Don Arnold with the Scott Gilpin Law Office contacted appellants attorney to complain of the alleged bogus lawsuit against Martin and to assert that he would get it dismissed.

Nearly two years later appellant attempted to enforce the judgment by seeking to foreclose on Martins residence on January 23, 2006. Martin then obtained legal assistance and filed a motion to set aside the default judgment (Code Civ. Proc.,  473, subd. (d), 415.50) on April 5, 2006, on grounds that the order for service by publication was invalid. After a hearing, the trial court found that the order for service by publication was defective, and therefore the default judgment entered against respondents was void. The default judgment entered on October 21, 1993, was set aside, as was the renewal of the judgment entered on October 17, 2003. This appeal followed.

DISCUSSION

I. The Validity of the Service by Publication.

Appellant argues that the trial court erred by finding the order for service by publication defective. He maintains that he exercised reasonable diligence in attempting to locate and serve respondents, as necessary to obtain an order for service by publication. Appellant points out that Martin was out of the state for months at a time in 1992, when efforts to locate him were undertaken, and left no  usual place of business to receive service by mail. He claims that locating respondents would have taken extraordinary diligence, which is more than the law requires, and therefore the order for service by publication was valid.

We examine the requirements to invoke jurisdiction through service of process by publication with the fundamental principle in mind that [e]ssential to in personam jurisdiction to render a money judgment is notice and an opportunity to be heard in conformance with due process of law. [Citations.] [] [W]hen notice is a persons due, process which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. The reasonableness and hence the constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected, . . . Exceptions in the name of necessity do not sweep away the rule that within the limits of practicability notice must be such as is reasonably calculated to reach interested parties. [Citation.] (Donel, Inc. v. Badalian (1978) 87 Cal.App.3d 327, 332.)

[T]he governing statutes afford the plaintiff a variety of means by which to effect service upon the defendant. Service may be accomplished by means of personal delivery of the summons and complaint to a party ( 415.10), by delivery to the business office or dwelling of certain classes of parties ( 415.20, 416.10-416.90), by mailing (with an acknowledgment of receipt) to a party ( 415.30), or, if a party is out of state, by any of the preceding means or by first class mailing, requiring a return receipt ( 415.40). Finally, if service upon a party by these enumerated means proves impossible, service may be effected through publication, which must be authorized by court order. ( 415.50.) (Watts v. Crawford (1995) 10 Cal.4th 743, 748.)

Consistent with the notions of fair play and due process, substituted service by publication is provided by statute as a last resort, where reasonable diligence to locate a person in order to give him notice before resorting to the fictional notice afforded by publication has been exercised. (Donel, Inc. v. Badalian, supra, 87 Cal.App.3d 327, 332.) Pursuant to Code of Civil Procedure section 415.50,[8] summons may be served by publication, only if upon application it appears to the satisfaction of the court the party to be served cannot with reasonable diligence be served in another manner. (Kott v. Superior Court (1996) 45 Cal.App.4th 1126, 1135; see also Watts v. Crawford, supra, 10 Cal.4th 743, 748-749; Parish v. Peters (1991) 1 Cal.App.4th 202, 210-211.)[9] In order to utilize service by publication, section 415.50 requires a showing that reasonable diligence was exercised in the attempt to locate the litigant upon whom personal service is required. (Anastos v. Lee (2004) 118 Cal.App.4th 1314, 1317.) Service by publication is sufficient to meet the requirements of jurisdiction only when a persons whereabouts remain unknown despite reasonably diligent inquiry. (David B. v. Superior Court (1994) 21 Cal.App.4th 1010, 1016.)  Personal service remains the method of choice under the statutes and the constitution. [Citations.] When substituted or constructive service is attempted, strict compliance with the letter and spirit of the statutes is required. [Citation.] [Citation.] (Kott v. Superior Court, supra, 45 Cal.App.4th 1126, 1137; see also Sanford v. Smith (1970) 11 Cal.App.3d 991, 998-999.) In order to obtain in personam jurisdiction by a form of constructive service, there must be strict compliance with the requisite statutory procedures. (Tandy Corp. v. Superior Court (1981) 117 Cal.App.3d 911, 913.)

The element of reasonable diligence necessary to justify service by publication   denotes a thorough, systematic investigation and inquiry conducted in good faith . . . . [Citation.] [Citation.] (In re Christiano S. (1997) 58 Cal.App.4th 1424, 1428, fn. 3.) Before allowing a plaintiff to resort to service by publication, the courts necessarily require him to show exhaustive attempts to locate the defendant, for it is generally recognized that service by publication rarely results in actual notice. (Espindola v. Nunez (1988) 199 Cal.App.3d 1389, 1392-1393; see also Watts v. Crawford, supra, 10 Cal.4th 743, 750.) It is well established that the affidavit submitted under section 415.50 must establish reasonable diligence by probative facts based on personal knowledge. (Olvera v. Olvera (1991) 232 Cal.App.3d 32, 42.)

[T]he showing of diligence in any given case must rest on its own facts . . . . (Kott v. Superior Court , supra, 45 Cal.App.4th 1126, 1138.) In each case where the question here presented is under review the particular facts will control. No single formula nor mode of search can be said to constitute due diligence in every case. [] [I]n proceeding to avail himself . . . for constructive service of summons, a plaintiff must, in fact, have exercised due diligence. A mere formal compliance with the provisions of the statute, or a statement to that effect in his affidavit, will not suffice; nor will an order for publication based upon such an affidavit, or a judgment following a service of publication thereon, be conclusive of the fact that such diligence was exercised. [Citation.] (Donel, Inc. v. Badalian, supra, 87 Cal.App.3d 327, 333.) The question is simply whether appellant took those steps which a reasonable person who truly desired to give notice would have taken under the circumstances. (Ibid.) Whether appellant exercised reasonable diligence is a question of fact unless the error in the case turns on a question of law, so our deferential review is limited to a determination of whether there is substantial evidence to support the trial courts finding. (See Falahati v. Kondo (2005) 127 Cal.App.4th 823, 828; Stanislaus County Dept. of Child Support Services v. Jensen (2003) 112 Cal.App.4th 453, 458; Transamerica Title Ins. Co. v. Hendrix (1995) 34 Cal.App.4th 740, 742; Graf v. Gaslight (1990) 225 Cal.App.3d 291, 295; Nourafchan v. Miner (1985) 169 Cal.App.3d 746, 750-751.)

Here, the efforts of a process server and investigator disclosed that the former address for the business of Lampe & Martin at 3300 Powell Street in Emeryville was apparently no longer in use. Martin was also intermittently absent from the state during the time period appellant was seeking to serve process upon him. A legitimate current address and telephone number for Lampe & Martin was discovered, however. (Transamerica Title Ins. Co. v. Hendrix, supra, 34 Cal.App.4th 740, 744-745.) The office of Martins accountant Stanley Douglas at the Buskirk address was provided by a reliable source, the California Department of Boating and Waterways, as a location for service of process upon Martin. Despite learning of the Buskirk address, appellants attorney did not send anyone there to attempt to serve process.    Ordinarily, . . . two or three attempts at personal service at a proper place should fully satisfy the requirement of reasonable diligence and allow substituted service to be made. [Citation.]  [Citations.] (Stafford v. Mach (1998) 64 Cal.App.4th 1174, 1182.) Appellants sole effort to locate and serve Martin at the Buskirk address was by telephone call to the phone number given to his attorney on July 6, 1992, and several other undefined attempts to make contact, which reached the answering service for respondents accountants office.

The record before us indicates that conscientious efforts to serve process at the Buskirk address may very well have been successful. The office at the Buskirk address had a staff and was open during business hours. Martin had arranged to have his mail sent to the Buskirk address and forwarded to him from there. Douglas was Martins accountant and agreed to accept and dispatch mail for Martin at the Buskirk address. Nevertheless, appellant failed to pursue even moderate efforts to serve respondents either in person or by mail at the office designated for receipt of mail by Martin. Appellant ignored or at least failed to conscientiously pursue an obvious lead that held great promise for locating Martin and effectuating service. (See Kott v. Superior Court, supra, 45 Cal.App.4th 1126, 1139; Donel, Inc. v. Badalian, supra, 87 Cal.App.3d 327, 333-334.) Where the party conducting the investigation ignores the most likely means of finding the defendant, the service is invalid even if the affidavit of diligence is sufficient. (David B. v. Superior Court, supra, 21 Cal.App.4th 1010, 1016.) And, where mailing of summons is reasonably feasible, any method of service less likely to provide actual notice is insufficient. (Donel, Inc. v. Badalian, supra, at p. 332.)

Another effective method was also available for completing service of process upon Martin. His home address on Sweet Drive in Lafayette was at all times readily ascertainable through nothing more onerous than a search of the telephone book or other public directories. (Donel, Inc. v. Badalian, supra, 87 Cal.App.3d 327, 333.) Appellants remonstration that Martins home address was in Contra Costa County, while both the yacht brokerage office and the site of the transaction were in Alameda County, does not persuade us that he was therefore absolved from pursuing a likely means of locating respondents. Reasonable diligence does not depend upon geographic distances or county borders. Diligence is a relative term and must be determined by the circumstances of each case. (Vorburg v. Vorburg (1941) 18 Cal.2d 794, 797.) Martins Lafayette home was in relatively close geographic proximity to the Emeryville office, and nothing prevented appellant from discovering the residence address or serving respondents there, either personally or by mail. In fact, appellant learned of the residence address on Sweet Drive in Lafayette through an outside process server after the judgment was renewed in October of 2003, and apparently could have done so just as easily 10 years before, as Martin had lived at that location continuously with a listed telephone number since 1989.

Appellant made no reasonable effort to discover Martins residence address or to accomplish personal service there. (Olvera v. Olvera, supra, 232 Cal.App.3d 32, 43.) Although Martin was recurrently engaged in travel away from his residence while appellant was attempting to serve process, the residence was a permanent one and Martin was also often there during the time frame in question. Where, as here, for substantial periods of time the defendant was available for personal service the facts surrounding the attempts to serve the defendant must negative that any reasonable way existed to effectuate such service. (Evartt v. Superior Court (1979) 89 Cal.App.3d 795, 800.) The facts before us do not satisfy appellants burden to demonstrate that no reasonable way existed to serve defendant in person or by mail at the Buskirk address in Pleasant Hill or the Sweet Drive address in Lafayette. (Id., at p. 802.) We therefore conclude that appellant did not exercise reasonable diligence in attempting to locate Martin before seeking court approval to serve him by publication. (Kott v. Superior Court, supra, 45 Cal.App.4th 1126, 1139.) The efforts of appellant to locate and serve Martin as recited in the affidavits filed in support of the application for service by publication were deficient. The order for service by publication was therefore void, and the service of summons upon respondents was invalid. (David B. v. Superior Court, supra, 21 Cal.App.4th 1010, 1016; Olvera v. Olvera, supra, 232 Cal.App.3d 32, 43; Sanford v. Smith, supra, 11 Cal.App.3d 991, 999.)

II. The Effect of the Invalid Order for Service by Publication.

We proceed to an examination of the effect upon the judgment of the invalid service of summons upon respondents. Our inquiry commences with recognition of the unassailable premise that   compliance with the statutory procedures for service of process is essential to establish personal jurisdiction.  [Citation] (Renoir v. Redstar Corp. (2004) 123 Cal.App.4th 1145, 1152.)  Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void. [Citation.] [Citation.] Under section 473, subdivision (d), the court may set aside a default judgment which is valid on its face, but void, as a matter of law, due to improper service. (Ellard v. Conway (2001) 94 Cal.App.4th 540, 544.)

Both the default judgment and the renewal of the judgment obtained by appellant were thus void. Without proper service upon respondents by publication, the trial court had no personal jurisdiction over them, the failure to file an answer to the complaint did not constitute a default, and entry of a default judgment was void as beyond the power of the court. (Renoir v. Redstar Corp., supra, 123 Cal.App.4th 1145, 1154; Transamerica Title Ins. Co. v. Hendrix, supra, 34 Cal.App.4th 740, 747.) If service of summons was not made or was improper, and actual notice was not received, the default judgment is void for lack of personal jurisdiction. (Yeung v. Soos (2004) 119 Cal.App.4th 576, 582.) Likewise, the failure to validly serve summons upon respondents renders the renewal of the judgment void. (Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal.App.4th 195, 206-207.)

Appellant complains that respondents motion to vacate the default judgment was untimely, which was a basis to deny any relief, whether or not the order for publication was void. He points out that under section 473.5, respondents were required to seek to set aside the default judgment within two years after its entry. He adds that even if the motion for relief was based on section 473, subdivision (d), the lack of diligence or laches in moving to set aside the judgment after learning of it in January of 2004 should have defeated [respondents] claim for relief under equitable principles. Appellant also submits that respondents failed to satisfy another prerequisite for obtaining relief from default, a meritorious defense.

This is not a case where the defendant has pursued relief under section 473.5 which must be brought no later than two years after entry of the default judgment, and requires an affidavit submitted by the defendant showing under oath that his or her lack of actual notice in time to defend was not caused by inexcusable neglect or avoidance of service. (Cf., Anastos v. Lee, supra, 118 Cal.App.4th 1314, 1318-1319.).[10] Nor has the default been vacated under the inherent equitable power of the court to grant relief from default or default judgment procured by extrinsic fraud or mistake, which also demands from the moving party proof of diligence in seeking to set aside the default and a meritorious defense. (Cf., Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 290-291; Gibble v. Car-Lene Research, Inc. (1998) 67 Cal.App.4th 295, 314-315.)

Instead, without compliance with the statutory requirements for constructive service of process, the judgment is void for lack of personal jurisdiction and subject to direct or collateral attack at any time without a showing of a meritorious defense. (Estate of Estrem (1940) 16 Cal.2d 563, 572; Fidelity Creditor Service, Inc. v. Browne, supra, 89 Cal.App.4th 195, 206-207; Plaza Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal.App.4th 1, 20; Molen v. Friedman (1998) 64 Cal.App.4th 1149, 1156; Estate of Buck (1994) 29 Cal.App.4th 1846, 1854; Donel, Inc. v. Badalian, supra, 87 Cal.App.3d 327, 334-335.) Lack of personal jurisdiction renders a judgment (or default) void, and the default may be directly challenged at any time. (Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1250.) A motion to vacate a void judgment is a direct attack, and the lack of jurisdiction may be demonstrated, as it was here, by extrinsic evidence. (Strathvale Holdings v. E.B.H., supra, at p. 1249; Renoir v. Redstar Corp., supra, 123 Cal.App.4th 1145, 1154.) Any delay in seeking to vacate a judgment void for defective service of process is of no significance. (Renoir v. Redstar Corp., supra, at p.1154.)  It follows that it may be set aside on motion, with no limit on the time within which the motion must be made. [Citations.] (Ibid.) Thus, respondents motion to set aside the default judgment and the renewal of the judgment was properly

granted by the trial court. Accordingly, the order of the trial court that set aside and vacated the judgment entered against respondents is affirmed.

Respondents are awarded costs on appeal.

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Analysis and review provided by Carlsbad Property line attorney.

[1] Wcislo, the previous owner and seller of the yacht to appellant, was a named defendant in the action but is not a party to this appeal.

[2] We will refer to Martin, and Lampe & Martin collectively as respondents.

[3] The application and supporting affidavits were drafted in July of 1992.

[4] The actual listed address was at 3300 Powell Street in Emeryville. We assume this reference to 330 Powell Street is a typographical error, as all other declarations state the address as 3300Powell Street in Emeryville.

[5] Mike Lampe was then the president of Lampe & Martin, but Lampe & Martin and Mike Lampe Yachts, Inc. were not the same business entity.

[6] Appellant also filed a complaint against Martin with the California Department of Boating and Waterways that alleged violations of the Yacht and Ship Brokers Act (Harb. & Nav. Code, 700 et. seq.).

[7] In his declaration, Zelis also asserted vaguely that he made several other attempts to make contact with the defendants at this location, but failed in any way to specify the nature of those attempts. His handwritten note attached as an exhibit indicated only that the telephone number for the Buskirk address was called on July 6, 1992.

[8] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

[9] Section 415.50, subdivision (a), provides: A summons may be served by publication if upon affidavit it appears to the satisfaction of the court in which the action is pending that the party to be served cannot with reasonable diligence be served in another manner specified in this article and that either:

(1) A cause of action exists against the party upon whom service is to be made or he or she is a necessary or proper party to the action.

(2) The party to be served has or claims an interest in real or personal property in this state that is subject to the jurisdiction of the court or the relief demanded in the action consists wholly or in part in excluding the party from any interest in the property.

[10] Section 473.5 reads: (a) When service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered.

(b) A notice of motion to set aside a default or default judgment and for leave to defend the action shall designate as the time for making the motion a date prescribed by subdivision (b) of Section 1005, and it shall be accompanied by an affidavit showing under oath that the partys lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect. The party shall serve and file with the notice a copy of the answer, motion, or other pleading proposed to be filed in the action.

(c) Upon a finding by the court that the motion was made within the period permitted by subdivision (a) and that his or her lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect, it may set aside the default or default judgment on whatever terms as may be just and allow the party to defend the action.