87 Cal.App.5th 37
Cal. Ct. App.2022Background
- Golden Properties (broker) claimed Arkesh Ventures (owner) agreed to pay a 3% commission if a tenant bought the property; tenant bought it in 2016 for $4,850,000.
- Golden demanded $145,500 commission from First American (escrow); First American initially acknowledged holding funds but did not pay; Arkesh and its president Banerjee refused to pay.
- Golden sued Arkesh and Banerjee in 2017; process server attempted personal service at a Pleasanton address then used substituted service at a Kingsmill Terrace (Dublin) address, left papers with a co-resident and mailed copies.
- Defaults entered June 2017; First American later substituted in as plaintiff and obtained default judgment against Arkesh and Banerjee in May 2020; Banerjee was personally served with a cross-complaint in Sept. 2017.
- Defendants moved to set aside the default/judgment on grounds of improper substituted service, that the complaint failed to state a claim against Banerjee (so judgment was void), and under Code Civ. Proc. § 473(b); the trial court denied relief and defendants appealed the denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of substituted service (personal jurisdiction) | Service was properly effected at Kingsmill Terrace by leaving with a co-resident and mailing thereafter; process server’s declarations and SOS listing support service. | Substituted service was improper because Banerjee did not reside at the Kingsmill Terrace address and process server’s account is not credible. | Court: No abuse of discretion; substantial evidence supports substituted service, so personal jurisdiction exists. |
| Whether default judgment is void as to Banerjee for failure to state a cause of action | Complaint alleged Banerjee acted as Arkesh’s president and alter ego and apprised him of claim; therefore judgment is not void. | Complaint did not state a cause of action against Banerjee, so default judgment is void and subject to collateral attack under § 473(d). | Court: Judgment not void. Under Christerson rule, a complaint that apprises defendant of the nature of the demand makes the judgment voidable, not void; § 473(d) relief unavailable. |
Key Cases Cited
- Christerson v. French, 180 Cal. 523 (Cal. 1919) (if complaint apprises defendant of the nature of the demand, default judgment is not void despite defects in stating a cause of action)
- Falahati v. Kondo, 127 Cal.App.4th 823 (Cal. Ct. App. 2005) (default judgment is void if court lacked jurisdiction over the parties)
- Dill v. Berquist Constr. Co., 24 Cal.App.4th 1426 (Cal. Ct. App. 1994) (default against a defendant not served as statute prescribes is void)
- Trackman v. Kenney, 187 Cal.App.4th 175 (Cal. Ct. App. 2010) (naming an unnamed person by description or ‘John Doe’ in proof of service is acceptable practice)
- Cruz v. Fagor America, Inc., 146 Cal.App.4th 488 (Cal. Ct. App. 2007) (trial court lacks authority under § 473(d) to set aside a judgment that is not void)
- People v. American Contractors Indem. Co., 33 Cal.4th 653 (Cal. 2004) (errors in excess of jurisdiction are generally voidable and should be challenged directly)
- Vasey v. California Dance Co., 70 Cal.App.3d 742 (Cal. Ct. App. 1977) (on direct appeal, default judgment reversed as to individuals where complaint failed to plead alter-ego facts)
- Grappo v. McMills, 11 Cal.App.5th 996 (Cal. Ct. App. 2017) (discussed conflicting views on whether failure to state a cause renders a default judgment void)