Monticue v. Binko Corp. CA2/2 ( 2022 )


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  • Filed 1/19/22 Monticue v. Binko Corp. CA2/2
    NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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    not been certified for publication or ordered published for purposes of rule 8.1115.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 TWO
    DEBORAH Y. MONTICUE et                                     B309983
    al.,
    (Los Angeles County
    Plaintiffs and                                        Super. Ct. No. BC661809)
    Respondents,
    v.
    BINKO CORP. et al.,
    Defendants and
    Appellants.
    APPEAL from an order of the Superior Court of Los
    Angeles County, Barbara M. Scheper, Judge. Affirmed.
    Spiegel & Utrera and Nicolas W. Spigner for Defendants
    and Appellants.
    Moran Law, Michael F. Moran and Lisa Trinh Flint for
    Plaintiffs and Respondents.
    Defendants and appellants Binko Corp., doing business as
    Bentley Manor by Serenity Care Health (Binko), and Bioseh
    Ogbechie1 appeal from an order denying their motion to set aside
    their default and to vacate the default judgment entered in favor
    of plaintiffs and respondents Deborah Monticue (Deborah) and
    Howard A. Monticue (Howard), in and through his successor-in-
    interest Deborah Monticue (collectively, plaintiffs). We affirm
    the trial court’s order.
    BACKGROUND
    On May 17, 2017, plaintiffs filed an action against Binko
    and others, alleging that Howard was admitted in January 2016
    into a residential care facility owned and operated by Binko, and
    during Howard’s stay he developed an infected stage 4 pressure
    sore on his coccyx that led to his death on August 16, 2016.
    Plaintiffs asserted causes of action for violation of the Elder
    Abuse and Dependent Adult Civil Protection Act (Welf. & Inst.
    Code, § 15600 et seq.), negligence, willful misconduct, and
    wrongful death.
    Service of complaint and 2017 statements of damages
    On May 27, 2017, plaintiffs served a copy of the summons
    and complaint on Binko’s attorney, John Valentine, Jr., at
    Valentine’s business address. Binko’s designated agent for
    service of process at that time, however, was Ogbechie, Binko’s
    sole officer.
    On August 3, 2017, plaintiffs attempted to serve on
    Valentine two separate statements of damages (the 2017
    1    Binko and Ogbechie are referred to collectively as
    defendants.
    2
    statements of damages) seeking a total of $1,320,133.29.
    Valentine was not present at his office, so the process server left
    copies of the 2017 statements of damages with a receptionist at
    the office. Later that same day, the process server mailed copies
    of the 2017 statements of damages to Valentine’s business
    address.
    Plaintiffs amended their complaint to add Ogbechie as a
    defendant on September 15, 2017. On October 12, 2017,
    plaintiffs mailed a copy of the summons and complaint, along
    with a notice and acknowledgment of receipt form, to Valentine
    at his business address. Plaintiffs subsequently received the
    notice and acknowledgment of receipt form, signed by Valentine
    and dated October 13, 2017, indicating that he was authorized to
    accept service on Ogbechie’s behalf.
    Valentine filed separate answers on behalf of Binko and
    Ogbechie on November 6, 2017, and November 21, 2017,
    respectively, as Binko’s and Ogbechie’s attorney of record.
    Valentine, Binko, and Ogbechie raised no objection to any
    possible defects in service of the summons and complaint and no
    objection to service on Binko of the 2017 statements of damages.
    Motion to compel depositions and Valentine’s motion to be
    relieved as defendants’ counsel
    Plaintiffs served deposition notices on Binko and Ogbechie
    to produce two employees who were Howard’s caregivers at
    Binko’s residential care facility. The employees failed to appear
    for their depositions, and Valentine informed plaintiffs’ counsel
    that his clients refused to produce the employees for deposition.
    Plaintiffs’ counsel proceeded with the depositions and took a
    certificate of nonappearance. On November 30, 2018, plaintiffs
    3
    moved for an order to compel Binko’s employees to appear for
    deposition and requested monetary sanctions against defendants.
    On December 3, 2018, Binko filed a statement of
    information with the California Secretary of State designating
    Valentine as its agent for service of process and listing
    Valentine’s business address as the location where he was
    authorized to accept service on Binko’s behalf.
    On December 11, 2018, Valentine filed a motion to be
    relieved as counsel for defendants. In a declaration submitted in
    support of the motion, Valentine stated that Ogbechie held a 100
    percent ownership interest in Binko and that Ogbechie was
    defendants’ contact person. Valentine further stated that
    Ogbechie had instructed him to cease working on the case; that
    he had informed Ogbechie of the consequences of not defending
    against plaintiffs’ action; that he advised Ogbechie of the option
    of retaining replacement counsel; and that as of the date of
    Valentine’s declaration, Ogbechie had not retained new counsel.
    Valentine further stated in his declaration that he had mailed
    defendants a copy of his motion to be relieved as counsel at their
    last known address, confirmed with defendants via e-mail that
    the address was current, and informed defendants of the
    upcoming motion to compel and provided them with a copy of
    that motion.
    Defendants did not file an opposition to the motion to
    compel. Valentine filed a declaration in response to the motion
    stating that he had informed Ogbechie about the deposition
    notices that were the subject of the motion to compel, and that
    Ogbechie had responded that the deponents would not appear for
    their scheduled depositions. Valentine further stated that he had
    e-mailed a copy of plaintiffs’ motion to compel to Ogbechie, who
    4
    responded with an e-mail directing Valentine to stop working on
    the case.
    On December 26, 2018, the trial court granted plaintiffs’
    motion to compel. The court ordered defendants to produce the
    two employees for deposition within 30 days and issued monetary
    sanctions against defendants in the amount of $2,948.75.
    Plaintiffs served notice of the trial court’s ruling on defendants by
    mail. Plaintiffs also served defendants with deposition notices for
    the same two employees, scheduled for January 10, 2019.
    On January 7, 2019, the trial court granted Valentine’s
    motion to be relieved as defendants’ counsel. The court’s order,
    prepared by Valentine, listed defendants’ address as 6303
    Owensmouth Avenue, 10th floor, Woodland Hills, California. The
    proof of service signed and filed by Valentine, however, indicated
    defendants’ address as “6300 Owensmouth Avenue.”
    Motion for terminating sanctions
    On January 14, 2019, plaintiffs filed a motion for
    terminating sanctions after defendants failed to produce their
    employees for deposition. Plaintiffs’ motion sought an order
    striking defendants’ answers and an order entering judgment
    against defendants.
    Plaintiffs initially served the motion for terminating
    sanctions on defendants at the incorrect “6300 Owensmouth
    Avenue” address. They subsequently corrected the mistake by
    serving defendants by mail at the correct “6303 Owensmouth
    Avenue” address. Plaintiffs filed a proof of service on January 24,
    2019, showing they had served defendants with the motion for
    terminating sanctions at the correct address. Binko’s then
    current statement of information filed with the California
    Secretary of State listed its principal executive office, principal
    5
    business office, and mailing address as “6303 Owensmouth
    Avenue.”
    Defendants did not appear at the January 25, 2019 final
    status conference. The trial court vacated the February 4, 2019
    trial date.
    Defendants filed no opposition to plaintiffs’ motion for
    terminating sanctions and failed to appear at the February 22,
    2019 hearing on that motion. The trial court granted the motion
    for terminating sanctions and ordered defendants’ answers
    stricken. The trial court set an April 23, 2019 hearing date for an
    order to show cause (OSC) re: entry of default and default
    judgment against defendants.
    Plaintiffs served defendants by mail at their 6303
    Owensmouth Avenue address with notice of the trial court’s
    ruling granting the motion for terminating sanctions and striking
    defendants’ answers.
    2019 statements of damages
    In March 2019, plaintiffs served four new statements of
    damages on defendants (the 2019 statements of damages):
    Howard’s statement of damages dated March 6, 2019 to Binko,
    seeking $1,371,012.98, which included $1 million in punitive
    damages; Deborah’s statement of damages dated March 6, 2019,
    to Binko in the amount of $753,841.45; and Howard’s and
    Deborah’s March 6, 2019 statements of damages to Ogbechie, in
    the same amounts as their March 6, 2019 statements to Binko.
    On March 6, 2019, the process server attempted to
    personally serve Binko and Ogbechie with the 2019 statements of
    damages at the 6303 Owensmouth Avenue address. The security
    guard at the address refused the process server entry to the 10th
    floor to effect personal service on defendants. The process server
    6
    left copies of the 2019 statements of damages with the security
    guard. On March 13, 2019, a second process server mailed copies
    of the March 2019 statements of damages to defendants at the
    6303 Owensmouth Avenue address.
    Entry of default
    On April 17, 2019, plaintiffs filed separate requests for
    entry of default and for default judgment against defendants.
    Copies of the requests for entry of default and default judgment
    were served by mail on defendants at the 6303 Owensmouth
    Avenue address. The superior court clerk subsequently entered
    default against defendants as of plaintiffs’ requested date—
    April 17, 2019.
    Also on April 17, 2019, plaintiffs filed with the court their
    evidence in support of their applications for default judgment.
    Copies of those documents were served by mail on defendants
    that same day.
    Defendants did not appear at the April 23, 2019 hearing on
    the OSC re: default and default judgment. The trial court
    continued the matter because it had no record that defaults had
    been entered against defendants.
    Defendants did not appear at the July 12, 2019 continued
    hearing on the OSC at which the trial court found the proposed
    judgment needed corrections and directed plaintiffs to resubmit
    the necessary documents.
    On July 29, 2019, the trial court entered judgment against
    defendants and in favor of Howard in the amount of
    $1,408,045.52. The trial court also entered judgment against
    defendants and in favor of Deborah in the amount of $754,869.74.
    On July 30, 2019 notices of the entry of judgments were served by
    mail on defendants at the 6303 Owensmouth Avenue address.
    7
    Motion to set aside default and default judgment
    On August 28, 2020, defendants filed a motion to set aside
    the default and default judgment. They subsequently took that
    motion off calendar.
    Defendants filed an amended motion to set aside entry
    default and default judgment on September 24, 2020, arguing
    that the judgment was void and must be set aside under Code of
    Civil Procedure section 473, subdivision (d).
    Defendants argued that they were not properly served with
    the motion for terminating sanctions because plaintiffs served
    them by mail at the incorrect 6300 Owensmouth Avenue address
    and because the motion was not served 21 court days before the
    February 22, 2019 hearing on the motion. Defendants further
    argued they did not receive actual notice of the statements of
    damages before default was entered against them and that the
    statements of damages had to be served before the trial court
    ordered terminating sanctions against them on February 22,
    2019. Defendants claimed the 2017 statements of damages were
    not properly served on Binko via substituted service because
    Valentine was not Binko’s registered agent for service of process
    at the time. Defendants argued that attempted substituted
    service on Valentine of the 2017 statements of damages and of
    the summons and complaint were invalid because no attempt was
    made to personally serve Binko before the substituted service.
    Finally, defendants argued that the default judgment awards,
    including the punitive damages awards, were invalid because
    defendants had not testified or submitted documentation as to
    financial condition at the time judgment was entered. Plaintiffs
    opposed defendants’ motion.
    8
    Trial court ruling
    On October 28, 2020, the trial court denied defendants’
    motion to set aside the default and default judgment entered
    against them. The court ruled that defendants had forfeited any
    challenge to service of the summons and complaint because
    defendants had never moved to quash service and because they
    appeared in the action by filing their respective answers to the
    complaint on November 6, 2017, and November 21, 2017.
    The trial court found that defendants were properly served
    with notice of the motion for terminating sanctions because
    plaintiffs had re-served the motion by mail on January 24, 2019
    at the correct address. The court rejected defendants’ argument
    that service of that motion was untimely and found that plaintiffs
    had timely served notice of the motion for terminating sanctions
    16 court days plus five calendar days before the hearing date.
    The trial court further found that defendants had waived
    any defect in service of plaintiffs’ 2017 statements of damages
    because they answered the complaint after that service and had
    not previously argued that service on Valentine was improper.
    As to defendants’ arguments regarding the 2019 statements of
    damages, the trial court found that plaintiffs had properly served
    those statements by leaving copies with the security guard who
    had refused the process server access to the 10th floor to serve
    defendants personally and by thereafter mailing copies of the
    statements to defendants. The court found this method of service
    to be valid, because “a defendant will not be permitted to defeat
    service by rendering physical service impossible.” (Khourie, Crew
    & Jaeger v. Sabek, Inc. (1990) 
    220 Cal.App.3d 1009
    , 1013.)
    This appeal followed.
    9
    CONTENTIONS ON APPEAL
    Defendants raise the following contentions on appeal:
    1. The default judgments are void because the 2019
    statements of damages were not served on them before entry of
    default.
    2. Binko was never properly served with the 2017
    statements of damages, and the trial court abused its discretion
    by finding service on Binko was proper.
    3. Because the order entering defaults against defendants
    is void, the default judgments entered against them must be
    vacated and their answers reinstated.
    DISCUSSION
    Plaintiffs request dismissal of this appeal on the grounds
    that defendants are in violation of a trial court order to respond
    to postjudgment discovery and that a bench warrant was issued
    for Ogbechie. Defendants provided evidence, albeit improperly as
    exhibits to their reply brief, that the bench warrant was recalled.
    They also represent in their reply brief that they are not in
    violation of any trial court orders. We exercise our discretion to
    address the merits of defendants’ appeal.
    I.     Applicable law and standard of review
    Code of Civil Procedure section 473, subdivision (d),2
    provides that a court “may, on motion of either party after notice
    to the other party, set aside any void judgment or order.” A trial
    court’s ruling on a motion for relief from default is reviewed for
    abuse of discretion. (Luxury Asset Lending, LLC v. Philadelphia
    2    All further statutory references are to the Code of Civil
    Procedure.
    10
    Television Network, Inc. (2020) 
    56 Cal.App.5th 894
    , 907.) Under
    this standard, an appellate court must uphold the trial court’s
    factual findings that are supported by substantial evidence. (In
    re Marriage of Drake (2015) 
    241 Cal.App.4th 934
    , 939-940.) The
    trial court’s legal conclusions are reviewed de novo. (Ibid.)
    II.    Service of 2019 statements of damages
    A.     Applicable legal framework
    In any wrongful death or personal injury action, section
    425.11, subdivision (c) requires that a statement of damages be
    served on a defendant before any default may be taken. A
    plaintiff seeking to preserve the right to recover punitive
    damages in a default judgment must also serve a statement of
    damages on the defendant under section 425.115, subdivision (f)
    before default is entered.
    If the defendant has not yet appeared, the statement of
    damages must be served in the same manner as a summons.
    (§§ 425.11, subd. (d), 425.115, subd. (g).) If a party has appeared
    in the action, the statement must be served on the party’s
    attorney, or if the party appeared without an attorney, in the
    manner provided for service of a summons. (§§ 425.11, subd. (d),
    425.115, subd. (g).) An entry of default is void if a required
    statement of damages was not served before the default was
    taken. (Schwab v. Rondel Homes, Inc. (1991) 
    53 Cal.3d 428
    , 435.)
    Section 580, subdivision (a), limits a trial court’s
    jurisdiction to grant relief under a default judgment to the
    amount specified in the statement of damages under sections
    425.11 or 425.115. Sections 425.11, 425.115, and 580 were
    enacted to ensure that a defendant who does not contest an
    action does not suffer open-ended liability. (Dhawan v. Biring
    (2015) 
    241 Cal.App.4th 963
    , 969.) “[D]ue process requires notice
    11
    to defendants, whether they default by inaction or by wilful
    obstruction, of the potential consequences of a refusal to pursue
    their defense. Such notice enables a defendant to exercise his
    right to choose—at any point before trial, even after discovery
    has begun—between (1) giving up his right to defend in exchange
    for the certainty that he cannot be held liable for more than a
    known amount, and (2) exercising his right to defend at the cost
    of exposing himself to greater liability.” (Greenup v. Rodman
    (1986) 
    42 Cal.3d 822
    , 829.)
    The statutes do not specify a requisite period of time
    between service of the statement of damages and entry of default.
    Courts in California require the statement to be served “‘a
    reasonable period of time before default may be entered.’”
    (Schwab v. Southern California Gas Co. (2004) 
    114 Cal.App.4th 1308
    , 1322 (Schwab), disapproved on other grounds in Sass v.
    Cohen (2020) 
    10 Cal.5th 861
    , 887.) The key factor in determining
    whether proper notice has been given is whether the defendant
    had sufficient notice of the amount of claimed damages to permit
    a reasoned decision whether to take action to respond to the
    claims.
    B.     No abuse of discretion
    Defendants erroneously claim they were not properly
    served with the 2019 statements of damages before “default was
    entered as a terminating sanction” on February 22, 2019. The
    trial court’s February 22, 2019 order did not order entry of
    default as a terminating sanction against defendants. In that
    order, the trial court struck defendants’ respective answers as a
    terminating sanction and set an April 23, 2019 hearing date for
    12
    an OSC re: entry of default and default judgment.3 Default was
    entered against defendants by the clerk of the superior court as of
    April 17, 2019.
    Defendants were served by substituted service with the
    2019 statements of damages on March 6, 2019—more than a
    month before default was entered against them. A registered
    process server went that day to personally serve defendants at
    their place of business where a security guard refused him access
    to the 10th floor where defendants’ office was located.
    Defendants had also previously been served with the 2017
    statements of damages on August 3, 2017, more than a year and
    a half before default was entered against them. The trial court
    did not abuse its discretion by finding that defendants were
    properly served with formal notice of the statements of damages.
    Defendants erroneously claim that an order striking a
    pleading as a terminating sanction is the equivalent of entry of
    default. Section 2023.030, the statute authorizing terminating
    sanctions, does not treat an order striking an answer as the
    equivalent of a default. (§ 2023.030, subd. (d); Department of
    Fair Employment & Housing v. Ottovich (2014) 
    227 Cal.App.4th 706
    , 715.) Rather, that statute distinguishes between an order
    striking the pleadings of a party engaged in discovery abuses
    (§ 2023.030, subd. (d)(1)) and an order rendering a judgment of
    3     Defendants concede in their reply brief that the trial court
    did not enter their defaults when it granted the motion for
    terminating sanctions on February 22, 2019. They argue,
    however, that the trial court had the authority to enter default on
    that date, and on that basis claim they should have been served
    with the statements of damages. Defendants cite no authority to
    support that claim.
    13
    default against that party (§ 2023.030, subd. (d)(4)). The trial
    court here did not order entry of default as a terminating
    sanction.
    Matera v. McLeod (2006) 
    145 Cal.App.4th 44
     on which
    defendants rely, is distinguishable. The trial court in that case
    ordered as terminating sanctions against the defendants that
    their answer be stricken and that default be entered against
    them. (Id. at p. 52.) The appellate court held that service of a
    statement of damages two days before entry of default was not a
    reasonable period of time to apprise the defendants of their
    potential liability and on that basis reversed the default
    judgment. (Id. at p. 62.) No such basis for reversal exists here.
    Defendants in this case were served with the statements of
    damages twice—once in August 2017 and again on March 6,
    2019—well in advance of the April 17, 2019 entry of default.
    They had ample notice of their potential liability before default
    was entered against them. (See, e.g., Schwab, 
    supra,
     114
    Cal.App.4th at p. 1323 [personal service of statement of damages
    15 days before entry of default provided reasonable notice for due
    process purposes]; California Novelties, Inc. v. Sokoloff (1992) 
    6 Cal.App.4th 936
    , 945 [service by mail of statement of damages 17
    days before filing request for entry of default provided reasonable
    notice].)
    III. 2017 statements of damages
    Binko waived any defect in service of the 2017 statements
    of damages by failing to raise any objection before making a
    general appearance in the action. “‘A general appearance
    operates as a consent to jurisdiction of the person, dispensing
    with the requirement of service of process, and curing defects in
    service.’” (Fireman’s Fund Ins. Co. v. Sparks Construction, Inc.
    14
    (2004) 
    114 Cal.App.4th 1135
    , 1145 (Fireman’s Fund).) Filing an
    answer constitutes a general appearance. (Ibid.)
    Binko raised no objection that service of the 2017
    statements of damages on Valentine in August 2017 was invalid
    before filing its November 6, 2017 answer to the complaint.
    Binko accordingly waived the right to challenge any defect in
    service. (Fireman’s Fund, supra, 114 Cal.App.4th at p. 1145.)
    IV. Default judgment
    For reasons discussed, we reject defendants’ argument that
    entry of default against them is void—the sole basis they advance
    for vacating the default judgment and reinstating their answers.
    Defendants provide no valid basis for setting aside the defaults,
    vacating the judgment, or reinstating their answers.
    DISPOSITION
    The judgment is affirmed. Plaintiffs shall recover their
    costs on appeal.
    ________________________
    CHAVEZ, J.
    We concur:
    ________________________
    LUI, P. J.
    ________________________
    ASHMANN-GERST, J.
    15
    

Document Info

Docket Number: B309983

Filed Date: 1/19/2022

Precedential Status: Non-Precedential

Modified Date: 1/19/2022