Monticue v. Binko Corp. CA2/2

Filed 1/19/22 Monticue v. Binko Corp. CA2/2
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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
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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
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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
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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
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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.
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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.
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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.
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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
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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
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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.
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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.
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