Court Opinion

ID: 7797864
Source: CourtListenerOpinion
Date Created: 2022-08-04 18:02:28.671288+00
Date Added: 2024-06-11T16:28:42.103392
License: Public Domain

Filed 8/3/22 Towns End Development v. Valdez 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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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not been certified for publication or ordered published for purposes of rule 8.1115.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

TOWNS END                                                 B317492
DEVELOPMENT, INC.,
                                                          (Los Angeles County
         Plaintiff and Appellant,                         Super. Ct. No. 19STCV27223)

         v.

VIRGINIA F. VALDEZ,

     Defendant and
Respondent.

     APPEAL from an order of the Superior Court of Los
Angeles County, Malcom H. Mackey, Judge. Affirmed.
     Chiao & Wu, Ching K. Chiao and Alexei Brenot for Plaintiff
and Appellant.
     Law Offices of Edgardo M. Lopez and Edgardo M. Lopez for
Defendant and Respondent.

                                             ******
       Plaintiff and appellant Towns End Development, Inc.
(Towns End) appeals from the order quashing service of the
summons and complaint on defendant and respondent Virginia F.
Valdez, vacating the default and setting aside the default
judgment entered against Valdez, and dismissing without
prejudice the complaint Towns End filed against her. We affirm
the trial court’s order.

                   FACTUAL BACKGROUND
       Towns End is a California corporation with its principal
place of business in Irvine, California. Valdez is a 98-year-old
widow who lives in her home at 8614 Laurel Canyon Boulevard
in Sun Valley California. In addition to her home, Valdez owns a
multiunit residential apartment building located at 3870 Clinton
Avenue in Los Angeles, California (the Clinton property).
       Valdez listed the Clinton property for sale in November
2018. On November 9, 2018, Towns End submitted a written
offer to purchase the Clinton Property for $875,000. The offer
was submitted on a California Association of Realtors residential
income property purchase agreement and joint escrow
instructions agreement (the Purchase Agreement) that contains
both mediation and arbitration provisions. The mediation
provision requires the parties to mediate any dispute arising out
of the agreement or transaction before resorting to arbitration or
court action.1 The arbitration provision states that any dispute

1     The mediation provision states in relevant part: “The
Parties agree to mediate any dispute or claim arising between
them out of this Agreement, or any resulting transaction, before
resorting to arbitration or court action through the C.A.R.

                                2
not settled through mediation must “be decided by neutral,
binding arbitration.”2 (Boldface omitted.) The Purchase
Agreement states that the filing of an action to preserve a statute
of limitations or to enable the recording of a notice of pending
action shall not constitute a waiver or violation of the mediation
and arbitration provisions.
      Valdez signed the Purchase Agreement on November 13,
2018. Escrow was opened that same day, with a scheduled
closing date of November 30, 2018. Valdez cancelled the sale and
escrow on or after November 30, 2018.

Consumer Mediation Center . . . or through any other mediation
provider or service mutually agreed to by the Parties.”
2      The arbitration provision states in part: “The Parties agree
that any dispute or claim in Law or equity arising between them
out of this Agreement or any resulting transaction, which is not
settled through mediation, shall be decided by neutral, binding
arbitration. . . . [¶] ‘NOTICE: BY INITIALING IN THE SPACE
BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE
“ARBITRATION OF DISPUTES” PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA
LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT
POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT
OR JURY TRIAL. . . . IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION,
YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY.’” (Boldface omitted.) Both
parties initialed the arbitration provision.

                                 3
                    PROCEDURAL HISTORY
       Towns End attempted to initiate mediation with Valdez by
sending a request for mediation to the C.A.R. Mediation Center
on January 8, 2019. On January 30, 2019, C.A.R. Mediation
Center notified Towns End that notice of the request to mediate
had been sent to Valdez on January 9, 2019, requesting a
response on or before January 18, 2019, but Valdez had not
responded.
       On August 2, 2019, Towns End filed a complaint against
Valdez for breach of contract and specific performance. Towns
End also filed and recorded a lis pendens against the Clinton
property and served a copy of the lis pendens on Valdez by mail
at her residence address.
Attempted personal service of summons and complaint
and service by publication
       In a case management statement filed on November 20,
2019, Towns End reported that it had made multiple
unsuccessful attempts to serve Valdez with the summons and
complaint and that service by publication might be necessary. At
a January 27, 2020 hearing, the trial court took the matter off
calendar and advised Towns End’s counsel to file an application
for leave to serve Valdez by publication.
       In February 2020, Towns End filed an application for leave
to serve Valdez by publication.3 The application was supported
by the declaration of Towns End’s attorney, Alexei Brenot, among
other documents. Brenot stated in his declaration that his law
firm had confirmed Valdez’s residence address as 8614 Laurel

3    Towns End filed a previous application for publication in
January 2020 that was rejected by the court.

                                4
Canyon Boulevard in Sun Valley; that a process server made
several unsuccessful attempts to personally serve Valdez with the
summons and complaint at her residence; that a copy of the
summons and complaint and notices of acknowledgment were
sent to Valdez by first class mail to her residence address, but the
notices of acknowledgment were never returned. Brenot further
stated that his firm had conducted Internet searches for Valdez
and submitted an information request to the U.S. Post Office but
had been unable to locate Valdez.
      Attached as an exhibit to Brenot’s declaration was a
declaration of reasonable diligence by Erick Martin Salas stating
that he attempted to effect personal service on Valdez at her
residence address on December 12, 13, 14, and 15, 2019. Salas’s
notation for the December 15, 2019 attempted service states:
“There is no answer at residence address. Neighbor from 8266,
Victor—Hispanic, 50’s, said subject was an old lady who was
taken to the hospital by an ambulance over 1 year ago and has
not been seen since then. There are different people that come to
the property every once in a while.”4

4      Salas executed an earlier declaration of reasonable
diligence that Towns End had attached to its previous application
for service by publication rejected by the court in January 2020.
Salas’s previous declaration states that he attempted to effect
personal service on Valdez at her residence on August 6, 7, 8, and
9, 2019. Salas’s notation regarding the August 9, 2019 attempted
service states: “There is no answer at residence address.
Property looks abandoned or unoccupied. Front white gate was
locked up. No noise at all. Neighbor from 9622, Francisco, who is
a Hispanic, Male, 46 years old, said there used to be a lady living
by herself that hardly had any visitors. He used to see the care

                                 5
      On February 24, 2020,5 the trial court issued an order
directing Towns End to serve Valdez by publication in the San
Fernando Sun. On July 24, 2020, Towns End filed a proof of
publication stating that service of the summons and complaint
had been completed by publication in the San Fernando Sun on
March 12, 19, 26, and April 2, 2020.
Entry of default, default judgment, and sale of the
property
      Towns End submitted a request for entry of default on
September 14, 2020, and the superior court clerk entered default
against Valdez that same day. On December 7, 2020, Towns End
submitted a request for entry of default judgment. On
February 8, 2021, the trial court entered default judgment
against Valdez and in favor of Towns End. Towns End served a
notice of entry of default judgment on Valdez by mail at her
residence address.
      After entry of the default judgment, Towns End attempted,
unsuccessfully, to contact Valdez to have her sign and return
documents necessary to effect the sale of the Clinton property.
On July 26, 2021, Towns End filed an ex parte application for an
order directing the court clerk to execute documents on Valdez’s
behalf to allow the Clinton property to be sold. The trial court
granted the application and entered the requested order on
July 28, 2021.

giver. He has not seen anyone for a long time, he is not sure if
she is hospitalized or passed away.”
5     Although the order for publication was issued on
February 24, 2020, it is file stamped and listed on the superior
court’s registry of actions as February 18, 2020.

                                 6
        Pursuant to the trial court’s order, the clerk of the court
executed the documents necessary to complete Towns End’s
purchase of the Clinton property. On August 31, 2021, Towns
End completed the purchase and recorded a grant deed
transferring ownership of the Clinton property from Valdez to
itself.
Motion to quash service and set aside default judgment
        On October 7, 2021, Valdez filed a motion to quash service
of the summons and to set aside the default and default judgment
under Code of Civil Procedure sections 418.10 and 473,
subdivision (d).6 Valdez argued that the service by publication
was void because the affidavits filed in support of the service
were deficient. Valdez further argued that Towns End had failed
to comply with the mandatory mediation and arbitration
provisions of the Purchase Agreement before filing its lawsuit.
Valdez’s motion was supported by her own declaration, the
declaration of her attorney, and the declarations of several of her
family members.
        In her declaration, Valdez states that she is a 98-year-old
widow; she has lived in her Sun Valley residence for the past 40
years; her mobility is limited, and she uses a walker; she relies on
caregivers for assistance 24 hours a day, seven days a week; and
she never leaves her home except to attend doctor appointments.
Valdez further states that she never received documents
concerning Towns End’s lawsuit and had never been informed by
anyone about the lawsuit; and had she known she was being
sued, she would have hired an attorney to defend her.

6    All further statutory references are to the Code of Civil
Procedure.

                                 7
       Valdez’s niece, Sheena Valdez Foster, submitted a
declaration stating that in July 2021, she went to the Clinton
property at Valdez’s request to deliver a letter to a tenant about
past due rent. The tenant telephoned Valdez’s residence the
following day, and Foster answered the call. The tenant told
Foster to check Valdez’s mailbox because the tenant had sent
Valdez a letter, along with a FedEx envelope addressed to Valdez
that had been delivered to the tenant’s apartment at the Clinton
property. Foster opened the envelope and found documents
indicating the Clinton property had been sold. Valdez asked
Foster to contact Valdez’s brother, Corsino Floresca.
       Floresca states in his declaration that Valdez is in poor
health and needs full-time caregiver assistance. Floresca further
states that visitors to Valdez’s home, including her caregivers,
park their cars behind the house in a driveway that can be
accessed through an alley that runs parallel to Laurel Canyon
Boulevard. Visitors enter the home through the kitchen door at
the back of the home. In his declaration, Floresca also discusses
his efforts to find an attorney to represent Valdez in this action.
       Valdez’s attorney, Edgardo M. Lopez, states in his
declaration that he conducted a visual inspection of Valdez’s
home. He parked in the home’s driveway, which he accessed
through an alley at the rear of the property. Lopez took
photographs of the driveway, where his car and three other
vehicles were parked. Lopez also photographed the front of the
home. In addition to the photographs, Lopez attached to his
declaration images of Valdez’s home that he obtained from
Google Maps, including an aerial view that showed the alley and
driveway at the rear of the property. Lopez opines in his
declaration that had Towns End’s process server exercised

                                 8
reasonable due diligence, the process server would have located
the alley behind Valdez’s residence and been capable of
personally serving Valdez with the summons and complaint.
      Towns End opposed Valdez’s motion, arguing that the
motion was untimely under section 473.5 and was substantively
defective because Valdez offered no defense to the underlying
action and provided no proposed response to the complaint.
Towns End further argued that service by publication was
proper.
      After hearing argument from the parties at a November 2,
2021 hearing on the motion, the trial court granted Valdez’s
motion, quashed service of the summons and complaint, vacated
the default entered against Valdez on September 15, 2020, and
set aside the default judgment entered against her on
February 2, 2021. The trial court found that Towns End knew
the location of Valdez’s residence, that its service efforts had been
inadequate, and that Towns End had not established that it could
not with reasonable diligence have served Valdez in an
authorized manner other than by publication.
      The trial court also found that the case could be dismissed
on the ground that the issues were subject to the parties’
arbitration agreement and Towns End had not exhausted the
arbitration remedy. The court ordered Towns End’s complaint
dismissed without prejudice. This appeal followed.

                           DISCUSSION
I.    Applicable law and standard of review
      A.     Service by publication
      “‘[C]ompliance with the statutory procedures for service of
process is essential to establish personal jurisdiction. [Citation.]

                                  9
[A] default judgment entered against a defendant who was not
served with a summons in the manner prescribed by statute is
void.’” (Ellard v. Conway (2001) 94 Cal.App.4th 540, 544
(Ellard).) Whether a judgment is void for lack of proper service is
a question of law that an appellate court reviews de novo.
(Calvert v. Al Binali (2018) 29 Cal.App.5th 954, 961-962.)
        A summons may be served by various methods. If service
of a summons by other means is impossible, service may be
effected by publication, upon the trial court’s approval. (Watts v.
Crawford (1995) 10 Cal.4th 743, 748-749.) Section 415.50
governs service by publication. Subdivision (a) of that statute
provides in pertinent part: “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 . . . .” (§ 415.50, subd. (a).) “If a defendant’s address is
ascertainable, a method of service superior to publication must be
employed, because constitutional principles of due process of law,
as well as the authorizing statute, require that service by
publication be utilized only as a last resort. . . . ‘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.’” (Watts, at p. 749, fn. 5, citations
omitted.)
        Whether a plaintiff exercised the diligence necessary to
justify service by publication depends on the facts of the case.
(Donel, Inc. v. Badalian (1978) 87 Cal.App.3d 327, 332.) We
review a trial court’s finding whether a defendant could or could
not with reasonable diligence be served by a means superior to

                                  10
publication for substantial evidence. (See Giorgio v. Synergy
Management Group, LLC (2014) 231 Cal.App.4th 241, 248.)
       When an order directing service by publication is
improperly made, a court may quash the service of summons
effected pursuant to such an order. (Mix v. Yoakum (1934) 138
Cal.App. 290, 293.) A trial court has the inherent ability to
reconsider a prior order directing service of summons by
publication so it may correct its own errors. (Humphrey v. Bewley
(2021) 69 Cal.App.5th 571, 579.)
       B.    Vacating default judgment based on improper
             service or lack of notice
       Section 473.5 allows a defendant to seek relief from entry of
a default or default judgment if service of the summons “has not
resulted in actual notice to a party in time to defend the action,”
so long as the failure of actual notice was not due to the
defendant’s “avoidance of service or inexcusable neglect.”
(§ 473.5, subs. (a), (c).)7 “‘“[A]ctual notice” in section 473.5
“means genuine knowledge of the party litigant. . . .” [Citation.]’
[Citation.] ‘“[A]ctual knowledge” has been strictly construed,
with the aim of implementing the policy of liberally granting
relief so that cases may be resolved on their merits. [Citation.]’
[Citation.] We review the court’s findings regarding the actual
notice of the action for an abuse of discretion.” (Ellard, supra, 94
Cal.App.4th at p. 547.)

7     Section 473.5, subdivision (a) provides in part: “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.”

                                 11
       Section 473, subdivision (d) similarly allows a defendant to
move to set aside a judgment that is void due to lack of proper
service. A “‘default judgment entered against a defendant who
was not served with a summons in the manner prescribed by
statute is void.’” (Ellard, supra, 94 Cal.App.4th at p. 544.)
Whether a judgment or order is void due to lack of proper service
is a question of law that we review de novo. (Calvert v. Al Binali,
supra, 29 Cal.App.5th at pp. 961-962.) We review a trial court’s
decision whether to set aside a void judgment or order under the
facts and circumstances before it for abuse of discretion.
(Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th
1009, 1020 (Pittman).) A trial court’s decision in this regard is
not an abuse of discretion unless it exceeded the bounds of reason
in light of the circumstances. (County of San Diego v. Gorham
(2010) 186 Cal.App.4th 1215, 1230.)
II.    Timeliness of Valdez’s motion
       A motion for relief from a default judgment under section
473.5 must “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.” (§ 473.5, subd. (a).) A party moving
for relief under section 473.5 based on lack of actual notice must
do so within two years after entry of judgment and must act with
diligence upon learning of the judgment. (Trackman v. Kenney
(2010) 187 Cal.App.4th 175, 180 (Trackman).)
       A two-year time limit also applies to a party moving under
section 473, subdivision (d) to set aside a judgment that is valid
on its face but void for lack of proper service. (Trackman, supra,
187 Cal.App.4th at p. 180 [two-year statutory period for relief

                                12
from default judgment in § 473.5 applies to § 473, subd. (d)
motion to set aside judgment void for lack of proper service]; Dill
v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444
(Dill) [motion to vacate a void judgment is timely if made within
two years of entry of judgment].)
       We reject Towns End’s argument that the 180-day time
limit in section 473.5, subdivision (a)(ii) applies, and that
Valdez’s motion to set aside the default judgment was untimely.
Towns End maintains that it served Valdez with notice of entry
of the default judgment by mail on February 8, 2021; that Valdez
had 180 days thereafter, or until August 12, 2021, to move to set
aside the default judgment; and that her motion for relief from
the default judgment, filed on October 7, 2021, was untimely.
       There is evidence in the record, however, that Valdez never
received notice that she had been sued or that a default judgment
had been entered against her. That evidence supports Valdez’s
position that the default judgment was void under section 473,
subdivision (d) for lack of personal jurisdiction. (OC Interior
Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th
1318, 1330-1331 [lack of jurisdiction shown by extrinsic evidence
nullifies a judgment that appears valid on its face].) Under these
circumstances, the two-year statutory time period for relief from
the default judgment applies. (Trackman, supra, 187
Cal.App.4th at p. 181; Dill, supra, 24 Cal.App.4th at p. 1444.)
Valdez’s motion to set aside the default judgment, filed eight
months after entry of the judgment, was timely.
III. Validity of service by publication
       Substantial evidence supports the trial court’s
determination that Towns End failed to establish that it could
not with reasonable diligence have served Valdez by a means

                                13
superior to publication. Towns End knew the address and
location of Valdez’s home. There was evidence that Valdez’s
home can be accessed through an alleyway in the rear of the
property where the home’s driveway and kitchen door are
located. Vehicles parked on the home’s driveway are plainly
visible in photographs taken from the rear alleyway. Valdez
stated in her declaration that she and her caregivers are present
in the home except when she has a doctor’s appointment. Towns
End’s process server stated in his declaration that “[t]here are
different people that come to the property every once in a while.”
       That the trial court previously issued an order authorizing
service by publication did not preclude the court from
subsequently quashing service of the summons effected pursuant
to that order. (Mix v. Yoakum, supra, 138 Cal.App. at p. 293.)
The trial court had the inherent authority to reconsider its prior
order directing service by publication. (Humphrey v. Bewley,
supra, 69 Cal.App.5th at p. 579.) The trial court did not err by
quashing service of the summons.
IV. No abuse of discretion in vacating default judgment
       Because there was substantial evidence that Valdez had no
actual notice of Towns End’s lawsuit, and that Towns End failed
to establish that it could not, with reasonable diligence, have
served Valdez by a means superior to publication, the trial court
did not abuse its discretion by setting aside the default judgment
entered against Valdez. (Pittman, supra, 20 Cal.App.5th at
p. 1020.)
V.     Failure to provide a draft response to the complaint
       We reject Towns End’s contention that Valdez’s motion to
vacate the default judgment should have been denied because she
failed to offer a defense to the action and failed to provide a draft

                                 14
proposed response to the complaint. In her motion, Valdez
disputed that she had accepted Towns End’s offer to purchase the
Clinton property and that a valid contract had been formed.
Valdez also argued that the parties’ dispute was governed by the
mediation and arbitration provisions of the Purchase Agreement.
Towns End does not challenge the trial court’s determination
that the mediation and arbitration provisions apply or the court’s
dismissal of Towns End’s complaint on that basis.

                          DISPOSITION
       The order quashing service of the summons and complaint
on Valdez, vacating and setting aside the default and the default
judgment entered against Valdez, and dismissing without
prejudice the complaint filed by Towns End is affirmed. Valdez
shall recover her costs on appeal.

                                    ___________________________
                                    CHAVEZ, J.

We concur:

_______________________________
ASHMANN-GERST, Acting P. J.

____________________________
HOFFSTADT, J.

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