Court Opinion

ID: 3169302
Source: CourtListenerOpinion
Date Created: 2016-01-13 20:01:49.002611+00
Date Added: 2024-06-11T12:07:14.968844
License: Public Domain

Filed 1/13/16 Bailey v. Rose CA6
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                      SIXTH APPELLATE DISTRICT

GARRY A. BAILEY et al.,                                              H040711
                                                                    (Santa Clara County
         Plaintiffs and Respondents,                                 Super. Ct. No. 1-10-CV-179515)

         v.

CHARLES EVERETTE ROSE,

         Defendant and Appellant.

         Defendant Charles Everette Rose appeals from a default judgment, challenging the
denial of relief from default and the prove-up damages supporting the judgment. Finding
no error, we will affirm.
                                   I. TRIAL COURT PROCEEDINGS
         Plaintiffs brought a class action complaint against several individuals and entities
including defendant Charles Everette Rose.1 Rose was named in the first amended
complaint, which alleged violations under the Consumer Legal Remedies Act (Civ. Code,
§ 1750, et seq. (the Act)) and the Racketeer Influenced and Corrupt Organizations Act
(18 U.S.C § 1962 (RICO)), conspiracy to breach fiduciary duty, unlawful solicitation
(Bus. & Prof. Code, § 6150, et seq.), unfair competition (Bus. & Prof. Code, § 17200,
et seq.), interference with contractual relations, and fraud. The complaint also alleged

         1
        The other defendants were Mohamed Haffar, Haffar & Associates, Michael
Nazarinia, Daylight Technologies, Inc. (Daylight), Amwest Capital Mortgage, Inc., and
Glenn Hinton. Only defendant Rose is a party to this appeal.

                                                             1
negligence, professional negligence, and breach of fiduciary duty against other
defendants. The complaint alleged defendants used “ ‘robo-dialers’ ” and telemarketers
to solicit clients and collect advance fees for loan modification services that were not
performed or supervised by a licensed attorney. Plaintiffs alleged “[d]efendants sent the
homeowners a contract, along with a form letter instructing the homeowners to pay by
cashier’s check, credit card, or ‘… deposit the funds to Haffar & Associates [Wells
Fargo] Account # XXXXXX9714.’ ” According to the complaint, telemarketers received
a $600 commission when they “convinc[ed] the homeowner to pay $3,500 in advance
‘legal fees.’ ” Plaintiffs alleged Haffar & Associates received more than $3.8 million in
advance fees from a class of “approximately 1,100 homeowners,” no meaningful services
were performed, and defendants refused requests to refund unearned fees. Defendant, in
pro per, filed an answer to the first amended complaint denying culpability.
       Class members testified by declaration in support of plaintiffs’ motion for class
certification that telemarketers solicited them to pay $3,500 for home loan modification
services, they paid that fee, and they never received the promised services or refunds.
The court certified the class and ordered plaintiffs to file a second amended complaint
conforming the class definition to the certification.
       In February 2012, plaintiffs filed a second amended complaint, again naming Rose
and expanding the class definition to include: “All persons who retained Haffar &
Associates for mortgage loan modification services and who either (1) paid a fee for
those services prior to their full performance or (2) were first contacted by a telemarketer
offering services on behalf of Haffar & Associates, or both, and who did not receive a full
refund of all fees paid.” The second amended complaint also added a request for
damages under section 1782 of the Act. In support of that request, plaintiffs asserted
their compliance with statutory notice and demand requirements. In March 2012, the
default of codefendants Mohamed Haffar and Haffar & Associates (the Haffar
defendants) was entered for failure to answer the second amended complaint, and Rose
                                              2
was served with that notice. In April 2012, the parties filed a joint statement and
stipulation proposing a form and manner of class notice. That stipulation, signed by
Rose, acknowledged the Haffar defendants’ default for failure to answer the second
amended complaint.
       On May 18, 2012, the court served the parties by e-mail with the order approving
the joint class notice proposal. Four minutes later, Rose e-mailed plaintiffs’ counsel
asking “Anything I need to do [?]” Plaintiffs’ counsel immediately responded “I think
you are referring to the e-mail from the court about class notice. No, there’s nothing you
need to do,” and in a follow-up e-mail advised Rose “There’s nothing more you need to
sign at this time.”
       Three days later, plaintiffs’ counsel sent Rose an e-mail seeking participation in a
joint case management statement for a June 8 case management conference. Counsel
asked Rose when he planned to file an answer to the second amended complaint and
respond to document production demands and interrogatories. She also asked Rose for a
deposition date. Rose responded “I have no idea I was supposed to or should … if I get a
judgment against me … I will file BK im 28 BTW … it’s not a big deal. [¶] I have
decided moving forward you are a waste of my time … leave us alone. [¶] I was your
best tool, until you decided to decline my offer. I wanted to be dropped from the case
and wasn’t going to come sit with you and lay out everything without some assurance I
would be released. [¶] Stay Evil! … Your time will come, I’m all about karma. You
have been snood since day 1.” That was the last e-mail exchange between plaintiffs’
counsel and Rose. Later that day, plaintiffs filed a request for Rose’s default, which the
clerk entered and electronically served on Rose. Rose received notice but did not appear
at the June 8 case management conference or a later conference held in September.
       Rose retained attorney Moataz Hamza sometime after entry of default, and in
February 2013 moved to set aside the May 2012 default, claiming plaintiffs’ counsel had
failed to serve the second amended complaint and had willfully concealed its filing. In
                                             3
support of that claim, Rose declared under penalty of perjury that he had not been served
with the second amended complaint, and, upon learning of the default in November 2012,
he immediately sought counsel for assistance. The trial court denied the motion, finding
Rose not diligent or credible, his testimony belied by the record.
       In June 2013, Rose’s current counsel moved for reconsideration, arguing that
Hamza had acted negligently, and Rose was entitled to equitable relief from default
because Hamza’s failings amounted to positive misconduct. In a declaration supporting
that motion, Rose claimed Hamza “inaccurately state[d] that [Rose] discovered that entry
of default was entered against [him] in November 2012.” Rose claimed he had been
diligent in seeking to set aside the default by hiring Hamza in July 2012, but Hamza
delayed filing the motion, claiming in October that there was plenty of time to file it.
Hamza filed a declaration voicing his misunderstanding that a motion to set aside default
was due within six months after entry of judgment, not six months after entry of default.
Rose argued further that the default was facially void under Carrasco v. Craft (1985)
164 Cal. App. 3d 796 (Carrasco) and Gray v. Hall (1928) 203 Cal. 306 (Gray). He
pressed that the second amended complaint did not contain substantive changes with
respect to the claims against him; therefore, he was not required to answer the second
amended complaint and the resulting default was void. That motion was denied.
       In April 2013, while the motion for relief from default was pending, plaintiffs
moved under section 1781, subdivision (c)(3) of the Act for a finding of no defense
against non-defaulting defendants Glenn Hinton, Daylight Technologies, and Amwest
Capital Mortgage (the Hinton defendants). In support of that motion, plaintiffs submitted
bank records and witness declarations tracing class money through Haffar & Associates’
Wells Fargo account (the 9714 account) to the Hinton defendants. Telemarketers
testified by declaration that they worked for Haffar & Associates under Rose’s
supervision and received paychecks from Daylight Technologies. Rose admitted to
working at Daylight, a company that generated clients in the mortgage modification
                                              4
business. According to telemarketer declarations, Rose provided the Haffar & Associates
sales division with phone numbers generated by robo-dialers, and telemarketers solicited
class members from those phone lists to pay $3,500 for loan modification services. One
class member testified that Rose himself solicited her to pay $3,500 for loan modification
services, and, as instructed, she deposited that fee into the 9714 account. The court
granted that motion, unopposed by the Hinton defendants, but it denied a separate no
defense motion as to defendant Nazarinia, with whom plaintiffs later settled.
        In September 2013, plaintiffs moved for judgment on their claim under the Act
and for dismissal of the remaining causes of action as to the Hinton defendants. Plaintiffs
also moved for a default judgment on all causes of action against Rose and the Haffar
defendants (the defaulting defendants). On the Consumer Legal Remedies Act claim, the
court ordered the Hinton defendants to pay $4,513,676 in damages (the total deposited
into the 9714 account between November 2008 and October 2010 ($4,546,032) less an
offset for the Nazarinia settlement), with the defaulting defendants jointly and severally
liable for $3.8 million (the amount alleged in the operative complaint) of that amount.
The Hinton defendants were ordered to pay prejudgment interest, costs and attorney’s
fees.
        The court ordered the defaulting defendants jointly and severally to pay
$3.8 million in damages on causes of action under the Act, conspiracy to breach fiduciary
duty, unlawful solicitation, unlawful competition, and RICO, trebled to $11,400,000
under RICO (18 U.S.C § 1964(c)), plus attorney’s fees, costs, and prejudgment interest.
On plaintiffs’ individual interference with contractual relations and fraud claims, the
court ordered the defaulting defendants jointly and severally to pay $50,000 in damages
plus prejudgment interest.
        Rose moved unsuccessfully for a new trial, repeating his arguments that the
default was void and he should be relieved from default based on Hamza’s positive

                                             5
misconduct, and challenging the sufficiency of the evidence supporting the $3.8 million
damages award.
                                      II. DISCUSSION
A.     ENTRY OF DEFAULT
       Relief from default is governed by Code of Civil Procedure section 473.2 Under
section 473, subdivision (b), the trial court may provide relief upon a showing of
“mistake, inadvertence, surprise, or excusable neglect.” Relief must be sought within a
reasonable time, but in no case more than six months after entry of default. (§ 473,
subd. (b).) After statutory relief is no longer available, the trial court has equitable power
to vacate a default. (Rappleyea v. Campbell (1994) 8 Cal. 4th 975, 981.) Although
extrinsic fraud or mistake may form the basis for equitable relief (In re Marriage of Park
(1980) 27 Cal. 3d 337, 342), the trial court’s equitable power to set aside a default is
narrower, not wider, than the authority under section 473, subdivision (b). (Weitz v.
Yankosky (1966) 63 Cal. 2d 849, 857 (Weitz).)
       The question as to whether a default was properly entered is reviewable upon
appeal from the final judgment. (Bristol Convalescent Hospital v. Stone (1968)
258 Cal. App. 2d 848, 859 (Bristol).) We review the trial court’s denial of a motion to set
aside a default—both under section 473 and on equitable grounds—for an abuse of
discretion. (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 981.) We review whether the
default was void as a matter of law de novo. (Talley v. Valuation Counselors Group, Inc.
(2010) 191 Cal. App. 4th 132, 146.)

       1.       Leave of Court was not Required to Amend the Consumer Legal
                Remedies Act Cause of Action
       Rose contends that the second amended complaint was not an operative pleading,
and thus required no answer, because plaintiffs did not have leave of court to amend

       2
           Unspecified statutory references are to the Code of Civil Procedure.

                                               6
beyond the class definition. Rose cites section 472, which allows a plaintiff to amend a
complaint once as a matter of right, and section 473, subdivision (a)(1), which requires
leave of court for further amendment. But Civil Code section 1782, not the Code of Civil
Procedure sections cited by Rose, controls the amendment to plaintiffs’ claim under the
Act.
         Civil Code section 1782, subdivision (a) requires at least 30 days notice before a
consumer may commence an action for damages under the Act, and Civil Code
section 1782, subdivision (d) provides authority to amend a complaint without leave of
court to include a request for damages after notice is given. Paragraph 62 in the second
amended complaint sought damages under the Act and asserted that plaintiffs had
complied with the requisite notice and demand requirements. That particular amendment
was therefore proper under Civil Code section 1782, subdivision (d) without leave of
court.
         2.     The Default Was Not Void as a Matter of Law
         Alternatively, Rose contends the second amended complaint contained no
substantive changes from the first amended complaint; accordingly, he argues that his
answer to the first amended complaint served as the answer to the second amended
complaint by operation of law, rendering the default void. Under section 473,
subdivision (d), the court may set aside a void judgment or order at any time.
         Rose relies on Carrasco, supra, 164 Cal. App. 3d 796, to argue that the default was
void based on no substantive change between the first and second amended complaints.
The defendants in Carrasco filed a motion to set aside a default entered five months
earlier, arguing that “the default and default judgment were void insofar as the amended
complaint made no new substantial allegation against either defendant, and, therefore, no
new answer was required.” (Id. at pp. 801, 807.) The trial court rejected that argument
as beyond the scope of the defendants’ motion to set aside default, which was based “on
the grounds that the default and default judgment entered against defendants in this action
                                               7
were taken against them by reason of mistake, inadvertence, and/or excusable neglect.”
(Id. at p. 808.) The Carrasco court determined the question “whether the default
judgment should be voided” was properly before the trial court (ibid.), and in answering
that legal question in the first instance, concluded that the trial court erred by entering
default because the original answer could stand as an answer to the amended complaint.
(Id. at p. 811.)
       In reaching its conclusion, Carrasco relied on Gray, supra, 203 Cal. 306, which
explained that judgment by default may be taken against a defendant who fails to answer
an amended complaint, but only when the new complaint changed or added a cause of
action, not “where the original plea or answer set forth a sufficient defense to the
declaration or complaint as amended.” (Carrasco, supra, 164 Cal.App.3d at pp. 808–
809.) Gray further explained: “ ‘In short, when a complaint is amended after answer, the
defendant is not bound to answer de novo. He may do so if he chooses; but, if he does
not elect to do so, his original answer stands as his answer to the amended complaint; and
in such a case he will not be in default except as to the additional facts set up in the
amended complaint, and not put in issue by the answer.’ ” (Gray, at p. 313.)
       More recently, the California Supreme Court distinguished between judgments
that are void and those that are simply voidable in People v. American Contractors
Indemnity Co. (2004) 33 Cal. 4th 653. A judgment is void when the court lacks
jurisdiction in a fundamental sense. Lack of fundamental jurisdiction “ ‘means an entire
absence of power to hear or determine the case, an absence of authority over the subject
matter or the parties.’ ” (Id. at p. 660.) In significant contrast, a court exceeds its
jurisdiction “ ‘[W]hen a statute authorizes [a] prescribed procedure, and the court acts
contrary to the authority thus conferred[.]’ ” (Id. at p. 661.) “When a court has
fundamental jurisdiction, but acts in excess of its jurisdiction, its act or judgment is
merely voidable.” (Ibid.) In light of American Contractors, we reject defendant’s view
that Carrasco stands for the proposition that a default is void if entered for failure to
                                               8
answer an amended complaint. Rather, Carrasco can only be understood as setting aside
a voidable default.
       Guided by American Contractors, it is clear that the error complained of here—
entering default for failure to answer an amended complaint even where the original
answer possibly could stand as an answer to the amended complaint—would render the
default merely voidable. (Accord, Bristol Convalescent Hospital v. Stone, supra,
258 Cal.App.2d at p. 862 [“It is clear from the decision of Gray v. Hall, supra,
203 Cal. 306, that a judgment entered upon default for want of an answer to an amended
complaint is not a void judgment if the time for answering under ordinary circumstances
had indeed expired before entry of the default. Such a default, it would seem, is of the
class that may be set aside only under section 473, Code of Civil Procedure, or on appeal
from the judgment, or by suit in equity.”].) This is because the trial court had jurisdiction
over the subject matter and the parties when it issued the default, and the default, entered
after the time to answer the second amended complaint had expired, was proper. (Id. at
p. 862 [“The entry of the default is a ministerial duty performed by the clerk, who has no
duty and no authority himself to make a determination whether the answer to the original
complaint might stand as an answer to the amended complaint. … The clerk’s function
is to determine if there is proof of service and whether an answer has been filed within
the time allowed by law or the order of the court.”].)
       Having concluded that the default here is not void as a matter of law, we find no
abuse of discretion in the trial court’s denial of Rose’s pleas to set aside the default.
Rose’s motion for relief was made nine months after default was entered. Thus, the
motion was governed not by section 473, but rather by the court’s more narrow equitable
power. (Weitz, supra, 63 Cal.2d at p. 857.)
       If Rose, before the time to answer the second amended complaint had elapsed, had
formed the opinion that a new answer was not required, he should have brought the issue
to the attention of the trial court preferably before the entry of default but in any event by
                                               9
a timely motion to set aside the default once entered. (Bristol, supra, 258 Cal.App.2d at
p. 863.) But rather than timely indicating that his first answer would serve as his answer
to the second amended complaint, Rose appears to have intentionally defaulted. His
belated motion for relief from that default did not even raise Carrasco/Gray. Instead,
Rose displayed an utter lack of candor by making baseless fraud allegations against
opposing counsel, and later deflecting culpability for those unfounded allegations onto
his lawyer. The trial court did not abuse its discretion by rejecting Rose’s Carrasco/Gray
argument on reconsideration as a basis for equitable relief.

       3.     Attorney Hamza’s Conduct Does Not Support Equitable Relief from
              Default
       Rose argues that he is entitled to equitable relief from default because he was
diligent in pursuing the motion to set aside default but, through no fault of his own, his
lawyer failed to timely file the motion. An attorney’s conduct may constitute grounds for
the type of equitable relief sought here but only when there has been a “ ‘total failure on
the part of counsel to represent the client’ [citation] coupled with an absence of fault and
due diligence on the part of the client [citation], absence of prejudice to the [opposing
party] [citation], and a careful weighing of the public policies favoring a trial on the
merits and protecting the innocent client versus those favoring finality of
judgments, … and holding grossly incompetent attorneys responsible for their
incompetence.” (Seacall Development, Ltd. v. Santa Monica Rent Control Bd. (1999)
73 Cal. App. 4th 201, 208.)
       We find no abuse of discretion in the trial court’s rejection of Rose’s attorney
misconduct argument. On this record, attorney Hamza did not totally fail to represent
Rose: According to Hamza’s declaration and e-mails submitted in support of Rose’s
motion for reconsideration, Hamza had drafted a motion to set aside default in July 2012.
Nor does the record demonstrate due diligence or absence of fault: Rose was aware that
the second amended complaint had been filed, yet he communicated an intent to walk

                                             10
away from the case, and waited nearly two months to retain Hamza to file a motion for
relief from default. Rose followed up with Hamza only once in August and once in
October, and he did not act on Hamza’s request to call the court to have the matter
calendared. Rose also signed a declaration under penalty of perjury that he discovered
the entry of default in November 2012, and only at that time began his search for counsel,
a position he completely retracted in his motion for reconsideration.
B.     EVIDENCE OF DAMAGES
       When a default judgment is sought under section 585, subdivision (b), as here, the
plaintiff has the affirmative duty to establish entitlement to damages. (Kim v. Westmoore
Partners, Inc. (2011) 201 Cal. App. 4th 267, 287 (Kim).) The plaintiff must prove
damages against a defaulting defendant by establishing a prima facie case. (Johnson v.
Stanhiser (1999) 72 Cal. App. 4th 357, 361.) The damages determination is reviewable on
appeal (Kim, at p. 288; Uva v. Evans (1978) 83 Cal. App. 3d 356, 364), but a reviewing
court may interfere with a damages determination only where the award is so
disproportionate to the evidence as to suggest it was “the result of passion, prejudice or
corruption [citations] or where the award is so out of proportion to the evidence that it
shocks the conscience of the appellate court.” (Uva, at pp. 363–364.) Damages
unsupported by substantial evidence satisfies that standard. (Ostling v. Loring (1994)
27 Cal. App. 4th 1731, 1746.)
       According to Rose, plaintiffs’ only prove-up evidence was Haffar & Associates’
statements showing deposits totaling $4,546,032 between November 2008 and
October 2010. He argues such evidence is insufficient to support $3.8 million in
damages alleged in the operative complaint. Rose contends that plaintiffs did not prove
the actual size of the class, and presses that the 9714 account statements do not show the
origin of deposits, much less link deposits to the loan modification clients solicited by
Daylight. Rose points to the “thousands of deposits” in denominations other than $3,500
or $1,750 that the class members paid, and he argues that plaintiffs had no proof that
                                             11
large deposits were aggregated payments from credit processing agencies such as
American Express, or that those deposits constituted payments from class members. Nor,
according to Rose, did plaintiffs discount from the $4.5 million deposited into the 9714
account fees paid by satisfied loan modification clients or revenue generated by attorneys
working for Haffar & Associates apart from the firm’s loan modification practice.
       We conclude the damages award is supported by substantial evidence in the
record. In addition to the 9714 account statements and counsel’s declaration, the motion
and judgment were based on the declarations of named plaintiffs and class representatives
Garry and Brooke Bailey, Daylight’s bank statements, and the court’s file, including
judicially noticed documents.
       Garry and Brooke Bailey filed declarations in support of the motion for judgment
testifying that they were telephonically solicited by Haffar & Associates to purchase loan
modification services, they were told that the fee for those purported services was $3,500,
they paid that fee by credit card, and they were damaged in excess of $250,000 because
they relied on Haffar & Associates’ “ ‘legal advice’ ” to stop paying their mortgage, and
Haffar & Associates failed to perform or refund their money. In support of their Civil
Code section 1781, subdivision (c)(3) no defense motion against the Hinton defendants,
plaintiffs submitted class member declarations explaining that telemarketers instructed
them to pay a $3,500 fee by depositing the money directly into the 9714 account, or pay
by check or credit card, and they followed that instruction. Plaintiffs also submitted
telemarketer declarations explaining that class members were instructed to pay $3,500, or
an agreed upon first payment, by credit card, cashier’s check, or by making a payment
directly into the 9714 account.
       Substantial evidence supports $3.8 million in damages even absent proof of the
exact size of the class. By defaulting, Rose admitted to “collect[ing] advance ‘legal fees’

                                            12
from more than one thousand homeowners.” (Kim, supra, 201 Cal.App.4th at p. 281.)3
Further, the second amended complaint did not specifically quantify damages at $3,500
per class member, as Rose claims, and the record contains evidence that many class
members paid more than $3,500. Class member King paid $3,995, class member
Schwartz paid $4,095, and class member Lima paid $7,000. Judicially noticed State Bar
Court filings supporting co-defendant Haffar’s disbarment identified homeowners who
paid $4,450, $8,200, $3,695, and $4,875 for unrealized loan modification services.
       The second amended complaint did not limit the alleged damage to $1,750 or
$3,500 increments, and the record contains evidence that class members paid for loan
modification services in varying incremental amounts. Class member King paid in
$1,750, $500, $450, and $400 increments, and she separately purchased a loan analysis
for $495. Class member Schwartz purchased a similar report for an additional $595.
Class member Lima made an initial $2,000 deposit into the 9714 account, and was given
a payment schedule in $1,500 and $1,000 increments.
       Plaintiffs also presented evidence that deposits from “American Express
Settlement” and “FNBO Pymt Proc” were credit card payments from class members.4 In
opposition to Rose’s motion for a new trial, plaintiffs presented a declaration from a
merchant who accepts American Express card payments that those payments appear on
his bank statement as “American Express Settlement,” and they do not reflect the
customer’s exact payment because American Express deducts its fee before depositing
the money into the merchant’s account.

       3
         Daylight’s partial database (covering the period between December 2009 and
June 2010) identified 634 persons who paid Haffar & Associates for loan modification
services. Although plaintiffs were able to identify another 181 clients through
advertisement, without Daylight’s full database it was impossible to identify all class
members.
       4
       The court took judicial notice that FNBO stands for First National Bank of
Omaha and FNBO provides credit card payment processing services.

                                            13
       Further evidence undermines Rose’s argument that the damages award failed to
offset legitimate revenue. By defaulting, Rose admitted that co-defendant Haffar
reactivated his bar membership in June 2008 after being approached by Rose and co-
defendant Hinton to market loan modification services under an attorney’s name. The
9714 account was opened in late June 2008, and it saw almost no activity between that
time and October 2008, after which deposits surged. Plaintiffs produced Daylight’s bank
records showing more than $2.5 million of the $4.5 million received into the 9714
account between November 2008 and October 2010 deposited into a Daylight account.
Rose admitted to working at Daylight, and telemarketers testified they were paid from
Daylight’s account. The California State Bar database identified co-defendant Haffar as
the only attorney employed by Haffar & Associates, and a summer intern testified by
declaration that two other attorneys worked out of Haffar’s office, but they had private
offices and maintained separate practices. Former Haffar & Associates employees
testified that Haffar was rarely in the main office or the telemarketing sales office. Rose
also admitted by default that no meaningful services were performed on behalf of the
solicited clients. Thus, substantial evidence in the record shows that Haffar & Associates
generated little or no revenue in other practice areas, or otherwise provided “hundreds of
individuals … significantly lower mortgage payments” as Rose contends.5
       Finally, the $60,000 settlement with co-defendant Nazarinia does not undermine
the judgment against Rose. That settlement occurred after the trial court denied
plaintiffs’ motion for summary adjudication of Nazarinia’s liability under the Act, finding

       5
         Even if some clients received services of value, those contracts were void as
unlawful solicitations under Business and Professions Code section 6154 because they
were procured through the services of “a runner or capper,” i.e., “any person, firm,
association or corporation acting for consideration in any manner or in any capacity as an
agent for an attorney at law or law firm … in the solicitation or procurement of business
for the attorney at law or law firm[.]” (Bus. & Prof. Code, § 6151.)

                                             14
a triable issue regarding his knowledge and furtherance of the alleged conspiracy. That
settlement reflected the cost and associated risks of going to trial to establish Nazarinia’s
culpability. In contrast, not only had Rose admitted his liability by defaulting, witness
declarations show Rose’s direct and extensive involvement in the solicitation scheme. As
head of the sales department, Rose operated the automated computer dialer that generated
the sales leads, supervised the telemarketers, wrote telemarketing scripts, and directly
solicited class members. The record contains substantial evidence to support the trial
court’s finding that class members suffered at least $3.8 million in damages.6 Given
Rose’s far-reaching involvement, we cannot say that the trial court’s judgment shocks our
conscience, or is disproportionate to the evidence.
                                    III. DISPOSITION
       The judgment is affirmed as to defendant Rose.

       6
         Rose does not contest the $50,000 awarded to the Baileys, plaintiffs’ entitlement
to treble damages under RICO, costs, or attorney’s fees.

                                             15
                               ____________________________________
                               Grover, J.

WE CONCUR:

____________________________
Rushing, P.J.

____________________________
Márquez, J.

Bailey et al. v Rose
H040711