Court Opinion

ID: 3209294
Source: CourtListenerOpinion
Date Created: 2016-06-03 22:02:13.020308+00
Date Added: 2024-06-11T14:29:22.521518
License: Public Domain

Filed 6/3/16 Haddad v. Willis CA1/3
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                DIVISION THREE

KHOSROW HADDAD,
         Plaintiff and Respondent,
                                                                     A145369
v.
LILLIYA G. WILLIS,                                                   (Contra Costa County
                                                                     Super. Ct. No. MSC1401218)
         Defendant and Appellant.

         Appellant Lilliya G. Willis (Willis), in propria persona, appeals from the trial
court’s order denying her motion to set aside a default and default judgment entered in
favor of respondent Khosrow Haddad (Haddad) and against Willis. She contends the
default and default judgment were the result of excusable neglect or mistake, or were
procured by fraud. We reject the contention and affirm the order.
                              FACTUAL AND PROCEDURAL BACKGROUND
         On June 25, 2014, Haddad filed a complaint against Willis alleging breach of
contract, quiet title, accounting, unjust enrichment, partition, declaratory relief,
imposition of constructive trust, and ouster. He filed a notice of lis pendens the same
day. He alleged in his complaint that he and Willis were joint owners of a single family
home (the Property) located in Antioch, California. On or about December 11, 2011,
they agreed to live in the Property together. Haddad would pay for two-thirds of the
costs and expenses related to the Property—including the down payment, mortgage,
taxes, insurance, and improvements—and would own two-thirds of the Property. Willis
would pay for one-third of the costs and expenses related to the Property, and would own

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one-third of the Property. If one party contributed more than his or her share, that party
would receive a corresponding additional interest in the Property.
       Based on the agreement, Haddad executed a grant deed transferring two-thirds of
the interest in the Property to his personal trust and one-third of the interest to Willis.
Haddad paid $140,000 towards the down payment and Willis paid $30,013 towards the
down payment. They agreed Willis would reimburse Haddad for the additional $46,666
she was required to pay towards the down payment so that she would retain her one-third
interest in the Property. Willis never reimbursed him the $40,666, and thereafter failed to
pay for one-third of the monthly mortgage. Haddad also contributed over $225,000 in
improvements to the Property, but Willis did not reimburse him one-third of that cost.
       On May 15, 2014, Willis excluded Haddad from the Property and took sole and
exclusive possession of it. She refused to allow him to enter, yet expected him to
continue paying the costs and expenses related to the Property, including the mortgage,
which was in his name only. In his complaint, Haddad sought, among other things, an
accounting of all property acquired by the parties, division of property, transfer of title or
compensatory damages in the alternative, a partition by sale, a judicial determination as
to his right, title and interest to the Property, and an order declaring that Willis was
holding the Property in trust for Haddad. The summons and complaint and other related
documents were served on Willis by a registered California process server on
July 12, 2014. On August 12, 2014, Haddad filed a request for entry of default, which he
served on Willis by mail the same day. The trial court granted the request.
       Thereafter, on October 30, 2014, Haddad filed a request for a default judgment
seeking declaratory relief “or decree, that [Willis] has no right, title, or interest, in the real
property” and that her “alleged Deed to the Property is null, void, and of no effect.”
Haddad also sought “a Judgment of Ejectment to remove Willis from the Property which
she wrongfully possesses and [from which she] has ousted [Haddad].” Haddad submitted
a declaration setting forth detailed information regarding the purchase, the loan, and the
parties’ agreement. He attached to his declaration a copy of the grant deed, loan

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documents, and copies of receipts and credit card statements for the various expenses he
incurred in improving the Property.
       On November 12, 2014, the trial court granted Haddad’s request and entered a
default judgment in favor of Haddad and against Willis. It ordered, declared and
adjudged that Haddad held 100 percent of the interest in the Property and that Willis had
no interest in the Property. It declared the grant deed null and void and of no effect. It
ordered that Haddad shall recover exclusive possession of the Property, and that a writ of
execution shall issue directing the removal of Willis from the Property. A Notice of
Entry of Judgment was served by mail on Willis on November 14, 2014.
       On March 3, 2015, Willis filed a motion “to set aside unlawful detainer default,”
challenging the entry of default and default judgment. She declared she had a one-third
interest in the Property and was lawfully residing in it when Haddad filed his action and
obtained a default and default judgment against her. She made a $30,000 down payment
on the Property and also “added value to the property through [her] labor (remodeling,
interior design, and landscaping).” She was “locked . . . out” of the Property on
January 31, 2015, and had nowhere to stay. Haddad refused to allow her inside to
retrieve her car, identification, computer, clothing, and other personal belongings, as well
as paintings worth $350,000.
       She declared she had previously paid the couple’s expenses when they lived
together in Napa and had paid $1,800 per month in rent and utility bills, “exhausting my
savings as I did not have income.” While they were living in Napa, Haddad suggested
they purchase a home and share equal ownership in the home. A year later, Haddad
“suppressed my ownership from half to 1/3, swearing on his mother’s grave that he will
treat me very good and I never would regret anything if I let him to have his way.”
Haddad “induced me to purchase the subject property and to cohabitate with him by
promising me that he would always take care of me. Plaintiff has breached his promise
to support me and has now breached his promise for me to enjoy the ownership and the
subject property with one-third of the ownership.”

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       Willis declared, “I do not believe I received proper notice of the action.” “While I
received some papers that I now understand were related to this unlawful detainer action,
I did not understand the papers and my obligation to respond within a particular time. I
mistakenly thought Plaintiff was threatening me and bluffing with court action and not
actually engaged in an official legal action against me as I never have received one paper
that actually came from the court.” She did not believe she had “all the papers related to
this action” and believed she “misunderstood the meaning of the copy of the judgment I
saw, because it said ‘proposed.’ I expected at least something with an original signature
of a judge and envelope coming directly from the court house.”
       Willis argued the judgment should be set aside based on “excusable mistake
and/or excusable neglect.” Citing Code of Civil Procedure section 473, subdivision (b),
Willis argued she failed to respond due to a “mistake of fact as to the papers” because she
thought they were merely a “threat of legal action by . . . Haddad and not real court
papers.” She “made an honest mistake of law” because she is “not familiar with unlawful
detainer laws, and speaks English as a second language.” She argued she was also
entitled to relief under Code of Civil Procedure, section 1179, which allows the court to
“relieve a tenant against a forfeiture of a lease or rental agreement.” She asserted that
Haddad fraudulently induced her to pay the $30,000 down payment by promising to
“always take care of [her] and let [her] live in the property, and that she would be a one-
third owner of the property.”
       In her answer to the complaint, Willis declared that Haddad “locked her out from
her home in pajamas only” and that she was thereafter taken to an emergency room and
another hospital where she was diagnosed with adjustment disorder. She was an artist
and had no family or a place to stay. She asked the court to “[r]estore [her] to her former
premises due to extreme hardship” and allow her to “have roommates in the house” so
she could pay the mortgage and property taxes.

                                              4
       Haddad filed an opposition to the motion on May 1, 2015.1 He argued that
Willis’s request was time-barred and also failed on the merits because she had not shown
excusable neglect or mistake, and had not described any extrinsic fraud that prevented her
from defending the action. He argued that all of the alleged fraudulent acts to which
Willis referred related to the merits of the underlying complaint, and not to the issue of
whether she was entitled to equitable relief.
       The trial court issued a tentative ruling, which it adopted as it order on
May 14, 2015. The court ruled: “Defendant’s motion to set aside the default and default
judgment is denied. The motion is untimely under CCP 473(b). In addition, defendant
has failed to allege extrinsic fraud for purposes of obtaining equitable relief from the
default.”
                                        DISCUSSION
       Willis contends the order must be reversed because the default and default
judgment were the result of excusable neglect or mistake under Code of Civil Procedure,
section 473,2 subdivision (b), or were procured by fraud, entitling her to equitable relief.
We disagree.
       Section 473, subdivision (b), provides in part: “The court may, upon any terms as
may be just, relieve a party or his or her legal representative from a judgment, dismissal,
order, or other proceeding taken against him or her through his or her mistake,
inadvertence, surprise, or excusable neglect. Application for this relief shall be
accompanied by a copy of the answer or other pleading proposed to be filed therein,
otherwise the application shall not be granted, and shall be made within a reasonable
time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding
was taken.” The six-month time limitation of section 473 is jurisdictional; the court has

       1
          Willis asserts the opposition was not timely filed, but the record shows it was
filed nine court days before the hearing. It was therefore timely under Code of
Civil Procedure, section 1005, subdivision (b), which provides that oppositions must be
filed and served “at least nine court days . . . before the hearing.”
        2
          All further statutory references are to the Code of Civil Procedure unless
otherwise stated.

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no power to grant relief under section 473 once the time has lapsed. (Rutan v. Summit
Sports, Inc. (1985) 173 Cal. App. 3d 965, 970 (Rutan).)
       The six-month period begins to run when the clerk enters the default, not when the
default judgment is entered, unless the defendant is seeking relief only from the default
judgment, and not the default. (Rutan, supra, 173 Cal.App.3d at p. 970; Nemeth v.
Trumbull (1963) 220 Cal. App. 2d 788, 791.) “[The] [r]eason for the rule is that vacation
of the judgment alone would be an idle act; if the judgment is set aside the default would
remain and permit immediate entry of another judgment giving the plaintiff the relief to
which his complaint entitles him.” (Nemeth v. Trumbull, supra, 220 Cal.App.2d at
pp. 791–792.) “The reason for the rule disappears where the objective of the motion is to
vacate a portion of the judgment in excess of that demanded by the
complaint . . . Possibly, then, . . . the 6-month period should be computed from the date of
the judgment . . . .” (Id. at p. 792.)
       Here, Willis seeks relief from both the default and the default judgment.
Moreover, she does not assert—nor does the record support a finding—that Haddad
obtained anything in the default judgment that was “in excess of that demanded by the
complaint.” Thus, even if Willis were to successfully challenge the default judgment, to
do so would be “an idle act” because the default would remain, and Haddad would be
able to immediately obtain another default judgment. Accordingly, the six-month period
in this case commenced on August 12, 2014, the date of entry of default. Her motion to
set aside the default and default judgment, filed March 3, 2015, therefore fell outside the
jurisdictional six-month time limitation of section 473.3

       3
        We note that even if Willis were challenging only the entry of the default
judgment and not the default, her section 473 claim would fail on the merits. She asserts
her lack of knowledge of the law and limited English skills prevented her from fully
appreciating the nature or effect of the unlawful detainer papers. A trial court, however,
does not have the authority to asset aside a default judgment on the ground that the
defendant did not realize the legal effect of failing to file an answer. (Yarbrough v.
Yarbrough (1956) 144 Cal. App. 2d 610, 615.)

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       Even after the six-month period has passed, however, a trial court may still vacate
a default on equitable grounds. This is because courts have the inherent authority to grant
relief from defaults or default judgments procured by extrinsic fraud. (Weitz v. Yankosky
(1966) 63 Cal. 2d 849, 855; Aldrich v. San Fernando Valley Lumber Co. (1985)
170 Cal. App. 3d 725, 737.)
       A trial court may grant relief under its inherent equity power if the aggrieved party
was prevented from presenting a claim or defense because of the fraud of the opponent.
(In re Marriage of Stevenot (1984) 154 Cal. App. 3d 1051, 1068; DeMello v. Souza (1973)
36 Cal. App. 3d 79, 85.) “Two essential conditions are found in a classic case in equity
which seeks to set aside a judgment: first, the judgment is one entered against a party by
default under circumstances which prevented him from presenting his case; second, these
circumstances result from extrinsic fraud practiced by the other party or his attorney.”
(Otani v. Kisling (1963) 219 Cal. App. 2d 438, 442.)
       A party who seeks to have a default or default judgment vacated under the trial
court’s equity power must make a stronger showing than is necessary to obtain relief
under section 473. (Gribin Von Dyl & Associates, Inc. v. Kovalsky (1986)
185 Cal. App. 3d 653, 660.) “[D]uring the period when relief under section 473 is
available, there is a strong public policy in favor of granting relief and allowing the
requesting party his or her day in court. Beyond this period there is a strong public policy
in favor of the finality of judgments and only in exceptional circumstances should relief
be granted.” (In re Marriage of Stevenot, supra, 154 Cal. App. 3d 1051, 1071.) We
review a challenge to an order denying a motion to vacate on equitable grounds for an
abuse of discretion. (In re Marriage of Park (1980) 27 Cal. 3d 337, 347; Weitz v.
Yankosky, supra, 63 Cal.2d at pp. 854, 856 [the court’s discretion to grant equitable relief
is narrower, not wider, than its power to grant relief under section 473].)
       Willis asserts that Haddad engaged in fraud by agreeing to “always take care of
[Willis], treat her in a very good way and that she would be owner of the property. Based
on these promise[s], [Willis] paid $30,000 toward down payment of the property and
worked full time on remodeling and improving the property for over two years.” She

                                              7
asserts these promises also led her to believe that the unlawful detainer papers she
received were not “real legal document[s].” To the extent she is arguing that Haddad’s
statements to her—made before or around the time the parties purchased the Property
together—induced her into believing she did not have to respond to the complaint, we
conclude the trial court did not abuse its discretion in ruling that these facts did not
constitute extrinsic fraud.
       To warrant relief from judgment based on fraud, the extrinsic fraud must have
brought about the entry of the judgment; for example, by lulling the movant into
sacrificing his opportunity to present a defense. (Hopkins & Carley v. Gens (2011)
200 Cal. App. 4th 1401, 1410.) Examples of extrinsic fraud include the “[f]ailure to give
notice of the action to the other party,” “[c]onvincing the other party not to obtain counsel
because the matter is not going to proceed,” and seeking a judgment “after having
represented to the other party that it would not proceed without further notice.”
(In re Marriage of Stevenot, supra, 154 Cal.App.3d at p. 1051.) Here, Haddad provided
proper notice of the proceedings to Willis by having her personally served with the
summons and complaint.4 He notified her of the request for entry of default, and served
her with the default judgment. Because there is nothing in the record indicating Haddad
or his attorney did anything to prevent Willis from participating in the proceedings, the
trial court did not abuse its discretion in denying Willis’s request for equitable relief.
                                        DISPOSITION
       The order is affirmed. Respondent Khosrow Haddad shall be entitled to his costs
on appeal.

       4
        Willis asserts on appeal that she never received the summons and complaint
because she told the “strange man coming toward me and fetching me papers”—
presumably the registered process server—“to get out [of my home] along with his
papers.” We disregard this claim, which she makes for the first time on appeal, and not
under oath. In fact, she suggested below that she had received the papers but that she
simply did not understand what they were, or “mistakenly thought [Haddad] was
threatening me and bluffing with court action and not actually engaged in an official legal
action against me . . . .”

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                                _________________________
                                McGuiness, P.J.

We concur:

_________________________
Pollak, J.

_________________________
Jenkins, J.

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