Court Opinion

ID: 2643801
Source: CourtListenerOpinion
Date Created: 2013-11-22 22:50:07.040466+00
Date Added: 2024-06-11T12:52:19.093279
License: Public Domain

Filed 11/22/13
                            CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            SECOND APPELLATE DISTRICT

                                     DIVISION ONE

CONSECO MARKETING, LLC,                         B244444

        Plaintiff and Respondent,               (Los Angeles County
                                                Super. Ct. No. BS130398)
        v.

IFA AND INSURANCE SERVICES,
INC., et al.,

        Defendants and Appellants.

        APPEAL from an order of the Superior Court of Los Angeles County, Matthew
St. George, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.
        Kenneth D. Sisco for Defendants and Appellants.
        Adam D. Cotter; Anderson, McPharlin & Conners and Richard P. Tricker for
Plaintiff and Respondent.
                 _____________________________________________
          Conseco Marketing, LLC (judgment creditor), obtained a judgment based on a
sister state judgment pursuant to the Sister State and Foreign Money—Judgments Act
(SSFMJA) (Code Civ. Proc., § 1710.10 et seq.) against IFA and Insurance Services, Inc.
(IFA) and Retiring America and Insurance Services, Inc. (RA; collectively, judgment
debtors). (Undesignated section references are to the Code of Civil Procedure.)
Judgment debtors appeal from the order denying their motion to set aside default and
vacate the judgment. (All references to judgment are to the judgment entered pursuant to
the SSFMJA.)
          Judgment debtors contend judgment creditor lacks standing to apply for entry of
the sister state judgment because judgment creditor is not qualified to do business in
California. They argue their motion is timely under the SSFMJA because they were not
served with notice of entry of the judgment and only had belated “actual notice” of such
entry. They maintain their motion is timely under section 473.5 and should have been
granted under section 473.5 because they were deprived of an opportunity to defend in
view of a lack of service of process and their belated “actual notice” of the sister state
action.
          This appeal presents these issues: Is a judgment creditor which is a foreign limited
liability company required to qualify to do business in California as a precondition to
applying for entry of a sister state judgment under the SSFMJA? Is the 30-day limit to
make a motion to vacate the judgment triggered by service on a corporate judgment
debtor’s designated agent for service, without regard to when the judgment debtor
obtained “actual notice” of entry of the sister state judgment under the SSFMJA? Is
section 473.5 applicable to the SSFMJA?
          We affirm the order. A judgment creditor which is a foreign limited liability
company does not have to qualify to do business in California in order to enforce a sister
state judgment under the SSFMJA. Substantial evidence supports the trial court’s
findings judgment debtors were served properly with process in the sister state action and
with notice of entry of the judgment through their designated agent for service in
California. Such service on the designated agent, not a judgment debtor’s “actual

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notice,” triggers the 30-day limit for making a motion to vacate the judgment, so long as
the judgment debtor was effectively served with process in the sister state action. Section
473.5, which is a procedural remedy regarding relief from a default or default judgment,
is inapplicable to a judgment entered under the SSFMJA.
                                    BACKGROUND
1. The Indiana or Sister State Action
       On August 20, 2010, in an Indiana state court, judgment creditor filed a complaint
for breach of contract against judgment debtors. On August 26, 2010, the clerk served a
copy of the summons and complaint by certified mail with return receipt requested to
each of the judgment debtors in care of Executive on the Go, Inc. (Executive), their
designated agent for service. On August 30, 2010, Angela Cole of Executive signed the
return receipts in California.
       On October 6, 2010, judgment creditor filed a motion for entry of default
judgment. On October 14, 2010, the Indiana court entered a default against judgment
debtors. On December 6, 2010, a hearing was set on the damages issue. On December 7,
2010, the court entered judgment in favor of judgment creditor and against judgment
debtors for $675,256.45.
2. The California Full Faith and Credit Judgment
       On February 15, 2011, in the Los Angeles Superior Court, judgment creditor filed
its application for entry of judgment on sister state judgment pursuant to the SSFMJA.
On February 25, 2011, the clerk entered the sister state judgment. On March 7, 2011, a
registered California process server personally served a copy of the notice of entry of
judgment on sister state judgment on Sandra Sisneros, a “Person Authorized By The
Corporation[, namely, Executive,] to Receive Service of Process” on behalf of IFA and
RA. Proofs of service were filed on March 11, 2011.
3. Denial of Motion to Set Aside Default and Vacate Judgment
       On August 22, 2012, seventeen months after personal service of the notice of entry
of the sister state judgment, judgment debtors filed a motion to vacate judgment.
Judgment creditor filed opposition and objections to certain declarations.

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         The superior court denied the motion as untimely. This appeal is taken from that
order.
                                         DISCUSSION
1. Enforcement of Sister State Judgment in California through SSFMJA
         a. Sister State Judgment Entitled to Full Faith and Credit
         “Article IV, section 1 of the United States Constitution provides that ‘[f]ull Faith
and Credit shall be given in each State to the public Acts, Records and judicial
Proceedings of every other State.’ ‘It has long been the law that “the judgment of a state
court should have the same credit, validity, and effect in every other court in the United
States, which it had in the state where it was pronounced.” [Citations.]’ [Citation.]
‘Therefore, under California law, the judgment of a sister state must be given full faith
and credit if that sister state had jurisdiction over the parties and the subject matter, and
all interested parties were given reasonable notice and opportunity to be heard.
[Citation.]’ [Citation.]” (Liquidator of Integrity Ins. Co. v. Hendrix (1997) 54
Cal. App. 4th 971, 975 (Liquidator).)
         b. Application for Enforcement of Sister State Judgment
         “[A] sister state judgment is not, by itself, enforceable in California. It is only
after the sister state judgment has been made a California judgment that any form of
execution or enforcement can be had.” (Epps v. Russell (1976) 62 Cal. App. 3d 201, 204.)
         “In response to the constitutional mandate of full faith and credit, the California
Legislature enacted [the SSFMJA, which sets forth] several statutory provisions that
provide economical and expeditious registration procedures for enforcing sister state
money judgments in California. [Citation.] A California judgment can be obtained
simply by registering a sister state judgment with the superior court, thereby avoiding the
necessity of bringing a completely independent action here. [Citations.] With certain
exceptions, the new judgment has the same effect as an original California money
judgment and may be enforced or satisfied in like manner.’ [Citation.]” (Liquidator,
supra, 54 Cal.App.4th at p. 975.)

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       In California, pursuant to the SSFMJA, in a special proceeding “[a] judgment
creditor may apply for the entry of a judgment based on a sister state judgment by filing
an application pursuant to Section 1710.20.” (§ 1710.15, subd. (a).) “An application for
entry of a judgment based on a sister state judgment shall be filed in a superior court.”
(§ 1710.20, subd. (a).) “[T]he clerk shall enter a judgment based upon the application for
the total of the following amounts as shown therein: [¶] (1) The amount remaining
unpaid under the sister state judgment. [¶] (2) The amount of interest accrued on the
sister state judgment (computed at the rate of interest applicable to the judgment under
the law of the sister state). [¶] (3) The amount of the fee for filing the application for
entry of the sister state judgment.” (§ 1710.25, subd. (a).)
       As this court previously explained, the entry of a sister state judgment by the clerk
is a ministerial, not a judicial, act, and the SSFMJA “simply permits the registration of a
sister state judgment so it may be enforced against property located in this state.
[Citation.]” (Bank One Texas v. Pollack (1994) 24 Cal. App. 4th 973, 978–979.) An
application for entry of a sister state judgment under the SSFMJA is not the exclusive
means to enforce the sister state judgment in California. As an alternative, such
enforcement may be sought through a traditional lawsuit. (§ 1710.60.)
       c. Thirty Days to Make Motion to Vacate Judgment Upon Notice
       The omission of the SSFMJA to provide for notice and hearing before entry of the
sister state judgment by the clerk does not render such judgment unconstitutional. After
notice of entry of that judgment, the judgment debtor may make a motion to vacate the
judgment. (Liebow v. Superior Court (1981) 120 Cal. App. 3d 573, 576.)
       “Notice of entry of judgment shall be served promptly by the judgment creditor
upon the judgment debtor in the manner provided for service of summons . . . . Notice
shall . . . inform the judgment debtor that the judgment debtor has 30 days within which
to make a motion to vacate the judgment.” (§ 1710.30, subd. (a).) “Not later than 30
days after service of notice of entry of judgment pursuant to Section 1710.30 . . . the
judgment debtor, on written notice to the judgment creditor, may make a motion to vacate
the judgment under this section.” (§ 1710.40, subd. (b).)

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       The judgment is subject to challenge on a variety of grounds, including failure to
serve or defective service of the notice of entry of judgment. The 30-day limit does not
apply where the judgment debtor was not served properly with process in the sister state
action. (Airlines Reporting Corp. v. Renda (2009) 177 Cal. App. 4th 14, 20 [30-day limit
does not apply where sister state judgment void for lack of personal jurisdiction].)
“When a court lacks jurisdiction in a fundamental sense, an ensuing judgment is void,
and ‘thus vulnerable to direct or collateral attack at any time.’ [Citation.]” (People v.
American Contractors Indemnity Co. (2004) 33 Cal. 4th 653, 660 (American Contractors
Indemnity).)
       d. Defenses to Recognition of Sister State Judgment under SSFMJA
       A sister state judgment entered pursuant to the SSFMJA “may be vacated on any
ground which would be a defense to an action in this state on the sister state judgment[.]”
(§ 1710.40, subd. (a).) “Following section 1710.40, the Law Revision Commission
Comment explains: ‘Common defenses to enforcement of a sister state judgment include
the following: [1] the judgment is not final and unconditional . . . ; [2] the judgment was
obtained by extrinsic fraud; [3] the judgment was rendered in excess of jurisdiction;
[4] the judgment is not enforceable in the state of rendition; [5] the plaintiff is guilty of
misconduct; [6] the judgment has already been paid; [and 7] suit on the judgment is
barred by the statute of limitations in the state where enforcement is sought.’ (Law
Revision Com. com., 19A West’s Ann. Code Civ. Proc. (1982) foll. § 1710.40, p. 694.)”
(Liquidator, supra, 54 Cal.App.4th at p. 976, italics added.)
       We note section 1710.40 does not describe or enumerate the defenses which
would justify vacating a sister state judgment, and, although the Law Revision
Commission does enumerate certain defenses, such defenses are not all-inclusive.
Rather, by using the word “include,” the Commission simply intended such defense
references as examples of the types of defenses which fall within section 1710.40. The
defense that the sister state judgment is void for lack of fundamental jurisdiction
constitutes another example. (See American Contractors Indemnity, supra, 33 Cal.4th at

                                               6
pp. 660–661; cf. Wells Fargo Bank, NA v. Baker (2012) 204 Cal. App. 4th 1063, 1068
(Wells Fargo Bank).)
2. Under SSFMJA, Judgment Creditor Need Not Qualify in California
       Judgment debtors contend judgment creditor lacks standing to obtain entry of a
sister state judgment because it is a nonqualified foreign corporation not entitled to do
business, namely, transact intrastate business, in California. We disagree.
       “‘Transact intrastate business’ means to enter into repeated and successive
transactions of business in this state, other than in interstate or foreign commerce.”
(Corp. Code, § 17001, subd. (ap).) “A foreign corporation shall not transact intrastate
business without having first obtained from the Secretary of State a certificate of
qualification.” (Corp. Code, § 2105, subd. (a).) “A foreign corporation transacting
intrastate business which has failed to qualify with the Secretary of State may
nevertheless defend an action brought against it in state court [and] may also commence
an action in state court[; it] may not, however, maintain an action commenced prior to
qualification, except upon the satisfaction of certain conditions. [Citation.]” (United
Medical Management Ltd. v. Gatto (1996) 49 Cal. App. 4th 1732, 1739.) Similarly, “[a]
foreign limited liability company transacting intrastate business in this state shall not
maintain any action, suit, or proceeding in any court of this state until it has registered in
this state.” (Corp. Code, § 17456, subd. (a).)
       But “a foreign limited liability company shall not be considered to be transacting
intrastate business . . . solely by reason of carrying on in this state any one or more of the
following activities: [¶] . . . Maintaining or defending any action or suit” or “Securing
or collecting debts[.]” (Corp. Code, § 17001, subd. (ap)(2)(A) & (H).) Thus, application
of judgment creditor, a foreign limited liability company, for entry of a sister state
judgment does not constitute the transaction of intrastate business because in proceeding
under the SSFMJA, judgment creditor is “[m]aintaining . . . [an] action” for the sole
purpose of “collecting [a] debt[].”
       Also, we note the SSFMJA does not contain a requirement that a judgment debtor
which is a foreign corporation or foreign limited liability company, such as judgment

                                               7
creditor here, needs to qualify with the Secretary of State as a precondition to invoking its
provisions to enforce a sister state judgment.
       Accordingly, judgment creditor’s proceeding under the SSFMJA in a California
court is permitted.
3. Motion to Vacate and Set Aside Judgment Untimely
       Judgment debtors contend the trial court abused its discretion in denying their
motion to vacate judgment as untimely. We disagree because substantial evidence
supports the court’s findings service of process on judgment debtors in the Indiana action
was proper and the motion was time-barred because it was made 17 months, rather than
within 30 days, after proper service on judgment debtors with notice of entry of the
judgment.
       a. Legal Principles
       The party moving under section 1710.40 to set aside the sister state judgment has
“the burden to show by a preponderance of the evidence why it was entitled to relief.
[Citation.]” (Tsakos Shipping & Trading, S.A. v. Juniper Garden Town Homes, Ltd.
(1993) 12 Cal. App. 4th 74, 88 (Tsakos).)
       For example, if the movant proves service of process in the sister state action was
not made or was defective, this burden has been met. Under these circumstances, the
sister state judgment is void for lack of fundamental jurisdiction and therefore
unenforceable in California. (American Contractors Indemnity, supra, 33 Cal.4th at
p. 660 [“‘Lack of jurisdiction in its most fundamental . . . sense means . . . absence of
authority over . . . the parties.’”].)
       In contrast, where service of process in the sister state action is proper, in order to
prevail on the motion to vacate the judgment, the burden is on movant both to:
(1) establish the motion is not time-barred; and (2) plead and prove a viable defense to an
action in this state on the sister state judgment.
       “The ruling on a motion to set aside a judgment rests in the sound discretion of the
trial court and will not be set aside on appeal unless a clear abuse of discretion appears.
[Citations.] On appeal . . . we view all factual matters most favorably to the prevailing

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party. [Citation.]” (Tsakos, supra, 12 Cal.App.4th at pp. 88–89.) We will not revisit the
trial court’s factual determination if supported by substantial evidence, and where no
conflict in the evidence exists, our review is de novo. (See, e.g., Wells Fargo Bank,
supra, 204 Cal.App.4th at p. 1068.) “Moreover, it is for the trial court to evaluate the
credibility of witnesses [citation] . . . . ‘A witness may be contradicted by the facts he
states . . . and there may be so many omissions in his account of particular transactions or
of his own conduct as to discredit his whole story.’ [Citation.]” (Tom Thumb Glove Co.
v. Han (1978) 78 Cal. App. 3d 1, 5.)
       b. Service Effected Properly in California and Indiana
       Judgment debtors contend they were not served with notice of entry of the sister
state judgment or with process in the Indiana action. The record belies their contentions.
       Judgment debtors are California corporations. It is undisputed Executive was their
designated agent for service during all relevant times. Their position is they were not
given “actual notice” of entry of the sister state judgment or of the sister state action
through service on their designated agent. As support, they rely on the declaration of
Brandon Cade, Executive’s office manager.
       Cade declared that from sometime in 2008 until March 1, 2012, for IFA and
October 25, 2011, for RA, Executive was their agent for service. During a search of
Executive’s records, he “found nothing to indicate that Executive received any sort of
paperwork, as Agent for Service, on behalf of either IFA or RA” and “if Executive had
received papers on behalf of either IFA or RA, those papers would have been logged in,
and forwarded to the client company; in this case, IFA and RA. There are no such log
entries.”
       While the Cade declaration may constitute evidence that Executive had no log
entries that reflected Executive was served on behalf of judgment debtors with notice of
entry of the sister state judgment and with process in the Indiana action, the declaration
does not refute the evidence establishing that Executive in fact had been served with such
notice and process. The record reflects service was made as follows.

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         In the Indiana action, on August 30, 2010, the court clerk served the summons and
complaint by certified mail with return receipt requested on Executive, as judgment
debtors’ agent for service of process. In California, Angela Cole of Executive signed the
return receipts for the summons and complaint served by the Indiana court clerk through
certified mail. On October 6, 2010, judgment creditor’s motion for entry of default
judgment against judgment debtors was filed and a copy was served on Executive. On
October 14, 2010, the Indiana court entered a default against judgment debtors.
Executive was served with a copy of that default order. Executive was served with a
notice of the hearing for December 6, 2010, regarding damages on default judgment. On
December 7, 2010, Executive was served with the court order for damages on default
judgment.
         In the SSFMJA proceeding, on March 7, 2011, notice of entry of the sister state
judgment was served on Executive pursuant to section 1710.30. This notice was
personally served on Sandra Sisneros of Executive for each judgment debtor. Proofs of
personal service were filed March 11, 2011.
         Judgment debtors offer no evidence Sisneros was not authorized by Executive to
be served with the notice of entry of the sister state judgment or a declaration from
Sisneros stating she never was served with this document. Nor do they offer evidence
Cole was not authorized by Executive to sign the return receipts for the certified mail in
the Indiana action or a declaration in which she disavowed her signature evidencing such
service.
         In addition, at the hearing on the motion, judgment debtors did not contest the
evidence reflecting the propriety of the service on Cole and Sisneros for Executive. Their
attorney in fact conceded judgment creditor had “provided pretty good evidence that the
agent for service was served,” and, “I don’t know what to do about that, except to argue”
Conseco could have called about their imminent default and asked, “What is going on
here.”
         As noted, the 30-day limit for making a motion to vacate the judgment under the
SSFMJA is inapplicable where a judgment debtor was not properly served with process

                                              10
in the sister state action. “‘[C]ompliance with the statutory procedures for service of
process is essential to establish personal jurisdiction. [Citation.] Thus, a [sister state]
default judgment entered against a defendant who was not served with a summons in the
manner prescribed by statute is void. [Citation.]’” (Ellard v. Conway (2001) 94
Cal. App. 4th 540, 544.) But this is not the case here because judgment debtors do not
contend service of process by certified mail with return receipt was unauthorized under
Indiana law. We note California law would provide for such service in an action.
(§ 415.40.)
       Judgment debtors had 30 days from personal service of the notice of entry of the
sister state judgment on March 7, 2011, to make a motion to vacate the judgment.
Judgment debtors did not file the motion until August 22, 2012, which was 17 months
later. The motion therefore was untimely.
       c. Actual Notice Inconsequential
       Judgment debtors contend they are entitled to have the sister state judgment
vacated because they had no “actual notice” of entry of that judgment under the SSFMJA
or of the Indiana action until about March 3, 2012, after judgment creditor levied on one
of IFA’s bank accounts. Their contention is without merit.
       When judgment debtors obtained “actual notice” of entry of the sister state
judgment is inconsequential under the SSFMJA. Under “section 1710.40, subdivision
(b), actual knowledge does not commence the running of the 30-day period. Rather, the
statute explicitly states that the 30-day period for bringing the motion commences with
service of the notice of [entry of] the sister state judgment.” (Tsakos, supra, 12
Cal.App.4th at p. 84.) And, as discussed above, judgment debtors were properly served
with notice of entry of the sister state judgment and with the summons and complaint in
the Indiana action.

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4. Section 473.5 Inapplicable to Judgment Under SSFMJA
       Judgment debtors contend the trial court erred in refusing to vacate the sister state
judgment pursuant to section 473.5. We disagree because section 473.5 is inapplicable to
a sister state judgment entered under the SSFMJA.1
       “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. The notice of motion shall 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).)
       Judgment debtors contend their motion to vacate judgment was timely under
section 473.5, subdivision (a) because it was made within 180 days after entry of the
sister state judgment. They contend the court should have vacated the sister state
judgment under section 473.5, subdivision (a) because their failure to offer a defense in
the Indiana action arose from the absence of service of process and their lack of actual
notice. The fatal fallacy of their position lies in their failure to recognize that section
473.5 is not applicable to a judgment entered pursuant to the SSFMJA.
       In Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal. App. 4th 195, at 203 the
court explained, “Section 473.5 is addressed to motions to set aside a default or default
judgment . . . . Section 473.5 is a procedural remedy by which a default or default

       1  In their reply brief, for the first time, judgment debtors make passing mention of
section 473. Judgment debtors have forfeited their claim to relief under section 473 by
failing to support that claim with any argument together with record references and
citation to applicable authorities. (MST Farms v. C.G. 1464 (1988) 204 Cal. App. 3d 304,
306; see also Boyle v. CertainTeed Corp. (2006) 137 Cal. App. 4th 645, 649–650; Sporn v.
Home Depot USA, Inc. (2005) 126 Cal. App. 4th 1294, 1303; Nwosu v. Uba (2004) 122
Cal. App. 4th 1229, 1246.)

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judgment may be set aside” and is inapplicable to a sister state judgment entered pursuant
to the SSFMJA because it is not a default or default judgment.
                                     DISPOSITION
      The order denying IFA and Insurance Services, Inc., and Retiring America and
Insurance Services, Inc.’s motion to vacate the judgment entered pursuant to the Sister
State and Foreign Money—Judgments Act (Code Civ. Proc., § 1710.10 et seq.) is
affirmed. Conseco Marketing, LLC, shall recover its costs on appeal.
      CERTIFIED FOR PUBLICATION.

                                                 MALLANO, P. J.
We concur:

      ROTHSCHILD, J.

      CHANEY, J.

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