Court Opinion

ID: 4635475
Source: CourtListenerOpinion
Date Created: 2020-11-23 20:02:24.019619+00
Date Added: 2024-06-11T07:58:23.501630
License: Public Domain

Filed 11/23/20 WVJP 2017-1 v. Barnes CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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 ONE

WVJP 2017-1, L.P.,                                     B292859

        Cross-complainant as                           (Los Angeles County
        Assignee and Appellant,                        Super. Ct. No. BC411601)

        v.

BRADLEY BARNES, et al.,

        Cross-defendants and
        Respondents.

      APPEAL from a judgment of the Superior Court of Los
Angeles County. Edward B. Moreton, Judge. Affirmed in part
and reversed in part with directions.
      Verus Law Group, Holly Walker and Mark N. Strom,
Cross-complainant as Assignee and Appellant.
      De Castro, West, Chodorow, Mendler & Glickfeld, Mark L.
Share, for Cross-defendants and Respondents.
              ___________________________________
       In 2013, Dove Street Capital Lenders obtained a default
judgment against Bradley and Allison Barnes. Five years later,
the Barneses moved to vacate the default pursuant to subdivision
(d) of Code of Civil Procedure section 473, which authorizes the
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court to vacate a void judgment at any time. The trial court
found the judgment to be void because it was entered even
though the Barneses had answered the cross-complaint.
       We conclude the motion to vacate the default was untimely
as to Bradley Barnes. A void judgment is one entered when the
court has no jurisdiction over an action. When the court does
have jurisdiction, a judgment entered in excess of that jurisdiction
is merely voidable, not void. Here, the judgment was merely
voidable as to Bradley Barnes because the court had jurisdiction
over him. Section 473 requires that a motion to vacate a voidable
judgment be brought within six months, which Mr. Barnes failed
to do.
       As to Allison Barnes, the court had no jurisdiction to enter
judgment against her because she was named in no cause of
action upon which judgment was ultimately granted. The
judgment against her was therefore void, and subject to collateral
attack at any time.
       Accordingly, we reverse as to Bradley Barnes, affirm as to
Allison Barnes, and remand the matter for further proceedings.
                         BACKGROUND
       On July 16, 2010, Dove Street Capital Lenders, LLC (Dove
Street) filed a cross-complaint against the Barneses and several
others to invalidate the conveyance via an allegedly forged deed

      1
        Undesignated statutory references will be to the Code of
Civil Procedure.

                                 2
of property at 1138 Louise Street, in Glendale, and to invalidate a
purchase money deed of trust in the amount of $1,371,000. The
heading of each of the 10 causes of action designated the cross-
defendants against whom it was asserted. Although Allison
Barnes was alleged in the body of the cross-complaint to be the
alter ego of other cross-defendants, the only causes of action
designating her as its target were the sixth, for unjust
enrichment, and ninth, for “notarial negligence.” And as
appellant’s counsel aptly acknowledged during oral argument, no
facts were alleged supporting the alter ego allegations.
       The Barneses answered the cross-complaint, after which
Dove Street amended it twice, although with no substantive
changes concerning the Barneses. The Barneses filed no further
answer.
       On March 26, 2013, the trial court entered default against
the Barneses on Dove Street’s second amended cross-complaint
even though they had answered the original complaint.
       On August 30, 2013, Dove Street filed a case summary in
support of the judgment and a request for attorney fees and costs,
detailing the evidence supporting its claims.
       On August 30, 2013, the court entered a default judgment
against Bradley Barnes in two separate sums of $3,999,046.94
and $2,102,150.96, and against Allison Barnes in the amount of
$2,102,150.96. The judgment was entered on the second cause of
action, for breach of guaranty, the seventh, for fraud, and the
tenth, for express indemnity, none of which was designated as
having been asserted against Allison Barnes.
       In 2017, Dove Street assigned its interest in the judgment
to WVJP 2017-1, L.P. (WVJP).

                                 3
       On August 1, 2018, almost five years after entry of
judgment, the Barneses moved to vacate the default and default
judgment pursuant to subdivision (d) of section 473 on the
grounds that the default and default judgment were void as a
matter of law because the Barneses had answered the original
cross-complaint, and because no cause of action had been
asserted against Allison Barnes, and no damages had been stated
against her in the prayer.
       WVJP opposed the motion, and later filed a sur-opposition
that the court disregarded as untimely.
       After a hearing, the court found the judgment was void
because the Barneses had answered the cross-complaint. It
therefore ordered the default and default judgment vacated.
       WVJP appeals.
                           DISCUSSION
       WVJP argues the Barneses’ motion to vacate the default
judgment was untimely because the judgment was not void but
merely voidable. We agree as to Bradley Barnes, but disagree as
to Allison Barnes.
       “Judgment may be had[] if the defendant fails to answer
the complaint.” (§ 585.) Conversely, default judgment may not
be had where the defendant answers the complaint.
       Subdivision (b) of section 473 authorizes the court to allow
relief from a default judgment on a showing of “mistake,
inadvertence, surprise, or neglect,” but a motion for such relief
must be made within six months of entry of the judgment.
       A judgment debtor who fails to bring a motion to vacate a
default judgment within six months may still obtain relief
pursuant to subdivision (d) of section 473, which authorizes the
court to vacate a void judgment at any time. (§ 473, subd. (d)

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[“The court may, . . . on motion of either party after notice to the
other party, set aside any void judgment or order”].) There is no
time limit for such relief.
       Finally, a trial court retains discretion to vacate a default
on equitable grounds even if statutory relief is unavailable.
(Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) “One ground
for equitable relief is extrinsic mistake—a term broadly applied
when circumstances extrinsic to the litigation have unfairly cost
a party a hearing on the merits.” (Ibid.) “But for a party to
qualify for such equitable relief on this basis, courts have
developed a three-part test: first, the defaulted party must
demonstrate it has a meritorious case; second, it must articulate
a satisfactory excuse for not presenting a defense to the original
action; and third, the moving party must demonstrate diligence
in seeking to set aside the default once it was discovered.” (Lee v.
An (2008) 168 Cal.App.4th 558, 566.)
       “The law strongly favors trial and disposition on the merits.
Therefore, any doubts in applying section 473 must be resolved in
favor of the party seeking relief. When the moving party
promptly seeks relief and there is no prejudice to the opposing
party, very slight evidence is required to justify relief. We will
more carefully scrutinize an order denying relief than one which
permits a trial on the merits.” (Mink v. Superior Court (1992) 2
Cal.App.4th 1338, 1343.)
       It is undisputed the Barneses sought relief under section
473 much later than six months after the judgment. “Although
the trial court has discretion to vacate the entry of a default or
subsequent judgment, this discretion may be exercised only after
the party seeking relief has shown that there is a proper ground
for relief, and that the party has raised that ground in a

                                 5
procedurally proper manner, within any time limits.” (Cruz v.
Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495.) After six
months have elapsed, “a trial court may grant a motion to set
aside that judgment as void only if the judgment is void on its
face.” (Id. at p. 496; see also Talley v. Valuation Counselors
Group, Inc. (2010) 191 Cal.App.4th 132, 146.)
      Therefore, the issue here is whether the judgment was
void.
     We review a trial court’s determination that a judgment is
void de novo. (Cruz v. Fagor America, Inc., supra, 146
Cal.App.4th at 496.)
      “A court can lack fundamental authority over the subject
matter, question presented, or party, making its judgment
void, or it can merely act in excess of its jurisdiction or defined
power, rendering the judgment voidable.” (In re Marriage of
Goddard (2004) 33 Cal.4th 49, 56.)
     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.” (People v.
American Contractors Indemnity Co. (2004) 33 Cal.4th 653,
660.) In contrast, a court acts in excess of its jurisdiction
“when 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.; see also In re Marriage of Goddard, supra,
33 Cal.4th at p. 56; Johnson v. E-Z Ins. Brokerage, Inc. (2009)
175 Cal.App.4th 86, 98 [a judgment is “void if the court lacked
jurisdiction over the subject matter or parties, for example, if
the defendant was not validly served with summons.

                                 6
[Citation]. In contrast, a judgment is valid but voidable if it is
the result of the court’s failure to follow proper procedure”].)
A.   The Judgment Against Allison Barnes is Void
      The Barneses argue the judgment is void as against
Allison Barnes because she was not named as a party to any
cause of action on which judgment was entered. We agree.
      Due process requires that a complaint apprise the
defendant of the nature of the plaintiff’s demand against her.
(Grappo v. McMills (2017) 11 Cal.App.5th 996, 1015; see Cal.
Rules of Court, rule 2.112 [“Each separately stated cause of
action . . . must specifically state: [¶] . . . [¶] . . . The party or
parties to whom it is directed (e.g., ‘against defendant
Smith’)”].) Failure to do so renders the complaint void. Here,
the cross-complaint named Allison Barnes only in two causes
of action, neither of which prevailed. She was not named in
the cause of action under which judgment was entered against
her. Therefore, that judgment is void.
     WVJP argues that Allison Barnes was discussed at
length in the body of the complaint, and was alleged to have
been the altar ego of defendants against whom judgment was
entered; therefore, she had notice of the claims against her.
We disagree. Although a defendant may be alleged to have
committed wrongdoing, the complaint must specify that the
plaintiff seeks redress for that wrongdoing. By naming Allison
Barnes to some causes of action but not others, the complaint
informed her it specifically sought no relief against her on the
claims for which she was not named.

                                   7
B. The Judgment Against Bradley Barnes was at Most
Voidable
     Bradley answered Dove Street’s cross-complaint, and he
had notice of the causes of action directed at him that
ultimately prevailed. Therefore, the trial court had
jurisdiction over the action and him.
      Section 585 authorizes entry of judgment when a
“defendant fails to answer the complaint.” Such entry of
judgment is accomplished in some circumstances by the clerk
of the court (§ 585, subd. (a)), and in others by the court itself
(id. at subd. (b)).
      Here, the trial court entered a default judgment even
though the Barneses had materially answered the cross-
complaint, which may have constituted a mistaken application
of section 585. (See Carrasco v. Craft (1985) 164 Cal.App.3d
796, 811 [an original answer is effective to deny the original
allegations repeated in an amended complaint].) But the
mistake did not implicate the power of the court over the
parties or subject matter.
     The judgment was therefore merely voidable, not void.
(See In re Marriage of Goddard, supra, 33 Cal.4th at p. 56; see
Wells Fargo & Co. v. City and County of San Francisco (1944)
25 Cal.2d 37, 40 [“A mere erroneous decision . . . does not
make the judgment void, if the court had jurisdiction of the
subject matter and of the person of the defendant”]; Lee v. An,
supra, 168 Cal.App.4th at pp. 565-566 [same].)
     Gray v. Hall (1928) 203 Cal. 306 is instructive. There, a
defendant answered a complaint that was later amended, and
the defendant elected not to answer the amended complaint.
After default was taken and default judgment entered, the

                                  8
defendant sought to vacate the judgment by mandamus. In
holding the challenge to be improper, the Court stated:
“[W]hen 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 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. . . .”
(Id. at p. 313.) Should the trial court erroneously enter default
against a defendant who has answered, the judgment
thereafter entered “is not void on its face,” because “there can
be no doubt that it was within the jurisdiction of the superior
court to” enter the judgment. (Ibid.) “The judgment rendered
there is in full force and effect, for it was not appealed and has
not been vacated or set aside. The decision of the court was
final and cannot be reviewed on appeal, for there is now no
appeal.” (Ibid.) “Jurisdiction in cases of this character implies
the power of the court to decide a question wrongly as well as
rightly. It was not necessary for us to determine in this
proceeding whether the ruling of the court in the original
action was correct or not. This being a collateral attack upon
the judgment, we need have gone no further than to determine
whether it was void or not.” (Id. at pp. 313-314.)
      Here, subdivision (d) of section 473 afforded the Barneses
no relief with respect to a merely voidable judgment. “A
litigant may collaterally attack a final judgment for lack of
personal or subject matter jurisdiction, or for granting relief
that the court had no power to grant, but may not collaterally
attack a final judgment for nonjurisdictional errors.” (Estate
of Buck (1994) 29 Cal.App.4th 1846, 1854; see also People v.

                                 9
$6,500 U.S. Currency (1989) 215 Cal.App.3d 1542, 1548 [“ ‘If a
judgment, no matter how erroneous, is within the jurisdiction
of the court, it can only be reviewed and corrected by one of the
established methods of direct attack’ ”].)
     Relying on Heidary v. Yadollahi (2002) 99 Cal.App.4th
857 (Heidary), the Barneses argue that a default judgment
entered by a judge after an answer has been filed is void on its
face. We disagree.
      In Heidary, the cross-defendants answered the cross-
complaint but failed to appear for trial because a notice of
continuance of the trial had not been served on them. “[T]he
trial court (apparently without checking to see if appellants
had been given notice) ordered [the appellants’] answers to the
cross-complaint be stricken and their defaults entered ‘for
their failure to appear at trial this date.’ ” (Heidary, supra, 99
Cal.App.4th at p. 860.) The appellate court reversed the
resulting default judgment, holding that “[w]here a defendant
has filed an answer, neither the clerk nor the court has the
power to enter a default based upon the defendant’s failure to
appear at trial, and a default entered after the answer has
been filed is void.” (Id. at p. 863.)
     Heidary cited three cases supporting its holding: Warden
v. Lamb (1929) 98 Cal.App. 738, 741; Miller v. Cortese (1952)
110 Cal.App.2d 101, 104-105; and Barbaria v. Independent
Elevator Co. (1955) 133 Cal.App.2d 657, 658, but none of them
held that where a defendant has filed an answer, a default
judgment entered by a judge is void. Warden v. Lamb and
Barbaria v. Independent Elevator Co. held simply that “a court
has no authority to enter the default of a defendant if, when it
was entered, he has a pleading on file.” (Warden, at pp. 743-

                                10
744; Barbaria, at p. 658.) Miller v. Cortese held that where the
clerk of the court exceeds the power conferred upon him by
statute to enter a default judgment, “the clerk’s action is a
nullity and open to attack at any time.” (Miller, at p. 105.)
      Although Heidary did state that “[w]here a defendant has
filed an answer, neither the clerk nor the court has the power
to enter a default based upon the defendant’s failure to appear
at trial, and a default entered after the answer has been filed
is void,” it did not do so in a context of distinguishing between
a void and voidable judgment. (Heidary, supra, 99
Cal.App.4th at p. 863.) We therefore read Heidary’s use of the
word “void” in its generic sense meaning improper. (See Lee v.
An, supra, 168 Cal.App.4th at p. 566 [holding that a prior
court’s use of the term “void” outside the context of
distinguishing void from voidable orders does not control “for
the purpose of deciding whether relief could be sought after
the six-month period in section 473, subdivision (b)”].)
      The Barneses cite several cases for the proposition that a
default judgment erroneously entered by a court clerk is void,
and subject to collateral attack at any time. We do not
disagree. But the judgment here was entered by the court, not
the clerk of the court.
     “There is a marked difference between a default
judgment entered by the court under subdivision [b] of section
585, supra, and one entered by the clerk under the first
subdivision of the section.” (Baird v. Smith (1932) 216 Cal.
408, 412.) When a judgment is “entered by the court and not
by the clerk,” the court has “jurisdiction of the parties and of
the subject matter of the litigation,” and “any impropriety in
the court’s entry of judgment constitute[s], at most, but an

                                11
erroneous exercise of jurisdiction. In such a case there is not
an absence of jurisdiction, only an irregular or erroneous
exercise of it. [Citation.] A judgment entered by a court under
such circumstances is therefore merely voidable, and not void,
and can only be attacked by appeal or motion made within six
months thereafter. However, where a clerk purports to enter a
default and judgment prematurely, or otherwise exceeds the
limited power conferred upon him by the statute, there is an
entire absence of jurisdiction and his action, as already shown,
is a nullity and open to attack at any time.” (Id. at p. 412.)
C.   Amount of the Judgment
     The Barneses argue the judgment roll in this case reveals
that the judgment is void because it includes “special damages
of $430,884.90 and interest at the rate of 25%” that were not
alleged in the cross-complaint.
     We reject the argument because the Barneses failed to
make it below. “ ‘It is a firmly entrenched principle of
appellate practice that litigants must adhere to the theory on
which a case was tried.’ ” (Colony Ins. Co. v. Crusader Ins. Co.
(2010) 188 Cal.App.4th 743, 751; see also In re Marriage of
King (2000) 80 Cal.App.4th 92, 110-111 [an appellant cannot
pursue a new theory for vacating judgment on appeal not
raised in the trial court].) Although we may in the exercise of
our discretion consider a new theory on appeal when it is
purely a matter of applying the law to undisputed facts, it is
unclear on this record whether the judgment exceeds the
prayer, especially given that we will affirm vacating the
judgment against Allison Barnes.
     Nevertheless, the matter must be remanded to the trial
court for two considerations. First, because the court

                               12
determined only that the default judgment was void because
an answer had been filed, it is not clear whether or to what
extent the court considered vacating the judgment on
equitable grounds, or what the result of such an inquiry
should be.
       Second, given that we affirm the court’s order vacating
 the judgment against Allison Barnes, remand is necessary to
 excise from the monetary award any sums attributable to that
 judgment, preserving that portion which was not void. (See
 Wilkinson v. Wilkinson (1970) 12 Cal.App.3d 1164, 1168.)
                          DISPOSITION
       The judgment is affirmed in part and reversed in part, and
remanded for further proceedings. Each side to bear its own
costs on appeal.
       NOT TO BE PUBLISHED

                                                 CHANEY, J.

We concur:

             BENDIX, Acting P. J.

                             *
             FEDERMAN, J.
      *
       Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.

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