Court Opinion

ID: 2654129
Source: CourtListenerOpinion
Date Created: 2014-02-22 01:01:48.673593+00
Date Added: 2024-06-11T12:55:32.764826
License: Public Domain

Filed 2/21/14 Total Access Payments v. Shaw CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

TOTAL ACCESS PAYMENTS, INC.,

     Plaintiff and Appellant,                                          G048188
                                                                       (Consol. with G048302)
         v.
                                                                       (Super. Ct. No. 30-2011-00507384)
ANGELA SHAW et al.,
                                                                       OPINION
     Defendants and Respondents;

MATTHEW ANDERSON,

     Defendant and Appellant.

                   Appeals from a judgment in G048188 and a postjudgment order in
G048302 of the Superior Court of Orange County, Derek W. Hunt, Judge. Judgment
affirmed in part, reversed in part, and remanded. Postjudgment order affirmed.
                   The Layfield Law Firm, Philip J. Layfield and Christopher S. Walton for
Plaintiff and Appellant.
              No appearance for Defendants and Respondents.
              Craton & Switzer, Curt R. Craton and Robert E. Tokar for Defendant and
Appellant.
                                   *          *           *
                                       INTRODUCTION
              If it seems too good to be true, it probably is. Total Access Payments, Inc.
(Total Access), invested $1 million, with the promise that it would realize a profit of
$143 million—a 14,200 percent return on investment. Total Access’s initial investment,
however, disappeared. It sued to recover its investment, as well as punitive damages.
              Several defendants defaulted. Trial was held on Total Access’s claims
against the nondefaulted defendants. After the trial, Total Access requested a default
judgment against the defaulted defendants. The trial court determined, based on the
evidence at trial, as well as additional evidence presented in connection with the default
judgment prove-up, that Total Access was not entitled to recover any damages from three
of the defaulted defendants. Total Access appeals from the judgment only as to those
three defendants. This appeal relates solely to whether the trial court erred in its analysis
of liability and damages at the prove-up hearing pertaining to the defaulted defendants.
              One of the defaulted defendants (Richard Kryza) was never named in the
substantive allegations of the complaint; the trial court did not err in refusing to enter
judgment against him, and we affirm the judgment as to Kryza. As to the other two
defaulted defendants (Matthew Anderson and Dakota Holdings, Inc.), the complaint
stated causes of action against them for conversion, fraud, and unfair business practices.
The court did not determine whether Total Access had made a prima facie showing of
damages as to those causes of action against Anderson and Dakota Holdings, Inc.
Therefore, we reverse the judgment and remand the matter to the trial court for further
consideration of damages, both compensatory and punitive.

                                              2
              Defaulted defendant Matthew Anderson filed a cross-appeal, arguing the
trial court never acquired jurisdiction over him because he was not properly served.
Anderson asks that if the judgment is reversed on Total Access’s appeal, the order
denying Anderson’s motion for relief from default also be reversed. The trial court did
not err in denying the motion for relief from default, and we affirm that ruling.
              Anderson contends that he is the prevailing party, and that the trial court
erred in granting Total Access’s motion to tax his costs. Being in default, Anderson had
no right to file a memorandum of costs, and the trial court did not err in taxing costs. We
therefore affirm the order granting the motion to tax costs.

                    STATEMENT OF FACTS AND PROCEDURAL HISTORY
              In December 2009, Maximum Business Innovations, Inc. (MBI), convinced
Total Access to place $1 million in escrow for the benefit of MBI. MBI promised that
Total Access would then be able to “leas[e]” a bank account with about $50 million on
deposit, from which Total Access could obtain a loan of $40 million, which would then
be invested, at MBI’s direction, and produce about $143 million. Instead, the money in
the escrow account was released to several different companies and individuals, leaving
Total Access with nothing.
              In September 2011, Total Access sued multiple defendants, which it
grouped into two categories: the “MBI Defendants” and the “Dakota Defendants.” The
causes of action in the complaint were as follows: (1) conversion, against the MBI
Defendants and the Dakota Defendants; (2) breach of fiduciary duty, against the MBI
Defendants; (3) professional negligence, against the MBI Defendants; (4) fraud, against
the MBI Defendants and the Dakota Defendants; (5) to set aside fraudulent conveyances,
against the MBI Defendants and the Dakota Defendants; (6) unfair business practices,
against the MBI Defendants and the Dakota Defendants; and (7) unjust enrichment,
against the MBI Defendants and the Dakota Defendants.

                                             3
              Defaults of the following defendants were entered: MBI, Anderson, Kevin
McBride, Kryza, Ideal Development and Investments, LLC, and Dakota Holdings, Inc.
(Dakota Holdings).
              When the case went to trial, “the court assured counsel that to the extent
that parties had been defaulted, it would receive the evidence put before the jury as also
constituting evidence against the defaulted defendants . . . . Furthermore, when the jury
portion of the trial ended, the court stated that it would permit plaintiff to submit a default
package to augment any evidence pertinent to the defaulted defendants.”
              On November 13, 2012, Anderson filed a motion for relief from default,
pursuant to Code of Civil Procedure sections 473 and 473.5. The trial court denied the
motion.
              Judgment was entered on January 30, 2013. The judgment awarded Total
Access damages in the amount of $5.225 million, plus prejudgment interest, against
defendants Timothy P. Gates and Rhett Landon Shepard. The judgment also awarded
Total Access damages in the amount of $1 million against defaulted defendants Ideal
Development and Investments, LLC, MBI, and McBride. The judgment provided that
Total Access should not recover any damages from defaulted defendants Anderson,
Dakota Holdings, and Kryza. Anderson submitted a memorandum of costs, claiming to
be the prevailing party; the memorandum of costs was never filed and is not a part of the
trial court’s record. The trial court granted Total Access’s motion to tax Anderson’s
costs.
              Total Access timely appealed from the judgment. Anderson filed a timely
cross-appeal of the order denying relief from default and the postjudgment order granting
Total Access’s motion to tax Anderson’s costs.

                                              4
                                         DISCUSSION
                                              I.

          DID THE TRIAL COURT ERR IN REFUSING TO ENTER JUDGMENT AGAINST
                      ANDERSON, DAKOTA HOLDINGS, AND KRYZA?
              Total Access argues that the trial court erred in failing to enter default
judgments against Anderson, Dakota Holdings, and Kryza. Total Access further argues
that by defaulting, those defendants admitted the truth of the allegations in the complaint;
Total Access contends the evidence it presented was sufficient to meet its burden to
obtain default judgments against them.
                                             A.
                                    Standard of Review
              “‘A judgment or order of the lower court is presumed correct. All
intendments and presumptions are indulged to support it on matters as to which the
record is silent, and error must be affirmatively shown. This is not only a general
principle of appellate practice but an ingredient of the constitutional doctrine of reversible
error.’” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)
              In reviewing a challenge to a judgment, including a default judgment, we
apply the substantial evidence rule, accepting as true the evidence that supports the
judgment, disregarding conflicting evidence, and drawing all reasonable inferences in
favor of the judgment. (Chicago Title Ins. Co. v. AMZ Ins. Services, Inc. (2010) 188
Cal.App.4th 401, 416.)
              However, whether the trial court erred in the manner by which it analyzed
issues of liability and damages at the default prove-up hearing is a pure legal issue that
we review de novo. (People ex rel. Lockyer v. Sun Pacific Farming Co. (2000) 77
Cal.App.4th 619, 632.) Further, we independently review the record to determine
whether the complaint stated a cause of action as to the claims for relief properly asserted
against the defaulted defendants. (Entezampour v. North Orange County Community

                                              5
College Dist. (2010) 190 Cal.App.4th 832, 837.) “It is well established a default
judgment cannot properly be based on a complaint which fails to state a cause of action
against the party defaulted because . . . ‘[a] defendant who fails to answer admits only
facts that are well pleaded.’” (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 829.)
                                               B.
                                 Defaulted Defendant Kryza
                Kryza was not named in the complaint. An amendment to the complaint
was filed on January 5, 2012, naming Kryza as Doe defendant No. 4. The complaint does
not mention the Doe defendants in any of its allegations; the Doe defendants are
mentioned in the caption of the complaint and nowhere else. The complaint grouped the
named defendants under two broad categories—the MBI Defendants and the Dakota
Defendants. The Doe defendants were not included in either group. Each cause of action
in the complaint specifies whether it is asserted against both the MBI Defendants and the
Dakota Defendants, or against only the MBI Defendants. Therefore, there are no
allegations in the complaint against Kryza. (Falahati v. Kondo, supra, 127 Cal.App.4th
at p. 829 [default judgment void against party who was mentioned only in the caption,
but not in the body, of the complaint because “‘the caption of the complaint constitutes
no part of the statement of the cause of action’”].) The trial court did not err in refusing
to enter judgment against Kryza. (Taliaferro v. Taliaferro (1959) 171 Cal.App.2d 1, 8 [if
the complaint shows no ground for relief against the defendant, default judgment cannot
be entered].)
                                               C.
                   Defaulted Defendants Anderson and Dakota Holdings
                Anderson and Dakota Holdings were both named in the body of the
complaint, and were included in the Dakota Defendants group. We first consider whether
a cause of action was stated against Anderson and Dakota Holdings. Both were named in
the first, fourth, fifth, sixth, and seventh causes of action (for conversion, fraud, to set

                                               6
aside fraudulent conveyances, unfair business practices, and unjust enrichment,
respectively). When considering a request to enter a default judgment, the trial court’s
inquiry into the complaint’s adequacy is similar to that triggered by a general demurrer;
the trial court looks at whether the complaint contains sufficient factual allegations to
support the asserted claims. (Alexander v. McDow (1895) 108 Cal. 25, 29; Zucco v.
Farullo (1918) 37 Cal.App. 562, 564.) The court must indulge reasonable inferences in
support of the factual allegations in the complaint; mere uncertainties and other defects
subject to a special demurrer do not bar a default judgment against the defaulted
defendant. (Buck v. Morrossis (1952) 114 Cal.App.2d 461, 466; see Price v. Hibbs
(1964) 225 Cal.App.2d 209, 218.)

              1. First Cause of Action—Conversion
              “‘“The elements of a conversion are the plaintiff’s ownership or right to
possession of the property at the time of the conversion; the defendant’s conversion by a
wrongful act or disposition of property rights; and damages.”’” (Plummer v.
Day/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 45.) Although the cause of action for
conversion was alleged against both the MBI Defendants and the Dakota Defendants, it
specifically alleged: “The MBI Defendants misappropriated and converted the funds
held in escrow to the detriment of Plaintiff[] in an amount to be proven at trial.”
(Boldface omitted, italics added.) As to the Dakota Defendants, the complaint alleged:
“The Dakota Defendants produced a fraudulent piece of paper that they in fact forged in
furtherance of this scheme to allow the MBI Defendants to illegally release the Escrowed
Funds.” The complaint also alleged that “[w]ithin days of the Dakota Defendants
receiving [Total Access’]s money, they began to disperse the funds to various
international bank accounts to hide the money.” Similarly, the complaint alleged that
within days of Anderson receiving Total Access’s money, he bought a new Range Rover
and real estate and other assets in his girlfriend’s name. The complaint sufficiently

                                              7
alleged the Dakota Defendants—including Anderson and Dakota Holdings—participated
in the conversion of Total Access’s money.

               2. Fourth Cause of Action—Fraud
               “The elements of fraud are (1) the defendant made a false representation as
to a past or existing material fact; (2) the defendant knew the representation was false at
the time it was made; (3) in making the representation, the defendant intended to deceive
the plaintiff; (4) the plaintiff justifiably relied on the representation; and (5) the plaintiff
suffered resulting damages.” (West v. JPMorgan Chase Bank, N.A. (2013) 214
Cal.App.4th 780, 792.) “Fraud must be pleaded with specificity rather than with
‘“general and conclusory allegations.”’ [Citation.] The specificity requirement means a
plaintiff must allege facts showing how, when, where, to whom, and by what means the
representations were made, and, in the case of a corporate defendant, the plaintiff must
allege the names of the persons who made the representations, their authority to speak on
behalf of the corporation, to whom they spoke, what they said or wrote, and when the
representation was made. [Citation.]” (Id. at p. 793.)
               The fourth cause of action for fraud alleged that the Dakota Defendants, of
which Anderson and Dakota Holdings were a part, “continued to represent that Plaintiff’s
funds were being used for legitimate purposes when in fact the MBI and Dakota
Defendants had already distributed the funds to themselves personally.” This allegation
meets the requirements of a false representation of fact, and Anderson’s and Dakota
Holdings’s knowledge of its falsity. The complaint also alleged the Dakota Defendants
intended to deceive Total Access, Total Access justifiably relied on the representations,
and Total Access suffered damages as a result. The complaint stated a cause of action for
fraud against Anderson and Dakota Holdings.

                                                8
              3. Fifth Cause of Action—Fraudulent Conveyance
              A fraudulent conveyance is “a transfer by the debtor of property to a third
person undertaken with the intent to prevent a creditor from reaching that interest to
satisfy its claim.” (Yaesu Electronics Corp. v. Tamura (1994) 28 Cal.App.4th 8, 13; see
Civ. Code, § 3439.04.) Absent a transfer by a judgment debtor, there can be no claim of
fraudulent conveyance. “‘In order to establish a fraudulent conveyance under this section
[Civ. Code, [former] § 3439.04], three things or elements must be pleaded and proved:
first, there must be a conveyance or the creation of an obligation; second, the transferor
must be, at the time of the conveyance, insolvent or the conveyance must render him
insolvent; third, the conveyance must have been made, or the obligation incurred, without
a fair consideration.’” (Estate of Heigho (1960) 186 Cal.App.2d 360, 365-366,
fn. omitted.) The complaint alleged Total Access’s $1 million investment was dispersed
from the escrow account; although lack of consideration was not specifically alleged, that
element can reasonably be inferred from the allegations that the disbursements were
intended to hide the money and were used to make unauthorized purchases. However,
the complaint did not allege the second element of a fraudulent conveyance claim—that it
rendered the transferor insolvent—and therefore did not establish a valid claim against
Anderson and Dakota Holdings.

              4. Sixth Cause of Action—Unfair Business Practices
              The sixth cause of action for unfair business practices under Business and
Professions Code section 17200 alleged: “The MBI and Dakota Defendants have
violated the Unfair Business Practices Act by engaging in the unlawful, unfair and/or
fraudulent business acts and/or practices alleged herein . . . , including the mail fraud,
wire fraud, securities fraud.” Reading the complaint liberally and accepting the
reasonable inferences supported by its allegations, we conclude the complaint adequately
alleged the Dakota Defendants’ provision of a fraudulent document to allow the escrow

                                              9
money to be removed qualified as an unfair business practice, under any of the three
prongs of section 17200—unlawful, unfair, or fraudulent.1

              5. Seventh Cause of Action—Unjust Enrichment
              The seventh cause of action alleged unjust enrichment against the MBI
Defendants and the Dakota Defendants. The cause of action alleged as follows: “In the
event that the MBI and Dakota defendants deny that they entered into contracts with
Plaintiff to provide professionally competent services, and investment advice, to provide
them with a legitimate business transaction with legal benefits, to exercise the applicable
standard of care, loyalty and honesty, and to comply with all applicable rules of
professional conduct, Plaintiff hereby pleads unjust enrichment in the alternative.” The
cause of action also alleged: “Defendants provided Plaintiff with advice that defendants
knew or should have known to be wrong and improper in furtherance of a scheme to take
control of Plaintiff[’s] funds. Defendants also acted contrary to the applicable respective
rules of professional conduct and contrary to their obligation to Plaintiff to provide them
with professionally competent advice, investment advice by basing their advice solely on
their desire to coerce Plaintiff[] to surrender large sums of money, rather than providing
professional services or providing accurate disclosures.” This cause of action is tied
directly to the provision of professional services and investment advice, in which
activities the Dakota Defendants are not alleged to have participated. The causes of
action for breach of fiduciary duty and professional negligence were asserted only against
the MBI Defendants, and the complaint alleged that only the MBI Defendants were
involved in presenting the investment opportunity to Total Access and convincing Total

       1
         Anderson argues that all causes of action against him fail because they did not
allege that he personally did anything wrong. The complaint successfully alleged causes
of action against Anderson by alleging that the Dakota Defendants, of which Anderson
was alleged to be a member, collectively were liable for committing causes of action
against Total Access.

                                             10
Access to make the investment. There are no allegations that any of the Dakota
Defendants were involved in soliciting Total Access’s investment. Therefore, the
complaint does not state a cause of action against either Anderson or Dakota Holdings for
unjust enrichment.

              6. Prima Facie Case of Damages
              Once the trial court determined that the allegations of the complaint stated a
case against the defaulted defendants as to the causes of action for conversion, fraud, and
unfair business practices, Total Access was only required to make out a prima facie case
of damages, in an amount not to exceed the damages stated in the complaint. (Johnson v.
Stanhiser (1999) 72 Cal.App.4th 357, 361-362.) Following the default prove-up hearing,
the trial court issued a minute order reading, in relevant part, as follows: “There are three
other defendants not heretofore mentioned in connection with this prove-up: Dakota
Holdings, Inc., Matthew Anderson, and Richard Kryza. [¶] At trial there was collateral
evidence that perhaps both Messrs Kryza and Anderson had trouble with law
enforcement in other venues, and possibly in connection with transactions like the one at
issue in the instant litigation. The evidence in this case, however—and that also includes
the evidence touching on defendant Dakota Holdings, Inc.—was minimal and insufficient
to establish that either of these three played any significant role vis-à-vis plaintiff’s
investment. The court will therefore not grant judgment against any of them.”
              The trial court erred in its analysis of liability because it did not deem
admitted the facts contained in the well-pleaded causes of action in the complaint.
Instead, the court weighed the evidence on the issue of liability against the defaulted
defendants who remain before us—Anderson and Dakota Holdings. The court further
erred by failing to consider whether Total Access had established a prima facie case of
damages against Anderson and Dakota Holdings. To recap: After determining whether
the complaint stated causes of action against the defaulted defendants, the trial court

                                              11
should have determined whether Total Access had established a prima facie case of
damages and, if so, in what amounts. Instead, the trial court never reached the issue of
damages, which was the only remaining issue it should have considered at that point.
This is error, requiring reversal.
              On this record, we cannot determine whether there was sufficient evidence
of damages to meet the relatively low standard of making a prima facie case. In
connection with the default prove-up hearing, Total Access submitted the declaration of
Brett Radford, its chief executive officer. Radford declared that Total Access delivered
$1 million into an escrow account, pursuant to its funding agreement with MBI, on or
about December 29, 2009, and that Total Access received nothing in return. Total
Access did not provide any evidence of what cause of action this evidence was related to,
or evidence that Anderson and Dakota Holdings caused its damages. Total Access did
not designate the reporter’s transcript of either the damages portion of trial or the default
judgment prove-up hearing, which might have given us the information we would need as
an appellate court to consider whether Total Access established a prima facie case of
damages against Anderson and Dakota Holdings. We remand the matter to the trial court
to determine whether, as to the causes of action for conversion, fraud, and unfair business
practices, Total Access established a prima facie case of damages. It is up to the trial
court to decide whether the evidence already presented to the trial court, by declaration or
trial testimony, may be supplemented on remand.

                                              II.

                DID THE TRIAL COURT ERR IN DENYING ANDERSON’S MOTION
                              FOR RELIEF FROM DEFAULT?

              On the day set for the start of trial, Anderson filed a motion for relief from
default, pursuant to Code of Civil Procedure sections 473 and 473.5. The trial court
denied the motion because Anderson failed to prove he was unaware of the pendency of

                                             12
the action against him. The court stated: “But the condition precedent to my doing
anything on behalf of Mr. Anderson is he has to prove to me he was legitimately unaware
of what was going on and there was legitimate excusable neglect and inadvertence. And
I’ve made my call based on the spotty evidence that I’ve got . . . .”
              “‘“A motion seeking such relief [under Code of Civil Procedure
section 473] lies within the sound discretion of the trial court, and the trial court’s
decision will not be overturned absent an abuse of discretion. [Citations.] However, the
trial court’s discretion is not unlimited and must be ‘“exercised in conformity with the
spirit of the law and in a manner to subserve and not to impede or defeat the ends of
substantial justice.”’ [Citations.] [¶] Section 473 is often applied liberally where the
party in default moves promptly to seek relief, and the party opposing the motion will not
suffer prejudice if relief is granted. [Citations.] In such situations ‘very slight evidence
will be required to justify a court in setting aside the default.’ [Citations.] [¶] Moreover,
because the law strongly favors trial and disposition on the merits, any doubts in applying
section 473 must be resolved in favor of the party seeking relief from default [citations].
Therefore, a trial court order denying relief is scrutinized more carefully than an order
permitting trial on the merits. [Citations.]”’ [Citation.]” (Fasuyi v. Permatex, Inc.
(2008) 167 Cal.App.4th 681, 695.)
              The trial court found Anderson’s motion was timely under both
sections 473, subdivision (b), and 473.5, subdivision (a) of the Code of Civil Procedure.
The court also found that Anderson had properly submitted a proposed response to the
complaint along with his motion for relief from default, as required by both sections 473,
subdivision (b), and 473.5, subdivision (b). The remaining issues were whether
Anderson had actual notice he was named in the lawsuit, and, if not, whether the lack of
actual notice was caused by inexcusable neglect.
              The trial court found Anderson’s declaration that he had not received actual
notice of the pendency of the lawsuit against him lacked credibility. We find no abuse of

                                              13
discretion in that finding. The court noted that Anderson’s declaration in support of the
motion did not provide his home address and did not specify how long he had lived at
that address, other than to say it had been for “several years.” The court also noted that a
law firm representing Anderson in a related federal action acknowledged receiving copies
of the pleadings in the present action, which would have alerted it to Anderson being a
named defendant in this case. Like the trial court, we find this record extremely thin.
However, we find no abuse of discretion by the trial court in determining, on this record,
that Anderson failed to establish a lack of actual knowledge of the pendency of the
lawsuit or excusable neglect on his part.
              Anderson argues that his default was improperly entered in the first place
because the trial court never obtained jurisdiction over him. Total Access served
Anderson by publication, pursuant to Code of Civil Procedure section 415.50.2 Anderson
contends that the order for service by publication was invalid in two ways: (1) Total
Access failed to demonstrate it had exercised reasonable diligence in trying to locate
Anderson before seeking the order for service by publication, and (2) the newspaper
selected for service was not the one most likely to give actual notice to Anderson. At the
hearing on Anderson’s motion for relief from default, the trial court addressed this issue
as follows: “Therefore, what I’m telling you is back on January 13th—or whenever it

       2
          “(a) A summons may be served by publication if upon affidavit it appears to the
satisfaction of the court in which the action is pending that the party to be served cannot
with reasonable diligence be served in another manner specified in this article and that
either: [¶] (1) A cause of action exists against the party upon whom service is to be made
or he or she is a necessary or proper party to the action. [¶] (2) The party to be served has
or claims an interest in real or personal property in this state that is subject to the
jurisdiction of the court or the relief demanded in the action consists wholly or in part in
excluding the party from any interest in the property. [¶] (b) The court shall order the
summons to be published in a named newspaper, published in this state, that is most
likely to give actual notice to the party to be served.” (Code Civ. Proc., § 415.50,
subds. (a), (b).)

                                             14
was—I was satisfied that a request for publication was in order, and I ordered it; it was in
order and it was published.”
               The fact that Anderson’s address was later obtained by Total Access and he
was personally served at that address with a trial subpoena does not make the service by
publication ineffective. The relevant statute authorizes continuing attempts to locate a
party even after an order for service by publication has been entered: “Notwithstanding
an order for publication of the summons, a summons may be served in another manner
authorized by this chapter, in which event the service shall supersede any published
summons.” (Code Civ. Proc., § 415.50, subd. (d).)
               Anderson argues that the default should not have been entered because the
request for entry of default was not properly filed. Code of Civil Procedure section 587
provides, in relevant part: “An application by a plaintiff for entry of default under
subdivision . . . (c) of Section 585 . . . shall include an affidavit stating that a copy of the
application has been mailed to the defendant’s attorney of record or, if none, to the
defendant at his or her last known address and the date on which the copy was mailed. If
no such address of the defendant is known to the plaintiff or plaintiff’s attorney, the
affidavit shall state that fact.” The request for entry of Anderson’s default does not state
the application was served on Anderson’s attorney of record or on Anderson at his last
known address; nor does it state Anderson’s last known address was unknown to Total
Access and its attorneys.
               The affidavit requirement is not jurisdictional in nature, however. (In re
Marriage of Harris (1977) 74 Cal.App.3d 98, 102.) In In re Marriage of Harris, the
court concluded that the trial court had erred by entering the wife’s default because the
affidavit in support of the request for entry of default judgment did not aver that the
application had been mailed to either the wife or her attorney of record. (Id. at
pp. 100-101.) However, because there was substantial evidence that the wife had actual

                                               15
notice of the husband’s intent to take her default, there was no prejudice. (Id. at
pp. 102-103.)3
              Here, Anderson’s address for service had not been obtained when the
request for entry of default was filed. Total Access’s error was in failing to check the box
on the form indicating a copy of the request was not mailed to Anderson or his attorney,
whose addresses were unknown. The purpose of Code of Civil Procedure section 587 is
“to prevent the taking of the default of an unwary litigant, to minimize the possibility that
a default might be taken of one who intended to defend on the merits, and to reduce the
incidence of motions for relief under Code of Civil Procedure section 473 or under the
equity power of the court.” (Davis v. Thayer (1980) 113 Cal.App.3d 892, 907.) None of
these goals would have been achieved in this case by the checking of the blank box on
the form.
              Finding no prejudicial error, we affirm the trial court’s denial of
Anderson’s motion for relief from default.

                                             III.

                         DID THE TRIAL COURT ERR IN GRANTING
                         TOTAL ACCESS’S MOTION TO TAX COSTS?
              Anderson, claiming to be the prevailing party, argues the trial court erred
by granting Total Access’s motion to tax costs. Anderson’s memorandum of costs was
never actually filed in the trial court because Anderson was in default and was not
permitted to file any pleadings. (People v. One 1986 Toyota Pickup (1995) 31

       3
         Total Access cites Taylor v. Varga (1995) 37 Cal.App.4th 750, 759, for the
proposition that “[t]he language in [Code of Civil Procedure former] section 587 does not
apply to entry of default following service by publication.” At the time the request for
default was filed in Taylor v. Varga, that was true. (Id. at pp. 759-760, fn. 10.)
Section 587, however, has been amended, and currently applies to entries of default after
service by publication as well as after service by other methods.

                                             16
Cal.App.4th 254, 259; Heathman v. Vant (1959) 172 Cal.App.2d 639, 647.) Total
Access’s motion to tax costs, and the trial court’s order granting the motion to tax, were
unnecessary actions.
              Anderson does not cite any authority for the proposition that a defendant
who defaulted, but against whom the plaintiff failed to make a prima facie case for
damages, is entitled to recover costs. Anderson was not a prevailing party for purposes
of recovering costs, and the trial court did not err in granting Total Access’s motion to tax
costs.

                                       DISPOSITION
              The judgment in favor of Kryza is affirmed. The judgment in favor of
Anderson and Dakota Holdings is reversed and the matter is remanded to the trial court
with directions to (1) enter judgment in favor of Total Access and against Anderson and
Dakota Holdings on the causes of action for conversion, fraud, and unfair business
practices, and (2) conduct further proceedings to determine the appropriate amount of
compensatory and/or punitive damages, if any, which Total Access may recover from
Anderson and Dakota Holdings. The postjudgment order to tax costs is affirmed. Total
Access to recover costs on appeal against Anderson.

                                                  FYBEL, J.

WE CONCUR:

MOORE, ACTING P. J.

THOMPSON, J.

                                             17