Court Opinion

ID: 9351216
Source: CourtListenerOpinion
Date Created: 2022-12-29 19:02:48.593335+00
Date Added: 2024-06-11T16:58:20.775840
License: Public Domain

Filed 12/29/22
                           CERTIFIED FOR PUBLICATION

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                               SIXTH APPELLATE DISTRICT

 FIRST AMERICAN TITLE                               H048731
 INSURANCE COMPANY,                                (Santa Clara County
                                                    Super. Ct. No. CV307206)
         Plaintiff and Respondent,

         v.

 KAUSHIK BANERJEE et al.,

         Defendants and Appellants.

        Plaintiff First American Title Insurance Company, Inc. (First American) obtained
a default judgment against defendants Kaushik Banerjee and Arkesh Ventures, Inc.
(collectively, defendants) in an action to enforce a commission agreement related to the
sale of real property. Defendants unsuccessfully moved to set aside the default judgment.
        Defendants appeal from the order denying their motion to set aside the default;
they have not directly appealed from the default judgment. Defendants argue the trial
court was incorrect to find that substituted service of the original summons and complaint
was properly effected. They also argue the judgment is void as to Banerjee because the
complaint does not state a cause of action against him. For the reasons stated here, we
will affirm the order denying the motion to set aside the default judgment.
                          I.    TRIAL COURT PROCEEDINGS
        The original plaintiff in this case was Golden Properties, Inc. dba California
Golden Properties (Golden Properties). According to the complaint, Golden Properties
acted as a real estate broker for a rental property owned by Arkesh Ventures, Inc. The
complaint describes defendant Banerjee as “the President of [Arkesh Ventures] [who]
had complete authority to enter into agreements” on behalf of the corporation. The
complaint alleges “defendants, and each of them, were the agents, servants, employees,
or alter egos of their co-defendants.”
       Golden Properties arranged for a tenant to lease the rental property in 2011 for five
years. A commission agreement between Arkesh Ventures and Golden Properties
required Arkesh Ventures to pay Golden Properties a commission if the tenant decided to
buy the property. The commission would be three percent of the sales price.
       The tenant exercised an option to renew the lease, and ultimately purchased the
property from Arkesh Ventures in 2016 for $4,850,000. Golden Properties demanded
that First American (as escrow holder for the sale) hold the three percent commission
($145,500) and an outstanding lease fee ($5,994.95). First American initially indicated it
was holding the funds demanded by Golden Properties, but then did not pay Golden
Properties. Arkesh Ventures and Banerjee refused to pay Golden Properties the
commission. The complaint filed in March 2017 alleges a breach of contract cause of
action against Arkesh Ventures and Banerjee, and a promissory estoppel cause of action
against First American.
       Golden Properties served the summons and complaint on Arkesh Ventures and
Banerjee through substituted service. The process server described in a declaration of
diligence that service was attempted at an address in Pleasanton on six occasions in
March 2017. On the final attempt, someone at the Pleasanton address denied knowledge
of Banerjee or Arkesh Ventures. According to the declaration, the process server then
attempted service at a gated community address on Kingsmill Terrace in Dublin,
California on seven occasions. Banerjee’s name was listed on the directory, but there
was no answer on the intercom and the process server was unable to gain access through
the gate on those first seven attempts. On the eighth attempt at the Kingsmill Terrace
address in April 2017, the process server served the documents by substituted service on
a “co-resident” who indicated Banerjee was not home. (Capitalization omitted.) The
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process server also mailed a copy of the documents addressed to Banerjee at that
Kingsmill Terrace address.
       Defaults were entered against Arkesh Ventures and Banerjee in June 2017 after
they did not file a responsive pleading. First American cross-complained against Arkesh
Ventures and Banerjee for indemnity and contribution in July 2017. A proof of service
indicates Banerjee was personally served the summons and cross-complaint by a process
server in September 2017.
       Golden Properties settled its claims with First American and assigned its claims
against Arkesh Ventures and Banerjee to First American. The trial court entered an order
substituting First American as the sole plaintiff in the action in June 2019. First
American requested entry of default judgment as to Arkesh Ventures and Banerjee in
December 2019. The trial court entered default judgment against Arkesh Ventures and
Banerjee in May 2020.
       Defendants moved to set aside the default and default judgment in June 2020 on
three grounds: (1) that the judgment against Banerjee was void for failure to state a cause
of action against him; (2) that the judgment was void because service of the original
summons and complaint was improper; and (3) that the default judgment should be set
aside for mistake, inadvertence, surprise, or excusable neglect (Code Civ. Proc., § 473,
subd. (b). Unspecified statutory references are to this Code.) Part of the evidence
supporting the motion was a declaration from Banerjee stating he did not live at the
Kingsmill Terrace address when the original summons and complaint was served by
substituted service. As part of its opposition, First American attached a printout from the
business search function on the California Secretary of State’s website showing a mailing
address for Arkesh Ventures that matches the Kingsmill Terrance address where
substituted service occurred.
       The trial court denied the motion by written order. The court found that
defendants “were served by substitute service on 19 April 2017 at 6079 Kingsmill
                                              3
Terrace in the City of Dublin.” The order notes the “process server declares that she left
the summons and complaint with an individual who identified himself as a co-resident of
the property” and who stated that “defendant Banerjee was not home at the time. The
process server also mailed a copy of the summons and complaint to the defendants at this
address.” The court denied discretionary relief under section 473, subdivision (b),
finding defendants did not act diligently. The court found that Banerjee was personally
served with the cross-complaint in 2017, two months after default had been entered on
the complaint. Defendants nonetheless waited more than two years before moving to set
aside the default in 2020 after the default judgment had been entered. Finally, the court
found the judgment was not void as to Banerjee because the complaint contained an alter
ego allegation.
                                     II.   DISCUSSION
   A. SUBSTITUTED SERVICE WAS PROPERLY EFFECTED
       Challenging substitute service of the original summons and complaint, defendants
contend the default judgment is void for lack of personal jurisdiction over them. A party
may move to set aside a void judgment under section 473, subdivision (d). “A default
judgment is void if the trial court lacked jurisdiction over the parties.” (Falahati v.
Kondo (2005) 127 Cal.App.4th 823, 830 (Falahati).) A default judgment entered against
a defendant who was not served in the manner prescribed by statute is void. (Dill v.
Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444.) “Under section 473,
subdivision (d), the court may set aside a default judgment which is valid on its face, but
void, as a matter of law, due to improper service.” (Ellard v. Conway (2001)
94 Cal.App.4th 540, 544.) When, as here, the trial court considers disputed evidence
related to whether service was proper, our review is for abuse of discretion. (Ramos v.
Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1440–1441.) Under that
standard, we defer to factual findings on disputed evidence so long as those findings are
supported by substantial evidence.
                                              4
       “If a copy of the summons and complaint cannot with reasonable diligence be
personally delivered to the person to be served ... , a summons may be served by leaving
a copy of the summons and complaint at the person’s dwelling house ... in the presence of
a competent member of the household or a person apparently in charge of his or her
office, place of business, or usual mailing address ... who shall be informed of the
contents thereof, and by thereafter mailing a copy of the summons and of the complaint
by first-class mail, postage prepaid to the person to be served at the place where a copy of
the summons and complaint were left.” (§ 415.20, subd. (b).)

       The trial court found defendants had been served the original summons and
complaint by substituted service. That finding is supported by the process server’s proof
of service and declaration of diligence. The process server first attempted to serve the
documents at an address in Pleasanton on multiple occasions before being informed
Banerjee did not live there. Apparently at Golden Properties’ suggestion, the process
server then attempted service at the Kingsmill Terrace address. The declaration of
diligence notes the address is located in a gated community and that “the subject’s name
is listed on the directory.” (Capitalization omitted.) The process server was unable to
gain access through the gate on the first several dates when service was attempted. On
the final attempt, the process server delivered the documents to someone who identified
himself as a co-resident and indicated Banerjee was not at home. The person served was
described on the proof of service as “ ‘John Doe’ (refused to state name – 50 year old
East Indian male, grey hair, 5’9”, 170 pounds), co-resident.” (Capitalization omitted.)
(See Trackman v. Kenney (2010) 187 Cal.App.4th 175, 183 [because persons in “charge
of businesses or residences often refuse to give their true legal names,” “it is an accepted
practice to name such a person as ‘John Doe’ or similar fictitious name, or by
description.”].) The process server thereafter mailed the documents to Banerjee at the
Kingsmill Terrace address. The same Kingsmill Terrace address is listed as Arkesh
Ventures’ mailing address on a printout from the business search function on the
                                              5
California Secretary of State’s website, which was filed by First American in the trial
court. The foregoing is substantial evidence to support the trial court’s decision that
substituted service was properly effected. We therefore find no abuse of discretion.
       Defendants’ appellate arguments merely reassert contentions considered and
rejected by the trial court. For example, defendants argue “there is no evidence that
Banerjee resided at any of the addresses where service was attempted.” (Capitalization
omitted.) To the contrary, the person who accepted service at the Kingsmill Terrace
address identified himself as a co-resident of Banerjee. And Banerjee’s name was on the
directory for that address. By finding that substituted service was proper, the trial court
credited the process server’s sworn declaration over defendants’ evidence. We do not
reweigh the evidence on appeal. (Kim v. TWA Construction, Inc. (2022)
78 Cal.App.5th 808, 837.)
   B. THE DEFAULT JUDGMENT IS NOT VOID
       Defendants argue the default judgment is void as to Banerjee because the
complaint does not state a cause of action against him. A defendant who seeks to
challenge a default judgment has “three potential avenues of relief: a direct appeal from
the judgment, a motion to set aside the judgment and a collateral attack on the judgment.”
(Falahati, supra, 127 Cal.App.4th at p. 829–830.) Each avenue has its features,
including limitations on the type of errors that can be addressed.
       Defendants elected to challenge the default judgment by moving to set it aside as
void under section 473, subdivision (d), which vests trial courts with authority to “set
aside any void judgment.” But a “trial court has no statutory power under section 473,
subdivision (d) to set aside a judgment that is not void.” (Cruz v. Fagor America, Inc.
(2007) 146 Cal.App.4th 488, 495–496.) Longstanding Supreme Court precedent dictates
that “a judgment is not void if the court has jurisdiction of the parties and of the subject
matter, irrespective of whether or not the complaint states a cause of action so long as it
apprises the defendant of the nature of the plaintiff’s demand.” (Christerson v. French
                                              6
(1919) 180 Cal. 523, 525 (Christerson); Trans-Pacific Trading Co. v. Patsy Frock &
Romper Co. (1922) 189 Cal. 509, 513–514; accord Falahati, at p. 830.) It thus appears
that entering a default judgment based on a complaint that apprises a defendant of the
nature of the plaintiff’s demand but does not adequately state a cause of action is an act in
excess of jurisdiction that renders a judgment voidable rather than void. “Errors which
are merely in excess of jurisdiction should be challenged directly, for example by motion
to vacate the judgment, or on appeal, and are generally not subject to collateral attack
once the judgment is final unless ‘unusual circumstances were present which prevented
an earlier and more appropriate attack.’ ” (People v. American Contractors Indemnity
Co. (2004) 33 Cal.4th 653, 661.)
                                                                                   1
       Having elected to focus solely on section 473, subdivision (d) on appeal,
defendants must demonstrate that the complaint did not apprise Banerjee of the nature of
the plaintiff’s demand. (Christerson, supra, 180 Cal. at p. 525.) We review this legal
question de novo. (See Aixtron, Inc. v. Veeco Instruments Inc. (2020)
52 Cal.App.5th 360, 391.) The complaint identifies Banerjee as the president of Arkesh
Ventures with complete authority to enter into agreements on its behalf. It alleges that
“defendants, and each of them, were the agents, servants, employees, or alter egos of
their co-defendants.” It further alleges that “Arkesh, by and through its agent Banerjee,
agreed to pay Golden Properties compensation” under the commission agreement.
(Capitalization omitted.) And it alleges that the commission agreement was breached
when Golden Properties was not paid. From the foregoing, the complaint apprised
Banerjee of the nature of Golden Properties’ demand to enforce the commission
agreement that Banerjee signed on behalf of Arkesh Ventures, and that Banerjee was
being sued as an alter ego of Arkesh Ventures. Defendants’ argument that Banerjee was

       1
         Defendants also sought discretionary relief in the trial court under section 473,
subdivision (b) in the trial court, but do not challenge that aspect of the trial court’s
decision on appeal.
                                             7
not apprised of the nature of the complaint because he did not receive it is foreclosed by
the finding that substituted service was properly effected, which we have already
discussed. Because the complaint apprised Banerjee of the nature of the plaintiff’s
demand, the default judgment was not void and the trial court properly denied the motion
to set aside the judgment.
       We acknowledge that had defendants directly appealed from the default judgment
they could have attacked the complaint as not stating a cause of action. (See, e.g., Vasey
v. California Dance Co. (1977) 70 Cal.App.3d 742, 745 (Vasey); Rose v. Lawton (1963)
215 Cal.App.2d 18, 19; Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267,
282.) Vasey involved an appeal from default judgments entered against a corporation and
two individuals. (Vasey, at p. 745.) The appellate court reversed the default judgment as
to the individual defendants because the complaint did not state a cause of action against
them. (Id. at pp. 749–750.) The court reasoned that “[a]lthough by a default a defendant
admits the allegations in the complaint, the defendant who fails to answer admits only
facts which are well pleaded.” (Id. at p. 749.) As to the individual defendants, the
complaint did not state a cause of action for alter ego liability because it did not plead
evidence showing “such a unity of interest and ownership that the separate personalities
of the corporation and the individuals do not exist, and that an inequity will result if the
corporate entity is treated as the sole actor.” (Ibid.) The Vasey court did not consider
whether the default judgment was void.
       Vasey and similar authorities arose as direct appeals from default judgments. By
contrast here, defendants did not directly appeal from the default judgment. The notice of
appeal identifies as the matter appealed the order denying the motion to set aside the

                                              8
default. The notice of appeal would not have been timely as to the judgment itself, even
                                                                        2
under the time limit set by California Rules of Court, rule 8.108(c).
       Defendants contend Christerson and later cases applying it are distinguishable
because they involved “collateral attacks on default judgments and not a direct appeal,
such as here, from an order denying a motion to set aside a default.” But there are
different types of direct attacks, and different remedies available for them. Had
defendants directly appealed from the default judgment, they would have been able to
rely on the reasoning of Vasey. But because defendants failed to timely appeal from the
                                                         3
default judgment, the reasoning of Christerson applies. Our review is limited to whether
the trial court erred in finding the default judgment was not void. As we have discussed,
the default judgment was not void and we have found no error.
       Defendants cite Grappo v. McMills (2017) 11 Cal.App.5th 996 (Grappo), where
the majority affirmed an order setting aside a default judgment and suggested the
judgment was void for failure to state a cause of action. (See id. at pp. 1009, fn. 4; 1012–
1015.) But the dissent in that case cited Christerson and noted that a “default judgment
cannot be attacked collaterally on the ground the complaint fails to state a cause of
action, and is valid as long as the complaint is ‘sufficient to apprise [the defendant] of the

       2
          Rule 8.108(c) tolls the time to appeal if a motion to vacate is filed “until the
earliest of” three dates: 30 days after the trial court serves an order denying a motion to
vacate; 90 days after the first motion to vacate is filed; or 180 days after the judgment. In
this case, the judgment was entered May 11, 2020, defendants moved to vacate the
judgment on June 9, 2020, the trial court denied the motion to vacate on November 24,
2020, and defendants filed a notice of appeal on December 18, 2020. The earliest of
those dates is 90 days after the motion to vacate was filed, or September 8, 2020. The
December 2020 notice of appeal was therefore filed 101 days after the deadline to
challenge the judgment.
       3
          The same reasoning distinguishes the Supreme Court cases defendants cite in
their reply brief, which all involved direct appeals from judgments and did not consider
whether the judgments at issue in those cases were void. (E.g., Lynn v. Knob Hill
Improvement Co. (1917) 177 Cal. 56, 58.)
                                              9
nature of the [plaintiff’s] demand.’ ” (Grappo, at p. 1023 (dis. opn. of Stewart, J.).) We
are not bound by Grappo, and respectfully disagree with the majority to the extent it
suggests the rule of Christerson does not apply in this procedural context.
                                  III.   DISPOSITION

       The order denying the motion to set aside the default and default judgment is
affirmed. As the prevailing party, First American Title Insurance Company, Inc. is
entitled to its costs on appeal by operation of California Rules of Court, rule 8.278(a)(1).

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                                      ____________________________________
                                      Grover, J.

WE CONCUR:

____________________________
Greenwood, P. J.

____________________________
Lie, J.

H048731 - First American Title Insurance Company v. Banerjee et al.
 Trial Court:                                 Santa Clara County Superior Court
                                              Superior Court Case No. CV307206

 Trial Judge:                                 Hon. Socrates Peter Manoukian

 Counsel for Plaintiff and Respondent First   Jeffrey Lowenthal
 American Title Insurance Company             Jill K. Cohoe
                                               Steyer, Lowenthal, Bookrookas, Alvarez &
                                               Smith, LLP

 Counsel for Defendants and                   Paul A. Frassetto
 Appellants Kaushik Banerjee, Arkesh           Frassetto Law Offices
 Ventures, Inc.

a

H048731 - First American Title Insurance Company v. Banerjee et al.