Filed 5/23/17
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
DONALD T. GRAPPO,
Plaintiff and Appellant,
A147522
v.
HEATHER McMILLS et al., (Alameda County
Super. Ct. No. RG13702180)
Defendants and Respondents.
Representing himself, appellant Donald T. Grappo filed a complaint purporting to
allege 10 causes of action. Seven of the causes of action were set forth in one paragraph,
the other three ranging from two paragraphs to five—a complaint, we note, that as framed
could not have withstood a demurrer. Grappo had the complaint served on Kenneth
McKean, a man named in the caption but not identified in the complaint—and who from
all indications had no relationship with Grappo. Six months after such service—and
without warning to anyone—Grappo filed a request for default against McKean and his
firm (McKean & McMills), seeking a default judgment for $9,982,308.83, with a claimed
itemization of damages referring to numbers nowhere found in the complaint. The clerk
entered the default on July 1, 2014, but the court refused to enter judgment, entering an
order listing seven specific reasons why.
On November 23, 2014 McKean died, a death of which Grappo was aware. Two
weeks later, Grappo filed another request for default and court judgment, a request “not
mailed” to anyone because McKean was “now deceased.” This request sought a
judgment in the amount of $12,012,818.88, once again with numbers found nowhere in
the complaint. This time, however, Grappo filled in the declaration portion in the request
1
referring to “$60,000,” an amount in the prayer for the claimed value of personal property
referred to in the eighth cause of action “belonging to some of the heirs of the Michael A.
Grappo 2003 Trust.” Apparently based on that, the court entered judgment for Grappo
and against McKean and McKean & McMills for $60,000 plus costs of $750.
Respondent Aubrey Cambra, the trustee of McKean’s trust, learned of the default
judgment when a creditor’s claim was made in McKean’s estate, and filed a motion to
vacate and set aside the default judgment. Grappo, now represented by counsel, opposed
the motion asserting, however falsely, that at “the time of the entry of judgment [Grappo]
was unaware” McKean had died. The trustee filed a reply, and the matter came on for
hearing before the same trial court which had entered the judgment. Following a lengthy
hearing, the trial court entered a comprehensive order vacating the judgment as to
McKean.
Grappo appeals from that order, an appeal we reject as the trial court was right.
And we publish the opinion, to remind trial courts that however burdened they be, they
must vigilantly attend to their duty in connection with the default process, “ ‘to act as
gatekeeper, ensuring that only the appropriate claims get through.’ ” (Fasuyi v.
Permatex, Inc. (2008) 167 Cal.App.4th 681, 691 (Fasuyi); Kim v. Westmoore Partners,
Inc. (2011)
201 Cal.App.4th 267, 272–273 (Kim).) Grappo’s claim here should not have
gotten through, the default judgment never entered in the first place.
THE PROCEEDINGS BELOW
On November 8, 2013, “[s]elf [r]epresented” Grappo filed a complaint. The
complaint names five defendants, two entities and three individuals, not one of which or
whom is described or identified. Indeed, Grappo does not even identify himself, or
describe any claimed connection or relationship with any of the defendants, his complaint
beginning as follows: “COMES NOW the Plaintiff, Donald T. Grappo and says that: on
or about April 28, 2009 and continuing through the year 2012, Defendants, and each of
them did willfully and with malice aforethought misappropriate funds belonging to the
Michael A. Grappo 2003 Trust.”
2
We digress momentarily from a description of the complaint to note that Grappo
cannot be a proper plaintiff as to claims held by a trust. The proper plaintiff is the trustee.
(Code Civ. Proc., § 369, subd. (a) 1; O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044,
1062.) In short, the complaint as pled shows that Grappo has no standing. It also shows
that no cause of action is properly pled.
The complaint states on the front page that it is for “fraud, breach of fiduciary
duty, gross negligence, misappropriation of funds.” However, the complaint itself
purports to allege many more causes of action, 10 to be exact, the first seven of which are
each alleged in one paragraph. The complaint refers to only four amounts of money: a
claimed abstract of judgment held by another Grappo in the amount of $3,477,259.08 (set
forth in the third cause of action), and three small amounts leading to a $1,000 per month
claimed overpayment causing the Michael A. Grappo 2003 Trust to lose money. The
latter references are in the first paragraph of the eighth cause of action, for “gross
negligence and defalcation,” which also includes this second paragraph: “9. Defendant
McKean further removed or authorized the removal of items of personal property
belonging to some of the heirs of the Michael A. Grappo 2003 Trust without prior
notification to said property owners and without ever notifying said property owners of
the disposal of these items of personal property which were being stored at the Piedmont
property site.”
The prayer of the complaint sought this:
“2. All excessive attorney’s fees returned to the heirs of the Michael A. Grappo
2003 Trust;
“3. All excessive Trustees fees charged the Trust by Trustees returned to the heirs
of the Michael A. Grappo 2003 Trust;
“4. Punitive damages for loss of revenue to the trust determined and said amounts
be returned to the heirs of the Michael A. Grappo 2003 Trust;
1
All undesignated statutory references are to the Code of Civil Procedure.
3
“5. Punitive damages for failed [sic] to renew Abstract of Judgment in the sum of
$3,477,259.08 plus interest thereon;
“6. The sum of $60,000.00 which is the value of property removed from the
Piedmont property site and disposed of without notification to the owner of said
property.”
On December 30, 2013, McKean was served at his home in Piedmont.
On June 30, 2014, Grappo filed a request for entry of default against McKean and
McKean & McMills, LP. Item 2 in the request, “Judgment to be entered,” read as
follows:
“2. Judgment to be entered. Amount Credits acknowledged Balance
“a. Demand of complaint….. $ $ $ 0.00
“b. Statement of damages
“(1) Special………………... $ 9,981.558.83 $ $ 9,981,558.83
“(2) General……………….. $ $ $ 0.00
“c. Interest…………………. $ $ $ 0.00
“d. Costs (see reverse)……... $ 750.00 $ $ 750.00
“e. Attorney fees…………… $ $ $ 0.00
“f. TOTALS……………….. $ 9,982,308.83 $ 0.00 $ 9,982,308.83”
(Fn. and bold type omitted.)
Item 6, the declaration of mailing required under Code of Civil Procedure section
587, represented that the request was served on two law firms and on “Ken McKean,
McKean & McMills LP, 28 Lorita Ave, Piedmont, CA 94611.” Interestingly, one of the
law firms, Cooper, White & Cooper, LLP, had on April 18, 2014 substituted in as counsel
for Heather McMills, apparently the other principal of McKean & McMills.
On July 1, the clerk entered the default. However, the court entered an order
denying the request for default judgment, indicating that it was “NOT ENTERED” for
the following reasons, listing seven.
4
On November 23, McKean died, a death that obviously became known to Grappo.
Two weeks later, on December 8, Grappo filed another request for default2 and court
judgment. Item 2 of this request read as follows:
“2. Judgment to be entered. Amount Credits acknowledged Balance
“a. Demand of complaint….. $ 2,000,000.00 $ -0- $ 2,000,000.00
“b. Statement of damages
“(1) Special………………... $ 3,477,259.08 $ -0- $ 3,477,259.08
“(2) General……………….. $ $ $
“c. Interest…………………. $ 6,504,309.80 $ -0- $ 6,504,309.80
“d. Costs (see reverse)……... $ 750.00 $ -0- $ 750.00
“e. Attorney fees…………… $ 30,500.00 $ -0- $ 30,500.00
“f. TOTALS……………….. $12,012,818.88 $ -0- $12,012,818.88
“g. Daily damages were demanded in complaint at the rate of $ 10% per annum per
day beginning (date): 11/08/2000.” (Fn. and bold type omitted.)
In item 6, the declaration of mailing, Grappo checked the box that a copy of the
request was “not mailed to the following defendants,” going on to state that “Defendant
Ken McKean and Ken McKean as owner of McKean & McMills, LP, is now deceased
and could not be served.” No service was made on McMills, apparently the other
“owner” of “McKean & McMills” who was still alive—indeed, as noted, represented by
counsel.
Grappo also filed a five-paragraph declaration in the request, which declaration
read in its substantive entirety as follows:
“A complaint was filed in the above entitled matter on November 6, 2013. This
Plaintiff affirms that the value of property which was removed without notice from the
garage at the Piedmont Avenue property belonging to Declarant Donald T. Grappo is
approximately $60,000.00. This Declarant cannot provide receipts for any of said
2
As the court noted below, and Grappo acknowledged, this second request for
default was improper.
5
property in that any and all information in connection with said property was also stored
at the Piedmont Avenue property and was destroyed along with the property itself.
“I attach a copy of an email sent to me from attorney Brittain Habegger on
March 21, 2011 which states in pertinent part ‘. . . It is my understanding that having
given you and other family members several years to collect from the garage those
things. . .’
“At no time was there ever a notification given to me, or to the best of my
knowledge, information and belief to any of my family members that Trustee McKean
intended to remove and destroy any of my property stored in the Piedmont property
garage.”
No prove-up hearing was held. Rather, on December 22, the trial court filed a
“Judgment Default” that Grappo recover from defendants Ken McKean and McKean &
McMills, LP $60,000 plus costs of $750.00.
The clerk served notice of entry of judgment on Grappo. No service was made, or
apparently even attempted, on McKean & McMills or McKean or McMills as
individuals.
On February 17, 2015, Grappo sent a letter to the trial court that read in its entirety
as follows:
“This letter is addressing the $10 Million dollar figure cited in my request for
judgment. I thank the court for issuing the $60,750.00 judgment which reimburses me
for the items of personal property stored at the Piedmont property. However,
Mr. McKean committed so many egregious errors while acting as trustee of my father’s
trust, that it boggles the mind. I would appreciate you reviewing my request for
judgment and considering issuing me a judgment connected with this missteps [sic] while
trustee of the Michael A. Grappo 2004 Trust at your earliest opportunity.
“It has come to my attention that Mr. Ken McKean has passed away. He has
property valued in the millions and I will have to file a creditor’s claim soon in his estate
if I am going to be able to collect some or all of the monies owed to me and my siblings
as a result of his misdeeds.
6
“Thank you for your kind consideration.”
Aubrey Cambra, trustee of the Kenneth A. McKean Trust, learned of the default
judgment when Grappo filed a creditor’s claim in McKean’s estate. On November 4,
2015, Cambra filed a motion to vacate the default judgment and enter a different
judgment. The motion references section 663; the memorandum of points and authorities
refers to section 663 and also to section 473.5.
Grappo, now represented by counsel, filed opposition. Exclusive of exhibits, his
substantive opposition was all of three pages, with two arguments: (1) that the motion
was untimely; and (2) even if timely, it “must be denied on the merits, because there was
no prejudice to Defendant McKean or Cambra.”
Cambra filed a reply, and the motion came on for hearing before the same trial
court that had entered the default judgment. The court heard extensive argument, lasting
almost an hour. Among other things, Grappo’s counsel argued there was no prejudice,
that there was “nothing that could have been done” as McKean had defaulted. The court
interrupted: “Well, motion to vacate the default.” To which Grappo’s attorney
responded, “Right.”
Following the hearing, the trial court entered its order granting the motion,
vacating the judgment against McKean. The order was a comprehensive nine paragraphs,
the first five of which detailed the procedural history leading to the setting before the
court. The next three paragraphs set forth the bases for the court’s ruling, as follows:
“Trustee contends that Plaintiff should have substituted Kenneth McKean’s
personal representative in this action and litigated against that personal representative in
obtaining a judgment, as required by Code of Civil Procedure section 377.41.
“When a defendant in a pending action dies, the action may be prosecuted against
the decedent’s personal representative. Pursuant to Code of Civil Procedure section
377.41, the court shall allow a pending action that does not abate to be continued against
the decedent’s personal representative or, to the extent provided by statute, against the
decedent’s successor in interest. As a general proposition, judgment cannot be entered
for or against a decedent, nor against the personal representative of the decedent’s estate,
7
until the representative has been made a party by substitution, and a judgment entered
against the decedent prior to substitution of a personal representative or successor-ininterest is subject to general attack. (Sacks v. FSR Brokerage, Inc. (1992) 7 Cal.App.4th
950, 956-957 [(Sacks)].) However, the judgment is not void, and it will be set aside only
upon a showing of prejudice. (Id. at p. 957.)
“Trustee has made a sufficient showing to vacate the judgment against Defendant
Ken McKean. It is undisputed that Plaintiff has filed a creditor’s claim against the
McKean Trust in Case No. RP15-765907 based on the Default Judgment in this action,
and has filed another civil lawsuit against Trustee in Case No. RG15-779986, also based
on the Default Judgment against Defendant Ken McKean. Trustee has established that
she was not given notice of the existence of the default or the application for default
judgment, and thus had no opportunity to seek relief from the default before Default
Judgment was entered against Defendant Ken McKean. The prejudice to the Trust is
clear, and Trustee has made a sufficient showing that the judgment against Defendant
Ken McKean is void. (Code Civ. Proc., sec. 473(d).)”
Grappo filed a timely appeal from the order.
DISCUSSION
I. The Trial Court Order Was Correct
A. Governing Principles: Defaults and Default Judgments
The law concerning section 473 relief was set forth by the Supreme Court in
Elston v. City of Turlock (1985) 38 Cal.3d 227, 233: “A motion seeking such relief 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,
8
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].”
(Accord, Shamblin v. Brattain (1988) 44 Cal.3d 474, 478 [“very slight evidence is
required to justify a trial court’s order setting aside a default”].)
A ruling setting aside a default or default judgment is reviewed under the abuse of
discretion standard, and an appellate court will reverse only upon “ ‘ “a clear case of
abuse” ’ ” and “ ‘ “a miscarriage of justice.” ’ ” (Blank v. Kirwan (1985) 39 Cal.3d 311,
331; Denham v. Superior Court (1970)
2 Cal.3d 557, 566.) In short, as one court of
appeal recently described it, Grappo has a “ ‘daunting task.’ ” (Dreamweaver
Andalusians, LLC v. Prudential Ins. Co. of America (2015)
234 Cal.App.4th 1168, 1171.)
B. Governing Principles: Appellate Review
The most fundamental principle of appellate review is that “A judgment or order
of a lower court is presumed to be correct on appeal, and all intendments and
presumptions are indulged in favor of its correctness.” (In re Marriage of Arceneaux
(1990) 51 Cal.3d 1130, 1133; accord, Ketchum v. Moses (2001)
24 Cal.4th 1122, 1140.)
And, of course, we will uphold the decision of the trial court if it is correct on any
ground. (Ladas v. California State Auto. Assn. (1993)
19 Cal.App.4th 761, 769.)
In light of those principles and presumptions, the burden is on Grappo to
demonstrate error—and also “prejudice arising from” that error. (Gould v. Corinthian
Colleges, Inc. (2011) 192 Cal.App.4th 1176, 1181.) He has done neither.
C. Introduction to the Analysis
Grappo’s opening brief is not a model of appellate advocacy. The brief sets out
what occurred below in a fashion favorable to him, the loser, rather than in support of the
trial court’s decision, which is bad enough. Worse, both of Grappo’s briefs continue the
assertion his counsel made below, that Grappo did not have “knowledge of . . . McKean’s
death on December 8, 2014, when the Request to Enter Default Judgment was filed.” As
noted, this is flatly false, as shown by Grappo’s “under penalty of perjury” representation
that McKean “is now deceased.” Such advocacy is not to be condoned.
9
The introduction to Grappo’s brief distills his position in the following language:
“Appellant Grappo is seeking to have the Order reversed as a matter of law, based on
undisputed facts, such that the December 22, 2015 judgment against defendant McKean
stands and remains in effect. Alternatively, the lower court Order could be reversed as an
abuse of discretion, to the extent that any court actions were discretionary, given the
violation of established legal principals [sic]. The Order should be reversed and
Grappo’s December 22, 2014 judgment against McKean should remain in effect.” By no
means.
D. Grappo Has Not Demonstrated Error
Grappo’s first argument is that the motion was late, beyond the time limits allowed
by section 663.
To put the issue in context, Cambra’s motion to vacate stated that it was made
“pursuant to Code of Civil Procedure § 663 on the ground that the legal basis for the
Judgment Default is incorrect and/or erroneous in that it is neither consistent with nor
supported by the facts. Mr. McKean was deceased and the entity of which he was a
general partner, McKean & McMills, LP, was not in existence at the time the Court
entered the Judgment Default on December 22, 2014.”
The essence of this argument was that because McKean was dead, the judgment
was void. In support of the argument, Cambra cited many cases holding that, as one
Supreme Court case cited by Cambra tersely put it, “A judgment rendered for or against a
dead person is void . . . .” (In re Estate of Parsell (1923) 190 Cal. 454, 456)—language
the Supreme Court first used in 1868, in Judson v. Love (1868)
35 Cal. 463.3
3
Numerous cases have used such language since. (See, for example, Johnson v.
Simonelli (1991) 231 Cal.App.3d 105, 107, fn. 1 [“If Violet died in 1989, the court’s
judgment entered against Violet in 1990 was in excess of its jurisdiction and void as it
was entered against a person who was no longer a party.”]; Herring v. Peterson (1981)
116 Cal.App.3d 608, 611–612 [trial court order was “in excess of its jurisdiction and
void” where “defendant dies and no personal representative is substituted”]; Estate of
Edwards (1978)
82 Cal.App.3d 885, 893 [judgment entered after party intervener died
was “void” because “the action could no longer proceed as to her, and it became
necessary that someone be substituted for her. [Citation.] This was not done . . . .”].)
10
Witkin describes this state of affairs this way: “Death During Action. If the
defendant was alive when the action was begun and personal jurisdiction over him or her
was obtained, the defendant was originally a party. Death occurring thereafter, before
judgment, makes it improper to render judgment for or against the defendant without first
taking the procedural step of substituting the executor or administrator. The failure to
take this step is a departure from the mandatory requirements of the statute, and does
result in a judgment for or against a person not a party. Hence, it seems clearly in excess
of jurisdiction and subject to prevention or annulment by some form of direct attack.
(See Boyd v. Lancaster (1939) 32 [Cal.App.2d] 574, 581 [reversal on appeal: ‘The defect
would appear to us to go to the jurisdiction to file and enter such an order’]; Estate of
Cazaurang (1939) 35 [Cal.App.2d] 556, 558 [prohibition issued to restrain trial];
Hamilton v. Hamilton (1948) 83 [Cal.App.2d] 771, 774; Herring v. Peterson (1981)
116 [Cal.App.3d] 608, 612 [trial court acted in excess of jurisdiction in dismissing action
on motion of defense counsel, where defendant died and no personal representative was
substituted] . . . .)” (2 Witkin, Cal. Procedure (5th ed. 2008) Jurisdiction, § 317, p. 929.)
Grappo’s opposition did not even mention any of the cases cited in Cambra’s brief
talking about “void.” In fact, the only case cited by Cambra referred to in Grappo’s
opposition was Sacks, supra,7 Cal.App.4th 950, a case, as quoted above, the trial court
referred to in its order.
Sacks arose in the context where plaintiff Sacks had summary judgment entered
against him in favor of all defendants, including Glen Gaither, who had died. Sacks
appealed, contending that it was error to enter judgment in favor of a defendant who had
died. Addressing the contention, the court observed as follows: “As a general
proposition, it is true, as Sacks contends, that under these provisions judgment cannot be
rendered for or against a decedent, nor can it be rendered for or against a personal
representative of a decedent's estate, until the representative has been made a party by
substitution. [Citations.] A long line of cases has therefore allowed direct attack upon a
judgment obtained without substitution of a personal representative after a party has died.
[Citations.] In California, the rule can be traced back to the early Supreme Court
11
decision in Judson v. Love (1868) 35 Cal. 463, which observed that the proceedings after
the death of the defendant were ‘irregular and void as to him and his successors in
interest. . . .’ (Id. at p. 467.) However, this general proposition has not been applied
blindly, but rather has acted to prevent prejudice to the parties because of lack of notice,
lack of proper representation, or some other disadvantage.” (Sacks, supra,
7 Cal.App.4th
at p. 957.) The Court of Appeal went on to hold that any error was harmless, since none
of the parties was prejudiced by Gaither’s death. (Id. at p. 959.)
Sacks is cited as “cf.” at the end of the Witkin passage quoted above, the author
going on in the next paragraph to state that “This technical lapse [i.e., judgment against a
dead person], however, does not render the judgment void and subject to collateral attack.
The courts frequently describe it as a ‘mere irregularity,’ which renders the judgment
‘voidable only.’ (See Hogan v. Superior Court (1925) 74 [Cal.App.] 704, 709; Machado
v. Flores (1946) 75 [Cal.App.2d] 759, 762; cf. Bliss v. Speier (1961) 193 [Cal.App.2d]
125, 126.” (Witkin, supra, at p. 929.)
We are not aware of any void versus voidable case that deals with a default
judgment taken against a dead person, as here. Perhaps in that case we might be inclined
to hold in that situation that the judgment is void. Period. And, of course, a void
judgment is subject to attack at any time. (Hayashi v. Lorenz (1954) 42 Cal.2d 848, 851;
Tearlach Resources Limited v. Western States Internat., Inc. (2013)
219 Cal.App.4th 773,
779; Manson, Iver & York v. Black (2009)
176 Cal.App.4th 36, 43; Rochin v. Pat
Johnson Manufacturing Co. (1998)
67 Cal.App.4th 1228, 1239.)4 Or perhaps using the
Sacks analysis in the default situation, that death is per se prejudice.
But we need not make such a holding to affirm the trial court here, because we can
affirm on the basis on which it ruled, applying Sacks, finding prejudice, and vacating the
judgment under Code of Civil Procedure section 473, subdivision (d).
Grappo’s second argument, his apparent attempt to overcome the trial court’s
ruling, is as follows: “The Sacks court’s test for vacating a judgment involving a
4
As will be shown, the judgment here is void because the complaint does not
support the default judgment entered for Grappo—indeed, any default judgment at all.
12
decedent upon a showing of prejudice does not apply to section 473 subdivision (d)
relief.” The argument is not clear, and no clarity is added by Grappo’s distillation of it.
One thing that Grappo does argue is that reliance on section 473, subdivision (d)
was not proper because it was “cited in [Cambra’s] Reply brief, which does not meet
explicit statutory requirements for a noticed motion.” As noted, Cambra’s motion papers
cited section 473, though not subdivision (d), which was first cited in the reply brief.
Regardless, Grappo’s argument would not avail him, not in light of the cases that
recognize a court has discretion to accept arguments or evidence made for the first time
in reply. (See, for example, Alliant Ins. Services, Inc. v. Gaddy (2008) 159 Cal.App.4th
1292, 1308; Plenger v. Alza Corp. (1992)
11 Cal.App.4th 349, 362, fn. 8 [in summary
judgment case, trial court had discretion to consider new evidence in reply papers as long
as other party had opportunity to respond].)
Those cases would seem to apply a fortiori in the default context, with the strong
presumption to provide a hearing on the merits. And most certainly in connection with
section 473, which should be liberally construed, any doubts about its application to be
resolved in favor of the party seeking relief from default. (Zamora v. Clayborn
Contracting Group, Inc. (2002) 28 Cal.4th 249, 256 [“ ‘the provisions of section 473 . . .
are to be liberally construed and sound policy favors the determination of actions on their
merits’ ”]; Rappleyea v. Campbell (1994)
8 Cal.4th 975, 980 (Rappleyea) [“[b]ecause the
law favors disposing of cases on their merits, ‘any doubts in applying section 473 must be
resolved in favor of the party seeking relief from default’ ”].) As one Court of Appeal
has described, “substantial compliance” with statutory requirements is all that is required
to set aside a default judgment (County of Stanislaus v. Johnson (1996)
43 Cal.App.4th
832, 837), and that rigid application of the requirements “fails to give full remedial effect
to the statute.” (Ibid.; accord, Mann v. Cracchiolo (1985)
38 Cal.3d 18, 29 [in applying
section 473, trial courts “ ‘should employ a flexible rather than rigid or formalistic
approach to decisionmaking’ ”].)
All this is particularly apt here, where from the very beginning—that is, page 4 of
the reporter’s transcript—the lengthy argument on Cambra’s motion focused on section
13
473. And, as quoted above, the trial court applied Sacks and found that: “Trustee has
made a sufficient showing to vacate the judgment against Defendant Ken McKean. . . .
Trustee has established that she was not given notice of the existence of the default or the
application for default judgment, and thus had no opportunity to seek relief from the
default before Default Judgment was entered against Defendant Ken McKean. The
prejudice to the Trust is clear, and Trustee has made a sufficient showing that the
judgment against Defendant Ken McKean is void. (Code Civ. Proc., sec. 473(d).)”
And prejudice there was, as Grappo’s counsel conceded below, when the trial
court interrupted her “no prejudice” argument with the terse observation, “Well, motion
to vacate the default”—and counsel replied, “Right.” There was prejudice. That ends
Grappo’s “abuse of discretion” argument.
The closing of Grappo’s reply brief states that “equities and public policy strongly
support maintaining the validity of the underlying judgment.” Nothing is cited in claimed
support, which is perhaps not surprising, as the law is 180 degrees contrary, illustrated,
for example, by Au-Yang v. Barton (1999) 21 Cal.4th 958, 963: “ ‘[T]he policy of the
law is to have every litigated case tried upon its merits, and it looks with disfavor upon a
party, who, regardless of the merits of the case, attempts to take advantage of the mistake,
surprise, inadvertence, or neglect of his adversary.’ ”
Fasuyi, supra,167 Cal.App.4th at
p. 696, is similar: “ ‘Because the law favors disposing of cases on their merits, “any
doubts in applying section 473 must be resolved in favor of the party seeking relief from
default [citations]. . . .” ’ In Witkin’s typically succinct statement of the rule, the
remedial relief offered by section 473 is ‘highly favored and is liberally applied.’
(8 Witkin, Cal. Procedure, Attack on Judgment in Trial Court, [(4th ed. 1997)] § 152, pp.
653–654 and numerous cases there collected.)”
Indeed, the only case cited by Grappo for this argument—cited for the proposition
that there should be “finality of judgments”—makes this point in spades. And hardly
helps Grappo. That case is Rappleyea, supra,8 Cal.4th 975, which involved defendants
from out of state who represented themselves. The court misinformed defendants as to
the correct filing fee for their answer, which caused the answer to be accepted for filing
14
eight days late. The clerk entered defendants’ default, and plaintiff subsequently
misinformed defendants that they had no legal rights under section 473, even though the
six-month limitation period to seek relief had not expired. When defendants learned that
a default judgment might soon be entered, they moved to set aside the default. The trial
court denied the motion, eventually entered a default judgment, and the Court of Appeal
affirmed. (Rappleyea, supra, at p. 980.) The Supreme Court reversed, with directions to
reverse the default judgment and to instruct the trial court to set aside the entry of default,
holding that the trial court abused its discretion in denying defendants’ motion.
(Rappleyea, at p. 985.)5
5
We end this part of the opinion with brief comments about the dissent.
As Grappo’s counsel conceded at oral argument, Grappo’s complaint does not
state a claim. Despite that, and despite that Grappo may be the poster child for an
avaricious overreacher—improperly attempting to get a $12 million judgment against a
known dead man—the dissent would resurrect the default judgment in Grappo’s favor.
Why is hard to fathom. The stated reason for doing so is “the public policy favoring the
finality of judgments,” citing Rappleyea, supra, 8 Cal.4th at p. 982—a case, as discussed,
that actually held the default judgment was improper, and it, and the default itself, had to
be set aside. Regardless, the dissent says what it says, and we offer these few
observations about it.
The dissent approaches the setting before us contrary to our role here (presuming
the order is correct); contrary to the role of any court dealing with defaults (discretion
liberally applied to grant relief); and contrary to public policy (cases are to be tried on the
merits). It also disregards how we are to read the record—in favor of the trial court and
in support of the order.
In its thorough analysis, the trial court found that “Trustee has established that she
was not given notice of the existence of the default or the application for default
judgment, and thus had no opportunity to seek relief from the default before Default
Judgment was entered against Defendant Ken McKean. The prejudice to the Trust is
clear.” The dissent states that this finding is not supported by substantial evidence, a
position that includes that the dissent disagrees “that the Trustee’s lack of opportunity to
seek relief from the default before entry of the default judgment alone was enough.”
Indeed, and as noted, Grappo’s counsel conceded as much below when, in the course of
her argument that there was no prejudice, that there was “nothing that could have been
done” as McKean had defaulted, the court interrupted: “Well, motion to vacate the
default.” Grappo’s attorney responded, “Right.” The dissent describes this as “little
more than throat-clearing.”
15
II. The Default Judgment Was Not Supported
In Fasuyi, supra,167 Cal.App.4th 681, we reversed a trial court that had denied
relief from a default judgment, and remanded with instructions to vacate it and the
default, to allow the defendant to plead. We began our discussion this way:
“The Role of the Court in Default Judgments
“It is, of course, the case that there is no opposing party in a default judgment
situation. Thus, cases properly recognize that in such situation ‘it is the duty of the court
to act as gatekeeper, ensuring that only the appropriate claims get through.’ (Heidary v.
Yadollahi (2002) 99 Cal.App.4th 857, 868; see Electronic Funds Solutions, LLC v.
Murphy (2005)
134 Cal.App.4th 1161, 1179.)
“California Judges Benchbook: Civil Proceedings Before Trial (CJER 2d ed.
2008) (Benchbook) is a treatise that ‘focuses on the judge’s role.’ (Benchbook, supra,
preface, p. v.) It provides ‘practical working tools to enable a judge to conduct
proceedings fairly, correctly, and efficiently. [It is] written from the judge’s point of
view, giving the judge concrete advice on what to look for and how to respond.’ (Ibid.)
“Chapter 16 of the Benchbook deals with defaults and default judgments, and in
its second section of advice states that ‘[a] judge may enter a default judgment against a
defendant only if the plaintiff has precisely followed certain procedures that ensure that
the defendant received sufficient notice of the pending action to make an informed choice
as to whether to defend or ignore the plaintiff’s claims. [Citations.] When the plaintiff
fails to comply with these procedures, the defendant need not suffer the consequences of
a default judgment. [Citation.]’ (Benchbook, supra, § 16.2, p. 371.) As the Court of
The trial court found that the trustee did not have notice of the default.
Notwithstanding this, and for some reason approaching the issue with a jaundiced eye,
the dissent says “[f]or all we know from the record . . . the Trustee could have learned of
the action from McKean before he died or from his partner and co-defendant, McMills,
after he died but before the default judgment was entered.” We do not read the record to
attempt to contradict things. To the contrary, “factual inferences drawn by [the trial
court] are presumed correct.” (Shapiro v. Clark (2008) 164 Cal.App.4th 1128,
1139–1140.)
16
Appeal put it in Lopez v. Fancelli (1990) 221 Cal.App.3d 1305, 1312, the first case cited
in the Benchbook: ‘The rules pertaining to defaults and default judgments must be
precisely followed to ensure that a defaulting defendant is aware of plaintiff’s claims.’ ”
(Fasuyi, supra,
167 Cal.App.4th at p. 691.)
The threshold issue in Fasuyi dealt with the various forms and papers that had to
be filed preparatory to a proper default and default judgment. And so we quoted the
sections of the Benchbook we did. Another section of the Benchbook is apt here, section
16.33, entitled “Judge’s Evaluation of Allegations of Complaint.” This is what it says:
“A judge may not enter a default judgment against a defendant unless the
plaintiff’s complaint states a cause of action against the defendant. Taliaferro v. Davis
(1963) 216 [Cal.App.2d] 398. The allegations of the complaint are not deemed admitted
by the default. The plaintiff must prove each essential element of the complaint entitling
the plaintiff to a recovery against the defendant. The plaintiff may not introduce
evidence on claims not pleaded in the complaint; this would operate as an amendment to
the complaint, opening the default and entitling the defendant to respond. Jackson v.
Bank of Am. (1986) 188 [Cal.App.3d] 375, 387–389.
“Plaintiffs in a default judgment proceeding must also prove that they are entitled
to the damages claimed. Barragan v. Banco BCH (1986) 188 [Cal.App.3d] 283, 302; see
Don v. Cruz (1982) 131 [Cal.App.3d] 695, 706–707 (award of $100,000 in damages at
default judgment hearing in personal injury action was excessive in light of plaintiff’s
evidence which established only that she suffered some degree of discomfort without
substantial evidence of disability); Petty v. Manpower, Inc. (1979) 94 [Cal.App.3d] 794
(damages not fixed by contract must be proved).” (Benchbook, supra, at p. 894.)
Justice Bedsworth has well described this responsibility, most recently in Kim,
supra, 201 Cal.App.4th at pp. 272–273. Reversing the default judgment the trial court
had entered, he repeated his “cautionary tale” for the trial courts: “And it is not the first
time we have told this tale. As we previously explained in Heidary v. Yadollahi (2002)
99 Cal.App.4th 857, 868, ‘[i]t is imperative in a default case that the trial court take the
time to analyze the complaint at issue and ensure that the judgment sought is not in
17
excess of or inconsistent with it. It is not in plaintiffs’ interest to be conservative in their
demands, and without any opposing party to point out the excesses, it is the duty of the
court to act as gatekeeper, ensuring that only the appropriate claims get through. That
role requires the court to analyze the complaint for itself—with guidance from counsel if
necessary—ascertaining what relief is sought as against each defaulting party, and to
what extent the relief sought in one cause of action is inconsistent with or duplicative of
the relief sought in another. . . .’ ” Then, after noting that the trial court there, and in
other cases, did not do what is required, and had entered the judgment in error, he
concluded with this: “We need to shore this up. The court’s role in the process of
entering a default judgment is a serious, substantive, and often complicated one, and it
must be treated as such.” Indeed.
Proper application of the gatekeeper function should have precluded any default
judgment here. For several reasons.
First, as noted above, Grappo’s complaint does not set forth the identity or
relationship of any of the people or entities named in the caption. Indeed, he does not
even indicate his own identity, or his claimed relationship with any of the defendants.
Second, the complaint does not comply with the California Rules of Court. For
example, rule 2.112 provides that each cause of action should be headed so as to identify
briefly the nature of the claim asserted; and if there is more than one, it should identify
the defendant or defendants against whom the cause of action is being asserted. As the
leading practical treatise advises, failure to comply with rule 2.112 presumably renders a
complaint subject to a motion to strike (Code of Civ. Proc., § 436), or a special demurrer
for uncertainty. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The
Rutter Group 2016, ¶ 6:113, pp. 6-33–6-34.)
Third, to the extent that any wrong is attempted to be asserted, they appear to be
wrongs against the Michael A. Grappo 2003 Trust. Grappo is not the proper plaintiff.
(Code Civ. Proc. § 369; Portico Management Group, LLC v. Harrison (2011)
202 Cal.App.4th 464, 473.)
18
Fourth, and most fundamentally, Grappo’s complaint does not state a claim for
any loss of property. That is, reading Grappo’s complaint as liberally as one can in his
favor, the only possible cause of action that deals with any “property” allegedly lost is the
eighth. That cause of action is styled “Gross Negligence and Defalcation.” And the only
reference to property is in the second of its two paragraphs, that quoted above: “9.
Defendant McKean further removed or authorized the removal of items of personal
property belonging to some of the heirs of the Michael A. Grappo 2003 Trust without
prior notification to said property owners and without ever notifying said property owners
of the disposal of these items of personal property which were being stored at the
Piedmont property site.” It does not state a cause of action.
We know of no cause of action for “defalcation.” And “ ‘California does not
recognize a distinct cause of action for “gross negligence” independent of a statutory
basis.’ ” (Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 856, fn. 18.) Moreover,
“gross negligence” requires a “ ‘ “ ‘want of even scant care” ’ ” or “ ‘ “an extreme
departure from the ordinary standard of conduct.’ ” ’ ” (City of Santa Barbara v.
Superior Court (2007)
41 Cal.4th 747, 754.) Certainly, that is not alleged here.
But even if Grappo’s claim were for ordinary negligence, it would fail, as such a
claim requires a legal duty to use due care and breach of that duty. (Ladd v. County of
San Mateo (1996) 12 Cal.4th 913, 917; Rowland v. Christian (1968)
69 Cal.2d 108,
112.) Neither is alleged here.
If the complaint does not state a cause of action or the allegations do not support a
claim for relief, a default judgment is erroneous and “cannot stand.” (Kim, supra, 201
Cal.App.4th at p. 282 [default judgment reversed where complaint failed to state
cognizable claims against defendants]; Falahati v. Kondo (2005)
127 Cal.App.4th 823,
829; Vasey v. California Dance Co. (1977)
70 Cal.App.3d 742, 749 [defendants who
defaulted did not admit corporation was their alter ego where complaint was insufficient
in pleading elements to justify disregard of corporate entity].) As Falahati succinctly put
it, “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, as Witkin
19
explains, ‘[a] defendant who fails to answer admits only facts that are well pleaded.’
Because the third amended complaint alleged no facts with respect to Kondo, there were
no facts for Kondo to admit.” (Falahati v. Kondo, supra, 127 Cal.App.4th at p. 829, fn.
omitted.) And so, Falahati went on to hold, “The default judgment in the present case is
void for two reasons. The complaint contained no factual allegations with respect to
Kondo; therefore it failed to apprise him of the nature of plaintiffs’ demand against him.
In addition, the complaint does not specify the amount of damages plaintiffs seek from
Kondo . . . .” (
Falahati, supra, at p. 830, fn. omitted, citing Christerson v. French (1919)
180 Cal. 523, 525–526.)
Were all that not enough, counsel for Grappo admitted at oral argument that
Grappo’s complaint did not state a claim.
Finally, the default judgment is void for the additional reason that the $60,000
amount awarded to Grappo is not supported by the complaint. As quoted, the only
property referred to is in the eighth cause of action: “items of personal property
belonging to some of the heirs” of the trust. (Italics added.) The exhibit Grappo attached
to the request, an e-mail from attorney Habegger, refers to his understanding that his
office had given Grappo “and other family members” a long opportunity to remove the
items. According to the proofs of service, there are apparently six other Grappos spread
throughout California and Oregon—apparently the other “heirs” or “family members”
with some interest in the property.
DISPOSITION
The order is affirmed. Cambra shall recover her costs on appeal.
20
_________________________
Richman, Acting P.J.
I concur:
_________________________
Miller, J.
A147522; Grappo v. McMills
21
Stewart, J., dissenting,
There comes a time when the policy favoring relief from defaults gives way to the
public policy favoring the finality of judgments. (Rappleyea v. Campbell (1994) 8 Cal.
4th 975, 982 (Rappleyea).) As this court has stated, “[o]nce relief is no longer available
under section 473, the public policy in favor of finality of judgments predominates, and
the power to set aside valid final judgments . . . should be exercised only when
exceptional circumstances require that the consequences of res judicata be denied.” (In
re Marriage of Stevenot (1984)
154 Cal.App.3d 1051, 1071.) It is the majority’s
elevation of the former policy over the latter, with the result that a default judgment that
is final is nonetheless virtually always open to challenge, that leads me to dissent.
Here, the majority affirms a trial court order vacating a final judgment under Code
of Civil Procedure section 473, subdivision (d)1 at the request of a party who learned of it
before it was final and thus could have applied for relief under section 473,
subdivision (b) based on a showing of “mistake, inadvertence, surprise, or excusable
neglect.”2 Had the Trustee timely made such an application, she would have had the
benefit of the law’s strong policy in favor of relieving parties from default and allowing
them their day in court that the majority wields strenuously in defense of what the trial
court did. But the Trustee made no such application. Instead, she waited until six
months after she learned of the judgment, at which point ten months had elapsed since the
judgment was entered, to move to set the judgment aside, and she did so without
explanation or evidence. Because the judgment had in the meanwhile become final and
the time for seeking relief under section 473, subdivision (b) had passed, the policy
favoring relief from defaults had given way to the equally important policy the majority
ignores: the policy of “leaving judgments final” or, stated otherwise, the law’s “distaste
1
All further statutory references are to the Code of Civil Procedure unless
otherwise indicated.
2
An application for relief under section 473, subdivision (b) must be accompanied
by “a copy of the answer or other pleading proposed to be filed” and be made “within a
reasonable time, in no case exceeding six months, after the judgment . . . was taken.”
1
for the forfeiture of a judgment, which is vested personal property.” (Rappleyea, supra,
8 Cal.4th at p. 982.)
In affirming this judgment, the majority goes to great lengths to reach the result
that it does. It presents a selective and one-sided recitation of the record, omitting many
key facts. In particular, it fails to mention that the Trustee admits she was aware of the
default judgment before it was final but sat on her hands until months after it became
final when the time for making a motion under section 473, subdivision (b) had lapsed.
Nor, therefore, does it discuss the fact that by the time the Trustee moved to set it aside,
relief under section 473, subdivision (b) was no longer available. The majority also fails
to mention that the complaint was filed and the decedent, McKean, was served with the
summons almost a year before he died and that his default was taken five months before
he died, and there is no evidence as to why he failed to answer the complaint or seek
relief from the default on his own behalf in the first instance.
The majority also takes a detour from the course charted by the parties to discuss
arguments about defects it finds in Grappo’s underlying complaint and a challenge to his
standing. The parties did not raise these arguments, and for good reason. The majority’s
standing argument is simply wrong, and its argument that the complaint fails to state a
cause of action provides no basis for a collateral attack on the judgment. In chiding the
trial court for failing to fulfill its role as “gatekeeper,” the majority oversteps its own role,
which is one of decision-maker, not advocate. Doing so leads to errors that could have
been avoided.
In addressing the arguments the parties did make, the majority ignores decades of
settled law—including decisions by our highest court and this one—holding that a
judgment entered for or against a dead person is not void but merely voidable. It
suggests that this body of law does not apply to judgments obtained by default but
provides no authority or rationale for this proposition.
Finally, the majority assumes prejudice based solely on the fact that McKean died
before the default judgment was entered, despite the lack of any actual evidence that a
different outcome would even potentially have resulted if the Trustee had been
2
substituted shortly after his death. I cannot agree, especially given the Trustee’s failure to
take any steps to protect her rights until months after she became aware of the default
judgment.
In my view, the failure to substitute the Trustee for the deceased McKean rendered
the default judgment here voidable, not void; and it could not be set aside on the ground
the defendant had died before its entry by a motion filed more than six months (indeed,
ten months) after it was entered. For that reason alone, the order vacating this final
judgment should be reversed. In addition, though, even if a final judgment could be
attacked at any time on the ground the Trustee here asserted, as the majority implicitly
holds, the motion still should have been denied because the Trustee did not show any
prejudice. The majority’s conclusion that there was prejudice, like the trial court’s, is
based on speculation. In short, the presumption of correctness we accord this trial court
ruling is overcome by two clear legal errors appearing in this record, either one of which
alone is reason to reverse.
BACKGROUND
Because the majority’s discussion omits important facts, and focuses on others that
in my view are irrelevant, I briefly restate the factual background as I see it.
In November 2013, Grappo commenced this action in propria persona alleging
misappropriation of funds in the administration of the Michael A. Grappo 2003 Trust. He
prayed for $60,000 in specific damages, various allegedly excessive fees in an
unspecified amount and punitive damages. One defendant was Kenneth A. McKean,
whom the majority asserts is “not identified in the complaint—and who from all
indications had no relationship with Grappo.” (Maj. opn., p. 1.) But, while the complaint
is not an exemplar, it plainly identifies McKean as a trustee, alleging: “Defendant
McKean’s duty as a trustee was to either make money for said trust and certainly not to
cost it’s [sic] heirs part of their inheritance by causing said trust to lose money.” (Italics
added.) The majority also faults the complaint because Grappo “does not even identify
himself, or describe any claimed connection or relationship with any of the defendants.”
(Maj. opn., p. 2; see also id., p. 18.) Even apart from the obvious implication from the
3
family name he shares with the trustor that Grappo is one of the “heirs” injured by the
defendants’ alleged malfeasance, Grappo identifies himself as an “heir” to the trust both
in the body of the complaint and its signature block. The Trustee could find no fault with
this complaint, criticizing it neither below nor on appeal. In her respondent’s brief she
states as obvious that which the majority finds inscrutable: Grappo “filed the trial court
action in his capacity as a beneficiary of the Grappo Trust.”3
McKean was personally served with process in December 2013 but entered no
appearance, and it was not until six months later, on June 30, 2014, that Grappo requested
entry of default against him. The clerk entered default the following day, which the
majority inexplicably asserts was done “without warning to anyone.” (Maj. opn., p. 1.)
As it acknowledges elsewhere however (Maj. opn., p. 4), Grappo had previously served
McKean with the request for entry of default by mail (on June 19, 2014). He also served
two law firms.
Thereafter, on November 12, 2014, Grappo filed a “written application”
requesting the entry of a default judgment against McKean. The court denied the
application on various grounds. It also advised Grappo that, under section 580, the court
would be limited by the complaint’s allegations to an award of $60,000 in damages, and
directed Grappo to use the required Judicial Council forms.
On November 23, 2014, a year after the complaint was filed and roughly four and
a half months after McKean’s default had been taken, McKean died.
A short time later, on December 8, 2014, Grappo filed a request for entry of a
default judgment against McKean using the required form. In the “Declaration of
mailing” portion of the form, Grappo checked a box indicating the request was not
mailed to McKean and inserted an explanatory note stating, “Defendant Ken McKean
and Ken McKean as owner of McKean & McMills, LP is now deceased and could not be
served.”
3
The Trustee also tells us in her brief that McKean was the general partner of the
entity that served as Trustee and, indeed, Grappo’s “primary contact.”
4
As the majority notes, no prove-up hearing was held. None was required. (See
Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group
2016) ¶¶ 5:202, 5:208, pp. 5-53 to 5-54; § 585, subd. (d).)
On December 22, 2014, the court signed and entered a judgment of default against
McKean in the amount of $60,750, consisting of $60,000 in principal damages and $750
in costs.4 Notice of its entry was served only on Grappo.
On May 6, 2015, about six weeks before the judgment would become final,
Grappo filed a written creditor’s claim concerning the judgment in trust administration
proceedings for McKean’s estate. The Trustee was represented by counsel in that
proceeding, and Grappo’s claim specified the date the judgment had been entered, some
four and a half months earlier. Upon rejection of the claim, Grappo sued the Trustee,
seeking payment of the judgment. Below, the Trustee argued she learned of the default
judgment “no earlier” than the date Grappo filed the creditor’s claim.5
One and a half months after the Trustee learned about the judgment, it became
final, on June 22, 2015, when the 180-day deadline to appeal it expired. (See Cal. Rules
of Court, rule 8.104(a)(1)(C); § 12a, subd. (a).)
Subsequently, on October 29, 2015, nearly six months after the Trustee learned of
the default judgment and more than 10 months after the judgment was entered, the
Trustee finally took action. She filed a “Notice of Intention to Move to Set Aside and
Vacate a Judgment and to Enter Another and Different Judgment,” citing section 663,
which was plainly inapplicable,6 and stating the motion would request the default
4
As the majority notes (Maj. opn., pp. 4, 6), Grappo took the default and procured
entry of a default judgment in the same amount against McKean’s partnership, McKean
& McMills, L.P., too, but the trial court declined to set that judgment aside and it is not at
issue in this appeal.
5
The Trustee’s assertion, made in the papers and orally at the hearing, was based
only on the creditor’s claim. The Trustee filed no declaration, and there is no evidence
that she did not learn of the default proceedings earlier.
6
Section 663 authorizes post-trial relief from a judgment “based upon a decision
by the court, or the special verdict of a jury,” and entry of “another and different
judgment” and “may only be brought when ‘the trial judge draws an incorrect legal
5
judgment against McKean be vacated. The stated basis for the motion was that McKean
was deceased, yet Grappo sought “to exploit [his] death by seeking enforcement of the
Judgment [of] Default against Mr. McKean’s Trust estate in a separate action without
first having substituted Mr. McKean’s personal representative in this action and litigating
against that personal representative to judgment, as [section] 377.41 requires.” The
Trustee argued the judgment was “void” due to McKean’s death, and the motion was
timely under section 473.5, which governs motions to set aside defaults or default
judgments “[w]hen service of a summons has not resulted in actual notice to a party in
time to defend the action.” (§ 473.5, subd. (a).)
Grappo, at this point represented by counsel, opposed the motion by responding to
the only two statutory bases invoked, arguing the motion was untimely under section 663
and section 473.5 did not apply because McKean received actual notice of the action well
before he died and in time to defend. Grappo also argued there was no prejudice to the
Trustee from not having been substituted in as a party, since McKean was alive when his
default was taken and there was nothing the Trustee could have done later to avert entry
of the default judgment.7
For the first time in her reply, the Trustee invoked section 473, subdivision (d),
arguing there is no deadline to move to set aside a void judgment under section 473,
subdivision (d). Section 473, subdivision (d) authorizes a court, on noticed motion, to
“set aside any void judgment.” The reply also alluded to the court’s inherent equitable
power to vacate a default judgment and asserted that entry of the default judgment had
resulted from extrinsic fraud and mistake. However, other than copies of pleadings from
this case and related proceedings, the Trustee submitted no evidence in support of her
conclusion or renders an erroneous judgment upon the facts found by it to exist.’ ”
(§ 663; Payne v. Rader (2008) 167 Cal.App.4th 1569, 1574, italics omitted.) It does not
apply to default judgments. (See Hearn v. Howard (2009)
177 Cal.App.4th 1193, 1207,
fn. 5; First Nat. Bank v. Turnbull (1950)
99 Cal.App.2d 764, 766.)
7
The majority criticizes the brevity of this written opposition (“all of three pages”)
(Maj. opn., p. 7), but the Trustee’s substantive argument was equally brief and she
invoked two inapplicable statutes.
6
motion. Thus there was no showing that the default judgment was the product of any
fraud or mistake by McKean, the Trustee or her counsel, or that there was prejudice, i.e.,
that the Trustee would have acted differently had she been substituted for McKean when
he died or had a defense to the action.
Following a contested hearing, the trial court granted the motion to vacate the
judgment. The court did not address the motion’s timeliness, but recognized “as a
general proposition” that a judgment rendered for or against a decedent “is not void,
and . . . will be set aside only upon a showing of prejudice.” (Italics added.) It concluded
the Trustee “was not given notice of the existence of the default or the application for
default judgment, and thus had no opportunity to seek relief from the default before
Default Judgment was entered” and “the prejudice to the Trust is clear.” The court then
concluded that the Trustee “has made a sufficient showing that the judgment . . . is void.”
(Italics added.) This timely appeal followed.
DISCUSSION
I.
What This Appeal Is Not About
In challenging the trial court’s ruling, Grappo argues principally the Trustee
waited too long to move to set aside the default judgment and in any event made an
insufficient showing to justify that relief. I agree. Before setting out my reasoning, I
address two subjects I believe lead the majority decidedly in the wrong direction.8
8
I agree with the majority that the other issue Grappo raises furnishes no ground
for reversal (namely, that the Trustee raised section 473, subdivision (d) improperly
below only in her reply papers). But I would not be so quick to condemn the quality of
Grappo’s appellate briefing. (Maj. opn., p. 9.) While Grappo’s opening brief is no
“model of appellate advocacy” (ibid.), his presentation of the facts is not nearly as one-sided as the majority describes it, and his reply brief states the arguments I believe should
carry the day. And while Grappo’s briefing does misstate that he didn’t know of
McKean’s death when he requested entry of a default judgment (see ibid.), the most
plausible explanation is oversight on his counsel’s part, not intentional misrepresentation.
The evidence that McKean died before judgment consists of one sentence in tiny print on
Grappo’s form request for default judgment, which he filed in propria persona two years
ago. Apparently, nobody noticed this, including the Trustee’s counsel who makes similar
7
First, I have already alluded to the majority’s error in relying on the policy
favoring liberal application of section 473 and the adjudication of cases on their merits.
The majority cites no case calling for liberal application of the court’s power to vacate a
final judgment under section 473, subdivision (d), which is the critical issue here. Most
of the cases the majority cites calling for “section 473” to be liberally applied involve
applications for discretionary relief under section 473, subdivision (b), a provision not at
issue here. None involves a motion to vacate a final judgment. (See Zamora v. Clayborn
Contracting Group, Inc., (2002) 28 Cal.4th 249, 258; Au-Yang v. Barton (1999)
21 Cal.4th 958, 961; Shamblin v. Brattain (1988)
44 Cal.3d 474, 477, fn. 3; Elston v. City
of Turlock (1985)
38 Cal.3d 227 (Elston)9; Fasuyi v. Permatex, Inc. (2008)
167 Cal.App.4th 681, 689, 694–703; McCormick v. Board of Supervisors (1988)
198 Cal.App.3d 352, 356–357, 359–360; see also
Rappleyea, supra,8 Cal.4th at p. 982
[motion to set aside entry of default filed and ruled on before judgment was entered].)
Furthermore, I agree with the majority that Rappleyea is pertinent (see Maj. opn.,
misstatements in her own brief by accusing Grappo of “appl[ying] for and obtain[ing] a
default judgment . . . without notifying the trial court that Mr. McKean had died.” At oral
argument, the Trustee’s counsel even stated it was “just as likely if not more likely” that
the trial court didn’t notice this either when entering the default judgment. The fact that
Grappo was aware of McKean’s death and notified the trial court of it in his request for
entry of default judgment surfaced during this court’s review of the record.
In any event, to the extent the majority has concerns about the quality of the
parties’ briefing, I’m puzzled as to why the Trustee emerges free from criticism. It was
the Trustee, for example, who moved in the trial court under section 663, yet on appeal
disavows that statute, arguing it was “immaterial” to the trial court’s ruling. While true,
that is only because the Trustee managed eventually to cite the proper statute
(section 473, subdivision (d)) in her reply papers, after relying on two plainly
inapplicable statutes in her opening papers. Indeed, at oral argument the Trustee’s
counsel candidly admitted that “we threw all the statutes at it” in the trial court papers.
9
The majority quotes Elston at some length but omits the opening sentence of
Elston’s analysis which illuminates it involved relief under section 473, subdivision (b):
“Section 473 permits the trial court to ‘relieve a party . . . from a judgment, order, or
other proceeding taken against him or her through his or her mistake, inadvertence,
surprise or excusable neglect.’ ” (Elston, supra, 38 Cal.3d at pp. 232–233; see also id. at
p. 233, fn. 4 [quoting the text of section 473, subdivision (b)].)
8
pp. 14–15), but the majority ignores what our Supreme Court actually said in that case
about the near-sanctity of final judgments: “ ‘[W]hen relief under section 473 is
available, there is a strong public policy in favor of granting relief and allowing the
requesting party his or her day in court. Beyond this period there is a strong public
policy in favor of the finality of judgments and only in exceptional circumstances should
relief be granted.’ ” (Rappleyea, at pp. 981–982, italics added.) Presumably my
colleagues would agree that if an untimely appeal were taken from a default judgment no
amount of liberality could save it. (See, e.g., Shapiro v. Clark (2008) 164 Cal.App.4th
1128, 1137 [appeal held untimely].) Final is final, and liberality has its limits. In short,
having cited authorities that do not apply, it is the majority that has approached this case
in a manner “contrary to the role of any court dealing with defaults . . . and contrary to
public policy.” (Maj. opn., p. 15, fn. 5.)
The second overarching flaw in the majority’s analysis is its detour to address the
merits of Grappo’s complaint, and its haste to condemn it as failing to state any
cognizable claim for relief and as supposedly reflecting Grappo’s lack of standing. (Maj.
opn., pp. 3, 12 fn. 4, 18–19.) Neither of the parties raised these issues below, and it was
only at our direction that they addressed one of them in supplemental briefing on appeal
(the complaint’s sufficiency). I would not reach out to decide either question. (See, e.g.,
Harnedy v. Whitty (2003) 110 Cal.App.4th 1333, 1338–1339; City of Industry v. City of
Fillmore (2011)
198 Cal.App.4th 191, 205.) Given that the majority has done so,
however, I disagree that “the judgment here is void because the complaint does not
support the default judgment entered for Grappo—indeed, any default judgment at all.”
(Maj. opn., p. 12, fn. 4.) To the extent it suggests the trial court’s ruling can be affirmed
on grounds of lack of standing or failure to state a claim, I disagree.10
10
I have no disagreement that trial courts must carefully and properly discharge
their gatekeeping role when asked to enter a judgment by default. But here, the trial court
did so, rejecting Grappo’s first request for entry of a default judgment, directing him to
try again and limiting the judgment to an amount specifically alleged in the complaint.
9
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 nature of the [plaintiff’s] demand.” (See Molen v.
Friedman (1998) 64 Cal.App.4th 1149, 1156–1157; see also Ferraro v. Camarlinghi
(2008)
161 Cal.App.4th 509, 539 [“If the complaint, though defective, ‘ “apprises the
defendant of the nature of the plaintiff’s demand,” ’ the entry of default is merely
erroneous, not void”]; Barquis v. Merchants Collection Assn. (1972)
7 Cal.3d 94, 99,
122.) Falahati v. Kondo (2005)
127 Cal.App.4th 823, a decision the majority has cited
(Maj. opn., pp. 19–20), makes this very point: “a default judgment is not necessarily void
just because it is based on a complaint which fails to state a cause of action.” (Falahati,
at p. 830.) Rather, “[a] default judgment is void if the trial court lacked jurisdiction over
the parties or the subject matter of the complaint or if the complaint failed to ‘apprise[]
the defendant of the nature of the plaintiff’s demand,’ or if the court granted relief which
it had no power to grant including a default judgment which exceeds the amount
demanded in the complaint.”11 (Ibid., fn. omitted; accord, Christerson v. French (1919)
180 Cal. 523, 525.) Whatever the shortcomings of Grappo’s complaint, it surely apprised
McKean of the nature of the claim upon which the court entered judgment: he alleged
personal property was unlawfully removed from the Piedmont property and McKean was
the person who authorized its removal, and prayed for $60,000 in damages as a result.
(See, e.g., Molen, at p. 1157 [complaint sufficient to apprise defendants that plaintiffs
demanded damages for losses occasioned by breach of lease, specifically, “$23,795.34
plus $9,000 per month for 129 months”].) It therefore is immaterial that, as pointed out
by my colleagues (Maj. opn., p. 20), Grappo’s counsel acknowledged at oral argument
(commendably, in my view) the complaint does not state a claim. For much the same
reason, I also disagree with the majority’s conclusion that the judgment is void because
“the $60,000 amount awarded to Grappo is not supported by the complaint.” (Id., p. 20.)
11
Other cases cited by the majority involve direct appeals from a default judgment
and are not on point. (See Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267;
Rose v. Lawton (1963)
215 Cal.App.2d 18.)
10
The $60,000 damages award matches the complaint’s demand to the penny. A default
judgment is void if the damages award exceeds the amount of damages specified in the
complaint, because the court lacks jurisdiction to award anything higher. (See David S.
Karton, A Law Corp. v. Dougherty (2009) 171 Cal.App.4th 133, 150; Falahati, at
p. 830.)
As for Grappo’s standing, I read the law quite differently than the majority. While
“ ‘[a]s a general rule, the trustee is the real party in interest with standing to sue and
defend on the trust’s behalf,’ . . . this general rule does not extend to an action alleging
the trustee itself breached a duty. ‘[A] trust beneficiary can bring a proceeding against a
trustee for breach of trust.’ ” (Estate of Giraldin (2012) 55 Cal.4th 1058, 1075.) The
majority cites no case to the contrary. What is more, the majority overlooks this court’s
own decision in Harnedy v.
Whitty, supra,110 Cal.App.4th 1333, which analyzed the
case law at length and recognized that beneficiaries have standing to sue a trustee for the
trustee’s own malfeasance. (See
id. at pp. 1338–1342.) We could not have put it more
plainly: “when the claim being asserted rests in whole or in part on alleged breaches of
trust by the trustee, a beneficiary has standing to pursue such a claim against either (1)
the trustee directly, (2) the trustee and third parties participating in or benefiting from his,
her or its breach of trust, or (3) such third parties alone.” (Id. at pp. 1341–1342.) We
explained that “[o]nly in circumstances . . . [in which] no misfeasance or breach of trust
by the trustee is asserted and the beneficiary is effectively seeking to step into the shoes
of the trustee and enforce the trust agreement directly, does the beneficiary lack
standing.” (Id. at p. 1342; see also id. at p. 1342, fn. 2.) Thus, under these authorities the
majority nowhere acknowledges, it is plain that Grappo, a trust beneficiary, has standing
to sue McKean for breaches of duty McKean committed while acting as a trustee—
including allegedly disposing of personal property being stored at the Piedmont property
that was allegedly under McKean’s management and supervision.
In short, I cannot sustain the trial court’s ruling on either of the grounds that the
majority has independently raised.
I turn now to the questions that the parties have raised on appeal.
11
II.
The Trustee’s Motion Was Timely Under Section 473, Subdivision (d) Only if the
Default Judgment Was Void.
The majority holds the trial court properly vacated this judgment under
section 473, subdivision (d). (Maj. opn., p. 12.) That provision states, “The court . . .
may, on motion of either party after notice to the other party, set aside any void judgment
or order.” (§ 473, subd. (d).) This provision “does not place any time limit on bringing
such a motion.” (Tearlach Resources Limited v. Western States Internat., Inc. (2013)
219 Cal.App.4th 773, 779.) By contrast, a judgment that is not void but merely voidable
may not be set aside beyond the six-month time limit of section 473, subdivision (b).
(See Lee v. An (2008)
168 Cal.App.4th 558, 563 (Lee); accord, Torjesen v. Mansdorf
(2016)
1 Cal.App.5th 111, 118 (Torjesen); see also § 473, subd. (b).) After six months,
once discretionary relief from a default judgment under section 473, subdivision (b) is no
longer available, as already noted, the public policy favoring finality of judgments comes
into play. (See
Rappleyea, supra, 8 Cal.4th at pp. 981–982.) “ ‘A motion to vacate a
judgment, made after the expiration of the six-month period allowed in section 473 of the
Code of Civil Procedure . . . is governed by the rules applicable to collateral attack.
[Citations.] In the absence of extrinsic fraud or mistake [citation] a judgment so attacked
cannot be set aside unless it is void . . . .’ ”12 (Torjesen, at p. 116; accord, Cruz v. Fagor
America, Inc. (2007)
146 Cal.App.4th 488, 495–496.)
In short, the trial court’s power to set aside this final judgment under section 473,
subdivision (d) turns on whether the judgment was void, or merely voidable, due to
McKean’s death, a question we review de novo. (See Rodriguez v. Cho (2015)
236 Cal.App.4th 742, 752.) The majority doesn’t expressly hold that the judgment here
12
To be clear, extrinsic fraud or mistake constitutes a separate basis for
collaterally attacking a final judgment (whether or not the judgment is argued to be void),
pursuant to a court’s equitable powers. (See generally 8 Witkin, Cal. Procedure
(5th ed. 2008) Attack on Judgment in Trial Court, § 215, p. 823, et seq.) But Rappleyea
instructs that equitable relief from a final judgment “may be given only in exceptional
circumstances.” (Rappleyea, supra, 8 Cal.4th at p. 981.) I discuss the unavailability of
potential equitable relief from this judgment, post.
12
was void, but that is the necessary implication of its decision. It is an implication with
which I cannot agree.
III.
The Default Judgment Was Not Absolutely Void.
Lee v. An sets out a helpful framework for understanding whether a judgment is
void or merely voidable. Lee explained, “The distinction between void and voidable
orders is frequently framed in terms of the court’s jurisdiction. ‘Essentially, jurisdictional
errors are of two types. “Lack of jurisdiction in its most fundamental or strict sense
means an entire absence of power to hear or determine the case, an absence of authority
over the subject matter or the parties.” [Citation.] 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.” ’ [Citations.] For example, if a defendant is not validly
served with a summons and complaint, the court lacks personal jurisdiction and a default
judgment in such action is subject to being set aside as void.” (Lee, supra,
168 Cal.App.4th at pp. 563–564.) By contrast, “ ‘[w]hen a court has fundamental
jurisdiction, but acts in excess of its jurisdiction, its act or judgment is merely voidable.
[Citations.] That is, its act or judgment is valid until it is set aside . . . .’ ” (Torjesen,
supra,
1 Cal.App.5th at p. 117.) Errors that “ ‘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 . . . .’ ” (Ibid.;
accord, Lee, at pp. 565–566 [“ ‘a party seeking to set aside a voidable judgment or order
must act to set aside the order or judgment before the matter becomes final’ ”].)
This court recognized in Woolley v. Seijo (1964) 224 Cal.App.2d 615 (Woolley),
another of our cases the majority does not discuss, that a judgment rendered against a
defendant after his death but before substitution of his personal representative is not void.
(Id. at p. 620.) The contrary contention is “meritless,” we said, because “[i]t is settled
that a judgment for or against a dead person is void only if the plaintiff or defendant was
dead before the action was begun. [Citation.] It is equally well settled that where a party
dies subsequent to the commencement of the action and after the court has acquired
13
personal jurisdiction over him, the entry of judgment against him is a ‘mere irregularity’
which renders the judgment voidable only and therefore immune from collateral attack.”
(Id. at pp. 620–621; accord, Collison v. Thomas (1961) 55 Cal.2d 490, 495–496; see also,
e.g., Machado v. Flores (1946)
75 Cal.App.2d 759, 762 (Machado) [“[T]he California
courts are not committed to the position advanced by appellants that the death of a party,
ipso facto, renders absolutely void, a judgment for or against such party”].)
Witkin, on which the majority otherwise relies (Maj. opn., pp. 11–12), concurs:
“Death occurring during the trial, and before verdict or submission for decision, generally
results in a voidable, not void, judgment. The executor or administrator should be
substituted as a party, but failure to substitute is merely error, not a jurisdictional defect,
and the judgment is not subject to collateral attack.” (7 Witkin, supra, Judgment, § 4,
pp. 549–550, italics added; see also 4 Witkin, supra, Pleading, § 259, p. 335 [“Failure to
substitute, however, is merely a procedural irregularity, not an act in excess of
jurisdiction”]; 2 Witkin, supra, Jurisdiction, § 317, p. 929 [“This technical lapse . . . does
not render the judgment void and subject to collateral attack. The courts frequently
describe it as a ‘mere irregularity,’ which renders the judgment ‘voidable only’ ”], italics
added.)
The principle that a judgment is not void but merely voidable where a party has
died derives from California Supreme Court authority dating back more than a century.
(See Todhunter v. Klemmer (1901) 134 Cal. 60, 63 (Todhunter) [“the death of a party
pending suit does not oust the jurisdiction of the court, and hence . . . the judgment is
voidable only, not void”]; Phelan v. Tyler (1883)
64 Cal. 82, 82–83 (Phelan) [“ ‘in such
cases, the judgment is simply erroneous, but not void . . . because the court having
obtained jurisdiction over the party in his lifetime, is thereby empowered to proceed with
the action to final judgment’ ”].) Although a court should refrain from exercising its
jurisdiction over a party who dies, its failure to do so is merely an error that may be
corrected, because the court’s jurisdiction is not suspended without a substitution of the
decedent’s personal representative. (See Phelan, at pp. 82–83.) “ ‘[A] judgment against
a person dead at its rendition is valid until reversed or set aside by some competent
14
judicial authority, and . . . cannot be collaterally attacked . . . .” (Tyrrell v. Baldwin
(1885) 67 Cal. 1, 5 (Tyrrell), italics added.)
The results in many cases reflect this rule. For example, Tyrrell held a judgment
entered against a defendant in a dispute over real property ownership was not void even
though the defendant died before trial, and was admissible in a later action brought by the
decedent’s grantees concerning the same subject matter. (See Tyrrell, supra, 67 Cal. at
pp. 4–5.) Woolley held a federal judgment entered jointly and severally against a
defendant who died before its rendition was enforceable against his estate in an
independent state action; it could not be collaterally attacked in the latter action. (See
Woolley, supra, 224 Cal.App.2d at pp. 620–621.) Todhunter upheld a judgment
enforcing an appeal bond, holding the death of one of the plaintiffs before entry of
judgment in the underlying suit did not render either the judgment or the bond void and
unenforceable, but merely voidable. (See
Todhunter, supra, 134 Cal. at pp. 62–63.) And
Phelan held the death of a party pending an appeal did not render the Supreme Court’s
subsequent decision and judgment in the case void even though no personal
representative was ever substituted into the case, and the judgment had preclusive effect
on a later action. (See
Phelan, supra, 64 Cal. at pp. 82–83.)
The majority’s suggestion that a different rule applies to default judgments is not
supported by any authority of which I am aware, and at least one Court of Appeal
decision has permitted a default judgment to be enforced though entered in the name of a
dead person. Machado affirmed a judgment of nonsuit in an equitable action to enjoin
enforcement of a default judgment entered in the name of a plaintiff who had died after
filing the action but before summons was served, and whose representative was not
substituted in until after the judgment was entered. (See Machado, supra, 75 Cal.App.2d
at pp. 760–761, 763.) The court held the judgment wasn’t void, and its enforcement
could only be prohibited on an equitable basis and no such basis had been shown. (Id. at
pp. 762–763.)
Against this weight of authority, the majority cites a number of decisions
describing judgments entered in the name of a dead party as “void.” (See Johnson v.
15
Simonelli (1991) 231 Cal.App.3d 105, 107, fn. 1; Herring v. Peterson (1981)
116 Cal.App.3d 608, 612; Estate of Edwards (1978)
82 Cal.App.3d 885, 893; Estate of
Parsell (1923)
190 Cal. 454, 456.) Every one of those cases involved a direct attack on a
non-final judgment, made by way of timely appeal (see Johnson, at p. 107 [appeal from
summary judgment]; Herring, at p. 610 [appeal from order of dismissal]; Estate of
Edwards, at p. 887 [appeal from judgment]) or a timely post-judgment motion filed
within six months after entry of judgment (see Estate of Parsell, at p. 455 [assuming such
fact]). While the courts described those voidable judgments as “void,” the distinction
was immaterial and not at issue, and so the language was dictum. (See Torjesen, supra,
1 Cal.App.5th at p. 118; see also Hogan v. Superior Court (1925)
74 Cal.App. 704, 709
[rejecting “contention that under all circumstances a judgment is void where it is
rendered for or against a deceased party,” and observing “Estate of Parsell . . . does not
so hold”].) None of these authorities authorize a trial court to vacate a final judgment
based solely on the judgment having been entered in the name of a deceased party. 13
The majority also asserts that “[w]e are not aware of any void versus voidable case
that deals with a default judgment taken against a dead person,” and states that it “might
be inclined to hold in that situation that the judgment is void” though it declines to
expressly so hold. (Maj. opn., p. 12.) But the majority does not explain why a different
“void/voidable” rule should apply to a default judgment than to all other judgments
entered in the name of a dead person. The court is not divested of jurisdiction to proceed
when a defendant dies after the court has already acquired personal jurisdiction over the
defendant, which is why such a judgment is voidable and not void. (Woolley, supra,
13
As the majority notes (Maj. opn., pp. 11–12), language in some of these cases
describing judgments as “void” derives from Judson v. Love (1868) 35 Cal. 463, where
the Supreme Court described proceedings conducted after a defendant had died as
“irregular and void” (id. at p. 467) and “ineffectual.” (Id. at p. 470.) But Judson also
didn’t involve a collateral attack on a final judgment; it, too, was a direct appeal from a
judgment entered in the name of a deceased defendant who had died before entry of
judgment. (See
id. at pp. 466–467.) Indeed, the judgment in that case was valid, and left
to stand (because the defendant had died after the verdict had been rendered). (See id. at
p. 467.)
16
224 Cal.App.2d at pp. 620–621; Collison v. Thomas, supra, 55 Cal.2d at pp. 495–496.)
This is true whether the judgment is issued after litigation on the merits or obtained by
default. In my view, there is no reason a court’s error in entering a judgment on the
merits against a party who has died should be immune from collateral attack but the same
error should render a default judgment absolutely void, open to attack at any time even
after it has become final. And Rappleyea strongly suggests otherwise. (
Rappleyea,
supra, 8 Cal.4th at pp. 981–982.)
In sum, this judgment was not void but merely voidable, and so the Trustee should
have moved to set it aside within six months of its entry, before it became final and
immune to collateral attack. Indeed, the Trustee knew about the judgment before the six
months lapsed yet sat on her rights. The Trustee’s belated motion should have been
denied. (See Torjesen, supra, 1 Cal.App.5th at p. 118;
Lee, supra,168 Cal.App.4th at
p. 561.)
IV.
The Trial Court Erred in Vacating the Judgment Because There Is No Substantial
Evidence the Trustee Was Prejudiced.
The trial court’s ruling in this case can and should be reversed solely on the
ground that the Trustee’s motion was untimely, and I could stop there. But I also
disagree with the majority that the judgment can be affirmed “on the basis on which [the
trial court] ruled, applying Sacks [v. FSR Brokerage, Inc. (1992) 7 Cal.App.4th 950],
[and] finding prejudice.” (Maj. opn., p. 12.) Rather, as I see it, even if the majority’s
implicit holding is correct—that there is no time limit for challenging a default judgment
where the defendant died between the taking of his default and the entry of judgment on
the default—the Trustee demonstrated no prejudice that would justify setting aside the
judgment here.
The majority posits that “perhaps using the Sacks analysis in the default
situation . . . death is per se prejudice” (Maj. opn., p. 12), by which I take the majority to
mean “renders a judgment void.” But that cannot be true, as just demonstrated by the
many cases rejecting collateral attacks on judgments entered in the name of a party who
17
died. (See Tyrrell, supra, 67 Cal. at pp. 4–5;
Todhunter, supra, 134 Cal. at pp. 62–63;
Phelan, supra, 64 Cal. at pp. 82–83;
Woolley, supra, 224 Cal.App.2d at pp. 620–621;
Machado, supra, 75 Cal.App.2d at pp. 760–763.) A further flaw in the majority’s
hypothesis—that Sacks authorizes a collateral attack on a judgment against a dead person
where a showing of prejudice is made—is that like the other cases the majority cites,
Sacks, too, was a direct attack on the judgment, specifically, a timely appeal from a
judgment entered after a grant of summary judgment. (See
Sacks, supra, 7 Cal.App.4th
at pp. 953–956.)
Setting aside the timing issues already discussed, I do agree that no matter the
context or timing, a trial court’s error in rendering judgment for or against a decedent
may be redressed only if there was some kind of prejudice “because of lack of notice,
lack of proper representation, or some other disadvantage.” (See Sacks, supra,
7 Cal.App.4th at pp. 957–959, and authorities cited.) But I cannot agree with the
majority there was any showing of prejudice here. Specifically, I do not agree that the
Trustee’s lack of opportunity to seek relief from the default before entry of the default
judgment alone was enough.14 (Maj. opn., p. 14.) The trouble with this conclusion is that
it is premised on an assumption, and not on evidence, that the Trustee could and would
have sought such relief—and obtained it—had she been substituted into the case before
the judgment was entered.
As already mentioned, there is no evidence showing when the Trustee actually
learned about the default. For all we know from the record, as opposed to the Trustee’s
assertion in her briefs, the Trustee could have learned of the action from McKean before
he died or from his partner and co-defendant, McMills, after he died but before the
default judgment was entered. I say this not with a “jaundiced eye” as my colleagues
14
I also don’t agree Grappo’s counsel conceded this issue at the hearing. (Maj.
opn., p. 14.) The majority is too quick to pounce on a passing comment (“right”) that, in
context, strikes me as little more than throat-clearing. Indeed, she later returned to her no
prejudice argument, telling the trial court again that, “once the default was entered, then it
had absolutely no effect whether he was alive or not when his default judgment was
entered. And so that’s when—by no prejudice—,” to which the court responded, “Okay.”
18
posit (Maj. opn., p. 16, fn. 5), but because of the lack of any evidence bearing on when
the Trustee first learned of the default proceedings, let alone the lawsuit itself or its
status. (Cf. Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267,
276–278 (Pulte Homes ) [discussing unexplained gaps in moving party’s evidentiary
showing, and reversing order granting motion to vacate default judgment as abuse of
discretion].) Contrary to the majority’s assertion, moreover, this is not a matter as to
which we may presume the correctness of a factual inference. (Maj. opn., p. 16, fn. 5.)
After all, even factual inferences must be supported by substantial evidence, yet there is
nothing in this record from which any factual inference on this subject can be drawn.
(See Shapiro v. Board of Directors (2005)
134 Cal.App.4th 170, 178–179; see also State
Farm Fire & Casualty Co. v. Pietak (2001)
90 Cal.App.4th 600, 610 [reciting familiar
rule that “ ‘when two or more inferences can reasonably be deduced from the facts, a
reviewing court lacks power to substitute its deductions for those of the trial court’ ”];
Roddenberry v. Roddenberry (1996)
44 Cal.App.4th 634, 651 [“[i]nferences may
constitute substantial evidence, but they must be the product of logic and reason.
Speculation or conjecture alone is not substantial evidence”].) Simply put, the record
here is completely silent as to whether the Trustee knew anything about this lawsuit
before Grappo filed his creditors’ claim. The majority’s assertion that she did not is not
“inference,” but conjecture.
But even accepting the unsupported assertion in the Trustee’s brief below that she
did not learn of the default before she was served with the creditor’s claim, which was
after the judgment was entered, she has still failed to show prejudice. That is because she
made not the slightest showing that she had any substantive basis to challenge the entry
of default. Nor did she provide any evidence that if relief from default had been granted
there was any viable defense she could have raised on the merits. So no showing was
made that any rights were lost. This might have been a different case had the Trustee
introduced evidence that some potential basis for challenging the default was lost when
the case proceeded to judgment in her absence. But given her tactical choice not to do so,
19
in my view the mere fact that a judgment was entered on the default is insufficient to
establish prejudice.
Here, therefore, the trial court erred in vacating the judgment because there is no
substantial evidence the Trustee was prejudiced. (See Pulte Homes, supra, 2 Cal.App.5th
at p. 272 [substantial evidence review of order vacating default judgment].) As in Sacks,
any error in entering the judgment against McKean rather than his personal representative
“could at most be a technical one” that did not have “the slightest effect” on the results of
this litigation. (Sacks, supra,
7 Cal.App.4th at p. 959.) This record does not show that “a
different result would have been probable” had Grappo substituted the Trustee in for
McKean before requesting entry of judgment. (§ 475; see also Leavitt v. Gibson (1931)
3 Cal.2d 90, 105–106 [affirming order denying executor’s motion to vacate judgment
entered nunc pro tunc against defendant who died during trial after evidence closed and
post-trial briefing was nearly complete, and affirming judgment, because “Every
privilege which could in the ordinary course of events inure to the benefit or advantage of
the defendant had absolutely accrued before his demise”].)
Indeed, this record demonstrates the Trustee was not prejudiced. She admits she
knew about this judgment four and a half months after it was entered, which was well in
time to move to set it aside on the basis of mistake, inadvertence, surprise or excusable
neglect (§ 473, subd. (b)). Yet she made no effort to do so. She did nothing at all to seek
relief for a full six months after she learned of the judgment. So the timing of Grappo’s
request for entry of a default judgment could not be prejudicial. (Cf. Rodriguez v.
Henard (2009) 174 Cal.App.4th 529, 537 [defendants not prejudiced by defect in mailing
notice of application for entry of default judgment where they “learned of the default and
default judgment in sufficient time to bring a motion for [discretionary] relief under
section 473, and they did in fact file such a motion . . . [but] . . . failed to satisfy the trial
court that any statutory basis upon which to set aside the default and default judgment
existed”].)
20
V.
Equitable Relief Was Unavailable.
Here, the majority affirms the trial court’s ruling solely on the ground the trial
court properly applied section 473, subdivision (d), and does not consider whether the
trial court’s ruling could be sustained on the alternative ground that it was within the
court’s discretion to grant the Trustee equitable relief from the judgment due to extrinsic
fraud or mistake. Because I disagree that relief was available under section 473, I briefly
address the Trustee’s argument that equitable relief was available too, a question
reviewed for abuse of discretion. (See Rappleyea, supra, 8 Cal.4th at pp. 980–981
[considering whether trial court’s ruling denying relief from default could be sustained as
proper exercise of its equitable powers where court misapplied section 473]; see also
Pulte Holmes, supra, 2 Cal.App.5th at pp. 272, 275–279.)
Here, the Trustee argues in passing that “[t]he default judgment resulted from
extrinsic fraud and mistake,” because Grappo “did not inform the trial court of Mr.
McKean’s . . . death before applying for the default judgment,” which led the court to
“mistakenly enter[] the default judgment on December 22, 2014.” I would reject this
argument, first, because Grappo did inform the court of McKean’s death before entry of
judgment, although the parties overlooked this below and in their appellate briefs.
Equitable relief also could not have been granted, in any event, because the Trustee made
no showing she had a meritorious defense, a showing required to set aside the judgment
on equitable grounds. (See Lee, supra, 168 Cal.App.4th at p. 566; Machado, supra,
75 Cal.App.2d at p. 763.) Nor did she show diligence in seeking equitable relief, which
also is required. (See Pulte Holmes, supra, 2 Cal.App.5th at pp. 277–278 [largely
unexplained five-month delay held dilatory as a matter of law].) So in my view, for these
separate reasons, the trial court would have abused its discretion had it vacated this
judgment based on its inherent equitable powers.
CONCLUSION
To be clear, it is not my position that it is proper to enter a default judgment (or
any judgment, for that matter) in the name of a party who has died. Such a judgment is
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erroneous. But like many other types of trial court error, an error of this sort—rendering
the judgment merely voidable not void—may be challenged only by certain means, and
here those means were not utilized: through a direct, timely attack within six months, or
through a collateral attack on an equitable basis not proved here by this record. I cannot
agree with the rule adopted by the majority that renders such a judgment open to attack
anytime and achieves finality in name only. Nor do I concur that it is open to attack at all
in the absence of evidence indicating the failure to substitute had any effect on the
outcome of the case. Nor, finally, do I reach either conclusion in derogation of our duty
as a reviewing court to presume the correctness of the trial court’s ruling (Maj. opn.,
p. 16, fn. 5); they are conclusions I reach based upon careful scrutiny of both this record
and the law. In my view, the trial court erred when it vacated this judgment. Regardless
of the majority’s concerns for the potential substantive merits of this lawsuit, and
regardless of the somewhat clumsy manner by which Grappo, a layperson, set about to
request entry of this default judgment, this judgment did become final, and as such it
constituted a vested property right that the majority, in affirming, far too lightly casts
aside. (See Rappleyea, supra, 8 Cal. 4th at p. 982.)
I would therefore reverse the grant of relief from the default judgment and
reinstate the judgment.
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STEWART, J.
Grappo v. McMills (A147522)
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Trial Court: Alameda County Superior Court
Trial Judge: Hon. Ronni B. MacLaren
Counsel:
Law Office of Kathleen Aberegg, Kathleen Aberegg, for Plaintiff and Appellant.
Hartog, Baer & Hand, Ryan J. Szczepanik, for Defendants and Respondents.
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