Wednesday, January 21, 2015
C.A. Overturns Judgment Based on Service by Publication
Panel Rejects Claim That Mailing Was Excused Because Address Was ‘Unknown’
By a MetNews Staff Writer
A plaintiff’s failure to mail copies of its application for entry of default and default judgment to the defendant’s last known address rendered service by publication and the ensuing judgment invalid, the Sixth District Court of Appeal ruled yesterday.
The panel overturned a judgment in favor of the Cupertino-based law firm of Murray & Murray. The court said the firm could not avoid complying with Code of Civil Procedure §587 by claiming the defendant’s address was “unknown,” based solely on the plaintiff’s failed attempts to complete personal service.
The law firm represented Raissi Real Estate Development, LLC in Chapter 11 proceedings that were dismissed. It then sued the company for attorney fees, obtaining a default judgment for more than $370,000.
In moving to set aside the judgment, which was granted following publication in a local weekly, Raissi said it first learned of the lawsuit when it received a lien notice from Santa Clara County with the abstract of judgment attachment. It also argued that the judgment should be set aside on the ground of attorney mistake, for lack of subject matter jurisdiction over bankruptcy, and for extrinsic fraud or mistake.
At the motion hearing, Raissi’s attorneys raised the additional issue of non-compliance with §587. Santa Clara Superior Court Judge Patricia Lucas offered to continue the hearing in order to allow Murray & Murray to respond to the new issue, but the plaintiff’s counsel, while arguing that it had been “blind-sided,” did not accept the judge’s offer of a continuance.
The firm argued that it had made eight separate attempts to serve Raissi at various properties where it supposedly had a presence. As for a property referred to by Raissi’s counsel, the attorney for the law firm said no attempt was made at service there because the property appeared vacant, had a sign saying it was for lease, and was known to be in foreclosure based on the bankruptcy proceeding.
The judge took the matter under submission and subsequently denied the motion, expressly accepting the firm’s argument that it complied with §587 by declaring the defendant’s address to be “unknown.”
But Justice Eugene Premo, writing for the Court of Appeal—after concluding that Murray & Murray waived its objection to the belated argument by not taking the judge up on her offer of a continuance—said the court could not conclude that it would have been futile for the firm to mail copies of the papers to the same addresses where it attempted personal service.
Failure to mail the papers to any of those addresses, he concluded, deprived Raissi of due process.
“Furthermore, it is noteworthy that Murray & Murray has not demonstrated or even argued how it would be prejudiced by reversal of the trial court’s ruling, other than by virtue of having to prove the allegations of its complaint,” the jurist wrote. “Nothing more than a trial on the merits awaits it below.”
The case is Murray & Murray v. Raissi Real Estate Development, LLC, 15 S.O.S. 346.
Copyright 2015, Metropolitan News Company