National Diversified Services, Inc. v. Bernstein

Opinion

Defendant Fredric Bernstein appeals from the November 7, 1983 order which denied his motion to vacate a default judgment entered against him and nonappealing codefendants on May 5, 1983, in the amount of $56,779.89. His appeal raises the questions whether a default judgment is void on its face when the record reflects the defendant was not served within three years of the commencement of the action and whether the complaint adequately notified him of the damages ultimately awarded.

The original complaint filed on June 4, 1979, did not name Bernstein as a defendant. Plaintiff National Diversified Services, Inc. alleged that on May 30, 1978, it entered into a written agreement with Ramsey Motor Co., Inc. to purchase two Ferrari automobiles for a total price of $75,284 and to pay for them by conveying a 1969 Trojan Voyager boat with a trade-in value of $22,500 and owing $52,784. Plaintiff alleged further that it had conveyed the boat, but defendants Ramsey Motor Co., Inc., Ray Ramsey, and Ferrari of Monterey had refused to deliver the automobiles. Plaintiff sought specific performance, or alternatively, “damages which are in excess of $10,000,” and return of the boat. On November 20, 1981, plaintiff’s motion to amend the complaint was granted, adding allegations designed to pierce the cor

In 1933, a provision was added to Code of Civil Procedure section 473 that: “The court may, ... on motion of either party after notice to the other party, set aside any void judgment or order.” This amendment codified the inherent power of the court to set aside an order or judgment void on its face at any time. (F. E. Young Co. v. Fernstrom (1938) 31 Cal.App.2d Supp. 763 , 765 [ 79 P.2d 1117 ]; Estate of Estrem (1940) 16 Cal.2d 563 , 571-572 [ 107 P.2d 36 ].) If the judgment is void on its face, then the six months limit set by section 473 to make other motions to vacate a judgment does not apply. (Thorson v. Western Development Corp. (1967) 251 Cal.App.2d 206 , 210-212 [ 59 Cal.Rptr. 299 ].)

Defendant’s argument would benefit by citation to Pearson v. Superior Court (1932) 122 Cal.App. 571 , 574-575 [ 10 P.2d 489 ], which held that a default judgment based upon an untimely return of summons “was void upon the face of the record for want of jurisdiction.” (The case may be found by looking under the “Jurisdiction” annotation to § 581a in West’s Annotated Codes.) Pearson relied on Vrooman v. Li Po Tai (1896) 113 Cal. 302 , 305-307 [ 45 P. 470 ], which reversed a plaintiff’s judgment based on an untimely return of service under a statutory predecessor of section 581a. Vrooman was not a default judgment. There defendant raised the question in his answer, rather than following the more usual practice of filing a motion to dismiss. (Id., at p. 304.)

Defendant should prevail if Pearson and the approach suggested by Vrooman retain vitality. According to Pearson, supra, 122 Cal.App. at page 575, when a return of summons was filed after the three-year period: “[T]he trial court then had jurisdiction in that proceeding to do nothing but dismiss the action upon its own motion or upon the motion of a party beneficially interested therein . . . .”

In our view, however, the rationale of Pearson has succumbed to the evolution of the law regarding dismissals for failure to serve and return summons within three years. Several statutory and case law exceptions have developed since the time of Pearson, the net effect of which has been to make dismissal discretionary, rather than mandatory. The statute at the time of Pearson provided that no further proceedings shall be had in an action when summons was not returned within three years unless the defendant had made an appearance within three years, or unless the defendant was absent from the state or concealing himself within the state to avoid service. (See quotation of statute in Bellingham Bay L. Co. v. Western A. Co. (1917) 35 Cal.App. 515 , 517 [ 170 P. 632 ]; Stats. 1907, ch. 376, § 2, p. 712.) In

It is established that a default judgment, at least one entered under Code of Civil Procedure section 585, subdivision (b), as here, is valid when based on actual service of summons on the defendant, though no proof of service is filed prior to entry of the judgment. (Herman v. Santee (1894) 103 Cal. 519 , 523-525 [ 37 P. 509 ]; Hibernia S. & L. Soc. v. Matthai (1897) 116 Cal. 424 , 426 [ 48 P. 370 ].) It is inconsistent to maintain a default judgment can be valid without a proof of service, but it can become void if the proof is filed late. We do not wish to encourage counsel to withhold filing a return of summons until a default judgment is challenged for inadequate service, yet that would seem to have been the better course under Pearson, supra, 122 Cal.App. 571 .

The modern rule must be that a judgment based on a late return of summons is irregular, but not void. In Drake v. Duvenick (1873) 45 Cal. 455 , 463, 466, the court held that an irregularity in obtaining jurisdiction did not render the ensuing default judgment void and subject to collateral attack. Also a default judgment is not void because the statute of limitations has run on the complaint. (Crane v. Cummings (1902) 137 Cal. 201 , 202 [ 69 P. 984 ].) We hold that the late return of a summons is merely an irregularity which does not render a default judgment based thereon subject to collateral attack.

The attack here is clearly collateral. A motion to vacate a judgment not brought within the six months provided by Code of Civil Procedure section 473 is a collateral attack. (People v. Norris (1904) 144 Cal. 422 , 424 [ 77 P. 998 ]; Becker v. S.P.V. Construction Co. (1980) 27 Cal. 3d 489 , 492-493 [ 165 Cal.Rptr. 825 , 612 P.2d 915 ].) The 182 days allowed to attack a default judgment are calculated from the time of entry of the default, not the judgment. (Title Insurance etc. Co. v. King etc. Co. (1912) 162 Cal. 44 , 45-46 [ 120 P. 1066 ]; Davis v. Thayer (1980) 113 Cal.App.3d 892 , 901-904 [ 170 Cal.Rptr. 328 ].) Even adding 10 days due to mailing of the notice of entry of default (Code Civ. Proc., § 1013; see Carli v. Superior Court

Plaintiff also asserts that the allegations of the complaint notified defendant that a specific amount greater than $10,000 was sought. We agree, but not to the extent of upholding the judgment for $56,779.89. This amount represents $45,600 as damages flowing from breach of the promise to deliver the Ferraris, $6,179.89 for boat repair expenses, and $5,000 for loss of use of the automobiles.

Plaintiff correctly notes that Thorson v. Western Development Corp., supra, 251 Cal.App.2d 206 , is comparable. Plaintiffs there sought to recover property they parted with based on defendant’s fraud and damages based on the fraud. The default judgment awarded both return of the property and damages. The appellate court affirmed this award, reasoning that ordinarily it would be inconsistent to obtáin both restitution and damages, but that the rescission statute allows for damages not inconsistent with restitution. (Id., at pp. 213-214.) The amount of damages awarded was that generally alleged.

The difference from Thorson is that plaintiff here did not identify as damages in connection with the restitution claim any amount near the $55,000 awarded. Plaintiffs sought alternatively to recover their boat, plus damages for its deterioration and loss of its use, amounting to “in excess of $10,000,” or delivery of the two cars. No amounts were alleged to represent the loss of use of the cars or any loss of a benefit of the bargain.

Allstate Leasing Corp. v. Smith (1965) 238 Cal.App.2d 128 , 132 [ 47 Cal.Rptr. 636 ], explains that when another has wrongfully exercised dominion over an owner’s property, the owner’s “remedies include specific recovery of the property, or its present value, plus damages for the period of its detention (Civ. Code, § 3379; Code Civ. Proc., §§ 509, 627, 667); or damages for the value of the property at the time of conversion plus interest and the expense of pursuing the property. (Civ. Code, § 3336.)”

A party entitled to specific recovery of the property is entitled to an alternative judgment under Code of Civil Procedure section 667. The unsuccessful party must deliver the property if possible and has no option to pay for it and keep it. (Cummings v. Stewart (1871) 42 Cal. 230 , 233; Griffith

The largest money judgment that we can say defendant was on notice of would be $32,500, representing $22,500 for the value of the boat and $10,000 for its detention. When a default judgment is partially void for being excessive, an appellate court will strike the excess and affirm the valid portion. (Thorson v. Western Development Corp., supra, 251 Cal.App.2d 206 , 215.)

We therefore modify the default judgment by deleting the unwarranted amount, and affirm a default judgment in the principal amount of $32,500.

Panelli, P. J., and Brauer, J., concurred.