IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO
November 30, 2010
APOLINAR TORRES ET AL., PLAINTIFFS AND RESPONDENTS,
ELISEO RODRIGUEZ, DEFENDANT AND APPELLANT.
APOLINAR TORRES ET AL., PLAINTIFFS AND RESPONDENTS,
ELISEO RODRIGUEZ, DEFENDANT AND RESPONDENT; COUNTRYWIDE HOME LOANS, INC., INTERVENOR AND APPELLANT.
APPEAL from the Superior Court of San Bernardino County. Michael A. Sachs and Thomas S. Garza, Judges. Affirmed. (Super.Ct.No. VCVVS 044198) (Super.Ct.No. VCVVS 044198)
The opinion of the court was delivered by: Hollenhorst Acting P.J.
Torres v. Rodriguez CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
This matter arises from defendant Eliseo Rodriguez (Rodriguez) mistakenly building a house on the wrong lot, lot 23, (Assessor's Parcel Number (APN) 0434-073-23), owned by plaintiffs Apolinar Torres and Mary Torres (the Torreses). Intervenor Countrywide Home Loans, Inc. (Countrywide) loaned Rodriguez $408,000, secured by a deed of trust on Rodriguez's adjacent property, lot 22 (APN 0434-073-22). The Torreses sued Rodriguez for trespass, ejectment and quiet title, and obtained a default judgment due to Rodriguez failing to provide responses to the Torreses' discovery requests.
At issue are two consolidated appeals by Rodriguez and Countrywide.*fn1 Rodriguez appeals the default judgment and Countrywide appeals the trial court's order denying Countrywide's motion to vacate the default judgment against Rodriguez.
Rodriguez contends the default judgment is unlawful because the
default judgment relief was not prayed for in the complaint and the
judgment violates Rodriguez's constitutional rights to due process and
to seek redress of his grievances. In addition, the judgment should
be set aside under Code of Civil Procedure section 473,*fn2
and the trial court abused its discretion in granting
Countrywide contends in its appeal that the trial court abused its discretion in denying Countrywide's motion to vacate the default judgment because the judgment is void on its face, the order quieting title must be reversed because Countrywide is an indispensable party that was not named as a party, and the court abused its discretion in granting terminating sanctions.
We conclude the judgment is not void, Rodriguez's constitutional rights were not violated, and the trial court did not abuse its discretion in granting terminating sanctions and entering the default judgment. The judgment is affirmed.
2. Factual and Procedural Background
a. Complaint and General Denial
The Torreses filed a verified complaint in December 2006 for trespass, ejectment, and quiet title. They alleged they acquired lot 23 (the Property) by grant deed in 1986. In or after September 2005, Rodriguez built a house on the Property, causing damage of $270,000, the cost of restoring the Property to its original state, and $30,000, the approximate amount of expenses arising from the Torreses' inability to sell the Property. Additionally, the Torreses sustained damages of $2,000 monthly since September 2005, when Rodriguez took possession of the Property, to the Torreses' exclusion. In the complaint prayer, the Torreses requested general damages of $300,000, monthly damages of $2,000, recovery of possession, and quiet title in their favor.
Rodriguez, represented by Leonard H. Burgess (Burgess), filed a general denial in March 2007.
b. Discovery and Default
In June 2007, the court set the matter for trial on October 22, 2007.
On June 29, 2007, the Torreses served Rodriguez, through his attorney, Burgess, with requests for admission, form interrogatories, special interrogatories, and production requests. On August 6, 2007, the Torreses' attorney, Richard D. Malone (Malone), sent Burgess a letter demanding responses to the discovery on or before August 21, 2007. Malone sent Burgess by facsimile another letter on August 22, 2007, demanding Rodriguez's discovery responses by August 27, 2007. In response, Burgess sent by facsimile a letter stating that draft responses were being finalized and that, by August 27, 2007, either discovery responses would be provided or Malone would be contacted.
Because Burgess failed to provide any responses or contact Malone by August 27, 2007, the Torreses filed a motion to compel discovery responses and requested monetary sanctions. Due to the rapidly approaching trial on October 22, 2007, the court granted the Torreses' request for an ex parte order shortening time for service of notice of the motion. Rodriguez did not file opposition to the Torreses' discovery motion and neither Rodriguez nor his attorney appeared at the hearing on September 21, 2007.
During the hearing, Malone informed the court that the night before he had received by facsimile Rodriguez's responses to the requests for admission and therefore the motion was moot as to the admissions requests. As a consequence, the motion was granted only to the extent the court ordered Rodriguez to pay the Torreses within 10 days $480 in sanctions, the cost of bringing the motion.*fn3 The court also heard and granted the Torreses' motion to compel responses to interrogatories and production requests. The court ordered Rodriguez to respond to the discovery within 10 days and pay $440 in monetary sanctions. Notices of the motion rulings were served on Rodriguez, through Burgess, by mail and by facsimile on September 21, 2007.
On October 3, 2007, Rodriguez and Burgess signed a substitution of attorney form, substituting Rodriguez in propria persona. The attorney substitution form was not filed or served by mail on the Torreses' attorney until October 9, 2007. Rodriguez provided the court with a mailing address in Vail, Arizona.
Meanwhile, on October 5, 2007, the Torreses' attorney appeared for the mandatory settlement conference (MSC) but neither Rodriguez nor counsel representing him appeared.
On October 9, 2007, the Torreses filed an application for an ex parte order shortening time to bring a motion seeking terminating sanctions or, alternatively, issue or evidence sanctions against Rodriguez, along with monetary sanctions. The Torreses' attorney, Malone, who apparently was unaware Rodriguez had substituted Burgess out as his attorney, called Burgess on October 9 and left a voice mail message providing Burgess with detailed notice of the ex parte hearing on October 10, 2007.
Later that day, Malone received from Burgess a facsimile consisting of a copy of Rodriguez's substitution form reflecting that Rodriguez was representing himself. As a consequence, that same day Malone called Rodriguez at the phone number on the substitution of attorney form and left a detailed voice mail message informing Rodriguez of the ex parte hearing on October 10.
Rodriguez did not appear at the ex parte hearing on October 10, 2007. The court granted the Torreses' ex parte application and set the motion for terminating sanctions on October 25, 2007. The court further vacated the trial date on October 22, 2007.
On October 10, 2007, the Torreses' motion for terminating sanctions was filed and served on Rodriguez at his Arizona address, by overnight delivery, as ordered by the court. Malone's supporting declaration stated that on October 1, 2007, attorney Henry Harmeling called Malone and told him that Burgess had asked Harmeling to call Malone and tell him that Rodriguez would not be providing the discovery responses, nor paying the court ordered sanctions. The Torreses therefore requested the court to order terminating sanctions or, alternatively, issue and/or evidence sanctions against Rodriguez under section 2023.030.
On October 25, 2007, the trial court heard the Torreses' motion for terminating sanctions. Rodriguez did not file opposition to the motion or appear at the hearing. The court granted the motion, ordered Rodriguez's answer stricken, and entered default against Rodriguez. In addition, the court ordered Rodriguez to pay the Torreses $480 in monetary sanctions. On October 30, 2007, the court clerk sent a copy of the minute order to the parties' counsel of record. Malone's office also served Rodriguez on October 30, 2007, with a copy of the order imposing terminating sanctions and monetary sanctions. But rather than sending notice to Rodriguez at his Arizona address, notice was sent to Burgess, even though he was no longer the attorney of record.
On November 2, 2007, the Torreses filed a request for a court judgment in the amount of $50,000 in damages for lost rental value and $2,204.44 in costs. In addition, the Torreses asked the court to quiet title in their favor and order that they recover possession of the Property by issuance of a writ of execution. Rodriguez was served by mail at his residence in Arizona.
In support of the Torreses' request for default judgment, the Torreses filed declarations proving up their claims against Rodriguez. The Torreses stated in their declarations that in September 2005, Rodriguez constructed a residence on the Torreses' property (lot 23, APN 434-073-23), without their consent, and was currently occupying the home. The Torreses confirmed that attached to their declarations were copies of the deed to their property, lot 23.
The Torreses requested in their supporting declarations that the court order them owners in fee simple of the Property, including the residence and all other improvements on the Property, and that Rodriguez has no adverse interest in the Property. The Torreses also requested the court order that they recover possession of the Property from Rodriguez and that the county sheriff remove Rodriguez from the Property. In addition, the Torreses requested monetary damages and recovery of their litigation costs. Attached to the Torreses' declarations was documentation establishing their litigation costs.
On November 13, 2007, Rodriguez filed another substitution of attorney form, replacing himself with attorney Stanley Hodge.
On November 16, 2007, the court entered a default judgment, ordering quiet title in favor of the Torreses, a writ of execution allowing them to recover possession, and damages and costs of $52,204.54. Notice of entry of judgment was filed and served on Rodriguez, through his attorney, on December 6, 2007.
In January 2008, Rodriguez filed a notice of pendency of action (lis pendens) regarding lot 23, which was recorded and served on the Torreses.
c. Rodriguez's Motion to Set Aside Default
On January 23, 2008, Rodriguez filed a motion to set aside the default judgment. In his supporting declaration, Rodriguez explained that he owned lot 22, which he purchased in February 2004 for $29,000. He spent $385,000 to build a house but an engineering or surveying error caused it to be constructed mistakenly on lot 23. Although Rodriguez hired Burgess to represent him and Rodriguez responded to the propounded discovery, Rodriguez was unaware that Burgess did not provide the Torreses with Rodriguez's discovery responses. After Rodriguez substituted himself in propria persona on October 9, 2007, he discovered the Torreses had filed a motion to enter default against him due to Rodriguez's attorney's failure to provide Rodriguez's discovery responses.
On January 29, 2008, Rodriguez filed a notice of appeal of the default judgment entered on November 16, 2007.
At the hearing on March 3, 2008, on Rodriguez's motion to vacate the judgment, the court declined to decide Rodriguez's motion because of the pending appeal. The trial court ordered the lower court proceedings stayed pending the appeal.
3. Rodriguez's Appeal
Rodriguez's appeal only concerns the legality of the default judgment entered on November 16, 2007, against Rodriguez. "[A]ppeal from the default judgment presents for review only the questions of jurisdiction and the sufficiency of the pleadings. [Citations.]" (Corona v. Lundigan (1984) 158 Cal.App.3d 764, 766-767.) In addition, the issue of excessive damages may be reviewed on an appeal from a default judgment "if the damages awarded exceed the sum sought in the complaint. [Citations.]" (Steven M. Garber & Associates v. Eskandarian (2007) 150 Cal.App.4th 813, 824.)
Generally, when appealing a default judgment, "attack is confined to jurisdictional matters and fundamental pleading defects. [Citations.] An objection that the complaint failed to state facts sufficient to constitute a cause of action may be considered. [Citations.] The question as to whether or not a default was properly entered may be reviewed upon an appeal from the judgment. [Citation.]" (Bristol Convalescent Hosp. v. Stone (1968) 258 Cal.App.2d 848, 859.) Sufficiency of the evidence challenges, however, are not reviewable in appeals from default judgments. This is because "[t]he default of the defendant . . . admits . . . the absolute verity of all the allegations of the complaint giving rise to liability." (Ibid.) Challenges to the sufficiency of the evidence are beyond the scope of appellate review of the default judgment.
a. Section 473 Relief
We do not decide in this appeal the issue of whether the default judgment should be vacated under section 473 because the trial court declined to rule on Rodriguez's section 473 motion on the merits due to a lack of jurisdiction during the instant appeal.
While the issue of relief from default is not properly before this court, we nevertheless observe that, upon remand, default relief appears to be appropriate under section 473. In addition, where a motion to vacate judgment is brought more than six months after the default was entered, the trial court has inherent, equitable power to set aside a judgment on the grounds of extrinsic fraud or mistake: "To set aside a judgment based on extrinsic fraud or extrinsic mistake, the moving party must satisfy three elements: 'First, the defaulted party must demonstrate that it has a meritorious case. Secondly, the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Lastly, the moving party must demonstrate diligence in seeking to set aside the default once it had been discovered.' [Citations.]" (Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 290-291.)
The terms extrinsic fraud or mistake "are given a broad meaning and tend to encompass almost any set of extrinsic circumstances which deprive a party of a fair adversary hearing. It does not seem to matter if the particular circumstances qualify as fraudulent or mistaken in the strict sense." (In re Marriage of Park (1980) 27 Cal.3d 337, 342; Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981; Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471.) Extrinsic fraud or mistake is shown where an attorney engaged in positive misconduct. (People v. One Parcel of Land (1991) 235 Cal.App.3d 579, 584; Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 739.)
In the present case, upon remand, the trial court must decide Rodriguez's pending motion for relief from default, which was stayed during this appeal. The record indicates that Rodriguez's misfortunes began with his representation by Burgess, who allegedly ignored the Torreses' discovery requests and motions to compel responses. Facing an imminent trial date on October 22, 2007, Burgess caused Rodriguez to execute a substitution of attorney on October 3, 2007, which Burgess delayed filing until October 9, 2007. Then Burgess abandoned Rodriguez to a pending motion for terminating sanctions to be heard on shortened notice on October 25, 2007. Although Rodriguez was notified of the sanctions motion, it is understandable that, as an Arizona resident, acting in propria persona, he did not obtain a new lawyer until November 13, 2007. By that date the default paperwork had already been submitted to the court. Before Rodriguez's new lawyer could act, the default judgment was entered on November 16, 2007. Between October 9, 2007, and November 13, 2007 -- a mere five weeks -- Rodriguez was unrepresented by legal counsel, during which time the Torreses were able to secure his default and a judgment. Without deciding the issue for the trial court, it seems that Rodriguez has a strong case for relief from default judgment.
Having said this, we address the issues properly before this court by virtue of Rodriguez's appeal of the default judgment. Those issues are limited to whether the trial court exceeded its jurisdiction or abused its discretion when entering default and default judgment; whether the default judgment unlawfully exceeds the scope of the relief requested in the complaint and default documents; and whether Rodriguez's state and federal constitutional rights to due process and to seek redress were violated.
b. Good Faith Improver Claim
Rodriguez seems to suggest in his appellant's opening brief that the Torreses illicitly "convinced" the judge to "render an unlawful judgment" by submitting to the court a proposed judgment containing improper verbiage (¶¶ 3 and 4 of the judgment). Rodriguez does not cite to anything in the record supporting such a proposition.
Rodriguez further argues that the default judgment is unlawful because it contains improper language interfering with Rodriguez's rights as an innocent improver of the Property under section 871.5. Rodriguez claims he is a good faith improver of the Property and therefore has the right to recover his expenses incurred in improving the Property; that is, over $385,000, spent building a home on the Property. Rodriguez asserts that the following language contained in the default judgment unlawfully prevents him from asserting his rights as a good faith improver:
"3. Defendant ELISEO RODRIGUEZ owns no right, title estate, lien, or interest in the property;
"4. Defendant ELISEO RODRIGUEZ is enjoined from making any further claim to the Property adverse to Plaintiffs APOLINAR TORRES AND MARY TORRES, by legal action or otherwise, on the basis of any fact or facts that were asserted, or that might have been asserted or proved, in this action[.]"
Rodriguez asserts that, because of this language in the judgment, "he is entitled to no reimbursement and, furthermore, cannot seek reimbursement in the future." Therefore the judgment is unlawful, according to Rodriguez, since he has been foreclosed from litigating his claim, as a good faith improver, to recover the cost of building a residence on the Property.
This contention lacks merit because, "Generally speaking, the party who makes default thereby confesses the material allegations of the complaint." (Taliaferro v. Davis (1963) 216 Cal.App.2d 398, 408-409.) In general, an "appeal from the default judgment presents for review only the questions of jurisdiction and the sufficiency of the pleadings. [Citations.]" (Corona v. Lundigan (1984) 158 Cal.App.3d 764, 766-767.) This is because "'[t]he judgment by default is said to "confess" the material facts alleged by plaintiff, i.e., the defendant's failure to answer has the same effect as an express admission of the matters well pleaded in the complaint.' [Citation.]" (Beeman v. Burling (1990) 216 Cal.App.3d 1586, 1597.)
While Rodriguez may have a valid claim to compensation from the Torreses as a good faith improver of the Torreses' property under section 871.5, Rodriguez did not assert such claim in a cross-complaint or even in his answer to the Torreses' complaint. Furthermore, by default, Rodriguez is deemed to have admitted the allegations in the Torreses' complaint, including allegations that the Torreses are the sole owners of the Property. The default judgment language, declaring that Rodriguez has no right, title estate, lien, or interest in the Property, and enjoining Rodriguez from asserting any claim to the Property asserted in this action, is thus lawful.
c. Scope of Relief Requested in the Complaint and Default Documents
Rodriguez contends the judgment is unlawful because the injunctive relief ordered in paragraph 4 of the default judgment was not prayed for in the complaint or requested in the Torreses' default documents. We disagree. The default judgment relief is consistent with that requested in the Torreses' complaint and default documents.
In determining the maximum permissible liability of the defendant, we may consider "[t]he allegations of the complaint herein combined with the demand[ ] contained in the prayer." (Thorson v. Western Dev. Corp. (1967) 251 Cal.App.2d 206, 213; see also § 580.) "The court cannot allow a plaintiff to prove different claims or different damages at a default hearing than those pled in the complaint." (Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 868.) If default relief is granted in excess of the relief demanded in the complaint, the default judgment is in excess of jurisdiction, and is subject to collateral attack. (Weiss v. Blumencranc (1976) 61 Cal.App.3d 536, 542; 6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 149, p. 585.)
Here, the trial court did not exceed its jurisdiction by enjoining Rodriguez from making any claim to the Property adverse to the Torreses. While the complaint prayer does not specifically request injunctive relief, such relief is requested in the complaint and inherent in the Torreses' cause of action for quiet title.
As the court explained long ago in Brooks v. Calderwood (1868) 34 Cal. 563, 566, which concerned a quiet title action, "The very object of the suit was to determine whether the defendants had any just claim or title to the premises as against plaintiff, and settle the question forever. The Court has determined that they have none, and we see no reason why it may not make its judgment effectual by restraining the defendants from further setting up a false claim. It has been judicially determined that defendants have no just claim, estate or interest in a portion of the land, and, as to that portion, there is no reason why the plaintiff should be permitted to be further harassed by them."
Here, in the Torreses' quiet title action, the trial court found that ownership of the Property belonged solely to the Torreses. Even though the complaint prayer did not specifically request injunctive relief, the relief stated in paragraphs 3 and 4 of the default judgment (quoted above), was encompassed by the Torreses' verified complaint and the Torreses' declarations proving up the Torreses' claims.
The Torreses allege in the quiet title cause of action that they are the sole owners of the Property, lot 23. Attached to the complaint is a copy of the Property grant deed, which the Torreses' verify is a true and correct copy of the grant deed. Rodriguez claims an adverse interest in the Property based on his construction of a residence on the Property and occupation of the residence. The Torreses further allege Rodriguez has no right, title, estate, lien or interest in the Property.
The complaint prayer requests, as to the cause of action for quiet title, a judgment declaring the Torreses owners of the Property in fee simple and that Rodriguez has no adverse interest in the Property.
In determining whether the default judgment relief exceeds the scope of the complaint and thus the jurisdiction of the court, we recognize that "It 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 excess of or inconsistent with it. . . . [I]t 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 . . . . The court must then compare the properly pled damages for each defaulting party with the evidence offered in the prove-up. (§ 585, subd. (b) ['[T]he court shall hear the evidence offered by the plaintiff, and shall render judgment in his or her favor for such sum (not exceeding the amount stated in the complaint, in the statement required by Section 425.11, or in the statement provided for by Section 425.115), as appears by such evidence to be just. . . .'].)" (Heidary v. Yadollahi, supra, 99 Cal.App.4th at p. 868.)
Under section 764.010, determination of title to real property requires a hearing on the matter. Section 764.010 states: "The court shall examine into and determine the plaintiff's title against the claims of all the defendants. The court shall not enter judgment by default but shall in all cases require evidence of plaintiff's title and hear such evidence as may be offered respecting the claims of any of the defendants, other than claims the validity of which is admitted by the plaintiff in the complaint. The court shall render judgment in accordance with the evidence and the law." (Italics added.)
The court in Yeung v. Soos (2004) 119 Cal.App.4th 576, 580-581 (Yeung), acknowledged that "Code of Civil Procedure section 764.010 is frequently referred to as a prohibition against default judgments in quiet title actions. [Citation.] 'However, the provision against default judgments [in quiet title actions] appears to be a misnomer; i.e., it seems only to require a higher standard of evidence at the "prove-up" hearing .' [Citation.] Competent evidence is required at the hearing of a quiet title action after default. [Citation.] Code of Civil Procedure section 764.010 simply provides that a plaintiff does not have a right to entry of judgment in his or her favor as a matter of course following entry of the defendant's default in a quiet title action. [Citation.] The statute does not preclude entry of a defendant's default. [Citations.]"
The Yeung court concluded that default judgment could be entered in a quiet title action but section 764.010 required an evidentiary hearing before doing so: "In quiet title actions, judgment may not be entered by the normal default prove-up methods; the court must require evidence of the plaintiff's title. (. . . ['. . . All proof that plaintiff would have had to present at trial, however, must be presented at that hearing; a declaration or other summary procedure will not be permitted. Live witnesses must testify, and complete authentication of the underlying real property records is essential.'].") (Yeung, supra, 119 Cal.App.4th at p. 581.)
Nevertheless, the Yeung court held that, even though the trial court did not conduct the statutorily required evidentiary hearing under section 764.010, the default judgment in Yeung was not void on the face of the record. (Yeung, supra, 119 Cal.App.4th at p. 582.) The Yeung court explained: "A judgment is void on the face of the record when it appears on the face of the record that the trial court had no power to enter the default or the default judgment. [Citation.] Thus, for example, a court has no power to enter a defendant's default after the defendant has answered but has failed to appear for trial. [Citations.] In addition, a default judgment is void when the damages are in excess of the damages specified in the complaint or the statement of damages. [Citation.]" (Yeung, supra, 119 Cal.App.4th at p. 582.)
Since procedurally, the circumstances in Yeung are essentially the same as those in the instant case, the result is the same: The default judgment is not void. "[T]he trial court is authorized to enter a default in a quiet title action. (Code Civ. Proc., § 764.010.) The trial court may enter judgment following a default after an evidentiary hearing. (Ibid.) Although plaintiffs presented substantial documentary evidence of their title, the evidentiary hearing in this quiet title action was not properly conducted. The trial court rendered judgment by the normal default prove-up method, including the submission of documents and declarations. The trial court should have held an evidentiary hearing. However, the improper procedure did not deprive the trial court of the power to enter the judgment. The procedure was merely erroneous. The judgment is not void on this ground. [Citation.]" (Yeung, supra, 119 Cal.App.4th at p. 582.)
Here, as in Yeung, although the trial court should have conducted an evidentiary hearing before entering a default judgment, rather than rendering judgment by the normal default prove-up method, the improper procedure did not deprive the trial court of the power to enter the judgment. While Rodriguez does not contest on appeal the sufficiency or admissibility of the evidence and thus such objections are forfeited (Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4; Campos v. Anderson (1997) 57 Cal.App.4th 784, 794, fn. 3), we note that the record shows that the Torreses presented evidence establishing their title to the Property. The Torreses state in their default prove-up declarations that they are the sole owners of the Property and verify that an attached copy of the Property grant deed is a true and correct copy of the deed. The Torreses further state that Rodriguez built a residence on the Torreses' property without their consent and remains in possession of the home. In addition, the Torreses allege in their verified complaint that an attached copy of the grant deed is a true and correct copy of the grant deed, which names the Torreses as title holders of the Property.
We conclude the default judgment is not void and the relief ordered in the default judgment does not exceed the scope of the relief requested in the complaint and default documents. Rodriguez thus received sufficient notice that the Torreses were seeking the relief granted in the default judgment.
d. Constitutional Challenge
Rodriguez argues that the default judgment violates his state and federal constitutional rights to due process and to seek redress of his grievance, in which he seeks reimbursement of $385,000 spent building a home inadvertently on the Torreses' property, rather than on his own property.
There was no constitutional violation of Rodriguez's rights to redress or due process. He received proper notice of the proceedings, either through his attorney of record and/or personally, and had the opportunity to seek redress but did not appropriately pursue it by following proper legal procedures allowing for such relief. As a consequence, default judgment was lawfully entered against Rodriguez. Furthermore, there remains the opportunity for Rodriguez to seek redress by pursuing his motion to vacate the default judgment, once this appeal is decided and the case is remanded to the trial court.
e. Granting Terminating Sanctions
Rodriguez contends the trial court abused its discretion by granting the Torreses' motion for terminating sanctions and entering default judgment against Rodriguez, rather than imposing a lesser sanction. Rodriguez claims he did all he could to provide responses to the Torreses' discovery and was unaware that his attorney failed to provide his responses to the Torreses. He also claims that until he substituted himself in propria persona, he was unaware of the Torreses' discovery motions. Rodriguez adds that the law disfavors forfeiture or dismissal of a valid claim, such as Rodriguez's claim to recover in excess of $385,000.
We first note that Rodriguez's arguments that he did all he could to comply with the Torreses' discovery requests, and his attorney was at fault for noncompliance with the discovery requests and terminating sanctions, may be valid grounds for granting a motion to vacate the default judgment, but such motion has not yet been heard in the trial court and we do not address it in this appeal. As a consequence, the only facts and evidence which this court will consider are those before the trial court when it ruled on the motion for terminating sanctions on October 25, 2007. At that time, there was no evidence before the trial court that Rodriguez had made a good faith effort to respond to the Torreses' interrogatories and production requests, or that Rodriguez was unaware of the motions to compel discovery.
Generally, management of discovery lies within the sound discretion of the trial court. Thus, a discovery order is reviewed under the abuse of discretion standard. (County of Los Angeles v. Superior Court (2005) 130 Cal.App.4th 1099, 1104.) The discovery act provides for powerful sanctions for abuse of discovery: "They include monetary sanctions, contempt sanctions, issue sanctions ordering that designated facts be taken as established or precluding the offending party from supporting or opposing designated claims or defenses, evidence sanctions prohibiting the offending party from introducing designated matters into evidence, and terminating sanctions that include striking part or all of the pleadings, dismissing part or all of the action, or granting a default judgment against the offending party." (Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 12.)
Misuse of the discovery process, justifying sanctions, "includes failing to respond or submit to authorized discovery, providing evasive discovery responses, disobeying a court order to provide discovery, unsuccessfully making or opposing discovery motions without substantial justification, and failing to meet and confer in good faith to resolve a discovery dispute when required by statute to do so. [Citation.]" (Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1214.)
A terminating sanction may be imposed after a motion to compel is granted and the party to be sanctioned has failed to comply with that order. (§§ 2023.010, subd. (g), 2023.030, subd. (d).) In determining whether to impose a terminating sanction, the trial court considers the "totality of the circumstances: conduct of the party to determine if the actions were willful; the detriment to the propounding party; and the number of formal and informal attempts to obtain the discovery." (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1246.) "'Terminating sanctions have been held to be an abuse of discretion unless the party's violation of the procedural rule was willful [citations] or, if not willful, at least preceded by a history of abuse of pretrial procedures, or a showing less severe sanctions would not produce compliance with the procedural rule. [Citations.]' [Citation.]" (Parkview Villas Assn., Inc. v. State Farm Fire & Casualty Co. (2005) 133 Cal.App.4th 1197, 1215.)
The trial court's selection of a particular discovery sanction is an exercise of discretion, "subject to reversal only for manifest abuse exceeding the bounds of reason." (Kuhns v. State of California (1992) 8 Cal.App.4th 982, 988.)
Here, the trial court did not abuse its discretion by granting terminating sanctions. The record reflects a history of Rodriguez abusing the discovery process by not responding to the Torreses' discovery requests and not complying with the trial court's discovery orders. Furthermore, there was no sign that any lesser sanctions on the eve of trial would have been effective since Rodriguez had not opposed the discovery motions, had not appeared at the hearings on the motions, and had not complied with the court's previous discovery orders to provide discovery responses and pay monetary sanctions.
As in Collisson & Kaplan v. Hartunian (1994) 21 Cal.App.4th 1611, "[w]hat we have here is defendants' persistent refusal to share with plaintiff the facts underlying their denial of liability and their purported affirmative defenses. We also have an approaching trial date scheduled for less than two months after the sanction hearing. On this, we conclude that, '[i]n choosing this sanction, the court was attempting to tailor the sanction to the harm caused by the withheld discovery. [Citation.]'" (Id. at p. 1619.)
Under such circumstances, the trial court did not abuse its discretion in granting terminating sanctions.
4. Countrywide's Appeal
As the beneficiary under a deed of trust securing an interest in lot 22 for a $408,000 loan issued to Rodriguez in 2006, Countrywide appeals the order denying its motion to vacate the default judgment against Rodriguez.
Countrywide contends that, as the lender of $408,000 to Rodriguez and as beneficiary of the promissory note, secured by a deed of trust recorded against lot 22, Countrywide holds a substantial security interest in the Torreses' property, lot 23. Countrywide's property interest in the Property (lot 23) is premised on the theory that Countrywide is a bona fide encumbrancer, since Countrywide believed the house for which its funds were used, was built on lot 22 and Countrywide had no knowledge of the Torreses' interest in the house. Countrywide and its predecessor-in-interest, Hyperion Capital Group, LLC dba Hyperion Mortgage, LLC, were not served with the summons and complaint in the Torreses' action for trespass, ejectment, and quiet title, or named as parties in the complaint.
Countrywide's lawyers first contacted the lawyer for the Torreses on November 30, 2007, and again on December 11, 2007, to assert Countrywide's purported interest in lot 23. This was after default judgment was entered on November 7, 2007.
On April 23, 2008, Countrywide filed a motion to vacate the default judgment and seeking leave to intervene. Its proposed complaint in intervention contained claims for unjust enrichment, equitable mortgage, declaratory relief, and injunctive relief. The defendants included the Torreses, Rodriguez, and Rodriguez's wife.
On July 14, 2008, the trial court granted Countrywide's motion to intervene, but denied, without prejudice and on jurisdictional grounds, the motion to vacate the default judgment against Rodriguez. Countrywide appealed the order denying its motion to vacate the default judgment. Thereafter, Wells Fargo became the beneficiary of the deed of trust in place of Countrywide, and has replaced Countrywide as the appellant in Countrywide's appeal.
Countrywide objects to the default judgment because it orders quiet title, not only to lot 23, but also to all improvements on lot 23, including the residence. Countrywide argues that, since the complaint does not seek quiet title as to the residence, the judgment is void because it exceeds the relief sought in the Torreses' complaint. As we discuss above in connection with Rodriguez's appeal, we reject this contention because the complaint allegations and prayer encompass the relief granted in the default judgment. Furthermore, the judgment only states that Rodriguez has no "right, title, estate, lien, or interest" in the Property (lot 23). The judgment makes no mention of claims to the Property by other parties, such as Countrywide.
We also reject Countrywide's contention the trial court abused its discretion in imposing terminating sanctions. As discussed above regarding Rodriguez's appeal, there was no abuse of discretion due to Rodriguez's history of failing to respond to discovery, failing to comply with the court's discovery orders, failing to oppose the discovery motions or appear at hearings on the motions, and failing to pay court ordered sanctions. The trial court could reasonably conclude under these circumstances that lesser sanctions would have been ineffective.
Countrywide further contends the default judgment is void because Countrywide was not named as a necessary and indispensable party under section 389, subdivision (b). Under section 389, subdivision (a) "a person is a 'necessary' party to a proceeding if '(1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.'" (City of San Diego v. San Diego City Employees' Retirement System (2010) 186 Cal.App.4th 69, 83 (City of San Diego).)
If a person qualifies as a "necessary" party, "courts then determine if the party is also 'indispensable.' Under this analysis 'the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person's absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for non-joinder.' (Code Civ. Proc., § 389, subd. (b).)" (City of San Diego, supra, 186 Cal.App.4th at pp. 83-84.)
"'Whether a party is necessary and/or indispensable is a matter of trial court discretion in which the court weighs "factors of practical realities and other considerations."' [Citation.]" (City of San Diego, supra, 186 Cal.App.4th at p. 84, quoting County of Imperial v. Superior Court (2007) 152 Cal.App.4th 13, 26.)
Even if a party is indispensable and is not joined, the court has the power to proceed with a case. (City of San Diego, supra, 186 Cal.App.4th at p. 84.) Absence of an indispensable party does not go to a trial court's jurisdiction. The absence may impair the court's ability to grant effective relief, but is not a defect of fundamental, subject matter jurisdiction. (Kraus v. Willow Park Public Golf Course (1977) 73 Cal.App.3d 354, 364-365.)
As a consequence of not being joined as a party, "'[a]n indispensable party is not bound by a judgment in an action in which he was not joined.' [Citations.] Thus, a judgment in an action not naming an indispensable party, for example, an action seeking to stop a development, might well be inadequate because it is subject to later collateral attack by the nonjoined indispensable party. [Citation.] In this connection, the rule is: 'Failure to join an "indispensable" party is not "a jurisdictional defect" in the fundamental sense; even in the absence of an "indispensable" party, the court still has the power to render a decision as to the parties before it which will stand. It is for reasons of equity and convenience, and not because it is without power to proceed, that the court should not proceed with a case where it determines that an "indispensable" party is absent and cannot be joined. [Citation.]' [Citation.]" (Save Our Bay, Inc. v. San Diego Unified Port Dist. (1996) 42 Cal.App.4th 686, 693.)
Here, the default judgment is not void, regardless of whether Countrywide is an indispensable party. Furthermore, Countrywide has not been prejudiced by not being named as a party in the Torreses' lawsuit. Failure to join known adverse claimants "will result in a judgment that does not bind them." (§ 762.010, 1980 Law Rev. Com. comment.) As to unknown parties, under section 764.030, "The judgment in the action is binding and conclusive on all of the following persons, regardless of any legal disability: (a) All persons known and unknown who were parties to the action and who have any claim to the property, whether present or future, vested or contingent, legal or equitable, several or undivided. . . ." (Italics added.)
Although the Torreses named the unknown parties in accordance with section 764.030, the Torreses did not serve them in accordance with section 763.010, subdivision (b). As a consequence, the court did not have jurisdiction over the unknown parties and judgment was not binding on them, including Countrywide. The instant action therefore only affected the Torreses' claims to the Property against Rodriguez. Countrywide may proceed with its equitable claims asserted in its complaint in intervention.
Since the default judgment is not void and the trial court did not abuse its discretion in granting terminating sanctions, we conclude the trial court did not abuse its discretion in denying Countrywide's motion to vacate the default judgment.
The judgment is affirmed. The Torreses are awarded their costs on appeal from Rodriguez and Countrywide.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
We concur: s/McKinster J. s/Miller J.