Filed 3/2/20 Khabushani v. Brent CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

MICHAEL KHABUSHANI,

Plaintiff and Appellant,

v.

NAJILA K. BRENT et al.,

Defendants and Appellants,

RAMIN ZARRIN-EHTERAM

et al.,

Defendants and Respondents

2d Civil No. B287600

(Super. Ct. No. 56-2016-00480666-

CU-CO-VTA)

(Ventura County)

The origin of the present case lies in a 1996 default judgment obtained by Hassan Zarrin-Ehteram (Hassan) against Michael Khabushani (appellant) and his wife. In 1999 Hassan assigned the judgment to his son, Ramin Zarrin-Ehteram (Ramin). In December 2015, with interest the judgment had increased to over $5 million. In 2016 Ramin, represented by “Brent defendants,” brought an action against appellant and his wife to set aside fraudulent transfers of property they had allegedly made to prevent collection of the 1996 judgment. Appellant responded by filing the present action to vacate the judgment. The action sought damages from Ramin, Hassan, Brent defendants, and Leticia Gonzales, Brent defendants’ receptionist.

All of the defendants defaulted by failing to timely file a responsive pleading. In 2017 the trial court entered a default judgment against them. Thus, there are two default judgments at issue in this case: (1) the 1996 default judgment in Hassan’s favor and against appellant, (2) the 2017 default judgment in appellant’s favor and against defendants. The 2017 default judgment vacated the 1996 default judgment and awarded damages of approximately $1.85 million to appellant.

The trial court vacated the 2017 default judgment and the underlying defaults. Appellant appeals from the trial court’s order. Some of the defendants have filed protective cross-appeals from the 2017 default judgment.

As to defendant Gonzales, we affirm. As to the Brent defendants, we reverse the order vacating the 2017 default judgment and the underlying defaults on the first through fourth causes of action. The award of damages was based on these causes of action. But in view of Brent defendants’ protective cross-appeal, we order entry of judgment in their favor on the first through fourth causes of action. As to the “Ramin defendants” and the fifth and sixth causes of action seeking to vacate the 1996 default judgment, we remand for an evidentiary hearing on whether they were served with process in Iran. In the Disposition, post, at p. 26, we direct how the trial court should proceed depending upon its findings at the hearing.

Factual and Procedural Background

In January 2016 Ramin filed in the Los Angeles County Superior Court a complaint against appellant seeking to set aside fraudulent transfers of real property. Defendant attorney Najila K. Brent (Brent), represented Ramin. Ramin’s complaint was based on the 1996 default judgment against appellant and his wife and in favor of Ramin’s deceased father, Hassan. The judgment was twice renewed – once in 2006 and again in 2015.

Proceeding in propria persona, in April 2016 appellant filed in the Ventura County Superior Court a complaint against defendants (1) Brent, (2) Law Office of Najila K. Brent, (3) Najila K. Brent, a Professional Law Corporation (these three defendants are hereafter collectively referred to as “Brent defendants”), (4) Ramin, (5) Hassan, (6) Hassan’s estate (defendants (4) through (6) are hereafter collectively referred to as “Ramin defendants”), and (7) “Does 1 through 100.” In May 2016 appellant amended the complaint to insert the name of Leticia Gonzales in place of “the fictitious name of DOE[] 6.” Gonzales was the “receptionist and front desk clerk” at the Brent law office.

Appellant’s complaint is based on Ramin defendants’ and Brent defendants’ efforts to obtain and enforce the 1996 default judgment in favor of Hassan and against appellant and his wife. The complaint challenges the validity of the judgment and accuses Brent of misrepresenting that it would not be enforced. Appellant alleged that he “was not served with either the original complaint [or] amended complaint in [Hassan’s] Action.” After the default judgment was entered, Brent said “that there was nothing to worry [about] since she had total control over the default Judgment and would not enforce on the Judgment.” “[I]n 2015, [appellant] was surprised when Defendant Brent recorded an Abstract of Judgment against [appellant’s and his wife’s] residences in Ventura County.”

Appellant’s six causes of action are designated: “1. Promissory estoppel and detrimental reliance; 2. Breach of implied covenant of good faith and fair dealing; 3. Intentional interference with prospective economic advantage; 4. Intentional misrepresentation; 5. Declaratory relief [that the 1996 default judgment and abstracts of judgment recorded in reliance on that judgment ‘are invalid’]; and 6. To set aside [the 1996] default judgment [and cancel the abstracts of judgment].” The causes of action are against all defendants except the fourth cause of action, which is against only Brent defendants. Each of the first four causes of action seeks “actual damages in excess of $5,000,000 to be proven at trial.” In the sixth cause of action appellant claims that the 1996 default judgment is void “because the court had [not] acquired personal jurisdiction over [him].”

Defendants allegedly did not file a responsive pleading to appellant’s complaint within 30 days after service of the summons as required by Code of Civil Procedure section 412.20. Proofs of service show that Brent defendants were personally served on May 10, 2016. On June 10, 2016, the 31st day after service of process, defaults were entered against Brent defendants.

A proof of service shows that Gonzales was personally served on June 9, 2016. On July 15, 2016, default was entered against her.

On July 29, 2016, defaults were entered against Ramin defendants. Ramin, who lives in Iran, declared under penalty of perjury that Ramin defendants had not been served with process. Ramin defendants did not file a motion to set aside the defaults entered against them.

Brent defendants filed an ex parte application to extend the time to serve and file a responsive pleading. Brent was designated as the applicants’ counsel. The application bears a stamp showing that the court received it on June 10, 2016, the same day that defaults were entered against Brent defendants.

Brent filed a motion to set aside the defaults entered against Brent defendants. The filing date was December 9, 2016, one day short of six months after the entry of defaults on June 10, 2016. The motion was based in part on the following discretionary relief provision of section 473, subdivision (b) (section 473(b)): “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief . . . shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Italics added.)

In February 2017 the trial court denied Brent defendants’ motion to set aside the defaults. It ruled: “[Brent defendants’] default was taken on June 10, 2016. [Their] failure to seek a set aside until December 9, 2016 does not establish a timely and good faith effort to allow the matter to proceed on its merits.” The court denied Brent defendants’ motion for reconsideration.

On January 17, 2017, exactly six months after the entry of default against Gonzales, she filed a motion to set aside her default. Proceeding in propria persona, Gonzales claimed that she was entitled to discretionary relief under section 473(b) and that the entry of default was void under section 473, subdivision (d) (section 473(d)). The court denied the motion for the following reasons: first, Gonzales “fail[ed] to demonstrate that she acted diligently in moving for such relief”; second, the entry of default was not void “because [appellant] . . . demonstrates by a preponderance of the evidence that service of the Summons, Complaint, and relevant Doe Amendment on . . . Gonzales was proper.”

In July 2017 Ramin assigned to Brent and her PLC his interest in the 1996 default judgment against appellant and his wife.

In October 2017 the court entered a $1,898,000 default judgment in favor of appellant and against defendants. The judgment awards $1,826,000 in compensatory damages, $25,000 in punitive damages, and $47,000 in attorney fees even though appellant represented himself throughout the proceedings. In addition, it vacates the 1996 default judgment against appellant and orders the cancellation of abstracts of judgment recorded in reliance on that judgment.

Brent defendants filed a motion to vacate the default judgment and set aside the underlying defaults entered against them. In support of the motion, Brent declared: “On May 30, 2016 [20 days after Brent defendants had been served], I learned that an immediate family member was suffering a severe medical crisis. Not only did the news require my immediate and full attention, it was severely distressing. I tried to meet and confer with [appellant] . . . but [he] . . . refused to grant me the extension.” On June 9, 2016, the 30th day after Brent defendants had been served, Brent submitted to the court an ex parte application for an extension of time. “Understanding [appellant] intended to sue only me and my law firm, I appeared as NAJILA K. BRENT and on behalf of LAW OFFICES OF NAJILA K. BRENT, APLC.” “The following morning, on June 10, 2016, . . . I was informed that my Application had been rejected for a technicality. . . . I immediately addressed the issue and . . . resubmitted the Application.” That same day, appellant filed his request for entry of default against Brent defendants. The court clerk entered default as requested.

In December 2017 Brent, acting as counsel for Gonzales and Ramin defendants, filed motions to vacate the default judgment and set aside the defaults entered against them.

Trial Court Ruling

In January 2018 the trial court granted all of the defendants’ motions to vacate the default judgment and set aside the defaults. It concluded that relief from default was required under the following mandatory provision of section 473(b): “[T]he court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (Italics added.)

The trial court reasoned: “All of the Motions were filed within 2.5 months of the entry of default judgment, but in excess of 6 months after the defaults were entered [so that relief from the defaults was available under the mandatory provision but not under the discretionary provision of section 473(b), which requires that an application for discretionary relief from default must be made within six months after the entry of default ]. Cisneros v. Vueve (1995) 37 C[al.]4th 906, 909 . . . , fn. 2 (as long as the default resulted from attorney neglect, an attorney’s ‘affidavit of fault’ [filed within six months after the entry of the default judgment] compels relief from both the default and any resulting default judgment [under the mandatory relief provision of section 473(b)].) Although the Brent declaration doesn’t do a very good job of ‘falling on her sword [i.e., admitting fault],’ sufficient evidence is presented that the default/default judgments against the defendants were caused by attorney Brent’s mistake, inadvertence, surprise, or neglect; specifically, the medical crisis in her family and the ex parte request for extension of time to respond which was filed on 6/9/16, prior to the date a responsive pleading was due. Here, the entry [of] default was attorney Brent’s fault; while the subsequent default judgment was not her fault.” “[S]he should have quickly moved to set aside the default as soon as she admittedly learned of it in July 2016, instead of waiting (without explanation) until December 2016 . . . .” The court expressly declined to decide the issue of “the alleged failure to properly serve Defendants and Counsel” because the resolution of this issue is not “necessary to decide these Motions.”

Filing of Appeal and Cross-Appeals

Appellant filed an appeal seeking to overturn the trial court’s order vacating the 2017 default judgment and setting aside the underlying defaults. Defendants filed protective cross-appeals from the 2017 default judgment. But Ramin defendants subsequently abandoned their cross-appeal.

APPEAL FROM ORDER VACATING THE 2017

DEFAULT JUDGMENT AND SETTING ASIDE DEFAULTS

Grounds for Vacating Default Judgment and

Setting Aside Defaults

Section 473(d) provides that a trial court “may . . . set aside any void judgment or order.” “[T]he trial court ‘has no statutory power under section 473, subdivision (d) to set aside a judgment [or order] that is not void . . . .’” (Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th 1009, 1020 (Pittman).) “Where the basis of a claim for relief from a default is not based upon voidness, there [generally] remains only” discretionary or mandatory relief under section 473(b). (In re Marriage of Andresen (1994) 28 Cal.App.4th 873, 883, fn. 8.) However, relief may be obtained under section 473.5, which was not invoked by defendants. Section 473.5 applies “[w]hen service of a summons has not resulted in actual notice to a party in time to defend the action . . . .” (Ibid.)

“‘[W]here relief is no longer available under statutory provisions, a trial court generally retains the inherent power to vacate a default judgment or order on equitable grounds where a party establishes that the judgment or order . . . resulted from extrinsic fraud or mistake.’” (Pittman, supra, 20 Cal.App.5th at p. 1025.) In their reply brief in their cross-appeal, for the first time Brent defendants claim that “the trial court’s equitable authority to set aside the default judgment and defaults [for extrinsic mistake] is an additional basis for affirming its ruling on the Motion.” “This claim is forfeited because by withholding it [until] the reply brief [Brent defendants] deprived [appellant] of the ability to address it.” (Niles Freeman Equipment v. Joseph (2008) 161 Cal.App.4th 765, 783.)

The Trial Court Erroneously Relied on the Mandatory

Provision of Section 473(b) to Grant Relief from Default

Brent Defendants

Appellant states that it is his “position that the trial court should have not [set] aside the defaults and default judgments entered against [Brent defendants], because their motion did not comply with the mandatory requirements for a mandatory relief under section 473.” We agree. There is an insuperable legal obstacle to Brent defendants’ claim that they met the requirements of the mandatory relief provision. When Brent’s alleged “mistake, inadvertence, surprise, or neglect” occurred in 2016, she was not representing a “client” as required by the mandatory relief provision of section 473(b). Instead, she was representing herself and her PLC. It was not until June 2017 that Brent defendants filed substitution of attorney forms stating that they were substituting Frank C. Olah as counsel of record in place of former counsel Brent.

In Esther B. v. City of Los Angeles (2008) 158 Cal.App.4th 1093, 1100 (Esther B.), the court held, “[T]he plain language of section 473, subdivision (b), precludes mandatory relief in favor of a ‘pro. per.’ Party . . . .” The holding applies to pro. per. parties who, like Brent, are attorneys: “Under the plain language of [section 473(b)], the mandatory relief provision only applies in the case of an ‘attorney’ representing a ‘client.’ . . . [¶] . . . The purpose of the mandatory relief provision is to relieve the innocent client of the burden of the attorney’s fault, place that burden on the malfeasant attorney and avoid triggering more litigation in the form of a malpractice suit. [Citations.] Granting mandatory relief to parties appearing in pro per, even if they are attorneys, would not serve any of the purposes of the legislation. In these situations the ‘client’ is not innocent, there is no one to whom the blame can be shifted and there is no risk of a malpractice action because the client would have to sue herself.” (Id. at pp. 1099-1100.) Here, the “default . . . was not in fact caused by [retained counsel’s] mistake, inadvertence, surprise or neglect.” (§ 473(b).) It was caused by Brent’s own omissions.

Although Brent represented her PLC, it was not Brent’s “innocent client.” (Esther B., supra, 158 Cal.App.4th at p. 1100.) There is no risk that the PLC will sue Brent for malpractice. For purposes of the mandatory relief provision of section 473(b), Brent’s PLC was her alter ego. In McClain v. Kissler (2019) 39 Cal.App.5th 399, 427-429, the court held that a corporation was not entitled to relief under the mandatory provision of section 473(b) because its attorney controlled the corporation and therefore was “in essence representing herself.” (Id. at p. 427.) The court reasoned, “Granting relief to an attorney who represents an entity she completely controls would undermine the rule affording discretionary relief [under section 473(b)] only from excusable mistakes and allow attorneys who represent themselves a benefit other self-represented clients do not receive.” (Id. at p. 428.)

Gonzales

Gonzales represented herself until July 27, 2017, when the trial court conducted a hearing on her motion to set aside her one-year earlier July 15, 2016 default under the discretionary provision of section 473(b). On July 27, 2017, Gonzales filed a substitution of attorney form substituting Brent in place of herself as counsel of record. Thus, the mandatory relief provision of section 473(b) is unavailable to Gonzales because her

“default . . . was not in fact caused by [Brent’s] mistake, inadvertence, surprise, or neglect.” (§ 473(b); see Cisneros v. Vueve, supra, 37 Cal.App.4th at p. 912 [mandatory relief provision of section 473(b) inapplicable where “a neglectful client permits the default to be taken against him before retained counsel enters the scene”].)

Ramin Defendants

The mandatory relief provision of section 473(b) is unavailable to Ramin defendants because their application for relief was not accompanied by Brent’s “sworn affidavit” showing that their “default . . . was . . . in fact caused by [Brent’s] mistake, inadvertence, surprise, or neglect.” (Ibid.) Their application did not even mention section 473(b). In the application Brent maintained that the default judgment “is void under CCP section 473(d)” because “the service of summons [on Ramin defendants] never took place.” Appellant filed proofs of service showing that Masoud Farivar effected substituted service on Ramin defendants by leaving a copy of the summons and complaint with the housekeeper at Ramin’s residence in Tehran, Iran. Brent declared: “I know for a fact that my client does not reside in the address provided.” The alleged residence “was sold in 2004 to a man named Ali Zeinali. After Mr. Zienali’s death, his children donated the property to the Government of Iran. I was informed that the property was later converted to an elementary school named Iran.”

Argument that Default Judgment and Underlying

Defaults are Void

The trial court’s erroneous reliance on the mandatory provision of section 473(b) does not end our inquiry. “‘“[A] ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for a wrong reason. If right upon any theory of law applicable to the case, it must be sustained regardless of the considerations which may have moved the trial court to its conclusion.”’” (Transamerica Ins. Co. v. Tab Transportation, Inc. (1995) 12 Cal.4th 389, 399, fn. 4.)

Gonzales

Gonzales was not named as a defendant in the original complaint. The complaint was amended to substitute her name for the fictitious name of Doe 6. Gonzales claims that the default judgment and underlying default as to her are void because “the summons served on her did not contain the notice required by section 474,” which concerns the service of process on Doe defendants. Section 474 provides: “[N]o default or default judgment shall be entered against a defendant so designated, unless it appears that the copy of the summons or other

process . . . bore on the face thereof a notice stating in substance: ‘To the person served: You are hereby served in the within action (or proceedings) as (or on behalf of) the person sued under the fictitious name of (designating it).’ The certificate or affidavit of service must state the fictitious name under which such defendant was served . . . .” (Italics added.)

Gonzales argues, “The proof of service was defective on its face.” We agree. The proof of service for Gonzales states, “The ‘Notice to the Person Served’ was completed as follows: A. As an INDIVIDUAL defendant.” For the service to be valid under section 474, the proof of service should have stated, “The ‘Notice to the Person Served’ was completed as follows: B. As the person sued under the fictitious name of Doe 6.” Because of the deficient proof of service, we uphold the trial court’s order vacating the 2017 default judgment and setting aside the underlying default as to Gonzales. (See Pelayo v. J. J. Lee Management Co. (2009) 174 Cal.App.4th 484, 493,496 [although summons complied with section 474, the proof of service did not state the fictitious name under which the defendant was served; therefore, the trial court erroneously denied defendant’s motion to vacate default judgment and underlying default].) Gonzales’s protective cross-appeal from the default judgment is dismissed as moot.

Brent Defendants

Brent defendants contend that the “defaults are void as a matter of law” because Brent’s ex parte application for an extension of time to file a responsive pleading, which was submitted to the court on June 9, 2016 (the 30th day after service of the summons), “triggered an automatic extension under section 430.41(a)(2).” The statute provides: “The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.” (§ 430.41, subd. (a)(2).)

Section 430.41, subdivision (a)(2) does not apply here. Brent did not file a request for an automatic 30-day extension of time under that section. Instead, she filed an ex parte application for an extension of time to serve and file a responsive pleading under rules 3.1200-3.1207 of the California Rules of Court. In the application Brent did not declare “that a good faith attempt to meet and confer [with appellant] was made,” nor did she “explain[] . . . why the parties could not meet and confer.” (§ 430.41, subd. (a)(2).) She declared that on June 6, 2016, she had “informed [appellant] in person” of her situation, but he had “denied [her] Request for Extension.” Her application sought an extension of time “[d]ue to serious family health issue.” A “Practice Pointer” from a treatise on civil procedure advises: “[A] motion for extension of time to plead does not prevent entry of default. (Consequently, be sure to request your extension early.)” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2019) ch. 5-B “Entry of Default,” § 5:32, p. 5-10.)

Brent defendants claim that the defaults entered against them are void because “[t]he trial court’s own records indicate that [they] are active, non-defaulted parties to the action. . . . A defendant cannot be both an active party and in default.” We do not follow this argument. The record on appeal shows that, on June 10, 2016, defaults were entered against Brent defendants. “‘A defendant against whom a default has been entered is out of court and is not entitled to take any further steps in the cause affecting plaintiff’s right of action; he cannot thereafter, until such default is set aside in a proper proceeding, file pleadings or move for a new trial or demand notice of subsequent proceedings.’” (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385-386.)

Thus, as to the first through fourth causes of action seeking damages from Brent defendants, we must reverse the trial court’s order vacating the default judgment and setting aside the underlying defaults.

Brent Defendants and Ramin Defendants:

The Fifth and Sixth Causes of Action

Brent defendants maintain that, as to the fifth and sixth causes of action, the 2017 default judgment is void because these causes of action constitute “an action to quiet title, which means that an evidentiary hearing was required prior to entry of the default judgment. See § 764.010.” Ramin defendants make the same claim in their separately filed respondents’ brief. An evidentiary hearing on the issue of title was not conducted.

The statute in question – section 764.010 – provides that, in an action to quiet title to real property, “[t]he 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.”

Appellant’s fifth and sixth causes of action are in effect actions to quiet title against Ramin defendants’ judgment lien arising from their 1996 default judgment against appellant and his wife. The fifth and sixth causes of action seek to set aside the 1996 default judgment and cancel the abstracts of judgment recorded in reliance on that judgment. “[A]n abstract of judgment attaches to all interests . . . owned by the judgment debtor in real property in the county in which the abstract is recorded and creates a judgment lien on that property . . . .” (Federal Deposit Ins. Corp. v. Charlton (1993) 17 Cal.App.4th 1066, 1069.)

“[T]he unambiguous language of section 764.010 precludes a traditional default prove-up in quiet title actions and imposes an absolute ban on a ‘judgment by default’ in such actions. [¶] . . . [N]otwithstanding a defendant’s default in a quiet title action, the plaintiff is not automatically entitled to judgment in its favor but must prove its case in an evidentiary hearing with live witnesses and any other admissible evidence [citations].” (Nickell v. Matlock (2012) 206 Cal.App.4th 934, 947; accord, Harbour Vista, LLC v. HSBC Mortgage Services Inc. (2011) 201 Cal.App.4th 1496, 1503 [“To us, the prohibition [of section 764.010] against default judgments in quiet title actions appears absolute”].)

The trial court, therefore, lacked jurisdiction to enter a default judgment as to the fifth and sixth causes of action. Accordingly, the 2017 default judgment is void as to both Brent defendants and Ramin defendants insofar as it vacated the 1996 default judgment and cancelled abstracts of judgment recorded in reliance on that judgment.

Moreover, the fifth and sixth causes of action fail to state a cause of action for relief against Brent defendants. Appellant’s complaint against Brent defendants rests on their conduct as attorney for Ramin defendants. Appellant cannot vacate the 1996 default judgment in favor of Ramin defendants by suing their attorney. This is another reason why the default judgment on the fifth and sixth causes of action is void as to Brent defendants. “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 . . . ‘[a] defendant who fails to answer admits only facts that are well pleaded.’” (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 829 (Falahati); see also Rose v. Lawton (1963) 215 Cal.App.2d 18, 20 [“‘If . . . the allegations [of the complaint] do not support the demand for relief, the plaintiff is no more entitled to that relief by default judgment than he would be if the defendant had expressly admitted all of the allegations. Such a default judgment is erroneous, and will be reversed on appeal’”].)

Thus, we must affirm the trial court’s order vacating the 2017 default judgment as to the fifth and sixth causes of action.

Ramin Defendants

Ramin defendants argue, “Because [appellant] sued [them] and [their] attorney Brent for conspiracy, [appellant] was required to first obtain an order under Civil Code section 1714.10.” Civil Code section 1714.10, subdivision (a) provides, “No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action.” The statute is inapplicable here because appellant’s complaint does not state a cause of action against Brent for a civil conspiracy with her clients.

Ramin defendants contend that the entry of the defaults and default judgment was precluded because appellant’s “[c]omplaint consisted of allegations comprising a compulsory cross-complaint in the underlying fraudulent transfer action filed by [Ramin] against [appellant].” The relevant statute is section 426.30, subdivision (a), which provides: “[I]f a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.”

We need not decide whether the causes of action in Ramin’s complaint against appellant and in appellant’s complaint against Ramin defendants are “related” within the meaning of section 426.30, subdivision (a). Even if the compulsory cross-complaint statute were applicable, it would not render the default judgment against Ramin defendants void. “Section 426.30 is an affirmative defense that completely disposes of any cause of action to which it applies.” (Chao Fu, Inc. v. Chen (2012) 206 Cal.App.4th 48, 56.) “Failure to . . . plead section 426.30 constitutes a waiver of this defense.” (Hulsey v. Koehler (1990) 218 Cal.App.3d 1150, 1153.) By not filing a response to appellant’s complaint, Ramin defendants waived the compulsory cross-complaint defense.

Ramin defendants argue that the defaults and default judgment entered against them are void under section 473(d) “because the service of summons [upon them in Tehran] never took place.” In the trial court Ramin submitted a declaration under penalty of perjury to this effect. Ramin’s declaration conflicts with the proofs of service signed by Masoud Farivar. Farivar declared under penalty of perjury that he had effected substituted service on Ramin defendants by handing copies of the summons and complaint to the housekeeper at Ramin’s residence in Tehran. The trial court erroneously concluded that it was not necessary to decide whether Ramin defendants had been properly served because they were entitled to mandatory relief under section 473(b).

Thus, as to Ramin defendants, the matter must be remanded to the trial court with directions to conduct a hearing on whether they were served with process as required by statute. If they were not so served, the default judgment and underlying defaults entered against them are void. ““‘[A] default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void.’”” (OC Interior Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th 1318, 1331.)

BRENT DEFENDANTS’ CROSS-APPEAL FROM

THE 2017 DEFAULT JUDGMENT

Brent defendants’ protective cross-appeal from the 2017 default judgment is triggered because we reverse the trial court’s order vacating the default judgment on the first through fourth causes of action. The award of attorney fees is invalid because appellant did not demand attorney fees in his complaint. (Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 495; Feminist Women’s Health Center v. Blythe (1995) 32 Cal.App.4th 1641, 1676.) In any event, appellant did not incur attorney fees because he represented himself throughout the proceedings. The award of punitive damages is also invalid because before the default was taken appellant did not serve Brent defendants with a notice of the amount of punitive damages sought. (§ 425.115, subds. (b), (f); Wiley v. Rhodes (1990) 223 Cal.App.3d 1470, 1473.)

Brent defendants “have challenged the sufficiency of the evidence to support the [compensatory] damages [of $1,826,000] awarded to [appellant on the first through fourth causes of

action], and they were right to do so. [Appellant’s] effort to prove up his damages was wholly insufficient to sustain any award of damages in his favor.” (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 289 (Kim).) “[I]t is incumbent upon the [appellant] to prove up his damages, with actual evidence. . . . [Appellant’s declaration in support of an award of damages] may establish the amount [he] feels entitled to recover, but it fails utterly to demonstrate what he is legally entitled to recover. [His] failure to offer any significant evidence to support his damage claims precludes any monetary judgment in his favor.” (Id. at p. 272.) “[W]hile Code of Civil Procedure section 585 does give the court discretion to ‘permit the use of affidavits, in lieu of personal testimony, as to all or any part of the evidence or proof required or permitted to be offered, received, or heard in those cases,’ it specifically requires that ‘[t]he facts stated in the affidavit or affidavits shall be within the personal knowledge of the affiant and shall be set forth with particularity, and each affidavit shall show affirmatively that the affiant, if sworn as a witness, can testify competently thereto.’ (Code Civ. Proc., § 585, subd. (d), italics added.)” (Id. at p. 287.)

Appellant claims: “Prior to Defendants’ obtaining a wrongful Judgment against me some time in 1996 . . . , I was purchasing at least two (2) properties per year, which I was able to sell and obtain profit of at least $60,000 per year. However, due to Defendants’ wrongful conduct . . . , I did not earn said average annual profit from the sale of the properties of $60,000 for the last fourteen (14) years, or a total of $840,000.” This is conclusory, rank speculation devoid of any supporting facts. “‘[I]t is fundamental that “damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery.”’ [Citation.]” (Regalado v. Callaghan (2016) 3 Cal.App.5th 582, 602.)

Appellant further claims that he lost “equity in several real properties . . . in the total amount of $986,000” because of the “foreclosure or fire sale due to my inability to apply for and get approved for refinancing due [to] the recorded [1996 default] Judgment against me and my wife.” Appellant lists five of his properties that were foreclosed. His claim of loss of equity, without a recitation of supporting facts, is conclusory and insufficient to prove up damages of $986,000.

“‘“When the plaintiff has had full and fair opportunity to present the case, and the evidence is insufficient as a matter of law to support plaintiff’s cause of action, a judgment for defendant is required and no new trial is ordinarily allowed, save for newly discovered evidence. . . . Certainly, where the plaintiff’s evidence is insufficient as a matter of law to support a judgment for plaintiff, a reversal with directions to enter judgment for the defendant is proper.”’ [Citations.] [¶] . . . [Therefore, Brent defendants] are entitled to entry of judgment in their favor [on the first through fourth causes of action].” (Kim, supra, 201 Cal.App.4th at p. 289.) As to Brent defendants, “[w]e consequently reverse the default judgment entered in [appellant’s] favor [on the first through fourth causes of action], and remand the case to the trial court with directions to enter judgment in [Brent defendants’] favor.” (Id. at p. 272.)

Ramin Defendants Are Entitled to the Benefit of the Reversal

of the 2017 Default Judgment Against Brent Defendants

Ramin defendants abandoned their cross-appeal from the 2017 default judgment. “As a general rule, where only one of several parties appeals from a judgment, the appeal includes only that portion of the judgment adverse to the appealing party’s interest, and the judgment is considered final as to the nonappealing parties. [Citations.] That general rule has an important exception, however: ‘[W]here the part [of a judgment] appealed from is so interwoven and connected with the remainder, . . . that the appeal from a part of it . . . involves a consideration of the whole, . . . if a reversal is ordered it should extend to the entire judgment. The appellate court, in such cases, must have power to do that which justice requires and may extend its reversal as far as may be deemed necessary to accomplish that end.’” (Estate of McDill (1975) 14 Cal.3d 831, 840.)

The exception applies here to the 2017 default judgment against Ramin defendants insofar as it awarded damages and attorney fees to appellant. It would be manifestly unjust to reverse the judgment as to Brent defendants but allow the judgment to stand as to Ramin defendants. For the same reasons that the evidence is insufficient to support the damages award against Brent defendants, it is also insufficient to support the identical damages award against Ramin defendants. (See Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2019) ¶ 8:197, p. 8-162 [“The rule permitting reversal of an ‘interwoven’ portion of a judgment affecting a nonappealing party . . . also applies to error against a respondent who has not filed a cross-appeal: If the court finds reversible error as to appellant, it can also reverse as to error against respondent, notwithstanding the absence of a cross-appeal, where the appealed portion of the judgment is ‘so interwoven’ with the unappealed portion that the court’s reasoning necessarily must apply equally to both points”].)

The Fifth and Sixth Causes of Action

The 2017 default judgment on the fifth and sixth causes of action vacated the 1996 default judgment and cancelled the abstracts of judgment recorded in reliance on that judgment. As explained ante, at pp. 16-17, the default judgment on the fifth and sixth causes of action is void because the trial court did not conduct an evidentiary hearing as required by section 764.010.

Although the fifth and sixth causes of action are alleged against all defendants, only the causes of action against Ramin defendants can provide appellant with the relief he seeks: the vacation of the 1996 default judgment and the cancellation of the abstracts of judgment recorded in reliance upon that judgment. Appellant’s causes of action against Brent defendants rest on their conduct as attorneys for Ramin defendants. The complaint alleges that in November 1991 “Brent and her Law Firm took over the legal representation in [the lawsuit against appellant] on [Hassan’s (Ramin’s father’s)] behalf.” The sixth cause of action requests that the court set aside “[t]he [1996] Default Judgment and Abstracts of Judgment obtained by [Brent] Defendants on [Hassan’s] behalf including that of his successor-in-interest [Ramin] . . . .” Appellant cannot vacate the 1996 default judgment entered in Hassan’s favor by suing Hassan’s attorney.

Thus, the fifth and sixth causes of action fail to state a cause of action against Brent defendants. This is another reason why the default judgment as to Brent defendants on the fifth and sixth causes of action must be vacated. “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 . . . ‘[a] defendant who fails to answer admits only facts that are well pleaded.’ ” (Falahati, supra, 127 Cal.App.4th at p. 829.) By failing to answer appellant’s complaint, Brent defendants admitted that they were purporting to act on behalf of Ramin defendants’ as their attorney.

Disposition

As to defendant Gonzales, the order vacating the 2017 default judgment and setting aside the default is affirmed. Gonzales’s protective cross-appeal is dismissed as moot.

As to Brent defendants, the order vacating the 2017 default judgment and setting aside the defaults on the first through fourth causes of action is reversed. But based on Brent defendants’ protective cross-appeal, the default judgment on the first through fourth causes of action is reversed. The reversal includes the award of compensatory and punitive damages as well as attorney fees. On these causes of action, the trial court is directed to enter judgment in favor of Brent defendants and against appellant.

Also as to Brent defendants, the order vacating the 2017 default judgment and setting aside the defaults on the fifth and sixth causes of action is affirmed because the judgment is void for failure to conduct an evidentiary hearing as required by section 764.010 and because the fifth and sixth causes of action do not state a cause of action for relief against Brent defendants.

As to Ramin defendants, the matter is remanded to the trial court with directions to conduct a hearing on whether they were served with process in the manner required by statute. If the court finds that they were not so served, its order vacating the 2017 default judgment and setting aside the underlying defaults shall stand affirmed as to Ramin defendants.

If the court finds that Ramin defendants were properly served, then:

(1) As to the first through third causes of action seeking damages, the order vacating the 2017 default judgment and setting aside the defaults is reversed. (The fourth cause of action for intentional misrepresentation is against only Brent defendants.) But as to these three causes of action, the default judgment against Ramin defendants is reversed for insufficiency of the evidence, and the trial court is directed to enter judgment in their favor. The reversal includes the award of compensatory and punitive damages as well as attorney fees.

(2) As to the fifth and sixth causes of action against Ramin defendants, the order vacating the default judgment is affirmed because the trial court did not conduct an evidentiary hearing as required by section 764.010. The order setting aside the underlying defaults is reversed. The trial court shall conduct the required evidentiary hearing and shall determine whether appellant is entitled to the relief sought in these two causes of action, i.e., the vacation of the 1996 default judgment and the cancellation of the abstracts of judgment recorded in reliance on that judgment.

The parties shall bear their own costs on appeal.

NOT TO BE PUBLISHED.

YEGAN, J.

We concur:

GILBERT, P. J.

TANGEMAN, J.
Kent Kellegrew, Judge

Superior Court County of Ventura

______________________________

Michael Khabushani, in propria persona for Plaintiff and Appellant.

Myers, Widders, Gibson, Jones & Feingold, Dennis N. Jones and James E. Perero for Defendants and Appellants, Najila K. Brent, Law Offices of Najila Brent and Najila K. Brent, APLC.

Najila K. Brent for Defendants and Respondents, Ramin Zarrin-Ehteram, Hassan Zarrin-Ehteram, Estate of Hassan Zarrin-Ehteram and Leticia Gonzales.