ACCREDITED SURETY AND CASUALTY COMPANY, INC. VS HOUSHANG POURBEMANI, ET AL.

Tentative Rulings

Case Number: 19STLC09552    Hearing Date: June 1, 2021    Dept: 25

PROCEEDINGS: MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT

MOVING PARTY: Defendant Houshang Pourbemani, in pro per

RESP. PARTY: Plaintiff Accredited Surety and Casualty Company, Inc.

MOTION TO SET ASIDE/VACATE DEFAULT & DEFAULT JUDGMENT

(CCP § 473(d), equitable relief)

TENTATIVE RULING:

Defendant Houshang Pourbemani’s Motion to Set Aside Default and Default Judgment is DENIED.

SERVICE:

[X] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[X] Correct Address (CCP §§ 1013, 1013a) OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: Filed on May 18, 2021 [ ] Late [ ] None

REPLY: None filed as of May 26, 2021 [ ] Late [X] None

ANALYSIS:

I. Background

On October 15, 2019, Plaintiff Accredited Surety and Casualty Company, Inc. (“Plaintiff”) filed an action for indemnity, reimbursement, and interpleader against Defendants Houshang Pourbemani individually and dba Dream Dwell (“Pourbemani”), Best Cheer Stone, Inc. (“Best Stone”), Payman Soltani (“Soltani”), Raz Khavari (“Khavari”), and Ardeshir Bourbour (“Bourbour”) (collectively, “Defendants”). Defendants Soltani and Bourbour filed an Answer on November 19, 2019, and November 27, 2019, respectively. Defendant Best Cheer was dismissed on October 29, 2019, and Defendant Khavari was dismissed on November 19, 2019.

Following Defendant Pourbemani’s failure to respond to the Complaint, default was entered against him on December 10, 2019, and a default judgment of $19,521.91 was entered on September 16, 2020.

On March 11, 2021, Defendant Pourbemani filed the instant Motion to Set Aside Default and Default Judgment (the “Motion”). No opposition was initially filed.

Following Plaintiff’s oral arguments at the April 21 initial hearing, the matter was continued and Plaintiff was ordered to file a brief no more than twenty days before the next hearing. (4/21/21 Minute Order.) In addition, Defendant Pourbemani’s counsel Steven P. Harris, who appeared at the hearing, was ordered to file a substitution of attorney forthwith. (Id.)

Plaintiff filed a brief in opposition and declarations on May 18, 2021. Defendant Pourbemani did not file any response to Plaintiff’s brief or the requested substitution of attorney.

II. Legal Standard & Discussion

A. CCP 473(d) & 473.5

“A summons is the process by which a court acquires personal jurisdiction over a defendant in a civil action. The form of a summons is prescribed by law, and this form must be substantially observed. [Citation.] Service of a substantially defective summons does not confer jurisdiction over a party [citation] and will not support a default judgment. [Citation.]” (MJS Enterprises, Inc. v. Superior Court (1984) 153 Cal.App.3d 555, 557.) “Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void.’ [Citation.]” (Sakaguchi v. Sakaguchi (2009) 173 Cal.App.4th 852, 858, emphasis added.)

A trial court has the inherent power to set aside a judgment void on its face at any time. (Connelly v. Castillo (1987) 190 Cal.App.3d 1583, 1588.) When considering the facial validity of ta judgment, the Court may only consider the contents of the judgment roll. (OC Interior Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th 1318, 1327 (holding that “[t]o prove that the judgment is void, the party challenging the judgment is limited to the judgment roll, i.e., no extrinsic evidence allowed.”).) If the judgment is not void on its face, the time limitations of Code of Civil Procedure section 473.5 apply. (Trackman v. Kenney (2010) 187 Cal.App.4th 175, 180-81; Schekel v. Resnik (1994) 27 Cal.App.4th Supp. 1, 3-4 (“[t]he Rogers court held that the time limitation set forth in Code of Civil Procedure section 473.5 applies by analogy to motions for relief from default judgment valid on its face but otherwise void for improper service” [citing Rogers v. Silverman (1989) 216 Cal.App.3d 1114, 1124.]).)

Actual notice “does not substitute for proper service [and] [u]ntil statutory requirements are satisfied, the court lacks jurisdiction over a defendant. [Citations.]” (Ruttenberg v. Ruttenberg (1997) 53 Cal.App.4th 801, 808-09.)

Defendant Pourbemani seeks to set aside the default and default judgment entered against him arguing the Summons and Complaint were served at an incorrect address. (Mot., pp. 2-3.)

Code of Civil Procedure section 415.20, subdivision (c), provides that, “if the only address reasonably known for the person to be served is a private mailbox obtained through a commercial mail receiving agency, service of process may be effected on the first delivery attempt by leaving a copy of the summons and complaint with the commercial mail receiving agency in the manner described in subdivision (b) of Section 17538.5 of the Business and Professions Code.” Every person with a private mailbox is required to sign an agreement authorizing the commercial mail receiving agency to act as an agent for service of process for him or her. (Bus. & Prof. Code, § 17538.5, subd. (d)(1).) In addition, “[e]very [commercial mail receiving agency] owner shall be required to accept service of process for and on behalf of their mail receiving customers, and for two years after termination of any mail receiving service customer agreement.” (Id.) If the commercial mail receiving agency is served with process for a customer who previously terminated his or her mail service agreement, the commercial mail receiving agency must, within five days, send all documents via first-class mail to the last known or personal address of the mail receiving customer. (Id.)

Plaintiff filed a proof of service showing Defendant Pourbemani, individually and dba Dream Dwell, was served by substitute service at 19528 Ventura Blvd., #752, Tarzana, CA 91356 (the “Private Mailbox Address”) with Andrea Doe, the UPS Store Clerk on October 24, 2019. (11/6/19 Proof of Service.) The proof of service was executed by Lauri Greenberg, a registered process server, and includes a declaration stating that copies of the Summons and Complaint were mailed to the Private Mailbox Address that same day. (Id.) The proof of service also states that Defendant Pourbemani’s physical address is not known. (Id.) Thus, service at the Private Mailbox Address was permitted.

Defendant Pourbemani argues he is not the owner of the box at the Private Mailbox Address at which the Summons and Complaint were served. (Mot., p. 5.) He states the UPS clerk erred in accepting service of the Summons and Complaint without confirming whether Defendant Pourbemani was in fact, the private box holder. (Id.) As evidence, he provides a statement from Daniella Daniali, stating she is the manager of the UPS Store located at the Private Mailbox Address and that there has never been a mailbox under Defendant Pourbemani’s name at that location. (Id., Pourbemani Decl., ¶ 7, Exh. 2.) She also states Defendant Pourbemani does not have access to mailbox #752 because it is not under his name. (Id.) Although Daniali’s statement is signed, it is not signed under penalty of perjury. Thus, it is entitled to little evidentiary weight. (See Code Civ. Proc., § 2015.5)

In its opposition brief, Plaintiff argues the Private Mailbox Address was a proper address for service. First, Plaintiff points out that the Private Mailbox Address is the address Defendant Pourbemani continues to use for his records with the Contractor’s State License Board. (5/18/21 Supp Brief, Blosky Decl., ¶ 20, Exh. 11.) Notably, contractors are required to notify the Contractor’s State License Board of any change of business address within 90 days or risk disciplinary action. (Bus. & Prof. Code, § 7083.)

In addition, Plaintiff submits the declaration of Joseph Blosky, a surety claims consultant at Guardian Group, Inc. (“Guardian”) (5/18/21 Supp. Brief, Blosky Decl., ¶¶ 1-2.) Guardian provides claims consulting services for Plaintiff, and Plaintiff retained Guardian to investigate several claims made against Defendant Pourbemani’s bond. (Id. at ¶¶ 3-4.) Blosky provides a copy of the application submitted to Plaintiff for his contractor’s bond dated February 19, 2019 where he used the Private Mailbox Address as his mailing address. (Id. at ¶ 7, Exh. 1.) The bond issued to Defendant Pourbemani for the term of February 1, 2019 through February 1, 2020 also states his “address for service” is the Private Mailbox Address. (Id. at ¶ 8, Exh. 2.) (Emphasis added.)

Blosky states that he received claims against Defendant Pourbemani’s contractor’s bond in July 2019, August 2019, and October 2019. (Id. at ¶¶ 9, 12, 13.) After the first claim, Blosky reviewed the Contractor’s State License Board records to confirm Defendant Pourbemani’s mailing address, which was the Private Mailbox Address. (Id.) For each claim, Blosky mailed a letter to Defendant Pourbemani at the Private Mailbox Address. (Id. at ¶¶ 9-14, Exhs. 3-6.) Defendant Pourbemani was also mailed a copy of a statutory notice of payment of the various claims submitted against his bond on or about May 26, 2020. (Id. at ¶ 16, Exh. 9.)

Blosky attests that on June 26, 2020, he received a voicemail from a person representing himself to be Defendant Pourbemani requesting a “status. (Id. at ¶ 17.) Blosky returned the call the following day and they discussed the amounts owed. (Id.) During a July 15, 2020 call, Defendant Pourbemani asked that copies of correspondence be forwarded to a different address, but did not state the Private Mailbox Address was no longer the address for his business or otherwise improper. (Id. at ¶ 18.) These calls cast doubt on Defendant Pourbemani’s claim that he did not learn of this action until December 7, 2020. (Mot., Pourbemani Decl., ¶ 5.)

In addition, Defendant Pourbemani did not file a response to Plaintiff’s opposition brief explaining why he did not change his address with the Contractor’s State License Board. Although he does not provide any specific date, Defendant Pourbemani admits that he “learned” Behfar Mousavi, a person he was working with, changed the company address to the Private Mailbox Address, did not have a key to the box, but “was not concerned” and thus did nothing to ensure the address on record with the Contractor’s State License Board was accurate. (Id. at ¶¶ 2-3.)

Defendant Pourbemani also states that his signature on the bond application was forged and that he prepared an affidavit of identity theft, but did not provide a copy of this supposed affidavit. (Id. at ¶ 5.) Again, Defendant Pourbemani did not file a response to Plaintiff’s opposition brief, and to Blosky’s declaration in particular, demonstrating that at the time he discussed the “amounts owed” during the June 2020 and July 2020 phone calls, he also expressed concern that the bond application had been forged.

The Court finds Defendant has not carried his burden to show the Private Mailbox Address was not a proper address for service.

B. Equitable Relief

Defendant Pourbemani also cites the Court’s equitable power to grant relief from a default and default judgment due to extrinsic fraud. (Mot., pp. 3-5.)

“When a default judgment has been obtained, equitable relief may be given only in exceptional circumstances.” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) (Italics in original.) “Even where relief is no longer available under statutory provisions, a trial court generally retains the inherent power to vacate a default judgment…where a party establishes that the judgment or order was void for lack of due process or resulted from extrinsic fraud or mistake.” (County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1228.) “To set aside a judgment based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second, the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last, the moving party must demonstrate diligence in seeking to set aside the default once ... discovered.” (Id., at p. 982.)

Extrinsic fraud occurs when a party is deprived of the opportunity to present a claim or defense because it was kept in ignorance or was in some other way fraudulently prevented from participating in the proceeding by the opposing party. (County of San Diego v. Gorham (2010) 186 Cal.App.4th at p. 1228-29.) Extrinsic mistake is “a term broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits.” (Rappleyea v. Campbell (1994) 8 Cal.4^th 975 at p. 981.)

Defendant Pourbemani argues extrinsic fraud occurred because the UPS clerk accepted service for a box without verifying he was the box holder and because Mousavi forged documents with his signature. (Mot., p. 5.) However, extrinsic fraud only occurs when an opposing party fraudulently deprives the moving party of the opportunity to present a defense. (County of San Diego v. Gorham (2010) 186 Cal.App.4th at p. 1228-29.) Neither the UPS clerk nor Mousavi are opposing parties in this case.

Second, Defendant Pourbemani has not demonstrated a satisfactory excuse for not responding to the Complaint exists. Specifically, he has not established he lacked notice. As discussed above, the declaration from Daniali, the purported manager of the UPS Store at the Private Mailbox Address stating Defendant Pourbemani did not have access to box #752 is not signed under penalty of perjury, so it is entitled to little evidentiary weight. Further, that Defendant Pourbemani called Blosky in June and July 2020 regarding correspondence mailed to the Private Mailbox Address casts doubt on his assertion that he did not have access to box #752 or notice of this action until December 2020. Based on these calls, it appears Defendant Pourbemani did have access to that box, and thus, access to the Summons and Complaint that were served there in October 2019. Defendant did not file a response to Plaintiff’s opposition demonstrating otherwise.

Thus, Defendant Pourbemani has not demonstrated he is entitled to equitable relief.

C. Defendant’s Attorney

As a final note, the Court expresses concern over Defendant Pourbemani’s purported counsel, Steven Harris. At the previous hearing, Harris represented himself to be an attorney and for this reason, he was ordered to file a substitution of attorney. (4/21/21 Minute Order.) Plaintiff provides declarations demonstrating there appears to be no record of Harris with the California State Bar, of his supposed organization, the “California Veteran’s Administration”, nor of his supposed office located at 9045 Corbin Ave., 2^nd Floor, Suite 225, Northridge, CA 91324. (5/18/21 Plf. Supp. Brief, Sosa Decl., ¶¶ 2-4, Exh. 1, Stratton Decl., ¶¶ 2-10, Exhs. 1-4.) Having conducted its own search, the Court could not find a “Steven P. Harris” with Northridge address on the California State Bar website either.

III. Conclusion & Order

For the foregoing reasons, Defendant Houshang Pourbemani’s Motion to Set Aside Default and Default Judgment is DENIED.

Moving party is ordered to give notice.

Case Number: 19STLC09552    Hearing Date: March 05, 2020    Dept: 25

MOTION TO DEPOSIT BY STAKEHOLDER, FOR DISCHARGE, AND FOR ATTORNEY’S FEES

(CCP §§ 386, 386.5)

TENTATIVE RULING:

Plaintiff Accredited Surety and Casualty Company, Inc.’s Motion to Deposit by Stakeholder and for Discharge is GRANTED. Plaintiff’s request for attorney’s fees and costs is also GRANTED in the amount of $2,000.00. Interpleader funds of $13,000.00 are to be deposited within ten (10) days of receipt of this order.

Trial date remains scheduled for April 13, 2021 at 8:30 a.m. in Department 25.

ANALYSIS:

1. Background

On October 15, 2019, Plaintiff Accredited Surety and Casualty Company, Inc. (“Plaintiff”) filed an action for indemnity, reimbursement, and interpleader against Defendants Houshang Pourbemani individually and dba Dream Dwell (“Pourbemani”), Best Cheer Stone, Inc. (“Best Stone”), Payman Soltani (“Soltani”), Raz Khavari (“Khavari”), and Ardeshir Bourbour (“Bourbour”) (collectively, “Defendants”). Defendants Soltani and Bourbour filed an Answer on November 19, 2019, and November 27, 2019, respectively. Defendant Best Cheer was dismissed on October 29, 2019, and Defendant Khavari was dismissed on November 19, 2019. Default was entered as to Defendant Pourbemani on December 10, 2019.

On January 22, 2020, Plaintiff filed the instant Motion to Deposit by Stakeholder, for Discharge, and for Attorney’s Fees (the “Motion”). To date, no opposition briefs have been filed.

1. Legal Standard

Interpleader is a procedure whereby a person holding money or personal property to which conflicting claims are being made by others, can join the adverse claimants and force them to litigate their claims among themselves. (For example, an escrow-holder who receives conflicting demands from the parties to the escrow regarding the funds or documents he or she holds.) (Hancock Oil Co. v. Hopkins (1944) 24 C2d 497, 508; City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122.)

Once the stakeholder’s right to interplead is established, and he or she deposits the money or personal property in court, he or she may be discharged from liability to any of the claimants. This enables the stakeholder to avoid a multiplicity of actions, and the risk of inconsistent results if each of the claimants were to sue him or her separately. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 874; City of Morgan Hill v. Brown, supra, 71 Cal.App.4th at 1122.)

“An interpleader action is traditionally viewed as two suits: one between the stakeholder and the claimants to determine the stakeholder's right to interplead, and the other among the claimants to determine who shall receive the funds interpleaded ... As against the stakeholder, claimants may raise only matters which go to whether the suit is properly one for interpleader; i.e., whether the elements of an interpleader action are present.” (State Farm Fire & Cas. Co. v. Pietak (2001) 90 Cal.App.4th 600, 612.)

If the defendant-stakeholder claims no interest in the funds or property held, he or she need not file an interpleader cross-complaint. He or she may simply apply to the court for permission to deposit the money or property with the court clerk, and for an order discharging him or her from further liability to the adverse claimants. Such order will also substitute the adverse claimants as parties to the action; or, if only money is involved, simply dismiss the stakeholder. (Code Civ. Proc., §§ 386, subd. (a), 386.5.) The motion must be supported by an affidavit by the stakeholder establishing the ground for interpleader. (Code Civ. Proc., § 386, Subd. (a).) The supporting affidavit must also state that the moving party is “a mere stakeholder with no interest in the amount or any portion thereof and that conflicting demands have been made upon him for the amount by parties to the action…” (Code Civ. Proc., § 386.5.) Notice of the motion must be served on each of the adverse claimants to the funds or property. (Code Civ. Proc., §§ 386, subd. (a), 386.5.) “Where a deposit has been made pursuant to Section 386, the court shall, upon the application of any party to the action, order such deposit to be invested in an insured interest-bearing account.” (Code Civ. Proc., § 386.1.)

The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred. (UAP-Columbus JV 326132 v. Nesbitt (1991) 234 Cal.App.3d 1028, 1036.) The court may order payment thereof out of the funds deposited by the stakeholder. (Code Civ. Proc., § 386.6.)

1. Discussion

Here, all claimants have been served with the Summons and Complaint, and have either filed an answer, been dismissed, or have defaulted. The subject matter of this action is a $15,000.00 contractor’s bond. (Mot., Sosa Decl., ¶ 2.) Plaintiff states it has no interest in the proceeds and that it cannot determine the validity of the conflicting demands that have been made as to the funds. (Id. at ¶ 8.) Thus, upon deposit of the funds with the Court, Plaintiff is discharged from further liability. In addition, the Court enters a restraining order to prevent the prosecution of other actions affecting the rights and obligations as between the parties in the interpleader. (Code Civ. Proc., §§ 386, 386.5.)

Furthermore, the fees and costs sought by Plaintiff are proper. Plaintiff’s counsel has expended substantial attorney’s fees and costs brining this action and protecting itself from liability. Specifically, Plaintiff’s counsel filed the instant action and Motion, served all Defendants, will deposit the bond, and sought to preserve the surplus funds. (Mot., Sosa Decl., ¶ 6, 7, 10, Exh. 1.) Therefore, fees and costs are awarded in the amount of $2,000.00. (Id. at ¶ 10.) Plaintiff is to deposit funds of $13,000.00 within ten (10) days of receipt of this order.

1. Conclusion & Order

For the foregoing reasons, Plaintiff Accredited Surety and Casualty Company, Inc.’s Motion to Deposit by Stakeholder and for Discharge is GRANTED. Plaintiff’s request for attorney’s fees and costs is also GRANTED in the amount of $2,000.00. Interpleader funds of $13,000.00 are to be deposited within ten (10) days of receipt of this order.

Trial date remains scheduled for April 13, 2021 at 8:30 a.m. in Department 25.

Moving party is ordered to give notice.