APPELLANT’S REPLY BRIEF
INTRODUCTION &
STATEMENT OF THE CASE
This is an appeal from an order denying a motion to vacate the renewal
of a default judgment. Appellant Kelley Lynch moved for the order on the
ground that Leonard Cohen and LC Investments, LLC, the original judgment
creditors, failed to serve the summons and complaint, the proof of substituted
service is evidence of extrinsic fraud, respondent has submitted no evidence whatsoever
proving that the alleged Jane Doe existed and/or was served, the Court failed
to obtain jurisdiction, the Court has no jurisdiction over the corporations,
Cohen had no standing to bring the suit in his individual capacity, a number of
the corporations inserted into the judgment were and remain suspended, and, the
judgment as well as the renewal of judgment are void. The court denied her motion. Please refer to Appellant’s Opening Brief for
the facts and discussion set forth therein.
On August 9,
2013, Appellant filed a Motion to Vacate and/or Modify Default Judgment entered
May 15, 2006; Memorandum of Points & Authorities; Declarations of Kelley
Lynch and Rutger Penick. 1 CT 7.
On January 6,
2014, Respondent filed an Opposition to Defendant’s motion; Declaration of
Scott Edelman; Declaration of Michelle Rice; Declaration of Robert Kory; and
Declaration of Leonard Cohen. Leonard
Cohen’s declaration addressed his statements that Lynch was in fact Jane
Doe. Cohen submitted two photographs
supporting his false assertions. 1 CT 107. Michelle Rice’s declaration contained a
tremendous amount of immaterial, irrelevant information, which seemed centered
around personal attacks on Lynch and prejudicial information meant to influence
the Court. 2 CT 232. It is of interest to note that Rice’s
declaration confirmed that Cohen did not hear from Lynch, following issuance of
the Colorado restraining order, until early 2011. This followed both FTB and IRS instructing
Appellant to obtain the tax information Leonard Cohen and the corporations were
required to provide her. “In early 2011,
upon Mr. Cohen’s return to Los Angeles at the conclusion of his 2008-2010 World
Tour, Ms. Lynch resumed her harassment of Mr. Cohen and my law partner, Robert
Kory …” 2 CT 234. Robert Kory’s declaration essentially
addressed federal tax matters and arguments.
The declaration confirmed that the fraudulent complaint narrative, LA
Superior Court Case No. BC338322, was used to file and amend Leonard Cohen’s
personal returns and apply for/obtain federal and state tax refunds. This is a relevant and material issue as Kory
& Rice, LLP and other Cohen representatives refused to respond to Lynch’s
statements that she was not served the summons and complaint. By December 2005, Leonard Cohen and his
representatives clearly felt that a default judgment was assured or they most
likely wouldn’t have filed personal tax returns that could later be attacked as
fraudulent. Letters Kory sent to IRS
were attached to his declaration which had no relevance or materiality to the
issues before the Court. Robert Kory’s
letters were replete with fraudulent misrepresentations that Lynch has
addressed with Internal Revenue Service directly. 2 CT 296.
On
January 17, 2014, the Court denied Appellant’s original motion to set aside the
May 15, 2006 default judgment.
On
July 13, 2015, Respondent filed a renewal of judgment totaling
$14,059,183.80. At the October 6, 2015
hearing on her motions, Appellant challenged the initial judgment amount and
additional application of $6,717,808.80 in financial interest as fraud and
noted that Respondent was engaged in extortion with respect to these
amounts. 1 RT 5 – 6 (10.06.15 hearing
transcript); 2 CT 360.
On
July 28, 2015, Appellant filed a Motion to Set Aside Renewal of Judgment;
Declarations of Kelley Lynch, John Rutger Penick, Etc. The motion was made, in accordance with CCP
Section 683.170, on the grounds that Appellant was entitled to relief as the
original judgment (May 15, 2006) and renewal of judgment (July 13, 2015) were
void and taken against her through extrinsic fraud. Thus, Appellant was deprived of a fair
adversary hearing. 1 Supp. CT 1.
On
September 21, 2015, Respondent filed an Opposition to Appellant’s Motion to Set
Aside July 13, 2015 Renewal of Judgment.
2 CT 367.
On
October 16, 2015, Appellant filed her Notice of Appeal. 2 CT 400.
On
February 23, 2016, Appellant lodged the Reporter’s Transcript dated October 6,
2015 with the Court of Appeals. RT
(10.06.15).
On
April 20, 2017, Appellant filed her Opening Brief.
On
July 20, 2017, Respondent’s Brief was filed.
Respondent’s
Brief opened by arguing that this appeal is the “Groundhog Day appeal” due to
the fact that it involves a “situation in which a series of unwelcome or
tedious events appear to be recurring in exactly the same way.” [RB 8.]
Appellant finds this characterization of the appeal shameless, offensive and unprofessional in
the extreme. California law is clear
that “An order made by a
court or judge wholly without jurisdiction is void and of no force or effect … A
void order remains without effect as completely as if never entered.” Svistunoff v Svistunoff (1952)
108 CA2d 638. Furthermore, as the
judgment deprived Lynch of substantial property interests, the due process
violations are egregious under both state and federal constitutions.
DISCUSSION
Section 683.120 provides: “(a) The judgment creditor may renew a
judgment by filing an application for renewal of the judgment with the court in
which the judgment was entered. (b) Except
as otherwise provided in this article, the filing of the application renews the
judgment in the amount determined under Section 683.150 and extends the period
of enforceability of the judgment as renewed for a period of 10 years from the date
the application is filed.” Section 683.170,
subdivision (a), provides, “The renewal of a judgment pursuant to this article
may be vacated on any ground that would be a defense to an action on the
judgment, including the ground that the amount of the renewed judgment as
entered pursuant to this article is incorrect, and shall be vacated if the
application for renewal was filed within five years from the time the judgment
was previously renewed under this article.”
The denial of an order to vacate a renewal of a judgment is an
appealable order. Jonathan Neil & Associates, Inc. v.
Jones (2006) 138
Cal.App.4th 1481, 1487.
Respondent’s Reply Brief Arguments
Respondent’s generally have argued as follows: “Appellant’s motion to vacate renewal of the judgment is a motion for
reconsideration by another name. The
principal ground she asserts is the same as the ground she relied on in the
previous, unsuccessful motion: that she
was not served the summons and complaint, and therefore the default judgment
and renewal are void. (AOB 29). In other words, she is again seeking
reconsideration of the 2014 order denying her motion to vacate the 2006 default
judgment. The outcome of the motion to vacate the renewal is controlled by the
B265753 decision. In that case, the
court dismissed Lynch’s appeal from the denial of her motion for terminating
sanctions on the ground that “orders denying reconsideration motions are not
appealable’ but may be reviewed only as part of a timely appeal from the
underlying order, but “Lynch did not appeal from the order denying her 2013
motion to vacate.” (B265753 Opin.
P.3.)” (Respondent’s Brief 23-24). This is an unpublished opinion
in an unrelated case. California Rules
of Court Rule 8.1115 states that “...an opinion of a California Court of Appeal
or superior court appellate division that is not certified for publication or
ordered published must not be cited or relied on by a court or a party in any
other action.” The facts in that case,
which involved a motion for terminating sanctions (related to fraud upon the
court) are entirely different from the facts upon which Appellant’s motion to
vacate the renewal of judgment and/or this appeal are based.
Respondent
further argued that 1) the Court should dismiss this appeal in light of its
decision in Case No. B265753. RB 24; 2)
Lynch forfeited any jurisdiction challenge in the judgment by making a general
appearance. Notes that Trial Court deny
discuss this reason. RB 27. Lynch argued the general rule does not apply
where the judgments are void. AOB 34-35. RB 30; and, 3) The Renewal of Judgment is
Valid. Because the previous decision
controls and because Lynch has waived any further challenge to jurisdiction,
the court need not reach the “merits” of the appeal. But if the court were to revisit the issue of
jurisdiction to impose a default judgment on Lynch, it should affirm. Lynch has not demonstrated any valid grounds
for setting aside the renewal of the judgment.
RB 31. This Court should not
dismiss this appeal based upon a decision related to a motion for terminating
sanctions that is unrelated to the motion to vacate the renewal of the default
judgment; Lynch did not make a general appearance and/or forfeit any
jurisdictional challenges; and the renewal of the default judgment is void for
lack of jurisdiction.
The Defenses Available To The Judgment Debtor Are the Same As In An
Independent Action On The Judgment
As set
forth in Goldman
v Simpson (2008) 160 CA4th 255,
260:
Before
the 1982 enactment of the Enforcement of Judgments Law (§ 680.010 et seq.), the
sole method by which a judgment creditor could extend the enforcement period of
a money judgment was by obtaining a new judgment against the judgment debtor in
an independent action based on the judgment. (See Pratali v. Gates (1992) 4
Cal.App.4th 632, 637-638, 5
Cal.Rptr.2d 733.) In the Enforcement of Judgments Law, the
Legislature adopted an alternative summary procedure for renewal. (Ibid.; §
683.050; see Recommendation Proposing the Enforcement of Judgments Law (Oct.
1980) 15 Cal. Law Revision Com. Rep. (1980) p. 2009.) Under this procedure, a
money judgment is enforceable for 10 years from the date it is entered. (§
683.020.) To obtain a renewal of the judgment, the judgment creditor must file
an application for renewal with the clerk of the court that entered the
judgment before the expiration of the 10-year period of enforceability. (§
683.130, subd. (a); see § 683.140 [setting forth information to be included in
application].) "Upon the filing of the application, the court clerk shall
enter the renewal of the judgment in the court records." (§ 683.150, subd.
(a).) The creditor must serve notice of the renewal on the debtor, (§ 683.160,
subd. (a)), and the debtor then has 30 days after service to make a motion to
vacate or modify the renewal (ibid.;see § 683.170, subd. (b)).
Thus, a judgment creditor
has two distinct methods by which to continue to pursue collection of a
judgment as it nears expiration of the 10-year period of enforceability: the
renewal of judgment provisions set forth in sections 683.110 et seq., or an
independent action on the judgment. Although the two methods are distinct, the
defenses available to the judgment debtor in the statutory procedure are the
same as in an independent action on the judgment. As here relevant, section
683.170, subdivision (a), provides that "[t]he renewal of a judgment
pursuant to this article may be vacated on any ground that would be a defense
to an action on the judgment.
In an independent action on a judgment, the debtor may
challenge the judgment "in accordance with the rules and principles governing
collateral attack" (Kirkpatrick
v. Harvey (1942) 51 Cal.App.2d 170, 172, 124 P.2d 367; see
also Cradduck v. Financial
Indent. Co. (1966) 242
Cal.App.2d 850, 855, 52 Cal.Rptr. 90), including "lack of personal or subject matter
jurisdiction … Such a collateral attack challenges the
jurisdiction of the court to enter the original judgment.
Certainly, therefore, in making a statutory motion under section 683.170,
subdivision (a), to vacate a renewal of judgment, the debtor may contend that
the court lacked personal jurisdiction at the time of the initial
judgment. (See Fidelity Creditor Service, Inc. v. Browne (2001) 89
Cal.App.4th 195, 201-202, 106
Cal.Rptr.2d 854 [failure to have ever
served process on a defendant is a defense to an action on the judgment and
therefore can be raised on a § 683.170 motion].)
The
statutory renewal of judgment is an automatic, ministerial act accomplished by
the clerk of the court; entry of the renewal of judgment does not constitute a
new or separate judgment. "Filing the renewal application
(and paying the appropriate filing fee, Gov.C. § 70626(b)) results in automatic renewal
of the judgment. No court order or new judgment is required. The court clerk
simply enters the renewal of judgment in the court records. [See CCP §
683.150];Jonathan
Neil & Assocs., Inc. v. Jones (2006) [138 Cal.App.4th 1481, 1487, 1489[, 42 Cal.Rptr.3d 350]." (Ahart, Cal. Practice Guide:
Enforcing Judgments and Debts (The Rutter Group 2007) 116:75, p. 6A-41.) Thus,
"[t]he judgment renewal procedure is a different mechanism to extend the
life of a judgment than that of bringing an independent action on a judgment. (Fidelity
Creditor Service v. Browne, supra, 89 Cal.App.4th at p. 200[, 106 Cal.Rptr.2d 854].) Entry by the trial court clerk of a
renewal is a ministerial act." (Jonathan Neil & Associates, Inc. v.
Jones, supra, 138 Cal.App.4th at p. 1489, fn. 1, 42 Cal.Rptr.3d 350.) "[R]enewal does not create a new
judgment or modify the present judgment. Renewal merely extends the
enforceability of the judgment." (Id. at p. 1489, 42 Cal.Rptr.3d 350.) The renewed judgment “has no independent
existence” from the original judgment. (Id. at p. 1490, 42 Cal.Rptr.3d 350.) .”
A Collateral Attack On A
Judgment Is Permissible In An Independent Action In Equity
Section 683.170, subdivision (a), provides
that “the renewal of a judgment pursuant to this article may be vacated on any
ground that would be a defense to an [independent] action on the
judgment.” In
an independent action on a judgment, the debtor may challenge the judgment “in
accordance with the rules and principles governing collateral attack.” See Kirkpatrick v. Harvey and Cradduck v. Financial Indent. Co.
A collateral
attack on a judgment is fundamentally different from a motion to vacate a
judgment in that it ordinarily involves initiating a lawsuit to vacate the
judgment for lack of personal jurisdiction. The complaint could also
include other causes of action such as vacating the judgment on the grounds of
extrinsic fraud or mistake in certain situations. Appellant’s motion to vacate the renewal of
judgment, and all defenses available to her, should be viewed in the identical
light as that of an independent action in equity.
With respect to an
independent action in equity, there are no time limits for a collateral attack
on a judgment. The party seeking to
vacate the judgment is allowed the full panoply of discovery methods utilized
in California litigation including discovery requests, depositions, and most
importantly, the use of oral testimony.
A California Court of Appeal ruled that laches cannot be invoked as a
defense in cases where there has been a complete failure of service of process
upon a defendant. See County of San Diego v. Gorham (2010) 186
CA4th 1215, 1229. Prejudice is not a
factor in setting aside a void judgment or order. See Sindler v. Brennan (2003) 105
CA4th 1350, 1354.
A denial of any
motion made under section 473 of the Code of Civil Procedure generally does not
preclude an independent action in equity to set aside the judgment. In other words, the denial of the previous
motion is not entitled to collateral estoppel effect in most cases. See Groves
v. Peterson (2002) 100 CA4th 659, 668.
In that case the Court of Appeals held that collateral estoppel may
apply if the defendant had an opportunity to present oral testimony at the
section 473 motion hearing and the issues were fully litigated. In the instant case, the issues have never
been litigated and no oral testimony has ever been permitted.
The reasoning
behind the general rule that the denial of the previous motion is not entitled
to collateral estoppel effect, which has been well settled in California for
over 100 years, is the fact that in the standard motion procedure, the moving
party is limited to presenting affidavits of voluntary witnesses unless the
trial court exercises discretion and permits a greater latitude. In using
the motion procedure the party does not have the right to produce oral
testimony or to compel witnesses to attend for deposition or
cross-examination. The motion procedure, while simpler and more
convenient, does not involve all the aspects of full litigation. Because
the remedies of a motion in the underlying case and an independent action in
equity are cumulative, parties should be entitled to resort first to the
convenient and expeditious remedy without worrying about the issue of
collateral estoppel if the motion is denied. Thus even if a section
473 motion has been denied, parties may still pursue an independent action that
affords them all the advantages of a regular trial of the issue.
Prior Order Does Not Collaterally Estop The
Subsequent Action
Groves
v. Peterson (2002) 100 Cal. App. 4th 659
held as follows:
In the
specific context of the present case, where the issue is whether the prior
denial of a motion in the underlying case to set aside a default and default
judgment should be given collateral estoppel effect so as to bar a subsequent
independent action in equity to set aside the prior judgment, a long line of
cases has established a rule that such prior order does not collaterally estop
the subsequent action. (Estudillo v.
Security Loan etc. Co. (1906) 149 Cal. 556, 564, 565; Jeffords v. Young
(1929) 98 Cal.App. 400, 406-407; Wilson v. Wilson (1942) 55
Cal.App.2d 421, 426; Rose v. Fuqua (1962) 200 Cal.App.2d 719, 724; Otani
v. Kisling (1963) 219 Cal.App.2d 438, 442; Huff v. Mendoza (1980) 109
Cal.App.3d 677, 681; Rohrbasser v. Lederer, supra, 179
Cal.App.3d 290, 297-300.)… The present case involves causes of action to
set aside the prior judgment for lack of service of process or on equitable
grounds. Accordingly, the broader aspect
of res judicata (precluding any subsequent litigation on the same cause of action)
is not involved. Instead, the narrower
aspect known as collateral estoppel or issue preclusion is involved. (Rohrbasser v. Lederer, supra, 179
Cal.App.3d at pp. 296-297.) This
requires proof that the particular issue was actually litigated and necessarily
decided in the prior action. (Id. at
p. 297.) … As explained in the Supreme Court’s early case and reiterated
in the recent case in this line, the reason for this rule is: in the motion procedure the moving party is
limited to presenting ex parte affidavits of voluntary witnesses, unless the
trial court in its discretion permits a greater latitude. The party does not have the right to produce
oral testimony or to compel witnesses to attend for deposition or
cross-examination. In other words, the
motion procedure does not involve all the aspects of full litigation. The remedies of a motion in the underlying
case and an independent action in equity are cumulative. The motion procedure is simpler and more convenient. The party should be entitled to resort first
to the convenient and expeditious remedy, without penalty of the bar of
collateral estoppel if the motion is denied.
Despite denial of the motion, the party may then pursue an independent
action that affords the party all the advantages of a regular trial of the
issue. (Estudillo v. Security Loan
etc. Co., supra, 149 Cal. at pp. 564, 565; Rohrbasser v. Lederer,
supra, 179 Cal.App.3d at pp. 297-298, 299.) Applying this rule to the present case, the
trial court erred in concluding Groves’s present action is barred by collateral
estoppel. The subsequent action is not
barred even if the trial court actually decided the disputed issue against
Groves on the motion. Because of the
limitations of the motion procedure, the California courts do not treat the
denial of the motion as a bar to the subsequent action … Another line of cases has branched off to create an exception to
the general rule. These cases hold that
collateral estoppel will bar the subsequent independent action in equity if the
record of the prior proceedings shows the moving party was in fact given a
hearing on the motion that was the equivalent of a trial with oral
testimony. (Darlington v. Basalt Rock Co. (1961) 188 Cal.App.2d 706, 709,
710 [judge held hearing, made clear the court did not restrict the party to
affidavits, interrogated a witness, and gave party full opportunity to develop
the issues by oral testimony]; Preston v.
Wyoming Pac. Oil Co. (1961) 197 Cal.App.2d 517, 527 [trial court held
hearings in which much oral testimony and other evidence was received]; see Sarten v. Pomatto (1961) 192
Cal.App.2d 288, 300-301 [dictum, recognizing principle that “where the
trial of an issue on a motion is as comprehensive as the trial of the same
issue in a suit” collateral estoppel would apply, but remanding because the
record did not show the manner in which the motion was litigated].) The present case does not fall within this
exception, since the record shows the motion was determined on the declarations
without presentation of oral testimony.
(Rohrbasser v. Lederer, supra,
179 Cal.App.3d at pp. 298, 300.)
In
Rohrbasser v. Lederer, supra, 179
Cal.App.3d at pages 299-300, the party asserting collateral estoppel
argued that in order to avoid collateral estoppel the party who lost the prior
motion must show that it requested the right to produce oral testimony and such
request was denied. The appellate court
rejected that argument. It said, “[S]uch
a requirement . . . not only runs against the grain of the rationale
allowing these distinct and cumulative remedies, but also fails to recognize
that in certain courts such as the Central District of the Los Angeles County
Superior Court . . . a request to present oral testimony in support
of a motion is rarely, if ever, granted.
[Citation.] [¶] Thus, the practical consequences of such a
requirement would be to eliminate the use of the summary disposition of issues
on motion as envisioned by the Estudillo
court, because of the severe restrictions which are presently imposed on the
use of oral testimony to support a motion.”
(Id. at p. 299.)
The Issues
Have Not Actually Been Litigated & Lynch Was Deprived Of An Opportunity To
Present Oral Testimony & To Confront & Cross Examine Witnesses
Under Los
Angeles Superior Court rule 9.1(b) and California Rules of Court rule 323(a),
oral testimony is not allowed on motions except upon good cause in the trial
court’s discretion. Appellant raised the
fact that, as she was not permitted to provide oral testimony, she did not
receive a full and fair hearing on her motion for renewal of default
judgment. 1 RT 33. Nothing has ever been actually
litigated. Res Judicata and/or
collateral estoppels are inapplicable.
There has never been a trial with oral testimony although witnesses have
appeared in Court, related to this motion, in anticipation of providing oral
testimony. Additionally, Appellant was
not provided the opportunity to confront and/or cross examine any of the
witnesses who submitted declarations to the court and/or the process server. Appellant has most certainly addressed her
requests for oral testimony with the Trial Court.
Groves v. Peterson (2002) 100 Cal.App.4th 659, 667 held:
Collateral estoppel is an aspect of the doctrine of res judicata. Under
collateral estoppel, a prior judgment between the same parties operates as an
estoppel or conclusive adjudication as
to those issues that were actually litigated and necessarily determined in
the prior action. (Rohrbasser v. Lederer (1986) 179 Cal.App.3d 290, 296-297, 224 Cal.Rptr.
791.)
In the specific context of the present case, where the issue is whether
the prior denial of a motion in the underlying case to set aside a default and
default judgment should be given collateral estoppel effect so as to bar a
subsequent independent action in equity to set aside the prior judgment, a long
line of cases has established a rule that such prior order does not
collaterally estop the subsequent action. (Estudillo v. Security Loan etc. Co. (1906) 149
Cal. 556, 564, 565, 87 P. 19; Jeffords v. Young
(1929) 98 Cal.App. 400, 406-407, 277 P. 163; Wilson v. Wilson
(1942) 55 Cal.App.2d 421, 426, 130 P.2d 782; Rose v. Fuqua
(1962) 200 Cal.App.2d 719, 724, 19 Cal.Rptr. 634; Otani v. Kisling (1963) 219 Cal.App.2d
438, 442, 33 Cal.Rptr. 239; Huff v. Mendoza
(1980) 109 Cal.App.3d 677, 681, 167 Cal.Rptr. 348; Rohrbasser v. Lederer, supra, 179 Cal.App.3d 290,
297-300, 224 Cal.Rptr. 791.)
As explained in the Supreme Court's early case and reiterated in the
recent case in this line, the reason for this rule is: in the motion procedure the moving party is limited to presenting ex
parte affidavits of voluntary witnesses, unless the trial court in its
discretion permits a greater latitude. The party does not have the right to produce
oral testimony or to compel witnesses to attend for deposition or
cross-examination. In other words, the motion procedure does not involve all the aspects
of full litigation. The remedies of a motion in the underlying
case and an independent action in equity are cumulative. The
motion procedure is simpler and more convenient. The
party should be entitled to resort first to the convenient and expeditious remedy,
without penalty of the bar of collateral estoppel if the motion is denied. Despite
denial of the motion, the party may then pursue an independent action that
affords the party all the advantages of a regular trial of the issue.
(Estudillo v. Security Loan etc. Co., supra, 149 Cal. at pp. 564, 565, 87 P.
19; Rohrbasser v. Lederer, supra, 179
Cal.App.3d at pp. 297-298, 299, 224 Cal.Rptr. 791.)
Applying this rule to the present case, the trial court erred in
concluding Groves's present action is barred by collateral estoppel. The
subsequent action is not barred even if the trial court actually decided the
disputed issue against Groves on the motion. Because
of the limitations of the motion procedure, the California courts do not treat
the denial of the motion as a bar to the subsequent action.
Another line of cases has branched off to create an exception to the
general rule. These cases hold that collateral estoppel will bar the subsequent
independent action in equity if the record of the prior proceedings shows the
moving party was in fact given a hearing on the motion that was the equivalent
of a trial with oral testimony. (Darlington v. Basalt Rock Co. (1961) 188
Cal.App.2d 706, 709, 710, 10 Cal.Rptr. 556 [judge held hearing, made clear the
court did not restrict the party to affidavits, interrogated a witness, and
gave party full opportunity to develop the issues by oral testimony]; Preston v. Wyoming Pac. Oil Co. (1961) 197
Cal.App.2d 517, 527, 17 Cal.Rptr. 443 [trial court held hearings in which much
oral testimony and other evidence was received]; see Sarten v.
Pomatto (1961) 192 Cal.App.2d 288, 300-301, 13 Cal.Rptr. 588
[dictum, recognizing principle that “where the trial of an issue on a motion is
as comprehensive as the trial of the same issue in a suit” collateral estoppel
would apply, but remanding because the record did not show the manner in which
the motion was litigated].) The present case does not fall within this
exception, since the record shows the motion was determined on the declarations
without presentation of oral testimony. (Rohrbasser v. Lederer, supra, 179 Cal.App.3d
at pp. 298, 300, 224 Cal.Rptr. 791.)
In Rohrbasser v. Lederer, supra, 179 Cal.App.3d at pages 299-300, 224
Cal.Rptr. 791, the party asserting collateral estoppel argued that in order to
avoid collateral estoppel the party who lost the prior motion must show that it
requested the right to produce oral testimony and such request was denied. The
appellate court rejected that argument. It said, “ [S]uch a requirement ․ not only runs
against the grain of the rationale allowing these distinct and cumulative
remedies, but also fails to recognize that in certain courts such as the
Central District of the Los Angeles County Superior Court a request to present oral testimony in support of
a motion is rarely, if ever, granted. [Citation.] [¶] Thus,
the practical consequences of such a requirement would be to eliminate the use
of the summary disposition of issues on motion as envisioned by the Estudillo
court, because of the severe restrictions which are presently imposed on the
use of oral testimony to support a motion.” (Id. at
p. 299, 224 Cal.Rptr. 791.) 4
This argument in Rohrbasser brings us to Barker v. Hull (1987) 191
Cal.App.3d 221, 236 Cal.Rptr. 285, on which the Petersons rely and which they
cited to the trial court. Barker interpreted the Rohrbasser line and the
Darlington line to mean that the party asserting collateral estoppel could meet
its burden of proof by showing that “the issue was actually litigated and that
evidence was not restricted [;] he need not establish that any particular type
of evidence, such as oral testimony, was presented” or that “an exhaustive
adversarial hearing” was held. (Barker v. Hull, supra, 191 Cal.App.3d at p.
226, 236 Cal.Rptr. 285.) On its facts, the Barker court concluded: the trial court gave Barker an opportunity to
take Hull's deposition; Barker made no
claim to have found new evidence; thus “Barker fully
presented the issue in the prior case, was given the opportunity to obtain all
available evidence, and ․
the issue was, therefore, actually litigated and determined in the prior
action.” (Id. at p. 227, 236 Cal.Rptr. 285.)
Relying on Barker, the Petersons contend that here Groves had time to
gather his evidence, he submitted his four affidavits, and he “never requested
the opportunity to gather more evidence.” This certainly does not amount to a showing
fitting the Darlington exception (proof that oral testimony was actually
presented). If the mere fact Groves “never requested the opportunity to gather
more evidence” were sufficient to meet the Barker test, we would have to
conclude that Barker is irreconcilable with Rohrbasser and should not be
followed.
We hold, therefore, that Groves's present independent action in equity
is not barred by collateral estoppel because, following the general rule, the
denial of the prior motion in the underlying case to set aside the judgment has
no collateral estoppel effect.
Alternatively, we would reach the same
result even if we concluded that the issue of the validity of the service of
process was actually litigated on the prior motion. The
record does not show such issue was also actually and necessarily decided on
the merits by the prior ruling. (Rohrbasser v. Lederer, supra, 179 Cal.App.3d
290, 297, 224 Cal.Rptr. 791; Bame v. City of
Del Mar, supra, 86 Cal.App.4th 1346, 1364, 104 Cal.Rptr.2d 183.) On the
issue of service of process the ruling on the prior motion in the underlying
case was: “A motion for relief from a default
judgment which is alleged to be void for lack of valid service of
process may be brought within two years after entry of the judgment. Gibble v.
Car-Lene Research, Inc. (1998) 67 Cal.App.4th 295, 301[,] fn. 3 [78 Cal.Rptr.2d
892]; Rogers v. Silverman (1989) 216 Cal.App.3d
1114, 1120-1124 [265 Cal.Rptr. 286]. Judgment was entered in this case in 1994.” This
shows that on the issue of service of process Groves's motion was rejected on
the ground it was untimely under Code of Civil Procedure section 473.5.5 Because
the ruling was limited to a procedural ground, it did not actually determine
whether the service was valid. The ruling, therefore, did not collaterally
estop litigating the merits of that issue in Groves's present independent
action in equity. (Sternbeck v. Buck (1957) 148 Cal.App.2d 829, 831, 307 P.2d 970.)
Groves held that the independent action in equity was not barred by collateral
estoppel because, following the general rule, the denial of the prior motion in
the underlying case to set aside the judgment has no collateral estoppel
effect. The same principles should apply
in this case.
California Favors Resolution Of Cases On Their Merit
California law
favors the resolution of cases on their merits, rather than by default. (See Rappleyea
v. Campbell (1994) 8 Cal.4th 975, 980.)
The policy of the law is
to have every litigated cause tried on its merits; and it looks with disfavor
on a party who, regardless of the merits of his cause, attempts to take
advantage of the mistake, surprise, inadvertence, or neglect [the
statute uses the term “excusable neglect”] of his adversary. (14 Cal.Jur. 1075, § 116.)
A trial court
may also grant relief from default on equitable grounds, even where the
statutory requirements have not been met, by finding extrinsic fraud or
mistake. “A judgment against a party may
be set aside in equity when it is obtained by extrinsic fraud or mistake. (See 8 Witkin, Cal. Procedure (4th ed.
1997) Attack on Judgment in Trial Court,
§ 223, pp. 727-728; id., § 231, pp. 741-742.) The ‘essential characteristic’ of extrinsic
fraud ‘is that it has the effect of preventing a fair adversary hearing, the
aggrieved party being deliberately kept in ignorance of the action or proceeding,
or in some other way fraudulently prevented from presenting his claim or
defense.”’ (8 Witkin, supra,
§ 223, p. 727.)
Default Judgment In Excess Of The Prayer
CCP Section 580 provides
in relevant part that “the relief granted to the plaintiff, if there be no
answer, cannot exceed that which he shall have demanded in his complaint.
...” The primary purpose of this section
is to insure that defendants in cases which involve a default judgment have
adequate notice of the judgments that may be taken against them. Anderson v. Mart (1956) 47 Cal. 2d 274, 282 [303 P.2d 539]. “If a judgment other than that which is
demanded is taken against him, [the defendant] has been deprived of his day in
court -- a right to a hearing on the matter adjudicated.” Burtnett
v. King (1949)33 Cal.2d 805,
807-808, 205 P.2d 657; accord Swycaffer v.
Swycaffer, supra, 44 Cal.2d at p. 693.)
The default judgment is further rendered void under CCP
Section 580 due to the fact that, regardless of an expert’s hearsay fabricated
expense ledger, corporate assets, valuations of corporations and assets,
Cohen’s loans and/or expenses paid for by corporations, and so forth were not
before the Court. These were
intentionally excluded from the fabricated expense ledger. That ledger failed to set forth corporate
ownership interests, assets (including Leonard Cohen’s substantial loans),
liabilities, and/or valuations of corporate property. These amounts total millions of dollars in
corporate and other property wrongfully converted to Leonard Cohen. An alleged defaulting defendant should not be
subject to damages in excess of an amount specifically set out in the
complaint. Under Section 580, the Trial
Court exceeded its authority when it granted such relief. A judgment by default in excess of the amount
of the relief demanded by the prayer denies the defaulting defendant a fair
hearing and is an act in excess of jurisdiction. (1 Witkin, Cal. Procedure (2d
ed. 1970) Jurisdiction, § 204, p. 735; Wilkinson v. Wilkinson (1970) 12 Cal.
App. 3d 1164 [91 Cal.
Rptr. 372].)
Respondent argues that appellant failed to raise the
above contention in the trial court, and that therefore this court has no
standing to consider it on appeal. Although it is true that appellant did not
present this ground in its motion to set aside the default judgment below,
questions of jurisdiction are never waived and may be raised for the first [94 Cal. App. 3d 799] time
on appeal. Consolidated Theatres, Inc. v. Theatrical Stage Employees Union
(1968) 69 Cal.
2d 713, 721 [73 Cal. Rptr. 213, 447 P.2d 325]; Costa v.
Banta (1950) 98 Cal.
App. 2d 181, 182 [219 P.2d 478]; 1 Witkin, Cal. Procedure, supra,
Jurisdiction, § 10, p. 535.
Cohen Family Trust Is Not The Real Party In Interest
Robert
Kory, as Trustee for the Cohen Family Trust, has provided no evidence
supporting his position that an assignment of the judgment in this case was
made to the Cohen Family Trust. This
issue was not before the Trial Court and no revised renewal of judgment has
been filed in the name of the Cohen Family Trust. Leonard Cohen, whose estate was not before
the Probate Court, is deceased and the original corporate plaintiff, LC
Investments, LLC is now a cancelled corporation in California. The status of the original corporate plaintiff
was never revived. As a result, the
Cohen Family Trust, lacks capacity to enforce the judgment and has no standing
with respect to this appeal. See Cal-Western
Business Services, Inc. v. Corning Capital Group, Case No. B241714 (2d
District, November 6, 2013)
The Court in that case held that:
At the time Cal-Western filed the instant
action on the Judgment four years later [after the assignment], Pacific West
One’s corporate powers had not been
revived and it remained a suspended corporation lacking capacity to file or
maintain a suit. Therefore, because
a defense based on lack of capacity to sue existed at the time of notice of the assignment and could have been
asserted against Pacific West One had it brought the action itself, Cal-Western
was subject to the same defense in suing to enforce the Judgment as Pacific
West One’s assignee.
Leonard Cohen passed away while this
matter has been before the Court of Appeals.
There is no evidence to support Kory’s argument that the Trust is the
assignee of the judgment. There is also
no evidence to support any argument that LC Investments, LLC, a cancelled
corporation or its alleged assets, are part of the Cohen Family Trust. Under section 686.010, these alleged
successors should have formally substituted as the judgment creditors. Renewing the judgment in the name of deceased
parties constitutes a statutory basis for vacating the renewal. Section
683.170, subdivision (a) provides the “renewal of a judgment pursuant to this
article may be vacated on any ground that would be a defense to any action on
the judgment . . . .” Generally, a valid
defense to an action on a judgment is that the action is not brought by the
proper party. See Redevelopment Agency of San Diego v. San
Diego Gas & Electric Co.(2003) 111 Cal.App.4th 912,
920-921. A defendant has a statutory
right to have an action prosecuted against him or her in the name of the real
party in interest. Giselman v. Starr (1895) 106
Cal. 651, 657. “The real party in
interest is `the person possessing the right sued upon by reason of the
substantive law.” Ventura County Ry. Co. v. Hadley Auto
Transport (1995) 38 Cal.App.4th 878,
880. In this case, the real party in
interest is deceased singer-songwriter Leonard Cohen and cancelled corporation
LC Investments, LLC. Since there has not
been an appropriate substitution of the real party in interest in this case,
the wrong party bringing or continuing an action is a defense to an action on
the judgment, and thus constitutes a basis for vacating the renewal of
judgment. (§ 683.170, subd. (a). The
renewal of judgment remains in the names of the original judgment creditors,
Leonard Cohen and LC Investments, LLC.
Hazel-Atlas, Judgments Procured By Fraud, & Fraud Upon The Court
When it can be proved that a judgment of a
court was obtained by fraud, the question arises whether or not it can be set
aside and a new trial had. The problem to be discussed here is when can relief
be obtained. Two different procedures are to be distinguished: 1. A motion in
the court that rendered the judgment. 2. An independent action to set the
judgment aside brought in the same court or a different court.
In Hazel-Atlas, 322 U.S.,
234, the United States Supreme Court held that a federal court could grant relief in equity from the
court’s own prior final judgment under certain rare circumstances, including when there is
“after-discovered fraud.” Id. at 244. A Hazel-Atlas claim for
fraud requires clear and convincing evidence that there was “(1) an intentional
fraud; (2) by an officer of the court; (3) which is directed at the court itself;
and (4) in fact deceives the court.” Herring v. United
States, 424 F.3d 384, 386-87 (3d Cir. 2005). All of these elements are present and that
includes blatant fraud with respect to service of process and the transmittal
of legal pleadings to IRS and FTB in a further attempt to defraud the U.S.
Government and State of California. This
is a nearly identical situation to Hazel-Atlas although in this case the
“article” can be viewed as fraudulent legal pleadings and perjured
declarations. This is a deliberately
planned and carefully executed scheme to defraud not only Kelley Lynch,
corporations which the Court has no jurisdiction over, but the Internal Revenue
Service, Franchise Tax Board, and other tax authorities. In fact, the lawsuit is nothing other than
Leonard Cohen’s defense to allegations that he committed criminal and civil tax
fraud and he used it as an opportunity to engage in further fraudulent
conduct.
In Hazel-Atlas the
court said: The general rule [is] that
[courts] not alter or set aside their judgments after the expiration of the
term at which the judgments were finally entered . . . [But] every element of
the fraud here disclosed demands the exercise of the historic power of equity
to set aside the fraudulently begotten judgment. Here . . . we find a
deliberately planned and carefully executed scheme to defraud not only the
Patent Office but the Circuit Court of Appeals... The public welfare demands
that the agencies of public justice be not so impotent that they must always be
mute and helpless victims of deception and fraud . . ." The opinion did not
refer to the distinction between extrinsic or intrinsic fraud. Lynch takes great offense at the mere notion
that someone may submit one fraudulent legal pleading after another, essentially
slandering and falsely accusing her, with impunity. She has argued that intrinsic and extrinsic
fraud, including with respect to service of process, are not mutually
exclusive. Both elements are present in
this case.
The type of fraud involved in the Hartford case certainly leads to the conclusion
that intrinsic and/or extrinsic fraud could be grounds for upsetting a
judgment. Mr. Justice Black's assertion that the "agencies of public
justice [are] not so impotent that they must always be mute and helpless
victims of deception and fraud ...” would apply to deception committed by
intrinsic fraud as well as deception by extrinsic fraud. Perjury is considered
intrinsic fraud and since the false article utilized by Hartford seems
analogous to perjured evidence submitted by Respondent in declarations signed
under oath of perjury. As has been seen,
the amendment to Federal Rule 60(b) introduced the term "fraud on the
court" and no distinction was drawn between extrinsic and intrinsic fraud
in the saving clause. The rule expressly
provides that either intrinsic or extrinsic fraud can be ground for relief by
motion to the court that rendered the judgment.
In Hazel-Atlas, Mr. Justice Black concluded
that “tampering with the administration of justice as indisputably shown here
involves far more than injury to a single litigant. It is a wrong against the
institutions set up to protect and safeguard the public, institutions in which
fraud cannot complacently be tolerated consistent with the good order of society."
Additionally, Universal Oil Products Co. v.
Root Refining Co., 328 U. S. 575 (1945), cited the Hartford case and said
at p. 580, the U.S. Supreme Court concluded that: "The inherent power of a federal court
to investigate whether a judgment was obtained by fraud is beyond
question." It would seem to follow
that the same inherent powers apply to state courts.
Lynch’s motion for terminating sanctions
addressed egregious fraud upon the court in pursuit of the denial of the
original motion to vacate as well as the renewal of judgment. The fraud upon the court remains unresolved
and continues throughout this appeal.
The Renewal Of Default Judgment Is Void
Any order or judgment that
gives effect to a void judgment is in fact void. County of Ventura v. Tillett (1982) 133 Cal.App.3d 105,
110, 183 Cal.Rptr. 741. A
void judgment [or order] is, in legal effect, no judgment. By it no rights are divested. From it no rights can be obtained. Being worthless in itself, all proceedings
founded upon it are equally worthless.
It neither binds nor bars any one.’”
Bennett v. Wilson (1898) 122 Cal. 509, 513-514, 55 P. 390. “There is an abuse of
discretion when the trial court’s action ‘transgresses the confines of the
applicable principles of law.’” Gabriel P. v.
Suedi D. (2006) 141 Cal.App.4th 850, 862.
CONCLUSION
The orders of the trial
court should be reversed and the trial court directed to (1) vacate its orders
denying Lynch’s motion to vacate the renewal of judgment and motion to set
aside default and default judgment, (2) enter a new order granting the motion,
(3) and permit Lynch to file her answer to the complaint and require the court
to proceed to hear the case based upon the merits. Finally, Respondent’s request for attorney’s
fees should be denied and the Court of Appeals should note that numerous parties
are financially benefiting from their misconduct.
Dated:
11 September 2017 Respectfully
submitted,
___________________________________
Kelley
Lynch, in Propria Persona
