Case Name:    Christopher Baxa v. Armcon Corporation dba Coachella Valley Collection Service                

Case No.:        2016-CV-297305

Demurrer to the Complaint by defendant Armcon Corporation dba Coachella Valley Collection Service                

Factual and Procedural Background

This is an action brought by plaintiff Christopher Baxa (“Baxa”) to set aside a judgment for improper service.  (See Complaint at ¶ 1.)  On June 3, 2010, Sonora Wells Homeowners Association (“the Association”) sued Baxa in the Small Claims Division of the Riverside Superior Court.  (Id. at ¶ 7.)  The Association allegedly served Baxa with the small claims action via substitute service.  (Id. at ¶ 8.)  However, Baxa claims that he never received actual notice of the small claims action.  (Id. at ¶ 9.)

On August 5, 2010, a small claims judgment was issued in favor of the Association against Baxa for $3,097.50.  (See Complaint at ¶ 10.)  Thereafter, the Association assigned the judgment to Armcon Corporation dba Coachella Valley Collection Service (“Defendant”).  (Id. at ¶ 11.)  When Baxa learned about the judgment, he notified Defendant that service of the small claims action was invalid.  (Id. at ¶ 13.)  However, Defendant refused to set aside the judgment and continues to collect the underlying debt.  (Id. at ¶ 14.)

On July 6, 2016, Baxa filed a Complaint against Defendant setting forth the following causes of action: (1) to set aside judgment for improper service; (2) violation of California Rosenthal Act (Civ. Code, § 1788 et seq.); and (3) violation of Federal Fair Debt Collection Practices Act (Civ. Code, § 1692 et seq.).

Currently before the Court is Defendant’s demurrer to the Complaint.  Baxa filed written opposition.  Defendant filed reply papers.

Demurrer to the Complaint   

Request for Judicial Notice

In support of the demurrer, Defendant requests judicial notice of the following: (1) the small claims action filed by the Association against Baxa (INS 10001450 small claims action) (Exhibit A); (2) proof of service pertaining to Baxa with respect to the small claims complaint (Exhibit B); (3) civil minute order and notice of entry of judgment (Exhibit C); and (4) notice of the register of action (Exhibit D).

As an initial matter, the Court notes that Defendant’s request for judicial notice fails to comply with California Rules of Court, rule 3.1113(l) which requires a request for judicial notice to be made in a separate document listing the specific items for which notice is requested.  Instead, Defendant identifies the items subject to judicial notice in its memorandum of points and authorities.  Nevertheless, Defendant does include a declaration from counsel identifying and attaching the exhibits which are the subject of judicial notice.  Furthermore, Baxa does not dispute the request in his opposition and the requested items appear relevant and subject to judicial notice as court records under Evidence Code section 452, subdivision (d).

Accordingly, the request for judicial notice is GRANTED.

Legal Standard

“In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules.  ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.  We also consider matters which may be judicially noticed.’”  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)  “A demurrer tests only the legal sufficiency of the pleading.  It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.”  (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.)

“The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.  The court does not, however, assume the truth of contentions, deductions or conclusions of law.  …  [I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory.  And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.”  (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850.)

Analysis   

The sole argument raised on demurrer is that the Court lacks jurisdiction to address Baxa’s claims as he failed to file a motion to vacate the judgment with the small claims court.  In opposition, Baxa contends that he was not required to vacate the judgment with the small claims court as he can collaterally attack a void judgment for lack of personal jurisdiction.

If a defendant was not properly served and did not appear at the hearing in the small claims court, the defendant may file a motion to vacate the judgment with the clerk of the small claims court.  ( Code Civ. Proc., § 116.740, subd. (a).)  Upon a showing of good cause, the court may grant the motion to vacate the judgment.  ( Code Civ. Proc., § 116.740, subd. (c).)  Similarly, a defendant who did not appear at the hearing has no right to appeal the judgment, but may file a motion to vacate the judgment in accordance with Code of Civil Procedure section 116.730 or 116.740 and also may appeal the denial of that motion.  (Code of Civ. Proc., § 116.710, subd. (d).)

According to the Complaint, Baxa moves to set aside the small claims judgment because he was not properly served.  (See Complaint at ¶¶ 1, 16, 17.)  In reviewing section 116.740, the Court finds nothing in the statute which precludes Baxa from filing a separate action to collaterally attack the judgment.  In fact, the statute expressly says that a defendant “may” file a motion to vacate thus giving Baxa the option of seeking relief through the small claims court.  (See Service Employees Internat. Union, Local 18, AFL-CIO v. American Building Maintenance Co. (1972) 29 Cal.App.3d 356, 360 [“The obvious purpose of the ‘may’ language is to give an aggrieved party the choice between arbitration or the abandonment of its claim.”].)  Furthermore, as the opposition points out, “[a] defendant is always free to ignore the judicial proceedings, risk a default judgment, and then challenge the judgment on jurisdictional grounds in a collateral attack.”  (Yu v. Signet Bank/Virginia (1999) 69 Cal.App.4th 1377, 1386.)  Therefore, Baxa’s Complaint to vacate the judgment and challenge Defendant’s collection practices is not foreclosed by the small claims statutes.

Accordingly, the demurrer to the Complaint on the ground that the Court lacks jurisdiction over the lawsuit is OVERRULED.