National Bank of Calif. v. Vildosola CA4/1

• Court: California Court of Appeal
• Decided: October 21, 2015
• Docket: D065897
• Status: Unpublished

Opinion

Filed 10/21/15 National Bank of Calif. v. Vildosola CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

NATIONAL BANK OF CALIFORNIA, D065897

Plaintiff and Respondent,

v. (Super. Ct. No. 37-2011-00093140- CU-BC-CTL) LORENZA RAMOS DE VILDOSOLA,

Defendant and Appellant.

APPEAL from an order of the Superior Court of San Diego County, John S.

Meyer, Judge. Affirmed.

Bankhead & Howard, Murray M. Bankhead; Karcher Harmes and Kathryn E.

Karcher for Defendant and Appellant.

Levinson Arshonsky & Kurtz, Steven N. Kurtz, Anne C. Manalili and Helen Kim

Colindres for Plaintiff and Respondent.

In this case, the defendant's family trust borrowed in excess of $2 million from a

bank and, as security for the loan, the defendant provided the bank with a continuing

guaranty of the obligation. According to the bank, payment on the loan fell into default, and the bank sued the defendant on the guaranty. In loan documents she executed, the

defendant identified a home in La Jolla as her address and the bank accomplished service

of its complaint on the defendant by way of substituted service on a person at that

address. The substituted service was made only after two attempts to serve the defendant

personally at the address were unsuccessful. Following substituted service on the

defendant, an attorney contacted the bank's attorney on defendant's behalf and for several

months engaged in negotiation with the bank. The negotiations were unsuccessful, and

the bank took the defendant's default and obtained a default judgment against her.

After entry of the default judgment, the defendant moved for relief from the

judgment. She asserted that substituted service was improper and that the residence

where substituted service was accomplished was not her home. The trial court found that

the evidence defendant presented was not credible and did not overcome the presumption

that service was proper. Accordingly, the trial court denied the defendant's motion.

We affirm the trial court's order. The record presented fully supports the trial

court's factual determinations and, in light of those determinations, the trial court did not

abuse its discretion in denying defendant's motion.

FACTUAL AND PROCEDURAL HISTORY

A. Loan

In July 2007, plaintiff National Bank of California (the bank) lent the defendant

Lorenza Ramos de Vildosola's family trust $2.265 million. Vildosola's daughter,

Lorenza, was the trustee of the family trust and signed the promissory note. The loan was

secured both by a home in La Jolla, located at 7106 Vista Del Mar Avenue, and a

personal guaranty executed by Vildosola. Both Vildosola and Lorenza signed loan

2 documents which directed that all notices concerning the loan be provided to them at the

Vista Del Mar Avenue address. The personal guaranty further required Vildosola to

notify the bank if she changed her address.

Prior to execution of the loan, the 7106 Vista Del Mar Avenue address was listed

as Vildosola's address in a statement filed with the Secretary of State with respect to a

family real estate corporation, G & L Properties. The statement was signed by

Vildosola's late husband, Gustavo Vildosola, and listed the Vista Del Mar address as his

address and the corporation's address as well as Vildosola's address. The statement was

renewed by the corporation without change in 2006.

For her part, later in 2007 Lorenza listed the Vista Del Mar residence as the

address for a limited liability consulting company, LVR Consulting Services (LVR), she

operated; the statement Lorenza signed and filed with the Secretary of State with respect

to LVR listed the Vista Del Mar address as her address as well.

B. Service

In 2011, required payments on the loan had not been made, and the bank filed a

complaint against both Vildosola as guarantor and Lorenza as trustee of the family trust.

The complaint also named Victor Vildosola (Victor), Vildosola's son, as a defendant.

The complaint alleged, in addition to claims on the promissory note and guaranty,

allegations that Vildosola, Lorenza, and Victor had engaged in a scheme to hide

Vildosola's assets from the bank by use of transfers between family trusts and

corporations.

On July 9, 2011, Victor was personally served at his home in San Diego.

The bank attempted to personally serve Vildosola at the Vista Del Mar Avenue

3 residence twice; thereafter, the bank's process server accomplished substituted service on

Vildosola by serving a woman who resembled Lorenza and who, when asked, identified

herself as "Lorenza." The substituted service was made on July 11, 2011, and a proof of

service was filed by the bank on August 22, 2011. Personal service on Lorenza was

made at the same time substituted service on Vildosola was accomplished.

C. Negotiations

The record indicates that at the time the bank's complaint was served on Victor,

Vildosola and Lorenza, the bank had commenced foreclosure proceedings on the Vista

Del Mar home. One week after the complaint was served, the bank's attorneys were

contacted by telephone by an attorney, Chris Ramsey, who stated that he was

representing the Vildosola family and that Vildosola was herself very anxious to avoid

foreclosure on the Vista Del Mar Avenue property.

Between July 2011 and May 2012, the bank's attorneys and Ramsey

communicated by telephone and email fairly regularly. Initially, Ramsey conveyed the

family's offer to convey the proceeds from the sale of a luxury condominium in Mexico

City to the bank in lieu of the deed of trust it held on the Vista Del Mar home; later, he

conveyed an offer from Vildosola and Victor to pay the bank $248,500 to settle the

bank's claims. These proposals were rejected by the bank.

The bank took Vildosola's default in November 14, 2011. Between November

2011 and June 2012, the bank's attorneys repeatedly advised Ramsey that the bank would

obtain a default judgment against Vildosola unless the matter was resolved. On October

11, 2012, the trial court, on the bank's motion and after the bank had made a sufficient

showing at a prove-up hearing, entered judgment against Vildosola, Lorenza and Victor

4 in the amount of $2.6 million.

D. Motion to Vacate

Prior to entry of judgment, Lorenza made a motion to quash service on her; she

argued she did not live at the Vista Del Mar Avenue home and that no service on her was

made there. The trial court rejected her contentions and denied her motion to quash.

On November 11, 2013, 13 months after entry of judgment, Vildosola moved to

set aside the default and default judgment. Vildosola largely repeated Lorenza's earlier

contention that Lorenza was never served at the Vista Del Mar home. In support of her

motion, Vildosola offered declarations that she and Lorenza executed in Mexico. The

declarations stated that the Vista Del Mar home was neither her residence nor place of

business, that Lorenza was travelling in Europe at the time the bank's process server

delivered the summonses and complaints to the Vista Del Mar Avenue address and that

the home had been leased to a family from Tucson at the time of service.

Attached to Lorenza's declarations were what she stated were true and correct

copies of her Mexican passport, an itinerary, and airline tickets, which she asserted were

proof that she was travelling abroad on July 11, 2011, when the bank's service on her was

purportedly made.

Both declarations were executed in Mexicali, Baja California and were made

under penalty of perjury under the laws of California.

The bank objected to Vildosola's and Lorenza's declarations on, among other

grounds, that the declarations did not comply with Code of Civil Procedure section 2014,

in that they were neither executed before a United States consular official nor a judge of

record in Mexico. The trial court sustained the bank's Code of Civil Procedure section

5 2014 objections to the declarations.

Vildosola also offered the declaration of a La Jolla real estate agent, who stated

that a second real estate agent told her that the tenants at Vista Del Mar had contacted the

second agent because of attempts to serve Vildosola and Lorenza.

Vildosola also argued, as did Victor in a companion motion, that they had a

defense on the merits to the bank's complaint. They asserted that the loan was part of an

overall scheme to purchase a "stranger-owned life insurance" (STOLI) policy on

Vildosola's life. In such schemes, the policy is used as a means of attracting investors,

who, in exchange for a share of the eventual proceeds of the policy, make the required

premium payments. (See Lincoln Nat'l Life Ins. Co. v. Gordon R.A. Fishman Irrevocable

Life Trust (C.D.Cal. 2009) 638 F.Supp.2d 1170, 1177–1178.) In 2009, the Legislature

made such schemes unlawful in California. (See Ins. Code, § 10110.1, subd. (d).)

For its part, in opposing the motion the bank produced evidence that: both

Vildosola and Lorenza repeatedly identified the Vista Del Mar home as their residence

and place of business; the process server positively identified Lorenza as the person who

accepted the summonses and complaints; one week after service, Vildosola contacted her

son Victor, who in turn asked Ramsey to represent her.

The bank also contested the validity of the itinerary and ticket Vildosola produced.

The bank pointed out that the documents set forth different travel times.

In ruling on Vildosola's motion, the trial court stated: "[S]omebody is flat out

lying." The court then denied Vildosola's motion.

DISCUSSION

In her principal contention on appeal, Vildosola argues the trial court erred in

6 sustaining the bank's objection to her declaration and the declaration of Lorenza. As we

have noted, both declarations were executed in Mexicali, Baja California under penalty of

perjury of the laws of the State of California. As we explain more fully below, we agree

with the trial court that the declarations were not admissible over the bank's objection.

I

We begin our consideration of Vildosola's claims by recognizing that service on

her was presumptively valid. The bank's proof of service, which was timely filed in the

trial court, states that after making two attempts to personally serve Vildosola at the Vista

Del Mar residence, the summons and complaint were left with Lorenza and thereafter

mailed to Vildosola at the Vista Del Mar address. Such substituted service is authorized

by Code of Civil Procedure section 415.20.1 Where, as here, the plaintiff has filed a

proof of service, which, on its face, states that the defendant was validly served, "[s]uch

proof presumptively establishes the fact of proper service, but it may be impeached and

the lack of proper service shown by contradictory evidence." (M. Lowenstein & Sons,

Inc. v. Superior Court (1978) 80 Cal.App.3d 762, 770; see Dill v. Berquist Construction

Co. (1994) 24 Cal.App.4th 1426, 1441-1442 [filing a proof of service that complies with

the statutory requirements creates a rebuttable presumption that service was proper].)

We must also recognize that the trial court's credibility determinations are binding

on us on appeal. (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 421.)

II

As we have noted, in attempting to overcome the presumption of valid service,

1 All further statutory references are to the Code of Civil Procedure. 7 Vildosola submitted her declaration stating that the Vista Del Mar home is neither her

residence nor place of business and Lorenza's declaration asserting that she was traveling

abroad at the time service was made at the Vista Del Mar address. The trial court

properly sustained the bank's objection to the declarations.

Testimonial evidence may be taken, and presented as evidence, in three ways: by

affidavit, by deposition, or by oral examination in court. (§§ 2002 & 2005.) Affidavits

are written declarations made under oath "before any officer authorized to administer

oaths." (§ 2012.) When properly executed, affidavits may be used in and are preferred in

motion proceedings. (§ 2009; Cal. Rules of Court, rule 3.1306(a).)

If an affidavit is taken in a foreign country, it "may be taken before an

ambassador, minister, consul, vice-consul, or consular agent of the United States, or

before any judge of a court of record having a seal in such foreign country." (§ 2014.)

In lieu of an affidavit sworn under oath before an official authorized to take oaths,

a party may offer a declaration which states that it is made under the penalty of perjury

under the laws of the State of California. (§ 2015.5.) However, a sworn declaration

under penalty of perjury is not permissible in cases where an oath is required to "be taken

before a specified official other than a notary public." (Ibid.)

As the bank contends, because both declarations were made in Mexico, section

2014 permitted them if they were taken before an official specified in section 2014. As

declarations made in a foreign country, they were not admissible under section 2015.5 as

declarations made under penalty of perjury of the laws of the State of California.

We reject Vildosola's contention that, in this context, the requirements of section

2014 are permissive and that a declaration under penalty of perjury under section 2015.5

8 is an alternative means of presenting evidence. The short answer to this argument is that

section 2015.5 provides an alternative, except in those cases when it does not.

By its express terms, a section 2015.5 declaration may be used in lieu of an

affidavit, except in cases where an oath is required before an official other than a notary.

The "other than a notary" limitation on the exception is of some pertinence here. Under

section 2013, a sister state affidavit is valid if taken before a notary. (§ 2013.) Thus,

because a sister state affidavit may be taken before a notary, the exception to section

2015.5 does not apply and declarations under penalty of perjury are an alternative to

sister state affidavits.

On the other hand, while section 2014 permits affidavits made in foreign

countries, they are valid only if taken before officials specified in the statute and those

officials do not include notaries. Thus, section 2014 falls within the exception to section

2015.5, because it requires an oath before an official other than a notary.

The practical implication of the statutes, as we have interpreted them, is that a

declaration under penalty of perjury is permissible if the declaration is made here in

California or in any other state. (§§ 2013 & 2015.5.) More formality is required if a

declaration or affidavit is executed in a foreign country; in those cases, the declarant or

affiant must engage in the more formal and cumbersome process of going before a judge

of a court of record or a United States consular official or agent, and swear an oath in the

presence of the official. (§§ 2014 & 2015.5.) This distinction is consistent with the

realities of personal jurisdiction over residents of the United States as opposed to

jurisdiction over foreign nationals in foreign countries as well as United States citizens

who are abroad. In the former case, the declarant is going to recognize that he or she is

9 likely subject to both the civil and criminal processes of our state's courts. A foreign

citizen making a statement in his or her own country is, as a practical matter, going to

feel somewhat less accountable to the processes of our courts and thus, in order to assure

that statements from them are made with an appropriate level of reliability and

trustworthiness, the Legislature has expressly required that they be made with somewhat

more formality. As the court suggested in Kulshrestha v. First Union Commercial Corp.

(2004) 33 Cal.4th 601, 612-618 when it rejected a litigant's argument that substantial

compliance with section 2015.5 was sufficient, strict construction of the statute is needed

to meet the Legislature's desire to enhance the trustworthiness of out-of-state

declarations.

In sum then, the trial court did not err in sustaining the bank's objection to the two

III

Even if the trial court had admitted the two disputed declarations, the declarations

would not have altered the outcome in the trial court or here on appeal. The trial court's

statements on the record and its ruling make it clear that it did not find Vildosola, her

daughter or her son credible. The trial court's determination of credibility is of course

binding on us, where, as here, it is fully supported by the record. (Craig v. Brown &

Root, Inc. (2000) 84 Cal.App.4th 416, 421.) In particular, the conflict between what

Vildosola and Lorenza told the bank when applying for the loan about their residence—

that they resided at the Vista Del Mar address—and their later claim that it was not their

residence or place of business, substantially undermined the trustworthiness of all their

statements.

10 Not only were the disputed declarations less than credible, as a technical matter

they did not defeat the validity of the bank's service. Even if the trial court indulged the

notion that Lorenza was not at the home when the summons and complaint were

delivered, section 415.20 only requires that they be left with someone apparently in

charge at the residence. (See Bein v. Brechtel-Jochim Group, Inc. (1992) 6 Cal.App.4th

1387, 1393.) The record shows that even if the process server did not deliver the papers

to Lorenza, he did deliver them to someone in charge at the Vista Del Mar address, as

required by the statute.

In addition, we note the undisputed fact that, within a week of service, an attorney

contacted the bank on behalf of the Vildosola family and discussed Vildosola's concern

about losing the Vista Del Mar home; thereafter, the attorney communicated settlement

offers on behalf of both Vildosola and Victor, including an offer to pay the bank

$284,500. This course of conduct by counsel, over several months, is circumstantial

evidence Vildosola and her son had actual notice of the bank's lawsuit against them.

Actual notice, when it is established, gives the plaintiff the benefit of a more liberal

construction of the service of process statutes. (Bein v. Brechtel-Jochim Group, Inc.,

supra, 6 Cal.App.4th at p. 1392.)

11 DISPOSITION

The order is affirmed. Plaintiff National Bank of California to recover its costs of

appeal.

BENKE, J.

WE CONCUR:

McCONNELL, P. J.

McDONALD, J.