Filed 1/20/15
                             CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                               SIXTH APPELLATE DISTRICT

MURRAY & MURRAY,                                      H039036
                                                     (Santa Clara County
        Plaintiff and Respondent,                     Super. Ct. No. 1-11-CV213714)

        v.

RAISSI REAL ESTATE
DEVELOPMENT, LLC,

        Defendant and Appellant.


        Appellant Raissi Real Estate Development, LLC (Raissi) appeals from the order
denying its motion to set aside default and default judgment, as well as the default
judgment itself. Respondent Murray & Murray (Murray & Murray), a professional
corporation, filed a civil complaint against Raissi seeking recovery of unpaid legal fees
incurred in a bankruptcy proceeding. After multiple unsuccessful attempts at personal
service, Murray & Murray obtained permission from the trial court to serve Raissi by
publication. After the time for Raissi to respond expired, Murray & Murray obtained a
default judgment in the amount of $372,403.81. Raissi claims it first learned of Murray
& Murray‟s lawsuit, and the default judgment, after it received a lien notice from the
County of Santa Clara with the abstract of judgment attached.
        On appeal, Raissi argues the trial court erred in denying the motion to set aside
default and default judgment on the grounds that Murray & Murray failed to comply with
Code of Civil Procedure section 587,1 which requires the application for entry of default
and default judgment be mailed to the defendant‟s last known address. Murray & Murray
        1
            Further unspecified statutory references are to the Code of Civil Procedure.
instead declared that Raissi‟s address was “unknown” to it because it had been unable to
personally serve Raissi at any of the addresses it discovered.
       We agree that a mailing address is not “unknown” to a plaintiff merely because
personal service could not be effected at that address. Accordingly, we will reverse the
judgment and remand.
I.     FACTUAL AND PROCEDURAL BACKGROUND
       In June 2010, Raissi entered into a written agreement with Murray & Murray in
which Murray & Murray agreed to represent Raissi in a Chapter 11 bankruptcy case, filed
that same day in the United States Bankruptcy Court, Northern District of California. In
July 2010, Raissi sought and obtained authorization from the bankruptcy court for
Murray & Murray to represent it in the ongoing bankruptcy proceedings under a general
retainer on the terms and conditions set forth in the written agreement. Over the
following year, Murray & Murray represented Raissi in bankruptcy, generating attorney
fees and expenses in the amount of $329,705.12. The bankruptcy proceedings were
dismissed and the bankruptcy case closed in June 2011. Raissi failed to pay Murray &
Murray‟s outstanding fees.
       In November 2011, Murray & Murray filed a complaint against Raissi for breach
of contract, account stated, open book account and failure to pay for goods and services
rendered, seeking recovery of its unpaid fees.
       In January 2012, Murray & Murray brought an ex parte motion for an order
extending the deadline to serve the summons and complaint and allowing it to serve
Raissi via publication. In support of its motion, Murray & Murray submitted a
declaration from its attorney, detailing its unsuccessful efforts to personally serve Raissi
since December 9, 2011. The trial court granted the motion, extending the time for
serving the summons and complaint and authorizing Murray & Murray to serve Raissi by
publication. Murray & Murray caused the summons to be published in the San Jose Post-
Record weekly from February 27 to March 19, 2012.

                                              2
       Raissi made no response, and Murray & Murray obtained a default and default
judgment against it in the amount of $372,403.81. In its request for entry of default,
Murray & Murray indicated, in a section of the form entitled “Declaration of mailing
(Code Civ. Proc., § 587),” that it had not mailed a copy of the request to Raissi because
Raissi‟s address was “unknown.”
       Raissi moved to set aside the default and the default judgment, raising three
grounds in its motion: (1) attorney mistake (§ 473, subd. (b)); (2) lack of subject matter
jurisdiction resulting in a void judgment (id., subd. (d)); and (3) extrinsic fraud or
mistake. As to the first ground of “attorney mistake,” the moving papers explained that
when Raissi‟s counsel changed the address for its registered agent on February 29, 2012,
he “mistakenly chose a wrong address.” The second ground, lack of subject matter
jurisdiction, was based on the argument that Murray & Murray‟s fees were generated in a
bankruptcy action and thus the bankruptcy court retained exclusive jurisdiction over any
dispute regarding those fees. Finally, Raissi contended the trial court should exercise its
equitable power and set aside the judgment because Murray & Murray failed to serve or
attach a proof of service to the request for default and default judgment following service
by publication.
       At the hearing on the motion, Raissi raised an argument that was not set forth in its
moving or reply papers. Raissi argued that Murray & Murray‟s request for default was
defective because it was not mailed to Raissi‟s “last known address” as required by
section 587. Instead, Murray & Murray declared it did not mail the request to Raissi
because its address was “unknown.” Consequently, entry of default violated Raissi‟s
right to due process as it did not have notice of the proceedings.
       The trial court offered to give Murray & Murray “a chance to look into this [new
argument], study the statute, read the case and follow-up if you would like to do that.”
Murray & Murray, after first objecting to being “blind-sided,” responded to the argument
by pointing out that it had made eight separate attempts to personally serve Raissi at “all

                                              3
the properties.” Murray & Murray also said it had “no reason” to believe the property
Raissi‟s counsel referenced was a viable address because the property: (1) appeared
vacant; (2) had a sign indicating it was available to lease; and (3) was the very property
the bankruptcy court had previously “granted the secured lender permission to continue
its foreclosure proceeding [against].” Following those remarks, Murray & Murray
submitted the matter, implicitly rejecting the opportunity to submit additional briefing.
       The trial court subsequently denied the motion, rejecting Raissi‟s claims that it
was entitled to relief due to attorney mistake, lack of jurisdiction, or extrinsic fraud or
mistake. The trial court also found that the declaration concerning service of the request
for default complied with section 587 because the evidence demonstrated that Raissi‟s
address was “unknown” to Murray & Murray.
       Raissi timely appealed.
II.    DISCUSSION
       A.     Murray & Murray waived its objections to Raissi‟s section 587 arguments
       As discussed above, Raissi first raised its argument that Murray & Murray‟s
affidavit violated section 587 in its reply papers. This was, undoubtedly, improper and
Murray & Murray properly objected. However, Murray & Murray elected to proceed
without taking advantage of the trial court‟s offer to “study the statute, read the case and
follow-up,” presumably through additional briefing. By implicitly rejecting the
opportunity to continue the matter and prepare further arguments in support of its
position, Murray & Murray has waived its objection to the argument. (Hepner v.
Franchise Tax Bd. (1997) 52 Cal.App.4th 1475, 1486.)
       B.     The trial court abused its discretion in denying Raissi‟s motion
       Raissi argues that the trial court erred in finding that Raissi‟s last known address
was not known to Murray & Murray simply because Murray & Murray had
unsuccessfully sought to personally serve Raissi at those addresses. Murray & Murray
researched and found six different addresses for Raissi in the public records, but never

                                               4
sought to mail any papers, including the request for entry of default to any of those
addresses. Instead, it checked the box indicating that Raissi‟s address was “unknown.”
              1.     Standard of review
       It is well established that the trial court‟s ruling on a motion for relief under
section 473 is reviewed for an abuse of discretion. “ „A ruling on a motion for
discretionary relief under section 473 shall not be disturbed on appeal absent a clear
showing of abuse.‟ [Citation.] „ “[T]hose affidavits favoring the contention of the
prevailing party establish not only the facts stated therein but also all facts which
reasonably may be inferred therefrom, and where there is a substantial conflict in the
facts stated, a determination of the controverted facts by the trial court will not be
disturbed.” ‟ ” (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249,
257-258.)
       “Section 473 is often applied liberally where the party in default moves promptly
to seek relief, and the party opposing the motion will not suffer prejudice if relief is
granted. [Citations.] In such situations „very slight evidence will be required to justify a
court in setting aside the default.‟ [Citations.] [¶] Moreover, because the law strongly
favors trial and disposition on the merits, any doubts in applying section 473 must be
resolved in favor of the party seeking relief from default.” (Elston v. City of Turlock
(1985) 38 Cal.3d 227, 233, fn. omitted.) An order denying a motion for relief under
section 473 is therefore “ „scrutinized more carefully than an order permitting trial on the
merits.‟ ” (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1420 (Huh).)
       Regardless, “ „[i]n order to qualify for [discretionary] relief under section 473, the
moving party must act diligently in seeking relief and must submit affidavits or testimony
demonstrating a reasonable cause for the default.‟ [Citation.] In other words, the court‟s
„discretion may be exercised only after the party seeking relief has shown that there is a
proper ground for relief, and that the party has raised that ground in a procedurally proper
manner, within any applicable time limits.‟ ” (Huh, supra, 158 Cal.App.4th at p. 1419.)

                                               5
              2.      Section 587
       Section 587 provides, in relevant part, as follows: “An application by a plaintiff
for entry of default . . . shall include an affidavit stating that a copy of the application has
been mailed to the defendant‟s attorney of record or, if none, to the defendant at his or
her last known address and the date on which the copy was mailed. If no such address of
the defendant is known to the plaintiff or plaintiff‟s attorney, the affidavit shall state that
fact. [¶] No default . . . shall be entered, unless the affidavit is filed. The nonreceipt of
the notice shall not invalidate or constitute ground for setting aside any judgment.”
(Italics added.)
       It is well settled that “[t]he requirement of an affidavit of mailing under section
587 is not jurisdictional, and hence the failure to file one does not deprive the trial court
of jurisdiction to render judgment.” (Rodriguez v. Henard (2009) 174 Cal.App.4th 529,
536.) A court may properly decline to set aside a default judgment where the absence of
the affidavit of mailing is not prejudicial. (Ibid.)
       When is an absent--or as in this case, a defective--affidavit of mailing prejudicial?
The answer seems to be where the party seeking relief from default can credibly claim it
would have received the request for entry of default in question.
       In Candelaria v. Avitia (1990) 219 Cal.App.3d 1436, this court considered the
application of section 587 in a case where the party seeking to enforce the default
judgment had failed to comply with its affidavit requirement. We held that, under the
circumstances of that case, there was no prejudice to the defaulting party because “the
record show[ed] the extensive but unsuccessful efforts” of the respondents to locate the
appellants. (Candelaria v. Avitia, supra, at p. 1444.) In fact, several letters had been
mailed to the last known address, “but all were undelivered.” (Ibid.) Accordingly, “even
if a copy of the request for uncontested hearing had been mailed to appellants‟ last known
address, it was not likely that appellants would have received it.” (Ibid.)



                                               6
       Likewise, the defaulting party in In re Marriage of Harris (1977) 74 Cal.App.3d
98, was not entitled to relief from default due to a missing affidavit of mailing where
there was “substantial evidence to support a finding that wife had actual notice of
husband‟s intent to take a default, even though husband had not complied with [section
587].” (Id. at p. 102.) “The attorney she had earlier consulted stated that he informed her
that her default would be taken. There was evidence that the required notice had been
sent to her by husband‟s attorney, even though the affidavit requirement had not been
complied with. If wife did receive actual notice, the error in failing to file an affidavit
would not be prejudicial. If no harm to wife resulted from that error, the motion to set
aside the judgment was properly to be denied. (Cal. Const., art. VI, § 13.)” (Ibid.)
       Here, of course, we do not have the situation where Murray & Murray failed to
file an affidavit of mailing. Rather, its affidavit indicated it did not mail a copy of the
request for entry of default to Raissi because Raissi‟s address was unknown to it.
However, Murray & Murray‟s ignorance of Raissi‟s mailing address is demonstrably not
true. There is a difference between knowing an address for purposes of personal service
and knowing an address for purposes of mail delivery. Simply because Murray &
Murray‟s efforts to personally serve the summons and complaint on Raissi at various
addresses were unsuccessful does not lead to the conclusion that Raissi was not receiving
mail at those addresses. It is not disputed that the address at which Murray & Murray
attempted personal service was the same address to which the County of Santa Clara
mailed the notice of lien which apprised Raissi of the default judgment against it. This
address was a vacant commercial building, with signage indicating it was available to
lease. Simply because no one was available at that address to accept personal service at
the times subservice was attempted does not mean that first-class mail sent to Raissi at
that address would be returned undeliverable. Murray & Murray admittedly never
attempted to mail any documents to any of the addresses it uncovered for Raissi, so it
cannot credibly claim that any such mail would have been undeliverable.

                                               7
       Murray & Murray relies on Slusher v. Durrer (1997) 69 Cal.App.3d 747 (Slusher)
to support its claim that section 587 requires nothing more than “ „reasonable diligence‟ ”
in attempting to locate the adverse party. (Slusher, supra, at p. 756.) The trial court
found its efforts to personally serve Raissi prior to seeking permission to serve by
publication established its reasonable diligence. We think Slusher is distinguishable.
       In Slusher, supra, 69 Cal.App.3d 747, the plaintiff obtained a default judgment
against the defendant on her civil complaint alleging assault and battery. The defendant
had been personally served with the civil complaint when he appeared to defend against
the misdemeanor assault and battery charges. (Id. at p. 750.) Plaintiff‟s section 587
declaration of mailing the request for entry of default, however, indicated that
defendant‟s address was “unknown” to plaintiff and her attorney. (Slusher, supra, at p.
750.) The defendant successfully moved to set aside the default, and the declaration he
submitted in connection with that motion presented ample evidence to establish that his
mailing address was readily obtained. In opposition, “the declarations filed by plaintiff
and her counsel do not reveal any effort by the plaintiff to ascertain defendant‟s mailing
address, although several of defendant‟s relatives and acquaintances frequented plaintiff‟s
place of business. The effort expended by her counsel disclosed at best a minimal search
or inquiry of known available sources.” (Id. at p. 756.) It was in this context that the
court held that the mailing requirement of section 587 is analogous to “[t]he necessary
predicates to secure the right to effect service by publication.” (Slusher, supra, at p. 756.)
“[S]ection 415.50 requires a showing that „reasonable diligence‟ was exercised in the
attempt to locate the litigant upon whom personal service should be made. A comment to
the . . . section 415.50 requirement of reasonable diligence indicates that a „thorough,
systematic investigation and inquiry‟ be conducted in good faith. No less an inquiry is
required by section 587. Available sources such as city and county directories, utility
companies, friends, acquaintances, or relatives or licensing offices (for example the



                                              8
Department of Motor Vehicles license registration) must be checked for a mailing
address. Such an inquiry would satisfy the minimum requirement.” (Ibid.)
       By contrast, Murray & Murray undertook reasonable efforts to locate addresses at
which it could personally serve Raissi and when those attempts at personal service failed,
it sought and obtained an order allowing it to serve Raissi by publication. Murray &
Murray never attempted to mail anything to any of those addresses. Unlike Candelaria,
we do not have evidence of futile attempts to mail documents to the party against whom
default was being sought. Thus, we cannot conclude that if Murray & Murray had mailed
a copy of its application to seek default to the same address where it had attempted to
effect personal service, it was not likely that Raissi would have received it. As a result,
Raissi was prejudiced by Murray & Murray‟s defective compliance with section 587.
       Furthermore, it is noteworthy that Murray & Murray has not demonstrated or even
argued how it would be prejudiced by reversal of the trial court‟s ruling, other than by
virtue of having to prove the allegations of its complaint. Nothing more than a trial on
the merits awaits it below. “It is the policy of the law to favor, wherever possible, a
hearing on the merits, and appellate courts are much more disposed to affirm an order
where the result is to compel a trial upon the merits than they are when the judgment by
default is allowed to stand and it appears that a substantial defense could be made.”
(Weitz v. Yankosky (1966) 63 Cal.2d 849, 854.)
       Because Murray & Murray failed to comply with section 587, Raissi‟s motion to
set aside the default and default judgment should have been granted.
       C.     Matters raised in reply brief
       In its reply brief, Raissi sets forth a number of arguments which it failed to raise in
its opening brief, including, among other things: (1) Murray & Murray failed to provide
notice of its ex parte application for an extension of time to serve Raissi and permission
to serve by publication as required by California Rules of Court, rules 3.1203 and 3.1204;
(2) the trial court granted Murray & Murray an extension of time to serve Raissi which

                                              9
exceeded the amount allowed by the California Rules of Court; (3) the trial court‟s order
granting the ex parte application was not served on Raissi; and (4) the ex parte
application for an extension of time to serve Raissi was itself untimely, as it was filed two
days after the time in which to serve the summons and complaint had expired. We also
can find no reference in the record showing that any of these arguments were ever made
to the trial court.
       Generally, the raising of a new ground for the first time in a reply brief is not
proper appellate practice. (Taylor v. Roseville Toyota, Inc. (2006) 138 Cal.App.4th 994,
1001, fn. 2.) Accordingly, the arguments are waived both because they were raised for
the first time on reply and Raissi made no attempt to show good cause why we should
consider them.2 (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 766; see also Proctor
v. Vishay Intertechnology, Inc. (2013) 213 Cal.App.4th 1258, 1274 [argument in reply
brief forfeited on appeal where plaintiffs failed not only to present the issue in their
opening brief but to present it to trial court].)
III.   DISPOSITION
       The judgment is reversed. Upon remand, the trial court is directed to vacate its
order denying the motion to set aside default and default judgment and enter a new order
granting that motion. Raissi Real Estate Development, LLC shall recover its costs on
appeal.




       2
          As note previously, Raissi‟s section 587 argument was also raised for the first
time at the hearing on its motion to set aside the default and default judgment (see
discussion, ante, at Section II.A). We recognize that inspiration is sometimes belated, but
absent good cause, even the most inspired eleventh-hour efforts will likely be exercises in
futility. It is unfair to opposing counsel and, in most circumstances, should not be
condoned.


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                                                         Premo, J.




      WE CONCUR:




            Rushing, P.J.




            Elia, J.




Murray & Murray v. Raissi Real Estate Development, LLC
H039036
Trial Court:                            Santa Clara County Superior Court
                                        Superior Court No. 1-11-CV213714


Trial Judge:                            Hon. Patricia M. Lucas


Counsel for Defendant/Appellant:        C. Alex Naegele
Raissi Real Estate Development LLC      Charles Alexander Naegele

                                        Parker & Mazo
                                        Eugene D. Mazo


Counsel for Plaintiff/Respondent:       Dorsey & Whitney
Murray & Murray                         John Walshe Murray
                                        Robert A. Franklin
                                        Thomas T. Hwang




Murray & Murray v. Raissi Real Estate Development, LLC
H039036
