Filed 2/1/16 Trousas v. Kim CA4/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA



KIM TROUSAS et al.,                                                 D068062

         Plaintiffs and Respondents,

         v.                                                         (Super. Ct. No. SCVSS146291)

SOO M. KIM et al.,

         Defendants and Appellants.



         APPEAL from orders of the Superior Court of San Bernardino County, Bryan F.

Foster, Judge. Affirmed in part and reversed in part with directions.



         Best Best & Krieger and Kira L. Klatchko for Defendant and Appellant Soo M.

Kim.

         Law Office of Chad Biggins and Chad Biggins for Defendant and Appellant

Samuel Kim.

         Pedersen McQueen, Neil Pedersen, Teresa A. McQueen and Armond M. Jackson

for Plaintiffs and Respondents.
       In this case, we affirm in part the trial court's orders denying defendants and

respondents Soo Kim's and Samuel Kim's (hereinafter sometimes referred to by their first

names or collectively as the Kims) respective motions to be relieved from default

judgments entered against them. Both of the Kims appeared in the trial court and then

failed respectively to respond to discovery requests and a first amended complaint (FAC)

filed by plaintiffs and respondents Kim Trousas, Brandi Lynn Stiff, and Rebecca Meta

Frederick (collectively plaintiffs). The FAC alleged claims for wrongful termination and

emotional distress; plaintiffs took the Kims' defaults, proved up their damages, and the

trial court entered default judgments in the amount of $2 million against each of them,

including $750,000 in punitive damages. Three years after entry of the default

judgments, the Kims moved for relief from the defaults and argued their counsel did not

have authority to represent them.

       In denying the Kims' motions for relief from the default judgments, the trial court

found that as a matter of fact they were both properly served with the FAC and plaintiffs'

statement of damages. With respect to Soo Kim, the trial court found that her statements

to the effect that her two prior attorneys had somehow concealed from her the status of

the litigation were not credible. In denying Samuel Kim's motion, the trial court

implicitly made a similar finding.

       We affirm in part. The record supports the trial court's conclusions the Kims

authorized the respective attorneys to act on their behalf and were properly served with

the FAC and the statement of damages. However, plaintiffs presented no evidence with


                                             2
respect to the financial condition of either defendant. Accordingly, the awards of

punitive damages must be vacated.

                   FACTUAL AND PROCEDURAL BACKGROUND

       A. 2007

       In 2006, plaintiffs were all employees at a restaurant known as Kay's Café, located

in Highland, California. In January 2007, they filed a complaint against the alleged

owners of Kay's Café: Soo Kim, Conway Kim (hereinafter sometimes Conway), KCS

Enterprises, LLC (KCS) and Alan Holub. Plaintiffs alleged that for a number of years

they had been the victims of various forms of sexual harassment, including name calling,

lewd comments, and unwanted and unwelcome touching and grabbing. They further

alleged that this conduct gave rise to claims under the Fair Employment and Housing Act

(Gov. Code, § 12900 et seq.) as well as claims for wrongful termination, wage and hour

violations of the Labor Code, battery, intentional infliction of emotional distress and

negligence.

       In February 2007, Soo Kim was served with the original complaint by way of

substituted service on an employee at the restaurant. According to the declaration of

plaintiffs' process server, he made three attempts to serve the complaint personally on

Soo at the restaurant before leaving the complaint with a waitress. In April 2007,

plaintiffs attempted to personally serve a statement of damages on Soo at the restaurant;

after a number of attempts, plaintiffs' process server left the statement of damages with

another employee of the restaurant. Soo appeared by way of an answer to the initial


                                             3
complaint, filed by her first attorney, Chanhoo Joo (Joo). Joo also answered on behalf of

Conway Kim and KCS. In addition, Joo served responses to plaintiffs' discovery

requests, which included a verification signed by Soo.

      B. 2008

      In January 2008, plaintiffs took Conway Kim's deposition as the person most

qualified to answer on behalf of defendant KCS. Conway explained Soo Kim was his

"friend," but not his wife; he further explained that he and his brothers, Samuel Kim and

Kent Kim were the owners of KCS, which was the actual owner of Kay's Café. Conway

further explained that he used Soo's name on various business documents related to Kay's

Café because he had poor credit. Shortly after Conway's deposition was taken, plaintiffs

discovered that ownership of Kay's Café had recently been transferred to a new entity, 3-

CSK, Inc. (3-CSK), which had the same agent for service of process as KCS, to wit:

Samuel Kim.

      In response to Conway Kim's deposition testimony and the transfer to 3-CSK,

plaintiffs prepared the FAC, which added Samuel Kim, Kent Kim and 3-CSK as

defendants. Although Joo served a motion to withdraw as counsel in February 2008, two

days before the motion to withdraw was heard, on April 7, 2008, plaintiffs served Joo

with the FAC. Thereafter, Joo's motion to withdraw was granted.

      On May 28, 2008, plaintiffs were served with a substitution of attorney signed by

Soo Kim and Vince Shulman (Shulman), Soo's second attorney. Shulman advised

plaintiff's counsel he was authorized to accept service of process on behalf of Soo Kim.


                                            4
In 2008, Shulman also appeared at case management conferences on behalf of Soo, or

employed cocounsel to do so, and filed a case management statement that indicated he

was going to file a demurrer on his clients' behalf.

       Shulman also advised plaintiffs' counsel that he represented Samuel Kim and was

authorized to accept service on behalf of Samuel. Plaintiffs served the FAC on Samuel

by way of service on Shulman, who duly acknowledged service on Samuel. Shulman

also arranged for local counsel to appear on behalf of Samuel at case management

conferences. No answer to the FAC was ever filed on behalf of Samuel.

       In December 2008, a statement of damages was served on Samuel Kim by way of

service on Shulman.

       C. 2009

       Because Soo Kim had failed to provide responses to plaintiffs' discovery requests,

in January 2009, plaintiffs moved for an order imposing terminating sanctions. In

February 2009, the trial court granted plaintiffs' motion, struck Soo's answer and entered

her default.

       Because no answer was ever filed on behalf of Samuel Kim, plaintiffs took

Samuel's default on May 29, 2009.

       D. 2010

       On March 18, 2010, the trial court conducted a prove-up hearing and awarded

plaintiffs $2 million in damages against each defendant, including $750,000 in punitive

damages. Judgments against Soo Kim and Samuel Kim in that amount were then


                                              5
entered.

       E. 2013

       In 2013, plaintiffs served levies of execution on depository institutions where Soo

Kim and Samuel Kim had accounts. Soo and Samuel then obtained a preliminary

injunction preventing plaintiffs from making further attempts to execute on the judgment

and moved to set aside their respective defaults and default judgments.

       1. Soo Kim's Motion

       In a declaration she filed in support of her motion for relief from the default and

default judgment, Soo stated she was not an employee of Kay's Café, did not manage it,

did not authorize either Joo or Shulman to appear on her behalf and that her signature on

the discovery verification and substitution of attorneys had been forged. In response,

plaintiffs submitted the declaration of a document examiner who concluded that the

signature on a fictitious business name statement filed for Kay's Café in 2006, and the

signature on the declaration Soo submitted in support of her application for the

preliminary injunction, both of which Soo conceded were hers, were made by the same

person who signed the substitution of attorney and verification of discovery responses.

       In reply, Soo submitted the declaration of her own expert, who criticized plaintiffs'

expert's conclusion and analysis. However, as the trial court noted, Soo's expert did not

conclude that the signatures on the verification and substitution were forgeries.

       2. Samuel Kim's Motion

       In support of his motion for relief from default, Samuel argued that the record did


                                             6
not show that he had ever been properly served with a statement of damages; Samuel's

motion, in the first instance, simply argued that, although the court's records showed that

the statement of damages had been mailed to Shulman, proof of the mailing to Shulman

was insufficient to show that the statement of damages had been properly served.

Initially, Samuel's motion was not supported by any declaration he made. Instead, it

relied solely on counsel's declaration that the record did not show that Samuel had ever

been personally served with a statement of damages. At the outset, Samuel made no

statements with respect to when he learned about the lawsuit or his relationship with

Shulman.

       In response to Samuel's contention that service of the statement of damages on

Shulman was ineffective, plaintiffs produced documentation which showed that Shulman

had advised plaintiffs' counsel that he represented Samuel and that he agreed to accept

service of the FAC on his behalf. Plaintiffs also relied on minutes from the trial court

which reflected that Shulman had arranged for counsel to appear at case management

conferences on behalf of Samuel, among others, before the statement of damages was

mailed to Shulman.

       The proof that Shulman agreed to accept service on behalf of Samuel Kim caused

Samuel to substantially alter and expand the theory upon which he sought relief from the

default and default judgment. In his reply brief, Samuel submitted a declaration in which

he stated that he had no knowledge of the lawsuit until plaintiffs' executed on the

judgment and that he had not retained Shulman to represent him or authorized him to


                                             7
accept service on his behalf. Counsel further argued that there was no proof in the record

that Shulman had ever made an appearance in the action on Samuel's behalf; accordingly,

counsel argued that plaintiffs were not entitled to the benefit of Code of Civil Procedure

section 425.11, subdivision (d)(2), which would permit service of the statement of

damages on Shulman.

       As we indicated the outset, the trial court denied the respective motions for relief

from the respective default judgments.

                                       DISCUSSION

                                              I.

                                   SUE KIM'S APPEAL

       A. Jurisdiction

       On appeal, Soo contends she was never properly served with the complaint, the

statement of damages, or the FAC, and that neither Joo nor Shulman was ever authorized

to later appear on her behalf. She contends that she established her signatures on

discovery documents and the substitution of attorney were forged. Thus, she contends

that the trial court never had personal jurisdiction over her and that it should not have

entered her default and later a default judgment.

       1. Standard of Review

       In considering Soo's factual contentions, we are of course constrained by our role

as a court of review and bound to accept the trial court's contrary factual findings,

notwithstanding that they were based entirely on a documentary record, if those findings


                                              8
are supported by the record. (See Shamblin v. Brattain (1988) 44 Cal.3d 474, 479.)

       2. Principles of Law

       Soo's appeal is principally governed by two well-established principles of civil

procedure: (1) when an attorney appears for a defendant, we may presume the attorney

was authorized to do so; and (2) when a party appears in an action, the party waives any

defects in service of process.

       The law is fairly clear that when an attorney appears in a lawsuit, his appearance is

presumptively authorized. (Gagnon v. Nevada Desert Inn, Inc. (1955) 45 Cal.2d 448,

459; Kallman v. Henderson (1965) 234 Cal.App.2d 91, 98; Wilson v. Sharp (1959) 175

Cal.App.2d 691, 695.) However, that presumption is "disputable, and the burden of proof

rests upon the person attacking the authority of the attorneys to act." (Kallman v.

Henderson, supra, at p. 98.)

       With respect to the consequence of a party's appearance in an action, the law is

equally clear. In Fireman's Fund Ins. Co. v. Sparks Construction, Inc. (2004) 114

Cal.App.4th 1135, service on the defendants was defective; nonetheless, the defendants

appeared in the action and filed answers. In holding that, in light of their appearance in

the action the defendants could not assert the defects in service, the court stated: "The

rule that a general appearance 'waives' objections to defective service is actually a matter

of forfeiture, not waiver. Service of summons is required in order to give the defendant

notice of the action, as due process demands. [Citation.] But once the defendant appears

in the action, this purpose has been served. 'A defendant has a right to demand that


                                             9
process be issued against him in the manner provided by law, but if process is not so

issued and he appears generally without making objection, such appearance, being the

purpose of the process, confers jurisdiction of the person and the court is empowered to

act in the premises.' [Citation.] [¶] . . . [¶] Any rule that a general appearance does not

waive objections to service unless the waiver is knowing and intelligent would exalt form

over substance. A defendant who has actual knowledge of the action and who has

submitted to the authority of the court should not be able to assert a violation of rules

which exist only to bring about such knowledge and submission. We therefore hold that

a defendant who makes a general appearance forfeits any objection to defective service,

even when the defendant does not know at the time that such an objection is available."

(Id. at pp. 1147-1148, fn. omitted.)

       3. Analysis

       The trial court determined Joo and Shulman were authorized to appear on Soo's

behalf. In reaching this conclusion, the trial court relied on the fact Soo signed the

discovery verification and substitution of Shulman as counsel; in doing so, the trial court

expressly rejected Soo's contention her signatures were forged. This factual finding by

the trial court—that Soo signed the verification and substitution—is material to the trial

court's finding that she authorized the appearance of counsel, and ultimately to its finding

of personal jurisdiction over her.

       There is ample evidence which supports the trial court's conclusion that Soo

signed the pertinent litigation documents. Soo's overall credibility was diminished by the


                                             10
fact that, although she denied having any control over or knowledge with respect to the

operation of Kay's Café, she signed a 2006 fictitious business name statement which

stated that she would be doing business as Kay's Café and listed the restaurant's Highland

address as her place of business. Her credibility was diminished further by the deposition

testimony of her friend, codefendant Conway Kim, who conceded under oath that she

was the record owner of the restaurant. Her credibility was of course also damaged by

the fact that, in order to adopt Soo's version of events, the trial court would have to accept

the somewhat implausible notion that not one but two members of the bar engaged in

separate consecutive acts of forgery and fraud in order to appear on her behalf. As the

trial court stated: "I have to suspend belief in order to buy her statement."

       More particularly, the trial court's finding that no forgery occurred was supported

by the conclusion of the expert retained by plaintiffs, who determined the signatures that

appeared on the verification and substitution were Soo's. Although, as we noted, Soo's

expert criticized plaintiffs' expert's qualifications and methodology, he did not offer a

contrary opinion. Given the entire record, and in particular Soo's lack of credibility, the

trial court did not act unreasonably in accepting plaintiffs' expert's conclusion that Soo

signed the disputed documents.

       In short, the record fully supports the trial court's conclusions that Soo signed the

litigation documents and that her signatures in turn were convincing evidence Joo and

Shulman were authorized to appear on her behalf. The authorized appearance of counsel

on Soo's behalf of course in turn dispenses with her jurisdictional contentions.


                                             11
(Fireman's Fund Ins. Co. v. Sparks Construction, Inc., supra, 114 Cal.App.4th at

pp. 1147-1148.)

       B. Service of Statement of Damages

       In any wrongful death or personal injury action, Code of Civil Procedure section

425.11, subdivision (c) requires that a statement of damages be served on a defendant

before any default may be taken. If the defendant has not yet appeared, the statement of

damages must be served in the same manner as a summons. (Code Civ. Proc., § 425.11,

subd. (d).) In the trial court, Soo's counsel agreed that a statement of damages may be

served by way of substituted service.

       Although Soo's declaration states that she never received the statement of damages

delivered to one of the employees at Kay's Café, as is the case with respect to service of

the summons, the record strongly indicates that she in fact received both the summons

and the statement of damages and that the summons and statement were eventually

passed along to her attorneys. The inference that she had actual notice of both documents

arises from the fact that she obtained counsel to defend her in the action and her overall

lack of credibility. In light of this record, the trial court could conclude that substituted

service of the statement of damages gave Soo actual notice of it and that the trial court

could thereafter take her default.

       In this regard, where substituted service has been employed and has provided

actual notice, the principle that we liberally interpret the service of process statutes in

favor of service applies and permitted substituted service under Code of Civil Procedure


                                              12
section 415.20, subdivision (b) at the place of business Soo identified in the fictitious

business name statement she executed. (See Pasadena Medi-Center Associates v.

Superior Court (1973) 9 Cal.3d 773, 778; see also Bein v. Brechtel-Jochim Group, Inc.

(1992) 6 Cal.App.4th 1387.) This is not an instance where no service contemplated

under the statutes was used but the defendant nonetheless had actual notice of the

litigation. (See, e.g., American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th

383, 389; Summers v. McClanahan (2006) 140 Cal.App.4th 403, 413.) We recognize

that in such instances actual notice will not effect service.

       C. Punitive Damages

       The default judgment entered against Soo included $750,000 in punitive damages.

As Soo points out, no evidence as to her income or net wealth was or could be presented

at the prove-up hearing.

       The necessity of such evidence in support of an award of punitive damages is well

established and of constitutional dimension. (See Adams v. Murakami (1991) 54 Cal.3d

105, 111-112.) In Adams, the Supreme Court stated that "an award of punitive damages

cannot be sustained on appeal unless the trial record contains meaningful evidence of the

defendant's financial condition" (id. at p. 109), because "[w]ithout such evidence, a

reviewing court can only speculate as to whether the award is appropriate or excessive"

(id. at p. 112). "Even if an award is entirely reasonable in light of the other two

factors . . . , the award can be so disproportionate to the defendant's ability to pay that the

award is excessive for that reason alone." (Id. at p. 111.)


                                              13
       Importantly, an appellate court may review the alleged excessiveness of a damages

award in an appeal from a default judgment. (Steven M. Garber & Associates v.

Eskandarian (2007) 150 Cal.App.4th 813, 824; Scognamillo v. Herrick (2003) 106

Cal.App.4th 1139, 1150.) A damage award not supported by substantial evidence is

excessive and thus subject to our review, not withstanding that it was made in a default

proceeding and is embodied in a default judgment. (Ostling v. Loring (1994) 27

Cal.App.4th 1731, 1746.) Accordingly, the validity of the punitive damage award is

properly before us and, because there is no evidence of Soo's financial condition in the

record, we must reverse the portion of the judgment against her that awards plaintiffs

punitive damages.

                                            II.

                               SAMUEL KIM'S APPEAL

       A. Shulman's Authority

       As he did in the trial court, Samuel once again argues that Shulman had no

authority to represent him. The record wholly refutes his contention.

       As was the case with respect to Soo, based on Shulman's appearance on behalf of

Samuel at the case management conferences, the trial court was permitted to presume that

Shulman was authorized to do so. (Kallman v. Henderson, supra, 234 Cal.App.2d at

p. 98.) That presumption was of course rebuttable. (Ibid.) However, in attempting to

rebut the presumption, Samuel relied solely on his own declaration stating that he did not

authorize Shulman to act on his behalf and had no knowledge of the action until plaintiffs


                                            14
attempted to execute on his bank accounts. He offered no evidence from Shulman or any

evidence that he attempted to obtain evidence from Shulman. On this record, this

showing was entirely inadequate to overcome the presumption of authority.

       As we have noted, in initially challenging the default judgment Samuel relied

solely on the narrow and entirely technical argument that service of the statement of

damages on Shulman by mail was ineffective because Shulman had not appeared in the

action on behalf of Samuel. (See Code Civ. Proc., § 425.11, subd. (d)(1) & (2).) This

initial argument was not supported any declaration from Samuel or any assertion with

respect to Shulman's authority to represent him. Only when, in opposition to Samuel's

motion, plaintiffs produced evidence both that Shulman represented he had authority to

accept service of the FAC and thereafter appeared at case management conferences on

Samuel's behalf, did Samuel attack Shulman's authority to act on his behalf and argue that

therefore the acknowledgement of service of process signed by Shulman did not give the

trial court jurisdiction over him and that service of the statement of damages on Shulman

was invalid. Samuel's belated presentation of the broader equitable argument that he had

been the victim of fraud by Shulman suggests recent invention and plainly undermines

Samuel's credibility.

       Samuel's statement that he had no knowledge of the action until plaintiffs executed

on their judgment also lacks credibility. The record shows that Samuel was an owner of

KCS and that his brother, Conway Kim, was another owner of KCS. The record also

suggests that Samuel was the agent for service of process for both KCS and 3-CKS, the


                                            15
transferee of KCS's interest in Kay's Café. The transfer to 3-CKS, which occurred after

the lawsuit commenced, of course suggests an effort to avoid payment of any judgment.

Given these circumstances, in order to accept Samuel's assertion that he was entirely

ignorant of plaintiffs' complaint, one would have to believe that although Conway and his

friend Soo were defending the litigation in which Samuel's interest in KCS was plainly

placed in peril and arranging for the transfer to 3-CKS, they both nonetheless kept

Samuel in the dark about the litigation. The trial court plainly was not required to

indulge such a dubious narrative.

       In sum, the record shows that Shulman was presumptively authorized to appear on

Samuel's behalf and that Samuel's belated, self-serving and uncorroborated declaration

failed to overcome that presumption. Thus, the FAC and statement of damages were

properly served on Shulman before Samuel's default was entered, and the trial court did

not err in denying Samuel's motion for relief from the default judgment.1

       B. Punitive Damages

       As was the case with respect to Soo, no evidence of Samuel's financial condition

was offered at the prove-up hearing, and, accordingly, the trial court erred in awarding

$750,000 in punitive damages against him. As we indicated with respect to Soo, in

1      Parenthetically, we reject Samuel's alternative contention that Shulman's conduct
amounted to the abandonment that permits relief from default under the court's power to
remedy extrinsic fraud. (See Orange Empire Nat'l Bank v. Kirk (1968) 259 Cal.App.2d
347, 353-356.) Having asserted that he did not know about the litigation and never
retained Shulman, Samuel never presented any evidence that he relied on Shulman to
represent him and that Shulman thereafter, and for no valid reason, failed to protect his
interests. In the absence of such evidence, the trial court could only speculate as to
whether the failure to defend the action was the fault of Samuel or Shulman.
                                            16
attacking the default judgment Samuel may challenge such an award of punitive damages

as excessive. (See Steven M. Garber & Associates v. 2.5Eskandarian, supra, 150

Cal.App.4th at p. 824; Scognamillo v. Herrick, supra, 106 Cal.App.4th at p. 1150.)

                                      DISPOSITION

      The orders denying Soo Kim's and Samuel Kim's motions for relief from the

default judgments are reversed insofar as the orders leave undisturbed the respective

awards of punitive damages. On remand, the trial court is directed to vacate the awards

of punitive damages and permit plaintiffs to seek awards of punitive damages that meet

the requirements of the law and due process and, in particular, present evidence with

respect to the financial condition of Soo Kim and Samuel Kim. In all other respects, the

orders are affirmed.2

      Plaintiffs to recover their costs of appeal.
                                                                     BENKE, Acting P. J.

WE CONCUR:


HALLER, J.


IRION, J.




2     Soo has asked that we take judicial notice of documents related to Shulman's 2014
summary disbarment. Neither the documents nor the circumstances set forth in them
were before the trial court when it ruled on Soo's motion for relief from the default
judgment. Her request for judicial notice is therefore denied. (Doers v. Golden Gate
Bridge etc. Dist. (1979) 23 Cal.3d 180, 184.)
                                             17
