WELLS FARGO BANK, N.A., as Trustee, etc.

, Plaintiff and Respondent,

v.
GMAC MORTAGE USA CORPORATION, Defendant and Appellant.

No. B217147.

Court of Appeals of California, Second District, Division Two.

Filed July 23, 2010.

Cunningham & Treadwell, James H. Treadwell and Jonathan L. Fong for Defendant and
Appellant.

Houser & Allison, Eric D. Houser and Jeffrey S. Allison for Plaintiff and Respondent.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

CHAVEZ, J.

GMAC Mortgage USA Corporation (GMAC) appeals from a judgment entered after the trial court
granted a motion for judgment on the pleadings (motion) filed by plaintiff and respondent Wells
Fargo Bank, N.A., as Trustee for the Registered Holders of Merrill Lynch Mortgage Investors
Trust, Asset-Backed Certificates, Series 2004-WMC4 (Wells Fargo). GMAC had previously
defaulted, and the trial court had agreed that the motion was the proper means of disposing with
Wells Fargo's claims as to all remaining defendants. GMAC argues that because it had defaulted,
the trial court was without jurisdiction to consider anything other than a default prove-up package
or a motion to set aside the default. Appellant seeks reversal of the judgment entered pursuant to
the motion for judgment on the pleadings. For the reasons set forth below, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Wells Fargo filed this lawsuit on August 29, 2006. On December 18, 2006, Wells Fargo filed its
first amended complaint (FAC). The FAC alleged, among other things, that Wells Fargo was the
assignee of a first deed of trust secured by property located in Sherman Oaks, California
(property). It further alleged that forged substitutions of trustees, and forged reconveyances of the
first and second loans on the property, among other fraudulent documents, were recorded in the
official records of Los Angeles County. In sum, Wells Fargo was the victim of a fraudulent
mortgage elimination scheme.
The FAC further alleged that when the property was later in escrow, Wells Fargo demanded that
the escrow not be closed until its loan was paid. Certain defendants represented to Wells Fargo that
litigation would not be necessary and its loan would be paid. However, the escrow closed without
Wells Fargo's loan being paid as had been represented. Wells Fargo alleged that the defendants
falsely promised Wells Fargo that its loan would be paid off and wrongfully benefited from the
fraudulent mortgage elimination scheme to the detriment of Wells Fargo. The new mortgage loan
purporting to be in first priority position was a loan from People's Choice Home Loans (People's
Choice).[1]

Only the first and fourth causes of action alleged in the FAC are at issue in this appeal. In its first
cause of action for cancellation of written instruments, Wells Fargo sought the cancellation of the
void liens recorded against the property and elimination of the cloud on the title of the property in
order to allow Wells Fargo to proceed with foreclosure. In its fourth cause of action for equitable
subordination, Wells Fargo requested that the court impress an equitable lien against the property
in favor of Wells Fargo in first priority position securing the amount of the first loan.

GMAC's predecessor-in-interest and originator of the more recent loan, People's Choice was
named as a defendant in the FAC filed on December 18, 2006. After People's Choice gave notice
of its bankruptcy on March 27, 2007, the action was stayed concerning the claims in which
People's Choice was named. Wells Fargo, through its own investigation, determined that People's
Choice had assigned the loan to GMAC. Wells Fargo promptly dismissed People's Choice, which
nullified the stay. On August 5, 2008, Wells Fargo added GMAC as a doe defendant.[2]

The summons, FAC and amendments thereto were served on GMAC on October 2, 2008. GMAC
failed to file a response and its default was entered on December 8, 2008.

Wells Fargo obtained summary judgment as to some defendants, and settled as to others. As of
March 12, 2009, the remaining claims of the FAC were the first, third, and fourth causes of action
against GMAC and three other defendants. At a status conference, it was discussed between
counsel for Wells Fargo and the court that a motion for judgment on the pleadings should be used
as a mechanism as to the first and fourth causes of action in order to cancel the fraudulently
recorded instruments and to restore Wells Fargo's deed of trust to its first position as a matter of
record. The court set the hearing date for April 7, 2009.[3] Wells Fargo's motion for judgment on
the pleadings was filed on March 12, 2009, and was served on GMAC.
GMAC did not attempt to file an opposition to the motion, nor did it file a motion to set aside the
default. However, counsel for GMAC appeared at the hearing on April 7, 2009. The minute order
from the hearing states, in pertinent part:

"Plaintiff's counsel advises the court that he will not stipulate to setting aside the default as to
defendant GMAC Mortgage USA.
"Plaintiff Wells Fargo Bank, N.A.'s motion for judgment on the pleadings is well taken and is
granted.
"The prove-up hearing is ordered off calendar."

GMAC did not object to the motion or raise a question as to the trial court's jurisdiction. Although
counsel for GMAC apparently sought a stipulation from Wells Fargo setting aside the default,
Wells Fargo did not agree to such a stipulation and GMAC did not move to set aside the default.

The trial court entered its order and judgment on April 21, 2009. Notice of entry of the order was
served on April 24, 2009. On June 22, 2009, GMAC filed its notice of appeal.

DISCUSSION

GMAC's status as a defaulted party limits our review of the judgment. "Where, as here, the
defaulting party takes no steps in the trial court to set aside the default judgment, appeal from the
default judgment presents for review only the questions of jurisdiction and the sufficiency of the
pleadings. [Citations.]" (Corona v. Lundigan (1984) 158 Cal.App.3d 764, 766-767; Bristol
Convalescent Hospital v. Stone (1968) 258 Cal.App.2d 848, 859 [generally, an appeal by a
defendant against whom a default judgment has been taken is "confined to jurisdictional matters
and fundamental pleading defects"].)[4] GMAC does not attack the sufficiency of the pleadings,
therefore our review is limited to the question of jurisdiction.

"`"Lack of jurisdiction in its most fundamental or strict sense means an entire absence of power to
hear or determine the case, an absence of authority over the subject matter or the parties."'
[Citations.]" (Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1249.) When the
evidence is not in conflict, whether jurisdiction exists is a question of law which we review de
novo. (Roman v. Liberty University, Inc. (2008) 162 Cal.App.4th 670, 677.)

I. JURISDICTION

GMAC does not attack the fundamental jurisdiction of the trial court. It does not argue that the
court lacked jurisdiction over the parties or the subject matter of the lawsuit.
Instead, GMAC argues that the trial court lacked jurisdiction to enter judgment on the pleadings. In
support of this argument, GMAC cites W.A. Rose Co. v. Municipal Court for Oakland-Piedmont
Judicial Dist. (1959) 176 Cal.App.2d 67 (W.A. Rose). In W.A. Rose, the respondent filed a request
with the court clerk to enter default after appellant's time to plead had passed. The clerk did not act
on the request. (Id. at p. 69.) The appellant later filed a motion for change of venue, which was
calendared for hearing. Respondent then filed a second request for entry of default. The Court of
Appeal determined that this request should have been granted, as appellant's time to appear had
expired and the only pleading on file was a motion for change of venue. (Id. at p. 70.) The central
issue was whether the notice of motion for change of venue constituted an appearance preventing
the entry of default. The court concluded that it did not. (Id. at p. 71.)

In discussing the issue, the court focused on the untimely filings made by the appellant after its
default should have been entered. The court stated, "[t]he subsequent untimely filings by appellant
and motions made by respondent did not affect the duty of the clerk to enter the default when
requested, nor did they restore the jurisdiction to the court which was lost when default should
have been entered." (W.A. Rose, supra, 176 Cal.App.2d at p. 72.) As GMAC points out, the court
stated that after the appellant's default, "[t]he municipal court . . . lost jurisdiction to do anything
but enter the default and judgment." (Ibid.) Based on this quote from W.A. Rose, GMAC argues
that the trial court had no jurisdiction to do anything other than enter a default and judgment,
therefore its decision to hear and grant the motion for judgment on the pleadings was in excess of
its jurisdiction.

The matter before us is distinguishable. In contrast to W.A. Rose, this matter involved multiple
defendants, and Wells Fargo had a continuing obligation to prosecute its action against the
remaining defendants. GMAC's default did not operate to limit the court's jurisdiction as to Wells
Fargo or those remaining defendants. The motion for judgment on the pleadings which the trial
court heard and granted was filed by Wells Fargo, which was still an active party in the litigation.
The trial court had not lost jurisdiction to hear and decide motions filed by Wells Fargo; GMAC,
however, had lost its right to oppose them. (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984)
155 Cal.App.3d 381, 385-386 ["The entry of a default terminates a defendant's rights to take any
further affirmative steps in the litigation until either its default is set aside or a default judgment is
entered"].)[5]

Further, Code of Civil Procedure section 585, subdivision (b) specifically authorizes the trial court
to enter judgment against a defaulting defendant upon the application of the plaintiff. (See also
W.A. Rose, supra, 176 Cal.App.2d at p. 72.) By defaulting, a party "is presumed to admit all the
facts which are well pleaded in the complaint. The judgment which follows upon this sort of
admission is, in contemplation of law, a complete adjudication of all the rights of the parties
embraced in the prayer for relief and arising from the facts stated in the complaint." (Application
of Circosta (1963) 219 Cal.App.2d 777, 786.) Having failed to cure its default, GMAC admitted
the well pleaded facts in the FAC and subjected itself to judgment for the relief demanded therein.
Evidence in support of the judgment existed in the form of public records attached as exhibits to
the FAC, including the indictment of the perpetrators of the fraud, who had since been convicted,
and copies of the forged documents. Wells Fargo requested that the trial court take judicial notice
of these public records, and the trial court properly considered them in determining that judgment
in the plaintiff's favor was warranted.[6]

We conclude that the trial court had jurisdiction to hear and grant Wells Fargo's motion for
judgment on the pleadings, and had jurisdiction to enter judgment against GMAC.

II. MOTION FOR JUDGMENT ON THE PLEADINGS

The question of the trial court's procedural error in using a motion for judgment on the pleadings
against GMAC is not properly before this court. GMAC's default terminated GMAC's entitlement
to take any further steps in the litigation affecting Wells Fargo's right of action. (People v. One
1986 Toyota Pickup (1995) 31 Cal.App.4th 254, 259.) Because it was not entitled to object to the
propriety of the motion for judgment on the pleadings in the trial court, GMAC is not entitled to
appeal the trial court's decision to allow the motion. As discussed above, our review in this matter
is limited to the question of whether the trial court had jurisdiction to hear the motion and to enter
judgment against GMAC. We have concluded that it had such jurisdiction.

However, we note that GMAC has failed to show that any procedural error was reversible.
California Constitution Article VI, section 13 provides that "[n]o judgment shall be set aside . . .
for any error as to any matter of procedure, unless, . . . the court shall be of the opinion that the
error complained of has resulted in a miscarriage of justice." Here, GMAC has not shown that
reversal for a default prove-up hearing would yield a different result. The causes of action ruled
upon by the trial court resulted in a judgment canceling certain void liens and securing first priority
for Wells Fargo's lien. GMAC makes no argument as to how this result would change if a default
prove-up, rather than a motion for judgment on the pleadings, had been the mechanism employed
to confirm the judgment against it.

Thus, if this issue were properly before this court, we would conclude that any error is harmless.
DISPOSITION

The judgment is affirmed. Wells Fargo is entitled to its costs of appeal.

We concur:

BOREN, P. J.

DOI TODD, J.

[1] People's Choice gave notice of its bankruptcy in this action on March 27, 2007, and later advised that it no longer
had the loan. People's Choice was dismissed from the action on July 31, 2008.

[2] Defendant People's Choice was represented by the same counsel as GMAC.

[3] The minute order from April 7, 2009, reflects that the matter was on calendar for a "default prove-up hearing as to
defendant GMAC Mortgage USA." Wells Fargo suggests that this may have been an error on the part of the clerk.

[4] A defaulted party may also properly seek review of a damage award through a direct appeal from the judgment.
(Ostling v. Loring (1994) 27 Cal.App.4th 1731, 1749.) Excessive damages are not an issue in this matter.

[5] We do not disagree with the cases GMAC has cited on this point. (See Steven M. Garber & Associates v.
Eskandarian (2007) 150 Cal.App.4th 813, 823 ["[t]he entry of default cuts off the right to file pleadings and motions,
and the right to notices and the service of pleadings"]; Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294,
1301 [defaulted defendant is "no longer an active party in the litigation"].) However, these cases do not stand for the
proposition that the trial court lacks jurisdiction to hear a plaintiff's motion for judgment on the pleadings after one of
several defendants has defaulted.

[6] GMAC cites Taliaferro v. Hoogs (1963) 219 Cal.App.2d 559, 560 for the proposition that a plaintiff must prove up
its case against a defaulting defendant with evidence of the damages sustained. The case does not discuss the
jurisdictional issue before us, therefore it is not helpful.