Was Kelley Lynch served with Cohen's summons and complaint?
Yes. A California registered process server with First Legal Support Services made six attempts to serve Lynch with the summons and complaint at her Mandeville Canyon Road residence but received no response from anyone within the home. On his seventh attempt, on August 24, 2005, a woman answered the door but would not identify herself. The process server left the summons and complaint with the unnamed female and indicated on his declaration of diligence filed with the court: "Subject not in. Subserved on "Jane Doe" - White Female, 5'7", 135 lbs, blond hair, black eyes, co-occupant." On this same day, First Legal Support Services mailed a copy of the summons and complaint to Lynch at the Mandeville Canyon address. A proof of service of the mailing was filed with the court. Lynch never denied receiving the mailed summons and complaint.
The California Code of Civil Procedure provides a means of effective service of process if a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served. A summons may be served by leaving a copy of the summons and complaint at the person's dwelling house in the presence of a person apparently in charge, followed by mailing the documents to the same address. The process server's six attempts at unsuccessful service more than qualified as reasonable diligence. Further, it is not uncommon for a person answering the door to refuse to be identified. Therefore, it is an accepted practice to name such a female person as "Jane Doe." The courts have found this practice reasonably calculated to achieve actual service and therefore valid. Thus, the substituted service on Lynch was valid.
In addition, Michelle Rice, attorney for Cohen, argued that there was ample evidence that Lynch had actual notice of the summons and complaint, confirming that service was effectuated on Lynch. On August 24, 2005, the day of substituted service of the summons and complaint on "Jane Doe" at Lynch's residence, a person named Chad, who identified himself as one of Lynch's housemates, called Cohen's then attorney Scott Edelman to complain about service of the summons and complaint. On that same day, Edelman received an email from Lynch stating: "If you try to serve this fraudulent law suit on me one more time, I will hold you personally responsible for mental duress." Since Edelman had no prior contact with Lynch, there is only one reasonable explanation as to how and why Lynch's housemate and then Lynch contacted Edelman, Lynch must have read Edelman's name and contact information from the complaint left with "Jane Doe."
Further, in three different motions Leonard Cohen's former manager Lynch attempted to argue that the service of process was defective. Each time the court rejected Lynch's allegations. The judge reiterated to Lynch: "You don't have to be personally served if I am persuaded that valid sub service was made, and I am so persuaded and have been."
(See Proof of Service of Summons (p. 49), Superior Court, State of California, County of Los Angeles, BC338322)
(See Transcript of October 6, 2015 hearing, Superior Court, State of California, County of Los Angeles, BC338322)
Is Lynch's allegation of "tax fraud" against Cohen a sufficient justification for her non-participation in the lawsuit Cohen brought against her for misappropriation of his funds and breach of her fiduciary duties?
No. Leonard Cohen's ex-manager Lynch repeatedly asserted to Cohen's attorneys that she was not participating in the litigation because of her subjective belief that the whole matter constituted "tax fraud." Lynch claimed to have "reported" Cohen to the IRS in April 2005 and alleged that Cohen filed his lawsuit in August 2005 as retaliation for her report. But attorneys for Cohen believe the evidence suggests Lynch's actual report of Cohen to the IRS was in March 2007, ten months after Leonard Cohen's judgment was entered against her, and it resulted in no change in Cohen's income tax returns for any of the years at issue after IRS review.
If Lynch truly believed her allegation of "tax fraud" had any merit, there was nothing precluding Lynch from asserting her claim either as a counterclaim against Cohen's lawsuit, a cross-claim against Westin or as an affirmative defense to Cohen's claims against her.
For a claim of fraud to justify equitable relief from a judgment, the fraud must be extrinsic, meaning the fraud deprived Lynch of her opportunity to present her case in court. Lynch put forth her claim of "tax fraud" in her motion for terminating sanctions. The court denied Lynch's motion stating that she had not demonstrated there was extrinsic fraud and shown no basis to set aside the default judgment.
(See Transcript of June 23, 2015 hearing, Superior Court, State of California, County of Los Angeles, BC338322)