Judge: Anne Hwang, Case: 23STCV06720, Date: 2024-01-18 Tentative Ruling

Case Number: 23STCV06720    Hearing Date: January 18, 2024    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely.  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

BACKGROUND

On March 28, 2023, Plaintiff Amanda Alcala (“Plaintiff”) filed a complaint against Defendant Los Angeles County Metropolitan Transportation Authority (“Defendant”).

On April 6, 2023, Plaintiff served Defendant with the summons and complaint.

On July 25, 2023, default was entered against Defendant.

On November 8, 2023, Defendant filed this motion to set aside the default pursuant to Code of Civil Procedure section 473(b) and 473.5.

Plaintiff opposes and Defendant replies.

LEGAL STANDARD

Under Code of Civil Procedure section 473(b), the Court may relieve a party from a default entered against him through his mistake, inadvertence, surprise, or excusable neglect.  This application must be filed no more than six months after entry of the order from which relief is sought, and must contain an affidavit of fault demonstrating the moving party’s mistake, inadvertence, surprise, or excusable neglect.

A mistake is a basis for relief under section 473 when by reason of the mistake a party failed to make a timely response.  Surprise occurs when a party is unexpectedly placed in a position to his injury without any negligence of his own. Excusable neglect is a basis for relief when the party has shown some reasonable excuse for the default.  (Credit Managers Association of California v. National Independent Business Alliance (1984) 162 Cal.App.3d 1166, 1173; Davis v. Thayer (1980) 113 Cal.App.3d 892, 905.)  Under Code of Civil Procedure section 473, the moving party bears the burden of demonstrating an excusable ground, such as fraud or mistake, justifying a court’s vacating a judgment.  (Basinger v. Roger & Wells (1990) 220 Cal.App.3d 16, 23–24.)   

Relief under this section is mandatory when based on an attorney affidavit of fault; otherwise, it is discretionary. (Id.)

DISCUSSION

            As an initial matter, Defendant’s motion is timely since it was filed within six months after default was entered.

Here, Defendant asserts that Carl Warren & Company (“Carl Warren”) is its third-party claims adjuster responsible for reviewing summons and complaints served on Defendant and thereafter referring cases to defense attorneys. (Motion, 6.) Defendant argues that a complaint and summons is first received by Defendant’s Legal Services Department and then physically transferred to Carl Warren, which is located in the same building. Defendant argues Carl Warren never received the documents, and therefore, the documents were likely lost during the transfer process. Defendant offers the declaration of Uchenna Ikobi, a claims supervisor for Carl Warren who states they learned of the lawsuit on September 20, 2023 after receiving Plaintiff’s Application for Extension of Time to File Requests for Entry of Default Judgment. (Ikobi Decl. ¶ 5.) Therefore, Defendant argues failure to transfer the complaint and summons was due to excusable neglect.

In opposition, Plaintiff first argues Defendant did not file this motion within a reasonable time because it was filed more than three months after entry of default. (Opp., 5.) However, here Defendant asserts it learned of the lawsuit on September 20, 2023. (Ikobi Decl. ¶ 5.) Therefore, since the motion was filed on November 8, 2023, it was filed within a reasonable time. Plaintiff also argues that on May 26, 2023, she emailed Melissa West, a Carl Warren claims adjuster, informing her that a complaint was served. (Opp., 2.) However, by July 17, 2023, Ms. West had still not received the complaint. While Plaintiff argues Defendant was on notice of the complaint by May 26, 2023, she does not establish that Defendant’s claim adjuster had obtained the summons and complaint. “Because the law favors disposing of cases on their merits, ‘any doubts in applying section 473 must be resolved in favor of the party seeking relief from default [citations].’” (Rappleyea v. Campbell¿(1994) 8 Cal.4th 975, 980.) Therefore, because Defendant asserts the summons and complaint was lost during the transfer to Carl Warren, the Court finds that it has shown a reasonable excuse for the default.

As a result, the Court declines to address Defendant’s argument regarding section 473.5.

Plaintiff requests the Court to order Defendant to pay $500 in sanctions and pay $5,748.22 in attorney fees to Plaintiff’s counsel. (Opp., 8.) Defendant does not address this request in the reply.

“Whenever the court grants relief from a default, default judgment, or dismissal based on any of the provisions of this section, the court may do any of the following:

(A) Impose a penalty of no greater than one thousand dollars ($1,000) upon an offending attorney or party.

(B) Direct that an offending attorney pay an amount no greater than one thousand dollars ($1,000) to the State Bar Client Security Fund.

(C) Grant other relief as is appropriate.”

(Code Civ. Proc. 473(c)(1).)

Plaintiff’s request for $5,746.22 exceeds the $1,000 limit in section 473(c). However, the Court finds that a penalty is warranted since Plaintiff offers proof that it was communicating with Carl Warren before default was entered, and that the complaint and summons was served. (Mikayelyan Decl. ¶ 7–9, Exh. E.) The Statement of Damages was also served on June 6, 2023. (Id. ¶ 10, Exh. F.) In response, Ms. West from Carl Warren informed Plaintiff: “I have not received anything to date. I will be on the look out.” (Exh. E, May 30, 2023 email.) In response to Plaintiff’s follow-up on July 5, 2023, Ms. West stated “I have not heard from the city.” (Exh. E, July 17, 2023 email.) Therefore, Defendants, through their agent Carl Warren, could have taken more proactive steps to avoid entry of default by attempting to locate the complaint, rather than waiting for it to appear. Under these circumstances, the Court finds that a penalty is appropriate. 

CONCLUSION AND ORDER

Therefore, the Court GRANTS Defendant’s motion to set aside the default entered against it on July 25, 2023. Defendant shall file and serve its proposed answer within 15 days. 

Defendant shall pay $500 to counsel for Plaintiff within 30 days.

Defendant to provide notice and file a proof of service of such.