Judge: Anne Hwang, Case: 23STCV20665, Date: 2024-05-13 Tentative Ruling

Case Number: 23STCV20665    Hearing Date: May 13, 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. 

MOTION 

            Defendant Cedar Restaurant Group, LLC d/b/a Yamashiro Hollywood (“Defendant”) moves to set aside entry of default on December 20, 2023.  Plaintiff Margarit Akopian (“Plaintiff”) opposes the motion. 

ANALYSIS 

Per Code of Civil Procedure section 473, subdivision (b), a court “may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” In addition, a court must vacate a default or dismissal when a motion for relief under Section 473, subdivision (b) is filed timely and accompanied by an attorney’s sworn affidavit attesting to the attorney’s mistake, inadvertence, surprise or neglect “unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise or neglect.”  (Code Civ. Proc., § 473, subd. (b).)   

The party or the legal representative must seek such relief “within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Code Civ. Proc., § 473, subd. (b); see Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 [“because more than six months had elapsed from the entry of default, and hence relief under section 473 was unavailable”]; People v. The North River Ins. Co. (2011) 200 Ca.App.4^th 712, 721 [motion for relief under section 473 must be brought “within a reasonable time, in no case exceeding six months”]).  “The six-month limit is mandatory; a court has no authority to grant relief under section 473, subdivision (b), unless an application is made within the six-month period.”  (Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 340, citations omitted.)   

Defendant moves to set aside entry of default and default judgment due to excusable neglect or mistake. Its insurance carrier, Allianz, repeatedly reached out to Plaintiff's counsel for information, but each time, closed the file for failure on the part of Plaintiff to respond. (Bodie Decl. ¶ 18.) Then, due to a computer glitch, Allianz had generated two separate claims on the same matter with conflicting information, hampering its efforts to assign this matter. (Bodie Decl. ¶ 9; Exh. A.) In fact, this technical glitch even made the claim files, at times, inaccessible. (Bodie Decl. ¶ 12; Exh. C.) With little information or cooperation, assignment of defense counsel was further delayed. (Id.) Defendant was unaware the claim was being delayed and prevented from being timely answered. (Id.) Through genuine mistake and surprise, Defendant had inadvertently not provided a timely response.

First, default was entered against Defendant on December 20, 2023.  Defendant filed the subject motion on March 12, 2024, which was within six months of entry of default and thus, the subject motion is timely.  (Code Civ. Proc., § 473(b).)   

Second, Defendant also filed a copy of its proposed Answer, as Exhibit G to the declaration of counsel in support of the motion to set aside default, as is required to seek discretionary relief under section 473, subdivision (b).  (Code Civ. Proc., § 473(b).)   

Next, the Court notes that Defendant seeks relief under the discretionary portion of section 473, subdivision (b), as Defendant does not attribute fault to its attorney, and therefore cannot move under the mandatory prong. The Court finds that Defendant has made a sufficient showing of mistake, surprise or excusable neglect in that each time its insurance carrier reached out to Plaintiff, no response was provided, and thus the file was closed multiple times. Then, due to a glitch, Allianz had generated two separate claims on the same matter with conflicting information, hampering its efforts to assign this matter. “[I]t is the policy of the law to bring about a trial on the merits whenever possible, so that any doubts which may exist should be resolved in favor of the application, to the end of securing to a litigant his day in court and a trial upon the merits.”  (Frank E. Beckett Co. v. Bobbitt (1960) 180 Cal.App.2d Supp. 921, 928 (Bobbitt).)  “Even in a case where the showing under section 473 is not strong, or where there is any doubt as to setting aside of a default, such doubt should be resolved in favor of the application.”  (Ibid., quoting Van Dyke v. MacMillan (1958) 162 Cal.App.2d 594, 598, italics in Bobbitt.)  “[D]uring the period when relief under section 473 is available, there is a strong public policy in favor of granting relief and allowing the requesting party his or her day in court.”  (In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1071.)  

Further, a showing of diligence is required when seeking discretionary relief.  (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1420.) Defendant provides that neither Defendant nor its carrier had any knowledge of the default until March 5, 2024. Prior to that, its insurance carrier was having difficulty finding the file and the case assignment to an attorney was therefore delayed. Plaintiff’s opposition supports this argument, as Plaintiff’s counsel concedes he provided notice of the default on Defendant on this date. (Opp., pg. 3:7-8.) As such, the Court finds Defendant was diligent in seeking relief.

Plaintiff does not present any argument regarding any prejudice or demonstrate that it would suffer any prejudice if the court were to grant the requested relief.   

Given the strong public policy that favors resolving disputes on their merits, the court finds it appropriate to grant the motion under the discretionary portion of section 473, subdivision (b) and to set aside entry of default against Defendant Yamashiro.  (See Bobbit, supra, 180 Cal.App.2d Supp. at p. 928.) 

            Penalties

Under Code of Civil Procedure section 473, subdivision (c), “[w]henever 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 appropriate.”  

Plaintiff seeks a penalty against Defendant. Plaintiff also requests the imposition of monetary sanctions against Defendants but does not provide statutory authority in support of this request.  Accordingly, the Court finds it just to order Defendant to pay Plaintiff a penalty in the amount of $1,000 within 30 days of this order.

CONCLUSION AND ORDER

Accordingly, the Court grants Defendant’s motion to set aside entry of default.  Defendant is ordered to pay Plaintiff a penalty in the amount of $1,000 within 30 days of this order.

Defendant is ordered to provide notice of this Order and file proof of service of such.