Judge: Anne Richardson, Case: 21STCV21531, Date: 2024-08-29 Tentative Ruling

Case Number: 21STCV21531    Hearing Date: August 29, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Pleadings

Plaintiff Andiamo Grupo, LLC (Andiamo) sues Defendants Rancho Pacific Resorts, LLC, (Rancho Pacific) William Angel (Angel), Brian West, and Michael Montgomery (collectively, the Defendants) for (1) Breach of Contract and (2) Breach of Guaranty, pursuant to a June 8, 2021 Complaint.

On August 5, 2021, the Defendants answered the complaint alleging various affirmative defenses.  

On June 21, 2022 the Defendants and Playas Del Paraiso Resort Company S. De R.L. De C.V. (Playas Del Paraiso), filed a second amended cross-complaint (collectively, the Cross-Complainants), against Andiamo and Richard Arons (Arons), Laura Balegeer (Balegeer), Hacienda San Lorenzo S. De R.L. De C.V. (Hacienda), Bolero S. De R.L. De C.V. (Bolero), and Roes 1 through 500 (collectively, the Cross-Defendants). The cross-complaint alleges claims of (1) Breach of Written Contract, (2) Breach of the Implied Covenants of Good Faith and Fair Dealing, (3) Fraud [Promise Without Intent to Perform], (4) Monies Had and Received, (5) Account Stated, (6) Accounting, and (7) Declaratory Relief.

On July 26, 2022, cross-defendants Andiamo and Arons filed a joint answer to the Second Amended Complaint alleging various affirmative defenses.

Default was entered as to Balegeer and Bolero on March 20, 2024. Default was entered as to Hacienda on April 9, 2024.

The claims arise from a series of contracts pertaining to investment in a resort property, Playas Del Paraiso, located in San Felipe, Mexico. Plaintiffs/Cross-Defendants and Defendants/Cross-Complainants entered into various agreements including a promissory note and guaranty, which Defendants/Cross-Complainants have since defaulted on. In its cross-complaint, Defendants/Cross-Complainants allege, among other things, that Plaintiffs/Cross-Defendants breached the agreements in various ways including failing to pay maintenance fees and the balance of the purchase and sale contract. In brief, each party claims that the other owes them substantial amounts of money related to the Playas Del Paraiso project.

Motion Before the Court

On June 25, 2024, Cross-Defendants Balegeer, Hacienda, and Bolero, and moved for an order vacating the pending default and/or default judgment against each of them or dismissing the cross-complaint as to Hacienda and Bolero (the Mexican Entities). They also argue that the purported service of process on each of them was insufficient to establish personal jurisdiction, and that the court does not have subject matter jurisdiction over the action.

On August 16, 2024, the Cross-Complainants opposed the motion, arguing that the Court does have personal and subject matter jurisdiction over parties and causes of action alleged in the SAC. The Cross-Complainants state that they however do not oppose setting aside the defaults, as to Balegeer and the Mexican Entities. (Opp. p. 9.)

On August 16, 2024, Cross-Defendants Andiamo and Arons filed an opposition to the motion, arguing that service was properly carried out on Balegeer, Hacienda, and Bolero, and requesting that the defaults remain in place. They also object to various statements in Balegeer’s declaration.

Evidentiary Objections

Objections Nos. 1-4: OVERRULED

Relief from Default

            Legal Standard

Code of Civil Procedure section § 415.20 subdivision (b) provides: “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, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box…”

Code of Civil Procedure section § 473 subdivision (b) provides: “The 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. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time…” (bold emphasis added)

According to proofs of service on file with the court, the SAC was served on Balegeer individually and on Balegeer on behalf of Bolero on February 14, 2024, and on Balegeer on behalf of Hacienda on April 4, 2024. The address where the parties were served is listed as a Mailbox International location in Woodland Hills. Additionally, prior to effecting service at the Mailbox International location, Cross-Complainants made several attempts to serve Balegeer and the Mexican entities (Klinkert Decl. ¶¶3-6.)

Cross-Defendants Hacienda, Bolero, and Balegeer argue that only Balegeer is listed as the recipient for mail at the Mailbox International location, and thus service was ineffective as to Hacienda and Bolero. Balegeer admits that she had actual notice of the summons and complaint, but she mistakenly believed that the service at the Mailbox International was not valid pursuant to California law. (Balegeer Decl., ¶13)

In her declaration Balegeer also states that she is “personally familiar with the management and activities of the two Mexican corporations, [Hacienda] and [Bolero].” (Balegeer Decl., ¶4) Service on an officer or manager of an entity on behalf of the entities is effective service on the entities. (Code of Civil Procedure §416.10(b).) For out-of-state or foreign corporations, service may be made on “any officer of the corporation or its general manager in this state.” (CA Corp. § 210.)

However, neither Balegeer nor either of the Mexican Entities have lodged a proposed answer or other pleading to the SAC as required by Code of Civil Procedure section § 473 subdivision (b). Thus, even if the Court were to find that Balegeer and the Mexican Entities’ failure to respond to the SAC was an honest mistake, the Court is jurisdictionally barred from granting relief from judgment. 

Conclusion

The Motion to Quash Service and/or Dismiss the Cross-Complaint of Cross-Defendants Laura Balegeer, Hacienda San Lorenzo S. De R.L. C.V., and Bolero S.DE R.L. DE C.V is DENIED without prejudice.