Judge: Anne Richardson, Case: 23STCV10239, Date: 2023-10-27 Tentative Ruling

Case Number: 23STCV10239    Hearing Date: October 27, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

On May 8, 2023, Plaintiff Irven Mitchell—an 82-year-old individual—sued Defendants Bassam F. Sayegh, RPM Brake Services Inc., RPM Auto Service & Repair, and Does 1 through 100 pursuant to a Complaint alleging claims of (1) Breach of Written Contract, (2) Breach of Oral Agreement, (3) Breach of the Implied Covenant of Good Faith and Fair Dealing, (4) Rescission – Unjust Enrichment, (5) Fraud in the Inducement, (6) Deceit (Promissory Fraud), (7) Financial Abuse of Elder, (8) Conversion, (9) Intentional Infliction of Emotional Distress (IIED), and (10) Breach of Written Warranty.

The claims arise from allegations that Defendants—automobile repair dealers—took advantage of Plaintiff’s impaired cognitive ability to twice perform unnecessary repairs to Plaintiff’s classic car, causing Plaintiff an out-of-pocket loss in the sum of $16,000, minus a $1,454 refund, for damages of $14,546, plus costs related to the retention of experts and an attorney to recover unjust amounts spent due to Defendants’ fraud and deceit.

On May 12, 2023, the Complaint, summons, and other documents were served on Defendants RPM Brake Services Inc. and RPM Auto Service & Repair.

On May 18, 2023, the Complaint, summons, and other documents were served on Defendant Sayegh.

On May 23, 2023, Defendant Sayegh filed a “Response to 23STCV10239” that states, in full: “I am responding to Irven D. Mitchell (Case# 23STCV10239) whose car I repaired in 2021. He is now suing, claiming that the repair was not done properly. Bassam F. Sayegh.”

On May 26, 2023, Plaintiff filed proofs of service for all three Defendants.

On June 8, 2023, Plaintiff filed amended proofs of service for all three Defendants.

On July 12, 2023, Plaintiff secured entries of default against Defendants RPM Brake Services Inc. and RPM Auto Service & Repair.

On August 3, 2023, Defendant RPM Brake Services, Inc. filed and served a motion to set aside the default against it.

On August 18, 2023, Defendant Sayegh filed a substitution of attorney indicating that Defendants Sayegh and RPM Brake Service, Inc. were to be represented by David K. Dorenfeld of DorenfeldLaw, Inc.

On September 5, 2023, the Court held an Order to Show Cause (OSC) re: Failure to File Proof of Service and Case Management Conference (CMC) hearing. At that time, the Court noted that there was a motion to set aside default on file and that Defendant Sayegh attempted to file a response that was not legally entered as an Answer to the Complaint, and inquired whether Plaintiff was agreeable to setting aside the default; Plaintiff’s counsel responded that he was not. The OSC and CMC were continued to the hearing date on the motion, October 27, 2023.

On September 27, 2023, Defendant Sayegh filed a Verified Answer.

On October 3, 2023, Plaintiff opposed the motion to set aside.

On October 6, 2023, Plaintiff made a motion for judgment on the pleadings (MJOP) against the May 23, 2023 “Response” by Defendant Sayegh.

On October 18, 2023, Defendant Sayegh opposed the MJOP.

On October 20, 2023, Defendant RPM Brake Services, Inc. replied to the October 3rd opposition to its motion to set aside.

The motion to set aside default and MJOP are now before the Court.

The Court first discusses the MJOP and then moves on to the analysis on the motion to set aside default.

Motion for Judgment on the Pleadings

Legal Standard

Either prior to trial or at the trial—and barring statutory provisions otherwise—the plaintiff or the Defendants may move for judgment on the pleadings where the appropriate ground for such a motion is the same as that arguable by general demurrer, namely, the failure to state a cause of action or defense. (Dobbins v. Hardister (1966) 242 Cal.App.2d 787, 791 A motion for JOP is used to challenge a pleading in the same manner as a general demurrer—that is, the challenged pleading (1) establishes that the court does not have subject-matter jurisdiction or (2) does not allege facts sufficient to support a cause of action or defense. (Code Civ. Proc., § 438, subd. (c)(1); see Marzec v. Public Empls. Ret. Sys. (2015) 236 Cal.App.4th 889, 900; International Assn of Firefighters v. City of San Jose (2011) 195 Cal.App.4th 1179, 1196.)

To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) Courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) However, this analysis “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) The face of the complaint includes exhibits attached to the complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence. (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447, superseded by statute on other grounds as stated in White v. Cridlebaugh (2009) 178 Cal.App.4th 506, 521.)

As with a demurrer, the grounds for a motion for judgment on the pleadings must appear on the face of the pleading or be based on facts capable of judicial notice. (Bufil v. Dollar Fin. Grp. (2008) 162 Cal.App.4th 1193, 1202, disapproved on other grounds in Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 985-986, fn. 15.) The only significant difference between the two motions is that a motion for judgment on the pleadings is brought after the time to file a general demurrer has expired. (Code Civ. Proc., § 438, subd. (f); Caldera Pharms. v. Regents of the Univ. of Cal. (2012) 205 Cal.App.4th 338, 350; International Assn of Firefighters v. City of San Jose, supra, at p. 1196.)

Order Granting Judgment on the Pleadings: DENIED.

In his MJOP, Plaintiff Mitchell seems to challenge the May 23, 2023 “Response” by Defendant Sayegh as an answer to the Complaint, i.e., a pleading subject to a sufficiency challenge. Plaintiff argues that the “Response” is defective and that equity calls for permitting a default judgment request to proceed against Defendant Sayegh. (MJOP, pp. 3-5.)

In opposition, Defendant Sayegh argues that the MJOP does not present arguments on which MJOP relief may be granted. Defendant Sayegh also argues that Plaintiff failed to meet and confer prior to the filing of this motion and that the motion is, in effect, mooted by the filing of the September 27, 2023 Verified Answer. (Opp’n to MJOP, pp. 1-2.)

No reply is on file.

The Court finds in favor of Defendant Sayegh.

On September 5, 2023, the Court indicated to the parties that the June 23, 2023 “Response” by Defendant Sayegh was “not legally entered as an Answer,” i.e., Defendant Sayegh’s filing did not constitute a pleading in response to the Complaint. The record thereafter fails to reflect that Plaintiff Mitchell sought an entry of default against Defendant Sayegh. In turn, Defendant Sayegh filed a Verified Answer on September 27, 2023. Under these circumstances, the MJOP challenges a filing that the Court never accepted as an Answer, i.e., a pleading that can be subject to a sufficiency challenge. For this reason, the MJOP lacks merit.

The Court also notes that Defendant Sayegh has been diligent, before and after retaining counsel, in attempting to respond to this action. As a result, even had an entry of default been entered against him, grounds would exist under Code of Civil Procedure section 473 to relieve him from that default.

In conclusion, Plaintiff Mitchell’s MJOP is DENIED.

Motion to Set Aside Default

Legal Standard

Section 473 subdivision (b) of the Code of Civil Procedure provides for both discretionary and mandatory relief from a judgment, dismissal, and/or order or other proceeding taken against a party through his or her mistake, inadvertence, surprise, or excusable neglect. (Code Civ. Proc., § 473, subd. (b) [mandatory relief more narrowly targeted to defaults, default judgments, and dismissals]; Pagnini v. Union Bank, N.A. (2018) 28 Cal.App.5th 298, 302.)

The discretionary provision of section 473, subdivision (b), states in pertinent part that “[t]he 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” and that “the application shall not be granted, and shall be made 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).)

Order Setting Aside and/or Vacating Default: GRANTED.

In its motion, Defendant RPM Brake Services, Inc. argues that it is entitled to an order setting aside and/or vacating the default on statutory and equitable grounds. (See Code Civ. Proc., § 473, subd. (b).) As background, the motion explains that Defendant Sayegh is RPM Brake’s sole officer and director, that the Complaint, summons, and other documents for this lawsuit were found by him in front of his business address on Robertson Blvd, and that none of Defendants’ employees were served with the papers. The motion also explains that the May 23, 2023 “Response” by Defendant Sayegh was made on his and RPM Brake’s behalf and that Sayegh was unaware of service requirements for his “Response” or the fact that leaving documents on the floor in front of his offices did not constitute service of the summons and Complaint.

Based on these facts, Defendant RPM Brake Services, Inc. argues that it is entitled to statutory relief against default based on improper service—i.e., leaving the service documents on the floor in front of his offices. RPM Brake Services, Inc. also argues that the entry of default against it is a result of a failure by Defendant Sayegh to understand that his May 23, 2023 “Response” did not include RPM Brake, constituting a failure to respond to the Complaint as a result of a mistake. Last, Defendant RPM Brake Services, Inc. notes that it has acted diligently to address default. (Set Aside Mot., pp. 4-7; see Set Aside Mot., Sayegh Decl., ¶¶ 1-8 & Dorenfeld Decl., ¶¶ 1-5.)

In opposition, Plaintiff attempts to rebut these positions. Plaintiff argues that the mandatory provision of section 473, subdivision (b) is not available here, with which the Court agrees. Plaintiff next makes a variety of arguments against relief. These include arguments that: service was properly effected on RPM Brake Services, Inc. by substituted service at the Robertson address; Defendants have acted improperly, e.g., Defendants’ employee shoving Plaintiff’s process server; Defendant Sayegh was aware of this lawsuit based on various mailings to the Robertson address; any failure to respond to the Complaint by RPM Brake Services, Inc. cannot be based on inexcusable neglect insofar as Defendant Sayegh’s ignorance of the law is not a ground for relief; the three elements for extrinsic mistake are not met here; Defendant Sayegh should face Code of Civil Procedure section 1209 sanctions (contempt proceedings); Defendants have attempted to avoid service of settlement offers; the June 23, 2023 “Response” was defective; Defendants should not be allowed to play “fast and loose” with the law; and Defendant Sayegh’s Answer should be stricken, among other things. (Set Aside Opp’n, pp. 2-9.)

In reply, Defendant RPM Brake Services, Inc. reiterates its motion arguments in support of relief under section 473, subdivision (b) and on equitable grounds. (Set Aside Reply, pp. 1-3.)

The Court finds in favor of Defendant RPM Brake Services, Inc.

The Court is satisfied that Defendant Sayegh’s misimpression as to whether the June 23, 2023 “Response” applied to him and Defendant RPM Brake Services, Inc. constitutes excusable neglect that put Defendants under the mistaken impression that they had answered the Complaint, however defective the “Response” may have been. Indeed, the result in this case is consistent with public policy in the state regarding judgments. “[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 their day in court. Beyond the period when relief under section 473 is available, there is a strong public policy in favor of the finality of judgments and only in exceptional circumstances should relief be granted.” (In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1071; Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981-982 [quoting same].)

The Court also finds Plaintiff’s reference to Kramer v. Traditional Escrow, Inc. (2020) 56 Cal.App.5th 13, 31 unconvincing. While the June 23, 2023 “Response” was defective, Defendants have generally exercised diligence in responding to this lawsuit through that response and subsequently securing counsel. (Set Aside Mot., Sayegh Decl., ¶¶ 2-8.) This new counsel has attempted to obtain a stipulation to set aside the default, which Plaintiff’s counsel has refused. (Set Aside Mot., Dorenfeld Decl., ¶¶ 2-4.) The timeline in this case supports a finding of diligence: The complaint was filed on May 8, 2023; service was effected on RPM Brake Services on May 12, 2023; a “response” was filed on May 23, 2023 by defendant Sayegh, who is the sole officer and director of RPM Brake Services, Inc.; entry of default of RPM Brake Services, Inc. was entered on July 12, 2023; a motion to set aside the default was filed on August 3, 2023, and a Verified Answer was filed by defendant Sayegh on September 27, 2023.

Based on these circumstances, the Court cannot say that Defendants have not exercised diligence in attempting to ascertain what the law requires of them.

Defendant RPM Brake Services, Inc.’s motion is thus GRANTED. 

Conclusion

Plaintiff Irven D. Mitchell’s Motion for Judgment on the Pleadings Against Defendant Bassam F. Sayegh is DENIED.

Defendant RPM Brake Services, Inc.’s Motion to Set Aside and/or Vacate Defaults Entered on July 12, 2023, Pursuant to CCP § 473(b) and on Equitable Grounds is GRANTED.

The July 12, 2023 entry of default against Defendant RPM Brake Services, Inc. is SET ASIDE.

Defendant RPM Brake Services, Inc. is ORDERED to file its proposed Verified Answer—attached as Exhibit C to the Dorenfeld declaration—within 10 court days of this ruling.