Judge: Audra Mori, Case: 19STCV37663, Date: 2022-08-29 Tentative Ruling

Case Number: 19STCV37663    Hearing Date: August 29, 2022    Dept: 31

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

1. Background

Plaintiff Jose Antonio Menjivar (“Plaintiff”) filed this action against defendants Taltar-Westwood, Inc. (“Taltar-Westwood”), Anahita Construction, Inc. (“Anahita”), and Does 1 to 50 for injuries relating to Plaintiff’s fall from a ladder.  On October 21, 2020. Plaintiff filed an Amendment to Complaint naming Alireza Haghighat (“Haghighat”) as Doe 1.  Plaintiff has filed a Request for Dismissal dismissing Taltar-Westwood and Haghighat from the action.  (Requests for Dismissal filed Oct. 13, 2020, and Oct. 15, 2021.) 

Plaintiff served Anahita with the summons, complaint and related documents by substituted service on May 14, 2020, and on May 27, 2021, Plaintiff obtained Anahita’s default. 

At this time, Anahita moves to set aside the default entered against it.[1]  Plaintiff opposes the motion, and Anahita filed a reply. 

2. Motion to Set Aside Default

“Where the six-month period during which motions under Code of Civil Procedure section 473 can be made has passed, relief may still be granted under the court's equity powers....'A trial court has an inherent equity power under which, apart from statutory authority, it may grant relief from a default judgment obtained through extrinsic fraud or mistake.' ”  (In re Marriage of Coffin (1976) 63 Cal.App.3d 139, 148-149 [citations omitted].)  Extrinsic fraud or mistake can “encompass almost any set of extrinsic circumstances which deprive a party of a fair adversary hearing.”  (Marriage of Park (1980) 27 Cal.3d 337, 342.)  “Examples of extrinsic fraud are:  failure to give notice of the action to the other party...”  (City and County of San Francisco v. Cartogena (1995) 35 Cal.App.4th 1061, 1067.)  

“While the grounds for an equitable action to set aside a default judgment are commonly stated as being those of extrinsic fraud or mistake, the terms are given a very broad meaning which tends to encompass all circumstances that deprive an adversary of fair notice of hearing whether or not those circumstances would qualify as fraudulent or mistaken in the strict sense.”  (Munoz v. Lopez (1969) 275 Cal.App.2d 178, 181; Marriage of Park (1980) 27 Cal.3d 337, 342; County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1229 [default judgment obtained by false proof of service constitutes extrinsic fraud].)  But extrinsic mistake is not a basis for relief when a defendant's own negligence “permitted the fraud to be practiced” or where there is no “causation between the misrepresentation and a defendant's failure to present a defense.”  (Kramer v. Traditional Escrow, Inc., supra, 56 Cal.App.5th 13, 36 [internal quotes omitted].)

When a default judgment has been obtained, equitable relief may be given only in exceptional circumstances.  “[W]hen 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. Beyond this period there is a strong public policy in favor of the finality of judgments and only in exceptional circumstances should relief be granted.”  (Rappleyea v. Campbell (1994)8 Cal. 4th 975, 981-82.)  “ ‘To set aside a judgment based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second[ ], the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last [ ], the moving party must demonstrate diligence in seeking to set aside the default once ... discovered.’ [Citation.]”  (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 982.) 

Here, Anahita moves to set aside the default against it based on extrinsic mistake.  Anahita asserts that it has a meritorious defense to Plaintiff’s claims and provides that it did not move for relief earlier because the landlord of the premises where the incident happened told Anahita’s principal, Haghighat, that the landlord had been sued, not Anahita.  Further, Anahita states that Haghighat consulted an attorney- a Mr. Soleimani- that advised Haghighat that this lawsuit had been dismissed.  Haghighat then consulted counsel on April 7, 2022, who advised Haghighat that Anahita had been sued and defaulted. 

In opposition, Plaintiff argues there is no legitimate basis to set aside the default entered against Anahita because its motion is untimely and the default was caused by Anahita’s principal, not its attorney.  Plaintiff further argues that Anahita had ample notice of this action and that it knew it was in default.  Plaintiff asserts that in October 2020, Plaintiff’s counsel spoke with Haghighat and informed him of these proceedings. 

As Anahita asserts in reply, Anahita is not bringing this motion under CCP § 473(b), which requires an application for relief to be made no more than six months after a default is entered.  Rather, Anahita is requesting relief based on its alleged extrinsic mistake.  Even where statutory relief is unavailable, courts may still vacate default judgments on equitable grounds.  (Rappleyea, 8 Cal. 4th at 981; see also Bae v. T.D. Service Co. of Arizona (2016) 245 Cal. App. 4th 89, 97 [“Apart from any statute, courts have the inherent authority to vacate a default and default judgment on equitable ground such as extrinsic fraud or extrinsic mistake.”].)  Accordingly, Anahita’s motion is not untimely, as it is not being made under CCP § 473(b).  Similarly, Plaintiff’s argument that relief is not proper under CCP § 473(b) because the default was not caused by Anahita’s attorney is irrelevant to the instant motion seeking relief on equitable grounds. 

Anahita avers that it has a meritorious defense to the action because Plaintiff was not injured after the incident, and that Plaintiff fell off his own ladder when performing his work for Anahita.  Anahita asserts that after Plaintiff fell, he jumped up with one tiny scratch and declared, “I’m alright.”  Anahita states Plaintiff then went back to work two days later and performed his work without difficulty.  Plaintiff, in opposition, does not directly challenge these allegations.  Based on the facts presented by Anahita, it appears that Anahita has a meritorious defense to the action. 

As to its excuse for not presenting a defense earlier, Anahita asserts that when its principal, Haghighat, checked the Court’s docket he found that a Request for Dismissal had been filed on October 13, 2020.  Haghighat’s assertion the October 13, 2020 Request for Dismissal caused him to believe the action was dismissed is questionable.  The subject request for dismissal states on its face that the action is being dismissed as to Taltar-Westwood only; there is no reference to Anahita on this request for dismissal.  Nonetheless, Haghighat attests that an attorney advised Haghighat that this lawsuit had been dismissed.  Plaintiff provides evidence showing that Plaintiff’s counsel communicated with Haghighat in or about October 2020, and Plaintiff states that Haghighat informed Plaintiff’s counsel that he was in the process of hiring an attorney.  This would seemingly corroborate Haghighat’s claim that he consulted with an attorney prior to the default and that the attorney incorrectly informed Haghighat that the action had been dismissed. 

Furthermore, Anahita provides that upon consulting with its current counsel on April 7, 2022, and learning that Anahita was in default, Haghighat retained counsel on the same day to defend it and file this motion.  Anahita then filed this motion on April 28, 2022, after attempting to meet and confer with Plaintiff’s counsel about setting aside the default.  There is no showing that Anahita delayed in filing this motion after learning about the default entered against it.  

Plaintiff has not alleged any prejudice in vacating the default against Anahita.  In the absence of prejudice to the Plaintiff, Defendant's burden of proving diligence is reduced.  (Rappleyea, 8 Cal. 4th at 983-84 [“Of the three items a defendant must show to win equitable relief from default, diligence is the most inextricably intertwined with prejudice. If heightened prejudice strengthens the burden of proving diligence, so must reduced prejudice weaken it.”].)  Under this standard, Anahita has sufficiently shown diligence.  Moreover, Haghighat’s consultation with a prior attorney that informed him the action had been dismissed may have led Haghighat to believe that Anahita was not required to defend against the action.  Balancing the equities presented, the Court finds that Defendant's potentially meritorious defense to the action combined with lack of prejudice weighs in favor of setting aside the default. 

Therefore, the motion to set aside the default is granted as to Anahita.  Anahita is ordered to file its answer or responsive pleading within 10 days. 

Moving Defendant is ordered to give notice. 

PLEASE TAKE NOTICE:

• Parties are encouraged to meet and confer after reading this tentative ruling to see if they can reach an agreement.
• If a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept31@lacourt.org with the Subject line “SUBMIT” followed by the case number.  The body of the email must include the hearing date and time, counsel’s contact information, and the identity of the party submitting.  
• Unless all parties submit by email to this tentative ruling, the parties should arrange to appear remotely (encouraged) or in person for oral argument.  You should assume that others may appear at the hearing to argue.  
• If the parties neither submit nor appear at hearing, the Court may take the motion off calendar or adopt the tentative ruling as the order of the Court.  After the Court has issued a tentative ruling, the Court may prohibit the withdrawal of the subject motion without leave. 

Dated this 29^th day of August 2022