Judge Christian R. Gullon, Case Number: 22PSCV01041, Date: 2023-09-11 Tentative Ruling

Judge: Christian R. Gullon, Case: 22PSCV01041, Date: 2023-09-11 Tentative Ruling

MOTION TO SET ASIDE DEFAULT JUDGEMENT AND REQUEST FOR DEFAULT JUDGEMENT AGAINST DEFENDANT LARRY ORTEGA is DENIED.

This is a complaint for recovery of administrative fines and penalties pursuant to public utilities code. Plaintiff THE PEOPLE OF THE STATE OF CALIFORNIA, by the CALIFORNIA PUBLIC UTILITIES COMMISSION (“Plaintiff” or “Commission”) alleges the following against Defendants COMMUNITY UNION, INC. (“CU”) and LARRY ORTEGA[1]: The Commission initiated an investigation to determine whether Defendant CU implemented the California’s One Million New Internet Users Coalition program in accordance with the terms of approval granted by the Commission. In 2021, the Commission issued its decision finding that CU was in violation and ordered that CU return the $162,109 it unlawfully received and held Ortega personally liable (pierced the corporate veil).

On December 14, 2022, Plaintiff filed a POS indicating that CU had been served via the Secretary of State.

On February 28, 2023, the court issued the following minute order regarding the CMC and OSC re: Failure to File POS: Defendant Larry Ortega/Community Union appears and is self-represented. Plaintiff requests to continue the instant matters to April 27, 2023 at 8:30 a.m. for proper notice and for Mr. Ortega to seek counsel; request is granted. Pursuant to the request of plaintiff, the Case Management Conference scheduled for 02/28/2023, and Order to Show Cause Re: Failure to File Proof of Service scheduled for 02/28/2023 are continued to 04/27/2023 at 08:30 AM in Department L at Pomona Courthouse South ; Plaintiff is to provide notice.

On March 1, 2023, Plaintiff filed a POS by First-Class Mail (POS-030) form indicating the Ortega had been served via mail. Additionally, the POS (POS-010) form indicates that Ortega was served via his “voluntary appearance at the CMC on February 28, 2023,” citing to CCP section 410.050.[2]

On April 24, 2023, Ortega filed a ‘Motion to Continue to June 27, 2023.’ A review of the motion indicates that Ortega sought to move an April 27, 2023 hearing because of medical concerns (he had an angiogram).

On April 25, 2023, the court issued the following minute order regarding ‘Defendant Ortega's Request for Continuance’: The Court is in receipt of Defendant Ortega’s ex-parte request dated April 24, 2023, purportedly on behalf of himself and defendant Community Union, Inc., to continue the April 27, 2023, Case Management Conference. The Court declines to consider this document as it is improperly before the Court for two separate reasons. First, both defendant Ortega and defendant Community Union, Inc. are in default status. Neither defendant Ortega nor defendant Community Union, Inc., may participate in the matter unless and until that default status is cured by the Court upon written motion by a party. Second, defendant Ortega is not a licensed attorney, so he is not permitted to represent defendant Community Union, Inc., in the case under any circumstances. As a result of the default status, the court sets an Order to Show Cause re: Default Judgment for June 27, 2023, at 8:30 a.m. Clerk to give notice as well as a courtesy copy to defendant Ortega. The case management conference currently set for April 27, 2023, remains on calendar.

On May 9, 2023, the court clerk entered a clerk’s judgment (CCP section 585a) for $162,109.00 against both CU and Ortega.

On August 21, 2023, Ortega filed the instant ‘MOTION TO SET ASIDE DEFAULT JUDGEMENT AND REQUEST FOR DEFAULT JUDGEMENT AGAINST DEFENDANT LARRY ORTEGA.’[3]

On September 11, 2023, during the hearing on the motion to set aside the default, the court continued the hearing. According to the minute order, “On the Court's own motion, the Hearing on Motion to Set Aside/Vacate Default and Default Judgment (CCP 473.5) scheduled for 09/11/2023 is continued to 11/14/2023 at 10:00 AM in Department O at Pomona Courthouse South. The Defendant is ordered to file supplemental briefing due on or before September 21, 2023. The Court notes it will continue to accept opposition and replies.”

Ortega makes the motion pursuant to CCP section 473 (a)(1), (b) and (d) on the grounds of mistake, inadvertence and excusable neglect. (Motion p. 1.)[4]

CCP section 473 subdivision (b) allows a court to vacate a prior order upon a showing that the order was entered due to a party’s mistake, inadvertence, surprise, or excusable neglect. Additionally, the motion “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).)¿The terms mistake, inadvertence, surprise, and excusable neglect which warrant relief under Code of Civil Procedure § 473(b) are defined as follows:

Mistake is not a ground for relief under section 473, subdivision (b), when ‘the court finds that the “mistake” is simply the result of professional incompetence, general ignorance of the law, or unjustifiable negligence in discovering the law ....’ [Citation] Further, ‘[t]he term “surprise,” as used in section 473, refers to “some condition or situation in which a party ... is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against.” [Citation] Finally, as for inadvertence or neglect, ‘[t]o warrant relief under section 473 a litigant's neglect must have been such as might have been the act of a reasonably prudent person under the same circumstances. The inadvertence contemplated by the statute does not mean mere inadvertence in the abstract. If it is wholly inexcusable it does not justify relief.’ [Citation]

(Henderson v. Pacific Gas & Electric Co. (2010) 187 Cal.App.4th 215, 229-230) (emphasis added).

First, as noted by Plaintiff in opposition, Defendant filed his supplemental declaration about one week after the court’s deadline. In untimely filing his amended motion/supplemental brief, that further evidences that Defendant chose not to timely file his answer. What is more, Defendant explains the untimely supplemental brief was “due a series of physical and technical hurdles he was unable to get this filed on time.” (Reply p. 2.) The lack of an explanation/details (e.g., the court system would not allow him to upload the supplemental brief) is but another theme that impaired his original motion (see discussion below).

Second, even addressing the merits,[5] it again fails to provide an explanation as to why Defendant could file an answer. If anything, as noted by Plaintiff in opposition, the narrative has changed: instead of experiencing health problems in March, Defendant experienced health problems in January.

All in all, though mindful of the public policy strongly favors granting relief, the evidence/declarations and arguments, when read in their totality, draw into question the credibility and veracity of Defendant, indicating that Defendant knew he was to file an answer and he could have filed an answer, but chose not to timely file an answer.[6] (See Hodge Sheet Metal Products v. Palm Springs Riviera Hotel (1961) 189 Cal.App.2d 653, 658 [“The weighing of the veracity of the affidavit was in the province of the trial court.”].)

While slightly unclear, the premise of the motion appears to be that Ortega “erroneously presumed that [his] time to file an answer to the request for default judgment would run 90 days from date of Notice, February 28, 2023” and that he “inadvertently failed to ask the court to extend the time I had to Answer Plaintiff’s Complaint during the February 28, 2023 Hearing.” (Motion p. 3.)

The motion fails for a few reasons, all of which are noted by Plaintiff in opposition.

First, to the extent that Ortega presumed he had 90 days to file an answer upon service of the summons and complaint (or after court retained jurisdiction at the February 28, 2023 CMC), Ortega has not explained why not knowing when to file an answer constitutes as excusable neglect. Though Plaintiff is pro-per, a pro per litigant is treated like any other party and is entitled to the same, but no greater consideration than other litigants and attorneys. (See, e.g., Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246-47.)[7]

Second, to the extent that Ortega could not file his answer within 30 days of service of the summons and complaint/court retaining personal jurisdiction because of health challenges—which were undeniably serious as he experienced a heart attack—Ortega has not explained why he could not file his answer within 30 days when his chest pain did not commence until March 28, 2023 and he went to the emergency room on April 21, 2023; thirty days from February 28, 2023 is Mach 30, 2023, which is well before he went to the emergency room. (See April 24, 2023 Motion to Continue to June 27, 2023.)

Third, even using its discretion afforded by CCP section 473 subdivision (b), the court would deny the motion because setting aside the judgment would merely forestall the inevitable in a simple judgment enforcement action which there are no defenses. Plaintiff would or could move for judgment by way of a motion (e.g., summary judgment or judgment on the pleadings), which would unnecessarily expend resources.

Lastly, to the extent that Ortega attempts to set aside the default judgment against CU as well, there are two problems: (i) the motion is only made on behalf of Ortega in his individual capacity and (ii) CU requires formal representation.

Based on the foregoing—notably as an answer was due at the latest by March 30, 2023 and Ortega did not do so and has failed to offer a reason why—the motion is denied.

[1] Ortega is the President and Chief Executive Officer of CU. He is pro per.

[2] According to the statute, “A general appearance by a party is equivalent to personal service of summons on such party.”

[3] As noted by Plaintiff in opposition, notice of the motion was untimely as it was due, pursuant to CCP section 1005(b) by August 11, 2023, but notice of the motion was not served until August 21, 2023. As the court is denying the motion on other grounds, continuing the motion for proper notice is unnecessary.

[4] Subsection (a)(1) is inapplicable because while it does allow a court to allow for an answer after the time limited the code, the section does not apply when a defendant is in default. Additionally, subsection (d) d inapplicable because it pertains to correct clerical mistakes. As clerical mistakes are not at issue, this subsection will not be discussed. Thus, as the basis of the motion appears to be based upon mistake/neglect, only subsection (b) will be discussed.

[5] Defendant’s declaration attached to the motion is dated to September 21, 2023, which is the date that the brief was due by.

[6] Defendant attempted to file an answer on September 25, 2023 but was rejected by the court. An answer was also filed and received on October 20, 2023.

[7] And as observed by Plaintiff, Ortega is not unsophisticated as he is the president of a company and obtained a $450,000 grant from the Commission.