Judge: Christopher K. Lui, Case: 23STCV03263, Date: 2025-03-18 Tentative Ruling

Case Number: 23STCV03263    Hearing Date: March 18, 2025    Dept: 76

The following tentative ruling is issued pursuant to Rule of Court 3.1308 at 1:47 PM on March 17, 2025. 

Notice of intent to appear is REQUIRED pursuant to California Rule of Court 3.1308(a)(1).  The Court does not desire oral argument on the motion addressed herein. 

As required by Rule 3.1308(a)(1), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 by 4:00 p.m. on March 17, 2025.

Notice to Department 76 should be sent by email to smcdept76@lacourt.org, with opposing parties copied on the email.  The high volume of telephone calls to Department 76 may delay the Court’s receipt of notice, so telephonic notice to 213-830-0776 should be reserved for situations where parties are unable to give notice by email.

Per Rule of Court 3.1308, the Court may not entertain oral argument if notice of intention to appear is not given.

            This is a wage and hour action and wrongful termination action.

Defendant Opulence Wellness & Weight Loss, a California Corporation moves to set aside the default entered against it.

TENTATIVE RULING 

Defendant Opulence Wellness & Weight Loss, a California Corporation’s motion to set aside the default entered against it is GRANTED. Defendant is to respond to the Complaint within 30 days.

ANALYSIS

Motion To Set Aside Default

Defendant Opulence Wellness & Weight Loss, a California Corporation moves to set aside the default entered against it. The default was entered on October 2, 2023.

(b) 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, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. . . .    

(Civ. Proc. Code, § 473(b)[bold emphasis and underlining added].)

“ ‘Where, as in the present case, a motion to vacate a default judgment is made more than six months after the default was entered, the motion is not directed to the court's statutory power to grant relief for mistake or excusable neglect under … section 473, but rather is directed to the court's inherent equity power to grant relief from a default or default judgment procured by extrinsic fraud or mistake.’ [Citations.]” (Gibble v. Car-Lene Research, Inc. (1998) 67 Cal.App.4th 295, 314 [78 Cal. Rptr. 2d 892] (Gibble).)

“‘Extrinsic fraud occurs when a party is deprived of the opportunity to present his claim or defense to the court; where he was kept ignorant or, other than from his own negligence, fraudulently prevented from fully participating in the proceeding. [Citation.] Examples of extrinsic fraud are: … failure to give notice of the action to the other party, and convincing the other party not to obtain counsel because the matter will not proceed (and then it does proceed). [Citation.] The essence of extrinsic fraud is one party's preventing the other from having his day in court.’ [Citations.] Extrinsic fraud only arises when one party has in some way fraudulently been prevented from presenting his or her claim or defense. [Citations.]” (Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1300 [24 Cal. Rptr. 3d 780].)

 “ ‘Extrinsic mistake involves the excusable neglect of a party. [Citation.] When this neglect results in an unjust judgment, without a fair adversary hearing, and the basis for equitable relief is present, this is extrinsic mistake. [Citation.] Reliance on an attorney who becomes incapacitated, or incompetence of the party without appointment of a guardian ad litem, are examples of extrinsic mistake. [Citation.]’ ” (Heyman v. Franchise Mortgage Acceptance Corp. (2003) 107 Cal.App.4th 921, 926 [132 Cal. Rptr. 2d 465].)

To set aside a judgment based on extrinsic fraud or extrinsic mistake, the moving party must satisfy three elements: “First, the defaulted party must demonstrate that it has a meritorious case. Secondly, the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a  [*291]  defense to the original action. Lastly, the moving party must demonstrate diligence in seeking to set aside the default once it had been discovered.” (Stiles v. Wallis (1983) 147 Cal. App. 3d 1143, 1147–1148 [195 Cal. Rptr. 377] (Stiles), italics added; see also Gibble, supra, 67 Cal.App.4th at p. 315.)

(Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 290-91 [bold emphasis added].)

            Because this motion was filed on February 26, 2025—a year and 4 months after the entry of default—the motion is untimely under Civ. Proc. Code, § 473(b), and is directed to the Court’s inherent equity power to grant relief from a default or default judgment procured by extrinsic fraud or mistake.

            Defendant indicates that an attorney named Laurie Melissa Cortez of Emilio Law Group APC was retained on its behalf, who informed Defendant the matter was closed (Declaration of Natasha Holliman, ¶6 – 9)—and Plaintiff admits that there was an attorney involved—which raises the possibility of extrinsic mistake in the form of reliance upon an attorney who then abandons the client.

There is one factor which suggests a lack of diligence in seeking to set aside the default. The request for entry of default was mailed directly to Opulence Wellness & Weight Loss at 1200 S. Pacific Coast Hwy #C, Redondo Beach, CA 90277 on October 2, 2023. (See Request for Entry of Default filed on October 2, 2023.) Defendant does not address whether or not such notice was not received.

However, Doe Defendants Natasha Wright Holliman and Kenneth Earl Holliman were not served with the Doe amendments until January 2025. The reasonable inference is this is the first time they realized this case was still pending and they would be potentially personally liable. The instant motion was filed on February 26, 2025. The Court infers that this was the first time Defendant realized the case was still pending and its default had been entered.  The Court finds sufficient diligence in bringing this motion.

Moreover, setting aside default is consistent with the policy favoring the determination of actions on their merits. (Rodrigues v. Superior Court (2005) 127 Cal.App.4th 1027, 1037.)

Further, there is no prejudice to Plaintiff in setting aside the default, because she could obtain entry of default judgment if the individual Defendants assert defenses which would be applicable to the defaulted entity defendant:

b. [5:266] Defaulting defendant jointly liable with answering defendant: Similarly, no default judgment can be taken where several defendants are sued on a joint liability, and one of them answers asserting defenses which would exonerate the defaulting defendant from such liability. [Mirabile v. Smith (1953) 119 CA2d 685, 689, 260 P2d 179, 181]

(Weil & Brown, et al., California Practice Guide: Civil Procedure Before Trial [5:266.][The Rutter Group June 2024 Update][underlining added].)

In the instant action, if the defense presented by the appearing defendants is sustained, no judgment could or should be entered against this defaulting defendant. (Plott v. York, 33 Cal.App.2d 460 [91 P.2d 924]; Nicholls v. Anders, 13 Cal.App.2d 440 [56 P.2d 1289]; Lynch v. Bencini, supra; Minehan v. Silveria, 11 Cal.App.2d 266 [53 P.2d 770].)

Under the circumstances here related a grave injustice would result if the municipal court proceeded to enter judgment against petitioner, as contemplated, and the other answering defendants established that the debt had been paid.  For every wrong there should be a remedy, and no good reason appears why the perpetration of such a wrong could not and should not be prevented by this proceeding.  The trial judge should be prevented from entering such a judgment until the determination of the action on its merits insofar as it affects petitioner's liability as a member of the partnership.

(Mirabile v. Smith (1953) 119 Cal.App.2d 685, 689.)

Taken together, the foregoing reasons justify setting aside the entry of default.

The Court will not address the merit of Defendants’ potential defenses to the Complaint at this time.

The motion to set aside the default entered against it is GRANTED. Defendant is to respond to the Complaint within 30 days.