Judge: Daniel S. Murphy, Case: 22STCV21241, Date: 2024-06-17 Tentative Ruling

Case Number: 22STCV21241    Hearing Date: June 17, 2024    Dept: 32

BACKGROUND

            On June 29, 2022, Plaintiff A&N Industrial Properties, LLC filed a complaint against Defendants Bart & Judy’s Bakery, Inc. (B&J) and Bart Greenhut (Greenhut). The complaint alleges the following causes of action: (1) breach of lease; (2) common counts; and (3) breach of written guaranty.   

            At an Order to Show Cause (OSC) on January 18, 2024, the Court struck B&J’s answer because B&J was a corporation not represented by counsel. There was no appearance for or by B&J at the hearing. On January 30, 2024, Greenhut was dismissed without prejudice pursuant to Plaintiff’s request. The Court entered default judgment against B&J on April 9, 2024.

            On May 9, 2024, B&J filed the instant motion to set aside the default. Plaintiff filed its opposition on June 3, 2024. B&J filed its reply on June 10, 2024.     

LEGAL STANDARD

“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.” (Code Civ. Proc., § 473(b).) “The party seeking relief . . . bears the burden of proof in establishing a right to relief.” (Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1410.) “The burden is a double one: the moving party must show a satisfactory excuse for his default, and he must show diligence in making the motion after discovery of the default.” (Id., internal citations omitted.)

DISCUSSION

            B&J moves for relief on the grounds that Greenhut, its CEO and authorized representative, could not attend the OSC or promptly obtain counsel due to his medical condition. (Greenhut Decl. ¶¶ 6, 8.) Plaintiff counters that Greenhut has been an active participant in the action, including after relieving his counsel. (Patterson Decl. ¶¶ 6, 8, 13-15.) Greenhut has directly communicated with Plaintiff’s counsel on multiple occasions and has been repeatedly reminded of the need to obtain counsel for B&J. (Ibid.)

            B&J was put on notice of the requirement to obtain counsel through the Court’s November 29, 2023 order relieving its then-counsel. In fact, Greenhut had an attorney in mind by January 10, 2024. (Patterson Decl. ¶ 15.) At the latest, B&J was placed on notice by January 18, 2024, when its answer was stricken for failure to obtain counsel. Given that Greenhut has actively participated in the litigation, was able to contact a new attorney by January 10, 2024, and was on repeated notice of the need to retain counsel, B&J has not provided a sufficient excuse for waiting until April 9, 2024 to substitute new counsel and then waiting one more month after that to file this motion. This demonstrates neither a satisfactory excuse for the default nor diligence in seeking relief.

            The trial had already been continued once to allow time for B&J to obtain counsel. If the default is set aside, Plaintiff will have to expend resources to withdraw the recorded judgment and unwind other post-judgment procedures that have taken place. In this particular case, the policy in favor of the efficient resolution of disputes outweighs the policy in favor of resolution on the merits. (See McClain v. Kissler (2019) 39 Cal.App.5th 399, 405.)   

CONCLUSION

            Defendant B&J’s motion to set aside default is DENIED.