Judge: David A. Hoffer, Case: 30-2020-1156697, Date: 2022-09-19 Tentative Ruling

Defendant Balance Trust LLC’s unopposed motion to vacate default judgment is GRANTED.  Defendant’s unopposed motion to set aside entry of default is DENIED. 

I.  Motion to Vacate Default Judgment

“The relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint…”  (Code Civ. Proc., § 580, subd. (a).)  “Section 580 ‘ensure[s] that a defendant who declines to contest an action ... [is] not ... subject[ed] ... to open-ended liability’ and operates as a limitation on the court's jurisdiction. [Citations.]”  (Stein v. York (2010) 181 Cal.App.4th 320, 325).  As such, “[i]f a default judgment awarded against a defendant exceeds the relief demanded in the complaint [Citation]…, the defendant is ‘effectively denied a fair hearing [citations]’ [Citation.]. Thus, a default judgment in an amount greater than the amount demanded is void and subject to either direct or collateral attack. [Citation.]”  (Id., at p 326.)

Here, Plaintiff’s complaint prayed for a decree to foreclose the assessment lien and for damages in the principal sum of $23,594.79.  [Complaint, pp. 4-5]  After the case was reclassified to unlimited civil at Plaintiff’s request, Plaintiff did not amend the complaint.  Under section 580, the court was not permitted to enter default judgment in excess of $23,594.79.  Therefore, the default judgment in the amount of $37,520.40 is void and the motion to vacate that judgment is granted.

2.  Motion to Set Aside Entry of Default

A court may grant discretionary relief from a judgment, dismissal, order or other proceeding taken against a party upon the party’s showing of “mistake, inadvertence, surprise or excusable neglect.”  (Code Civ. Proc., § 473, subd. (b); Leader v. Health Industries of Am., Inc. (2001) 89 Cal. App. 4th 603, 615.)  A motion seeking discretionary relief from default must be filed within 6 months after the clerk’s entry of default.  (Code Civ. Proc., § 473, subd. (b).) 

Motions to set aside default and default judgment are separate procedures.  (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970.)  The setting aside of a default judgment “does not necessarily have any bearing on, and may be set aside without disturbing,” the entry of default.  (Id.) 

Here, Defendant’s meritorious argument to vacate the default judgment does not automatically result in the setting aside of the entry of default.  Defendant did not provide any argument as to why the void default judgment also requires the setting aside of the entry of default. 

As for Defendant’s motion for discretionary relief, it is untimely.  The court entered default against Defendant on September 14, 2021.  Defendant filed the instant motion on May 9, 2022, outside the six-month window. 

Even if the motion to set aside entry of default was not untimely, Defendant has not demonstrated excusable neglect.  Heric admits he received notice of the summons and complaint.  He subsequently gave the property back to his lender.  He thought the matter was resolved because he believed the debt transferred with the property.  However, Heric did not provide a reason to support his belief that he did not have to respond to the complaint.  He did not contact Plaintiff nor did he consult with an attorney.  Defendant’s neglect was not excusable.  The motion to set aside entry of default is denied. 

Within 30 days of this hearing, Plaintiff is ordered to either amend its complaint to seek a greater amount of damages (effectively opening the door for Defendant to respond) or request default judgment based on the original complaint.  (See Stein, supra, 181 Cal.App.4th at p. 327).

Defendant is ordered to give notice of this ruling.