Judge: David A. Rosen, Case: 21GDCV00018, Date: 2023-03-24 Tentative Ruling

Case Number: 21GDCV00018    Hearing Date: March 24, 2023    Dept: E

Hearing Date: 03/24/2023 – 8:30am
Case No. 21GDCV00018
Trial Date: N/A
Case Name: PETER OLIVER v. KARIM BOUMAJDI, et al.

2 TENTATIVE RULINGS – MOTION TO SET ASIDE DEFAULT JUDGEMENT

[The parties filed a stipulation on 2/6/2023 wherein Plaintiff and Defendants, Karim Boumajdi and Tesla Reseller, agreed that most of the matters raised in both Defendants’ motions are substantially similar and have overlapping issues. Plaintiff and Defendants stated they do not think it would be unduly burdensome on the Court to address the matters together. Therefore, this Court will address both motions in a singular tentative ruling.]

Moving Party:  Defendants, Karim Boumajdi aka Kevin Boumajdi and Tesla Reseller Group, Inc. a California corporation

Responding Party: Plaintiff, Peter Oliver

Opposition and Reply submitted.

Moving Papers: Karim Boumajdi’s motion; Boumajdi’s proposed order; Tesla Reseller Group’s motion; Tesla Reseller Group’s proposed order; Stipulation to consolidate hearings

Opposition Papers: Plaintiff’s Opposition to Boumajdi; Declaration of Michael N. Berke; Plaintiff’s Request for Judicial Notice re: Boumajdi; Plaintiff’s Opposition to Tesla Reseller Group; Declaration of Michael N. Berke; Request for Judicial Notice re: Boumajdi; Amended Request for Judicial Notice re: Tesla Reseller Group

Reply: Boumajdi’s Reply; Tesla Reseller Group’s Reply

RELIEF REQUESTED¿ 

Defendant, Karim Boumajdi moves for an order setting aside the entry of default and default judgment against him in this proceeding. This motion is made pursuant to CCP §473(d) and the Court’s inherent equitable powers.

Defendant, Tesla Reseller Group (TRG), moves for an order setting aside the entry of default and default judgment against it in this proceeding. This motion is made pursuant to CCP §437(d) and the Court’s inherent equitable powers.

Procedural
16/21 Day Lapse (CCP §12c and §1005(b): Ok
Proof of Service Timely Filed (CRC, Rule 3.1300):Ok
Correct Address (CCP §1013, §1013a): Ok

ARGUMENTS
Moving Arguments
Defendants argue that under CCP §473(d) the default judgment is void for lack of personal jurisdiction because Plaintiff failed to properly serve Defendants. Defendants argue they were not properly served by substitute service under CCP §415.20(b) because the Little Door at the Harlowe is not Mr. Boumajdi’s usual place of business, that Mr. Thompson could not accept service, as Thompson is an employee of Harlowe and not of either defendant, and that Mr. Thompson never provided him the notice of the papers that were allegedly served by substitute service. Defendants also argue that the Court may exercise its inherent powers and discretion to set aside the default judgment.

Opposition Arguments
Opposition argues that where Defendants were served by substitute service – 7321 Santa Monica Blvd – was Defendants’ usual place of business because the address is noted as Boumajdi’s business address in corporate fillings with the California Secretary of State. Plaintiff also argues that CCP §473(d) is inapplicable here. Plaintiff also argues the instant motion is untimely under the Court’s inherent equitable powers.

ANALYSIS
Zirbes v. Stratton notes as follows:

“In order to obtain in personam jurisdiction through any form of constructive service there must be strict compliance with the requisite statutory procedures. [Fn. omitted.]” ( Stamps v. Superior Court (1971) 14 Cal.App.3d 108, 110 [92 Cal.Rptr. 151].) To be constitutionally sound the form of substituted service must be “reasonably calculated to give an interested party actual notice of the proceedings and an opportunity to be heard ... [in order that] the traditional notions of fair play and substantial justice implicit in due process are satisfied.” 

(Zirbes v. Stratton (1986) 187 Cal.App.3d 1407, 1416.)

Ellard v. Conway states:

“[C]ompliance with the statutory procedures for service of process is essential to establish personal jurisdiction. [Citation.] Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void. [Citation.]” (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444, 29 Cal.Rptr.2d 746.) Under section 473, subdivision (d), the court may set aside a default judgment which is valid on its face, but void, as a matter of law, due to improper service.

(Ellard v. Conway (2001) 94 Cal.App.4th 540, 544.)

Strathvale Holdings v. E.B.H. states:

“ ‘Lack of jurisdiction in its most fundamental or strict sense means an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties.” (People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 660, 16 Cal.Rptr.3d 76, 93 P.3d 1020, quoting Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 288, 109 P.2d 942, italics added.) “When a court lacks jurisdiction in a fundamental sense, an ensuing judgment is void, and ‘thus vulnerable to direct or collateral attack at any time.’ ” (Ibid., quoting Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 119, 101 Cal.Rptr. 745, 496 P.2d 817.)

A motion to vacate a void judgment is a direct attack. (Walker v. San Francisco Housing Authority (2002) 100 Cal.App.4th 685, 693–694, 122 Cal.Rptr.2d 758; 8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, § 2, p. 508.) “[O]n direct attack, lack of jurisdiction may be shown by extrinsic evidence, i.e., evidence outside the judgment roll.” (8 Witkin, supra, § 5, p. 513.) The Witkin treatise explains the proper procedure to be taken to vacate a judgment that is void, but appears proper on its face: “The rule prohibiting extrinsic evidence does not mean that a judgment void for lack of jurisdiction can be enforced merely because the supporting papers, though false in fact, are in good form. It merely requires that the challenge of a judgment good on its face should be made by a direct attack.” (8 Witkin, supra, § 11, p. 518.)

…

“ ‘A motion to vacate a default and set aside [a] judgment (§ 473) “is addressed to the sound discretion of the trial court, and in the absence of a clear showing of abuse ... the exercise of that discretion will not be disturbed on appeal.” ’ (Lint v. Chisholm (1981) 121 Cal.App.3d 615, 619–620 [177 Cal.Rptr. 314], quoting City Bank of San Diego v. Ramage (1968) 266 Cal.App.2d 570, 579 [72 Cal.Rptr. 273].) The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925 [101 Cal.Rptr. 568, 496 P.2d 480].)” (Anastos v. Lee (2004) 118 Cal.App.4th 1314, 1318–1319, 13 Cal.Rptr.3d 716.)

(Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1249.)

Defendants argue they were not properly served by substitute service under CCP §415.20(b) and Plaintiff argues that Defendants were properly served under CCP §415.20(b).

CCP §415.20(b) states:

If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served, as specified in Section 416.60, 416.70, 416.80, or 416.90, a summons may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. Service of a summons in this manner is deemed complete on the 10th day after the mailing.

(CCP §415.20(b).)

While both parties dispute whether or not the address where Defendants were sub-served was a “usual place of business,” the Court does not find that this matter needs to be addressed. In relevant part of 415.20(b),  the Court points its attention to “…or a person apparently in charge of his or her office, place of business…”

Here, Defendants provided evidence in the Boumajdi declaration that Billy Thompson, the individual that was sub-served at 7321 Santa Monica Blvd, was not able to accept service. The Boumajdi Declaration states that Thompson is not on The Little Door Corp’s payroll nor does Boumajdi manage him. (Boumajdi Decl. ¶6.) The Boumajdi Declaration also states that he did not learn that Mr. Oliver sued him in this case until June 2022 when he learned that Mr. Oliver’s lawyer had put a lien on a personal injury lawsuit that Boumajdi filed in 2019 and that the lien would affect a settlement of his personal injury case. (Id. at ¶11.)

In Opposition, Plaintiff did not provide contrary evidence that Mr. Thompson could accept service, that Thompson was employed by defendants (or one of them) or that Defendants received service of process. “Service must be made upon a person whose ‘relationship with the person to be served makes it more likely than not that they will deliver process to the named party.’” (Ellard v. Conway (2001) 94 Cal.App.4th 540, 546.)

TENTATIVE RULING
Evidence provided by Defendants demonstrated that Defendants never received the substitute service papers before the entry of default since Defendants did not learn of this suit until June 2022. Defendants also provided evidence that Mr. Thompson could not accept service. Opposition did not provide evidence to contradict moving parties’ assertions or evidence. Further, both Defendants provided a proposed Answer in their motions.

Boumajdi’s motion to set aside default judgment is GRANTED.

Tesla Reseller Group’s motion to set aside default judgment is GRANTED.

The proposed Answers to the Complaint are deemed filed and served.

Plaintiff’s requests for judicial notice are denied without prejudice.

The Court will set a Case Management Conference at this hearing.