Judge: Deirdre Hill, Case: 21TRCV00403, Date: 2022-08-12 Tentative Ruling

Case Number: 21TRCV00403    Hearing Date: August 12, 2022    Dept: M

Hearing Date: August 12, 2022                                 

Moving Parties: Defendants Quants Investment Technologies, Quants, Inc., and Gokhan Kisacikoglu                  

Responding Party: Plaintiff Gerald Chamales           

Motion to Vacate Judgment

            The court considered the moving and opposing papers.  No reply papers have been filed as of August 8, 2022.

RULING

            The Motion is GRANTED.

BACKGROUND

            On May 28, 2021, Plaintiff Gerald Chamales filed a Complaint asserting causes of action for breach of contract and common counts for Defendants Quants Investment Technologies, Quants, Inc., and Gokhan Kisacikoglu failure to make payments in accordance with the terms of the contract.  Plaintiff sought $422,475.31 in damages.

            Prior to the filing of the Complaint the Parties entered into a stipulation for entry of judgment (the “Stipulation”), which provided in part, that Defendants were liable to Plaintiff in damages of $422,475.31 arising from Defendants’ breach of contract.  The stipulation provided in relevant part that Plaintiff would not file a lawsuit if Defendants made full and complete payments of the $422,475.31.

            On May 24, 2022, the court entered judgment against Defendants pursuant to Plaintiff’s request for entry of judgment and the Stipulation.

            Defendants now move the court to set aside the Judgment

LEGAL AUTHORITY

CCP section 473(b) provides, in relevant part: 

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. 

California courts have held that setting aside a settlement or stipulation will occur only upon a showing of good cause, such as “inadvertence, excusable neglect, fraud mistake of fact or law, where the facts stipulated have changed or there has been a change in the underlying conditions that could not have been anticipated, or where special circumstances exist rendering it unjust to enforce the stipulation.”  Huston v. Workers' Comp. Appeals Bd. (1979) 95 Cal.App.3d 856, 865–866; see also County of Sacramento v. WCAB (Weatherall) (2000) 77 Cal. App. 4th 1114.  Moreover, lack of diligence, or lack of full knowledge of the facts, does not constitute good cause to set aside stipulations.  Huston, supra, 95 Cal.App.3d at 866, [“[w]hen there is no mistake but merely a lack of full knowledge of the facts, which . . . is due to the failure of a party to exercise due diligence to ascertain them, there is no proper ground for relief”]. 

DISCUSSION

            Defendants contend that the court did not have the authority to grant the Judgment because the Stipulation is a cognovit clause that did not comport with statutory and due process requirements, as Defendants were not given notice and a hearing before the entry of the final judgment against them.

            Generally, a court cannot render judgment against a defendant without according the due process rights of notice and an opportunity to be heard, unless defendant voluntarily, knowingly, and intelligently waives these rights.  Isbell v. County of Sonoma (1978) 21 Cal.3d 61, 64. 

            Here, the court finds that there is good cause to set aside the Judgment against Defendants because the court did not consider the opposition filed by defendants to the entry of Judgment.  The opposition to the entry of judgment was filed on the same day as the judgment was rendered.  In the opposition to the entry of judgment, Defendant Kisacikoglu represents that he does not recall signing the Stipulation and that the signatures (on behalf of Defendants) in the Stipulation do not appear to be his.  Kisacikoglu Decl., ¶4, filed May 24, 2022.   The court notes that Defendants had answered the Complaint on October 28, 2021, and after they answered, a hearing should have been set to allow Defendants to be heard and oppose the request for entry of Judgment.  The court finds that based on Defendant Kisacikoglu’s representations made under penalty of perjury, Defendants did not voluntarily, knowingly, and intelligently waives their rights to oppose and be heard on the entry of judgment.  Accordingly, the court finds there is good cause to set aside the Judgment.

            The Motion is GRANTED. 

            Moving party is ordered to give notice of ruling.