Judge Deirdre Hill, Case 22TRCV00081 2022-10-19 Tentative Ruling

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Responding Party: Defendants Trojan Capital Investments, LLC and Trinity Financial Services, LLC

Motion for an Order to Vacate and Set Aside the Ruling on Demurrer Entered by Default, to Set Aside the Order of Dismissal and to Permit the Filing of a Second Amended Complaint

On February 3, 2022, plaintiff Martin G. Torres filed a complaint against Robyn Wonnell, First Magnus Financial Corporation, Trojan Capital Investments, LLC, and Trinity Financial Services, LLC for (1) predatory lending practices, (2) fraud, (3) unfair debt collection practices, (4) reformation of contract, and (5) declaratory relief.

On April 25, 2022, the court sustained with leave to amend defendants’ Trojan Capital Investments and Trinity Financial Services’ demurrer to the 2^nd, 3^rd, 4^th, and 5^th causes of action.

On July 26, 2022, the court sustained defendants Trojan Capital Investments, LLC and Trinity Financial Services, LLC’s demurrer without leave to amend as to the 2^nd, 3^rd, 4^th, and 5^th causes of action.

On September 13, 2022, the court entered an order of dismissal with prejudice as to defendants.

“The court may, upon 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. . . . Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.” CCP § 473(b).

Under CCP §473, plaintiff Martin Torres requests that the court (1) vacate and set aside the ruling sustaining the demurrer without leave to amend entered on July 26, 2022 and the order of dismissal entered on September 13, 2022 and (2) give leave to plaintiff to file a SAC or, alternatively, leave to file an opposition to the demurrer to the FAC.

On July 26, 2022, the court sustained defendants’ demurrer to the 2^nd, 3^rd, 4^th, and 5^th causes of action in the FAC without leave to amend. Plaintiff had not filed an opposition. Plaintiff’s counsel appeared at the hearing. The motion was heard, argued, and the court adopted the tentative ruling as the order of the court. The minute order indicates that the court encouraged counsel to meet and confer over the issue of failure to oppose the demurrer to possibly avoid a CCP §473 motion. The court had previously sustained defendants’ demurrer to the complaint with leave to amend.

At the CMC hearing on September 13, 2022, there was no appearance by plaintiff’s counsel. The court entered an order of dismissal with prejudice as to defendants based on the ruling on the demurrer.

According to plaintiff’s counsel’s declaration, he is a solo practitioner who relies heavily upon his office manager to calendar hearings and opposition dates. His office manager failed to calendar the opposition date to the hearing at issue. Plaintiff’s counsel contracted Covid-19 on or about July 11, 2022 and was ill for more than a week until July 19, 2022, during the time period in which the opposition to the demurrer had been due. He states that it was his mistake to not have looked back at each of his emails and to ensure that all of the dates had been properly calendared. It was not until the day before the hearing on July 26, 2022 that he realized that his office had failed to calendar the opposition date and that he had failed to file an opposition. He states that the entry of the order of dismissal and the proceeding taken against his client was a result of his mistake in failing to properly calendar the demurrer and to timely oppose it. He states also that his neglect was excusable because of his illness. Paul Orloff decl.

Plaintiff argues that had it not been for plaintiff’s counsel’s attorney failing to file an opposition, the court “would have likely granted leave to amend because of the facts alleged in the [proposed] SAC.”

In opposition, defendants contend that the court’s detailed ruling was not solely based on the fact that plaintiff did not file an opposition but rather due to the legal arguments raised in the demurrer. Defendants assert that plaintiff has not shown how the outcome of the demurrer would have been different if plaintiff had filed an opposition. Defendants argue that the proposed SAC alleges “the same defective arguments as the prior pleading” and that the claims are fatally defective.

In reply, plaintiff acknowledges that there are deficiencies in the FAC and argues that the proposed SAC addresses the deficiencies raised by the demurrer, including adding “additional facts and allegations related to the validity of the assignment,” including that the “2018 MERS transfer was long after Magnus had gone bankrupt and out of business and that MERS “cannot transfer interests on behalf of a defunct corporation.”

The court finds that the court’s ruling on the demurrer without leave to amend was not caused by the attorney’s mistake, inadvertence, surprise, or neglect. Rather, the court considered the allegations of the FAC, the arguments in the demurrer, and determined whether the facts alleged were sufficient to meet the elements of the causes of action. The court found that the allegations were insufficient. The court had already given plaintiff the opportunity to amend and the FAC did not correct the defects. Moreover, plaintiff has not shown by this motion how any proposed allegations would meet the elements. Further, mandatory relief under CCP §473 is unavailable. See English v. IKON Business Solutions, Inc. (2001) 94 Cal. App. 4^th 130, 143 (“the mandatory provision of section 473(b) applies to a ‘default’ entered by the clerk (or the court) when a defendant fails to answer a complaint, not to every ‘omission’ or ‘failure’ in the course of an action that might be characterized as a ‘default’ under the more general meaning of the word.”).