Judge Edward B. Moreton, Jr., Case 20SMCV00492 2023-01-10 Tentative Ruling

Judge: Edward B. Moreton, Jr., Case: 20SMCV00492, Date: 2023-01-10 Tentative Ruling

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

This is a wrongful foreclosure case. Plaintiff Edgar Meinhardt alleges Defendants[1] misrepresented the terms of a home loan, including the amount of the loan, and then wrongfully foreclosed on his home. Plaintiff alleges sixteen causes of action for (1) violation of Civil Code §2923.5, (2) wrongful foreclosure, (3) set aside foreclosure sale, (4) violation of Civil Code §2924.12, (5) violation of the Real Estate Settlement Procedures Act (RESPA), (6) rescission and damages under the Truth in Lending Act (TILA), (7) violation of the Home Ownership and Equity Protection Act (HOEPA), (8) fraud and deceit, (9) negligent misrepresentation, (10) negligence, (11) breach of contract, (12) quiet title, (13) cancellation of instruments, (14) accounting, (15) unfair competition in violation of Business & Professions Code §17200 and (16) declaratory relief. Plaintiff is appearing in pro per.

This hearing is on Defendant Susan Lee’s motion to set aside entry of default. Defendant alleges she failed to answer due to a calendaring error on the part of her counsel and Plaintiff’s failure to notify her counsel that an amended complaint had been served and that Plaintiff intended to seek entry of default.

Code Civ. Proc. §473, subd. (b) provides for two distinct types of relief -- commonly differentiated as “discretionary” and “mandatory” -- from a default. “Under the discretionary relief provision, on a showing of ‘mistake, inadvertence, surprise, or excusable neglect,” the court has discretion to allow relief from default. Under the mandatory relief provision, on the other hand, upon a showing by attorney declaration of ‘mistake, inadvertence, surprise, or neglect,’ the court shall vacate any ‘resulting default judgment or dismissal entered.’” (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 615-616.)

Applications seeking relief under the mandatory provision of §473 must be “accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.” (Code Civ. Proc. §473, subd. (b).) The mandatory provision further adds that “whenever relief is granted based on an attorney’s affidavit of fault [the court shall] direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.” (Id.)

The application for relief must be made no more than six months after entry of judgment. Id. And the application must be “accompanied by a copy of the answer or other pleading proposed to be filed therein”. Id.

“It is settled that the law favors a trial on the merits. . . and therefore liberally construes section 473.” (Bonzer v. City of Huntington Park (1993) 20 Cal.App.4^th 1474, 1477.) “Doubts in applying section 473 are resolved in favor of the party seeking relief from default. . . and if that party has moved promptly for default relief, only slight evidence will justify an order granting such relief.” (Id. at 1477-78.)

Defendant’s motion to set aside default is timely. Defendant’s motion was filed on December 13, 2022, within six months after default was entered on October 24, 2022. The motion is also accompanied by a copy of the answer. Accordingly, the motion is procedurally proper.

Further, the motion seeks mandatory relief and is accompanied by an attorney affidavit of fault. While Defendant’s counsel blames Plaintiff or his counsel for allegedly failing to notify him of service of the First Amended Complaint (“FAC”) (Slome Decl. ¶¶3-5), he never explains why his own client didn’t notify him of the service of the FAC. There is no indication that service of the FAC on Defendant was in any way defective. Defendant has not submitted a declaration to explain why she did not inform her own counsel of the service. And Plaintiff has submitted emails showing that defense counsel was in fact notified that Plaintiff intended to serve and add Defendant as part of the case. (Ex. 1 to Opp.) In any event, counsel concedes he eventually did discover the service of the FAC in time to respond to it, but for his failure to calendar the correct date for filing the responsive pleading. (Slome Decl. ¶8.) Based on this error, the Court will grant the motion to set aside default. (See Communidad en Accion v. Los Angeles City Council (2013) 219 Cal.App.4^th 1116, 1134-35 (an isolated calendaring mistake was sufficient basis to grant relief from default); Mehdizadeh v. Mercedes Benz of United States, 2021 Cal. Super. Lexis 78937 at *3 (“An attorney's calendaring error is sufficient to warrant relief under CCP § 473(b).”)

Plaintiff argues that the fault actually lies with Defendant and not defense counsel, and therefore, mandatory relief should not be granted. While the Court agrees Defendant should have informed her own counsel that she was served with the Complaint and there is evidence Defendant was attempting to avoid service, the Court cannot discredit defense counsel’s affidavit that the error ultimately resulting in the failure to respond was a calendaring one made by counsel. In other words, even if Defendant had promptly told her own counsel that she had been served, counsel would still have failed to timely respond due to a calendaring mistake.

If relief is granted based on the mandatory relief prong of Code Civ. Proc. § 473(b), the court shall direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties. Code Civ. Proc. § 473(b) states: “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.” Under Rogalski v. Nabers Cadillac (1992) 11 Cal.App.4th 816, 823, the “fees” referenced in § 473(b) are those incurred in obtaining the default only, not the fees incurred opposing the motion. At the time the default was entered, Plaintiff was acting in pro per and, therefore, there are no attorneys’ fees to be awarded. But Plaintiff is entitled to costs incurred in securing the default.

For the foregoing reasons, the Court GRANTS Defendant Susan Lee’s motion to set aside default. Plaintiff may file a request for costs within 20 days of this Order.

[1] Defendants are Sunny Acre LLC, Tsasu LLC, Equity Financial Design LLC, Philip Jimenez, Universal Commercial Capital, Eric Tran, Leonard Hsu Jr., Susan Lee, and Christopher XF Lee.