Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

MOVING PARTY: Defendant American Restore, Inc. 

 

RESPONDING PARTY: Plaintiffs George Pino and Wendy Pino  

 

 

BACKGROUND 

Plaintiffs George and Wendy Pino own a condominium unit located at 840 20th Street, Unit 7, Santa Monica, California.  (First Amended Complaint (“FAC”) ¶1.)  Their home is part of a complex managed by Defendant Laurel Square Owners Association (“HOA”).  (FAC ¶¶1, 2.)  The HOA and each of its members are bound by the Declaration of Covenants, Conditions and Restrictions.  (“CC&R’s”).  (FAC ¶¶11, 12.)     

Plaintiffs’ home has a history of recurring roof and wall leaks.  (FAC ¶¶13-35.)  The CC&R’s require the HOA to repair and maintain the roof and exterior walls.  (FAC ¶¶40-44.)  According to Plaintiffs, the HOA hired unlicensed and unqualified contractors to perform a patchwork of repairs to Plaintiffs’ home that failed within weeks.  ((FAC ¶¶13-35.)          

The operative (first amended) complaint alleged claims for (1) breach of governing documents, (2) breach of fiduciary duty, (3) negligence against HOA, (4) negligence against Doe Defendants, (5) nuisance, (6) continuing trespass, and (7) declaratory relief.  On December 23, 2022, Plaintiffs substituted Defendant American Restore, Inc. in place of one of the Doe Defendants.     

This hearing is on Defendant American Restore Inc.’s motion to set aside entry of default.  Defendant argues that due to the inadvertent mistake of one of its employees, the complaint was not provided to Defendant’s counsel, and this error was not discovered until that same employee received the notice of entry of default.           

LEGAL STANDARD 

Code Civ. Proc. §473, subd. (b)¿provides for two distinct types of relief from a default -- commonly differentiated as “discretionary” and “mandatory.”  “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 must 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 the judgment, dismissal, order, or proceeding was taken.  (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.4th 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.) 

TIMELINESS 

Defendant’s motion to set aside default is timely.  The motion was filed on March 15, 2023, within six months after default judgment was entered on February 15, 2023.  Further, the motion is accompanied by a copy of the proposed answer to the complaint.  Accordingly, the motion is procedurally proper. 

REQUEST FOR JUDICIAL NOTICE 

Plaintiffs request judicial notice of (1) Defendant’s entity details as of April 10, 2023, as shown on the California Secretary of State’s website and (2) Defendant’s statement of information filed with the California Secretary of State on February 28, 2022.  The request is unopposed.  The Court grants the request pursuant to §452(c), §452(h) and §453.   

DISCUSSION 

Defendant argues that the Court should grant discretionary relief from default due to the inadvertent mistake of one of its employees, Susan Bill.  Ms. Bill is charged with forwarding new lawsuits to Defendant’s counsel to ensure Defendant is properly defended.  (Bill Decl. ¶2.)  A copy of the FAC was left in Ms. Bill’s offices, but Ms. Bill primarily worked outside the office.  (Bill Decl. ¶2.)  Ms. Bill claims she did not discover the existence of the lawsuit until she received a copy of Plaintiff’s request for entry of default on February 17, 2023.  (Bill Decl. ¶6.)    On the same date, she emailed a copy of the request for entry of default to Defendant’s counsel.  (Bill Decl. ¶7.)   

Also, on the same day, defense counsel reached out to Plaintiffs’ counsel asking to stipulate to set aside the default if one was entered.  Plaintiffs’ counsel indicated he needed to consult with his clients.  (Kraus Decl. ¶3.)  After checking the docket and seeing that default had not yet been entered, defense counsel attempted to electronically file an answer.  (Kraus Decl. ¶4.)  However, the answer was rejected because the default had already been entered.  (Kraus Decl. ¶5.)   Defense counsel again reached out to Plaintiffs’ counsel but Plaintiffs would not stipulate to set aside the default unless Defendant reimbursed Plaintiffs for $2000 in alleged fees and costs related to the default.  (Kraus Decl. ¶¶6-7.)  Defense counsel asked Plaintiffs’ counsel to explain how the fees could have totaled $2,000 when Plaintiffs’ counsel only prepared a one page judicial council form seeking entry of default.  (Kraus Decl. ¶8.)  Plaintiffs’ counsel never explained how their fees and costs totaled $2,000.  (Kraus Decl. ¶¶6-7.)  

On these facts and given the liberal policy favoring the resolution of a case on its merits, the Court concludes discretionary relief is warranted based on the client’s inadvertent mistake in overlooking a copy of the complaint left on her desk while she was working remotely.  (Cf. Bernards v. Grey (1950) 97 Cal.App.2d 672, 682-686 (finding excusable neglect where a party was personally served a summons and complaint but then “placed them in his briefcase, merely noting that they referred to the present action and through inadvertence, did not call to counsel’s attention the papers he had received and was not at said time aware of their nature”); Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal.2d 523, 526-27 (finding excusable neglect where secretary misunderstood the directions given to her by the president of the company and failed to forward the papers to Defendant’s attorney); Gorman v. California Transit Co. (1926) 199 Cal. 246, 248-249 (upholding order vacating a default judgment due to failure to answer because after service of the summons and complaint on the secretary of the corporation, the summons and complaint were mistakenly taken by an employee from the desk of one who was to notify the president of the corporation, and filed); Twereet v. Ivymax Inc., 2021 Cal. Super. LEXIS 43834 at *2 (setting aside default where defendant was not aware of complaint because its offices were closed and its employees were working remotely during COVID-19 shutdown).   

The Court further concludes Plaintiff would not suffer prejudice if the motion were granted beyond that which is inherent in all Section 473 motions.  Indeed, Plaintiff has not identified any prejudice.  Further, any prejudice Plaintiff will have suffered is at least partly traceable to Plaintiffs’ failure to reach out to Defendant to warn it of their intent to seek an entry of default.  (Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 701 (noting ethical and professional duty to warn opposing attorney before seeking default); Smith v. Los Angeles Bookbinders Union No. 63 (1955) 133 Cal.App.2d 486, 500 (disapproved on other grounds in MacLeod v. Tribune Pub. Co., Inc. (1959) 52 Cal.2d 536, 551) (“The quiet speed of plaintiffs’ attorney in seeking a default judgment without the knowledge of defendants’ counsel is not to be commended.”).)   

Plaintiffs argue that Defendant has not shown faulty service.  A process server left a summons, complaint and amendment to the complaint with Defendant’s office manager, Sara Rodriguez, and also mailed copies of the documents to Lawrence Andrews, who is Defendant’s agent for service of process.  (Exs. 1-2 to Request for Judicial Notice.)  Plaintiffs’ argument misses the point.  Defendant is not arguing service was faulty, but rather, despite effective service, Ms. Bill (the person charged with forwarding complaints to Defendant’s attorney) failed to do so because she was working remotely and overlooked the FAC. 

Plaintiff’s citation to Andrews v. Jacoby (1919) 39 Cal.App. 382, 383-384 is equally unavailing.   There, the court concluded that the client was aware of the complaint, sent it to counsel, but counsel was too busy and occupied with other affairs to respond to the complaint.  Contrary to Andrews, in this case, there is no showing Ms. Bills or defense counsel was aware of the complaint and simply chose to ignore it because they were too busy with other affairs.   

Plaintiff next argues that if the Court were to vacate default, they should be entitled to an award of attorneys’ fees and costs.  Section 473(c)(1) states that “Whenever the court grants relief from a default, default judgment, or dismissal based on any of the provisions of this section, the court may do any of the following: (A) Impose a penalty of no greater than one thousand dollars ($1,000) upon an offending attorney or party. (B) Direct that an offending attorney pay an amount no greater than one thousand dollars ($1,000) to the State Bar Client Security Fund. (C) Grant other relief as is appropriate.”  Pursuant to section §473(c)(1)(A), the Court will impose sanctions in the amount of $500 to be paid by Defendant to Plaintiffs. 

CONCLUSION 

For the foregoing reasons, the Court GRANTS Plaintiff’s motion to set aside default.  The Court further awards sanctions in the amount of $500 in favor of Plaintiffs and against Defendant to be paid within 30 days of this Order.     

DATED:  April 27, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court