Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

MOVING PARTY: Defendants Nelson Hauling LLC and Christopher Gralon Nelson 

 

RESPONDING PARTY: Plaintiff Dakota Financial LLC 

 

BACKGROUND 

This action arises from a dispute over a leased truck.  Plaintiff Dakota Financial, LLC (“Lessor”) leased a truck to Defendant Nelson Hauling LLC (“Lessee”) under a lease agreement (“Lease”).  Defendant Christopher Gralon Nelson (“Guarantor”) executed a Guaranty, guaranteeing payments by Lessee under the Lease, together with costs and attorneys’ fees incurred in the enforcement of the Lease and Guaranty.  Lessor alleges Lessee never made any payments under the Lease, which payments now total $40,403.94 plus late charges and accrued interest at the rate of 18% per annum from May 24, 2022.  Lessor further alleges Guarantor has failed to pay amounts owed by the Lessee.  The operative complaint alleges claims for (1) breach of lease, (2) breach of guaranty, (3) possession (claim and delivery) and (4) willful and malicious conversion.  

This hearing is on Defendants’ motions to quash service of summons and to set aside default judgment.  Defendants argue Lessor failed to properly serve them, and therefore, the Court had no jurisdiction to enter the default judgments against them.   

LEGAL STANDARD 

“Compliance with the statutory procedures for service of process is essential to establish personal jurisdiction.  Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void.  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.)  “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.”  (Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1249 (trial court properly granted motion for relief from default and default judgment based on CCP §473(d) where defendants argued there was no valid service of process and they lacked minimum contacts with California).)   

A defendant may therefore move to set aside a default and default judgment based on improper service and lack of personal jurisdiction under Code Civ. Proc. §473(d).  (Id. at 1250.)  A defendant need not bring a motion to quash prior to or in conjunction with a motion for relief from default and default judgment pursuant to Code Civ. Proc. §473(d).  (Id.) 

It is always the plaintiff’s burden to establish the existence of jurisdiction.  (Id. at 1250-1251; Dill v. Berquist Const. Co., Inc. (1994) 24 Cal.App.4th 1426, 1439-1440.)  Thus, even though defendant is the moving party on a motion to quash or a motion to set aside a void judgment under CCP §473(d), the burden is on plaintiff to establish proper service.  (Dill, 24 Cal.App.4th at 1439-1440.)  A valid proof of service gives rise to a rebuttable presumption of valid service.  (Id. at 1441-1442.)  But the presumption may be overcome by contrary evidence.  (City of Los Angeles v. Morgan (1951) 105 Cal.App.2d 726, 731.) 

The statutory requirements of service are construed to uphold jurisdiction, rather than defeat it.  (See Pasadena Medi-Center Associates v. Sup.Ct. (1973) 9 Cal.3d 773, 778.)  As long as the defendant receives actual notice of the lawsuit, substantial compliance with the Code provisions governing service of summons will generally be held sufficient.  (Id.) 

DISCUSSION 

The Court first addresses Plaintiff’s argument that Defendants did not serve the motions to quash or set aside default within the statutory period required under the Code.  Under Code Civ. Proc. §1005, all moving papers must be filed at least 16 court days before the hearing.  Where the moving papers are served by mail within the State of California, the 16 day notice period shall be increased by five calendar days.  Under Code Civ. Proc. 1010.6, agreement is required to serve documents electronically, and if the moving papers are served electronically, an additional two court days is added to the 16 day notice period.  While the Court agrees the motions were not timely served under these code provisions, it will nonetheless consider the motions as the hearing was continued from the originally noticed date of January 25, 2023 to February 22, 2023, giving Plaintiff sufficient notice.        

The Court next addresses the sequencing of the motions.  Defendants have brought both a motion to quash service of summons and a motion to set aside default.  When a motion to quash is brought concurrently with a motion to vacate a default, the court must rule on the motion to vacate first.¿ When a default has been entered, a defendant cannot file any motions other than a motion to vacate default.  (Steven M. Garber & Assocs. v Eskandarian (2007) 150¿Cal.App.4th 813, 823-24 (holding that a defendant against whom a default has been entered is out of court and is not entitled to take any further affirmative steps in the action except for a motion for relief from the default).)  Accordingly, the Court considers Defendants’ motions to set aside default first. 

Plaintiff filed Proofs of Service, showing that on June 20, 2022, Defendants were served by substituted service.¿ Specifically, the Summons and Complaint and other documents were left with a Jane Doe at 12050 Clark Street, Apt #204, Moreno Valley, California which was Guarantor’s personal address.  (Ex. A to Motions.)¿ Plaintiff also mailed the documents to the same address on June 21, 2022.¿ (Ibid.)¿ The Proofs of Service are signed by a registered California process server under penalty of perjury and a declaration of diligence is attached.¿ (Ibid.).¿ Evidence Code section 647 provides that a registered process server’s declaration of service establishes a rebuttable presumption of proper service.  (American Express Centurion Bank v. Zara (2011) 199¿Cal.App.4th 383, 390; Evid. Code § 647.)¿¿  

This rebuttable presumption shifts the burden to Defendants to produce evidence showing that they were improperly served.  Lessee argues that service on Lessee was defective because service was not made on its registered agent for service of process.  The Court agrees. 

Lessee is a limited liability company.  The persons on whom service may be rendered on behalf of a limited liability company is governed by Corp. Code §17701.16.  Section 17701.16(b) provides, service on a limited liability company may be done by “[p]ersonal service…(1) to any individual designated by it as agent, or (2) if the designated agent is a corporation, to any person named in the latest certificate of the corporate agent filed pursuant to Section 1505 at the office of the corporate agent[.]”  In addition to this method of service, an LLC may be served by substituted service on the designated agent pursuant to CCP §415.20(a).  (Corp. Code §17701.16(a).)   

Lessee’s registered agent for service of process is Legalzoom.com Inc., located at 101 N. Brand Blvd, 11th Floor, Glendale California.  Plaintiff did not serve Lessee’s registered agent for service of process.  (Ex. A to Lessee’s Motion).  Because Plaintiff’s service on Lessee was defective, the Court did not have jurisdiction to enter default judgment against Lessee on August 19, 2022, and the default will be set aside.  (Contreras v. Quad Fuel, 2022 Cal. Super. LEXIS 65375 at *1 (vacating default where there is no proof of service on registered agent); Source at Beach v. Square Mixx Bp, 2018 Cal. Super. LEXIS 85689 at *2 (vacating default where proof of service did not identify correct registered agent).) 

Guarantor also argues service on him was defective because substitute service was made on an address that was no longer his residence.  The Court disagrees.   

Personal service may be accomplished by personally delivering a copy of the summons and complaint to the person to be served.  Code Civ. Proc. §415.10.  If a copy of the summons and complaint cannot with reasonable diligence be personally served, substitute service may be effected 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 … in the presence of … a person apparently in charge … and by thereafter mailing a copy of the summons and complaint by first class mail … to the person to be served at the place where a copy of the summons and complaint were left.”  Code Civ. Proc. §415.20(b).  To obtain personal jurisdiction through substituted service, there must be strict compliance with statutory requirements.  (Stamps v. Superior Court (1971) 14 Cal.App.3d 108, 110.)   

Here, Plaintiff did not personally serve Guarantor.  Instead, Plaintiff effected substitute service by leaving a copy of the summons and complaint with a Jane Doe at 12050 Clark Street, Apt #204, Moreno Valley, California.  Guarantor attests that this was no longer his address at the time of service (on June 20, 2022).  Guarantor further avers that he does not know who Jane Doe is.  (Gralon Decl. ¶9.)  In addition to his declaration, Guarantor has provided a driver’s license showing his address as 3081 Goshawk Lane, Perris California 92571 and a rental agreement for the Perris address showing an effective date of May 6, 2022 (Ex. B to Motion; Ex. A to Nelson Decl.)  Guarantor also attests he never received actual notice of the summons and complaint. (Gralon Decl. ¶11.)   

However, Plaintiff has submitted evidence casting doubt on Guarantor’s claims.  As of the time service was attempted and as recently as January 9, 2023, the secretary of state shows the principal and mailing address for Guarantor’s business is 12050 Clark Street, Apt #204, Moreno Valley, California.  (Exs. 3, 13 to Ferns Decl.)  The statement of information for Lessee filed with the secretary of state also identifies Guarantor’s address as 12050 Clark Street, Apt #204, Moreno Valley, California.  (Ex. 14 to Ferns Decl.)  Moreover, when the process server attempted service on June 20, 2022, Guarantor’s roommate indicated “he was out,” and not that Guarantor had moved out.  (Ex. 6 to Ferns Decl.)  Plaintiff also notes that the rental agreement was entered into between Guarantor and his mother, and Guarantor’s purported present address (3081 Goshawk Lane, Perris California 92571) is actually associated with a residential home run by his parents, Gralon Nelson and Darleen Nelson.  (Exs. 11 and 12 to Ferns Decl.)  Plaintiff notes Guarantor has not provided any cancelled checks dated in May 2022 for the alleged $1,200 rent set forth in the rental agreement, nor is there any proof from his former landlord that Guarantor had moved out by May 2022.  Based on these facts, which Defendants have not controverted, the Court concludes service on Guarantor was proper, and the Court had jurisdiction to grant default judgment against Guarantor on August 19, 2022.  

As to Defendants’ motions to quash, the motions may be filed “on or before the last day of his or her time to plead” or within “any further time that the court may for good cause allow.”¿ (Code of Civ. Proc. § 418.10(a)(1).¿ Here, Lessee has shown good cause for not filing a motion to quash within the statutorily permitted time, as it was not served properly.  However, for reasons set forth above, the Court concludes service on Guarantor was proper.  Accordingly, the Court grants Lessee’s motion to quash but denies Guarantor’s motion to quash.     

In the event any of Defendants’ motions are granted, Plaintiff requests that the Court condition its Order on requiring Defendants to (1) turn over the truck and (2) file their answers with the Court within fifteen (15) days from the date of the entry of any Order granting the motions.  Plaintiff cites no authority that the Court may condition its Order as requested.  Moreover, an answer would only be required once Plaintiff properly serves the Lessee, and Lessee would then have 30 days to respond.  Accordingly, the Court denies Plaintiff’s request to condition its Order.  

However, given that Guarantor appears to have perjured himself, the Court believes sanctions are warranted.  The Court will allow notice and opportunity to be heard on whether sanctions should issue.  The Court grants Plaintiff leave to file a motion for attorneys’ fees and costs incurred as a result of (1) opposing Guarantor’s motions and (2) bringing the motion for attorneys’ fees and costs.   

CONCLUSION 

Based on the foregoing, the Court GRANTS Nelson Hauling LLC’s motions to quash service of summons and to set aside default.  The default judgment against Nelson Hauling LLC entered on August 19, 2022 will be vacated.  The Court DENIES Christopher Gralon Nelson’s motions to quash and to set aside default.  Plaintiff shall file a motion for attorneys’ fees and costs within 30 days of this Order.       

 

IT IS SO ORDERED. 

 

DATED: February 22, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court