Judge Elaine Lu, Case Number: 23STLC01807, Date: 2024-01-25 Tentative Ruling

On March 17, 2023, Plaintiff Barry Rosen (“Plaintiff”) filed the instant action to involuntarily dissolve Defendant Clark Drive Homeowners Association (“Defendant”). On May 4, 2023, default was entered against Defendant.

On July 7, 2023, Defendant concurrently filed motions to set aside the default and a demurrer to the complaint. On August 2, 2023, Defendant’s motion to set aside the default and demurrer were taken off calendar in the limited civil department because the action was reclassified as an unlimited civil case and transferred for reassignment to an Independent Calendar Court. (Minute Order 8/2/23.) On August 8, 2023, the instant action was reassigned to the current department.

On August 29, 2023, Defendant re-filed its motion to set aside the default set to be heard February 1, 2024. On December 14, 2023, Defendant filed a notice of errata as to the instant motion to set aside the default.

On January 5, 2024, Plaintiff filed the instant motion for entry of default judgment and to appoint a receiver set to be heard January 25, 2024. On January 10, 2024, Defendant filed an opposition to Plaintiff’s motion for entry of default judgment and to appoint a receiver. On January 17, 2024, Plaintiff filed an opposition to Defendant’s motion to set aside the default and a reply as to the motion for entry of default judgment and to appoint a receiver.

On January 25, 2024, the Court continued Plaintiff’s motion for entry of default judgment and to appoint a receiver to be heard concurrently with Defendant’s motion to set aside default. In doing so, the Court requested that each party file supplemental evidence explaining: (1) whether Plaintiff’s Counsel was aware that Defendant was represented by counsel before Plaintiff sought entry of default on May 4, 2023, and (2) whether prior to seeking entry of default Plaintiff’s Counsel ever advised opposing counsel of his impending request for entry of default. (Shapell Socal Rental Properties, LLC v. Chico's FAS, Inc. (2022) 85 Cal.App.5th 198, 213; Lasalle v. Vogel (2019) 36 Cal.App.5th 127, 137.) On January 30, 2024, Plaintiff filed a supplemental brief re Plaintiff’s motion for entry of default judgment. No reply has been filed as to Defendant’s motion to set aside default.

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.

“Section 473 is often applied liberally where the party in default moves promptly to seek relief, and the party opposing the motion will not suffer prejudice if relief is granted . . . [citation omitted]. In such situations “very slight evidence will be required to justify a court in setting aside the default . . . [citation omitted].” Moreover, because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default . . . [citation omitted]. Therefore, a trial court order denying relief is scrutinized more carefully than an order permitting trial on the merits. . . . [citation omitted].” (Elston v. City of Turlock (1985) 38 Cal.3d 227, 233-34.)

Defendant moves to set aside its default under the discretionary provision of Code of Civil Procedure section 473(b).

“ ‘Although a trial court has discretion to vacate the entry of a default or subsequent judgment, this discretion may be exercised only after the party seeking relief has shown that there is a proper ground for relief, and that the party has raised that ground in a procedurally proper manner, within any applicable time limits.’ [Citation.]” (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 97.) Pursuant to Code of Civil of Procedure section 473(b), a motion to set aside/vacate a default cannot be brought more than 6 months after the entry of default and must be made within a “reasonable time.” Similarly, a motion pursuant to Code of Civil Procedure section 473(b) to vacate a default judgment must be made within six-months of the entry of default judgment. (CCP § 473(b).) The six-month time limit is jurisdictional. (Rutan, supra, 173 Cal.App. 3d at p.970.) Six months is defined as half a year for the purposes of this section which pursuant to section 6803 of the Government Code is the equivalent of 182 days. (Davis, supra, 113 Cal.App.3d at pp.901-904.)

Here, default was entered against Defendant on May 4, 2023. On July 7, 2023 – 64 days later – Defendant first moved to set aside the default. Accordingly, Defendant’s request to set aside the default is timely.

“[Code of Civil Procedure § 473(b)] includes a discretionary provision, which applies permissively, and a mandatory provision, which applies as of right. Although this bifurcation is not demarcated in any internal subtitling, it is plainly evident in the textual structure of the statute.” (Minick v. City of Petaluma (2016) 3 Cal.App.5th 15, 25.)

Under the discretionary standard specific facts must be demonstrating “mistake, inadvertence, surprise or excusable neglect[,]” (CCP § 473(b) [italics added]), and “must show a satisfactory excuse for his default, and he must show diligence in making the motion after discovery of the default.” (Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1410.) However, the mandatory “provision requires the court to vacate any resulting default, default judgment or dismissal ‘whenever an application for relief ... is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.’” (Las Vegas Land & Development Co., LLC v. Wilkie Way, LLC (2013) 219 Cal.App.4th 1086, 1092, [quoting CCP § 473(b)].)

Surprise refers to is “‘some condition or situation in which a party to cause is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against.’ [Citation.]” (Credit Managers Assn. v. National Independent Business Alliance (1984) 162 Cal.App.3d 1166, 1173.) Mistake of fact is also grounds for relief where a defendant was mistaken as to some fact material to the defendant’s duty to respond, by reason of which defendant failed to make a timely response. (See e.g. Lieberman v. Aetna Ins. Co. (1967) 249 Cal.App.2d 515, 523–524.)

As to excusable neglect, the entirety of the circumstances must be considered as to whether the failure to plead is excusable. (Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1143 [“The question in each case is whether the circumstances, which may include busyness and lapse of memory, make the neglect in issue excusable.”].)

Here, it appears that Defendant’s default was erroneously entered. According to Plaintiff’s proof of service, Defendant was served on March 21, 2023. Defendant’s responsive pleading was initially due thirty days later – on April 20, 2023. (Lamanna Decl. ¶ 2.) On April 18, 2023 – prior to the deadline for filing a timely responsive pleading -- Defense Counsel sent an email to Plaintiff’s Counsel introducing himself and advising that Defendant would likely file a demurrer based on the Plaintiff’s failure to comply with Civil Code § 5950. (Swedelson Decl. ¶ 2; Lamanna Decl. ¶ 3.) Plaintiff’s Counsel concedes that he received correspondence from Defense Counsel regarding the instant action before requesting default. (Lamanna Decl. ¶ 3.)

April 18, 2023 was only two days before Defendant’s responsive pleading was due, and the parties were not able to meet and confer regarding the potential demurrer within five days before the responsive pleading was due (on April 20, 2023). Hence, the automatic 30-day extension for Defendant to respond applies. (CCP § 430.41(b)(2), [“If the parties are not able to meet and confer at least 5 days before the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.”].) Pursuant to Code of Civil Procedure section 430.41(b)(2), the deadline for Defendant to file a responsive pleading was automatically extended to May 22, 2023.[1] Thus, the default entered on May 4, 2023 is void as it was entered prematurely before the automatically extended the deadline for Defendant to file a responsive pleading.

Indeed, it appears that Plaintiff’s Counsel did not heed his ethical and statutory obligations before seeking Defendant’s default. “The obligation to advise opposing counsel of an impending default is part of an attorney's responsibility to the court and the legal profession and takes precedence over the obligation to represent the client effectively.” (Shapell Socal Rental Properties, LLC v. Chico's FAS, Inc. (2022) 85 Cal.App.5th 198, 213.) “The ethical obligation to warn opposing counsel of an intent to take a default is now reinforced by a statutory policy that all parties ‘cooperate in bringing the action to trial or other disposition.’ [Citation.] Quiet speed and unreasonable deadlines do not qualify as ‘cooperation’ and cannot be accepted by the courts.” (Lasalle v. Vogel (2019) 36 Cal.App.5th 127, 137.) “Attorneys who do not comply with that obligation are ‘practicing in contravention of the policy of the state and menacing the future of the profession.’ [Citation.]” (Shapell Socal Rental Properties, LLC, supra, 85 Cal.App.5th at p.214.)

Plaintiff’s Counsel concedes that he received correspondence from Defense Counsel regarding the instant action before requesting default. (Lamanna Decl. ¶ 3.) However, Plaintiff’s Counsel requested entry of default without informing Defendant of such. (Lamanna Decl. ¶ 4; Swedelson Decl. ¶¶ 4, 6.)

“On May 15, 2023, [Defense Counsel] emailed Plaintiff’s counsel regarding Plaintiff’s decision to file a Request for Entry of Default despite ongoing efforts to meet and confer regarding Plaintiff’s failure to comply with Civil Code § 5950 and while the parties were actively discussing mediation.” (Swedelson Decl. ¶ 7.) On May 30, 2023, Defense Counsel sent a follow up email requesting that Plaintiff set aside the default and pursue mediation. (Swedelson Decl. ¶ 8.) However, Plaintiff refused to stipulate to set aside the default without the payment of $30,000 in attorneys’ fees. (Lamanna Decl. ¶ 10; Swedelson Decl. ¶ 9.) On June 15 and 28, 2023, Defense Counsel sent follow up emails requesting that Plaintiff agree to set aside the default to which Plaintiffs’ Counsel did not respond. (Swedelson Decl. ¶ 10.)

The totality of the circumstances warrant vacating the entry of default. As noted above, the default was improperly entered because the deadline to respond had been automatically extended by virtue of the parties’ meet and confer efforts. (CCP § 430.41(b)(2).) Further, despite being in contact with Defense Counsel, Plaintiff’s Counsel requested default without warning Defense Counsel that he intended to do so as required by statute and by his ethical duty as an attorney. Accordingly, Defendant’s motion to vacate default is GRANTED.

As to Plaintiff’s request for attorney’s fees, Plaintiff fails to show that any amount of fees is warranted under the circumstances.

Discussion – Motion for Entry of Default Judgment and Request for a Receiver

As Defendant’s request to vacate the entry of default has been granted, there is no basis to enter default judgment.

Based on the foregoing, Defendant Clark Drive Homeowners Association’s motion to set aside the entry of default is GRANTED.

Defendant is to file within five (5) days of notice of this order Defendant’s proposed demurrer with a hearing properly reserved in this department on the online Court Reservation System.

Plaintiff Barry Rosen’s motion for entry of default judgment is DENIED as MOOT.

[1] The thirtieth day from April 20 was May 20, 2023, which fell on a Saturday, and thus, the deadline was extended to the next court day, May 22, 2023.

County of Los Angeles

Department 26