Judge Elaine W. Mandel, Case Number: 22SMCV02025, Date: 2024-07-19 Tentative Ruling

Judge: Elaine W. Mandel, Case: 22SMCV02025, Date: 2024-07-19 Tentative Ruling

Case Number: 22SMCV02025 Hearing Date: July 19, 2024 Dept: P

Tentative Ruling

Utica Leaseco, LLC v. Hicks, et al., Case No. 22SMCV02025

Hearing Date: July 19, 2024

1. Specially Appearing Defendants Benson and Hicks’ Motion to Vacate Default and/or Default Judgment, or in the Alternative to Quash Service

2. Specially Appearing Defendant Apex Solution, Inc.’s Motion to Vacate Default and/or Default Judgment, or in the Alternative to Quash Service

3. Specially Appearing Defendants Benson and Apex Solutions, Inc.’s Motion to Quash

Plaintiff Utica sues Apex Solutions, Benson and Hicks for breach of a lease agreement. Defendants specially appear to move to set aside and vacate the default and default judgments against them, arguing they were never served with the summons and complaint.

On July 6, 2023 the court clerk entered default as requested on 1/10/2023 and 2/7/2023 against all defendants for $289,555.70. On August 28, 2023 the court clerk entered default as requested on 7/6/2023 against all defendants for $289,555.70. On February 9, 2024, the court previously presiding over this case denied the default judgment electronically submitted on July 6, 2023 and stated: “Without prejudice. The court needs to better understand the legal fees and the legal costs, which seems a bit like double counting. A clear, concise declaration explaining the basis for each item of damages is needed.” 2/9/24 Minute Order. The Minute Order stated “Filing party may resubmit all documents with the above-listed information.” Plaintiff did not resubmit documents but filed requests for entry of default against Apex and Benson on May 30, 2024 and Hicks on June 4, 2024, which were rejected because the instant motions were scheduled.

Benson and Hicks filed a motion to vacate under Code of Civil Procedure section 473.5 or, in the alternative, to quash service of summons. Apex filed a motion to vacate under Code of Civil Procedure section 473(d) or, in the alternative, to quash service of summons.

Requests for Judicial Notice

Both motions to set aside request judicial notice of Apex’s Statement of Information filed with the CA Secretary of State, Articles filed with the CA Secretary of State and plaintiff’s proof of service dated November 28, 2022. These court takes notice of these exhibits per Evidence Code §§452(d), (h). The court takes judicial notice of the documents, but not the truth of their contents.

Benson and Hicks’ Motion to Set Aside under CCP §473.5

A court may set aside a default or default judgment when service of summons has not provided a party with actual notice. Code Civ. Proc. §473.5. “When a defendant challenges the court’s personal jurisdiction on the ground of improper service of process ‘the burden is on the plaintiff to prove the existence of jurisdiction by proving, inter alia, the facts requisite to an effective service.’” Summers v. McClanahan¿(2006) 140 Cal.App.4th 403, 413. A proof of service filed by a plaintiff including the declaration of a registered process server gives rise to a presumption of the facts stated therein, requiring defendant to produce evidence of non-service. American Exp. Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 390.

On January 3, 2023 plaintiff filed proofs of service by registered process server I. Anis with declarations of diligence regarding substitute service. See Hicks POS filed 01/03/2023; see also Benson POS filed 01/03/2023. This establishes a presumption of valid service under Evid. Code §647. The burden shifts to defendants to prove they were not served.

Both defendants were substitute served at 12130 Millenium Drive in Playa Vista, a WeWork co-working space. Defendants state they have never had any connection with that address. Benson Decl. ¶3(c); Hicks Decl. ¶3(a). Benson used a WeWork space on Jefferson but ended that tenancy in 2020. See Benson Decl. ¶3(b). Defendants attest they did not live or work at any address listed in the declaration of diligence.

Plaintiff admits defendants are entitled to relief under Code of Civil Procedure section 473.5, but argues they failed to file a proposed responsive pleading. Plaintiff contends defendants were served, citing a hearsay statement from the Jefferson WeWork receptionist that defendants were “not here,” not that they no longer leased space. Plaintiff’s investigator obtained addresses for defendants and served them in January 2024. However, service in January 2024 is irrelevant to whether service was properly effectuated at the Millenium address. Plaintiff presents no evidence defendants ever used the Millenium address or that service at that location would be valid. Defendants establish the substitute service did not constitute actual notice, but the motion cannot be granted until they comply with section 473.5(b) by filing a proposed responsive pleading.

Apex’s Motion to Set Aside Default Judgment under CCP §473(d)

The court may, upon motion of either party after notice to the other party, set aside any void judgment or order. Code of Civil Proc. §473(d). Apex moves to set aside the default judgment for invalid service of summons. No opposition was filed. For the reasons stated above, the default judgment void and is set aside. GRANTED.

Alternative Motions to Quash Service by (1) Benson and Hicks and (2) Apex

Defendants’ alternative motions to quash service of summons is DENIED as MOOT. All defendants were served with the complaint. Schiern Decl. ¶¶2-6. This renders the motion to quash MOOT. See Code Civ. Proc. §418.10(3)(a).

Apex’s Motion to Quash

“A defendant, 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, may serve and file a notice of motion for one or more of the following purposes: To quash service of summons on the ground of lack of jurisdiction of the court over him or her.” Code Civ. Proc. §418.10(a)(1).

On April 24, 2024 plaintiff filed POS on Apex by substitute service on April 14, 2024 upon “‘JOHN DOE’ BENSON (DECLINED FULL NAME), OCCUPANT/PERSON IN CHARGE Description: CAUCASIAN, Male, 50+ yrs old, 6 ' 0" tall, 180 lbs., BLACK hair[.]” at 535 Avenue C, #B, Redondo Beach by registered process server Martinez. See Apex POS filed 04/24/2024. Plaintiff’s POS creates a rebuttable presumption of proper service. The burden shifts to defendant to rebut the presumption.

Effecting service on a corporation requires delivery of summons and complaint to some person on behalf of the corporation. Code Civ. Proc. §416.10; Dill v. Berquist Const. Co., Inc. (1994) 24 Cal.App.4th 1426, 1437. When the defendant is a corporation, the “person to be served” is one of the individuals specified in section 416.10 as agent for service of process.

Defendant Benson is agent for service of process for Apex. Benson Decl. ¶1. But he denies having been served been served or being at the location of alleged service on the date and time specified. He is the only male occupant in his dwelling. Benson Decl. ¶3. Benson is not 6 feet tall, and his hair is not black, as stated in the POS. Benson Decl. ¶5. Benson was allegedly served at home, but the business address for Apex and for Benson as agent for service of process is in Oakland. He did not receive any summons and complaint in the mail. Benson Decl. ¶4.

In opposition, plaintiff argues Benson was properly served because the proof of service created a rebuttable presumption, and Apex is a suspended corporation that cannot defend itself.

California law prohibits a suspended corporation from appearing to defend itself. Rev. & Tax. Code §23302. Reed v. Norman (1957) 48 Cal.2nd 338, 343. The fact that Apex is a suspended corporation does not affect adequacy of service. Under California law, a plaintiff may affect service of process on a suspended corporation under the regular service of process statutes. See Grell v. Laci Lea Beau Corp., 73 Cal.App.4th 1300, 1306 (1999). If Apex is not effectively served, the court does not have jurisdiction, regardless of whether it is suspended.

The Martinez POS creates a rebuttable presumption of service; he states he attempted service at the Redondo Beach residence on April 5, 7, 9, and 13, and a man opened the door on April 14, identifying himself as Benson. Martinez Decl. ¶¶3-5. Martinez mailed copies of the summons and complaint to that address, which was not returned. Martinez Decl. ¶5.

However, in light of Benson’s declaration and denial of service, and the inconsistencies between the POS and Benson’s declarations, the court finds defendant rebutted the presumption of service. GRANTED.