Judge: Frank M. Tavelman, Case: 22BBCV00239, Date: 2023-03-24 Tentative Ruling

Case Number: 22BBCV00239    Hearing Date: March 24, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION TO SET ASIDE DEFAULT JUDGMENT

ALLEGATIONS: 

On April 12, 2022 JNS Foods, Inc. (“JNS”) filed suit against RDM International (“RDM”). The Complaint contains causes of action for (1) an open book account, (2) account stated, and (3) reasonable value. Default Judgment was entered against RDM on September 7, 2022. RDM now moves to set aside the default judgment on grounds that RDM was not served.

HISTORY: 

On February 21, 2023 RDM filed this Motion to Set Aside Default Judgment. On March 13, 2023 JNS filed its opposition. On March 17, 2023 RDM filed their reply.  

ANALYSIS: 

I.                LEGAL STANDARD 

C.C.P. § 473.5(a) provides as follows: “When service of a summons has not resulted in actual notice to a party in time to defend the action and a default… has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default… has been entered.” 

C.C.P. § 473(d) allows the Court to find a judgment void, even if facially valid, in the instance that service is defective such that jurisdiction is lacking. “To establish personal jurisdiction, compliance with statutory procedures for service of process is essential; if a default judgment was entered against a defendant who was not served with a summons as required by statute, the judgment is void, as the court lacked jurisdiction in a fundamental sense over the party and lacked authority to enter judgment.” (Kremerman v. White (2021) 71 Cal.App.5th 358, 370.)

“Even where relief is no longer available under statutory provisions, a trial court generally retains the inherent power to vacate a default judgment…where a party establishes that the judgment or order was void for lack of due process or resulted from extrinsic fraud or mistake.” (County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1228.)¿¿ 

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“To set aside a¿judgment¿based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second, the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last, the moving party must demonstrate diligence in seeking to set aside the default once ... discovered.” (Id., at p. 982.)¿¿¿ 

II.              MERITS

Default Judgment was entered against RDM on September 7, 2022. Service was rendered on June 20, 2022. (Oppo. Exh A.) Service was made upon “CA REG. AGENT INC/REG. AGENTS, KRISTIE B.” at 1401 21st Street, Suite 370, Sacramento CA 95811. (Id.)

RDM argues it did not receive actual notice of the lawsuit because its registered agent was never served. RDM argues Robert Moore (“Moore”) is the registered agent for RDM and always has been. RDM submits the declaration of Moore stating as much. (Moore Decl. ¶¶ 3 & 6.) Moore’s declaration states California Registered Agent, Inc. was never the agent for service of process for JDM (Id. at 6.) Moore also states RDM has never maintained an address at 1401 21st Street, Suite 370, Sacramento CA 95811. (Id.) RDM also submits a copy of its statement of information with the California Secretary of State (“SOS”) which lists Moore as the registered agent and the address as 11643 Otsego St. North Hollywood, CA 91601. (Mot. Exh. 2.)

JNS argues at the time of service the registered agent with the SOS was California Registered Agent Inc. JNS submits a printout from LexisNexis containing the Secretary of State information for RDM. (Oppo. Exh. D.) This printout contains no date as to when it was made, though JNS claims the information was accurate as of the filing of the complaint and service. (Oppo. pg. 5.) This printout also lists Moore as a registered agent at the Otsego St. address. (Id.)

JNS also submits an electronic filing with the SOS, dated December 13, 2021, listing the registered agent as California Registered Agent, Inc. (Oppo. Exh. E.) This filing is electronically signed by Barbara Morris. (Id.) JNS claims RDM did not file a new statement of information listing Moore as the registered agent until August 3, 2022, a month after service had been effectuated. (Oppo. Exh. F.) Moore contends the December 2021 filing was unauthorized and he has never met or employed anyone by the name of Barbara Morris. (Moore Decl. ¶ 5.)  

JNS argues RDM had ample notice of the suit by way of two letters, attached as Exhibits G and H. The letter labeled Exhibit G is dated June 22, 2022. The letter labeled Exhibit H is dated August 9, 2022. Both letters are addressed to Peter Yip, whose name appears in the allegedly unauthorized SOS filing. (Oppo. Exhs. G, H, & E.) Both letters are addressed to 11643 Otsego St. North Hollywood, CA 91601. RDM argues in reply that JNS has attached no evidence these letters were ever received. (Reply pg. 2.)

Order for Evidentiary Hearing

RDM filed its motion within the two-year period provided by C.C.P. § 473.5(a). Nonetheless, a factual dispute exits concerning service which may be determinative.  This affects an analysis of whether the 180-day limitation should apply or the two-year limitation.  The agent for service of process changed with the Secretary of State.   Defendant argues the change was not authorized.  As such, this Court will conduct an evidentiary hearing concerning the matters.   The parties are encouraged to subpoena the necessary records from California Registered Agent, Inc. and any other parties necessary to determine if that entity was the proper entity for service of process.   The Court also orders the live testimony of Robert Moor to evaluate the claims submitted under penalty of perjury against any other evidence the parties seek to introduce regarding Barbara Morris.

Should the parties stipulate to a resolution prior to the evidentiary hearing, the parties are ordered to advise the Court as soon as possible so that another matter can be scheduled for the reserved date.

III        CONCLUSION

the Court CONTINUES the motion to set aside judgment and sets an evidentiary hearing for April 21, 2023 at 1:45 p.m.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

RDM International’s Motion to Set Aside Default Judgment came on regularly for hearing on March 24, 2023, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTION TO SET ASIDE DEFAULT JUDGMENT IS CONTINUED, AND AN EVIDENTIARY HEARING IS SCHEDULED FOR APRIL 21, 2023 AT 1:45 P.M. 

DEFENDANT TO GIVE NOTICE, UNLESS ALL PARTIES WAIVE NOTICE. 

IT IS SO ORDERED. 

DATE:  March 24, 2023                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles