Judge: Frank M. Tavelman, Case: 22BBCV00992, Date: 2023-08-11 Tentative Ruling

Case Number: 22BBCV00992    Hearing Date: August 11, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION TO SET ASIDE DEFAULT

ALLEGATIONS: 

On November, 15, 2022, Yuri Stein (“Plaintiff”) filed suit against JH Roofing, Inc., Yea Sook Jang, 4660 Coldwater Canyon Condominium Association, Inc., Avi Kesary, and Cardinal Management Group (collectively “Defendants”) in connection with an incident in which Plaintiff’s property was allegedly damaged from a water leak. The Complaint contains causes of action for (1) Negligence and (2) Premises Liability.  

On April 12, 2023, default was entered against JH Roofing and Yea Sook Jang (“Moving Parties”). Moving Parties now seek to set aside the default pursuant to Code of Civil Procedure §§ 473(b).

HISTORY: 

On July 6, 2023 Moving Parties filed this motion to set aside default judgment. On July 28, 2023, Plaintiff filed his opposition. On August 4, 2023, Moving Parties filed their reply.

The Court notes that the other three defendants have all filed an answer in this matter.

ANALYSIS: 

I.                    LEGAL STANDARD 

CCP § 473.5(a) provides: “When service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment 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 or default judgment has been entered.”

II.                 MERITS

Moving Parties argue that the default should be set aside on grounds they lacked actual notice pursuant to C.C.P. § 473.5.

“[A]ctual notice in section 473.5 means genuine knowledge of the party litigant…[A]ctual knowledge has been strictly construed, with the aim of implementing the policy of liberally granting relief so that cases may be resolved on their merits.’” (Ellard v. Conway (2001) 94 Cal.App.4th 540, 547 [Citations Omitted].)

“[A] party can make a motion showing a lack of actual notice not caused by avoidance of service or inexcusable neglect . . .” (Trackman v. Kenney (2010) 187 Cal. App. 4th 175, 180.) “‘[I]t does not require a showing that plaintiff did anything improper…[T]he defaulting defendant simply asserts that he or she did not have actual notice’.” (Id.)

“[I]f the court has acquired jurisdiction, i.e., summons has been served, but service of summons has not resulted in actual notice to a defendant, although the defendant has acquired actual knowledge of the action from another source, this does not preclude a defendant from seeking relief under section 473.5.” (Ellard supra, 94 Cal. App. 4th at 548.)

Plaintiff primarily argues that Moving Parties are not entitled to relief under C.C.P. § 473.5 because they purposely avoided service.

The proofs of service submitted for Moving Parties show service was rendered by substitute service on February 26, 2023. Service was rendered on a “Huang Jang” at 745 N Euclid Ave. Fullerton, CA 92832. Plaintiff states service was rendered at this location after he discovered Moving Parties no longer resided at their previous address of 1045 Clancey Ave., Downey, CA 90241. (Lisitsa Decl. ¶ 8, Exh. C.) Plaintiff states a stakeout of the previous address revealed a new address for Moving Parties. (Id., Exh. E.)

Moving Parties state that “Huang Juang” (true name Hong Jang), has limited understanding of English and is the primary resident at the Fullerton address. (Hong Decl. ¶¶ 2,4.) Moving Parties argue Jang did not understand the nature of the documents served and so set them aside with no further thought. (Hong Decl. ¶ 5.) Moving Parties state Jang handles the mail that comes to the home and also set aside the subsequently mailed copies. (Hong Decl. ¶ 6.) Moving Parties state Jang only provided the papers to them on May 19, 2023. (Yea Sook Decl. ¶ 2, Chon Decl. ¶ 3.)

Plaintiff’s argument that Moving Parties purposefully avoided service is based on their failure to report a change of address with the California State Contractors License Board (“SCLB”). (Lisitsa Decl. ¶ 9.) Moving Parties state, they updated the information for JH Roofing to the Fullerton address on September 30, 2022. (Chang Supl. Decl. Exh. A.) Moving Parties also state that Heung Sop Chon is the registered agent for service of process for JH Roofing, Inc. (Chon Decl. ¶ 2.) The Court notes the stakeout report attached as Exhibit E contains no information regarding a new address, only that Moving Parties no longer resided at the Downey address.

The Court finds Plaintiff’s argument that Moving Parties purposefully avoided service to be unconvincing. Plaintiff alleges a grand scheme by Moving Parties to avoid service by purposefully ensuring service would go to someone with limited capacity to understand the documents. Plaintiff further alleges that Yea Sook Jang must live at the Fullerton residence because she shares the same last name as Hong Jang. Plaintiff’s arguments do nothing to refute Moving Parties claim that they simply did not receive notice of the lawsuit until after default was entered. The liberal standard of relief under C.C.P. § 473.5 does not require Moving Parties refute Plaintiff’s allegations of conspiracy.

Further, the Court finds Moving Parties have made a showing that their lack of notice was due to excusable neglect. “The definition of excusable neglect is defined as ‘neglect that might have been the act or omission of a reasonably prudent person under the same or similar circumstances.’[citation].” (Department of Water & Power v. Superior Court (2000) 82 Cal.App.4th 1288, 1293.) “There must be more than the mere failure to discover a fact; the party seeking relief must establish the failure to discover the fact in the exercise of reasonable diligence.” (Id.)

Here, Moving Parties have provided declarations stating they did not receive the papers from Hong Jang until May 19, 2023. (Yea Sook Decl. ¶ 2, Chon Decl. ¶ 3.) Plaintiff argues Moving Parties must show that they are not living at the address or that they did not designate Hong Jang to handle their mail. The Court finds this argument unconvincing. Moving Parties have shown they neglected to keep tabs on the paperwork received by service and by mail at their designated address. Moving Parties further have demonstrated that they retained counsel almost immediately upon receiving notice of the lawsuit (Yea Sook Decl. ¶ 3.) One could certainly argue that Moving Parties should keep better tabs on their mail and perhaps should even have designated a different address for service. However, both of these arguments speak to normal neglect, not inexcusable neglect. Failure to receive actual notice due to language barrier and situations in which a person served never relays the paperwork to the defendant are extremely commonplace.

Last, the Court finds Plaintiff’s argument that Hong Jang was Moving Parties agent for purpose of service to be unconvincing. Plaintiff cites Sullivan v. Centinela Valley Union High School Dist. (2011) 194 Cal. App. 4th 69, where the California Appellate Court found a principal could receive actual notice though their agent. The holding in Sullivan specifically found the existence of an agency relationship because the school district held Sullivan out as an agent to third parties, an ostensible agency. (Suillivan supra, 194 Cal. App. 4th 69 at 77.) Plaintiff’s allegation that Hong Jang is Moving Parties agent contains no facts indicating Moving Parties held Hong Jang out as such. Moving Parties did not indicate in any way to Plaintiff that Hong Jang was authorized to receive service such that actual notice can be imputed.

The Court finds Moving Parties showing is sufficient to indicate they did not receive actual notice of the lawsuit because of their excusable neglect. As such, the motions to set aside default are GRANTED.

Sanctions

Plaintiff does not seek sanctions, rather reasonable costs and attorneys’ fees pursuant to the default. Plaintiff cites Jade K. v. Viguri (1989) 210 Cal.App.3d 1459, which held “Section 473 permits the court to grant relief ‘upon such terms as may be just.’ The court may properly order payment of costs or attorney fees to the adverse party as compensation for loss or expense occasioned by the granting of the section 473 motion.” (Jade supra, 210 Cal.App.3d 1459 at 1463 [Citations Omitted].) Plaintiff’s counsel alleges she will have spent 17 total hours on her opposition and preparing for the hearing and seeks $13,600 in fees. (Lisitsa Decl. ¶ 19.)

The Court notes that the holding permits the Court to grant costs and fees in certain default situations, but it does not require it to do so. First, the amount of fees and costs Plaintiff seeks to recover are in connection with this motion, not with obtaining the underlying default. Second, Moving Parties rightly point out that Jade concerned a highly involved default judgment and not just the entry of default. Third, the Court finds the amount of time Plaintiff’s counsel alleges she spent preparing these documents to be extremely incongruous with industry standards. As such, the Court declines to award any costs or fees.

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RULING:

ORDER 

JH Roofing, Inc. & Yea Sook Jang’s Motion to Set Aside Default came on regularly for hearing on August 11, 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 MOTIONS TO SET ASIDE DEFAULT ARE GRANTED.  DEFENDANTS ANSWER ATTACHED TO THE MOTION TO SET ASIDE DEFAULT SHALL BE DEEMED THE ANSWER TO THE COMPLAINT.

PLAINTIFF’S REQUEST FOR SANCTION IS DENIED.

ALL EXISTING COURT DATES TO REMAIN.

DEFENDANT TO GIVE NOTICE, UNLESS ALL PARTIES WAIVE NOTICE.

IT IS SO ORDERED. 

DATE:  August 11, 2023                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles