Judge: Frank M. Tavelman, Case: 24NNCV00399, Date: 2025-06-06 Tentative Ruling

Case Number: 24NNCV00399    Hearing Date: June 6, 2025    Dept: A

MOTION TO SET ASIDE/VACATE

NOTICE:

The Court is not requesting oral argument on this matter.  The Court is guided by California Rules of Court, Rule 3.1308(a)(1) whereby notice of intent to appear is requested.  Unless the Court directs argument in the Tentative Ruling, no argument is required and any party seeking argument should notify all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no argument is received.  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

On March 21, 2024, Anat Escher (Plaintiff) brought this action against Brunch & Sip, LLC (Brunch & Sip), Rasheedah White (Rasheedah), and Larry White (Larry) (collectively Defendants). Rasheedah and Larry are alleged to own and operate restaurants under the Brunch & Sip name. Plaintiff alleges that, on February 16, 2023, Defendants signed a promissory note for $265,000 with Plaintiff. (Compl. ¶ 6.) Plaintiff alleges the notes provided for repayment to be made in three installments and that Defendants failed to make the second and third payments.

On June 5, 2024, Plaintiff requested that the Court enter default against each Defendant. Default was entered that same day. On September 3, 2024, Plaintiff’s request for Default Judgment as against each Defendant was granted.

On February 14, 2025, Defendants filed the instant Motion to Set Aside or Vacate the Default Judgement. Defendants make this motion pursuant to C.C.P. § 473(b) and C.C.P. § 473.5. Defendants argue that they were improperly served and that they lacked actual notice of the lawsuit until such time as they received the notice of entry of the Default Judgment. Plaintiff opposes the motion, arguing that Defendants’ request for relief under C.C.P.§ 473(b) is untimely and that their affidavits do not establish a lack of actual knowledge as required by C.C.P. § 473.5.

ANALYSIS: 

I.                    LEGAL STANDARD 

C.C.P. § 473(b)

The discretionary provision of Code of Civil Procedure § 473(b), in pertinent part, reads as follows:

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…

Under C.C.P. § 473(b), an application for relief must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought and must be accompanied by an affidavit of fault attesting to the mistake, inadvertence, surprise or neglect of the moving party or its attorney. (C.C.P. § 473(b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.)

C.C.P. § 473.5

CCP § 473.5(a) provides that a party who has not received timely actual notice may file a notice of motion to set aside the default judgment: “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.”

A motion seeking relief under CCP § 473.5 must be served and filed within a reasonable time but in no event later than two years after the entry of default judgment or 180 days after service of written notice that default or default judgment has been entered, whichever is earlier. (C.C.P. § 473.5(c).)

II.                 EVIDENTIARY OBJECTIONS

Plaintiff’s Objection Nos. 1-8 to the declaration of Rasheedah are SUSTAINED. As will be discussed in the ruling below, Defendants submit no declaration from Larry in support of this motion. Defendants instead rely on the declaration of Rasheedah, which attempts to speak for all three Defendants. Rasheedah attests that she is an officer of Defendant Brunch & Sip and obviously possesses personal knowledge of her individual affairs. However, the portions of her declaration referring to “we” and “us” clearly indicate that Rasheedah is testifying as to Larry’s notice of the lawsuit. The Court finds that Rasheedah lacks the foundation to make such statements on Larry’s behalf, but the declaration remains valid as concerns Rasheedah and Brunch & Sip.

Plaintiff’s Objection Nos. 1,2 and 4 to the declaration of counsel Stephen T. Best (Best) are SUSTAINED. The Best declaration does not establish any basis for his personal knowledge of the actions taken by Plaintiff in attempting to serve Defendants or Rasheedah’s status as the agent for service of process for Brunch & Sip.  Objection 3 is OVERRULED.

Defendants’ Objection Nos. 1-4 to the declaration of counsel Daniel Krishel (Krishel) are OVERRULED. Defendants object to Krishel’s statements that Exhibits D-H are true and correct copies of the proofs of substitute service in this case on grounds that they misstate the record. (Evid. Code § 403.) Curiously, Defendants do not object to the Exhibits themselves. In any event, the Court does not see how these Exhibits, which appear to be copies of documents on file with this Court already, misstate the record. Nor have Defendants briefed any such reasoning.

Defendants’ Objection Nos. 5-6 to the declaration of Anat Escher are SUSTAINED. The portions of the declaration objected to speak to the merits of the underlying contract action and are irrelevant for purposes of determining this motion to set aside/vacate.

Defendants’ Objection No. 7 to the declaration of Anat Escher is OVERRULED. Exhibit K to this declaration appears to be a screenshot of text message conversation which Escher attests occurred in March 2024 between herself and Rasheedah. (Escher Decl. ¶ 3.) A party proffering screenshots of text messages as evidence must authenticate those messages. (See, e.g., People v. Cruz (2020) 46 Cal.App.5th 715, 730.) Escher states this exchange is between herself and Rasheedah, this statement alone is sufficient.

III.              MERITS

Relief under C.C.P. § 473(b)

Under C.C.P. § 473(b), an application for relief must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought and must be accompanied by an affidavit of fault attesting to the mistake, inadvertence, surprise or neglect of the moving party or its attorney. (C.C.P. § 473(b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.)

The Court notes that Defendants’ motion does not actually seek relief as concerns the Default itself, and only requests that the Court issue an order setting aside/vacating the Default Judgment. The is important because, as will be explained in detail below, the failure to request relief as concerns the underlying default ultimately renders any order setting aside a subsequent judgment invalid.

In Pulte Homes Corp. v. Williams Mechanical, Inc., the California Court of Appeal held that it was improper to grant relief from a default judgment under C.C.P. § 473(b) without also granting relief from the default itself. (Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 273.) In Pulte, the owner of a dissolved corporation sought relief from default and default judgment pursuant to C.C.P. § 473(b) and C.C.P.§ 473.5. (Id. at 271.) Per C.C.P. § 473(b), the motion was made timely as to the entry of the default judgment but was untimely as to the default itself. (Id. at 273.) The Court of Appeal found that it was improper for the trial court to grant C.C.P. § 473(b) relief from the default judgment where it could not also grant that relief to the underlying default. (Id.)  The Court found that granting such relief would an “idle act”, reasoning that it would only result in the entry of a subsequent default judgment. (Id.)

Much like the movant in Pulte, Defendants have filed a motion which is timely as to the default judgment but not the default itself. To obtain relief from the default judgment on grounds of C.C.P. § 473(b), Defendants were required to bring this motion no later than six months from the June 5, 2024 entry of default (December 5, 2024). Plaintiff argues that Defendants failure to do so results in their inability to obtain any relief under C.C.P. § 473(b) and must result in the denial of the motion.

Contrary to Plaintiff’s assertion however, Pulte is not dispositive of this motion. Plaintiff’s presentation of Pulte entirely ignores its discussion of alternative relief under C.C.P. § 473.5. Although Pulte found relief unavailable under C.C.P. § 473(b), the Court noted that relief might still be available under C.C.P. § 473.5 (or on grounds of equitable relief). (Id. at 273-276.)

As explained above, C.C.P. § 473.5 has a two year statutory period in which a party can bring a motion to vacate a Default/Default Judgment. Under this metric, Defendants’ motion would be timely as to both the Default and the Default Judgment. As Pulte makes clear, relief pursuant to C.C.P. § 473.5 may still be available to Defendants upon a sufficient showing that they lacked actual notice of the lawsuit.

Relief under C.C.P. § 473.5

As mentioned above, motions made pursuant to C.C.P. § 473.5 are concerned with a determination of “actual notice” of the lawsuit by the moving party. “Actual notice” in context of C.C.P. § 473.5 means genuine knowledge of the party litigant. (Ellard v. Conway (2001) 94 Cal.App.4th 540, 547.) “[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.’” (Id. [internal citations omitted].)

A defendant seeking to set aside a default or default judgment under section 473.5 bears the burden of demonstrating, by affidavit, that his/her lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect. (Rios v. Singh (2021) 65 Cal.App.5th 871, 885.) While such affidavits may be based on personal knowledge, they cannot rely solely upon conclusory statements and must instead attest to facts demonstrating the lack of actual knowledge. (Id. citing Sakaguchi v. Sakaguchi (2009) 173 Cal.App.4th 852, 862.)

Here, to obtain relief on grounds of C.C.P. § 473.5 each Defendant must demonstrate via affidavit that they lacked actual knowledge of this action. Each Defendant must also demonstrate that their lack of actual knowledge was not the result of inexcusable neglect or avoidance of service. The Court notes that Defendants’ motion is unaccompanied by any affidavit from Defendant Larry White. As the Court has been presented with no affidavit attesting to Larry White’s actual notice, relief cannot be granted to him under C.C.P. § 473.5.

In contrast, Defendant Rasheedah has submitted declarations attesting to lack of actual notice for both herself and Brunch & Sip. Rasheedah states that neither she nor Brunch and Sip were aware that Plaintiff had served notice of the lawsuit upon a server (Forbes) at one of their restaurants. To this end, Rasheedah attests to the following facts:

“I am a named Defendant to this action and am also an Owner, Manager, and the Statutory Agent for Defendant Brunch & Sip, LLC (“Brunch & Sip”) since at least 2019.” (Rasheedah Decl. ¶ 1.)

“Naomi Forbes is the Lead Server at Brunch & Sip.” (Rasheedah Decl. ¶ 7.)

“We were unaware that any documents, including but not limited to the Summons and Complaint, were served upon Ms. Forbes.” (Rasheedah Decl. ¶ 10.)

“Ms. Forbes failed to inform us of the service of these documents or otherwise pass the Summons and Complaint along to us.” (Rasheedah Decl. ¶ 11.)

“We never received any communications from Plaintiff Anat Escher (“Plaintiff”) or her attorney informing us that a lawsuit had been filed or that Plaintiff was seeking a default judgment against Defendants.” (Rasheedah Decl. ¶ 11.)

“We were not aware of this pending lawsuit or any judgment entered until Felicia Robles, the manager of Brunch & Sip, received a Notice of Entry of Judgment on or about September 23, 2024 and later provided it to me on September 27, 2024.” (Rasheedah Decl. ¶ 13.)

Defendants also submit the declaration of Forbes herself, in which she confirms that she did not pass on the documents that were given to her by the process server. (Forbes Decl. ¶ 6.) Forbes does not state what she actually did with the documents or if she told anyone about them, only that she did not give them to Rasheedah or Larry because they rarely came in to the restaurant. (Forbes Decl. ¶¶ 5-6.)

Plaintiff argues that the declarations of Rasheedah and Forbes are insufficient to demonstrate their lack of actual notice. Plaintiff maintains that when Forbes was served by the process server, Defendants received “actual notice”. The Court disagrees for reasons stated below.

The Court fails to see how service on Forbes constitutes “actual notice” as to Rasheedah individually. As noted in Pulte, “…a person cannot have actual notice through an agent, but a corporation can have actual notice only through an agent who has the appropriate authority.” (Pulte supra, at 274.) Rasheedah, the individual, cannot be said to have actual notice of the lawsuit simply because the employee of a company she owns received substitute service. The question remains, however, whether service on Forbes was sufficient to provide Brunch & Sip with actual notice.

Plaintiff argues that Forbes possessed the requisite authority to accept service on behalf of Brunch & Sip, relying on C.C.P. § 415.20(a). Plaintiff argues that because Forbes was served as the person “apparently in charge” at the restaurant, as required by C.C.P. § 415.20(a), such service must have resulted in actual notice upon the restaurant.

The Court disagrees that service on a person who is “apparently in charge” for purposes of C.C.P. § 415.20(a) must necessarily result in a finding that their employer had actual notice of the action. Nothing in the language of C.C.P. § 415.20(a) suggests that its “apparently in charge” requirement bears on a determination of actual notice for purposes of C.C.P. § 473.5, rather than a determination of proper service for purposes of C.C.P. §§ 473(b) or (d). Indeed, the primary case discussing the “apparently in charge” requirement, Ellard v. Conway (2001) 94 Cal.App.4th 540, discussed the two standards entirely separately.

In Ellard, the Court of Appeal upheld a default judgment where a process server ultimately left a copy of the summons and complaint with private post office store manager and mailed the documents to the same place. (Ellard supra, 94 Cal.App.4th at 545-547.) The defendants had challenged the default on grounds that (1) service upon the postal manager was improper and (2) they did not receive actual notice of the suit. (Id.) The Ellard court rejected the argument that the judgment was void for proper service, finding the postal manager was a “…person whose relationship with the person to be served makes it more likely than not that they will deliver process to the named party” for purposes of C.C.P. § 415.20(b). (Id. at 546.)

Separately from the determination of proper service, the Ellard court found that defendants did not lack actual notice of the lawsuit in time to defend. (Id. at 547.) The Ellard court found that the evidence in the case demonstrated defendants had received actual notice of the suit and had reached out with respect to informal resolution. (Id.) Nothing in the Ellard court’s analysis of actual notice relied upon a determination that the person served was “apparently in charge”.

What then, is to be made of Pulte’s holding that a “corporation can have actual notice only through an agent who has the appropriate authority.” (Pulte supra, at 274.) The Pulte court did not expand upon this holding and provided no guidance as to when a person served “has the appropriate authority” to convey actual notice on the corporation. Nor has any subsequent published appellate authority expounded upon Pulte’s reasoning. Given this dearth of authority, the Court finds the instant case is too factually dissimilar from Pulte to apply its holding as concerns actual notice.

In Pulte, a dissolved corporation which maintained no officers was served via substitute service on the person that was previously designated the corporations agent for service of process. (Pulte supra, at 274.) In finding that such service provided actual notice the Pulte court held, “At least under these circumstances, we believe that notice to the person designated by the corporation as its agent for service of process is actual notice.” (Id.) In other words, Pulte held that a dissolved corporation had actual notice from service on its prior registered agent because there was otherwise no way in which that corporation could have received actual notice. In contrast, Brunch & Sip appears very much to be an active corporation with a designated agent for service of process. The rationale behind Pulte appears simply inapplicable.

Ultimately, the Court finds that Rasheedah’s declaration that she lacked actual notice of this action is not defeated by Plaintiff’s substitute service upon Forbes. The evidence appears clear that, for whatever reason, Forbes elected not to pass on the documents served upon her and thus no officer of Brunch & Sip was alerted to the lawsuit. Despite the fact that Forbes was designated the “lead server” for the restaurant, nothing in the evidence indicates that this position conferred upon her the “appropriate authority” discussed in Pulte.

As a last matter, the Court does not find the fact that Defendants’ counsel contacted Plaintiff on October 3, 2024 to be indicative of actual notice. (See Krishel Decl. Exh. G2 at p. 52.) This interaction clearly occurred after the September 3, 2024 entry of default judgment. Nor is the email from Rasheedah to Krishel on March 8, 2024 indicative of actual notice of the lawsuit. (See Krishel Decl. Exh. J at p. 82.) This email interaction occurred before this lawsuit was filed and makes no reference to a lawsuit.

Conclusion

The Court finds the motion to set aside/vacate on grounds of C.C.P. § 473.5 must be DENIED as to Defendant Larry White and GRANTED as to Defendants Rasheedah White and Brunch & Sip, LLC. While Defendant Larry White has submitted no declaration as to his lack of actual notice, the declarations of Rasheedah White and Naomi Forbes are sufficient to demonstrate that both Rasheedah White and Brunch & Sip, LLC lacked such notice. The motion to set aside/vacate on grounds of C.C.P. § 473(b) (as distinguished from C.C.P. § 473.5) must be DENIED as to all Defendants. Defendants request for relief under this section is untimely as to the default itself, and thus granting relief from the default judgment would be improper as an idle act.

Pursuant to the above, the Court orders the default and the judgment against Rasheedah White and Brunch & Sip, LLC be vacated. These Defendants are ordered to file their responsive pleadings (attached as Exhibit E to the declaration of their counsel Stephen Best) within 10 days of the entry of this order. 

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ORDER 

Brunch & Sip, LLC, Rasheedah White, and Larry White’s Motion to Set Aside/Vacate came on regularly for hearing on June 6, 2025, 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: 

DEFENDANT LARRY WHITE’S MOTION TO VACATE DEFAULT AND DEFAULT JUDGMENT IS DENIED WITHOUT PREJUDICE.

DEFENDANTS RASHEEDAH WHITE AND BRUNCH & SIP, LLC’S MOTION TO VACATE DEFAULT AND DEFAULT JUDGEMENT IS GRANTED.

THE DEFAULT AND DEFAULT JUDGMENT AGAINST DEFENDANTS RASHEEDAH WHITE AND BRUNCH & SIP, LLC ARE HEREBY VACATED.

DEFENDANTS RASHEEDAH WHITE AND BRUNCH & SIP, LLC ARE TO FILE THEIR RESPONSIVE PLEADINGS NO LATER THAN 10 DAYS AFTER ENTRY OF THIS ORDER.

DEFENDANT BRUNCH & SIP, LLC TO GIVE NOTICE.

CASE MANAGEMENT CONFERENCE SCHEDULED SEPTEMBER 9, 2025 AT 9:00 AM.

IT IS SO ORDERED.