Judge: Gail Killefer, Case: 22STCV14556, Date: 2023-05-17 Tentative Ruling

Case Number: 22STCV14556    Hearing Date: May 17, 2023    Dept: 37

HEARING DATE:                 May 17, 2023     

CASE NUMBER:                   22STCV14556

CASE NAME:                        Galaxion Transpacific Commerce, LLC v. Benjamin Zhe Min Wang, et al.

MOVING PARTY:                 Defendant, Benjamin Zhe Min Wang

OPPOSING PARTY:             Plaintiff, Galaxion Transpacific Commerce, LLC.

TRIAL DATE:                        None

PROOF OF SERVICE:           OK

MOTION:                               Defendant’s Motion to Vacate Default

OPPOSITION:                        April 28, 2023

REPLY:                                  May 8, 2023

TENTATIVE:                        Defendant’s motion is denied. Plaintiff is to give notice.

Background

This action arises in connection with a Purchase Agreement for 81 tons of frozen chicken paws  between Galaxion Transpacific Commerce, LLC. (“Plaintiff”) and Julia Benjamin Zhe Min Wang (“Wang”) and Black River Energies, LLC dba Nature Foods Provisions Co. (“BRE”) (collectively “Defendants”).

On November 2, 2022, a default was entered against Defendant Wang.

Defendant Wang now moves to set aside the default. Plaintiff opposes the motion.

Discussion

Courts generally view default judgments with disfavor. (Nicholson v. Rose (1980) 106 Cal.App.3d 457, 462-463.)  “It is also well established that it is the policy of the law to bring about a trial on the merits whenever possible, so that any doubts which may exist should be resolved in favor of the application, to the end of securing to a litigant his day in court and a trial upon the merits.”  (Frank E. Beckett Co. v. Bobbitt (1960) 180 Cal.App.2d Supp. 921, 928.) 

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 … 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 … and for leave to defend the action.”

Section 473(b) provides for two distinct types of relief—commonly differentiated as “discretionary” and “mandatory”—from certain prior actions or proceedings in the trial court.  (Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1124 (Luri).)  “Under the discretionary relief provision, on a showing of ‘mistake, inadvertence, surprise, or excusable neglect,’ the court has discretion to allow relief from a ‘judgment, dismissal, order, or other proceeding taken against’ a party or his or her attorney.  Under the mandatory relief provision, on the other hand, upon a showing by attorney declaration of ‘mistake, inadvertence, surprise, or neglect,’ the court shall vacate any ‘resulting default judgment or dismissal entered.’ ”  (Ibid., internal citations and quotation marks omitted, quoting CCP § 473(b).)  “Applications seeking relief under the mandatory provision of section 473 must be ‘accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.’  (§ 473(b).)  The mandatory provision further adds that ‘whenever relief is granted based on an attorney’s affidavit of fault [the court shall] direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.’  [Citations.]”  (Luri, ibid.)

“‘[A] trial court may ... vacate a default on equitable grounds even if statutory relief is unavailable.’ [Citation.]” (Sakaguchi v. Sakaguchi (2009) 173 Cal.App.4th 852, 862.) “The moving party carries the burden of proving that he or she is entitled to equitable relief.” (Ibid.) Equitable relief may be based on “extrinsic fraud,” or “extrinsic mistake.”  Extrinsic fraud occurs when, “the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, … or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff.” (Luxury Asset Lending, LLC v. Philadelphia Television Network, Inc. (2020) 56 Cal.App.5th 894, 911, internal quotation marks removed.) On the other hand, extrinsic mistake involves the excusable neglect of a party. (Ibid.) “‘To set aside a judgment based on extrinsic fraud or extrinsic mistake, the moving party must satisfy three elements: ‘“First, … demonstrate that it has a meritorious case. Secondly, … articulate a satisfactory excuse for not presenting a defense to the original action. Lastly, … demonstrate diligence in seeking to set aside the default once it had been discovered.” [Citations.]’ [Citation.]” (Ibid.)

Defendant moves to set aside the default under the CCP § 473.5, contending that he did not receive actual notice of this lawsuit by failing to receive the Final Hearing for Trial. (Motion, 2.) Wang contends that even though he received the Summons for this matter, he did not receive actual notice of the lawsuit. (Id.) Further, Wang attests he “got an impression from [Plaintiff’s counsel] that the lawsuit might stop after the promise to demand JBS Brazil through Chinese Embassy to fulfill the order or refund.” (Id.) “Wang and Company never were served with court hearing date so Company and Wang could defend before the judgment was entered.” (Motion, 3.)

Defendant also moves to set aside the default under the discretionary relief provision of CCP § 437(b). Defendant states that he satisfies the mistake, inadvertence, surprise, or excusable neglect requirement of section 473(b), because he and remaining Defendants never received actual notice of the hearing, or the First Amended Complaint, and only learned about it after the request for default had already been made. “Company and Wang received no actual notice of the action in time to defend against an action brought by debt collector...” (Motion, 3.)

In opposition, Plaintiff correctly contends that the motion to set aside pursuant to CCP § 473.5 was not timely filed, since Defendants were served with the Request for Entry of Default by mail on July 8, 2022, and 180 days after that date was January 17, 2023. (Opposition, 6.) Plaintiff also correctly explains that Civil Code § 1788.61(a)(2) is also unavailing to Defendant Wang, as Wang admitted to receiving notice of this action through the Summons and Complaint. (Opp., 6.) Plaintiff further attests that counsel for Plaintiff even corresponded with Defendant to remind them of their deadline to file a responsive pleading to the Complaint in this matter. (Opp., 5.) Lastly, Plaintiff also correctly asserts that no showing of inadvertence, surprise, or excusable neglect has been made here as:

“[t]he moving party here merely submitted a letter, not a declaration signed under penalty of perjury, to support his motion without explaining why those inadvertence, surprise or neglect are excusable. In fact, Defendants was fully aware of this lawsuit and the deadline to answer through his correspondence with Plaintiff’s counsel.

...

Defendant Wang also stated in his letter to the judge that ‘since I did not receive anything from the court, I thought the case did not proceed.’ This is not an excusable neglect by a reasonable prudent person. Not receiving anything from the court does not provide any excusable grounds for Defendant not to answer the complaint timely. Defendant Wang is a sophisticated business person and he knew the nature of the summons and complaint he received. Defendant Wang in his letter admitted that he had actual notice of this lawsuit.

Furthermore, Defendant Wang is a sophisticated business person with experience and knowledge of civil litigations. He was named as defendant in at least three civil lawsuits in this very courthouse during the past 15 years. Therefore, Defendant Wang must be, or should be familiar with the civil procedure, including timely filing the answers.” (Opp., 4-5.)

In reply, Wang proceeds to asserts that his neglect, surprise, or inadvertence was caused by the court’s alleged failure to send notice of entry of default, and that the certificate of mailing attached by Plaintiff’s Opposition “was claimed to be sent by mail but without a receipt.” (Reply, 3-4.) This argument is unavailing, and Wang further fails to show how such contentions support his claims of excusable neglect or inadvertence here.

The court finds that it cannot set aside the default under CCP §§ 473.5 or 473(b). A party moving to set aside default pursuant to section 473.5, “shall serve and file with the notice a copy of the answer, motion, or other pleading proposed to be filed in the action.” (CCP § 473(b).) Likewise, a motion to set aside default under section 473(b), “shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted ….” Here, Defendant has not attached or filed a copy of the answer he proposes to file in this action. Therefore, the court cannot give him relief under either CCP §§ 473.5 or 473(b).

The court also finds that it cannot set aside the default on equitable grounds. As stated above, a party moving to set aside a judgment based on extrinsic mistake or extrinsic fraud must demonstrate that he has a meritorious case. Here, Defendant’s motion fails to include a sworn declaration from counsel attesting to any mistake, and further fails to state and show that Defendant has a meritorious defense. Granted, “only a minimal showing is necessary” to demonstrate a meritorious claim. (Mechling v. Asbestos Defendants (2018) 29 Cal.App.5th 1241, 1246.) However, a moving party “‘must show facts indicating a sufficiently meritorious claim to entitle … [her] to a fair adversary hearing.’ [Citation.]” (Ibid.) Here, the Complaint alleges that Defendant breached the Purchase Agreement between the parties, fraudulently induced Plaintiff to transfer monies without intending to perform the agreement, and unjustly enriched themselves at Plaintiff’s expense. In this motion, Defendant does not provide any facts (e.g., that no breach was made, or no fraud undertaken) to show that he has a meritorious claim entitling him to a fair adversary hearing. No further responsive pleading was included with this motion either, so that the court may glean whether Defendant has a meritorious defense. Therefore, Defendant has failed to satisfy the meritorious claim requirement for extrinsic mistake.

For these reasons, Defendant’s motion is denied.

Conclusion

Defendant’s motion is denied. Plaintiff is to give notice.