Judge: Gary I. Micon, Case: 23CHCV03839, Date: 2024-11-18 Tentative Ruling

Case Number: 23CHCV03839    Hearing Date: November 18, 2024    Dept: F43

Dept. F43

Date: 11-18-24

Case # 23CHCV03839, Expert Electric, LLC v. Green Home Systems, Inc., et al.

Trial Date: None set.

EX PARTE APPLICATION TO SET ASIDE DEFAULT, DEFAULT JUDGMENT, AND STAY WRIT OF EXECUTION ON LEVYIED FUNDS

MOVING PARTY: Defendant Green Solar Enterprises, LLC

RESPONDING PARTY: Plaintiff Expert Electric, LLC

RELIEF REQUESTED

Defendant requests that the Court enter an order setting aside the judgment, stay execution, recall writ, and restitution of levied funds.

RULING: Motion is denied.

SUMMARY OF ACTION

On December 18, 2023, Plaintiff Expert Electric, LLC (Plaintiff) filed this action against Defendants Green Home Systems, Inc. (GHS) and Green Solar Enterprises, LLC (GSE), (collectively Defendants), after Defendants failed to pay outstanding balances for services performed by Plaintiff under a written service contract. The complaint alleged causes of action for (1) breach of contract; (2) fraudulent inducement; (3) misrepresentation; (4) account stated; (5) book account; (6) unjust enrichment; and (7) unfair business practices.

On September 16, 2023, Plaintiff contacted Defendants, through counsel, demanding payment of the outstanding balance ($38,909.04). Defendants failed to pay by October 15, 2023, and Plaintiff commenced this action.

On February 13, 2024, Plaintiff personally served the summons and complaint on Defendants’ authorized agent for service, Jaxon Yang Business Rep, Registered Agent Solutions, Inc., at 720 14th Street, Sacramento, CA 95814. On February 22, 2024, Plaintiff also served the summons and complaint via mail to each Defendant at 720 14th Street, Sacramento, CA 95814. Plaintiff filed proofs of service on March 28, 2024.

On March 28, 2024, Plaintiff filed a request for entry of default. On April 15, 2024, Plaintiff filed a request for entry of default judgment. On April 15, 2024, Plaintiff served Defendants the moving papers requesting default and default judgment, via first class mail, at 720 14th Street, Sacramento, CA 95814. The Court granted default judgment on April 22, 2024.

On June 18, 2024, Plaintiff filed an application for a Writ of Execution for $42,541.52—$38,909.04 in damages, $1,897.48 in prejudgment interest, $1,200.00 in attorney fees, and $535.00 in court costs. The Court issued the Writ on June 21, 2024.

On September 30, 2024, GSE filed an ex parte application requesting the Court set aside the entry of default judgment and to issue a stay of execution.

On September 30, 2024, Plaintiff filed an opposition. On November 8, 2024, Plaintiff filed a supplemental declaration in support of its opposition.

No reply has been filed as of November 13, 2024.

ANALYSIS

Summary of Arguments

GSE argues the Court should set aside the default judgment and stay the execution because GSE was not aware of this case until the Los Angeles County Sheriff levied GSE’s bank accounts at City National Bank. As a result of this levy, GSE suffers harm because these accounts house GSE’s operation expenses, which GSE uses to fund employee payroll, employee benefits and to open accounts with third-party vendors. Finally, GSE claims it lacked actual notice of this case because of mistake, inadvertence, surprise, and excusable neglect: its corporate agencies for service of process failed to transmit the summons and complaint to GSE. GSE provides no further explanation.

In opposition, Plaintiff argues that GSE had notice of this suit well before September 30, 2024. On September 16, 2023, Plaintiff mailed GSE a letter, through counsel, demanding payment of the outstanding balance and provided copies of invoices. In this letter, Plaintiff stated its intent to pursue legal action if GSE did not comply with the demand within thirty (30) days of the letter’s date. Plaintiff mailed the letter to the address listed on GSE’s Statement of Information with the California Secretary of State as of April 17, 2023: 8510 Balboa Blvd., Ste. 200 Northridge, CA 91325. Subsequent email communications between counsel followed this letter, but no payments were made. Plaintiff notes that it served Defendants authorized agent for service of process on February 13, 2024 at 720 14th Street, Sacramento, CA 95814. Plaintiff also claims its counsel received an email from Ramona Vidican, an administrator and legal affairs liaison to the company with full authority of GSE’s principals to speak on its behalf, proposing the parties enter into a payment plan for the outstanding balance in order to set the default judgment aside. GSE failed to take any action in response to the complaint until after Plaintiff levied GSE’s deposit account funds. Finally, GSE has not established the existence of any irreparable harm, immediate danger, or any other statutory basis for granting ex parte relief.

Default

“The court may, upon any terms as may be just, relieve a party . . . 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.” (Code Civ. Proc., § 473, subd. (b).)

The law favors hearings on the merits, so any doubts as to the application of section 473 should be resolved in favor of the party seeking relief from default. (See Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1139-1140.)

Corporations have actual notice through agents who have the appropriate authority. (Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 274.) “[N]otice to the person designated by the corporation as its agent for service of process is actual notice. An agent for service of process has the necessary authority because the corporation has expressly held that person out to the world as authorized to receive notice of actions.” (Ibid.)

In this case, the summons and complaint were personally served on GSE’s authorized agent for service and mailed to GSE’s address of record. GSE does not explain what actions or procedures led to the authorized service agent’s failure to transmit the summons and complaint to GSE. Regardless, upon service to GSE’s authorized agent for service, GSE was deemed to have actual notice of this case.

Additionally, the evidence shows that GSE, through Ramona Vidican, was aware of the entry of default by at least April 24, 2024, based on Vidican’s April 24, 2024 email asking if the judgment could be set aside if a payment plan were made. (Opposition, Exh. E, at p. 1.) Although GSE has met the other requirements of section 473—filing its ex parte application motion within six months of entry of default and accompanying the application with a copy of its responsive pleading—GSE has failed to show lack of notice regarding the entry of default judgment, lack of notice of this case, or good cause for not filing its application sooner.

Defendant’s motion to set aside and vacate entry of default is denied.

Writ of Execution

GSE argues that a stay is warranted pursuant to Code of Civil Procedure section 918.

The court “may stay the enforcement of any judgment or order.” (Code Civ. Proc., §§ 918, subd. (a), 918.5, subd. (a).) Where an undertaking would be required to stay enforcement of the judgment pending appeal, section 918, subdivision (b), limits the length of time which the court may stay enforcement without the opposing party’s consent: “If the enforcement of the judgment or order would be stayed on appeal only by the giving of an undertaking, a trial court shall not have power, without the consent of the adverse party, to stay the enforcement thereof pursuant to this section for a period which extends for more than 10 days beyond the last date on which a notice of appeal could be filed.” (Code Civ. Proc., § 918, subd. (b).)

Section 918 applies whether or not “an appeal will be taken from the judgment or order and whether or not a notice of appeal has been filed.” (Code Civ. Proc., § 918, subd. (c).)

A litigant in an unlimited civil proceeding must file a notice of appeal from a default judgment on or before the earliest of: (1) 60 days if the defendant was given notice of the entry of judgment by the court clerk or an opposing party; or (2) 180 days after the entry of default judgment. (Cal. Rules of Court, rule 8.100.)

Here, the clerk did not mail notice of entry of judgment to the parties. Accordingly, Defendant had until Monday, October 21, 2024, at the latest, to file a notice of appeal. GSE filed its ex parte application on September 30, 2024. Thus, pursuant to section 918, subdivision (b), the Court had authority to stay execution until October 31, 2024. However, because Plaintiff does not consent to the stay, and it is now November 2024, the Court has no authority to stay the writ of execution of the judgment pursuant to section 918.

GSE correctly notes that “the burden is cast upon the judgment debtor to establish facts justifying an order denying the writ.” (Lohman v. Lohman (1946) 29 Cal.2d 144, 150.) Here, GSE’s counsel claims he filed a Notice of Claim of Exemption with the Los Angeles Sheriff’s Department on September 15, 2024 to challenge the levy on wages, benefits, and other third-party funds from Defendant’s accounts on deposit. (Declaration of Brandon K. Gonzalez, Esq., ¶ 4, Exh. A.) However, GSE does not provide the court with the specific portions of the amounts levied which GSE must access in order to avoid irreparable harm. Regardless, due to timing and lack of Plaintiff’s consent, the Court cannot grant GSE’s request.

Finally, GSE argues the Court should stay the execution because the Court will vacate its default judgment. As stated above, the Court denies GSE’s request to set the default judgment aside.

Accordingly, the Court denies GSE’s request to stay the writ of execution pursuant to section 918.

Conclusion

The ex parte application is denied.

Moving party to give notice.