Judge Gary Y. Tanaka, Case 22TRCV00175 2023-03-02 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Thursday, March 2, 2023

Department B Calendar No. 7

Edward M. McClure’s Motion to Set Aside Default and Default Judgment is granted, in part.

The motion to set aside entry of default is granted. The request to set aside a default judgment is moot because no default judgment has been entered.

Plaintiff filed the Complaint on March 8, 2022, and the First Amended Complaint on March 16, 2022. Plaintiff alleges the following facts. Plaintiff is the court appointed conservator for Fujiko Nakano. Defendant is the son of Fujiko Nakano. Plaintiff alleges that Defendant took advantage of Nakano’s mental unfitness, took her away from her home and brought her to live in Torrance, and proceeded to abscond assets belonging to Nakano. Plaintiff alleges the following causes of action: 1. Elder Abuse; 2. Breach of Fiduciary Duty; 3. NIED; 4. IIED; 5. Accounting; 6. Tortious Interference with Contractual Relations; 7. Conversion; 8. Declaration of Nullity. Defendant’s default was entered on September 22, 2022.

CCP § 473(b) states, in relevant part: “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. . . . Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties. . . .”

“After six months from entry of default, a trial court may still vacate a default on equitable grounds even if statutory relief is unavailable. . . . One ground for equitable relief is extrinsic mistake—a term broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits. Extrinsic mistake is found when [among other things] ... a mistake led a court to do what it never intended[.] When a default judgment has been obtained, equitable relief may be given only in exceptional circumstances. [W]hen relief under section 473 is available, there is a strong public policy in favor of granting relief and allowing the requesting party his or her day in court. Beyond this period there is a strong public policy in favor of the finality of judgments and only in exceptional circumstances should relief be granted. . . . 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.” Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981–82 (internal citations and quotations omitted; emphasis in original).

CCP § 473(d) empowers the Court to set aside any judgment that is void as a matter of law, e.g., lack of subject matter jurisdiction; lack of personal jurisdiction; lack of proper service of the summons and complaint; or the judgment violated due process rights. See Dhawan v. Biring (2015) 241 Cal.App.4th 963, 973-74; See also Ellard v. Conway (2001) 94 Cal.App.4th 540, 544; See also Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 862-64. “It is well settled that a judgment or order which is void on its face, and which requires only an inspection of the judgment roll or record to show its invalidity, may be set aside on motion, at any time after its entry, by the court which rendered the judgment or made the order.” Hiroko Kawakita Hayashi v. Lorenz (1954) 42 Cal.2d 848, 851.

CCP § 473.5(a) states, in relevant part: “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.” CCP § 473.5(b) states: “A notice of motion to set aside a default or default judgment and for leave to defend the action shall designate as the time for making the motion a date prescribed by subdivision (b) of Section 1005, and it shall be accompanied by an affidavit showing under oath that the party's lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect. The party shall serve and file with the notice a copy of the answer, motion, or other pleading proposed to be filed in the action.” The phrase “actual notice” means “genuine knowledge of the party litigant” and does not include constructive or imputed notice to the client. Tunis v. Barrow (1986) 184 Cal.App.3d 1069, 1077.

The entry of default was improperly entered in this action. The improper entry of default may be set aside pursuant to CCP § 473(d). Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 862. As noted above, Plaintiff filed the Complaint on March 8, 2022. Plaintiff then filed the First Amended Complaint on March 16, 2022. Thus, on March 16, 2022, the First Amended Complaint became the operative pleading in this action. On that date, the original Complaint had no legal effect. However, inexplicably, on April 25, 2022, Plaintiff personally served the original Complaint upon Defendant, not the First Amended Complaint. (Proof of Service, filed July 21, 2022.) To reiterate, the original Complaint had already been superseded by the First Amended Complaint on March 16, 2022. Thus, the original Complaint essentially was a nullity with no legal effect.

Both parties concentrate extensively upon authorities dealing with the scenario in which a Defendant had already had his default taken against him upon proper service of the original Complaint, and then, thereafter, a First Amended Complaint was filed. In that scenario, the filing of the First Amended Complaint may or may not, depending on the substance of the First Amended Complaint, “open” up the default. Plaintiff argues that there were no substantive changes to the First Amended Complaint, and, therefore, the default should not be “reopened.” However, that is not the scenario in the instant action. Here, service upon Defendant of a pleading that was no longer the operative pleading at the time of service is without legal effect, and, therefore, responding to that pleading would have been, itself, a completely ineffectual act.

Therefore, the Court holds that the order of September 22, 2022, entering default on the original Complaint is void. The entry of default is hereby set aside. Plaintiff’s request for sanctions pursuant to CCP § 473(c) is denied.

Defendant is ordered to file and serve the proposed Answer that was attached to the motion within 3 days of this date.