Judge George F. Bird, Jr., Case 22CMCV000222 2023-01-26 Tentative Ruling

Judge: George F. Bird, Jr., Case: 22CMCV000222, Date: 2023-01-26 Tentative Ruling

“INSTRUCTIONS:
If the parties wish to submit on the tentative ruling and avoid a court
appearance on the matter, the moving party must:

1. Contact the opposing party and all other
parties who have appeared in the action and confirm that each will submit on the
tentative ruling.

2. No later than 4:00 p.m. on the court day
before the hearing, call the Courtroom (310-761-4302) advising that all parties
will submit on the tentative ruling and waive hearing; and

3. Serve notice of the Court's ruling on all
parties entitled to receive service.

If this procedure is followed, when the case is
called the Court will enter its ruling on the motion in accordance with its
tentative ruling. If any party declines to submit on the tentative ruling, then
no telephone call is necessary, and all parties should appear at the hearing.
If there is neither a telephone call nor an appearance, then the matter may
either be taken off calendar or ruled on.

Plaintiff Hilario Nunez
(“Plaintiff”) filed the Complaint on July 14, 2022, against Defendant Nunez
General Contractors, Inc. (“Defendant”) alleging eight causes of action
stemming from when Plaintiff was employed by Defendant as a general laborer.
(Complaint (“Compl.”), ¶¶ 5, 6, 8.) Plaintiff alleges that Defendant failed to
give proper rest breaks, pay for overtime work, and pay for off the clock work.
(Compl., ¶ 8.) Plaintiff served Defendant on July 20, 2022, and Defendant
failed to respond. (See Proof of Personal Service filed July 25, 2022.) Default was entered against Defendant on
November 22, 2022.

Default was entered against
Defendant on November 22, 2022. Defendant brings this motion to vacate the
default[1]
(“Motion to Set Aside/Vacate Default”) pursuant to Code of Civil Procedure,
473, subdivision (b). Defendant argues that, after receiving the Summons and
Complaint, Defendant provided the documents to American Claims Management who
was already handling a worker’s compensation matter filed between Plaintiff and
Defendant. (Decl. of Enrique Nunez, owner of Defendant, ¶ 2.) Defendant
received a communication from American Claims Management which states that the
documents were forwarded to Everest National Insurance. (Ibid.)
Defendant interpreted this notice to mean that this matter and the worker’s
compensation matter were being handled by Everest National Insurance. (Ibid.)
Defendant also suggest that service was improper.

Plaintiff presents several arguments
in opposition. Plaintiff argues that service of the Complaint was proper, and
the Defendant has failed to properly serve the Motion to Set Aside/Vacate
Default. (Opposition, pp. 4-6.) Next, Plaintiff argues that Defendant failed to
satisfy Code of Civil Procedure, section 473, because Plaintiff has not shown
that setting aside the default will not prejudice Plaintiff. (Opposition, p.
6:14-24.) Plaintiff reminds the court
that, without an affidavit of attorney error, setting aside the default is
discretionary. Finally, in the event the default is set aside, Plaintiff
requests sanctions of $2,363.00 for fees and costs associated with obtaining
the default. (Opposition, pp. 8-9.)

“(b) 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….”
(Code Civ. Proc., § 473, subd. (b).)

“While section 473 is remedial and
should be liberally construed, nevertheless the moving party has the burden of
showing that the default was entered through ‘mistake, inadvertence, surprise
or excusable neglect’ (§ 473), which he must establish by a preponderance of
the evidence (Luz v. Lopes, 55 Cal.2d 54, 61—62, 10 Cal.Rptr. 161, 358
P.2d 289); in the absence of such showing the default may not be set aside. (Yarbrough
v. Yarbrough, 144 Cal.App.2d 610, 614—615, 301 P.2d 426; Gudarov v.
Hadjieff, 38 Cal.2d 412, 418, 240 P.2d 621; Beard v. Beard, 16
Cal.2d 645, 647, 107 P.2d 385.)” (Goodson v. Bogerts, Inc. (1967) 252
Cal.App.2d 32, 38 [60 Cal.Rptr. 146, 150].)

“(c)(1) Whenever the court grants
relief from a default, default judgment, or dismissal based on any of the
provisions of this section, the court may do any of the following: (A) Impose a
penalty of no greater than one thousand dollars ($1,000) upon an offending
attorney or party.

(B)
Direct that an offending attorney pay an amount no greater than one thousand
dollars ($1,000) to the State Bar Client Security Fund. (C) Grant other relief
as is appropriate.” (Code Civ. Proc., § 473, subd. (c).)

“A summons may be served on a
corporation by delivering a copy of the summons and the complaint by any of the
following methods: (a) To the person designated as agent for service of process….”
(Code Civ. Proc., § 416.10, subd. (a).) The Proof of Service document states
that Enrique Covarrubias Nunez, agent for service of process of Defendant, was
served on July 20, 2022, at the address of 11022 Pope Ave., Lynwood, CA 90262.
(Proof of Service filed July 25, 2022.) Baruch Kreiman, counsel for Plaintiff,
declares that Enrique Covarrubias Nunez is the agent for service of process of
Defendant. (Decl. of Baruch Kreiman, ¶ 2.) When evaluating service of process
for a default “[t]he provisions of this chapter should be liberally construed
to effectuate service and uphold the jurisdiction of the court if actual
notice has been received by the defendant….” (Ramos v. Homeward
Residential, Inc. (2014) 223 Cal.App.4th 1434, 1443 [168 Cal.Rptr.3d
114, 121].) Defendant declares he received a copy of the Summons and Complaint
and then mailed the documents to American Claims Management. (Decl. of Enrique
Nunez, ¶ 2.) Defendant makes no argument that the time of service impacted his
ability to defend the lawsuit.

“(a) Written notice shall be given,
as prescribed in subdivisions (b) and (c), for the following motions: … (10)
Motion to Set Aside Default or Default Judgment and for Leave to Defend Actions
pursuant to Section 473.5.” (Code Civ. Proc., § 1005, subd. (a)(10).) “… if the
notice is served by mail, the required 16-day period of notice before the
hearing shall be increased by five calendar days if the place of mailing and
the place of address are within the State of California, 10 calendar days if
either the place of mailing or the place of address is outside the State of
California but within the United States….” (Code Civ. Proc., § 1005, subd.
(b).)

The Proof of Service attached to the
motion states that on December 16, 2022, the motion was sent by mail to “Mr.
Baruch Krieman, Esq. ABRAMSON LABOR GROUP 11846 Ventura Blvd., Ste. 100 Studio
City, CA 91604” from Henderson, NV. The address Defendant mailed the motion to
matches the address in the heading of Plaintiff’s Complaint and Opposition.
Because service was mailed from outside of California but within the United
States, 10 calendar days are added to the notice period. 16 court days' notice
would be January 3, 2023. With the additional 10 calendar days, notice must
have been sent on or before December 20, 2022. The December 16, 2022, mailing
date is well in advance of the notice period required in Code of Civil
Procedure, section 1005, subdivision (b).

“The court's ‘discretion may be
exercised only after the party seeking relief has shown that there is a proper
ground for relief, and that the party has raised that ground in a procedurally
proper manner, within any applicable time limits.’ (Cruz v. Fagor America,
Inc. (2007) 146 Cal.App.4th 488, 495, 52 Cal.Rptr.3d 862.)” (Huh v. Wang
(2007) 158 Cal.App.4th 1406, 1419 [71 Cal.Rptr.3d 65, 74], as modified (Jan.
16, 2008).) Plaintiff has complied with the basic requirements of a motion to
vacate default by bringing the motion less than six months after the default
was entered and providing a copy of the proposed answer to be filed. (Code Civ.
Proc., § 473, subd. (b).) Defendant submits a declaration in support of the
motion which declares he was under the impression that this matter was being
handled by the insurance company that was also handling a worker’s compensation
matter between the same parties. (Decl. of Enrique Nunez, ¶ 2.) Defendant
states that he received a phone call that a settlement was about to proceed
with Plaintiff and mistakenly believed that the settlement included this
dispute. (Ibid.)

The Court finds this mistake
reasonable in light of the circumstances presented by Defendant. Defendant was
never informed by American Claims Management or Everest National Insurance that
the matters were not consolidated and being handled together. Defendant was
also not provided a copy of the settlement agreement for the worker’s compensation
claim to see that this matter was not covered in the settlement agreement. (Ibid.)
While the letter from American Claims Management classifies forwarding the
documents to Everest National Insurance as a “request for representation,”
Defendant reasonably assumed Everest National Insurance took on representation
if Defendant was not sent a clear rejection of representation and the Summons
and Complaint were not returned to Defendant. This mistake led Defendant to
reasonably neglect this lawsuit by believing Everest National Insurance was
handling the matter.

Plaintiff argues that Defendant has
not demonstrated a lack of prejudice to Plaintiff before the default can be
vacated. Plaintiff cites “Cal. Code. Civ. P. §§473-473.5” for this proposition.
(Opposition, p. 6:14-17.) The judicial counsel comments to Code of Civil
Procedure, section 473.5, state, “The court may set aside the default or
default judgment on any conditions that may be just and permit the defendant to
defend on the merits of the case. Such conditions would usually include
elimination of any prejudice to the plaintiff that would result from the
opening of the default or default judgment.” (Code Civ. Proc., § 473.5,
Judicial Counsel Comments, 2022 Main Volume.)

The Court does not interpret this
comment to prevent vacating a default if the moving party fails to demonstrate
a lack of prejudice to the opposing party. The court is empowered to liberally
construe granting motions to vacate under Code of Civil Procedure, section 473,
in favor of trial on the merits. (See Goodson v. Bogerts, Inc. (1967) 60
Cal.Rptr. 146, 252 Cal.App.2d 32;¿Hansen v. Hansen (1961) 12 Cal.Rptr.
44, 190 Cal.App.2d 327;¿Reed v. Williamson (1960) 8 Cal.Rptr. 39, 185
Cal.App.2d 244.) At most, this comment allows the court to set conditions when
vacating a default to relieve any prejudice presented by the opposing party.
Here, Plaintiff has not presented what prejudice they may experience if the
default is vacated.

The Court finds that Defendant does
not need to demonstrate a lack of prejudice. Based on the foregoing, the Court
GRANTS the Motion to Set Aside/Vacate Default.

Under Code of Civil Procedure,
section 473, subdivision (c), the court may grant sanctions, not to exceed
$1,000, to the party who sought default. Here, the Court declines to enter any
sanctions against Defendant or Defendant’s counsel. Default was entered against
Defendant on November 22, 2022, and Defendant promptly brought a request to
vacate default on December 16, 2022. Defendant was reasonably mistaken about
the extent of the insurance companies’ representation of Defendant in the
matters between Plaintiff and Defendant. Based on the October 31, 2022, letter
from Plaintiff’s counsel to Ms. Vargas and her response directing Plaintiff to
the worker’s compensation attorney, it seems Plaintiff was aware there was
confusion about the representation of Defendant for this matter and chose not
to inquire, but to bring a motion for default. (See Decl. of Baruch Kreiman, ¶
4; Exhibit 3.)

Because awarding sanctions is within
the Court’s discretion, and the Court finds a lack of communication and proper
inquiry on behalf of both parties, the Court DECLINES to award sanctions.

The Court GRANTS
the Motion to Set Aside/Vacate Default. The Court DECLINES to award sanctions.

[1] Defendant titles their motion “Motion
for Order Vacating Entry of Default and Set Aside Judgment.” No default
judgment has been entered in this matter, so the Court will only consider this
as a motion to set aside default.