Judge: James L. Crandall, Case: 22-1260789, Date: 2022-12-22 Tentative Ruling

1.    Motion to Set Aside/Vacate Default

Defendant moves to set aside the July 15, 2022, entry of default. For the following reasons, Defendant’s motion is granted.

Defendant requests discretionary relief under Code of Civil Procedure Section 473(b).

Section 473(b) provides in pertinent 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.”

Defendant timely filed the Motion on August 15, 2022, which was within six months of July 15, 2022, the date default was entered against Defendant.

Defendant contends that it failed to respond to the Complaint for two reasons. First, Defendant asserts that it’s registered agent for service of process failed to notify the company of service of the Complaint until 34 days had passed. Strauss Decl., ¶¶ 2:5-24. Second, shortly after learning about service of the Complaint, Defendant closed its doors and laid off its entire legal staff and approximately six hundred employees. Straus Decl., ¶¶ 2:12-16. It was not until July 25, 2022, when Defendant retained outside counsel to oversee its legal affairs. Strauss Decl., ¶¶ 3:17-20. On July 28, 2022, Defendant reconnected with defense counsel to again provide instruction in this case. Ibid.

Defendant’s shut down of its business operations is sufficient to support the granting of relief under CCP § 473(b), therefore, the Court does not need to rule on Plaintiff’s evidentiary objections to the Declarations of Michael Strauss and Richard Gallagher concerning whether Defendant received delayed notification of service of the Complaint from its registered agent for service of process. Plaintiff had been in communication with Defendant since June 30, 2022, concerning this matter, and only after the shut down of business operations did communications from defense counsel cease. However, prior to filing the entry of default, Plaintiff never contacted Defendant to determine how the matter would be handled, and instead filed the request for entry of default. Mooney Decl., ¶¶ 3:15-16.

Doubtful cases are usually resolved in favor of granting relief: “Because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.” Elston v. City of Turlock (1985) 38 Cal.3d 227, 233; see Fasuyi v. Permatex, Inc. (2008) 167 Cal. App. 4th 681, 696. Where the party in default moves promptly to seek relief, and no prejudice to the opposing party will result from setting aside the default and letting the case go to trial on the merits, “very slight evidence will be required to justify a court in setting aside the default.” Ibid.

Defendant is timely in filing this Motion and the evidence submitted sufficiently demonstrates mistake, inadvertence, surprise, or excusable neglect under CCP § 473(b).

The Motion to Set Aside Default is GRANTED. Defendant is to file its Answer within 5 days. Defendant shall give notice.

Plaintiff’s request for attorneys’ fees is DENIED.

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