Judge Jill Feeney, Case Number: 23STCV07729, Date: 2023-11-16 Tentative Ruling

This is an action for unlawful detainer. Plaintiff KR 6255 Sunset, LLC entered into a 10-year commercial lease with Defendant Kreation Juicery, Inc. on March 31, 2022. Plaintiff now seeks possession of the premises, past-due rent, attorney’s fees, forfeiture of the agreement, interest, late fees, operating expenses, rent concessions, liquidated damages, and holdover rent.

In an unlawful detainer action, a defendant’s time to respond to the complaint is five days excluding Saturdays, Sundays, and other judicial holidays after the complaint is served. (Code Civ. Proc., section 1167.) If at the time appointed, “any defendant served with a summons does not appear and defend, the clerk, upon written application of the plaintiff and proof of the service of summons and complaint, shall enter the default of any defendant so served, and, if requested by the plaintiff, immediately shall enter judgment for restitution of the premises and shall issue a writ of execution thereon. The application for default judgment and the default judgment shall include a place to indicate that the judgment includes tenants, subtenants, if any, named claimants, if any, and any other occupants of the premises. Thereafter, the plaintiff may apply to the court for any other relief demanded in the complaint, including the costs, against the defendant, or defendants, or against one or more of the defendants.” Code Civ. Proc., section 1169.

Per Code of Civil Procedure, section 473, subdivision (b), a court may relieve a party or his counsel from a judgment against him because of his “mistake, inadvertence, or excusable neglect.” When a party seeks relieve “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.” (Code Civ. Proc. section 473) And when such relief is available, “there is a strong public policy in favor of granting relief and allowing the requesting party his or her day in court.” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981-982, internal quotations omitted.) A proposed answer, motion, or other pleading proposed to be filed in the action was required to be served and filed with the motion to set aside the default and default judgment. (Code Civ. Proc. section 473 subd. (b))

The discretionary portion of section 473, subdivision (b) provides: “The court may, upon 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.

“[I]t 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 (Bobbitt).) “Even in a case where the showing under section 473 is not strong, or where there is any doubt as to setting aside of a default, such doubt should be resolved in favor of the application.” (Ibid., quoting Van Dyke v. MacMillan (1958) 162 Cal.App.2d 594, 598, italics in Bobbitt.) “[D]uring the period when 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.” (In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1071 (Stevenot).)

Defendant’s employee responsible for overseeing its litigation matters, Mollie O’Rourke, testifies that she received the summons and Complaint around April 20, 2023 from Defendant’s Controller. (O’Rourke Decl., ¶2.) Based on her previous experience with prior litigation, O’Rourke believed Defendant had 30 days to respond to the Complaint and that it would have time to retain counsel. (Id.) Defendant retained counsel on May 3, 2023. (Id., ¶4.) O’Rourke was not aware that default had already been entered against it. (Id.)

Defendant’s Counsel testifies that on May 8, 2023, the Court held a case management conference where Defendant informed the Court that it would seek a stipulation to set aside default or move to set aside default. (Sadat Decl., ¶4.) The Court scheduled another Case Management Conference for June 22, 2023 and informed the parties that any motion to set aside default should be filed that date and that the Court would not enter default judgment prior to that date. (Id.) Plaintiff then refused to stipulate to set aside default and filed a request for entry of default judgment. (Id., ¶¶5-6.)

Defendant’s evidence shows that Defendant’s employee, O’Rourke, believed that Defendant had 30 days to respond to Plaintiff’s Complaint. However, the deadline was actually 5 days because this is an action for unlawful detainer. By the time Defendant retained counsel, Defendant was already in default. Thus, Defendant’s failure to respond to the Complaint was due to O’Rourke’s mistaken belief that the deadline to respond was 30 days. It is not clear whether O’Rourke is an attorney or whether O’Rourke should have known the deadline was shorter in an unlawful detainer actions. Nevertheless, doubts which may exist about an application for relief from default must be resolved in favor of the moving party. Here, because Defendant’s failure to respond to the Complaint was due to O’Rourke’s mistake, the motion is granted.

Plaintiff cites Goodson v. Bogerts, Inc. (1967) 252 Cal.App.2d 32, 42 in support of its request for bond. More recent case law citing Goodson explains that Civ. Code 473(b) permits a court to grant relief from judgment “upon any terms as may be just” so long as the conditions are reasonably proportionate to the other party’s prejudice or expense. (Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1147.) Although a condition such as a bond in the amount of the compensatory damages sought is not unreasonable or unjust per se, such conditions are only occasionally upheld. (Id at p.1148.) For example, bond may be imposed to redress costs incurred as a result of default or to protect the plaintiff in the event of eventual recovery. The question of appropriateness is vested in the discretion of the trial court and depends on each case’s own peculiar facts and circumstances. (Id.)

Here, Plaintiff fails to provide any evidence that it was prejudiced by Defendant’s default or that it incurred damages sufficient to justify bond in the amount stated in its request for entry of default judgment. Additionally, the evidence shows that Defendant’s default was caused by its mistake and not a deliberate attempt to avoid litigation. Therefore, the circumstances here do not justify a bond. Plaintiff’s request is denied.

Although Defendant argues that possession is no longer an issue because Plaintiff admits to re-leasing the subject property, Plaintiff did not admit possession was no longer an issue in its opposition. In any case, Plaintiff did not request a judgment for restitution of the premises and a writ of execution at the time it requested entry of default with the court clerk. Whether possession is at issue is not relevant to this motion.