Judge: John J. Kralik, Case: 20BBCV00396, Date: 2022-12-23 Tentative Ruling

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Case Number: 20BBCV00396    Hearing Date: December 23, 2022    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations of the Complaint

Plaintiff TD Auto Finance LLC (“Plaintiff”) alleges that Defendant Adis Minasyan entered into a written Retail Installment Sales Contract with Eurocar on May 21, 2016, whereby Eurocar sold to Minasyan a 2010 Bentley Continental Convertible 2D motor vehicle (VIN SCBDP3ZA5AZ064001).  Minasyan took possession of the vehicle but Plaintiff was the registered owner and lienholder of record with such ownership being registered with Defendant State of California Department of Motor Vehicles (“DMV”).  Pursuant to the agreement, Minasyan paid a $20,000 down payment and was to make 71 consecutive monthly installment payments of $1,821.91.  Plaintiff alleges that Minasyan defaulted on the payments on September 24, 2016, and further that the vehicle is no longer in Minasyan’s possession.  Plaintiff alleges that Defendant New Tech Auto Care (“New Tech”) is now in possession of the vehicle and is claiming that it holds a lien on the vehicle for allegedly performing repairs and for storage. 

The complaint, filed June 24, 2020, alleges causes of action for: (1) breach of contract; (2) conversion; (3) claim and delivery; (4) quiet title; and (5) TRO, preliminary and permanent injunctions, and damages. 

On October 13, 2020, Plaintiff and DMV agreed and stipulated that Plaintiff does not seek any monetary recovery of any kind against DMV at the time of execution of the stipulation, DMV shall abide by the determination of the Court respecting transfer of the registration or title to the subject vehicle so long as all parties are given proper notice, DMV acknowledges receipt of the summons and complaint in the action, and the Court may excuse DMV from any appearance and from attending any further proceedings in the action (including trial) or until further notice.  On October 15, 2020, the Court signed the Order excusing DMV from attending any further proceedings in the matter unless specifically directed by the Court, a further amended complaint is filed by Plaintiff, and/or a cross-complaint is filed by a party. 

B.     Relevant Background

On October 29, 2020, the defaults of Defendants New Tech Auto Care and Adis Minasyan were entered.  On April 14, 2021, default judgment was entered against: (1) Defendant New Tech Auto Care for possession of the vehicle or if possession could not be had, for the amount of $96,700; and (2) Defendant Adis Minasyan for $134,139.61 if and when Plaintiff gains possession of the collateral.

On June 4, 2021, the Court granted Defendant Adis Minasyan’s motion to set aside the default and default judgment.  The Court ordered Defendant to file a copy of the proposed answer following the hearing on June 4, 2021.  It does not appear that Minasyan filed an answer. 

On July 28, 2021, the defaults of Defendants New Tech Auto Care and Adis Minasyan were again entered.  On January 3, 2022, default judgment was entered against: (1) Defendant New Tech Auto Care for possession of the vehicle or if possession could not be had, for the amount of $96,700; and (2) Defendant Adis Minasyan for $134,139.61 if and when Plaintiff gains possession of the collateral.  

C.     Motion on Calendar

On November 28, 2022, Defendant New Tech Auto Care (“New Tech”)  filed a motion to set aside the default and default judgment. 

On December 8, 2022, Plaintiff filed an opposition brief. Defendant did not file a reply brief.

LEGAL STANDARD

CCP § 473.5 states:

(a) 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.

(b) 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.

(c) Upon a finding by the court that the motion was made within the period permitted by subdivision (a) and that his or her lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect, it may set aside the default or default judgment on whatever terms as may be just and allow the party to defend the action.

(CCP § 473.5.) 

DISCUSSION

A.    Timeliness

In the opposition brief, Plaintiff argues that the motion is not timely, such that New Tech is barred from filing this motion.  Plaintiff argues that the request for entry of default form was served on New Tech’s agent for service of process twice—first on March 21, 2021 based on the first request and on September 17, 2021 based on the second request.  Thus, it argues that the deadline to file the motion was 180 days from these dates—such that the latest date to file this motion was March 17, 2022.  Plaintiff argues that the motion was filed on November 28, 2022, which is beyond the 180-day limit.

However, the default judgments were entered on April 14, 2021 and January 23, 2022.  Here, New Tech filed the motion on November 28, 2022, which is within 2 years of the default judgments entered on April 14, 2021 and/or January 23, 2022. New Tech filed this motion within a reasonable time within the 2 years limit to bring this motion based on the entry of default judgment against it.

While Plaintiff argues that the shorter time period should be used, New Tech’s agent for service of process, Mr. Movsesyan stated in his declaration that he did not know of this action or the defaults/default judgments entered against New Tech until August 2022.  (Movsesyan Decl., ¶5; see Luxury Asset Lending, LLC v. Philadelphia Television Network, Inc. (2020) 56 Cal.App.5th 894, 908 [finding grounds to vacate the default judgment pursuant to CCP § 473.5 where “PTNI only discovered the default well after judgment had been entered.”].) 

As such, the Court will find that the motion was timely filed and will consider the merits of the motion. 

B.     Merits of Motion

New Tech moves to vacate the default and default judgment entered against it and seeks leave to file an answer to the complaint.  New Tech moves pursuant to CCP § 473.5, arguing that it was never properly served with the summons and complaint and that the attempted substituted service did not result in actual notice to New Tech.

On October 7, 2020, Plaintiff filed the proof of service of the summons showing that Plaintiff had served New Tech by substituted service on September 14, 2020 at 11:00 a.m. by leaving the documents with Greg K. (employee/accepting service) at the place of business, located at 5635 Tujunga Ave in North Hollywood.  The documents were thereafter mailed.  The proof of service states that the agent for service of process is Khachatur Movsesyan.  Service was effectuated by Humberto Gonzalez, Jr., who is a registered California process server.  

            In support of the motion, New Tech provides the declaration of Khachatur Movsesyan (New Tech’s agent for service of process).  Mr. Movsesyan states that he is the agent for service for New Tech and his principal address is 5635 Tujunga Ave. in North Hollywood.  (Movsesyan Decl., ¶1.)  He states that he was never served with the documents regarding this matter and that he does not have an employee named “Greg K.”  (Id., ¶4.)  He states that he learned of the default and default judgment in August 2022 after his attorney brought to his attention the fact that Plaintiff had secured a default judgment and was proceeding with the writ of execution.  (Id., ¶5.)  He states that upon being notified, he checked the LASC website and reviewed the case summary. (Id., ¶6.)  Mr. Movsesyan states that the resulting default and default judgment were entirely due to lack of actual notice in order to ensure that a responsive pleading was timely filed.  (Id., ¶7.)

As noted by the opposition, Mr. Movseyan’s statement lack’s the required averment his lack of notice in time to defend the action was not caused by his avoidance of service or inexcusable neglect. Because the opposition plainly pointed this out, and Mr. Movseyan has failed to respond to his challenge in any way the Court must conclude that he cannot make such a statement truthfully. Moreover, Mr. Movseyan’s statement fails to explain how he, as the corporation’s recognized agent for service of process could really be without notice of the action until August 2022 despite all of the notices properly directed to him at the appropriate address.  Is it really his practice not to review the mail? If so, would not that constitu

CONCLUSION AND ORDER

            Defendant New Tech Auto Care’s motion to vacate the default and default judgment is denied.

            Defendant shall provide notice of this order.