Judge: John J. Kralik, Case: 22BBCV01265, Date: 2024-04-12 Tentative Ruling

Case Number: 22BBCV01265    Hearing Date: April 12, 2024    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiff Moorpark Investors, LLC (“Plaintiff”) alleges that on November 1, 2019, Plaintiff and Defendants Dena Waldon and Joe Ann Waldon entered into a written lease agreement whereby Defendants agreed to lease the premises located at 12246 Moorpark Street, Apt. 106Tin Studio City from Plaintiff.  The lease term was for 9 months, such that the lease expired on July 31, 2020.  Per the latest rent increase, the current rent is alleged to be $3,529 per month, effective April 1, 2022. 

Plaintiff alleges that on September 7, 2021, Plaintiff served Defendants with a 15-Day Notice to Pay Rent or Quit with Blank Declaration of COVID-19 Related Financial Distress for rent due September 1, 2020 to September 30, 2021.  Plaintiff alleges that Defendants owed $42,250 in rent from September 2020 to September 2021.  (Compl., ¶17.)  Plaintiff alleges that on October 6, 2021, it served Defendant with a 3-Day Notice to Pay Rent or Quit for rent due from October 1, 2021 to October 3, 2022, such that Defendant owed $3,250 for rent in October 2021.  Plaintiff alleges that Plaintiff and Defendants submitted an application to the CA COVID-19 Rent Relief Program for rental assistance owed from September 1, 2020 to September 30, 2021 and October 1, 2021 to October 31, 2021 in the amounts of $42,250 and $3,250 respectively.  Plaintiff alleges that: (a) check number 57437685 was processed for $42,250 from the program on October 14, 2021 and issued to Dena Walden, which was cashed by Defendants on October 21, 2021; and (b) check number 57543742 was processed for $3,250 from the program on October 18, 2021 and issued to Dena Walden, which was cashed by Defendants on November 19, 2021.  Plaintiff alleges that it made repeated demands for the $45,500 in COVID-19 rental debt, but Defendants have converted the funds for their own use.

The complaint, filed December 20, 2022, alleges causes of action for: (1) receipt of stolen property; (2) conversion; (3) constructive trust; (4) money had and received; (5) unjust enrichment; (6) declaratory relief; (7) breach of contract; and (8) fraud.   

B.     Relevant Background and Motion on Calendar

On February 1, 2023, the default of Dena Waldon was entered.    

On August 2, 2023, the default of Joe Ann Waldon was entered. 

On November 27, 2023, the default judgment of Defendants was entered in the amount of $108,991.04. 

On February 27, 2024, Dena Waldon (in pro per) filed a motion for relief from default.

On March 19, 2024, Joe Ann Waldon (in pro per) filed a motion to vacate striking the answer, default, and default judgment. 

On March 28, 2024, Plaintiff filed an opposition to Joe Ann Waldon’s motion only.

On April 5, 2024, Joe Ann Waldon filed a reply brief.  That same day, Defendants filed a single request for judicial notice.

DISCUSSION RE DENA WALDON’S MOTION

A.    Request for Judicial Notice

Dena Waldon requests judicial notice of documents filed in the case Moorpark Investors, LLC v. Waldon (Pasadena Case No. 22PDUD01204), including the unlawful detainer complaint, the Judgement – Unlawful Detainer, the October 25, 2022 Minute Order and Notice of Entry of Judgment, and Ex Parte Application for Stay.  The request is granted.  (Evid. Code, § 453(d).) 

With the reply brief, Defendants request judicial notice the October 25, 2022 Minute Order for the Non-Jury Trial in the unlawful detainer case.  The request is granted.

The October 25, 2022 minute order issued by the Honorable William D. Dodson in the unlawful detainer case states in relevant part:

Defendants to move out by 12/18/22. No money owed.

Stipulated judgment entered for Plaintiff Moorpark Investors, LLC against Defendant Dena Waldon and Defendant Joe Ann Waldon on the Complaint filed by Moorpark Investors, LLC on 06/20/2022 for a total of $0.00.

(10/25/22 Minute Order.)

B.     Merits of Motion

Dena Waldon moves to vacate the default based on extrinsic fraud. 

“A judgment against a party may be set aside in equity when it is obtained by extrinsic fraud or mistake.”  (Parage v. Couedel (1997) 60 Cal.App.4th 1037, 1044.)  “Extrinsic fraud usually arises when a party is denied a fair adversary hearing because he has been ‘deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense.”  (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 97.)  In other words, “[e]xtrinsic fraud only arises when one party has in some way fraudulently been prevented from presenting his or her claim or defense.”  (Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1300.) 

Dena Waldon argues that Plaintiff filed the first action in Pasadena, which the parties settled so that Plaintiff would be entitled to possession as of December 18, 2022 in exchange for Plaintiff waiving all back rent and damages.  Dena Waldon argues that this agreement was fraudulently induced because Plaintiff did not intend to waive its claims, but instead split its causes of action to file an action for the monetary damages.  (D. Waldon Decl., at p.5.)  Dena Waldon argues that Defendants vacated the premises and removed their possessions before December 28, 2022, which was before the time that Plaintiff’s process server in this action claimed to have personally served Dena Waldon at the premises.  (Id., at p.6.) 

According to the proof of service filed on January 5, 2023, Dena Waldon was personally served on December 28, 2022 at 5:25 p.m. at the apartment unit.  Service was effectuated by Victor Curiel, a registered California process server. 

At most, Dena Waldon provides her declaration stating that she vacated the premises before December 28, 2022.  However, she provides no documentary evidence that she was not at the property or that the description of the person served (female, age 40, height 5’8”, weight 190, race: African America, black hair, and brown eyes) did not describe her.  She states that she was staying at different motels and couch-surfing at homes of friends and relatives, but does not specify any dates.  The Court will order Dena Waldon to provide a supplemental declaration to describe whether she was properly served with the summons and complaint and whether the lack of notice of the time to defend the action was not caused by her avoidance of service or inexcusable neglect.

Next, Dena Waldon argues that the parties entered into a settlement agreement whereby Plaintiff represented it would be waiving all back rent and damages.  A copy of the settlement terms (if one exists) is not provided such that the Court cannot verify whether this was in fact the case and to determine if Plaintiff engaged in fraudulent activity.  However, a copy of the October 25, 2022 minute order is provided showing that Defendants agreed to move out by December 18, 2022 and that no money was owed.  There may be a valid argument by Dena Waldon that she believed that no rent was due and owing based on the terms of the oral stipulated judgment that was recorded by Department R of the Pasadena Courthouse. 

The Court notes that this motion is not opposed by Plaintiff, though Plaintiff has opposed the motion filed by Joe Ann Waldon.  As the motion is continued, the parties may file responsive briefs. 

DISCUSSION RE JOE ANN WALDON’S MOTION

            Defendant Joe Ann Waldon moves to vacate the order striking the answer, default, and default judgment, pursuant to CCP § 657(1). 

The Court notes that CCP § 657(1) is regarding vacating a verdict and to seek a new trial due to irregularity in the proceedings of the court, jury, or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial. 

As an initial matter, CCP § 657(1) is not the correct code section for Joe Ann Waldon to seek relief.  Section 657 is employed following the conclusion of a trial.  Here, no trial has been conducted.  As Joe Ann Waldon has not sought relief based on a proper legal ground, the motion is denied on this basis. 

If considering the merits, Joe Ann Waldon argues that she paid her filing fees but the Court was misinformed that she had not paid the fees.  Joe Ann Waldon argues that the Court improperly struck her answer based on this misinformation, resulting in her default and the default judgment.  Joe Ann Waldon provides a receipt dated March 15, 2023 showing that Dena Waldon paid $435 for case no. 22BBCV01265 for “unlimited Civil – Ans non-Plaintiff incl. UD.”  (Mot., Exhibit.)  However, the receipt shows that Dena Waldon paid her own fees.  There is no showing that Joe Ann Waldon paid her fees or that they were paid on her behalf. 

In addition, as pointed out by Plaintiff in opposition, the Court held a Case Management Conference on May 11, 2023 and noted that Dena Waldon filed an answer after defaulting and that Joe Ann Waldon filed her answer without paying the required filing fee.  (Opp., Ex. D.)  The Court continued the CMC to July 27, 2023 and set an OSC re: Striking the Answers of both Defendants.  (Id.)  On May 22, 2023, Plaintiff filed with the Court and served on Defendants the Notice of Ruling at CMC.  (Id., Ex. E.)  On July 27, 2023, the Court held the CMC and OSC and struck the answers filed by Defendants for their failure to appear.  (Id., Ex. F.)  Thus, Defendants had notice of and the opportunity to attend the CMC and OSC hearing, but they failed to do so.  Further, though there was ground to strike Joe Ann Waldon’s answer for failure to pay fees, the Court deferred the striking of the answer to allow time for Joe Ann Waldon to attend the CMC and OSC, but she failed to appear.  Thus, the striking of the answer was proper. 

The Court notes that this was the only ground upon which Joe Ann Waldon has moved for relief in the motion papers.  The motion to vacate the order striking the answer and for relief from the default and default judgment is denied on this ground.

However, Joe Ann Waldon argued for the first time in the reply brief that the default was entered as a result of extrinsic fraud, as similarly argued by Dena Waldon.  As this was raised for the first time in the reply brief, this is an improper argument that the Court may decline to consider.  Nevertheless, the Court will continue the hearing on the motion and allow Plaintiff to file a supplemental opposition to Joe Ann Waldon’s reply brief and Joe Ann Waldon may file a supplemental reply brief. 

CONCLUSION AND ORDER

            Defendant Dena Waldon’s motion for relief from default and default judgment is continued to May 17, 2024 at 8:30 a.m.  Defendant Dena Waldon is ordered to file a supplemental brief/declaration detailing her whereabouts on December 28, 2022 to ascertain whether she was properly served with the summons and complaint and to provide the settlement terms in the Pasadena unlawful detainer case (if there are any additional terms beyond the October 25, 2022 minute order).  Defendant’s supplemental brief/declaration shall be filed and served by April 25, 2024.  Plaintiff’s opposition shall be filed and served by May 6, 2024.  Defendant’s reply brief shall be filed and served by May 10, 2024. 

Defendant Joe Ann Waldon’s motion for relief from default and default judgment is continued to May 17, 2024 at 8:30 a.m.  Plaintiff’s supplemental opposition to Defendant Joe Ann Waldon’s new reply arguments about extrinsic fraud shall be filed and served by May 6, 2024.  Defendant’s supplemental reply brief shall be filed and served by May 10, 2024. 

            Defendants shall provide notice of this order.

DATED:  April 12, 2024                                                        ___________________________

                                                                                          John J. Kralik

                                                                                          Judge of the Superior Court