Judge: Katherine Chilton, Case: 22NWLC19638, Date: 2023-04-26 Tentative Ruling

Case Number: 22NWLC19638    Hearing Date: April 26, 2023    Dept: 25

PROCEEDINGS:      MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT

MOVING PARTY:   Defendants HB Beer Company, Inc. and D-Town Investors, Inc.

RESP. PARTY:         Plaintiff Creditors Adjustment Bureau, Inc.

MOTION TO SET ASIDE/VACATE DEFAULT

(CCP §§ 473(d); 473.5; Equitable Relief)

TENTATIVE RULING: 

The Motion of Defendants HB Beer Company, Inc. dba Huntington Beach Beer Company (“HB”) and D-Town Investors, Inc. dba Tuna Town Adba Dos Torros (“D-Town”) (collectively, “Defendants”) to Set Aside Entry of Defaults is GRANTED. The defaults entered on October 10, 2022 and November 4, 2022 and the judgment entered on January 5, 2023 are hereby VACATED. Defendants are ordered to file a copy of their proposed Answer to the Complaint within five days of this order.  

SERVICE:   

[X] Proof of Service Timely Filed (CRC, rule 3.1300)                   OK  

[X] Correct Address (CCP §§ 1013, 1013a)                                                        OK  

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b))                        OK  

OPPOSITION:           Yes                                                                           [   ] Late                          [   ] None 

REPLY:                        None filed as of April 21, 2023                  [   ] Late                          [X] None 

ANALYSIS: 

                I.Background 

On August 16, 2022, Plaintiff Creditors Adjustment Bureau, Inc. (“Plaintiff”) filed an action against HB, D-Town, and Defendant Ponderosa Chophouse Enterprises, Inc. dba Black Bull Chop House (“Ponderosa”). Default was entered against HB on October 10, 2022. Default was entered against D-Town and Ponderosa on November 4, 2022. HB and D-Town filed the instant motion to set aside the defaults on December 16, 2022. Plaintiff filed a request for entry of default judgment against HB, D-Town, and Ponderosa on December 27, 2022, and the Court entered default judgment against them on January 5, 2023 in the amount of $30,364.85.

On February 21, 2023, the prior court in Norwalk held a hearing on the motion but declined to rule, finding that this action needed to be transferred to the Stanley Mosk Courthouse. The action was subsequently transferred to this Court.

Defendants HB and D-Town filed the instant Motion to Set Aside Entry of Defaults on December 16, 2022. Plaintiff has opposed the Motion. Defendants did not reply. The Court notes that when Defendants filed the Motion, no default judgment had been entered. Thus, the Court will construe the Motion to set aside the default judgment in addition to the defaults.

              II.Legal Standard & Discussion 

“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.” (Code Civ. Proc., § 473.5(a).) The meaning of “actual notice” is strictly construed and means “genuine knowledge of the party litigant and does not contemplate notice imputed to a principal from an attorney's actual notice.” (2. [§ 219] Strict Construction., 8 Witkin, Cal. Proc. 6th Attack § 219 (2023) citing Rosenthal v. Garner (1983) 142 Cal.App.3d 891, 895.)

“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.” (Code Civ. Proc. § 473(b).) The Court may set aside any judgment for The Court may set aside any void judgment or order at any time. (Code Civ. Proc., § 473, subd. (d); Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1249.) Policy favors dispositions of cases on their merits. (Code Civ. Proc. § 583.130.)

Here, the Court finds that Defendants did not receive actual notice of the Complaint and the evidence Plaintiff has presented does not satisfy the requirements of actual notice for Code of Civil Procedure section 473.5(a). It is clear that the summons and complaint that were substitute served on Defendants’ employees never made it to Mr. Peña, who was the authorized agent for service of process for the Defendants. (Peña Decl., ¶¶ 2-6.) One of those employees says he advised the process server that he was not authorized to accept service. (Cassidy Decl., ¶ 2.)

Plaintiff, despite its extensive objections to this Motion, has not presented any evidence that Mr. Peña had actual notice. (See, e.g., Ellard v. Conway (2001) 94 Cal.App.4th 540, 548 [actual notice found where defendant contacted plaintiff’s counsel before the responsive pleading deadline to discuss the lawsuit, faxing plaintiff’s counsel a proposal to waive or toll the deadline for answering the complaint, referencing the case number, and calling the plaintiffs directly to make a settlement offer].)

Defendants’ motion is GRANTED.  

            III.Conclusion & Order 

For the foregoing reasons, the defaults entered on October 10, 2022 and November 4, 2022 and the judgment entered on January 5, 2023 are hereby VACATED. Defendants are ordered to file a copy of their proposed Answer to the Complaint within five days of this order.    

Moving party is ordered to give notice.