Judge Katherine Chilton, Case 22STLC03835 2023-04-11 Tentative Ruling

Judge: Katherine Chilton, Case: 22STLC03835, Date: 2023-04-11 Tentative Ruling

Case Number: 22STLC03835 Hearing Date: April 11, 2023 Dept: 25

PROCEEDINGS: MOTION TO VACATE DEFAULT AND DEFAULT JUDGMENT

MOVING PARTY: Defendants Hamid Barekatain and Universal Auto Group

RESP. PARTY: Plaintiff Clifford Johnson

MOTION TO VACATE DEFAULT AND DEFAULT JUDGMENT

(CCP § 473.5)

TENTATIVE RULING:

Defendants Hamid Barekatain and Universal Auto Group’s Motion to Vacate Default and Default Judgment is GRANTED. Default entered against Defendants on August 5, 2022, and default judgment entered on August 29, 2022, are hereby VACATED.

Defendants are ordered to file the Proposed Answer within ten (10) days of notice of the Court Order.

SERVICE:

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

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

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

OPPOSITION: Filed on March 6, 2023. [ ] Late [ ] None

REPLY: None filed as of April 6, 2023. [ ] Late [X] None

ANALYSIS:

I. Background

On June 7, 2022, Plaintiff Clifford Johnson (“Plaintiff”) filed an action against Defendants Hamid Barekatain (“Barekatain”) and Universal Auto Group (“Universal Auto”), (collectively “Defendants”), for violation of the Unruh Civil Rights Acts.

On August 5, 2022, pursuant to Plaintiff’s request, default was entered against Defendants Barekatain and Universal Auto. (8-5-22 Request for Entry of Default.) Default judgment was entered for Plaintiff and against Defendants in the amount of $5,161.10 on August 29, 2022. (8-29-22 Default Judgment.) On February 23, 2023, Plaintiff filed a Memorandum of Costs After Judgment.

On March 6, 2023, Defendants filed the instant Motion to Vacate Default and Default Judgment (“Motion”). Plaintiff filed an Opposition on March 6, 2023. No reply has been filed.

II. Legal Standard

Pursuant to Code of Civil Procedure § 473(b), both discretionary and mandatory relief is available to parties from “judgment, dismissal, order, or other proceeding taken against him or her.” Discretionary relief is available under the statute as “the court may, upon any terms as may be just, relieve a party or his or her legal representative from judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. (Code of Civ. Proc. § 473(b).) Alternatively, mandatory relief is available when “accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.” (Ibid.) Under this statute, an application for discretionary or mandatory relief must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought. (Code Civ. Proc., § 473(b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.)

“‘[W]hen 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…[Citation.]” (Rappleyea v. Campbell¿(1994) 8 Cal. 4th 975, 981-82.)

Furthermore, “[a]pplication for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein.” (Code of Civil Procedure § 473(b).)

III. Discussion

Defendants now move to set aside the default and default judgment entered against them pursuant to Code of Civil Procedure § 473 and on the ground that their failure to file an answer “was a result of excusable neglect, mistake and surprise.” (Mot. p. 1.) Defendants have submitted a Proposed Answer with the Motion. (Neimand Decl. ¶ 9 , Ex. C.)

On or about June 15, 2022, Defendant Barekatain, President of Universal Auto, received a copy of Plaintiff’s Complaint and asked the office manager for Universal Auto, Maggie Artoonian, to forward the Complaint to Attorney Steve Neimand. (Barekatain Decl. ¶¶ 2, 4; Artoonian Decl. ¶¶ 1-2.) Ms. Artoonian forwarded the matter to Counsel Neimand via email and both Defendant Barekatain and Ms. Artoonian believed “that [Counsel Neimand] would be taking care of it.” (Barekatain Decl. ¶ 5; Artoonian Decl. ¶ 3, Ex. A.)

Counsel Neimand has been retained for over a decade as Universal Auto’s General Counsel and has “handled substantially all of its legal matters.” (Neimand Decl. ¶ 1; Barekatain Decl. ¶ 4; Artoonian Decl. ¶ 2.) Counsel also handles legal matters of “any employees or officers named in the suit.” (Neimand Decl. ¶ 1.) Whenever a complaint is filed against Universal Auto, the “standard practice and procedure is for them to send [Counsel Neimand] the complaint to handle it” and for Counsel to “respond to the complaint and defend the action.” (Neimand Decl. ¶ 1; Barekatain Decl. ¶ 4; Artoonian Decl. ¶ 2.) If necessary, Counsel will contact Universal Auto, “but otherwise it assumes [Counsel is] taking care of the matter.” (Neimand Decl. ¶ 1; Barekatain Decl. ¶ 4; Artoonian Decl. ¶ 2.)

On or around February 16, 2023, Defendant Barekatain received Notice of Involuntary Lien from the Los Angeles County Recorder/Clerk. (Barekatain Decl. ¶ 6, Ex. A.) Prior to this Notice, Defendant Barekatain and Ms. Artoonian did not receive a copy of the Request to Enter Default, “purportedly mailed to [them] on August 3, 2023” or any other notice regarding the default judgment entered against Defendants. (Barekatain Decl. ¶ 6; Artoonian Decl. ¶ 4.)

On the same day, Ms. Artoonian contacted Counsel Neimand regarding this lien. (Neimand Decl. ¶ 2; Artoonian Decl. ¶ 6.) Counsel informed Ms. Artoonian that he had no knowledge of the case and had not received the email sent to him about the Complaint on June 15, 2022. (Neimand Decl. ¶ 3, Ex. A; Artoonian Decl. ¶ 6, Ex. A.) Counsel has attached a screenshot of his email account showing that he did not receive the June 15, 2022, email and accordingly, did not have knowledge of the case and did not respond to the lawsuit. (Neimand Decl. ¶ 4, Ex. B.)

Counsel states that although the Request for Default indicates that Defendants were served with a copy of the document, neither Defendant Barekatain, nor Ms. Artoonian, received this document. (Neimand Decl. ¶ 5; Barekatain Decl. ¶ 6; Artoonian Decl. ¶ 4.) Furthermore, the Certificate of Mailing of Notice of Entry of Default Judgment indicates that it was only mailed to Plaintiff’s counsel and Defendant Barekatain and Ms. Artoonian did not receive it. (Neimand Decl. ¶ 6; Barekatain Decl. ¶ 6; Artoonian Decl. ¶ 4.)

On February 21, 2023, Counsel Neimand contacted Plaintiff’s counsel by email and regular mail regarding stipulation to vacate the default and default judgment, but did not receive any response. (Neimand Decl. ¶ 7.)

Defendants argue that they have meritorious defenses to the claims made in the Complaint. (Neimand Decl. ¶ 8; Barekatain Decl. ¶¶ 7-8.)

Plaintiff argues that the Motion should be denied because it was not timely filed, pursuant to § 473(b), and thus, the Court lacks jurisdiction to rule on the Motion. (Oppos. p. 1.) Plaintiff also argues that the fact that Defendants did not receive the Request for Entry of Default and Judgment, does not invalidate the judgment. (Ibid. at p. 2.)

The Court finds that Defendants’ Motion is not timely as it was filed more than six (6) months after entry of default and default judgment. However, the Motion is accompanied by an attorney’s declaration of fault, stating that Counsel did not file a responsive pleading because he did not receive a copy of the Complaint and did not know about the lawsuit.

“Even where relief is no longer available under statutory provisions, a trial court generally retains the inherent power to vacate a default judgment or order on equitable grounds where a party establishes that the judgment or order was void for lack of due process or resulted from extrinsic fraud or mistake.” (County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1228; Bacon v. Bacon (1907) 150 Cal. 477, 491-92; Olivera v. Grace, 122 P.2d 564, 567-68; Stiles v. Wallis (1983) 147 Cal.App.3d 1143, 1147 (“There are four grounds which a court, utilizing its equity capacity may rely upon to provide relief from default. Those areas are (1) void judgment, (2) extrinsic fraud, (3) constructive service, and (4)¿extrinsic mistake.”) In limited civil cases, grounds for equitable relief also include “inadvertence or excusable neglect.” (Code of Civ. Proc. § 86(b)(3).)

The Court finds that default and default judgment were entered due to Counsel’s inadvertence and excusable neglect. Thus, the Court may rely on its inherent powers to vacate the default and default judgment on equitable grounds. For this reason, the Court GRANTS Defendants’ Motion.

IV. Conclusion & Order

For the foregoing reasons,

Defendants are ordered to file the Proposed Answer within ten (10) days of notice of the Court Order.

Moving party is to give notice.