Judge: Kevin C. Brazile, Case: 21STCV24343, Date: 2022-08-24 Tentative Ruling

Hearing Date: August 24, 2022

Case Name: IAP, Inc. v. Radiant Images, Inc., et al.

Case No.: 20STCV48124

Matter: Motion to Set Aside Default/Default Judgment

Moving Party: Defendant Radiant Images, Inc.

Responding Party: Plaintiff IAP, Inc.

Notice: OK

Ruling: The Motion to Set Aside Default/Default Judgment is denied.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On November 2, 2021, a default was entered for Defendant Radiant Images, Inc.  On January 31, 2022, the Court entered a default judgment against Defendant in the amount of $68,801.68.  

Defendant now seeks to set aside the default and default judgment due to improper service (Code Civ. Proc. § 473(d)), lack of actual notice (Code Civ. Proc. § 473.5), and excusable conduct (Code Civ. Proc. § 473(b).)

Code Civ. Proc. § 473(d) provides, “The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.”

Here, service of the First Amended Complaint (“FAC”) and summons was effectuated via substitute service on September 8, 2021, on Kurk Stevens at 2505 N. Via Artis Ave., Los Angeles, California 90039, which is the home and workplace of Gianna Wolfe, who is the agent for service of process and CEO for Defendant.  Defendant argues that the substitute service was improper because there was no attempt at personal service and Stevens had no authority to accept service or any other mail on behalf of Defendant.  

This lacks merit.  While personal service must be attempted with reasonable diligence for an individual (Code Civ. Proc. § 415.20(b)), there is no such requirement for serving corporate entities like Defendant.  Rather, for entities, substitute service may be “[i]n lieu” of personal service.  (Code Civ. Proc. § 415.20(a).).

Further, there need not be actual authority for Stevens to accept service on behalf of Defendant.  Rather, the statute simply requires that service be on someone “apparently in charge” of the office location.  There is nothing to indicate that Stevens was not apparently in charge.  To the contrary, Wolfe admits “Kurk Stevens is the only employee of Defendant . . .”  (Wolfe Decl. ¶  6), and would occasionally work from Wolfe’s home office (Wolfe Decl. ¶ 8.)  The Court finds that service was proper.

Defendant next argues that it did not have actual notice of this lawsuit in time to defend against it.  (Code Civ. Proc. § 473.5.)  Specifically, Defendant contends it never received the FAC from Stevens or through any other means.  

Respectfully, the Court does not find Defendant’s contention credible.  Wolfe’s declaration fails to detail whether Wolfe received the FAC through mail after service on Stevens.  Additionally, Plaintiff points out that it emailed several documents and communications about this lawsuit to Wolfe, who had been responding from her email up until November 2020.  Defendant could have filed a reply disputing mail or email notice, but did not do so.  Additionally, Defendant admits to having had notice of the default judgment when it was served by substitute service at Wolfe’s home office (Wolfe Decl. ¶ 9), so it is somewhat perplexing why Defendant did not have notice when the FAC was served there by the same means.  

Finally, Defendant seeks to set aside the default judgment under Code Civ. Proc. § 473(b), but Defendant has failed to show diligence under this statute.  (Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1410.)  Indeed, Wolfe admits to having had notice of the default judgment served on March 18, 2022, but did not file the instant Motion until July 29, 2022.  This is too late (cf. Younessi v. Woolf (2016) 244 Cal.App.4th 1137, 1145 [unexplained delay of 7 weeks rendered motion untimely]), and her explanation that she was “confused” would show anything but diligence.  The Court notes that the Motion was filed less than 4 weeks after Plaintiff’s counsel told Webmo Inc., for which Wolfe is CFO, that it suspected that Webmo, Inc. had obtained a fraudulent transfer from Defendant.  (Grynberg Decl. ¶ 11.)

In sum, the Motion to Set Aside Default/Default Judgment is denied.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.