Judge Lee W. Tsao, Case Number: 22NWCV00269, Date: 2023-06-29 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV00269, Date: 2023-06-29 Tentative Ruling

Case Number: 22NWCV00269 Hearing Date: June 29, 2023 Dept: C

CREDITORS ADJUSTMENT BUREAU, INC. v. MOONSTAR MANUFACTURING, INC.

CASE NO.: 22NWCV00269

HEARING: 06/29/23

Defendant’s Motion to Set Aside Default and Default Judgment is GRANTED.

Moving Party to give Notice.

Defendant MOONSTAR MFG., INC.’s Proposed Answer attached to the Moving Papers are not deemed filed. Defendant MOONSTAR MFG., INC. is ORDERED to file the Proposed Answer within five court days of the Court’s issuance of this Order.

Defendant argues that the default judgment should be set aside pursuant to CCP §§473(b), 473.5; 473(d); or for equitable reasons.

In Opposition, Plaintiff argues that Defendant has failed to carry his burden of demonstrating that he is entitled to relief from default.

CCP §473(b)

Applications under CCP §473(b) must “be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, or proceeding was taken.” (Id.) Default Judgment by the Court was entered on June 17, 2022. The instant Motion to Set Aside Default and Default Judgment was filed more than six months later on January 17, 2023. The Motion cannot be granted under CCP §473(b).

CCP §473(d)

At any time, “[t]he court…may, on motion of either party after notice to the other party, set aside any void judgment or order.” (CCP §473(d).) The Motion is not granted under CCP §473(d) because Defendant offers no argument or evidence to suggest that the default judgment is void on its face.

Equitable Relief

However, even where statutory relief is unavailable, a trial court has inherent, equitable power to set aside a judgment on the ground of extrinsic fraud or mistake. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) In order to obtain such relief, the party in default must show: (1) a meritorious defense; (2) a satisfactory excuse for not presenting a defense to the original action; and (3) diligence in seeking to set aside the default once it was discovered. (Id. at 982.) Defendant proffers no proof of extrinsic fraud or mistake. Equitable relief is not available.

CCP §473.5

CCP §473.5 sets the time limit as requiring the motion to be filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment; or (ii) 180 days after service on the party of a written notice that a default or default judgment had been entered. The Motion is timely under CCP §473.5. Under CCP §473.5, the Court may set aside a default or default judgment if “(1) [defendant] received through no inexcusable fault of his own, no actual notice of the action in time to appear and defendant, and had not made a general appearance; (2) a default or default judgment has been entered against him by the court; (3) he acted with reasonable diligence in serving and filing the notice of motion to set aside the default or default judgment; and (4) he has a meritorious defense.” (CCP §473.5.)

The policy of hearing cases on their merits is well-established. (See, e.g., Berman v. Klassman (1971) 17 Cal.App.3d 900.) Given the liberality associated with Motions to Set Aside Defaults, the Court finds the declarations of Michael Solano and Francis Del Carmen Membreno sufficient to warrant relief. The law favors trials on the merits. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980.) The Court finds adequate grounds to allow Defendant the opportunity to defend itself on the merits of this action.

The Motion is GRATNED under CCP §473.5.