Judge Lee W. Tsao, Case Number: 22NWCV00969, Date: 2023-08-30 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV00969, Date: 2023-08-30 Tentative Ruling

Case Number: 22NWCV00969 Hearing Date: August 30, 2023 Dept: SEC

creditors adjustment bureau v. v&s carpet and flooring

CASE NO.: 22NWCV00969

HEARING: 8/30/23 @ 10:30 AM

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

Moving Party to give NOTICE.

Defendant V&S Carpet and Flooring, Inc. (Defendant) moves for relief from default judgment pursuant to CCP § 473(b).

Background

This is a breach of contract between Defendant and the State Compensation Insurance Fund (SCIF) regarding unpaid premiums on Defendant’s workers’ compensation insurance contract with SCIF. SCIF assigned its right to collect the unpaid premiums to Plaintiff Creditors Adjustment Bureau, Inc. (Plaintiff). Plaintiff alleges that Defendant failed to pay premiums to SCIF for three policies dating from May 10, 2019 to October 15, 2021. Defendant alleges it was in contact with SCIF’s Audit Department regarding the dispute as to the unpaid premiums and was negotiating regarding the classification of employees.

Plaintiff filed the Complaint on October 11, 2022. After Defendant failed to answer, Plaintiff requested entry of default on December 27, 2022. Plaintiff made a request for default judgment on January 4, 2023 and the court entered default judgment on January 18, 2023.

Legal Standard

Discretionary and mandatory relief is available to parties from “judgment, dismissal, order, or other proceeding taken against him or her.” (CCP § 473(b).) 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. (CCP § 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.” (CCP § 473(b).) 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. (CCP § 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.)

Discussion

Here, default judgment was entered on January 18, 2023. Defendant filed his Motion to Set Aside Default on May 25, 2023, within the six months allowed by CCP § 473. Thus, there is a strong public policy in favor of granting Defendant’s Motion to Set Aside Default.

Default judgment against Defendant is set aside because Defendant mistakenly believed the lawsuit against him was not proceeding and he acted diligently to file his motion. Defendant states that he was negotiating with SCIF’s Audit Department at the time he was served with lawsuit. (Sanchez Decl., ¶ 5.) Defendant alleges he was informed by the Audit Department that the lawsuit would “go away and not be pursued” once the dispute as to Defendant’s employee classifications was resolved. (Sanchez Decl., ¶ 6.) Thus, Defendant’s mistake was excusable within the meaning of CCP § 473(b) and the strong public policy in favor of determination on the merits. Additionally, Defendant learned of the default judgment in February 2023 and obtained counsel on March 6, 2023. Defendant’s counsel suffered from a serious medical condition beginning in the middle of March and continued to May. Defendant’s counsel prepared the Motion to Set Aside Default upon returning to work. Thus, the Court finds that Defendant and its counsel worked diligently within the meaning of CCP § 473(b). Therefore, default judgment is set aside.

Accordingly, Defendant’s Motion to Set Aside Default Judgment is GRANTED. Defendant is ordered to file and serve its Answer as attached to this Motion within ten days of this order.