Judge Lee W. Tsao, Case Number: 22NWCV01607, Date: 2023-09-20 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV01607, Date: 2023-09-20 Tentative Ruling

Case Number: 22NWCV01607 Hearing Date: September 20, 2023 Dept: C

creditors adjustment bureau v. OM Roofing

CASE NO.: 22NWCV01607

HEARING: 9/20/23 @ 9:30 AM

Defendant’s Motion to Set Aside Default Judgment is CONTINUED to September 27, 2023 at 10:30 a.m. in Dept. SE-C to give Defendant an opportunity to file an Answer or other responsive pleading to accompany the Motion to Set Aside Default Judgment.

Defendant to give NOTICE.

Defendant OM Roofing, Inc. (Defendant) moves for relief from default judgment pursuant to CCP § 473(b).

Background

This is a breach of contract lawsuit 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 filed the Complaint on December 14, 2022. Entry of Default Judgment was entered on March 14, 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, Plaintiff’s Request for Entry of Default was entered on March 14, 2023. Defendant filed its Motion to Set Aside Default on May 26, 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.

Defendant’s sole officer and shareholder, Becky Brown, has demonstrated excusable neglect under CCP § 473(b). Ms. Brown states that she left for an extended stay in Vallejo, California after her mother suffered from a severe stroke on January 22, 2023. (Brown Decl., ¶ 5.) An office manager was served and made Ms. Brown aware of a legal document during the week of January 23, 2023. (Brown Decl., ¶ 8.) On February 9, 2023, Ms. Brown was advised by counsel on another matter that the legal document was the Complaint and she needed to retain an attorney to represent Defendant. (Brown Decl., ¶ 16.) Ms. Brown states that she neglected to investigate the document or retain an attorney to represent Defendant earlier because she was attempting to run the business while away and care for her mother’s extensive needs after her stroke. (Brown Decl., ¶¶ 9-14.) 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 weighs in favor of setting aside the default.

However, a proposed answer or other pleading is not filed with the Motion or at any time prior to the hearing. “Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted ….” (CCP § 473(b).) "The objectives of the “accompanied by” requirement, i.e., a screening determination that the relief is not sought simply to delay the proceedings, is satisfied by the filing of a proposed answer at any time before the hearing.” (County of Stanislaus v. Johnson (1996) 43 Cal.App.4th 832, 838.) Thus, the Motion does not meet the requirements of CCP § 473(b).