Judge Lynne M. Hobbs, Case Number: 24STCV08768, Date: 2024-11-04 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV08768, Date: 2024-11-04 Tentative Ruling

Case Number: 24STCV08768 Hearing Date: November 4, 2024 Dept: 61

NUS APPARELS LTD., A FOREIGN CORPORATION vs GTEX GLOBAL SOURCING, INC., A NEW YORK CORPORATION, et al.

TENTATIVE

Defendant and Cross-Defendant GTEX Global Sourcing, Inc.’s Motion to Set Aside Entry of Default is GRANTED. No fees or costs are awarded. Defendant GTEX Global Sourcing is ordered to file an answer within 20 days.

Moving party to provide notice.

DISCUSSION

Code of Civil Procedure section 473, subdivision (b) states:

The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. 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, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken . . . . Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment . . . unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.

Defendant GTEX Global Sourcing, Inc. (GTEX) seeks to set aside the default entered against it August 7, 2024, under the above statute. It submits the declaration of its CEO, Fusun Hoffer, who states that after receiving notice of the suit, GTEX had difficulty obtaining counsel in California because it is a New York corporation with relatively few California contacts, and because Hoffer was busy with a family illness and work commitments. (Hoffer Decl. ¶¶ 3–5.) Hoffer states that three of the attorneys she spoke to regarding representation in this matter declined the job, before she found the attorney who represents GTEX presently. (Hoffer Decl. ¶ 5.)

Plaintiff in opposition argues that GTEX had a duty to obtain counsel, or to file a responsive pleading even if no counsel could be obtained. (Opposition at pp. 4–5.) Plaintiff further argues that press of business is not sufficient justification as a matter of law, and that family illness cannot furnish a basis for relief from default absent specific details. (Opposition at pp. 5–7.)

“[W]here the party in default moves promptly to seek relief, and the party opposing the motion will not suffer prejudice if relief is granted . . . very slight evidence will be required to justify a court in setting aside the default. Moreover, because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default. Therefore, a trial court order denying relief is scrutinized more carefully than an order permitting trial on the merits.” (Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 695.)

Defendant has shown entitlement to relief from default under Code of Civil Procedure § 473, subd. (b), based on excusable neglect in the failure to obtain counsel in time to prevent default. Although Plaintiff argues that GTEX should have filed an answer without counsel, that would have been improper. Corporations generally cannot represent themselves in court without counsel, and any answer filed by GTEX in pro per would have been subject to strike. “[U]nder a long-standing common law rule of procedure, a corporation, unlike a natural person, cannot represent itself before courts of record in propria persona, nor can it represent itself through a corporate officer, director or other employee who is not an attorney. It must be represented by licensed counsel in proceedings before courts of record.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1145.) GTEX has promptly sought relief from default, and Plaintiff articulates no prejudice to be suffered by allowing this case to proceed on the merits. In this context, GTEX’s showing is sufficient to obtain relief.

Plaintiff seeks an award of $630.20 in costs incurred in obtaining GTEX’s default. (Opposition at p. 7.) The authority to award costs or fees against a party obtaining relief from default based on excusable neglect comes from section 473, subd. (b), which permits relief from default “upon any terms as may be just.” (Code Civ. Proc. § 473, subd. (b); Rogalski v. Nabers Cadillac (1992) 11 Cal.App.4th 816, 822 [“Such conditions might include the attorney fees and costs incurred by the plaintiff in obtaining the default judgment and a maximum of $1,000 in sanctions.”].) Yet the $630.20 that Plaintiff seeks to have reimbursed has little to do with the default or this motion, as these costs consist in the initial filing fee and the costs for service of process. (Opposition Exh. D.) These costs have no relation to the entry of default, and any award in connection with this motion is discretionary in any event.

The motion is therefore GRANTED. No costs or fees are awarded.