Judge Lynne M. Hobbs, Case Number: 24STCV10351, Date: 2024-10-04 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV10351, Date: 2024-10-04 Tentative Ruling

Case Number: 24STCV10351 Hearing Date: October 4, 2024 Dept: 61

DEVIN GREENWOOD vs ICAA LLC

TENTATIVE

Defendant ICAA LLC’s Motion for Relief from Default is DENIED.

Plaintiff 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.

“[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 ICAA, LLC (Defendant) moves for relief from default entered against it on July 10, 2024, on the grounds of improper service and excusable neglect. Defendant argues that the proof of service filed with this court on May 22, 2024, indicates that service was made upon Defendant by substitute service at an address on Ontario Circle in Fontana, without prior diligent attempts to personally serve Defendant’s agent for service of process as required by Code of Civil Procedure § 415.20, subd. (b). (Motion at p. 4.)

Defendant also presents the declaration of Ibrahim Aboud, its agent for service of process, who states that substitute service was accomplished upon his mother. (Aboud Decl. ¶ 2.” He states that he did not receive the documents until at least a week later. (Aboud Decl. ¶ 3.) He also states that he was not able to locate the contact information for the insurance company until July 8, 2024, when he sent the documents to the insurer. (Aboud Decl. ¶ 5.) He states that he did not know that he was required to file a responsive pleading by a certain date. (Aboud Decl. ¶ 6.) Default was entered on July 10, two days after Aboud sent the documents to the insurer.

Defendant’s argument from defective service is misplaced, because it is based on a requirement for reasonable diligence in attempting personal service that attaches only to service against natural persons, not LLCs like Defendant. Code of Civil Procedure § 415.20, subd. (b), upon which Defendant bases its motion, describes how substitute service can be accomplished upon a natural person ( “[i]f a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served.” (Code Civ. Proc. § 415.20, subd. (b).)*

But another subsection in the same statute, applicable to service against corporate entities, contains no mention of reasonable diligence or any requirement therefore. (Code Civ. Proc. § 415.20, subd. (a).) Corporations Code § 17701.16, which prescribes the manner of service to be made upon limited liability companies (like Defendant), specifically references Code of Civil Procedure § 415.20, subd. (a) — not subdivision (b) — as a proper method of service. (Corp. Code § 17701.16, subd. (c).) Thus the failure to attempt personal service upon Aboud before substitute serving him is of little consequence here.

Defendant’s evidence in support of relief is also thin. The declaration of Aboud merely states that he failed to timely learn of the lawsuit, failed to tender the claim to his insurer, and failed to learn of the deadline for responding, “due to mistake, inadvertence, surprise, or excusable neglect,” without further elaboration. (Aboud Decl. ¶¶ 3, 5–6.)

Defendant’s vague attestations are contradicted by the more specific testimony of Plaintiff’s counsel, Scott Braybrooke. Contrary to Aboud’s statement that he did not learn of the lawsuit from his mother until much later, Braybrooke states that he received a call from Aboud on May 21, 2024, the very day that service was accomplished. (Braybrooke Decl. ¶ 8.) During this call, Aboud asked if Braybrooke could provide the date and location of the accident so he could forward the claim details it to his insurer. (Braybrooke Decl. ¶ 8.) Braybrooke states he not only gave him the requested details, but also the contact information for the claims representative who was handling the file, which Aboud in the present motion states he could not locate. (Braybrooke Decl. ¶ 8.)

Braybrooke also states that he attempted to reach out prior to default. He sent an email to the third-party administrator handling the file, noting that Defendant had not filed a responsive pleading, and stating that he “would be pleased to hold off with a Default as long as there is an Answer on file by July 9th.” (Braybrooke Decl. Exh. 7.) He received no response, evidently because Defendant at that time had not yet contacted the insurer. (Braybrooke Decl. ¶ 11; Aboud Decl. ¶ 5.) The first he heard from Defendant’s counsel was July 12, two days after default had been entered, when he received an email from another adjuster asking for a response to a settlement offer and seeking an extension to file an answer. (Braybrooke Decl. ¶ 11, Exh. 8.) When Defendant asked Plaintiff to stipulate to relief from default, and Braybrooke inquired as to the reasoning behind a potential motion for relief, the rationale that Defendant then provided was that Defendant “turned the matter over to his insurance company and assumed they would handle it.” (Braybrooke Decl. ¶ 14.) This position is not the one presented in the motion, which suggests the insurer acted promptly after Defendant tardily tendered the claim on July 8, 2024. (Aboud Decl. ¶ 5; Dunkel Decl. ¶¶ 5–8.)

It must be conceded that, after default was entered, Defendant promptly sought relief, and therefore may obtain relief on even a slight evidentiary showing. (Fasuyi, supra, 167 Cal.App.4th at p. 695.) But Defendant has failed to offer even such a slight showing here. The Aboud declaration consists largely of conclusory recitations of the statutory standard, and what factual content is presented is rebutted by the Braybrooke declaration submitted in opposition. This evidence suggests that Defendant had timely knowledge of both the lawsuit and the means to contact its insurer, but failed to do so for reasons that it does not explain.

Instead of using its reply materials to bolster its own evidentiary showing or rebut Plaintiff’s, Defendant instead pivots to argue that it should not be held accountable for its insurer’s delay in responding to Plaintiff’s July 2 email. (Reply at p. 3.) Defendant relies on authority holding for the proposition that an insurer’s neglect should not be attributed to a party seeking relief from default under Code of Civil Procedure § 473, subd. (b). (Reply at p. 3, citing Rogalski v. Naberg Cadillac (1992) 1 Cal.App.4th 816, 821.) But in the case cited, the insurer “repeatedly led ]the insured] to believe it would respond to the complaint and then abruptly abandoned ]them] without taking any steps to protect [their] rights.” (Rogalski, supra, 1 Cal.App.4th at p. 821.) The court held that “[i]n these circumstances, . . . the ‘attorney-client’ relationship between the two was obliterated and [the insurer]’s conduct should not be imputed to [the insured].” (Ibid.)

This authority is inapposite to the present case. The evidence here suggests that Defendant, rather than its insurer, neglected the complaint. By the time Plaintiff sent the email to the insurer inquiring about a responsive pleading, Defendant had still not yet sought any defense from the insurer, despite receipt of service and informal correspondence with Plaintiff’s counsel. Defendant’s inexcusable neglect is justly attributable to itself.

The motion is therefore DENIED.

*The subsection’s specific application to natural persons is confirmed by the statutory sections it references (Code of Civil Procedure §§ 416.60, 416.70, 416.80, and 416.90) and the Judicial Council Comments pertaining to the statute.