Judge: Malcolm Mackey, Case: 21STCV41035, Date: 2023-08-04 Tentative Ruling

Case Number: 21STCV41035    Hearing Date: August 4, 2023    Dept: 55

JACOBSON v. GARZA,                                                      21STCV41035

Hearing Date:  8/4/23,  Dept. 55

#3:   MOTION TO SET ASIDE JUDGMENT.

Notice:  Okay

Opposition

MP:  Defendant

RP:  Plaintiffs

Summary

On 11/8/21, plaintiffs JOSHUA JACOBSON AND EQUISOLAR, INC. filed a Complaint for Declaratory Relief, alleging that non-party Kristin Bartok, claiming to be an agent for Defendant JESUS "JESSE" GARZA, admitted, to plaintiffs’ counsel, the invalidity of a financing statement created due to Plaintiff’s not refunding payments or paying damages for nonperformance of a solar panel contract, and Bartok offered to withdraw the liens regarding Defendant’s dispute regarding Plaintiff’s failure to sell solar panels to the homeowner, but never did withdraw the lien.

MP Positions

Moving parties request an order to set aside the default and default judgment in this matter,  allowing moving party to defend this action on its merits, on grounds including the following:

·         Defendant was never personally served with the summons and Complaint.

·         The first time Defendant received notice of this case was on April 28, 2023, when a person substitute-served with the summons at the wrong residential address, contacted Defendant.  CCP   § 473.

·         Defendant did not have notice in time to defend.  CCP   § 473.5.

·         On May 2, 2023, that Defendant retained counsel to represent him, and defense counsel contacted Plaintiff's Counsel in the hopes of reaching an agreement to set aside the default judgment.

RP Positions

Opposing party advocates denial, or granting with several conditions, such as payment of a $1000 penalty, for reasons including the following:

·         Defendant wants to set aside the default judgment based on a skeletal answer with sixteen affirmative defense (two of which are not actually affirmative defenses) that is nowhere near in compliance with factual pleading requirements.

·         The apparent motive is to revive the false Financing Statement, when Plaintiff’s evidence supports the conclusion of falsity.  The judgment imposes no monetary damages or costs on defendant, only the expungement of a false UCC-1 financing statement.

·         The process server declaration is more credible than Defendant’s.

Tentative Ruling

The motion is granted.

The Court vacates and sets aside default entered 11/9/22 and default Judgment filed 12/7/22.

Defendant’s proposed Answer may be served and filed, as a separate document, within 10 days.

The opposing request for conditions is denied, the Court finding no just basis for that.

Just conditions for default relief generally “may only redress costs incurred as a result of the default,” but sometimes courts are permitted to order a deposit or bond for plaintiffs in the event of their recovery.  Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1147-48.

Further, the Court finds Defendant’s declaration credible in showing that the address served is not his residence, and that Defendant did not have notice in time to defend.

A trial court has discretion as to whether to accept a process server declaration, or contradictory evidence, in deciding whether service of a summons and complaint was validly accomplished.  Am. Express Centurion Bank v. Zara (2011) 199 Cal. App. 4th 383, 390;  Khourie, Crew & Jaeger v. Sabek, Inc.  (1990) 220 Cal. App. 3d 1009, 1014. 

“ ‘In order to qualify for [discretionary] relief under section 473, the moving party … must submit affidavits or testimony demonstrating a reasonable cause for the default.’ ”  Huh v. Wang (2007) 158 Cal.App.4th 1406, 1419.

“Section 473.5, subdivision (c) allows the court to set aside the default judgment if it finds the defendant's lack of actual notice in time to defend was not caused by the defendant's avoidance of service or inexcusable neglect.”  Ellard v. Conway (2001) 94 Cal. App. 4th 540, 547.

The opposition, focused on proving the merits of the Complaint, disproving defenses, and attacking the pleading, does not relate to any cognizable ground to deny relief from default.

There is no longer any requirement of showing a meritorious defense as to a statutory motion to set aside default.  Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1144.

As for the merits of the Complaint, there is a modicum of law indicating that an order directing the Secretary of State to expunge a UCC-1 recording, is probably authorized.  See, e.g.,  Cal. Bus. Law Deskbook § 11:115  (citing U.S. v. Biggs, 2007 WL 3313022, *11 (E.D. Cal. 2007) (“holding that plaintiffs “‘are entitled to its requested relief of an order declaring the financing statements void, authorizing the California Secretary of State to expunge them from the public record, and enjoining defendants from filing any more financing statements’”); Lightstorm Entertainment, Inc. v. Cummings, 2021 WL 2483792, *3 (C.D. Cal. 2021) (“‘a party improperly named as a debtor in a UCC-1 is entitled to injunctive relief pursuant to [§ 9625(a)]’”), available on Westlaw.