Judge Mark A. Young, Case 20SMCV01063 2022-10-25 Tentative Ruling

Judge: Mark A. Young, Case: 20SMCV01063, Date: 2022-10-25 Tentative Ruling

Case Number: 20SMCV01063 Hearing Date: October 25, 2022 Dept: M

CASE NAME: Menkes v. Palms Blvd. Venice Beach LLC, et al.

CASE NO.: 20SMCV01063

MOTION: Motion to Vacate Default/Default Judgment

HEARING DATE: 10/25/2022

BACKGROUND

On August 7, 2020, Plaintiff Nina Menkes filed the instant action against Defendants Palms Blvd Venice Beach, LLC (“PBVB”) and Andre Wegner (Doe 1). Plaintiff alleges that PBVB ran an illegal, for-profit, “party house” on a 24/7 basis directly next door to her through the duration of the COVID-19 pandemic. Plaintiff brought seven causes of action for Private Nuisance, Public Nuisance, Trespass, Intentional Infliction of Emotional Distress, Negligence, Unjust Enrichment, and Violation of Business & Professions Code §§ 17200, et seq.

On August 13, 2020, Plaintiff served PBVB at 1352 Palms Blvd., Venice CA (real property owned by PBVB) through an employee. PBVB filed no responsive pleading. On September 30, 2020, Plaintiff filed and served doe amendments, including a doe amendment adding Wegner. On October 8, 2020, Plaintiff sub-served Wegner at property owned by him, a mobile home located at 32802 Valle Rd, SPC 126, San Juan Capistrano, CA 92675. On July 6, 2021, Plaintiff filed requests for entry of default against Wegner and PBVB. Default judgment was entered against Wegner and PBVB on September 7, 2021.

On May 2, 2022, the Court issued a writ of Execution. On June 23, 2022, Defendant filed the instant motion to vacate default and default judgment. Plaintiff opposes.

Legal StandardS

CCP § 473(b)

Relief under Code of Civil Procedure section 473(b) is either discretionary or mandatory. A motion for mandatory relief must be made no more than six months after entry of judgment and be accompanied by an attorney’s sworn affidavit attesting to the attorney’s “mistake, inadvertence, surprise or neglect.” (CCP § 473(b).) The attorney affidavit of fault must contain a “straight forward admission of fault.” (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 610.) But it need not contain an explanation of the reasons for the attorney’s mistake, inadvertence surprise or neglect. (Martin Potts & Assocs., Inc. v. Corsair, LLC (2016) 244 Cal.App.4th 432, 438-441.) Relief must be granted “unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect.” (Ibid.) If mandatory relief is granted, the court must “direct the attorney to pay reasonable compensatory legal fees and costs” to the opposing counsel or parties. (CCP § 473(b).)

Where a party cannot obtain an attorney affidavit of fault, the party may seek discretionary relief under Code of Civil Procedure section 473(b) due to “mistake, inadvertence, surprise, or excusable neglect.” (CCP § 473(b).) A motion for discretionary relief must be made “within a reasonable time but in no instance exceeding six months after the judgment, dismissal, order, or proceeding was taken.” (Id.) If discretionary relief is granted, the court may in its discretion order the moving party to pay the costs, including attorney fees, incurred in obtaining the default. (Rogalski v. Nabers Cadillac (1992) 11 Cal.App.4th 816, 823; Vanderkous v. Conley (2010) 188 Cal.App.4th 111, 118-119.) If the motion for discretionary relief is granted, the court may order the offending attorney to pay monetary sanctions up to $1,000 to opposing parties, or up to $1,000 to the State Bar Client Security Fund, or “[g]rant other relief as is appropriate.” (CCP § 473(c)(1)(A), (B), (C).)

A motion for relief under section 473(b) “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).) However, this requirement is not jurisdictional; substantial compliance may suffice. (Carmel, Ltd. v. Tavoussi (2009) 175 Cal.App.4th 393, 403 [finding substantial compliance where counsel offered proposed answer at motion hearing rather than serving it with moving papers].)

CCP § 473(d)

Code of Civil Procdure section 473(d) states that “[t]he court may . . . on motion of either party after notice to the other party, set aside any void judgment or order.” “California is a jurisdiction where the original service of process, which confers jurisdiction, must conform to statutory requirements or all that follows is void.” (Honda Motor Co. v. Superior Court (1992) 10 Cal.App.4th 1043, 1048.) There is no time limit on when a void judgment can be challenged. (Deutsche Bank National Trust Co. v. Pyle (2017) 13 Cal.App.5th 513, 526.) A defendant must also show that service of the Summons and Complaint did not substantially comply with the statutory requirements, which can be shown by a failure of actual notice. (Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1442-1443.)

CCP § 473.5

Code of Civil Procedure section 473.5(a) permits the court to set aside a default or default judgment “[w]hen service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against him.” “The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered .” (Id.) The phrase “actual notice” means “genuine knowledge of the party litigant” and does not include constructive or imputed notice to the client. (Tunis v. Barrow (1986) 184 Cal. App. 3d 1069, 1077.) A defendant also must show that his “lack of actual notice in time to defend the action was not caused by his inexcusable neglect or avoidance of service.” (Id. at 1077-1078.) Further, the court is “not required to accept [a] self-serving evidence contradicting the process server's declaration.” (Rodriguez v. Nam Min Cho (2015) 236 Cal.App.4th 742, 751.)

Equitable Relief

To qualify for equitable relief based on extrinsic mistake, which exists when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits, the defendant must demonstrate: (1) “a meritorious case”; (2) “a satisfactory excuse for not presenting a defense to the original action”; and (3) “diligence in seeking to set aside the default once the fraud [or mistake] had been discovered.” (Mechling v. Asbestos Defendants (2018) 29 Cal.App.5th 1241, 1245-1246 (citing In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1071).)

Analysis

Defendant Andre Wegner moves to vacate the default and default judgment entered against him on September 7, 2021. (CCP § 473(b), 473(d), 473.5.) This default was based on the proof of service filed on May 20, 2021. The proof of service indicates substituted service occurred on October 8, 2020, at 32802 Crown Valley Parkway Dr., Spc. 126, San Juan Capistrano, CA, 92675. Process was served on Jose Delgado, purported assistant to Defendant and authorized to accept service. Defendant also notes that he has a meritorious defense and affirmative claims against Plaintiff and third parties responsible for Plaintiff’s damages.

First, the motion under Code of Civil Procedure section 473(b) is untimely. This motion was made more than six months after the entry of judgment. Thus, the Court lacks authority to grant the motion under this section.

As to Code of Civil Procedure sections 473(d) and 473.5, Defendant argues that he did not receive actual notice of this lawsuit from the improper service of summons. Defendant also seeks to vacate the judgment on equitable grounds, which would substantially follow the same analysis. Defendant argues that service on Delgado at the Crown Valley Parkway address was invalid. He argues that Delgado is not the agent for service of process for PBVB, and never authorized to accept service on Defendant’s behalf. The address listed is at a mobile home park and was the residential address for Delgado. (Wegner Decl., ¶¶ 6-11.) Delgado recently passed away on February 22, 2022. Delgado could only speak Spanish, and could not read, write or speak English—although Plaintiff notes the process server spoke Spanish. (Muller Decl., ¶ 11.) Delgado never advised the Movant that he was served with any Summons. (Wegner Decl.) Defendant has never resided at that location, and never used that address to conduct business.

Defendant claims to have learned of this case on May 15, 2022, after he received notice for the sale of real property in Texas. Apparently, Defendant is on the title of the property due to his ability to obtain a “very good loan” for the property, but otherwise does not hold an interest in the property. (See Brothers Decl.) Thus, Defendant concludes that service on Delgado did not provide actual notice to Wegner.

Plaintiff presents evidence contradicting Defendant’s position. First, Wegner is a managing member of PBVB. (Muller Decl., Exs. 1-2.) Wegner listed the service and business address for Defendant PBVB as 30262 Crown Valley Parkway, Laguna Niguel, CA 92677. The bankruptcy filing by PBVB in January 2022 lists this address as PBVB’s address. (RJN Ex. 2.) Defendant only provides evidence that he no longer has an interest in PBVB. (RJN Exs. 1-2.) Instead, he passively refers to the request for judicial notice to conclude this. Defendant never denies ever having an interest in PBVB, such as at the time of service. On the other hand, as of September 24, 2019, Wegner was the registered agent for service of process for PBVB. (Muller Decl., Ex. 1.) In a separate suit, Wegner declared multiple times in April 2021 that he was the “managing member of” PBVB. (Ex. 2.)

Notably, Plaintiff served PBVB at 1352 Palms Blvd, Venice, CA 90291, the real property “then owned” by PBVB. Plaintiff served PBVB via an employee, Jill Gia, who identified herself as an employee and authorized agent. Defendant ignores this service on PBVB, and the potential notice that this service provided him. Furthermore, Wegner presents evidence that confirms he, in fact, does rent a mailbox from the Crown Valley Parkway address. Plaintiff notes that all documents served on Defendant were served via those addresses, including the default notices.

Plaintiff additionally demonstrates that Defendant had earlier, actual notice of this action in April 2022 rather than May 2022. Plaintiff offers evidence that his Texas counsel served Wegner with notices relating to these proceedings in April 2022. (Muller Decl., ¶ 28.) Counsel presents Wegner’s signature on a return receipt dated April 11, 2022. (Ex. 6.) The return receipt indicates that it is related to this judgment: “Menkes.ForeignJudgmentWedgner040822.” Otherwise, the exhibit and counsel do not describe the contents of the delivery. Plaintiff provides convincing evidence that Wegner signed a return receipt of a package related to this judgment in April. (Muller Decl., Ex. 6.) To the Court, this discrepancy demonstrates Wegner’s dishonesty about about his knowledge of this suit. As such, the Court concludes that it is more likely that Wegner did have actual notice of this suit than not, and believed himself to be judgment proof until Plaintiff’s discovery of the Texas property.

The motion is also therefore untimely. Plaintiff served written notices of the default judgment on Wegner at the Crown Valley Parkway address, and PBVB (c/o Wegner) at the Palms address on July 6, 2021. Plaintiff similarly served the judgment on September 22, 2021. Defendant filed the motion more 185 days later, in May 2022. Finally, Defendant does not provide a proposed responsive pleading. This is required for relief under any requested basis.

Accordingly, Defendant’s motion is DENIED.