Judge: Mark A. Young, Case: 23SMCV02865, Date: 2025-01-08 Tentative Ruling

Case Number: 23SMCV02865    Hearing Date: January 9, 2025    Dept: M

CASE NAME:           Berman, et al., v. Orcones Trucking Inc., et al.

CASE NO.:                23SMCV02865

MOTION:                  Motion to Vacate Default

HEARING DATE:   1/9/2024

Legal Standard

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 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 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.)¿ 

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 Orcones Trucking Inc. moves to set aside default against it entered on or about September 21, 2023, and requests leave to file an answer.

            Defendant’s motion is untimely on all grounds. (CCP §§473(b), 473.5.) The record demonstrates that Defendant received actual notice of this lawsuit in time to defend. Plaintiffs filed this suit on June 27, 2023. Default was entered against Defendants on August 31, 2023. Default judgment was entered against Defendant on September 21, 2023. The motion was filed more than a year after from both events, on October 22, 2024. This is outside the jurisdictional six month period for section 473 relief.

Furthermore, Defendant had actual knowledge of this suit in time to defend the suit. Defendant explains that it made a mistake in believing that, because it timely notified its insurance broker, the broker was going to handle all issues including appointment of counsel. (Wang Decl., ¶¶ 5-6.) The principal of Defendant admits to being sub-served on July 12, 2023, and passing along the documents to his insurance (Gacia Decl., ¶ 5.) Thus, section 473.5 relief is also unavailable.

Defendant also did not move within a reasonable amount of time after acquiring knowledge of the default. Counsel admits that on April 11, 2024, they were assigned to this case by Defendant’s insurer. (Wang Decl., ¶ 4.) Despite counsel’s claim to be reasonably investigating the service at this juncture, Defendant waited another six months to file the instant motion.

Accordingly, the motion is DENIED.