Judge: Mark E. Windham, Case: 23STLC06102, Date: 2024-03-04 Tentative Ruling
Case Number: 23STLC06102 Hearing Date: March 4, 2024 Dept: 26
National Commercial Recovery, Inc. v. Neoglory
Jewelry, et al.
VACATE DEFAULT AND DEFAULT JUDGMENT
(CCP §§ 418.10, 473(b), 473.5, 473(d))
TENTATIVE RULING:
Defendants Neoglory Jewelry, Yue Lu and Li Wu’s Motion to
Vacate Default and Default Judgment is DENIED.
ANALYSIS:
On September 20, 2023, Plaintiff National Commercial
Recovery, Inc. dba Blair Smith and Associates (“Plaintiff”) filed the instant
action against Defendants Neoglory Jewelry (“Neoglory”), Yue Lu (“Defendant
Lu”) and Li Wu (“Defendant Wu”). Plaintiff filed proofs of substitute service
of the Summons and Complaint on October 3, 2023. When Defendants failed to file
a responsive pleading, Plaintiff obtained their default on November 22, 2023
and default judgment on December 26, 2023.
On February 7, 2024, Defendants filed the instant Motion to
Vacate Default and Default Judgment. Plaintiff filed an opposition on February
13, 2024.
Discussion
Defendants move for relief pursuant to Code of
Civil Procedure sections 473, subdivision (b), section 473.5, or Code of
Civil Procedure section 473, subdivision (d).
Defendants Neoglory Jewelry and Yue Lu
According to the proof of substitute service, Defendant
Neoglory was sub-served by leaving the papers with Gensheng Lyu, the father of
its agent for service of process, Defendant Lu, at 15929 Ladysmith St Hacienda
Heights on September 28, 2023. (Proof of Substitute Service, filed 10/03/23,
¶¶3-5.) Two attempts at personal service were made prior to leaving the papers
with Lyu and were thereafter mailed to the service address. (Id. at pp.
3-4.)
The Motion for relief is supported by the declaration of
Defendant Lu, who states that they instructed their accountant to close the
business in June 2023 and were not involved in the company after that. (Motion,
Lu Decl., ¶4.) Lu also declares that they told Lyu the business was closed in
June 2023 and that Defendant Wu was the person in charge. (Id. at ¶5.)
Lyu did not inform Defendant Lu of the papers because Lyu believed that
Defendant Lu was no longer involved in the business. (Id. at ¶6.) Defendant
Lyu did not learn of the action until November 2023 when informed by their
attorney. (Ibid.)
Under Code of Civil
Procedure section 473, subdivision (b), an application for relief must be made
no more than six months after entry of the order from which relief is sought,
and must be accompanied by an affidavit of fault attesting to the mistake, inadvertence,
surprise or neglect of the moving party or its attorney. (Code Civ. Proc., §
473, subd. (b); English v. IKON Business Solutions (2001) 94 Cal.App.4th
130, 143.) The motion must also be accompanied by a copy of the moving
defendant’s proposed pleading. (Code Civ. Proc., § 473, subd. (b).) This can be
corrected if Defendant submits a proposed responsive pleading by the hearing
date. (Code Civ. Proc., § 473, subd. (b); Carmel, Ltd. v. Tavoussi
(2009) 175 Cal.App.4th 393, 403.)
The Motion is also brought under Code of Civil Procedure
section 473.5, subdivision (a):
When 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 or
her in the action, he or she may serve and file a
notice of motion to set aside the default or default judgment and for
leave to defend the action. 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.
(Code Civ. Proc., § 473.5, subd. (a).)
Additionally, the motion “shall be accompanied by an affidavit showing under
oath that the party's lack of actual notice in time to defend the action was
not caused by his or her avoidance of service or inexcusable neglect. The party
shall serve and file with the notice a copy of the answer, motion, or other
pleading proposed to be filed in the action.” (Code Civ. Proc., § 473.5, subd.
(b).) Again, the Motion is timely and supported by a proposed answer. However,
it is not supported by a declaration showing under oath that lack of notice was
not caused by inexcusable neglect. As noted above, the Summons and Complaint
were not just left with Lyu but mailed to the service address.
The Motion for relief is denied as to Defendants
Lu and Neoglory Jewelry.
Defendant Li Wu
According to the proof of substitute service, Defendant Wu
was also sub-served by leaving the papers with Gensheng Lyu, identified as
Defendant Wu’s uncle, at 15929 Ladysmith St., Hacienda Heights on September 28,
2023. (Proof of Substitute Service, filed 10/03/23, ¶¶3-5.) Defendant Wu
declares that 15929 Ladysmith St. was neither their business address nor
residence. (Motion, Wu Decl., ¶¶3-4.) Defendant Wu was informed of the Summons
and Complaint by Lyu and reached out to Plaintiff’s counsel. (Id. at
¶¶5-6.) Defendant Wu did not understand the need to file an answer because they
believed the amount owed had been paid off. (Id. at ¶¶6-7.)
Defendant Wu moves to vacate the default and
default judgment on the grounds that it is void, pursuant to Code of
Civil Procedure section 473, subdivision (d), which states that “[t]he court
may, .... on motion of either party after notice to the other party, set aside
any void judgment or order.” (Code Civ. Proc., § 473, subd. (d).) Rogers v.
Silverman (1989) 216 Cal.App.3d 1114, 1116 holds that the limitations
period contained in Code of Civil Procedure section 473.5 applies by analogy to
motions brought under Code of Civil Procedure section 473, subdivision (d). As
noted above, the Motion is timely under Code of Civil Procedure section 473.5. The
Motion disputes that Defendant Wu had any connection to the 15929 Ladysmith St.
address but Plaintiff’s opposition demonstrates that this was the business’
principal office and mailing address. (Opp., Besnyl Decl., Exh. A.) Defendant
Wu offers no evidence to corroborate their contention that the business address
was 625 S Hill Street Booth #119, Los Angeles. (See Motion, Wu Decl., ¶3.)
Service of the Summons and Complaint on Defendant Wu, therefore, was in
accordance with the statutory requirements.
The other basis
for relief sought by Defendant Wu is Code of Civil Procedure section 473,
subdivision (b). As discussed above, the Motion is timely and supported by a
copy of Defendant Wu’s answer to the Complaint. However, again, the Motion does
not describe how Defendant Wu’s failure to understand the need to file an
answer following receipt of the papers and conversation with Plaintiff’s
counsel amounts to mistake, inadvertence, surprise, or excusable neglect, as
defined by the law. The Motion is also denied as to Defendant Wu.
Conclusion
Defendants Neoglory Jewelry, Yue Lu and Li Wu’s Motion to
Vacate Default and Default Judgment is DENIED.
Court clerk to give notice.