Judge: Maurice A. Leiter, Case: 19STCV25759, Date: 2022-12-05 Tentative Ruling

Case Number: 19STCV25759    Hearing Date: December 5, 2022    Dept: 54

Hearing Date: December 5, 2022 (c/f November 9, 2022)

Department 54, Judge Maurice A. Leiter

1. Motion for an Order Vacating and Setting Aside Entry of Default; and

2. Motion to Quash Service of Summons

(1)-(2) Moving Party: Specially Appearing Defendants Bellisio Foods, Inc., C.P. Food Products, Inc., C.P. Foods, Inc., and C.P. Foods West, Inc.

(1)-(2) Responding Party: Plaintiff Eva D’Avella

T/R:     SPECIALLYLY APPEARING DEFENDANTS’ MOTION TO SET ASIDE DEFAULT JUDGMENT IS GRANTED.

SPECIALLYLY APPEARING DEFENDANTS’ MOTION TO QUASH IS GRANTED.

            DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing. 

The Court considers the moving papers, opposition, and reply.

BACKGROUND 

 On July 24, 2019, Plaintiff Eva D’Avella filed a complaint against Defendants Overhill Farms, Inc., Bellisio Foods, Inc., C.P. Food Products, Inc., C.P. Foods, Inc., and C.P. Foods West, Inc., asserting causes of action for violations of FEHA, wrongful termination in violation of public policy, and intentional infliction of emotional distress.

On July 21, 2022, defaults were entered against Defendants Bellisio Foods, Inc., C.P. Food Products, Inc., C.P. Foods, Inc., and C.P. Foods West, Inc. (“Specially Appearing Defendants”).

On September 15, 2022, the Specially Appearing Defendants moved to quash the service of summons for lack of personal jurisdiction. They also moved to set aside the entries of default against them.

On November 9, 2022, the Court continued the motion to quash to be heard at the same time as their motion to set aside default. The Court could not decide the motion to quash while the Specially Appearing Defendants were in default.

ANALYSIS

1. Motion to Set Aside Default

CCP § 473(b) provides, in pertinent part, “[t]he 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.”

The Court has broad discretion to vacate the entry of default, default judgment, or a dismissal where the moving party timely establishes a proper ground for relief.  (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495.)  “Apart from any statute, courts have the inherent authority to vacate a default and default judgment on equitable grounds such as extrinsic fraud or extrinsic mistake.”  (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 97.)  A motion seeking such equitable relief “‘may be brought on such ground even though the statutory period [for relief under Code of Civil Procedure section 473, subdivision (b)] has run.’ [Citation.]”  (Id.) 

1. Standing

Plaintiff asserts that the Specially Appearing Defendants lack standing to bring a motion to set aside default because it is brought by Defendant Overhill Farms Inc. on their behalf. (Opposition re: Set Aside Defaults at pp. 8-9.) Because their motion to set aside default is joined with their motion to quash service of summons, it is not considered a general appearance; their Specially appearance is permissible. (C.C.P. § 418.10(d); Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1246, 1251.) They have standing to bring this motion.

1. Timeliness

Under CCP § 473(b), an application for relief must be made no more than six months after entry of the order from which relief is sought. Where a party moves for mandatory relief under section 473, the six-month deadline runs from the entry of default judgment. (See Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 296-297 [finding that the six-month deadline to apply for relief based on attorney neglect runs from the entry of default judgment and that the order granting relief sets aside the default and the default judgment].) 

As discussed below, relief is warranted under CCP § 473(b) due to attorney fault. A default judgment has not yet been entered; the six-month deadline has not elapsed.

1. CCP § 473(b)

The party moving for relief under CCP § 473(b) has the burden of showing through declarations or other evidence that default was entered “due to some mistake, either of fact or of law of himself, or of his counsel, or through some inadvertence, surprise or neglect which may properly be considered excusable….” (Kendall v. Barker (1988) 197 Cal.App.3d 619, 623-624.)

Specially Appearing Defendants first argue that the defaults entered against them should set aside pursuant to CCP § 473(b) because of mistake, inadvertence, surprise, or excusable neglect. They assert they were improperly included in this lawsuit because there is no factual basis to support the allegation that they employed Plaintiff, and Plaintiff has failed to find any evidentiary support in three years of litigation. (Id. at pg. 14.) This is not a basis for relief pursuant to CCP § 473(b); the mistake must have been perpetrated by the moving defendant or his attorney of record, not the plaintiff.

Next, they argue that the entries of default were due to surprise and inadvertence. Counsel for the Specially Appearing Defendants reviewed the register of actions in this case, and while the requests for entry of default were filed on July 21, 2022, counsel did not see any indication that the Court’s clerk entered the requested defaults. (Motion re: Set Aside Defaults at pg. 14; Schaedel Decl. ¶ 16, Exh. H.) Counsel also indicated that he believed this case had been stayed pending arbitration. (Schaedel Decl. ¶ 12, Exh. F.)

Relief under § 473(b) is warranted. As used in Section 473(b), “surprise” means “some condition or situation in which a party … is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against.” (Credit Managers Association. v. National Independent Business Alliance (1984) 162 Cal.App.3d 1166, 1173.) “Inadvertence is defined as lack of heedfulness or attentiveness, inattention, fault from negligence.” (Hodge Sheet Metal Products v. Palm Springs Riviera Hotel (1961) 189 Cal.App.2d 653, 656.) The Court also must set aside default based on an attorney affidavit of fault. Counsel declares that the failure to respond or file a motion to quash sooner was due to counsel’s belief that the case had been stayed. Counsel’s error need not be excusable or reasonable to set aside entry of default. 

The Court grants the Specially Appearing Defendants’ motion to set aside default on this ground. The Court need not address other grounds to set aside default.

1. Sanctions

Specially Appearing Defendants argue Plaintiff should be sanctioned pursuant to California Rules of Court, rules 2.30(b) and 3.110(g) and CCP § 575.2(a) for failing to abide by applicable rules.

To the extent that the Specially Appearing Defendants seek monetary sanctions against Plaintiff for maintaining an action against them without proper evidentiary support or personal jurisdiction, this motion is an improper vehicle for such sanctions.  They should have pursued a motion pursuant to CCP § 128.7, which has its own safe-harbor provision.

The Court also finds that sanctions are not appropriate under CRC rule 3.110(g). Under this rule, a “plaintiff must file a request for entry of default within 10 days after the time for service has elapsed,” and otherwise “the court may issue an order to show cause why sanctions should not be imposed if the plaintiff fails to timely file the request for the entry of default.” Due to the elapse of time caused by the appeal and the pending arbitration, setting an order to show cause pursuant to CRC rule 3.110(g) is not warranted under the circumstances.

            The Court denies the Specially Appearing Defendants’ request for monetary sanctions.

1. Motion to Quash Service of Summons

“A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes: (1) To quash service of summons on the ground of lack of jurisdiction of the court over him or her.”¿ (CCP § 418.10(a)(1).)¿

“When a motion to quash is properly brought, the burden of proof is placed upon the plaintiff to establish the facts of jurisdiction by a preponderance of the evidence.” (Aquila, Inc. v. Superior Court (2007) 148 Cal.App.4th 556, 568.) A summons is the means by which a court acquires personal jurisdiction over a civil defendant, and compels them to appear in court. (Mannesmann DeMag, Ltd. v. Superior Court (1985) 172 Cal.App.3d 1118, 1122.)  A defendant is under no duty to respond in any way to a defectively served summons. (Kappel v. Barlett (1988) 200 Cal.App.3d 1457, 1466; Ruttenberg v. Ruttenberg (1997) 53 Cal.App.4th 801, 808.) It makes no difference that defendant had actual knowledge of the action, as such knowledge does not dispense with the statutory requirements for service of summons. (Ibid.)

1. Procedural Issues

As discussed above, these Defendants have standing to bring this motion.

Plaintiff argues that the instant motion is untimely because it was not filed within 30 days after being served with the summons and complaint. (Opposition re: Quash at pg. 3.) Generally, a motion to quash service of summons on the ground of lack of personal jurisdiction must be filed “on or before the last day of his or her time to plead or within any further time that the court may for good cause allow.” (CCP § 418.10(a)(1).) There is good cause to permit this motion to quash. The parties were engaged in a meet and confer to try to avoid filing a motion to quash. (Motion re: Quash at pp. 8-9; Schaedel Decl. ¶¶ 4-11, Exhs. A-F.)

1. Lack of Personal Jurisdiction

Specially Appearing Defendants seek to quash the service of summons on the grounds that California lacks general and specific jurisdiction over them.

“When a defendant moves to quash service of process on jurisdictional grounds, the plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction.  Once facts showing minimum contacts with the forum state are established, however, it becomes the defendant’s burden to demonstrate that the exercise of jurisdiction would be unreasonable.”  (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449 (Citations Omitted).)

“Personal jurisdiction may be either general or specific. A nonresident defendant may be subject to the general jurisdiction of the forum if his or her contacts in the forum state are ‘substantial…continuous and systematic.’ In such a case, ‘it is not necessary that the specific cause of action alleged be connected with the defendant's business relationship to the forum.’ Such a defendant’s contacts with the forum are so wide-ranging that they take the place of physical presence in the forum as a basis for jurisdiction.”  (Id. at 445-446 (Citations Omitted).)

“If the nonresident defendant does not have substantial and systematic contacts in the forum sufficient to establish general jurisdiction, he or she still may be subject to the specific jurisdiction of the forum, if the defendant has purposefully availed himself or herself of forum benefits, and the ‘controversy is related to or ‘arises out of’ a defendant’s contacts with the forum.’” (Id. at 446 (Citations Omitted).) “The first element of specific jurisdiction is whether the defendant purposefully availed himself of forum benefits. Courts apply the “ ‘effects test’ ” to determine purposeful availment in the defamation context. (Citation.) Under this test, intentional conduct occurring elsewhere may give rise to jurisdiction in California where it is calculated to cause injury in California. The defendant must expressly aim or target his conduct toward California, with the knowledge that his intentional conduct would cause harm in the forum. (Dongxiao Yue v. Wenbin Yang (2021) 62 Cal.App.5th 539, 547 (Citations omitted).)

Specially Appearing Defendants argue there is no general jurisdiction: they are not domiciled in California, lack a physical presence in the state, and do not engage in business in the state. (Motion re: Quash at pp. 7, 12-13; Drays Decl. ¶¶ 2-7; Rodriguez at ¶ 5.) The argue they lack any control over or involvement with Overhill Farm, Inc.’s operations. (Id.) As to specific jurisdiction Specially Appearing Defendants assert they have not purposefully availed themselves to jurisdiction in California, and have not engaged in any advertisements or marketing activities in California. (Id.)

In its attempt to meet its initial burden, Plaintiff merely argues that Specially Appearing Defendants were served through Jaime Serrano, who was their collective vice president. (Opposition re: Quash at pg. 5; Farkas Decl. ¶ 5, Exh. D.) But Specially Appearing Defendants have presented evidence that Mr. Serrano was only the vice president of human resources for Overhill Farms, Inc. (Schaedel Decl., Exh. A; Rodriguez Supplemental Decl. ¶ 7.) There are no grounds to suggest that Mr. Serrano had implied authority to accept service on behalf of the Specially Appearing Defendants. Even if he did, this would not satisfy Plaintiff’s burden of showing personal jurisdiction.

The Court grants the Specially Moving Defendants’ motion to quash service of summons.