Judge: Maurice A. Leiter, Case: 23STCV23945, Date: 2024-09-05 Tentative Ruling

Case Number: 23STCV23945    Hearing Date: September 5, 2024    Dept: 54

Hearing Date: September 5, 2024

Department 54, Judge Maurice Leiter

Motion: Motion to Set Aside Default and Default Judgment

Moving Party: Defendants Nectar, Inc., and Darren Sarravis

Responding Party: Plaintiff Incentax, LLC

Recommendation -

            The Court considers the moving papers, opposition, and reply. The Motion to Set Aside Default and Default is GRANTED.

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 8:30 am on the day of the hearing.

BACKGROUND

 On October 2, 2023, Incentax, LLC sued Nectar Inc., and its Chief Executive Officer Darren Savarris[1] alleging six causes of action based on a breach of contract. Default judgment was entered against Defendants on May 29, 2024. Defendants now move to set aside the default and default judgment.  

ANALYSIS

Code of Civil Procedure § 473(b) provides: "The 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....”

Judges must vacate dismissals, default entries, and default judgments “whenever (1) an application is made no more than six months after entry of judgment, (2) the application is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, and (3) the attorney's mistake, inadvertence, surprise or neglect in fact caused the dismissal or entry of default.” (Benedict v. Danner Press  (2001) 87 Cal.App.4th 923, 927 (citing CCP §473(b)). Also see Wagner v. Wagner (2008) 162 Cal.App.4th 249, 258.)

Where counsel seek relief alternatively under both the excusable and attorney-fault provisions of Code of Civil Procedure Section 473 and confirms that any act or omission leading to the entry of the default was done without the client's knowing participation, relief is mandatory. (Solv-All v. Sup. Ct. (2005) 131 Cal.App.4th 1003, 1012. Under Code of Civil Procedure Section 473, "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.”’”  State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal. App. 4th 600, 611.)

            In December of 2023, Defendant retained Avyno La, P.C., with attorney Jan Sundberg as lead counsel. At the time, Sundberg was in settlement discussions with Plaintiff’s attorney, Amir Benakote. Benakote filed a Request for Entry of Default on December 29, 2023, after the parties had agreed that Sundberg was not required to file an answer.

            On April 11, 2024, it was found that Sundberg mis-calendared the matter. On April 19, 2024, Sundberg spoke with Plaintiff’s new attorney, Lisa Spiwak. Spiwak informed Sundberg that default had been entered in the case, but agreed to a stipulation to set aside if Sundberg prepared a draft. Spiwak followed up with Sundberg on three separate occasions, receiving no response. Spiwak then moved forward with default. Sundberg claims that although Spiwak notified her that default had been entered on April 19, 2024, Sundberg nor her client received notice.

            Sundberg’s handling of this matter has hardly been exemplary. He took on the matter in December 2023 but did not enter an appearance. While there may have been ambiguity as to whether the parties agreed to defer an answer while they discussed settlement, Sundberg did not address the situation promptly when he learned the matter was in default. Defense counsel explains that personal emergencies impacted his ability to handle the matter. In any event, Sundberg’s client should not be penalized for counsel’s neglect. The Court grants the motion under Code Civ. Proc. §473(b).