Judge: Maurice A. Leiter, Case: 24STCV23332, Date: 2025-05-12 Tentative Ruling

Case Number: 24STCV23332    Hearing Date: May 12, 2025    Dept: 54

Hearing Date: May 12, 2025

Department 54, Judge Maurice Leiter

Motion to Set Aside/Vacate Judgment

Moving Party: Defendant GLS US Freight, LLC

Responding Party: Plaintiff Capital Credits Group, LLC dba The Enterprise Zone Company

T/R:     THE MOTION TO SET ASIDE/VACATE JUDGMENT IS GRANTED. DEFENDANT’S REQUEST FOR SANCTIONS IS DENIED.

DEFENDANT 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 September 10, 2024, Plaintiff Capital Credits Group, LLC dba The Enterprise Zone Company sued Defendants GLS US Freight, Inc. and James Blevins for: (1) Breach of Written Contract; (2) Breach of The Implied Covenant of Good Faith and Fair Dealing; (3) Quantum Meruit; (4) Declaratory Relief; (5) Common Count – Good and Services Rendered; (6) Common Count – Account Stated; and (7) Common Count – Open Book Account.

On March 17, 2025, the Court entered a Stipulated Judgment on the Offer to Compromise and Acceptance under Code of Civil Procedure Section 998 between Plaintiff and GLS. On March 26, 2025, the Court dismissed GLS with prejudice.

ANALYSIS

Pursuant to Code of Civil Procedure Section 473(b), a court may “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.” In addition, a court must vacate a default or dismissal when a motion for relief under Section 473(b) is filed timely and accompanied by an attorney’s sworn affidavit attesting to the attorney’s mistake, inadvertence, surprise or neglect “unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise or neglect.”¿ (Code Civ. Proc., § 473, subd. (b).)¿¿¿ 

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Defendant GLS moves to set aside or vacate the judgment entered on March 17, 2025 and compel Plaintiff and/or its legal representative, Amir Benakote of Golden State Employment Lawyers to pay the attorneys’ fees and costs GLS incurred in bringing this motion. GLS contends it did not stipulate to the judgment entered and did not receive a copy of the proposed judgment submitted to the Court, did not offer to have judgment taken against it.

In opposition, Plaintiff contends GLS forced it to seek judgment based on the accepted 998 offer after failing to render payment of the settlement funds to Plaintiff in February. Plaintiff also contends it sought judgment on the belief that an accepted 998 Offer constituted an agreed-upon settlement which could be submitted to the Court as a Stipulated Judgment, based on the statutory language of Code of Civil Procedure § 998(b)(1).

Pursuant to Code of Civil Procedure § 998(b)(1), “If the offer is accepted, the offer with proof of acceptance shall be filed and the clerk or the judge shall enter judgment accordingly.” “[U]nder section 998, entry of judgment is ‘the expected and standard procedural result unless specific terms and conditions stated in the offer provide otherwise.’ ” (Arriagarazo v. BMW of North America, LLC (2021) 64 Cal.App.5th 742, 749; emphasis added.) As such, “where a section 998 offer sets out certain settlement terms but fails to specify whether acceptance would result in judgment, an award, or dismissal, ‘the offer, by virtue of default to the statutory language, is simply intended as one to “allow judgment to be taken” in exchange for the specified amount of funds.’ ” (Id.) As the drafter of the 998 offer, GLS’s duty was to make clear that the settlement would be conditioned on dismissal of the claims with prejudice. (See Arriagarazo, supra, 64 Cal.App.5th 749, stating, [“As the drafter, BMW had the duty to make clear in its section 998 offer any intention to stray from the usual path under section 998 of entry of judgment.”]

The Offer to Compromise and Acceptance Under Code of Civil Procedure Section 998 explicitly states that “[u]nder this offer, Plaintiff shall dismiss with prejudice all claims against GLS US Freight, LLC or against GLS US Freight, Inc.” (Id.) The Court finds that GLS made clear that dismissal with prejudice was a condition of the 998 offer. Plaintiff agreed to the 998 offer without indicating any disagreement with that provision. Defendant did not stipulate to a judgment being entered. Plaintiff’s filing of a proposed stipulated judgment is inconsistent with the terms of the 998.

The motion is GRANTED. The Court does not believe sanctions for either side are warranted. Defendant’s request for sanctions is DENIED.