Judge Michael D. Washington, Case Number: 37-2022-00034320-CU-PA-NC, Date: 2024-05-17 Tentative Ruling

Judge: Michael D. Washington, Case: 37-2022-00034320-CU-PA-NC, Date: 2024-05-17 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - May 02, 2024

05/03/2024 01:30:00 PM N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael D Washington

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Civil - Unlimited PI/PD/WD - Auto Motion Hearing (Civil) 37-2022-00034320-CU-PA-NC DIAZ VS MARTINEZ [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Set Aside Default, 04/02/2024

The Motion to Set Aside Default brought by defendant Amanda Martinez (Ms. Martinez) is GRANTED.

This case pertains to an automobile accident – a rear end collision at relatively slow speeds. The driver who allegedly hit the vehicle in front of her at a red light is defendant Martinez. The occupants of the vehicle that was rear-ended by Ms. Martinez were plaintiffs Thomas and Lisa Diaz (collectively, Plaintiffs).

Ms. Martinez had insurance that covered the auto accident, and according to the attorneys that represent that insurance company – non-party State Farm Automobile Insurance Company (State Farm) – liability in this case is not disputed. All that is in dispute is the amount of the damages.

It appears from the evidence provided that there were ongoing discussions between Plaintiffs and representatives of Ms. Martinez' insurance company, State Farm. While those discussions were ongoing, Plaintiffs initiated the instant lawsuit against Ms. Martinez and served Ms. Martinez. That service was achieved by substituted service on January 22, 2023 by leaving the documents in question with Ms. Martinez' apparent sister. (ROA 16.) Plaintiffs claim that substituted service was necessary because Ms. Martinez 'had been evading service on January 19, 2023, January 20, 2023, and January 22, 2023...' (39, p. 4:4-6.) The insurance company, State Farm, claims that it was never notified of the lawsuit – by either its client, Ms. Martinez, or by Plaintiffs, whose legal representatives were in frequent communication with State Farm during this time. Eventually, while State Farm was still unaware of the lawsuit, default was entered against Ms. Martinez. (ROA 18.) That occurred on May 24, 2023. Said default was in the rather high amount of $1,027,590.49. (ROA 18.) According to the declaration of a State Farm representative, State Farm first became aware of the existence of a lawsuit on February 23, 2024. (ROA 34, ¶ 13.) Ms. Martinez filed the instant Motion to Set Aside Default on April 2, 2024. Somewhat confusingly, and as will be addressed in greater detail below, portions of that motion describe the motion as also being brought by State Farm.

Merits of Motion Ms. Martinez seeks relief under three different statutes: Code of Civil Procedure § 473(b), Code of Civil Procedure § 473.5, and Code of Civil Procedure § 473(d).

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3109319 CASE NUMBER: CASE TITLE: DIAZ VS MARTINEZ [IMAGED] 37-2022-00034320-CU-PA-NC Relief under Code of Civil Procedure § 473(b) is strictly governed by a six-month limitations period. The default against Ms. Martinez was taken on May 24, 2023. The instant motion was filed on April 2, 2024.

More than six months having passed between those two events, the prospect of relief under Code of Civil Procedure § 473(b) is foreclosed.

Relief under Code of Civil Procedure § 473.5 is designed for those times when service has been properly achieved by meeting the technical legal requirements, but fails to result in actual notice to the party. Here, there is a bit of triangulation between Ms. Martinez and State Farm – i.e. State Farm is seeking to set aside default against Ms. Martinez on grounds that actual notice was not received by State Farm. While this may, at first blush, seem counterintuitive, it raises equitable concerns, and State Farm also seeks relief under Code of Civil Procedure § 473(d) on equitable grounds.

The 6-month limit does not apply where relief is sought on equitable grounds; e.g., extrinsic fraud or mistake, judgment void, etc. [internal citation]. Moreover, a court may treat a motion under CCP § 473(b) as a motion for equitable relief. (Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2023) ¶ 5:381, citing Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981, also citing Manson, Iver & York v. Black (2009) 176 Cal.App.4th 36, 47 (emphasis in original).) State Farm relies on the relatively recent case of Lasalle v. Vogel (2019) 36 Cal.App.5th 127. Though the Lasalle case sought relief under Code of Civil Procedure § 473(b) it is instructive on the analysis to be done when it comes to examining equitable considerations.

'The law favors judgments based on the merits, not procedural missteps.' Lasalle, supra, 36 Cal.App.5th at 134. The Lasalle case makes reference to a shift in professional courtesy and the meaning of professionalism with regard to giving opposing counsel informal notice before engaging in the harsh act of taking a party's default. As applied here, the moving papers describe that the style of litigation that Plaintiffs' counsel has engaged in here – serving an insured, not giving the insurer a courtesy notice despite being in frequent communication otherwise, taking the insured's default, and then waiting for the six-month window of time to set aside to close before finally taking steps to notify the insurer – is something that Plaintiffs' counsel has now done on multiple occasions as a matter of routine. The Lasalle court would seem to condemn this conduct in relatively strong language, and this Court follows suit.

Moreover, while the mere tactic is itself to be scorned, in light of the instant case it would appear to almost shock the conscience. The event in question was a minor auto accident consisting of a rear-end fender bender at a red light that triggered an estimated $1,821.38 in vehicle repair damages. While the Court is mindful that certain 'eggshell' plaintiffs might trigger significant damage in the form of bodily injury, the total default award in this case was over $1 million. The egregiousness of that facial disparity raises a condemnable practice to something more pernicious – more along the lines of the kind of intrinsic fraud that is necessary to set aside a default on equitable grounds.

For these reasons, equity requires a set aside and/or principles of estoppel bar Plaintiffs from opposing the instant motion using 'gotcha' procedural arguments about the failure to timely respond to the lawsuit in order to obtain an award that would appear – on the information presently available and without prejudicing the issue should later facts be developed – grossly out of proportion to the events in question.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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3109319