Judge Michael E. Whitaker, Case Number: 22SMCV02361, Date: 2024-06-05 Tentative Ruling

Judge: Michael E. Whitaker, Case: 22SMCV02361, Date: 2024-06-05 Tentative Ruling

MOTION Motion to Vacate/Set Aside Default, Default Judgment and to Quash and Recall Writ of Execution

On November 11, 2022, Plaintiff Sally Maslon (“Plaintiff”) filed this action against Defendants Hans Overturf (“Overturf”) and Sisu Holding Company, Inc. (“Sisu”) for (1) breach of fiduciary duty (2) financial elder abuse, (3) undue influence, (4) breach of oral contract, and (5) negligence.

Overturf was allegedly Plaintiff’s financial planner, money manager, option trader, crypto currency trader, and a stock, equity, commodity, and securities investor. (Complaint ¶ 2.) Plaintiff claims Overturf mismanaged her money, causing her to lose approximately $252,000. (Id. at ¶¶ 5-13.)

On May 9, 2023, the Court entered default against Overturf. On June 26, 2023, Overturf filed a motion to set aside the default on the grounds that he has not resided at the Eureka, California service address since 2015, when he moved to Switzerland. On July 24, 2023, the Court denied Overturf’s motion to set aside the default on the grounds that Overturf’s declaration lacked credibility in light of the contrary evidence Plaintiff provided demonstrating that Overturf resided at the Eureka address at the time of service. Thereafter, the Court entered default judgment against Overturf on January 23, 2024, and issued a writ of execution on the same date.

Overturf now moves again to set aside the default and default judgment and to quash the writ of execution. Plaintiff opposes the motion.[1]

1. Proof of Service of Summons on Sisu Holding Company, Inc. (“Sisu”) filed April 4, 2023.

2. Proof of Service of Summons on Hansueli Overturf (“Hans” or “Defendant”) filed April 4, 2023.

3. Denied Default Request as to Sisu for having “Faulty Proof of Service” filed May 9, 2023.

5. Declaration of Hans Overturf in Support of his Motion to Set Aside Default (“Default Relief Motion”) filed June 26, 2023.

6. Declaration of Ho-El Park in Support of Default Relief Motion filed June 26, 2023.

7. Declaration of Plaintiff in Opposition to Default Relief Motion filed July 11, 2023.

8. Declaration of Plaintiff’s Counsel, Jeffrey A. Cohen in Opposition to Default Relief Motion filed July 11, 2023.

Judicial notice may be taken of records of any court in this state. (Evid. Code, § 452, subd. (d)(1).) Because the requested exhibits are all court records within this state, the Court may take judicial notice of them. (Ibid.) However, “while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files. Courts may not take judicial notice of allegations in affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof.” (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 [cleaned up].)

Accordingly, the Court takes judicial notice of the court records, including the truth of results reached and legal implications of the records, the Court does not take judicial notice of the truth of hearsay allegations in the requested exhibits.

With respect to Plaintiff’s objections to the Declaration of Ho-El Park, the Court rules as follows:

With respect to Plaintiff’s objections to the Declaration of Overturf, the Court rules as follows:

Code of Civil procedure section 473 “includes a discretionary provision, which applies permissively, and a mandatory provision, which applies as of right.” (Minick v. City of Petaluma (2016) 3 Cal.App.5th 15, 25 (hereafter Minick).) “Section 473 is a remedial statute to be “applied liberally” in favor of relief if the opposing party will not suffer prejudice. Because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default. Unless inexcusable neglect is clear, the policy favoring trial on the merits prevails.” (Minick, supra, 3 Cal.App.5th at p. 24 [cleaned up].)

The party or the legal representative must seek such relief “within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Code Civ. Proc., § 473, subd. (b); see Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 [“because more than six months had elapsed from the entry of default, and hence relief under section 473 was unavailable”]; People v. The North River Ins. Co. (2011) 200 Ca.App.4^th 712, 721 [motion for relief under section 473 must be brought “within a reasonable time, in no case exceeding six months”]). “The six-month limit is mandatory; a court has no authority to grant relief under section 473, subdivision (b), unless an application is made within the six-month period.” (Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 340, citations omitted.)

Defendant filed this motion on February 22, 2024, which is nine months and thirteen days after the Clerk of the Court’s entry of default. Accordingly, the Court finds Overturf’s motion to set aside the Clerk of the Court’s entry of default is untimely regarding discretionary relief under Section 473.

And because Overturf’s motion is untimely with respect to the Clerk of the Court’s entry of default, the Court is thus unable to set aside the default judgment entered against Overturf despite Overturf’s motion being timely in that regard. (See Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 273 [finding that where a motion to set aside default and default judgment is untimely as to the default but still timely as to the default judgment, a court cannot set aside a default judgment under Code of Civil Procedure section 473 “because that would be ‘an idle act’”].)^{^[2]}

Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, 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), emphasis added.) Here, the Court entered the default judgment against Overturf on January 23, 2024 and Overturn filed his motion on February 22, 2024. Thus, with respect to the relief sought by Overturf under the mandatory provisions of Section 473, the Court finds that Overturf’s motion is timely. (See, e.g., Sugasawara v. Newland (1994) 27 Cal.App.4th 294 [six-month limitation period for relief from default based on attorney's neglect commences at time default judgment is rendered, rather than earlier when default is entered].)^{^[3]}

“In considering whether the trial court properly denied relief under section 473(b), the first question is the sufficiency of defendants' showing of attorney fault, if believed, to trigger the mandatory relief provisions of that statute.” (Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 Cal.App.4th 868, 896, disapproved on other grounds by Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830 (hereafter Standard).) “Under section 473(b), a party is entitled to relief from a default and resulting judgment whenever, on timely application for relief, his attorney ‘attest[s] to his or her mistake, inadvertence, surprise, or neglect’ in connection with the default or the judgment.” (Ibid.)

In Standard, counsel for the defendants attested that he believed the service of the summons on defendants was defective and informed defendants that they were not required to answer the summons under the laws of the United States. Defense counsel also did not advise the defendants to take any affirmative action, for example move to quash the service of the summons. Defense counsel also indicated that he expected to “receive notice of any application for entry of default before default was entered so that we could respond.” “He also acknowledged that he was responsible for advising defendants in connection with, and preparing, the first motion for relief from the default; that in doing so he “believed that the Court would set aside any default because of an invalid service of process”; and that he omitted “any argument showing that there was a ‘mistake, inadvertence, surprise, or excusable neglect’ in WEC and Winbond Israel's motions.” Although he did not separately point it out, he also indisputably omitted from defendants' first motion any invocation of the mandatory relief provisions of section 473(b), and the required showing to support such an invocation.” (Standard, supra, 179 Cal.App.4th at p. 897.)

After considering the record before the trial court, the appellate court held that “Counsel's mistakes, in contrast, entitled them to relief . . . . [defense counsel's] affidavit and the record as a whole overwhelmingly established that the default and ensuing judgment were the products of attorney fault.” (Standard, supra, 179 Cal.App.4th at p. 900.)

Further, “[t]he court's determination of whether the default was caused by the attorney's mistake, inadvertence, surprise, or neglect is in part a credibility determination. Credibility is an issue for the fact finder, we do not reweigh evidence or reassess the credibility of witnesses. When the evidence gives rise to conflicting reasonable inferences, one of which supports the findings of the trial court, the trial court's finding is conclusive on appeal.” (Cowan v. Krayzman (2011) 196 Cal.App.4th 907, 915 [cleaned up].)

Here, Defendant advances the Declaration of Ho-El Park, Overturf’s former counsel of record (“Park”),[4] to support the request for relief under Section 473. But Park does not address the entry of the default judgment other than as follows: “After learning this discrepancy, along with discrepancy in this Court’s rulings on evidentiary objections as to Plaintiff’s process server, and also having more time to obtain further evidence to prove Defendant’s permanent residency in Switzerland, Defendant has decided to bring this instant motion to set aside default and now, a default judgment.” (See Declaration of Ho-El Park, ¶ 17.) In other words, Park does not assert that the judgment was entered because of his mistake, inadvertence, surprise or neglect.

More important, Park does not attest that because of his mistake, inadvertence, surprise, or neglect the Clerk of the Court entered the default against Overturf. (See Declaration of Ho-El Park, ¶¶ 3-16.) In fact, as Park declares, Overturf retained his services on or about May 18, 2023, which is after the default was entered on May 9, 2023. (See id at ¶¶ 3-4.) Thus, the Court determines that there was nothing Park did or could have done, whether based upon mistake, inadvertence, surprise or neglect, that resulted in the default entered against Overturf.

Furthermore, to the extent Overturf challenges the evidentiary rulings and factual findings made in connection with the Court’s July 24, 2023 ruling, that challenge is also untimely. (See Code Civ. Proc., § 1008, subd. (a) [“[w]hen an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make an application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order”], emphasis added.)

Here, the Clerk of the Court mailed notice of the ruling to Overturf’s counsel on July 25, 2023 which is well past the 10 days under Section 1008.

For the reasons stated, the Court denies Overturf’s motion to vacate/set aside the default and default judgment and to quash the writ of execution.

[1] The Court notes that Overturf has filed a Motion for Continuance to Extend Time to file Reply and to Continue Hearing Date scheduled for hearing on August 1, 2024. Without addressing the merits of that motion, Overturf seeks the extension and continuance to retain counsel.

[2] The Court of Appeal’s rationale in Pulte Homes was that “[i]f the judgment were vacated, it would be the duty of the court immediately to render another judgment of like effect, and the defendants, still being in default, could not be heard in opposition thereto[.]” (Pulte Homes Corp., supra, 2 Cal.App.5th 267 at p. 273; but see Schwab, supra, 114 Cal.App.4th at p. 1320 [“A prematurely entered default is invalid, and any judgment entered after an invalid default is also invalid”], disapproved on other grounds by Sass v. Cohen (2020) 10 Cal.5th 861.)

[3] Under Code of Civil Procedure section 473, relief from a default judgment based upon an attorney’s affidavit of fault requires a trial court to also vacate the underlying entry of default. (See Sugasawara v. Newland, supra, 27 Cal.App.4th at pp. 295-296.)

[4] Overturf filed a Substitution of Attorney-Civil on April 29, 2024. According to the substitution, Overturf is now representing himself.