Judge Michael E. Whitaker, Case Number: 23SMCV04901, Date: 2024-07-03 Tentative Ruling

Judge: Michael E. Whitaker, Case: 23SMCV04901, Date: 2024-07-03 Tentative Ruling

On October 18, 2023, Plaintiff B. Lance Miller (“Plaintiff”) filed suit against Defendants Duc Minh Dang (“Dang”) and Karen Nguyen (“Nguyen”) (together, “Defendants”), alleging two causes of action for (1) breach of contract; and (2) common counts. Default was entered against both Defendants on April 12, 2024.

Nguyen now moves to set aside the default entered against her primarily under Code of Civil Procedure section 473.5. Plaintiff opposes the motion. No reply was filed.

Per Code of Civil Procedure section 473.5, “[w]hen service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him of a written notice that the default or default judgment has been entered.” (Code Civ. Proc., § 473.5, subd. (a).) A notice of motion to set aside a default or default judgment and for leave to defend the action “shall be accompanied by an affidavit showing under oath that the party’s lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect. The party shall serve and file with the notice a copy of the answer, motion, or other pleading proposed to be filed in the action.” (Code Civ. Proc., § 473.5, subd. (b).) “Upon a finding by the court that the motion was made within the period permitted by subdivision (a) and that his or her lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect, it may set aside the default or default judgment on whatever terms as may be just and allow the party to defend the action.” (Code Civ. Proc., § 473.5, subd. (c); Tunis v. Barrow (1986) 184 Cal.App.3d 1069, 1077 [“actual notice” means “genuine knowledge of the party litigant” and does not include imputed notice”].)

In Ramos v. Homeward Residential, Inc., the Court of Appeal stated: “It is the policy of the law to favor, whenever possible, a hearing on the merits. Appellate courts are much more disposed to affirm an order when the result is to compel a trial on the merits than when the default judgment is allowed to stand. Therefore, when a party in default moves promptly to seek relief, very slight evidence is required to justify a trial court's order setting aside a default. In the present case, defendant promptly moved to have the default judgment set aside once he learned of it. The trial court's order granting relief was within its sound discretion and, in the absence of a clear showing of abuse of discretion, should not be disturbed. Even in a case where the showing is not strong, or where there is any doubt as to setting aside of a default, such doubt should be resolved in favor of the application.” (Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1444, emphasis added [cleaned up]; Luxury Asset Lending, LLC v. Philadelphia Television Network, Inc. (2020) 56 Cal.App.5th 894, 907 [“with respect to setting aside a default judgment, it is the policy of the law to favor, whenever possible, a hearing on the merits”].) Against this backdrop, the Court assesses whether Nguyen has met her burden.

Foremost, Plaintiff filed a proof of service on April 12, 2024, apparently showing that Nguyen was personally served with the summons at “220 26th Street #200 Santa Monica California 90402” on October 29, 2023. Thereafter, based upon the request of Plaintiff, the Court entered default against Nguyen on April 12, 2024.

A declaration of service by a registered process server establishes a presumption that the facts stated in the declaration are true. (Evid. Code, § 647; Rodriguez v. Cho (2015) 236 Cal.App.4th 742, 750.)[1] But Plaintiff admits that the proof of service upon which the default was entered against Nguyen is defective -- “The proof of service erroneously stated the place of service as the plaintiff’s business address . . . .” (See Opposition, p. 2.) As such, the Court determines that the default should not have been entered in the first instance, and Plaintiff cannot and should not benefit from the presumption under Code of Civil Procedure section 647 due to the erroneous “return of a process server.”

Equally important, Nguyen contends she was never personally served with the summons and recently became aware of the litigation through Defendant Duc Minh Dang, her former spouse.[2] In support of the motion, Nguyen advances her declaration in which she states in full:

1. I am over the age of 18 and am a named party in this matter. I have knowledge of the matters testified to herein and if called upon, I could and would competently testify thereto.

2. I was not personally served with the summons and complaint in this matter. I reviewed the Proof of Service of Summons that was filed in this case and it contains false information. First, the address where I was allegedly served is not my address, but the address of Plaintiff.

3. I was recently informed of the lawsuit by my ex-husband, co-defendant Duc Minh Dang.

4. I tried to call counsel for Plaintiff to discuss this matter, but I was unable to get a hold of him.

5. June 6, 2024 (sic), I retained my current counsel [3] to handle this matter. I am informed and believe that my current counsel reached out to counsel for Plaintiff to stipulate to set aside the default judgment, but was unsuccessful, resulting in this instant Application. I further authorized my counsel to stipulate with counsel for Plaintiff to pay any alleged process server fees and filing fees incurred in association with the default judgment.

6. I was not personally served with the summons and complaint in this matter. I believe that counsel for Plaintiff rushed forward to obtain a default judgment against me without giving me proper notice.

In opposition Plaintiff contends that Nguyen had actual notice of the litigation precluding relief under Section 473.5, notwithstanding Plaintiff’s admission that the proof of service of the summons is faulty. In particular, Plaintiff implies that the incorrect service address listed on the proof of service was a harmless error, indicating that Nguyen was actually served at “274 San Felipe Street, Pomona, California 91707.” In support, Plaintiff provides the Declaration of Kris Fujimoto (“Fujimoto”), which provides in relevant part:

3. On October 29, 2023 around 10:30 a.m. I served KAREN NGUYEN a copy of the summons and complaint. The service was made at 274 San Felipe Street, Pomona, California 91707.

4. When I approached the property on October 29, I called out KAREN NGUYEN's name. I was asked, "Who is it'? I replied, "My name is KRIS and I have legal documents for you".

5. Satisfied that the individual had identified herself, I left the summons and complaint on the door wedged between the knob and door jamb. I informed the defendant that she had been served.

5. [sic] I had previously, on the same day, served the other defendant, DUC MIEN DANG, at his residence in Upland.

6. In error, the proof of service, item 4, had the client's address rather than the Pomona address where the service was made.

(Declaration of Fujimoto, ¶¶ 3-6.) Based upon the Fujimoto declaration, Plaintiff argues that Nguyen has not overcome the presumption of valid service of the summons. The Court disagrees with Plaintiff.

First, as the Court notes above, Plaintiff cannot rely on the presumption of validity because Plaintiff admits that the proof of service is flawed.

Second, although Fujimoto avers to where Fujimoto purportedly served Nguyen with the summons, neither Plaintiff nor Fujimoto advances a corrected proof of service.

Third, there is no proof in the record that the purported service address - 274 San Felipe Street, Pomona, California 91707 is Nguyen’s dwelling house, usual place of abode, usual place of business, or usual mailing address, or even associated with her in any manner. (See Code Civ. Proc., § 415.20, subd. (b).) This is particularly important because the Court is not satisfied that simply calling out a person’s name, coupled with a response of “Who is it,” is sufficient to identify the person at the San Felipe Street address on October 29, 2023 as Nguyen, especially when Nguyen avers she was not personally served with the summons as Fujimoto now claims to have perfected.

In sum, the Court rejects Plaintiff’s argument and finds that Nguyen has advanced sufficient competent evidence to rebut the presumption of proper service.

In considering Plaintiff’s arguments, the Court does not find them to be persuasive when measured against Nguyen’s declaration which the Court readily acknowledges may be viewed as “very slight evidence.” But the “very slight evidence” is all that Nguyen needs to advance in support of the motion, and any doubt the Court may have about granting the relief sought is resolved in Nguyen’s favor, especially when the effect of not granting the relief sought may result in an adverse judgement against Nguyen. In summary, the Court finds that Nguyen has met her burden for relief under Section 473.5.

Therefore, the Court grants Nguyen’s motion to set aside the entry of default, and vacates the default entered on April 12, 2024 regarding Nguyen only.

Further, the Court orders Nguyen to file and serve a response to the Complaint on or before July 31, 2024.

In addition, the Court discharges the Order to Show Cause re Entry of Default Judgment set for hearing on July 3, 2024, and sets a Case Management Conference on September 24, 2024 at 8:30 A.M. in Department 207. All parties shall comply with California Rules of Court, rules 3.722, et seq., regarding Initial and Further Case Management Conferences. In particular, all parties shall adhere to the duty to meet and confer (Rule 3.724) and to the requirement to prepare and file Case Management Statements (Rule 3.725).

[1] “The return of a process server registered pursuant to Chapter 16 (commencing with Section 22350) of Division 8 of the Business and Professions Code upon process or notice establishes a presumption, affecting the burden of producing evidence, of the facts stated in the return.” (Evid. Code, § 647.)

[2] Plaintiff states that Defendant Dang has filed for Chapter 13 Bankruptcy Protection. (See Opposition, p. 1.) Accordingly, the Court notes that if Plaintiff is correct the “Automatic Stay” applies regarding Defendant Dang, but without knowing when Defendant Dang commenced the bankruptcy proceeding, the Court cannot determine if the default entered against Defendant Dang was proper.

[3] Counsel for Defendant, Kalab A. Honey, states that counsel’s office was retained to represent Nguyen on June 5, 2024 after the default was entered against Nguyen. (See Declaration of Kalab A. Honey, ¶ 2.)