Judge Michael E. Whitaker, Case Number: 24SMCV01862, Date: 2025-02-05 Tentative Ruling

Judge: Michael E. Whitaker, Case: 24SMCV01862, Date: 2025-02-05 Tentative Ruling

MOTION Application to Vacate and Set Aside Entry of Default and Default Judgment

MOVING PARTY Defendants Izabella Mesropyan, Estate of George Yan, and GB Auto Services

On April 22, 2024, Plaintiff Simon Simonyan (“Plaintiff”) filed an unlawful detainer complaint against Defendants Izabella Mesropyan, the Estate of George Yan, and GB Auto Service Kourosh (together, “Defendants”).

Default was entered against Defendants on May 13, 2024, and the Clerk of the Court entered default judgment for possession against Defendants on August 8, 2024.

Defendants now applies to set aside and vacate the entry of default and default judgment.[1] Plaintiff opposes the application.

“Proceeding to judgment in the absence of a party is an extraordinary and disfavored practice in Anglo–American jurisprudence: The policy of the law is to have every litigated case tried upon its merits, and it looks with disfavor upon a party, who, regardless of the merits of the case, attempts to take advantage of the mistake, surprise, inadvertence, or neglect of his adversary.” (Au-Yang v. Barton (1999) 21 Cal.4th 958, 963 [cleaned up].)

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.)

Per Code of Civil Procedure section 473, subdivision (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.”

Defendants first filed their application to vacate/set aside the default on December 12, 2024, which is seven months after the entry of default. Accordingly, the Court finds the application to vacate/set aside the Clerk of the Court’s entry of default is untimely regarding discretionary relief under Section 473.

And because Defendants’ application 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 Defendants despite the application 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]}

Here, the Court entered the default judgment against Defendants on August 8, 2024 and Defendants first filed their application to vacate/set aside on December 12, 2024. Thus, with respect to the mandatory relief provisions of Section 473, the application 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 (hereafter Standard), 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.” (Standard, supra, 179 Cal.App.4th at p. 896.)

Here, Defendants have provided the attorney declaration of Michael Thomas Stoller, which provides:

1. I was counsel of record for Defendants Izabella Mesropyan, Izabella Mesropyan, Estate of George Yan, and GB Auto Services (“Defendants”) in the above captioned action from the time it was filed until new counsel recently substituted in this week. The facts stated herein are made based on my personal knowledge, except where based on information and belief, and as to those facts, I so state. If called as a witness, I could and would competently testify thereto.

2. I make this as an attorney declaration of fault under Section 473(b) of the Code of Civil Procedure. I apologize that my neglect led to default and default judgment in this matter and seek to have the default and default judgment vacated so my clients may defend their case on the merits.

3. The default judgment in this matter occurred because we were negotiating to buy out the Client’s possession and the assets. We already have won a previous UD action, that was concluded, however the final judgment and attorney’s fees were not executed by the judge, prior to his retirement.

4. Additionally, I believe this default judgment should be vacated because I had spoken with counsel for Plaintiff Simon Simonyan (“Plaintiff”), who told me that if we dismissed our civil action against Mr. Simonyan, Case No. 22SMCV01444 (the “Civil Action”), he would vacate the default in this matter. See Exhibit A to the present declaration.

6. Plaintiff’s counsel never followed through on his promise to vacate the default judgment in this case, and accordingly I submit this declaration in favor of vacating the default judgment in this case, quashing and recalling the writ of possession issued in this matter, and staying any lockout that is currently pending due to counsel’s mistake.

7. A 5-Day Sheriff’s Notice to Vacate has been posted on my client’s door whose expiration has passed. Accordingly, a lockout was pending for my client that has now occurred that is wrongful and my client loses business each day there is a wrongful judgment of possession against my clients. I am filing this declaration in support of ex parte relief based on this exigency and the fact that my client will be irreparably harmed if unable to defend their beloved small business in auto repair in this action on the merits of the case.

8. On or before August 11, 2024, I had a medical event and was diagnosed with Bell’s Palsy. My physician advised that prognosis for recovery is positive however recovery is expected to take from 90 to 120 days.

9. When I dismissed the civil case in September 2024, I failed to follow-up with Opposing Counsel mainly because I was out of the office due to my medical condition. Thereafter, in November 2024, I discovered the Opposing Counsel did not set aside the default and agreed to hold off the execution of the writ to allow the parties to discuss the settlement discussions. Although he agreed to hold off any further actions to allow the parties to discuss settlement, the original agreement was for both parties to dismiss their respective cases and in the event a settlement was not achieved the parties would have to start over with their respective actions.

10. I apologize to the Court for my error and ask that my former client not be prejudiced as a result.

First, the Stoller Declaration does not demonstrate that the entry of default in May 2024 was due to Counsel’s mistake, surprise, inadvertence, or excusable neglect. The only reference to the entry of default is as follows: “I apologize that my neglect led to default.” (See Stoller Decl., ¶ 2.) Stoller does not explain the nature of the neglect and how it led to the default. Second, regarding the resulting entry of default judgment on August 8, 2024, the Court finds, based upon the record, that the default was not caused by Stoller’s mistake, inadvertence, surprise or neglect because, as noted, the Stoller Declaration does not fully address the entry of default in the first instance.

Further, the parties apparently reached a settlement agreement in September 2024, in which Plaintiff purportedly agreed to set aside the default, which did not occur, and Stoller did not follow up, due to health issues. But failure to follow up on an agreement to vacate a default is not a mistake, inadvertence, surprise, or excusable neglect that caused the default to be entered in May 2024.

In short, the Stoller Declaration is devoid of information about any mistake, surprise, inadvertence or excusable neglect on the part of Stoller that caused the default to be entered on May 13, 2024.

Therefore, the Court denies Defendants’ motion to set aside the default and default judgment. On the Cout’s own motion, the Court continues the Order to Show Cause re Entry of Default Judgment (Damages) to July 23, 2025 at 8:30 A.M. in Department 207. Further, Plaintiff shall file a Request for Entry of Default Judgment (Damages) on or before June 20, 2025.[4]

[1] The Court notes that several declarations were filed in support of Defendants’ application. But the Cout finds the Declarations to be immaterial to the issues presented under Section 473.

[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 v. Southern Cal. Goas Co. (2004) 114 Cal.App.4th 1308, 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] The entry of default “[c]uts off the defendant's right to file pleadings and motions (other than a motion to set aside default under § 473), and it also cuts off the defendant's right to notices and the service of pleadings or papers.” (Bailey v. Citibank, N.A. (2021) 66 Cal.App.5th 335, 347, emphasis added.)