Judge: Michael J. Strickroth, Case: 2022-01258463, Date: 2023-08-21 Tentative Ruling

Motion to Set Aside/Vacate Default and Judgment

Defendant Parkco Building Company’s Motion to Vacate Default and Default Judgment and Quash Service of Summons and Complaint is GRANTED.

Defendant Parkco Building Company brings this Motion under Code of Civil Procedure § 473.5 and Code of Civil Procedure § 473(d).

Code Civ. Proc. § 473.5 states: “(a) When 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 or her of a written notice that the default or default judgment has been entered. ¶ (b) A notice of motion to set aside a default or default judgment and for leave to defend the action shall designate as the time for making the motion a date prescribed by subdivision (b) of Section 1005, and it 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. ¶ (c) 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.” (Emphasis supplied.)

“[D]oubts must be resolved in favor of relief, with an order denying relief scrutinized [on appeal] more carefully than an order granting it.” Lasalle v. Vogel (2019) 36 Cal.App.5th 127, 134.

Here, the parties dispute whether the Motion was timely. Code Civ. Proc. § 473.5 states “[t]he 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 or her of a written notice that the default or default judgment has been entered.” (Emphasis supplied.)

Plaintiff claims it mailed the Request for Entry of Default on 07-21-2022 when the Default was entered. Indeed, Code Civ. Proc. § 587 requires that “[a]n application by a plaintiff for entry of default under subdivision (a), (b), or (c) of Section 585 or Section 586 [] include an affidavit stating that a copy of the application has been mailed to the defendant's attorney of record or, if none, to the defendant at his or her last known address and the date on which the copy was mailed.” Plaintiff does not provide evidence it served Defendant written notice that the default had been entered.

The Notice of Entry of Default Judgment was served by mail on 09-29-2022. The Motion was filed on 02-28-2023.  Thus, the motion is timely because it was served 154 days after service of the Notice of Entry of Judgment, not accounting for the five day extension under Code Civ. Proc. § 1013 for serving the Notice of Default Judgment by mail.

Based on the foregoing, the Motion is timely.

To show lack of actual notice, Defendant provides a declaration from Peter Pendleton, the individual through whom Plaintiff claimed to substitute serve Defendant.  Pendleton declares he had not been an employee of Parkco since 07-25-2021, Parkco had never authorized him to receive service of process on Parkco’s behalf, nor has he ever held himself out as someone authorized to do so (¶¶ 1, 3.) Pendleton further declares that on 06-04-2022, after he visited the address of Defendant he was approached by a stranger outside the gate, was asked if he could accept a document, to which he replied “I think so.” (¶ 4.) Pendleton further declares that after receiving the documents he did not return to the premises for a while and forgot to inform Walter Hoyle (C.E.O. of Defendant) about the papers. (¶ 5.) The foregoing is sufficient to establish Defendant's lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect.

Plaintiff also contends Defendant failed to file a Proposed Answer, which is a requirement of a Motion brought under Code Civ. Proc. § 473.5. Plaintiff is correct that Defendant failed to meet this requirement. Thus, the Court denies relief under Code Civ. Proc. § 473.5.

Defendant also moves under Code Civ. Proc. § 473(d), which states: “The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.”

“A judgment or order is said to be void on its face when the invalidity is apparent upon an inspection of the judgment-roll.’ ” Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1441; Trackman v. Kenney (2010) 187 Cal.App.4th 175, 181.

Improper service is a valid grounds under Code Civ. Proc. § 473(d). “Lack of jurisdiction in its most fundamental or strict sense means an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties. When a court lacks jurisdiction in a fundamental sense, an ensuing judgment is void, and ‘thus vulnerable to direct or collateral attack at any time. ¶ A motion to vacate a void judgment is a direct attack. [O]n direct attack, lack of jurisdiction may be shown by extrinsic evidence, i.e., evidence outside the judgment roll. The Witkin treatise explains the proper procedure to be taken to vacate a judgment that is void, but appears proper on its face: The rule prohibiting extrinsic evidence does not mean that a judgment void for lack of jurisdiction can be enforced merely because the supporting papers, though false in fact, are in good form. It merely requires that the challenge of a judgment good on its face should be made by a direct attack.” Strathvale Holdings v. E.B.H., (2005) 126 Cal. App. 4th 1241, 1249.

“We conclude that when a motion to vacate is made on the ground that the default judgment is void because of improper service, the limitation period contained in Code of Civil Procedure section 473.5¹ applies by analogy.” Rogers v. Silverman, (1989) 216 Cal. App. 3d 1114, 1116.

Code Civ. Proc. § 416.10 provides: “A summons may be served on a corporation by delivering a copy of the summons and the complaint by any of the following methods:

(a) To the person designated as agent for service of process as provided by any provision in Section 202, 1502, 2105, or 2107 of the Corporations Code (or Sections 3301 to 3303, inclusive, or Sections 6500 to 6504, inclusive, of the Corporations Code, as in effect on December 31, 1976, with respect to corporations to which they remain applicable). ¶ (b) To the president, chief executive officer, or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a general manager, or a person authorized by the corporation to receive service of process.”

Code Civ. Proc. § 415.20 states the following regarding substitute service: “(a) In lieu of personal delivery of a copy of the summons and complaint to the person to be served as specified in Section 416.10, 416.20, 416.30, 416.40, or 416.50, a summons may be served by leaving a copy of the summons and complaint during usual office hours in his or her office or, if no physical address is known, at his or her usual mailing address, other than a United States Postal Service post office box, with the person who is apparently in charge thereof, and by thereafter mailing a copy of the summons and complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. When service is effected by leaving a copy of the summons and complaint at a mailing address, it shall be left with a person at least 18 years of age, who shall be informed of the contents thereof. Service of a summons in this manner is deemed complete on the 10th day after the mailing.” (Emphasis supplied.)

The Editor’s Notes for Code Civ. Proc. § 415.20 state: “The papers must be delivered to a person who is apparently in charge of such office, such as the personal secretary of the person to be served, and such delivery must be made during the usual office hours. In addition, a copy of the papers thereafter must be mailed (by ordinary first-class mail, postage prepaid) to the person to be served at the place of delivery.” 

Here, Plaintiff’s proof of service states that on 06-04-2022, a Saturday, at 1:55 p.m. “Peter Penalton, I delivered the documents to Peter Penalton who indicated they were the employee with identity confirmed by subject stating their name. The individual accepted service with direct delivery. The individual appeared to be a bald white male contact 55-65 years of age, 5'10"-6'0" tall and weighing 140-160 lbs.” (Exh. A to Motion)

Defendant provides the declaration of Water Hoyle which states the address on the proof of service is an eight acre property where he stores business equipment, resides and manages business operations. (¶ 3.) Hoyle declares that Defendant has not performed any business activity or any employees since July 2021. (¶ 2) Hoyle also declares that when Defendant was in business it had usual business hours of Monday through Friday, 8:00 a.m. to 5:00 p.m. (¶ 4) Hoyle further declares that Pendleton had no employment or professional relationship with Parkco since 7-25-21, was not a principal of Defendant, and was not designated as an agent for service of process, or authorized to accept service of process. (¶¶ 5-8) Peter Pendleton further provides a declaration consistent with what is described above.

Plaintiff does not dispute it attempted to serve Defendant on a Saturday by substitute service. From the evidence provided by Defendant the process server did not attempt to enter any office building, and only left the Summons and Complaint with Mr. Pendleton, who was leaving the premises. Additionally, Mr. Pendleton was not an agent of Defendant and certainly was not “apparently in charge.”

Based on the foregoing, the Court finds service of the Summons and Complaint was improper. The Judgment is vacated under Code Civ. Proc. § 473(d). The Court also quashes the service of summons and complaint under Code Civ. Proc. § 418.10.

Accordingly, the Court GRANTS Defendant Parkco Building Company’s Motion to Vacate Default and Default Judgment and Quash Service of Summons and Complaint.

The Courts schedules this matter for a Case Management Conference on 12-04-2023 at 8:30 AM in Department C15.

Plaintiff to give notice.