Judge: Michelle Williams Court, Case: 19STCV02323, Date: 2022-08-04 Tentative Ruling

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Case Number: 19STCV02323    Hearing Date: August 4, 2022    Dept: 74

19STCV02323           RENE AGUERO vs RANDY DOTEN

Defendant’s Unopposed Motion to Set Aside Default and Vacate Default Judgment

TENTATIVE RULING:      The motion is GRANTED.  The default judgment entered on June 29, 2021 is vacated and the default entered on April 20, 2020 is set aside.  Defendant is granted 10 days leave to separately file and serve the proposed answer and cross-complaint.  A Case Management Conference is scheduled for September 28, 2022 at 8:30 a.m.

Background

On January 23, 2019, Plaintiffs Rene Aguero and Computer Institute of Technology, Inc. filed this action against Randy Doten. On August 19, 2019, Plaintiffs filed a First Amended Complaint asserting causes of action for: (1) breach of written contract; (2) fraud; (3) rescission; (4) unfair business practices; (5) intentional interference with prospective economic advantage. Plaintiff Aguero alleges they operated the Computer Institute of Technology and had Defendant operating one of the campuses, the Tujunga Branch. After closing the Tujunga Branch in 2017 because of Defendant Doten’s alleged improper billing practices and unauthorized actions, Defendant continued to operate the school, without authorization from Plaintiff or the Bureau of Private Secondary Education. Plaintiff also alleges that Defendant diverted revenues and did not offer any classes that he was paid to offer.

On April 20, 2020, the clerk entered Defendant’s default. The Court entered default judgment on June 29, 2021.

Motion

On July 7, 2021, Defendant filed the instant motion to set aside default and vacate default judgment pursuant to Code of Civil Procedure section 473.5.

The motion is unopposed. (Code Civ. Proc. § 1005(c).)

Motion to Vacate Default and Default Judgment

Standard

“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.” (Code Civ. Proc., § 473.5(a).) The motion must “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” as well as the proposed answer to be filed. (Code Civ. Proc., § 473.5(b).)

“Section 473.5, Code of Civil Procedure is the successor statute to former section 473a. It permits the court to set aside a default or default judgment against a defendant and allow him to defend the action on its merits if (1) he received through no inexcusable fault of his own, no actual notice of the action in time to appear and defend, and had not made a general appearance; (2) a default or default judgment has been entered against him by the court; (3) he acted with reasonable diligence in serving and filing the notice of motion to set aside the default or default judgment; and (4) he has a meritorious defense.” (Goya v. P.E.R.U. Enterprises (1978) 87 Cal.App.3d 886, 890–91.)

“While a defendant moving for relief from a default judgment is required to serve and file a copy of his proposed answer with the motion (Code Civ.Proc., § 473.5, subd. (b)), hearing on the motion is not the occasion to try the merits of the action. The court’s inquiry is limited to whether the . . . pleading contains a statement of facts sufficient to constitute a meritorious case, and the truth concerning the meritorious defense is not at issue.” (Tunis v. Barrow (1986) 184 Cal.App.3d 1069, 1080 (internal citations omitted).)

The Default is Set Aside and the Default Judgment is Vacated

Defendant’s motion was timely filed within eight days of the entry of judgment and is therefore timely. (Code Civ. Proc. § 473.5(a).) The motion is also supported by a proposed answer and a proposed cross-complaint, which contain a statement of facts sufficient to satisfy the meritorious defense requirement of Code of Civil Procedure section 473.5. Defendant indicates he purchased a branch of the school and did not have a consulting agreement with Plaintiff.

The motion is accompanied by Defendant’s declaration in which he states he was never served with the summons and complaint or any other documents. (Doten Decl. ¶ 2.) Defendant became aware of the action in March of 2021 after his business partner, Gustavo Lopez, indicated Aguero had sued Lopez. (Id. ¶¶ 2-3.) Defendant Doten hired a private investigator who searched court records and discovered the instant action. (Id. ¶¶ 4-5.)

Defendant reviewed the proof of service of summons, which indicated Defendant was served via substitute service on December 17, 2019 at 601 South Figueroa Street, Suite 4050, Los Angeles, CA 90071. (Doten Decl. Ex. A.) Defendant indicates this was a temporary office that he vacated on July 21, 2019, nearly five months prior to the date of service. (Doten Decl. ¶ 7, Ex. B.) Defendant’s motion satisfies the requirements of Code of Civil Procedure section 473.5.

Separately, the Court notes Defendant’s evidence demonstrates both the default and default judgment are void for improper service. (Ellard v. Conway (2001) 94 Cal.App.4th 540, 544 (“a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void.”); Nagel v. P & M Distributors, Inc. (1969) 273 Cal.App.2d 176, 180 (“The court has the right and power at any time to vacate a void entry of default and a void default judgment.”).)

“[A]n individual may be served by substitute service only after a good faith effort at personal service has first been made: the burden is on the plaintiff to show that the summons and complaint cannot with reasonable diligence be personally delivered to the individual defendant.” (American Exp. Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 389; Lebel v. Mai (2012) 210 Cal.App.4th 1154, 1164 (“Substituted service is valid only if a good faith, reasonable effort at personal service on the party to be served is first attempted.”).) “Two or three attempts to personally serve a defendant at a proper place ordinarily qualifies as reasonable diligence.” (American Exp. Centurion Bank, supra, 199 Cal.App.4th at 389 (emphasis added).) Because Plaintiff did not attempt personal service at a proper place, but rather an invalid old address for Defendant, Plaintiff did not satisfy the requirements for substitute service. The default and default judgment are also properly set aside as void.