Judge Monica Bachner, Case 21STCV26829 2022-07-25 Tentative Ruling

Defendant’s motion to set aside default is continued to August 19, 2022, at 10:00 a.m. for an evidentiary hearing.

Defendant Husni Othman aka Husni S Othman (“Defendant”) moves for an order setting aside the default entered against him in this action brough by Plaintiff Westlake (“Plaintiff”). [1] Defendant moves to set aside default on the following grounds: (1) it was entered as a result of his mistake, inadvertence, surprise, and/or excusable neglect; (2) service of the summons did not result in actual notice; and/or (3) the judgment and/or entry of default is void. (Motion, pg. 1; C.C.P. §§473(b), 473.5, 473(d).)

The Court notes the instant motion is brought by Defendant alone, and not by the other named defendant in this action, Roxanne Auto Sales Corp aka Roxanne Auto Sales, Inc. ACA Roxanne Auto Sales (“Roxanne Auto”).

Plaintiff Westlake Services, LLC dba Westlake Financial Services (“Plaintiff”) filed its complaint against Defendant and Roxanne Auto (collectively, “Defendants”) in the instant action on July 21, 2021, alleging causes of action for open book account, account stated, reasonable value, breach of contract, and breach of guarantee for an unpaid debt in the amount of $26,695.55, due on August 23, 2019, incurred in connection with Defendants’ alleged breach of a September 15, 2014 Master Dealer Agreement (“Contract”) entered into by Plaintiff and Defendants. (Complaint ¶¶1-3, 19-20, Exh. 1.)

On October 20, 2021, Plaintiff filed a proof of service indicating that on July 27, 2021, Defendant was served with the summons and complaint by mail and acknowledgment of receipt of service to an address outside California [258 71^st Street Brooklyn NY, 11209 (“Service Address”)] with return receipt requested. (C.C.P. §415.40.) The proof of service attached a copy of the signed returned receipt indicating delivery on 8/3/22; however, the signature on the line next to the box checked “Addressee” is indecipherable and the field marked “Received by (Printed Name)” does not have the printed name of the recipient/person who signed, but another indecipherable signature. Plaintiff filed a second proof of service indicating that on September 21, 2021, Roxanne Auto had been served by substituted service on Defendant, as the Agent for Service of Process of Roxanne Auto, at the same Service Address, where the documents were left in the presence of “Sandy Othman,” Defendant’s wife, and a copy of the documents were thereafter mailed to the same address. Defaults were entered against Defendant on October 21, 2021, and against Roxanne Auto on December 14, 2021. Plaintiff submitted a default packet and request for court judgment against Defendants on December 14, 2021, in advance of a Status Conference Regarding Default Judgment Packet scheduled for January 6, 2022. On December 27, 2021, Defendant filed an answer to the complaint which was filed by the Court and not rejected. On January 6, 2022, the Court struck Defendant’s answer in light of the default entered against him and continued the hearing on the status conference. Defendant filed the instant motion on January 31, 2022. Plaintiff filed an opposition on July 11, 2022. As of the date of the hearing, Defendant has not filed a reply.

C.C.P. §473.5(a) provides as follows: “When service of a summons has not resulted in actual notice to a party in time to defend the action and a default… 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… has been entered.”

C.C.P. §473.5(b) provides that a motion to set aside, “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.C.P. §473.5(c) provides the Court may set aside the default judgment upon a finding that: (1) the motion was timely, and (2) the 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[.]”

Defendant’s motion pursuant to C.C.P. §473.5 is timely. Defendant filed and served the instant motion fewer than two years after default was entered and less than 180 days after notice of entry of default was mailed to the Service Address. [The Court notes 180 days after October 21, 2021 is April 19, 2022.]

As a preliminary matter, Defendant mistakes the method of service on Roxanne Auto [by substituted service on September 21, 2021] as service on him, an individual, which was purportedly effectuated by mail on an out-of-state defendant. (Decl. of Defendant ¶¶2-6.) As such, Defendant’s evidence does not directly address whether he resided at the Service Address at the time of alleged service on him. However, Defendant submitted evidence supporting his assertion that he did not have actual notice in time to defend the action prior to default being entered against him on October 21, 2021. Specifically, Defendant declared he “first” learned of the lawsuit on or around November 1, 2021, when he received a phone call from his wife about documents she had received. (Decl. of Defendant ¶8.) Defendant declared he has been separated from his wife and due to the strained nature of his relationship with her, he was not in receipt of the actual documents until recently. (Decl. of Defendant ¶8.) Here, while Defendant concedes had had actual notice of the instant lawsuit as of November 11, 2021, he does not concede to having such notice prior to default being entered against him, and as such, he did not have notice with sufficient time to defend. Moreover, the proof of service of summons by mail on an out of state defendant does not demonstrate actual service on Defendant given the field where the name is to be printed is not correctly filled out, and could have been completed by Defendant’s wife. While the declaration is silent as to where Defendant resided in August 2021 [the date the summons and complaint addressed to Defendant were delivered at the Service Address], the assertions in the declaration taken together suggest Defendant did not receive or have notice of these documents either. Defendant declared he did not live or work at the Service Address at the time “substituted service” allegedly occurred and the lawsuit and the default entered against him are a surprise which he would not have expected nor have had reason to expect. (Decl. of Defendant ¶10.) Defendant declared that if he had actual notice of the lawsuit, he would have hired a lawyer immediately to defend against the claim. (Decl. of Defendant ¶10.)

In opposition, Plaintiff submitted conflicting evidence as to whether Defendant had actual notice of the lawsuit with sufficient time to defend against it. Specifically, Plaintiff submitted a declaration from Greg Johnson (“Johnson”) an investigator employed Plaintiff and Plaintiff’s counsel who declared that he received a phone call from Plaintiff on August 25, 2021, in which Plaintiff stated he had “received mail” from the law office, confirmed the Service Address was correct, and asked what his options were. (Decl. of Johnson ¶¶1-2.) Plaintiff also submitted evidence that on October 29, 2021, Plaintiff’s counsel Kenneth J. Freed (“Freed”) returned a telephone call to Defendant’s counsel Ramsey Abboushi (“Abboushi”) in which they discussed the merits of the instant action and other matters. (Decl. of Freed ¶3.) This evidence suggests Defendant had retained counsel in connection with the instant action prior to November 1, 2021, and conflicts with his assertion that he did not know about the lawsuit until that date.

“The court may, upon any terms as may be just, 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. Application for this relief… shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken…” (C.C.P. §473(b).)

As a preliminary matter, Defendant’s motion is timely. Defendant filed the instant motion less than four months after entry of default against him, and accordingly, within the statute’s six-month deadline. In addition, Defendant submitted evidence suggesting he moved for relief within a reasonable time of discovering the default entered against him. (Decl. of Defendant ¶¶8-9.)

Defendant did not meet his burden of establishing his default was taken through mistake, inadvertence, surprise, and/or excusable neglect. Without this showing, the Court has no discretion to grant relief. (Schwab v. Southern California Gas Co. (2004) 114 Cal.App.4th 1308, 1319.) However, in light of the conflicting evidence relating to whether Defendant was personally served with the summons and complaint, the Court sets an evidentiary hearing. As discussed above, there is conflicting evidence as to when Defendant had knowledge of the instant lawsuit.

“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.” (C.C.P. §473(d).)

“[U]nder subdivision (d) of Code of Civil Procedure section 473, the court may set aside orders and judgments that are ‘void,’ including orders and judgments void for want of fundamental jurisdiction or personal jurisdiction. [Citation]” (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 97.)

Given the proof of service on Defendant not being properly signed, there is conflicting evidence as to whether Plaintiff has established actual delivery to the person to be served. (See C.C.P §415.40(a) [“Proof that a summons was served on a person outside this state shall be made… [i]f served in a manner specified in a statute of this state, as prescribed by Section 417.10, and if service is made by mail pursuant to Section 415.40, proof of service shall include evidence satisfactory to the court establishing actual delivery to the person to be served, by a signed return receipt or other evidence…” (Emphasis added.)].) Namely, as discussed above, Defendant’s evidence suggests that while the documents were mailed to the Service Address, he did not have knowledge of them until November 1, 2021, given he and his wife had separated, she informed him of the documents, and he was no longer living at the Service Address. However, Plaintiff submitted conflicting evidence suggesting the documents were actually delivered to the person to be served [Defendant] notwithstanding the improperly filled return receipt slip given Defendant called Plaintiff’s investigator regarding the documents.

Based on the foregoing, Defendant’s motion to vacate default is continued to August 19, 2022, at 10:00 a.m. for an evidentiary hearing.

[1] Defendant moves to set aside the entry of default and default judgment. (Notice of Motion, pg. 1.) Here, although default was entered, judgment was not. Thus, the only issue properly before the court is whether the court should vacate the entry of default.