Judge: Nathan Nhan Vu, Case: 30-2022-01282882, Date: 2023-08-21 Tentative Ruling
Motion to Set Aside Default
Defendants Silverstreak Solutions, Inc.’s and Unrivaled Brands, Inc.’s Motion to Quash Service of Summons and Set Aside Default and Any Default Judgment is GRANTED.
The Proof of Service of Summons, (ROA #9, #11), are QUASHED and are of no effect.
The Entry of Default, (ROA #13), and the Default Judgment, (ROA #40), are SET ASIDE and are of no effect.
Defendants Silverstreak Solutions, Inc. And Unrivaled Brands, Inc. move to quash service of the summons and to set aside the default and any default judgment enetered in this case.
Standard to Quash Service of Process
A court lacks jurisdiction over a defendant if there has not been proper service of process upon that defendant. (See Ruttenberg v. Ruttenberg (1997) 53 Cal.App.4th 801, 808.)
Therefore, “[a] defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes: (1) To quash service of summons on the ground of lack of jurisdiction of the court over him or her. . . .” (Civ. Proc. Code, § 418.10, subd. (a); see Board of Supervisors v. Superior Court (1994) 23 Cal.App.4th 830, 855, fn. 4.)
Generally, “once a defendant files a motion to quash the burden is on the plaintiff to prove by a preponderance of the evidence the validity of the service and the court’s jurisdiction over the defendant.” (Bolkiah v. Superior Court (1999) 74 Cal.App.4th 984, 991; see also Summers v. McClanahan (2006) 140 Cal.App.4th 403, 413 [same].)
However, this burden shifts when a properly executed proof of service has been filed. “The return of a [registered] process server [] upon process or notice establishes a presumption, affecting the burden of producing evidence, of the facts stated in the return.” (Evid. Code, § 647); see Floveyor Int’l, Ltd. v. Superior Court (1997) 59 Cal.App.4th 789, 795; American Exp. Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 390.)
As explained by the Evidence Code, “[t]he effect of a presumption affecting the burden of producing evidence is to require the trier of fact to assume the existence of the presumed fact unless and until evidence is introduced which would support a finding of its nonexistence, in which case the trier of fact shall determine the existence or nonexistence of the presumed fact from the evidence and without regard to the presumption.” (Evid. Code, § 604.)
Service of Process of Summons and Complaint
The Civil Procedure Code normally requires that a summons and complaint be personally served:
A summons may be served by personal delivery of the summons and of the complaint to the person to be served. Service of a summons in this manner is deemed complete at the time of such delivery. The date upon which personal delivery is made shall be entered on or affixed to the face of the copy of the summons at the time of its delivery. However, service of summons without such date shall be valid and effective.
(Code Civ. Proc., § 415.10.)
However, the Civil Procedure Code also allows for substituted service in specific circumstances:
In lieu of personal delivery of a copy of the summons and complaint to the person to be served . . . 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.
(Code Civ. Proc., § 415.20, subd. (a).)
Service of Process on Defendants
In this case, Plaintiff Creditors Adjustment Bureau, Inc. filed proofs of service stating that each of the Defendants had been served the Summons and Complaint through service upon “JEFFREY BATLINER, REGISTERED AGENT (authorized to receive service of process)”. (See ROA #9, #11 [Proofs of Service for Silverstreak Solutions, Inc. and Unrivaled Brands, Inc., respectively].) The proofs of service also stated that substituted service had been effectuated by leaving the documents with “"LUNA DOE", REFUSED TO GIVE LAST NAME, EMPLOYEE” on October 10, 2022 and then mailing the documents. (See ibid.)
The proofs of service were signed by “J. Martinez”, a registered process server. This thus created a rebuttable presumption that the Summons and Complaint were served on both Defendants.
In response, Defendants submitted evidence that on April 11, 2022, Defendant Silverstreak Solutions, Inc. (Defendant Silverstreak) and Defendant Unrivaled Brands, Inc. (Defendant Unrivaled) filed Statements of Information with the California Secretary of State listing Erika Rasch as their registered agent for service of process. (Declaration of Roger L. Scott in Supp. of Def.s’ Mot to Quash Service of Summons and Set Aside Default and Any Default J. (“Scott Decl.”), ¶¶ 2-3, Exhs. 1-2.)
Defendants also presented evidence that on September 15, 2022, Defendant Unrivaled filed another Statement of Information with the California Secretary of State, changing its registered agent for service of process to Robert Baca, its new interim Chief Legal OFficer. (Id., ¶ 4, Exh. 3; Declaration of Robert Baca in Supp. of Def.s’ Mot to Quash Service of Summons and Set Aside Default and Any Default J. (“Baca Decl.”), ¶¶ 4-7.)
Neither the April 11, 2022 Statements of Information nor the September 12, 2022 Statement of Information list Jeffrey Batliner as the Agent for Service of Process. IN addition, neither of the proofs of service indicate that either Erika Rasch or Robert Baca were served with the Summons and Complaint.
Further, while the process server attempted substitute service upon “Luna Doe”, the proof of service does not indicate that Luna Doe was “the person who is apparently in charge”, other than to state that she was an “EMPLOYEE”. Further, the proofs of service do not indicate where Luna Doe was served or where the documents were subsequently mailed, so that it cannot be determined if service was effectuated at Defendants’ office.
Plaintiff did not file an opposition to the instant motion and thus, waived any argument on this issue. (See Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 288 [failure to address or oppose issue in motion constitutes waiver of that issue]; see also Wright v. Fireman’s Fund Ins. Companies (1992) 11 Cal.App.4th 998, 1011 [“it is clear that a defendant may waive the right to raise an issue on appeal by failing to raise the issue in the pleadings or in opposition to a . . . motion”].)
Plaintiff also did not submit any evidence to rebut Defendants’ evidence or to show that service of process upon the Defendants was proper. Thus, the court must quash service of process of the Summons and Complaint.
Standard to Set Aside Entry of Default or Default Judgment
The Civil Procedure Code authorizes the court to “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.” (Code Civ. Proc., § 473, subd. (b).)
The requirement that the judgment or order have been entered through “inadvertence, surprise, excusable neglect, or mistake” is “not meaningless, and the party requesting such relief must affirmatively show that the situation is one which clearly falls within such category.” (In re Wolper’s Estate (1956) 146 Cal.App.2d 249, 251.)
“It is obvious that a party who seeks relief under [section 473] must make a showing that due to some mistake, either of fact or of law, of himself [or herself] or of his [or her] counsel, or through some inadvertence, surprise or neglect which may properly be considered excusable, the judgment or order from which he [or she] seeks relief should be reversed. In other words, a burden is imposed upon the party seeking relief to show why he [or she] is entitled to it, and the assumption of this burden necessarily requires the production of evidence. (Hewins v. Walbeck (1943) 60 Cal.App.2d 603, 609-610.)
Thus, in a motion to set aside a default judgment or order under Section 473(b), the initial burden is on the moving party to prove excusable neglect by a “preponderance of the evidence.” (Kendall v. Baker (1988) 197 Cal.App.3d 619, 624.)
“A ‘mistake’ justifying relief may be either a mistake of fact or a mistake of law.” (H.D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 1368.)
“A mistake of fact exists when a person understands the facts to be other than they are; a mistake of law exists when a person knows the facts as they really are but has a mistaken belief as to the legal consequences of those facts.” (Gilio v. Campbell (1952) 114 Cal.App.2d Supp. 853, 857.)
“An ‘honest mistake of law’ can provide ‘a valid ground for relief,’ at least ‘where a problem is complex and debatable,’ but relief may be properly denied where the record shows only “ignorance of the law coupled with negligence in ascertaining it.’” (Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1412-1413, quoting A & S Air Conditioning v. John J. Moore Co. (1960) 184 Cal.App.2d 617, 620.) Whether a mistake of law furnishes grounds for relief depends on the reasonableness of the misconception and the justifiability of the failure to determine the correct law. (Id. at p. 1413.)
A motion for relief under Section 473(b) must “be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Ibid.) The “six-month time limitation is jurisdictional; the court has no power to grant relief under section 473 once the time has lapsed.” (Austin v. Los Angeles Unified School Dist. (2016) 244 Cal.App.4th 918, 928.)
The Civil Procedure Code also states that “[t]he 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.” (Code Civ. Proc., § 473, subd. (d).)
“[I]f a default judgment was entered
against a defendant who was not served with a summons as required by statute,
the judgment is void, as the court lacked jurisdiction in a fundamental sense
over the party and lacked authority to enter judgment.” (Kremerman v.
White (2021) 71 Cal.App.5th 358, 370.) While the trial court “retains
discretion to grant or deny a motion to set aside a void judgment” under Section 473(d), it does not
have discretion “to set aside a judgment that is not void” in the first
instance. (Id. at p. 369.)
Entry of Default and Default Judgment on Defendants
As stated above, service of process upon the Defendants was not properly effectuated. Thus, the court never obtained personal jurisdiction over them in the first instance.
Plaintiff obtained Entry of Default and Default Judgment against Defendants in this case. (See ROA #13, #40.) Because the court lacked personal jurisdiction over the Defendants when the default documents were entered, the Entry of Default and Default Judgment should be set aside pursuant to Section 473(d).
In addition, Defendants submitted evidence that the Entry of Default and Default Judgment were taken through the mistake, inadvertence, surprise, or excusable neglect of counsel. (See Scott Decl, ¶¶ 6-8; Baca Decl., ¶¶ 5-12.) Here, Defendants have sought relief from these defaults within 6 months of the Default Judgment being entered. Therefore, the Entry of Default and Default Judgment must be set aside pursuant to Section 473(b).
Plaintiff did not file an opposition to the instant motion and thus, waived any argument on this issue. Thus, the court must grant the motion to set aside the Entry of Default and Default Judgment.
The court clerk shall give notice of this ruling.