Judge: Nathan Vu, Case: 2021-01234570, Date: 2022-10-10 Tentative Ruling

Please Note: The hearing on this matter has been changed to 8:30 A.M.

Motion to Set Aside Default

Defendant Anthony Costanzo’s motion to set aside default and default judgment are DENIED without prejudice.

Defendant Anthony Costanzo moves to set aside the default and the default judgment entered against him on 04/11/2022.

Relief Pursuant to Civil Procedure Code Section 473(b)

On 04/11/2022, the court entered a default judgment in favor of Plaintiff Hughes & Hughes, Attorneys at Law, LLP and against Defendant. By this motion, Defendant now seeks relief from the default and the default judgment, pursuant to Civil Procedure Code section 473(b).

That statute provides that: “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.” (Civil Proc. Code, § 473(b).)

However, a review of Defendant’s declaration and memorandum of points and authorities reveals that he is not actually asserting any mistake, inadvertence, surprise, or excusable neglect on his part. Rather, Defendant asserts that service against him was ineffective and that he did not receive actual notice until after the default judgment was entered. (See Costanzo Decl., ¶¶ 2-5; Mem. P.&A.s at p. 4:2-13.) Therefore, Section 473(b) is inapplicable.

Relief Pursuant to Civil Procedure Code Section 473.5

Considering the entirety of Defendant’s motion in context, it appears that Defendant is, in actuality, seeking relief from the default judgment due to ineffective service of process pursuant to Civil Procedure Code section 473.5. Plaintiff’s opposition to the motion indicates that Plaintiff understands that Defendant’s argument is that the default and default judgment should be set aside due to ineffective service of process.

The court will exercise its discretion and construe Defendant’s motion as one made under Section 473.5. (See Coshow v. City of Escondido (2005) 132 Cal.App.4th 687, 701 [trial court has discretion to construe motion in limine as motion for judgment on the pleadings under its “inherent powers to control litigation and conserve judicial resources . . . as justice may require.”].)

Civil Procedure Code section 473.5 states: “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.” (Civil Proc. Code, § 473(b).)

Here, there is a dispute of fact as to when Defendant learned of this action and whether Defendant learned of the action before the default judgment was entered. (Compare Costanzo Decl. ¶¶ 3-5 and Letterman Decl. ¶¶ 3-4.) Under these circumstances, this court may assess credibility and resolve conflicts in the evidence. (See Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479; Cowan v. Krayzman (2011) 196 Cal.App.4th 907, 915.)

Here, Plaintiff effectuated substituted service of the summons and complaint by serving those documents on Lois Letterman, an administrative assistant at Defendant’s workplace, on 02/14/2022, and subsequently mailing the summons and complaint to the same address. (ROA #9.)

Defendant asserts that because of the COVID pandemic, he was working remotely form home at this time and, in fact, did not work in the office after March 2020. (Costanzo Decl., ¶ 2.) Defendant also claims that he went into the office on 04/11/2022 but “there was no summons and complaint or any information about this civil lawsuit in my office”.” (Id., ¶ 3.) Defendant also asserts that his employer “never informed [him] that they received any legal documents directed to [him]”. (Id., ¶ 4.)

On the other hand, Plaintiff submits the declaration of Ms. Letterman, who confirmed that she was served with “the documents pertaining to the lawsuit on February 14, 2022” and that she informed Defendant about the documents “by Instant Message within a day or two after accepting service of the documents.” (Letterman Decl., ¶ 3.) Ms. Letterman also recalled that within a week, Defendant “replied that he had received the documents in the mail at his residence and to ‘not worry about them.’” (Ibid.) Finally, Ms. Letterman confirmed that she personally handed the documents to Defendant when he came into the office in April 2022. (Id., ¶ 4.)

The court finds Ms. Letterman’s declaration to be more credible than Defendant’s declaration. Unlike Defendant, Ms. Letterman is a disinterested third-party, with no reason to lie. Defendant provides no reason for the court to disbelieve Ms. Letterman’s declaration nor does Defendant present any explanation for the divergence between Ms. Letterman’s declaration and Defendant’s declaration. Defendant also provides no other evidence in support of his assertions.

Defendant cites to Zirbes v. Stratton (1986) 187 Cal.App.3d 1408, in which the court held that, when effectuating constructive service, “there must be strict compliance with the requisite statutory procedures.” (Id. at p. 1416.) Thus, the court in that case held that substituted service on a wife at a restaurant where she had worked in the past and currently owned a community property interest was insufficient. (Id. at p. 1417.)

Zirbes v. Stratton is distinguishable. The wife in that case had not actually worked at the restaurant for 3-4 years prior to the substituted service. (Ibid.) Further, the trial court had found that there was no actual notice and “a terrible lack of due process.” (Ibid.) In this case, Defendant was still working for the employer at the time of service, Defendant received actual notice of the lawsuit within days of service, and Defendant was handed the papers two months later.

Further, subsequent cases make it clear that the strict compliance required by Zirbes v. Stratton is relaxed if actual notice has been received by the defendant. (See Stafford v. Mach (1998) 64 Cal.App.4th 1174, 1182-1183 [“The pre-1969 service of process statutes requiring strict and exact compliance have now been more liberally construed to effectuate service if actual notice has been received by the defendant.”]; Katz v. Campbell Union High School Dist. (2006) 144 Cal.App.4th 1024, 1034-1035 [substantial compliance may be sufficient when summons is served personally, but strict compliance is usually required when it is served by publication].) Here, Defendant had actual notice of the lawsuit and was handed the summons and complaint.

Based on the above, the court finds that the requirements of Civil Procedure Code section 437.5 have not been met.

Relief on Equitable Grounds

Defendant also requests that the default and default judgment be set aside on equitable grounds.

“A trial court has an inherent equity power under which, apart from statutory authority, it may grant relief from a default judgment obtained through extrinsic fraud or mistake.” (Munoz v. Lopez (1969) 275 Cal. App. 2d 178, 181.)

As explained by the court of appeal in In re Marriage of Melton (1994) 28 Cal.App.4th 931:

Extrinsic fraud occurs when a party is deprived of his opportunity to present his claim or defense to the court, where he was kept in ignorance or in some other manner fraudulently prevented from fully participating in the proceeding. Examples of extrinsic fraud are: . . . failure to give notice of the action to the other part [or] convincing the other party not to obtain counsel because the matter will not proceed (and it does proceed).

. . .

Extrinsic mistake involves the excusable neglect of a party. When this neglect results in an unjust judgment, without a fair adversary hearing, and the basis for equitable relief is present, this is extrinsic mistake. Reliance on an attorney who becomes incapacitated, or incompetence of the party without appointment of a guardian ad litem, are examples of extrinsic mistake.

(Id. at p. 937, citations omitted.)

Extrinsic fraud and extrinsic mistake “are given a very broad meaning which tends to encompass all circumstances that deprive an adversary of fair notice of hearing whether or not those circumstances would qualify as fraudulent or mistaken in the strict sense.” (Munoz v. Lopez, supra, 275 Cal. App. 2d at p. 181.)

However, even giving the terms “extrinsic fraud” and “extrinsic mistake” a very broad meaning, Defendant has failed to show that either was present here. Defendant was not “kept in ignorance or in some other manner fraudulently prevented from fully participating in the proceeding”. In fact, Defendant received actual notice. In addition, Defendant does not allege excusable neglect or neglect of any kind on his part. Defendant was given fair notice of this action.

Thus, the motion must be denied. However, the court will deny without prejudice as Defendant may be able to seek relief on other grounds.

Plaintiff shall give notice of this ruling.