Judge: Peter A. Hernandez, Case: 21PSCV00889, Date: 2022-08-16 Tentative Ruling

Case Number: 21PSCV00889    Hearing Date: August 16, 2022    Dept: O

Defendants California Investment Regional Center LLC’s and Zhong Fang’s Motion to Vacate and Set Aside Defaults is GRANTED.

Background   

Plaintiff Guangliang Zeng (“Plaintiff”) alleges as follows:

Plaintiff is a Chinese citizen. Defendant California Investment Regional Center LLC (“CIRC”) is a regional center for EB-5 investment immigration. On June 5, 2014, Plaintiff signed a “U.S. EB-5 Investment Immigration Agreement” and “EB-5 Investment Management Agreement” (collectively, “Investment Agreements”) with CIRC and paid $500,000.00. On June 30, 2017 and November 13, 2019, Plaintiff and CIRC signed a “Refund Agreement” and “Deferred Refund Agreement” (collectively, “Refund Agreement”). CIRC failed to refund the amount as agreed.

On October 29, 2021, Plaintiff filed a complaint, asserting a cause of action against CIRC, Zhong Fang (“Fang”) and Does 1-50 for:

1.                  Breach of Contract

On February 1, 2022, Fang’s default was entered. On February 2, 2022, CIRC’s default was entered.

Legal Standard

Relief under Code of Civil Procedure section 473 is either discretionary or mandatory. A motion for mandatory relief must be “made no more than six months after entry of judgment” and be “accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.” (Code Civ. Proc., § 473, subd. (b).)

The attorney affidavit of fault must contain a “straightforward admission of fault.” (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 610.) The attorney affidavit of fault, however, need not include an explanation of the reasons for the attorney’s mistake, inadvertence surprise or neglect. (Martin Potts & Assocs., Inc. v. Corsair, LLC (2016) 244 Cal.App.4th 432, 438-441.) “Relief is mandatory when a complying affidavit is filed, even if the attorney’s neglect was inexcusable.” (Rodrigues v. Superior Court (2005) 127 Cal.App.4th 1027, 1033.) Relief must be granted unless the court finds that the default or dismissal was not in fact the attorney’s fault. (Id.)

Where a party cannot obtain an attorney affidavit of fault, the party may seek discretionary relief under section 473(b) due to “mistake, inadvertence, surprise, or excusable neglect.” (Code Civ., Proc., § 473, subd. (b).) A motion for discretionary relief must be made “within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Id.) “The burden of proof. . . is on the moving party who must establish his position by a preponderance of the evidence.” (Luz v. Lopes (1960) 55 Cal.2d 54, 62.) “Because the law favors disposing of cases on their merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.” (Rapplyea v. Campbell (1994) 8 Cal.4th 975, 980 [quotation marks and citation omitted].)

A motion for relief under section 473, subdivision (b) “shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted. . .” (Code Civ. Proc., § 473, subd. (b).)

Discussion

Fang and CIRC move the court for an order setting aside their defaults entered on February 1, 2022 and February 2, 2022, respectively, on the basis of mistake, inadvertence, surprise, or excusable neglect.

At the outset, the court notes that Fang and CIRC have moved for discretionary relief only, even though the motion is supported by the declaration of their counsel, Jing Wang (“Wang”). “[W]hen faced with a motion for relief under section 473, the trial court does not have to consider the availability of relief under the mandatory provision unless such relief is requested in an appropriate manner.” (Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1126.)

With that said, the court finds that Fang and CIRC have shown grounds for discretionary relief. Wang represents that she is general counsel and the attorney for Fang and CIRC; that in mid-December 2021, she traveled up north to the Ventura area where she became very ill; that she was so sick and weak that she was not able to get out of bed and go home; that, since she did not have a computer with her, she would have only been able to review her emails on her cell phone, but because she was so ill, she did not do so; that, accordingly, she was unaware that on December 13, 2021, Fang had sent her an email in which he attached the summons and complaint, asking her to respond to the complaint; that on January 2, 2022, and due to the fact that her illness worsened, she went to a medical clinic to get tested for Covid-19  and tested positive (see Exhibit A); that on or about March 8, 2022, Fang sent her the Request for Entry of Default with respect to himself by email; that, upon receiving the Request for Entry of Default, she contacted Fang and asked him if he had been served with the summons and complaint; that Fang responded affirmatively and advised that he had sent her the summons and complaint via email; that she then checked her emails in December 2021 and saw that Fang sent her the summons and complaint on December 13, 2022 and asked her to respond to the complaint; that on March 16, 2022, she sent a meet and confer letter to Plaintiff’s counsel Jessica Xu (“Xu”), via email, explaining the circumstances of not filing a timely answer to the complaint and asking Xu to agree to stipulate to vacate and set aside the default; and that, on March 23, 2022, Xu declined her request. (Wang Decl., ¶¶ 1-7, Exhs. A-C.)

Fang and CIRC have also provided the court with a copy of their proposed pleading.

The motion is granted.