Judge Randolph M. Hammock, Case Number: 22STCV39345, Date: 2023-06-29 Tentative Ruling

Plaintiffs Shenzhen Aiper Intelligent Co. LTD and Aiper Intelligent Co. LTD are Chinese corporations that export products to wholesalers and retailers in California. Plaintiffs allege that Defendants, Taok LLC, and Suptech conspired to defraud Plaintiffs through multiple written instruments. Plaintiffs bring causes of action for (1) fraud, (2) intentional interference with prospective economic advantage, (3) civil theft, and (4) declaratory relief.

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.

Relief under section 473.5 is available only where the defendant’s lack of actual notice “was not caused by his or her avoidance of service or inexcusable neglect.” (§ 473.5, subd. (b).

According to the December 27, 2022, Proof of Service, a registered California process server served the Complaint, Summons, and related documents on Suptech by substitute service. (12/27/2022 Proof of Service, ¶ 5). On December 21, 2022, the process server left the documents with “Tim Zhao—Employee—Person Apparently in Charge” at 10767 7th St. Suite B, Rancho Cucamonga, CA. (Id.) On December 22, 2022, the process server mailed the documents to the same address.

In lieu of personal delivery of a copy of the summons and complaint to the person to be served as specified in Section 416.10, 416.20, 416.30, 416.40, or 416.50, 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. Service of a summons in this manner is deemed complete on the 10th day after the mailing.

Suptech contends service did not result in actual notice. Suptech submits the declaration of Pingcheng Jiang, who attests to have “been employed by Suptech since November 1, 2022, at their office located at 10767 7th Street, Rancho Cucamonga, CA 91730.” (Jiang Decl. ¶ 2.) Jiang has been “the only person working in the office” since November 1, 2022. (Id. ¶ 3.) Jiang further attests that “no person by the name of Tim Zhao has ever worked at Suptech while [he has] been employed there, nor [does he] know any person by the name of Tim Zhao.” (Id. ¶ 5.)

According to the January 3, 2023, Proof of Service, a registered California process server served the Complaint, Summons, and related documents on Taok LLC by substitute service. (01/03/2023 Proof of Service, 5.) On December 29, 2022, the process server left the documents with “Dan Wong—Employee—Person Apparently in Charge” at 9370 7th St. Suite F, Rancho Cucamonga, CA. (Id.) On December 30, 2022, the process server mailed the documents to the same address.

Like Suptech, Taok also contends service did not result in actual notice. Although the California Secretary of State website listed the Principal Address for Taok LLC as 9370 7th Street, Suite F, Rancho Cucamonga, CA 91730, since February 1, 2021, Taok, represents it has sublet the premises to a third party, Just Jade. (See Wang Decl., Exh. B.) Since that time, only Just Jade—and not Taok—has purportedly occupied the subject premises. Thus, Defendant contends it could not have been served at that address.

moving parties on March 3, 2023. For whatever reason, Plaintiff submitted a new request to enter default against the moving parties on June 1, 2023, which was denied since it had already been “previously entered.” In any case, a default judgment has yet to be entered against them.

In opposition, Plaintiff contends Suptech has not met its burden to show improper service. Plaintiff also argues that Taok LLC was validly served because Defendant failed to keep its address up to date with the Secretary of State. Instead, it was not until June 14, 2023, that Defendant changed its office and service address to 10767 7th Street, Rancho Cucamonga, CA. (Li Decl., Exh. C.) Relatedly, Plaintiff contends this neglect was not excusable.

Here, the Defendants promptly moved to set aside the defaults well-within the mandatory time limit of section 473.5. Suptech has sufficiently established that it lacked actual notice of the pending lawsuit. Plaintiff has failed to produce any evidence to the contrary. Moreover, there is no evidence that Defendant avoided service, or that it committed inexcusable neglect. (See Tunis v. Barrow (1986) 184 Cal.3d 1069, 1077-1078 [A defendant seeking relief under CCP § 473.5 must show that his or her lack of actual notice in time to defend was not caused by inexcusable neglect or avoidance of service.”].)

As to Taok, Taok presents evidence that another party occupied the premises where service purportedly occurred. There is no evidence that Defendant avoided service, or that its neglect—namely, failure to keep its address of service up to date—was inexcusable.

The law favors judgments on the merits. Thus, on a motion for relief from default, “doubts must be resolved in favor of relief, with an order denying relief scrutinized [on appeal] more carefully than an order granting it.” (Lasalle v. Vogel (2019) 36 Cal. 5th 127, 134, [emphasis in original].)

Alternatively, in the event that relief under Code of Civil Procedure § 473.5 is somehow not available or improper, this Court would exercise its inherent power, and its sound discretion, to grant the requested relief under Code of Civil Procedure § 473 (b).

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.