Judge: Richard Y. Lee, Case: 30-2021-01208987, Date: 2023-08-24 Tentative Ruling
Motion to Vacate Default
Defendant, C4 Distribution Co., LLC (“C4”) moves for an order vacating the default entered against it and granting it leave to file the same exact answer that was previously stricken.
C4 contends that it filed an Answer to Plaintiff’s Complaint on October 4, 2021; that it was a suspended entity until May 25, 2022, during which the Court granted Plaintiff’s motion to strike C4’s Answer; that on May 25, 2022, C4 revived its corporate status, but that since that time, Counsel has mistakenly proceeded as though the Answer filed by C4 was active in this case. C4 contends that Plaintiff failed to request a prove-up hearing relating to the default, and that Counsel was reminded of the default when Plaintiff’s counsel presented his Statement of the Case in August 2023. C4 asserts that the Court may relieve a party from default under Code of Civil Procedure section 473(b), and that its motion is filed within a reasonable period of time, not exceeding six months after entry of default. C4 also contends that there is no prejudice to Plaintiff and that the parties have conducted very little discovery and/or motion type practice except to continue the prior trial date in this case. C4 additionally argues that the attached declaration shows that the service of the Summons was improper, depriving the court of jurisdiction as to the defendant.
Plaintiff, Abstrax Labs, Inc. (“Plaintiff”), contends that C4’s motion to set aside the default is barred by the six-month limitation of Code of Civil Procedure section 473(b) and the court is without jurisdiction to consider it; that C4 has done nothing about the default until the eve of trial; that relief under Code of Civil Procedure section 473(d) is not applicable as the requested relief is not to correct a clerical error and the order is not void; and that C4 has not alleged there was any extrinsic fraud or mistake to justify the court’s equitable powers. Plaintiff also asserts that the default entered against C4 was not a result of mistake, inadvertence, surprise, or excusable neglect; that C4’s counsel’s statement that he has mistakenly been proceeding as though the answer filed by C4 was active is not a mistake or excusable neglect in allowing the default to be entered; and that Counsel’s statement is a delay in filing the motion to vacate, not in the entry of the underlying order such that the basic requirements of Code of Civil Procedure section 473(b) have not been satisfied and the motion should be denied. Plaintiff argues that Counsel’s statement that he thought that C4’s answer was active is disingenuous as there are at least three pleadings that refer to the default of C4, and that granting the motion and proceeding to trial would prejudice Plaintiff by not allowing it to conduct reasonable discovery and related motions to properly prepare to address C4’s defenses. Lastly, Plaintiff asserts that if the Court grants the motion, Plaintiff is entitled to recover fees under Code of Civil Procedure section 473(b) and (c)(1), and thus, Plaintiff requests that C4 or the attorney for C4 be ordered to pay Plaintiff legal fees and costs in an amount to be determined by the court, but not less than $1,000.
Code of Civil Procedure section 473(b) states, in relevant part: “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 accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Code Civ. Proc. § 473(b).)
Under Code of Civil Procedure section 473(b), a motion to set aside must be brought within six months after the order or proceeding was taken. “In order to qualify for relief under section 473, the moving party must act diligently in seeking relief . . .” (Elston v. City of Turlock (1985) 38 Cal.3d 227, 234.) The party seeking relief bears the burden of proof in establishing a right to relief. (Hopkins & Carley v. Gens (2011) 200 Cal. App.4th 1401, 1410.) “The moving party has a double burden: He must show a satisfactory excuse for his default, and he must show diligence in making the motion after discovery of the default. [Citation.]” (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1420, internal quotations omitted.) Whether the moving party has successfully carried this burden is a question entrusted to the discretion of the trial court and its ruling will not be disturbed in the absence of a demonstrated abuse of that discretion. (Hopkins & Carley v. Gens (2011) 200 Cal. App. 4th 1401, 1410.)
‘[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. [Citations.]’ ” (Kendall v. Barker (1988) 197 Cal.App.3d 619, 623-624.) In a motion under section 473, the initial burden is on the moving party to prove inadvertence, surprise, excusable neglect or mistake by a “preponderance of the evidence.” (Id. at p. 624.)
Here, C4 states in conclusory and vague fashion that the motion is filed within a reasonable period of time, not exceeding six months after entry of the default. There is no evidence to support this assertion.
As noted by Plaintiff, the Court’s Minute Order entering default is dated March 10, 2022. (Ex. 1 to Motion, ROA 69.) A Notice of Ruling with a copy of the tentative ruling was filed by Plaintiff on March 15, 2022, and was served on C4’s counsel on March 15, 2022. (Ex. 2 to Motion, ROA 68.) The instant motion for relief was filed on August 8, 2023, nearly one year and five months after the entry of order entering default as to C4.
C4’s Counsel states that since May 25, 2022 when C4 was revived and after RD withdrew its motion to strike, “I have been mistakenly proceeding as though the answer filed by C4 was active in this case.” (Declaration of Brian Carlin, ¶ 6, ROA 133.) This does not show diligence in bringing the instant motion although it appears that C4 was aware of entry of default against it as early as March 10, 2022, or at least by March 15, 2022.
Based on the foregoing, the instant motion which is brought pursuant to Code of Civil Procedure section 473(b) was not timely brought and C4 fails to show that it acted diligently in making the motion after knowing of the default.
Additionally, that C4’s Counsel has been “mistakenly proceeding as though the answer filed by C4 was active in this case,” after default was entered against C4 does not show that the default was entered as a result of mistake, inadvertence, surprise or excusable neglect as required to support relief from default under Code of Civil Procedure section 473(b). Thus, C4 fails to meet its burden to show that it is entitled to relief under Section 473(b).
C4 fails to present any argument or evidence to support vacating default on equitable grounds.
Further, C4 vaguely asserts in the memorandum that the attached declaration describes that the service of the Summons was improper, depriving the court of jurisdiction as to the defendant, but no authority is cited, and the Declaration of Brian C. Carlin in support of the instant motion to vacate default contains no facts concerning the service of Summons. (See ROA 133.) The Court may treat an argument as waived where no legal authority supporting the argument is cited. (Hood v. Gonzales (2019) 43 Cal.App.5th 57, 73-74.) The court is not required to examine undeveloped claims or to supply arguments for the litigants. (See Maral v. City of Live Oak (2013) 221 Cal.App.4th 975, 984-985; Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 546; see also Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852 [holding that failure to make reasoned legal argument forfeits claim].)
Accordingly, the Court DENIES C4’s Motion to Vacate Default.
C4’s Request for Judicial Notice (ROA 135)
C4 requests that the Court judicially notice two documents: (1) “California Secretary of State Website Business Filings Indicating that C4 Distribution Co., LLC showing inactive status;” and (2) “California Secretary of State Website Business Filing Indicating that C4 Distribution Co., LLC was revived on May 25, 2022.”
The request is DENIED as the materials are not relevant to a determination of the motion. A court may deny a request for judicial notice on the ground that the material is not relevant to the determination of the issues. (State Compensation Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 442-443.)
Plaintiff to give notice.
Motions to be Relieved
Brian C. Carlin and Law Office of Brian C. Carlin, move for an order relieving them as Counsel of Record for Defendants, C4 Distribution Co., LLC and Golden Systems, LLC.
The Court, however, notes that on March 10, 2022, the Court granted Plaintiff, Abstrax Labs, Inc.’s motion to strike the Answers, ordered the Answers to Complaint filed by C4 and Golden Systems stricken, and ordered the defaults of C4 and Golden Systems entered as of the date of the Order. (ROA 69.)
In general, “after a plaintiff has obtained a default, the defendant no longer has any right to participate in the case.” (Nickell v. Matlock (2012) 206 Cal.App.4th 934, 941–942.) The defendant cannot participate in any other hearings or conferences with the court. (Harbour Vista, LLC v. HSBC Mortgage Services Inc. (2011) 201 Cal.App.4th 1496, 1504–1505.)
“The entry of a default terminates a defendant’s rights to take any further affirmative steps in the litigation until either its default is set aside or a default judgment is entered. [Citations.] ‘A defendant against whom a default has been entered is out of court and is not entitled to take any further steps in the cause affecting plaintiff’s right of action; he cannot thereafter, until such default is set aside in a proper proceeding, file pleadings or move for a new trial or demand notice of subsequent proceedings.’ [Citation.]” (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal. App. 3d 381, 385-386.)
As defaults were entered against C4 and Golden Systems on March 10, 2022, and they have not been set aside, these defendants no longer have any right to participate in the case. While the motion to be relieved as counsel concerns counsel’s representation of these defendants, it appears to the Court that permitting such a motion under these circumstances would not be appropriate as the defaulted defendant could not oppose such a motion, should it wish to, until after the default was set aside. Given the defaulted status of these defendants, granting the motion to be relieved as counsel would also be a moot act. The Court declines to rule on the motions.
Moving Counsel to give notice.