Judge: Robert B. Broadbelt, Case: 22STCV10556, Date: 2023-04-12 Tentative Ruling

Case Number: 22STCV10556    Hearing Date: April 12, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Defendant Eric Bruget           

RESPONDING PARTY:       Plaintiff Kimberlina Whettam & Associates, Inc.

Motion to Set Aside Default

The court considered the moving, opposition, and reply papers filed in connection with this motion.

DISCUSSION

Plaintiff Kimberlina Whettam & Associates, Inc. (“Plaintiff”) filed the operative First Amended Complaint in this action on June 15, 2022, against, among others, defendant Eric Bruget (“Defendant”).

Defendant’s default was entered on August 31, 2022.

Defendant now moves the court for an order setting aside his default pursuant to the court’s inherent equitable authority.

“Apart from any statute, courts have the inherent authority to vacate a default and default judgment on equitable grounds such as extrinsic fraud or extrinsic mistake.”  (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 97.)  “A party seeking relief under the court’s equitable powers must satisfy the elements of a ‘stringent three-pronged test’: (1) a satisfactory excuse for not presenting a defense, (2) a meritorious defense, and (3) diligence in seeking to set aside the default.”  (Kramer v. Traditional Escrow, Inc. (2020) 56 Cal.App.5th 13, 29.) 

First, the court finds that Defendant has met his burden to show a satisfactory excuse for not presenting a defense.

“A defendant has a satisfactory excuse if it shows that an extrinsic fraud or extrinsic mistake occurred.”  (Kramer, supra, 56 Cal.App.5th at p. 29.)  “‘Extrinsic fraud usually arises when a party is denied a fair adversary hearing because he has been “deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his clam or defense.”’  [Citations.]  In contrast, the term ‘extrinsic mistake’ is ‘broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits.”  (Bae, supra, 245 Cal.App.4th at p. 98 [internal citations omitted].)

Defendant has presented evidence showing that he was “deliberately kept in ignorance of the action or proceeding” by his counsel and therefore has met his burden of showing that extrinsic fraud occurred.  (Bae, supra, 245 Cal.App.4th at p. 98; Kramer, supra, 56 Cal.App.5th at pp. 29, 36].)  Defendant states, in his declaration, that (1) he retained attorney Tracy Green to defend him in this action; (2) he depended on Green to inform him of developments in this case; (3) Green never provided him with any document filed in this action and never informed him of any deadlines with which he had to comply, including the deadline to respond to Plaintiff’s First Amended Complaint; (4) in February of 2023, Green “began evasively responding to” Defendant; (5) after becoming concerned with insufficient contact with Green, he accessed the online docket of the court, discovered his default, and expressed his concerns to Green;            (6) Green stated that she would attend the hearing and would tell Defendant what occurred; and (7) Green did not inform Defendant that his default had been entered. (Bruget Decl., ¶¶ 2-7.)  

The court therefore finds that Defendant has presented evidence showing that his attorney kept him in ignorance of the status of this action, including the details of his default and his obligation to respond to the First Amended Complaint.   

The court notes that, as Plaintiff argues in its opposition, ordinarily, “the negligence of an attorney is imputed to the client.”  (Seacall Development, Ltd. v. Santa Monica Rent Control Bd. (1999) 73 Cal.App.4th 201, 204-205; Opp., p. 6:8-12.)  However, “[i]mputation of the attorney’s neglect to the client ceases at the point where ‘abandonment of the client appears.’”  (Seacall Development, Ltd., supra, 73 Cal.App.4th at p. 205.)  Here, as set forth above, Defendant has presented evidence showing attorney Green’s abandonment of Defendant. 

The court also notes that Plaintiff contends that Plaintiff’s counsel communicated with attorney Green and, “[a]ccordingly, it stands to reason that all of the pleadings discussed [in the declaration] were communicated by Attorney Green to her clients [Defendant] and his sister, Wendy.”  (Ezra Decl, ¶ 8.)  However, Plaintiff’s counsel does not present competent evidence showing that attorney Green did communicate with Defendant and advise him of the deadline to respond to Plaintiff’s First Amended Complaint or the default entered against him.  

The court therefore finds that Defendant’s evidence is sufficient to support a finding of extrinsic fraud based on attorney misconduct.                 

Second, the court finds that Defendant has met his burden to show that he has a meritorious defense.

Defendant has submitted (1) a proposed answer to the First Amended Complaint, which includes (i) a general denial and (ii) 13 affirmative defenses, (2) the declaration of Defendant’s counsel, who states that counsel believes that “Defendant has a meritorious defense to the claims made against him in the unverified First Amended Complaint[,]” and (3) Defendant’s own declaration, in which he states that he believes he has “valid defenses” to the claims asserted against him in this action.  (King Decl., Ex. D [Proposed Answer]; King Decl., ¶ 6; Bruget Decl., ¶ 9.)

“It has long been established that merely attaching a verification to a proposed answer is sufficient to demonstrate meritoriousness [citation].”  (Stiles v. Wallis (1983) 147 Cal.App.3d 1143, 1148.)  However, a verified answer is not required to show merit.  (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 983 [acknowledging that ordinarily, a verified answer is sufficient to show merit, but finding that the unverified answer was sufficient when the complaint was not verified and answer responded to the allegations].)  The court finds that (1) the proposed answer, which denies each allegation of the First Amended Complaint, and (2) the declaration of counsel attesting to the merits of Defendant’s defenses are sufficient to show a meritorious defense.  (Ibid.) 

Third, the court finds that Defendant has met his burden to show that he acted diligently in seeking to set aside the default.

Defendant presents evidence showing that he became aware of the default entered against him on February 20, 2023 “for the first time,” and thereafter retained new counsel to set aside his default.  (Bruget Decl., ¶¶ 5, 7.)  Defendant’s motion, filed on March 20, 2023, was filed only one month after Defendant discovered his default.  The court therefore finds that Defendant has submitted evidence showing that he acted diligently upon learning of the default entered against him.

Based on the evidence and arguments presented by the parties, the court finds that Defendant has met his burden of submitting evidence establishing that he is entitled to relief pursuant to the court’s equitable powers and therefore grants Defendant’s motion.  (Kramer, supra, 56 Cal.App.5th at p. 29.) 

ORDER

The court grants defendant Eric Bruget’s motion to set aside default.

The court orders that the default entered against defendant Eric Bruget on August 31, 2022, is set aside.

The court orders defendant Eric Bruget to file his answer to Plaintiff’s First Amended Complaint within 10 days of the date of this order.   

The court orders defendant Eric Bruget to give notice of this ruling.

IT IS SO ORDERED.

DATED:  April 12, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court