Judge Robert B. Broadbelt, Case Number: 23STCV24015, Date: 2025-01-08 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 23STCV24015, Date: 2025-01-08 Tentative Ruling

RESPONDING PARTIES: Plaintiffs MM&R Products, Inc., and Ngai Kwong International, Ltd.

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

The court overrules defendant Tre Milano, LLC, d/b/a InStyler’s evidentiary objections filed on September 9, 2024 because plaintiffs MM&R Products, Inc., and Ngai Kwong International, Ltd. filed the subject exhibits not to prove defendant Tre Milano, LLC, d/b/a InStyler’s liability, but to argue that it had knowledge of the pending default judgment, such that these exhibits are not made inadmissible under Evidence Code section 1152. (Evid. Code, § 1152, subd. (a).)

Defendant Tre Milano, LLC, d/b/a InStyler (“Defendant”) moves the court for an order setting aside (1) the November 15, 2023 entry of its default, and (2) default judgment, entered in favor of plaintiffs MM&R Products, Inc., and Ngai Kwong International, Ltd. (“Plaintiffs”) and against Defendant on January 31, 2024. Defendant moves for relief pursuant to Code of Civil Procedure sections 473 and 473.5, and pursuant to the court’s inherent authority.

First, the court finds that Defendant has not shown that it is entitled to relief under Code of Civil Procedure section 473.5 because Defendant has not shown that service of summons did not result in Defendant’s actual notice in time to defend this action. (Code Civ. Proc., § 473.5, subd. (a).)

“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.” (Code Civ. Proc., § 473.5, subd. (a).)

The “Proof of Service of Summons” filed by Plaintiffs on November 15, 2023, states that Defendant was personally served with the summons and complaint based on service thereof on “Alley Alvarez, authorized to accept service for California Corporate Agents, Inc., Agent for service of Process[.]” (Nov. 15, 2023 Proof of Service of Summons, ¶¶ 3-5.) Because the proof of service was completed by a registered California process server, there is a presumption affecting the burden of producing evidence of the facts stated in the return. (Nov. 15, 2023 Proof of Service of Summons, ¶ 7; Fernandes v. Singh (2017) 16 Cal.App.5th 932, 940; Evid. Code, § 647.)

The court acknowledges that Defendant asserts that (1) Daniel M. Fugardi, the sole managing member of Hoziane, LLC, which is the sole managing member of Defendant (“Fugardi”), has “never met, let alone heard of an ‘Alley Alvarez[,]’” and (2) Fugardi was “never given a copy of the Complaint, the Summons, or any legal documents regarding this action by California Corporate Agents, Inc.” and was not notified of this action until April 26, 2024. (Fugardi Decl., ¶¶ 1, 9, 11.) However, Fugardi expressly states that California Corporate Agents, Inc. is Defendant’s agent for service of process. (Fugardi Decl., ¶¶ 7 [Defendant’s April 21, 2023 Statement of Information listed California Corporate Agents, Inc. as its agent for service of process], 11 [referring to California Corporate Agents, Inc. as the agent for service of process]; Fugardi Decl., Ex. A, April 21, 2023 Statement of Information for Defendant, p. 1 [listing as “Agent for Service of Profess” California Corporate Agents, Inc.”].)

Thus, personal service on Defendant’s agent for service of process, California Corporate Agents, Inc.—which was effected by personally serving Ally Alvarez, the person authorized to accept service for California Corporate Agents, Inc.—constitutes personal service on Defendant.[1] (Nov. 15, 2023 Proof of Service, ¶¶ 3, 5; Corp. Code, § 17701.16, subd. (b) [“Personal service of a copy of any process against the limited liability company . . . by delivery . . . (2) if the designated agent is a corporation, to any person named in the latest certificate of the corporate agent filed pursuant to Section 1505 at the office of the corporate agent, shall constitute valid service on the limited liability company . . . .”].) Because a corporate entity “can have actual notice only through an agent who has the appropriate authority[,]” Defendant is deemed to have received actual notice of this action based on the personal service of the summons and complaint on its agent for service of process. (Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 274 [emphasis in original]; Ibid. [“notice to the person designated by the corporation as its agent for service of process is actual notice. An agent for service of process has the necessary authority because the corporation has expressly held that person out to the world as authorized to receive notice of actions”] [emphasis in original].)

Second, the court finds that Defendant has not shown that it is entitled to relief pursuant to the inherent authority of the court based on the doctrine of extrinsic mistake.

“[C]ourts 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.) “[T]he term ‘extrinsic mistake’ is ‘broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits. [Citations.] . . . .’” (Ibid.) “To qualify for equitable relief based on extrinsic mistake, the defendant must demonstrate: (1) ‘a meritorious case’; (2) ‘a satisfactory excuse for not presenting a defense to the original action’; and (3) ‘diligence in seeking to set aside the default once the fraud [or mistake] had been discovered.’” (Mechling v. Asbestos Defendants (2018) 29 Cal.App.5th 1241, 1246.) “When ‘a default judgment has been obtained, equitable relief may be given only in exceptional circumstances.’” (Ibid. [emphasis in original].)

The court finds that Defendant has not demonstrated a satisfactory excuse for not presenting a defense to the original action that satisfies the “stringent” test for extrinsic mistake because (1) “‘[r]elief on the ground of extrinsic fraud or mistake is not available to a party if that party has been given notice of an action yet fails to appear, without having been prevented from participating in the action[,]’” and (2) Defendant received actual notice of this action based on service of the summons and complaint on its registered agent for service of process, such that Defendant’s evidence that it never received the summons and complaint from its agent does not qualify for equitable relief. (Bae, supra, 245 Cal.App.4th at p. 100 [relief requires satisfaction of the “‘stringent three-part formula’”]; Pulte Homes Corp., supra, 2 Cal.App.5th at pp. 276, 277 [“We therefore hold that a dissolved corporation cannot claim excusable neglect when its agent for service of process at the time of dissolution has not made any effort to notify it and has not shown that an effort, if made, would have failed”].)

Third, the court finds that Defendant has not shown that it is entitled to relief under Code of Civil Procedure section 473 because Defendant did not file this motion within six months of entry of its default on November 15, 2023.

“Application for [discretionary] relief [under section 473] 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, subd. (b).) “Under the discretionary relief provision (§ 473(b)), a motion to set aside a default judgment must be made no more than ‘six months’ after the default—not the default judgment—is entered [citation].” (Jimenez v. Chavez (2023) 97 Cal.App.5th 50, 59-60 [internal citation omitted].)

Defendant’s default was entered on November 15, 2023. (Nov. 15, 2023 Request for Entry of Default, p. 1.) Defendant filed the pending motion on July 29, 2024, i.e., more than six months after its default was entered. Thus, the court finds that Defendant’s motion, to the extent that it is made under section 473, subdivision (b), is untimely. (Code Civ. Proc., § 473, subd. (b); Jimenez, supra, 97 Cal.App.5th at pp. 59-60; Pulte Homes Corp., supra, 2 Cal.App.5th at p. 273 [the motion was filed more than six months after entry of the party’s default, such that the trial court could not set aside the default, “[a]nd because it could not set aside the default, it also could not set aside the default judgment under Code of Civil Procedure section 473, because that would be ‘an idle act;”].)

Thus, for the reasons set forth above, the court denies Defendant’s motion to set aside its default and default judgment.

The court denies defendant Tre Milano, LLC, d/b/a InStyler’s motion to set aside entry of default and default judgment.

The court orders plaintiffs MM&R Products, Inc., and Ngai Kwong International, Ltd. to give notice of this ruling.

[1] The court notes that, in his declaration, Fugardi states that “[t]he Secretary of State identifies the agent as Chris Johnson, located at 2108 N. St., Ste C, Sacramento, CA.” (Fugardi Decl., ¶ 7.) Thus, Fugardi appears to assert that Chris Johnson is the only person authorized to accept service on behalf of California Corporate Agents, Inc. However, Defendant did not submit evidence (e.g., filings with the Secretary of State) of that fact, nor did Defendant present argument and analysis to support such an argument.

mm&r products, inc. , et al.; Plaintiffs, vs. tre milano, llc, d/b/a instyler , et al.; Defendants.	Case No.:	23STCV24015

	Hearing Date:	January 8, 2025

	Time:	10:00 a.m.

	[tentative] Order RE: defendant’s motion to set aside entry of default and default judgment