Judge: Robert B. Broadbelt, Case: BC571210, Date: 2022-08-26 Tentative Ruling

Case Number: BC571210    Hearing Date: August 26, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Defendants JYG Concrete Construction, Inc., and John Stich

RESPONDING PARTY:       Plaintiff Juan Cruz Rodriguez

Motion to Set Aside Default Judgment

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

REQUEST FOR JUDICIAL NOTICE

The court grants Plaintiff’s request for judicial notice.  (Evid. Code, § 452, subd. (c).)

DISCUSSION

Plaintiff Juan Cruz Rodriguez (“Plaintiff”) filed this FEHA action on February 2, 2015.  Plaintiff filed the First Amended Complaint against defendants JYG Concrete Construction, Inc., JYG Construction, a corporate form unknown, and John Stich on July 7, 2015, alleging claims for discrimination, retaliation, and wrongful termination. 

The defaults of Defendants were entered on June 27, 2016. 

On November 30, 2016, the court entered judgment against Defendants in the sum of $279,565.75.

Defendants John Stich (“Stich”) and JYG Concrete Construction, Inc. (“JYG”) (collectively, “Defendants”) now move the court for an order setting aside the default judgment entered against them on the ground that the service of summons did not result in actual notice to Defendants in time to defend this action.

The court grants the motion to set aside as to defendant John Stich and denies the motion to set aside as to defendant JYG Concrete Construction, Inc.

First, the court denies Defendants’ motion to the extent that it is made pursuant to Civil Code section 1788.61, because Defendants do not argue, and the court does not find, that this FEHA action was “brought by a debt buyer.”  (Civ. Code, § 1788.61, subd. (a)(1) [“if service of a summons has not resulted in actual notice to a person in time to defend an action brought by a debt buyer” the person may serve a motion to set aside the default or default judgment]; Civ. Code, § 1788.50, subd. (a)(1) [a debt buyer is a person regularly engaged in the business of purchasing charged-off consumer debt for collection purposes].)

Second, the court denies Defendants’ motion as to defendant JYG.  Plaintiff presents evidence that JYG is suspended and is not in good standing with the Franchise Tax Board.  (Pl. RJN, Ex. A, p. 1 [establishing that JYG’s standing is “Suspended—FTB”]; see also defendant Stich Decl., ¶ 2 [“JYG shut down operations on or about February 2013”].)  “[D]uring the period that a corporation is suspended for failure to pay taxes, it may not prosecute or defend an action [citation], appeal from an adverse judgment [citation], seek a writ of mandate [citation], or renew a judgment obtained prior to suspension [citation].”  (Cal-Western Business Services, Inc. v. Corning Capital Group (2013) 221 Cal.App.4th 304, 310.)  However, a suspended corporation may still be sued.  (Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300, 1306.)  JYG has not refuted Plaintiff’s evidence establishing that it is a suspended corporation, nor has JYG argued that it intends to revive its status and lawfully defend itself against Plaintiff’s action.  Instead, the evidence submitted with Defendants’ moving papers confirms that JYG is not an active corporation.  (Stich Decl., ¶ 2.) 

The court therefore denies Defendants’ motion to set aside the default judgment entered against defendant JYG, since JYG, as a suspended corporation, is not authorized to defend this action.  (Cal-Western Business Services, Inc., supra, 73 Cal.App.4th at p. 310.)

Third, the court grants defendant Stich’s motion to set aside because the court finds that Stich has presented evidence that the default and default judgment entered against him are void as based on improper service.  The court may set aside any void judgment or order.  (Code Civ. Proc., §¿473, subd. (d).)  “[A] default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void.”  (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444.)  Thus, a “court may ‘set aside a default judgment which is valid on its face, but void, as a matter of law, due to improper service.’”  (Kremerman v. White (2021) 71 Cal.App.5th 358, 371.)  A default or default judgment determined to be void may be challenged at any time.  (Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1250.)

Plaintiff’s Proof of Service states that Stich was served, by substituted service, on March 22, 2016, by leaving the lawsuit documents with “Jane” Stich at 30730 Hasley Canyon Road.  (March 25, 2016 Proof of Service, ¶¶ 3-5.)  “Jane” Stich was identified to be Stich’s wife and co-occupant, and was described as a 5’4” tall Caucasian female with a weight of 170 pounds.  (March 25, 2016 Proof of Service, ¶¶ 3, 5.)  Elizabeth Stich, defendant Stich’s wife and co-occupant, submits a declaration stating that she “did not accept service of any documents at 30730 Hasley Canyon Road” in connection with this matter; that she is four inches shorter than the description provided for “Jane” and weighs 75 pounds less than described; that she never received a copy of the summons and complaint; and that it is her customary practice to file documents for Stich in his office, but that the summons and complaint in this case were never received.  (Elizabeth Stich Decl., ¶¶ 1-3.)  Defendant Stich states in his declaration that he is unfamiliar with any woman meeting the description in the Proof of Service, and that his wife (i.e., Elizabeth Stich) “is about half the size of the person who allegedly accepted service (Cauc/F/52/5’1/95#).”  (John Stich Decl., ¶¶ 4-5.)  Stich also states that he never received a copy of the summons and complaint in this action, or the statement of damages and request for entry of default.  (Stich Decl., ¶ 5.)

Defendant Stich has presented evidence that Stich was not properly served with the summons and complaint.  Accordingly, the default and the judgment entered against Stich are void due to improper service and therefore present grounds to be set aside.  (Code Civ. Proc., § 473, subd. (d).)

ORDER

            The court denies defendant JYG Concrete Construction, Inc.’s motion to set aside default judgment and default.

            The court grants defendant John Stich’s motion to set aside default judgment and default.

            The court orders that the default entered against defendant John Stich on June 27, 2016, and the default judgment entered against defendant John Stich on November 30, 2016 are set aside.

The court orders defendant John Stich to file an Answer to plaintiff Juan Cruz Rodriguez’s First Amended Complaint within 10 days from the date of this order.

The court sets a Case Management Conference in this action on _________________, 2022, at 8:30 a.m.   

The court orders defendant John Stich to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 26, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court