Judge Ronald F. Frank, Case Number: 21TRCV00687, Date: 2024-01-30 Tentative Ruling

Judge: Ronald F. Frank, Case: 21TRCV00687, Date: 2024-01-30 Tentative Ruling

Case Number: 21TRCV00687 Hearing Date: January 30, 2024 Dept: 8

Tentative Ruling¿

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HEARING DATE: January 30, 2024¿¿

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CASE NUMBER: 21TRCV00687

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CASE NAME: Mid-Century Insurance Company v. Blusky Restoration Contractors, et al.

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MOVING PARTY: Defendant/Cross-Defendant, ProCorp Construction, Inc.

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RESPONDING PARTY: Defendant, Blusky Restoration Contractors, LLC

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DEFAULT DATE: May 6, 2023

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MOTION:¿ (1) Motion to Set Aside Default

Tentative Rulings: (1) GRANTED, on the condition that ProCorp reimburse Blusky for the costs of service and for $500 in reasonable attorneys fees incurred by Blusky in opposing this motion

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I. BACKGROUND¿¿

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A. Factual¿¿

On September 30, 2021, Plaintiff, State Farm General Insurance Company (“Plaintiff”) filed a Complaint against Defendant, Blusky Restoration Contractors, LLC. On June 13, 2022, Plaintiff filed a First Amended Complaint (“FAC”) alleging causes of action for equitable subrogation for damages to property.

On May 5, 2022, Cross-Complainant, Blusky Restoration Contractors, LLC, filed a Cross-Complaint against Cross-Defendants, ProCorp Construction, Inc., Southwest Home Remodeling, Inc. dba Southwest Roofing, and Dwayne Swallows dba Swallow Roofing, and ROES 1 through 20. The Cross-Complaint alleged causes of action for: (1) Equitable Indemnity; (2) Equitable Apportionment; (3) Declaratory Relief; and (4) Express Indemnity. Blusky filed a request for a Clerk’s default after ProCorp failed to file a formal response to the Cross-Complaint.

B. Procedural

On January 3, 2024, Defendant/Cross-Defendant, Procorp Construction, Inc. (“Procorp”) filed this Motion to Set Aside Default. On January 17, 2024, Defendant, Blusky Restoration Contractors, LLC (“Blusky”) filed an opposition. On January 23, 2024, Procorp filed a reply brief.

II. ANALYSIS¿

A. Legal Standard

Pursuant to Code of Civil Procedure §473(b), both discretionary and mandatory relief is available to parties from a judgment, dismissal, order, or other proceeding. Discretionary relief is available under the statute as “the court may, upon any terms as may be just, relieve a party or his or her legal representative from judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. (Code of Civ. Proc. §¿473(b).) Alternatively, mandatory relief is available when “accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.” (Ibid.) Under this statute, an application for discretionary or mandatory relief must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought. (Code Civ. Proc., § 473(b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.)

“‘[W]hen relief under section 473¿is¿available, there is a strong¿public¿policy¿in¿favor¿of granting relief and allowing the requesting party his or her day in court…[Citation.]” (Rappleyea v. Campbell¿(1994) 8 Cal. 4th 975, 981-82.)

B. Discussion

Mistake, Inadvertence, Surprise, or Excusable Neglect

Here, Procorp avers that the default must be set aside due to excusable neglect. Procorp contends it was never served with the Blusky Cross-Complaint and was unaware of the proceedings filed against it. Procorp admits to its inadvertence

This Court notes that on February 28, 2023, Blusky filed a Motion to Serve Procorp via the Secretary of State. Blusky also asserts that the Secretary of State served Procorp with the Blusky cross-complaint on March 6, 2023. Blusky also contends that Clerk’s default was entered on May 6, 2023. This motion is made on January 2, 2024, more than six (6) months after default was entered. Lastly, Blusky points out numerous attempts at service, including: in 2022, Blusky attempted to serve Procorp repeatedly at its address on record with the Secretary of State. Further, Blusky also contends that it also called and sent Procorp letters indicating that it was attempting to serve Procorp, and Procorp ignored these communications. Blusky also notes that during its meet and confer process with Procorp, they asked Procorp to confirm their address and telephone number, and to confirm AmTrust was aware of the matter and find out why it did not participate in the lawsuit of its insured. Blusky contends Procorp did not confirm or deny these details or that its carrier was involved, but instead stated it did not know what happened before its request to set aside default.

As to the timeline of this issue, Procorp clearly fails under mandatory relief as it is more than six months from after entry of default. However, ProCorp also moves on equitable grounds, which is not subject to the same strict timing requirement. (Luxury Asset Lending, LLC v. Philadelphia Television Network, Inc. (2020) 56 Cal. App. 5th 894, 910 [A trial court may vacate a default on equitable grounds even if statutory relief is unavailable.].) The moving party carries the burden of proving that he or she is entitled to equitable relief. (Ibid.) Section 473 concerning relief from judgment or order taken by mistake, etc., should be liberally construed. (Goodson v. Bogerts, Inc. (1967) 252 Cal. App. 2d 32, 38.) California has a strong public policy favoring resolution of cases on their merits.

The Court finds that Procorp has articulated a satisfactory excuse regarding lack of notice, and that the inclusion of the proposed Answer evinces Procorp’s intent to participate in litigation. “[I]t is not every mistake that will excuse a default, the determining factor being the reasonableness of the misconception.” (Shank v. County of L.A. (1983) 139 Cal.App.3d 152, 157.) Further, the motion was served and filed within a reasonable time, within 8 months after entry of default. Blusky’s contention that it will be severely prejudiced because of the efforts expended in obtaining default and default judgment is unavailing, especially as public policy favors disposing cases on the merits. These facts warrant setting aside the default entered against Procorp. (Taliaferro v. Taliaferro (1963) 217 Cal.App.2d 216, 220 [“It is the policy of the law that every case should be heard upon the merits where possible; that a motion to set aside a default is one addressed to the sound discretion of the court; that the ruling on such motion will not be reversed in the absence of a clear showing of abuse of discretion; that section 473 is a remedial provision to be liberally construed to the end that cases be disposed of upon their merits.”].)

This motion is therefore GRANTED. The May 6, 2023 default will be set aside. The Court determines that the “terms as may be just” include imposing a condition on the granting of this motion that ProCorp reimburse Blusky for the costs Blusky incurred in applying for service on the Secretary of State and for $500 in reasonable attorneys fees Blusky incurred in opposing this motion which was brought outside the 6-month period for the usual 473(b) motion.

III. CONCLUSION

For the foregoing reasons, ProCorp’s Motion to Set Aside/Vacate Default is GRANTED. ProCorp shall file its proposed Answer as a stand-alone document within 7 days of this ruling, and shall give notice of ruling to all appearing parties. ¿¿