Judge Ronald F. Frank, Case 22TRCV00077 2023-05-08 Tentative Ruling

Judge: Ronald F. Frank, Case: 22TRCV00077, Date: 2023-05-08 Tentative Ruling

Case Number: 22TRCV00077 Hearing Date: May 8, 2023 Dept: 8

Tentative Ruling¿

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HEARING DATE: May 8, 2023¿¿

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CASE NUMBER: 22TRCV00077

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CASE NAME: LAT Group, Inc, Qiandai Zhao v. Manhong Zhang, et al.

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MOVING PARTY: Defendant, Linda Bao

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RESPONDING PARTY: Plaintiffs, LAT Group, Inc. and Qiandai Zhao

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TRIAL DATE: None set.

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MOTION:¿ (1) Motion to Set Aside/Vacate Entry of Defaults

Tentative Rulings: (1) Defendant Bao’s Motion is GRANTED and she ordered to file her proposed Demurrer as a stand-alone document forthwith after reserving a hearing date through CRS. As a condition of granting the motion, the Court orders Ms. Bao to reimburse Plaintiff’s counsel for the costs of the default application, fixed by the Court at $500. The payment by Ms. Bao or her counsel must be made on or before May 31, 2023.

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I. BACKGROUND¿¿

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A. Factual¿¿

On February 1, 2022, Plaintiffs, LAT Group, Inc. and Qiandai Zhao (“Plaintiffs”) filed a Complaint against Defendants, Manhong Zhang, Sunshine Investment, Inc., Estate of Jacky Lo, Harbor Torrance Family Trust, Linda Bao, Haotian Lo, Harbor Green Grain, L.P., Harbor Green Resources Development Holding, Inc., Manning Meat Holdings, Inc., River Star Recycling, Apex Electronic Commerce Company Limited, and DOES 1 through 50.

Plaintiffs claim Defendant Bao was served via substituted service on July 4, 2022, to a John Doe at the address: 6509 Pepperdine Dr, Buena Park, CA 90620. Plaintiffs note that the substituted service was effectuated after two unsuccessful service attempts on the same address. Plaintiffs further note that Defendant Bao is a registered owner of that property, and the complaint was left with a male John Doe in the house who fits the description of her allegedly estranged husband. However, Defendant Bao asserts that she has been living with her daughter at a different address for two years, which is why she did not receive service.

B. Procedural

On April 10, 2023, Defendant, Linda Bao filed a Motion to Set Aside Entry of Default, supporting declarations, and submitted her proposed responsive pleading (a demurrer), as an exhibit. On April 25, 2023, Plaintiffs filed an opposition and supporting declaration. On May 1, 2023, Defendant filed a reply brief.

II. REQUEST FOR JUDICIAL NOTICE

Defendant, Linda Bao requested that this Court take Judicial Notice of the following:

1. Proof of Service of Summons by Plaintiffs LAT GROUP, INC. and QIANDAI ZHAO on Ms. Bao, filed on July 12, 2022, attached to this document as Exhibit 1.

2. Request for Entry of Default filed by Plaintiffs LAT GROUP, INC. and QIANDAI ZHAO on March 1, 2023, attached to this document as Exhibit 2.

The Court GRANTS Defendant Bao’s request and takes judicial notice of the above.

III. ANALYSIS¿

A. Legal Standard

Under Code of Civil Procedure, section 473(b), an application for relief must be made no more than six months after entry of the order from which relief is sought and must be accompanied by an affidavit of fault attesting to the moving party’s mistake, inadvertence, surprise, or neglect. (Code Civ. Proc., § 473(b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.) 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).)¿

“It is the policy of the law to favor, wherever possible, a hearing on the merits, and appellate courts are much more disposed to affirm an order where the result is to compel a trial upon the merits than they are when the judgment by default is allowed to stand and it appears that a substantial defense could be made. Stated another way, the policy of the law is to have every litigated case tried upon its merits, and it looks with disfavor upon a party, who, regardless of the merits of the case, attempts to take advantage of the mistake, surprise, inadvertence, or neglect of his adversary.” (Weitz v. Yankosky (1966) 63 Cal.2d 849, 854–855.)¿

Code of Civil Procedure, section 473.5 permits the Court to set aside a default and default judgment when the service of a summons has not resulted in actual notice to a party in time to defend the action. ¿ Code of Civil Procedure section 473.5 requires the motion to be accompanied by an affidavit showing under oath that the party's lack of actual notice in time to defend the action was not caused by the party's avoidance of service or inexcusable neglect. ¿The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of the following:¿(1) two years after entry of a default judgment against him or her; or¿¿(2) 180 days after service on him or her of a written notice that the default or default judgment has been entered.¿In addition, a copy of the proposed answer or other responsive pleading must be filed.

B. Discussion

Defendant Bao argues that the entry of default should be set aside in the interest of due process where the attempted service failed to provide actual notice to her. Ms. Bao asserts that she did not get actual notice of Plaintiffs’ lawsuit until March 2023, when she first came across the documents after finding some unopened regular mail envelopes at a corner shelf when retrieving some personal belongings at her estranged husband’s residence. (Bao Decl., ¶ 3.) Defendant Bao further asserts that the default should be set aside, because her lack of notice was not caused by avoidance of service or inexcusable neglect. (Bao Decl., ¶ 6.) Instead, Bao notes that she no longer resides at the residence service was sent due to her estranged relationship with her husband, and the need to take care of her four granddaughters, which has caused Ms. Bao to live with her daughter for about two years. (Bao Decl., ¶ 2.) As further evidence that she was not avoiding service, Defendant Bao notes that she was a mere former personal assistant of the late Mr. Lo, had little to no interaction with Plaintiffs, did not sign any agreements with Plaintiffs, did not know whether Mr. Lo or his entities entered into any agreements with Plaintiffs, and did not receive any of Plaintiffs’ money. (Bao Decl., ¶ 6.)

Lastly, Defendant Bao asserts that Plaintiffs will not be prejudiced if the Court grants her motion because no rights have been or will be impaired because this court has not determined the default judgment application against Defendant Bao.

In opposition, Plaintiffs assert that Defendant Bao was properly substitute-served pursuant to Code of Civil Procedure Section 415.20. Plaintiffs argue that they properly served Defendant at her last known residence, in the presence of a John Doe matching the description of her allegedly estranged husband, who is a competent member of the household. Plaintiffs further assert that the diligence requirement for personal service was met in this case, based on the two previous unsuccessful service attempts. The Court agrees. However, this does not mean that the Court is willing to enforce a default judgment against a Defendant who is claiming, under oath, that she was not served, no longer resides at the address where service was effected, and that the competent adult to who the documents were delivered is an estranged spouse. The family law courts and restraining order courts are replete with examples of ex-spouses and estranged spouses or partners wo ignore or destroy legal documents bearing the names of their former co-habitants.

Plaintiffs assert that if Defendant Bao does not make any effort to change her mailing address or make herself available to be found at a new residence, she must be expected to coordinate with the resident of her last known address to ensure she can be reached via mail. Although the Court agrees Defendant Bao should provide her current residence to Plaintiffs, Plaintiffs cite no authority forcing her to communicate with her estranged husband about legal papers. It would certainly be a better practice for a cohabitant -- who moves away from a former residence where the estrange partner continues to live – to complete a U.S. mail change of address or forwarding application to avoid circumstances such as these. The fact that Ms. Bao failed to do so here is a fact considered by the Court on the scales of reasonable diligence. But the Court does not agree with Plaintiffs’ position that Defendant Bao need provide more evidence to support her claim. She has already submitted a declaration of the reasoning in which she did not respond. She need not produce the evidence suggested by Plaintiffs to prove that she has been living with her daughter for two years.

Lastly, Plaintiffs argue that her motions should be denied because her declaration does not allege any mistake, inadvertence, surprise, or excusable neglect. While it would have been stronger proof for this Motion had Plaintiff detailed why she did not update her mailing address or more regularly pick up her mail from her previous residence, this is not necessary since she did not receive actual service.