Judge Ronald F. Frank, Case 22TRCV00313 2022-12-16 Tentative Ruling

Judge: Ronald F. Frank, Case: 22TRCV00313, Date: 2022-12-16 Tentative Ruling

Case Number: 22TRCV00313 Hearing Date: December 16, 2022 Dept: 8

Tentative Ruling¿

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HEARING DATE: December 16, 2022¿¿

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CASE NUMBER: 22TRCV00313

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CASE NAME: Brian Poulter v. Ricardo Juarez, et al

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MOVING PARTY: Defendant, Ricardo Juarez

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RESPONDING PARTY: Plaintiff, Brian Poulter

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TRIAL DATE: None set¿

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MOTION:¿ (1) Motion to Set Aside Entry of Default and Judgments, to Quash any Writ of Possession/Execution, and for Leave to Defend the Action

Tentative Rulings: (1) DENIED.

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I. BACKGROUND¿¿

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A. Factual¿¿

On April 25, 2022, Plaintiff Brian Poulter brought this action against Defendant, Ricardo Juarez alleging causes of action for: (1) Breach of Contract; and (3) Fraud. This action is based on the remodeling of Plaintiff’s residence. The Plaintiff is the homeowner of a $1,000,000 property. The defendant is a licensed contractor who was hired to construct the foundation and rough framing of the two-story remodel of Plaintiff’s property. Plaintiff brought claims for breach of contract and fraud against Defendant alleging that Defendant essentially carried out a Ponzi scheme using his role as a general contractor to take money from new clients to pay for older clients’ outstanding projects. A default judgment was entered by this Court against Defendant on July 29, 2022.

Defendant now brings this Motion to Set Aside Entry of Default and Judgment, to Quash any Writ of Possession/Execution, and for Leave to Defend the Action.

B. Procedural

On November 17, 2022, Defendant filed his Motion to Set Aside Entry of Default and Judgment, to Quash any Writ of Possession/Execution, and for Leave to Defend the Action. On December 7, 2022, Plaintiff filed an opposition. To date, no reply brief has been filed.

II. ANALYSIS¿

A. Legal Standard

Section 473(b) provides for both discretionary and mandatory relief. [Citation.]” (Pagnini v. Union Bank, N.A. (2018) 28 Cal.App.5th 298, 302.) An application for relief under this section must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought and must be accompanied by an affidavit of fault attesting to the mistake, inadvertence, surprise or neglect of the moving party or its attorney. (Code Civ. Proc., § 473, subd. (b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.) Relief under this section is mandatory when based on an attorney affidavit of fault; otherwise, it is discretionary. (Id.) However, mandatory relief is not available where the attorney at fault abandoned the client and the attorney does not provide their affidavit of fault. (Las Vegas Land & Development Co., LLC v. Wilkie Way, LLC (2013) 219 Cal.App.4th 1086, 1092.)

B. Discussion

Here, Defendant claims that the Motion to Set Aside Entry of Default Judgement, and to Quash Writ of Possession/Execution were entered due to Defendant’s surprise, mistake, excusable neglect, or inadvertence pursuant to Code of Civil Procedure § 473(b). Defendant claims he had no actual notice of the lawsuit in time to respond pursuant to Code of Civil Procedure § 473.5 because the $250,000 general damages awarded in the judgment violate Code of Civil Procedure § 580 as well as Defendant’s constitutional rights. Defendant alleges that he should be allowed to file the responsive pleading attached herein as Exhibit “A”.

Section 473.5 permits the court to set aside default and permit the defendant to defend the action on the merits if “(1) he received through no inexcusable fault of his own, no actual notice of the action in time to appear and defend, and had not made a general appearance; (2) a default or default judgment has been entered against him by the court; (3) he acted with reasonable diligence in serving and filing the notice of motion to set aside the default or default judgment; and (4) he has a meritorious defense.”¿(Goya v. P.E.R.U. Enterprises (1978) 87 Cal.App.3d 886, 890-891.)¿

The focus of section 473.5 is whether the defaulting party obtained actual notice in time to defend the action.¿“Discretionary relief based upon a lack of actual notice under section 473.5 empowers a court to grant relief from a default judgment where a valid service of summons has not resulted in actual notice to a party in time to defend the action.”¿ (Anastos v. Lee (2004) 118 Cal.App.4th 1314, 1319.)¿“A party seeking relief under section 473.5 must provide an affidavit showing under oath that his or her lack of actual notice in time to defend was not caused by inexcusable neglect or avoidance of service.”¿(Ibid.)¿The term “actual notice” means “genuine knowledge of the party litigant.”¿(Rosenthal v. Garner (1983) 142 Cal.App.3d 891, 895.)¿

1. Received Through no Inexcusable Fault of his Own, no Actual Notice

Defendants Motion asserts that he did not answer the complaint because he did not realize that he was served, and that his failure to respond was due to inadvertence and excusable neglect. (Motion, p. 10.) Defendant notes that once he received the Judgment package in the mail, Defendant acted diligently and retained his attorney. (Ibid.) After consulting with his Attorney, Defendant claimed that he questioned his children about the Summons and Complaint, which is when he learned for the first time that his son, Rodrigo Juarez, placed the documents in a pile of papers and magazines. (Id. at p. 10-11.)

Defendant also claims that due to the stress and anxiety resulting from Plaintiff’s ongoing threats and harassment, Defendant suffered from debilitating headaches which are ongoing to this date for which he received medical treatment. (Id. at 11.) Defendant asserts that the headaches impaired Defendant’s ability to fully perform his normal job and household duties, which include going through his papers and mail. (Ibid.) Defendant contends that the lawsuit was subserved on May 7, 2022, during the height of Defendant’s stress and debilitating headaches. (Ibid.) As such, Defendant concludes that it is not unreasonable that a person in the same or similar situation would not attend to their mail and papers during this time. (Ibid.)

In opposition, Plaintiff asserts that allegedly attempted service four different times, until Plaintiff’s process server sub-served Defendant’s son Rodrigo Juarez at their home in Santa Ana, California on May 7, 2022 (Declaration of Brian Poulter (“Poulter Decl.”), ¶ 3, Ex. 1.) Rodrigo was described, by the process server, as a Hispanic male in his 40’s and as Defendant’s co-occupant. (Ibid.) Following service of the summons and Defendant’s failure to respond to the complaint, Plaintiff dismissed the Doe Defendants with prejudice, as is required to obtain a default judgment, and requested entry of default against Defendant, which was entered on June 27, 2022. (Poulter Decl., ¶ 4, Exs. 2, 3.) Notice was served on Defendant. (Ibid.) Plaintiff also requested entry of a default judgment against Defendant and submitted a 153-page declaration that included 15 exhibits in support of his request. (Id. ¶ 5.) This too was served on Defendant. (Ibid.) On July 29, 2022, over a month later, the Court heard and granted Plaintiff’s request and entered the default judgment. (Id. ¶ 6, Ex. 4.) Plaintiff served Defendant with notice of the judgment on August 4, 2022, which Defendant admits he received. (Id. ¶ 7; Declaration of Ricardo Juarez (Juarez Decl.”), ¶ 23.) Plaintiff email served Defendant everything from the complaint to the writ of execution that prompted him to finally participate in this case. (Poulter Decl., ¶ 8.)

Plaintiff also notes that in Defendant’s declaration in support of his motion, he states that he emailed Plaintiff on March 23, 2022, about issues with construction. (Juarez Decl., ¶ 18.) Plaintiff’s declaration in support of the default judgment included a copy of this email in Exhibit 5, which confirms Defendant’s address as rjgcontractor@gmail.com—the same address where Plaintiff has been serving copies of the documents he filed in this case. (Poulter Decl., ¶¶ 8, 9.) Defendant cites this same Exhibit 5 as support for his claims about Plaintiff’s actions. (See Juarez Decl., ¶ 20.) This same Exhibit 5 contains texts from Plaintiff warning Defendant that he intended to file a lawsuit against him based on their dispute. (Poulter Decl., ¶ 9.) Plaintiff also makes note of the fact that Defendant admits that his son received the summons and complaint, but that it was potentially mishandled.

Plaintiff cites to Bellm v. Bellia when arguing that Defendant’s allegation that his headaches impaired his ability to perform his “jobs and household duties, which included going through the papers and mail” fails to make a showing of neglect sufficient to set aside the default judgment. In Bellm, the defendant alleged in his motion to set aside a default judgment that after he was served with the complaint he forgot about the matter because of business pressures during the Christmas season and because of the serious illness and eventual death of his father and recent death of his mother. The trial court declined to relieve the defendant from default and the Court of Appeal affirmed stating: “The only allegations that Bellia made regarding the effect of these factors, however, were that his parents’ illnesses and deaths ‘were very trying to me’ and that business pressures ‘caused me to forget about being served with Bellm’s complaint.’” Plaintiff asserts that similarly here, Defendant’s allegations of headaches causing him to not check mail and papers failed to explain how the symptoms of headaches prevented him from reviewing his mail. (Juarez Decl., ¶ 23.) Additionally, Plaintiff contends that the fact that these headaches came from “stress and anxiety caused by Plaintiff’s actions” indicates that the parties' dispute was likely at the forefront of Defendant’s conscious, including the multiple warnings that Plaintiff gave him about a potential lawsuit. (Opp., p. 5.)

2. A Default or Default Judgment has Been Entered Against Him by the Court

Here, on July 29, 2022, the Court heard and granted Plaintiff’s request and entered the default judgment. (Poulter Decl., ¶ 6, Ex. 4.) Plaintiff served Defendant with notice of the judgment on August 4, 2022. (Id. ¶ 7.) The Request for Entry of Default, containing the same dollar amounts that were ultimately awarded, was mailed to the same address for Defendant as service of the Summons and Complaint, in late June of 2022. These notices constitute a series of red flags to a reasonably diligent litigant that a lawsuit is pending, seeking over $350,000, and that a judgment is being sought and then granted. No efforts were made to seek a remedy, relief from the default, or otherwise respond to the lawsuit until the second week of September at the earliest.

3. Defendant Acted With Reasonable Diligence in Serving and Filing the Notice of Motion to Set Aside

Here, Defendant claims that after receiving the judgment package, he immediately retained an attorney who scheduled a hearing on the motion on September 13, 2022. An application for relief under section 473(b) must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought and must be accompanied by an affidavit of fault attesting to the mistake, inadvertence, surprise or neglect of the moving party or its attorney. (Code Civ. Proc., § 473, subd. (b).) Even though a hearing date was reserved months earlier, Defendant’s Motion was not filed until November 17, 2022. As such, Defendant’s motion is timely for the purposes of section 473(b), but was not presented as quickly as one facing such a substantial judgment might have otherwise done.

4. Meritorious Defense

The last element of Section 473.5 requires the moving part to show that he has a meritorious defense.”¿(Goya, 87 Cal.App.3d at 890-891.)¿

In Defendant’s motion and Declaration, he disputes the allegations made in Plaintiff’s complaint. (Motion, p. 3-8.) Namely, Defendant asserts that the complaint focus on the delay(s) and the number of days Defendant was at the job site. Defendant asserts that these facts are not relevant to whether a breach occurred. Defendant argues that the Contract is controlling, and that the Contract does not provide for the number of on-site days. Defendant also claims that the contract also does not provide a completion deadline. Defendant asserts that when no deadline is provided, a reasonable deadline is imposed, which Defendant claims is an issue to be addressed by an expert and this Court.

Next, Defendant also asserts that Plaintiff has no standing to assert a claim for “misappropriation” of damages owed to Barragan Construction by Defendant. Defendant asserts that the claim is not ripe for litigation because the Complaint fails to allege “injury in fact.” Defendant also asserts that he was never engaged in a Ponzi scheme, never told Plaintiff he had no money, or otherwise used his money to finish other projects, did not state or admit the allegations in the Complaint, did not make false representations, or steal Plaintiff’s money. (Juarez Decl., ¶ 6.) Amongst other disputed allegations, Defendant notes that the Judgement of $352,823.17 erroneously includes an award of $250,000.00 in general damages. Defendant argues that while Plaintiff’s declaration in support of the Entry of Default and Judgment includes a claim supporting general damages, the Complaint does not. Thus, Defendant asserts that the award should be stricken.

In opposition, Plaintiff argues that Defendant’s claims about the merits of the underlying claim should be disregarded because Code of Civil Procedure section 585.5(c) requires Defendant to attach a copy of the pleading proposed to be filed in this action. Instead, the majority of Defendant’s moving papers and Declaration are dedicated to disputing the allegations in the underlying complaint.

IV. CONCLUSION

For the foregoing reasons, Defendant’s Motion to Set Aside Entry of Default and Judgment, to Quash Any Writ of Possession/Execution, and for Leave to Defend the Action is DENIED.

Moving party to give notice. ¿¿