Judge: Ronald F. Frank, Case: 22TRCV00993, Date: 2024-06-07 Tentative Ruling

Case Number: 22TRCV00993    Hearing Date: June 7, 2024    Dept: 8

Tentative Ruling¿¿ 

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HEARING DATE:                 June 7, 2024¿ 

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CASE NUMBER:                   22TRCV00993

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CASE NAME:                        Gardena Neighbors LLC v. WG Holdings SPC, LLC, et al.   

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MOVING PARTY:                 Plaintiff, Gardena Neighbors LLC

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RESPONDING PARTY:        Defendant, Bridgeland Resources LLC f/k/a WG Holdings SPV, LLC

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DISPOSED OF DATE:          May 4, 2023

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MOTION:¿                              (1) Motion to Compel Discovery Responses to Post-Judgment Demand for Identification and Production of Documents

Tentative Rulings:                  (1) Motion to Compel Discovery Responses to Post-Judgment Demand for Identification and Production of Documents is GRANTED in part (subpoenas) and DENIED in part (402 hearing with PMK).

 I. BACKGROUND¿¿¿ 

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A. Factual¿¿¿ 

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            On October 20, 2022, Plaintiff, Gardena Neighbors LLC (“Plaintiff”) filed a Complaint against Defendant, WG Holdings SPV, LLC (f/k/a Bridgeland Resources LLC), and DOES 1 through 100. The Complaint seeks declaratory relief of an alleged controversy between Plaintiff and Defendant where Plaintiff has alleged that the oil and gas lease is now terminated because: (1) CalGEM reports show the well at issue is “Idle”; and (2) indefinite leases are generally void under California Law and the underlying lease is an indefinite lease.   Defendant contends that the oil and gas lease is still in effect.

            On March 13, 2023, Plaintiff filed a Request for Entry of Default as to Defendant, which was granted that same day.

            Further, on May 4, 2023, this Court made a ruling as to the judgment in this case noting that on March 17, 2023, after hearing the testimony and evidence presented by Plaintiff’s COO, Ben Eilenberg and its attorney Richard B. Jacobs, that the oil and gas lease originally entered into on or about May 29, 1939, by and between Carroll M. Hatfield and Bessie Hatfield, Security-First Company, and Apex Petroleum Corporation, as subsequently amended, has expired via its own terms as to the property identified as APN 6129-023-029 as the well on site is now designated as Idle by CalGEM and has been observed to no longer be producing.

            Now, almost a year after this Court’s May 4, 2023 ruling in favor of Plaintiff, Defendant has filed a Motion for Post-Judgment Discovery in anticipation of its Motion to Set Aside Default.

B. Procedural¿¿¿ 

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On April 29, 2024, Plaintiff/Judgment Creditor, Nardiello Law Firm filed this Motion to Compel Discovery Responses to Post-Judgment Demand for Identification and Production of Documents, and Request for Monetary Sanctions. On May 24, 2024, WG Holdings filed Opposition papers.  No reply has been received.   

¿II. ANALYSIS¿¿ 

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A.    Legal Standard

The Court may set aside a default or default judgment upon a motion and affidavit attesting that the lack of actual notice was not caused by the party’s avoidance of service or inexcusable neglect.  (Code Civ. Proc., § 473.5.)  A motion under section 473.5 must be brought either within two years after entry of a default judgment or within 180 days after service of a written notice that the default or default judgment has been entered, whichever is earlier.  (Code Civ. Proc., § 473.5, subd. (a).) “[I]f a defendant is not validly served with a summons and complaint, the court lacks personal jurisdiction and a default judgment in such action is subject to being set aside as void.”  (Lee v. An (2008) 168 Cal.App.4th 558, 564 (Lee).)  “Subdivision (d) of section 473 allows a court to set aside a void judgment without any mention of a time limit.”  (Id. at p. 563.) Defendant’s Motion to Set Aside will be timely as it was entered on March 12, 2023, and this motion was brought a little over the year mark.

B.    Discussion

            Here, Plaintiff is seeking post-judgement discovery on Defendant  in anticipation of Defendant’s Motion to Set Aside. Plaintiff notes that when filing the suit and attempting to serve Defendant, there was a group listed on the CalGEM website as the current operator (or non-operator) under the least of the inactive well as being WG Holdings SPV, LLC. Therefore, Plaintiff searched for WG Holdings SPV, LLC on the California Secretary of State Database, and that although there was no listing for WG Holdings SPV, LLC in California there was one for WG Holdings LLC (which was listed as a terminated business). However, Plaintiff notes that a corporate document then pointed Plaintiff to Delaware as a potential site for WG Holdings SPV, LLC. Once again, Plaintiff notes that there was no WG Holdings SPV, LLC, but there was a listing for WG Holdings, LLC and it was listed as an active business. Thus, these who and where Plaintiff served the documents.

            After receiving the default judgment, Plaintiff notes it posted copies of the judgment at the property, and since receiving the judgment, Plaintiff has incurred tens of thousands of dollars of development costs for the planned development of the property based upon the closure of the well. Now, Plaintiff notes it has been contacted by the attorneys for Defendant who state the company is in existence in California (despite not appearing on the California Secretary of State’s Business Search page) and wanting to set aside the default. Plaintiff argues that WG Holdings SPC, LLC effectively made itself impossible to serve by failing to register with the State of California as a business doing business in California and because of this, Plaintiff believes it has properly complied with the requirements.

            However, in anticipation of Defendant’s Motion to Set Aside, which has now been filed, Plaintiff notes that the primary question before the Court will be whether Defendant received notice. Thus, Plaintiff is seeking discovery as to the relationship between WG Holdings, LLC and WG Holdings SPV, LLC. Plaintiff wishes this Court: (1) allow Plaintiff to issue subpoenas to both entities’ for service of process to learn who the contact point for each company are and have been; or (2) have this Court issue subpoenas of its own volition to both entities’ agents for service of process to learn who the contact points for each company are and have been.

            In opposition, Defendant partially opposes Plaintiff’s motion as it seeks unnecessary discovery under the circumstances.  The Court notes that the actual argument in opposition to the discovery motion comprises very few of the 15-page opposition memorandum.  Defendant clarifies that it does not oppose the issuance of the subpoenas, but instead, opposes an evidentiary hearing of its PMK, whether characterized as a 402 hearing, a deposition, or otherwise.  The Court agrees that the subpoenas themselves will be helpful for the pending Motion to Set Aside, but disagrees that “a short 402 hearing with Defendant’s PMK” should be ordered.  The requested evidentiary hearing appears to be premature at this time. Plaintiff will be able to present oral argument as to why it believes the PMK hearing is necessary; however, with declarations of individuals, and verified responses to the subpoena demands, this Court tentatively denies the PMK hearing at this time.

III. CONCLUSION¿¿¿ 

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For the foregoing reasons, Plaintiff’s Motion to Compel Post-Judgment Discovery is GRANTED as to the subpoenas, but DENIED as to the Defenant’s PMK hearing.

Defendant is ordered to give notice.