Judge: Salvatore Sirna, Case: 20PSCV00051, Date: 2025-05-01 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 20PSCV00051    Hearing Date: May 1, 2025    Dept: G

Defendants Keystone Cabinetry, Inc. and Julian Sahagun’s Motion to Vacate Default and Default Judgment

Respondent: Plaintiff Dawson Fan

TENTATIVE RULING

Defendants Keystone Cabinetry, Inc. and Julian Sahagun’s Motion to Vacate Default and Default Judgment is DENIED.

BACKGROUND

This is a breach of contract action arising from a custom cabinet installation agreement. On September 30, 2014, plaintiff Dawson Fan (Plaintiff) entered into a written agreement with defendants Keystone Cabinetry, Inc. and Julian Sahagun (collectively, Defendants) in which Defendants agreed to install new custom cabinetry at Plaintiff’s property in Diamond Bar. Over the next two years, the parties made additional modifications to the contract orally or in writing. While Plaintiff originally agreed to pay $126,000 for the work, Plaintiff ultimately paid Defendants $276,300. However, on October 15, 2019, Plaintiff alleges Defendants breached the contract by failing to perform and install the cabinets.

On January 17, 2020, Plaintiff filed a complaint against Keystone Cabinetry, Inc. (Keystone) and Does 1-5, alleging breach of contract and common counts. On February 24, Plaintiff amended the Complaint to replace Doe 1 with Sahagun.

On July 1, 2020, Plaintiff filed a First Amended Complaint (FAC) against the same defendants alleging (1) breach of contract, (2) common counts, (3) accounting, and (4) fraud.

On February 11, 2021, Plaintiff filed a Second Amended Complaint (SAC) against the same defendants alleging (1) breach of contract and (2) fraud. On March 2, 2023, Plaintiff’s counsel filed a declaration stating Defendants’ counsel had passed away. On April 25, Defendants did not appear for a final status conference and the court set an order to show cause (OSC) re: striking of Defendants’ answer for failure to secure counsel. At the OSC on May 9, 2023, Defendants did not appear, and the court struck their answer, resulting in an entry of default against them.

On July 10, 2023, Plaintiff submitted an application for default judgment. The court entered default judgment against Defendants on July 12, 2023.

REQUEST FOR JUDICIAL NOTICE

The court GRANTS Plaintiff’s request for the court to take judicial notice of its own records in Exhibits 31 to 33 and 35 to 38. (Evid. Code, § 452, subd. (d).) The court DENIES Plaintiff’s request for judicial notice of Exhibit 39 as the search results may involve different people and companies with the same names. (Evid. Code, § 452, subd. (h).)

MOTION TO SET ASIDE

Defendants move to set aside the default from May 9, 2023 and default judgment from July 12, 2023. For the following reasons, the court DENIES Defendants’ motion.

Legal Standard

A party may seek equitable relief from a default and default judgment by filing a motion even though the statutory period from Code of Civil Procedure section 473, subdivision (b) has run. (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 98, citing Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981 (Rappleyea); County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1229.) Under the doctrine of extrinsic mistake or fraud, “relief from a default and default judgment is potentially available when the clerk or trial court erred in entering them.” (Ibid.) However, the mistake or fraud must be extrinsic.

“Fraud or mistake is extrinsic when it deprives the unsuccessful party of an opportunity to present his case to the court [citations]. If an unsuccessful party to an action has been kept in ignorance thereof [citations] or has been prevented from fully participating therein [citation], there has been no true adversary proceeding, … the judgment is open to attack at any time. A party who has been given proper notice of an action, however, and who has not been prevented from full participation therein, has had an opportunity to present his case to the court and to protect himself from any fraud attempted by his adversary. [Citations] Fraud perpetrated under such circumstances is intrinsic even though the unsuccessful party does not avail himself of his opportunity to appear before the court. Having had an opportunity to protect his interest, he cannot attack the judgment once the time has elapsed for appeal or other direct attack.” (Westphal v. Westphal (1942) 20 Cal.2d 393, 397, citations omitted and emphasis added.)

To gain relief under the doctrine of extrinsic mistake or fraud, defaulted party must satisfy three elements: (1) “the defaulted party must demonstrate that it has a meritorious case[;]” (2) “the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action[;]” and (3) “the moving party must demonstrate diligence in seeking to set aside the default once … discovered.” (Id. at p. 100, quoting Rappleyea, supra, 8 Cal.4th at p. 982; see In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1071.) The moving party may demonstrate extrinsic fraud or mistake with evidence not included in the judgment roll or record relating to the judgment. (Bae v. T.D. Service Co. of Arizona (2016) 245 Cal.App.4th 89, 98, citing Munoz v. Lopez (1969) 275 Cal.App.2d 178, 183-184.)

Discussion

The court DENIES the motion to set aside the default and default judgment. The court finds that Plaintiff properly noticed Defendants of their attorney’s passing, the default, and the default judgment. As a result, Plaintiff did not prevent Defendants from fully participating in the default or default judgment proceedings.

The court begins by determining whether the 3110 North Clybourn Ave., Burbank, California address (Burbank Address) is the appropriate location for sending any notices or pleadings to Defendants following the death of Defendants’ former attorney. The court finds that the Burbank Address is the correct address.

Defendants argue that any notice sent to this address is ineffective because they stopped receiving mail at the Burbank address in November 2019, after renting the property to a new tenant. (Motion, pp. 8:18-19, 14:14-15:8; Sahagun Decl., ¶ 4.) However, the Secretary of State lists the Burbank address as Keystone’s official mailing address, and the Contractors State License Board links the Burbank address to Keystone’s contractor license. (Opp., p. 6:1-3; Evanns Decl., ¶¶ 9-10, Exhs. 10-11.) Furthermore, Sahagun registered the Burbank address as his mailing address for real estate transactions from 2020 to 2021, for tax/assessment purposes, as well as two other business entities he owns. (Evanns Decl., ¶¶ 11-14, Exhs. 12-15.)

Defendants claim they continue to list the Burbank address on the Secretary of State’s website “because Defendants have kept the corporate form active for accounting and contractor licensing purposes.” (Motion, p. 8:19, fn. 1.) Defendants’ reasons for listing the Burbank address, however, are irrelevant to the court’s analysis. Since Defendants list the Burbank address as their official mailing address, they remain responsible for any mail delivered to that address. (See Evid. Code §§ 620, 623.) Therefore, the court finds that any notices or pleadings mailed to the Burbank address put Defendants on notice.

On March 2, 2023, Plaintiff’s counsel mailed a copy of the Declaration of Michael C. Gangi Regarding Passing of Defendants’ Counsel to the Burbank Address. (Gangi Decl. Re: Passing, p. 4.) The declaration confirms that Defendants’ former attorney passed away before January 2023. (Gangi Decl. Re: Passing, ¶ 11.) With this declaration, Plaintiff notified Defendants of their attorney’s passing.

On April 25, 2023, the court mailed the April 25, 2023 Minute Order to the Burbank Address. (04/25/2023 Min. Order, p. 2; 04/25/2023 Cert. of Mailing, p. 1.) The April 25, 2023 Minute Order explicitly states:

“The Court has read and considered Plaintiff's Declaration filed 3/2/2023 in regards to Defendant's Counsel passing. There is no appearance by Individual Defendant, Julian Sahagun or a Representative from Keystone Cabinetry, Inc. present in Court this date. … The matter is further set for an Order to Show Cause Re: Striking of Defendant’s Answer for Failure to Secure Counsel is scheduled for 05/09/2023 at 08:30 AM in Department G at Pomona Courthouse South.” (03/25/2023 Min. Order, p. 2.)

Although Defendants may not appreciate the consequences of an “Order to Show Cause Re: Striking of Defendant's Answer for Failure to Secure Counsel,” the court notified Defendants of the upcoming hearing. In conjunction with the Declaration of Michael C. Gangi, Esq. Regarding Passing of Defendants’ Counsel, Defendants had notice that the upcoming hearing would proceed with no counsel if they did not retain another attorney.

On July 7, 2023, Plaintiff mailed a copy of her default judgment package to Defendants’ Burbank Address. (07/10/2023 PoS, pp. 2-3.) The default judgment package included: (1) the case summary in support of the application for default judgment against Defendants; (2) Plaintiff’s declaration in support of the application for default judgment; (3) Yiyang Cui’s declaration in support of the application for default judgment; (4) a request for court judgment against Sahagun; (5) a request for court judgment against Keystone; (6) a declaration regarding costs; (7) a request for dismissal; and (8) a [proposed] judgment. (07/10/2023 PoS, p. 3.) Yiyang Cui’s declaration explicitly informed Defendants that the court had struck Defendants’ answer and entered default against them on May 9, 2023. (07/10/2023 Cui Decl., ¶ 24.) Furthermore, on July 14, 2023, Plaintiff notified Defendants that the court had entered the default judgment on July 12, 2023. (Abst. of Judgment, ¶¶ 1(a), 8(a), 16; Abst. of Judgment PoS, p. 1.)

Since Plaintiff provided Defendants with proper notice of their attorney’s passing, the default, and default judgment, Plaintiff did not prevent Defendants from fully participating in this action and gave Defendants an opportunity to present their case to the court and to protect themselves from any alleged fraud. Consequently, the court does not find extrinsic fraud. Due to the absence of extrinsic fraud, the court may not invoke the doctrine of extrinsic mistake or fraud to provide Defendants the relief they seek from the default and default judgment.

Accordingly, the motion to set aside the default and default judgment is DENIED.

CONCLUSION

For the foregoing reasons, Defendants’ motion to set aside default and default judgment is DENIED.