Judge: Stephen P. Pfahler, Case: 21CHCV00602, Date: 2022-08-16 Tentative Ruling

Case Number: 21CHCV00602    Hearing Date: August 16, 2022    Dept: F49

Dept. F-49

Date: 8-16-22

Case #21CHCV00602

QUASH

MOVING PARTY: Defendants/Judgment Debtors, Evergreen Construction Group, Inc., et al.

RESPONDING PARTY: Plaintiffs/Judgment Creditors, Matthew Barch, et al.

RELIEF REQUESTED

Motion to Quash Service of the Summons

SUMMARY OF ACTION

On June 26, 2018, Plaintiffs Matthew and Soon Barch entered into a written contract with Defendant Evergreen Construction Group, Inc. for the addition of room to the home of Plaintiffs. The total contract price was $135,000, with a $50,000 deposit. Plaintiffs tendered the $50,000 payment, but contend the work never commenced.

On August 11, 2021, Plaintiff Matthew and Soon Barch filed a complaint for Breach of Contract, Common Counts, Fraud, and Intentional Tort (Unfair Business Practices). On August 16, 2021, Plaintiff filed a peremptory challenge to Department 47, thereby leading to reassignment to Department 49.

On November 1, 2021 and November 12, 2021, the clerk entered defaults against Evergreen Construction Group, Inc. and Shimon Shai Ben Hamo, respectively. On May 31, 2022, the court entered default judgments against Defendants for $57,161.25.

RULING: Denied.

Defendants/Judgment Debtors Evergreen Construction Group, Inc. (Evergreen) and Shimon Shai Ben Hamo moves to quash service of the summons and complaint on grounds of invalid service. Defendants contend substituted service on Defendants’ identified mailbox rental location was neither the active mailing address at the time of service for Evergreen or a business operations location. Evergreen also denies knowledge of any employee named “Gary Karagezian” (the recipient of service identified as the “mailbox clerk), or any notice from Gary. As for the individual, Hamo denies ever being personally served based on disagreement over the appearance of the party identified for substituted service. Defendants/Judgment Debtors alternative move for relief under Code of Civil Procedure section 473, subdivision (b), due to surprise, inadvertence and/or excusable neglect as a result of their unawareness of the lawsuit.

Plaintiffs/Judgment Creditors in opposition contend service was executed by a licensed process server and the proof of service complies, including the declaration of mailing.

Defendants/Judgment Debtors in reply deny the provision of any false information to the Secretary of State, and now portray the recent verification as a simple “mistake of oversight, rather than due to malicious intent.” [See Declaration of Petito ¶ 3.] Defendants/Judgments Debtors next contend that their own website displays the “correct” office address thereby seeking to dispel any accusations of evasion of service. Defendants/Judgment Debtors next reiterate the challenges to the physical description of the person described in the proof of service, notwithstanding the implicit admission of the correct office location. [Petito Decl., ¶ 5.] Moving counsel also submits a declaration denying any “recollection” regarding a communication from Plaintiffs’ counsel on the default, but also disclaims any accusation of accusing Plaintiffs’ of “lying to this court.” Finally, Defendants/Judgments Debtors implore the court to allow the adjudication of the case on the merits.

A plaintiff has the initial burden to establish valid statutory service of a summons and complaint. (Dill v. Berquist Const. Co., Inc. (1994) 24 Cal.App.4th 1426, 1439-40; Floveyor Internat. v. Sup. Ct. (1997) 59 Cal.App.4th 789, 794.) Two proofs of service were filed on September 24, 2021 and September 28, 2021. The proof of service as to Evergreen indicates substituted service on September 13, 2021 at 10:33 a.m. Service was completed on Oshri Ptito, agent for service via service of “Mailbox Clerk,” Gary Karagezian at 18375 Venture Blvd., Suite 382, Tarzana. The proof of substituted service indicates mailing of the documents on the same date to the same address. The proof of service was executed by James Figueroa, a licensed process server.

The second proof of service on Hamo was served at 6444 Bellingham Ave., Suite 204, North Hollywood on September 14, 2022.  Substituted service is indicated on a person identified as “Jane Doe,” approximately 40 years in age, 5’8” inches, 200 lbs, and Hispanic in appearance. Licensed process server Victor Curiel signed the proof of service. The declaration of diligence shows three prior attempts where person was represented as either not present or not working at this business address. Documents were mailed to the same address on a listed date of September 24, 2022.

“The return of a process server registered [under] Division 8 of the Business and Professions code upon process or notice establishes a presumption, affecting the burden of producing evidence, of the facts stated in the return.” (Evid. Code, § 647.)

The October 26, 2017 filing with the Secretary of State shows Evergreen Construction Group, Inc. identifying a person named Oshri Ptito as both the agent for service and the business address, as 18375 Ventura Blvd., Suite 382, Tarzana. [Declaration of Leighton Anderson, Ex. B.] In an October 25, 2021 filed “Corporation – Statement of Information No Change—Oshri Ptito certifies that no information for Evergreen Construction Group, Inc. changed. [Anderson Decl., Ex. C.] Notwithstanding the filed documents with the State of California, Oshri Petito,[1] identified CEO of Evergreen Construction Group, Inc., lists the business address of Evergreen as 6444 Bellingham Ave., Suite 204, North Hollywood. [Declaration of Oshri Petito.] Petito further proceeds to completely deny ever conducting business operations and at this 18375 Ventura Blvd., Suite 382, Tarzana, but admits to utilizing a mailbox on the premises. Said use of the particular mailbox ceased “at least [] 3 years [ago].” [Petito Decl., ¶ 3.]

The statements filed to the Secretary of State versus the declaration clearly present conflicting representations, and potentially intentionally misleading information especially considering the declaration of Petito was submitted under penalty of perjury. While the court accepts the representation of Petito that no actual operations occurred at the location of the mailbox operation center, and the statement in reply that the failure to update was an error, nothing in this statement in any way undermines Plaintiffs’/Judgment Debtors’ valid reliance on the listed address. Any and all lawfully operating corporations in the State of California must present an agent for service. (Corp. Code, §§ 1502, 1505, 16310.) No change in the address of the agent for service of process or appointment of a new agent for service of process shall be effective until an amendment to the statement of partnership authority is filed. (Corp. Code, § 16310, subd. (c).) The initial filing predates the date of service and the later confirmation post-dates the dates of service. Service on a corporate entity is required to be completed on the agent for service. (Code Civ. Proc., §§ 17701.16.) Moving parties submit no argument for the proposition that service was required at the North Hollywood address. Service on the mailbox employee was therefore proper and valid. (Code Civ. Proc., §§ 415.20, 416.10.) Thus, Petito was obliged to submit any changes regarding the proper location for the registered agent for service of the corporate entity, and cannot claim invalid service based on a self-serving declaration, or now rely on an admission of fault in reply. The motion is denied as to Evergreen.

As for the Hamo, the court acknowledges the truthfulness of the Petito declaration for purposes of confirming operations at the North Hollywood address. Nevertheless, the dispute over the description of the “Jane Doe” recipient of substituted service comes down to declarative credibility of judgment debtor witnesses versus the process server. Petito denies employment of any female fitting the description of the person described in the proof of service. [Petito Decl., ¶ 5 and Reply Petito ¶ 5.] Hamo and office employee Ariella Lousky also also deny the presence of any such employee fitting this description. [Declarations of Shimon Hamo and Ariella Lousky.] Process server Victor Curiel also submits a counter declaration attesting to the service. Curiel provides a description of North Hollywood premises, but otherwise offers no argument over the disputed description of the person apparently in charge.

Again, all declarants agree that the address was correct, and mail service remains undisputed. Nothing in the motion disputes the representation that a person was present in the office, and therefore apparently in charge of the premises for purposes of accepting service regardless of this persons physical appearance. (Code Civ. Proc., 415.20, subd. (b).) Service in this context is allowed “upon a person upon a person whose ‘relationship with the person to be served makes it more likely than not that they will deliver process to the named party.’” (Bein v. Brechtel-Jochim Group, Inc. (1992) 6 Cal.App.4th 1387, 1393; Ellard v. Conway (2001) 94 Cal.App.4th 540, 546 (footnote 3).) The court therefore finds Defedants/Judgments Debtors fail to shift the presumption of valid service established by the proof of service, and supported by the declaration of Curiel. The motion is therefore denied as to Hamo as well.

Judgment Debtors raise an alternative request for relief under Code of Civil Procedure section 473, subdivision (b). “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. 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.”

“The six-month time limit for granting statutory relief is jurisdictional and the court may not consider a motion for relief made after that period has elapsed. (Citation.) The six-month period runs from entry of default, not entry of judgment.” (Manson, Iver & York v. Black (2009) 176 Cal.App.4th 36, 42.) The clerk entered defaults on November 1, 2021 and November 12, 2021, and the subject motion was filed on July 21, 2022, which is more than 180 days of the default entry dates. The court denies the motion on this basis as untimely. (Ibid.) The court also declines to take consideration of the statements in reply seeking to apply the mistake, inadvertence, excusable neglect standard given the untimeliness of the motion. The court also disregards the statement from counsel regarding the lack of recollection given the finding of proper service regardless of the recall of a phone call or electronic communication.

The court declines to consider any arguments under Code of Civil Procedure section 473.5. While Plaintiffs/Judgment Creditors raised this in opposition, the motion lacks any such supporting argument.

The motion is therefore denied in its entirety.

The course of conduct of Judgment Debtors demonstrates a disregard for the action even after notice was mailed to the North Hollywood address. Public policy however favors adjudication on the merits. The court therefore offers an alternative option. Judgment debtors may post a bond for the total outstanding default judgment principal of $50,100 as a condition of the court setting aside the default judgment. (Goodson v. Bogerts, Inc. (1967) 252 Cal.App.2d 32, 42-44.) Upon proof of posting the undertaking with the court, and notice from moving parties under penalty of perjury, the court will set aside the default, and allow Judgment Debtor to answer only.

Judgment Debtors to provide notice.