Judge: Stephen P. Pfahler, Case: 22STCV15295, Date: 2024-06-11 Tentative Ruling

Case Number: 22STCV15295    Hearing Date: June 11, 2024    Dept: 68

Dept. 68

Date: 6-11-24

Case #22STCV15295

VACATE DEFAULT

MOVING PARTY: Defendant, Woojoo Kim

RESPONDING PARTY: Unopposed/Plaintiff, Valley View-Santa Fe Springs LLC

RELIEF REQUESTED

Motion to Vacate Default

SUMMARY OF ACTION

Plaintiff Valley View-Santa Fe Springs LLC leased certain premises, 14525 Velley View Avenue, Suite H, Santa Fe Springs, to Defendant Endotec, Inc. for a five year term from March 1, 2016 to February 28, 2021. Defendants Woojoo Kim and Young Dock Shim executed a guaranty on the lease. Plaintiff alleges tenant ceased making payments in June 2020, thereby leading a total default of $16,451.10. Plaintiff additionally alleges excessive wear and tear damage to the premises, thereby leading to an additional claim for $15,135.46 less the $3,655.80 security deposit.

On May 9, 2022, Plaintiff filed a complaint for Breach of Contract. On December 1, 2022, Plaintiff filed a first amended complaint for Breach of Contract, and Breach of Guaranty. On February 16 and 28, 2023, the clerk entered defaults against Woojoo Kim and Endotec, Inc., respectively. On July 20, 2023, the court entered judgment against Kim for $32,227.66. On September 19, 2023, an order of dismissal for Young Dock Shim was entered.

RULING: Granted.

Defendant Woojoo Kim moves to vacate the February 16 and July 20, 2023, default and default judgment on grounds of lack of actual notice of the complaint, or alternatively on grounds of mistake, inadvertence, and/or excusable neglect. Woojoo Kim also intermingles an argument for relief based on extrinsic mistake. The court electronic filing system shows no filed opposition at the time of the tentative ruling publication cutoff. Moving party filed a notice of non-opposition and declaration.

Code of Civil Procedure section 473.5 provides in part:

(a) When service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered.

…

(c) Upon a finding by the court that the motion was made within the period permitted by subdivision (a) and that his or her lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect, it may set aside the default or default judgment on whatever terms as may be just and allow the party to defend the action.

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.) Plaintiffs filed multiple proofs of service. On December 19, 2022, the court granted leave to serve the Secretary of State for Endotec, Inc., due to the inability to execute service on the agent for service, Woojoo Kim at any identified address. On January 30, 2023, Plaintiff filed a proof of service attesting to personal service on “KIM woo joo AKA Woojoo Hoover” at 2510 Monterey Pl., Fullerton, on December 24, 2022. On February 1, 2023, Plaintiff filed a second proof of service representing personal service on “KIM WOOJOO aka WOOJOO KIM” on December 24, 2022, at 2510 Monterey Pl., Fullerton. On February 16, 2023, Plaintiff filed a third proof of service attesting to personal service of “KIM WOOJOO aka WOOJOO KIM, an individual” on December 24, 2022, at 2510 Monterey Pl., Fullerton.

All three proofs of service were executed by a licensed process server. “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 proofs of service remain factually undisputed. A writ of execution was entered on October 11, 2023, and returned on March 13, 2024, following the levy on a bank account in the name of Woojoo Kim. The motion was filed on March 19, 2024.

Woojoo Kim concedes to knowledge of the action and concedes to communications with counsel regarding the denial of any liability notwithstanding the execution of the guaranty. [Affidavit of Woojoo Kim, ¶¶ 10-13.] Notwithstanding, Woojoo Kim maintains Plaintiff was obliged to provide notice of the default. The court finds no legal authority for this position. Again, Woojoo Kim appears aware of the summons and complaint, with no challenge to the validity of service. The court finds no basis for relief on grounds of the failure to then notify Woojoo Kim again about the entry of default prior to seeking the writ of execution. The motion is therefore denied on the basis of improper service or notice.

The court considers the alternative request. Code of Civil Procedure section 473 subdivision (b) provides in part:

“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 motion was filed 243 days, or seven months and 28 days after entry of the judgment, and 397 days, or one year, one month and three days after the entry of default. The court lacks jurisdiction to grant relief. The motion is therefore denied on this basis.

Woojoo Kim finally cites to extrinsic mistake doctrine. Given the lapse of the six month deadline and lack of invalid notice, the requested relief depends on equity. “[E]xtrinsic mistake” constitutes “a term broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits.” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) “[E]xtrinsic mistake exists when the ground ... is the excusable neglect of the defaulting party to appear and present his claim or defense. If that neglect results in an unjust judgment, without a fair adversary hearing, the basis for equitable relief on the ground of extrinsic mistake is present. (Citation.) Relief will be denied, however, if the complaining party's negligence permitted the ... mistake to occur. (Citation.)” (Manson, Iver & York v. Black, supra, 176 Cal.App.4th at p. 47.) Circumstances of extrinsic mistake include numerous examples, including: “when one party relies on another to defend (Citations); ... when a mistake led a court to do what it never intended (Citation); when a mistaken belief of one party prevented proper notice of the action (Citations); ... cases involving ... mistaken belief as to immunity from suit (Citations). (Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471-472.)

“‘To set aside a judgment based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second[ ], the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last [ ], the moving party must demonstrate diligence in seeking to set aside the default once ... discovered.’” (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 982.)

Since the equitable power of the court is being invoked, the relief sought is subject to equitable defenses, including laches. Thus, relief may be denied if it is shown that the moving party has been guilty of unreasonable delay in seeking relief, causing prejudice to the opposing party. (McCreadie v. Arques (1967) 248 Cal.App.2d 39, 46 [plaintiff would be prejudiced by having to prove matters 5 years old if judgment set aside].)  The greater the prejudice to the responding party, the more likely it is that the court will determine that equitable defenses such as laches or estoppel apply to the request to vacate a valid judgment. (Rappleyea v. Campbell, supra, 8 Cal.4^th at p. 983.)

Woojoo Kim admits to executing the guaranty on behalf of a Endotec, Inc., an employer at the time. Endotec, Inc. was owned by a South Korean corporation identified as Korea Bone Bank Co., Ltd. The lease required a signature and guaranty of a United States resident, which led to Woojoo Kim being “mandated” to execute the lease. Woojoo Kim was unaware of the impacts of the guaranty if the lessee defaulted. Woojoo Kim was eventually terminated from employment. Upon service of the lawsuit, Woojoo Kim contacted counsel, and believed a dismissal was forthcoming due to the lack of any continuing relationship with Endotec, and denial of responsibility for the default. [Affidavit of Woojoo Kim.]

The court accepts the circumstances for not responding to the complaint and the diligence in seeking relief upon execution of the writ to the bank account. Woojoo Kim only cites to numerous meritorious affirmative defenses, and in fact includes a proposed answer, which the court also accepts as meeting the first element of the required showing. The court declines to substantively consider the merits of any and all proposed defenses to the action.

Judgment Creditor presents no opposition and therefore otherwise expresses no basis of prejudice. The court finds the underlying collection unfairly imposes a hardship of Woojoo Kim, thereby warranting adjudication on the merits. The court therefore grants the motion to vacate on equitable grounds.

Woojoo Kim is ordered to separately file the answer within 10 days of this order.

Woojoo Kim to give notice.