Judge: Stephen P. Pfahler, Case: 23STCV02658, Date: 2024-03-04 Tentative Ruling

Case Number: 23STCV02658    Hearing Date: March 4, 2024    Dept: 68

Dept. 68

Date: 3-4-24

Case #23STCV02658

VACATE DEFAULT

MOVING PARTY: Defendants, Tania Muradian, et al.

RESPONDING PARTY: Plaintiff, Coastline Re Holdings Corp.

RELIEF REQUESTED

Motion to Vacate Default

SUMMARY OF ACTION

On March 25, 2013, a stipulated judgment was entered between Coastline Re Holdings Corp. v. Creative Video Logic, Inc., a California corporation; Khachik V. Mouradian, also known as Jack Mouradian, an individual, et al. for $1,257,902.31 (LC096145). The judgment was renewed on June 17, 2022 for $2,419,353.

Plaintiff alleges defendant Khachik Mouradian transferred title to certain real property to Tania Muradian and Elize Achjian in order to evade any potential future collection efforts. Plaintiff also alleges a deed of trust, as well as multiple other judgments recorded as notices of attachment from other named defendants recorded on the property, including Desert Palace, Inc., a Nevada corporation doing business as Caesars Palace; and Paris Las Vegas Operating Company, LLC also known as Las Vegas Operating Co., LLC, a Nevada limited liability company doing business as Paris Las Vegas.

On February 7, 2023, Plaintiff filed its complaint for Conspiracy to Fraudulently Conceal Assets, Aiding and Abetting Fraudulent Concealment of Assets, Voidable Transfer, and Declaratory Relief. On May 24, 2023, the clerk entered defaults against Desert Palace LLC, a Nevada limited liability company, formerly known as and/or as successor in interest to Desert Palace, Inc., a Nevada corporation doing business as Caesars Palace; Paris Las Vegas Operating Company, LLC also known as Las Vegas Operating Co., LLC, a Nevada limited liability company doing business as Paris Las Vegas. On June 5, 2023, the clerk entered defaults against Khachik V. Mouradian, also known as Jack Mouradian, also known as Kachik V. Mouradian, also known as Kachik Mouradian, also known as Khachic V. Mouradian, an individual; Elize H. Achjian, also known as ELIZE ACHJIAN, also known as Elo Muradian; Tania Muradian, also known as Tania Mouradian.

RULING: Granted.

Request for Judicial Notice: Granted.

Evidentiary Objections to the Declarations of Elize Achjian and Tania Muradian: Overruled.

Defendants The Estate of Khachik V. Mouradian, Elize H. Achjian, and Tania Muradian move to vacate the June 5, 2023, entered default on grounds of lack of actual notice of the complaint, or alternatively on grounds of mistake, inadvertence, and/or excusable neglect. Plaintiff Coastline Re Holdings Corp. in opposition asserts service was proper, the motion lacks support under the improper service standard, and lacks evidence of mistake, inadvertence or support. Plaintiff also challenges the lack of any designated personal representative for the Estate of Khachik V. Mouradian. Defendants in reply maintain sufficient evidence was provided establishing invalid service in that substituted service failed to apprize Defendants of their need to defend the subject action. Defendants alternatively maintain a right to relief under Code of Civil Procedure section 473, subdivision (b). Finally, Defendants represent that Elize Achjian is the personal representative of Khachik Mouradian.

The motion in fact fails to indicate which if any of the individual defendants, or another person, represents the estate. Only in reply, does Elize Achjian identify as the personal representative of the estate, as the widow of Khachik V. Mouradian. The reply also contains a copy of the death certificate.

The court accepts the representations of Elize Achjian. Given the estate is in default and therefore unable to proceed in the civil portion of the action both without seeking to vacate the default and then proceed with appointment of a successor, the court considers the application as to all parties for purposes of the subject motion. (Code Civ. Proc., §§ 377.31, et seq.; Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385–386.)

As for Elize H. Achjian, and Tania Muradian, both submit declarations denying any service of the summons and complaint, and only became aware upon service of the notice of default. [Declarations of Elize H. Achjian, and Tania Muradian.]

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.) The proofs of service on Elize H. Achjian and Tania Muradian was executed by a licensed process server by leaving the summons and complaint with a person apparently in charge identified as Jane Doe on April 13, 2023. The proof of service complies, including a declaration of diligence showing three prior attempts, and mailing upon completion of service. The proofs of service were filed on April 25, 2023, with service completed at 17517 Rushing Drive.

“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.) “If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served, as specified in Section 416.60, 416.70, 416.80, or 416.90, a summons may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. Service of a summons in this manner is deemed complete on the 10th day after the mailing.” (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; see Ellard v. Conway (2001) 94 Cal.App.4th 540, 546 (footnote 3).)

The parties do not factually dispute the process server in fact left the papers with Jane Doe for the parties. The parties also acknowledge the address without any dispute as to residency. Substituted service on a person apparently in charge of the premises is allowed where the “‘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., supra, 6 Cal.App.4th at p. 1393; Ellard v. Conway, supra, 94 Cal.App.4th at p. 546 (footnote 3); Code Civ. Proc., 415.95, subd. (a).)

Other than a conclusive denial of awareness, the motion itself lacks any support establishing a basis of invalid notice given the lack of facts accounting for service at the undisputed address. Furthermore, counsel in opposition references a conversation with an attorney purportedly representing the family in June 9, 2023, thereby further undermining any claims of unawareness. [Declaration of Hal Goldflam.] The proofs of service, paucity of facts in the motion and supporting declarations, and challenging counter-declaration undermines any finding for relief under the lack of actual notice standard.

Only in the reply, do the declarants offer new information. The subsequently filed declarations deprive Plaintiff of the opportunity to respond to the new information. Even considering the new declaration, however, the declarations continue to deny knowledge of the identified “Jane Doe” fitting the physical description in the proof of service. [Second Declarations of Elize H. Achjian, and Tania Muradian, ¶¶ 4-6.]

The court finds the new information insufficient. A simple denial of awareness fitting the description still fails to overcome the implicit admission of a valid address, and the evidentiary presumption entitled to the process server that the papers were left with a person apparently in charge regardless of a disputed personal description. The therefore denies the motion on this basis.

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.)

“[A] trial court is obligated to set aside a default, default judgment, or dismissal if the motion for mandatory relief (1) is filed within six months of the entry of judgment, (2) ‘is in proper form,’ (3) is accompanied by the attorney affidavit of fault, and (4) demonstrates that the default or dismissal was in fact caused by the attorney's mistake, inadvertence, surprise, or neglect.’” (Martin Potts & Associates, Inc. v. Corsair, LLC (2016) 244 Cal.App.4th 432, 443.)

The motion was filed on December 4, 2024, exactly one day short of the six month cutoff for the timely presentation of the motion. The motion lacks any declaration from any attorney regarding any conduct by counsel leading to the default. The application purely depends on the lack of awareness by the individual defendants. Again, the court considers the motion within context of counsel purportedly informing Plaintiff of representation, yet still waiting until the cusp of the deadline before seeking leave for relief, and without accounting for the estate.

A discretionary standard applies to the motion given the lack of an attorney statement and dependence on the individual parties’ explanations. (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1251-1252; see Rodriguez v. Brill (2015) 234 Cal.App.4th 715, 727.) Public policy favors adjudication of claims on the merits. Nevertheless, where conduct by the party acting in pro per represents a deliberate, strategic decision, public policy vests the court with discretion to find no basis for relief. (Benedict v. Danner Press (2001) 87 Cal.App.4th 923, 929-930; Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1251-1252.)

The second set of declarations admits to the retention of current counsel, but specifically admits to withholding authorization for counsel to seek relief from the default, due to distraction with the passing of Khachik V. Mouradian, and lack of understanding of the “severity” and importance of the “situation.” [Second Declarations of Elize H. Achjian, and Tania Muradian, ¶¶ 7-8.] The court again acknowledges the lack of an opportunity for Plaintiff to respond to the second set of declarations.

The court also takes into account that the motion was filed on the last day possible for statutory relief consideration. Further briefing in order to both preserve the statutory deadline and allow for additional challenge to the new argument will not likely alter the factors presented to the court. The declarations while more forthcoming continue to raise valid challenges to the credibility of the decision making process, and demonstrate a potential deliberate decision. The death occurred on December 26, 2021, which is well after the service and default dates, and Defendants were admittedly in touch with counsel following the notice of default.

Public policy still favors adjudication on the merits. Given the equities of the subject case relative to the widow and daughter of decedent, and other potential efforts for judgment collection by other judgment creditors, lien holders and/or secured interests, the court finds a compelling public policy interest to allow the action to proceed on the merits rather than via default. The motion is therefore granted under Code of Civil Procedure section 473, subdivision (b).

The motion lacked a copy of the requisite responsive document. The court orders the individual defendants to answer the complaint within 20 days of the subject order, and schedule a motion for appointment of a designated successor upon appearance in the action and pending appointment with the Probate Court or other means for establishing Elize Achjian as the estate representative, as applicable.

Defendants to give notice to all parties.