Judge: Steven A. Ellis, Case: 20STCV39557, Date: 2024-03-20 Tentative Ruling

DEPARTMENT 29 - LAW AND MOTION RULINGS IMPORTANT  (PLEASE SEND YOUR E-MAIL TO DEPT. 29 NOT DEPT. 2)

Communicating with the Court Staff re the Tentative Ruling 1. Please notify the courtroom staff by email not later than 9:30 a.m. on the day of the hearing if you wish to submit on the tentative ruling rather than argue the motion. The email address is SSCDEPT29@lacourt.org. Please do not use any other email address. 2. You must include the other parties on the email by "cc." 3. Include the word "SUBMISSION" in all caps in the Subject line and include your name, contact information, the case number, and the party you represent in the body of the email. If you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the motions. THE COURT WILL HEAR ARGUMENT UNLESS BOTH SIDES SUBMIT ON THE TENTATIVE.  4. Include the words "SUBMISSION BUT WILL APPEAR" if you submit, but one or both parties will nevertheless appear. 5. For other communications with Court Staff a. OFF-CALENDAR should appear in all caps in the Subject line where all parties have agreed to have a matter placed off-calendar. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) date of proceeding. b. CASE SETTLED should appear in all caps in the Subject line where all parties have agreed that the case has settled for all purposes. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) whether notice of settlement/dismissal documents have been filed; (c) if (b) has not been done, a date one year from the date of your email which will be a date set by the court for an OSC for dismissal of the case. c. STIPULATION should appear in all caps in the Subject line where all parties have stipulated that a matter before the court can be postponed. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) what proceeding is agreed to be postponed e.g. Trial, FSC; (c) the agreed-upon future date; (d) whether all parties waive notice if the Court informs all counsel/parties that the agreed-upon date is satisfactory. This communication should be used only for matters that are agreed to be postponed and not for orders shortening time. 6. PLEASE MAKE SURE THAT ALL COMMUNICATIONS WITH COURT STAFF DEAL ONLY WITH SCHEDULING AND ADMINISTRATIVE MATTERS AND DO NOT DISCUSS THE MERITS OF ANY CASE. (UPDATED 6/17/2020) 
IMPORTANT:  In light of the COVID-19 emergency, the Court encourages all parties to appear remotely.  The capacity in the courtroom is extremely limited.  The Court appreciates the cooperation of counsel and the litigants. 
ALSO NOTE:  If the moving party does not contact the court to submit on the tentative and does not appear (either remotely or in person), the motion will be taken off calendar.  THE TENTATIVE RULING WILL NOT BE THE ORDER OF THE COURT.

Case Number: 20STCV39557    Hearing Date: March 20, 2024    Dept: 29

Motion to Set Aside Default and Default Judgment filed by Defendant Discovery Days Early Learning Center, Inc.

Tentative

The motion is granted.

Background

On October 15, 2020, Eric Renteria (“Plaintiff”) filed a complaint against Paul Argueta, 85 Palmetto Drive LLC, United Pacific Bank, and Does 1 through 25 for injuries Plaintiff allegedly sustained on April 4, 2019, while Plaintiff was performing work at premises owned or controlled by Defendants.

On January 26, 2021, Plaintiff amended the complaint to name Mark A. Baratta as Doe 1 and Discovery Days Early Learning Center, Inc. (“Defendant”) as Doe 2.

On March 16, 2021, Plaintiff filed a request to dismiss his claims against United Pacific Bank.

On April 12, 2021, 85 Palmetto Drive, LLC and Mark A. Barrata filed an answer to the complaint.  On March 11 and September 7, 2022, Plaintiff filed requests to dismiss his claims against these defendants.

On April 28, 2022, default was entered against Defendant.

On September 26, 2022, Defendant filed a motion to set aside the default.  The motion was set for hearing on April 14, 2023. The Court’s tentative ruling was to grant the motion, but when Defendant’s counsel did not appear at the hearing, the Court took the motion off calendar.

On May 1, 2023, Defendant filed a motion for reconsideration of the April 14 ruling, arguing that counsel failed to appear because of a conflicting hearing and due to technical problems.  On May 26, 2023, the Court denied the motion, reasoning that the Court made no ruling on April 14 and that the failure to appear for oral argument is not a new or different fact or circumstance warranting reconsideration.

On May 30, 2023, Defendant filed a new motion to set aside the default.  The motion was set for hearing on March 20, 2024.  On March 5, 2024, Plaintiff filed an opposition and objection to some of Defendant’s evidence.  No reply has been filed.

Objections

Plaintiff’s objections are OVERRULED.  With regard to the hearsay objections, the statements are offered for a non-hearsay purpose (not for the truth of the matters asserted).

Legal Standard

“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.”  (Code Civ. Pro., §473, subd. (b).)

To qualify for relief under section 473, the moving party must act diligently in seeking relief and must submit affidavits or testimony demonstrating a reasonable cause for the default. (Elston v. City of Turlock (1985) 38 Cal.3d 227, 234.)

“In a motion under section 473 the initial burden is on the moving party to prove excusable neglect by a “preponderance of the evidence. [Citations]”” (Kendall v. Barker (1988) 197 Cal.App.3d 619, 624.) “The moving party has a double burden: He must show a satisfactory excuse for his default, and he must show diligence in making the motion after discovery of the default.” (Id. at p. 625.)

In addition, and separately, even when there is no statutory basis to set aside a default or default judgment, courts have “the inherent authority to vacate a default and default judgment on equitable grounds such as extrinsic fraud or extrinsic mistake.”  (Bae v. T.D. Service Co. (2016) 245 Cal.App.4th 89, 97; see also, e.g., Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981-982.)

“Extrinsic fraud” generally involves some act that kept the party seeking relief “in ignorance of the action or proceeding” or “fraudulently prevented” the party “from presenting his claim or defense.”  (Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471; see also, e.g., Bae, supra, 245 Cal.App.4th at p. 97.) 

“Extrinsic mistake” is defined broadly and encompasses “almost any set of extrinsic circumstances which deprive a party of a fair adversary hearing.”  (In re Marriage of Park (1980) 27 Cal.3d 337, 342; see also, e.g., Rappleyea, supra, 8 Cal.4th at p, 981.)  There need not necessarily be a mistake “in the strict sense.”  (Park, supra, 27 Cal.3d at p. 342.)  But a mistake is intrinsic, and not extrinsic, when “a party’s own negligence allows the … mistake to occur.”  (Kramer v. Traditional Escrow (2020) 56 Cal.App.5th 13, 29.)  Intrinsic mistakes relate to the merits of the case, such that granting relief would improperly allow a party to relitigate the case.  (Kulchar, supra, 1 Cal. 3d at pp. 472-73.)  Examples of intrinsic mistakes, or intrinsic fraud, are perjury, failing to complete discovery, or failing to prepare adequately for trial.  (Ibid.)

Courts apply a stringent, three-part test for equitable relief pursuant to the inherent authority of the court.  A party seeking relief on equitable grounds must show (1) “a satisfactory excuse”; (2) “a meritorious case”; and (3) "diligence in seeking” relief.  (Rappleyea, supra, 8 Cal.4th at p. 982; see also, e.g., Kramer, supra, 56 Cal.App.5th at p. 29; 1 Weil & Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group 2023), ¶ 5:435.)

Discussion

The request for statutory relief is denied.  Default was entered against Defendant on April 26, 2022.  This motion was filed more than six months later, in May 2023.  The request for statutory relief from the default under Code of Civil Procedure section 473, subdivision (b), is therefore untimely and cannot be granted.

The request for discretionary relief is granted.  Defendant has presented sufficient evidence in support of each of the three required elements – a satisfactory excuse, a meritorious case (defense), and diligence in seeking relief.  (See Scott Decl., ¶¶ 2-6, 9; Agge Decl., ¶¶ 8, 10.)  Defendant also attaches to the motion (as Exhibit 1) a copy of the answer to the complaint that it seeks to file.

The Court also grants Plaintiff’s request for sanctions.  Plaintiff is not responsible in any way for the failure to Defendant to file a timely response to the complaint and has now been forced to incur unnecessary expenses in connection with these relief from default proceedings.  Where relief is sought on a statutory basis, the power to award sanctions is clear.  (Code Civ. Proc., § 473, subd. (c).)  The Court concludes that it has at least the equivalent power to award sanctions when granting relief on an equitable, non-statutory basis.

Sanctions are set in the amount of $1,000.

Conclusion

The Court GRANTS the motion to set aside the default on equitable grounds.

The Court ORDERS that the default entered on April 26, 2022, is hereby SET ASIDE.

The Court GRANTS LEAVE to Defendant to file the Answer attached to its moving papers within 7 days of the hearing.

The Court ORDERS Defendant to pay sanctions in the amount of $1,000 to Plaintiff within 30 days of the hearing.

The OSC re Default Judgment is discharged.

The Court SETS a Trial Setting Conference in approximately 21 days.

Moving party is ordered to give notice.