Judge: Steven A. Ellis, Case: 20STCV40751, Date: 2024-06-10 Tentative Ruling

Case Number: 20STCV40751    Hearing Date: June 10, 2024    Dept: 29

Motion to Set Aside Default and Default Judgment filed by Defendants Doublz Restaurants LLC and PPP Management Group, Inc.

Tentative

The motion is granted, subject to the terms set forth below.

Background

On October 23, 2020, Gloria Marie Northup (“Plaintiff”) filed a complaint against Doublz Restaurants LLC, PPP Management Group Inc. (collectively, “Defendants”), and Does 1 through 50, asserting causes of action for general negligence and premises liability causes of action arising out of a slip and fall occurring on December 13, 2018.

After a number of unsuccessful attempts, default was entered against each of the Defendants on January 20, 2023.  Plaintiff dismissed the Doe defendants on August 21, 2023, and a default judgment against each Defendant was entered on August 30, 2023.

On February 5, 2024, Plaintiff filed a Notice of Entry of Judgment.

On February 22, 2024, Defendants filed this motion to set aside the default and default judgment. Plaintiff filed an opposition on May 23, and Defendants filed a reply on May 29.

Legal Standard

Code of Civil Procedure § 473(b) provides for mandatory and discretionary relief from dismissal. “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 through his or her mistake, inadvertence, surprise, or excusable neglect.”  (Code Civ. Proc., § 473, subd. (b).)  Where such an application for discretionary relief is made, the motion shall be accompanied by a copy of the answer or pleading proposed to be filed, or the application will not be granted. (Ibid.) The court must grant relief from dismissal where the application is accompanied by an attorney affidavit attesting to his or her mistake, inadvertence, surprise, or neglect. (Ibid.) In either case, the application must be made within a reasonable time, and in no case exceeding six months after the judgment. (Ibid.)

“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.” (Code Civ. Proc., § 473.5, subd. (a).)

“The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.” (Code Civ. Proc., § 473, subd. (d).)

In addition, and separately, even when there is no statutory basis to set aside a default or dismissal, 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

Defendants seek relief from default and the default judgment on the following grounds: (1) service did not result in actual notice to the party in time to defend, and therefore the default and default judgment may be set aside under Code of Civil Procedure section 473.5; (2) there was no valid service, and therefore the judgment is void and may be set aside under Code of Civil Procedure section 473, subdivision (d); (3) the failure to respond was the result of Defendants’ mistake, inadvertence, surprise, or excusable neglect,” and therefore the Court has discretion to grant relief under Code of Civil Procedure section 473, subdivision (b); and (4) the default and default judgment were the result of “extrinsic mistake,” and therefore the Court has the inherent, non-statutory authority to grant relief on equitable grounds.

Beginning with Defendants’ arguments under Code of Civil Procedure section 473.5, that statute provides as follows:

“(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.

(b) A notice of motion to set aside a default or default judgment and for leave to defend the action shall designate as the time for making the motion a date prescribed by subdivision (b) of Section 1005, and it shall be accompanied by an affidavit showing under oath that the party’s lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect. The party shall serve and file with the notice a copy of the answer, motion, or other pleading proposed to be filed in the action.

(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.”

(Code Civ. Proc., § 473.5.)

The Court has carefully considered the evidence in the record and the arguments presented by both sides.  The Court concludes that, even assuming that service was properly effected under the provisions of the Code, Defendants have made a sufficient showing that they did not receive actual notice in time to defend the action.  (E.g., Poulis Decl., ¶¶ 3-8, 11; Negrette Decl., ¶¶ 2-4.)  Accordingly, the motion to set aside the default and default judgment is granted.

Code of Civil Procedure section 473.5, subdivision (c), authorizes the Court to set aside the default and default judgment “on whatever terms as may be just.”  Here, Plaintiff opposes the motion in its entirety but also argues, in the alternative, that if the motion is granted, the Court also set aside the dismissal of the Doe defendants.  That request for alternative relief is granted.  The Doe defendants were dismissed after entry of the default of the named Defendants, and for the purpose of facilitating entry of the default judgment.  As the Court is setting aside the default judgment and the default, the Court finds that justice will be served by also setting aside Plaintiff’s dismissal of the Doe defendants.

As the Court is granting relief under section 473.5, the Court need not reach, and does not reach, the other grounds for relief stated in Defendants’ motion.

Conclusion

The Court GRANTS Defendants’ Motion.

The Court SETS ASIDE the default of Defendants entered on January 20, 2023.

The Court SETS ASIDE the default judgments entered on August 30, 2023.

The Court SETS ASIDE the dismissal of the Doe defendants entered on August 22, 2023.

The Court ORDERS that Defendants fully comply with Code of Civil Procedure section 430.41 prior to filing the Demurrer attached to the moving papers.  As part of the meet and confer process, the Court ORDERS counsel for all parties to meet and confer about the potential for naming Doe defendants and for dismissing any improperly named parties.

Moving Party is to give notice.