Judge Teresa A. Beaudet, Case 22STCV30819 2023-03-30 Tentative Ruling

Plaintiff Andrea Campos (“Plaintiff”) filed this action against Defendants Sabina Arezou Manians (“Manians”), Seyed Abbas Hosseini (“Hosseini”), and Rasht LLC (collectively, “Defendants”). The Complaint asserts causes of action for (1) common law fraudulent conveyance, (2) actual fraudulent transfer in violation of Civil Code section 3439, et seq., and (3) constructive fraudulent transfer in violation of Civil Code section 3439, et seq. In the Complaint, Plaintiff alleges that Manians and Hosseinin are managers and/or members of Rasht LLC. (Compl., ¶ 5.)

Defendants now move to set aside the entry of default against them.[1] Plaintiff opposes.

“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.”

“[B]ecause the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.” ((Elston v. City of Turlock (1985) 38 Cal.3d 227, 233 [negative treatment on other grounds].) Where the party in default moves promptly to seek relief, and no prejudice to the opposing party will result from setting aside the default, “very slight evidence will be required to justify a court in setting aside the default.” (Ibid. .)

Plaintiff filed a proof of service on September 29, 2022 indicating that Rasht LLC was served with the Complaint in this matter by personal service on September 22, 2022. In addition, Plaintiff filed proofs of service on September 30, 2022 indicating that Manians was served with the Complaint by personal service on September 22, 2022, and that Hosseini was served with the Complaint by personal service on September 23, 2022.

Hosseini and Manians indicate that they submitted answers “by mail to the Superior Court of California, County of Los Angeles (Stanley Mosk Courthouse) and Plaintiffs attorney was served electronically on October 20, 2022.” (Hosseini Decl., ¶ 16; Manians Decl., ¶ 16.)

On October 25, 2022, a Notice of Rejection - Pleadings was filed, indicating that “[w]e are unable to process your…answer/response…submitted on 10/21/2022 for the following reason(s):…the required fee of $1305 was not submitted.” Hosseini and Manians state that they “did not know there was a filing fee and that [they] needed to mail a check with the Answer.” (Hosseini Decl., ¶ 17; Manians Decl., ¶ 17.)

Thereafter, on October 27, 2022, Defendants each filed a “Declaration of Demurring or Moving Party in Support of Automatic Extension.” Hosseini indicates that he “consulted with attorney Shahram Dargahi,” and that “Mr. Dargahi advised us to file a Declaration of Demurring Party in Support of Automatic Extension,” but “failed to explain that we had a deadline to file a Demurrer or an Answer to Plaintiffs [sic] Complaint.” (Hosseini Decl., ¶ 19.)

On December 5, 2022, default was entered against Defendants. Thereafter, on December 19, 2022, Defendants filed answers to the Complaint. Hosseini and Manians indicate that “[a]fter being served with the Request for Entry of Default on December 5, 2022, and making the necessary research on lawsuit procedure, [they] filed [their] Answer[s] for the second time on

Defendants assert that based on the foregoing, their “failure to answer in a timely manner and through the online portal are only caused by their mistake, inadvertence, surprise or excusable neglect…” (Mot. at p. 6:1-2.) Defendants also assert that Plaintiff will not be prejudiced if relief is granted. Defendants assert that “Plaintiff knew that Defendants had attempted to file their Answered [sic] in a timely manner as Plaintiff was served by email on October 20, 2022… Defendants filed their Answer on December 19, 2022, just days after plaintiff filed the request for default.” (Mot. at p. 6:13-16.)

Plaintiff asserts that Defendants are not entitled to discretionary relief under Code of Civil Procedure section 473, subdivision (b) because ignorance of the law is not a mistake that would support relief. Plaintiff cites to Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1405, which involved a motion to set aside a judgment under Code of Civil Procedure section 473, subdivision (b). The Hopkins Court noted that “[a]n honest mistake of law can provide a valid ground for relief, at least where a problem is complex and debatable, but relief may be properly denied where record shows only ignorance of the law coupled with negligence in ascertaining it. In considering whether a mistake of law furnishes grounds for relief, the determining factors are the reasonableness of the misconception and the justifiability of lack of determination of the correct law.” (Id. at pp. 1412-1413 [internal quotations and citations omitted].)[2]

Plaintiff asserts that here, “Defendants did not default because they were ignorant of a complicated legal matter; they defaulted because they failed to file their Answers timely and refused to attempt to comply with the legal process by seeking help despite their lack of knowledge.” (Opp’n at p. 9:4-6.) However, as set forth above, Hosseini and Manians assert that attorney Shahram Dargahi advised them to file a Declaration of Demurring Party in Support of Automatic Extension, and that Mr. Dargahi failed to explain that Hosseini and Manians had a deadline to file a demurrer or an answer to Plaintiff’s Complaint. (Hosseini Decl., ¶ 19, Manians Decl., ¶ 19.) Hosseini and Manians also indicate that they were unaware that there was a filing fee and that they needed to mail a check with their answers. (Hosseini Decl., ¶ 17; Manians Decl., ¶ 17.) The Court finds that the foregoing demonstrates excusable neglect on the part of Hosseini and Manians as to their failure to timely answer the Complaint.[3]

Plaintiff also asserts that “Defendants’ claim that they made the necessary research on lawsuit procedure upon receiving Plaintiff’s Request for Entry of Default on December 5, 2022 shows that Defendants disregarded the legal process and ‘ignored the law and rules’ until they suffered the consequences of the possibility of default judgment entered against them.” (Opp’n at p. 9:26-10:1.) As set forth above, Hosseini and Manians also indicate that Hosseini consulted with an attorney who failed to explain that they had a deadline to file a demurrer or answer to the Complaint. (Hosseini Decl., ¶ 19, Manians Decl., ¶ 19.)

Plaintiff also contends that “[s]hould Defendants’ default be set aside, Plaintiff will be prejudiced by delay already caused especially given that Plaintiff’s current lawsuit stems from her attempt to recover judgment from her May 26, 2022 judgment.” (Opp’n at p. 11:21-23.) The instant action was recently filed on September 21, 2022. The Court does not find that Plaintiff has demonstrated that a long delay exists here that would warrant denying the instant motion.

As to Rasht LLC, the Court notes that Defendants submit no evidence as to why Rasht LLC’s answer was untimely filed. In addition, as noted by Plaintiff, Rasht LLC’s answer filed on December 19, 2022 indicates that Manians is “representing Rasht LLC.” The Court notes that “[t]he rights and liabilities of corporations are distinct from the persons composing it. Thus, a corporation cannot appear in court except through an agent. In purporting to represent the corporation in court, that agent is engaged in the practice of law. Only persons who are active members of the State Bar may practice law. A lay person who purports to represent a corporation is engaged in the unlawful practice of law.” (Clean Air Transp. Sys. v. San Mateo County Transit Dist. (1988) 198 Cal.App.3d 576, 578.) Manians does not provide evidence that she is an active member of the State Bar licensed to practice law. It does not appear that any substitution of attorney was filed as to Rasht LLC.

Based on the foregoing, the Court grants Hosseini and Manians’s motion to set aside the default entered against them and denies Rasht LLC’s motion to set aside the default entered against it.

Lastly, “[w]henever the court grants relief from a default, default judgment, or dismissal based on any of the provisions of this [Section 473], the court may do any of the following: (A) Impose a penalty of no greater than one thousand dollars ($1,000) upon an offending attorney or party. (B) Direct that an offending attorney pay an amount no greater than one thousand dollars ($1,000) to the State Bar Client Security Fund. (C) Grant other relief as is appropriate.” (Code Civ. Proc., § 473, subd. (c)(1).)

Plaintiff asserts that “[i]f the Court grants Defendant’s Motion to Vacate and Set Aside Entry of Default, Plaintiff requests that the Court impose a penalty of $1,000 upon Defendants due to the failure to Answer the Complaint. Furthermore, Plaintiff requests that the Court issue an order requiring Defendants to compensate Plaintiff for the costs and attorney’s fees associated with Plaintiff’s Request for Entry of Default as well as the costs and attorney’s fees associated with Plaintiff’s Opposition to the Motion…” (Opp’n at p. 12:11-16.) Plaintiff seeks $6,007.26 in fees and costs in connection with Plaintiff’s opposition to the instant motion. (Freidman Decl., ¶ 26.) The Court does not find that the circumstances of this case are appropriate for imposing either a penalty or other relief such as attorney fees, and therefore, the Court does not do so.

Based on the foregoing, Defendants’ motion is granted as to Hosseini and Manians. The motion is denied as to Rasht LLC. The default entered against Hosseini and Manians is ordered set aside.

Hosseini and Manians’s answers to the Complaint are deemed filed and served as of the date of this hearing.

[1]The Court notes that Defendants filed three separate motions captioned “Motion to Set Aside Default and Default Judgment.” It is unclear why three separate motions were filed, as the motions were each brought by Defendants collectively and each motion appears to be identical. It appears that the three oppositions filed by Plaintiff are also identical. The Court also notes that the caption pages of the motions indicate that Defendants seek to set aside “default and default judgment,” but default judgment has not yet been entered by the Court against Defendants.

[2]Plaintiff also notes that “[w]hen a litigant is appearing in propria persona, he is entitled to the same, but no greater, consideration than other litigants and attorneys…Further, the in propria persona litigant is held to the same restrictive rules of procedure as an attorney…” (Burnete v. La Casa Dana Apartments (2007) 148 Cal.App.4th 1262, 1267.)

[3]The Court notes that “[t]he test of whether neglect was excusable is whether a reasonably prudent person under the same or similar circumstances’ might have made the same error.” (Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1128 (internal quotations omitted).)

ANDREA CAMPOS, Plaintiff, vs. SABINA AREZOU MANIANS, et al., Defendants.	Case No.:	22STCV30819
	Hearing Date:	March 30, 2023
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT; MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT; MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT

Superior Court of California

County of Los Angeles

Department 50