Judge: Teresa A. Beaudet, Case: BC699631, Date: 2023-03-02 Tentative Ruling

Case Number: BC699631    Hearing Date: March 2, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Kate Geller (“Geller”) filed this action on March 26, 2018 against Defendants Strong Arm Group, LLC (“SAG”), Eric Yohan Knipe (“Knipe”), and Joseph Feldman (“Feldman”).

On January 22, 2021, Feldman filed a Cross-Complaint against SAG and Knipe (jointly, “Cross-Defendants”). On March 23, 2021, Feldman filed a First Amended Cross-Complaint (“FACC”) against Cross-Defendants. On May 4, 2022, the Court issued an order sustaining in part and overruling in part Cross-Defendants’ demurrer to the FACC, and denying Cross-Defendants motion to strike the FACC in its entirety. The Court ordered Feldman to file and serve an amended cross-complaint, if any, within 20 days of the May 4, 2022 Order.

 On May 9, 2022, Feldman filed the operative Second Amended Cross-Complaint (“SACC”) against Cross-Defendants.

On August 22, 2022, default was entered against Cross-Defendants on the SACC.[1]

Cross-Defendants now move for an order setting aside and vacating the August 22, 2022 defaults entered against them, “and any default judgments entered thereon.”[2] Feldman opposes.

Request for Judicial Notice

The Court grants Cross-Defendants’ request for judicial notice

Discussion

Code of Civil Procedure section 473, subdivision (b) provides in pertinent 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.”

 “[T]he moving party has the burden of showing that the neglect leading to default was excusable.” (Jackson v. Bank of Am. (1983) 141 Cal.App.3d 55, 58.) “[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.)

Cross-Defendants assert that default was entered against them “as a result of mistake, inadvertence, surprise, excusable neglect, and/or intrinsic and/or extrinsic fraud, equitable fraud, equitable mistake, and/or based on a lack of procedural due process, as a result of SAG and ERIC’s lack of notice, and also as a result of Mr [sic] Feldman’s Counsel, Mr [sic] Brown’s failure to provide them with required notices…” (Mot. at p. 3:3-7.)

As an initial matter, the Court notes that on May 4, 2022, the Court issued an Order granting Feldman’s motion for an order disqualifying Andrew P. Altholz from legally representing or otherwise assisting in any manner Cross-Defendants in this lawsuit. The instant motion was filed on behalf of Cross-Defendants by the Law Office of Norman J. Kreisman. Cross-Defendants filed substitutions of attorney on November 14, 2022 substituting Norman J. Kreisman of the Law Office of Norman J Kreisman for Mr. Altholz as their counsel.

Cross-Defendants submit the Declaration of Andrew P. Altholz in support of the instant motion. However, as Feldman notes, Mr. Altholz’s Declaration is not signed. Code of Civil Procedure section¿2015.5¿defines a¿“declaration”¿as a writing that is signed, dated, and certified as true under penalty of perjury.¿Thus, the Court declines to consider Mr. Altholz’s declaration.

Cross-Defendants also submit the Declaration of Eric Knipe in support of the instant motion. Knipe asserts that neither he nor SAG were served with notice of Feldman’s August 22, 2022 request for entry of default against them. (Knipe Decl., ¶ 6.) Knipe also states that Cross-Defendants did not receive notice of the Court’s May 4, 2022 Order disqualifying Mr. Altholz as their counsel. (Knipe Decl., ¶ 6.) Knipe asserts that Cross-Defendants were unaware of these matters until November 4, 2022, and that thereafter, Cross-Defendants engaged new counsel. (Knipe Decl., ¶ 7.)

In addition, Cross-Defendants note that the subject request for entry of default against Cross-Defendants was served on Mr. Altholz by mail on August 22, 2022. (See Item 6(b) of Feldman’s Request for Entry of Default.) The Court also notes that the proof of service attached to Feldman’s SACC indicates that the SACC was served on Mr. Altholz by email on May 9, 2022. However, as set forth above, the Court issued an Order on May 4, 2022 disqualifying    Mr. Altholz as Cross-Defendants’ counsel.

Cross-Defendants assert that no proceedings could properly occur in this case pursuant to Code of Civil Procedure section 286 after Mr. Altholz was disqualified. Pursuant to Code of Civil Procedure section 286, “[w]hen an attorney dies, or is removed or suspended, or ceases to act as such, a party to an action, for whom he was acting as attorney, must, before any further proceedings are had against him, be required by the adverse party, by written notice, to appoint another attorney, or to appear in person.”[3] As set forth above, Knipe asserts that

Cross-Defendants did not receive notice of the Court’s May 4, 2022 Order disqualifying          Mr. Altholz as their counsel. (Knipe Decl., ¶ 6.)

Feldman asserts that his counsel attempted to provide written notice as required by Code of Civil Procedure section 286. Feldman’s counsel (Michael S. Brown) indicates that on May 9, 2022, he sent an email to Mr. Altholz requesting the contact information for Cross-Defendants, but Mr. Altholz never responded. (Brown Decl., ¶¶ 14-15.) Mr. Brown indicates that his purpose in seeking such information was so he could serve Cross-Defendants with the May 4, 2022 Order. (Brown Decl., ¶ 14.) Mr. Brown also asserts that he commenced a search for the current locations of Cross-Defendants so that he could have them personally served with the May 4, 2022 Order (or at least mailed to whatever addresses he could find), but none of his search attempts proved fruitful. (Brown Decl., ¶ 17.) Thus, Feldman does not appear to provide evidence that Cross-Defendants were advised “by written notice, to appoint another attorney, or to appear in person.” (Code Civ. Proc., § 286.)

In addition, the Court finds that the circumstances here demonstrate “surprise” for purposes of Code of Civil Procedure section 473, subdivision (b). “The term surprise, as used in section 473, refers to some condition or situation in which a party . . . is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against.” (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 611 [internal quotations omitted].)

 As set forth above, the SACC was served on Altholz on May 9, 2022, after the Court issued its May 4, 2022 Order that Mr. Altholz was disqualified as counsel for Cross-Defendants. In addition, Knipe indicates that he and SAG were not served with notice of the May 4, 2022 disqualification Order or the August 22, 2022 request for entry of default. (Knipe Decl., ¶ 6.)

Cross-Defendants attach as Exhibits 2 and 3 to Knipe’s Declaration proposed answers to Feldman’s “First Amended Cross-Complaint.” (Knipe Decl., ¶ 9, Exs. 2-3.) The Court notes that the operative pleading is Feldman’s SACC. As set forth above, Code of Civil Procedure section 473, subdivision (b) provides that “[a]pplication 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…” However, this provision does not provide that a motion to set aside a default must be denied if the proposed pleading contains typographical error(s).   

Lastly, the Court notes that the instant motion contains a number of arguments pertaining to the Court’s May 4, 2022 Order granting Feldman’s motion for attorney disqualification. To the extent Cross-Defendants are asserting that the Court should reconsider the May 4, 2022 Order, the Court does not find that any such request is appropriately made in the instant motion. The Court notes that pursuant to Code of Civil Procedure section 1008, subdivision (a), “[w]hen an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order.” The instant motion is not a noticed motion for reconsideration pursuant to Code of Civil Procedure section 1008.

Conclusion

Based on the foregoing, Cross-Defendants’ motion is granted. The default entered against Cross-Defendants on August 22, 2022 is ordered set aside. Cross-Defendants must respond to the SACC within 10 days from the date of this Order.

Cross-Defendants are ordered to give notice of this Order.

DATED:  March 2, 2023       

                        ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court