Judge: Theodore R. Howard, Case: 21-1191783, Date: 2022-09-29 Tentative Ruling
Defendant Randall Bates’ motion to set aside entry of default is GRANTED. His request for sanctions against Plaintiff Caltex Acquisition IV, LLC and its counsel is DENIED.
Motion to set aside entry of default
A court may grant discretionary relief from a judgment, dismissal, order or other proceeding taken against a party upon the party’s showing of “mistake, inadvertence, surprise or excusable neglect.” (Code Civ. Proc., § 473, subd. (b).) The relief offered by section 473, subdivision (b) is to be liberally applied. (Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 696 {Fasuyi).) “The law favors judgments based on the merits, not procedural missteps.” (Lasalle v. Vogel (2019) 36 Cal.App.5th 127, 134.) As such, “‘any doubts in applying section 473 must be resolved in favor of the party seeking relief from default [citations].’” (Id., at p. 134-135.)
Defendant seeks relief from default on the ground that his failure to timely respond was due to inadvertence, surprise, mistake, or excusable neglect. In support of the motion, Defendant submitted his own declaration [ROA 25], which states:
• At all times alleged in the complaint, he was employed as a facilities manager and security by NQR, Inc., a non-profit corporation. He has never been an owner, officer, director or manager of NQR.
• Three years prior to Bates’ employment with NQR, he was employed for 17 years by Benny Hinn Ministries, who he is informed and believes is an affiliate of Plaintiff.
• In late-April 2021, Bates received the complaint that claimed he prevented Plaintiff from entering the property. Because the complaint related to his employment, he turned it over to Dr. Norman Quintero, the principal of NQR, for guidance on how to proceed. Dr. Quintero told Bates he would discuss the complaint with NQR’s attorneys and get back to him. Shortly thereafter, Dr. Quintero told Bates that he did not need to respond because no action has been filed. Bates relied on Dr. Quintero’s information and believed it was based on consultation with NQR’s lawyer. He is not a lawyer and has never been sued.
• In early January 2022, Bates received a copy of the amendment to the complaint, which changed the spelling of his first name. Bates gave the amendment to Dr. Quintero, who told him no action on his part was required because he had not yet been served with any existing action. Again, Bates relied on the information and took no action.
• On February 4, 2022, Bates received the request for entry of default. He notified Dr. Quintero, who said he would take again with NQR’s lawyers. Dr. Quintero then told Bates that a case had apparently been filed at some point and that he needed to respond. Bates then immediately retained his current counsel, who attempted to file an answer which was rejected due to the entry of default.
Here, Defendant showed that the conduct he is being sued for was within his scope of employment and he immediately went to his employer after he received the summons and complaint in April 2021. His employer told him that he would consult with its attorneys and subsequently told Defendant that he did not need to respond. When Defendant received the amendment to the complaint in January 2022, he again went to his employer, who again told him he did not need to respond. When Defendant received the request for entry of default on February 4, 2022, he went to employer again, who told him he would consult with its attorneys and then told him he needed to respond. Defendant then immediately retained counsel.
Based on the circumstances, Defendant has sufficiently demonstrated mistake or excusable neglect, and his situation is akin to situations where courts granted relief to parties turned over summons and complaints to others for assistance. (See, e.g., Weitz v. Yankosky (1966) 63 Cal.2d 849, 856 [defaulted party can demonstrate excusable neglect by showing they were reasonably justified in relying on insurer to defend]; Fasuyi, supra, 167 Cal.App.4th at p. 694 [same].) Plaintiff has not shown that it would be prejudiced if the default was set aside. Therefore, Defendant’s motion to set aside entry of default is GRANTED.
Request for sanctions
Defendant also requests the imposition of sanctions against Plaintiff and its counsel under Code of Civil Procedure section 128.5. He asserts that Plaintiff’s refusal to stipulate to set aside the entry of default was frivolous because he informed Plaintiff of the circumstances and that it would not be able to recover any amount in a default judgement because it did not plead a dollar amount in the complaint.
Section 128.5 statute permits a court to order “a party, the party's attorney, or both, to pay the reasonable expenses, including attorney's fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.” (Code Civ. Proc., § 128.5, subd. (a).) Frivolous tactics includes “actions which are ‘totally and completely without merit.’ [Citation.]” (Park Magnolia v. Fields (1987) 191 Cal.App.3d Supp. 1, 4. [landlord’s conduct in obtaining premature entry of default, judgment, and writ of possession, opposing tenant’s motion to vacate and to quash writ, and conditioning a deposition as a condition of relief met the definition of frivolous tactics].)
Here, the request for entry of default was proper, as Defendant does not dispute that he received the summons and complaint or any of the subsequent paperwork. Given Defendant’s admission regarding knowledge of the action, Plaintiff disputed the reasonableness of Defendant’s conduct. And while Defendant is correct that Plaintiff’s failure to plead a dollar amount in the complaint renders it unable to recover in a default judgment (Yu v. Liberty Surplus Ins. Corp. (2018) 30 Cal.App.5th 1024, 1031-1032 [prayer for damages “in accordance with proof” insufficient for default judgment]), that goes to futility, not to frivolity. Therefore, although the motion to set aside should be granted, it cannot be said that Defendant’s refusal to set aside the default was totally and completely without merit as to constitute frivolous conduct.
Defendant to file and serve his proposed answer, currently attached as Exhibit 4 to Dimitri Gross’ declaration, within 5 days of notice of ruling.
Defendant to give notice.