Judge: Virginia Keeny, Case: 22VECV00753, Date: 2022-10-25 Tentative Ruling

Case Number: 22VECV00753    Hearing Date: October 25, 2022    Dept: W

BANK OF AMERICA V. CRAIG KATZ 

 

MOTION TO SET ASIDE/VACATE DEFAULT AND DEFAULT JUDGMENT 

 

Date of Hearing:          October 25, 2022                    Trial Date:        N/A

Department:               W                                             Case No.:         22VECV00753; 22VECV00774

 

Moving Party:             Defendant, Craig Katz  

Responding Party:       Plaintiff, Bank of America

 

BACKGROUND 

 

These are collection cases, arising out of two unpaid balances on a credit account issued by Plaintiff to Defendant. On June 6, 2022, Plaintiff Bank of America filed a complaint for common counts, alleging that Defendant, Craig Katz became indebted to Plaintiff in the amount of $41,969.23 (Case No. 22VECV00753).  On June 8, 2022, Plaintiff also filed a complaint for common counts alleging damages of $28,855.43 (Case No. 22VECV00774). On August 23, 2022, default judgments were entered against Defendant in both cases. On September 9, 2022, the Court granted defendant’s ex parte application to stay enforcement of default judgment.

 

Defendant filed a Motion to Set Aside/Vacate Default in both cases on September 9, 2022.

 

 

[TENTATIVE] RULING 

 

1.      Defendants’ Motions to Set Aside/Vacate Default in Case Nos. 22VECV00753 and 22VECV00774 are GRANTED.

 

 

LEGAL STANDARD 

 

CCP § 473.5(a) permits the court to set aside a default or default judgment “[w]hen 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.” This motion must be made within a reasonable time, but in no event exceeding two years after entry of default or 180 days after service of the notice that default judgment has been entered. (CCP § 473.5.) The motion shall be accompanied by an affidavit showing under oath that the party’s lack of actual notice was not caused by his or her avoidance of service or inexcusable neglect and include a copy of the answer, motion, or other proposed pleading. (Id.) The phrase “actual notice” means “genuine knowledge of the party litigant” and does not include constructive or imputed notice to the client. (Tunis v. Barrow (1986) 184 Cal.App.3d 1069, 1077.) ‘[A]ctual knowledge’ has been strictly construed, with the aim of implementing the policy of liberally granting relief so that cases may be resolved on their merits.” (Olvera v. Olvera (1991) 232 Cal.App.3d 32, 39–40.)

 

“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…” (CCP §473(b).) CCP § 473 “should be liberally applied and the power freely exercised to carry out the policy in favor of trial on the merits.” (Carrasco v. Craft (1985)164 Cal.App.3d 796, 803.) There is also “a strong policy behind granting relief if the moving party brings the motion for relief within the statutory time.” (Id.) 

 

“The court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any…resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (CCP § 473(b).)

 

Defendant requests the court to set aside/vacate default pursuant to CCP §§ 473 and 473.5.

 

Defendant states that he has no recollection of being served with a complaint in either case. (Katz Decl. ¶ 2.) He states that he is aware of this matter because he found two notices of default in his mailbox on August 18, 2022. (Katz Decl. ¶ 2.) He states that he had no time to prepare a defense because the default judgments were entered a few days after he found them. (Katz Decl. ¶ 2.) Plaintiff declares that he has not been evading service and acted immediately when he discovered the notices, engaging counsel Eric Brown on August 23, 2022.  (Katz Decl. ¶ 3.)

 

Additionally, defendant’s counsel attests that, at the time defendant engaged him on August 23, 2022, he was dealing with a client emergency. (Brown Decl. ¶ 5.) When counsel was able to reach out to Plaintiff on August 24, 2022, he discovered that default judgment had been entered the previous day. (Brown Decl. ¶ 6.)

 

In opposition, Plaintiff contends that Defendant has not made an excusable mistake under CCP § 473 or under CCP §473.5. Plaintiff attaches evidence that Defendant was served substitute service on his spouse on June 18, 2022 at his home in case no. 22VECV00774, and the complaint was mailed afterward to his home. (Balzer Carr Decl. Ex. 2.) Plaintiff also attaches evidence that Defendant was served personally on June 9, 2022 in case no. 22VECV00753. (Balzer Carr Decl. Ex. 1.) Plaintiff argues that Defendant provided no explanation for why his wife would withhold notice of the suit from him and alleges that his claimed lack of notice is disingenuous, and his declaration is evasive.

 

Plaintiff also asserts that the request to set aside based on attorney fault should also be denied because the default was not caused by attorney mistake. Defendant’s counsel was retained on the same day the default judgment requests were submitted and granted. At that point, there was no action that Defendant’s counsel could have taken to prevent the default.

 

In reply, Defendant states that his declaration is sufficient to show lack of actual notice. Defendant states that the proof of personal service in 22VECV00753 does not match the description of Defendant. 

 

ANALYSIS  

 

Because § 473 is liberally applied, and “actual notice” is strictly construed to promote resolving cases on their merits, the court finds that Defendant has satisfied the requirements for CCP § 473.5. Defendant’s Motion includes a declaration, under penalty of perjury, that Defendant does not recall being served with either of the complaints. His declaration indicates that he only gained actual notice on or about August 18, 2022. Defendant states that after reviewing the notices of default he acted immediately to respond and engage counsel on August 23, 2022. However, the default judgments were entered that same day, allowing no time to respond. Defendant declares that he has not evaded service. Additionally, the frequency and timing with which Defendant engaged counsel and filed the motion to set aside/vacate default is consistent with not having notice until August 18, 2022 and then subsequently acting with a willingness to assert a defense on the merits of the case. Even though Plaintiff attaches proof of personal service, Defendant alleges in the reply that the description of Defendant is not accurate. This, coupled with Defendant’s declaration that he does not recall being served, creates a showing that service was not properly made to provide actual notice. Thus, the court finds that Defendant has put forward a sufficient declaration stating that he had no actual notice until he discovered the notices in the mailbox on August 18, 2022, pursuant to CCP § 473.5.

 

CONCLUSION 

 

 Defendant’s motions to set aside/vacate default are GRANTED.