Judge: Yolanda Orozco, Case: 21STCV25095, Date: 2022-09-07 Tentative Ruling
Case Number: 21STCV25095 Hearing Date: September 7, 2022 Dept: 31
MOTION TO SET ASIDE/VACATE DEFAULT IS DENIED
Background
On July 8, 2021, Plaintiff Reshef Loza (“Plaintiff”) filed this action against Defendants P.A.C. Properties Management LLC (“PAC”). The Complaint asserts causes of action for:
1) Breach of Implied Warranty of Habitability;
2) Breach of Implied Warranty of Habitability;
3) Negligent Premises Liability;
4) Nuisance;
5) Trespass;
6) Intentional Infliction of Emotional Distress;
7) Breach of Contract;
8) Breach of the Covenant of Quiet Enjoyment;
9) Breach of Covenant of Good Faith and Fair Dealing;
10) Fraud/Deceit/Intentional Misrepresentation of Fact;
11) Negligent Misrepresentation; and
12) Violation of Civil Code § 1950
The Complaint alleges, inter alia, that on March 9, 2019, Plaintiff rented an apartment unit from PAC located at 12142 Burbank Blvd., Valley Village CA 91607. Soon after moving in, Plaintiff developed a cough, congestion, and difficulty breathing. It was later discovered that mold was present in the apartment unit that Plaintiff was living in which was caused by burst pipes. Plaintiff notified PAC, and PAC’s maintenance used dehumidifiers to remove the excess humidity. Due to the developed health condition, Plaintiff sought medical treatment, and he was given medication. In May 2019, PAC’s agents inspected the unit to check for further signs of mold before patching the area.
By December 2020, Plaintiff began having difficulty breathing again, and he was diagnosed with an upper respiratory tract disease. It was discovered that, since the last repair, the pipes burst again, which exposed Plaintiff’s apartment unit with moisture. PAC repaired the pipes and provided dehumidifiers to remove the condensation. Thereafter, on January 25, 2021, Plaintiff independently hired a lab to run a mold test, and it was discovered that there was toxic mold in the apartment. Plaintiff moved out from the apartment unit in March 2021.
On December 17, 2021, Plaintiff filed amendments to the complaint adding P.A.C Properties, Peter Andrew Coeler, Barbara Carmen Coeler, and Peter Andrew Coeler and Barbara Carmen Coeler, Trustees of the PB Living Trust, dated June 16, 2017 as named defendants.
On February 7, 2022, defaults were entered as to the Defendants PAC, P.A.C Properties, Peter Andrew Coeler, Barbara Carmen Coeler, and Peter Andrew Coeler and Barbara Carmen Coeler, Trustees of the PB Living Trust, dated June 16, 2017 (collectively, “Defendants”). Does 1 through 20 were dismissed without prejudice on March 23, 2022.
Plaintiff sought Default Judgment against Defendants in the total amount of $552,585.00. (Min. Or. 07/05/22.) Judgment was denied on July 5, 2022, on the basis that Plaintiff had failed to file and serve a statement of damages on the Defendants, Plaintiff had failed to prove he was entitled to all the damages requested, and the amount requested was not supported by the evidence submitted. (Id.)
On August 10, 2022, Defendants moved to Set Aside the Default and Default Judgment, if entered, and to Quash Service of Summons.
Legal Standards
Vacate/Set Aside Default
“Section 473(b) provides for both discretionary and mandatory relief. [Citation.]” (Pagnini v. Union Bank, N.A. (2018) 28 Cal.App.5th 298, 302.) An application for relief under this section must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought and must be accompanied by an affidavit of fault attesting to the mistake, inadvertence, surprise or neglect of the moving party or its attorney. (Code Civ. Proc., § 473, subd. (b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.) In addition, an application for relief under this section “shall be accompanied by a copy of the answer or other pleading proposed to be filed herein, otherwise the application shall not be granted.” (Code Civ. Proc., § 473, subd. (b).) Relief under this section is mandatory when based on an attorney affidavit of fault; otherwise, it is discretionary. (Id.) When relief from default and default judgment is based on an attorney affidavit of fault, the six-month period starts to run from the date of the entry of the default judgment. (Code Civ. Proc., § 473, sub. (b); Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 295.)
Quash Service of Summons
A defendant . . . may serve and file a notice of motion for one or more of the following purposes: (1) To quash service of summons on the ground of lack of jurisdiction of the court over him or her. . ..”. (C.C.P. § 418.10(a).) A court lacks jurisdiction over a party if there has not been proper service of process. (See Ruttenberg v. Ruttenberg (1997) 53 Cal.App.4th 801, 808.)
“When a motion to quash is properly brought, the burden of proof is placed upon the plaintiff to establish the facts of jurisdiction by a preponderance of the evidence.” (Aquila, Inc. v. Sup. Ct. (2007) 148 Cal.App.4th 556, 568.)
Discussion
Late Filed Opposition
Defendants argue Plaintiff’s Opposition is untimely under Code of Civil Procedure section 1005 because the Opposition was served and filed late on August 29, 2022. Given that Defendants have not attested that they have been prejudiced by the delay, the Court exercises its discretion to consider the late-filed Opposition along with Defendants’ Reply.
1. Motion to Vacate/Set Aside Default
When a motion to quash is brought concurrently with a motion to vacate a default, the court must rule on the motion to vacate first. (Steven M. Garber & Assocs. v Eskandarian (2007) 150 Cal.App.4th 813, 823-24 [holding that a defendant against whom a default has been entered is out of court and is not entitled to take any further affirmative steps in the action except for a motion for relief from the default].) Given that Default Judgment was not entered, the Court considers the Defendants’ requests for relief from default first.
Discretionary relief is available based on the party’s own declaration or other evidence showing mistake, inadvertence, surprise, or excusable neglect. (Minick v. City of Petaluma (2016) 3 Cal.App.5th 15, 25-26.) Here¿Defendants seek discretionary relief due to “defendants’ excusable mistake” rather than that of their attorney. (Reply 4:7-9.) In support of their application,
Defendants include the Declaration of Amanda Racette, the Operations Manager of P.A.C. Properties who attests:
“On December 27, 2021, I learned that a summons and complaint for P.A.C. Properties, an unknown business entity, Peter Andrew Coeler, Barbara Carmen Coeler, and Peter Andrew Coeler and Barbara Carmen Coeler, trustees of the PB Living Trust dated June 16, 2017 were purportedly served on Katie Pulley at the P.A.C. office.”
(Raccette Decl. ¶ 2.)
The documents were emailed to the Defendants’ insurance broker who confirmed he received them via email. (Id.) Racette admits that no follow-up was done with the insurance carrier because she believed she would be contacted if further action was needed. (Id. ¶ 2.)
Beth Christian, the Claims Technical for Defendants’ insurance carrier, Swyft, attests that as of December 2021, she believed the matter had been settled and no longer active based on information from an adjuster who had recently left Swyft. (Christian Decl. ¶ 4.)
Christian admits that on or about December 2021, she became aware of the online court docket indicating Plaintiff had filed four Doe Amendments but asserts she did not know if the Doe Defendants were served or when the responsive pleading deadline was. (Id. ¶ 5.) Christian does not state when she learned the matter had not been settled but confirms that she received a coverage option from coverage counsel on February 15, 2022. (Id. ¶ 8.) Christian asserts that Swyft assigned defense counsel to the Doe Defendants on April 12, 2022. (Id. ¶ 10.)
Christian asserts that any delays in assigning defense counsel were inadvertent and primarily caused by the “absence of tenders of defense from Doe Defendants. If Swyft had, in fact received tenders of defense from Doe Defendants, [Christian] would have been aware of the responsive pleading deadline and would have taken action to ensure that Swyft assigned defense counsel to Doe Defendants prior to the responsive pleading deadline.” (Christian Decl. ¶ 11.)
Defendants have not provided any declarations as to why they failed to request tenders of defense from Swyfft. Moreover, there are no declarations from Defendants showing diligence in seeking to vacate the default.
In the Motion, defense counsel attests that this Motion was not brought immediately after receiving the assignment because the defense counsel sought to resolve the matter with Plaintiff’s counsel. On June 27, 2022, defense sought a stipulation to set aside the default entered against the Doe Defendants, yet no response was received from Plaintiff. (Hoffman Decl. ¶ 8.) Defense counsel does not state why a stipulation was not sought earlier or why this Motion was not brought earlier.
a. Service on Defunct Entity P.A.C Management, LLC
Defendants assert that personal service on P.A.C. Management LLC was improper because it is a defunct corporation that should have been served by substitute service.
Under Code of Civil Procedure section 416.20 a “corporation that has forfeited its charter or right to do business, or has dissolved” may be served “by delivering a copy of the summons and of the complaint:
(a) To a person who is a trustee of the corporation and of its stockholders or members; or
(b) When authorized by any provision in Sections 2011[.]”
Corporation Code Section 2011 provides that a dissolved corporation “may be served by delivering a copy thereof to an officer, director, or person having charge of its assets or, if no such person can be found, to any agent upon whom process might be served at the time of dissolution.” (Corp. Code § 2011 subd. (b).)
Here, Plaintiff’s process server gave a copy of the summons and complaint to the person whom he believed to be the authorized agent, as permitted under Civil Procedure section 416.20. Moreover, the trustees and/or shareholders of P.A.C. Management were subsequently served via substitute service, with confirmation that a copy of the documents were mailed to the trustees/shareholders. (Opp. Ex. A.) Furthermore, there are no declarations by Defendants attesting that they lacked notice of the pending action.
b. Motion is Untimely
An application for this relief under section 473 “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.” (Code Civ. Proc., § 473, subd. (b).)
Although Defendants included a copy of the Answer, in their motion for relief, their Motion is untimely and relief cannot be granted under section 473. On February 7, 2022, default was entered against the Defendants, yet Defendants did not seek relief until August 10, 2022, more than 6 months after default was entered. (See Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 273 [Petitioner’s motion for relief was filed less than six months after entry of default judgment, but more than six months after entry of its default, thus the court could not grant relief under section 473.].) This six-month time limitation is jurisdictional; the court has no power to grant relief under section 473 once the time has lapsed. (See e.g., Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 345; Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980; Weitz v. Yankosky (1966) 63 Cal.2d 849, 855.).
Default should have been filed on August 8, 2020, to be within the six months
deadline. Moreover, Defendants would still need to show that the Motion was made
within a reasonable time. (See Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal.2d 523, 532.)
Therefore, the Court lacks the power to grant the motion based on jurisdictional time limits, despite the fact Plaintiff failed to allege she would be prejudiced if the motion were granted.
Since the Motion to Set Aside/Vacate the Default is DENIED; Defendants’ Motion to Quash Service of Summons is MOOT.
Conclusion
Defendants’ Motion to Set Aside/Vacate Default is DENIED. Defendants’ Motion to Quash Service of Summons is MOOT.
Defendants to give Notice.
The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All masking protocols will be observed at the Courthouse and in the courtrooms.