Judge: Yolanda Orozco, Case: 21STCV25095, Date: 2022-09-30 Tentative Ruling

Case Number: 21STCV25095    Hearing Date: September 30, 2022    Dept: 31

1.     MOTION TO SET ASIDE/VACATE DEFAULT IS GRANTED

2.     MOTION TO QUASH SERVICE OF SUMMONS 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 discovered in the apartment unit that Plaintiff was living in, and this was caused by burst pipes. Plaintiff notified PAC, and PAC’s maintenance used dehumidifiers to remove the excess humidity. Due to the his health condition, Plaintiff sought medical treatment, and he was given medication. By 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 to 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 submit sufficient proof, 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. The hearing was continued, and Defendants served and submitted a supplemental brief on September 09, 2022. 

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 do not argue 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.   

Defendants are correct in asserting that an entry of default judgment is void when the plaintiff fails to serve a statement of damages under  Code of Civil Procedure section 425.11. (See Hamm v. Elkin (1987) 196 Cal.App.3d 1343, 1345-1346 [finding that a statement of damages must be served ‘before a default may be taken’ in a personal injury case.].) Since the Plaintiff in this instant action has failed to serve Defendants with a statement of damages, Defendants assert that the entry of default should be set aside. 

Default judgment for an action arising upon contract or judgment for the recovery of monetary damages has no explicit requirement that a statement of damages be served on the defendant. (See Code Civ. Proc., § 585.) In Shwab v. Rondel Homes, Inc. (1991) the plaintiff brought a civil rights action under Civil Code sections 54.1 and 54.3 and failed to serve the defendants with a statement of damages. (53 Cal.3d 428, 429.) The California Supreme Court interpreted that the word “notice” and “special and general damages” “implies that the Legislature intended that a defendant be given actual notice of the special and general damages claimed by the plaintiff.” (Id. at 428.) Therefore, because the plaintiffs in Shwab prayed for damages for mental and emotional distress, “Plaintiff’s action was subject to § 425.11.” (Id.) 

Here, Plaintiff’s cause of action is for breach of rental/lease agreement, but Plaintiff is also seeking to recover damages for Intentional Infliction of Emotional Distress and other special and general damages that were not alleged in the Compliant with specificity. Plaintiff’s notice to Defendants of the damages claimed only stated that Plaintiff would seek damages “according to proof.” For this reason, the Court cannot find that Plaintiff provided Defendants sufficient notice of the damages sought. This was also a stated reason why Plaintiff’s Motion for Default Judgment was denied. (See Min. Or. 07/05/22). 

Accordingly, the Court GRANTS Defendants’ request to set aside the Entry of Defaults entered on February 7, 2022, against 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. 

Since the Entry of Default will be Set Aside, the Court need not decide if Defendants Motion to Vacate/Set Aside Default was timely under section 473. 

2. Motion to Quash Service of Summons 

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).)

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.

Defendants’ Motion to Quash Service of Summons is DENIED.

Conclusion 

Defendants’ Motion to Set Aside/Vacate Default is GRANTED. 

Defendants’ Motion to Quash Service of Summons is DENIED. 

Defendants to give Notice.