ARMS TRANS INC. VS. S-LOGIBIS USA INC., ET AL.

Tentative Rulings

Case Number: TC028676    Hearing Date: December 17, 2020    Dept: A

#6. Arms Trans Inc. v. S-Logibis USA INC, et al.

Case No.: TC028676

Matter on calendar for: Motion to Set Aside Default and Default Judgment; Motion to Vacate for Lack of Actual Notice

Tentative ruling:

1. Background

Plaintiff Arms Trans Inc. provides transport, forwarding, warehouse, and trucking services. It acquired a default judgment against Defendants S–Logibis USA Inc., S–Logibis (UK) LTD, and Jae Sung Choi in early 2018. When Plaintiff attempted to enforce the judgment against Defendants in South Korea, Plaintiff learned the judgment was unenforceable because Plaintiff had not served Defendants in accordance with South Korean law. Plaintiff moved to set aside/vacate the judgment, and on January 7, 2020 the Court granted Plaintiff’s motion.

On May 6, 2020, Plaintiff again obtained a default judgment against Defendants. Defendants now move to set aside the default and default judgment or move to vacate for lack of actual notice. Plaintiff opposes.

For the reasons set forth below, the Court grants the motion.

1. Standard

   The court has broad discretion to vacate the entry of default, default judgment, or a dismissal where the moving party timely establishes a proper ground for relief. (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495.) The general underlying purpose of Section 473, subdivision (b) is to promote the determination of actions on their merits. (Even Zohar Const. & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 838-839.)

   Mistake, Inadvertence, Surprise, or Excusable Neglect

   “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).)

Lack of Actual Notice

Code of Civil Procedure § 473.5 may be used when service does not result in actual notice of a suit. It is limited to the earlier of (i) 180 days after service of a written notice that default or default judgment has been entered, or (ii) two years after entry of default judgment. (CCP § 473.5(a).) The moving party shall file a proposed pleading. (CCP 473.5(b).) This statute authorizes the setting aside of both default judgment and the underlying default.

1. Analysis

   Request for Judicial Notice

   Defendants request that the Court take judicial notice of the following: (1) The proof of service by substitute service on Defendant Jae Sung Choi; (2) The proof of service by substitute service on Defendant S-Logibis USA, Inc.; and (3) The proof of service by substitute service on Defendant S-Logibis (UK) Ltd. These documents were filed in the instant action.

   The Court grants the request but not as to any hearsay. (Evid. Code § 452(d).)

   Timeliness

   The Court finds that Defendants’ motion is untimely under CCP § 473(b). Plaintiffs entered default against Defendants on April 29, 2020. Defendants had six months from that date, or until October 29, 2020, to file a motion to set aside the default and default judgment. Defendants filed their motion on November 3, 2020, past the six-month deadline.

   The Court declines to grant equitable relief under § 473(b). Defendants engaged counsel in July 2020 to assist them in setting aside the default judgment. (Choi Decl., ¶ 7.) Defendants’ motion relies on Jungnyeo Kim’s declaration, in which she states that she is an elderly housekeeper for Defendant Choi, and she has no recollection of receiving or giving Defendant Choi the summons and complaint. (Kim Decl., ¶¶2, 4; Choi Decl., ¶¶9-10.) No extrinsic factors prevented Defendants from filing a timely motion. (See Olivera v. Grace

   Defendants’ motion is timely, however, under CCP § 473.5. They filed their motion within two years after entry of default judgment. The Court will address the merits under CCP § 473.5.

   Lack of Actual Notice

“When 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 or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action.” (CCP § 473.5(a).)

Defendant Choi asserts that “[i]n 2019, [Defendant Choi] became aware that this lawsuit was pending because Plaintiff had apparently obtained default judgment against me and the two S-Logibis entities without my knowledge, and attempted to enforce the judgment against me in Korea, where I resided.” (Choi Decl., ¶ 3.) At that point, Defendant Choi had actual knowledge of the lawsuit against him. However, this does not bar Defendants from seeking relief now. The Court did not have jurisdiction over Defendants, because Defendants had not been properly served with the summons. (See Holiness Church of San Jose v. Metropolitan Church Ass'n The Court set aside the first default judgment so Plaintiff could properly serve Defendants.

Plaintiff served Defendants by substitute service on February 10, 2020, complying with South Korean law. (Park Decl., ¶ 3; RJN, Exh. 1-3.) Defendants argue they did not have actual notice because Defendant Choi’s elderly housekeeper did not give him the summons. (Kim Decl., ¶¶2, 4; Choi Decl., ¶¶9-10.)

Defendants have established that they did not receive actual notice, and that the lack of actual notice was not caused by their inexcusable neglect or avoidance of service. (CCP § 473.5(b). This lawsuit may proceed on the merits. Elston v. City of Turlock

1. Ruling

   The Court grants Plaintiff’s motion to set aside default and default judgment/move to vacate for lack of actual notice.

   Next dates:

   Notice:

Case Number: TC028676    Hearing Date: January 07, 2020    Dept: A

# 18. Arms Trans Inc. v. S-Logibis USA Inc., et al.

Case No.: TC028676

Matter on calendar for: Motion to Set Aside Default Judgment

Tentative ruling:

1. Background

   Plaintiff Arms Trans Inc. provides transport, forwarding, warehouse, and trucking services. It acquired a default judgment against Defendants S–Logibis USA Inc., S–Logibis (UK) LTD, and Jae Sung Choi in early 2018. When Plaintiff attempted to enforce the judgment against the Defendants in South Korea, the judgment was unenforceable because Plaintiff had not served Defendants in accordance with South Korean law.

   Plaintiff now moves to set aside the default judgment so that it may effect proper service. No opposition has been filed. For the reasons set forth below, the Court grants the motion.

2. Standard

There are three ways a default judgment may be set aside if the defendant lacks actual notice. First, Code of Civil Procedure § 473.5 may be used when a defendant was properly served but did not receive actual notice of a suit. It is limited to the earlier of (i) 180 days after service of a written notice that default or default judgment has been entered, or (ii) two years after entry of default judgment. (C.C.P., § 473.5(a).) This statute authorizes the setting aside of both default judgment and the underlying default.

Second, is Code of Civil Procedure § 473(d), which allows a court to set aside any void judgment or order. The procedure under subsection (d) depends on whether the judgment is void on its face. (Trackman v. Kenney (2010) 187 Cal.App.4th 175, 181.) A judgment is void on its face if its “invalidity appears on the face of the record, including the proof of service. [Citation.] (Ibid.) A facially void judgment may be set aside either by a separate action or via motion. (Ibid.) When a judgment is facially valid, a motion to set aside under subsection (d) must be brought within two years. (Id. at 180.) This is because courts have adopted by analogy the statutory limitation of Code of Civil Procedure § 473.5(a). (Ibid.)

Third, a party may request show that extrinsic fraud or mistake exists. (Trackman, supra, 187 Cal.App.4th at 181.) “[S]uch a motion may be made at any time, provided the party acts with diligence upon learning of the relevant facts. [Citation.]” (Ibid.)

1. Analysis

   Plaintiff is correct that the procedure of this case is unusual as it is traditionally a defendant that will seek to set aside the default judgment. However, Plaintiff’s motion clearly outlines that service was deemed inadequate in South Korea in that Defendants did not receive actual notice. Accordingly, as this motion as brought within two years of the judgment, the judgment and underlying default must be set aside under Code of Civil Procedure § 473.5(a).

2. Ruling

   The motion to set aside the default judgment and entry of default is granted.

   Next dates:

   Notice: