CALABASAS PARK ESTATES OWNERS ASSO. VS. S.B.R.S. INC.

Tentative Rulings

Case Number: ****6254    Hearing Date: October 07, 2020    Dept: W

CALABASAS PARK ESTATES OWNERS ASSOCIATION V. S.B.R.S. INC.

defendant’s motion to set aside default and default judgment

Date of Hearing: October 7, 2020 Trial Date: None set.

Department: W Case No.: ****6254

Moving Party: Defendant S.B.R.S. Inc.

Responding Party: Plaintiff Calabasas Park Estate Owners Association

BACKGROUND

Plaintiff alleges Defendant S.B.R.S. Inc. breached the Homeowners Owners Association agreement by failing to pay HOA assessments. On September 22, 2017, Plaintiff filed a complaint asserting causes of action for 1) Foreclosure of Lien; 2) Breach of Covenants; 3) Quantum Meruit; and 4) Account Stated.

On January 14, 2019, default judgment was entered against Defendant. Defendant now moves to set aside the entry of default and default judgment on the grounds none of the entities listed in the caption of the Complaint were served.

[Tentative] Ruling

Defendant S.B.R.S. Inc.’s Motion to Set Aside Default and Default Judgment is DENIED.

DISCUSSION

Defendant S.B.R.S. Inc. moves this court for an order setting aside the default judgment for failure to appear as well as for an order quashing the service of the summons due to lack of jurisdiction pursuant to Code of Civil Procedure section 418.10(a)(1). None of the other dbas of S.B.R.S. Inc. move to set aside the default, nor could they for they have been suspended or cancelled.

Although Defendant cites to Code of Civil Procedure section 473.5[1] in the Notice of Motion, it appears that Defendant moves to set aside the default based on Code of Civil Procedure section 473 due to purported “mistake or inadvertence” by both Plaintiff and Defendant. Specifically, Defendant contends the failure of S.B.R.S. Inc. to answer the complaint was due to the fact that none of the entities listed in the caption of the Complaint were served.

Code of Civil Procedure, section 473(b) contains two distinct provisions for relief. The first provision is discretionary and broad in scope, providing: “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).) The second provision is mandatory and narrowly covers only default judgments and defaults that will result in entry of judgments. It states: “[T]he court shall, whenever 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 affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) 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).)

Where a party moves for discretionary relief, “[t]he general rule is that the six-month period within which to bring a motion to vacate under section 473 runs from the date of the default and not from the default judgment taken thereafter.” (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970; Weiss v. Blumencranc (1976) 61 Cal.App.3d 536, 540; Nemeth v. Trumbull (1963) 220 Cal.App.2d 788, 791.) The six-month limit is mandatory and a Court has no authority to grant relief under CCP section 473(b) unless an application is made within the six-month period. ; ;(Arambula v. Union Carbide Corp. ;(2005) 128 Cal. App. 4th 333, 340.) ; Accordingly, this six-month limit is jurisdictional because the Court has no power to grant relief under CCP section 473(b) after that time. ;(Davis v. Thayer ;(1980) 113 Cal.App.3d 892, 901.)

On August 27, 2018, entry of default was entered against Defendant S.B.R.S. INC. also known as S.B.R.S.INC. also known as SBRS, INC., a California Corporation and on January 4, 2019, default judgment was entered. More than six months later, on August 11, 2020, Defendant filed the instant motion to set aside the entry of default and default judgment. The court notes on February 27, 2020, Defendant made an appearance at the Debtor Examination. This was six months before Defendant filed their motion to set aside the default judgment. As such, the instant motion has not been made within a reasonable time and is untimely.

Assuming arguendo the motion had been timely, Defendant has not shown the default judgment was entered against them based on mistake, inadvertence, surprise, or excusable neglect. The registered process server, Calvin Jones, declares under penalty of perjury, that on April 10, 2018 and July 17, 2018 he caused to be served by hand delivery the Summons and Complaint package, et al. on the party S.B.R.S. Inc., also known as S.B.R.S. Inc., also known as SBRS, Inc. a California Corporation on an authorized agent to accept service of process through the Office of the Secretary of State. (Jones Decl. ¶¶2, 4.) Since Plaintiff filed Proofs of Service, the burden shifts to SBRS to rebut the presumption of service.

Defendant has not demonstrated they did not receive the proof of services. The Secretary of State was served because Plaintiff could not locate the Defendant company or the agent for process of service for S.B.R.S., Inc., Mr. Erami. Mr. Safaie claims Plaintiff had no problem finding him when they served the subpoena for the judgment debtor examination, but he does not dispute that Mr. Erami was the agent for service of process in 2018. Moreover, Defendant has failed to attach a copy of the answer or other pleading proposed to be filed therein as required by Code of Civil Procedure section 473.

“Apart from statutory authority, all courts are said to have an inherent power to correct their records so as to make them speak the truth, and under this inherent power courts have frequently corrected their final judgments when, because of clerical errors or omissions, the judgments actually rendered were not the judgments intended to be rendered.” (Olivera v. Grace (1942) 19 Cal.2d 570, 574.) Under 473(d), a default or default judgment is void if a defendant was not served with a summons in the manner prescribed by statute. (See Sakaguchi v. Sakaguchi  (2009) 173 Cal.App.4th 852, 858; Ellard v. Conway (2001) 94 Cal.App.4th 540, 544.)

The court finds Defendant was served with a summons in the manner prescribed by statute. Corporations Code ;1702(a) provides, as follows: “If an agent for the purpose of service of process has resigned and has not been replaced or if the agent designated cannot with reasonable diligence be found at the address designated for personally delivering the process, or if no agent has been designated, and it is shown by affidavit to the satisfaction of the court that process against a domestic corporation cannot be served with reasonable diligence upon the designated agent by hand in the manner provided in Section 415.10, subdivision (a) of Section 415.20 or subdivision (a) of Section 415.30 of the Code of Civil Procedure or upon the corporation in the manner provided in subdivision (a), (b) or (c) of Section 416.10 or subdivision (a) of Section 416.20 of the Code of Civil Procedure, the court may make an order that the service be made upon the corporation by delivering by hand to the Secretary of State, or to any person employed in the Secretary of State's office in the capacity of assistant or deputy, one copy of the process for each defendant to be served, together with a copy of the order authorizing such service. Service in this manner is deemed complete on the 10th day after delivery of the process to the Secretary of State.”

Defendant contends Plaintiff failed to properly serve any of the S.B.R.S., Inc. entities. There are at least five S.B.R.S. Inc. entities, three of which have been suspended, one canceled, and only one is active. Mr. Erami was the agent for service of process for S.B.R.S. Inc. and had as his address for service 1415 East 17^th Street, #240, Santa Ana, CA 92705. Service was attempted at that address but the process server determined that he was unknown at the address and not listed on the directory. Unable to find another address for Mr. Erami, the plaintiff applied for an order allowing service on the Secretary of State, which was granted, upon a showing of due diligence. As such, defendant was properly served.

Based on the foregoing, Defendant S.B.R.S. Inc.’s Motion to Set Aside Default and Default Judgment is DENIED.