On 08/25/2017 KEVIN CRAVENS filed a Contract - Other Contract lawsuit against OLYMPIA FINANCIAL MORTGAGE. This case was filed in Los Angeles County Superior Courts, Van Nuys Courthouse East located in Los Angeles, California. The Judge overseeing this case is MICHAEL J. CONVEY. The case status is Pending - Other Pending.
Pending - Other Pending
Los Angeles County Superior Courts
Van Nuys Courthouse East
Los Angeles, California
MICHAEL J. CONVEY
OLYMPIA FINANCIAL MORTGAGE INC.
TRIUNFO ONE LLC
HOEFFLIN RICHARD MICHAEL
SCHREIBER EDWIN CORDELL
SEXTON WILLIAM JAMES
3/13/2018: Minute Order
5/14/2018: Case Management Statement
5/21/2018: Case Management Statement
7/30/2018: Request for Dismissal
8/28/2018: Case Management Statement
10/24/2018: Minute Order
11/14/2018: Minute Order
2/14/2019: Minute Order
Answer on First Amended Complaint; Filed by Jeff Aronson (Defendant); Olympia Financial Mortgage, Inc. (Defendant); Stewart Oroz (Defendant)Read MoreRead Less
Amended Complaint; Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Amended Complaint; Filed by Kevin Cravens (Plaintiff); Kevin Cravens (Plaintiff)Read MoreRead Less
Stipulation and Order (Stipulation For Plaintiff To File A First Amended Complaint; [Proposed] Order Thereon); Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Notice of Lodging (Plaintiff's Notice Of Lodging Proposed First Amended Complaint); Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
at 08:30 AM in Department U, Michael J. Convey, Presiding; Case Management Conference - HeldRead MoreRead Less
at 08:30 AM in Department U, Michael J. Convey, Presiding; Hearing on Motion to Compel Discovery (not "Further Discovery") - Not Held - Taken Off Calendar by PartyRead MoreRead Less
Minute Order ( (Case Management Conference)); Filed by ClerkRead MoreRead Less
Case Management Statement; Filed by Olympia Financial Mortgage, Inc. (Defendant); Jeff Aronson (Defendant); Stewart Oroz (Defendant)Read MoreRead Less
Case Management Statement; Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Request for Judicial Notice; Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Opposition; Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Motion to Compel; Filed by Triunfo One, LLC (Defendant)Read MoreRead Less
Request for Judicial Notice (in Support of Motion to Compel Arbitration and to Stay Action Pending Completion of Arbitration); Filed by Triunfo One, LLC (Defendant)Read MoreRead Less
Proof of Service-By Mailing; Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Notice; Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Notice of Incoming Transfer; Filed by ClerkRead MoreRead Less
Other - (CIVIL DEPOSIT); Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Notice of Case Management Conference; Filed by ClerkRead MoreRead Less
Complaint; Filed by Kevin Cravens (Plaintiff)Read MoreRead Less
Case Number: LC106677 Hearing Date: January 26, 2021 Dept: U
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT
KEVIN CRAVENS, an individual,
OLYMPIA FINANCIAL MORTAGE, INC., a California corporation; JEFF ARONSON, an individual; STEWART OROZ, an individual; TRIUNFO ONE, LLC, a California limited liability company; and DOES 1 – 50, inclusive,
) ) ) ) )
CASE NO: LC106677
[TENTATIVE] ORDER RE: ARONSON’S MOTION TO SET ASIDE DEFAULT
January 26, 2021
Kevin Cravens (Plaintiff) initiated this suit against Olympia Financial Mortgage, Inc. (Olympia), Jeff Aronson (Aronson), Stewart Oroz, Triunfo One, LLC, (Defendants) and Does 1 through 50 on August 25, 2017. On April 8, 2019, Plaintiff filed a first amended complaint, alleging: (1) breach of fiduciary duty; (2) fraud; (3) breach of contract; (4) rescission of contract; (5) two counts of interference with contractual relationships; (6) interference with prospective economic advantage; (7) violation of Business & Professions Code section 17200; and (8) accounting.
Default was entered against Aronson and Olympia on October 5, 2020. On November 5, 2020, Aronson filed this motion to set aside the default entered against him pursuant to Code of Civil Procedure section 473.
II. LEGAL STANDARD
In relevant part, Code of Civil Procedure section 473(b) provides:
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.
The court has broad discretion to vacate the entry of default, default judgment, or a dismissal, but that discretion can be exercised only if the defendant establishes a proper ground for relief, by the proper procedure and within the set time limits. Pursuant to Code of Civil Procedure section 473(b), a motion to set aside/vacate cannot be brought more than six months after the entry of default and must be made within a “reasonable time.”
On January 29, 2020, the Court entered a minute order striking Aronson’s Answer and entering default against him. In the ordinary course of events, the six-month deadline for filing a motion for relief under Code of Civil Procedure section 473(b) ran on July 29, 2020, but Aronson did not file his motion to set aside the default until November 5, 2020. Aronson urges the Court to toll the limitations period during the time when only emergency hearings were being held because of a closure ordered in connection with the COVID-19 pandemic. Even if the Court were to accept this tolling argument, since the Court closure lasted from March 16 to June 21, 2020, with a reopening on June 22, 2020, the extension urged would have expired on November 4, 2020 – one day before Aronson filed his motion. Because the Court lacks jurisdiction to grant relief under section 473(b) on a motion filed after the six-month deadline, the Court cannot provide a remedy based on Aronson’s arguments under subdivision (b) that his default was entered as a result of mistake, inadvertence, surprise or excusable neglect. (Cruz v. Fagor Am., Inc. (2007) 146 Cal. App. 4th 488, 495.) If a motion is filed more than six months after default, a trial court may only grant relief under subdivision (d), which allows the court to “set aside any void judgment or order.” (Code of Civ. Proc. §473(d).)
In its motion, Aronson attacks the default entered by the Court as void, a miscarriage of justice, and a violation of due process, thus invoking the Court’s authority to provide relief under subdivision (d). A collateral attack on a void judgment may generally be brought at any time. (Ronchin v. Pat Johnson Mfg. Co. (1998) 67 Cal. App. 4th 1228, 1239.) Indeed, “a default that is void on its face of the record when entered is subject to challenge at any time irrespective of lack of diligence in seeking to set it aside within the six-month period of section 473.” (Plotitsa v. Superior Court (1983) 140 Cal. App. 3d 755, 761.)
Even if the Court were to consider Plaintiff’s laches argument, moreover, it would conclude that Plaintiff’s motion here is timely under subdivision (d). Aronson’s motion was only about three months late and, during much of time that elapsed between default, the Superior Court was closed to all but emergency litigation. Indeed, Plaintiff took no steps to convert the default against Aronson to a default judgment until he filed his application on October 5, 2020.
To summarize, the Court finds that Aronson’s motion is untimely under section 473(b) but that it may rule on his alternative argument for relief under subdivision (d) of that statute.
B. The Court’s Entry of Default Is Void
“[A] trial court may grant a motion to set aside that [default] as void only if the judgment is void on its face.” (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1441.) A judgment or order is void on its face when its invalidity is apparent upon an inspection of the judgment-roll. (Ibid [Citation omitted].)
In this case, the Court struck Aronson’s answer and entered default for his failure to comply with an order to appear at a status conference and based on Plaintiff’s argument that Aronson had notice that the Court would impose such a sanction for a non-appearance. The law and the record reflect that the entry of default on January 29, 2020 was void on its face not only because the Court lacked authority to enter such an order but also because Aronson was given no notice that he would face such a serious sanction.
The order striking the answer and entering default is void because the Court had no power to issue such relief. A failure to comply with a Court order to appear at a CMC – standing alone – is not a proper basis for the ultimate sanction of default. (Wantuch v. Davis (1995) 32 Cal. App. 4th 786, 795; Link v. Carter (1998) 60 Cal. App.4th 1315.) Such a lapse may be met with a monetary sanction under Code of Civil Procedure section 177.5, but that provision does not authorize the defaulting of a defendant. In the alternative, the serious punishment of default may be imposed where there has been egregious discovery abuse and no other means of enforcing compliance. (Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1516.)
The January 29, 2020 orders are also void because Aronson was not given accurate notice that the Court was considering such a sanction in advance of the CMC. Indeed, there was no proper notice of such an impending sanction because the Court never threatened to impose default on Aronson.
On October 25, 2019, Hon. Michael J. Convey granted a motion relieving counsel for Defendants Aronson and Olympia Financial Mortgage, Inc. of the obligation of representing them in the action. The Court postponed the case management conference (CMC) for several months and ordered Aronson to appear personally or through counsel. Because Olympia Financial Mortgage Inc. is a corporation, which cannot appear in pro per, Judge Convey ordered Olympia to appear at the CMC represented by new counsel or face dismissal or default. Contrary to Plaintiff’s notice of ruling, the Court did not order that Aronson would suffer the same fate if he failed to appear. Plaintiff’s notice erroneously states that if Aronson fails to appear personally or through counsel “the Court intends to enter a default against him at that time.” Not only was that false, the Court’s Order Granting Attorney’s Motion to be Relieved– which was also served on Aronson -- flatly contradicts the unwarranted threat of default stating simply (and accurately) that Aronson was ordered to appear in person or by counsel and that Olympia was required to appear through counsel.
“Due process requires adequate notice be provided prior to the imposition of sanctions.” (J.W.. v. Watchtower Bible & Tract Soc'y of New York, Inc. (2018) 29 Cal. App. 5th 1142, 1167 [Citation omitted].) “Adequate notice and an opportunity to be heard prior to the imposition of sanctions are mandated not only by section 177.5, which prohibits sanctions “except on notice contained in a party's moving or responding papers; or on the court's own motion, after notice and opportunity to be heard,” but also by the due process clauses of both the federal and state Constitutions. (U.S. Const., 14th Amend.; Cal. Const., art. I, § 7; . . . ) Indeed, due process protections must be afforded in every situation in which the state deprives an individual of property. . . . Thus, it matters not whether the sanctions were imposed pursuant to section 177.5, which specifically requires notice and an opportunity to respond, or pursuant to rule 227, which is silent on the issue, because the imposition of sanctions always requires procedural due process.” (Caldwell v. Samuels Jewelers (1990) 222 Cal. App. 3d 970, 976 [Citations omitted].)
Because Aronson was never given proper notice that the Court was considering an entry of default as a sanction for not appearing at the CMC, the order granting such relief on Plaintiff’s oral motion was a violation of due process and should be deemed void on its face.
Where the Court grants relief under Code of Civil Procedure §473 for any reason other than an attorney’s affidavit of fault, the Court has the discretion to direct the moving party to pay a monetary penalty, to reimburse attorney’s fees expended because of the default entered, and/or to provide other appropriate relief. In this case, where it was Plaintiff’s erroneous notice of ruling and its arguments at the CMC that prompted the Court’s entry of a void order, the imposition of a monetary penalty on Aronson would be wrong and unfair. But since he received formal notice of the January 2020 entry of default well before Plaintiff submitted his application for default judgment, the Court concludes it is just to order Aronson to pay some reasonable attorney’s fees to Plaintiff. Because Plaintiff has submitted no declaration supporting the request for fees, however, neither Aronson nor the Court have been apprised of the amount sought by Plaintiff.
The Court orders Plaintiff to file a detailed declaration setting forth the specific work done and hours expended in preparing his application for default judgment no later than February 8, 2021. Aronson shall have until February 16, 2021 to file an opposition to the fee request. The Court sets a non-appearance case review for February 22, 2021 to review the parties’ submissions and either make a ruling on the papers or set the matter for a further hearing.
For the foregoing reasons, Aronson’s motion to set aside the default entered against him is GRANTED.
Plaintiff is ordered to file a declaration in support of his request for attorney’s fees on or before February 8, 2021. Aronson shall have until February 16, 2021 to file an opposition to the fee request. The Court sets a non-appearance case review for February 22, 2021 to review the parties’ submissions and either make a ruling on the papers or set the matter for a further hearing.
Aronson is ordered to give notice of the Court’s ruling.
DATED: January 26, 2021
Hon. Theresa M. Traber
Judge of the Superior Court
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