Memorandum Points Authorities

Cal. Super. - 3rd Dist.September 14, 2018

D H O O FB WW D P 10 11 LZ is 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mark A. Serlin, CSBN: 122155 SERLIN & WHITEFORD, LLP FILLED nis 701 E Street superior COU Scer Sacramento, CA 95814 “ Telephone: (916) 446-0790 MAR 28 201 Facsimile: (916) 446-0791 Email: ms@swllplaw.com Chatters executive oiticer BC Attorneys for Plaintiff By: L.Sanders, JD2, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF PLACER Judgment entered: March 14, 2019 JD2, INC., ) CASE NO. MCV0071316 ) Limited Civil Plaintiff, ) ) vs. ) MEMORANDUM OF _ POINTS AND ) AUTHORITIES IN OPPOSITION TO H2L1-CSC, JV, H2L1 ENGINEERING, ) MOTION TO SET ASIDE DEFAULT AND INC., COLEMAN SPOHN ) DEFAULT JUDGMENT CORPORATION, and DOES 1 through 10, ) inclusive, ) Date: April 11,2019 ) Time: 8:30 a.m. Defendants. ) Dept: 42 ) ) Complaint filed: September 14, 2018 ) ) I. INTRODUCTION Plaintiff JD2, Inc. (“JD2”) herby opposes the motion of defendants H2L1-CSC, JV, H2L1 Engineering, Inc., and Coleman Spohn Corporation (collectively, “Defendants”) to set aside default and default judgment in this matter. Defendants’ purported evidence in support of the motion is demonstrably false (to the extent admissible at all; see JD2’s objections to evidence submitted concurrently herewith). Defendants are not entitled to relief under the attorney fault provision of Code of Civil Procedure (“CCP”) § 473(b) because there is no competent admissible MPA IN SUPPORT OF MOTION TO SET 1 JD2, Inc. v. H2L1-CSC,JV, et al. ASIDE DEFAULT AND DEFAULT JUDGMENT Case No. MCV0071316 B e W ND ao wo 10 11 12 13 14 15 16 17 18 L2 20 21 22 23 24 25 26 27 28 evidence that the default was the actual result of any attorney fault and the evidence is manifestly insufficient to set aside the default under the non-mandatory provisions of CCP § 473(b). As such, the motion to set aside default and default judgment must be denied. Il. FACTUAL AND PROCEDURAL HISTORY JD2 entered into a subcontract with Defendants for a work of improvement located in California. JD2 completed its work well over a year ago, but still had a residual balance due of slightly under $15,000. Despite repeated demands therefor, the Defendants simply refused to pay. JD2 brought this suit in the fall of 2018 and duly served Defendants’ registered agent in Ohio, Bernard Mandel (who is an attorney). Shortly after service of process was effectuated on Defendants, Mr. Mandel telephoned the undersigned counsel to acknowledge such service and to claim that the only reason that the debt had not been paid was because of an alleged lack of billing statements sent to his clients. There were no settlement discussions whatsoever or even a request to extend the time for Defendants to respond to the complaint. The time to file a responsive pleading came and went and Defendants’ default was duly entered in early December, 2018. Despite being served with JD2’s request for entry of default, Defendants’ California counsel did not contact the undersigned counsel until a month later. Defendants’ California counsel contacted the undersigned in early January, 2019 seeking a stipulation to set aside the default. JD2 refused to set aside the default, and then two months after that, in early March, 2019, Defendants’ California counsel submitted a settlement offer (which was the first time settlement had been raised by anyone on behalf of the Defendants), which offer was declined by JD2. Then, more than three months after the default had originally been entered, Defendants filed the instant motion. Ill. THE DEFAULT SHOULD NOT BE SET ASIDE With respect to any motion to set aside default, the burden is on the moving party to prove the default was the result of mistake, inadvertence, or excusable neglect and must be proven by preponderance of the evidence. Elms v. Elms (1946) 72 Cal.App.2d 508, 519. A party may not be granted relief under CCP § 473 merely by showing the party opposing the relief will not be prejudiced; the moving party must show good cause for the relief requested by proving the MPA IN SUPPORT OF MOTION TO SET 2 JD?2, Inc. v. H2L1-CSC,JV, et al. ASIDE DEFAULT AND DEFAULT JUDGMENT Case No. MCV0071316 = e W ND O v WO 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 existence of a satisfactory excuse for the occurrence of that mistake. Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1440; Carroll v. Abbott Laboratories, Inc. (1982) 32 Cal.App.3d 892, 900. Where a party fails to meet his or her burden of proof, the court may not grant relief because it has no discretion to do so. Jott v. Franklin (1988) 206 Cal.App.3d 521, 528: Huh v. Wang (2007) 158 Cal.App.4th 1406, 1423. The only occasion for the application of CCP § 473 is where a party is unexpectedly placed in a situation to his injury without fault or negligence of his own and against which ordinary prudence could not have guard. Elms, supra at 72 Cal.App.2d 513; Hearn v. Howard (2009) 177 Cal.4th 1193, 1206. Moreover, California courts have universally determined that mistakes of law do not constitute excusable neglect under CCP § 473. Khourie, Crew and Jaegger v. Sabek, Inc. (1990) 220 Cal.App.3d 1009, 1014-15; Anderson v. Sherman (1981) 125 Cal.App.3d 228, 238; Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 Cal.App.4th 868, 879. See also Hearn v. Howard, supra. Mistake of law is only grounds for relief when the law is complex and debatable; ignorance of law and negligence in researching the law do not constitute excusable mistake and therefore not grounds for relief in default. Robbins v. Los Angeles Unified School District (1992) 3 Cal.App.4th 313, 319; Torbitt v. State of California (1984) 160 Cal.App.3d 860, 866-67; Tammen v. County of San Diego (1967) 66 Cal.2d 468, 476. Further, except where attorney fault is claimed to be the basis of relief, failure to bring a motion to set aside default within three months of the entry of default is fatal to such motion because the defaulting party is required to exercise diligence in moving to set aside the default. Stafford v. Mach (1998) 64 Cal.App.4th 1174, 1183-84 citing Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal.2d 523, 529; Billings v. Health Plan of America (1990) 225 Cal.App.3d 250, 258 fn. 5; Caldwell v. Methodist Hospital (1994) 24 Cal.App.4th 1521, 1525. Where a basis for setting aside a default is alleged attorney fault, it is not enough to show that there was attorney fault in connection with the default. Cisneros v. Vueve (1995) 37 Cal.App.4th 906, 911. Instead, by the express terms of CCP § 473(b) itself and relevant case law, an attorney claiming that his mistake, excusable neglect, or inadvertence was the cause of the default must take express responsibility for the default being entered. State Farm Fire & Casualty MPA IN SUPPORT OF MOTION TO SET 3 JD2, Inc. v. H2L1-CSC.JV, et al. ASIDE DEFAULT AND DEFAULT JUDGMENT Case No. MCV0071316 10 11 12 13 14 15 16 17 18 19 20 Zi. 22 23 24 Z29 26 27 28 Co. v. Pietak (2001) 94 Cal.App.4th 600, 609. This is because the court must assess both the credibility of the attorney declaration and causation of the default. Milton v. Perceptual Dev. Corp. (1997) 53 Cal.App.4th 861, 866-67. That is, an attorney declaration in support of a motion to set aside default based on attorney fault must admit that his or her error resulted in the entry of default in the attorney declaration. This is because the purpose of the mandatory relief provision of CCP § 473 is to relieve an innocent client of the attorney’s mistake, inadvertence, or neglect. Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 839. Applying the foregoing authorities to the instant case, it is manifest that Defendants have no viable basis to set aside the default. First, as to the non-attorney fault claim, there is simply no competent admissible evidence to show that the default was entered by reason of excusable neglect, mistake, inadvertence or the like. The sole evidence submitted by Defendants in support of the motion is the Mandel declaration, which contains only two substantive sections relating to the motion. The first sentence of paragraph 3 of the declaration is extremely oblique and asserts that there were settlement negotiations between the undersigned counsel and Mr. Mandel in October of 2018. Per the accompanying declaration of Mark A. Serlin, this is absolutely false. Indeed, the first time that the undersigned counsel had any communications with Mr. Mandel was after the summons and complaint had been served on Mr. Mandel as agent for service for each of the named defendants herein. That is, JD2 had already filed suit and had served the Defendants before Mr. Mandel had any communications with the undersigned counsel. Hence, the oblique assertion that there were discussions to resolve the matter without court intervention is blatantly false. Moreover, there were absolutely no settlement discussions between the undersigned and Mr. Mandel or, for that matter, between the clients themselves (see declaration of Todd Duke filed in opposition to the motion concurrently herewith). Moreover, paragraph 3 of the Mandel declaration is simply an assertion of Mandel’s personal belief (that “it would have been a waste of time or effort to file an answer or otherwise litigate”) rather than a confession that the default was entered as a result of Mr. Mandel’s mistake, inadvertence, or excusable neglect. Similarly, paragraph 4 of the Mandel declaration contains no statement whatsoever that the default of MPA IN SUPPORT OF MOTION TO SET 4 JD2, Inc. v. H2L1-CSC,JV, et al. ASIDE DEFAULT AND DEFAULT JUDGMENT Case No. MCV0071316 Nn Oo B® W H Y F B 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Zo 26 27 28 Defendants was entered by reason of any mistake, inadvertence, or excusable neglect on the part of Mr. Mandel and again simply expresses Mr. Mandel’s (ridiculously erroneous) belief regarding personal jurisdiction. Again, there is simply no indication that the default taken against Defendants was in any way the result of acts or omissions of Mr. Mandel and thus Defendants have not even begun to submit competent admissible evidence demonstrating the right to relief from default under the mandatory provisions of CCP § 473(b). Moreover, to the extent admissible, the Mandel declaration is neither credible nor forthright in taking responsibility for the entry of default, which also compels denial of the motion. State Farm Fire, supra. For essentially the same reasons, discretionary relief of CCP § 473(b) cannot be obtained by Defendants. First, Defendants knew good and well that they had been served with the summons and complaint because their attorney was the agent for service who was served on their behalf. Indeed, that attorney, Mr. Mandel, expressly acknowledged to the undersigned that the Defendants had been served. Moreover, as noted above, there is absolutely nothing in the Mandel declaration which indicates that the Defendants’ failure to timely respond to the complaint was a result of any mistake, inadvertence, or excusable neglect on his part. Therefore, per the foregoing authorities, Defendants have not met their burden of presenting competent admissible evidence showing entitlement to relief from default under CCP § 473(b). Furthermore, Defendants cannot demonstrate that they filed the instant motion with necessary diligence as per Stafford, supra; Dalmo, supra; and Caldwell, supra. Indeed, Defendants dallied and delayed filing this motion for well over the three month threshold established by Stafford, supra and the other cases cited above even though they had already retained California counsel some two and a half months before the motion was actually filed. No explanation whatsoever is offered for this long delay, and such is fatal to Defendants’ motion. Stafford, supra; Billings, supra. Notably, Defendants’ California counsel have submitted no declaration asserting that such failure was their fault. IV. CONCLUSION For the foregoing reasons, Defendants’ motion to set aside default and default judgment should be denied. In the event the Court disagrees, the Court should compel Defendants’ counsel, Bernard Mandel, to pay the reasonable attorneys’ fees and costs incurred by JD2 in obtaining the MPA IN SUPPORT OF MOTION TO SET 5 JD2, Inc. v. H2L1-CSC,JV, et al. ASIDE DEFAULT AND DEFAULT JUDGMENT Case No. MCV0071316 m W HO Y O wo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 29 26 27 28 declaration of Mark A. Serlin in opposition to the motion (at paragraf DATED: March a 2019 S:\Active Files\JD2\H2L1\court docs\set aside default.opposition.docx \ MARK A. SERLIN, Attorneys for Plaintiff JD2, INC. MPA IN SUPPORT OF MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT JD2, Inc. v. H2L1-CSC.JV, et al. Case No. MCV0071316