Case Number: TC028600 Hearing Date: December 19, 2019 Dept: A

# 17. Rafael Hernandez and Yesenia Hernandez v. Mac Esfandi

Case No.: TC028600

Matter on calendar for: Motion to Set Aside Default

Tentative ruling:

Background

Default judgment was entered against defendant Mac Esfandi, individually and as Trustee of the Declaration of Trust Dated December 3, 2003, on October 30, 2017. The judgment grants specific performance and orders the conveyance of the property at 410 West Maple Street, Compton, CA. Plaintiffs alleged that they entered into an oral purchase agreement whereby they would remodel and rent the property with an option to purchase the property. After the value of the property increased, Defendant allegedly reneged on the agreement. On October 25, 2018, Plaintiffs sought and received an order appointing an elisor to effect the transfer of the subject property.

Defendants now move to set aside the default judgment.

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.)

Analysis

This motion is outside the statutory two-year limit to set aside an order. Instead, Defendants argue extrinsic fraud or mistake exists and requests the Court utilize its equitable powers to set aside the default and default judgment. The default judgment was entered in this action on October 30, 2017. A notice of entry of judgment was served on November 9, 2017. Defendant Esfandi declares that he only learned of this action on August 28, 2019. He declares that although he owned the property at which he was served via substitute service and via mail, 8787 Shoreham Drive, Number 306, West Hollywood, CA 90069, he did not live at that location.

“ ‘Extrinsic fraud usually arises when a party is denied a fair adversary hearing because he has been “deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense.” ’ [Citation.]” (Manson, Iver & York v. Black (2009) 176 Cal.App.4th 36, 47.) It may exist where “ ‘ “the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff.” ’ [Citaion.]” (Ibid.)

“Extrinsic mistake occurs ‘when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits.’ [Citation.] In contrast with extrinsic fraud, extrinsic mistake exists when the ground of relief is not so much the fraud or other misconduct of one of the parties as it is the excusable neglect of the defaulting party to appear and present his claim or defense. If that neglect results in an unjust judgment, without a fair adversary hearing, the basis for equitable relief on the ground of extrinsic mistake is present. [Citation.] Relief will be denied, however, if the complaining party’s negligence permitted the fraud to be practiced or the mistake to occur. [Citation.]” (Manson, supra, 176 Cal.App.4th at 47.)

“ ‘[T]he party seeking equitable relief on the grounds of extrinsic fraud or mistake must show three elements: (1) a meritorious defense (2) a satisfactory excuse for not presenting a defense in the first place; and (3) diligence in seeing to set aside the [order] once discovered.’ [Citation.]” (Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th 1009, 1025.)

Defendant declares that he has worked at the same location for the past 25 years. He also declares that Plaintiff Rafael Hernandez worked for him for 14 years, so Plaintiffs knew they could find Defendant at his business address. Instead, Plaintiff sent the process server to an address where Defendant did not reside in order to prevent him from learning of the suit. Defendant’s defense to the action is a lease agreement that does not contain a purchase provision. (Decl. Esfandi, Exh. 1.)

However, although Defendant states he was occupied with his business, his declaration does not adequately address why he failed to act or investigate after Plaintiffs ceased making rent payments on the subject property after the entry of judgment. This failure shows that Defendant did not act with requisite diligence and that his own negligence resulted in his failure to diligently learn of or respond to this action.

Ruling

The motion to set aside the default judgment is denied.

Next dates:

Notice: