Case Number: BC506938 Hearing Date: May 15, 2014 Dept: 58

Judge Rolf M. Treu
Department 58
Hearing Date: Thursday, May 15, 2014
Calendar No.: 12
Case Name: Nechemia, et al. v. Li, et al.
Case No.: BC506938
Motion: Motion to Set Aside Default
Moving Party: Defendant Xiaoxi Li aka Cecilia Lee
Responding Party: Plaintiffs Ron Necemia and EurOrient Financial Group
Notice: OK

Tentative Ruling: Motion to set aside default is denied. The Court will discuss continuance and/or setting of OSCs re: default, dismissal, and/or default judgment at the hearing.

Background –
On 4/24/13, Plaintiffs Ron Nechemia and EurOrient Financial Group filed this action against Defendants Xiaoxi Li aka Cecilia Lee, Lori Gay Kremer aka Lori G. Moss, John Travis Flynn, Lou Juaneza, David M. Lee, and WhoScammedYou, LLC arising out of alleged defamatory statements published on the internet. Plaintiffs assert causes of action for (1) libel per se, (2) false light invasion of privacy, and (3) intentional infliction of emotional distress.

Except for Cecilia Lee and WhoScammedYou, all other defendants have been voluntarily dismissed by Plaintiffs: Juaneza with prejudice on 8/29/13, Moss with prejudice on 10/29/13, Flynn without prejudice on 1/8/14, and David M. Lee without prejudice on 1/29/14.

On 10/31/13, the Court denied Plaintiffs’ request for entry of default against WhoScammedYou which was submitted on 10/25/13. On 3/19/14, default was entered against Cecilia Lee. On 4/23/14, Cecilia Lee filed a motion to set aside the default.

Motion to Set Aside Default –
Cecilia Lee moves to set aside the default pursuant to CCP § 473(b). Cecilia Lee submits that the parties had been engaged in settlement negotiations (Horwitz Decl. ¶¶ 2-15); that Cecilia Lee was given notice of an OSC re: dismissal and/or entry of judgment against Cecilia Lee set for 3/26/14 (id. ¶ 18, Ex. A); that settlement negotiations were terminated on 3/18/14 with Plaintiffs requesting a response to the Complaint by 3/19/14 (id. ¶ 21); and that Cecilia Lee’s counsel mistakenly calculated that a response was due by 3/26/14 (id. ¶¶ 25-27).

Preliminarily, it is unclear whether Cecilia Lee is seeking relief pursuant to the discretionary or mandatory provisions of CCP § 473(b). Despite the submission of an attorney declaration, the motion appears to be based on discretionary relief only. See, e.g., Horwitz Decl. ¶ 27; Mot’n p. 4:7-28. Therefore, the Court treats the motion as being brought only under the discretionary relief provisions of CCP § 473(b). See Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1127-28.

For discretionary relief, Cecilia Lee must show that the mistake regarding the due date of her response was excusable (i.e., whether a reasonably prudent person under the same or similar circumstances might have made the same error) and that Cecilia Lee was diligent in seeking relief by filing the application within a reasonable time after the dismissal. Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 258.

Cecilia Lee fails to establish that the default was entered due to mistake, inadvertence, surprise, or excusable neglect. Notably, there is evidence that despite the parties’ settlement negotiations, Plaintiffs’ counsel repeatedly and consistently sent communications concerning both Plaintiffs seeking entry of default against Cecilia Lee and the need for Cecilia Lee to file a response to the Complaint. See Parker Decl. ¶ 7, Ex. C (email in December 2013); ¶ 15, Ex. G (letter in January 2014); ¶ 21, Ex. I (letter in February 2014); ¶ 23, Ex. J (letter dated 3/12/14); ¶ 27, Ex. K (email dated 3/14/14); ¶ 30, Ex. L (email dated 3/17/14); ¶ 31, Ex. M (email dated 3/18/14). Indeed, the Court notes that it ordered Plaintiffs to not grant any extension of time to respond (M.O. dated 11/1/13) and to move forward on defaults notwithstanding settlement (M.O. dated 2/7/14) and the Court imposed sanctions against Plaintiffs for failing to obtain defaults (M.O. dated 3/26/14).

Mr. Horowitz argues that it was unclear how Cecilia Lee could or should have responded to the 3/26/14 OSC. However, this is not responsive to the substantial evidence in which Plaintiffs’ counsel repeatedly and consistently requested Cecilia Lee’s response to the Complaint. Mr. Horowitz fails to explain how it is excusable to not file a response to the Complaint in light of these repeated communications from Plaintiffs’ counsel, notwithstanding settlement negotiations. Therefore, the motion to set aside default is denied.

OSC re: Entry of Default Judgment –
The Court notes that an OSC re: entry of default judgment is set for this date. Although no default judgment package has been lodged, the Court will continue the OSC because of the motion to set aside default that was set for hearing on this same date. The Court will discuss the continued OSC date at the hearing, as well as whether an OSC re: default/dismissal as to WhoScammedYou will be set.