Tentative Ruling

Judge Pauline Maxwell
Department 6 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
Saticoy Development Company LLC vs Skylar Gauss
Case No: 19CV01591
Hearing Date: Wed Feb 26, 2020 9:30

Nature of Proceedings: Motion to Set Aside Default

Tentative Ruling: The court grants defendant Aaron Valdis Gauss’s motion to set aside default. The relief is conditioned on Aaron Valdis Gauss providing a valid email address at which he can be served. Aaron Valdis Gauss shall provide that email address on the record at the February 26 hearing. All future pleadings may be served via email at the address Aaron Valdis Gauss provides. The court denies plaintiff Saticoy Development Co., LLC’s request for a penalty. Aaron Valdis Gauss shall file his verified answer to the complaint on or before March 9, 2020.

Background: On August 1, 2019, the court entered the default of Aaron Valdis Gauss (“Gauss”). Pursuant to a court order, plaintiff served Gauss on June 25, 2019, by email addressed to valdisgauss@gmail.com. Gauss lives in Taiwan.

Motion: Gauss now moves to set aside the default and default judgment. (There is no default judgment.) Gauss learned that plaintiff Saticoy Development Company, LLC, was seeking a default judgment against him when his brother, defendant Sklyar L. Gauss, informed him on January 28, 2020. The proof of service of summons in this case indicates service took place on June 25, 2019, by email to an email address that Gauss deleted in early 2019. Gauss asks the court to set aside the default under CCP § 473(b) based on inadvertence, surprise, or excusable neglect and under CCP § 473.5(a). Gauss has submitted a proposed answer for filing. Plaintiff opposes the motion.

A motion seeking relief from default lies within the sound discretion of the trial court. Elston v. City of Turlock, 38 Cal.3d 227, 233 (1985), superseded by statute on other ground as recognized in Wilcox v. Birtwhistle, 21 Cal.4th 973, 979-980 (1999). “[B]ecause the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.” Id. However, “the moving party must act diligently in seeking relief and must submit affidavits or testimony demonstrating a reasonable cause for the default.” Id. at 234.

“‘[T]he policy of the law is to have every litigated case tried upon its merits….” Fasuyi v. Permatex, Inc., 167 Cal.App.4th 681, 696 (2008), quoting Au-Yang v. Barton, 21 Cal.4th 958, 963 (1999). “[A]ny doubts in applying section 473 must be resolved in favor of the party seeking relief from default.” Id. Where the only true prejudice to the plaintiff is that it will now have to go back and try the case on the merits, “since the law strongly favors trial and disposition on the merits, there is no prejudice.” Rogalski v. Nabers Cadillac, 11 Cal.App.4th 816, 822 (1992).

CCP § 473.5(a) permits a party to set aside a default when service of a summons has not resulted in actual notice to a party in time to defend the action.

In his declaration, Gauss says that he was not served with the summons and complaint and states that he deleted his gmail account in early 2019. Plaintiff argues this is not sufficient and that Gauss has not provided any documentation of the deletion of the gmail address. But plaintiff does not contradict Gauss’s statement nor does it provide any evidence that the address was operative at the time the summons and complaint were purportedly served.

In response to the opposition, Jordan D. Hankey, counsel for Skylar Gauss as trustee of The La Cumbre Ranch Living Trust dated January 31, 2001, states that he sent a document to Gauss on July 25, 2019, via the valdisgauss@gmail.com address and got a “bounce back” message indicating the email was not delivered because the address could not be found or was unable to receive mail. This was only a month after the summons and complaint were sent to that address.

Plaintiff states that, in his deposition, Skylar Gauss said he had discussed this lawsuit with his brother. In December 2019, Jordan Hankey indicated in communications with counsel for plaintiff that the threat of default was the leverage needed in settlement discussions. Hankey states that he first learned that plaintiff had taken Gauss’s default on January 10, 2020.

Knowledge of the lawsuit is not the same as knowledge that the court had jurisdiction over Gauss such that a default could be entered. Plaintiff surmises that someone must have told Gauss that his default had been taken, but that is speculation.

The court finds that default was entered by surprise and Gauss did not have notice of purported service on him in time to defend. The court will grant defendant Aaron Valdis Gauss’s motion to set aside default.

Plaintiff asks that, in the event the court sets aside the default, that the court impose conditions, including that Gauss provide a valid email address at which he can be served and that he accept service by email going forward. Plaintiff also asks the court to impose a penalty of $1,000.

“Section 473 allows the court to impose just conditions in setting aside a default.” Rogalski v. Nabers Cadillac, supra, 11 Cal.App.4th at 822. CCP § 473.5(c) provides that the court “may set aside the default or default judgment on whatever terms as may be just…” As with CCP § 473, “this authorizes the imposition of reasonable conditions to avoid prejudice or unfairness to plaintiff.” Goya v. P.E.R.U. Enterprises, 87 Cal.App.3d 886, 894 (1978). When the court grants relief from default, it has discretion to impose a penalty of no more than $1,000 upon the offending attorney or party. CCP § 473(c)(1).

The court will condition the relief on Gauss providing a valid email address at which he can be served. All future pleadings may be served via email at the address Gauss provides. The court denies the request for a penalty.

The court grants defendant Aaron Valdis Gauss’s motion to set aside default. The relief is conditioned on Aaron Valdis Gauss providing a valid email address at which he can be served. Aaron Valdis Gauss shall provide that email address on the record at the February 26 hearing. All future pleadings may be served via email at the address Aaron Valdis Gauss provides. The court denies plaintiff Saticoy Development Co., LLC’s request for a penalty. Aaron Valdis Gauss shall file his verified answer to the complaint on or before March 9, 2020.