Case Number: BC600028 Hearing Date: May 24, 2019 Dept: 4A

Motion for Relief to Set Aside Entry of Default and Default Judgment

The court considered the moving and opposing papers. No opposition was filed.

BACKGROUND

On November 4, 2015, Plaintiff Shanrokh Yousefi (“Plaintiff”) filed a complaint against Defendants Stephen Michael Garcia, Irma Hoenes, Max Hoenes, and Fred Douglas Colbert. The complaint alleged general negligence and negligent entrustment of a motor vehicle arising from a vehicle collision that occurred on November 5, 2013.

Filed on December 5, 2016, the Proof of Service of Summons on Defendant Fred Douglas Colbert (“Defendant Colbert”)indicates that substituted service was accomplished on November 15, 2016 by leaving copies of the complaint, summons, statement of damages and other initiating documents with “Sister Christina Colbert” at 7026 Newell Street, Huntington Park, CA 90255 and mailing these documents to Defendant Colbert at that address thereafter.

Based on this proof of service and his failure to answer or otherwise appear, the Clerk entered default against Defendant Colbert on February 27, 2017.

More than nine months later, Plaintiff filed a proof of service stating that she served Defendant Colbert with a New Version of Statement of Damages on December 3, 2017 by substituted service on “Angel Rodriguez Hispanic Female 20 5’3” 120 lb Blk Hair/Eyes” at a business located at 5370 Schafer Ave Ste D Chino CA 91710. The process server noted that Ms. Rodriguez denied knowing Defendant Colbert.

On June 13, 2018, Plaintiff submitted her request for entry of default judgment against Defendant Colbert. In support of her request for default judgment, Plaintiff submitted a Statement of Damages dated October 11, 2017, seeking total general and special damages of $367,460.20. (Jennifer Mahgerefteh’s Declaration in Support of Plaintiff’s Request for Entry of Default Judgment by Court, Exh. A). The Statement of Damages is dated more than seven months after default was entered against Defendant Colbert.

On June 13, 2018, the Court entered default judgment against Defendant Colbert for $267,460.20, plus prejudgment interest and costs, for a total of $282,192.01.

On September 10, 2018, the Court dismissed the action because of Plaintiff’s failure to file a default judgment, but this dismissal was set aside on January 18, 2019. Thus, there was no action pending, nor any default or default judgment against Defendant Colbert for a period of more than four months.

On February 20, 2019, Defendant Colbert filed a motion to set aside the June 13, 2018 default judgment on the ground that he did not have actual notice of the summons and complaint.

On April 29, 2019, the Court continued the hearing on Defendant Colbert’s motion to set aside the June 13, 2018 default judgment for Plaintiff to file documents indicating whether the separate statement of damages was filed before or after the relevant entry of default.

Trial is set for September 24, 2019.

PARTY’S REQUESTS

Defendant Fred Douglas Colbert (“Defendant Colbert”) requests that this court set aside an entry of default and default judgment entered against Defendant Colbert pursuant to California Code of Civil Procedure section 473.5, subdivision (a). Plaintiff also requests this court to allow Plaintiff to file an answer.

LEGAL STANDARD

California Code of Civil Procedure section 473.5, subdivision (a) states: “When service of summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered.”

Under Code of Civil Procedure section 425.11(c), a plaintiff’s statement of damages must be served on the defendant before a default is taken. Where a default is entered before a statement of damages is properly served on the defendant, the default is invalid. (Schwab v. Southern California Gas Company (2004) 114 Cal. App. 4th 1308, 1321). This is true because due process requires that a defendant receive formal notice of potential liability before any default or judgment be entered against it. (Id.)

DISCUSSION

Defendant Colbert declares that he has used 10825 Arrow Route, Rancho Cucamonga, California 91737 as his address for the past six years. (Colbert Decl., ¶ 5.) Defendant Colbert also declares that he does not reside and has never lived at 7026 Newell Street, Huntington Park, California 90255. (Colbert Decl., ¶ 6.) He further declares that he does not have a business address or a business relationship with 5370 Schaefer Ave. STE D, Chino, California 91710, and has never lived at that address. (Colbert Decl., ¶ 7.) Defendant Colbert’s denial of any relationship with the business on Shafer Avenue is corroborated by the process server’s report that the woman at that location disavowed any acquaintance with Defendant Colbert. Defendant Colbert argues that he did not receive actual notice of this case or the request for entry of default or default judgment. (Motion, pp. 4:1-4:2; 4:23-4:24; 5:11-5:15.)

Plaintiff argues that Defendant Colbert falsely states that he does not receive mail at either the Newell or Schaefer addresses because Defendant Colbert discovered Plaintiff’s motion for relief from a dismissal after it was served at the Newell and Schaefer addresses. (Opposition, p. 3:1-3:5.). Bu Defendant Colbert’s knowledge of a 2019 says little to nothing about his residence or business addresses in 2016-2017.

The Court finds that Moving Defendant filed his motion to set aside under Code of Civil Procedure section 473.5(a) within two years of entry of default and that he did not receive writtten notice of either entry of default or default judgment that might have triggered an earlier deadline for filing the motion. On the merits of the motion, the Court credits Moving Defendant’s sworn statements that he did not receive actual notice of this lawsuit based on the substituted service at a residence where he did not reside or substituted service at a commercial location where he did not operate a business. There is no proof by Plaintiff that Defendant Colbert was personally served with any documents in this lawsuit or that he knew of its existence until well after the default and default judgment were entered.

Although not necessary to the Court’s ruling, the Court notes another possible deficiency in the default and default judgment entered against Defendant Colbert. Plaintiff served Defendant Colbert with a statement of damages on November 15, 2016 at the Newell Street address. (Mahgerefteh Decl., ¶ 4, Exh. C.) While this Statement to Damages was delivered to Newell Street before entry of default, it was never filed with the Court and it did not form the basis for Plaintiff’s later request for a default judgment, as it has damage figures that are distinctly different from those included in the default judgment.

After her default judgment package was rejected for failure to file a statement of damages, Plaintiff served Defendant Colbert again with a new and different statement of damages on December 3, 2017 at the Schaefer address. (Decl., ¶ 5, Exh. D.) It was this statement of damages that was submitted by Plaintiff to support her request for entry of default judgment. And indeed, the damages asserted in this statement appear to have formed the basis for the judgment entered, which included the exact amounts of general damages and past medical expenses sought in the statement of damages but simply excluded the $100,000 of estimated future medicals, which were likely not substantiated in the default package.

The Court finds that Defendant Colbert lacked actual notice of these damages statements which were delivered to a residence and business where he neither lived nor worked. Even if the statements were properly served on him, moreover, the Court would likely find that the default entered against Defendant Colbert was invalid based on either of these damages statements. Although the first damages statement was served before entry of default, it does not serve the due process purpose of disclosing potential exposure because the ultimate default judgment relied on a later and much different damages statement. As to the second statement of damages, it was served well after entry of default and, thus, could not form the predicate for a valid default judgment based on that earlier default. Accordingly, the Court questions whether either the default or the default judgment could be deemed valid and enforceable in light of the sequence of improper service of the inaccurate first damages statement and the more accurate but untimely second damages statement.

In any event, based on the Court’s rulings above with respect to Defendant Colbert’s motion under Code of Civil Procedure section 473.5(a), the motion is GRANTED.

The court vacates the June 13, 2018 entry of default and the February 20, 2019 default judgment and accepts Defendant Colbert’s Answer submitted to the Court on February 20, 2019 for filing on the date of this order.

Plaintiff is ordered to give notice.