Case Number: 17K05638 Hearing Date: May 29, 2018 Dept: 94

Defendant Sasan Chadorbaf’s Motion to Vacate Default and Default Judgment is GRANTED. Defendant Chadorbaf to file his proposed answer within 7 days from the date of this Order.

On May 3, 2017, Plaintiff Westlake Services, LLC dba Westlake Financial (“Plaintiff”) filed this action against Defendants Sasan Chadorbaf (“Chadorbaf”) and Western Motors. Default was entered against Chadorbaf on August 24, 2017. Default judgment was entered against Chadorbaf on November 9, 2017.

On April 17, 2018, Chadorbaf filed a Motion to Vacate Default and Default Judgment. On May 10, 2018, Plaintiff filed an opposition.

Discussion

In Defendant’s Notice of Motion, Defendant argues that the default and default judgment should be set aside under CCP § 473.5 for lack of actual notice. (Notice of Motion pp. 1-2.) Interestingly, Defendant does not argue under CCP § 473.5 in his Memorandum of Point and Authorities, but, instead, argue his case under CCP § 473(b). The Court deems both Section 473.5 and Section 473(b) as grounds for Defendant’s Motion.

A. CCP § 473.5

CCP § 473.5(a) provides: “When service of a 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.”

“A notice of motion to set aside a default or default judgment and for leave to defend the action shall designate as the time for making the motion a date prescribed by subdivision (b) of Section 1005, and it shall be accompanied by an affidavit showing under oath that the party’s lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect.” (CCP § 473.5(b).)

i. Timeliness

The Court must first determine if the Motion is timely under CCP § 473.5(a).

The Court begins with the 180-day requirement as it is the earlier time under Section 473.5(a). While the Requests for Entry of Default was filed and entered on August 24, 2017, there is no proof showing that Plaintiff served “a written notice that the default” was entered against Chadorbaf—nor does Plaintiff provide such proof in its opposition. Because no written notice of the entry of default was served Defendant, the Court cannot use it as the starting date of the 180-day calculation.

The Court now turns to whether Plaintiff served a written notice of the default judgment. Default judgment was entered on November 9, 2017, but, again, there is no proof of service of a notice of the default judgment on Chadorbaf. Plaintiff’s counsel, however, declares that he sent a “post judgment demand letter” to Chadorbaf on December 4, 2017, informing Chadorbaf of the default judgment entered against him. (Oppo., Decl. Yadegari ¶ 13.) While Plaintiff fails to provide proof of the demand letter, Chadorbaf admits in his declaration that he received the letter, which was how he learned of the default and default judgment against for the first time. (Motion, Chadorbaf Decl. ¶ 4.) Accordingly, the Court uses the December 4, 2017 date as the starting date to calculate the 180-day requirement under CCP § 473.5(a). The Motion was filed on April 17, 2018—less than 180 days from December 4, 2017. Therefore, the Motion satisfies the 180-day requirement under CCP § 473.5(a).

“The language of section 473.5 shows that the defendant is required to bring his motion ‘within a reasonable time, but in no event exceeding . . . two years after entry of a default judgment.’ [Citation.] Thus, the language shows that the two years begin to run after entry of a default judgment, but the reasonable time requirement is entirely separate.” (Schenkel v. Resnik (1994) 27 Cal.App.4th Supp. 1, 4.) Accordingly, Chadorbaf must also demonstrate that they made the instant Motion within “a reasonable time.” (See CCP § 473.5(a).)

“[A] ‘‘moving party . . . must show diligence in making the motion after discovery of the default.’’” (Younessi v. Woolf (2016) 244 Cal.App.4th 1137, 1145.) “‘‘[W]hat is a reasonable time in any case depends upon the circumstances of that particular case’’ [citation], and ‘[w]hether a party has acted diligently is a factual question for the trial court’” [citation].” (Id.)

Bearing this in mind, courts have held that an unexplained delay of seven weeks (id.), two months (Mercantile Collection Bureau v. Pinheiro (1948) 84 Cal.App.2d 606), three months (Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal.2d 523), or five months (Kendall v. Barker (1988) 197 Cal.App.3d 619) may be unreasonable.

Chadorbaf declares that upon learning of the entry of default and default judgment against him on December 4, 2017, he “immediately contacted” company named Simple Legal Solutions (“SLS”) to assist him with filing a motion to vacate default and default judgment. (Chadorbaf Decl. ¶¶ 4-5.) A person named Sam Rabahieh (“Rabahieh”) from SLS assisted Chadorbaf and told him that a motion to vacate default and default judgment was filed on his behalf and the hearing for the motion was scheduled for March 20, 2018. (Id. ¶¶ 5-6.) Plaintiff provides proof that such reservation was made for March 20, 2018 by Rabahieh. (Id., Exh. A.) Plaintiff declares that he appeared in court on March 20, 2018 for the hearing, but he was told that no motion to vacate default and default judgment was filed, so he sought help from another person. (Id. ¶ 8.)

In opposition, Plaintiff’s counsel declares that called Chadorbaf on November 1, 2017 to discuss a potential settlement. (Yadegari Decl. ¶ 11.) Based on this, Plaintiff argues that Chadorbaf unreasonably waited until April 17, 2018 to file the instant Motion. (Oppo. p. 6.)

The Court notes, however, that Plaintiff’s counsel does not declare that he informed Chadorbaf about the entry of default against him in the course of the November 1, 2017 communication. As discussed before, there’s no evidence that Plaintiff served a written notice of the entry of default on Chadorbaf until December 4, 2017. Importantly, Plaintiff does not dispute that Chadorbaf did not know of the default and default judgment until December 4, 2017. Therefore, Chadorbaf had no reason to file the Motion until December 4, 2017.

Based on the evidence presented by Chadorbaf, the Court in persuaded that Chadorbaf acted reasonably in seeking to file the Motion upon learning of the default and default judgment on December 4, 2017. Therefore, the Motion was filed within reasonable time as required by CCP § 473.5(a). (Credit Managers Assn. v. National Independent Business Alliance (1984) 162 Cal.App.3d 1166, 1172 [“The policy behind the statutes relating to time limits and other procedural matters is less powerful than the policy which seeks to dispose of litigation on the merits rather than on procedural grounds.”].)

ii. Merits

“‘[A]ctual notice’ in section 473.5 ‘means genuine knowledge of the party litigant….’ [Citations.] ‘[A]ctual knowledge’ has been strictly construed, with the aim of implementing the policy of liberally granting relief so that cases may be resolved on their merits.’ [Citation.]” (Ellard v. Conway (2001) 94 Cal.App.4th 540, 547.) “[A] party can make a motion showing a lack of actual notice not caused by avoidance of service or inexcusable neglect . . .” (Trackman v. Kenney (2010) 187 Cal.App.4th 175, 180.) “‘[I]t does not require a showing that plaintiff did anything improper . . . . [T]he defaulting defendant simply asserts that he or she did not have actual notice’.” (Id., citing to Younger, California Motions (2009–2010 ed.) § 26:30, p. 766.)

As provided by Trackman, supra, a declaration stating that the Summons and Complaint did not result in Chadorbaf acquiring actual notice of this action is sufficient. Chadorbaf submits a declaration stating that he was not served with the Summons and Complaint and did not learn of the default and default judgment against him in this action until December 4, 2017. (Chadorbaf Decl. ¶¶ 3-4, 9.) While Chadorbaf may have learned of this action from his November 1, 2017 communication with Plaintiff’s counsel, “actual knowledge from a source other than service of a summons does not preclude a defendant from seeking relief under section 473.5.” (Ellard v. Conway (2001) 94 Cal.App.4th 540, 548.) Constructive or imputed notice is not “actual notice” within the meaning of CCP § 473.5(a). (See Rosenthal v. Garner (1983) 142 Cal.App.3d 891, 895.) CCP § 473.5(a) explicitly permits Chadorbaf to seek relief of vacating the default and default judgment if the service of the Summons and Complaint did not result in him acquiring actual notice of this action.

In light of the foregoing reasons and the judicial policy to resolve cases on their merits, the Motion is GRANTED on the CONDITION that Chadorbaf files his proposed answer within 7 days from the date of this Order. Pursuant to under CCP § 473.5(a), the default and default judgment entered against Chadorbaf are hereby vacated.

Moving party to give notice.