Opinion
B227504
01-25-2012
LAW OFFICES OF KENNETH T. HAAN & ASSOCIATES, Plaintiff and Respondent, v. HEE JIN PARK AND HYO JIN CORPORATION, Defendants and Appellants,
Law Offices of Eric O. Ibisi and Eric O. Ibisi for Defendants and Appellants. Kenneth T. Haan & Associates, Kenneth T. Haan and Kenneth A. Levine for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
(Los Angeles County Super. Ct. No. BC418288)
APPEAL from an order of the Superior Court of Los Angeles County, Michael C. Solner, Judge. Affirmed.
Law Offices of Eric O. Ibisi and Eric O. Ibisi for Defendants and Appellants.
Kenneth T. Haan & Associates, Kenneth T. Haan and Kenneth A. Levine for Plaintiff and Respondent.
Appellants Hee Jin Park (H. Park) and Hyo Jin Corporation (the Corporation) seek to reverse the trial court's denial of their motion to set aside the default judgment entered against them on February 11, 2010 in favor of respondent, Law Offices of Kenneth T. Haan, represented by its principal, Kenneth T. Haan (Haan). Appellants argue that the trial court abused its discretion in denying them relief (1) under Code of Civil Procedure section 473, subdivision (b), because respondent failed to properly serve appellants with the summons and complaint and therefore appellants' first awareness of the lawsuit occurred upon receipt of the notice of entry of judgment and thus constitutes "surprise;" and (2) under section 473.5 because appellants did not receive actual notice of the lawsuit in time to defend the action because H. Park was out of the country and they only learned of the lawsuit upon receipt of the notice of entry of judgment.
H. Park is the owner and chief executive officer of the Corporation.
Unless otherwise noted herein, all section references are to the Code of Civil Procedure.
The trial court did not abuse its discretion in denying appellants the relief they sought because appellants' motion under section 473, subdivision (b), was not timely filed and because, based on the evidence before the trial court, it was reasonable to conclude that appellants had actual notice of the litigation in time to properly defend it justifying denial under section 473.5. Therefore, we will affirm the trial court's order.
FACTUAL AND PROCEDURAL BACKGROUND
The factual and procedural background is based on the documents contained in the one-volume Clerk's Transcript and on the one-volume Reporter's Transcript.
As the principal attorney of the Law Offices of Kenneth T. Haan, Haan began representing appellants in January of 2007 in several matters pursuant to a written agreement under which appellants agreed to pay hourly compensation to Haan and cover costs and expenses associated with the litigation. After appellants failed to pay Haan's fees, costs and expenses, on July 21, 2009, Haan filed a complaint against appellants and H. Park's daughter, Seongweon Park (S. Park), alleging breach of contract, common count in quantum meruit, account stated, breach of guarantee, fraud and fraudulent transfer, seeking an injunction and to recover legal fees. The complaint was amended on July 22, 2009.
After several attempts at personal service on H. Park at his residence, he was served by substituted service on August 5, 2009. Appellants did not appear before the trial court to defend against the lawsuit, however, and an entry of default was entered and filed on September 22, 2009. A default judgment was entered against appellants and in favor of Haan in the amount of $57,160.17 on February 11, 2010.
On April 22, 2010, appellants and S. Park filed a notice and motion to set aside the entry of the default judgment under section 473, subdivision (b), and section 473.5. Respondent conceded that S. Park was not properly served and therefore made no arguments against the motion to set aside the default judgment with respect to her. Although H. Park initially argued that he was out of the country from July 9, 2009 through December 31, 2009, his passport was entered into evidence and it showed that he entered Korea on July 23, 2009, reentered the United States on October 6, 2009, entered Korea on October 22, 2009 and reentered the United States on December 21, 2009. Additionally, Haan's secretary stated in her declaration that H. Park confirmed by telephone on September 3, 2009 that he was served with the summons and complaint and further asked that "any new documents should be sent to his residential address." Based on the foregoing, the trial court found that appellants were properly served notice of the case. Appellants' motion to set aside the default judgment was denied on July 20, 2010.
The rationale stated by the trial court applies to the requirements under section 473.5. The trial court did not discuss its findings or its rationale for denying the motion with respect to appellants' claims under section 473, subdivision (b).
Appellants filed a timely notice of appeal on September 17, 2010.
Appellants' notice of appeal was filed on September 17, 2010, which is 218 days after the date of entry of the default judgment by the trial court. However, it is not the default judgment that is being appealed but the order denying appellants' motion to set aside the default judgment. Therefore, despite the notice of appeal exceeding the period during which a timely appeal may be filed based on the default judgment, the appeal is timely with respect to the order denying appellants' motion.
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ISSUES ON APPEAL
Appellants seek reversal of the trial court's order denying their motion to set aside the default judgment entered against them on February 11, 2010. Specifically, appellants argue that (1) they are entitled to have the default judgment set aside under both section 473, subdivision (b) and section 473.5. Appellants assert further that the trial court's order denying them the relief they sought was an abuse of discretion.
The record indicates, however, that the trial court did not abuse its discretion in denying appellants' motion to set aside the order and, therefore, we will affirm.
DISCUSSION
1. The Trial Court's Denial of Appellants' Motion For Relief Under Section 473, subdivision (b), Was Not an Abuse of Discretion
Appellants argue that the trial court abused its discretion when it denied them relief under section 473, subdivision (b). Appellants assert in support that respondent failed to properly serve appellants with the summons and complaint and therefore appellants' first awareness of the lawsuit occurred upon receipt of the notice of entry of judgment and thus constituted "surprise," justifying such relief.
Section 473, subdivision (b), provides that "[a] court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall . . . be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken." With respect to discretionary relief, "the six-month period runs from the date of entry of default rather than from the date of entry of the default judgment [Citations.]." (Weiss v. Blumencranc (1976) 61 Cal.App.3d 536, 541; accord, Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970; but see, Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 296-297 [A motion for mandatory relief from default supported by an attorney's affidavit of fault, on the other hand, is timely if it is filed within six months after the entry of a default judgment.].) Even in circumstances where six months have not elapsed between the date of entry of the default judgment and the filing of the motion to set aside, a motion under section 473, subdivision (b), is too late if it is made more than six months after the entry of the default. (Koski v. U-Haul Co. (1963) 212 Cal.App.2d 640, 643.) This is because if the default judgment is vacated but the default on which it is based remains, the plaintiff would merely need to seek entry of another judgment. (Ibid.)
In general, a trial court's order granting or denying relief under the discretionary provisions found in section 473, subdivision (b), is reversible only on a finding of abuse of discretion. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.) "The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court." (Ibid.)
Appellants' motion for relief under section 473, subdivision (b), was untimely. The default was entered on September 22, 2009. The six-month period during which a section 473, subdivision (b), motion could have been filed ended on March 22, 2010. Appellants' motion was filed on April 22, 2010, a month after the deadline passed. The motion was untimely and, as a result, the trial court did not have jurisdiction to grant relief. (See, Davis v. Thayer (1980) 113 Cal.App.3d 892, 901.) Therefore, the trial court did not abuse its discretion when it denied appellants' motion for relief under section 473, subdivision (b).
2. The Trial Court's Denial ofAppellants' Motion For Relief Under Section 473.5 Was Not an Abuse of Discretion
Appellants also contend that the trial court abused its discretion by denying them relief under section 473.5 because they did not receive actual notice of the lawsuit in time to defend the action. In support, appellants assert that H. Park was out of the country and only learned of the lawsuit upon receiving a notice of entry of judgment.
"Section 473.5, subdivision (a) provides, '[w]hen service of a summons has not resulted in actual notice to a party in time to defend the action and a default or a 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. . . . ' " " ' "[A]ctual notice" in section 473.5 "means genuine knowledge of the party litigant . . . . " [Citation.]' [Citation.] ' "[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.]' [Citation.] We review the court's findings regarding actual notice of the action for an abuse of discretion. [Citation.]" (Ellard v. Conway (2001) 94 Cal.App.4th 540, 547.) Section 473.5, subdivision (c), also provides that the defendant's lack of actual notice must not be caused by the defendant's avoidance of service or inexcusable neglect. (Trackman v. Kenney (2010) 187 Cal.App.4th 175, 180.)
Appellants claim that H. Park was in Korea from July 9, 2009 until December 31, 2009. Appellants contend that due to H. Park's being out of the country, he did not receive actual notice of the litigation until it was too late to provide a proper defense. However, the record shows that H. Park was not out of the country for the duration of the time claimed. In fact, the exhibits show that he entered Korea on July 23, 2009 then reentered the United States on October 6, 2009. He again entered Korea on October 22, 2009 and reentered the United States on December 21, 2009. Additionally, Haan's secretary stated in her declaration that H. Park confirmed by telephone on September 3, 2009 that he was served with the summons and complaint and further asked that "any new documents should be sent to his residential address." The trial court could reasonably conclude, as a result, that appellants had received actual notice of the case against them in time to defend such case. Therefore, the trial court did not abuse its discretion when it denied appellants' motion under section 473.5.
Typically, public policy prefers a trial on the merits resulting in an order denying relief from a default judgment being subject to closer appellate scrutiny than one granting such relief. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980; Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 696.) However, the evidence presented was sufficient to support the trial court's order denying appellants relief under section 473.5. As a result, the trial court's order was not an abuse of discretion.
DISPOSITION
The order denying appellants' motion is affirmed. Respondent shall recover costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY, Acting P. J. WE CONCUR:
KITCHING, J.
ALDRICH, J.