641417126 Motion to Set Aside Default

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JUSTIN H. SANDERS (SBN 211488) [email protected] REGINALD ROBERTS, JR. (SBN 216249) [email protected] SANDERS ROBERTS LLP 355 South Grand Avenue, Suite 2450 Los Angeles, California 90071 Telephone: 213-943-1314 Facsimile: 213-234-4581 Attorneys for Defendants SCHOLASTICA TANG, TANG FAMILY INVESTMENT, LLC

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

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FOR THE COUNTY OF LOS ANGELES-CENTRAL DISTRICT

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TAMARA WILKINS, an individual,

) ) Plaintiff, ) ) vs. ) ) JOSEPH FRANCIS TREJO, an individual; ) ASTON ENZO INVESTMENTS, INC., A ) ) California Corporation; SCHOLASTICA ) TANG, an individual; WING YUEN ) TIMOTHY LIU, an individual; TANG FAMILY INVESTMENT, LLC; and DOES 1 ) ) through 100, Inclusive, ) ) Defendant(s). ) ) ) ) ) ) ) ) ) ) )

Case No.: BC467987 [Assigned for All Purposes to Judge Alan S. Rosenfield, Dept. 31] DEFENDANT TANG FAMILY INVESTMENT, LLC’S NOTICE OF MOTION AND MOTION TO SET ASIDE DEFAULT AND FOR LEAVE TO FILE RESPONSE TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES [Filed Concurrently With the Declaration Of Scholastica Tang In Support Thereof; Declaration Of Reginald Roberts, Jr. In Support Thereof; [PROPOSED] Order] DATE: TIME: DEPT:

August 10, 2012 1:30 p.m. 31

Complaint Filed:

August 25, 2011

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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on August 10, 2012 at 1:30 p.m. or as soon thereafter as

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the matter may be heard in Department “31” of the above-entitled Court, Defendant TANG

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FAMILY INVESTMENT, LLC (“TFI”) will move this Court, as pursuant to Code of Civil - 1DEFENDANT TANG FAMILY INVESTMENT, LLC’S MOTION TO SET ASIDE DEFAULT; MEMORANDUM OF POINTS & AUTHORITIES; DECL. OF REGINALD ROBERTS, JR.

MEMORANDUM OF POINTS AND AUTHORITIES

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I.

INTRODUCTION Defendant TANG FAMILY INVESTMENT, LLC (“TFI”) requests that the Court

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exercise its power to set aside the entry of default against TFI because TFI’s failure to file a

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responsive pleading to the Complaint was due to its mistake, inadvertence, surprise and

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excusable neglect. TFI’s co-defendant Joseph Trejo (“Defendant Trejo”) misled it by

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representing to it that he had obtained counsel for the defendants and that the legal matter was

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being taken care of. When TFI discovered that Defendant Trejo’s representations were false, it

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promptly obtained counsel and now moves to set aside the entry of default against it.

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Code of Civil Procedure § 473(b) vests this Court with the power to relieve TFI from an

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application for entry of default judgment entered against TFI on February 21, 2012. Relief under

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this provision of 473(b) is mandatory if the conditions are fulfilled. Matera v. McLeod, 145

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Cal.App.4th 44, 63 (Cal.App. 2 Dist., 2006). Furthermore, the policy of law favors controversies

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being heard and disposed of on the merits. Berman v. Klassman, 17 Cal.App.3d 900, 909

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(1971). Because TFI’s failure to timely respond to the Complaint was due to its mistake based on

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Defendant Trejo’s false representations and to excusable neglect, and because Plaintiff will

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suffer no prejudice if the Court grants this Motion, this Court should set aside the default

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judgment and allow TFI to defend itself.

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II.

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STATEMENT OF FACTS Plaintiff Tamara Wilkins (“Plaintiff”) filed this Complaint in the Superior Court of the

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County of Los Angeles on or about August 25, 2011. See Complaint. Plaintiff served TFI with

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the Complaint in or about December 2011. Almost immediately after learnin of the lawsuit,

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Defendant Scholastica Tang, on behalf of TFI, contacted Defendant Trejo, who organized the

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real estate “investments,” and with whom TFI invested funds for the real-estate transactions

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referenced in the Complaint, and asked for guidance. Defendant Trejo assured TFI that he would

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obtain legal counsel to assist with the legal matter and assured TFI that it did not need to take

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any actions related to the lawsuit. (Declaration of Ms. Tang (“Tang Decl.”) ¶ 3.) - 3DEFENDANT TANG FAMILY INVESTMENT, LLC’S MOTION TO SET ASIDE DEFAULT; MEMORANDUM OF POINTS & AUTHORITIES; DECL. OF REGINALD ROBERTS, JR.

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Both Ms. Tang and TFI believed Defendant Trejo and relied on his promises to obtain

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counsel to represent the Defendants. (Tang Decl. ¶ 4.) After the passage of several weeks, Ms.

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Tang inquired again of Mr. Trejo regarding the status of the legal proceedings and what, if

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anything, it needed to do. Defendant Trejo assured TFI again that he was taking care of the

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matter. (Tang Decl. ¶ 4.) Between late February and early March 2012, Defendant Trejo

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renewed his assurances that the legal matter was a misunderstanding and would be resolved.

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However, in May 2012, TFI lost confidence in Defendant Trejo’s representations and searched

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for counsel to assist it in this matter. (Tang Decl. ¶ 5.)

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TFI retained SANDERS ROBERTS LLP to represent it in this action. (Tang Decl. ¶ 5.)

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On or about June 4, 2012, counsel reviewed the Court’s on-line case summary and learned that

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on February 21, 2012, a Request for Default was entered against TFI. See Declaration of

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Reginald Roberts, Jr. (“Roberts Decl.”) ¶ 3.) Upon discovery of the entry of default, Reginald

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Roberts, Jr., of SANDERS ROBERTS LLP, immediately contacted Plaintiff’s counsel, Kevin B.

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Sawkins of SAWKINS & ALBERT, to seek relief from entry of default. Mr. Sawkins was not

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available to receive the call and Mr. Roberts left a voice message requesting relief. As of the

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date of the filing of this Motion, no one from the office of Sawkins & Albers has returned the

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call or otherwise agreed to the requested relief from default. (Roberts Decl. ¶ 3.)

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TFI has valid defenses to the claims brought against it by Plaintiff and may also cross-

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complain against Defendant Trejo. TFI now files this Motion seeking relief by the Court from

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entry of Default against it and requests leave to file a responsive pleading within two weeks of

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the hearing and granting of this request.

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This case is still in the pleading stage. There is no prejudice to Plaintiff in setting aside

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the entry of default.

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III.

DEFENDANT TFI REQUESTS THE COURT EXERCISE ITS DISCRETIONARY

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POWER TO GRANT ITS MOTION TO SET ASIDE THE DEFAULT

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“To set aside a judgment based upon extrinsic mistake one must satisfy three elements.

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First, the defaulted party must demonstrate that it has a meritorious case. Second, the party

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seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense - 4DEFENDANT TANG FAMILY INVESTMENT, LLC’S MOTION TO SET ASIDE DEFAULT; MEMORANDUM OF POINTS & AUTHORITIES; DECL. OF REGINALD ROBERTS, JR.

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to the original action. Last, the moving party must demonstrate diligence in seeking to set aside

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the default once ... discovered.” Rappleyea v. Campbell, (1994) 8 Cal.4th 975, 982, quoting

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Stiles v. Wallis (1983) 147 Cal.App.3d 1143, 1147–1148. “There are four grounds which a

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court, utilizing its equity capacity may rely upon to provide relief from a default. Those areas are

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(1) Void judgment, (2) Extrinsic fraud, (3) Constructive service, and (4) Extrinsic mistake.”

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Stiles v. Wallis (1983) 147 Cal.App.3d 1143, 1147. An extrinsic mistake exists and provides a

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basis to set aside entry of default where one party relies on another to defend it. Id.

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A.

Defenses Against Plaintiff’s Claims and Independent Claims Against Other

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Defendants

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The Court Should Set Aside Default Against TFI Because It has Valid

The default entered against TFI should be set aside because it can defend against

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Plaintiff’s claims based on the merits of the case. In addition, TFI is a victim and possesses valid

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claims against Defendant Trejo and others.

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Although named as one of several defendants in the Action, TFI engaged in no

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misconduct and was the victim of deception and possible fraud by Defendant Trejo. Indeed,

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Plaintiff only makes one passing reference to TFI in paragraph 8 of the Complaint. Plaintiff fails

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to allege a single fact accusing TFI of any misconduct whatsoever. The Court must afford TFI

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an opportunity to defend against Plaintiff’s claims on the merits, or lack thereof for all claims

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that purportedly relate to TFI. By granting the requested relief, the Court will allow the case

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against TFI to be decided on the merits and prevent and injustice against it and a windfall for

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Plaintiff at the expense of TFI.

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B.

TFI Relied on Misrepresentations of Defendant Trejo that He Was Providing It With a Legal Defense In This Matter

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Plaintiff filed this Complaint in the Superior Court of the County of Los Angeles on or

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about August 25, 2011. See Case Summary. In approximately December 2011, Ms. Tang, on

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behalf of TFI, contacted Defendant Trejo regarding the lawsuit. Defendant Trejo assured TFI

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that he would obtain legal counsel to assist with the legal matter and assured TFI that it did not

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need to take any actions related to the lawsuit. (Tang Decl. ¶ 3.) - 5DEFENDANT TANG FAMILY INVESTMENT, LLC’S MOTION TO SET ASIDE DEFAULT; MEMORANDUM OF POINTS & AUTHORITIES; DECL. OF REGINALD ROBERTS, JR.

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Ms. Tang and TFI believed Defendant Trejo and relied on his promises to obtain counsel

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to represent the Defendants. (Tang Decl. ¶ 3.) By the time TFI realized that Defendant Trejo

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misled it and did not retain counsel or otherwise take any steps to protect its interest in the

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action, the statutory time to file a responsive pleading had passed. (Tang Decl. ¶ 6.) This

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extrinsic fraud and mistake provides a valid basis for relief from entry of default against TFI.

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Accordingly, it urges this Court respectfully to grant the requested relief from entry of default

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and to resolve this matter on its merits.

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C.

In Seeking To Set Aside Default

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Since Learning of the Extrinsic Fraud and Mistake, TFI Has Been Diligent

If an application for relief is filed within six months after the entry of judgment, is in

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proper form, and is accompanied by an attorney’s affidavit of “mistake, surprise or neglect,” the

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court “shall vacate any (1) resulting default entered by the clerk against his or her client, and

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which will result in entry of a default judgment…” CCP 473(b). Relief under this provision of

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473(b) is mandatory if the conditions are fulfilled. Matera v. McLeod, 145 Cal.App.4th 44, 63

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(Cal.App. 2 Dist., 2006).

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In this case, Between late February and early March 2012, Defendant Trejo renewed his

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assurances that the legal matter was a misunderstanding and would be resolved. However, in or

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around May 2012, TFI lost confidence in Defendant Trejo’s representations and searched for

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counsel to assist it in this matter. (Tang Decl. ¶ 5.)

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TFI retained SANDERS ROBERTS LLP to represent it in this action. (Tang Decl. ¶ 5.)

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On or about June 4, 2012, counsel reviewed the Court’s on-line case summary and learned that

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on February 21, 2012, a Request for Default was entered against TFI. See Declaration of

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Reginald Roberts, Jr. (“Roberts Decl.”) ¶ 2.) Upon discovery of the entry of default, Reginald

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Roberts, Jr., of SANDERS ROBERTS LLP, immediately contacted Plaintiff’s counsel, Kevin B.

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Sawkins of SAWKINS & ALBERT, to seek relief from entry of default. Mr. Sawkins was not

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available to receive the call and Mr. Roberts left a voice message requesting relief. (Roberts

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Decl. ¶ 3.)

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Counsel for TFI has filed this motion to set aside the default approximately one hundred - 6DEFENDANT TANG FAMILY INVESTMENT, LLC’S MOTION TO SET ASIDE DEFAULT; MEMORANDUM OF POINTS & AUTHORITIES; DECL. OF REGINALD ROBERTS, JR.