Cleo Wrap v. Hyeob Sung USA











Filed 11/19/10 Cleo Wrap v. Hyeob Sung USA CA2/1




NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.



IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

CLEO WRAP, Plaintiff and Appellant, v. HYEOB SUNG USA, Defendant and Respondent.

B221379 (Los Angeles County Super. Ct. No. BC392898)

APPEAL from an order of the Superior Court of Los Angeles County. William F. Fahey, Judge. Affirmed.
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Law Offices of Martin F. Goldman and Martin F. Goldman for Plaintiff and Appellant.
No appearance for Defendant and Respondent.
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Plaintiff Cleo Wrap appeals from the order granting defendant Hyeob Sung USA’s motion under Code of Civil Procedure section 473.5[1] to vacate the default and default judgment entered against it. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Complaint and Entry of Default and Default Judgment
On June 18, 2008, Cleo Wrap filed an action against Shims Wholesale, Inc., doing business as Kensco; Michael Shim; and Hyeob Sung, USA, alleging they owed it $42,120 for merchandise that it had sold and delivered to them, but for which they had not paid. When Hyeob Sung, USA did not answer or otherwise respond to the complaint, Cleo Wrap obtained an entry of default on October 7, 2008 and a default judgment on March 9, 2009.[2]
2. The Section 473.5 Motion and the Trial Court’s Order Granting the Motion
On July 13, 2009, Hyeob Sung, USA moved under section 473.5 to set aside and vacate the entry of default and default judgment on the ground that it did not have actual notice in time to defend the lawsuit.[3] In conjunction with the motion, Hyeob Sung, USA submitted declarations of Bok Yi Kim Yeon (Yeon), its principal officer, and its attorney and a proposed answer to the complaint. According to the motion, Hyeob Sung, USA first learned of this action, and the entry of default and default judgment, on June 15, 2009, when Yeon was personally served with an order to appear in court on July 22, 2009, to provide information to assist in enforcing the default judgment against Hyeob Sung, USA. Hyeob Sung, USA argued that, because it lacked actual notice of the lawsuit before entry of the default and default judgment, the trial court should vacate them to allow for a defense of the action.
Cleo Wrap opposed the motion, asserting that Hyeob Sung, USA had been served with the summons and complaint on June 25, 2008, and that, as a result, Hyeob Sung, USA could not prove lack of actual notice to qualify for relief under section 473.5. Cleo Wrap also maintained that its counsel’s legal assistant had sent documents to Hyeob Sung, USA, regarding the entry of default and default judgment that further alerted Hyeob Sung, USA to the pendency of the action.
In reply, Hyeob Sung, USA explained that the proof of service that Cleo Wrap used to claim it had notice of the action did not establish service on Yeon, its principal, but rather indicated instead that substituted service had been achieved by leaving a copy of the summons and complaint with a woman named Ann Yeon, who was identified as the co-occupant of a dwelling. Hyeob Sung, USA continued to maintain that Yeon, its principal, did not receive notice of the action until asked to appear for a judgment debtor examination—well after entry of the default and default judgment.
The trial court held a two-day evidentiary hearing on the motion at which Yeon testified on behalf of Hyeob Sung, USA and the legal assistant for Cleo Wrap’s counsel and a process server testified on behalf of Cleo Wrap.
According to Yeon, she, as the principal of Hyeob Sung, USA, bought Kensco from Shim in mid-2002 and purchases merchandise from Shims Wholesale, Inc. to sell in her store, which is a 99-cent retail store. Yeon said that she had never done business with Cleo Wrap. She testified that, on June 25, 2008, a person approached her and told her to accept a summons and complaint in this action for Shims Wholesale, Inc., which she did, thinking that she was supposed to take them. When receiving these papers for Shims Wholesale, Inc., she did not understand that Hyeob Sung, USA was being sued as well. She did not receive a similar summons and complaint for Hyeob Sung, USA, nor did she see a copy of the summons indicating service on Hyeob Sung, USA before the hearing on the section 473.5 motion. Yeon stated that she first learned Cleo Wrap had sued Hyeob Sung, USA in June 2009 when she received notice of the judgment debtor examination as part of the efforts to enforce the default judgment. She denied being known by the first name of “Ann.” And she denied having received the documents from Cleo Wrap’s counsel regarding the request for entry of default and default judgment, although she admitted that they were addressed to Hyeob Sung, USA’s correct location.
Cleo Wrap’s counsel’s legal assistant described the documents that she had mailed to Hyeob Sung, USA regarding the entry of default and default judgment and said that none had been returned to her office as undeliverable. The process server testified that, on June 25, 2008, he had served a woman, whom he believed to be Ann Yeon, with the summons and complaint against Hyeob Sung, USA at the address of Hyeob Sung, USA and that the proof of service mistakenly indicated the place of service was a residence when it was a business. According to the process server, the woman said that she was authorized to receive documents.
The trial court granted Hyeob Sung USA’s motion.[4] Cleo Wrap filed a timely notice of appeal. (§ 904.1, subd. (a)(2) [order made after an appealable judgment is itself appealable].)
DISCUSSION
1. Section 473.5 Affords a Trial Court Discretion To Set Aside a Default and Default Judgment Entered Against a Party Who Lacked Actual Notice in Time to Defend the Action.
Under section 473.5, the trial court has discretion to set aside a default and default judgment entered against a party who did not have actual notice in time to defend the action. “Discretionary relief based upon a lack of actual notice under section 473.5 empowers a court to grant relief from a default judgment where a valid service of summons has not resulted in actual notice to a party in time to defend the action.” (Anastos v. Lee (2004) 118 Cal.App.4th 1314, 1319.) “‘“[A]ctual notice” in section 473.5 “means genuine knowledge of the party litigant . . . .” [Citation.]’ [Citation.]” (Ellard v. Conway (2001) 94 Cal.App.4th 540, 547; Rosenthal v. Garner (1983) 142 Cal.App.3d 891, 895 [actual notice of the party is required under section 473.5; imputed or constructive knowledge is insufficient].) “‘“[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, at p. 547; Thompson v. Sutton (1942) 50 Cal.App.2d 272, 276 [relief-from-default provisions “‘liberally construed so as to dispose of cases upon their substantial merits’”].)
2. The Trial Court Did Not Abuse Its Discretion By Granting Hyeob Sung, USA’s Section 473.5 Motion.
On appeal, Cleo Wrap contends that the section 473.5 motion was not timely filed within 180 days after service of written notice of the entry of default. According to Cleo Wrap, its counsel’s legal assistant on three occasions sent correspondence or court forms to Hyeob Sung, USA regarding the entry of default—all more than 180 days before Hyeob Sung, USA filed its section 473.5 motion. Nothing in the record, however, sufficiently demonstrates that Cleo Wrap served Hyeob Sung, USA with written notice of the entry of default more than 180 days before it moved for relief under section 473.5. The first document on which Cleo Wrap relies, is a letter dated August 7, 2008, that was sent before the clerk entered the default to inform Hyeob Sung, USA that Cleo Wrap intended to file a request for entry of default, and thus plainly is not written notice of entry of default. The second document is a request for default form including the clerk’s notation that he or she entered default on October 7, 2008, but nothing on the document indicates that it was sent as written notice to Hyeob Sung, USA after the entry of default. The third document appears to be a request for default judgment, with a file stamp of March 9, 2009, but it does not reference the prior entry of default as to Hyeob Sung, USA, nor is it signed to confirm service. As a result, on this record, Hyeob Sung, USA had a reasonable time to move for section 473.5 relief, in no event exceeding two years from entry of the default judgment (§ 473.5, subd. (a)), and the trial court properly could conclude that Hyeob Sung, USA’s section 473.5 motion filed one month after Yeon testified that she learned of the action and approximately four months after entry of the default judgment was timely under the statute.
Cleo Wrap also argues that, in granting the section 473.5 motion, the trial court should not have relied on Yeon’s testimony that she received only the summons and complaint for Shims Wholesale, Inc. and not the summons and complaint for Hyeob Sung, USA. According to Cleo Wrap, the evidence of the process server’s testimony that he delivered a summons and complaint for Hyeob Sung, USA to Ann Yeon, the summons indicating service on Hyeob Sung, USA, and the letters and court forms sent by his office to Hyeob Sung, USA, precluded a finding by the trial court that Hyeob Sung, USA lacked notice of the action in time to defend it, as required for relief under section 473.5.
We cannot reweigh the trial court’s credibility determinations or its evaluation of conflicting evidence. (Williams v. Hilb, Rogal & Hobbs Ins. Services of California, Inc. (2009) 177 Cal.App.4th 624, 643 [“An appellate court has no power to reweigh the evidence, or to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn from the evidence.”].) After hearing the testimony and reviewing the parties’ written materials and exhibits, the trial court was within its discretion to conclude that Hyeob Sung, USA did not have actual notice of the action in time to defend it before entry of the default and default judgment. (Ellard v. Conway, supra, 94 Cal.App.4th at p. 547; see also Crescendo Corp. v. Shelted, Inc. (1968) 267 Cal.App.2d 209, 213 [“‘where the evidence is conflicting, the court has a sound discretion to grant or deny the motion [to set aside a default judgment], and in the absence of a clear showing of abuse of discretion, the order will not be interfered with on appeal therefrom’”].)[5]
DISPOSITION
The order is affirmed. No costs are awarded.

NOT TO BE PUBLISHED.

ROTHSCHILD, Acting P. J.

We concur:

CHANEY, J.

JOHNSON, J.

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