Court Opinion

ID: 5125760
Source: CourtListenerOpinion
Date Created: 2021-11-12 23:02:24.399591+00
Date Added: 2024-06-11T08:22:52.599119
License: Public Domain

Filed 11/12/21 Squar Milner v. LeClerc CA1/1
                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

                                     FIRST APPELLATE DISTRICT

                                                   DIVISION ONE

 SQUAR MILNER LLP,
           Plaintiff and Respondent,
                                                                        A161500
 v.
 FRANCK LECLERC et al.,                                                 (San Francisco City & County
                                                                        Super. Ct. No. CGC-19-573018)
           Defendants and Appellants.

         Defendants appeal from a judgment after the trial court denied their
motion to vacate entry of default against them. They contend the trial court
abused its discretion in refusing to grant the motion. We affirm.
                                               I. BACKGROUND
         Defendants Franck LeClerc, Cafe Claude Restaurant, Inc., and six
other subchapter S corporations formed by LeClerc hired plaintiff Squar
Milner LLP to provide them with tax preparation, consulting, and accounting
services. Defendants failed to pay for the services rendered. On January 22,
2019, plaintiff filed suit against defendants, alleging causes of action for
breach of contract (written and oral), quantum meruit, and common counts of
open book account and account stated.
          Plaintiff served the summons on the corporate entity defendants on
February 4, 2019 and on LeClerc as an individual on March 11, 2019. On
March 6, counsel for plaintiff sent a letter to LeClerc stating that none of the
defendants had answered the complaint within 30 days as required. The
letter requested defendants inform plaintiff’s counsel by March 20 whether
they intended to answer, or plaintiff would file a request for entry of default.
Defendants did not respond to the letter.
      On April 2, default was entered with respect to the corporations, and,
on May 6, default was entered as to LeClerc as an individual. All parties
were served with notice of entry of default. On May 14, counsel for
defendants reached plaintiff’s counsel by telephone and offered to settle or
she would file a motion to set aside default.
      On May 30, defendants moved to set aside the default. In his
declaration filed in support of the motion, LeClerc stated that when he was
served with the “legal papers in this matter,” among the items he received
was a document “labeled NOTICE TO PLAINTIFF that had a hearing date of
June 26, 2019 at 10:30 a.m. in Dept. 610.” LeClerc stated he is a “non-
lawyer” and he believed that was the day he had to appear in court. He put
the matter on his calendar and was waiting for the hearing date when he
received a request to enter default which he did not understand. LeClerc
“immediately sought the services of an attorney to explain” the notice to him.
The attorney explained to LeClerc he “was to have filed a response to the
lawsuit within 30 days after receiving the papers” and that until then he
“had no idea” that he was required to file a response with the court before
June 26. LeClerc further stated he would be “severely prejudiced if [he were]
not allowed to respond and defend the lawsuit.”
      On June 12, plaintiff filed an opposition to the motion, and on June 19,
defendants filed a reply, apparently accompanied by a second declaration

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from LeClerc.1 In his second declaration, LeClerc denied that he had received
a letter from plaintiff’s counsel on March 6, 2019, and stated he did not know
of its existence until his attorney forwarded a copy of the letter. LeClerc
stated if he had received such a letter, he would not have understood the
“legalese,” would have gone into a state of anxiety, and would have
immediately contacted an attorney for advice. The next day, June 20,
plaintiff filed evidentiary objections to LeClerc’s second declaration, arguing
there could not be a reasonable dispute that he received the March 6 letter
because the “Return Receipt evidences Mr. LeClerc’s signature, which
perfectly matches the signature on the Declaration of Frank LeClerc Denying
Receipt of Letter Dated March 6, 2019.” The next day, LeClerc filed a third
declaration, admitting his signature appeared on the return receipt. He
stated, however, that he “had never seen the letter” before his attorney
forwarded it to him, and that he “must have placed it down without ever
opening it and it has been lost or destroyed.” He reasserted that if he had
opened and read it, he would have gone into a state of anxiety and contacted
an attorney.
      On June 25, 2019, the trial court denied defendants’ motion to set aside
entry of default.
      Following a prove-up hearing, the trial court entered default judgment
against defendants on August 4, 2020, in the amount of $82,217.84.
Defendants timely appealed.

      1 Defendants did not include the declaration in the clerk’s transcript,
but the register of actions reflects that it was filed with the reply brief.
Plaintiff included quotes from the second LeClerc declaration in their
evidentiary objections, which defendants do not dispute are accurate.

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                               II. DISCUSSION
        Defendants seek reversal of the judgment and an opportunity to
answer the complaint. They argue they promptly filed the motion to set aside
entry of default, plaintiff was not prejudiced by the delay, and the law favors
decisions on the merits.2
        A party may move to set aside a default taken through mistake,
inadvertence, surprise, or excusable neglect. (Code Civ. Proc., § 473,
subd. (b).) We review a trial court’s decision to deny a motion for relief from
default for abuse of discretion. (Elston v. City of Turlock (1985) 38 Cal.3d
227, 232–233 (Elston), superseded by statute on other grounds as stated in
Tackett v. City of Huntington Beach (1994) 22 Cal.App.4th 60, 64.) The trial
court abuses its discretion if its decision exceeds the bounds of reason. (State
Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 610.)
        Excusable neglect is neglect which must have been the act of a
reasonably prudent person under the same circumstances. (Elms v. Elms
(1946) 72 Cal.App.2d 508, 513 (Elms); Jackson v. Bank of America (1983)
141 Cal.App.3d 55, 58.) What qualifies as excusable neglect depends on the
facts of each case. (Pearson v. Continental Airlines (1970) 11 Cal.App.3d 613,
617.) The party seeking relief from default must prove excusable neglect by a
preponderance of the evidence. (Iott v. Franklin (1988) 206 Cal.App.3d 521,
528.)
        Here, defendants failed to show their neglect was excusable. It is
undisputed defendants were served with the summons and complaint.
LeClerc admitted he received the March 6, 2019 letter from plaintiff’s counsel

        Plaintiff points to several procedural deficiencies in defendants’
        2

opening brief and the record. Though we acknowledge procedural defects
exist, we will decide the case on the merits.

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notifying him that plaintiff would seek entry of default unless he responded
to the complaint. Although he stated in his declaration that he thought the
date for the case management conference was the date he had to appear in
court and he did not realize he had to respond to the complaint before then,
he does not explain why he failed to read the summons or read or respond to
counsel’s March 6 letter.3 We find no abuse of discretion in the trial court’s
determination that these actions were not those of a “reasonably prudent
person.” (See, e.g., Davis v. Thayer (1980) 113 Cal.App.3d 892, 906 [a party
who fails to read a complaint is grossly negligent; a party who reads a
complaint and disregards its allegations is careless and indifferent: in either
case the neglect is inexcusable]; Stiles v. Wallis (1983) 147 Cal.App.3d 1143,
1148–1149 [defendant failed to show excusable neglect where the notice on
the face of the summons “was calculated to inform anyone capable of reading
English . . . of the necessity of filing an answer with the court”]; Beall v.
Munson (1962) 204 Cal.App.2d 396, 398–400 [no excusable neglect where
defendant was served with summons but was unfamiliar with processes of
law and did not realize his default would be entered if he did nothing].)
      We acknowledge the guidance in our case law that orders denying relief
from default are subject to careful scrutiny, and that where a party moves
promptly for relief and the opposing party will not be prejudiced “ ‘very slight
evidence’ ” will be required to set aside the default. (Elston, supra, 38 Cal.3d
at p. 233.) We also recognize that the law favors deciding cases on the

      3Indeed, his appellate brief notes he “misread the documents and
negligently focused” on the case management statement. (Italics added.)
(See Elms, supra, 72 Cal.App.2d at p. 513 [“The only occasion for the
application of [Code of Civil Procedure] section 473 is where a party is
unexpectedly placed in a situation to his injury without fault or negligence of
his own and against which ordinary prudence could not have guarded.”].)

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merits, and any doubts must be resolved in favor of the party seeking relief
from the default. (Ibid.) On this record, however, defendants have failed to
demonstrate their neglect was excusable. (Schwab v. Southern California
Gas Co. (2004) 114 Cal.App.4th 1308, 1319 [court has no discretion to grant
relief unless moving party establishes default was taken through mistake,
inadvertence, surprise, or excusable neglect], disapproved on other grounds
in Sass v. Cohen (2020) 10 Cal.5th 861, 887, fn. 12; Stafford v. Mach (1998)
64 Cal.App.4th 1174, 1187 [“A court cannot set aside a default or default
judgment simply because the opposing party has not been prejudiced.”];
Carroll v. Abbott Laboratories, Inc. (1982) 32 Cal.3d 892, 900 [“We have . . .
found no case which permits the setting aside of a judgment in spite of
inexcusable neglect, simply because the other side has not been
prejudiced.”].)
      Defendants rely on Elston, supra, 38 Cal.3d 227 to argue the trial court
should have granted their motion. In Elston, the court addressed whether an
attorney’s failure to respond to the defendant’s request for admissions was
excusable neglect. The attorney’s affidavit stated two attorneys had recently
left the firm, he was extensively involved in other business and litigation
matters at the time, his office was understaffed at the time the request for
admissions were received, and the request for admissions was misplaced. (Id.
at p. 234.) The court granted relief from default, explaining, “Where an
attorney states that he was unaware of his duty to appear or answer because
his employees misplaced papers or misinformed him as to the relevant date,
relief is routinely granted.” (Ibid.)
      Elston is inapposite. There, the attorney explained he did not respond
to the request for admissions because his staff had misplaced them.
Moreover, he did not just fail to respond, he was unaware of the existence of

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the discovery. (Elston, supra, 38 Cal.3d at p. 234.) Here, it is undisputed
defendants were served with the summons and complaint, received a letter
from plaintiff’s counsel warning of the impending default, and failed to
provide any excuse for not reading the summons and responding or providing
it to corporate counsel.
      We conclude the trial court did not abuse its discretion in denying the
motion for relief from default.
                             III. DISPOSITION
      The judgment is affirmed. Plaintiff shall recover its costs on appeal.

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                                  MARGULIES, J.

WE CONCUR:

HUMES, P. J.

SANCHEZ, J.

A151500
Squar Milner LLP v. LeClerc

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