Court Opinion

ID: 6344424
Source: CourtListenerOpinion
Date Created: 2022-05-26 19:02:15.850137+00
Date Added: 2024-06-11T08:50:20.831939
License: Public Domain

Filed 5/26/22 Ken Okuyama Design etc. v. R Motor Co. CA2/3
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION THREE

KEN OKUYAMA DESIGN USA,                                        B312936
INC.,
                                                               Los Angeles County
         Plaintiff and Appellant,                              Super. Ct. No.
                                                               20GDCV00582
         v.

R MOTOR COMPANY,

         Defendant and Respondent.

     APPEAL from an order of the Superior Court of
Los Angeles County, Curtis A. Kin, Judge. Affirmed.

     Law Offices of Robert W. Cohen, Robert W. Cohen and
Mariko Taenaka for Plaintiff and Appellant.

     Call & Jensen and Joshua Simon for Defendant and
Respondent.
                  _________________________
       Plaintiff Ken Okuyama Design USA, Inc. appeals an
order setting aside and vacating a default and default judgment
entered against defendant R Motor Company. The evidence
showed plaintiff served defendant’s designated agent for service
of process with the summons and complaint, but the designated
agent apparently failed to forward the documents to defendant.
Based on this evidence, the trial court determined defendant was
not entitled to relief from default under Code of Civil Procedure
section 473.5, subdivision (a) (section 473.5(a)), because service
upon the designated agent constituted “actual notice” under the
statute, but defendant was entitled to relief under Code of Civil
Procedure section 473, subdivision (b) (section 473(b)), because
defendant only “became aware” of the action after the default
judgment was entered.1 Plaintiff contends the “actual notice”
finding cannot be logically reconciled with the finding that
defendant was unaware of the lawsuit, and thus the court abused
its discretion by granting relief under section 473(b). Plaintiff
also argues the evidence was insufficient to establish defendant’s
default resulted from excusable neglect. Finding no abuse of
discretion, we affirm.

1      Section 473.5(a) provides in relevant part: “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.”
       Section 473(b) provides in relevant part: “The 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.”

                                 2
              FACTS AND PROCEDURAL HISTORY
       Plaintiff is an industrial design firm. It was an active
California corporation in good standing when the alleged events
underlying its lawsuit against defendant occurred.2
       Defendant designs and builds “high-end electric
automobiles.” It is a Nevada company, registered to do business
in California, with its principal office in Texas. Defendant’s
registration information with the Nevada Secretary of State
lists CT Corporation System (CT) as its designated agent
for service of process.
       On July 17, 2020, plaintiff filed a complaint against
defendant for breach of contract. The complaint alleges
defendant failed to pay a series of invoices for design work
performed in September 2016, totaling approximately $400,000.
       On July 24, 2020, plaintiff personally served CT with
the summons and complaint.
       As of August 27, 2020, defendant had not responded to
the complaint, and plaintiff filed a request for entry of default.
The default was entered the same day. On September 28, 2020,
plaintiff filed its prove-up papers and request for judgment. On
September 29, 2020, the trial court entered the default judgment
against defendant.
       On February 5, 2021, defendant filed its motion to set
aside the default, requesting relief under section 473.5(a) and
section 473(b). In a supporting declaration, defendant’s CEO,
Dean Drako, declared that neither he nor anyone else at the
company had received a copy of the summons and complaint.

2    In 2020, plaintiff’s principal, who is primarily based in
Japan, dissolved the corporation.

                                 3
Drako said he received a demand letter from plaintiff’s counsel
in November 2017, claiming defendant owed plaintiff over
$400,000 under the parties’ contract. He responded the next day,
asking counsel to identify the contract. According to Drako,
plaintiff’s counsel referred him to “some alleged invoices” that he
“had never seen before,” but counsel “never provided a contract,”
and Drako “never heard from [plaintiff’s counsel] again.” Thus,
he “thought the matter was closed,” until he “became aware
of th[e] lawsuit . . . in late January [2021],” when he received
a writ of execution.3
        In a supplemental declaration, Drako acknowledged that,
according to plaintiff’s proof of service, plaintiff served CT with
the summons and complaint on July 24, 2020, but he again
denied that anyone at his company had received a copy of
the documents. He explained that, “without my knowledge,
[CT] had discontinued service to [defendant] several years ago
. . . due to nonpayment for service.” He said he was “unaware”
of the nonpayment, which he said was “unintentional or the
result of inadvertence.”
        Although CT “apparently discontinued service,” Drako
said “CT did forward a writ of execution to [defendant] in
late January” and this was the “first time” he “became aware
of this lawsuit.” Once he learned of the writ of execution, Drako
declared he “immediately engaged attorneys” to seek relief from
the default. He said the default was the result of defendant’s

3     Drako acknowledged that, in 2016, he authorized plaintiff’s
principal to perform design work for one of defendant’s vehicles.
He said defendant paid plaintiff’s principal approximately
$98,000 for the work, but defendant did not enter into “any
other contract” for additional work.

                                 4
“complete lack of notice of the lawsuit” and his “belief, based
on [his] prior correspondence with [plaintiff’s counsel], that
any dispute had been resolved.”
       Plaintiff opposed the motion. It maintained personal
service upon defendant’s designated agent CT constituted actual
notice “by operation of law,” precluding relief from default under
section 473.5(a). With respect to section 473(b), plaintiff argued
the evidence proved CT “did in fact forward the summons and
complaint to defendant the day it was served.” As for Drako’s
assertion that defendant’s failure to pay CT resulted from
“ ‘inadvertence,’ ” plaintiff argued there was no evidence that
“the neglect was excusable.”
       Plaintiff supported its opposition with documents CT
produced in response to a business records subpoena. The
records showed CT received “Initial” service from plaintiff on
July 24, 2020. A “Service of Process Transmittal” record showed
CT sent a package to defendant’s office in West Lake Hills, Texas
through United Parcel Services (UPS) the same day. According
to a UPS delivery notification, UPS delivered the package to
“WEST LAKE HILLS, TX” on July 28, 2020, and someone
named “LOPEZ” signed for it.
       CT’s records also included email correspondence with
defendant’s counsel, dated February 2, 2021, explaining that,
while “CT’s service for [defendant] was discontinued several
years ago due to nonpayment for service,” CT had nonetheless
“received and forwarded service a number of times recently,”
including on July 24, 2020.
       Defendant responded to the CT records in its reply brief.
Focusing on the July 24, 2020 Service of Process Transmittal,
defendant argued the record did not show what CT actually

                                5
forwarded to defendant, as the “ ‘DOCUMENT(S) SERVED’ ”
field had been left “blank.” As for the UPS delivery notification,
defendant emphasized the record lacked a full delivery address
and it said only that “LOPEZ” had signed for the package. In a
supplemental declaration, Drako declared there had “never been
an employee, officer, or other agent at [defendant] with the first
or last name of Lopez.”
       The trial court granted defendant’s motion, finding Drako’s
declarations were “sufficient to establish entitlement to relief
from default” under section 473(b), even though defendant
was not entitled to relief under section 473.5(a). Regarding
the latter statute, the court determined plaintiff’s personal
service of the summons and complaint upon defendant’s
designated agent constituted “actual notice” and precluded relief
under section 473.5(a). But the court found Drako’s declaration
nonetheless proved defendant had not become “aware of th[e]
action [until] late January 2021, when CT forwarded a writ of
execution to defendant, after which defendant promptly sought
legal representation to address the default.” In crediting the
declaration, the court noted the Service of Process Transmittal
record listed “no specific documents” under the “ ‘Document(s)
Served’ ” field. And, although the UPS delivery notification said
“LOPEZ” signed for the package, Drako had credibly declared
that no one named Lopez had ever been an employee, officer,
or agent at defendant. Because defendant “promptly filed
[its motion to set aside the default] after receipt of the writ
of execution,” the court concluded it was entitled to relief
under section 473(b).

                                6
                            DISCUSSION
1.     Governing Law and Standard of Review
       Section 473(b) authorizes the court to set aside a default
judgment upon a showing that the default resulted from mistake,
inadvertence, surprise, or excusable neglect. (Manson, Iver &
York v. Black (2009) 176 Cal.App.4th 36, 42; Kooper v. King
(1961) 195 Cal.App.2d 621, 625–626 (Kooper); Garcia v. Gallo
(1959) 176 Cal.App.2d 658, 665–666.) The motion for relief
must be made within six months after entry of the default,
and the party moving to set aside the default has the burden
of showing good cause for relief. (Manson, at p. 42; Marcotte v.
Municipal Court (1976) 64 Cal.App.3d 235, 239.)
       We review an order setting aside a default judgment for
an abuse of discretion. (Kooper, supra, 195 Cal.App.2d at p. 625.)
“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.” (Shamblin v. Brattain (1988) 44
Cal.3d 474, 478–479.) “In a matter in which an issue is tried
on affidavits, the rule on appeal is that those affidavits favoring
the contentions of the prevailing party establish not only the
facts stated therein but also all facts which reasonably may
be inferred therefrom. [Citation.] When there is a substantial
conflict in the facts presented by affidavits, the determination
of the controverted facts by the trial court will not be disturbed
on appeal.” (Reed v. Williamson (1960) 185 Cal.App.2d 244, 249
(Reed).)
       “Reviewing courts have always looked with favor on orders
excusing defaults and permitting controversies to be heard on

                                 7
their merits. Such orders are rarely reversed, and never unless
it clearly appears that there has been a plain abuse of discretion.
[Citation.] Even in a case where the showing under section 473
of the Code of Civil Procedure is not strong, or where there is any
doubt as to the setting aside of a default, such doubt should be
resolved in favor of the application. [Citation.] All presumptions
will be indulged in favor of the correctness of the order, and the
burden is on the appellant to show that the court’s discretion
was abused.” (Reed, supra, 185 Cal.App.2d at pp. 248–249.)
2.     The Trial Court Reasonably Exercised Its Discretion
       to Grant Relief from Default under Section 473(b)
       Plaintiff contends the trial court abused its discretion
under section 473(b) in two ways. First, because the court found
plaintiff personally served defendant’s designated agent CT
with the summons and complaint, which the court determined
constituted “ ‘actual notice’ of the proceedings by operation of
law” under section 473.5(a), plaintiff argues the court could not
“simultaneously” find defendant “ ‘lack[ed] awareness’ of the
action” as the premise for granting relief under section 473(b).4

4      In its opening brief, plaintiff argues, because “section 473.5
specifically dictates the result where a litigant claims not to have
received notice despite good service, the trial court was wrong to
turn to the more generalized inquiry of excusable neglect under
section 473(b) to achieve a different result on the same alleged
facts.” While this argument seems to contend relief from the
default was unavailable under section 473(b) because the court
denied relief under section 473.5(a), in its reply brief, plaintiff
expressly disavows that position as “obviously wrong,”
acknowledging there are “any number of scenarios commanding
relief under [section 473(b)] to litigants whose notice of the suit
was unquestioned.” Rather, plaintiff clarifies its position is only

                                  8
Second, plaintiff argues the evidence was insufficient to find
excusable neglect caused defendant’s default. Neither argument
establishes an abuse of discretion.
      a.    The trial court’s factual findings are logically
            coherent and consistent with governing law
      In moving to set aside the default judgment, defendant
advanced two independent theories for relief: (1) defendant
had not received “actual notice” of the proceeding in time to

that “relief under section 473(b) was unavailable to the defendant
in this case because the finding of actual notice is inconsistent
with the proposition that defendant ‘lacked awareness’ of
the suit.” We therefore limit our review to this inconsistency
argument. In any event, as plaintiff correctly acknowledges,
case law has long recognized a defendant may be entitled to relief
from default under section 473(b), even when there is undisputed
evidence that the defendant had actual notice of the proceeding.
(See, e.g., Pulte Homes Corp. v. Williams Mechanical, Inc. (2016)
2 Cal.App.5th 267, 273–275 (Pulte Homes) [recognizing, although
dissolved corporation was deemed to have “actual notice” under
section 473.5(a) by virtue of service upon its agent for service
of process, trial court had discretion to grant relief from default
on equitable grounds and under section 473(b) upon a showing
of extrinsic fraud or mistake]; Gorman v. California Transit Co.
(1926) 199 Cal. 246, 247–249 (Gorman) [discussed post];
Bernards v. Grey (1950) 97 Cal.App.2d 679, 682–683, 686
[affirming order setting aside default on ground of excusable
neglect where summons was served upon defendant in court,
while he was talking to his attorney, who placed the papers in
his brief case while unaware of their true nature]; Kooper, supra,
195 Cal.App.2d at pp. 624–627 [assessing whether defendant was
entitled to relief from default under section 473(b) for excusable
neglect where undisputed evidence showed defendant was
personally served with the summons].)

                                 9
defend the action, thus entitling it to relief from default under
section 473.5(a); and (2) due to mistake, inadvertence, surprise,
or excusable neglect, neither Drako nor any other employee of
defendant was aware of the action until after the default, and
once Drako learned of the action, he immediately moved to
set aside the default, thus entitling defendant to relief under
section 473(b). The trial court rejected the first theory,
concluding personal service upon defendant’s designated agent
CT constituted “actual notice” of the proceeding and precluded
relief under section 473.5(a). (See Pulte Homes, supra, 2
Cal.App.5th at pp. 273–274 [service upon dissolved corporation’s
agent constituted actual notice under section 473.5(a),
explaining: “ ‘[A] corporation, as an artificial entity created by
law, can only act in its affairs through its natural person agents
and representatives’ ”; thus, “a corporation can have actual notice
only through an agent who has the appropriate authority.”].)5

5      Because resolution of the issue is not necessary to
our disposition of this appeal, we make no judgment about
whether the trial court correctly concluded that service upon
a corporation’s designated agent constitutes “actual notice”
under section 473.5(a) in all cases. We note the Pulte Homes
court expressly limited its holding to “dissolved” corporations,
like the defendant in that case (Pulte Homes, supra, 2
Cal.App.5th at p. 274), while expressing doubt that imputed
notice through an agent for service of process would constitute
actual notice to an operating corporation, like defendant here:
“Presumably notice to the board of directors or to the president
of a corporation would be sufficient to constitute actual notice;
indeed, in the case of a functioning corporation, it is arguable that
it is necessary.” (Ibid., italics added, citing Corp. Code, § 300,
subd. (a); Jeppi v. Brockman Holding Co. (1949) 34 Cal.2d 11, 17;
see also Rosenthal v. Garner (1983) 142 Cal.App.3d 891, 895

                                 10
[“We hold that the reference in Code of Civil Procedure section
473.5 to ‘actual notice’ means genuine knowledge of the party
litigant and does not contemplate notice imputed to a principal
from an [agent’s] actual notice.”].)
       To the extent the trial court and plaintiff relied upon
Cannon v. American Hydrocarbon Corp. (1970) 4 Cal.App.3d
639 and Koski v. U-Haul Co. (1963) 212 Cal.App.2d 640 for the
proposition that service upon a corporation’s designated agent
constitutes actual notice under section 473.5(a), we conclude that
reliance was misplaced. Those authorities concern only whether
service upon a corporation’s designated agent may be deemed
to be personal service—not whether such service gives actual
notice to the corporate defendant. (See Cannon, at p. 652
[assessing whether service upon Secretary of State as provided
under former Corp. Code, § 6408 constituted “personal service”
under former Code Civ. Proc., § 473a]; Koski, at p. 643 [“[W]e
must determine if the service here made upon defendant is
personal service within the meaning of [former] Code of Civil
Procedure section 473a.”].) Indeed, the Cannon court made
clear that it was not service upon the Secretary of State that
constituted actual notice to the corporate defendant; rather,
it was the fact that the Secretary of State followed the command
of former Corporation Code section 6408 to “forward the copy
of the process to the corporation at the designated address,”
which “was done with the result that the defendant had actual
knowledge of the action against it in each instance.” (Cannon,
at p. 652, italics added.) Here, Drako’s declaration and other
evidence disputed plaintiff’s contention that CT actually
forwarded a copy of the process to defendant.
       As for Code of Civil Procedure section 416.10, upon which
the trial court and plaintiff also relied, the statute is irrelevant
to the question of actual notice, because it simply identifies those
persons to whom the summons and complaint may be delivered
to effect service upon a corporation. By its terms, section 473.5(a)
assumes there has been “service of a summons” in authorizing

                                 11
Plaintiff contends this finding was logically inconsistent with
the court’s other finding that defendant “ ‘lack[ed] awareness’
of the action” and thus precluded relief under section 473(b).
We disagree.
       When a judgment or order of the trial court is challenged
on the ground that it is infected by inconsistent findings, “it is
our duty to reconcile the conflicting findings, if possible, and give
to them a meaning which will be consistent with the judgment.”
(Denbo v. Senness (1953) 120 Cal.App.2d 863, 868.) “Findings
are to be read and considered together, and, if possible, are
to be reconciled so as to prevent any conflict on material points.
Unless the conflict is clear and the findings incapable of being
harmoniously construed, a judgment will not be reversed on the
ground of a conflict in the findings.” (Harper v. Markarian (1955)
131 Cal.App.2d 771, 778.)
       It is apparent from our examination of the trial court’s
minute order that, in finding a “lack of awareness,” the court
was referring to only defendant’s officers and employees, who,
according to Drako’s declaration, had not received a copy of the
summons and complaint. The court plainly regarded defendant’s
officers and employees, who had the duty and capacity to respond
to plaintiff’s complaint, as different and distinct from defendant’s
designated agent for service of process, which had the limited
authority to accept service of the complaint and to forward it
to those employees with the capacity to act upon it. Reading
and considering the court’s findings together, there is no conflict
between, on the one hand, the finding that plaintiff personally
served CT with the summons and complaint for purposes of

relief from default “[w]hen service of a summons has not resulted
in actual notice.” (Italics added.)

                                 12
establishing defendant’s actual notice under section 473.5(a) and,
on the other hand, the finding that defendant’s employees lacked
awareness of the action for purposes of assessing whether
defendant’s default was the result of mistake, surprise, or
excusable neglect under section 473(b).
       Not only are the court’s factual findings logically coherent,
but they are also consistent with case law interpreting section
473(b). Our Supreme Court’s opinion in Gorman is instructive.
The plaintiff in Gorman sued a transit corporation for damages
caused in an accident involving one of the corporation’s
automobiles. (Gorman, supra, 199 Cal. at p. 247.) The
summons and complaint were “served upon the secretary of
said corporation,” who delivered them to the manager of the
corporation’s traffic department, with the direction to deliver
the documents “together with the file relating to the accident”
to the corporation’s president upon his return to the office. (Ibid.)
The manager placed the documents and file on his desk “to
await the president’s return,” but before that occurred, another
employee “inadvertently” took the package and “returned [it]
to the compartment in which such files were ordinarily kept.”
(Ibid.) Thus, as the Gorman court explained, the summons
and complaint slipped the manager’s mind, “with the result
that the matter was not called to the attention of the president
upon his return, nor in fact until some days after the default of
the corporation had been taken and judgment thereon entered
against it for the full sum sought by the plaintiffs in the action.”
(Ibid.) The defendant corporation moved to set aside the default
under former Code of Civil Procedure section 473 (a predecessor
to section 473(b)) on the ground of excusable inadvertence or

                                 13
neglect. (Gorman, at p. 248.) The trial court granted the motion
and our Supreme Court affirmed. (Ibid.)
       The Gorman court found no abuse of discretion, concluding
the evidence proved “the inadvertence or neglect in question was
not the result of mere forgetfulness on the part of the person or
official charged with the duty of responding to the legal process
in due time, but that such inadvertence or neglect was based
upon other circumstances which would suffice to render the same
excusable.” (Gorman, supra, 199 Cal. at p. 248, italics added.)
Distinguishing between the corporation’s president, who had
the duty to ensure the company’s timely response to the legal
process, and the corporation’s secretary and manager, who were
charged with transmitting the documents to the president, our
high court reasoned the default was properly excused by the
“intervening facts” surrounding the employees’ “inadvertence
and forgetfulness” in failing to transmit the documents. (Id. at
pp. 248–249.) Because, due to that inadvertence, the president
did not become aware of the action until after the default
judgment was entered, the trial court reasonably exercised
its discretion to set aside the default. (Ibid.)
       The reviewing court in Pearson v. Continental Airlines
(1970) 11 Cal.App.3d 613 employed similar reasoning in
affirming an order granting a corporate defendant’s motion
for relief from default on grounds of inadvertence, mistake,
and excusable neglect under the predecessor to section 473(b).
(Pearson, at pp. 615, 620.) The evidence in Pearson showed an
assistant secretary of the defendant corporation, who supervised
the department that “initially handles any summons and
complaints served on [the corporation],” after receiving service
of the summons and complaint, gave the documents to a clerical

                               14
staff worker, who apparently failed to transmit the documents
to the insurance department charged with filing a claim with the
corporation’s insurer to defend the lawsuit. (Id. at pp. 616–617.)
After the default had been taken, the assistant secretary checked
his files and found that, “while the summons and complaint had
been filed, there was no evidence that a transmittal slip had been
prepared [and] the insurance department had no indication that
the pertinent papers had ever been forwarded to them.” (Id.
at p. 617.) Because it was “fairly inferable” from the assistant
secretary’s declaration that the clerical staff member made a
mistake in failing to transmit the documents to the department
charged with ensuring the corporation responded to the
complaint, the Pearson court concluded there was “no clear
abuse of discretion warranting appellate intervention.” (Id.
at pp. 618–620; see also Benjamin v. Dalmo Mfg. Co. (1948)
31 Cal.2d 523, 527 [finding excusable neglect in failing to
respond to complaint where, although president received
copies of summons and complaint, his secretary misunderstood
his instruction to forward papers to company’s attorney who
was charged with responding to lawsuit].)
       Like the reviewing courts in Gorman and Pearson, the
trial court here reasonably distinguished CT, which was charged
only with receiving service of process on behalf of defendant and
forwarding it to the company’s responsible employees, from those
responsible employees who had the authority and capacity to
ensure defendant responded to the complaint. In both Gorman
and Pearson, the undisputed evidence established the defendant
corporations had actual notice of the proceeding by virtue of
service upon an employee designated by the corporation to
receive legal process, but in each case the courts concluded

                                15
the default was excusable because a different employee with
the duty to ensure the corporation responded to the complaint
was not made aware of the proceeding until after the default was
taken. The evidence plainly established the same was true here.
The trial court reasonably found, on the one hand, that plaintiff
personally served defendant’s designated agent for service of
process and, on the other, that defendant’s officers and employees
charged with responding to the complaint nevertheless lacked
awareness of the action until after the default was taken.
       b.     Substantial evidence establishes the default
              resulted from mistake, inadvertence, or
              excusable neglect
       Plaintiff contends “[t]he ‘neglect’ that the trial court
excused in this case was [defendant’s] failure to pay for CT
Corporation’s services, which the defendant’s CEO surmised
‘may’ have led to defendant’s lack of awareness of the action and
its ultimate default.” Despite this purported finding, plaintiff
argues there was no “true evidence for this supposed neglect”
nor of its “connection to the default.” Rather, plaintiff maintains,
Drako’s declaration merely described “ ‘inadvertence in the
abstract,’ ” with no explanation “about how or why three years
in a row of CT invoices went unpaid” or “what, if anything,
made the neglect excusable.” Moreover, plaintiff argues, “even
if the failure to pay CT Corporation had been shown to be legally
excusable,” defendant failed to present “evidence of a causal
connection between that neglect and [its] asserted ignorance
of the lawsuit” to demonstrate “its default was ‘taken . . .
through’ its excusable neglect as section 473(b) requires.”
The record refutes plaintiff’s contention.

                                16
       The fundamental error in plaintiff’s argument is it ignores
an obvious implicit basis for the trial court’s ruling—namely,
that a mistake in CT’s transmission of the summons and
complaint to defendant’s office caused those employees charged
with responding on the company’s behalf to neglect that duty,
resulting in defendant’s default. While it is true that the
trial court’s minute order addressed defendant’s purportedly
unexplained failure to pay CT, the order also focused on evidence
of apparent problems with CT’s transmittal of the summons and
complaint. Critically, the court emphasized that CT’s Service
of Process Transmittal listed “no specific documents” under the
“ ‘Document(s) Served’ ” field and that the related UPS delivery
notification disclosed “someone named ‘Lopez’ signed” for the
package, although “no one having the name of Lopez has ever
been an employee, officer, or agent at defendant.” This evidence,
as highlighted in the court’s order, was plainly sufficient
to support a finding that defendant’s default resulted from
a mistake in CT’s transmittal of the summons and complaint.
       Pearson is again instructive. As discussed above, the
reviewing court in Pearson affirmed an order setting aside a
corporate defendant’s default, concluding there was sufficient
evidence that a clerical staff member made a mistake in failing
to transmit the summons and complaint to the insurance
department charged with ensuring the corporation responded.
(Pearson, supra, 11 Cal.App.3d. at pp. 618–620.) Although there
was “no declaration by the erring [clerical staff] member that
she ‘misunderstood’ ” the instruction to transmit the documents
or that she otherwise “failed to follow customary procedures,”
the Pearson court nevertheless concluded “either or both of the
circumstances seem[ed] fairly inferable” from evidence regarding

                                17
the customary procedures and the fact that the summons and
complaint were not transmitted to the insurance department.
(Id. at p. 618.) In reaching that conclusion, the reviewing court
emphasized the following principles, which apply equally to
our review of the evidence in this case: “ ‘[Our] courts have
repeatedly stated that it is the policy of our law to allow each
contested cause to be tried on its merits. Code of Civil Procedure,
section 473, is a legislative expression of this policy. Our courts
will indulge all presumptions and resolve all doubts in favor of
orders setting aside defaults. An order setting aside a default
under the provisions of Code of Civil Procedure, section 473,
will not be reversed unless the record clearly shows an abuse of
discretion.’ ” (Id. at p. 619, quoting Hodge Sheet Metal Products
v. Palm Springs Riviera Hotel (1961) 189 Cal.App.2d 653, 657.)
       No clear abuse of discretion is shown here. It is undisputed
that, as defendant’s designated agent for service of process,
CT was charged with accepting legal process on behalf of the
company and transmitting it to those employees responsible
for responding to that legal process on defendant’s behalf.
Drako’s declaration proves this did not occur insofar as neither
he nor anyone at defendant’s office received a copy of the
summons and complaint. Although there is no declaration
from a representative of CT to explain why this happened, it is
fairly inferable from either the blank on the Service of Process
Transmittal sheet or the signature field on the UPS delivery
notification, coupled with Drako’s declaration, that some mistake
beyond defendant’s control was made in the transmittal process
that prevented defendant’s employees from receiving a copy of
the complaint so they could timely respond to it. On this record,
we cannot say it was unreasonable for the trial court to draw

                                18
the inference that defendant’s default resulted from a mistake
and excusable neglect. (See Pearson, supra, 11 Cal.App.3d at
pp. 618–619.)
                             DISPOSITION
       The order is affirmed. Defendant R Motor Company is
entitled to its costs.

     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                    EGERTON, J.

We concur:

             EDMON, P.J.

             LAVIN, J.

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