Adam T Carralejo vs USA Legal Group Inc et al

Case Number

22CV04588

Case Type

Hearing Date / Time

Wed, 11/22/2023 - 10:00

Nature of Proceedings

Motion: Set Aside Judgment

Tentative Ruling

For Plaintiff Adam T. Carralejo: James C. Huber, Adam M. Bucci, Global Legal Law Firm

For Defendants Richard Alex Wade, Unlimited Solutions Today, LLC, a Florida Corporation, and USA Legal Group, Inc. a Florida Corporation: John R. Rydell II, Griffith & Thornburgh, LLP

For Defendant The Suder Company, LLC: No appearance

 

                       

RULING

For the reasons set forth herein:

1. As Plaintiff’s opposition to the motion was filed 14 calendar days late, the hearing on this matter is continued to December 27, 2023, at 10:00 a.m.
2. Defendants’ reply brief shall be filed and served no later than December 13, 2023.
3. Plaintiff shall give notice to all parties of this ruling and file a proof of service of same.

Background

This action was commenced on November 18, 2022, by the filing of the complaint by Plaintiff Adam T. Carralejo against Defendants Richard Alex Wade, Unlimited Solutions Today, LLC, USA Legal Group, Inc., The Suder Company, LLC, and Brian David Suder asserting causes of action for (1) breach of contract, (2) breach of the covenant of good faith and fair dealing, (3) unfair, unlawful and/or fraudulent business practices in violation of Business and Professions Code section 17200, et seq., and (4) fraud. Brian David Suder was dismissed, in his individual capacity, on February 15, 2023.

As alleged in the complaint:

“Defendants are engaged in the debt negotiation business. As part of this business Defendants provide services for others engaged in the debt negotiation business and solicited this business by claiming they would provide marketing, ad placement, consultation, customer application processing, administrative services, and customer service, consistent with established practice.” (Complaint, ¶ 16.) “Defendants approached Plaintiff to engage in Defendants’ business activities together, which included activities related to the processing of credit card payments and related activities.” (Complaint, ¶ 17.) “In connection with the services, Plaintiff and Defendants established accounts with payment processors . . . which processed credit card transactions for customers of Defendants’ businesses.” (Complaint, ¶ 18.)

“Thereafter, Defendants failed in their duties related to customer application processing, administrative services, and customer service. Specifically, Defendants failed to ensure that credit card payments were processed appropriately, which resulted in “chargebacks” – where customers dispute charges processed on their credit cards and seek returns. These chargebacks would occur up to several weeks after the payments were processed, but in the interim Defendants would draw down all amounts paid to them on the accounts established with the Processors. As a result, Plaintiff was left owing all of the chargeback amounts and associated fees to the Processors, while Defendants retained the majority of the funds associated with the disputed transactions.” (Complaint, ¶ 19.)

On October 4, 2022, the parties entered into an indemnification agreement. (Complaint, ¶ 20 & Exh. 1.) “Defendants, and each of them, has failed to indemnify and hold Plaintiff harmless for

financial obligations arising from the chargebacks and other obligations encompassed within the

Agreement.” (Complaint, ¶ 23.) As of the filing of the complaint, “the Processors are demanding approximately $400,000 from Plaintiff related to chargebacks, and associated fees and penalties, which amounts are owed by Defendants pursuant to the Agreement.” (Complaint, ¶ 24.)

“Plaintiff has performed all its obligations under the Agreement, with the exception of

any such obligations that have been excused.” (Complaint, ¶ 27.) “Defendants breached the Agreement by failing to indemnify and hold Plaintiff harmless for amounts related to chargebacks, and associated fees and penalties, demanded and/or levied by the Processors.” (Complaint, ¶ 28.)

As relevant to the present motion, Wade, Unlimited Solutions Today, and USA Legal Group, Inc. were served by substituted service on November 30, 2022, at 2578 Enterprise Road #191, Orange City, Florida by leaving the summons, complaint, civil case cover sheet, and civil case cover sheet addendum with UPS store owner Dharmesh Amin. Thereafter, on the same date, the documents were served by mail to the same address.

No answer having been filed by Wade, Unlimited Solutions Today, or USA Legal Group, Inc., their defaults were taken on January 23, 2023.

On April 24, 2023, an amended default judgment was entered in favor of Plaintiff and against Wade, Unlimited Solutions Today, USA Legal Group, Inc., and The Suder Company in the total amount of $1,380,708.00.

On October 20, 2023, Wade, Unlimited Solutions Today, and USA Legal Group, Inc. filed the current motion to set aside the judgment pursuant to Code of Civil Procedure section 473 on the grounds that the default resulted from the Defendants’ inadvertence, mistake, surprise, or excusable neglect.

Plaintiff late-filed his opposition on November 16, 2023.

Analysis

Plaintiff filed his opposition to the motion on November 16, 2023. He claims that the opposition is one day late and requests that the Court consider the opposition. Plaintiff’s calculation is incorrect. “All papers opposing a motion so noticed shall be filed with the Court and a copy served on each party at least nine Court days, and all reply papers at least five Court days before the hearing.” (Code Civ. Proc., § 1005, subd.(b), italics added.)

As November 10, 2023 was a Court holiday, nine Court days prior to the hearing is November 8, 2023. The opposition is not one day late. It is 14 calendar days late.

Other than to say the late filing was due to “inadvertence,” Plaintiff gives no other explanation, either in the body of the opposition or in the declaration of Plaintiff’s counsel, as to why the opposition is so late. Further, Plaintiff did not seek leave of Court to file the opposition late.

“No paper may be rejected for filing on the ground that it was untimely submitted for filing. If the Court, in its discretion, refuses to consider a late filed paper, the minutes or order must so indicate.” (Cal. Rules of Court, rule 3.1300(d).)

Although the Court has discretion on whether to consider the late-filed opposition, it will not make that determination at this time. Because the opposition was filed 14 calendar days late, the hearing on this matter will be continued to December 13, 2023, in order that Defendants have enough time to file a proper reply to the opposition.

As Plaintiff’s late filing of the opposition is the reason that the hearing on this matter is being continued, Plaintiff will be ordered to provide notice of this ruling on all parties.