Global Assets Liens & Foreclosures, LLC v. Alpha Core, Inc.

Case Number

24CV02783

Case Type

Hearing Date / Time

Mon, 07/21/2025 - 10:00

Nature of Proceedings

Defendant Alpha Core, Inc.’s Motion to Set Aside Entry of Default

Tentative Ruling

Global Assets Liens & Foreclosures, LLC v. Alpha Core, Inc.

Case No. 24CV02783  

           

Hearing Date:  July 21, 2025                                                  

HEARING:              Defendant Alpha Core, Inc.’s Motion to Set Aside Entry of Default

                                   

ATTORNEYS:        For Plaintiff Global Assets Liens & Foreclosures, LLC:  Michael S. Warda, Michael S. Warda, A Professional Law Corporation

                             For Defendant Alpha Core, Inc.: Sydney Jay Hall, Law Office of Sydney Jay Hall  

TENTATIVE RULING: 

The motion of defendant Alpha Core, Inc. to set aside the entry of default is continued to August 4, 2025, in order to allow defendant to submit a proposed responsive pleading as required pursuant to Code of Civil Procedure, section 473, subdivision (b).   

Background:

In its complaint filed on May 20, 2024, plaintiff Global Assets Liens & Foreclosures, Inc. alleges that it “is the assignee and owner of certain accounts receivable acquired through the East West Bank v. Herbl, Inc., receivership proceedings in the County of Santa Barbara, Case No. 23CV02629.” (Complaint, ¶ 6.) Plaintiff “seeks damages in the amount of at least $63,349.42, representing unpaid invoices for the sale and delivery of various cannabis products that became due from defendant[] [Alpha Core, Inc.] within the past 18 months . . . .” (Id., ¶ 7.)

Plaintiff asserts causes of action for breach of written contract, account stated, open account, and good sold and delivered.

Plaintiff filed a request for entry of default on January 28, 2025, and the clerk entered defendant’s default that day.

Defendant now moves to set aside the default, claiming that counsel for the parties had previously engaged in settlement discussions with the understanding that, in the event the parties were not successful reaching a settlement, plaintiff’s counsel would file an amended complaint to which defendant would file a responsive pleading. (Motion, p. 2; Exh. C to Motion.) According to defendant, on September 6, 2024, plaintiff’s indicated that he would no longer be representing plaintiff and provided defense counsel with the contact information for plaintiff’s new counsel.  (Motion, pp. 2-3.) Defendant further claims that its counsel immediately contacted plaintiff’s new counsel and the latter suggested that they meet to discuss settlement. (Motion, p. 3.) Defendant states that thereafter, from September 2024 until the present, plaintiff’s counsel has not contacted defendant’s counsel and did not provide any notice of the intent to file a request for entry of default. (Ibid.)

Plaintiff has not filed an opposition to the motion.

Analysis:

The court is empowered to relieve a party “upon any terms as may be just … from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” (Code Civ. Proc.,

§ 473, subd. (b).)  The reference to “judgment … order or other proceedings” allows relief both from default judgments and from the entry of default that preceded it. It also includes any step taken in a case, whether by the court or by one of the parties.  “Anything done from the commencement to the termination is a proceeding.” (Zellerino v. Brown (1991) 235 Cal.App.3d 1097, 1105.)

Relief under section 473, subdivision (b) may be based either on an “attorney affidavit of fault,” in which case relief is mandatory, or declarations or other evidence demonstrating “mistake, inadvertence, surprise or excusable neglect,” in which event relief is discretionary. (Code Civ. Proc., § 473, subd. (b).) Section 473, subdivision (b) therefore consists of two distinct parts: “a discretionary provision, which applies permissively, and a mandatory provision, which applies as of right.” (Minick v. City of Petaluma (2016) 3 Cal.App.5th 15, 25-26.) In either event, the proposed answer or other pleading must accompany the relief from default. (Code Civ. Proc., § 473, subd. (b).)

The Court finds that defendant is entitled to relief pursuant to either the mandatory, or discretionary provisions of section 473, subdivision (b). Defendant’s request for relief is accompanied by its counsel’s declaration wherein he states, in relevant part:

“I was retained by Defendant Alpha Core, Inc. in August 2024 and contacted counsel for Plaintiff Global Assets Liens & Foreclosures, LLC thereafter and informed him I was in the process of filing a demurrer to the complaint. Counsel for Plaintiff Global Assets Liens & Foreclosures, LLC responded I should file a Declaration of Demurring or Moving Party which I did. Attached as Exhibit B is a true and correct copy of the Declaration filed on July 22, 2024.

“Thereafter counsel for Plaintiff Global Assets Liens & Foreclosures, LLC and I

began negotiations to settle the case. Counsel also agreed to file an amended complaint in the event we were unable to settle the case, rather than have me file a demurrer.  

“The last communication I had with counsel for Plaintiff Global Assets Liens &

Foreclosures, LLC, was on October 8, 2024, when I responded to his email that I was available to discuss a possible settlement.

“Last week Alpha Core, Inc. contacted me and said they had been served with default paperwork.” (Decl. of Sydney Hall, ¶¶ 3-6.)

It therefore appears that defendant’s failure to file a response pleading was solely attributable to counsel and not to defendant itself. Relief is warranted on this basis.

Further, based upon defense counsel’s representations in the moving papers, the Court also finds that defendant’s failure to file a responsive pleading was based upon mistake, excusable neglect, or both.

However, the Court does not see that defendant submitted a proposed responsive pleading in connection with its application for relief. (Code Civ. Proc., § 473, subd. (b) [application “for . . . relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted”].)

Accordingly, the Court orders that defendant’s motion to set aside the entry of default be continued in order to allow defendant to submit a proposed responsive pleading as required pursuant to Code of Civil Procedure, section 473, subdivision (b).