James Head vs Tyler Head

Case Number

25CV01987

Case Type

Hearing Date / Time

Mon, 07/28/2025 - 10:00

Nature of Proceedings

Default Prove Up; Motion: Set Aside Entry of Default

Tentative Ruling

James Head v. Tyler Head                                 

Case No. 25CV01987

           

Hearing Date: July 28, 2025                                                   

HEARING:              Motion of Defendant Tyler Head to Set Aside Entry of Default

ATTORNEYS:        For Plaintiff James Head: John R. Rydell, II, Griffith & Thornburgh, LLP

                                    For Defendant Tyler Head: Bernie Kornberg, Jackson J. Tann, Miller Nash LLP   

TENTATIVE RULING: Defendant Tyler Head’s motion to set aside entry of default is granted. Tyler Head shall separately file and serve his answer to plaintiff’s complaint no later than August 1, 2025.

Background:

This action commenced on April 2, 2025, by the filing of the complaint by plaintiff James Head against defendant Tyler Head for breach of contract, and breach of covenant of good faith and fair dealing.

As alleged in the complaint:

On April 1, 2015, plaintiff and defendant entered into a joint venture agreement to buy and sell real estate for profit. (Compl., ¶ 8.) Plaintiff contributed $480,000.00 to the venture and defendant was responsible for locating and acquiring all the property, do the necessary tasks to improve each of the properties, and then sell the properties. (Ibid.) Plaintiff and defendant were each to be the beneficial owner of an undivided one-half interest in all of the joint venture’s assets and any profits were to be split equally between them. (Ibid.)

Without plaintiff’s prior approval, defendant invested $50,000.00 of the joint venture’s funds in an unsuitable non-real estate asset known as Newsbeat Social, and all of those funds were lost. (Compl., ¶ 10(a).) Defendant structured the transaction so that the tax loss associated with the investment was solely allocated to defendant. (Ibid.)

Defendant secretly brought a third party into the joint venture’s investment in Willow Creek, thereby allegedly reducing plaintiff’s interest in Willow Creek from one-half to one-third. (Compl., ¶ 10(b).) When Willow Creek was sold for a profit, defendant distributed $360,416.49 to the previously undisclosed third party, and also distributed at least $2,500.00 to defendant’s entity Turning Point Realty Group and $260,990.18 to defendant’s entity Strategic Investments, LLC. (Ibid.) Defendant caused the joint venture to make no distributions to plaintiff. (Ibid.)

With respect to the “Madrone Ridge project,” defendant claims that he secretly brought in an additional investor who allegedly owns a fifty percent interest in the project. (Compl., ¶ 10(c).) Defendant has engaged in self-dealing and has managed the project for his personal benefit instead of for the benefit of the joint venture. (Ibid.)

Plaintiff served defendant, through defendant’s attorney, by way of a Notice of Acknowledgment of Receipt, which was signed and returned to plaintiff’s counsel on April 28, 2025. (Kornberg Decl., ¶¶ 4, 5 & Exh. A.)

One day after the defendant’s answer was due, May 29, 2025, plaintiff filed a request for entry of default, which was entered as requested.

On June 6, 2025, defendant filed the present motion to set aside entry of default.

Plaintiff filed an “opposition” to the motion but does not appear to oppose the setting aside of the default. Rather, plaintiff asks the court to set aside the default conditioned upon payment by defendant to plaintiff the sum of $100,000.00 in sanctions and payment by defendant to plaintiff’s counsel the sum of $5,000.00 for attorney’s fees and costs.

Analysis:

“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. Application for this 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, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. . . . Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect. . . .” (Code Civ. Proc., § 473, subd. (b).)

The trial court has broad discretion to vacate the judgment and/or the clerk’s entry of default that preceded it.  However, “this discretion may be exercised only after the party seeking relief has shown that there is a proper ground for relief, and that the party has raised that ground in a procedurally proper manner, within any applicable time limits.” (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488,

495.)

“Where there is no showing the party opposing the motion to vacate the judgment “ ‘has suffered any prejudice or that injustice will result from the trial of the case upon its merits, very slight evidence will be required to justify a court in setting aside the default.” ’ [Citation.]” (Buckert v. Briggs (1971) 15 Cal.App.3d 296, 302-303.)

Defendant’s counsel declares, among other things, that due to his error the draft answer and cross-complaint were not sent to defendant for review until the day that the responsive pleadings were due and that he intended to alert plaintiff’s counsel that he was behind on filing the answer and intended to request a one-day extension to file the documents. (Kornberg Decl., ¶¶ 9, 10.) The answer and cross-complaint were completed and submitted for filing on May 29, 2025, but the filing was rejected because the default had been entered approximately 15 minutes prior. (Id. at ¶¶ 12, 13.)

Defense counsel requested that plaintiff’s counsel stipulate to set aside the default, but plaintiff’s counsel refused. (Kornberg Decl., ¶ 14.)

Plaintiff’s opposition does not dispute any of this. Rather, plaintiff argues irrelevant issues (with respect to the motion before the court) regarding defendant’s failure to abide by a 2024 mediation agreement. The court finds plaintiff’s refusal to stipulate to the setting aside of the default unjustified and unreasonable.

Further, plaintiff’s request that the set aside be conditioned upon the payment of $100,000.00 in sanctions is not only an unreasonable request, but the court is also precluded from doing so. Code of Civil Procedure section 473, subdivision (c)(2) provides that “where the court grants relief from a default or default judgment pursuant to this section based upon the affidavit of the defaulting party’s attorney attesting to the attorney’s mistake, inadvertence, surprise, or neglect, the relief shall not be made conditional upon the attorney’s payment of compensatory legal fees or costs or monetary penalties imposed by the court or upon compliance with other sanctions ordered by the court.”

While the court could grant reasonable compensatory legal fees and costs related to the motion to set aside the default, plaintiff’s request for $5,000.00 is unsupported by any information that would allow the court to do so. It appears to be a random amount. There is no declaration regarding the time spent, plaintiff’s counsel’s hourly rate, or anything else. The court has no basis to determine reasonable legal fees, and, because of that, the request will be denied. Even if plaintiff had provided a declaration showing that he incurred legal fees and costs related to the default, none of those legal fees or costs would be reasonable. “[I]t is now well-acknowledged that an attorney has an ethical obligation to warn opposing counsel that the attorney is about to take an adversary's default. [Citation.]” (Lasalle v. Vogel (2019) 36 Cal.App.5th 127, 135.) It is not disputed that plaintiff took defendant’s default one day after the responsive pleading was due without warning defense counsel that he intended to do so. Further, rather than force defendant to file the present motion, plaintiff should have stipulated to the setting aside of the default. Reasonable attorney’s fees would be $0.

The motion will be granted. Although defendant has provided copies of his proposed answer and cross-complaint in conjunction with the present motion, he will be ordered to separately file and serve the documents.