Preview
1 Ryan van Steenis (SBN 254542)
1601 S Shepherd Dr., #276
2 Houston, Texas 77019
314-749-2284
3 rjvansteenis@gmail.com
4
Attorney for Defendants Dave Bragg, and
5 Silicon Valley Real Ventures, LLC
6
SUPERIOR COURT OF THE STATE OF CALIFORNIA
7
FOR THE COUNTY OF SAN MATEO
8
9
Robert Arntsen; Mary Lee; Arntsen Family ) Case No.: 22-CIV-01148
10 Partnership, LP; and Brian Christopher Dunn )
Custodianship, ) NOTICE OF MOTION AND MOTION TO
11 ) SET ASIDE DEFAULT AGAINST
Plaintiffs, ) DEFENDANTS DAVID BRAGG AND
) SILICON VALLEY REAL VENTURES
12 LLC
vs. )
13 )
David M. Bragg; Kurtis Stuart Kludt; Silicon ) [Filed concurrently with Memorandum of Points
& Authorities and Declaration of Ryan van
14 Valley Real Ventures LLC; SVRV 385 Moore, ) Steenis (with Exhibits)]
LLC; SVRV 387 Moore, LLC; Gregory J. Davis; )
15 Kevin Wolfe; Jason Justesen; Paramont ) Judge: Hon. Robert D. Foiles
Woodside, LLC; and Paramont Capital, LLC; ) Date: June 2, 2023
16 ) Time: 9:00 a.m.
) Dept: 21
17 ) Courtroom: 2J
Defendants. ) Action Filed: March 15, 2022
18 ) Trial Date: Unassigned
)
19 )
)
20
21 TO THE COURT, PLAINTIFFS, AND THEIR ATTORNEYS OF RECORD
22 NOTICE IS HEREBY PROVIDED that on June 2, 2023, at 9:00 a.m. or as soon thereafter
23 as the matter may be heard in Department 21 of the above-entitled court, located at 400 County
24 Center, Redwood City, California 94063, Defendants David Bragg and Silicon Valley Real
25 Ventures LLC (collectively “Defendants”), hereby move this Court for an order setting aside the
26 clerk’s entry of default judgment against Defendants Bragg and Silicon Valley Real Ventures LLC
27 pursuant to California Code of Civil Procedure §473. Such motion is made on the ground that the
28
-1-
Bragg and SVRV’s Notice of Motion and Motion to Set Aside Default
1 default was entered without conference and was also taken against defendants through mistake,
2 inadvertence, surprise, or excusable neglect.
3 This motion is based on this notice of motion, the memorandum of points and authorities,
4 and the declaration of Ryan van Steenis filed concurrently herewith, and the pleadings and records
5 contained in the file, and any other evidence presented to the court at the time of the hearing.
6 DATED: March 23, 2023
7 Ryan van Steenis
Attorney for Defendant Bragg and
8 Silicon Valley Real Ventures, LLC
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-2-
Bragg and SVRV’s Notice of Motion and Motion to Set Aside Default
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION/FACTUAL BACKGROUND
3 Plaintiffs filed a first amended complaint on August 22, 2022. Defendants Bragg and SVRV
4 paid their first appearance fees on September 8, 2022, in connection with opposing Plaintiffs’ defeated
5 motions to compel filed before compliance with Local Rule 3.700. Declaration of Ryan van Steenis,
6 ¶ 2 (“RVS Decl.”).
7 The parties stipulated to an extension of time to respond until October 21, 2022, in light of
8 Plaintiffs’ stated intention to file a Second Amended Complaint. Id. at ¶ 3.
9 On October 21, 2022, defendant Bragg filed for bankruptcy in the United States District Court,
10 Eastern District, Sacramento Division, which created an automatic stay in the state court action and
11 obviated the need for a response. Id. at ¶ 4.
12 On January 3, 2023, Plaintiffs and SVRV stipulated that the automatic stay also applied to
13 SVRV because of Plaintiffs’ alter ego allegations in their operative pleadings. Id. at ¶ 5.
14 On January 31, 2023, Bragg filed an answer to Plaintiffs adversarial proceeding complaint
15 they filed in the bankruptcy court on December 22, 2022. Id. at ¶6.
16 On February 24, 2023, the Hon. Christopher Jamie lifted the automatic stay in this matter sua
17 sponte and ordered Defendants appearance as part of the bankruptcy court’s order to determination
18 whether (1) a debt between Plaintiffs and Defendants existed, and (2) if such a debt existed whether
19 it was dischargeable or not. See, Id., Exhibit 1, at p. 3 (“The court will also exercise its discretion to
20 bifurcate the process of determining the dischargeability of the debt at issue. See Fed. R. Civ. P. 42(b);
21 Fed. R. Bankr. P. 7042. Making a determination regarding the dischargeability of a debt involves a
22 two-step process: first, the establishment of the debt itself; and second, a determination as to the
23 nature-dischargeable or nondischargeable-of the debt. Banks v. Gill Distrib. Ctrs., Inc. (In re Banks),
24 263 F.3d 862, 868 (9th Cir. 2001). Inasmuch as the debt at issue here has not been established or
25
26
27
28
-1-
Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default
1 liquidated, the court sees no reason why the State Court should not perform the first step after which
2 this court will undertake the second step”).1 Id. at ¶ 7; Exhibit 1, p. 3.
3 On February 28, 2023, Plaintiffs filed a request for entry of default against Bragg and SVRV
4 for failing to respond to their August 22, 2022, first amended complaint, which the court entered the
5 same day. Plaintiffs filed the request for entry of default without conference with defendants’ counsel.
6 Plaintiffs’ request for entry of default did not disclose to the clerk that the automatic stay obviating
7 the need for an answer or response to their August 22, 2022, first amended complaint had been lifted
8 only three days prior. Id. at ¶ 8; Exhibit 2.
9 On March 9, 2023, defendants filed an opposition to Plaintiffs’ request and included a
10 proposed order for a request for an extension of time to respond until March 24, 2023, i.e., thirty days
11 after the bankruptcy court’s entry of its order lifting the automatic stay. Initially, the proposed order
12 was rejected because Defendants did not include the $20.00 processing fee. The instructions given to
13 Defendants were to resubmit it so it could be forwarded to the judge for approval. Id. at ¶ 9; Exhibit
14 3.
15 On or around March 16, 2023, an entry on the Court’s docket states: “RETURNED
16 UNSIGNED; GRANTING DEFENDANTS DAVID BRAGG AND SILICON VALLEY REAL
17 VENTURES REQUEST FOR AN EXTENSION OF TIME TO RESPOND OR ANSWER.” Id. at ¶
18 10; Exhibit 4 is a true and correct screenshot copy of the Court’s March 9, 2023, docket entry.
19 Defendants’ counsel genuinely, but mistakenly, interpreted this docket entry to mean an
20 extension of time had been granted to Defendants and proceeded forward to meet and confer with
21 Plaintiffs’ counsel to begin responding to Plaintiffs’ operative pleadings from March 16 to March 22,
22 2023. Id. at ¶ 11. Relying on Defendants’ counsel mistaken belief, Defendants counsel proposed a
23 motion to strike certain allegations against Plaintiffs first amended complaint. Id. at ¶ 11; see also,
24 Exhibit 5.
25
26
27 1
It is worth noting that Judge Jamie also denied Plaintiffs’ request for entry of default judgment in that forum. The
28 parties had agreed to provide Bragg additional time to respond, but Plaintiffs sought default ahead of the agreed upon
time to respond on the grounds that the agreement between the parties was not filed with the bankruptcy court.
-2-
Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default
1 On March 21, 2023, Plaintiffs file a request for entry of default judgment against Bragg and
2 SVRV. Again, believing the Court had allowed Defendants until March 24, 2023, to answer or
3 otherwise respond to Plaintiffs’ first amended complaint, I replied to Plaintiffs’ counsel the same day
4 (in a service email containing Defendants’ March 21, 2023, CMS) stating: “Robert & Collin, I will
5 respond separately to Plaintiffs just filed Motion for Default Judgment (inexplicably filed despite the
6 Court’s grant of Bragg and SVRV’s request for an extension of time to answer [or] respon[d],
7 including whether sanctions are warranted against Plaintiffs for having to respond to it.” Id. at ¶ 12;
8 Exhibit 6.
9 At the conclusion of the motion to strike meet and confer process on March 22, 2023,
10 Defendants filed a Notice of Motion and Motion to Strike, Memorandum of Points and Authorities,
11 a Meet and Confer Declaration, and a Request for Judicial Notice with a single exhibit. Defendants’
12 Memorandum of Points and Authority in support of the Motion to Strike was accepted by the Court.
13 However, on March 23, 2023, at 1:54 p.m., CT, I became aware that Defendants’ other filings in
14 response to Plaintiffs’ pleadings were rejected because, according to the return comment: “THE
15 DEFENDANTS LISTED ARE CURRENTLY DEFAULTED. THEREFORE, CLERK CANNOT
16 ACCEPT UNTIL DEFAULT IS SET ASIDE.”2 Id. at ¶ 13; Exhibit 7 and Exhibit 8.
17 Defendants’ counsel attempted to confer with Plaintiffs’ counsel to inquire whether they
18 would set the default aside in an effort to avoid law and motion work, but did not hear back by the
19 time of this filing. Id. at ¶ 14; Exhibit 9.
20 A true and correct copy of Defendants proposed response to Plaintiffs’ pleadings is attached
21 to the RVS Decl. as Exhibit 10, i.e., Defendants’ Notice of Motion and Motion to Strike, Meet and
22 Confer Declaration of Ryan van Steenis, and Request for Judicial Notice (with one Exhibit). Id. at ¶
23 15
24
25
26
27 2
The purported default was not sufficient to prevent acceptance of Defendants’ March 21, 2023, case management
28 statement by the Court. Attached hereto as Exhibit 11 is a true and correct file copy of Defendants’ March 21, 2023,
CMS.
-3-
Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default
1 II. AUTHORITY AND ARGUMENT
2 California Code of Civil Procedure, § 473(b) provides the Court with discretionary and
3 mandatory authority to relieve a party from default. With respect to the court’s discretionary authority,
4 the statute provides that:
5 “[t]he 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
6 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
7 therein, otherwise the application shall not be granted, and shall be made within a reasonable
8 time, in no case exceeding six months, after the judgment, dismissal, order or proceeding was
taken.”
9
10 With respect to the court’s mandatory authority to set aside Plaintiffs’ default, the statute provides:
11
“…the court shall, whenever an application for relief is made no more than six months after
12 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
13 default entered by the clerk against his or her client, and which will result in entry of a default
judgment … .”
14
15 In addition, California jurisprudence requires a conference with opposing counsel for
16 impending defaults. “The obligation to advise opposing counsel of an impending default is part of an
17 attorney’s responsibility to the court and the legal profession and takes precedence over the obligation
18 to represent the client effectively.” [T]he ethical obligation is rooted in decades of case authority,
19 and is reinforced by a statutory obligation arising under Code of Civil Procedure section 583.130”
20 LaSalle v. Vogel (2019) 36 Cal.App.5th 134, 137. Code of Civil Procedure section 583.130 states
21 that “it is the policy of the state that a plaintiff shall proceed with reasonable diligence in the
22 prosecution of an action but that all parties shall cooperate in bringing the action to trial or other
23 disposition. Except as otherwise provided by statute or by rule of court adopted pursuant to this
24 statute, … the policy favoring trial or other disposition of an action on the merits are generally
25 to be preferred over the policy that requires dismissal for failure to proceed with reasonable diligence
26 in the prosecution of an action …” (emphasis added).
27
28
-4-
Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default
1 A. Defendants Mistakenly Believed an Extension of Time was Granted
2 Here the Court can provide relief under its discretionary authority. After the bankruptcy
3 court lifted the automatic stay sua sponte, which came as a surprise to the parties, Defendants
4 genuinely believed an extension of time to respond had been granted. RVS Decl. ¶ 10, 11, and 12;
5 Exhibits 3, 4, 5, and 6. As a result, Defendants set about to prepare its response to the operative
6 pleadings, i.e., its motion to strike. Id. at ¶ 13; Exhibit 7, and 10.
7 B. Counsel Mistakenly Believed an Extension of Time was Granted
8 The Court must provide relief from Plaintiffs’ entry of default as relief is sought well within
9 the time limits required by statute and Defendants’ counsel has sworn to his mistaken belief that the
10 Court granted an extension of time. RVS Decl., ¶ 9 – 13. As a result of that genuine, but mistaken
11 belief, the parties continued to meet and confer from March 9 to March 22, 2022, regarding
12 Defendants’ motion to strike, and again met and conferred by telephone on March 22 regarding
13 Defendants’ contemplated demurrer. Id. at ¶ 11; Exhibit 5. It was not until receipt of Defendants’
14 rejected filings on March 23, 2022, at 1:54 p.m., CT, that counsel learned for the first time that
15 Bragg and SVRV were “listed [as] currently defaulted” that would prevent filings. Id. at ¶ 13;
16 Exhibit 8. Defendants’ counsel was under the good faith belief that defendants had until March 24,
17 2023, to file responses to Plaintiffs’ operative pleadings. Id. at ¶ 9 – 13. And given the acceptance
18 of Defendants’ other filings (i.e., Defendants’ Memorandum of Points and Authorities, and March
19 21, 2023, Case Management Statement) made at or around the same time the motion to strike
20 papers were rejected, counsel is still unclear whether the rejection reason for the motion to strike
21 papers is accurate. Id. at ¶ 13; Exhibit 7; Id. at ¶ 13, fn. 1 and Exhibit 11.
22 C. Plaintiffs Failed to Confer with Opposing Counsel to Advise of any Impending
Default, Precipitating the Need for Motion Work to Set it Aside
23
Plaintiffs failed to confer with Defendants’ counsel to advise them of any impending default.
24
Id. at ¶ 2; Exhibit 2. On these grounds alone the Court can exercise its inherent authority to set
25
aside the default. Plaintiffs request for entry of default makes it appear like Defendants had failed to
26
answer a complaint from August 22, 2022, but it makes no mention that an automatic stay had been
27
in place until Friday, February 24, 2023. Defendants’ obligation to respond had only become due
28
-5-
Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default
1 one business day prior to Plaintiffs’ request for entry of default (i.e., February 27, 2023).
2 Consequently, Plaintiffs’ counsel’s failure to confer with Defendants’ counsel regarding their
3 intention to seek a default nearly immediately after the lifting of the automatic stay secured the
4 entry of default for his clients but at the expense of “an attorney’s responsibility to the court and the
5 legal profession and takes precedence over the obligation to represent the client effectively. [T]he
6 ethical obligation is rooted in decades of case authority, and is reinforced by a statutory obligation
7 arising under Code of Civil Procedure section 583.130” LaSalle, supra, at 137. Failure to confer
8 also violates Code of Civil Procedure section 583.130 because it is, by definition, not cooperating as
9 the statute instructs. Plaintiffs seek to bypass the policy of this state by determining this matter on a
10 basis other than its merits.
11 III. CONCLUSION
12 For the reasons set forth in these papers, and good cause shown, Defendants request this
13 Court GRANT it the relief sought, and set aside Plaintiffs’ February 28, 2023, entry of default and
14 allow them to answer or otherwise respond to Plaintiffs’ operative pleadings.
15 DATED: March 23, 2023
16 Ryan van Steenis
Attorney for Defendant Bragg and
17 Silicon Valley Real Ventures, LLC
18
19
20
21
22
23
24
25
26
27
28
-6-
Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default
PROOF OF SERVICE
1
I am over the age of 18 and not a party to this action. I hereby certify that on March 23,
2
2023, I served the following document(s) on the parties in the above-entitled action:
3
DEFENDANT DAVID BRAGG AND SILICON VALLEY REAL VENTURES LLC’S
4
NOTICE OF MOTION, MOTION, AND MEMORANDUM OF POINTS AND
5
AUTHORITIES TO SET ASIDE PLAINTIFFS’ ENTRY OF DEFAULT
6
Via Email: I emailed the document(s) referenced above to the following persons at the following
7
email addresses:
8 Robert Dunn
rdunn@eimerstahl.com
9
Collin Vierra
10 cvierra@eimerstahl.com
Counsel for Plaintiffs
11
Jessica Chong
12 jchong@spencerfane.com
13 Brian Zimmerman
bzimmerman@spencerfane.com
14 Nicolas Reisch
nreisch@spencerfane.com
15 Ernesto Aldover
ernesto@arealestatelawfirm.com
16 Counsel for Defendants Gregory J. Davis, Kevin Wolfe, Jason Justesen, Paramont
17 Woodside, LLC, Paramont Capital, LLC, SVRV 385 Moore, LLC, and SVRV 387 Moore,
LLC
18
I declare under penalty of perjury under the laws of the State of California that the foregoing is a
19
true and correct statement.
20
Dated: March 23, 2023
21
Ryan van Steenis
22 Attorney for Defendant Bragg and
Silicon Valley Real Ventures, LLC
23
24
25
26
27
28
-1-
Proof of Service to Bragg and SVRV’s Memorandum of Points and Authorities in Support Motion to Set Aside Default
Preview
1 Ryan van Steenis (SBN 254542) 1601 S Shepherd Dr., #276 2 Houston, Texas 77019 314-749-2284 3 rjvansteenis@gmail.com 4 Attorney for Defendants Dave Bragg, and 5 Silicon Valley Real Ventures, LLC 6 SUPERIOR COURT OF THE STATE OF CALIFORNIA 7 FOR THE COUNTY OF SAN MATEO 8 9 Robert Arntsen; Mary Lee; Arntsen Family ) Case No.: 22-CIV-01148 10 Partnership, LP; and Brian Christopher Dunn ) Custodianship, ) NOTICE OF MOTION AND MOTION TO 11 ) SET ASIDE DEFAULT AGAINST Plaintiffs, ) DEFENDANTS DAVID BRAGG AND ) SILICON VALLEY REAL VENTURES 12 LLC vs. ) 13 ) David M. Bragg; Kurtis Stuart Kludt; Silicon ) [Filed concurrently with Memorandum of Points & Authorities and Declaration of Ryan van 14 Valley Real Ventures LLC; SVRV 385 Moore, ) Steenis (with Exhibits)] LLC; SVRV 387 Moore, LLC; Gregory J. Davis; ) 15 Kevin Wolfe; Jason Justesen; Paramont ) Judge: Hon. Robert D. Foiles Woodside, LLC; and Paramont Capital, LLC; ) Date: June 2, 2023 16 ) Time: 9:00 a.m. ) Dept: 21 17 ) Courtroom: 2J Defendants. ) Action Filed: March 15, 2022 18 ) Trial Date: Unassigned ) 19 ) ) 20 21 TO THE COURT, PLAINTIFFS, AND THEIR ATTORNEYS OF RECORD 22 NOTICE IS HEREBY PROVIDED that on June 2, 2023, at 9:00 a.m. or as soon thereafter 23 as the matter may be heard in Department 21 of the above-entitled court, located at 400 County 24 Center, Redwood City, California 94063, Defendants David Bragg and Silicon Valley Real 25 Ventures LLC (collectively “Defendants”), hereby move this Court for an order setting aside the 26 clerk’s entry of default judgment against Defendants Bragg and Silicon Valley Real Ventures LLC 27 pursuant to California Code of Civil Procedure §473. Such motion is made on the ground that the 28 -1- Bragg and SVRV’s Notice of Motion and Motion to Set Aside Default 1 default was entered without conference and was also taken against defendants through mistake, 2 inadvertence, surprise, or excusable neglect. 3 This motion is based on this notice of motion, the memorandum of points and authorities, 4 and the declaration of Ryan van Steenis filed concurrently herewith, and the pleadings and records 5 contained in the file, and any other evidence presented to the court at the time of the hearing. 6 DATED: March 23, 2023 7 Ryan van Steenis Attorney for Defendant Bragg and 8 Silicon Valley Real Ventures, LLC 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- Bragg and SVRV’s Notice of Motion and Motion to Set Aside Default 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION/FACTUAL BACKGROUND 3 Plaintiffs filed a first amended complaint on August 22, 2022. Defendants Bragg and SVRV 4 paid their first appearance fees on September 8, 2022, in connection with opposing Plaintiffs’ defeated 5 motions to compel filed before compliance with Local Rule 3.700. Declaration of Ryan van Steenis, 6 ¶ 2 (“RVS Decl.”). 7 The parties stipulated to an extension of time to respond until October 21, 2022, in light of 8 Plaintiffs’ stated intention to file a Second Amended Complaint. Id. at ¶ 3. 9 On October 21, 2022, defendant Bragg filed for bankruptcy in the United States District Court, 10 Eastern District, Sacramento Division, which created an automatic stay in the state court action and 11 obviated the need for a response. Id. at ¶ 4. 12 On January 3, 2023, Plaintiffs and SVRV stipulated that the automatic stay also applied to 13 SVRV because of Plaintiffs’ alter ego allegations in their operative pleadings. Id. at ¶ 5. 14 On January 31, 2023, Bragg filed an answer to Plaintiffs adversarial proceeding complaint 15 they filed in the bankruptcy court on December 22, 2022. Id. at ¶6. 16 On February 24, 2023, the Hon. Christopher Jamie lifted the automatic stay in this matter sua 17 sponte and ordered Defendants appearance as part of the bankruptcy court’s order to determination 18 whether (1) a debt between Plaintiffs and Defendants existed, and (2) if such a debt existed whether 19 it was dischargeable or not. See, Id., Exhibit 1, at p. 3 (“The court will also exercise its discretion to 20 bifurcate the process of determining the dischargeability of the debt at issue. See Fed. R. Civ. P. 42(b); 21 Fed. R. Bankr. P. 7042. Making a determination regarding the dischargeability of a debt involves a 22 two-step process: first, the establishment of the debt itself; and second, a determination as to the 23 nature-dischargeable or nondischargeable-of the debt. Banks v. Gill Distrib. Ctrs., Inc. (In re Banks), 24 263 F.3d 862, 868 (9th Cir. 2001). Inasmuch as the debt at issue here has not been established or 25 26 27 28 -1- Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default 1 liquidated, the court sees no reason why the State Court should not perform the first step after which 2 this court will undertake the second step”).1 Id. at ¶ 7; Exhibit 1, p. 3. 3 On February 28, 2023, Plaintiffs filed a request for entry of default against Bragg and SVRV 4 for failing to respond to their August 22, 2022, first amended complaint, which the court entered the 5 same day. Plaintiffs filed the request for entry of default without conference with defendants’ counsel. 6 Plaintiffs’ request for entry of default did not disclose to the clerk that the automatic stay obviating 7 the need for an answer or response to their August 22, 2022, first amended complaint had been lifted 8 only three days prior. Id. at ¶ 8; Exhibit 2. 9 On March 9, 2023, defendants filed an opposition to Plaintiffs’ request and included a 10 proposed order for a request for an extension of time to respond until March 24, 2023, i.e., thirty days 11 after the bankruptcy court’s entry of its order lifting the automatic stay. Initially, the proposed order 12 was rejected because Defendants did not include the $20.00 processing fee. The instructions given to 13 Defendants were to resubmit it so it could be forwarded to the judge for approval. Id. at ¶ 9; Exhibit 14 3. 15 On or around March 16, 2023, an entry on the Court’s docket states: “RETURNED 16 UNSIGNED; GRANTING DEFENDANTS DAVID BRAGG AND SILICON VALLEY REAL 17 VENTURES REQUEST FOR AN EXTENSION OF TIME TO RESPOND OR ANSWER.” Id. at ¶ 18 10; Exhibit 4 is a true and correct screenshot copy of the Court’s March 9, 2023, docket entry. 19 Defendants’ counsel genuinely, but mistakenly, interpreted this docket entry to mean an 20 extension of time had been granted to Defendants and proceeded forward to meet and confer with 21 Plaintiffs’ counsel to begin responding to Plaintiffs’ operative pleadings from March 16 to March 22, 22 2023. Id. at ¶ 11. Relying on Defendants’ counsel mistaken belief, Defendants counsel proposed a 23 motion to strike certain allegations against Plaintiffs first amended complaint. Id. at ¶ 11; see also, 24 Exhibit 5. 25 26 27 1 It is worth noting that Judge Jamie also denied Plaintiffs’ request for entry of default judgment in that forum. The 28 parties had agreed to provide Bragg additional time to respond, but Plaintiffs sought default ahead of the agreed upon time to respond on the grounds that the agreement between the parties was not filed with the bankruptcy court. -2- Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default 1 On March 21, 2023, Plaintiffs file a request for entry of default judgment against Bragg and 2 SVRV. Again, believing the Court had allowed Defendants until March 24, 2023, to answer or 3 otherwise respond to Plaintiffs’ first amended complaint, I replied to Plaintiffs’ counsel the same day 4 (in a service email containing Defendants’ March 21, 2023, CMS) stating: “Robert & Collin, I will 5 respond separately to Plaintiffs just filed Motion for Default Judgment (inexplicably filed despite the 6 Court’s grant of Bragg and SVRV’s request for an extension of time to answer [or] respon[d], 7 including whether sanctions are warranted against Plaintiffs for having to respond to it.” Id. at ¶ 12; 8 Exhibit 6. 9 At the conclusion of the motion to strike meet and confer process on March 22, 2023, 10 Defendants filed a Notice of Motion and Motion to Strike, Memorandum of Points and Authorities, 11 a Meet and Confer Declaration, and a Request for Judicial Notice with a single exhibit. Defendants’ 12 Memorandum of Points and Authority in support of the Motion to Strike was accepted by the Court. 13 However, on March 23, 2023, at 1:54 p.m., CT, I became aware that Defendants’ other filings in 14 response to Plaintiffs’ pleadings were rejected because, according to the return comment: “THE 15 DEFENDANTS LISTED ARE CURRENTLY DEFAULTED. THEREFORE, CLERK CANNOT 16 ACCEPT UNTIL DEFAULT IS SET ASIDE.”2 Id. at ¶ 13; Exhibit 7 and Exhibit 8. 17 Defendants’ counsel attempted to confer with Plaintiffs’ counsel to inquire whether they 18 would set the default aside in an effort to avoid law and motion work, but did not hear back by the 19 time of this filing. Id. at ¶ 14; Exhibit 9. 20 A true and correct copy of Defendants proposed response to Plaintiffs’ pleadings is attached 21 to the RVS Decl. as Exhibit 10, i.e., Defendants’ Notice of Motion and Motion to Strike, Meet and 22 Confer Declaration of Ryan van Steenis, and Request for Judicial Notice (with one Exhibit). Id. at ¶ 23 15 24 25 26 27 2 The purported default was not sufficient to prevent acceptance of Defendants’ March 21, 2023, case management 28 statement by the Court. Attached hereto as Exhibit 11 is a true and correct file copy of Defendants’ March 21, 2023, CMS. -3- Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default 1 II. AUTHORITY AND ARGUMENT 2 California Code of Civil Procedure, § 473(b) provides the Court with discretionary and 3 mandatory authority to relieve a party from default. With respect to the court’s discretionary authority, 4 the statute provides that: 5 “[t]he 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 6 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 7 therein, otherwise the application shall not be granted, and shall be made within a reasonable 8 time, in no case exceeding six months, after the judgment, dismissal, order or proceeding was taken.” 9 10 With respect to the court’s mandatory authority to set aside Plaintiffs’ default, the statute provides: 11 “…the court shall, whenever an application for relief is made no more than six months after 12 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 13 default entered by the clerk against his or her client, and which will result in entry of a default judgment … .” 14 15 In addition, California jurisprudence requires a conference with opposing counsel for 16 impending defaults. “The obligation to advise opposing counsel of an impending default is part of an 17 attorney’s responsibility to the court and the legal profession and takes precedence over the obligation 18 to represent the client effectively.” [T]he ethical obligation is rooted in decades of case authority, 19 and is reinforced by a statutory obligation arising under Code of Civil Procedure section 583.130” 20 LaSalle v. Vogel (2019) 36 Cal.App.5th 134, 137. Code of Civil Procedure section 583.130 states 21 that “it is the policy of the state that a plaintiff shall proceed with reasonable diligence in the 22 prosecution of an action but that all parties shall cooperate in bringing the action to trial or other 23 disposition. Except as otherwise provided by statute or by rule of court adopted pursuant to this 24 statute, … the policy favoring trial or other disposition of an action on the merits are generally 25 to be preferred over the policy that requires dismissal for failure to proceed with reasonable diligence 26 in the prosecution of an action …” (emphasis added). 27 28 -4- Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default 1 A. Defendants Mistakenly Believed an Extension of Time was Granted 2 Here the Court can provide relief under its discretionary authority. After the bankruptcy 3 court lifted the automatic stay sua sponte, which came as a surprise to the parties, Defendants 4 genuinely believed an extension of time to respond had been granted. RVS Decl. ¶ 10, 11, and 12; 5 Exhibits 3, 4, 5, and 6. As a result, Defendants set about to prepare its response to the operative 6 pleadings, i.e., its motion to strike. Id. at ¶ 13; Exhibit 7, and 10. 7 B. Counsel Mistakenly Believed an Extension of Time was Granted 8 The Court must provide relief from Plaintiffs’ entry of default as relief is sought well within 9 the time limits required by statute and Defendants’ counsel has sworn to his mistaken belief that the 10 Court granted an extension of time. RVS Decl., ¶ 9 – 13. As a result of that genuine, but mistaken 11 belief, the parties continued to meet and confer from March 9 to March 22, 2022, regarding 12 Defendants’ motion to strike, and again met and conferred by telephone on March 22 regarding 13 Defendants’ contemplated demurrer. Id. at ¶ 11; Exhibit 5. It was not until receipt of Defendants’ 14 rejected filings on March 23, 2022, at 1:54 p.m., CT, that counsel learned for the first time that 15 Bragg and SVRV were “listed [as] currently defaulted” that would prevent filings. Id. at ¶ 13; 16 Exhibit 8. Defendants’ counsel was under the good faith belief that defendants had until March 24, 17 2023, to file responses to Plaintiffs’ operative pleadings. Id. at ¶ 9 – 13. And given the acceptance 18 of Defendants’ other filings (i.e., Defendants’ Memorandum of Points and Authorities, and March 19 21, 2023, Case Management Statement) made at or around the same time the motion to strike 20 papers were rejected, counsel is still unclear whether the rejection reason for the motion to strike 21 papers is accurate. Id. at ¶ 13; Exhibit 7; Id. at ¶ 13, fn. 1 and Exhibit 11. 22 C. Plaintiffs Failed to Confer with Opposing Counsel to Advise of any Impending Default, Precipitating the Need for Motion Work to Set it Aside 23 Plaintiffs failed to confer with Defendants’ counsel to advise them of any impending default. 24 Id. at ¶ 2; Exhibit 2. On these grounds alone the Court can exercise its inherent authority to set 25 aside the default. Plaintiffs request for entry of default makes it appear like Defendants had failed to 26 answer a complaint from August 22, 2022, but it makes no mention that an automatic stay had been 27 in place until Friday, February 24, 2023. Defendants’ obligation to respond had only become due 28 -5- Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default 1 one business day prior to Plaintiffs’ request for entry of default (i.e., February 27, 2023). 2 Consequently, Plaintiffs’ counsel’s failure to confer with Defendants’ counsel regarding their 3 intention to seek a default nearly immediately after the lifting of the automatic stay secured the 4 entry of default for his clients but at the expense of “an attorney’s responsibility to the court and the 5 legal profession and takes precedence over the obligation to represent the client effectively. [T]he 6 ethical obligation is rooted in decades of case authority, and is reinforced by a statutory obligation 7 arising under Code of Civil Procedure section 583.130” LaSalle, supra, at 137. Failure to confer 8 also violates Code of Civil Procedure section 583.130 because it is, by definition, not cooperating as 9 the statute instructs. Plaintiffs seek to bypass the policy of this state by determining this matter on a 10 basis other than its merits. 11 III. CONCLUSION 12 For the reasons set forth in these papers, and good cause shown, Defendants request this 13 Court GRANT it the relief sought, and set aside Plaintiffs’ February 28, 2023, entry of default and 14 allow them to answer or otherwise respond to Plaintiffs’ operative pleadings. 15 DATED: March 23, 2023 16 Ryan van Steenis Attorney for Defendant Bragg and 17 Silicon Valley Real Ventures, LLC 18 19 20 21 22 23 24 25 26 27 28 -6- Bragg and SVRV’s Memorandum of Points and Authorities in Support of Motion to Set Aside Default PROOF OF SERVICE 1 I am over the age of 18 and not a party to this action. I hereby certify that on March 23, 2 2023, I served the following document(s) on the parties in the above-entitled action: 3 DEFENDANT DAVID BRAGG AND SILICON VALLEY REAL VENTURES LLC’S 4 NOTICE OF MOTION, MOTION, AND MEMORANDUM OF POINTS AND 5 AUTHORITIES TO SET ASIDE PLAINTIFFS’ ENTRY OF DEFAULT 6 Via Email: I emailed the document(s) referenced above to the following persons at the following 7 email addresses: 8 Robert Dunn rdunn@eimerstahl.com 9 Collin Vierra 10 cvierra@eimerstahl.com Counsel for Plaintiffs 11 Jessica Chong 12 jchong@spencerfane.com 13 Brian Zimmerman bzimmerman@spencerfane.com 14 Nicolas Reisch nreisch@spencerfane.com 15 Ernesto Aldover ernesto@arealestatelawfirm.com 16 Counsel for Defendants Gregory J. Davis, Kevin Wolfe, Jason Justesen, Paramont 17 Woodside, LLC, Paramont Capital, LLC, SVRV 385 Moore, LLC, and SVRV 387 Moore, LLC 18 I declare under penalty of perjury under the laws of the State of California that the foregoing is a 19 true and correct statement. 20 Dated: March 23, 2023 21 Ryan van Steenis 22 Attorney for Defendant Bragg and Silicon Valley Real Ventures, LLC 23 24 25 26 27 28 -1- Proof of Service to Bragg and SVRV’s Memorandum of Points and Authorities in Support Motion to Set Aside Default