TB LLC v. Sergio Morales

declaration is sufficient proof to support a finding of fact."] .) OppFi's counsel's travel costs to these depositions were thus reasonable and necessary to the litigation. The Court does not tax OppFi's deposition costs. (Code Civ. Proc., Sec. 1033.5(a)(3).)

IV. CONCLUSION

Based on the foregoing, the Commissioner and DFPI's motion to tax costs is DENIED. OppFi is entitled to recover the entirety of its claimed costs.

Dated this 27th day of August 2026 | | | Hon. Gary D. Roberts Judge of the Superior Court |

STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES TB LLC, a California limited liability company, Plaintiff, vs. SERGIO MORALES (aka SERGIO MORENO MORALES), an individual; S.M.M. INVESTMENTS, INC., a California corporation; ESTATE OF BEN SHAOOL, Deceased; an individual; SARASHOOL LLC, a California corporation; and DOES 1- 20, inclusive, Defendants. |))))))))))

) | CASE NO.: 24STCV26032 [TENTATIVE] ORDER RE: PLAINTIFF'S MOTION TO SET ASIDE DEFAULT OF DEFENDANTS Dept. 733 8:30 a.m. August 27, 2026 |

I. INTRODUCTION

This action arises from a breach of promissory note to pay money owed, as secured by a deed of trust, as well as a general breach of contract agreement. Plaintiff further asserts Defendant Sergio Morales and SMM Investments, Inc., never intended to pay any money borrowed and thus committed fraud in the transaction. Plaintiff also alleges against Defendant Estate of Ben Shaool and Sarashool LLC for specific performance as they have refused to perform on an agreement to release a lien and issue a deed of reconveyance to Sergio Morales to the property secured by the deed of trust, thus causing harm to Plaintiff.

On October 7, 2024, Plaintiff TB LLC ("Plaintiff") filed a complaint against Defendants Sergio Morales (aka Sergio Moreno Morales) ("Morales"), S.M.M. Investments, Inc. ("SMM"), Estate of Ben Shaool, deceased ("Shaool") and Sarashool LLC ("Sarashool") (together, "Defendants"), alleging causes of action for (1) Conversion, (2) Breach of Promissory Note, (3) Breach of Contract, (4) Negligent Misrepresentation, (5) Intentional Misrepresentation, and (6) Breach of Contract - Specific Performance.

On February 27, 2025, the Court Clerk entered default against Morales and SMM. On May 14, 2025, Plaintiff dismissed Shaool and Sarashool from the action. On July 10, 2026, Plaintiff filed the instant motion to set aside the defaults of Morales and SMM and for leave to amend to correct the name of Plaintiff. No opposition was filed. ¿

II. DISCUSSION

Here, Plaintiff seeks to set aside the default taken against Morales and SMM on the ground that it mistakenly named the wrong party at Plaintiff. Plaintiff is seeking leave to correct Plaintiff's name as "T.B. LLC," which is its properly registered name, and file an amended complaint. Plaintiff under Code of Civil Procedure section 473(b) and section 473(a)(1).

A. Section 473(b)

Application for either mandatory or discretionary relief pursuant to section 473(b) must be made within six months after the default was taken. (Code Civ. Proc., Sec. 473(b); see Henderson v. Pac. Gas & Elec. Co. (2010) 187 Cal.App.4th 215, 229 ["The party seeking relief under section 473 must be diligent, i.e. apply for relief within a reasonable time not to exceed six months after the judgment, dismissal, order, or proceeding was taken, and there must not be any prejudice to the opposing party if relief is granted."].)

Here, default was entered against Morales and SMM on February 27, 2025. The instant motion was filed on July 10, 2026. Thus, it is untimely under section 473(b).

Furthermore, the express language of section 473(b)'s discretionary relief provision states that "[t]he court may, upon any terms as may be just, relieve a party or the party's legal representative from a judgment, dismissal, order, or other proceeding taken against the party through the party's mistake, inadvertence, surprise, or excusable neglect." (Code Civ. Proc., Sec. 473(b).)

Similarly, the express language of section 473(b)'s mandatory relief provision states that "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 the attorney's mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against the attorney's client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against the attorney's client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect." (Ibid.)

Thus, by the statute's plain terms, relief under section 473(b) is only available as to defaults taken against the party seeking the relief. That is simply not the case here. Relief pursuant to section 473(b) is therefore unavailable.

B. Section 473(a)(1)

However, Plaintiff also seeks to amend the complaint pursuant to section 473(a)(1). "The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars..." (Code Civ. Proc., Sec. 473(a)(1).) "Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order". (Id., Sec. 576.)¿

The court has broad discretion to permit amendments to pleadings, and "the court's discretion will usually be exercised liberally to permit amendment of the pleadings."¿ (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.)¿ "The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified."¿ (Ibid.)¿ "If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend . . . ."¿¿ (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.)¿ Prejudice includes "delay in trial, loss of critical evidence, or added costs of preparation."¿ (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal.App.4th 1435, 1448.)¿¿¿¿

Here, Plaintiff's counsel asserts the following. Managing member of Plaintiff, Tony Bran, loaned Morales, on behalf of SMM, money, which was memorialized by a written promissory note dated August 23, 2023 which would then be secured by a Deed of Trust on a multi-family property owned by S.M.M. located at 316 North Maie Avenue, Compton, California 90220 ("316 North Maie"). (McClaren Decl., P. 15, Exs. 12. 13.) The promissory note and Deed of Trust were made payable to "TB LLC" and not its correct registered name of T.B. LLC. (Id. P. 16.) Although sometimes known as or referred to as TB LLC, the California Secretary of State has always registered this entity as T.B. LLC. (Ibid.)

Relying on this information, counsel, in drafting the original complaint, named Plaintiff as "TB LLC" without first consulting the Secretary of State's website. (Id. P. 24.) It was only after counsel commenced preparing a Default Judgment package that it was discovered that another entity had been registered under the name "TB LLC" which entity has no connection with the events alleged in the Complaint. (Id. P. 26.) Unbeknown to Plaintiff and its counsel, on September 10, 2025, while T.B. LLC was temporarily suspended, years past the operative facts of the Complaint and the filing of the Complaint, the California Secretary of State registered a new limited liability company known as TB LLC. (Id. P. 28.)

Due to counsel's inadvertence, Plaintiff seeks leave to amend to correct Plaintiff's name to o avoid possible confusion between the two entities regarding enforcement of a possible judgment and to prevent entering a void judgment. The Court finds Plaintiff's request to be sufficiently established.

The Court reiterates that the policy favoring amendment is so strong that denial of leave to amend can rarely be justified: "If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion." (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.) Thus, Plaintiff's motion for leave to amend is granted.

However, "[i]t has been repeatedly held that a defaulting defendant is entitled to be served by an amended complaint when the amendment is as to a matter of substance and not a mere matter of form The reason for this rule is plain. A defendant is entitled to opportunity to be heard upon the allegations of the complaint on which judgment is sought against him." (Thompson v. Cook (1942) 20 Cal.2d 564, 568 ["Service of the amended complaint in the manner provided for service of summons is much more likely to result in actual notice to the defendant that something has occurred requiring reassessment of the decision not to contest the action."].)

Here, the Court notes that Plaintiff has already filed its proposed first amended complaint naming the correct Plaintiff. However, such amended complaint must be served in the manner provided for service of summons. (Tidwell v. Henricks (1954) 124 Cal.App.2d 64, 66 ["The filing of an amended complaint * * *, not only vacated a defendant's default, but superseded the original complaint, and the original complaint is dropped out of the case and ceased to have any effect as a pleading or as a basis for a judgment. Where an original complaint had dropped out of existence as such when a second default was entered against a defendant, and an amended complaint had not yet been served on defendant, the second default stood as a nullity and was properly vacated by the trial court."] (emphasis in original).)

III. CONCLUSION

Plaintiff's motion for leave to amend is GRANTED. Default as to Morales and SMM is hereby vacated. Plaintiff is ordered to properly serve the FAC upon these defendants before any further action can be taken by the Court against them.

Dated this 27th day of August 2026 | | | Hon. Gary D. Roberts Judge of the Superior Court |

Case Number: 26STCV01151 Hearing Date: August 27, 2026 Dept: 733 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES ADAMS KABOB HOUSE INC., Plaintiff, vs. EL CAMINO ADHC, INC.; and Does 1 to 50, inclusive, Defendants. |))))