Supreme Court of South Carolina.

Gregory A. COLLINS (Deceased), Employee, Claimant, Respondent,

v.

Seko CHARLOTTE and Nationwide Mutual Ins. Co., Petitioners,

v.

West Expedited & Delivery Service, Inc., Defendant,

v.

Seko Worldwide and Federal Ins. Co., Defendants,

v.

Uninsured Employers Fund, Respondent.

 

Appellate Case No. 2012–213425.

Nos. 27519, 2012–213425.

Heard March 5, 2015.

Decided April 29, 2015.

 

 

Weston Adams, III, of McAngus Goudelock & Courie, LLC, of Columbia, and Helen Faith Hiser, of McAngus Goudelock & Courie, LLC, of Mt. Pleasant, both for Petitioner.

 

Linda Byars McKenzie, of Bowen McKenzie & Bowen, LLP, of Greenville, and Timothy Blair Killen, of Willson Jones Carter & Baxley, P.A., of Columbia, for Respondents.

 

Justice BEATTY.

*1 This matter is before the Court on a writ of certiorari to the Court of Appeals to review the decision in Collins v. Charlotte, 400 S.C. 50, 732 S.E.2d 630 (Ct.App.2012). The Court of Appeals reversed the Workers’ Compensation Commission’s (Commission) decision which found that Gregory Collins was not a statutory employee of Seko Charlotte at the time of his death. We affirm.

 

I. Facts

Collins worked for West Expedited & Delivery Service, Incorporated (West Expedited) and was killed in an automobile collision while returning to South Carolina after making a delivery in Wisconsin for Seko Charlotte. West Expedited, as a subcontractor, contracted with Seko Charlotte to make an interstate delivery of parts. Seko Charlotte, like West Expedited, is in the cargo delivery business.

 

Collins made deliveries to Wauwatosa and Menomonee Falls, Wisconsin. Although there is no written contract, Seko Charlotte engaged in business with West Expedited roughly two to three times per month. In this case, as was customary, Seko Charlotte paid West Expedited for mileage one way, however, West Expedited included the cost of the return trip in the mileage rate charged Seko Charlotte.

 

[1] As a result of Collins’ work-related death, Collins’ dependents filed a workers’ compensation claim against West Expedited FN1, Seko Worldwide, Federal Insurance Company, Seko Charlotte FN2, and Nationwide Mutual Insurance Company (Nationwide).FN3 The case was heard by a single commissioner of the Workers’ Compensation Commission. The single commissioner applied the three tests from Voss v. Ramco, Inc., 325 S.C. 560, 482 S.E.2d 582 (Ct.App.1997) FN4 and determined that Collins was Seko Charlotte’s statutory employee at the time of his fatal accident pursuant to section 42–1–410 of the South Carolina Code.FN5 Additionally, Collins was determined to be a traveling employee.FN6 Therefore, Seko Charlotte, and its insurance company, Nationwide, were liable.

 

Seko Charlotte and Nationwide timely appealed the single commissioner’s order. The appeal was heard by the Appellate Panel of the Commission. Applying the four factors of the employee/independent contractor test, the Appellate Panel of the Commission concluded Collins was not an employee of Seko Charlotte on the return trip because West Expedited had “the exclusive right of control over [Collins]” after the deliveries were made in Wisconsin. The Appellate Panel of the Commission reversed the single commissioner.

 

The Uninsured Employers Fund (Fund) appealed to the Court of Appeals.   Collins, 400 S.C. at 50, 732 S.E.2d at 630. The court found that the Commission committed an error of law when it applied the employee/independent contractor test instead of the statutory employee test. Id. at 57, 732 S.E.2d at 634. Applying the statutory employee test, the Court of Appeals concluded that Collins was Seko Charlotte’s statutory employee, reversed the Commission’s decision, and reinstated the single commissioner’s order. Id. at 58, 732 S.E.2d at 634. This Court granted Seko Charlotte and Nationwide’s petition for a writ of certiorari to review the decision of the Court of Appeals.

 

II. Standard of Review

*2 [2][3][4][5] “[Appellate] review is limited to deciding whether the Commission’s decision is unsupported by substantial evidence or is controlled by some error of law.” Hargrove v. Titan Textile Co., 360 S.C. 276, 289, 599 S.E.2d 604, 611 (Ct.App.2004). “The determination of whether a worker is a statutory employee is jurisdictional and, therefore, the question on appeal is one of law.” Fortner v. Thomas M. Evans Constr. & Dev., L.L.C., 402 S.C. 421, 429, 741 S.E.2d 538, 543 (Ct.App.2013). “As a result, this court has the power and duty to review the entire record and decide the jurisdictional facts in accord with its view of the preponderance of the evidence.” Id. “It is South Carolina’s policy to resolve jurisdictional doubts in favor of the inclusion of employers and employees under the [Workers’ Compensation Act].” Id. at 429–30, 741 S.E.2d at 543.

 

III. Discussion

[6][7][8] The issue on appeal is whether the Court of Appeals erred in holding that Collins was a statutory employee of Seko Charlotte at the time of his fatal accident? The statutory employment section of the Workers’ Compensation Act (“WCA”) provides:

 

When any person, in this section … referred to as “owner,” undertakes to perform or execute any work which is part of his trade, business or occupation and contracts with any other person (in this section … referred to as “subcontractor”) for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any workman employed in the work any compensation under this title which he would have been liable to pay if the workman had been immediately employed by him.

 

S.C.Code Ann. § 42–1–400 (1985). “The terms owner and contractor can be used interchangeably.” Fortner, 402 S.C. at 431, 741 S.E.2d at 544. “Thus, depending on the nature of the work performed by the subcontractor, an employee of a subcontractor may be considered a statutory employee of the owner or upstream employer.” Voss, 325 S.C. at 565, 482 S.E.2d at 585 (emphasis added). There are three tests to determine whether a statutory employment relationship exists:

To determine whether the work performed by a subcontractor is a part of the owner’s business, this Court must consider whether (1) the activity of the subcontractor is an important part of the owner’s trade or business; (2) the activity performed by the subcontractor is a necessary, essential, and integral part of the owner’s business; or (3) the identical activity performed by the subcontractor has been performed by employees of the owner.

 

Id. at 568, 482 S.E.2d at 586 (emphasis added). “If any of these tests is satisfied, the injured worker is considered the statutory employee of the owner.” Id.

 

[9][10] “The concept of statutory employment provides an exception to the general rule that coverage under the WCA requires the existence of an employer-employee relationship.” Fortner, 402 S.C. at 432, 741 S.E.2d at 544 (citing S.C.Code Ann. § 42–1–410). “The statutory employee doctrine converts conceded non-employees into employees for purposes of the [WCA].” Id. at 432, 741 S.E.2d at 544.

 

*3 Seko Charlotte and Nationwide, (collectively Petitioners) argue the Court of Appeals erred in holding that Collins was Seko Charlotte’s statutory employee at the time of this fatal accident because the contractual relationship between West Expedited and Seko Charlotte had terminated. Petitioners argue their contract terminated once the deliveries were made and Collins began his return trip to South Carolina. Petitioners, therefore, submit that without a contractual relationship, no statutory employment relationship may be found to exist between Collins and Seko Charlotte.

 

Conversely, the Fund argues that Collins was Seko Charlotte’s statutory employee because the return trip was “necessarily incidental to [Collins’] statutory employment with Seko.” The Fund represents that each of the three tests for creating a statutory employment relationship were met here. Further, the Fund submits that Collins’ injuries arose out of his employment relationship as he was a “traveling employee” and Collins does not meet the exception to the rule because he “did not deviate from the most direct route to return him to South Carolina.”

 

This case is fact-driven and under these facts, Collins qualifies as a statutory employee. The circumstances here involve a delivery of goods on a round-trip to Wisconsin and back to South Carolina. Seko Charlotte concedes that Collins was a statutory employee on the trip to Wisconsin. At issue is whether Collins’ status ever changed.

 

[11] The Court of Appeals was correct in concluding that the Commission erred in applying the employee/independent contractor test when it should have applied the statutory employee test. The statutory employee status is an exception to the normal employee/employer relationship. In the statutory employment analysis, active control of the worker is not the focal point. It is evident that Seko Charlotte understands this because Seko Charlotte had no more control over Collins on the trip to Wisconsin than it did on the return trip to South Carolina, yet it concedes that Collins was its statutory employee on the trip to Wisconsin.

 

[12] Seko Charlotte contends that it was the parties’ understanding that the delivery of the cargo to Wisconsin terminated their contract. Assuming this to be so, Seko Charlotte’s and West Expedited’s understanding of when their obligation to each other terminated is not dispositive of our inquiry. This is so because the contract only provides the necessary foundation for the creation of the statutory employee relationship. Once the statutory employee status attaches, the extent of the status is determined by the nature of the work contracted to be performed. We must view this issue from the perspective of when was the employee’s contracted work for the statutory employer completed. Our focus thus becomes the nature of the work itself.

 

Collins was engaged in an “express hot delivery” from South Carolina to Wisconsin for Seko Charlotte. In this instance, an “express hot delivery” is understood in the trade to mean an immediate and direct trip to Wisconsin. It is also understood that it is unlikely that the driver will have cargo on the return trip. Moreover, Morris West, owner of West Expedited, testified that it was unusual to carry cargo on a return trip of an “express hot delivery,” and when West Expedited did have a load it was for the same primary contractor.

 

*4 Seko Charlotte frequently used West Expedited’s services and knew that the trip was being made especially for them and that, more than likely, the return trip would be without cargo for another West Expedited customer. Indeed, Collins did not pick up any cargo for the return trip to South Carolina. Therefore, the nature of the work required immediate travel to Wisconsin and an expected return trip to South Carolina. As the Court of Appeals stated in Hall, the traveling itself is a large part of the job. Hall v. Desert Aire, Inc., 376 S.C. 338, 357, 656 S.E.2d 753, 762 (Ct.App.2007). Viewed from this perspective, it is reasonable to conclude that, under the facts of this case, the work for Seko Charlotte ended when Collins returned to South Carolina.

 

This conclusion is buttressed by the fact that Seko Charlotte concedes that: (1) it is in the cargo delivery business; (2) interstate deliveries are a necessary and integral part of its business; and (3) its drivers make similar deliveries as Collins did if it is within 100 miles of Charlotte. The nature of the work for Seko Charlotte’s direct employees is the same as the work performed by Collins. This fits squarely within the requirements of Voss.

 

Further, the language of section 42–1–400 states, “the owner shall be liable to pay to any workman employed in the work any compensation under this title which he would have been liable to pay if the workman had been immediately employed by him.” As such, this section does not allow for partial or conditional statutory employees. Seko Charlotte concedes that its drivers are covered on their return trips. Collins was entitled to the same coverage as Seko Charlotte’s direct employees.

 

IV. Conclusion

The Court of Appeals properly reversed the Commission’s decision and reinstated the single commissioner’s order. We, therefore, affirm the Court of Appeals.

 

AFFIRMED.

 

PLEICONES, Acting Chief Justice, KITTREDGE, HEARN, JJ., and Acting Justice JAMES E. MOORE, concur.

 

FN1. The Uninsured Employers Fund was brought into the case because West Expedited did not carry workers’ compensation insurance at the time of Collins’ fatal accident.

 

FN2. Seko Charlotte and Nationwide Mutual Insurance Company were brought into the case after Seko Worldwide, LLC filed a motion to add them as parties.

 

FN3. Nationwide is Seko Charlotte’s workers’ compensation insurance carrier.

 

FN4. Voss states:

 

To determine whether the work performed by a subcontractor is a part of the owner’s business, this Court must consider whether (1) the activity of the subcontractor is an important part of the owner’s trade or business; (2) the activity performed by the subcontractor is a necessary, essential, and integral part of the owner’s business; or (3) the identical activity performed by the subcontractor has been performed by employees of the owner.

 

Voss, 325 S.C. at 568, 482 S.E.2d at 586 (emphasis added).

 

FN5. Section 42–1–410 reads:

 

When any person … referred to as “contractor,” contracts … with any other person … for the execution or performance by or under the subcontractor of the whole or any of the work undertaken by such contractor, the contractor shall be Liable to pay to any workman employed in the work any compensation under this Title which he would have been liable to pay if that workman had been immediately employed by him.

 

S.C.Code Ann. § 42–1–410 (1985).

 

FN6. “It is well settled that ‘traveling employees are generally within the course of their employment from the time they leave home on a business trip until they return, for the self-evident reason that traveling itself is a large part of the job.’ ” Hall v. Desert Aire, Inc., 376 S.C. 338, 357, 656 S.E.2d 753, 762 (Ct.App.2007) (quoting Arthur Larson, Larson’s Workers’ Compensation Law, § 14.01 (Lexis–Nexis 2004)).

Court of Appeal,

Third District, California.

Ken GREGORY, Plaintiff and Appellant,

v.

Rafael SALDANA, Defendant and Respondent.

 

C073988

Filed April 29, 2015

 

(Super. Ct. No. CVCV112597)

Kenneth E. Bacon, Mastagni Holstedt, A.P.C., 1912 I Street, Sacramento, CA 95811, for Plaintiff and Appellant.

 

Michael W. Jansen, Timmons, Owen & Owen, 1401 21st Street, Suite 400, Sacramento, CA 95811, Linda Conrad, Law Office of Sargeant & Conrad, 429 F Street, Suite 8B, Davis, CA 95616–4510, for Defendant and Respondent.

 

ROBIE, Acting P.J.

*1 In California, service of process on an individual defendant may be made by substitute service on “a person apparently in charge of [the defendant’s] office, place of business, or usual mailing address.” (Code Civ. Proc., FN1 § 415.20, subd. (b).) Here, when plaintiff Ken Gregory (Gregory) sued defendant Rafael Saldana (Saldana) for breach of oral contract, the process server left the summons and complaint at a location the trial court found was “a valid business address for defendant Saldana,” but not with a “person [who was] apparently in charge.” (§ 415.20, subd. (b).) After finding the substitute service invalid, the trial court set aside a default and default judgment that previously had been entered at Gregory’s request.

 

FN1. All further statutory references are to the Code of Civil Procedure.

 

On appeal, Gregory challenges the trial court’s order setting aside the default and default judgment. We affirm, holding: (1) there was substantial evidence the substitute service of the summons and complaint was invalid and there was no actual notice to Saldana; (2) the standard of review for setting aside a default judgment is abuse of discretion; and (3) the trial court acted within its discretion in granting Saldana’s motion to set aside the default and default judgment.

 

FACTUAL AND PROCEDURAL BACKGROUND

Saldana is in a sole proprietorship doing business as Saldana Bros. Trucking, in the business of trucking hay. The “[p]hysical [b]usiness [a]ddress” of Saldana Bros. Trucking as listed on its fictitious business name statement is 12996 County Road 102 in Woodland. The “[b]usiness [m]ailing [a]ddress” is listed as post office box 584 also in Woodland.

 

Saldana grew up in Mexico, where he went to school until age 12. Thereafter, he did not attend school either in Mexico or California. Saldana “do[es] not read English,” so he “rel[ies] on friends to explain to [him] what documents mean if documents are presented to [him].”

 

Working with Saldana is his brother, Manuel Saldana, who is an employee of Saldana in Saldana Bros. Trucking. Saldana’s brother and his brother’s son, Fredi Saldana (Fredi), have lived at 34209 County Road 23A since 2010. Saldana has not lived there during this time. According to Fredi, “[t]he U.S. Postal Service and other carriers … sometimes deliver documents and/or packages to 34209 County Road 23A. If the mail or package is not addressed to [Fredi], [he] usually ignore[s] it.” Saldana “does not come into [34209 County Road 23A] without invitation and does not receive mail there on a regular or any other basis.” Saldana “does not read English and therefore [Fredi] feel[s] it is a waste of [Fredi’s] time to give [Saldana] mail because [Saldana] cannot understand it anyway.”

 

Also working with Saldana is his daughter, Linda Saldana, who does the paperwork for Saldana Bros. Trucking. Saldana’s daughter sent invoices to Gregory in January 2010 and August 2010 listing the address of Saldana Bros. Trucking as “34209 Hwy 23A” in Woodland.

 

*2 In November 2011, Gregory sued Saldana for breach of an oral contract that was allegedly entered into in April 2010 regarding Saldana purchasing alfalfa grown by Gregory.

 

On December 14, 2011, Gregory’s attorney mailed to Saldana at “34209 Highway 23A” copies of the summons, complaint, civil case cover sheet, and notice of case management conference, along with a notice and acknowledgement of receipt form. According to a declaration filed by Gregory’s attorney, the next day (December 15), Saldana called him, said he had received the documents, and wanted to know what they were. Gregory’s attorney then explained the documents to him.

 

Saldana never returned the notice and acknowledgement of receipt form.

 

On January 31, 2012, a process server went to 34209 County Road 23A and left with Fredi a copy of the summons and complaint. The proof of service listed “Freddie” as a “[c]o-[r]esident of [Saldana] and [m]anager of S[aldana] B [ros].” The process servicer later mailed copies of the documents to the same address. According to a declaration filed by Fredi, he “never told anybody that [he] was a ‘co-resident’ with [Saldana].” He “never told anybody that [he] was a [m]anager of S[aldana] B[ros]. and [he] ha[s] never been a [m]anager of S[aldana] B[ros].” He “ha[s] never been employed by [Saldana] or S[aldana] B [ros]. and ha[s] no relationship with [Saldana] other than being his nephew….”

 

In March 2012, Gregory filed a request for entry of default, which the court entered on March 16, 2012. The request for entry of default was mailed to “34209 County Road 23A” on July 11, 2012.

 

In August 2012, a default judgment totaling $ 92,098.34 was filed. The judgment left blank whom the judgment was against.

 

In September 2012, Saldana was personally served with an application and order to appear for a debtor’s examination on September 20, 2012.

 

On November 16, 2012, an amended default judgment was filed naming Saldana as the defendant whom the judgment was against.

 

On December 14, 2012, a deputy sheriff personally served Saldana with a bench warrant that listed the case of “Gregory” “vs.” “Saldana” with a bail amount of $93,974.44. Saldana signed the bench warrant, promising to appear in court at a debtor’s examination on January 31, 2013. According to a declaration filed by Saldana, he “did not know any time before December 14, 2012 that [he] had been sued by [Gregory].” December 14, 2012, when he met with the deputy sheriff and was given a bench warrant (for failing to appear at an order of examination), was “the first notice [he] had of the … lawsuit.”

 

After Saldana received notice of the lawsuit and bench warrant on December 14, 2012, it took Saldana “a couple of weeks to have a friend read and explain to [him] what it was.”

 

On January 31, 2013, Saldana appeared at the debtor’s examination.

 

On February 15, 2013, Saldana filed in pro. per. a motion to set aside the default and default judgment because he did not have notice of the lawsuit. In it, he asked for “time to find [l]egal [c]ounsel and … answer the … complaint to supply all information.”

 

*3 On February 21, 2013, Saldana appeared at a continuation of the debtor’s examination.

 

On March 11, 2013, Saldana found a lawyer to represent him.

 

On March 13, 2013, Saldana’s lawyer filed a motion to set aside the default and default judgment.

 

On April 24, 2013, the trial court granted the motion to set aside the default and default judgment “pursuant to C.C.P. § 473.5.” The summons and complaint were left at 34209 County Road 23A, which was “a valid business address for defendant Saldana, but … the substitute service of the summons and complaint at that address was not proper and valid service.” The motion was “timely made because it was filed within two years after entry of the default judgment.” As a “condition to setting aside of the default and default judgment,” Saldana has to pay “$2,000 to plaintiff G[regory] because defendant S[aldana] was not diligent in moving to set aside the default and default judgment.”

 

Gregory filed a timely notice of appeal from the trial court’s order granting relief from default and default judgment.

 

DISCUSSION

On appeal, Gregory contends that the substitute service was valid, Saldana received actual notice, and, applying a de novo standard of review, the trial court erred in ruling that Saldana’s motion to set aside the default and default judgment was timely.

 

As we will discuss below, we hold: (1) there was substantial evidence the substitute service of the summons and complaint was invalid and there was no actual notice to Saldana; (2) the standard of review for setting aside a default judgment is abuse of discretion; and (3) the trial court acted within its discretion in granting Saldana’s motion to set aside the default and default judgment.

 

I

There Was Substantial Evidence To Support The Trial Court’s Findings That Substitute Service Of The Summons And Complaint Were Invalid And There Was No Actual Notice To Saldana

To reach the issue of whether the trial court erred in granting Saldana’s motion to set aside the default and default judgment under section 473.5, we must first address the threshold issue raised by Gregory of whether the substitute service of the summons and complaint was valid. Only if the substitute service was invalid did the trial court have the discretion to set aside the default and default judgment. (§ 473.5, subds. (a), (c).) The trial court found the service invalid. We review this factual finding for substantial evidence. ( Stafford v. Mach (1998) 64 Cal.App.4th 1174, 1182.)

 

Substitute service on an individual may be made “by leaving a copy of the summons and complaint at the person’s … usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of … a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. Service of a summons in this manner is deemed complete on the 10th day after the mailing.” (§ 415.20, subd. (b).)

 

*4 Gregory claims that Saldana was properly served by substitute service under section 415.20, subdivision (a). But subdivision (a) is inapplicable here. Saldana operates his business as a sole proprietorship. Subdivision (a) applies to substitute service on corporations (§§ 416.10, 416.20), joint stock companies or associations (§ 416.30), unincorporated associations (§ 416.40) and public entities (§ 416.50). (§ 415.20, subd. (a).) “ ‘A sole proprietorship is not a legal entity itself. Rather, the term refers to a natural person who directly owns the business….’ ” ( Providence Washington Ins. Co. v. Valley Forge Ins. Co. (1996) 42 Cal.App.4th 1194, 1199.) Thus, service on a sole proprietorship is completed in the same manner as service on an individual, and we turn next to determining whether there was substantial evidence of lack of service on Saldana.

 

A

There Was Substantial Evidence Of Lack Of “Substantial Compliance” With The Substitute Service Statute

While it is “ ‘well settled that strict compliance with statutes governing service of process is not required,’ ” there must still be “[s]ubstantial [c]ompliance.” ( Summers v. McClanahan (2006) 140 Cal.App.4th 403, 410.) “[A] finding of substantial compliance requires three preconditions.” ( Carol Gilbert, Inc. v. Haller (2009) 179 Cal.App.4th 852, 865.) One, “there must have been some degree of compliance with the offended statutory requirements.” ( Id. at p. 866.) Two, “the objective nature and circumstances of the attempted service must have made it ‘ “ ‘highly probable’ ” ‘ that it would impart the same notice as full compliance.” (Ibid.) And three, “it must in fact have imparted such notice, or at least sufficient notice to put the defendant on his defense. In this regard, it is not enough that the process inform the defendant of the fact of a lawsuit, or even of a lawsuit in which his name appears. Due process requires notice of ‘the duty to defend.’ ” (Ibid.)

 

Applying these three factors here, there was substantial evidence to support the trial court’s finding “the substitute service of the summons and complaint at [34209 County Road 23A] was not proper and valid service.”

 

One, there was substantial evidence of the lack of requisite degree of compliance because Fredi was not “a person apparently in charge of [Saldana’s] office, place of business, or usual mailing address….” (§ 415.20, subd. (b), italics added.) According to Fredi’s declaration (which the trial court necessarily credited because of its factual finding that substitute service was invalid), he “never told anybody that [he] was a ‘co-resident’ with [Saldana].” He “never told anybody that [he] was a [m]anager of S[aldana] B [ros.] and [he] ha[s] never been a [m]anager of S[aldana] B[ros].” He “ha[s] never been employed by [Saldana] or S[aldana] B[ros]. and ha[s] no relationship with [Saldana] other than being his nephew….”

 

While Gregory points to the “declaration of diligence” from the process server that states to the contrary, the trial court made its own determination of witness credibility. The trial court’s determination of controverted facts and implied findings are conclusive and will not be disturbed on appeal. ( Stafford v. Mach, supra, 64 Cal.App.4th at p. 1182.)

 

Two, there was substantial evidence that the objective nature and circumstances of the service on Fredi did not make it highly probable that it would impart the same notice as full compliance. ( Carol Gilbert, Inc. v. Haller, supra, 179 Cal.App.4th at p. 866.) On January 31, 2012, a process server went to 34209 County Road 23A and left with Fredi a copy of the summons and complaint. According to Fredi’s declaration (which, as we have explained, the court credited), Saldana “d[oes] not come into [34209 County Road 23A] without invitation and does not receive mail there on a regular or any other basis.” And (which we have earlier recounted), Fredi “never told anybody that [he] was a ‘co-resident’ with [Saldana],” he “never told anybody that [he] was a [m]anager of S[aldana] B[ros.] and [he] ha[s] never been a [m]anager of S [aldana] B[ros].” He “ha[s] never been employed by [Saldana] or S[aldana] B [ros]. and ha[s] no relationship with [Saldana] other than being his nephew….” Thus, there was no objective evidence that notice to Fredi would result in notice to Saldana.

 

*5 And three, there was substantial evidence the service here did not give Saldana notice of any kind, let alone of his duty to defend. ( Carol Gilbert, Inc. v. Haller, supra, 179 Cal.App.4th at p. 866.) Fredi “usually ignore[s]” mail or packages “not addressed to [him].” And, in the event mail or packages are addressed to Saldana, Fredi “feel[s] it is a waste of [his own] time to give [Saldana] mail because [Saldana] cannot understand it anyway,” because Saldana “does not read English.”

 

B

Gregory’s Contentions Regarding Saldana’s Purported Actual Notice Contravene The Standard Of Appellate Review

Gregory contends that Saldana had actual notice of the lawsuit because Saldana received a letter sent by Gregory’s trial counsel with copies of the summons, complaint, and acknowledgement of service. According to Saldana, however, he “did not know any time before December 14, 2012 that [he] had been sued by [Gregory].” He was unable to read the letter sent by Gregory’s trial counsel with the copies because he “do[es] not read English.” He learned of the lawsuit only when he “received the [b]ench [w]arrant from the deputy.”

 

Gregory discounts this evidence, stating it is supported only by Saldana’s “unsubstantiated assertion,” and there was evidence Saldana “lacke[d] any credibility.”

 

Gregory’s attack of a witness’s credibility is misplaced, as it ignores the deference that we as an appellate court must give to a trial court’s explicit and implicit factual findings ( Shamblin v. Brattain (1988) 44 Cal.3d 474, 479) and “presumptions [we] indulge[ ] in favor of [the] correctness” of a trial court’s judgment or order ( In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133). “Even though contrary findings could have been made, an appellate court should defer to the factual determinations made by the trial court when the evidence is in conflict. This is true whether the trial court’s ruling is based on oral testimony or declarations.” (Shamblin, at p. 479.) Here, the declaration of Saldana conflicted with that of Gregory’s attorney on when Saldana had actual notice of the lawsuit. The trial court impliedly credited Saldana’s declaration, and we must defer to that factual finding on appeal.

 

II

The Standard Of Review Of The Trial Court’s Order Setting Aside A Default And Default Judgment Is Abuse Of Discretion

Gregory next contends the standard that governs our review of the trial court’s order setting aside the default judgment is a de novo review. His contention does not acknowledge the difference between setting aside defaults and default judgments involving facial deficiencies in judgments or orders pursuant to section 473, subdivision (d) and setting aside defaults and default judgments on affidavits under section 473.5, as happened here.

 

Section 473, subdivision (d) provides as follows: “The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.” Where a motion is made under this subdivision based on a factual defect, the motion can be set aside only if the facial defect is “ ‘is apparent upon an inspection of the judgment-roll.’ ” ( Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1441.)

 

In contrast, motions to set aside default judgments under section 473.5 go beyond the judgment roll. A motion under section 473.5, subdivision (b) “shall be accompanied by an affidavit showing under oath that the party’s lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect.” “Upon a finding by the court that the motion was made within the period permitted … and that his or her lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect, it may set aside the default or default judgment on whatever terms as may be just and allow the party to defend the action.” (§ 473.5, subd. (c).)

 

*6 Here, the trial court granted Saldana’s motion to set aside the default and default judgment “pursuant to C.C.P. § 473.5.” “[W]here a plaintiff has contested a motion to vacate a default judgment by way of affidavits or other evidence that goes beyond the judgment roll … of necessity our review goes beyond the judgment roll. [Citation.] In determining any issues raised by such evidentiary matters, our review is governed by the familiar abuse of discretion standard. [Citation.] That standard requires we defer to factual determinations made by the trial court when the evidence is in conflict, whether the evidence consists of oral testimony or declarations.” ( Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1440–1441.)

 

III

The Trial Court Was Within Its Discretion To Grant Saldana’s Motion To Set Aside The Default And Default Judgment Under Section 473.5

Gregory makes two arguments in support of his contention the trial court erred in setting aside the default. First, he claims Saldana had actual notice of the lawsuit. We have already reviewed and rejected this argument in part IB of the Discussion above. Second, he claims that Saldana’s motion was not filed within a reasonable time after his default was entered. As we explain below, the trial court was within its discretion to conclude otherwise.

 

“The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered.” (§ 473.5, subd. (a).) The time for filing a motion under section 473.5 “expressly commence[s] upon entry of the judgment rather than upon entry of the default.” ( Rogers v. Silverman (1989) 216 Cal.App.3d 1114, 1126.)

 

Here, the trial court’s implied finding that the motion was filed and served within a reasonable time was supported by the evidence and thus within the trial court’s discretion. Saldana “did not know any time before December 14, 2012 that [he] had been sued by [Gregory].” On December 14, 2012, when he met with the deputy sheriff and was given a bench warrant (for failing to appear at an order of examination), was “the first notice [he] had of the … lawsuit.” On February 15, 2013, which was two months after his first notice, he filed in pro. per. his motion to set aside the default. On March 13, 2013, which was three months after this first notice, his retained counsel filed a motion to set aside the default and default judgment.

 

To the extent Gregory argues that a three-month delay “absent satisfactory explanation for the delay” was a reason to deny Saldana relief from default, it was well within the court’s discretion to allow relief from default, because Saldana accounted for this delay. After receiving the first notice of the lawsuit and bench warrant on December 14, 2012, when he met with the deputy sheriff, it took Saldana “a couple of weeks to have a friend read and explain to [him] what it was.” Saldana “do[es] not read English,” so he “rel[ies] on friends to explain to [him] what documents mean if documents are presented to [him].” About two weeks after having the documents explained to him, Saldana filed in pro. per. his motion to set aside the default and default judgment on February 15, 2013. In his motion, he explained that he needed time to find an attorney to represent him. In the interim, Saldana appeared at a debtor’s examination on January 31, 2013, and a continuation of that examination on February 21, 2013.FN2 Less than one month after filing his pro. per. motion to set aside the default, Saldana found a lawyer to represent him on March 11, 2013. Within two days of finding a lawyer, Saldana, through his lawyer, filed the instant motion to set aside the default judgment on March 13, 2013. These explanations for Saldana’s three-month delay support the trial court’s implied finding of reasonableness.

 

FN2. Gregory claims that Saldana’s personal appearances at the debtor’s examinations “waiv[ed] any alleged defect in connection with the service of summons, complaint and/or default judgment documents making a general appearance in the action.” Gregory does not explain how these involuntary appearances at debtor’s examinations are the same as general appearances in the underlying action. Section 1014 defines what constitutes a defendant’s “appear[ance] in an action” and explains it is “when the defendant answers, demurs, files a notice of motion to strike, files a notice of motion to transfer …, moves for reclassification …, gives the plaintiff written notice of appearance, or when an attorney gives notice of appearance for the defendant.” This definition does not include the involuntary appearances at debtor’s examinations that Saldana made here.

 

*7 Finally, we note this implied finding was consistent with the trial court’s order requiring Saldana to pay $2,000 to Gregory because, as the trial court put it, Saldana was not “diligent” in moving to set aside the default and default judgment. The trial court had the discretion to impose this “term” (the payment of $2,000) because there was evidence it was “just” under the circumstances. (§ 473.5, subd. (c) [“Upon a finding by the court that the motion was made within the period permitted … and that his or her lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect, it may set aside the default or default judgment on whatever terms as may be just and allow the party to defend the action”].) Gregory’s counsel attached a declaration in opposition of the motion to set aside the default judgment. In it, Gregory’s counsel declared that because of Saldana’s “delay” in retaining an attorney and moving to set aside the default judgment, Gregory had to incur additional attorney fees and was unable to timely pay off a crop loan, causing Gregory to have to sell some farm equipment. The trial court reasonably could have credited the evidence that Saldana did not have actual notice of the lawsuit until December 14, 2012, given his inability to read English, which caused him greater delay in taking action to defend himself against the lawsuit, but that the three-month delay still showed a lack of diligence, requiring monetary compensation to Gregory for expenses he incurred because of that delay.

 

DISPOSITION

The judgment (order setting aside the default and default judgment) is affirmed. Saldana is entitled to his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)

 

We concur:

MURRAY, J.

HOCH, J.