Brittany Perrineau, et al. v. Patrick McKenna, et al.

(Beverly Hills Courthouse: Dept. 207) August 31, 2026 DEPARTMENT 207 LAW AND MOTION RULINGS

DEPARTMENT 207 HEARING DATE August 31, 2026 CASE NUMBER 22SMCV01121 MOTIONS Motions to Vacate Default Judgment and Set Aside Entry of Default MOVING PARTIES Defendant Leslie Gornik Defendant Patrick McKenna OPPOSING PARTIES Plaintiffs Brittany Perrineau, Harold Perrineau, and Joon Productions, Inc. MOTIONs This case arises from allegations of a fraudulent real estate investment.

On February 10, 2023, Plaintiffs Brittany Perrineau, Harold Perrineau, and Joon Productions, Inc. ("Plaintiffs") filed the operative second amended complaint ("SAC") against Defendants Patrick McKenna; Leslie Gornik; Palisades Funding, Inc.; Palisades Capital Management LLC; Palisades Development Company, Inc.; Pali Cap Management 9, LLC; Palisades Capital Fund 4, LLC; Palisades Capital Fund 8, LLC; and Palisades Capital Fund 7, LLC ("Defendants"), alleging eleven causes of action for (1) material misrepresentations and misleading statements in the sale of a security; (2) sale of unqualified securities; (3) joint and several liability pursuant to Corporations Code Sec. 25504; (4) joint and several liability pursuant to Corporations Code Sec. 25504.1; (5) breach of fiduciary duty; (6) violation of California Business and Professions Code Sec.Sec. 17200; (7) constructive fraud; (8) breach of written contract; (9) breach of written contract; (10) common counts; and (11) declaratory relief.

Plaintiff subsequently added Palisades Capital Fund Management, LLC as a Defendant via Doe Amendment.

On May 21, 2025, the Court granted Plaintiffs' motion for terminating sanctions and ordered the answers stricken of Defendants Patrick McKenna; Leslie Gornik; Palisades Funding, Inc.; Palisades Capital Fund 7, LLC; and Pali Cap Management 9, LLC ("Defaulted Defendants"). Default was requested and entered against the Defaulted Defendants the same day.

On October 16, 2025, Defendants Palisades Capital Management, LLC; Palisades Development Company, Inc.; Palisades Capital Fund 4, LLC; and Palisades Capital Fund 8, LLC were voluntarily dismissed.

On January 28, 2026, the Court entered default judgment against the Defaulted Defendants in the amount of $858,781.60, representing $353,621 in damages; $226,262.16 in prejudgment interest; $276,000 in attorneys' fees; and $2,898.44 in costs.

The Clerk of the Court served a notice of entry of judgment to Plaintiffs, and Plaintiffs served notice of entry of judgment on the Defaulted Defendants the same day.

On March 24, 2026, McKenna and Gornik filed separate Notices of Appeal. Notices of default of the appeal were issued on April 9, 2026.

On July 23, 2026, McKenna and Gornik, in pro per, ("Moving Defendants") filed separate motions to vacate the default judgments and set aside the entries of default pursuant to Code of Civil Procedure, section 473, subdivision (b). Plaintiffs filed an opposition to both motions.

LEGAL STANDARD I. DISCRETIONARY AND MANDATORY RELIEF "Proceeding to judgment in the absence of a party is an extraordinary and disfavored practice in Anglo-American jurisprudence: The policy of the law is to have every litigated case tried upon its merits, and it looks with disfavor upon a party, who, regardless of the merits of the case, attempts to take advantage of the mistake, surprise, inadvertence, or neglect of his adversary." (Au-Yang v. Barton (1999) 21 Cal.4th 958, 963 [cleaned up].)

Code of Civil procedure section 473 "includes a discretionary provision, which applies permissively, and a mandatory provision, which applies as of right." (Minick v. City of Petaluma (2016) 3 Cal.App.5th 15, 25 (hereafter Minick).)

"Section 473 is a remedial statute to be "applied liberally" in favor of relief if the opposing party will not suffer prejudice. Because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default. Unless inexcusable neglect is clear, the policy favoring trial on the merits prevails." (Minick, supra, 3 Cal.App.5th at p. 24 [cleaned up].)

The party or the legal representative must seek such relief " within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. " (Code Civ. Proc., Sec. 473, subd. (b), emphasis added; see Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 ["because more than six months had elapsed from the entry of default, and hence relief under section 473 was unavailable"]; People v. The North River Ins. Co. (2011) 200 Ca.App.4 th 712, 721 [motion for relief under section 473 must be brought "within a reasonable time, in no case exceeding six months"]).

" The six-month limit is mandatory; a court has no authority to grant relief under section 473, subdivision (b), unless an application is made within the six-month period. " (Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 340, emphasis added & citations omitted.)

A. DISCRETIONARY RELIEF Per Code of Civil Procedure section 473, subdivision (b), a court may "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."

B. MANDATORY RELIEF 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 m istake, 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., Sec. 473, subd. (b).)

"In considering whether the trial court properly denied relief under section 473(b), the first question is the sufficiency of defendants' showing of attorney fault, if believed, to trigger the mandatory relief provisions of that statute." (Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 Cal.App.4th 868, 896, disapproved on other grounds by Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830 (hereafter Standard).)

"Under section 473(b), a party is entitled to relief from a default and resulting judgment whenever, on timely application for relief, his attorney 'attest[s] to his or her mistake, inadvertence, surprise, or neglect' in connection with the default or the judgment." (Ibid.)

DISCUSSION I. TIMELINESS Plaintiffs argue the motions are untimely because Moving Defendants' six-month deadline expired on July 28, 2026 - six months following the January 28, 2026 judgment.

While it is true that the six-month deadline is July 28, 2026, that is the deadline for Moving Defendants to file their motion, not the deadline by which the motion must be heard. (See Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 340 ["a court has no authority to grant relief under section 473, subdivision (b), unless an application is made within the six-month period"].)

Here, Defendants filed their motions on July 23, 2026, within the six-month mandatory deadline. Therefore, the Court finds the motions to be timely.

II. MERITS OF MOTION In support of the motions, Moving Defendants each advance the Declaration of Douglas F. Galanter, which provides: 1. I was the attorney of record for defendants Patrick McKenna ("McKenna") and Leslie Gornik ("Gornik") in the above-captioned action. I am presently inactive and not eligible to practice law in California.

3. As the court's docket reflects, on March 7, 2025 this court issued its order directing [Moving Defendants] to provide supplemental responses to Plaintiffs' various written discovery requests, on or before March 27, 2026.

4. Due to the press of other matters and my lack of personal oversight, I failed to properly calendar the deadline for providing the aforementioned supplemental responses. Due to such failure, Plaintiffs filed a motion for terminating sanctions on April 17, 2026, which was heard on May 21, 2026. While I did prepare and serve supplemental discovery responses on McKenna's and Gornik's behalf on May 20, 2026, specifically responses to Plaintiffs' document requests and specially prepared interrogatories, they were served too late. I also failed to effectively oppose the motion for terminating sanctions. As a result, on May 21, 2026, the court granted the motion, striking Gornik's answer and entering her default.

5. The subsequent entry of the Judgment against McKenna and Gornik, therefore, was entirely the result of my own oversight and fault. Neither McKenna nor Gornik had involvement whatsoever in this matter, and neither bears any responsibility for the default having been entered.

6. I will be responsible for any costs incurred by Plaintiffs as a result of the court vacating the default judgment. Such costs should be minimal given the status and posture of the case as of the date of this declaration. (Galanter Decl. P.P. 1, 3-6.)

[1] The Court first notes that the Galanter declaration contains dating errors. Every instance where the date is listed as "2026" should actually indicate "2025."

Further, while the Galanter declaration explains that the failure to provide discovery responses was due to Galanter's mistake, inadvertence, surprise, and/or excusable neglect, Galanter does not demonstrate that his failure to oppose the motion for terminating sanctions was due to Galanter's mistake, inadvertence, surprise, and/or excusable neglect. For all the Court knows, that decision could have been strategic.

Nor does Galanter account for the failure to timely request that the May 21, 2025 entries of default be set aside, given that default judgment was not entered until January of 2026, more than six months later.

Plaintiffs urge the Court to find the Galanter declaration not credible, in light of prior declarations Galanter filed regarding the discovery at issue. Based upon the following, the Court finds Galanter not credible, and gives his statements no weight.

Indeed, on January 13, 2025, Galanter filed a declaration explaining that McKenna and Gornik both lost properties in the Palisades fire and Galanter had been unable to reach them. Galanter further explained that a family emergency on December 31, 2024, caused Galanter to have to travel to Boston until January 17, 2025 and deal with his own relocation due to the fires.

On January 27, 2025, Galanter filed a declaration explaining that he had only "perfunctory" text message communications the week of January 20, 2025, but received no substantive information from his clients. The declaration further explained that Galanter was unable to return to Los Angeles until January 24, 2025 and reiterated that Galanter was still attending to his own relocation, which was impacted by the effect of the fires on the local housing market.

Further, the May 21, 2025 Order granting terminating sanctions was not based solely on the failure to comply with the March 27, 2025 deadline. As the Stein declaration in support of the motion for sanctions (which the Court quoted in its ruling) indicates: 8. Since April, 2023 when Plaintiffs initiated written discovery, Mr. Chodos and I have had to deal with three law firms, Carlton Fields, Negrin, LLP, and Douglas Galanter. We have conducted extensive meet and confers with each of the three law firms seeking in essence the documentation and information that the Court Ordered on January 28, 2025.

At least 11 different Meet and Confer Letters were sent by Plaintiffs' Counsel as well as follow-up telephone conferences occurred. Carlton Fields received discovery meet and confer letters on June 23, 2023 and September 28, 2023. Matthew Negrin of Negrin, LLP received discovery meet and confer letters on November 9, 2023, January 24, 2024, March 5, 2024, and April 8, 2024. Mr. Galanter received discovery meet and confer letters on May 11, 2024, June 25, 2024, July 8, 2024, July 29, 2024, and September 18, 2024.

Similarly, the Plaintiffs have further attempted through the Status Conferences and IDC's conducted by the Court to resolve the discovery disputes. IDCs were held regarding these same disputes subject to the Orders of the Court on April 11, 2024 with Matthew Negin, and October 23, 2024 with Mr. Galanter. Status Conferences were held to monitor these matters on July 2, 2024 and February 26, 2025. These meet and confer efforts have been frustrated by the continuous intentional delay and obfuscation conducted by the McKenna Defendants and their Counsel.

Bottom line, key documents and information are intentionally being withheld and the only effective recourse is to grant terminating sanctions in this action against the McKenna Defendants. Notwithstanding, on April 8, 2025, I sent Mr. Galanter another email seeking resolution of and compliance with the discovery ordered by the Court. In particular, Plaintiffs extended the date of response and production to April 14, 2025 to resolve the nonproduction and failure to comply with the Court's order issues.

Attached hereto as Exhibit 6 is a true and correct copy of the email sent to Mr. Galanter on April 8, 2025. At no time has Mr. Galanter or any of the McKenna Defendants responded to the April 8, 2025 email, or the Order of the Court which was due to be complied with by March 31, 2025.

Thus, the conduct supporting terminating sanctions persisted for years before Galanter's purported 2025 failures to (1) properly calendar the Court's discovery deadline; (2) oppose the motion for terminating sanctions; or (3) timely move to set aside the entries of default, and Galanter has not adequately demonstrated that the failure to oppose the motion for terminating sanctions or timely move to set aside the entries of default was due to Galanter's mistake, inadvertence, surprise, or excusable neglect, as opposed to Defendants' continued strategic decision to withhold discovery.

CONCLUSION For the foregoing reasons, the Court denies Gornick's and McKenna's motions to vacate the default judgment and set aside the entries of default. Plaintiffs shall provide notice of the Court's ruling and file the notice with a proof of service forthwith.

DATED: August 31, 2026 ________/s/___________________ Michael E. Whitaker Judge of the Superior Court

[1] The Court notes that the State Bar of California has suspended Mr. Galanter from the practice of law, and thus Mr. Galanter is ineligible to practice law in California. (See https://apps.calbar.ca.gov/attorney/Licensee/Detail/93740.)

Case Number: 24SMCV00948 Hearing Date: August 31, 2026 Dept: 207 TENTATIVE RULING DEPARTMENT | 207 | HEARING DATE | August 31,2026 | CASE NUMBER | 24SMCV00948 | MOTION | Motion to be Relieved as Counsel | MOVING PARTY | Robert D. Estrin | OPPOSING PARTY |