Service Done Self Is Not Service Done Right

Braugh v. Dow, No. B311859 (D2d8 Jul. 3, 2023)

In this case, the plaintiff, who is an attorney, got a default judgment. Service was based on her handing the complaint packet to the defendant. Although her proof of service recited the fact that she was not a party to the action, it made clear that she was the one who did the handing. Years later, the defendant found out about the judgment and moved to vacate under Code of Civil Procedure § 473(d). The trial court granted the motion.

Under § 473(d), a facially void judgment can be vacated without limitation to time. That includes a judgment that is void for lack of valid service of process. And in the default context, “facially” is a bit of a term of art. Because it includes not just the judgment itself, but the whole judgment roll, which also includes the “affidavit or proof of service; the complaint; [and] the request for entry of default.” See § 670(a). Here, the proof of service says that the plaintiff herself personally served the complaint on the defendant. That violated § 414.10, which says “[a] summons may be served by any person who is at least 18 years of age and not a party to the action.” 

Plaintiff tries to argue that she substantially complied because defendant had actual notice. Thus, she says, the unlimited time under§ 473(d)’s facially void rule should not apply. Instead, defendant should have availed himself of § 473(b) which permits vacation of a judgment based on mistake or excusable neglect. And because § 473(b) has time limits, says plaintiff, defendant’s motion to vacate was too late and should have been denied.

The Court of Appeal disagrees. Because they create the fundamental jurisdiction of the court, to justify a default judgment, the service of process statutes must be strictly complied with. (At least until they become a non-issue after a defendant makes a general appearance that waives defects in service.) If the POS admits facts showing non-compliance with the rules, a default cannot be premised on that service. And as such, it is void, forever.

Affirmed.

Stealth Defaults Aren't Cool

Shapell SoCal Rental Properties, LLC v. Chico’s FAS, Inc., No. G060411N (D4d3, as modified Nov. 15, 2022).

Store stopped paying rent due to COVID. After it received a notice to pay or quit, it retained Counsel, who wrote to Landlord requesting that any communications regarding the lease be directed to Counsel. Landlord filed a UD complaint, and without sending a copy to Counsel, sub-served it by dropping a copy on a random retail employee, and mailing a copy to the local store. It neither served Store’s registered agent nor provided a copy to its corporate offices. The process never got to the right people, so Store didn't answer in time. Landlord requested default, and a default judgment was entered. Eventually, Store found out about the judgment and moved for relief from default under Code of Civil Procedure § 473(b), which the trial court denied.

Store appealed, but a stay pending appeal was not granted. Landlord regained possession. Landlord says the appeal is moot, but that’s not right. Upon a reversal, § 908 permits an appellate court to restore the parties to the pre-judgment status quo. That can include the return of possession to a tenant in the event of  the reversal of a judgment in favor of a landlord in a UD case. Or the court can award monetary restitution.

So far as the merits, the Court finds that, when a plaintiff’s attorney knows a defendant is represented by counsel, he or she has both an ethical and statutory obligation to warn that plaintiff intends to seek a default judgment. The ethical duty arises from a duty to behave with professional courtesy—a duty to the Court and the legal profession that overrides any duty to zealously advocate for one’s client. The statutory duty arises from § 583.130, which declares the state’s policy in favor of cases being decided on the merits. There’s a case on all fours—LaSalle v. Vogel, 36 Cal.App.5th 127, 137 (2019). Landlord tries to distinguish it on BS factual grounds, but the Court is having none of it. It notes that to the extent the case is distinguishable, it is because Landlord’s behavior here is worse.

So although the ethical breach doesn’t, per se, merit § 473(b) relief, the facts do here. Landlord clearly was engaged in sharp tactics designed to ensure that legal decision makers—both outside counsel and corporate decision makers—did not get timely notice of service. Moreover, Store moved quickly after it learned the facts. 

On rehearing, Landlord tries to argue that the policy shouldn’t apply in UD cases. But it can’t raise a new argument in a rehearing petition, so it was forfeited. And in any event there’s nothing about UD procedure that is inconsistent with the policy. Indeed, the rule is needed more is UD cases, where the tight response times provide unfortunate incentives for Landlords to engage in exactly the kind of service shenanigans that happened here. 

Reversed, remanded, and assigned to a new judge on remand.

FWIW, I have dealt with this personally. I once had to get relief from a defaulted judgment in a pro bono UD case, where the Landlord’s counsel knew I was representing the tenant, but nevertheless took a default without telling me. It was based on a proof of service that the court ultimately found was perjured. The landlord bar seems to make this worse by waiting to file a proof of service of summons until they file default papers. So even diligent docket docket monitoring can’t protect you from some shady claim of service. The Legislature really should require that the plaintiff can’t get a default in a UD case until a period of time (say, seven calendar days) after a proof of service is filed. Since the answer in UD isn’t due for a week after service, that would have no impact on diligent landlord lawyers who file proof right away. And it would encourage prompt filing of proofs of service.

Losing a Trial in Absentia Is Not a Default

Shayan v. Spine Care Orthopedic Physicians, No. B293857 (D2d8 Jan. 8, 2020)

Under Code of Civil Procedure § 473(b)’s mandatory relief provision, a Court is required to relive a moving party from a default or dismissal if its attorney files a declaration owning up to a mistake. But mandatory relief under § 473(b) is limited to relief from “defaults” and “dismissals,” which the more modern case law reads somewhat literally. A loss that is not a default or dismissal is not subject to mandatory relief.

Which is what happened here. Defendants failed to show up at trial. But instead of putting them into default, the trial court held a bench trial in their absence ultimately awarded relief to plaintiffs. That’s not a default, so no mandatory § 473(b) relief.

Affirmed.

All Gone to Pot...

McClain v. Kissler, No. A152352 (D1d2 Aug. 29, 2019)

This an odd case. It’s a fight between some pro ses (although one of them is a lawyer) over contracts related to a marijuana business. Defendant (the lawyer) claimed that she was never properly served. But she nonetheless participated in the litigation for a long time. That said, she never moved to quash service or answered either. Plaintiffs, on the other hand, never tried to put her in default. Eventually, the trial court ordered Plaintiffs to do that, on pain of sanctions. After they did so, Defendant moved for both mandatory and discretionary relief under Code of Civil Procedure § 473(b). Which the trial court denied, finding that Defendant’s neglect was inexcusable.

The Court of Appeal affirms in a lengthy split decision. It’s all made harder by the fact that the case is procedurally complicated and the record is a mess. The lead and dissenting opinions disagree on a number of points about the basic events of the litigation. But the real debate is philosophical. One one hand (the majority view) just not bothering to answer, after months and months of litigation, and even after being told by the court that you need to do, isn’t excusable neglect. So discretionary § 473(b) relief can’t save Defendant. On the other hand, Defendant’s active participation in the litigation suggests it really didn’t make any sense to resolve the case by default (the dissent’s view). Both sides seem basically right, as a matter of first principles anyway.

So far as mandatory § 473(b) relief goes, the Court holds that a lawyer pro se can’t avail herself of that by filing a declaration and falling on her sword. The whole point of mandatory relief is to save the client from her lawyer’s mistakes. When the client and the lawyer are the same person, that doesn’t make sense.

Affirmed.

No Mandatory § 473(b) Relief from Voluntary Dismissal

Jackson v. Kaiser Foundation Hosps., Inc., No. A150833 (D1d3 Feb. 8, 2019)

Plaintiff here followed the erroneous advice of an attorney regarding the statute of limitations and dismissed her case without prejudice. When the error was uncovered, she moved to vacate that dismissal under Code of Civil Procedure § 473(b), which affords mandatory relief from a “default or dismissal” due to an attorneys neglect, even if the neglect is inexcusable. The trial court denied the motion and Plaintiff appealed.

There’s a question as to whether the order is appealable. Generally, a § 473(b) seeks relief from a judgment of default or dismissal, which makes it appealable under § 904.1(a)(2) as an order entered after a final judgment. A voluntary dismissal, however, doesn’t result in the entry of judgment, so that logic doesn’t facially apply. But the Court nonetheless looks to some dicta in two cases and decides that a denial of a motion for relief is sufficiently final and the evidentiary record sufficiently clear to make the order appealable, even if the dismissal is not a judgment. 

I think I’m a little skeptical on this. Appellate jurisdiction is supposed to be a pure creature of statute. So we shouldn’t be opening up avenues to appeal that share some formal similarity with appealable orders, but aren’t actually the orders that the Legislature permitted to be appealed. After all, there is already a equitable safety-valve to appellate jurisdiction in the form of the writ of mandamus. So if the court really felt a need to get to the merits, it could have construed the notice of appeal here as a writ petition instead of creating a non-statutory appealable order.

And as to the merits, the mandatory relief provisions of § 473(b) apply only to defaults and dismissals. But they don’t apply to just any old dismissals, or so says the case law. They apply to default-like dismissals. That is, dismissals that result from whiffing on an obligation to respond. Like forgetting to file an opposition and stuff like that. An erroneous voluntary dismissal that results from an attorney’s inexcusable neglect won’t cut it.

Affirmed.

Blown Demurrer Opp. Counts as a "Dismissal" for Mandatory § 473(b) Relief

Pagnini v. Union Bank, N.A., No. A151390 (D1d5 Oct. 17, 2018)

Plaintiff’s attorney tried to file an amended complaint as a response to a demurrer. But the attorney didn’t know that Code of Civil Procedure § 472—the statute that permits an amendment as a response to a demurrer—had recently been amended to change the timing. Although the prior version let you moot a demurrer by filing an amendment before the demurrer hearing, the current version required the amended complaint to be filed before the opposition is due. This resulted in the clerk rejecting the amended pleading. The trial court ultimately granted the demurrer as unopposed and entered judgment for Defendant.

Several months later, Plaintiff filed a motion for mandatory relief under § 473(b). His motion was accompanied by a declaration from his attorney, attesting to the mistake that led to the dismissal. But the trial court denied the motion nonetheless. 

That was error. The mandatory relief provision in § 473(b) applies to both defaults and dismissals that are caused by the neglect (even the inexcusable neglect) of a party’s attorneys. At some point, the Legislature added dismissals to provide parity between mistakes by both plaintiffs and defense lawyers. Dismissals include failures to respond to “dismissal motions.” And while there does not appear to be a prior case that says it, the court finds that a failure to respond to a demurrer to the whole complaint readily fits into that category, given that if granted without leave to amend, a demurrer lead to a dismissal under § 581(f)(1). Which is what happened here after the attorney whiffed on the deadline.

Reversed.

Inexcusable Neglect Can Still Merit a Continuance

Levingston v. Kaiser Foundation Health Plan, Inc., No. E066271 (D4d2 Aug 17, 2018)

This is some kind of whistleblower case against Kaiser Permanente. Kaiser moved for summary judgment. Plaintiff opposed. Her opposition included some inadvertently disclosed privileged document that apparently belonged to Kaiser. That got her counsel DQ’ed and her opposition struck. The court ordered former counsel not to discuss the document and continued the SJ hearing for six months to let plaintiff get new counsel.

Sketchy Default; Sketchy Vacation ...

Grapo v. McMills, No. A147522 (May 23, 2017)

So this case involves a crazy default judgment scenario where an individual was served with a pro se complaint with his name in the caption, but he wasn’t mentioned in the counts. He didn’t respond. His default was taken, but before the default judgment was entered, he died. Plaintiff tried to get a $10 million judgment, which was rejected. Then he amended the complaint and sought $12 million, but the complaint also mentioned $60k in lost property. The trial court ultimately signed off on a $60k judgment.

D2d5 Retreads on a Broad Read of "Default or Dismissal"

Urban Wildlands Grp. v. City of L.A., No. B271350 (D2d5 Apr. 13, 2017)

Plaintiff filed for a writ of administrative mandamus but failed to file the administrative record with the trial court. The court denied the writ on the merits, finding that Plaintiff hadn’t met its burden to show error in the record. Plaintiff then sought relief under Code of Civil Procedure § 473(b) based on the fact that his attorney messed up the filing due to neglect. The court denied discretionary relief but granted under the mandatory relief provision in § 473(b).

But mandatory relief under § 473(b) is available only to address a default or dismissal. As we’ve discussed before, there’s an unresolved split of authority about what that means, with some courts reading “default or dismissal” narrowly and others giving it a little more leeway. Interestingly, the court here adopts the narrower reading even though the same division had previously authored two opinions going the other way. See In re Marriage of Hock & Gordon-Hock, 80 Cal. App. 4th 1438, 1442 (2000); Avila v. Chua, 57 Cal. App. 4th 860, 866 (1997). The court purports to disapprove of these cases.

Based on the narrow rule, what happened here wasn’t a default or dismissal. The trial court ruled against Plaintiff on the merits, finding that it wasn’t entitled to a writ because it failed to substantiate error in the underlying administrative proceeding. So the trial court erred in granting mandatory relief.

Reversed.

Everybody Deserves a Little Delay

Hamilton v. Orange Cnty. Sheriff’s Dept., No. G051773 (D4d2 Feb. 14, 2017)

Defendant in this case filed a summary judgment motion that would have been timely consistent with the original trial date. But the first hearing it could get was four days after trial was set to start. The court subsequently granted an ex parte to move the trial date back so that the SJ hearing date would be more than thirty days before trial.

Plaintiff noticed up the depositions of the SJ declarants plus a PMQ about six weeks before the SJ opposition was due. Defendant objected and then failed to get back to Plaintiff about dates for the depos for over a month. Just before the SJ opp was due, in lieu of setting the depos immediately, Defendant agreed to stipulate to put off the trial and the SJ hearing for another two months to allow time for the depos to go forward. With approval on the stipulation pending, Plaintiff didn’t file an SJ opposition on the due date. The court then denied the stipulation because of a lack of diligence, and proceeded to grant the unopposed MSJ and enter judgment for Defendant. The court subsequently denied a Code of Civil Procedure § 437(b) motion to set the judgment aside.

When a party is faced with an MSJ and still needs evidence to oppose it, the standard relief is to file a declaration under § 437c(h), laying out what discovery is needed and why more time to get it is merited. But that doesn’t preclude the party from taking the alternate route of seeking a continuance of the hearing, which like any continuance, can be granted on good cause in the sound discretion of the trial court.

Even if § 437c(h) wasn’t met here, the stipulation showed good cause to continue the hearing. Defendant had shined plaintiff on about setting dates for the depos, which had been timely noticed in time to meet the original schedule. Indeed, Defendant had essentially conceded that its scheduling cooperation was less than exemplary when it agreed to the stipulated continuance. So particularly given that the trial court had already continued the case to accommodate Defendant’s inability to get a timely summary judgment hearing, it was unfair and an abuse of discretion for the trial court to deny the stipulated continuance to give Plaintiff time to take the depos needed to oppose.

Reversed.

CCP § 473(b) Covers a Default from Failure to Pay Transfer Fees.

Gee v. Greyhound Lines, Inc., No C077077 (D3 as modified December 6, 2016)

When Plaintiffs case was transferred from Sacto to Fresno counties on motion of Defendant, she was—possibly erroneously—ordered to pay the transfer fees under Code of Civil Procedure § 397 or 399.* But when the case landed in Fresno, her lawyer never tendered the fees. Defendant moved to dismiss under § 399(a), which permits a court to dismiss an action with prejudice if fees go unpaid for 30 days. Plaintiff didn’t file an opposition or respond to the tentative (which was to grant) and the case was dismissed. 

Service on DeadCo's Authorized Agent Is Service Nonetheless

Pulte Homes Corp. v. Williams Mechanical, Inc., No. E064710 (D4d2 Aug. 9, 2016)
 
A defunct plumbing company whose charter had been suspended got sued for negligent performance of a contract. Plaintiff served its designated agent, who did nothing because the company was basically a dead letter. Plaintiff took a default.

The company, however, did have some insurance. After finding out about the default, the carrier retained counsel for the defunct company and moved for relief from default under Code of Civil Procedure § 473(b), which was granted by the trial court. But the Court of Appeal reverses.

Section 473(b) requires the motion to be filed within six months of the order to be vacated. The motion here was filed more than six months after the entry of default, although less than six months after a default judgment was entered. The court holds that the earlier date was the key one. Vacating a default judgment isn’t worth much unless you can also vacate the underlying default.

The court also rejects a challenge under § 473.5, which permits the setting aside of a default when the defendant never received actual notice. Here, there’s no question that the registered agent of the company was properly served. While service on an entity’s attorney might not be enough to give actual notice, when an attorney is also a designated agent, that service is sufficient to give the corporation actual notice as a matter of law. Even if the attorney neglects to inform the company’s principals because the company had gone out of business.

Finally, the court declines to award equitable relief from default on grounds of extrinsic mistake. That relief is available only under “rare circumstances” where the moving party is inequitably denied a hearing. To obtain the relief, the moving/defaulted party needs to show: (1) that its defense has merit; (2) a satisfactory excuse for not presenting the defense in the original action; and (3) that it acted diligently to set aside the default once discovered. There’s a threshold issue here that Defendant didn’t really raise extrinsic mistake until its reply brief, although two elements (excuse and timeliness) were discussed on the opening brief in connection with the 473.5 issue. The court finds that Defendant forfeited the argument on the meritorious-ness element. And in any event, Defendant didn’t meet the burden of showing either a satisfactory excuse or diligence.

Reversed.

Extrinsic Mistake Relieves Trustee of Default

Bae v. T.D. Service Co., No. B262921 (D2d4 Feb. 25, 2016)

Trustee to the deed of trust on a property gets sued in a real estate foreclosure dispute. Because trustees often get sued as relief-only defendants in cases where the title to property is at issue, Civil Code § 2924l sets forth a procedure permitting them to file a “declaration of non-monetary status” which absolves the trustee from participating in the litigation in any way unless some other party files an objection showing that some conduct by the trustee is really at issue. Trustee here served a § 2924l declaration, which was never opposed.

But Plaintiff put Trustee into default anyway, ultimately obtaining a $3 million default judgment more than two years later, Trustee, having become the subject of some collections efforts, moved for relief from default. The trial court granted the motion. Plaintiff appeals.

What makes this tricky are the time limits in the statutes that generally afford relief from default. Section 473(b) gives six months to move for relief on the grounds of mistake, inadvertence, or excusable neglect. Section 473.5 gives up to two years to obtain relief from a default that was entered without actual notice to the defendant.  

That all said, courts also have the inherent equitable power to vacate default judgments on grounds such as extrinsic fraud or extrinsic mistake. The court here focuses on the latter, which applies when some fact outside of the four corners of a default judgement led a court to mistakenly enter it. Courts generally apply a three-element test. The defaulted party seeking relief must: (1) show it has a meritorious case; (2) articulate a meritorious excuse for why it failed to defend the original case; and (3) that it acted diligently to set aside the default once discovered.

That test was met here. Trustee’s § 2924l declaration was timely and set out facts that showed a good faith belief that the trustee would was not liable for any act or omission of its own. No objection was ever filed, which should have absolved the trustee from answering and precluded any monetary liability. Trustee thus had a meritorious defense. 

Trustee also had a good excuse. It should have been able to rely on its filing of unchallenged § 2924l declaration in believing that it had no further obligation to participate in the case. In the absence of an objection, it was erroneous for the court to permit an entry of a default or default judgment against Trustee for failing to participate. 

Finally, Trustee acted diligently to set aside the default after learning about it. In addition to its reasonable reliance on its § 2494l declaration, Plaintiff made a bunch of service errors in prosecuting the default. In particular, Plaintiff failed to serve Trustee’s attorney with any of the default papers, including the default judgment, in violation of various statutes and rules governing the default procedure. In particular, Plaintiff violated Code of Civil Procedure §587 by failing to file an affidavit proving that a copy of the motion for entry of default had been mailed to the defaulting party’s attorney. It was thus not unreasonable that Trustee’s lawyer first learned of the default judgment when plaintiff tried to collect by levying its bank accounts. Which made Trustee’s lack of awareness pretty reasonable.

Affirmed.

Inexcusable, but Mandatory

Younessi v. Woolf, No. G051034 (D4d3 Feb. 16, 2106)

After Plaintiffs failed to respond to a demurrer filed by Defendants in a legal malpractice case, the court granted the motion, albeit affording leave to amend. On the last day of the amendment period, Plaintiffs filed a substitution of counsel. But no amended complaint. Following the procedure in Code of Civil Procedure § 581(f)(2) and Rule of Court 3.1320(h), Defendants filed an ex parte application to enter a dismissal, which the court granted in a signed order. The same day the order was entered, Plaintiffs belatedly filed an amended complaint, which everyone treated as ineffective due to the dismissal. A month-and-a-half later, Plaintiffs filed a motion for relief from default under § 473(b), which the trial court granted under § 473(b)’s discretionary prong. 

Getting to the Merits

Austin v. LAUSD, No. B258406 (D2d7) 

The trial court in this employment dispute granted the employer’s summary judgment motion, which plaintiff failed to timely oppose. Plaintiff filed an untimely pro se motion for reconsideration, explaining, among other things that there was additional evidence and that she had been abandoned by her attorney. The trial court recognized that the relief sought potentially implicated a discretionary relief from default under Code of Civil Procedure § 473(b). But because the motion papers were not sworn under penalty of perjury, the court found § 473(b) to be procedurally inapt. After a number of delays for plaintiff to obtain new counsel, plaintiff’s new lawyer filed a correctly formed § 473(b) motion. But by that time, the six-month limit for discretionary relief had run, so the trial court found that any relief from the default was foreclosed.
 
The Court of Appeal agrees that it is appropriate to treat the untimely reconsideration motion as a motion under § 473(b). The moving papers gave the defendant sufficient notice of the relief sought, so it was not unfair for the court to so construe the motion. But the trial court erred in finding that a penalty of perjury requirement applied. 

Indeed, in 1981, § 473(b) was specifically amended to explain that “[n]o affidavit or declaration of merits shall be required by the moving party.” It was thus plain error for the court to deny the motion on that ground. Because the motion and the evidence submitted with it made at least a colorable claim of excusable neglect under § 473(b), the trial court would have had the discretion to grant the motion, had it reached the merits. Thus, the rejection on the motion based on a non-existent procedural hurdle was prejudicial error, meriting reversal.
 
The court further notes that plaintiff substantially complied with § 473(b)’s requirement that an application “shall be accompanied by a copy of the answer or other pleading proposed to be filed therein[.]” Although she didn’t serve an opposition to the summary judgment motion, her “reconsideration” papers contained essentially the information and arguments that would be included in an opposition. Given the plaintiff’s good faith, the policy in favor of deciding cases on the merits (and, although the court doesn’t come out and say it, the sympathetic posture of a litigant abandoned by her attorney) that was sufficient to meet the requirement. So the court reverses and remands for the trial court to consider the § 473(b) motion on the merits in the first instance.
 
Reversed and remanded.

Need to Know Who Messed Up, But Not Why

Martin Posts & Assocs. v. Corsair, LLC, No. B263198 (D2d2 Jan 28, 2016)

Defendant in this case got defaulted for failing to answer. Six weeks after judgment was entered, it filed a motion for mandatory relief from default under Code of Civil Procedure § 473(b), attaching a declaration from its attorney taking the blame for the default. The declaration admitted that the failure to answer was at the feet of the attorney, but did not explain why the attorney neglected to file an answer. The trial court granted relief and the court of appeal here affirms.

Looking to the text of § 473(b), the Court holds that the declaration in support of a mandatory default motion must contain an admission by the attorney of mistake, inadvertence, surprise, or neglect. And based on the case law and purpose of the rule, it must further contain facts sufficient to show that it was the attorney, not the client, who was sufficiently the cause of the default. (There’s split of authority about mixed fault between attorney and client.) But as the court explains, the statute is concerned with “who is to blame, not why.” Unlike discretionary relief from default (also, somewhat confusingly, addressed in § 473(b), mandatory relief applies to both excusable and inexcusable conduct. So—provided the admission of fault and causation elements are satisfied—the attorney need not provide any detail in his or her explanation of why the mistake was made.

Affirmed.

In Rem

Buchanan v. Soto, No. D065652 (D4d1 Nov. 6, 2015)

Wife, facing a collections action, transferred some marital property to Husband’s separate ownership. Plaintiff won the collection case and then sued Husband and Wife for fraudulent conveyance. She had some trouble serving Husband, who had allegedly been deported to Mexico before the case was filed. Wife unconvincingly claimed not to know Husband’s address there. After several attempts to serve Husband at the pre-deportation residence, the court permitted service by publication. Husband defaulted and Plaintiff ultimately won a judgement against both Wife and (defaulted) Husband, with the court finding that the property had been fraudulently transferred by Wife to avoid collections.

Due Process and All That

Behm v. Clear View Techs., No. H040032 (D6, as modified Oct. 16, 2015)

A trial court entered terminating sanctions against Defendant after it failed to comply with discovery orders. The complaint prayed only for damages “in excess of $200,000.” But Plaintiff moved for and obtained a default judgment of $1.26 million, including $970k in punitives and compensatory damages that were more than $100k over the prayer. Defendant moved for mandatory relief from default under Code of Civil Procedure § 473(b) on the grounds that its attorney’s mistake was the cause of the default. The court denied the § 473(b) motion, but vacated the default judgment on the grounds that it shouldn’t have awarded more than what was demanded in the complaint. It invited plaintiff to file a new default judgment motion limited to $200k in damages. Both parties appealed.

No Mulligans in § 473(b) Seppuku

Even Zohar Const. & Remodeling Co. v. Bellaire Townhouses, LLC, No. S210804 (Cal. Jul. 20, 2015)

After Defendants failed to respond, the trial court entered a $1.7 million default judgment in a construction dispute. Defendants sought mandatory relief from default under Code of Civil Procedure § 473(b), which requires their attorney to cop to excusable neglect and, as they say, fall on his sword. But in his declaration—which the trial court described as “fuzzing up the issue”—their attorney mostly threw his office staff on his sword while inflicting only a flesh wound upon himself. The trial court denied the motion.

Then, a month later, Defendants filed a second § 473(b) motion. In it, their counsel told an entirely different story—a lengthy yarn about how he had been unduly occupied with obtaining the return of client files that he been seized by the DA in a criminal investigation. The trial court said that even if the seemingly disparate theories were factually consistent, it did not believe the attorney’s explanation for his failure to include them in the first motion—that he was embarrassed. It thus would have found that the motion was an improper motion for reconsideration under § 1008(b), because the facts it disclosed were available to Defendants at the time of the original motion. The trial judge felt bound, however, by Standard Microsystems Corp. v. Winbond Electronics Corp., 179 Cal. App. 4th 868 (2009), which it read to hold that the § 1008 reconsideration standard didn’t apply to § 473(b) motions. So it granted the motion. The court of appeal, in reversing, criticized Standard Microsystems, thus creating a split of authority. The California Supreme Court granted review.

Justice Werdegar’s opinion, for a unanimous court, holds that there is no conflict between § 473(b) and § 1008 that would require an exception to the reconsideration standard to a motion for relief from default. Section 1008 only has one exception—it does not preclude a trial court from sua sponte reconsidering a prior ruling while it still has jurisdiction to do so. Since that exception wasn’t at issue here—this was a renewed motion—the § 1008 standards applied. So the trial court would have been within its right to deny the motion on the basis that the was no new evidence. 

The court expressly disapproves of Standard Microsystems and a couple other cases, to the extent inconsistent with the opinion.

Court of appeal affirmed.

On the Dangers of Finding a Cite and Calling It Quits

Rodriguez v. Brill, No. F068518 (D5 Feb. 20, 2015)

This case touches on what, to me, is one of the most significant questions of practical appellate jurisprudence: In issuing a reasoned decision, what is the court’s obligation to independently research issues that are presented by the parties, but not thoroughly briefed? (Or, for that matter, issues that appear to be thoroughly briefed, but aren’t.)