Case Number: BC575625 Hearing Date: March 09, 2018 Dept: 46

Case Number: BC575625
GREG PHILLIPS VS EMAD SAMUEL ET AL

Filing Date: 03/17/2015
Case Type: Prtnrship & Corp Governance Case (General Jurisdiction)
Status: Default Judgment after Prove-up 05/18/2017

Future Hearings

03/09/2018 at 08:32 am in department 46 at 111 North Hill Street, Los Angeles, CA 90012
Motion Set Aside Default/Judgment

TENTATIVE RULING

Motion to Set Aside Judgment is DENIED. See discussion.

DISCUSSION

On 2/27/17, this court granted terminating sanctions against Plaintiff/Cross-Defendant (“P/X-D”) Phillips and Cross-Defendant (“X-D”) Gospel Truth. The First Amended Complaint (“FAC”) and their Answers were stricken, and default entered against them.

On 5/17/17, this court entered default judgment against P/X-D Phillips and X-D Gospel Truth. \

Notice of Entry of Judgment was served on 5/30/17.

P/X-D Phillips filed a Notice of Appeal on 10/2/17. On 2/15/18, the Court of Appeal issued its remittitur, dismissing the appeal as untimely.

X-D Gospel Truth now moves this court, per CCP § 473 and the court’s equitable power, for an order setting aside the default entered against it on the grounds that the terminating sanctions were granted and the default uncontested due to the mistake of its attorney.

CCP § 473 reads in relevant part as follows:

“(b) … 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 mistake, 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. The court shall, whenever relief is granted based on an attorney’s affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties…

(c)(1) Whenever the court grants relief from a default, default judgment, or dismissal based on any of the provisions of this section, the court may do any of the following:

(A) Impose a penalty of no greater than one thousand dollars ($1,000) upon an offending attorney or party.

(B) Direct that an offending attorney pay an amount no greater than one thousand dollars ($1,000) to the State Bar Client Security Fund.

(C) Grant other relief as is appropriate.

(2) However, where the court grants relief from a default or default judgment pursuant to this section based upon the affidavit of the defaulting party’s attorney attesting to the attorney’s mistake, inadvertence, surprise, or neglect, the relief shall not be made conditional upon the attorney’s payment of compensatory legal fees or costs or monetary penalties imposed by the court or upon compliance with other sanctions ordered by the court.”

“The court is empowered to relieve a party “upon any terms as may be just … from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” [CCP § 473(b)]. The reference to “judgment … order or other proceedings” allows relief both from default judgments and from the entry of default that preceded it. It also includes any step taken in a case, whether by the court or by one of the parties: “Anything done from the commencement to the termination is a proceeding.” [Zellerino v. Brown (1991) 235 CA3d 1097, 1105, 1 CR2d 222, 227 (internal quotes omitted)—relief from untimely demand for exchange of expert witness lists].” Weil & Brown et al., Cal. Prac. Guide Civ. Proc. Before Trial (The Rutter Group 2017) ¶ 5:282.

“Where relief is sought from a court order enforcing a procedural time limit, the six-month period starts to run from the date the court enters the order (rather than from an earlier date on which the deadline is raised in opposition papers). [Lee v. Wells Fargo Bank, N.A. (2001) 88 CA4th 1187, 1199-1200, 106 CR2d 726, 736].” Id. at ¶ 5:279.

“Where an “attorney affidavit of fault” is filed, there is no requirement that the attorney’s mistake, inadvertence, etc. be excusable. Relief must be granted even where the default resulted from inexcusable neglect by defendant’s attorney. [Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 CA4th 868, 897, 102 CR3d 140, 163 (disapproved on other grounds in Even Zohar Const. & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 C4th 830, 845, 189 CR3d 824, 835) (attorney opined service was defective on grounds having no arguable foundation in law); see also Vaccaro v. Kaiman (1998) 63 CA4th 761, 770, 73 CR2d 829, 834-835]. The court is not concerned with the reasons for the attorney’s inexcusable mistake. [Billings v. Health Plan of America (1990) 225 CA3d 250, 256, 275 CR 80, 84 (citing text); Martin Potts & Assocs., Inc. v. Corsair, LLC (2016) 244 CA4th 432, 438-441, 197 CR3d 856, 860-862 (collecting cases)—because focus is on who is to blame, not why, attorney affidavit need not contain explanation of reasons for mistake (though giving reasons often is the safer practice (see ¶ 5:390.1))].” Id. at ¶ 5:295.

“The motion must state that it seeks mandatory relief under CCP § 473. If it refers only to discretionary relief, the court need not set aside the default even if the motion is accompanied by an affidavit indicating the attorney was at fault. [Luri v. Greenwald (2003) 107 CA4th 1119, 1125, 132 CR2d 680, 685].” Id. at ¶ 5:304.

“The default and default judgment are separate procedures (¶ 5:4, 5:10). The latter may be set aside without disturbing the former. [Jonson v. Weinstein (1967) 249 CA2d 954, 958, 58 CR 32, 35; Behm v. Clear View Technologies (2015) 241 CA4th 1, 17, 193 CR3d 486, 498]… Such relief is appropriate where defendant has failed to prove “excusable neglect” or other ground for relief from default, but the default judgment as entered is erroneous (e.g., in excess of amount demanded in the complaint). [Jonson v. Weinstein, supra; Behm v. Clear View Technologies, supra, 241 CA4th at 17, 193 CR3d at 498—lack of adequate notice of punitive damages and excess damages rendered default judgment improper but had no effect on underlying default; and see Rutan v. Summit Sports, Inc. (1985) 173 CA3d 965, 970-971, 219 CR 381, 383-384—improper notice re sale of collateral rendered deficiency judgment improper but provided no ground for vacating earlier default]… But where the motion is filed more than six months after entry of default (though less than six months after entry of the default judgment), the default may not be set aside. Setting aside the default judgment without setting aside the default would be an “idle act” and thus not permitted even though technically timely. [Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 CA5th 267, 273, 206 CR3d 244, 249].” Id. at ¶¶ 5:413-5:414.1.

“An application for relief under § 473(b) requires both filing a notice of motion and service on the adverse party within the 6-month period. [Arambula v. Union Carbide Corp. (2005) 128 CA4th 333, 345, 26 CR3d 854, 861]… The 6-month limit is strictly enforced. Grounds for seeking relief under § 473(b) (“mistake, inadvertence, surprise or excusable neglect”) do not extend the time within which such relief must be sought. [Arambula v. Union Carbide Corp., supra, 128 CA4th at 345, 26 CR3d at 862].” Id. at ¶¶ 5:369-5:370 (emphasis in original).

Moreover, “[a]part from any statutory authority, a court has inherent, equitable power to set aside a judgment on the ground of extrinsic fraud or mistake. [Olivera v. Grace (1942) 19 C2d 570, 576-578, 122 P2d 564, 568; Sporn v. Home Depot USA, Inc. (2005) 126 CA4th 1294, 1300, 24 CR3d 780, 785 (citing text); Bae v. T.D. Service Co. (2016) 245 CA4th 89, 97, 199 CR3d 282, 287]. There are three essential requirements to obtain relief. The party in default must show:— a meritorious defense;— a satisfactory excuse for not presenting a defense to the original action; and — diligence in seeking to set aside the default once it was discovered. [Rappleyea v. Campbell (1994) 8 C4th 975, 982, 35 CR2d 669, 672-673—leaving open, however, whether the same test applies where a default but no judgment has been entered; Sporn v. Home Depot USA, Inc., supra, 126 CA4th at 1301, 24 CR3d at 785 (citing text)].” Weil & Brown, et al., Cal. Prac. Guide: Civ. Proc. Before Tr. (The Rutter Group 2017) ¶ 5:435.

“The statutory time limits on relief under CCP § 473(b) or § 473.5, supra, do not apply. The court may be asked to grant equitable relief from a default judgment whenever the “extrinsic fraud or mistake” is discovered. But once discovered, a party is expected to proceed diligently to seek relief (below). This requirement is “inextricably intertwined with prejudice” to the plaintiff. [Rappleyea v. Campbell, supra, 8 C4th at 983-984, 35 CR2d at 674; Lee v. An (2008) 168 CA4th 558, 566, 85 CR3d 620, 626—relief denied where defendant waited more than 2 years after discovering default judgment to seek relief].” Id. at ¶ 5:436.

There are two major procedural problems with this motion. First, X-D Gospel Truth’s attorney affidavit of fault is not taken under penalty of perjury, and therefore the court does not have any admissible evidence on which it could base a ruling. Code of Civil Procedure § 2015.5; see People v. Pacific Land Research Co. (1977) 20 C.3d 10, 21. Second, X-D Gospel Truth has blown through the statutory time in which a motion under Section 473 could be filed; default judgment was entered in May of 2017, and the instant motion was filed in February of 2018. Therefore, any motion to set the default aside must be under the court’s equitable power.

X-D Gospel Truth has made no effort to show a meritorious defense. And the excuses offered by its former attorney, even if admissible, are entirely unsatisfactory. The issue of the doctor’s note has already been dealt with in this court’s statement of decision. And remaining inactive in the face of a default proceeding based on an expectation of future termination is simply irresponsible. A party is only excused from the errors of his attorney where counsel has completely abandoned his client and thereby eviscerated the attorney-client relationship. Carroll v. Abbott Laboratories, Inc. (1982) 32 C.3d 892, 898-900. There are no facts before the court to show this kind of abandonment. Finally, there has been no actual showing of diligence, only unsupported conclusory assertions thereof.

For the foregoing reasons, X-D Gospel Truth’s motion is DENIED.

IT IS SO ORDERED:

___________________________
Frederick C. Shaller, Judge