2013-00142341-CU-BC

Castle-Breckenridge Management, Inc. vs. J.D. Allman, Inc.

Nature of Proceeding:  Motion to Set Aside Defaults

Filed By: Kalra, Gaurav Bobby

Defendants J.D. Allman, Inc. and Omegacomp, Inc.’s motion to set aside defaults is
granted.

Defendants seek to set aside the defaults entered in this action pursuant to CCP § 473
(b).  Here, the motion is accompanied by an “attorney’s sworn affidavit attesting to his
or her mistake, inadvertance, surprise or neglect” (Kalra Decl.)  and relief is mandatory  unless the Court finds that the default was not caused “by the attorney’s mistake,
inadvertance, surprise or neglect.”  (CCP § 473(b).)  Relief is mandatory even if
counsel’s conduct was inexcusable.  (Standard Microsystems Corp. v. Windbond
Electronics Corp. (2009) 179 Cal.App.4th 868, 894.) To obtain mandatory relief based
upon an attorney declaration of fault, under section 473, counsel need not show that
his or her mistake, inadvertence, surprise or neglect was excusable. No reason need
be given for the existence of one of these circumstances.  Attestation that one of these
reasons existed is sufficient to obtain relief. Graham v. Beers (1994) 30 Cal. App. 4th
1656, 1660; Lorenz v. Commercial Acceptance Ins. Co. (1995) 40 Cal. App. 4th 981,
989.  Despite Plaintiffs’ vigorous arguments to the contrary, Defendants have shown
that their defaults were entered as a result of Defendants’ former counsel’s “mistake,
inadvertence, surprise or neglect.”

Here, Defendants’ demurrer to Plaintiffs’ complaint was overruled on October 15,
2013, and Defendants were ordered to answer the complaint.  The Court’s order
contained an error as it stated that Defendants were to file their answers by October 2,
2013, well before the hearing took place.  Defendants’ counsel’s declaration indicates
that he simply failed to file an answer.  (Kalra Decl.)  Plaintiffs submitted a request for
entry of default on November 18, 2013 and Defendants’ defaults were entered that
same day.  Defendants then submitted an answer which was in fact filed on November
25, 2013.  Here, there is no question that the failure to file a timely answer was strictly
due to Defendants’ former counsel’s “mistake, inadvertence, surprise or neglect” and
relief is mandatory even if counsel’s conduct was inexcusable.  Additionally, the Court
finds that relief is also available under the discretionary provisions of CCP § 473(b).
Given the error in the Court’s ruling on the demurrer regarding the date to file an
answer, the Court finds that Defendants’ failure to file an answer prior to Plaintiffs’
submission of the requests for default was the result of “mistake, inadvertence,
surprise or excusable neglect.”

While the Court recognizes that Plaintiffs’ counsel attempted to communicate with
Defendants’ counsel prior to taking Defendants’ defaults, and while Plaintiffs are
correct that it would have been appropriate for Defendant’s counsel to request
clarification from the Court, the mistake is the type that a reasonable person could
have made under same or similar circumstances.  This finding is consistent with what
this Court has reiterated numerous times regarding this state’s “policy that cases
should be decided on their merits.”  (Smeltzley v. Nicholson Mfg. Co. (1977) 18 Cal.3d
932, 936.)

The Court also rejects the argument that the motion was not brought within a
reasonable time.  While true that the motion could likely have been brought much
earlier given that the defaults were entered in November 2013, it is within the six
month time frame set forth in CCP § 473(b) and as seen from Defendants’ counsel’s
declaration, during the past few months Defendants’ former counsel has been
assisting his mother as she experienced multiple organ failures and had to be moved
to his residence.  (Kalra Decl. ¶ 6.)  Counsel assisted his mother with care and
numerous surgeries and the motion was filed the business day after her funeral.  (Id.)
The motion was made within a reasonable time.

The motion is granted.  The Court will, however, as requested by Plaintiffs’ award
Plaintiffs fees associated with entry of default as authorized by CCP § 473(c).  The
requested fees of $3,745 are grossly excessive however.  Instead, the Court will award
Plaintiffs $1,050 ($350/hr x 3 hrs) in fees associated with taking Defendants’ defaults.
The fees are appropriate given Plaintiffs’ counsel’s attempts to communicate with
Defendants’ counsel prior to requesting default.  The fees shall be paid by Defendants’
counsel only and shall be paid on or before June 29, 2014.

The defaults entered on November 18, 2013, are set aside.  The Court deems the
answer filed on November 25, 2013 as Defendants’ operative answer in this action.
No further pleading is required.

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or other notice is required.