2. Defendants Leticia Camacho, D.D.S. and Bertha Robiatti’s motion for order vacating the default and default judgment entered against them in this action is granted.

1. Accordingly, plaintiff Anthony Hung Cao, D.D.S.’s motion for assignment order against defendant Leticia Camacho, D.D.S. on the basis of the default judgment entered against in her in this action is moot.

“With respect to setting aside a default judgment, it is the policy of the law to favor, whenever possible, a hearing on the merits, and appellate courts are much more disposed to affirm an order where the result is to compel a trial on the merits than they are when the judgment by default is allowed to stand and it appears that a substantial defense could be made. … Stated in another fashion, it is the policy of the law 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.” Orange Empire Nat. Bank v. Kirk (1968) 259 Cal. App. 2d 347, 352-53.

A motion to vacate a default or dismissal that is made more than six months after entry of default can be made on the ground that a court has the inherent equitable power to grant such relief where there has been extrinsic fraud or mistake. Orange Empire Nat. Bank v. Kirk, supra, 259 Cal. App. 3d at 352-53 (after period for relief under CCP Section 437(b) has passed, thereafter, equitable relief may be sought in an independent action but is available only for “extrinsic,” not “intrinsic,” fraud or mistake).

Positive misconduct by a party’s counsel – such as failure to appear at hearings or trial, essential abandonment of client’s case, and misrepresentations to client and court – is extrinsic mistake or fraud giving rise to the court’s inherent power to vacate a default and default judgment. Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal. App. 3d 725, 739 (affirming order vacating dismissal under inherent authority; counsel’s abandonment of client’s case constituted positive misconduct and extrinsic error; also finding that actual suspension of lawyer by bar, and lack of demand to client to find another lawyer as required under CCP 286 required vacation of dismissal); Orange Empire National Bank v. Kirk (259 Cal. App. 3d 347, 352 (reversing order denying relief from default under court’s inherent authority where counsel abandoned any defense of case and lied to client that counsel would take care of everything).

To set aside a judgment based on extrinsic fraud or extrinsic mistake, the moving party must satisfy three elements: “First, the defaulted party must demonstrate that it has a meritorious case. Secondly, the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Lastly, the moving party must demonstrate diligence in seeking to set aside the default once it had been discovered.” Moghaddam, 142 Cal. App. 4th at 290-91 (quoting Stiles v. Wallis (1983) 147 Cal. App. 3d 1143, 1147–1148)).

Here, the existing record in this case, including the denial of the preliminary injunction sought by Plaintiff before trial, establishes Defendants’ meritorious defense. Second, Defendants have provided sufficient explanation for not presenting a defense before – their attorney lied to them that they had already prevailed, failed to appear at trial, and was suspended by the state bar. Third, they have acted diligently after finding out – despite their counsel’s misrepresentations – about the default and default judgment entered against them as a result of their counsel’s positive misconduct. Further, defendants were not given notice as required under Code Civ. Proc. Section 286. No fees are awarded.