Case No.: 113CV242018
Case Name: Ajlouni, et al vs. SCI Apparel Ltd., et al

Defendants seek relief from a stipulated judgment entered on 9 December 2014 based on the terms of a settlement agreement. The judgment was entered after a noticed motion by Plaintiffs. Defendants state that they failed to oppose plaintiffs’ motion for entry of judgment because their counsel did not become aware of the motion until 9 December 2014, the date of the hearing. Defendants invoke surprise or inadvertence on the part of their counsel, or the staff where counsel’s private mailbox is located, as the reason for their default in opposing Plaintiffs’ motion. As a result, Defendants seek mandatory relief from the judgment pursuant to Code Civ. Proc., § 473(b). Defendants attached the declaration of Leonard Chaitin in support of their motion.

In their opposition to the motion, Plaintiffs advance four distinct arguments as to why the relief sought by Defendants should not be granted: 1) Defendants’ notice of motion is defective because it does not specify the nature of the relief sought and state the grounds for the relief, 2) mandatory relief under CCP 473(b) does not apply in this case as a matter of law, and 3) even if the mandatory relief provision of CCP 473(b) applies, Defendants fail to meet their burden of showing attorney fault, and 4) Defendants fail to meet their burden of showing surprise or excusable neglect under the discretionary relief provision of CCP 473(b).
1. Defective Notice of Motion

It was stated, “[a] basic principle of motion practice is that the moving party must specify for the court and the opposing party the grounds upon which that party seeks relief. Code of Civil Procedure section 1010 requires that a notice of motion must state “the grounds upon which it will be made.” California Rules of Court, rule [3.1110(a)] requires a notice of motion to state in its opening paragraph ‘the nature of the order being sought and the grounds for issuance of the order.’” (Luri v. Greenwald (2003) 107 Cal. App. 4th 1119, 1125.)

Plaintiffs correctly point out that both the initial notice of motion (filed on 12/26/14) as well as the amended notice of motion (filed on 1/7/15) failed to specify the grounds for the relief sought by Defendants. The relief sought (“set aside judgment”) also was not specifically identified as a request for mandatory relief under CCP 473(b).

Nonetheless, the Court in Luri also stated, “[a]n omission in the notice may be overlooked if the supporting papers make clear the grounds for the relief sought. The purpose of these requirements is to cause the moving party to “sufficiently define the issues for the information and attention of the adverse party and the court.” [Internal citations omitted.] (Id.)

Here, although Defendants’ notice of motion fails to specify the nature of the relief they seek and the grounds for such relief, the supporting documents attached to the notice of motion make such specifications in a manner that “sufficiently define[s] the issues for the information and attention of the adverse party and the court.” Particularly on pages 3 and 4 of the motion, Defendants quote portions of CCP 473(b) and demand mandatory relief under this provision. Besides, Plaintiffs are not prejudiced as a result of the defective notice of motion, since they were able to make substantive arguments in opposition to both the mandatory and discretionary reliefs under CCP 473(b). This supports the conclusion that in spite of the defective notice of motion, Defendants’ moving papers, considered as a whole, provided adequate notice to Plaintiffs regarding the nature of and grounds for the relief. Thus the defect is “cured.”

2. Applicability of Mandatory Relief under CCP 473(b)

The Court in Luri described the two separate reliefs under CCP 473(b) as follows:
Section 473, subdivision (b) provides for two distinct types of relief–commonly differentiated as “discretionary” and “mandatory”–from certain prior actions or proceedings in the trial court. “Under the discretionary relief provision, on a showing of ‘mistake, inadvertence, surprise, or excusable neglect,’ the court has discretion to allow relief from a ‘judgment, dismissal, order, or other proceeding taken against’ a party or his or her attorney. Under the mandatory relief provision, on the other hand, upon a showing by attorney declaration of ‘mistake, inadvertence, surprise, or neglect,’ the court shall vacate any ‘resulting default judgment or dismissal entered.’ ” (Id., at 1124; citing Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603.)

Plaintiffs argue that the mandatory relief provision under CCP 473(b) does not apply in this case as a matter of law, because Defendants do not challenge a default or a resulting default judgment. They invoke Hossain v. Hossain (2007) 157 Cal. App. 4th 454 in support of their position.

In their reply memorandum to Plaintiffs’ opposition, Defendants point out the existence of a split of authority on whether the mandatory provision applies only to literal default judgments after the clerk’s entry of default, or to procedural defaults as well. In addition, Defendants argue that Plaintiffs’ motion for entry of stipulated judgment was similar to a breach of contract original action. Thus Defendants’ motion to set aside the stipulated judgment is more akin to an actual default judgment than other procedural defaults to which the mandatory provision, as narrowly interpreted, does not apply. Defendants do not provide any authority supporting their position that the stipulated judgment in the present case is tantamount to a default judgment, and thus entitled to mandatory relief under CCP 473(b).

As rightly pointed out by Defendants, a split of authority exists among the districts of the California Court of Appeal as to whether the mandatory provision should be interpreted to reach circumstances other than default judgments and dismissals where the judgment at issue is procedurally equivalent to a default judgment. (See Huh v. Wang (2007) 158 Cal.App.4th 1406, 1415; Hossain v. Hossain, supra, 157 Cal. App. 4th 454, 457.) Some courts have allowed a party to challenge orders and judgments that are not technically default judgments under the mandatory provision of CCP 473(b). (See, for instance, In re Marriage of Hock & Gordon-Hock (2000) 80 Cal.App.4th 1438, 1443.)

The majority view, however, is that the mandatory provision expressly applies only to default judgments and dismissals and that the statute should not be construed beyond its explicit terms.
As used in the mandatory provision of section 473(b), ‘default’ carries its narrower meaning. The mandatory provision of the statute requires the court to vacate not any ‘default,’ but only a ‘default entered by the clerk … which will result in entry of a default judgment … .’ By qualifying the word ‘default’ in this manner, the Legislature plainly conveyed its intent to use the word in its narrower sense. Thus, the mandatory provision of section 473(b) applies to a ‘default’ entered by the clerk (or the court) when a defendant fails to answer a complaint, not to every ‘omission’ or ‘failure’ in the course of an action that might be characterized as a ‘default’ under the more general meaning of the word. (English v. IKON Business Solutions, Inc. (2001) 94 Cal.App.4th 130, 143; fn. omitted.)
Hossain, the case relied upon by Plaintiffs, endorsed the narrow interpretation by the English court. “A ‘default judgment’ within the meaning of section 473(b) is a judgment entered after the defendant has failed to answer the complaint and the defendant’s default has been entered.” (Hossain v. Hossain, supra, 157 Cal. App. 4th 454, 458, citing English, supra, 94 Cal.App.4th at pp. 143–144. [Internal citations omitted].) The Sixth Appellate District that reviews this Court’s decisions adopted the majority view. (See Huh v. Wang, supra, 158 Cal.App.4th 1406.)

This Court, too, follows the majority view that the language of CCP 473(b) is unequivocal and only applies to defaults, default judgments, and dismissals. As the English court stated,
It is not [a] […] court’s task, nor, indeed, its prerogative, when interpreting a statute, to extend the scope of the statute to encompass situations “analogous” to those the statute explicitly addresses. Rather, [a] […] court’s task is simply to determine what the Legislature meant by the words it used, relying first and foremost on the words themselves. For the reasons already given, the terms “default” and “default judgment,” as used in the mandatory provision of section 473(b), cannot reasonably be construed to encompass a summary judgment, regardless of whatever omissions or failures by counsel may have preceded the entry of that judgment. (English v. IKON Business Solutions, Inc., supra, 94 Cal.App.4th 130, 144.)

Similarly, in the case at hand, there is no default entered by the clerk and the stipulated judgment entered on 9 December 2014 is not a default judgment. As a result, Defendants are not entitled to mandatory relief under CCP 473(b).

3. Defendants’ Burden of Showing Attorney Fault for Mandatory Relief
Since the Court finds that Defendants are not entitled to mandatory relief as a matter of law, the issue of whether they meet their burden of showing attorney fault for purposes of mandatory relief is moot.
4. Defendants’ Burden of Showing Surprise or Excusable Neglect for Discretionary Relief
In contrast to mandatory relief under CCP 473(b), “discretionary relief under the statute is not limited to defaults, default judgments, and dismissals, but is available from any judgment.” (English v. IKON Business Solutions, Inc., supra, 94 Cal.App.4th 130, 149.) Thus, Defendants’ motion for relief from the 9 December 2014 stipulated judgment can properly be considered for discretionary relief under CCP 473 (b).

In order to be entitled for discretionary relief, Defendants must be diligent in seeking relief within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. (CCP 473(b).) The judgment in this case was entered on 9 December 2014. Defendants’ motion to set aside the judgment was filed on 26 December 2014, only two weeks after judgment was entered. This not only satisfies the absolute six-month time limit, but is also reasonable under the circumstances. Plaintiffs did not raise any argument disputing the diligence of Defendants in bringing this motion.

The other requirement for discretionary relief is that the “[a]pplication for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted ….” (Id.) Defendants have submitted a proposed opposition to Plaintiffs motion for entry of stipulated judgment.

On a more substantive level, Defendants must show mistake, inadvertence, surprise, or excusable neglect that led to the judgment from which they seek to be relieved. (Id.) Here, Defendants invoke “surprise or inadvertence on the part of defendants’ counsel or the staff where said counsel’s private mailbox is located.” (Amended notice of motion and motion to set aside judgment filed 1/7/15, p. 3, Lns. 11-12.)

For purposes of discretionary relief, “[t]he term ‘surprise,’ as used in section 473, refers to ‘some condition or situation in which a party . . . is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against.’ ” (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal. App. 4th 600, 611. Citations omitted.) Similarly, “neglect must have been such as might have been the act of a reasonably prudent person under the same circumstances. The inadvertence contemplated by the statute does not mean mere inadvertence in the abstract. If it is wholly inexcusable it does not justify relief.” (Elms v. Elms (1946) 72 Cal. App. 2d 508, 513. Citations omitted.)

In his declaration filed in support of the motion, Defendants’ counsel states that he checked his private mailbox on 7 December 2014, and found two notices of packages received at the counter. The counter was closed because it was a Sunday. Two days later, on 9 December 2014, he presented the two notices of package at the counter and was given three packages, two of which relating to Plaintiffs’ motion for entry of judgment. One of the packages that had a notice was Plaintiff’s reply memorandum in support of their motion for entry of judgment that was received at the counter on 2 December 2014. Another package that did not have a notice was Plaintiffs’ original motion for entry of judgment. The third package that had a notice was not related to this case. He does not recall receiving any notices of packages in November, although he admits the possibility that he received a package notice, put it away, and forgot about it. But again, he does not recall ever forgetting about receiving a notice of package at the counter. He also suggests that the staff at the private mailbox location might have inadvertently failed to provide him with the notice of package. But he does not know.

Defendants’ counsel does not explain if he checked his private mailbox in the days and weeks prior to 7 December 2014. Even after receiving Plaintiffs’ opposition memorandum highlighting this issue, Defendants’ counsel avoided directly responding to the issue. Instead, in his reply to Plaintiffs’ opposition, he attached the declaration of his co-counsel Motaz M. Gerges, Esq., stating that Mr. Gerges had access to the private mailbox and was checking the same a number of times between 12 November 2014 and the latter part of November. Gerges never saw any notices of packages. On top of not being a direct answer to the issue, Gerges’ declaration was not part of the original motion filed by Defendants. It was only submitted as an attachment to Defendants’ reply memorandum, depriving Plaintiffs the opportunity to examine it before they filed their formal opposition to the motion.

The suggestion that because of his federal practice, Defendants’ counsel is accustomed to electronic notification system is not an acceptable excuse to become neglectful of checking one’s traditional mailbox.

Defendants’ counsel admittedly recovered the package notices from his private mailbox on 7 December 2014, but conveniently skipped the next business day and presented the package notices at the counter on 9 December 2014, the date of the hearing on Plaintiffs’ motion for entry of judgment. He does not offer any explanation whatsoever as to why he did not collect the packages on Monday, 8 December 2014. That would have given him the opportunity to appear the next day at the hearing and seek some form of relief, such as a continuance or opportunity to be heard before the tentative ruling was adopted as final judgment.

Even more, the notice of package for Plaintiffs’ reply memorandum shows that it was received at the counter on 2 December 2014, but only picked up by Defendants’ counsel on 9 December 2014. When challenged by Plaintiffs as to why the package was sitting one whole week at the counter, Defendants’ counsel again avoids providing a direct response. Instead, he argues that it would not have made any difference since time has already run out to file a timely opposition to Plaintiffs’ motion. This is not a tenable argument when one is faced with an imminent adverse judgment.
Defendants’ counsel does not present any evidence besides his declaration (and the untimely filed Gerges’ declaration) showing how Plaintiffs’ correspondences were not timely delivered to him. Even his declaration is ambiguous and lacks specific facts. There is no explanation as to why there was no notice of packages for Plaintiffs’ original motion, or as to why it was not available until 9 December 2014. Evidence presented by Plaintiffs, on the other hand, clearly shows that the package was delivered to the receptionist at the front desk of the private mailbox company on 12 November 2014. (Opposition to motion to set aside judgment, filed 1/22/15, Exhibit B.) It is very difficult to imagine that the package some how mysteriously disappeared after its delivery on 12 November 2014, and magically resurfaced almost a month after. Defendants’ counsel has chosen not to investigate the situation, stating that it would have been “fruitless.”

“In determining whether the attorney’s mistake or inadvertence was excusable, the court inquires whether a reasonably prudent person might have made the same mistake under the same or similar circumstances. Thus, discretionary relief is available only from attorney error that is fairly imputable to the client, i.e., mistakes anyone could have made.” (Henderson v. Pacific Gas & Electric Co. (2010) 187 Cal. App. 4th 215, 229.)

In view of all the above, Defendants did not demonstrate “surprise” or “excusable neglect” in failing to oppose Plaintiffs’ motion for entry of the stipulated judgment. Evidence presented by Plaintiffs clearly shows that Defendants were properly served, and Defendants’ counsel was aware that Plaintiffs were in the process of filing their motion at the time. Plaintiffs first attempted to obtain a stipulated judgment at an ex parte hearing on 31 October 2014, which Defendants successfully defeated. Subsequently, Plaintiffs cleared with Defendants’ counsel the scheduling of the 9 December 2014 hearing date. These sufficiently put Defendants’ counsel on notice to expect delivery of the moving papers in a short while. A prudent litigant under the circumstances would have regularly checked his mailbox, inquired into the online case information website of the Court, or communicated with opposing counsel in an effort to avoid the kind of circumstances that led to this motion.

Defendants’ motion to set aside the stipulated judgment is DENIED.