Judge: Bruce G. Iwasaki, Case: 22STCV01714, Date: 2023-05-10 Tentative Ruling

Case Number: 22STCV01714    Hearing Date: February 21, 2024    Dept: 58

Judge Bruce G. Iwasaki

Department 58

Hearing Date:              February 21, 2024

Case Name:                 Song v. Wall  

Case No.:                    22STCV01714

Motion:                       Motion to Set Aside and Vacate Default Judgment

Moving Party:             Defendants Lonnie Wall, W2K Properties, LLC and Leslie Wall

Opposing Party:          Plaintiffs Chaehoon Song and Booyean Song

This is a breach of contract and fraud action in which landlord Plaintiffs Chaehoon Song and Booyean Song (Plaintiffs) allege that tenant Defendants Lonnie Wall, W2K Properties, LLC and Leslie Wall (Defendants) improperly used the real property located at 1452 and 1454 E. 23^rd Street, Los Angeles, CA (Property) as transitional housing and failed to pay rent.

After granting a motion for terminating sanctions, this Court struck all Defendants’ Answers and entered default on January 5, 2023.

Thereafter, Plaintiffs moved for entry of default judgment. Following three attempts, the Court entered default judgment on July 14, 2023.

On January 10, 2024, Defendants Lonnie Wall, W2K Properties, LLC and Leslie Wall moved to set aside the entry of default judgment. Plaintiffs opposed the motion. No reply was filed.

The motion to set aside and vacate the entry of default and default judgment is granted.  Defendants’ counsel is ordered to pay to Plaintiffs attorneys’ fees in the amount of $6,500.

Legal Standard

            Code of Civil Procedure section 473, subdivision (b) provides for either discretionary or mandatory relief from certain prior actions or proceedings in the trial court. (Luri¿v. Greenwald¿(2003) 107 Cal.App.4th 1119, 1124.)¿¿

            “ ‘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.” ’ [Citation.] Applications seeking relief under the mandatory provision of section 473 must be ‘accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.’ The mandatory provision¿further adds that ‘whenever relief¿is granted based on an attorney’s affidavit of fault [the court shall] direct the attorney to pay reasonable compensatory legal fees and costs¿to opposing counsel or parties.’¿”  (Ibid.; Code Civ. Proc., § 473, subd. (b).)¿¿

Analysis

         Defendants seek relief pursuant to the mandatory provision of Code of Civil Procedure section 473, subdivision (b), and based on the Court’s inherent equitable powers.

            The purpose of this mandatory relief provision is to alleviate the hardship on parties who lose their day in court due to an inexcusable failure to act by their attorneys. (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 257.) More recently, the Court of Appeal has stated the purpose was to relieve the innocent client of the burden of the attorney's fault, to impose the burden on the erring attorney, and to avoid precipitating more litigation in the form of malpractice suits. (SJP Limited Partnership v. City of Los Angeles (2006) 136 Cal.App.4th 511, 516.)

            However, the mandatory provision applies in limited circumstances. The provision applies to the entry of default judgment here.

            Under the mandatory relief provision, upon a showing by attorney declaration of “mistake, inadvertence, surprise, or neglect,” the trial court must vacate any “resulting default judgment or dismissal entered....” (Code Civ. Proc., § 473, subd. (b).) “The range of attorney conduct for which relief can be granted in the mandatory provision is broader than that in the discretionary provision, and includes ‘inexcusable’ neglect. But the range of adverse litigation results from which relief can be granted is narrower. Mandatory relief only extends to vacating a default which will result in the entry of a default judgment, a default judgment, or an entered dismissal.” (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 616 [italics in original].)

Here, on December 5, 2022, Plaintiffs filed a motion for terminating sanctions after Defendants failed to respond to discovery requests following a court order compelling compliance. On January 4, 2023, Defendants submitted an untimely opposition that failed to attach a declaration indicating compliance with the discovery court order. Based on the moving papers and the deficient opposition, the Court granted the motion for terminating sanctions.

            To the extent that a discovery sanction prescribes a “default” or “dismissal,” at least two courts have found the mandatory provision does apply. (Matera v. McLeod (2006) 145 Cal.App.4th 44, 65–66 [sanction striking the answer and entry of a default qualified for mandatory relief from default judgment]; Rodriguez v. Brill (2015) 234 Cal.App.4th 715, 725–726 [sanction striking the complaint and entering a dismissal qualified for mandatory relief].)

            Finding that the mandatory provision applies to the facts here, the Court will turn to Plaintiffs’ next argument that contends the motion to set aside is untimely.

            “This six-month time limitation is jurisdictional; the court has no power to grant relief under section 473 once the time has lapsed.” (Austin v. Los Angeles Unified School District (2016) 244 Cal.App.4th 918, 928.)

With respect to discretionary relief under Section 473, subdivision (b), the time begins to run when the order or proceeding in question “was taken.” For purposes of this provision, a default is considered its own proceeding—which means a request to set aside a default must be made within six months of its entry. (See e.g., Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 273 [holding that the trial court “could not set aside the default” under section 473(b) where the motion “was filed less than six months after entry of default judgment, but more than six months after entry of default”]; Rappleyea, supra, 8 Cal.4th at p. 980 [“more than six months had elapsed from the entry of default, and hence relief under section 473 was unavailable”].)

            Here, Plaintiffs note that default was entered against Defendants on January 5, 2023. (1/5/2023 Minute Order, p. 2.) Defendants did not file their motion to set aside until January 10, 2024 – one year and five days later. Thus, this Court is without power to grant discretionary relief from the entry of default under section 473, subdivision (b). (Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 297 [“Unless the default itself is vacated, little is gained by vacating the default judgment.”].)

            However, unlike the discretionary relief provision, the mandatory relief provision requires a court to vacate a default and any resulting default judgment, if a motion or application for relief from the default judgment (1) is filed “no more than six months after entry of judgment,” (2) is “in proper form,”[1] and (3) is accompanied by an attorney's affidavit of fault, unless the court finds that the default judgment or dismissal was not caused by the attorney's mistake, inadvertence, surprise, or neglect. (Code Civ. Proc., § 473, subd. (b).) That is, the statute provides that the application for mandatory relief must be “ ‘made no more than six months after entry of judgment.’”

            Here, as noted above, the motion to set aside was filed on January 10, 2024, which was within six months of the entry of default judgment on July 14, 2023. Therefore, the motion to set aside based on the mandatory relief provision was timely. (Sugasawara, supra, 27 Cal.App.4th at p. 297; see also Edmon et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2019) ¶ 5:305.1 [“The wording of the statute makes clear that the 6-month period runs from entry of the default judgment, not the original default. [¶] A motion made within that period is timely although the attorney neglect predated the entry of default”]; Cal. Judges Benchbook: Civil Proceedings After Trial (CJER 2018) Relief from Default and Default Judgment, § 1.12 [“A motion for mandatory relief is timely, even though more than six months have passed since entry of the default, as long as it is filed within six months after entry of the judgment”].)

            Finally, Plaintiffs argue that the moving papers do not demonstrate excusable neglect. As noted above, under the mandatory provision, “[t]he range of attorney conduct for which relief can be granted in the mandatory provision is broader than that in the discretionary provision, and includes ‘inexcusable’ neglect.” (Leader v. Health Industries of America, Inc., supra, 89 Cal.App.4th at 616.) Thus, Defendants’ counsel was not required to show excusable neglect, only that his neglect caused the entry of default and subsequent default judgment.

            Here, Defendants’ counsel’s evidence demonstrates that his neglect resulted in the default.

On December 5, 2022, Plaintiffs filed a motion for terminating sanctions based on Defendants’ failure to comply with the Court’s November 3, 2022 order requiring Defendants to provide “code compliant responses to plaintiff, without objections, by 11/28/2022.” The hearing was set for January 5, 2023. An untimely opposition was filed on January 4, 2023.

In moving for relief on this motion to set aside, Defendants’ counsel now submits a declaration stating that “leading up to the hearing on terminating sanctions” his “office sent complete responses of defendants [sic] discovery to Plaintiffs [sic] counsel by email.” (Saunders Decl., ¶ 3.) As noted, in opposing terminating sanctions, Defendants’ counsel failed to state when responses were served, a failure repeated in the Saunders declaration here. It appears, however, that the late discovery responses were served on November 30, 2022. (Saunders Decl., Ex. C.)

            As a result of Defendants’ counsel’s inexcusable neglect, he failed to produce evidence showing compliance (albeit untimely compliance) with the court’s order at the time of the hearing on the motion for terminating sanctions. This deficient opposition resulted in the Court granting the motion for terminating sanctions. That is, had such compliance been shown at the time of the hearing, the Court would have entered a lesser sanction than the request for terminating sanctions. Thus, Defendants’ counsel’s evidence shows his neglect that permits the Court to grant relief under the mandatory provision of section 473, subdivision (b).

            As a result of the Court’s findings on this motion, Plaintiffs’ request for sanctions pursuant to Code of Civil Procedure section 128.7 is denied.[2]

However, under the statute, Plaintiffs are entitled to “reasonable compensatory legal fees and costs.” (Code Civ. Proc., ¶ 473, subd. (d).) The Court will award fees in the reduced amount of $6,500, which reflects reasonable compensatory legal fees and costs incurred as a result of Defendants’ counsel’s neglect. (Gelman Decl., ¶¶ 8-9.)

Conclusion

            The motion to set aside the entry of default and default judgment is granted. Defendants’ counsel, Saunders & Associates, APC, are ordered to pay attorney fees and costs, in the sum of $6,500.00, due payable to Plaintiffs on or before March 1, 2024.  At the hearing, the Court will set a status conference.