Judge David B. Gelfound, Case Number: 21STCV35740, Date: 2024-03-28 Tentative Ruling

Judge: David B. Gelfound, Case: 21STCV35740, Date: 2024-03-28 Tentative Ruling

Counsel wishing to submit on a tentative ruling may inform the clerk or courtroom assistant in North Valley Department F49, 9425 Penfield Ave., Chatsworth, CA 91311, at (818) 407-2249. Please be aware that unless all parties submit, the matter will still be called for hearing and may be argued by any appearing/non-submitting parties. If the matter is submitted on the court's tentative ruling by all parties, counsel for moving party shall give notice of ruling. This may be done by incorporating verbatim the court's tentative ruling. The tentative ruling may be extracted verbatim by copying and pasting, as unformatted text, from the Los Angeles Superior Court’s website, http://www.lasuperiorcourt.org.
All hearings on law and motion and other calendar matters are generally NOT transcribed by a court reporter unless one is provided by the party(ies).

Case Number: 21STCV35740 Hearing Date: March 28, 2024 Dept: F49

Dept. F49

Date: 3/28/24

Case Name: Victor Irene Lopez v. 1000 Palms Associates Group, et al.

Case #: 21STCV35740

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

MARCH 28, 2024

MOTION FOR MANDATORY RELIEF, OR IN THE ALTERNATIVE, DISCRETIONARY RELIEF, TO SET ASIDE JUDGMENT

Los Angeles Superior Court Case # 21STCV35740

Motion filed: 2/27/24 (superseded by amendments filed on 3/4/24)

MOVING PARTY: Defendant 1000 Palms Associates Group (“1000 Palms” or the “Moving Defendant”)

RESPONDING PARTY: Plaintiff Victor Irene Lopez (“Plaintiff”)

NOTICE: ok

RELIEF REQUESTED: An order from the Court to grant the Moving Defendant’s motion to set aside the Court’s January 12, 2024, Judgment pursuant to Code of Civil Procedure section 473 subdivision (b).

TENTATIVE RULING: The motion is DENIED.

BACKGROUND

On September 28, 2021, Plaintiff initiated this action against Defendants 1000 Palms, 59th Equity Investors LLC, Equimax, Theresa Nicolas, Karabel & Sons Investments, and Does 1 to 25 (collectively, “Defendants”). Following this, Plaintiff filed a Request for Dismissal as to Defendant Theresa Nicolas, which was subsequently entered on December 23, 2021.

On March 15, 2022, Plaintiff filed his operative first amended complaint (“FAC”) against all Defendants, alleging general negligence, premises liability, and other causes of action according to proof. (Complaint, at 3.) The FAC alleges that Defendants’ negligent operation and management of their property resulted in personal injuries to Plaintiff. (Id., at 5.)

On November 30, 2022, Plaintiff filed a Request for Dismissal as to Defendant Karabel & Son Investments. The request was subsequently entered on December 1, 2022.

On January 12, 2024, the Court entered judgment (the “Judgment”) following a non-jury trial that took place from January 9 to January 11, 2024. The Court’s Minute Orders indicate that Defendants 1000 Palms, 59th Equity Invenstors LLC, Equimax, and their counsel made no appearances. (1/9/24 Minute Order, 1/11/24 Minute Order.)

On February 27, 2024, Defendant 1000 Palms filed its Motion to Set Aside the Judgment pursuant to Code of Civil Procedure section 473 subdivision (b). Subsequently, on March 4, 1000 Palms filed its amended Motion to Set Aside (the “Motion”).

On March 7, 2024, Defendants 59th Equity Inventors LLC and Equimax filed their Notice of Joinder, joining in the Motion filed by 1000 Palms.

On March 18, 2024, Plaintiff filed his Opposition to the Motion. Subsequently, 1000 Palms replied on March 21, 2024.

ANALYSIS

In certain cases of attorney fault, Code of Civil Procedure section 473 subdivision (b) requires the trial court to grant relief. The mandatory relief provision states in pertinent part: “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 first portion of Code of Civil Procedure section 473 subdivision (b) vests the trial court with the discretion to vacate a judgment on a party’s or attorney’s excusable neglect. (Todd v. Thrifty Corp. (1995) 34 Cal.App.986, 991.) It states in pertinent part: “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application 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, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (Code Civ. Proc., § 473, subd. (b).)

A. Mandatory Relief

The mandatory relief provision under Code of Civil Procedure section 473 subdivision (b) “applies only to defaults, default judgments, and dismissals.” (Shayan v. Spine Care & Orthopedic Physicians (2020) 44 Cal.App.5th 167, 169 (Shayan).)

The Shayan case involves an interpleader action. On the trial date, two named defendants, Spine Care & Orthopedic Physicians (“Spine Care”) and C&C, failed to appear. Similar to the present case, the trial court in Shayan proceeded with the trial, heard evidence, and subsequently rendered judgment against the non-appearing defendants, Spine Care and C&C, ordering the interpleaded funds in the amount of $19,365 to be distributed to the third named defendant Angelica Mazariegos (“Mazariegos”). (Shayan, supra, 44 Cal.App.5th at 169.) The Court of Appeal in Shayan affirmed the trial court’s denial of the motion for relief, under the mandatory provision of Code of Civil Procedure section 473 subdivision (b), filed by the two non-appearing defendants.

Here, Defendant 1000 Palms contends that the ruling in Shayan is completely inapplicable and inapposite because (1) unlike in Shayan, where only two of the three named defendants failed to appear at trial, in this present case, none of Defendants appeared (Reply, at 5), and (2) the Shayan court explicitly acknowledged its deviation from a series of prior cases that applied the mandatory relief provision under Code of Civil Procedure section 437 subdivision (b) to judgments analogous to defaults or default judgments. (Id., at 6.) However, the Court finds these arguments to be without merit.

First, upon closely examining the facts of the Shayan case, it becomes evident that there are significant similarities with the present case, despite the difference in the number of defendants who failed to appear. In Shayan, the plaintiff, acting as a lawyer for his client Mazariegos, represented her in an underlying personal injury action that resulted in a settlement of $30,000 in favor of Mazariegos. After deducting $10,000 in attorney’s fees, Spine Care and C&C asserted liens on the remaining recovery of $19,365. (Shayan, supra, 44 Cal.App.5th at 169.) Mazariegos’s attorney then initiated the interpleader action, depositing the disputed funds with the court to resolve the competing claims to the funds.

Here, 1000 Palms’s claim that Shayan must be distinguished on the basis that “the third named defendant [Mazariegos] appeared at trial, contested plaintiff’s contentions, and was permitted to challenge plaintiff’s evidence, cross examine witnesses, and have its affirmative defense adjudication on the merits” does not hold up under scrutiny.

Despite Mazariegos also being a named defendant, her interests in the recovery directly opposed those of the two absent defendants. This opposition in interest mirrors the dynamics in the present case, where Plaintiff appeared, contested, and presented evidence during the trial from January 9 to January 11, 2024, while the respective opposing parties failed to appear. The Court of Appeal in Shayan reasoned that there had been a trial on the merits, rather than a default, a default judgment, or a dismissal; and therefore, the mandatory relief provision was not applicable. (Ibid.)

Consequently, the ruling of the Shayan court is highly instructive, emphasizing that such a judgment is based on the merits of the case, rather than constituting a default or default judgment, despite the non-appearance of opposing parties. Therefore, the mandatory relief provision does not apply to this case.

Second, Defendant 1000 Palms argues that the Court should follow another line of cases that held that judgments functionally equivalent to a default, in situations where a party failed to appear, should be afforded the mandatory relief under Code of Civil Procedure section 473 subdivision (b).

The Shayan Court has also addressed this argument, stating, “we join these more recent cases.... We agree with Urban and the treatise: The plain language of the statute is unambiguous and controlling. It would be a disservice to embroider this language with freedom extensions to ‘analogous’ situations.” (Shayan, supra, 44 Cal.App.5th at 170.)

In The Urban Wildlands Group, Inc. v. City of Los Angeles (2017) 10 Cal.App.5th 993 (Urban), the Court of Appeal differentiated between two lines of cases, quoting a range of authorities. “The first line of cases holds that ‘dismissal’ and ‘default judgment’ mean only that, and should not be expanded to include other judgments.” (Urban, at 998.) “The second much less numerous line of cases ... use a more expansive definition of the term default judgment.” (Id., at 1000.)

Furthermore, the Urban decision resolves the divergence in authority. It notes, “in the trial court’s defense, it was entitled to rely on our prior opinion in Avila [Avila v. Chua (1997) 57 Cal.App.4th 860], and Hock [both follow the second line of cases] as legally controlling authority. When there is a division in Court of Appeal opinions, a trial court chooses which line of authority to follow. (Auto Equity Sales, Inc. v. Superior Court (2013) 218 Cal.App.4th 96, 101, fn. 7) However, upon reconsideration, we conclude our analysis in Avila and Hock broadly construing the section 473, subdivision (b) default, default judgment, or dismissal language was incorrect.” (Urban, supra, 10 Cal.App.5th at 1002.)

Consequently, 1000 Palms’s reliance on the second line of cases, including Avila (Reply, at 6), which has been disapproved by Urban, is found to be unpersuasive.

Accordingly, in line with the rationale and instructions provided in Shayan, the Court concludes that Defendant 1000 Palm is not entitled to mandatory relief under Code of Civil Procedure subdivision (b). The Judgement sought to be vacated is not a default or default judgment, rendering Defendant’s cited authority under this section inapplicable.

B. Discretionary Relief

Defendant further argues that its nonappearance at trial was due to its counsel’s excusable neglect, which Defendant argues, qualifies for the Court’s discretionary relief, under Code of Civil Procedure section 473 subdivision (b), to set aside the judgment.

“In contrast to the mandatory portion of section 473(b), ‘discretionary relief under the statute is not limited to defaults, default judgments, and dismissals....’ (Citation) As the California Supreme Court recently observed: ‘The discretionary relief provision of section 473, subdivision (b) applies to any ‘judgment, dismissal, order, or other proceeding. (Citation.)’” (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1419.)

“To warrant discretionary relief here, the proffered evidence must show that the attorney's error was excusable. (Citation.) Neglect is excusable only if a reasonably prudent person in similar circumstances might have made the same error. (Bettencourt v. Los Rios Community College Dist. (1986) 42 Cal.3d 270, 276.)” (Huh v. Wang, supra, 158 Cal.App.4th at 1423.)

Courts consider relevant factors in assessing counsel’s error, include: “(1) the nature of the mistake or neglect; and (2) whether counsel was otherwise diligent in investigating and pursuing the claim (Bettencourt v. Los Rios Community College Dist., at p. 276, 228);” and “Conduct falling below the professional standard of care, such as failure to timely object or to properly advance an argument, is not therefore excusable.” (Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 682.) Additionally, the fact that counsel “was busy with other matters during the relevant period ... standing alone would not constitute excusable neglect.” (Elston v. City of Turlock (1985) 38 Cal.3d 227, 234; see also, e.g., Ambrose v. Michelin North America (2005) 134 Cal.App.4th 1350, 1355; Garcia v. Hejmadi, supra, at 684.)

Here, Defendant acknowledges that “to obtain discretionary relief under section 473, the moving party must show the requisite mistake, inadvertence, or excusable neglect.” (Mot., at 9, Bonzer v. City of Huntington Park (1993) 20 Cal.App.4th 1474, 1478.) However, Defendant fails to meet this burden.

Defendant cites excusable neglect due to an error in calendaring the trial date (Mot., at 9, Reply, at 8). Furthermore, in its Reply, Defendant’s counsel argues that his failure to heed the notices is reasonable, given the circumstances he encountered during the relevant period. (Reply, at 9.)

The Court notes that the mistakes by counsel were not attributed to a clerk or legal assistant, nor were they due to extraordinary circumstances. It is also noted that even assuming true that counsel made a calendaring error, there have been multiple properly served notices of trial on Defendant, and there is no Notice of Unavailability filed by Defendant’s counsel at any point when notices were properly served. Consequently, the Court concludes that Defendant has not demonstrated excusable neglect. This conclusion aligns with established precedents. (See, e.g., Yeap v. Leake (1997) 60 Cal.App.4th, 591, 603 [“Discretionary relief need not be granted for ‘errors by [counsel] ... in failing to calendar and appear” at a hearing.]; Huh v. Wang, supra, 158 Cal.App.4th at 1423 [the court found the counsel failed to demonstrate excusable attorney neglect by declaring “[counsel] was overwhelmed and disorganized” ... he misfiled the summary judgment motion among “completed items” and “did not calendar the hearing date or the due date of the opposition.”])

Consequently, the Court DENIES Defendant’s Motion to Set Aside Judgment under Code of Civil Procedure section 473 subdivision (b).

CONCLUSION

Defendant 1000 Palms Associates Group’s Motion for Mandatory Relief, or in the Alternative, Discretionary Relief to Set Aside Judgment is DENIED.

Moving party to give notice.

*********************************************************************************************************************************************************

Dept. F49

Date: 3/28/24

Case Name: Victor Irene Lopez v. 1000 Palms Associates Group, et al.

Case #: 21STCV35740

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

MARCH 28, 2024

MOTION TO SET ASIDE JUDGMENT BASED UPON ABANDONMENT OF ATTORNEY

Los Angeles Superior Court Case # 21STCV35740

Motion filed: 2/22/24

MOVING PARTY: Defendants 59th Equity Investors, LLC, and Equimax (the “Moving Defendants”)

RESPONDING PARTY: Plaintiff Victor Irene Lopez (“Plaintiff”)

NOTICE: ok

RELIEF REQUESTED: An order from the Court to grant the Moving Defendants’ motion to set aside the Court’s January 12, 2024, Judgment based upon abandonment of attorney.

TENTATIVE RULING: The motion is DENIED.

BACKGROUND

On September 28, 2021, Plaintiff initiated this action against Defendants 1000 Palms Associates Group, 59th Equity Investors LLC, Equimax, Theresa Nicolas, Karabel & Sons Investments, and Does 1 to 25 (collectively, “Defendants”). Following this, Plaintiff filed a Request for Dismissal as to Defendant Theresa Nicolas, which was subsequently entered on December 23, 2021.

On November 30, 2022, Plaintiff filed a Request for Dismissal as to Defendant Karabel & Son Investments. The request was subsequently entered on December 1, 2022.

On January 12, 2024, the Court entered judgment (the “Judgment”) following a non-jury trial that took place from January 9 to January 11, 2024. The Court’s Minute Orders indicate that Defendants 1000 Palms, 59th Equity Investors LLC, Equimax, and their counsel made no appearances. (1/9/24 Minute Order, 1/11/24 Minute Order.)

On February 22, 2024, Defendants 59th Equity Investors, LLC, and Equimax filed their Motion to Set Aside the Judgment based on abandonment of attorney (the “Motion”).

On March 18, 2024, Plaintiff filed his Opposition to the Motion. Subsequently, the Moving Defendants replied on March 21, 2024.

On the same day, March 21, 2024, Defendant 1000 Palm Associates Group filed its Notice of Joinder, joining in Moving Defendants’ Motion.

ANALYSIS

The Supreme Court of California held that in situations where “[an] attorney’s conduct [effectively] obliterates the existence of the attorney-client relationship [attorney abandonment] ... his negligence should not be imputed to the client.” (Carroll v. Abbott Laboratories, Inc. (1982) 32 Cal.3d 892, 898 (Carroll).) “In the case of an attorney’s abandonment of a client, the injured client’s remedy is to bring a motion for discretionary relief under section 473.” (Las Vegas Land & Development Co., LLC v. Wilkie Way, LLC (2013) 219 Cal.App.4th 1086, 1092.)

A. Evidence Objections

Moving Defendants’ evidence objections:

The Court sustains: 1.

Plaintiff’s evidence objections:

The Court sustains: 1, 7, 9, 10, 12.

The Court overrules: 2, 3, 4, 5, 6, 8, 11.

B. Judicial Notice

Moving Defendants request that the Court take judicial notice of the Worker’s Compensation Public Information file for Plaintiff.

Evidence Code section 452, subdivision (d) permits the court in its discretion to take judicial notice of the records of any court in this state. Upon taking notice of court records, the court accepts as true only that (1) they were filed and (2) the assertions therein were made; the court does not take notice of the truth of their contents. (See Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374-375; see also Day v. Sharp (1975) 50 Cal.App.3d 904, 916.)

The court GRANTS Moving Defendants’ request for judicial notice, but only to the extent that is consistent with the above code section and the rulings in the precedents.

C. Discretionary Relief

The Motion does not claim that the Moving Defendants are entitled to mandatory relief under Code of Civil Procedure section 473 subdivision (b). This issue is addressed separately during Defendant 1000 Palms Associates Group’s Motion to Set Aside, pursuant to the same code section, where the Court concludes that mandatory relief is not warranted in the present case. For the instant Motion, the Court’s analysis is focused on the issue of discretionary relief, specifically within the narrow context of attorney abandonment, as argued herein.

1) Attorney Abandonment

[I]n the event of an attorney's unilateral withdrawal or abandonment of the client, the representation ends when the client actually has or reasonably should have no expectation that the attorney will provide further legal services. [Citations.] That may occur upon the attorney's express notification to the client that the attorney will perform no further services.... Absent actual notice to the client that the attorney will perform no further legal services or circumstances that reasonably should cause the client to so conclude[.]” (GoTek Energy, Inc. v. SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240, 1247.)

“The issue, therefore, becomes whether counsel’s conduct amounted to ‘positive misconduct’ by which plaintiff was ‘effectually and unknowingly deprived of representation.” (Carroll, supra, 32 Cal.3d at 898, 899, citing Daley v. County of Butte (1964) 227 Cal.App.2d, 380, 391 (Daley).)

In Daley, positive misconduct was identified where the plaintiff’s counsel neglected to serve plaintiff’s son to join him as a party, leading to repeated postponement of trial. The counsel also failed to appear at successive pretrial conferences, did not communicate with court, client or other counsel, and delayed signing a substitution of attorney for over five months. (Daley, supra, 227 Cal.App.2d at 392.)

In Buckert v. Briggs (1971) 15 Cal.App.3d 296 (Buckert), the attorney’s failure to notify plaintiffs regarding a new trial date, despite assurances, and absence at the trial constituted misconduct. Despite promises to seek to have the judgment set aside and to update plaintiffs, the attorney ceased all contact. The Buckert court concluded that the attorney in question was in fact not representing plaintiffs, and “obliterated the existence of the attorney-client relationship” with a “preconceived intention not to act on their behalf.” (Buckert, at 301.)

Orange Empire Nat. Bank v. Kirk (1968) 259 Cal.App.2d 347 further illustrates positive misconduct, where the defendant’s attorney failed to file an appearance in the case, missed the trial leading to a substantial judgment against the client, and failed to seek relief within the statutory period, all while repeatedly misleading the client about the case’s status.

In contrast, “discretionary relief need not be granted for ‘errors by [counsel] ... in failing to calendar and appear” at a hearing. (Yeap v. Leake (1997) 60 Cal.App.4th, 591, 603.) Also, grossly mishandling a routine discovery matter does not constitute an abandonment of the client (Carroll, supra, 32 Cal.3d at 900.) Despite the counsel’s apparent failure to effectively manage document production, the Carroll court held that this does not amount to a total failure of representation that would “obliterate the existence of the attorney-client relationship,” as the counsel remained engaged by propounding discovery requests, obtaining multiple extensions of time, and starting a rescue operation which resulted in the favorable judgment. (Ibid.)

Here, Moving Defendants contend that their prior counsel, Mr. Malczynski, abandoned their defense by failing to appear at trial, not filing necessary trial documents, inadequately responding to discovery requests leading to motions to compel, and not securing a signed fee agreement with the parties. (Mot., at 2.)

Consistent with precedent on identifying positive misconduct, the Court seeks to ascertain whether Mr. Malczynski completely failed to represent the client, or if he had de facto substituted himself out of the case. The case record reveals that prior to his nonappearance at the trial, Mr. Malczynski made efforts to delay the proceedings, including filing an ex parte application to continue the trial from September 20 to November 20, 2023, and another on November 8, 2023, to extend it further to January 5, 2024. On December 22, 2023, Mr. Malczynski attended the Final Status Conference, which was then continued by the Court to December 29, 2023. Mr. Malczynski did not attend the rescheduled Final Status Conference or the subsequent non-jury trial from January 9 and January 11, 2024. After the Court’s January 12, 2024, Judgment, Mr. Malczynski signed two Substitution of Attorney stipulations for the Moving Defendants. However, Mr. Malczynski continued as counsel of record for Defendant 1000 Palms Associates Group, on behalf of whom, Mr. Malczynski filed a Motion to Set Aside on February 27, 2024. In his own Motion to Set Aside, Mr. Malczynski seeks mandatory or discretionary relief based on his mistake in making calendaring errors and overlooking multiple properly served notices of trial from Plaintiff.

When reviewing Mr. Malczynski’s actions in their entirety, the Court does not find that he has “obliterated the existence of the attorney-client relationship” with a “preconceived intention not to act on their behalf,” nor does it find that he has effectively withdrawn himself from the case.

Insufficient representation by counsel does not equate to positive misconduct. Established precedents, as demonstrated in Daley, Orange Empire National Bank, and Buckert, necessitate a total failure in representation for it to be considered positive misconduct. Unlike the attorneys in Buckert and Orange Empire National Bank, Mr. Malczynski did not repeatedly assure his clients about managing the case without taking action, which would indicate a preconceived intention not to act. Additionally, contrary to the situation in Daley, he neither delayed a request from his client to be substituted with new counsel nor failed to timely file a remedial motion.

Despite Mr. Malczynski’s actions may fall below the professional standards of care expected of an attorney, the Court has nonetheless determined that the Moving Defendants failed to establish positive misconduct, which necessitates “extreme degree of neglect” and amount to a “total failure” that “obliterated the existence of the attorney-client relationship” with a “preconceived intention not to act on their behalf.”

2) Prejudice to the Opposing Party

“[W]here the attorney's failure to represent the client amounts to positive misconduct[,] (Citation) [a]n attorney's authority to bind his client does not permit him to impair or destroy the client's cause of action or defense.... The client will not be charged with responsibility for the misconduct of nominal counsel of record, providing the client acts with due diligence in moving for relief after discovery of the attorney's neglect, and the opposing party's rights will not be prejudiced nor suffer injustice as a result of the granting of relief.” (Orange Empire Nat. Bank v. Kirk, supra, 259 Cal.App.2d at 353.)

Even with a determination of positive misconduct, the established authority mandates that the party seeking to set aside the judgment must also show that the opposing party’s rights will not be prejudiced nor suffered injustice as a result.

However, the Moving Defendants have not met this burden. Instead, their Motion attempts to highlight the prejudice they would face if the Motion is denied. (Reply, at 10.) This focus is misplaced and lacks relevance to the required argument.

Furthermore, the Moving Defendants suggest that outcome of the January trial might have been different had the Court been informed of Plaintiff’s prior worker’s compensation issues. Yes, this argument, flawed by the lack of proper evidence, is also considered irrelevant. It fails to meet the preliminary requirement of demonstrating that granting relief would not prejudice Plaintiff. As a result, the Court dismisses this line of argument.

Consequently, the Court DENIES the Motion to Set Aside Judgment based upon abandonment of attorney.

CONCLUSION

The Motion to Set Aside Judgment based upon Abandonment of Attorney is DENIED

Moving party to give notice.