Judge Gary Y. Tanaka, Case 22TRCV00328 2022-12-06 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Tuesday, December 6, 2022

Department B Calendar No. 5

Plaintiff filed the Complaint on April 29, 2022. Plaintiff alleges the following facts. Since 1968, Plaintiff Bennett R. Georgen has owned the residential property located at 404 S. Juanita Avenue, Redondo Beach, California 90277. In June 2021, Defendant breached a land sales contract to purchase the Property from Plaintiff. Plaintiff alleges the following causes of action: 1. Breach of Written Note; 2. Quiet Title; 3. Declaratory Relief. Defendant’s default was entered on June 8, 2022.

Plaintiff’s objections 1 and 5 are sustained. Objections 2 to 4 are overruled.

CCP § 473(b) states, in relevant 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. . . . 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 court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties. . . .”

“After six months from entry of default, a trial court may still vacate a default on equitable grounds even if statutory relief is unavailable. . . . One ground for equitable relief is extrinsic mistake—a term broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits. Extrinsic mistake is found when [among other things] ... a mistake led a court to do what it never intended[.] When a default judgment has been obtained, equitable relief may be given only in exceptional circumstances. [W]hen relief under section 473 is available, there is a strong public policy in favor of granting relief and allowing the requesting party his or her day in court. Beyond this period there is a strong public policy in favor of the finality of judgments and only in exceptional circumstances should relief be granted. . . . To set aside a judgment based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second[ ], the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last[ ], the moving party must demonstrate diligence in seeking to set aside the default once ... discovered.” Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981–82 (internal citations and quotations omitted; emphasis in original).

CCP § 473(d) empowers the Court to set aside any judgment that is void as a matter of law, e.g., lack of subject matter jurisdiction; lack of personal jurisdiction; lack of proper service of the summons and complaint; or the judgment violated due process rights. See, Dhawan v. Biring (2015) 241 Cal.App.4th 963, 973-74; See also Ellard v. Conway (2001) 94 Cal.App.4th 540, 544; See, also, Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 862-64. “It is well settled that a judgment or order which is void on its face, and which requires only an inspection of the judgment roll or record to show its invalidity, may be set aside on motion, at any time after its entry, by the court which rendered the judgment or made the order.” Hiroko Kawakita Hayashi v. Lorenz (1954) 42 Cal.2d 848, 851.

Relief on the ground of extrinsic fraud or mistake is not available to a party who has been given notice of the action yet fails to appear, unless he or she was prevented from participating in the action. Yolo County Dept. of Child Support Services v. Myers (2016) 248 Cal.App.4th 42, 49. Equitable relief is available only where the fraud or mistake was extrinsic, which means that the party was denied the opportunity to be heard. If the fraud or mistake goes to the merits of the action, or occurred at trial, it is deemed “intrinsic” and is not a ground for relief. Marriage of Thorne & Raccina (2012) 203 Cal.App.4th 492, 505. Extrinsic mistake may be found where the party seeking relief was mentally incompetent when judgment was entered, and no guardian was appointed; or where the party's attorney was incapacitated and unable to act. Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471-72. Extrinsic mistake does not apply where a Defendant was simply ignorant of the law and failed to timely file an Answer. Stiles v. Wallis (1983) 147 Cal.App.3d 1143, 1148-1149. “To set aside a judgment based upon extrinsic mistake one 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.” Id.

“Extrinsic fraud occurs when a party is deprived of the opportunity to present his claim or defense to the court; where he was kept ignorant or, other than from his own negligence, fraudulently prevented from fully participating in the proceeding. [Citation.] Examples of extrinsic fraud are: ... failure to give notice of the action to the other party, and convincing the other party not to obtain counsel because the matter will not proceed (and then it does proceed). [Citation.] The essence of extrinsic fraud is one party's preventing the other from having his day in court.’ [Citations.] Extrinsic fraud only arises when one party has in some way fraudulently been prevented from presenting his or her claim or defense. [Citations.] [¶] Extrinsic mistake involves the excusable neglect of a party. [Citation.] When this neglect results in an unjust judgment, without a fair adversary hearing, and the basis for equitable relief is present, this is extrinsic mistake. [Citation.] Reliance on an attorney who becomes incapacitated, or incompetence of the party without appointment of a guardian ad litem, are examples of extrinsic mistake.” Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 290 (internal citations and quotations omitted).

Defendant moves to set aside the entry of default based on mistake, inadvertence, surprise, and excusable neglect. CCP § 473(b). Defendant also makes a stray reference to sub-section (d) but makes no argument to show that the entry of default was void. However, the bulk of the motion requests relief based on extrinsic fraud or mistake. Defendant’s evidence of extrinsic fraud or mistake consists of the following self-serving statements: “After the complaint was served, I was led to believe by Plaintiff that I did not need to respond as Plaintiff and I were discussing a way to resolve the matter. Plaintiff told me that he would take care of it; that I did not need to do anything.” (Decl., Peak, ¶¶ 3-4.)

This purported evidence does not set forth facts to demonstrate mistake, inadvertence, surprise, excusable neglect, extrinsic fraud, or extrinsic mistake. Defendant does not deny that he had notice of the lawsuit and does not challenge the service of the summons and complaint, in any way. Defendant had every opportunity to present a timely defense. As noted earlier, ignorance of the law does not constitute grounds for relief.

“Mistake is not a ground for relief under section 473, subdivision (b), when the court finds that the ‘mistake’ is simply the result of professional incompetence, general ignorance of the law, or unjustifiable negligence in discovering the law. Further, the 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. Finally, as for inadvertence or neglect, to warrant relief under section 473 a litigant's 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. It is the duty of every party desiring to resist an action or to participate in a judicial proceeding to take timely and adequate steps to retain counsel or to act in his own person to avoid an undesirable judgment. Unless in arranging for his defense he shows that he has exercised such reasonable diligence as a man of ordinary prudence usually bestows upon important business his motion for relief under section 473 will be denied. Courts neither act as guardians for incompetent parties nor for those who are grossly careless of their own affairs. The only occasion for the application of section 473 is where a party is unexpectedly placed in a situation to his injury without fault or negligence of his own and against which ordinary prudence could not have guarded.” Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1206 (internal citations and quotations omitted).

Even assuming that Plaintiff told Defendant that Defendant “did not need to do anything,” reliance on this statement from Defendant’s adversary is not justifiable and would, instead, constitute facts demonstrating Defendant’s own negligence which would foreclose granting relief based on extrinsic fraud or mistake. Justifiable reliance is an element of fraud. Simply relying on the adversarial party’s representations after service of a lawsuit, without taking adequate measures to protect one’s interests, does not constitute justifiable reliance, and, instead, constitutes one’s own negligence. Defendant did not argue that he was not properly served with the summons and complaint, or that his due process rights were violated such that he was unable to defend his rights in this action. Defendant freely admits that he had notice of this lawsuit. The facts presented by Defendant does not provide a satisfactory excuse for not presenting a defense to the original action.

Finally, even assuming arguendo that extrinsic fraud or mistake had been established, Plaintiff fails to provide competent evidence to demonstrate the existence of a meritorious case. Instead, conclusory statements to support this element are merely set forth in the memorandum of points and authorities. No actual evidence to support this element has been set forth.