Judge Kerry Bensinger, Case Number: 20STCV22189, Date: 2023-07-10 Tentative Ruling

On June 11, 2020, Plaintiff, Carl Baker, filed this action against Defendant, Jorge Martinez, for injuries and damages arising from a motor vehicle accident. At the time of the alleged accident, Plaintiff was working in the course and scope of his employment with the City of Los Angeles (“City”). City filed a subrogation action against Defendant to recover worker’s compensation benefits paid on Plaintiff’s behalf in the related case City of Los Angeles v. Martinez, Case No. 20STCV20865.

On June 29, 2022, the Court dismissed Plaintiff’s Complaint without prejudice after Plaintiff did not appear at the final status conference or non-jury trial. On the same day, the Clerk of the Court caused to be mailed notice of the Court’s dismissal order. Plaintiff filed proof of service of Notice of Court Order the next day. Thereafter, in the related case, Defendant tendered, and City accepted, Defendant’s policy limits. The related case was dismissed on July 28, 2022.

On November 23, 2022, Plaintiff filed the instant motion to set aside the dismissal under Code of Civil Procedure section 473, subdivision (b). At the hearing, Defendant argued that under Labor Code section 3850 et seq., settlement of the related case barred Plaintiff from seeking double recovery. The Motion was heard on April 6, 2023. After hearing argument, the Court requested that counsel for Plaintiff and City meet and confer to see if an agreement could be reached in sharing Defendant’s payment of his $15,000 policy limits. The parties did not reach agreement.

On May 9, 2023, the Court ordered further briefing from the parties. The parties have submitted further briefing.

Code of Civil Procedure section 473, subdivision (b) provides that a court may “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.” In addition, a court must vacate a default or dismissal when a motion for relief under Section 473, subdivision (b) is filed timely and accompanied by an attorney’s sworn affidavit attesting to the attorney’s mistake, inadvertence, surprise or neglect “unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise or neglect.” (Code Civ. Proc., § 473, subd. (b).)

The party or the legal representative must seek such relief “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); see Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 [“because more than six months had elapsed from the entry of default, and hence relief under section 473 was unavailable”]; People v. The North River Ins. Co. (2011) 200 Cal.App.4th 712, 721 [motion for relief under section 473 must be brought “within a reasonable time, in no case exceeding six months”].)

Defendant argues that he will suffer extreme prejudice if Plaintiff’s motion to set aside dismissal is granted. Defendant represents that on reliance of that dismissal, he and his insurance carrier settled the related case with City and paid the policy limits of $15,000. As such, there is no insurance money remaining to pay a settlement or verdict in this case.

In its briefing, City states that it does not necessarily oppose Plaintiff’s motion. Rather, City seeks to redirect the focus on the issue before the Court: whether Plaintiff’s action warrants reinstatement because of mistake or excusable neglect. City also points out that (1) setting aside dismissal would revive Plaintiff’s action against Defendant only, (2) the Court does not have jurisdiction to make any ruling that would affect the settlement reached between City and Defendant in the related case because City is not a party to this action nor is the validity of that settlement agreement an issue before the Court, and (3) under Draper v. Aceto (2001) 26 Cal.4th 1086, 1094-95, City’s subrogation claim has priority and the employee (Plaintiff) is entitled only to the amount, if any, remaining after full reimbursement of the employer for benefits it has paid to the employee.[1]

Plaintiff does not address any of the foregoing points. Rather, Plaintiff contends that City and Defendant knew that Plaintiff’s motion to set aside dismissal was pending yet negotiated a settlement release without Plaintiff or counsel present. As to the motion, Plaintiff argues Defendant fails to demonstrate prejudice, and further, set aside of the dismissal is mandatory under Code of Civil Procedure section 473. Plaintiff does not provide any explanation for the nearly five month delay in filing this motion.

Defendant contends that Plaintiff misrepresents the law and the facts of this case. First, Section 473 does not mandate an order setting aside dismissal of Plaintiff’s Complaint because Plaintiff fails to provide any reason for waiting nearly five months before seeking relief. Second, Plaintiff’s contention that City and Defendant negotiated a settlement while Plaintiff’s motion to set aside was pending is manifestly false. City and Defendant settled the case in July 2022. Plaintiff filed this motion in November 2022. This motion was not pending at the time City and Defendant negotiated a settlement.

After consideration of the Motion, Opposition, and further briefing, the Court finds that Plaintiff is not entitled to an order setting aside the June 29, 2022 dismissal of his Complaint. In his motion, Plaintiff’s counsel represents that no appearances were made at the Final Status Conference and Trial due to a calendaring issue. The calendaring issue, Plaintiff’s counsel contends, is excusable neglect. However, the Clerk of the Court mailed notice of the Court’s order dismissing Plaintiff’s action on June 29, 2023. Defendant provided Plaintiff with notice of the dismissal order on June 30, 2023. Yet Plaintiff waited until November 23, 2022—nearly five months later—to file a motion to set aside dismissal. Neither in Plaintiff’s motion nor his further briefing does Plaintiff explain the reason for the delay given the uncontroverted evidence he was given notice of the dismissal. Given the lack of explanation, the Court cannot find Plaintiff sought relief from the dismissal within a reasonable time. “The six months’ limitation [under Civil Code Procedure section 437] is simply a limitation upon the power of the court to grant any relief, regardless of any question either as to the merits of the application, or as to whether or not the application was made within what might be held to be a reasonable time under the circumstances. Under this statute, in addition to being made within the six months’ period, the application must be made within ‘a reasonable time,’ and what is a reasonable time in any case depends upon the circumstances of that particular case. While in the determination of that question, a large discretion is necessarily confided to [the trial] court [citation], there must be some showing—some evidence—as the basis for the exercise of such discretion. [Citation.]” (Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal. 2d 523, 528.) As such, Plaintiff must offer an explanation for a delay of more than three months. “To hold otherwise—that in the absence of any explanation a delay of more than three months in undertaking to open a default can be excused—would empower the trial court to dispense with the ‘reasonable time’ requirement of the statute.” (Id. at p. 532.) Here, Plaintiff’s failure to appear at the Final Status Conference (FSC) and Trial, coupled with a delay of five months after having been provided with notice by the Court and counsel, constitutes inexcusable neglect.

Moreover, Defendant demonstrates that he would be prejudiced if Plaintiff’s motion is granted. Defendant relied on the dismissal when negotiating a settlement with City in the related case. He cannot be returned to a predismissal negotiating posture; he is no longer similarly situated having depleted his insurance funds. Indeed, it is undisputed that Defendant has already paid the full amount of his insurance policy limits to City. Moreover, Defendant would be forced to re-enter litigation in this case having relied on the dismissal this action.

Based on the foregoing, the motion to set aside the June 29, 2022, dismissal is DENIED.

Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.

[1] During meet and confer efforts between counsel for City and Plaintiff, Plaintiff’s counsel demanded that City pay money to his client and counsel’s attorney’s fees. To the extent Plaintiff’s counsel seeks from City payment of attorney’s fees, City argues that Draper, supra also forecloses the request. “[I]f the client is the employee, and the employee recovers nothing because the settlement proceeds are less than the employer’s reimbursable compensation costs, then the employee’s attorney cannot recover fees from the settlement proceeds.” (Draper, 26 Cal.4th at pp. 1094-95.)