Judge: Mark H. Epstein, Case: 22SMCV00897, Date: 2023-04-13 Tentative Ruling

Case Number: 22SMCV00897    Hearing Date: April 13, 2023    Dept: R

As an initial matter, the court agrees with plaintiff that the order to show cause is DISCHARGED.  With that, the court turns to the real motion at hand: to vacate the default.

The court first addresses the registration issue.  The court agrees that plaintiff is registered now so the registration issue is MOOT.  The court admonishes defendant and defense counsel that they need to be far more careful.  Defense counsel accused plaintiff’s counsel of defrauding the court in the opposition—and those were the terms used.  Were it true, it is an offense that would subject counsel to discipline by the bar, including potentially suspension or disbarment.  It is a very serious charge to make against anyone, and especially a lawyer.  The court understands why defendant believed the things stated in the reply, but the fact is that a deeper dig would have demonstrated that the accusations were false and unjustified.  If defense counsel makes further similar accusations, counsel should be very sure that the accusations are true.  In this case, a call to plaintiff’s counsel seeking an explanation would have resolved the question entirely and that would have been the proper course before these sorts of inflammatory accusations are made.  The court appreciates plaintiff’s more measured response in the supplemental declaration, which, under the circumstances, was entirely proper and which the court has considered.

The court now turns to the merits of the motion. 

The default here was entered in August 2022.  Defendant stated that his counsel called plaintiff on December 30, 2022 to discuss various matters.  In that call, counsel stated that he had just been retained and was getting up to speed and would respond shortly.  Plaintiff’s counsel did not mention the default during that call.  Defendant in fact prepared an answer, but it was rejected because defendant was already in default.  No judgment has been entered in this case.

On the merits, the court finds that enough has been shown to warrant vacating default given the strong preference to resolve the case on its merits.  (Kramer v. Traditional Escrow, Inc. (2020) 56 Cal.App.5th 13.)  The default was entered two months after service.  That is not a really long time.  True, entry of the default was proper and plaintiff had every right to seek it.  But this is not a case where plaintiff was getting nothing but radio silence despite repeated efforts to engage the defense. 

Reading between the lines, it appears that defendant lost the property at a trustee’s sale in July 2022 (after the complaint was filed but before default was entered).  Defendant asserts that he had discussions with plaintiff and plaintiff suggested that it would be willing to sell the property back to defendant.  In November 2022—after the default was entered—defendant states that he had put together the financing to buy back the property on the terms plaintiff had suggested.  However, plaintiff (according to defendant) refused to respond to defendant’s offer.

According to defense counsel, defendant eventually retained counsel (in December), who called plaintiff as discussed above.

Under these circumstances, the court concludes that there is excusable neglect.  Defendant believed he was working toward a global resolution until sometime in the November/December 2022 time frame.  In the call between counsel on 12/30/22, plaintiff did not mention this case or that defendant was in default.  Defense counsel attempted to file an answer, but it was rejected.  Plaintiff argues that a careful reading of the declaration suggests that the real reason why defendant did not respond sooner was financial—that defendant did not want to spend the money on a lawyer.  But the court sees it differently.  A reading of the declaration drawing reasonable inferences in defendant’s favor would lead the court to believe that defendant was hoping to avoid litigation entirely by taking advantage of what defendant thought was an offer to resolve the case.  And, while it is true defendant could have represented himself for free, the court cannot say that it was unreasonable for the defendant to focus efforts on resolving the case rather than litigating it.  The court believes that it is fair to say that a “reasonably prudent person under the same or similar circumstances might have made the same error.”  (Battencourt v. Los Rios community College Dist. (1986) 42 Cal.3d 270, emphasis added, internal citation omitted.)

Both sides could have done better.  But that said, the policy favoring resolution on the merits carries the day.  The motion is GRANTED.  The answer defendant lodged is deemed filed as of this date.  The court will schedule a CMC for approximately 30 days hence.