Judge: Mel Red Recana, Case: 20STCV14792, Date: 2024-06-11 Tentative Ruling
All rulings shown here are TENTATIVE ONLY, and thus oral argument WILL be heard. All Counsel are still required to attend.
Case Number: 20STCV14792 Hearing Date: June 11, 2024 Dept: 45
Hearing
Date: June 11, 2024
Moving
Party: Defendants (all
Defendants)
Responding Party: Plaintiff Hasmik Nazarian
Motion
to Set Aside Default
The
court has considered the moving and opposition papers. No reply was received.
The court DENIES the motion to set aside dismissal under CCP § 473(b).
Background
Defendants Southern California Neurology Consultants; Southern
California Neurology Medical Group, Inc.; Neurology Medical Group, Inc.; Sage
Neurohospitalist Management Group, Inc.; Arbi Ohanian; Yafa Minazad; and Emma
Canales (collectively “Defendants”) all move to set aside the default entered
against each of them of this matter pursuant to CCP § 473(b). Defendants’
counsel submits a declaration attesting that the Defense never received the
Court’s October 31, 2023 notice of an order to file an amended answer, nor was
the issue raised in the November 3, 2023 Case Management Conference when trial
dates were set with all parties present. Defendants assert they only learned of
the order to file an amended answer after receiving the default from
Plaintiff’s counsel. (Zargaryan Decl., ¶ 18.) Thus, Defense Counsel ultimately
does not declare he is at fault for the default but, instead, states Defendants
never received the notice of the order to file a First Amended Answer.
On November 15, 2022, Plaintiff filed a request
for entry of default after Defendants failed to file a timely answer subsequent
to a hearing on a demurrer. Defendants claim that they did not answer because
they were relying on representations made by Plaintiff’s counsel that Plaintiff
intend to file a first amended complaint based on the Court’s findings in
response to Defendant’s demurrer. Defense Counsel claims that Plaintiff’s
counsel covertly filed the request for entry of default without providing notice
to Defendants.
On November 17, 2022 the Court denied
Plaintiff’s request for default due to an error with the request. Plaintiff
thereafter submitted a second filing requesting entry of default judgment on
the same day which the Court subsequently granted.
On November 18, 2022, Defendants filed an
answer. However, the Court later issued an order striking this answer, as it
was filed while Defendant was in Default.
On December 22, 2022, the Court issued a
minute order instructing Defendants' counsel to file a motion to set aside a
default as soon as possible.
On February 7, 2023, Defendants
filed their first motion to set aside / vacate default.
On April 7, 2023, the Court noted
during the Hearing for OSC re Set Aside Default that:
“There is
no appearance by or for the Defendants. The Court and counsel confer regarding
the status of the default. Counsel informs the Court that the Defendants are in
default but has filed a motion to set aside the default. After conferring with
counsel, the Court rules as follows: Case Management Conference is scheduled
for 08/21/2023 at 08:30 AM in Department 45 at Stanley Mosk Courthouse.”
On September 15, 2023, the Court and
counsel conferred regarding the tentative ruling for Defendant’s first motion
to set aside default and informed both counsel that they may each submit
simultaneously supplemental briefs no longer than ten pages to the Court within
five days. The court stated that once the briefs were received, the matter
would be taken into submission.
On October 31, 2023, the Court issued a
minute order granting Defendants’ February 7, 2023 motion to set aside default
and also ordering Defendant to answer:
“Defendants'
Answer filed on November 18, 2022 while Defendants were in default is STRICKEN.
The court orders Defendants to file a First Amended Answer within 10 days of
the date of this ruling.”
On
November 27, 2023, Plaintiff submitted a CIV-100 form, requesting the Court
again enter default because Defendants had failed to file an Amended Answer
pursuant to the orders of the October 31, 2023 Minute Order. The Court entered
default the same day.
On
December 6, 2023, Plaintiff filed a Notice of Entry of all Defendants’ Default
and Intent to Obtain Judgment for Damages wherein Plaintiff stated:
“The Court entered
your default on November 27, 2023 when you failed to comply with the Court’s
Order to file an Amended Answer to the Complaint. You have also failed to pay
court ordered costs. That Order is enforceable as a Judgment and a Judgment
will now be obtained. This is the Defendants’ third default.”
On
December 24, 2023, Defense counsel sent the following email to Plaintiff’s
counsel at approximately 5:00 PM:
Your tactics are laughable. I am not sure which
order you are referring to requiring an amended answer, but yet again you are
knowingly and willfully misrepresenting facts to the court and I have formally
filed a complaint against you with the State Bar. There was absolutely no
mention of an “amended answer” at the November 8 hearing, nor is there a
mention of it in the minute order. Please review the minute order from
the hearing date, there is no requirement to file an amended answer and
immediately withdraw your bogus default. If not, we will simply have this set
aside again, wasting more time and will NOT stipulate to toll your five-year
limit. You are well aware that your client's case is absolutely
frivolous and you are grasping for straws getting defaults as you know this is
the only way you will prevail. Once a jury returns a verdict for our clients,
please accept this as notice that we will be pursuing a malicious prosecution
case against you, your firm and your client. I would thank you for your professionalism
moving forward, but I'm not sure you know the definition of the word. Merry
Christmas.
On January 5, 2024 Plaintiff filed a Proposed Judgment for Sanctions,
noting that on October 31, 2023, the Court issued its Order granting
Plaintiff’s request for compensatory legal fees and costs in the reduced amount
of $217.26, and also ordered Defendants’ counsel of record to pay
$217.26 to Plaintiff Hasmik Nazarian, through her counsel of record, within 20
days of the date
of the Court’s ruling. Additionally, Plaintiff filed two judicial
counsel forms (CIV-100 and JUD-100) requesting Court judgment in the total
amount of $1,491,587.15 which includes attorneys’ fees and costs, along with a
memorandum of costs requesting $2,003.70 which includes filing and process
server fees and a jury fee deposit. The JUD-100 form specified it was
requesting the judgment against only Southern California Neurology Consultants.
It did not name or identify any of the other Defendants.
On March 7, 2024, (al) Defendants filed the instant motion, requesting
the Court Set Aside Default, as well as the Declaration of Defendants’ counsel
and attorney of record, Zorik Zargaryan and a Proposed Order.
On May 29, 2024, Plaintiff submitted his Opposition to Set Aside
Defendant’s Motion to Set Aside Defendants’ Third Default, along with the
Declaration of Plaintiff’s counsel and attorney of record, Suzanne E.
Rand-Lewis. Plaintiff additionally requests the Court impose a penalty of
$1,000.00 against Defendants and direct defense counsel to pay $1,000.00 to the
State Bar Client Security Fund, pursuant to Code of Civil Procedure
§473(c)(1) due to Defendants willful violation of this Court’s October 31,
2023, Order.
No reply has been filed.
Applicable Law
CCP 473
CCP § 473(b) states, in
relevant 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.”
Excusable Error
Accordingly, any neglect of
the attorney is imputed to the client, who has the burden on the motion of
showing this neglect was excusable. To determine whether the mistake was
excusable, the court will inquire whether the same error might have been made by
“a reasonably prudent person under the same or similar circumstances . . ..” (Bettencourt,
supra, 42 Cal.3d 270, 276, 228 Cal.Rptr. 190, 721 P.2d 71, citations
omitted.) Conduct falling below the professional standard of care, such as
failure to timely object or to properly advance an argument, is not therefore
excusable. To hold otherwise would be to eliminate the express statutory
requirement of excusability and effectively eviscerate the concept of attorney
malpractice. (Garcia v. Hejmadi, 58 Cal. App. 4th 674, 682, 68 Cal.
Rptr. 2d 228, 233 (1997), as modified on denial of reh'g (Nov. 19,
1997).)
Mandatory Relief Provision, Inexcusable Error
“The mandatory relief
provision acts as a ‘narrow exception to the discretionary relief provision for
default judgments and dismissals. [Citation.]’ ” (Rodriguez v. Brill (2015) 234 Cal.App.4th 715, 723, quoting Zamora v. Clayborn Contracting Group, Inc.
(2002) 28 Cal.4th 249, 257.) “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.” (Id. at 723.) “[T]he 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.” (Id.
at 723.)
“[A] mea
culpa declaration by an attorney establishing that a default, default judgment,
or dismissal was entered against his or her client as the result of attorney
neglect deprives the trial court of discretion to deny relief, even without a
showing that the neglect was excusable.” (Tackett v. City of Huntington
Beach (1994) 22 Cal.App.4th 60, 65.)
Where the attorney's neglect,
although inexcusable, was so extreme as to constitute misconduct effectively
ending the attorney-client relationship, relief is mandatory. “Abandonment” may
afford a basis for relief, at least where the client is relatively free of
fault, but performance which is merely inadequate will not. In Carroll v.
Abbott Laboratories, Inc. (1982) 32 Cal.3d 892, 898–901, 187 Cal.Rptr. 592,
654 P.2d 775, the court found relief under section 473 was not warranted where
the attorney did not abandon the client, but rather simply represented the
client ineffectively. Contrast this with Buckert v. Briggs (1971) 15
Cal.App.3d 296, 301–302, 93 Cal.Rptr. 61, where the trial judge was found to
have properly vacated judgment against the plaintiffs after their attorney not
only failed to inform them of the trial date but also failed himself to appear
at trial
Sworn Affidavit Attesting to Mistake
The text of section 473,
subdivision (b) does not require an explication of reasons as a prerequisite to
mandatory relief. “Statutory analysis begins with the plain language of [a]
statute, and if that language is unambiguous, the inquiry ends there” as well.
(KB Home Greater Los Angeles, Inc. v. Superior Court (2014) 223
Cal.App.4th 1471, 1476, 168 Cal.Rptr.3d 142.) As noted above, section 473,
subdivision (b) makes relief mandatory only if the request for relief “is
accompanied by an attorney's sworn affidavit attesting to his or her mistake,
inadvertence, surprise, or neglect.” (§ 473, subd. (b).) As this text
indicates, what must be attested to is the mistake, inadvertence, surprise, or
neglect—not the reasons for it. (Accord, State
Farm Fire & Casualty Co. v. Pietak (2001)
90 Cal.App.4th 600, 609, 109 Cal.Rptr.2d 256 (Pietak ) [attorney
affidavit must include “admission by counsel for the moving party that his
error resulted in the entry of a default or dismissal” or a “real concession of
error”].) (Martin Potts & Assocs., Inc. v.
Corsair, LLC, 244 Cal. App. 4th 432, 438, 197 Cal. Rptr. 3d 856, 860
(2016).)
This indispensable admission by counsel for
the moving party that his error resulted in the entry of a default or dismissal
from which relief is sought is commonly referred to as an “attorney affidavit
of fault.” (State Farm Fire & Cas. Co. v. Pietak, 90 Cal. App. 4th
600, 608–09, 109 Cal. Rptr. 2d 256, 261 (2001).)
“But neither declaration contains any
sworn admission of mistake, inadvertence, surprise, or error that resulted in a
dismissal of claims. At most, Ireijo has admitted he erred in proceeding in a
manner that precluded him from being able to pursue claims his client expected
him to pursue, which is a different matter. Pietak has not demonstrated he is
entitled to relief under the mandatory provision of section 473, subdivision
(b). (State Farm Fire & Cas. Co. v. Pietak,
90 Cal. App. 4th 600, 609, 109 Cal. Rptr. 2d 256, 261–62 (2001).)
“The legal memorandum Ireijo prepared
contains no real concession of error on his part. Indeed, the memorandum
states, “Ireijo submits that this [is] not a case of neglect on his part.” The
memorandum argues that counsel's interpretation of section 386 was correct and
suggests the decision not to file a cross-complaint in the instant matter was
an intentional, strategic determination . . . . Absent a straightforward
admission of fault by Ireijo, Pietak cannot obtain relief under the mandatory
provision of section 473.” (State Farm Fire & Cas. Co. v. Pietak, 90
Cal. App. 4th 600, 609–10, 109 Cal. Rptr. 2d 256, 262 (2001).)
Discussion
Defendants now maintain that the email sent on November 17, 2022, was
the first time the Defense heard anything regarding Plaintiff’s request for
default as opposed to an amended complaint. Declaration of Zorik Zargaryan ¶8.
(Defendant’s Motion to Set Aside Default (“Mot.”), pg. 4.)
Next, Defendants argue that they did not receive notice of the October
31, 2023, hearing and resultant Minute Order (whereby the Court granted
Defendant’s motion to set aside default and ordered them to file an amended
answer) because the only minute order received by Defendants’ counsel was the
order dated October 2, 2023. (Mot., pgs. 4-5.) The October 2, 2023, minute
order concerned scheduling a case management conference on November 3, 2023
which is why counsel for all parties appeared for the November 3, 2023, the
Case Management Conference. (Zargaryan Decl., ¶14; Mot., pgs. 4-5.) Defendants
further argue that on November 27, 2023, after trial dates were set and the
case was at issue, Plaintiff’s counsel “deviously filed yet another default
without a sliver of notice to Defendants’ counsel.” (Mot., pg. 5.)
Thus, Defendants maintain it was not until December 6, 2023, after
default was entered, that Plaintiff’s counsel provided notice to the defense of
the default. (Zargaryan Decl., ¶17, Ex. C, Mot., pg. 5.) Thus, Defendants
contend that in the instant case, Cal. Civ. Proc. Code § 473 provides that a
court may relieve a party from a final judgment on the basis of excusable
neglect. (Mot., pg. 8.) Defendant
further argues that if Plaintiff's
counsel knows the identity of the lawyer representing Defendant, he or she owes
an ethical obligation to warn before requesting entry of defendant's default.
Failure to do so is a professional discourtesy to opposing counsel that
will not be condoned by the courts. Thus, the instant motion should be granted
because Defendants were not given notice of Plaintiff’s most recent request for
entry of default judgment.
Plaintiff argues Defendants’ motion fails to establish “mistake,
inadvertence, surprise, or excusable neglect,” and thus, fails to establish
good cause to set aside the default.
(See, Declaration of Suzanne E. Rand-Lewis.) (Opposition (“Opp.”), pg.
2.) Furthermore, Plaintiff asserts that this is Defendant’s third default
entered in this case and it is due to Defendants’ deliberate and willful
violation of this Court’s Order, Court Rules, and litigation tactics designed
to purposefully delay Plaintiff’s prosecution of this case in order to cause
the five (5) year statute [Code of Civil Procedure §583.310] to run, and to
unnecessarily increase the cost and burden of this litigation to Plaintiff.
(Opp., pg. 2.) Moreover, Plaintiff asserts that Defendants’ willful violation
of this Court’s Order, failure to timely file their First Amended Answer, and
refusal to pay fees and costs ordered by the Court is a contempt of Court, and
not a valid basis for relief from default under Code of Civil Procedure. (Id.
at pgs. 2- 3.) Plaintiff alleges Defendants have not submitted a proper
attorney affidavit of fault required for mandatory relief pursuant to Code of
Civil Procedure §473(b). (Id. at pg. 3.) Lastly, Plaintiff argues that
he will be severely prejudiced if Defendants are granted relief from their
third default because this case has been pending for over four (4) years and
Defendants have done everything possible to delay its prosecution. (Id.)
Moreover, Plaintiff has incurred substantial attorneys’ fees and costs due to
Defendants’ dilatory conduct. (Id.)
On October 31, 2023, the Court granted Defendants’ request to set
aside the November 17, 2022, default and requested Defendants submit an Amended
Answer within ten days. Defendants failed to do so. Although Defendants now
state that it was not until December 6, 2024, that Defendants learned they were
once again in Default, the Court notes that on December 24, 2023, despite
knowing they were again in Default, Defendants sent Plaintiff’s counsel an
email indicating they were still of the belief that there was no requirement to
file an amended answer. Assuming arguendo, Defendants were not aware or
given notice of the October 31, 2024, order instructing Defendants to submit an
amended answer, by December 24, 2024, Defendants had every reason to be aware
of this order. This is because by December 24, 2024, it indisputable that Defendants
were aware of the Default that had been entered, which was based on their
failure to comply with this order. Such mistakes do not constitute, as
Defendants imply, excusable neglect because Defendants do not argue or
demonstrate that such mistakes were mistakes that a reasonably prudent person
under the same circumstances would make. The Court also notes that Defendants
did not file their Motion to Set Aside until March 7, 2024, despite Defendants’
awareness of being in Default by at the very latest—December 6, 2023.
Thus, Defendants must demonstrate that their requested relief now
falls within the mandatory provision of CCP 473(b). Yet, in addition to the
Court finding Defendants have failed to demonstrate excusable neglect or
mistake, the Court also finds a further issue which concerns Defendants’ sworn
affidavit.
As mentioned, Defendants concurrently submitted the Declaration of Defendants’
attorney of record, Zorik Zargaryan, with their moving papers. In Defendants’
moving papers, Defendants argue their Counsel was not aware of Plaintiff’s
intention to submit a request for default and that courts do not favor
upholding defaults when a party has not given notice or warned the opposing
party. While this Court agrees, this Court also maintains that Defendants’
failure to comply with the October 31, 2024, Court order and Defendants’
subsequent failure to file an amended answer is still ultimately Defendants’
responsibility. Given this, such a failure is neither the responsibility of the
Court, nor of Plaintiff’s counsel. As
the foregoing case law provides, the reasoning for mistake is not as critical
as the affidavit attesting to such mistake when seeking relief under the
mandatory provision. Defendants’ Counsel does not make an indispensable
admission of fault in either its affidavit, or its moving papers. Instead, Defendants
counsel provides reasoning, including not being noticed by the Court, not being
warned prior to Plaintiff filing his default, the order not being discussed at
the November 3, 2023 Case Management Conference, and Defendant’s reasoning for
not filing an answer when waiting for Plaintiff to file a first amended
complaint. Such reasoning is well considered by the Court. However, the Court
finds such reasoning does not constitute an attestation of fault.
Furthermore, Defendants have provided the Court with reasons to be
concerned regarding prejudice against Plaintiff. In the December 24, 2024,
email whereby Defendants’ counsel insisted that the Court had not ordered
Defendants to file an amended answer, Defendants’ counsel threatened
Plaintiff’s counsel that if Plaintiff did not withdraw its default, Defendants
would not stipulate to toll Plaintiff’s five-year limit. Given Plaintiff’s
action was filed in April of 2020, Defendant has provided the Court with reason
to question its motivations regarding its delay in filing an amended
answer.
Accordingly, the Court hereby DENIES Defendants’ request to Set Aside
and/or Vacate Default for the foregoing reasons.
It is so ordered.
Dated:
June 11, 2024
_______________________
MEL RED RECANA
Judge of the
Superior Court