Judge: Michael E. Whitaker, Case: 19STCV40369, Date: 2022-09-19 Tentative Ruling

Case Number: 19STCV40369    Hearing Date: September 19, 2022    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

 

TENTATIVE RULING

 

DEPARTMENT

32

HEARING DATE

September 19, 2022

CASE NUMBER

19STCV40369

MOTION

Motion to Set Aside Default and Default Judgment

MOVING PARTY

Defendant Ben Behzadi

OPPOSING PARTIES

Plaintiffs Eric B. Gordon and Judy A. Abel

 

MOTION

 

            Defendant Ben Behzadi moves to set aside the Clerk of the Court’s entry of default on January 28, 2022, the default judgment entered against Defendant on April 11, 2022 and all other orders entered as a result of attorney mistake, inadvertence, surprise or neglect.  Plaintiffs Eric B. Gordon and Judy A. Abel (collectively, “Plaintiffs”) oppose the motion. Defendant replies to the opposition. 

 

EVIDENCE

 

            With respect to the evidentiary objections filed by Defendant, the Court rules as follows:

 

  1. Overruled.

  2. Sustained in part:  “who stated that he was the person currently (and at the time of the Covid lockdown in March of 2020) responsible for managing the building at 800 W. 6th Street” (Inadmissible Hearsay)

  3. Sustained. (Inadmissible Hearsay)

  4. Sustained. (Inadmissible Hearsay)

 

ANALYSIS

 

            Code of Civil procedure section 473 “includes a discretionary provision, which applies permissively, and a mandatory provision, which applies as of right.” (Minick v. City of Petaluma (2016) 3 Cal.App.5th 15, 25 (hereafter, “Minick”).)  “Section 473 is a remedial statute to be “applied liberally” in favor of relief if the opposing party will not suffer prejudice.  Because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.  Unless inexcusable neglect is clear, the policy favoring trial on the merits prevails.”  (Minick, supra, 3 Cal.App.5th at p. 24 [cleaned up].) 

 

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 Ca.App.4th 712, 721 [motion for relief under section 473 must be brought “within a reasonable time, in no case exceeding six months”]).  “The six-month limit is mandatory; a court has no authority to grant relief under section 473, subdivision (b), unless an application is made within the six-month period.”  (Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 340, citations omitted.) 

 

  1. MANDATORY RELIEF

 

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

 

(Code Civ. Proc., § 473, subd. (b).) 

 

            “In considering whether the trial court properly denied relief under section 473(b), the first question is the sufficiency of defendants' showing of attorney fault, if believed, to trigger the mandatory relief provisions of that statute.”  (Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 Cal.App.4th 868, 896 (disapproved on other grounds by Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830) (hereafter, “Standard”).)  “Under section 473(b), a party is entitled to relief from a default and resulting judgment whenever, on timely application for relief, his attorney ‘attest[s] to his or her mistake, inadvertence, surprise, or neglect’ in connection with the default or the judgment.”  (Ibid.) 

 

            In Standard, counsel for the defendants attested that he believed the service of the summons on defendants was defective and informed defendants that they were not required to answer the summons under the laws of the United States.  Defense counsel also did not advise the defendants to take any affirmative action, for example move to quash the service of the summons.  Defense counsel also indicated that he expected “receive notice of any application for entry of default before default was entered so that we could respond.”  “He also acknowledged that he was responsible for advising defendants in connection with, and preparing, the first motion for relief from the default; that in doing so he “believed that the Court would set aside any default because of an invalid service of process”; and that he omitted “any argument showing that there was a ‘mistake, inadvertence, surprise, or excusable neglect’ in WEC and Winbond Israel's motions.” Although he did not separately point it out, he also indisputably omitted from defendants' first motion any invocation of the mandatory relief provisions of section 473(b), and the required showing to support such an invocation.”  (Standard, supra, 179 Cal.App.4th at p. 897.)   

 

            After considering the record before the trial court, the appellate court held that “Counsel's mistakes, in contrast, entitled them to relief . . . .  [defense counsel's] affidavit and the record as a whole overwhelmingly established that the default and ensuing judgment were the products of attorney fault.”  (Standard, supra, 179 Cal.App.4th at p. 900.)   

 

            Further, “[t]he court's determination of whether the default was caused by the attorney's mistake, inadvertence, surprise, or neglect is in part a credibility determination.  Credibility is an issue for the fact finder, we do not reweigh evidence or reassess the credibility of witnesses. When the evidence gives rise to conflicting reasonable inferences, one of which supports the findings of the trial court, the trial court's finding is conclusive on appeal.”  (Cowan v. Krayzman (2011) 196 Cal.App.4th 907, 915 [cleaned up].) 

 

Here, Defendant moves for mandatory relief based on an attorney affidavit of fault.  In its November 18, 2021 Minute Order, the Court ordered Defendant’s answer stricken as a terminating sanction for Defendant’s failure to serve verified responses to Plaintiff’s written discovery and pay monetary sanctions in compliance with the Court’s orders of September 14, 2020, and July 12, 2021.  (See November 18, 2021 Minute Order.) 

 

Defendant advances the Declaration of Donna Bullock (“Bullock”), Defendant’s former counsel of record.  In particular, Bullock claims that although Defendant signed a retainer agreement, no retainer payment was received by her office.  As such, Bullock claimed she informed Defendant that no work on his behalf would be taken until the payment was received.  (Declaration of Donna Bullock, ¶¶ 3-4.) And when no payment was tendered, Bullock declares:  “I did not believe that I was attorney for Defendant, or that I was required to represent him in this case. I was not contacted by the Defendant at any time following the date of the written retainer agreement until on or about June 19, 2022. I mistakenly believed that Mr. Behzadi had decided not to hire me and had hired someone else to represent him.”  (Id. at ¶ 5.)  In addition, Bullock states that due to a series of miscommunications and circumstances due to the stay-at-home orders related to the COVID-19 pandemic, such as the changing of her firm’s physical and electronic service addresses, her office inadvertently filed an answer to Plaintiff’s complaint on Defendant’s behalf and thereafter did not receive any further filings in the case.  (Declaration of Donna Bullock, ¶¶ 3-11.) 

 

In opposition, Plaintiffs argue that Defendant fails to establish grounds for relief under the mandatory provisions of Section 473 because Bullock’s declaration is not credible.  The Court agrees.

 

Plaintiffs advance the Declaration, Steven E. Weitz (“Weitz”), counsel for Plaintiffs.  Weitz states that he was informed in June 2019 by Defendant’s former counsel, Richard J. Greene and Bullock, that Bullock was representing Defendant.  (Declaration of Steven E. Weitz, ¶ 5, Exhibit 1.)  In fact, Bullock states in pertinent part in an email exchange in June 2019:  “This email shall confirm that I have been retained in place of Mr. Greene, and that I am to advise you that any arbitration or mediation be cancelled or taken off calendar, and any upcoming appointments cancelled, to be rescheduled through my offices.”  (Ibid.)  Bullock’s statement of retention is confirmed in a June 19, 2021 email in which Defendant states:  “Dear Donna, Please kindly send a letter to my attorney Mr. Rick Greene and her attorney Mr. Watson that you will represent me and cancel any appointments that has been set up for arbitration.  Thank you.”  (Ibid.)   Moreover, Weitz claims that he served discovery requests on  Bullock and made attempts to communicate with her before the “Covid lockdown.”  (Declaration of Steven E. Weitz, ¶ 6.) 

 

Plaintiffs’ evidence calls into question the credibility of Bullock’s affidavit of attorney fault.  Bullock’s statement that she did not believe she was “retained” to represent Defendant because of a lack of payment among other reasons is contradicted by her own email of June 24, 2019 in which she states the opposite and belies Defendant’s statement in the email of June 19, 2021 that Bullock agreed to represent him.  As such, the Court is unwilling to accept Bullock’s declaration as competent evidence of attorney fault.  In short, Bullock is not credible and Defendant is not entitled to mandatory relief under Section 473. 

 

  1. DISCRETIONARY RELIEF

 

Per Code of Civil Procedure section 473, subdivision (b), a 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.”   Defendant contends he is entitled to discretionary relief under Section 473 and advances his own declaration.  

 

Defendant claims that he retained Bullock to represent him by signing an engagement agreement and Bullock never represented to him otherwise.  (Declaration of Ben Behzadi, ¶¶ 5 & 7, Exhibit A.)  As a result, Defendant believed that Bullock would handle all aspects of the action filed by Plaintiffs.  (Id. at ¶¶ 6 & 8.)   Bullock filed an answer to the complaint on his behalf in December 2019.  (Id. at ¶ 9, Exhibit B.)  Thereafter, Defendant did not receive any communications from Bullock but assumed the lack of communication was attributed to the Covid-19 pandemic.  (Id. at ¶ 10.)  Thus, Defendant was unaware that a judgment was entered against in him in this action and was astonished when he learned that an abstract of judgment was recorded against his real property in June 2022.  (Id. at ¶¶ 11-12, Exhibit C.)  Consequently, Defendant retained new counsel and discovered that Bullock did not handle “all aspects” of his defense including responding to discovery requests propounded by Plaintiffs, resulting in the entry of default and default  judgment.  (Id. at ¶¶ 12-14.)  Defendant claims that the recordation of the abstract of judgment places “a significant encumbrance on his primary residence.”  (Id. at ¶ 15.) 

 

In opposition, Plaintiffs first argue that Defendant has not served verified responses to the underlying discovery requests.  In the context of a terminating sanction for failing to provide discovery, Section 473’s provision for mandatory relief requires “the application for relief to be accompanied by verified discovery responses[.]”  (Rodriguez v. Brill (2015) 243 Cal.App.4th 715, 729.)  “[S]ubstantial compliance with this requirement is sufficient.”  (Ibid.) 

 

In response to the opposition on this point, Defendant filed a Notice of Lodging Verified Discovery Responses.  As part of that notice, Defendant attached copies of verified responses to the underlying discovery requests, Form Interrogatories, Special Interrogatories and Requests for Production of Documents.  Thus, the Court finds that Defendant has demonstrated substantial compliance with the requirement as noted above.

 

Second, Plaintiffs claim that Defendant’s declaration is not credible. In particular, Plaintiffs assert:  “Defendant Behzadi, in his Declaration, claims that, for more than 2½ vears after his attorney filed and provided him with his Answer in the instant lawsuit involving his next-door neighbors, he did not make a single inquiry to his attorney regarding the lawsuit. Not an email, not a telephone call, not a text message, not a fax, not an in-person contact – nothing! That is inexcusable neglect and strains credibility beyond all belief regarding his declaration and that alone calls for the denial of this motion under the discretionary provisions.” 

 

Although the Court does not find Defendant’s inaction to be prudent or wise, he like so many other clients assume that their attorneys are working on their behalf and there is nothing in the record that would cause the Court to find otherwise.  Moreover, the Court has no basis to find Defendant’s statement that he assumed the pandemic which took hold after the answer was filed somehow delayed the action against him and served as an explanation for the lack of communication from Bullock who according to Defendant agreed to represent him as evident by the filing of the answer to Plaintiffs’ complaint.    

 

            Trial courts “must balance the public policy favoring a trial on the merits against the public policies favoring finality of judgments and disfavoring unreasonable delays in litigation and the policy an innocent client should not have to suffer from its attorney's gross negligence against the policy a grossly incompetent attorney should not be relieved from the consequences of his or her incompetence.”  (Seacall Development, Ltd. v. Santa Monica Rent Control Bd. (1999) 73 Cal.App.4th 201, 205 [cleaned up]; Oliveros v. County of Los Angeles (2004) 120 Cal.App.4th 1389, 1399 [there is a “strong public policy in favor of deciding cases on the merits”].)  Against this backdrop, Plaintiffs have not established that they will suffer prejudice by affording Defendant the relief he seeks in setting aside the default and subsequent default judgment. 

 

            Accordingly, based upon the record before this Court, the Court grants Defendant’s request for discretionary relief under Section 473 and the Court will order the default entered on January 28, 2022 and default judgment entered on April 11, 2022 set aside. 

 

  1. COMPENSATORY FEES

 

            In light of the Court’s determination to grant Defendant’s request for discretionary relief under Section 473, the Court will order Defendant to pay a penalty of $1000 to Plaintiffs.  (See Code Civ. Proc., § 473, subd. (c)(1)(A).) And because the Court is not granting Defendant relief per Bullock’s purported affidavit of fault, Plaintiffs are not entitled to further compensation under Section 473, subdivision (b) or subdivision (c)(1)(A.) 

           

CONCLUSION AND ORDER

 

In considering the evidence submitted by Defendant and Plaintiffs, the Court grants Defendant’s motion to set aside the entry of default and default judgment under Code of Civil Procedure section 473 for the reasons stated above, and orders the default entered on December 23, 2021 and default judgment entered on April 11, 2022 set aside.  As such, the Court orders the answer filed by Defendant on December 30, 2019 reinstated. 

 

Further, the Court orders Plaintiffs to take all necessary steps forthwith to have the abstract of judgment recorded against any of Defendant’s real property retracted.  And under Code of Civil Procedure section 473, the Court orders Defendant to pay a penalty of $1000 to Plaintiffs through their counsel of record on or before October 17, 2022. 

 

Lastly, the Court sets a Trial Setting Conference on November 16, 2022 at 8:30 A.M. in Department 32. 

 

Defendant shall provide notice of the Court’s orders and file a proof of service of the same.