Judge: Michael Shultz, Case: 22CMCV00007, Date: 2023-01-06 Tentative Ruling
Case Number: 22CMCV00007 Hearing Date: January 6, 2023 Dept: A
22CMCV00007
Assurant Global P&C Claims v. Hilliard Contracting Services, et al.
[TENTATIVE] ORDER
DENYING
[TENTATIVE]
ORDER TAKING OFF CALENDAR MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT BY
I.
BACKGROUND
This is a subrogation action.
Plaintiff provided homeowner’s insurance to its insured, who sustained water
damage to his home on March 10, 2021 allegedly caused by Defendant, Hilliard
Contracting Services (“Hilliard”) and H20 Dynamics (“H20”), who were contracted
to install rain barrels at the insured’s home. Plaintiff paid insurance
benefits $79,112.95 to its insured for the water damage.
On March 30, 2022, H20 filed a
cross-complaint against Hilliard for indemnity and contribution. The clerk
entered Cross-Defendant Hilliard’s default on H20’s cross-complaint on August
17, 2022. Plaintiff subsequently
dismissed Hilliard from the complaint.
II.
ARGUMENTS
Cross-Defendant Hilliard moves to
set aside the entry of default filed against it on August 17, 2022. Hilliard
argues that H20 did not serve its cross-complaint until July 14, 2022,
requiring Hilliard’s response by August 15, 2022. However, Hilliard settled
with Plaintiff in the main action resulting in Plaintiff’s dismissal of
Hilliard with prejudice.
Hilliard inadvertently missed the
deadline to answer the cross-complaint by two days because Hilliard was
negotiating settlement and meeting and conferring with H20 to stipulate to a
determination that the settlement was in good faith to avoid delays, motion
practice, and other costs and expenses. Despite efforts to meet and confer, H20
refused to stipulate to vacate the default unless Hilliard paid additional
money to settle Plaintiff’s claims against H20.
H20’s opposition, filed on December
13, 2022, states that the motion is not supported by any affidavit attesting to
counsel’s mistake, inadvertence, surprise, or excusable neglect in failing to timely
answer the cross-complaint. Malalai Anbari, counsel for Hilliard, merely
outlines the settlement and the fact that H20 is unwilling to stipulate to
vacate default.
III.
DISCUSSION
Code of Civil Procedure section 473(b)
provides for discretionary or mandatory relief from default. The court has
discretion to grant a party relief from a judgment, order, or other proceeding
taken against that party through the party’s mistake, inadvertence, surprise,
or excusable neglect. Code Civ. Proc., § 473 subd. (b). The
motion must be made within six months from the entry of default. Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333,
345. The clerk entered default against Cross-Defendant Hilliard on
August 17, 2022, and Cross-Defendant filed this motion on November 23, 2022.
The motion is timely made.
While Section 473 is liberally
applied, the party seeking relief has to show a satisfactory excuse for the
conduct and diligence in making the motion. Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401,
1410.
To apply for mandatory relief from
default, the motion must be accompanied by an attorney’s affidavit attesting to
his or her mistake, inadvertence, surprise, or neglect and the motion must be
made no more than six months after entry of judgment “unless the court finds
that the default or dismissal was not in fact caused by the attorney's mistake,
inadvertence, surprise, or neglect." Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 297; Code Civ. Proc., § 473 subd. (b
Whether or not Cross-Defendant
seeks mandatory or discretionary relief, Cross-Defendant has not met its burden
of proof showing entitlement to the relief or that counsel acted with
reasonable diligence. With an affidavit of fault, Cross-Defendant is not
entitled to mandatory relief. Hilliard’s motion argues that someone
inadvertently missed the responsive pleading deadline by two days, which was
“excusable under the circumstances.” Motion, 5:13-17. This assertion is not
supported by any declaration attesting to an attorney’s excusable neglect. See
Declaration of Malalai Anbari.
IV.
CONCLUSION
As Cross-Defendant Hilliard has
not provided the required declaration in support of the motion, the motion is
DENIED without prejudice. Alternatively, after hearing from the parties, the
court will consider continuing the hearing subject to counsel filing an
affidavit of fault in support of the motion.
[TENTATIVE] ORDER TAKING OFF CALENDAR MOTION FOR DETERMINATION OF
GOOD FAITH SETTLEMENT BY
Defendant Hilliard filed this
motion on November 23, 2022 seeking the court’s determination that the
settlement it entered into with Plaintiff for $21,500.00 was made in good faith
pursuant to Code of Civil Procedure, section 877.6.
Cross-Complainant H20 filed its opposition
in an “abundance of caution” since Defendant’s motion appears to be a
“proposed” motion to be filed pending the court’s determination of
Cross-Defendant Hilliard’s motion to set aside its default. Defendant Hilliard
is precluded from seeking the court’s determination since it is no longer a
party. Plaintiff dismissed Hilliard on July 25, 2022, and the clerk entered its
default on the cross-complaint on August 17, 2022. If the court intends to
grant the motion, Cross-Complainant H20 asks for a continuance to conduct
discovery on the issue of the good faith nature of settlement.
The relevant statute expressly states
that “[a]ny party to an action in which it is alleged that two or more parties
are joint tortfeasors … shall be entitled to a hearing on the issue of good
faith of a settlement” entered into by the plaintiff and one or more alleged
tortfeasors. Code Civ. Proc., § 877.6. Defendant
Hilliard is no longer a party in the main action resulting in the court’s loss
of jurisdiction over it. The effect of Plaintiff’s voluntary dismissal of
Defendant Hilliard “deprives the court of subject matter jurisdiction as well
as personal jurisdiction of the parties." Harris v. Billings (1993) 16 Cal.App.4th 1396, 1405. The court’s jurisdiction is limited to awarding costs and
attorney fees. Id.
Cross-Defendant Hilliard is in
default in H20’s Cross-Complainant. A defaulting defendant is “out of court”
and cannot take further steps until the default is set aside in a proper
proceeding. Rios v. Singh (2021) 65
Cal.App.5th 871, 887.
As Hilliard did not provide the
evidence required to vacate the default entry, the court is without
jurisdiction to grant Hilliard’s requested relief for a good faith settlement
determination. Accordingly, Hilliard’s motion for a determination of good faith
settlement is TAKEN OFF CALENDAR.
The court notes for future
reference that since H20 objects to the settlement, the court has discretion to
continue the hearing with respect to the good faith determination motion where
the opposing party needs to conduct more discovery to meet its statutory burden
of proof in opposing the motion. City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d
1251, 1265 [“ … it would be appropriate for
the objecting nonsettlor to move for a continuance of the hearing, if
necessary, for the purpose of gathering facts, which could include further
formal discovery, to support its statutory burden of proof as to all Tech-Bilt
factors nonsettlors placed in issue in order that the matter can be fully and
fairly litigated.”].