Judge: Michael Shultz, Case: 22CMCV00007, Date: 2023-01-31 Tentative Ruling
Case Number: 22CMCV00007 Hearing Date: January 31, 2023 Dept: A
22CMCV00007
Assurant Global P&C Claims v. Hilliard Contracting Services, et al.
[TENTATIVE] ORDER
GRANTING
[TENTATIVE]
ORDER CONTINUING HEARING 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 totaling $79,112.95
to its insured for the water damage.
On March 30, 2022, H20 filed a
cross-complaint against Cross-Defendant 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 Defendant Hilliard from the complaint.
The Court heard both motions on January
6, 2023. Pursuant to the oral stipulation of the parties, the Court continued the
hearing to allow Cross-Defendant Hilliard to submit an affidavit of fault in support
of the motion to vacate the default entered against it.
II.
ARGUMENTS
A.
Motion filed on January 17, 2023
Cross-Defendant Hilliard moves to
set aside default entered against it on August 17, 2022. Hilliard argues that Cross-Complainant
H20 did not serve its cross-complaint until July 14, 2022. At that time,
Hilliard had negotiated settlement with Plaintiff. Hilliard sought H20’s
stipulation that the settlement was made in good faith to avoid delays, motion
practice, and other costs and expenses.
Plaintiff’s dismissal of Hilliard caused
internal confusion concerning the deadline for Hilliard’s answer to the cross-complaint,
resulting in delay. Hilliard did not contact H2O quickly enough to address continuing
the deadline for Hilliard’s response to the cross-complaint.
H20’s supplemental opposition,
filed on January 24, 2023, states that despite being given an additional
opportunity, Hilliard did not submit an affidavit of fault. Hilliard was fully
aware of the default entered against it and cannot show mistake, inadvertence, surprise,
or excusable neglect. All the declarations submitted by Hilliard merely outline
the settlement with Plaintiff and the fact that H20 was 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).
Cross-Defendant has met its burden
to support discretionary relief from default. The deadline for filing the
answer to the cross-complaint was inadvertently not placed on calendar. Decl.
of Sheila Fix, ¶ 5. An order denying
relief is subject to closer appellate scrutiny than one granting relief and
doubt will be resolved in favor of the party attempting to get to trial.
Flores v. Board of Supervisors (1970) 13 Cal.App.3d 480, 483. Additionally, calendar errors by an attorney or a member of his
or her staff are, under appropriate circumstances, excusable. Flores at 483. Hilliard’s
counsel diligently sought Cross-Complainant’s agreement to extend time to
answer the cross-complaint, vacate default, and stipulate that Hilliard’s
settlement with Plaintiff was made in good faith beginning August 19, 2022. Decl
of Malalai Anbari, Ex. A. Cross-Complainant did not respond in substance until
October 4, 2022, wherein Geoffrey Melkonian, refused to set aside the default
unless Hilliard pay Plaintiff’s demand of $55,000. Anbari Decl. Ex. C.
Cross-Complainant has not shown
any prejudice that would result from vacating the entry of default. If there is no
prejudice, only slight evidence is needed. Doubts are resolved in favor of the
party seeking relief in furtherance of the policy supporting trial and
disposition on the merits. Mink v.
Superior Court, (1992) 2 Cal.App.4th 1338.
IV.
CONCLUSION
Based on the foregoing, Cross-Defendant’s
motion to vacate default entered on August 17, 2022, is GRANTED. The Court
orders Hilliard to file its answer to the cross-complaint forthwith.
[TENTATIVE]
ORDER CONTINUING MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT BY
Defendant Hilliard filed this
motion on November 23, 2022 seeking the court’s determination that its settlement
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.
In its reply filed on December 19,
2022, Hilliard argues that H20 untimely filed its opposition and should not be
considered. H20 has not met its burden of establishing that the settlement was
not made in good faith.
The Court has considered H20’s
opposition filed on December 13, 2022, although it was due on December 7, 2022.
Code Civ. Proc., § 1005, subd. (b) [oppositions are due nine court days before
the original hearing date of December 20, 2022]. The Court has discretion to
consider late papers to permit disposition on the merits. If there is any
prejudice resulting therefrom, the Court can continue the hearing. Mann v. Cracchiolo (1985) 38 Cal.3d 18, 30. Hilliard has not demonstrated prejudice resulting from the tardy
filing. Hilliard was able to file a reply brief, which the court has
considered.
Civil Procedure section 877.6 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. The Court
has discretion to continue the hearing 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.”].
Accordingly, the
Court continues the hearing on the motion for good faith determination to
____________________ at 8:30 a.m. in Department A of the Compton courthouse.