Judge Michael Small, Case Number: 23STCV19817, Date: 2024-01-22 Tentative Ruling

Judge: Michael Small, Case: 23STCV19817, Date: 2024-01-22 Tentative Ruling

Case Number: 23STCV19817 Hearing Date: January 22, 2024 Dept: 57

Pending before the Court is the motion of Defendant Alan Bunao (“Bunao”) under Code of Civil Procedure Section 473(b) to set aside the default judgment that was entered against him and in favor of Plaintiff 1200 Management LLC (“1200 Management”) on December 19, 2023. Bunao’s motion is accompanied by an affidavit submitted by his counsel Onica Valle Cole (“Cole”) that accepts fault for Bunao’s failure to respond to Plaintiff’s complaint. That failure led the Clerk to enter default against Bunao, which was followed by the Court’s entry of the default judgment. In the Court’s view, the relief that Bunao seeks is mandated by Section 473(b). Accordingly, the Court is granting Bunao’s motion and vacating both the Clerk’s default and the Court’s default judgment.

Section 473(b) contains provisions affording either discretionary or mandatory relief from default judgments. (Noceti v. Whorton (2014) 224 Cal.App.4th 1062, 1065-1066.) The discretionary provision applies to any kind of judgment, default or otherwise. It states that “[t]he 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. (Section 473(b), emphasis added.) The mandatory provision applies only to default judgments. It states that “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 attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise or neglect, vacate any (1) resulting default entered by the clerk . . . or (2) resulting default judgment . . . entered against his or her client. (Id., emphasis added). (See Zamora v. Clayborn Contracting Group (2002) 28 Cal.4th 249, 257 [discussing differing scope of the discretionary and mandatory provisions of Section 473(b)[.

If a Section 473(b) motion is filed within six months of entry of a default judgment and the attorney’s affidavit demonstrates that the default judgment was entered due to fault of the attorney, then the Court has no discretion to deny the motion -- the Court must grant the motion. (Jimenez v Chavez (2023) 97 Cal.App.5th 50, 58); Milton v. Perceptual Development Corp. (1997) 53 Cal.App.4th 861, 866-867; Lorenz v. Commercial Acceptance Ins. Co. (1995) 40 Cal.App.4th 981, 989.) Relief is mandatory even if the affidavit of fault indicates that the attorney’s mistake, inadvertence, surprise or neglect in failing to file a response on behalf of the defendant to the plaintiff’s complaint was inexcusable. (SJP Limited Partnership v. City of Los Angeles (2006) 136 Cal.App.4th 511, 516-517.) By contrast, mistake, inadvertence, surprise or neglect must be excusable in order for discretionary relief to be afforded under Section 473(b). (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1419.)

Bunao’s motion seeks relief under both the discretionary and mandatory provisions of Section 473(b). As to the mandatory relief it seeks, the motion was timely: it was filed within six months after entry of the default judgment. And the motion is accompanied by an affidavit of fault that was submitted Cole. The Cole affidavit states that Bunao contacted her on September 18, 2023 and reported that he had been served with 1200 Management’s complaint. (Cole Affidavit, ¶ 2.) Cole admits that “[m]y office should’ve filed an Answer for [Bunao] immediately.” (Id ¶ 3.) Cole explains that “[d]ue to the high case load I had at the time and some issues with staffing, the [timely] filing of [Bunao’s] Answer slipped through the cracks.” (Id., ¶ 4.)

Because Bunao’s motion was timely and accompanied by an affidavit from his counsel Cole indicating that the clerk’s default and ensuing default judgment against Bunao were Cole’s fault, relief from the default judgment is mandatory under Section 473(b). The Court has no discretion in the matter. It must grant Bunao’s motion. This is so even though Cole’s failure to file a timely response to 1200 Management’s complaint on behalf of Bunao due to Cole’s high case load and staffing issues that caused the need to respond to the complaint to slip through the cracks was, in the Court’s view inexcusable and thus would have warranted the denial of discretionary relief under Section 473(b) had mandatory relief been unavailable to Bunao.

Citing Graham v. Beers (1994) 30 Cal.App.4th 1656, 1660) [“Graham”], 1200 Management argues that Bunao does not qualify for mandatory relief under Section 473(b) because Cole’s affidavit reveals that she made a conscious decision to “back-burner” Bunao’s response to 1200 Management’s complaint. This argument is unavailing. In Graham, the trial court dismissed the plaintiff’s action for failure to prosecute the case. In dismissing the action, the trial court observed that plaintiff’s counsel had put the case on the “backburner” because counsel believed that the case was going to settle. (Id. at p. 1660.) The plaintiff subsequently moved to set aside the dismissal order under the mandatory relief provision of Section 473(b) based on affidavit of fault for putting the case on the backburner that was submitted by the plaintiff’s attorney. The trial court denied the Section 473(b) motion. (Ibid.) The Court of Appeal affirmed. It held that the mandatory relief provision of Section 473(b) does not apply to discretionary dismissals of a plaintiff’s case for failure to prosecute. (Id. at pp. 1658, 1661.)

Graham has no bearing, however, on the availability of Section 473(b)’s provision for mandatory relief from default judgments against defendants. This is borne out in subsequent caselaw that cites Graham. For example, citing Graham, the Court of Appeal in In re Marriage of Hock & Gordon-Hock (2000) 80 Cal.App.4th 1430, 1444, admonished that Section 473(b) provides no relief to a party who “had an opportunity to have his or her day in court,” but who did not take advantage of the opportunity and thus had his or her case dismissed. Put another way, Graham stands merely for the proposition that the mandatory relief provision of Section 473(b) “does not apply to circumstances which are not the procedural equivalent of a default.” (Ibid., citing Graham.) Here, we have a default judgment. 1200 Management’s reliance on Graham to block Bunao from obtaining mandatory relief under Section 473(b) from the default judgment is misplaced.

1200 Management did not expressly request that the Court exercise its discretion to impose monetary sanctions against Bunao and/or Cole under Section 473(c) in connection with the relief from the default judgment that the Court is granting to Bunao under Section 473(b). Accordingly, the Court is declining to do so.

Bunao attempted to file an answer to 1200 Management’s complaint after the clerk entered default against Bunao. The Court struck Bunao’s answer as improper: a party against whom a default was entered cannot file an answer until after the default is lifted. Now that the Court has set aside the Clerk’s default and the default judgment, Bunao is authorized to file his answer. The answer must be filed and served by January 29, 2024. The Court will set a date for a case management conference at the hearing on Bunao’s motion to vacate the default judgment.