Plaintiff obtained Defendant’s default on April 11, 2023, and default judgment was entered against Defendant on December 13, 2023.  

Thereafter, on January 17, 2024, Defendant filed a Substitution of Attorney. Defendant is currently represented by Erin O. Hallissy of Daniels Fine Israel Schonbuch & Lebovits LLP.  

On January 23, 2024, Defendant filed the instant motion to set aside the default and default judgment against it. Plaintiff opposes the motion, and Defendant filed a reply. 

Defendant moves to set aside the default and default judgment pursuant to the discretionary and mandatory provisions of CCP § 473(b), arguing malpractice of its former counsel, Welch. Defendant contends Welch failed to serve discovery verifications months after Defendant sent them to his office, failed to calendar and oppose Plaintiff’s motion for terminating sanctions, and failed to make Defendant aware of Plaintiff’s motions and the default obtained against it.  Defendant avers Welch’s minor steps to move the case forward does not negate Welch’s positive misconduct in his failure to make Defendant aware of important developments in this action.  

Plaintiff argues Defendant’s former attorney did not abandon representation of Defendant for relief to be available, because former defense counsel was active in representing Defendant by serving late verifications, filing a declaration and appearing at the hearing for terminating sanctions, filing a motion for reconsideration, and appearing at the two Order to Show cause hearings related to Plaintiff’s default. Plaintiff contends Defendant’s former counsel’s mistake was not so egregious as to effectively leave Defendant without representation, and therefore vacate the default. 

Defendant reasserts that it bore no responsibility in the matter because of Welch’s egregious representation. Defendant contends it is faced with filing an appeal and malpractice action against its prior counsel, and that it is more pragmatic for the case to proceed on the merits with new counsel involved.  

II. Motion to Set Aside Default and Default Judgment  

CCP § 473(b) states: 

The 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. Application for this relief … shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. … 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 … 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. The court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.  

Under the mandatory relief provision, judges must vacate dismissals, default entries, and default judgments “whenever (1) an application is made no more than six months after entry of judgment, (2) the application is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, and (3) the attorney's mistake, inadvertence, surprise or neglect in fact caused the dismissal or entry of default.” (Benedict v. Danner Press (2001) 87 Cal.App.4th 923, 927 (citing CCP §473(b)).)  

Here, the six-month limitation period for mandatory relief commences at the time the default judgment is entered, rather than the earlier date the default is entered.  (Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 296-97 [“it makes little sense to vacate a judgment without also vacating an underlying default....”].) Default judgment was entered on December 13, 2023. Consequently, if Defendant demonstrates it is entitled to relief under the mandatory provision of CCP § 473(b), the motion would be timely. However, there is no attorney’s sworn affidavit attesting to his mistake and that it caused the default. At the time of entry of default and default judgment, Defendant was represented by Welch. Defense counsel’s declaration provides Welch had filed a declaration of fault on July 19, 2023, stating default was purely the result of attorney negligence. (Hallissy Decl. ¶ 7.) No copy of Welch’s purported affidavit of fault was provided. Nonetheless, the Court reviewed the July 19, 2023 declaration on its docket, which was filed in connection with Defendant’s motion for reconsideration. Even if the Court were to consider this declaration, the declaration’s contents do not admit to any attorney-fault. Rather, the declaration pertains only to verified discovery responses served on Plaintiff. Thus, on its face, Defendant’s motion does not meet the basic requirements to set aside pursuant to the mandatory relief provision.  

To the extent the Defendant moves for relief pursuant to the discretionary provision of § 473(b), the motion is untimely. Unlike the mandatory relief provision, which runs from the date of default judgment, the time under the discretionary provision runs from the date of entry of default on April 11, 2023. Setting aside a default judgment, when a court is unable to set aside the underlying default, is an “idle act” the Court should not take, because “it would be the duty of the court immediately to render another judgment of like effect, and the defendants, still being in default, could not be heard in opposition thereto.”  (Howard Greer Custom Originals v. Capritti (1950) 35 Cal.2d 886, 888-89; see also Pulte Homes Corporation v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 273.)  Accordingly, the general rule is that the six-month period within which to bring a motion to vacate under the discretionary provision of § 473 runs from the date of the default and not from the judgment taken thereafter.  (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970.) Defendant did not file this motion to set aside until January 23, 2024, approximately nine months after default was entered. Thus, the motion is untimely.  

However, even if Defendant’s motion under the discretionary provision of § 473(b) was not untimely, the Court is unable to grant the relief requested based on the factual circumstances presented. The declaration of Defendant’s Vice-President D. Randy Fox (“Fox”) states his office tendered the lawsuit to BHR, and Welch agreed to provide defense in the matter on February 18, 2021. (Fox Decl. ¶¶ 3-4.) Fox did not hear from Welch or BHR for the remainder of 2021 and 2022, and assumed the matter was resolved or that no information was necessary from Defendant. (Id. at ¶ 7.) Welch contacted Fox on January 3, 2023, and indicated for the first time that Defendant needed to respond to discovery by mid-day of January 4, 2023; Fox was not aware of any delinquent discovery prior to this. (Id. at ¶ 8.) On February 9, 2023, Fox was sent a verification and asked to sign. (Id. at ¶10.) However, Fox was not provided draft responses to review, and informed Welch’s clerk that he was not comfortable signing a verification without speaking to Welch first. (Ibid.) To date, Fox has never spoken to Welch despite multiple message requests. (Id. at ¶ 11.) On December 20, 2023, Fox became first aware of the default judgment, and immediately sought outside counsel since Welch never responded to any of Fox’s telephone calls or requests for meetings. (Id. at ¶¶ 14-15.) On January 12, 2024, current defense counsel substituted in as counsel of record on the matter.  

PLEASE TAKE NOTICE: 

Dated this 7th day of February 2024