Judge Ronald F. Frank, Case Number: 21TRCV00892, Date: 2024-01-04 Tentative Ruling

On December 9, 2021, Plaintiff, Risingstar AR, Inc. (“Plaintiff”) filed a Complaint against Defendant, Samuel Salisbury, and DOES 1 through 40. The Complaint alleges causes of action for: (1) Theft; (2) Conversion; (3) Breach of Contract; and (4) Aiding and Abetting.

Defendant notes that on April 19, 2023, after many discussions of settlement, but no actual writing, Plaintiff’s counsel filed a request for entry of default. Defendant contends that his then-counsel, Brian Brumfield had only been retained solely as pre-litigation counsel. Defendant notes that he subsequently retained his current counsel who engaged in settlement discussions with Plaintiff’s counsel. Defendant notes that the parties had reached mutually agreeable terms, and Defendant’s attorney provided a draft agreement Plaintiff’s counsel approved as to form and indicated was acceptable to Plaintiff. Defendant asserts that Plaintiff never signed the settlement agreement that the parties had negotiated. Defendant also notes that Plaintiff’s counsel, without explanation, ceased all communications with Defendant’s counsel. Defendant’s counsel in declarations of both Mr. Manzo and Mr. Brumfield attest to informing counsel for Plaintiff that in an abundance of caution, if the agreement was not signed by a certain date, then Defendant would file a Motion to Set Aside default. Without receiving any follow-up communications from counsel for Plaintiff, and because Defendant believed no default would be pursued while the parties were still discussing settlement, Defendant asserts that he and his counsel were surprised by Plaintiff’s change of heart or change in strategy that resulted in the application for entry of a default judgment. With no resolution between counsel, Defendant filed this Motion to Set Aside Default.

Procedural

On October 6, 2023, Defendant filed this Motion to Set Aside Default, less than a week before his counsel substituted out, leaving Mr. Salisbury as self-represented. To date, no opposition has been filed.

Legal Standard

Pursuant to Code of Civil Procedure §473(b), both discretionary and mandatory relief is available to parties from a judgment, dismissal, order, or other proceeding.¿ Discretionary relief is available under the statute as “the court may, upon any terms as may be just, relieve a party or his or her legal representative from judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.¿ (Code of Civ. Proc. §¿473(b).)¿ Alternatively, mandatory relief is available when “accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.”¿ (Ibid.)¿ Under this statute, an application for discretionary or mandatory relief must be made no more than six months after entry of the judgment, dismissal, order, or other proceeding from which relief is sought.¿ (Code Civ. Proc., § 473(b); English v. IKON Business Solutions (2001) 94 Cal.App.4th 130, 143.)

“‘[W]hen relief under section 473¿is¿available, there is a strong¿public¿policy¿in¿favor¿of granting relief and allowing the requesting party his or her day in court…[Citation.]” (Rappleyea v. Campbell (1994) 8 Cal. 4th 975, 981-82.)

Discussion

Mistake, Inadvertence, Surprise, or Excusable Neglect

Here, Defendant argues this Court should set aside the default judgment due to the claimed unethical and unprofessional “surprise” which Plaintiff’s counsel allegedly sprung on Defendant by pursuing entry of a default when he had promised not to do so when the parties were engaged in settlement discussions. Defendant maintains that he only did not file an Answer or Demurrer because he was actively engaged in settlement discussions with Plaintiff’s counsel who had promised he would not be seeking default during such time. While there were finite time periods extending the time for Defendant to file an answer or other appearance, it appears from the circumstances that Defendant and his then-counsel reasonably believed the case would be settled on terms contained in a circulated settlement agreement, and that because of the looming settlement no default would be taken. Based on this, Defendant contends that his motion to set aside is based on his and his counsel’s excusable neglect because counsel believed settlement was imminent.

This Court also notes that Defendant’s counsel has complied with most of the requirements of Code of Civil Procedure § 473(b), as this motion has been made within six months. While Manzo’s declaration does not precisely meet the standards for an affidavit attesting to his mistake, inadvertence, or excusable neglect, the Court is inclined to grant discretionary relief under Section 473 and vacate the default judgment.