Judge: Steven A. Ellis, Case: 23STCV25603, Date: 2025-02-03 Tentative Ruling
Case Number: 23STCV25603 Hearing Date: February 3, 2025 Dept: 29
Geykhman v. Townsend
23STCV25603
Plaintiff’s Motion to Set Aside Judgment and Offer to Compromise
Tentative
The motion is
denied.
Background
On October
19, 2023, Peter Geykhman (“Plaintiff”) filed a complaint against Victoria
Townsend (“Townsend”), James Ginther III (“Ginther”), and Does 1 through 25,
asserting causes of action for motor vehicle negligence and general negligence arising
out of an alleged accident on September 12, 2022, at or near the intersection
of Olympic Boulevard and Valencia Street in Los Angeles.
In his
Complaint, Plaintiff alleges that Defendant Townsend was the driver of the
vehicle that caused the accident and that Defendant Ginther was the owner. (Complaint, at p. 4.)
On December
12, 2023, Ginther filed an answer. On
January 30, 2024, Townsend filed an answer.
The defendants are represented by separate counsel.
Plaintiff
propounded discovery, including Form Interrogatories, to Defendant
Townsend. In response to Form Interrogatory
4.1, which requires the responding party to identify any insurance policy “through
which you were or might be insured in any manner … for the damages, claims, or
actions that have arisen out of the INCIDENT,” Townsend identified two
policies: (1) a Progressive Insurance policy with limits of $15,000/$30,000 in
which she was the named insured; and (2) an Interinsurance Exchange of the
Automobile Club (“AAA”) policy with limits of $100,000/$300,000 in which
Ginther was the named insured. (Tafarella
Decl., ¶¶ 3-6 & Exh. A.)
On July 8,
2024, Plaintiff served Defendant Townsend with an Offer to Compromise under
Code of Civil Procedure section 998 in the amount of $15,000. (Landver Decl., ¶ 12 & Exh. 4.) Townsend accepted three days later, on July
11, 2024. (Id., ¶ 13 & Exh. 5.)
On August
6, 2024, the Court entered judgment in favor of Plaintiff and against Townsend
in the amount of $15,000 based on the offer to compromise. (Id., ¶ 15 & Exh. 7.) Payment of the judgment amount was made, and
on September 6, 2024, Plaintiff filed an acknowledgment of satisfaction of the
judgment in full. (Id., ¶¶ 16-17 & Exhs. 8-10.)
At this
point, Plaintiff was prepared to litigate or settle his causes of action
against Defendant Ginther. On September
12, 2024, Plaintiff served Ginther with an Offer to Compromise under Code of Civil
Procedure section 998 in the amount of $50,000.
(Id., ¶ 18 & Exh. 11.) On
November 8, 2024, Ginther responded by objecting on the ground that his potential
liability was extinguished because Plaintiff had already recovered $15,000 from
the allegedly negligent driver. (Id., ¶
19 & Exh. 12.)
On December 17, 2024,
Plaintiff filed this motion to set aside the judgment, the satisfaction of the
judgment, and the offer to compromise with Townsend, all under Code of Civil
Procedure section 473. Defendant Townsend filed an opposition on January 21, and
Plaintiff filed a reply on January 28.
Legal
Standard
Code of Civil Procedure section
473, subdivision (b) provides for both discretionary and mandatory relief from
dismissal.
As to discretionary relief,
the statute 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 through his or her mistake, inadvertence,
surprise, or excusable neglect.” (Code
of Civil Procedure § 473, subd. (b).) Where such an application for
discretionary relief is made, the motion must be accompanied by a copy of the
answer or pleading proposed to be filed; “otherwise the application shall not
be granted.” (Ibid.)
The statute also provides
for mandatory relief from dismissal, default, or default judgment:
“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 … unless the court finds that the default or
dismissal was not in fact caused by the attorney’s mistake, inadvertence,
surprise, or neglect.”
(Ibid.)
A request for discretionary
relief under section 473, subdivision (b), must be made (subject to certain
exceptions) “within a reasonable time, in no case exceeding six months.” (Ibid.) A request for mandatory relief must be made
within six months. (Ibid.)
Discussion
Plaintiff seeks to set aside the offer to compromise to
Townsend, the resulting judgment, and the satisfaction of judgment in this
case.
Plaintiff states that the mistake was that his counsel did
not realize that the judgment against Townsend would also effectively terminate
the case against Ginther. (Landver
Decl., ¶ 12.) Counsel states, “Had I
know that Defendant TOWNSEND’s acceptance of the Offer to Compromise would
preclude further action and recovery of damages from the other Defendant James
Ginther III, or that GINTHER’S $100,000 liability coverage would be
extinguished, I would not have presented this Offer to Compromise.” (Ibid.)
In Zamora v. Clayborn
Contracting Group (2002) 28 Cal.4th 249, the California
Supreme Court squarely held that discretionary relief is available under Code
of Civil Procedure section 473, subdivision (b), when a judgment is entered
under Code of Civil Procedure section 998 as a result of a mistake, inadvertence, surprise, or excusable
neglect. (28 Cal.4th at pp. 255-257.) In Zamora, the error was a “typo”; as
a result of an error by counsel’s legal assistant, the offer to compromise
inadvertently stated that the offer was for judgment “against” the attorney’s
client instead of “in favor of” the client.
(Id., at pp. 251-253.) The trial
court granted relief, and the Court of Appeal and the Supreme Court affirmed.
As the California Supreme
Court explained in Zamora, the Superior Court “reasonably concluded that
the mistake made by [plaintiff’s] counsel was excusable.” (Id., at p. 259.) “The erroneous substitution of the word ‘against’
for the phrase ‘in favor of’ is a clerical or ministerial mistake that could
have been made by anybody. While counsel’s
failure to review the document before sending it out was imprudent, we cannot
say that his imprudence rendered the mistake inexcusable under the
circumstances.” (Ibid.)
The Supreme Court also stated
that the record “suggests” that defendant “took unfair advantage of the mistake,”
as the justices observed that they “find it hard to believe that [Defendant]
had no inkling that the section 998 offer was a mistake.” (Ibid.)
The court also noted that the circumstances indicated a basis to set
aside the contract based on unilateral mistake or unconscionability. (Id. at pp. 260-261.)
The Supreme Court recognized
in Zamora the important public policies in favor of promoting settlements
and protecting the finality of judgments and concluded:
”[W]e are confident trial courts will
exercise this discretionary power to vacate judgments entered pursuant to a
settlement agreement both carefully and sparingly. We suspect most, if not all, courts will see
through claims of buyer’s remorse or breach of contract. Indeed, courts have
been exercising this power for over a century will no apparent ill
effects. Most cases still settle, and courts
rarely set aside settlement agreements.
Our holding today should not change that.”
(Id. at p. 261 [citations
omitted].)
In reaching this result in Zamora,
the Supreme Court distinguished two then-recent Court of Appeal cases, Pazderka
v. Caballeros Dimos Alang, Inc. (1998) 62 Cal.App.4th 658 and Commercial
Services Corp. v. National Bank of California (1999) 72 Cal.App.4th 1493.
Both of Pazderka and
Commercial Services Corp. involved offers to compromise under Code of Civil
Procedure section 998. In both cases, the
party who prepared the 998 did not include a provision for each side to bear
its own fees and costs, and then, following acceptance of the offer, sought discretionary
relief under Code of Civil Procedure section 473, subdivision (b), for the
attorney’s mistake, inadvertence, surprise, or excusable neglect. In both cases, the Superior Court granted
relief, and in both cases the Court of Appeal reversed, concluding that the
grant of relief was an abuse of discretion.
In Pazderka, the First
District Court of Appeal explained that a request for discretionary relief
under section 473 requires an inquiry into “whether a reasonably prudent person
under the same or similar circumstances might have made the same error.” (62 Cal.App.4th at p. 671 [citations omitted].) “The reasonably prudent person standard gives
an attorney the benefit of such relief only where the mistake is one which
might ordinarily be made by a person with no special training or skill.” (Ibid. [citations omitted].) The failure to include a provision relating
to attorney’s fees and costs, the court reasoned, was “not the type of mistake
ordinarily made by a person with no special training or skill.” (Ibid.)
Section 473 is “not intended to permit attorneys to escape the consequences
of ther professional shortcomings or to insulate them from malpractice claims.” (Id. at p. 672 [citations omitted].)
The following year, the
Second District Court of Appeal considered the same issue in Premium
Commercial Services. The court,
relying in part on Pazderka, reached the same result. (72 Cal.App.4th at pp. 1496-1497.)
Here, the issue is not
attorney’s fees and costs. Rather, it is
the liability of the owner of a vehicle for negligent driving by another.
Under the permissive use
statute, the owner of a vehicle is liable for death or injury to a person
resulting from the negligent operation of the vehicle, even when the owner was
not the one negligently driving the vehicle.
(Vehicle Code, § 17150.) Liability,
however, is limited to $15,000, where, as here, there is one injured person in one
accident. (Vehicle Code, § 17151, subd.
(a).) If the driver and the owner are
both party-defendants, “recourse shall first be had against the property of the
operator.” (Vehicle Code, § 17152.)
Plaintiff, having recovered
$15,000 in a judgment against the driver (Townsend), is now apparently
foreclosed from seeking additional relief against the owner (Ginther). Given that Ginther had a AAA insurance policy
with applicable policy limits of $100,000 that covered Townsend’s negligence
driving (at least arguably), Plaintiff now seeks to undo the settlement and
proceed against Ginther and/or Townsend under the AAA policy.
Plaintiff has not, however,
made a sufficient showing of a basis for the Court to exercise its discretion
to grant relief under Code of Civil Procedure section 473, subdivision
(b). Plaintiff’s counsel contends that
the decision to extend the section 998 offer was the product of a mistake or
excusable neglect, but this case does not involve a simple and typographical
error, as was true in Zamora. In
contrast to Zamora, the alleged mistake here was not readily
ascertainable or the type of mistake ordinarily made by a person with no
special training or skill. Under Pazderka
and Premium Commercial Services, relief is not available to Plaintiff
under Code of Civil Procedure section 473.
On reply, Plaintiff alludes
to possible misconduct or advantage-taking by Defendant Townsend. The Court finds no evidence of such bad
behavior. Townsend disclosed in
discovery that she was possibly covered by both her own Progressive Insurance
policy and Ginther’s AAA policy. At that
point, it was up to Plaintiff to make the strategic decisions about how to
proceed with litigation and/or settlement.
As the California Supreme
Court observed in Zamora, relief under Code of Civil Procedure section
473 cannot be granted in cases of buyer’s remorse, and courts must “exercise
this discretionary power to vacate judgments entered pursuant to a settlement
agreement both carefully and sparingly.”
(28 Cal.4th at p. 261.) This case
does not present an appropriate case to exercise the discretionary power to set
aside the settlement agreement and judgment.
Accordingly, the motion is
denied.
Conclusion
The Court DENIES Plaintiff Peter Geykhman’s motion to set
aside the judgment, the satisfaction of judgment, and the offer to compromise.
Moving Party is to give notice.