Bernal v. Town N Country Reedley, Inc.

In the present case, as required under Code of Civil Procedure section 473(b), Mr. Pham’s declaration specifically admits the failure to appear at the case management conference and order to show case regarding that failure to appear resulted from his own error. (Pham Decl. ¶¶ 3-5.)

However, this motion comes approximately seven months after the entry of default from which relief is sought. The statute states that an application for mandatory relief must be made “no more than six months after entry of judgment.” (Code Civ. Proc. § 473(b).) “The six-month limit is mandatory; a court has no authority to grant relief under section 473, subdivision (b), unless an application is made within the six-month period.” (Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 340.) Although this application is only seven months following the entry of default, the court lacks jurisdiction to grant it.

Where relief is sought more than six months after the entry of dismissal, the motion is directed to the court’s inherent equitable power to set aside a judgment on the ground 3

of extrinsic fraud or mistake. (Olivera v. Grace (1942) 19 Cal.2d 570, 576-578; Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1300; Bae v. T.D. Service Co. (2016) 245 Cal.App.4th 89, 97.) The terms “extrinsic fraud or mistake” are given a broad interpretation and cover almost any circumstance by which a party has been deprived of a fair hearing. There need be no actual fraud or mistake in the strict sense. (Marriage of Park (1980) 27 Cal.3d 337, 342; Sporn v. Home Depot USA, Inc., supra, 126 Cal.App.4th at p. 1300 [requires evidence “that the papers were lost, stolen, forwarded to the wrong person or eaten by the dog”]; County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1233.)

With regard to extrinsic mistake in particular, the term is broadly applied to cover situations in which circumstances extrinsic to the litigation have cost a party a hearing on the merits. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) These are usually cases of excusable neglect by defendant or defendant's attorney in failing to appear and present a defense: “If such neglect results in an unjust judgment, without a fair adversary hearing, the basis for equitable relief is present, and is often called ‘extrinsic mistake.’” (Kulchar v.

Kulchar (1969) 1 Cal.3d 467, 471; Manson, Iver & York v. Black (2009) 176 Cal.App.4th 36, 47.) Relief will be denied, however, if the complaining party's negligence permitted the mistake to occur. (Kulchar v. Kulchar, supra, 1 Cal.3d at p. 473; Manson, Iver & York v. Black, supra, 176 Cal.App.4th at p. 47; see also Wilson v. Wilson (1942) 55 Cal.App.2d 421.)

There are three essential requirements to obtain relief. The party seeking relief must show: (1) a meritorious case; (2) a satisfactory excuse for not presenting a defense to the original action; and (3) diligence in seeking to set aside the default once it was discovered. (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 982; Sporn v. Home Depot USA, Inc., supra, 126 Cal.App.4th at p. 1301.)

In the case at bench, due to multiple insurance claims representative changes and a misunderstanding as to whether defendants Reedley Properties and Lowe Enterprises, LLC were also insureds and intended clients of Foran Glennon a timely motion to set aside default was filed only for defendant Reedley Properties, LP. Counsel admits the mistake was made in the claims handling process and the failure to timely respond to the complaint not the fault of the defendants who timely tendered the claims to their insurer. (Hightower Decl., ¶ 12.)

Counsel also demonstrated diligence in pursuing a remedy once she learned of the default against the two other entities she was intended to represent. (Id., ¶¶ 4-5.) The evidence supports finding there is a satisfactory excuse for not presenting a timely defense and diligence by defendants. The motion lacks evidence to address the element of whether defendants have a meritorious case, as required for relief as an extrinsic mistake.

Although the court lacks jurisdiction to grant the motion on the statutory basis as presented here, the denial is without prejudice to defendants seeking relief under the court’s inherent equitable power.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order

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