Nicholson v. Rose

Opinion

FLEMING, Acting P. J.

Defendants Mason Rose and Pacific Institute for Advanced Studies (PIAS) appeal a default judgment against them and the denial of their motion to vacate the judgment (Code Civ. Proc., § 473).

Facts

Plaintiff Sylvia Nicholson, interested in community affairs, met defendant Rose in 1971 during the course of pursuing this interest. Rose told her he was an ordained minister, that he and his organization, Pacific Institute for Advanced Studies (PIAS), shared her interest in community affairs. Rose induced plaintiff to lend PIAS $23,500, to enable PIAS to purchase certain real property (the Easterday property).

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He promised her check would not be cashed until her attorney approved the transaction, the money would be used solely for the purchase of the Easterday property, and the loan would be secured by a trust deed on the property. He also promised to look after and protect her interests.

These promises were not kept. Plaintiff’s check was cashed without her attorney’s approval; the Easterday property was never purchased; the loan was never secured or repaid. As a consequence, plaintiff filed this action in 1974 for breach of contract and fraud against Rose and PIAS.

Discovery in this cause was long and arduous, principally because of defendants’ dilatory tactics. Specifically, Rose and PIAS objected to all of plaintiff’s interrogatories on spurious grounds, and were overruled. Plaintiff granted defendants five extensions of time to answer the interrogatories. Additionally, Rose’s deposition was continued twice at his request, and when he finally appeared for the deposition, he did so without counsel, thereby hampering the proceedings. At the trial setting conference plaintiff notified the court in advance that any trial date selected by defendants would be acceptable to her, and defendants set the mandatory settlement conference for January 24, 1978, and trial for February 15, 1978. Thereafter, defendants failed to appear at either proceeding. Upon defendants’ failure to appear at trial, the court ordered default judgment against both defendants for compensatory damages of $32,000 (the $23,500 loan, plus attorney’s fees) and for punitive damages of $10,000. Thereafter, defendants moved to vacate the judgment (Code Civ. Proc., § 473) on grounds of excusable neglect of counsel and of intrinsic fraud upon the court by plaintiff. The trial court denied the motion.