Perry v. Zabriskie

LILLIE, J. Invoking the court’s equity power, plaintiffs Perry commenced this action in May of 1965 to set aside a default judgment obtained by the defendants Zabriskie in February of that year involving the sale of a business assertedly obtained by fraud; their default had previously been taken in December of 1963. The gist of the present proceeding is that plaintiffs were lulled into a sense of false security by an attorney for the Zabriskies in the former action; thus, acting on his representations to their then attorney that matters would be held in abeyance until written demand for an appearance was made, they and their counsel did nothing to contest the Zabriskies’ claims, and no adversary hearing was had. The Zabriskies moved for summary judgment, as did plaintiffs. The court granted the Zabriskies’ motion, its minute order noting that (1) no fraud or mistake kept plaintiffs from presenting their defense, (2) they should have moved for relief in the former action and (3) plaintiffs knew of the default judgment within time to appeal. Plaintiffs appeal from the judgment entered herein.

The governing law is well established. A summary judgment is proper only if (1) the affidavits in support of the moving party are sufficient, strictly construed, to sustain a judgment in his favor and (2) the affidavits filed in opposition, liberally construed, do not show facts deemed sufficient by the court hearing the motion to present a triable issue. (Stationers Corp. v. Dun & Bradstreet, Inc., 62 Cal.2d 412, [479417]-418 [42 Cal.Rptr. 449, 398 P.2d 785].) Plaintiffs complain that unfair advantage was taken of their counsel by an attorney for the Zabriskies which prevented them from having a full and fair adversary trial with respect to the matters embraced in the prior proceeding which was commenced in December of 1962. According to the complaint in the present action, the 1962 suit sought damages for fraud in the sale of stock in a corporation; in June of the following year (1963) an amended complaint was filed which asked for other relief, including “restitution for fraud” and the declaration of a constructive trust. Summons on the amended complaint was allegedly issued on June 27, 1963, and service of the summons and amended complaint had on plaintiffs (defendants therein) by serving copies thereof on Stanley C. Poster, plaintiffs’ attorney. Thereafter Poster communicated with the attorney for the Zabriskies and orally received from him “an open extension of time to and including notice from said attorney for plaintiffs therein (defendants herein) to answer said complaint.” There then follow allegations of the taking of the default, despite the oral agreement to the contrary, without notice to Poster and the entry of the default judgment (February 15, 1965) more than six months later, thus depriving plaintiffs here of an opportunity to invoke the provisions of section 473, Code of Civil Procedure. The complaint further alleges that plaintiffs first learned of the above judgment in April of 1965 at which time their attorney immediately, but unsuccessfully, asked opposing counsel for a stipulation setting it aside. The pleading concludes with allegations that plaintiffs have no other remedy available to them and that they have a good defense to the action, the particulars of such defense being set forth in some four respects.