Opinion
Rehearing Denied Oct. 17, 1929
Hearing Granted by Supreme Court Nov. 14, 1929
Appeal from Superior Court, Los Angeles County; William C. Doran, Judge.
Action by G.W. Gordon against G.C. Harbolt and others. From an order vacating a default judgment, and permitting defendant the United States Fidelity & Guaranty Company to answer, plaintiff appeals. Reversed.
COUNSEL
Thomas A. Wood and O.B. De Camp, both of Los Angeles (F. Britton McConnell, of Los Angeles, of counsel), for appellant.
Lawler & Degnan, of Los Angeles, for respondent.
OPINION
BURNELL, Justice pro tem.
This appeal is from an order vacating a default and permitting the respondent corporation to file a verified answer. Two points are urged by appellant: First, that the court below was without jurisdiction to consider the motion for vacation of the default, by reason of the failure of the notice to state the grounds upon which the motion was to be made; and, second, that there was no showing of excusable neglect and that the court abused its discretion in granting the motion.
The first of these contentions is without merit. While it is true that the notice itself failed to state the grounds upon which the motion would be based, it did state it would be "upon the affidavit of Ernest R. Robbins, manager of defendant United States Fidelity & Guaranty Company, and the proposed answer," copies of which were served together with the notice. The affidavit of Mr. Robbins, after setting up the facts and circumstances of the service of summons upon respondent corporation and the reasons for its failure to appear, proceeds: "That the facts of this case in this cause have been fully and fairly stated to Lawler & Degnan, counsel for defendant herein, and after such statement affiant is advised by them that defendant herein has a good and substantial defense on the merits of this action. Wherefore affiant prays that, if said amended complaint and the summons issued thereon are deemed to have been properly served on defendant, United States Fidelity & Guaranty Company, on the 8th day of March, 1926, it be held that an answer thereto was not interposed by said United States Fidelity & Guaranty Company through mistake, inadvertence, and excusable negligence, as disclosed by the facts and circumstances set out above; that said defendant be permitted to file its verified answer; and that the said default heretofore entered be set aside." There is no question but that the proposed answer, which the court permitted to be filed, set up a good defense on the merits. It has been frequently held that the failure of the moving party in a proceeding for relief under section 473 of the Code of Civil Procedure to state the grounds upon which he relies will not deprive the court of jurisdiction to hear and pass upon the merits of the application, where the grounds sufficiently appear from the accompanying affidavits.
In Savage v. Smith, 170 Cal. 472, 150 P. 353, the precise point relied on by appellant was thus decided: "When the motion came on to be heard, the plaintiff objected to the hearing of the motion upon the grounds that there was no affidavit of merits on behalf of the defendant, and that the notice of motion did not state the ground upon which the motion would be made, as required by a rule of the superior court. The court continued the hearing to a later date. During the period intervening before the motion came on, the defendant filed further affidavits. The notice itself was not amended in any way. Upon the foregoing papers and other evidence, the court granted the motion to vacate the default. It is true that the notice of motion did not comply with the requirement of the rule, now embodied in section 1010 of the Code of Civil Procedure (amended in 1907), that the grounds of motion must be stated in the notice. It appears, however, that the notice of motion stated that it would be made upon the records and papers on file and upon the affidavit of which a copy was served with the notice. The records referred to showed that no answer had been filed until default had been entered and the affidavit of Mr. Hengstler made it perfectly plain that he was seeking therein to establish a showing that the failure to file the answer within time had been caused by excusable neglect. The notice, together with the records and affidavits therein referred to, were sufficient to apprise the plaintiff of the fact that the purpose of the proposed motion was to seek relief under section 473 of the Code of Civil Procedure, and that the ground of the motion necessarily was the defendant’s excusable neglect, which would justify relief under that section. The objection that the grounds of the motion were not stated in the notice was therefore properly disregarded. Reher v. Reed, 166 Cal. 525, 137 P. 263, Ann.Cas.1915C, 737." Other decisions which have reaffirmed the rule as above stated are those in Fink & Schindler Co. v. Gavros, 72 Cal.App. 688, 237 P. 1083, and Hecq v. Conner, 203 Cal. 504, 265 P. 180.
As to the second of appellant’s points, however, we are of the opinion that it is well taken. It is true that appellate courts have always been and are favorably disposed towards such action upon the part of trial courts as will permit, rather than prevent, the adjudication of legal controversies upon their merits. This attitude is clearly expressed in Jones v. Title Guaranty & Trust Co., 178 Cal. 375, 173 P. 586, 587, where it is said: "This court has always looked with favor upon orders excusing defaults and permitting controversies to be heard upon their merits. Such orders are rarely reversed, and never unless it clearly appears that there has been a plain abuse of discretion’ "— as well as in O’Brien v. Leach, 139 Cal. 220, 72 P. 1004, 96 Am.St.Rep. 105; Wolff & Co. v. Canadian Pacific Ry. Co., 89 Cal. 332, 26 P. 825, and many other cases. It is also true that a large amount of discretion is vested in the trial court in the matter of applications for relief from defaults (Gorman v. California Transit Co., 199 Cal. 246, 248 P. 923; Hitchcock v. McElrath, 69 Cal. 634, 11 P. 487), but, as is said in Bailey v. Taaffe, 29 Cal. 423: "The discretion intended, however, is not a capricious or arbitrary discretion, but an impartial discretion, guided and controlled in its exercise by fixed legal principles. It is not a mental discretion, to be exercised ex gratia, but a legal discretion, to be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice."
Quoting and applying this rule the court in Redding v. National Surety Co., 18 Cal.App. 488, 123 P. 544, 545, said: "Cases do occur where the appellate court is obliged to say that the action of the trial court involves a plain abuse of discretion; and in such a case it is the duty of the appellate court to reverse the action of the trial court." We feel that this is such a case. "Where, as in this case, a default and judgment have been duly and regularly entered against a litigant, such default and judgment cannot be set aside and vacated, except upon a showing that they were taken against him through his mistake, inadvertence, surprise, or excusable neglect." Redding, etc., Mining Co. v. National Surety Co., supra.
Did respondent make such a showing? These are the circumstances upon which it relies: The summons, together with two copies of the amended complaint, was served upon E.A. Robbins, manager of the defendant corporation, on March 8, 1926. This is undisputed. In his affidavit in support of the motion to vacate the default Mr. Robbins does not deny this fact, but merely says that there is nothing in the records of his company "indicating the time, place, or manner of the service upon said defendant." He says "that a copy of the amended complaint came to affiant’s attention, so far as affiant recalls, for the first time on April 13, 1926" (the day the default was entered). He does not say what he did with the papers when received, or why they escaped his attention until over a month had passed. "On the discovery of the copy of the amended complaint," April 13, defendant corporation attempted to locate the Western Pacific Securities Company, its principal on the bond sued on, but discovered that it had gone out of business. It thereupon informed a codefendant, one Harbolt, "of the existence of this action," who thereupon directed (with what authority is not stated) respondent to take up the question of defense with his (Harbolt’s) attorney. The latter, applied to to take the case, declined to do so until he had conferred with Harbolt, and subsequently, on April 29th, informed respondent that he would not act for it. Meanwhile respondent was advised by this attorney "that a default was being taken against defendant," and this information was corroborated by one of the counsel for appellant. The affidavit is silent as to the date of these conversations, although the context would indicate that they occurred on April 13th. Counsel for the plaintiff (appellant) told Mr. Robbins he would communicate with his client "with regard to setting aside said default." It is not alleged that any promise to set it aside was made, or even intimated; but Mr. Robbins states that "in reliance thereon," referring to the statement that plaintiff’s counsel would communicate with his client, respondent "took no action to set aside such default." These are all of the facts upon which the moving party relied as a showing of mistake, inadvertence, surprise, or excusable neglect.
It certainly cannot be said that the facts above and in Mr. Robbins’ affidavit set forth show that respondent was in "some condition or situation in which the party to a cause is unexpectedly placed, to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against." McGuire v. Drew, 83 Cal. 225, 23 P. 312. (Italics ours.) Rather do they disclose a parallel with the facts relied on in Coleman v. Rankin, 37 Cal. 247, where the defendant’s affidavit on motion to vacate a default recited that the summons had been served on him while he was in attendance at court as a witness, and that "upon receiving the same this deponent placed the same in his hat, and the same was lost therefrom," and that, like Mr. Robbins in the instant case, he had made no note of the date of service on himself. We think the remarks of the Supreme Court in that case are applicable here, namely: "The affidavit of the applicant, so far from disclosing a reasonable excuse for his neglect, tends rather to disclose a degree of negligence, carelessness, and lack of diligence hardly to be predicated of a prudent business man. ***" As said in Gillingham v. Lawrence, 11 Cal.App. 231, 104 P. 584, 585: "The defendant could read, and the summons expressly told him the time within which he must appear and answer. He let the time pass, and never even consulted an attorney. He was guilty of such carelessness and lack of diligence as could not be imputed to a prudent business man in a matter of material concern to himself. While courts are liberal in relieving parties of defaults caused by inadvertence or excusable neglect, and while they much prefer that a case should be heard on its merits, yet they do not act as guardians for incompetent parties, or parties who are grossly careless as to their own affairs. There must be rules and regulations by which rights are determined and under which judgments become final. If this court should determine that the defendant, as matter of law, was entitled to relief in this case, there could scarcely be a default judgment that would not have to be set aside, provided the proper affidavits could be procured from the defendant. *** Where a party willfully slumbers upon his rights when he should be alert, and makes no efforts to protect himself, courts cannot patiently listen to flimsy excuses and the claim of ignorance of the law. It was the duty of defendant to read the summons, and not only to read it, but to heed it."
Courts do not relieve litigants from the effects of mere carelessness. The rule is thus stated in Shearman v. Jorgensen, 106 Cal. 483, 39 P. 863, 864: "Inadvertence in the abstract is no plea upon which to set aside a default. The court must be made acquainted with the reasons for the inadvertence, and, if satisfactory, will act upon them, and relieve from burdens caused by them; but, if the inadvertence is wholly inexcusable, as if it arises from gross negligence, the court will not look upon it kindly, and will have none of it." See also, Durbrow v. Chesley, 24 Cal.App. 416, 141 P. 631; Gill v. Peppin, 41 Cal.App. 487, 182 P. 815, and Ross v. San Diego, etc., Co., 50 Cal.App. 170, 194 P. 1059, all of which reaffirm the rule as laid down in Shearman v. Jorgensen, supra. Many instances of the application of this rule may be found in the books. The following are typical: Where defendant’s attorney, on receiving the copy of summons and complaint, served on defendant April 9, erroneously marked them, "Answer due April 23d," and "the only reason presented for his not having filed the answer is ‘his mistake in marking said papers as aforesaid, and owing to the fact that there were so many cases against said defendants.’ " Williamson v. Cummings, etc., Co., 95 Cal. 652, 30 P. 762. Where the secretary of defendant corporation, who had been served with copy of summons and complaint, delivered them five days later to the president of the company, who held them, "thinking that his attorney would be in every day, and therefore waited until he should come." Shay v. Chicago Clock Co., 111 Cal. 549, 44 P. 237. Where defendant, expecting to be engaged in business out of town, gave the papers to his partner, instructing him "to attend to the matter and have the action defended," and, supposing his partner had done so, "dismissed the subject from his mind," while the partner placed the papers in a pigeonhole and forgot about them. Slater v. Selover, 25 Cal.App. 525, 144 P. 298.
The decision in Gorman v. California Transit Co., 199 Cal. 246, 248 P. 923, might at first blush seem to offer comfort to respondent. There the summons was served on the secretary of the corporation, who at once handed it to the manager of the traffic department, with directions to deliver both it and the file relating to the accident which was the subject of the action to the president immediately upon the latter’s return from a business trip. The file was placed on the manager’s desk to await the president’s return, "but prior thereto was inadvertently taken by one of the employees of the corporation— probably a stenographer in the traffic department" and returned to the usual repository for such files, the summons and complaint being with it. As a result the attention of the manager, "who was daily occupied with many details in connection with his immediate department, was withdrawn from said file, with the result that the matter was not called to the attention of the president upon his return, nor in fact until some days after the default of the corporation had been taken and judgment thereon entered against it for the full sum sought by the plaintiffs in the action."
In affirming an order granting a motion to vacate a default based upon these facts, the court thus pointed out the existence of intervening circumstances which rendered the inadvertence of the corporation officers excusable: "In the instant case, the inadvertence and forgetfulness of the secretary of the corporation was due to the fact that he had delivered said summons and complaint to the manager of the traffic department of said corporation with instruction to deliver the same to the president thereof immediately upon his return. The inadvertence of the manager of the traffic department in failing to carry out such instruction was attributable to the fact that the file containing such papers had been mistakenly removed from his desk by another employee of the defendant, and that his attention amid the engrossing details of his department was thus withdrawn from the same and from his duty to present the papers to the president of the corporation upon his return. It seems to us that these intervening facts furnish a sufficient basis to justify the conclusion of the trial court that the inadvertence of the officials of the defendant corporation was excusable, and justified the order from which this appeal has been taken."
Here there was no such intervening circumstance, but merely a lack of ordinary care and prudence, and as elsewhere said in the opinion from which we have just quoted: "It is true that the discretion thus to be exercised by the trial court is not capricious or arbitrary, but is an impartial discretion which must be guided and controlled in its exercise by fixed legal principles, and it should, therefore, appear that something more than mere inadvertence or neglect without reasonable excuse or justification existed, and that the inadvertence or neglect in question was not the result of mere forgetfulness on the part of the person or official charged with the duty of responding to the legal process in due time, but that such inadvertence or neglect was based upon other circumstances which would suffice to render the same excusable. Therein lies the distinction, we think, between the cases relied upon by the appellant in support of this appeal and the instant case."
We are constrained to hold that the learned trial court abused its discretion in granting the motion.
The order is reversed.
We concur: WORKS, P.J.; CRAIG, J.