Opinion
NOT TO BE PUBLISHED
APPEAL from orders of the Superior Court of Los Angeles County. No. BC366328, Coleman A. Swart, Judge.
Law Offices of Monica R. Molina and Monica R. Molina for Plaintiff and Appellant.
Law Office of Stephen A. Madoni and Stephen A. Madoni for Defendants and Respondents.
WOODS, J.
In his first appeal, plaintiff Jamie Aviles, doing business as the Flower Patch, contended that the trial court abused its discretion when it granted the motion of defendants Jeannie Kim and Jeannie, Inc. to set aside the default judgment entered against them and when it denied plaintiff’s motion to reconsider setting aside the default judgment. This court reversed the trial court’s holding due to defendants’ failure to attach a proposed pleading to their motion. Defendants refiled their motion to set aside the default judgment and attached the proper pleadings. The trial court granted the motion and denied plaintiff’s request for attorney’s fees for the first appeal in this matter. We affirm the order setting aside the default judgment and dismiss the appeal from the order denying attorney’s fees.
BACKGROUND AND PROCEDURAL HISTORY
In his second appeal, plaintiff submits arguments that this court has already addressed in his first appeal. Since the facts are the same, the following recitation of facts is from the first appeal, case No. B207877.
On April 20, 2006, defendants entered into an agreement to sell their business, the Flower Patch, to plaintiff. On February 14, 2007, plaintiff filed a lawsuit against defendants for breach of contract alleging defendants had violated the agreement by competing with plaintiff within a seven-mile radius of plaintiff’s business within four years of the agreement.
To effectuate service, plaintiff hired Eric Mendez, a process server, who served an unidentified female with the summons and complaint at a business in Los Angeles on West Sixth Street (the Sixth Street address). Plaintiff asserted the unidentified female was Kim because the female matched Kim’s description. However, the record does not indicate Kim was actually present at the time of service nor does the record indicate that the summons and complaint was forwarded to defendants. Moreover, although Kim owned the Sixth Street address, it was not defendants’ principal place of business, which was in La Mirada on Meganwood Place (the Meganwood address). Defendants assert that, before this alleged substitute service took place, they had stopped conducting business at the Sixth Street address.
Despite the fact plaintiff claims he properly effectuated substitute service, defendants failed to appear and did not answer the complaint. Accordingly, the court entered a default judgment against defendants, considering only plaintiff's written declaration. Thereafter, plaintiff attempted to levy on the default judgment. On January 10, 2008, the Los Angeles County Sheriff's Department sent defendants a notice of levy under writ of execution of money judgment.
To stop the levy, on February 8, defendants filed a motion to set aside the default judgment and entry of default. Defendants claimed they were not given actual notice of the summons and complaint. In order to establish lack of actual notice, defendants offered Kim’s declaration, which stated: the first time defendants learned of this case was when they received the notice of levy; defendants were never personally served with the summons and complaint either as individuals or on behalf of any fictitious entities; defendants never received any documents relating to the lawsuit; and defendants had no actual notice in time to defend the action. What is more, defendants offered evidence proving plaintiff had incorrectly addressed the notice of levy. The notice incorrectly asserted the Meganwood address was located in Fullerton rather than La Mirada. Defendants did not file an answer or other proposed pleading with their motion to set aside.
Plaintiff filed his opposition, arguing defendants had received actual notice. In support of his opposition, plaintiff offered the proof of service of the summons and complaint for this case and the claim and order of a separate small claims case that Mendez had effectuated, the original small claims case. Plaintiff asserted Mendez, while serving the summons and complaint for this case at the Sixth Street address, also served the same unidentified female, who matched Kim’s description, with the claim and order for the original small claims case. Plaintiff averred that even though Kim did not appear in this case, Kim did appear at the hearing for the original small claims case. Plaintiff also offered evidence showing that during the initial course of these proceedings, plaintiff, via mail, sent to the Sixth Street address copies of the first amended complaint, notice of rulings, status reports, and eventually a request for default judgment and that the post office never returned such documents.
On February 28, one day before the scheduled hearing on defendants’ motion, plaintiff filed a supplemental declaration. The declaration averred that plaintiff had recently become aware of an additional small claims case in which Kim used the Sixth Street address as her correspondence address, the second small claims case. Plaintiff asserted that evidence contradicted defendants’ statement they had ceased doing business at the Sixth Street address when Mendez effectuated substitute service. Plaintiff also requested the court take judicial notice of the writ of execution in the second small claims case.
At the hearing, defendants asserted that they did not receive plaintiff’s supplemental declaration and that his filing was not timely. Moreover, although plaintiff claims he made arrangements to have the original small claims case delivered to the court, nothing in the record supports that statement. At the hearing, plaintiff asked the court to take judicial notice of three small claims cases. The court declined to do so. After taking the issue under submission, the court issued its order granting the motion and finding defendants had presented sufficient evidence indicating they were never given actual notice of the litigation pending against them and also finding plaintiff had failed to rebut the evidence presented.
On March 17, plaintiff filed a motion to reconsider the trial court’s order, arguing he had new evidence, which proved defendants had received actual notice. The new evidence was the second small claims case and another small claims case in which Kim again used the Sixth Street address as her correspondence address (third small claims case). Plaintiff also requested the court take judicial notice of the entire file in the second and third small claims cases.
Plaintiff filed a request for the court to permit the oral testimony of Grace Lee, stating Lee would testify she had personal knowledge defendants had received actual notice of the summons and complaint; and, during the time plaintiff served defendants, Kim was conducting business at the Sixth Street address.
Defendants filed their opposition, arguing the trial court should deny the motion on two grounds: one, the motion was untimely, and, two, plaintiff had not sufficiently explained why plaintiff had not submitted the new evidence in plaintiff’s original opposition. At the hearing, the court specifically stated it would not make a ruling until it received the documents plaintiff sought to have judicially noticed. Furthermore, the trial court questioned plaintiff concerning Lee’s personal knowledge about whether defendants had actual notice of this case.
After further review, the court denied the motion for reconsideration on two separate grounds. First, plaintiff made the motion outside of the 10-day statutory period that Code of Civil Procedure section 1008, subdivision (a), prescribes and was therefore untimely. Second, the record indicated plaintiff was aware of the new facts at the time of the original hearing and thus was obligated to present them to the court at that time. The court concluded that there were no new facts justifying reconsideration of the court’s order setting aside the default judgment.
All statutory references are to the Code of Civil Procedure.
II. The Trial Court’s Determination after The First Appeal
On the first appeal, this court held in favor of defendants on all substantive issues relating to actual notice, but reversed the trial court on the technicality that defendants had not provided proposed pleadings with their motion to set aside the default judgment. After the remittitur was issued, defendants filed a new motion to set aside the default judgment and attached a proposed pleading (i.e., an answer). Plaintiff opposed defendants’ motion based on res judicata, collateral estoppel and section 1008. After a hearing, the trial court granted defendants’ motion and denied plaintiff’s motion for attorney’s fees.
DISCUSSION
I. Motion to Set Aside Default Judgment
In this second appeal, plaintiff submitted the same arguments that he made in the first appeal along with arguments based on res judicata, collateral estoppel and section 1008. In the first appeal, this court only held that the trial court abused its discretion in granting the defendants’ motion to set aside the default judgment because of a technical error, i.e., the defendants had not attached a proposed pleading.
Thus, the prior opinion noted defendants had not demonstrated they could defend the case on the merits.
On the substantive issues, this court noted plaintiff’s arguments essentially fell into two categories and were both erroneous. First, this court held that it was not necessary for the trial court to take judicial notice of the small claims cases, and the outcome of the case would not have changed even if judicial notice was taken. Second, when stripped of its judicial notice component, this court held that the trial court was within its discretion to infer defendants were not given actual notice. On all substantive issues regarding actual notice, this court held in favor of defendants, and plaintiff does not submit any new argument on this appeal to persuade this court otherwise. What remains are plaintiff’s additional erroneous arguments that the trial court abused its discretion by ruling on a motion that is barred by res judicata and collateral estoppel and by failing to comply with section 1008.
Defendants moved to set aside the default judgment pursuant to section 473.5. Section 473.5 permits a trial court to set aside a default judgment under certain conditions. (Goya v. P.E.R.U. Enterprises (1978) 87 Cal.App.3d 886, 890-891.) When, as here, an issue is tried on affidavits, the rule of appellate review is that the evidence favoring the prevailing party establishes not only evidentiary facts, but also all facts the court might reasonably infer from that evidence; and when the record contains substantial conflict in the facts presented, an appellate court will not disturb the trial court’s determination of those controverted facts. (Id. at p. 891.)
Defendants also argued the mandatory relief provision of section 473, subdivision (b). The proper standard for reviewing the appeal of a motion to set aside the default judgment based on attorney fault is the abuse of discretion standard. (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 257-258.)
First, plaintiff’s arguments regarding res judicata and collateral estoppel simply do not apply. The thrust of plaintiff’s argument is that this court found on substantive issues in favor of plaintiff and therefore issue preclusion should be given to the default judgment. Collateral estoppel bars re-litigation of an issue if (a) the issue is identical to one actually litigated and necessarily decided in a previous suit, (b) there was a final judgment on the merits, and (c) the party against whom the doctrine is asserted was a party, or in privity with a party, in the previous suit. (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 910.)
However, there must be a first action and then a second action for the plaintiff’s argument to be applicable. (See Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 326-328 & 326, fn. 5; Hernandez v. City of Pomona (2009) 46 Cal.4th 501, 511.) If a judgment is still open to direct attack by appeal or otherwise, it is not final and the doctrines of res judicata and collateral estoppel do not apply. (National Union Fire Ins. Co. v. Stites Prof. Law Corp. (1991) 235 Cal.App.3d 1718, 1726.) After a judgment or order is reversed on appeal, the case generally proceeds to retrial in the trial court as if the appealed judgment or order had never been rendered. (Gapusan v. Jay (1998) 66 Cal.App.4th 734, 743.) But subsequent trial court proceedings are subject to any specific directions given by the appellate court in connection with the remand, such as a partial retrial or entry of a particular judgment. (Ibid.) In the present case, plaintiff attempts to argue that the “second action on the same claim” is the motion to set aside the default judgment following the remitittur from this court. However, this claim is clearly not the case because the current proceeding is not yet final.
Second, plaintiff’s argument regarding defendants’ alleged failure to comply with section 1008 also does not apply. Section 1008 applies to motions that explicitly direct the court’s attention to a previous order and seeks to modify, amend, or revoke that order. (Standard Microsystems Corp v. Winbond Electronics Corp (2009) 179 Cal.App.4th 868, 887.) For example, in Ron Burns Construction Co., Inc. v. Moore (2010) 184 Cal.App.4th 1406, 1418, the appellate court held that a defendant’s second motion to set aside was not subject to section 1008 because the trial court had not previously denied the motion or refused to rule on the motion. Similarly, section 1008 is not applicable here because the trial court never denied defendants’ motion nor refused to rule on the motion.
Plaintiff asserts the court abused its discretion by failing to strike defendants’ section 473, subdivision (b) argument and by failing to take defendants’ motion to set aside off calendar because defendants added a substantive argument regarding that section to its original motion and continued the hearing date.
Defendants properly included a section 473, subdivision (b) argument explaining the reasons why a proposed pleading was not included with the first motion to set aside (i.e., because they believed no proposed answer was necessary as they had not been served).
“If the requirements for relief under section 473 are met, the viability of relief under section 473 cannot be defeated because the requirements for relief under section 1008 may not also have been met.” (Wozniack v. Lucutz (2002) 102 Cal.App.4th 1031, 1043 disapproved on another point in Le Francois v. Goel (2005) 35 Cal.4th 1094, 1107, fn. 5; Ron Burns Construction Co., Inc. v. Moore, supra, 184 Cal.App.4th at pp. 1418-1420 [same].) As such, the remedial nature of the set aside statute prevails over the punitive nature of section 1008. (Standard Microsystems Corp., supra, 179 Cal.App.4th at pp. 894-895.) A court shall allow for relief from an attorney’s mistake, whether excusable or not, if the attorney is willing to take the blame. (Beeman v. Burling (1990) 216 Cal.App.3d 1586, 1604.) The attorney’s negligence need not be the exclusive or sole cause of his client’s loss, so long as it was in fact a proximate cause. Importantly, defendants satisfied the requirements of section 473, subdivision (b) by filing an attorney affidavit of fault.
Furthermore, the trial court is in the best position to resolve any discrepancies in the motion and the trial court did not abuse its discretion by not taking the motion off calendar. “‘[A]ll such motions are addressed to the sound discretion of the court, and a legion of cases repeat the rule that the trial court’s decision will not be reversed on appeal except upon a clear showing of an abuse of discretion.’” (Eastwood v. Froehlich (1976) 60 Cal.App.3d 523, 529.) Importantly, appellant fails to demonstrate that any prejudice resulted from the amended notice of motion. Appellant had the statutory amount of time to file an opposition to the motion and had an opportunity to restate those arguments by submitting a supplemental declaration in opposition to the motion.
II. Attorney’s Fees
Plaintiff contends he was the prevailing party on the first appeal and is therefore entitled to attorney’s fees and costs. Plaintiff requested attorney’s fees pursuant to Civil Code section 1717. As the issue had not been addressed, this court gave the parties an opportunity to address whether the order denying attorney’s fees was an appealable order.
Plaintiff acknowledges that on October 1, 2009, the court awarded him costs of $1,204.48.
Plaintiff argues the order is an appealable order as it was a post-judgment request for attorney’s fees because the reversal placed the parties in the same positions as before the reversed judgment. (Gapusan v. Jay, supra, 66 Cal.App.4th at p. 743 [“‘“[A]n unqualified reversal remands the cause for a new trial, and places the parties in the trial court in the same position as if the cause had never been tried, with the exception that the opinion of the court of appeal must be followed so far as applicable.”’” (Citations omitted.)].)
Plaintiff urges that the default judgment then became the final judgment for purpose of appeal. “An order awarding attorney fees is separately appealable as an order after judgment.” (Whiteside v. Tenet Healthcare Corp. (2002) 101 Cal.App.4th 693, 706.) However, appellant ignores the fact that there is no final judgment in the case at bar because the trial court granted defendants’ request to set aside the default judgment in the same minute order in which it denied plaintiff’s motion for attorney’s fees, specifically stating “[t]here has been no final disposition of this litigation, and thus plaintiff’s motion is premature.” The court was correct. There was no default judgment in effect when plaintiff filed his notice of appeal. As the action is not final, the court could not determine which party was the prevailing party. Accordingly, we dismiss the appeal from the order denying the motion for attorney’s fees.
DISPOSITION
The order setting aside the default judgment is affirmed. The appeal from the order denying the motion for attorney’s fees is dismissed. Defendants to recover costs on appeal.
We concur: PERLUSS, P. J. ZELON, J.