Opinion
B161728.
7-16-2003
JAMES BUCKNER COBB, JR., et al., Plaintiffs and Respondents, v. DAVID J. ABRAHAM, JR., Defendant and Appellant.
David J. Abraham, Jr., in pro. per., for Defendant and Appellant. Law Offices of Samuel M. Huestis and Samuel M. Huestis for Plaintiffs and Respondents.
David J. Abraham, Jr., individually and doing business as Abraham & Co. Realtors, appeals from the default judgment entered against him. He contends the trial court abused its discretion in denying his motion to vacate the entry of default and the ensuing default judgment. We affirm.
In his notice of appeal, Abraham states that he is appealing from the order denying his motion to vacate. Because the motion is nonstatutory, the order denying the motion is not appealable. The order is, however, reviewable on appeal from the judgment. Accordingly, we construe the notice of appeal as referring to the judgment. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981, 884 P.2d 126; Winter v. Rice (1986) 176 Cal. App. 3d 679, 682, 222 Cal. Rptr. 340.)
FACTS AND PROCEDURAL HISTORY
On May 25, 2001, respondents James Buckner Cobb, Jr., and Ivy Oi Mui Ng Cobb, as trustees of the Ng Cobb Trust (hereafter collectively referred to as the Cobbs) filed the instant action against Abraham, Donald Lukens and others, alleging, among other things, fraud and deceit, breach of fiduciary duty, conspiracy, and negligence. The complaint alleged the following: In 1994, the Cobbs made two $ 50,000 loans to a Nevada corporation owned by Lukens, both of which were secured by deeds of trust on real property. The Cobbs retained Abraham, a real estate broker, to service the loans and to act as trustee in the event of foreclosure. According to the complaint, Abraham failed to disclose a preexisting business relationship with Lukens and was aware the loans were not properly secured. After Lukens defaulted, the Cobbs discovered that their security had been impaired such that they were unable to foreclose.
The summons and complaint were personally served on Abraham on June 26, 2001. The summons informed Abraham that he had 30 days after service of the summons to file a typewritten response with the court in proper legal form, and that "[a] letter or phone call will not protect you." Abraham was also advised that he could lose the case if he did not file a timely response.
On July 4, 2001, Abraham wrote a letter to the Cobbs attorney asserting that "all future complaints should be directed to Don Lukens" because Abraham had purportedly severed his business relationship with Lukens in 1999. A copy of the letter was sent to the court. Abraham made no other efforts to respond to the complaint.
On July 27, 2001, the notice of entry of default was mailed to Abraham at his current address. Abraham did not respond to the notice. On June 12, 2002, the court entered a default judgment against Abraham in the amount of $ 95,612.16, which consisted of the difference between $ 96,250 in settlement proceeds received from another defendant, and the amounts still owed on the notes secured by the trust deeds, plus interest, costs, and attorney fees. Notice of the judgment was mailed to Abraham at his current residence the following day.
On July 19, 2002, Abraham moved to vacate the entry of default and the resulting judgment. He did not deny receiving the summons and complaint or the entry of default. Nevertheless, he contended that relief from default should be granted because (1) he was "overwhelmed" by lawsuits relating to his dealings with Lukens; (2) he had been unable to afford counsel; and (3) he "naively believed" that he had resolved the matter by sending the July 2001 letter. He also asserted that he had never met the Cobbs and did not recall signing the documents attached as exhibits to the complaint.
The trial court denied the motion, noting that Abraham had actual notice of the lawsuit and had failed to offer a legitimate reason for waiting almost a year to seek relief from the entry of default. This appeal followed.
DISCUSSION
Abrahams motion for relief from default alleged that relief was proper under Code of Civil Procedure section 473, subdivision (b) or, alternatively, that the court should exercise its equitable powers to grant relief. The trial court concluded that relief was unavailable under section 473 because the motion was filed more than six months after the entry of default, and that in any event the motion was too late to warrant equitable relief. Abraham contends the trial court erroneously believed it lacked the discretion to grant the motion under section 473 because the motion was filed less than six months after the default judgment was entered. He further contends the trial judges "flippant attitude" toward the motion demonstrates that he abused his discretion in denying equitable relief.
All further statutory references are to subdivision (b) of Code of Civil Procedure section 473. Section 473 provides in pertinent part: "The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. . . ."
We review orders denying relief from default for an abuse of discretion. (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 981.) While the failure to exercise discretion is itself an abuse of discretion (Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 449), the record does not reflect any such failure here. Notwithstanding the fact that Abraham filed his motion less that six months after the default judgment was entered, the trial court properly concluded that relief under section 473 was unavailable because default had been entered almost a year earlier. Statutory relief from default is not available unless the motion is filed "within six months after the party becomes aware that a default has been entered against it. [Citations.]" (Stafford v. Mach (1998) 64 Cal.App.4th 1174, 1181.)
"Where, as in the present case, a motion to vacate a default judgment is made more than six months after the default was entered, the motion is not directed to the courts statutory power to grant relief for mistake or excusable neglect under Code of Civil Procedure section 473, but rather is directed to the courts inherent equity power to grant relief from a default or default judgment procured by extrinsic fraud or mistake. [Citations.]" (Gibble v. Car-Lene Research, Inc. (1998) 67 Cal.App.4th 295, 314.) "To set aside a judgment based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second[], the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last[], the moving party must demonstrate diligence in seeking to set aside the default once . . . discovered. [Citation.]" (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 982.)
It is undisputed that Abraham was properly served with the summons and complaint and that the entry of default was mailed to his current address almost a year before he sought relief from default. Although he claims to have believed that his letter to opposing counsel was sufficient to resolve the matter, any such belief was objectively unreasonable in light of the information provided in the summons. (Stiles v. Wallis (1983) 147 Cal. App. 3d 1143, 1149, 195 Cal. Rptr. 377.)
Contrary to Abrahams contention, nothing in the record reveals a "flippant attitude" from which it can be inferred that the court abused its discretion in denying Abrahams request for relief from default. Because Abraham was unable to articulate a satisfactory excuse for not filing a timely answer to the Cobbs complaint, and failed to demonstrate that he diligently sought to set aside the default, the trial court did not abuse its discretion in denying relief from default. "Although the policy of the law is to favor a hearing on the merits of a case, courts are not required to set aside default judgments for defendants who flagrantly ignore the responsibility to present a defense." (Stiles v. Wallis, supra, 147 Cal. App. 3d at p. 1148.)
The judgment is affirmed. Costs on appeal are awarded to respondents.
We concur: YEGAN, Acting P.J., and COFFEE, J.