Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Contra Costa County Super. Ct. No. C05-01759
Margulies, J.
When defendants Mauricio Baltrons and Elizabeth Castillo did not appear for a morning trial, the court declared them to be in default, struck their answer, and scheduled an afternoon hearing to prove damages. Although defendants appeared for the afternoon session, the trial court proceeded with the damages prove-up hearing and eventually entered judgment for plaintiff Custom Alloy Scrap Sales, Inc. (Custom Alloy). Defendants argue that the trial court’s entry of default was in error. We agree and reverse.
I. BACKGROUND
On August 29, 2005, Custom Alloy filed an action against Baltrons and his wife, Castillo, alleging that Baltrons had embezzled funds and stolen inventory while an employee of Custom Alloy. The complaint asserted causes of action for, among others, breach of contract, conversion, and breach of fiduciary duty, and sought to impose a constructive trust on property owned by Baltrons and Castillo. Defendants filed an answer in pro. per.
Other parties were also involved in the litigation at various times. There are various requests for dismissal in the record, and Defendants represent that all claims involving other parties were resolved prior to trial.
Trial was set for March 5, 2007. It is undisputed that five days before trial, Baltrons called the office of Custom Alloy’s counsel and asked what time he should appear for trial. The firm’s receptionist told him 9:00 a.m., based on the pleadings in the file. Later that day, the receptionist confirmed the time with Custom Alloy’s principal attorney, who told her, in error, that the time for trial was 1:30 p.m. The receptionist called Baltrons and told him to appear at 1:30 p.m.
The record does not contain a transcript of the proceedings on March 5. The court’s minutes state that the matter was called for a jury trial at 9:05 a.m. and that “due to deft’s failure to appear this date to commence trial the court strikes the answer of deft: Baltrons and Castillo and enters their default. A prove up hrg is set at 1:15 pm this date.” The minutes of the afternoon session state, “1:15 Court goes on the record for prove-up hrg. Atty Merrill presents the court with declarations for review and filing. [¶] . . . [¶] [After two witnesses had been called and examined] [t]he court finds defts Mauricio Baltrons and Elizabeth Castillo are present at 1:30 p.m. Mauricio Baltrons, Elizabeth Castillo appears [sic] in Pro Per. [¶] The court informs defts due to their non appearance this date this matter is proceeding by default. The court asks Mr. Baltron[s] if he has any evidence to dispute claims of pltf. Mr. Baltron[s] acknowle[d]ges he does have documentation [sic]. [¶] Atty Merrill calls Mr. Baltrons to the stand for examination. Mr. Baltrons is advised of his rights as this issue may be turned over to the DA’s office for criminal prosecution. Mr. Baltrons acknowle[d]ges he has been advised of his rights. [¶] The court receives declarations into evidence. The court recesses this hearing [until March 13] to allow for Mr. Baltrons and Ms. Castillo a chance to testify.”
Defendants’ brief on appeal asserts that they did not appear at 9:00 a.m., when the matter was called for trial, because they relied on the receptionist. As discussed below, we find it unnecessary to reach the issue of the reason for defendants’ failure to appear on time.
The court’s judgment provides a slightly different version of events, stating that “[t]his matter came on regularly for trial March 5, 2007 . . . . Based upon the failure to comply with the Local Rules, Pre-Trial Orders, and the failure to appear for trial, a default was entered for the benefit of [Custom Alloy] against [defendants]. After the taking of testimony and receipt of declarations with attached exhibits by the Court, [defendants] appeared in Court and were notified that a default had been taken against them. [Defendants] were offered the opportunity to testify and to cross-examine Plaintiff’s witnesses were available in the court room [sic]. Neither Defendant requested the opportunity to cross-examine any of Plaintiff’s witnesses, and neither Defendant requested to examine any of Plaintiff’s witnesses [sic] and the Court excused all of Plaintiff’s witnesses excepting CHAL SULPRIZIO. [Baltrons] took the stand and then requested a continuance in order to consult with counsel. [Castillo] joined in the request for the continuance. The Court granted the continuance until March 13, 2007.”
When the court convened on March 13, defendants appeared in pro. per., and Baltrons requested an additional two-week continuance, in hopes that he could persuade his insurer to provide counsel. The court granted the continuance.
Defendants were represented by counsel when the matter was called next on April 5. Counsel requested a short continuance because he had been retained only the prior day. Over Custom Alloy’s objection, the matter was continued again.
On May 4, when the matter was called again, the court noted, “We’re continuing with the prove-up hearing on the default.” Custom Alloy’s counsel examined the witness mentioned in the judgment, Chal Sulprizio. After cross-examining Sulprizio, defendants’ counsel asked the court to set aside the entry of default, arguing, “I think in the interest of justice, my clients should have the opportunity to present their case with counsel. [¶] They had no idea after the default was entered, and for whatever reason they were not timely that morning, that they had the right to ask that it be set aside. They did show up . . . at 1:30, whether it was a mistake, whether it was a forgivable mistake has never been adjudicated, and I think it ought to be. And, I think that basically [in] the interest of justice and the interest of the Court, it would be reasonable to allow this matter to proceed to a hearing.” The court rejected the request, stating, “Well, this is a prove-up hearing, it is not the time for setting aside a default. And if you feel you have a basis to do that, you’re going to have to file a formal set aside motion.” The court then announced the judgment amount. Written judgment was entered against defendants on May 25, 2007.
Although defendants purport to “appeal from the denial of their motion to set aside [the] default judgment,” there is no evidence a motion to set aside the default was ever filed. We assume that the appeal is taken from the final judgment, as stated in the notice of appeal.
II. DISCUSSION
Defendants contend that the trial court erred in entering a default judgment on the basis of their failure to appear for trial.
Defendants are unquestionably correct. This situation is materially indistinguishable from Wilson v. Goldman (1969) 274 Cal.App.2d 573 (Wilson). In that case, the defendant had filed an answer, but he and his attorney did not appear for trial at the scheduled time due to illness. Plaintiff’s attorney moved for a default, which was granted. A hearing on damages was eventually held, and judgment was entered for plaintiff. (Id. at pp. 575–576.) The judgment was eventually set aside, however, on a motion under Code of Civil Procedure section 473. In affirming the setting aside of the judgment, the Court of Appeal held, “Where a defendant has filed an answer, neither the clerk nor the court has the power to enter a default based upon the defendant’s failure to appear at trial, and a default entered after the answer has been filed is void.” (Id. at p. 577.) As the court explained, “Section 585 of the Code of Civil Procedure does not authorize the entry of any default in cases where an answer is on file, whether the defendant does or does not appear at the time the action is called for hearing. [Citations.] Where the defendant who has answered fails to appear for trial ‘the plaintiff’s sole remedy is to move the court to proceed with the trial and introduce whatever testimony there may be to sustain the plaintiff’s cause of action.’ [Citation.] In such case a plaintiff is entitled to proceed under the provisions of Code of Civil Procedure, section 594, subdivision 1, and he may do so in the absence of the defendant provided the defendant has been given at least five days notice of the trial. Section 594 does not authorize the entry of the default in the event the defendant fails to appear, and a hearing held pursuant to that section under such circumstances is uncontested as distinguished from a default hearing.” (Id. at p. 576.)
The ruling of Wilson has subsequently been adopted by other courts. (See Rooney v. Vermont Investment Corp. (1973) 10 Cal.3d 351, 372 [“Having filed an answer, defendants were entitled to have disputed issues of fact determined by a trial”]; Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 862 [“Simply stated, the court had no power to order the entry of appellants’ default when they failed to appear for trial”]; Kahn v. Kahn (1977) 68 Cal.App.3d 372, 382, fn. 5.) Because the trial court entered a default against defendants without requiring Custom Alloy to prove its case on liability, the court’s judgment must be reversed.
Custom Alloy contends that Wilson is distinguishable because “[c]rucially, appellants in Wilson had no notice of trial.” We disagree with this contention. The statement of facts in Wilson recites, to the contrary, that the “[d]efendant’s counsel was properly served with notice of trial.” (Wilson, supra, 274 Cal.App.2d at p. 575.) In any event, the rationale of Wilson does not rest on the absence of notice.
Custom Alloy also argues that the trial court entered a default not only because defendants failed to appear for trial but also because of defendants’ “failure to comply with local rules and pre-trial orders.” We find several flaws in this argument, but it is sufficient to cite two. First, the claim that the trial court entered the default as a sanction is not reflected in the record. Because the record does not contain a copy of the transcript of the March 5 hearing, it is not possible to determine with certainty the court’s rationale for entering default. In two separate places, however, the court’s minutes on the day in question cite only defendants’ failure to appear as the basis for the entry of default. These references include the unequivocal statement, “The court informs defts due to their non appearance this date this matter is proceeding by default.” Although the judgment recites that the default was entered “[b]ased upon the failure to comply with the Local Rules, Pre-Trial Orders, and the failure to appear for trial,” it was written and entered several weeks after the fact and does not cite any of the specific rule violations now proffered to explain the court’s action.
Custom Alloy cites three rules violations that might have justified a terminating sanction: the pro se defendants’ failure to prepare an issue conference statement, Castillo’s failure to appear at the issue conference, and defendants’ failure to appear at the mandatory settlement conference. There is no indication in the record that these rule violations were ever presented to the trial court as grounds for terminating sanctions.
Second, even if we assume that Custom Alloy’s contention is correct, we find nothing in the record to suggest that defendants were given notice and an opportunity to be heard before terminating sanctions were imposed. The docket sheet lists no noticed motion by Custom Alloy for sanctions, and there is none in the record. On the contrary, from the limited record provided us, it appears that the default was entered on the basis of an oral motion, made without advance notice to defendants at a time when they were not present in the courtroom. By the time defendants were present, the court had already entered the default and was intent on proceeding with the damages prove-up hearing. Sanctions, and particularly sanctions as severe as termination, cannot be imposed on a party without notice and an opportunity to be heard. (Sole Energy Co. v. Hodges (2005) 128 Cal.App.4th 199, 207-208.)
Custom Alloy further argues that there was no error because defendants were permitted to offer witnesses. At that point, however, their default already had been entered. To the extent defendants were permitted to offer witnesses, it was only on the issue of damages. As Wilson makes clear, the trial court was required to conduct a trial on liability—even if an uncontested hearing—as well as damages. No such trial occurred.
Because we conclude that the trial court’s entry of default was error regardless of the reason for defendants’ failure to appear, we do not consider their argument that the failure to appear was improperly induced by the conduct of Custom Alloy’s counsel.
III. DISPOSITION
The judgment of the trial court is reversed.
We concur: Stein, Acting P.J., Swager, J.