Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Appeal from an order of the Superior Court of Los Angeles County, Ramona G. See, Judge. Reversed and remanded with directions. Los Angeles County Super. Ct. No. YC049536
Law Office of Michael A. Lotta and Jonathan G. Shibley for Plaintiff and Appellant.
La Follette, Johnson, De Haas, Fesler & Ames, Don Fesler and David J. Ozeran for Defendant and Respondent.
CROSKEY, J.
In this appeal, plaintiff Charlotte Mousaelian (plaintiff) challenges an order that set aside a default and default judgment entered against defendant A-1 Coast Rentals (defendant). The order granting such relief to defendant was based on the trial court’s Code of Civil Procedure section 473 findings that defendant’s motion was timely and defendant’s failure to file a responsive pleading after being served with the summons and complaint was due to defendant’s excusable neglect. Our review of the record causes us to conclude just the opposite. Additionally, we find the record does not support defendant’s claims that the judgment is void because of (a) defective service, (b) a defective proof of service, and (c) a defective statement of damages; nor does the record support relief from the default and default judgment under the trial court’s inherent power to grant equitable relief. Therefore, the order from which plaintiff has appealed will be reversed and the matter remanded with directions to reinstate plaintiff’s judgment.
A second company, Montrose Financial, Inc. was also named as a defendant in this case, but it is not involved in the motion to set aside the default and default judgment, nor in this appeal.
BACKGROUND OF THE CASE
1. The Complaint and Default Judgment
This suit was filed on August 27, 2004. Plaintiff’s complaint alleges that on August 31, 2003, she was walking in a neighborhood in Palos Verdes, California when she fell into a hole that the defendants negligently failed to properly fence off. As a result of her fall, plaintiff was severely injured, she has suffered severe and permanent pain, she has been compelled to incur expenses for medical treatment, and she has not been able to engage in her usual occupation or any other occupation, and thus has suffered a loss of income.
According to a declaration filed by plaintiff in support of her request for a default judgment, the other defendant, Montrose Financial, Inc., is the property owner of record at the place where plaintiff fell, and the respondent-defendant in this appeal provided fencing for that lot.
On October 25, 2004, plaintiff filed a request for entry of defendant’s default. The default was entered that same day. The request for default states a copy of it was mailed to defendant at 24000 Crenshaw Blvd., Torrance, CA 90505, to the attention of one Heidi Ansell, on October 19, 2004. Also filed on October 25 was plaintiff’s statement of damages in which she claimed medical expenses, future medical and incidental expenses, loss of wages, future loss of wages, prejudgment interest, and general damages, all totaling over $600,000. Additionally on that same day, plaintiff filed her proof of service for service on defendant of the summons, complaint, statement of damages and several other documents. The proof of service states the documents were all served by an attorney service at the abovementioned address on Crenshaw Boulevard on September 14, 2004, by serving the abovementioned Heidi Ansell, whom the proof of service identifies as defendant’s authorized agent and general manager. The process server signed the proof of service under penalty of perjury on September 14, 2004.
On August 9, 2005, plaintiff filed a request for dismissal of all the Doe defendants and a request for entry of a court judgment. The form “request for court judgment” was served on defendant, to the attention of Heidi Ansell, at defendant’s business address. The request was supported by plaintiff’s own declaration and by her medical records. According to a declaration filed by plaintiff’s attorney in support of plaintiff’s opposition to defendant’s motion to vacate the default and default judgment, the request for court judgment was not properly prepared and so the attorney filed an amended request for court judgment and mailed a copy to defendant on November 1, 2005, again to the attention of Heidi Ansell. A default judgment, against both named defendants jointly and severally, was signed and filed on November 2, 2005, in the sum of $80,462.50.
After a defendant’s default is taken, the plaintiff is not required to serve the defendant with papers and notices, other than amendments to pleadings and amended pleadings. (§ 1010; Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1301.)
2. Defendant’s Motion to Vacate the Default and Default Judgment
a. Procedural Aspects and Defendant’s Asserted Grounds for the Motion
On April 28, 2006, which was just 4 days shy of six months after the entry of the default judgment, and 18 months and three days after entry of defendant’s default, defendant filed a motion under Code of Civil Procedure section 473 (§ 473) to set aside the default and default judgment. As grounds for the motion, defendant asserted that service of the summons and complaint was defective, defendant’s failure to file an answer was due to its own excusable neglect, and plaintiff failed to give a courtesy warning that it would be seeking entry of the default judgment.
Unless otherwise indicated, all statutory references herein are to the Code of Civil Procedure.
A hearing on the motion was held on May 23, 2006, the matter was taken under submission, and on June 13, 2006, the court issued its decision and order granting the motion and deeming defendant’s proposed answer to the complaint filed as of May 23, 2006. Thereafter, plaintiff filed this timely appeal.
b. Evidence Presented by Defendant—Declarations of Heidi Ansell, Elizabeth Johnson, and Barbara Columbus
Defendant submitted a total of five declarations in support of its motion. Two of the declarations were from Heidi Ansell, who was named in the process server’s proof of service as the person served with the summons, complaint and statement of damages. Two were from defendant’s attorney, Elizabeth Johnson. The fifth was from defendant’s bookkeeper and Heidi Ansell’s assistant, Barbara Columbus.
(i) Heidi Ansell
In her declarations, Ms. Ansell stated she has been defendant’s general manager since 1997 and in that capacity she is responsible for the management of defendant’s front office. Since 1997 it has been her policy that all legal documents that arrive there by any means are to be immediately brought to her. That includes having all process servers come to her as she is the only person authorized to accept service of process there. Such policies were in place in 2004 and 2005. When she receives legal documents she reviews them to determine whether they should be sent to defendant’s attorney or insurance carrier, or handled “in house.” She submits personal injury claims asserted against defendant to its insurer by sending them to defendant’s insurance broker.
In January 2004, she received a letter from plaintiff’s attorney in which the attorney “threatened to sue [defendant] for personal injuries [plaintiff] allegedly sustained as a result of a ‘slip and fall’ accident.” She tendered the letter to “Jerry Coleman at my insurance broker” and she also attempted at least three times to contact plaintiff’s attorney by telephone but plaintiff’s attorney did not return her calls.
The letter was addressed to the attention of defendant’s “risk management,” not to Heidi Ansell’s attention.
“In September 2004, [Ansell] became aware that the Complaint in this action was delivered to [defendant]” but she has “no recollection or record that the Complaint was formally and personally served on [her]” and “[t]o the best of [her] knowledge, [she] was never formally served with the Complaint in this action.” Shortly after she became aware that the complaint had been delivered to defendant, she telephoned the abovementioned Jerry Coleman who works at defendant’s insurance broker’s office, and Coleman told her “to send him a copy of the complaint by regular mail because there was no need to expedite the delivery to him, and he said that he would take care of it.” She instructed her assistant, Barbara Columbus, to send a copy of the complaint to Coleman. Columbus is also defendant’s bookkeeper. She did not instruct Columbus to prepare a cover or transmittal letter for sending the complaint to Coleman. She assumed Columbus would follow through on her directive to send the complaint to Coleman and thus she did not follow up to assure herself that Coleman received the complaint. She assumed Coleman would forward the complaint to the insurance carrier. She never received a communication from Coleman or the carrier that coverage was being denied or that an answer to plaintiff’s complaint had not been filed.
As discussed below, Ansell’s equivocation in her declaration regarding whether the papers were personally delivered to her does not support defendant’s assertions in its respondent’s brief that Ansell was not personally served and not properly served.
From September 2004 to November 2005 she “did not see and was not aware that any documents relating to this matter were sent to [defendant] in October 2004. Any Entry of Default that was mailed to [her] office in October 2004 was not brought to [her] attention and [she] was not aware of the existence of such a document.” “Any Request for Court Judgment [that] was mailed to [her] office in August 2005 was not brought to her attention and [she] was not aware of the existence of such a document.”
She heard nothing else about the matter “until shortly after November 1, 2005” when she received in the mail a copy of plaintiff’s request for a court judgment and she “had no idea that a default had been entered until [she] received [that document].” In late 2005 she referred the matter to Elizabeth Johnson who is one of the attorneys at the law firm that represents defendant. Johnson informed her that defendant’s default was entered in October 2004. That was when she first became aware that court proceedings had taken place in this case. When she received the request for court judgment in November 2005 she was not aware “that there was a 6-month deadline for the filing of a motion to set the default aside.” She waited until late December to contact attorney Johnson and they “did not have a substantive discussion about this matter until January 2006. At that time, Ms. Johnson instructed [her] to compile information relevant to this matter.”
As part of her preparation for filing defendant’s motion to set aside the default and default judgment, she searched her office and did not find a file relating to this case. She found the complaint in an unmarked file and “there was no verification that it had been mailed to Mr. Coleman in September 2004.” She asked her assistant, Ms. Columbus, to confirm that the complaint had been sent to Coleman but Columbus told her that because of the passage of time she could not remember whether she mailed the complaint to him. No one else on her staff had any recollection or information “regarding this matter.” She contacted Coleman and asked if he had a record of the complaint being sent to him but he told her he “was in the process of moving and would not have access to his files until after the time the Motion was due to be filed.” Then, in early May 2006 Coleman told her he could not find any record in his files of the complaint having been sent to him and he intended to send the matter to defendant’s insurance carrier. She received a “new claim acknowledgement” from the carrier regarding plaintiff’s personal injury claim; it was dated May 2, 2006.
After attorney Johnson told her to compile information about “this matter,” she (Ansell) “became involved in an extensive investigation regarding significant employee theft at [defendant’s] location and [she] was also responsible for the implementation of a new, expensive, computer system. These matters occupied schedule [sic] from January-April 2006. As a result, [she] was unable to provide the necessary information to Ms. Johnson until mid-April 2006.”
(ii) Elizabeth Johnson
Elizabeth Johnson stated in her declarations that she is an associate attorney in the law firm that represents defendant in this case. Heidi Ansell told her she has no recollection of being “formally or personally served with the Complaint.” The bookkeeper/assistant to Ms. Ansell, Barbara Columbus, told her (told Johnson) she could not recall whether she mailed a copy of the complaint. (Apparently Johnson means whether Columbus mailed a copy of the complaint to insurance broker, Mr. Coleman.) Columbus also told her that sometimes “the mail” was simply placed in piles or files, no matter what type of mail it was (that includes legal documents and junk mail), and was not read, prioritized, or brought to Ansell’s attention. (Apparently Columbus meant the mail coming to defendant’s office.) Moreover, Columbus stated that at least twice in the prior several years when Ansell instructed her to clean up the office, Columbus would “take the piles and files of mail and place[] them into other files or into cabinets.”
Although Ansell contacted Johnson in the last week of December 2005, due to Johnson’s “holiday schedule,” Johnson “did not have an opportunity to discuss this with her until early January 2006. At that time [Johnson] instructed Ms. Ansell to begin compiling the information necessary to complete the motion.” Johnson is “informed and believe[s] that Plaintiff’s counsel never attempted to contact Ms. Ansell to warn Defendant that a default judgment was about to be entered.”
(iii) Barbara Columbus
Barbara Columbus stated that since 1982 she has been defendant’s bookkeeper and Ms. Ansell’s assistant, and “[n]ormally, if Ms. Ansell instructs [her] to mail something, [she] does as [she is] instructed,” but because of the passage of time, she has “no recollection of whether or not [she] mailed the Complaint in this matter to [defendant’s] insurance broker, Jerry Coleman, in September 2004.” She is aware that Ansell has a policy that all legal documents that come to the office by any means are to be immediately brought to Ansell’s attention. “When Ms. Ansell is on vacation, all the mail into piles and/or files [sic] with other items and mail, including ‘junk’ mail.”
c. Evidence Presented by Plaintiff—Declarations of Plaintiff’s Attorney and Plaintiff’s Process Server
(i) Michael Lotta
Plaintiff’s attorney, Michael Lotta, stated that when he gave his process server the papers to serve on defendant, he (Lotta) was not aware of Heidi Ansell and thus did not give the process server Ms. Ansell’s name. However on October 19, 2004, when he mailed to defendant plaintiff’s request for entry of default, he mailed it to defendant’s place of business to the attention of Ansell. Also, in August and November, 2005, when he mailed plaintiff’s two requests for entry of judgment to defendant, he mailed them to defendant’s place of business to the attention of Ansell.
Lotta stated that despite the service of process on defendant in September 2004, and the three mailings of papers to defendant to the attention of Heidi Ansell after service of process, he was never contacted by anyone on behalf of defendant until he received the notice of motion to vacate that the defendant filed on April 28, 2006. He stated that after defendant’s default was taken in October 2004, he had no reason to contact defendant other than to mail documents to defendant to Ansell’s attention.
Lotta observed that defendant’s attorney, Ms. Johnson, never explained to the court in defendant’s moving papers why she took no action for five months and 26 days after the default judgment was entered and why she never attempted to contact him. He also observed that Heidi Ansell never denied having the summons, complaint and statement of damages served on her; rather she only stated she had no recollection or record of them being served on her. Additionally, he observed that Ansell did not acknowledge receiving the October 2004 request for default and the original (August 2005) request for judgment; she only acknowledged receiving the November 2005 amended request for court judgment, even though all three documents were mailed to the same address and to her attention. Lotta argued that either defendant’s motion for relief should be denied or a decision on it should be stayed until he has an opportunity to depose Heidi Ansell regarding the factual basis of the motion, including what Ansell knew about the procedural aspects of this case and when she gained such knowledge.
(ii) Chris Hutchinson
Chris Hutchinson submitted a declaration in support of plaintiff’s opposition to defendant’s motion for relief. Hutchinson stated he is a licensed process server who does business under the name Marathon Attorney Service. He has operated his business for approximately 28 years. In September 2004 his client, attorney Michael Lotta, requested that he serve process on defendant. Normally he asks attorneys to fill out a “buck sheet” with information regarding “who, when and where a party is to be served.” However when attorney Lotta gave him papers to serve on defendant he was not given the name of a specific person to serve with the papers. It is his practice that when he goes to a business to serve papers, he asks the receptionist, or the person that acknowledges his presence, who the “office manager ‘person in charge’ ” is, and then he personally serves such person. Based on this practice and on his review of the proof of service he filled out for service on defendant, he served Heidi Ansell as the authorized agent and general manager of defendant.
(d) The Trial Court’s Analysis of the Evidence
Citing to the declaratory evidence of Heidi Ansell, the court found defendant’s failure to file a responsive pleading to plaintiff’s complaint was due to defendant’s excusable neglect, and further found defendant’s section 473 motion for relief from such failure was timely.
CONTENTIONS OF THE PARTIES
Plaintiff contends the trial court lacked jurisdiction to set the default and default judgment aside under section 473 because the record does not contain evidence of defendant’s excusable neglect, and because defendant’s motion was not timely filed.
Defendant expands the appellate issues by asserting the order granting it relief from the default and default judgment can be affirmed on section 473 grounds as well as for other reasons. Defendant cites the rule that when a trial court’s decision is correct on any theory of law that is applicable to a case the decision will be affirmed even if it was made by the trial court for the wrong reason. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 18-19, disapproved on another point in Woodland Hills Residents Assn. v. City Council (1979) 23 Cal.3d 917, 944.) That includes orders granting relief from default judgments. (Parage v. Couedel (1997) 60 Cal.App.4th 1037, 1041.) The additional grounds asserted by defendant for affirming the trial court’s order granting defendant relief from the default and default judgment are the trial court’s inherent equity power to grant relief, and defendant’s contention that the judgment is void because plaintiff did not present proper proof of proper service on defendant, and the statement of damages is insufficient to inform defendant of the damages plaintiff seeks from defendant.
Defendant does not contend that the “mandatory” provisions for relief that are set out in section 473 (i.e., the mistake, inadvertence, surprise or neglect of a defendant’s attorney) are operative in this matter.
DISCUSSION
1. The Judgment Is Not Void
Defendant contends plaintiff failed to effectively show that defendant was properly served with the summons, complaint and statement of damages. Defendant asserts such failure makes the judgment void. The consequence of such void judgment, argues defendant, is that the judgment’s validity and the validity of the default taken against defendant may both be attacked at any time, including for the first time on appeal. Specifically, defendant argues that it cannot be determined from the proof of service “whether personal service was effected on Heidi Ansell or if substitute service was effected. If substitute service was effected, then it was defective, because the proof of service does not indicate that the summons, complaint, and statement of damages were mailed to Ms. Ansell after being left at the office.”
Defendant also argues that plaintiff failed to either (1) follow the Legislature’s directive that “[a]ll proof of personal service shall be made on a form adopted by the Judicial Council,” (§ 417.10, subd. (f)), or (2) use a proof of service that complies with alternative requirements set out in California Rules of Court, rule 2.150 for format of a proof of service. Defendant argues this failure affects not only service of the summons and complaint, but also service of the statement of damages because section 425.11 provides that in suits for personal injury, before a default may be entered, the plaintiff must serve on the defendant a statement that sets out the nature and amount of damages being sought and such service must be made “in the same manner as a summons.”
Section 417.10 states in part: “Proof that a summons was served on a person within this state shall be made: [¶] (a) If served under Section 415.10, 415.20, or 415.30, by the affidavit of the person making the service showing the time, place, and manner of service and facts showing that the service was made in accordance with this chapter. The affidavit shall recite or in other manner show the name of the person to whom a copy of the summons and of the complaint were delivered, and if appropriate, his or her title or the capacity in which she or she is served, and that the notice required by Section 412.30 [respecting informing the person served that he or she is being served on behalf of a defendant corporation] appeared on the copy of the summons served, if in fact it did appear.”
Additionally, defendant challenges the statement of damages because it does not identify defendant by name.
a. Statutory Provisions for Service of Summons on a Corporation
Defendant is a corporation. Section 416.10 provides that the person to be served on behalf of a corporation may be, among others, a person authorized by the corporation to receive service of process, or a general manager of the corporation. Here, Heidi Ansell is defendant’s general manager, and according to her own declaration, she is also the only person authorized to accept service of process at defendant’s place of business.
Sections 415.10 et seq. provides the manner in which a summons may be served. Included among the several methods are (1) personal service (§ 415.10), which is accomplished by personally delivering a copy of the summons and complaint to the person to be served, and (2) substitute service (§ 415.20), which can be accomplished by leaving a copy of the summons and complaint in the office of the person to be served during usual office hours, said copies to be left with the person who is apparently in charge, and thereafter mailing a copy of the summons and complaint to the person to be served, at the place where the copies were left.
b. Plaintiff’s Proof of Service
In the instant case, the proof of service states that among the documents served on defendant were copies of the summons, complaint and statement of damages.
In section 2a of the proof of service, under the heading “party served,” defendant’s name (“A-1 COAST RENTAL, a corporation”) is typed. Thus, defendant is identified as the party served.
In section 2b of the proof of service, under the heading “person served” the following is typed: “PARTY IN ITEM 2a by service on Heidi Ansell, Authorized Agent, Gen Mgr.” Thus, Ms. Ansell’s positions as defendant’s general manager and the person authorized to accept service of process are both identified.
In section 2c, under the heading “address,” there is typed 24000 CRENSHAW BLVD. [¶] TORRANCE, CA 90505.”
Section 3 of the proof of service states that the process server “served the party named in item 2” by personally delivering the copies on September 14, 2004, at 2:00 p.m. No mention is made of substitute service and mailing the documents served.
Lastly, section 4 of the proof of service states that the preprinted bottom portion of the summons, where the summons states “Notice to the person served: You are served:” was filled out to indicate that Ansell was served on behalf of “A-1 COAST RENTAL, a corporation” and was served under “CCP 416.10 (CORPORATION).”
Evidence Code section 647 provides that a registered process server’s return of process establishes a presumption of the facts stated in the return, and the presumption affects the burden of producing evidence. The effect of the presumption is to “require the trier of fact to assume the existence of the presumed fact unless and until evidence is introduced which would support a finding of its nonexistence, in which case the trier of fact shall determine the existence or nonexistence of the presumed fact from the evidence and without regard to the presumption.” (Evid. Code, § 603.)
Given that (1) the summons informed defendant’s office manager, Heidi Ansell, that she was being served on behalf of defendant under section 416.10, (2) the proof of service states copies of the summons, complaint and statement of damages were personally delivered and such service was on Heidi Ansell, (3) the Evidence Code presumption of the truth of such matters, and (4) nothing in Ansell’s declaration provides unequivocal evidence that the papers were not given to her personally by the process server, there is no cause or basis to find that the service of the documents invalidates the default and default judgment. The proof of service itself is not ambiguous as to whether it was personal service or substituted service that was effected, and Ansell never denies that the process server served her with such papers. She states only that she has no recollection whether or not the papers were personally handed to her by the process server, and simply asserts that, “to the best of [her] knowledge, [she] was never formally served.”
Further, we find no cause to declare that the format of the proof of service was defective as a matter of law so as to invalidate the default and default judgment. Defendant argues that the format of the proof of service does not comply with the abovementioned statutory and Rules of Court provisions for format of proofs of service. Assuming, arguendo, that the defendant is correct, the record fails to disclose that such circumstance in any way caused defendant to suffer the default and default judgment. A similar situation was addressed in Jonson v. Weinstein (1967) 249 Cal.App.2d 954, where a defendant who had been served as a fictitiously named defendant, and who had suffered a default and default judgment, argued that before a default could be entered against him the plaintiff was required to amend the complaint to add him as a Doe defendant. Rejecting that contention, the reviewing court stated: “Although section 474, Code of Civil Procedure, states that the plaintiff ‘must’ amend the complaint by substituting the defendant’s true name for his fictitious name, it does not demand that action as a precondition of his valid default. Failure to amend in conformity with section 474 causes no failure of jurisdiction over the person served as a fictitious defendant. [Citations.] The causes of a defendant’s failure to respond to process occur independently of the plaintiff’s failure to amend and are not cured by the amendment or lack of it.” (Id., at p. 958; italics added.)
c. The Statement of Damages
We also reject defendant’s contention that the statement of damages is ineffective because defendant’s name is not specifically mentioned in it. Whereas the caption on the complaint and summons specifically mentions both named defendants (A-1 Coast Rental and Montrose Financial, Inc.) and then mentions Does 1 to 100, the “defendants” portion of the caption on the statement of damages is shortened to “Montrose Financial, Inc., et al.” (Italics added.) Also, none of the defendants’ names are mentioned in the body of the statement of damages. We find no cause to conclude as a matter of law that merely shortening the caption on the statement of damages and not mentioning defendant’s name in the body of the statement of damages constitutes a defective statement of damages that could be the cause of the default and default judgment taken against defendant. The statement of damages was served with the summons and the complaint, both of which clearly mention defendant’s name, and the statement of damages begins: “PLEASE TAKE NOTICE that the plaintiff Charlotte Mousaelian hereby seeks to recover the following amounts for her damages:” after which are listed the various categories of damages together with the amount of damages for each category that plaintiff sought to recover. We do not agree that a layperson who reviews the summons, complaint and statement of damages “would be likely to conclude” that the statement of damages does not pertain to defendant. Moreover, the complaint repeats over and over that plaintiff’s damages are the “direct and legal result of the conduct of defendants, and each of them,” and the prayer in the complaint prays “for judgment against defendants, and each of them” and then sets out the types of damages claimed in the statement of damages.
Therefore, (1) we cannot say that defendant was never informed of the damages sought from it and (2) the default and default judgment in this case cannot reasonably be said to be the result of defendant believing that no damages were expected from it or believing that the amount of damages claimed in the statement of damages could not pertain to defendant. Indeed, the declarations submitted by defendant in support of its motion to vacate the default and default judgment show that it was the actions or inactions on the part of defendant and/or its agents (office manager, attorneys, insurance carrier and insurance broker) that followed service of the summons, complaint and statement of damages that led to the default and default judgment being taken.
2. Requirements for Obtaining Relief Under Section 473
Defendant sought relief from the default and default judgment by relying on the “discretionary” provisions in section 473. Those provisions state: “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.” (Ibid.; italics added.) Defendant’s motion was based on its claim of excusable neglect.
Section 473 motions are addressed to the discretion of the trial court and absent an abuse of that discretion, reviewing courts will not reverse the trial court’s ruling on such motions. (Rivercourt Co. Ltd. v. Dyna-Tel, Inc. (1996) 41 Cal.App.4th 1477, 1480.)
a. Timeliness of Defendant’s Motion
Defendant asked for relief from two things—the default taken against it, and the default judgment. The default judgment is specifically mentioned in the above-quoted portion of section 473, whereas the default comes under the catchall phrase “or other proceeding.” The default and the default judgment each have their own six-month outside time limit for relief under section 473. (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970; Jonson v. Weinstein, supra, 249 Cal.App.2d at p. 958; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (2006) [¶s]5:279-279.5, 5:282, 5:413-5:414, pp. 5-67, 5-68, 5-102.3.) As noted above, defendant filed its section 473 motion 4 days before the six-month outside time limit for seeking relief from the default judgment expired, and 18 months after the default was entered. Thus, under the terms of section 473, only the request for relief from the default judgment met the statute’s outside time limit. Therefore, unless a valid reason exists for vacating the default, the default must stand. We have already rejected the “void judgment” argument for vacating the default. We will address defendant’s claim to equitable relief from the default in a later part of this opinion.
Defendant’s argument that a court “should have authority to set aside both the judgment and the default” if the section 473 motion is filed within six months of the default judgment is not supported by the authority upon which defendant relies—Nemeth v. Trumbull (1963) 220 Cal.App.2d 788, 790. The court in Nemeth stated that the section 473 six-month period runs from the date of default and not from the date of the default judgment, but based on that analysis of section 473, the Nemeth court opined that in a case where the defaulting defendant’s objection to a judgment is simply that the judgment exceeds the amount requested in the complaint, “[p]ossibly, then, . . . the six-month period should be computed from the date of the judgment rather than the default.”
It is not just the failure to timely seek relief from the default that precludes vacating it. Defendant’s “reasonable excuse” basis for such relief also fails. The declarations submitted by defendant to support its section 473 motion do not show a simple case of the papers that were served on Ms. Ansell by Mr. Hutchinson being inadvertently misfiled or mislaid as a result of, for example, a misunderstanding of directions as to what should be done with the papers, such as is discussed in Bernards v. Grey (1950) 97 Cal.App.2d 679, 684-686. There is no evidence that Ansell’s assistant/bookkeeper Ms. Columbus misunderstood what was to be done with the papers—no evidence that instead of sending them to the insurance broker she instead put them in an unmarked file because she thought that was what she was supposed to do. Rather, the declaratory evidence from defendant presents a picture of an office with no reasonable, sustained effort to ensure that papers, including legal papers, are handled properly. There is evidence of neglect, but it is not excusable neglect. “The ‘excusable neglect’ referred to in . . . section [473] is that neglect which might have been the act of a reasonably prudent person under the same circumstances. [Citation.] A judgment will not ordinarily be vacated at the demand of a defendant who was . . . grossly negligent.” (Baratti v. Baratti (1952) 109 Cal.App.2d 917, 921.) Thus, defendant’s motion to have the default vacated failed to meet both the substantive prong of section 473 (a showing of mistake, inadvertence, surprise, or excusable neglect) and the procedural prong (meeting the time requirement).
As for vacating the judgment, we find defendant did not meet the “reasonable time” procedural requirement of section 473. Section 473 specifically states that the motion must be brought “within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (§ 473, italics added.) This requires more than just bringing a motion within six months. It requires diligence on the part of the moving party. (Elston v. City of Turlock (1985) 38 Cal.3d 227, 234.) Here, we find the trial court abused its discretion in granting relief from the default judgment under section 473. The evidence presented to support the section 473 motion is not sufficient to permit a finding that defendant brought its motion within a reasonable time. Declarations submitted by defendant fails to show any reasonable excuse for the section 473 being filed just four days shy of six months after the default judgment was entered.
Heidi Ansell stated in her declaration that she received a copy of plaintiff’s request for a judgment shortly after November 1, 2005; yet, she did not contact defendant’s attorney regarding the matter until “late 2005. Thus, she let nearly two months slip away. Attorney Johnson stated in her declaration that she discussed the matter with Ansell in early January and instructed Ansell to “compil[e] the information necessary to complete the motion.” Ansell stated that from January to April 2006 she was busy with “an extensive investigation regarding significant employee theft at our location and [she] was also responsible for the implementation of a new, expensive, computer system [and a]s a result [she] was unable to provide the necessary information to [attorney] Johnson until mid-April 2006.” Thus, another three and one-half months passed by.
Ansell’s explanation that she waited nearly two months to contact attorney Johnson because she was not aware that there is a six-month time limit for bringing motions to vacate is essentially an admission that Ansell sat on her hands before seeking relief. Additionally, Ansell stated in her declaration that in her position as defendant’s general manager, she has a staff that works with her. Yet, she provided no explanation as to why the staff could not have compiled the information needed for the section 473 motion while Ansell was busy with the employee theft and new computer system, or aided her with those two matters so as to free her up to compile the information her attorney asked for to bring this motion. Nor did she actually state that the employee theft and new computer system occupied all of her time for three months. She only stated: “These matters occupied schedule [sic] from January-April 2006.” Additionally, she did not explain why those matters took precedence over the section 473 motion. This showing does not come close to satisfying the diligence standard imposed under section 473. While it is true that the policy of the law is to try cases on their merits, inexcusable delay cannot be condoned by the courts. (Carroll v. Abbott Laboratories, Inc. (1982) 32 Cal.3d 892, 900.)
Lastly, there is an additional reason for finding the trial court abused its discretion when it vacated the default judgment under section 473. Defendant’s motion failed to present sufficient evidence to support a finding that there was a substantive reason for vacating the judgment, such as would be present if the judgment exceeded the amount claimed in the statement of damages, or the judgment provided a form of relief to which plaintiff was not entitled or which the court was not permitted to give. Absent a substantive reason for vacating a default judgment, its vacation would be an idle act since the plaintiff would simply have the judgment entered again on the basis that a default had been entered against the defendant and the plaintiff was entitled to prove up a default judgment.
3. Defendant’s Claim of Entitlement to Equitable Relief
Defendant claims relief from the judgment on the ground of extrinsic fraud. This is a request for relief on equitable grounds, and when such request is made after a default judgment has been entered, relief is given only in exceptional circumstances because of the “strong public policy in favor of the finality of judgments. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981-982.)
Specific time limits, such as those in section 473, are not applicable in motions for relief from extrinsic fraud; however, to obtain such relief, the moving party must demonstrate that (1) it was diligent in seeking relief once the default or default judgment was discovered, (2) it has a meritorious defense, and (3) it has a satisfactory excuse for not previously presenting a defense. (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 982.) Here, we are compelled to conclude, as a matter of law, that defendant cannot meet any portion of this three-part test. Therefore, while motions for equitable relief are addressed to the trial court’s discretion and normally we would remand the case for the trial court to exercise its discretion in the first instance, there is no basis to do so in this case.
First, we have already determined that defendant was not diligent in bringing its section 473 motion. The same lack of diligence impacts defendant’s request for equitable relief. Second, defendant has not demonstrated a meritorious defense to the complaint. All defendant did was file a general denial of the allegations in the complaint and assert 16 affirmative defenses. Defendant did not specifically address the allegations of the complaint in its answer, nor did it submit a declaration from an attorney attesting to the merits of defendant’s defense, as did the defendant in Rappleyea v. Campbell, supra, 8 Cal.4th at p. 983. Accord Shields v. Siegel (1966) 246 Cal.App.2d 334, 337, where the requested equitable relief was supported by declarations from persons at the insurance company that was supposed to “take care” of the suit for the defendant, and from the defendant’s attorney who represented to the court that the defendant had a meritorious defense to the suit. Also in accord is Olivera v. Grace (1942) 19 Cal.2d 570, 578-579, where a plaintiff brought suit to have a judgment set aside. There, the court stated that while the plaintiff’s complaint was not required to allege facts that would “absolute[ly] guarantee [a] victory,’ the complaint should “present facts from which it can be ascertained that the plaintiff has a sufficiently meritorious claim to entitle him to a trial of the issue at a proper adversary proceeding.” Finally, as already demonstrated, defendant has provided no satisfactory excuse for not presenting a timely defense.
DISPOSITION
The order from which plaintiff has appealed is reversed and upon remand the trial court is directed to reinstate the judgment previously entered in favor of plaintiff. Costs on appeal to plaintiff.
We Concur: KLEIN, P. J., KITCHING, J.