Opinion
B165696.
10-30-2003
ALETHA LYNN TALAMANTEZ, Plaintiff and Respondent, v. SEBASTIAN GOMEZ et al., Defendants and Appellants.
Jay S. McClaugherty and David H. Ryan for Defendants and Appellants. Jon Mitchell Jackson for Plaintiff and Respondent.
FACTS
A.
While reaching for his cell phone, Sebastian Gomez ran a red light and collided with a car driven by Aletha Lynn Talamantez. Talamantez sued Gomez, LFG&E International, and RTB General Engineering Company for damages. Defendants (all represented by the same lawyer) answered, the case was judicially arbitrated, and the arbitrator rendered an award ($325,000) in favor of Talamantez and against all three defendants. The arbitrators award was filed on September 25, 2002, and the last day for requesting a trial de novo (October 24) came and went without a request from any party. On October 29, the trial court gave notice that (on October 28) the arbitrators award had been entered as a judgment. The judgment was paid in full, and (on November 18) Talamantez filed a full acknowledgement of satisfaction of the judgment.
Nothing in the record discloses the relationship between Gomez and the other defendants; all we know is that the complaint alleges that each is the agent of the other.
B.
On December 6, Defendants filed a motion (1) to vacate the judgment on the ground of mistake, inadvertence or excusable neglect, and (2) to "enforce settlement and dismiss [the] case." (Code Civ. Proc., § 473.) We quote from the motion:
All section references are to the Code of Civil Procedure.
"Within one working day after the arbitrators award becoming final, defendants counsel began attempting to obtain an agreement that would allow the judgment to be set aside if the judgment was promptly paid, and simply have the case settled, so that there [would be] no judgment against [D]efendants. Indeed, the arbitrators award of $325,000 . . . was promptly paid . . . . Thus, the case is effectively over, except for this motion, which was necessitated because [Talamantez] was apparently advised that she should not agree to set aside the judgment.
". . . [D]efendant LFG&E is involved in environmental cleanup of landfills. Many of [its] projects require bonds. [Ronald Brookshire, LFG&Es president,] is quite concerned that if this judgment must be listed on the bond applications, his company will lose the ability to obtain some of their bonds, or will have to increase their bids, because of added costs of the bonds.
"Defendants bring this motion because, while defendants counsel believe that they acted appropriately and in the best interest of their clients , the clients are concerned that counsels actions in allowing the judgment to be entered has caused them harm . . . ." (Emphasis added.) The motion claims both traditional mistake and attorney error under section 473 (although only the latter ground is pursued on this appeal). According to Defendants lawyer (Linda L. Hamlin, of McClaugherty & Associates), Talamantez and her husband "were extremely disappointed" with the arbitrators award, and (on October 7, while there was still time to request a trial de novo) they demanded $475,000 to settle. Hamlin and her colleagues considered the settlement and "whether to file a request for trial de novo at great length" but "[u]ltimately . . . decided that [D]efendants would not file a request for trial de novo." (Emphasis added.)
"At that point, [Hamlin] became concerned that if [Talamantez] were to become aware that [D]efendants were not going to file a request for trial de novo, this might increase the likelihood that [Talamantez] would file a request for trial de novo. Consequently, [Hamlin] determined that [she] would have no contact with [Talamantezs] counsel, to avoid the potential discussion of the topic of the arbitrators award. [¶] [After] the time for filing a [r]equest for [t]rial de [n]ovo passed without [Hamlins] receipt of one from [Talamantezs] counsel[, Hamlin was] pleased to see that [Talamantez] did not de novo , and promptly thereafter contacted [Talamantezs] counsel to see if [they] could settle by release, request for dismissal and acknowledgement of satisfaction of judgment, with the hope that [Defendants] could avoid the judgment being filed. [& para;] It is our experience that we can generally avoid the entry of a judgment in this manner ." (Emphasis added.)
According to Hamlin, Talamantezs lawyer was contacted by LFG&Es "personal attorney," who explained that LFG&E is a small business and that the judgment might affect its ability to enter certain transactions, and to express concern about the manner in which Allstate had handled the defense of Talamantezs case. Talamantezs lawyer wrote back to explain her position: "Both [Talamantez] and her husband feel bad about any detrimental issues your client may experience because of the way Allstate decided to handle this matter. I would simply like to add that any concerns your client has as an Allstate insured should be handled directly with Allstate. Of course my office is standing by to assist in any way possible. [¶] . . . I believe an objective analysis will confirm that Mrs. Talamantezs decision is in her best interest and so I ask that you respect it just as I have."
Defendants (still represented by Hamlin) then filed their motion for relief.
C.
In opposition to Defendants motion for relief, Talamantezs lawyer submitted a declaration in which he explained that he had tried to call Hamlin to "attempt settlement" but his calls were not returned (and there was no response to a fax he sent) until after the judgment was entered. He explains: "At no time prior to the date [the judgment was entered] did defendants, their attorneys [or] Allstate Insurance Company ever make a single offer to settle this admitted liability severe injury case. . . . [¶] . . . When Ms. Hamlin and I did speak after judgment was entered on the arbitration award, she advised me that she was instructed by Allstate Insurance not to respond to my earlier telephone message or facsimile [and t]hat Allstate had made a decision not to file a [t]rial [d]e [n]ovo . [¶] . . . Allstate rolled the dice at its own insureds expense and long-term detriment. Had Allstate simply returned my call or responded to my facsimile, this case could have easily been resolved for payment of the arbitration award. Allstate was not aware of this fact because it made a strategic decision to specifically allow a judgment to be entered on the award." (Emphasis added.)
The trial court denied the motion, and Defendants (still represented by Hamlins law firm) now appeal from that order.
DISCUSSION
Defendants contend there was attorney error (they say the judgment was entered "inadvertently"), and they claim the trial court abused its discretion when it denied their motion for relief. They say they did not file a request for trial de novo because they "wished to settle," and now claim the entry of judgment was "unavoidable," then ask us to read the word "inadvertent" in section 473 to cover an act that is "unavoidable." That we cannot do.
As relevant, subdivision (b) of section 473 provides that, "[n]otwithstanding any other requirements of [section 473], the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorneys sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorneys mistake, inadvertence, surprise, or neglect . . . ." (Emphasis added.)
There are at least two major problems with Defendants reliance on section 473.
First, relief is available when an attorney has made a mistake, or allowed something to happen through inadvertence, surprise, or neglect, not when she has affirmatively decided not to request a trial de novo, and affirmatively "determined" not to return telephone calls and faxes with the hope that the plaintiff would not request a trial de novo and that a judgment would be entered. The statute provides relief for "mistake, inadvertence, surprise, or neglect," not for intentional conduct later characterized as "unavoidable." The statute means what it says. (City of Petaluma v. County of Sonoma (1993) 12 Cal.App.4th 1239, 1244.)
Second, relief is not available when the court concludes, as it did in this case, that the "default or dismissal was not in fact caused by the attorneys mistake, inadvertence, surprise, or neglect." (§ 473, subd. (b).) Here, the trial court expressly found that there was "nothing unique" about this case, that Defendants "were happy to let the arbitration award go to judgment," and then "suddenly want[ed] to call it a settlement." The court saw no mistake or inadvertence or surprise or excusable neglect. To the contrary, Defendants "did exactly what [they] intended to do and [they] paid the judgment. . . ."
No other conclusion is possible on these facts. Hamlin admitted that she affirmatively "decided that [D]efendants would not file a request for trial de novo," and that she affirmatively "determined that [she] would have no contact with [Talamantezs] counsel, to avoid the potential discussion of the topic of the arbitrators award." She said, in effect, that she and her firm do this all the time ("It is our experience that we can generally avoid the entry of a judgment in this manner"). (Graham v. Beers (1994) 30 Cal.App.4th 1656, 1660-1661 [a conscious decision to act in a certain way cannot be the basis for relief under the attorney error provision in section 473].)
To avoid this conclusion, Defendants contend there was a "glitch" in the system, but this claim is based on their premise that they ought to be afforded relief from a conscious decision to allow entry of judgment on the arbitration award. That is not how the statute works, and that is not what happened in Milton v. Perceptual Development Corp. (1997) 53 Cal.App.4th 861, which Defendants describe as their "`poster child for the extent to which definitions of the terms `default judgment, and `dismissals can be expanded for [section] 473 relief." In Milton, the trial court granted relief, and the Court of Appeal affirmed that decision, rejecting a claim that relief should have been denied on the ground that the moving attorneys negligence was not the sole cause of the default. (Id. at pp. 866-868.) Milton has nothing at all to do with the facts of this case.
The "glitch," according to Defendants, is that "if both parties accept the arbitrators award, a judgment is entered almost immediately. That judgment can affect the [D]efendants credit. If the [D]efendants attorney is concerned about protecting his credit, but also concerned that trying to settle for the amount of the arbitrators award might prompt the plaintiff to file a Request for Trial De Novo, [D]efendants attorney has to make a choice." That is precisely our point — that the "choice" is a conscious act, not a "glitch" and not a mistake.
In their reply brief, Defendants say the "[a]ppellants herein are the clients. Allstate and its attorneys did not discuss the filing of a [r]equest for [t]rial [d]e [n]ovo with appellants. Appellants had no input on the decision not to file the [r]equest for [t]rial [d]e [n]ovo." If true (there is nothing in the record to support this assertion), the point is irrelevant to the issue before us. Hamlin was acting as her clients agent, and the clients are bound by her admissions.
Although we do not view this as a close case, we do not believe the appeal is frivolous and therefore deny Talamantezs request for sanctions.
DISPOSITION
The order is affirmed. The request for sanctions is denied, but Talamantez is awarded her costs of appeal.
We concur: ORTEGA, Acting P.J. and MALLANO, J.