Court Opinion

ID: 9792275
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:26:21.716781+00
Date Added: 2024-06-11T07:37:41.364481
License: Public Domain

BAXTER, J.
—I respectfully dissent. The majority undertake to rescue these litigants from the consequences of their own procrastination. In so doing, the majority create uncertainty in the law and encourage others to seek review in this court of decisions which are correctly decided by the Court of Appeal and present no important issue of law. (Cal. Rules of Court, rule 29(a).)1
While reciting in detail a litany of error and omission which placed defendants in the unfortunate position of judgment debtors, the majority fail to identify the sole issue in this case. That question is whether the Court of Appeal erred in holding that the trial court did not abuse its discretion in refusing to grant equitable relief to defendants. It did not. Moreover, the Court of Appeal properly applied the rule governing appellate review of such discretionary trial court rulings, a rule which the majority fail even to acknowledge, let alone apply. Since the majority appear to have overlooked the applicable law, it is appropriate to restate it in the hope that the bench and bar will not construe this aberrational decision as a repudiation of its force.
“In reviewing the evidence in support of a [Code of Civil Procedure] section 473 motion, we extend all legitimate and reasonable inferences to uphold the judgment. The disposition of such a motion rests largely in the discretion of the trial court, and its decision will not be disturbed on appeal *987unless there has been a clear abuse of discretion. Although precise definition is difficult, it is generally accepted that the appropriate test of abuse of discretion is whether or not the trial court exceeded the bounds of reason, all of the circumstances before it being considered. [Citations.] We have said that when two or more inferences can reasonably be deduced from the facts, a reviewing court lacks power to substitute its deductions for those of the trial court.” (In re Marriage of Connolly (1979) 23 Cal.3d 590, 597-598 [153 Cal.Rptr. 423, 591 P.2d 911], italics added; see also Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479 [243 Cal.Rptr. 902, 749 P.2d 339]; Ayala v. Southwest Leasing & Rental, Inc. (1992) 7 Cal.App.4th 40, 44-45 [8 Cal.Rptr.2d 637]; MJM, Inc. v. Tootoo (1985) 173 Cal.App.3d 598, 603-604 [219 Cal.Rptr. 100].)2
The Court of Appeal, recognizing that a ruling on a section 473 motion or on a motion addressed to the equitable power of the court to set aside a default or default judgment lies within the sound discretion of the trial court, properly refrained from simply substituting its judgment for that of the trial court. The majority fail to explain the manner in which the Court of Appeal erred in doing so. Instead it proceeds to do that which neither the Court of Appeal nor this court may do. It has substituted its judgment for that of the trial court. I find no explanation in the majority opinion for this failure to acknowledge or apply well-established law.
Nor do I find an explanation of the relevance of many of the evidentiary facts recited and relied on by the majority. The erroneous advice given defendants by the clerk regarding the filing fee is relevant only insofar as it establishes that the default was taken as a result of a mistake by defendants *988that resulted in their failure to file a timely answer to the complaint. Thus, in December 1990 defendants had a basis for immediately seeking relief from default under section 473. That is the only relevance of the clerk’s action.
The statement of plaintiff’s counsel regarding the grounds on which relief from default might be sought is relevant only if defendants were misled by the statement and that fact contributed to defendants’ failure to file a timely section 473 motion. The record permits an inference that the statement was not directed to, and defendants would not have understood the advice to be directed to, whether they could seek relief from default on the basis of the filing fee misunderstanding, however. Instead, it appears to have been directed to defendants’ delay in seeking relief for what was then five months from the time they learned that the default had been entered, notwithstanding advice from plaintiff’s counsel that they would have to seek judicial relief from that action.3 If the trial court could have drawn that inference, this court must assume that it did so.
Alternatively, the trial court may have concluded that defendants’ delay of five months after learning that default had been entered, a delay that occurred before they were advised by plaintiff’s counsel that they could not claim inadvertence, mistake or excusable neglect, was itself a sufficient basis on which to deny the motion. Section 473 does not permit a litigant to delay for six months in seeking relief from default. Rather, it requires that the motion be made “within a reasonable time, in no case exceeding six months, after the judgment. . . .” (Ibid.) Six months is the outside limit. “Defendant has not cited, nor has independent research disclosed, any case in which a court has set aside a default where, in making application therefor, there has been an unexplained delay of anything approaching three months after full *989knowledge of the entry of the default. . . . [U . . .While the statutory six-month limitation is the ‘standard or criterion in all cases’ [citations] as the measure of the court’s jurisdiction to grant relief in any event, the ‘reasonable time’ test stands as an independent consideration and in any given situation, its determination, within the maximum six-month period, ‘depends upon the circumstances of that particular case.’ ” (Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal.2d 523, 529-530 [190 P.2d 593].)
The majority assert that the record is “murky” regarding the events after plaintiff applied to have defendants’ default entered. (Maj. opn., ante, at p. 979.) It is so only because the majority fail to imply that the trial court made all findings on disputed evidence necessary to support its ruling. When one does so, there is no murk. Based on undisputed evidence, and assuming that the trial court made all the findings on disputed facts and drew all reasonable inferences from the facts that would support its ruling, the record shows the following:
Defendants were notified by mail of the request for entry of default. That notice was given to them prior to the filing of the request. They were informed when their untimely answer to the complaint was filed that their default had been entered. Exhibits attached to their motion to set aside the default confirm that defendants were aware in December 1990 that their default had been entered. They were advised by plaintiff’s counsel both before and after the default was entered that, even with stipulations, a motion to set aside the default would have to be made. Plaintiff himself gave defendants the same advice. Neither plaintiff nor his counsel represented to defendants that he would stipulate to set aside the default, however. Finally, plaintiff’s counsel did not receive a copy of a stipulation to set aside the default from defendants until November 3, 1991, 11 months after entry of default, and that document was signed only by Ken Campbell.
As the majority acknowledge, defendants’ motion was not made within six months and the sole source of authority to set aside the judgment lies in the trial court’s equitable power to set aside the judgment on grounds that “extrinsic factors have prevented one party to the litigation from presenting his or her case.” (In re Marriage of Park (1980) 27 Cal.3d 337, 342 [165 Cal.Rptr. 792, 612 P.2d 882].) Here, however, since defendants knew immediately that their default had been taken, the question is not whether an extrinsic factor prevented them from filing their answer and litigating the merits, but whether any extrinsic factor led to their failure to file a reasonably timely section 473 motion. The majority identify no evidence which the trial court could not reasonably have disbelieved or rejected as a basis for concluding that relief from default was warranted. The record establishes *990beyond any question that defendants were aware the default had been taken and that if they were to avoid having judgment entered against them they would have to seek relief from default. The majority note disputed evidence on whether plaintiff led defendants to believe that plaintiff would stipulate to relief, but the majority do not accept the trial court’s implicit rejection of that evidence as a basis for relief. The trial court could reasonably have done so, as plaintiff offered evidence that he had repeatedly told defendants that an application for relief from default would have to be made, but defendants failed to apply within a reasonable time. The Court of Appeal found nothing in the record to justify disturbing the implied finding of the trial court that plaintiff’s actions had not lulled defendants into a false sense of security and thereby prevented them from participating in the action. The majority offer no explanation or authority for substituting its judgment for that of the trial court.
It is irrelevant for these purposes that the trial court mistakenly believed that it was ruling on a motion made pursuant to section 473. Had the motion been a timely section 473 motion, there would be no basis for a conclusion that the trial court erred in rejecting that evidence or for holding that the court abused its discretion in denying the section 473 motion. It follows that there is no basis in the same evidence for an exercise of the court’s equitable power to set aside the judgment. A party seeking equitable relief must make an even stronger showing than that necessary for relief under section 473 (Aheroni v. Maxwell (1988) 205 Cal.App.3d 284, 291 [252 Cal.Rptr. 369]), which these defendants did not do. There are no extrinsic facts that the trial court did not consider when it denied what it believed was a section 473 motion.
The law governing relief on grounds of extrinsic fraud discussed in Kulchar v. Kulchar (1969) 1 Cal.3d 467 [82 Cal.Rptr. 489, 462 P.2d 17, 39 A.L.R.3d 1368], on which the majority rely, has no application here. Equitable relief on grounds of extrinsic fraud or mistake is not a substitute for section 473 relief. When fraud or mistake is discovered within the time limits established by section 473, relief is available pursuant to that section. This is not a policy question related to the importance of finality of judgment, as the majority suggest. The Legislature has established the time within which relief on grounds of mistake may be sought by a party who is aware of the mistake. The failure to seek that relief on a timely basis necessarily forecloses the availability of equitable relief unless time of discovery of the mistake or fraud or other circumstances made it impossible for the party to make a timely motion under section 473. Deeming the motion one for equitable relief does not expand the time within which a motion should be made by a party who is aware of the grounds for such *991relief. The party must demonstrate diligence in attempting to seek relief under section 473. (See, e.g., Higley v. Bank of Downey (1968) 260 Cal.App.2d 640, 644 [67 Cal.Rptr. 365].) Concepts of inexcusable neglect and laches apply to motions seeking equitable relief. The court must consider the reasonableness of a party’s failure to seek relief within the statutory time limit. (See In re Marriage of Park, supra, 27 Cal.3d 337, 345.) Since plaintiffs failed to justify their failure to make a timely motion under section 473, the trial court would have abused its discretion had it treated their motion as one for equitable relief and granted it.
Nor is lack of prejudice to the opposing party determinative.4 This court simply has no power to create an alternative remedy which makes relief available to persons who have knowledge of the facts on which relief may be sought under section 473 but inexcusably fail to comply with the statutory time limit. Lack of prejudice to the other party does not “automatically enable one who fails to make his motion within six months of the default to set aside the judgment by appealing to the equity powers of the court. To hold otherwise would encourage litigants to wait until the six-month period elapses before moving to set a default judgment aside. To the extent that the court’s equity power to grant relief differs from its power under section 473, the equity power must be considered narrower, not wider.” (Weitz v. Yankosky (1966) 63 Cal.2d 849, 857 [48 Cal.Rptr. 620, 409 P.2d 700], italics omitted.)
There is no basis in this record for a conclusion that the trial court abused its discretion in denying defendants’ motion to set aside their default or for holding that defendants are entitled to equitable relief. The Court of Appeal did not err in affirming the judgment of the trial court. I would affirm the judgment of the Court of Appeal.
Lucas, C. J., and Werdegar, J., concurred.

Rule 29(a): “Review by the Supreme Court of a decision of a Court of Appeal will be ordered (1) where it appears necessary to secure uniformity of decision or the settlement of important questions of law; (2) where the Court of Appeal was without jurisdiction of the cause; or (3) where, because of disqualification or other reason, the decision of the Court of Appeal lacks the concurrence of the required majority of qualified judges.”

All statutory references are to the Code of Civil Procedure.
The scope of appellate review is no broader in cases such as this in which the trial court ruled on the basis of conflicting affidavits without holding an evidentiary hearing. “In the consideration of an order made on affidavits involving the decision of a question of fact, the appellate court is bound by the same rule as where oral testimony is presented for review. [Citations.] When an issue is tried on affidavits, the rule on appeal is that those affidavits favoring the contention of the prevailing party establish not only the facts stated therein but also all facts which reasonably may be inferred therefrom, and where there is a substantial conflict in the facts stated, a determination of the controverted facts by the trial court will not be disturbed.” (Griffith Co. v. San Diego College for Women (1955) 45 Cal.2d 501, 508 [289 P.2d 476, 47 A.L.R.2d 1349].) This rule applies to review of rulings on section 473 motions. (Lynch v. Spilman (1967) 67 Cal.2d 251, 259 [62 Cal.Rptr. 12, 431 P.2d 636]; Outdoor Imports, Inc. v. Stanoff (1970) 7 Cal.App.3d 518, 522 [86 Cal.Rptr. 593].) If the reviewing court were free to reject the inferences presumably drawn by the trial court, it would not be deciding if the trial court clearly abused its discretion in denying relief. Instead it would substitute its judgment for that of the trial court by deciding the merits of the 473 motion itself. Any ruling on such a motion would then be subject to appeal not on abuse of discretion grounds, but simply on an invitation to the appellate court to disagree with the trial court on the strength of the evidence.

The context in which plaintiff’s counsel stated in a May 24, 1991, letter to defendants that they “may not claim that the default entered was taken against you through inadvertence, mistake, or excusable neglect” fully justifies the trial court’s implicit conclusion that this statement did not mislead defendants with regard to the availability of relief. The statement was made at the end of the letter which recited counsel’s past efforts to settle the case, his discussion with them about the untimely answer, their unkept promises to provide information, and counsel’s belief that they, like a codefendant, had made promises they failed to keep. He then stated: “You have been given actual notice prior to and after notice of default and plaintiff has done everything reasonable to obtain a pleading or any timely appearance for the last six months,” after which the remark about the grounds on which relief from default was available was made. It is a permissible inference that the statement was simply counsel’s assessment that any claim made at that time, five months after the default had been entered, that the default was taken as a result of inadvertence, mistake, or excusable neglect would be unreasonable in light of the history of the communications between plaintiff, his counsel, and defendants.
Counsel’s assessment that a motion on the stated grounds to set aside the default would not be found meritorious ultimately proved to be accurate. The trial court denied the motion because “good cause was not shown.”

In fact the trial court may well have concluded that there was prejudice to plaintiff from the delay. The majority’s assertion that the prejudice to plaintiff from granting the belated motion for relief from default was “virtually nil” is speculative (maj. opn., ante, at p. 982), and overlooks the showing of prejudice made by plaintiff who asserted in opposition to the motion that two other defendants had initiated bankruptcy proceedings which affected his ability to obtain needed testimony, witnesses, and evidence, and that other witnesses and evidence were no longer available to him as a result of the time that had elapsed.