Bailey v. Roberts

• Decision Date: 28 March 1969
• Court: California Court of Appeals Court of Appeals
• Parties: Homer D. BAILEY, Administrator with the will annexed of the Estate of Lucy B. Bailey, Deceased, Plaintiff and Appellant, v. William ROBERTS, Defendant and Respondent. Civ. 33109.

Page 572

76 Cal.Rptr. 572

271 Cal.App.2d 282

Homer D. BAILEY, Administrator with the will annexed of the Estate of Lucy B. Bailey, Deceased, Plaintiff and Appellant, v. William ROBERTS, Defendant and Respondent.

Civ. 33109.

Court of Appeal, Second District, Division 1, California.

March 28, 1969.

Leo Shapiro, Beverly Hills, for plaintiff and appellant.

Ellis & Sloan and Lyle C. Ellis, Los Angeles, for defendant and respondent.

HISTORY OF THE LITIGATION

THOMPSON, Associate Justice.

Lucy B. Bailey died in 1932 survived by four children, Homer D. Bailey, Clarence R. Bailey, Gertrude Le Blanc, and Juanita Roberts. Clarence was appointed executor of her estate, one of the assets of which was a parcel of improved real property designated as 997 East 42nd Street, Los Angeles, California. In 1934, Juanita took possession of the 997 East 42nd Street property pursuant to an informal, unconfirmed arrangement of sale and continued to assert dominion over it until her death in 1964. The property produced rental income which was collected by Clarence until 1937 and then apparently by Juanita until she became ill in 1960. Thereafter, rents were collected by her son, the respondent in the matter here before us. Respondent used the rent to pay the 'expenses' of the property. Until Juanita's death, he applied the net of rental income over expense to her medical and other personal expenses. Until July 1966, respondent believed the property belonged to Juanita and her estate.

By reason of the mistaken belief of Clarence that he had no further duties to perform as executor, the probate proceeding was not concluded. On April 22, 1966, Homer petitioned the probate court to remove Clarence as executor of the estate. Clarence stipulated to his removal and Homer was appointed administrator with will annexed. Clarence filed a final account to which Homer, as a administrator, filed objections seeking to surcharge Clarence for negligence in administration of the affairs of the estate. One of the items placed in issue by the objections to the account was the alleged failure of Clarence to collect or account for the rents from the property at 997 East 42nd Street. The hearing on objections to the account of Clarence was held August 16, 1966, with respondent appearing as a witness. The matter was taken under submission on August 16 to permit counsel for both Homer and Clarence to file briefs. It remained submitted on November 29, 1966. On that date, Homer, as administrator of the estate, filed an action against respondent alleging that the property at 997 East 42nd Street was an asset of the estate, that respondent had collected $5,700 in rents from the property, and that he refused to pay the sum over to the estate. The complaint was served on respondent on December 7 while the matter of the accounting was still under submission. Two days later, respondent told Clarence that he had been served and was told by Clarence that he would be protected against loss in the action. Respondent and Clarence immediately consulted Lyle C. Ellis, counsel for Clarence in the accounting matter, and Clarence paid Ellis a retainer of $50 to represent respondent. Ellis assured respondent that Clarence and he would file pleadings on behalf of respondent if that action were required. During the month of December, Ellis twice sought to contact Leo Shapiro, counsel for appellant. He was unsuccessful until early in January when, by telephone, he informed Shapiro that he had been consulted by respondent and that it appeared that the complaint served upon respondent sought the same rents which were being sought by the estate in the still-pending objections to Clarence's accounting. Shapiro replied that he was not sure that was the case. Ellis did not file an answer on behalf of respondent nor did he seek an extension of time to plead. Without prior notice to Ellis, Shapiro filed a request for entry of default by the clerk on January 11, 1967, and default was entered on January 13. On January 23, the probate court entered its memo order surcharging Clarence's account in the amount of $3,129. Judgment by default in favor of appellant against respondent was entered January 24, 1967.

From February to June 1967, Ellis and Shapiro had several conversations concerning the liability of Clarence to the estate. Shapiro did not mention that respondent's default had been entered and judgment taken in the related action. Findings of fact and conclusions of law were entered in the probate matter June 19, 1967, and payment was demanded from Clarence by a letter from Shapiro to Ellis on June 27. Payment was made by two cashier's checks, one given on August 30 and the other on September 14.

Neither respondent nor Ellis were notified of the default judgment against respondent until August 4, 1967. On that date, notice arrived in the form of a levy of execution by appellant upon respondent's bank account. Respondent immediately notified Ellis who contacted Shapiro. Shapiro declined to set aside the default judgment but stated that he would discuss the matter further if something were paid upon the then long overdue debt from Clarence to the estate. Supplemental examination of respondent was set on two occasions, August 30 and September 14, 1967. At the time of each examination, there was handed to Shapiro a cashier's check representing a payment by Clarence to the estate. After the final payment in full by Clarence on September 14, Shapiro indicated his intention to collect his judgment against respondent in total.

On October 19, 1967, respondent, through Ellis, filed his notice of motion to set aside

                the entry of default and to permit respondent to answer the complaint.  The notice stated [271 Cal.App.2d 285] that the motion would be based upon equitable grounds including extrinsic mistake. 1  Declarations filed with the notice of motion contained the facts recited above and a statement of meritorious defense in that the rentals alleged to belong to the estate and to have been collected by respondent had been reimbursed to the estate by Clarence.  A proposed answer was also filed with the notice of motion.  It denied the title of the estate in the 997 West 42nd Street property and claimed that title was in the heirs of Juanita.  The proposed answer in a second affirmative defense also asserted that the estate sought to recover from respondent the same rents that were the subject of the surcharge on the account of Clarence.  Appellant submitted a declaration of Shapiro in opposition to the motion.  That declaration in essence did not contradict those in support of the motion with two exceptions.  It stated that Ellis, while telling Shapiro that he had been contacted by respondent, did not state that he would represent him, and it emphasized that there had been a two-and-one-half-month unexplained delay in filing the motion to set aside the default.  The motion was heard by the trial court on December 6, 1967, and granted on December 18.  This appeal followed
                

APPLICABLE PRINCIPLES

The motion for relief from default, granted by the trial court in the exercise of its equity jurisdiction, was in essence based upon extrinsic mistake of the respondent. In ruling on the motion, the trial court was required to determine whether: (1) under the circumstances presented to it respondent's neglect to file an answer within the statutory period was excusable (Weitz v. Yankosky, 63 Cal.2d 849, 48 Cal.Rptr. 620, 409 P.2d 700; Higley v. Bank of Downey, 260 Cal.App.2d 640, 67 Cal.Rptr. 365); (2) the respondent had a meritorious defense to the action (Lynch v. Spilman, 67 Cal.2d 251, 62 Cal.Rptr. 12, 431 P.2d 636); and (3) the respondent had acted seasonably to set aside the default after discovering that it had been entered. (Benjamin v. Dalmo Manufacturing Co., 31 Cal.2d 523, 190 P.2d 593.)

In reviewing the action of the trial court granting the motion, we are limited to determining whether its order constitutes an abuse of discretion (Lynch v. Spilman, Supra) and must resolve any doubt in favor of an order which relieves from default. (Reed v. Williamson, 185 Cal.Rptr. 244, 8 Cal.Rptr. 39.)

EXCUSABLE NEGLECT

Respondent's failure to file a timely answer...