Davis v. Thayer

• Decision Date: 23 December 1980
• Citation: 170 Cal.Rptr. 328,113 Cal.App.3d 892
• Court: California Court of Appeals Court of Appeals
• Parties: Jo Anne DAVIS, Plaintiff and Respondent, v. Charles E. THAYER, Jr., and Eileen D. Willette, individually, and dba Camarillo Gold & Silver Exchange, Camarillo Gold & Silver Exchange, a partnership, Defendants and Appellants. Civ. 57769.

Page 328

170 Cal.Rptr. 328

113 Cal.App.3d 892

Jo Anne DAVIS, Plaintiff and Respondent, v. Charles E. THAYER, Jr., and Eileen D. Willette, individually, and dba Camarillo Gold & Silver Exchange, Camarillo Gold & Silver Exchange, a partnership, Defendants and Appellants.

Civ. 57769.

Court of Appeal, Second District, Division 4, California.

Dec. 23, 1980.

As Modified on Denial of Rehearings Jan. 16, 1981.

Hearing Denied Feb. 18, 1981.

Taylor, McCord & Paul and Robert L. McCord, Jr., Ventura, for defendants and appellants

King & Skeels and C. Russell King, Santa Paula, for plaintiff and respondent.

LAIDIG, Associate Justice. ^*

This is an appeal from an order denying a motion to set aside an entry of default and a judgment predicated thereon.

On September 28, 1978, plaintiff and respondent, Jo Anne Davis, filed a complaint for restitution and damages against Charles E. Thayer and his mother Eileen D. Willette, defendants and appellants, doing business as Camarillo Gold & Silver Exchange, a partnership. The complaint, which concerned the sale of a partial interest in a contract for the purchase of gold, alleged that defendant Thayer had made numerous false representations to plaintiff, without any intention of performance. In addition to recission and recovery of the $20,000 she had invested in the contract, plaintiff alleged that she was entitled to punitive damages in the sum of $50,000 because defendants had acted with oppression, fraud, and malice.

Defendant Thayer was served with summons and complaint on September 28, 1978, while present at the Ventura County Municipal Court for arraignment on felony charges, one of which related to the claim of plaintiff in this action. Defendant Willette was served with summons and complaint on October 2, 1978, at her home in Santa Maria, California.

On November 2, 1978, each defendant was served by mail with a copy of a request for entry of default. One envelope was addressed to Willette at her home in Santa Maria where she had been served with the summons and complaint. The other was addressed to Thayer, in care of Willette, at the same address. Neither of the defendants entered an appearance and on November 3, 1978, defaults were entered as to each defendant.

On November 29, 1978, after hearing, the trial court granted judgment on the third cause of action (grounded on fraud and deceit) for $20,000 actual and $50,000 punitive damages.

On May 4, 1979, the defendants filed a notice of motion to set aside their defaults and the default judgment rendered against them. The motion was considered and orally denied by the court on June 18, 1979.

On July 3, 1979, a formal order signed by the trial judge stated that the motion "is, denied, on the sole ground that defendants' motion, filed May 4, 1979, exceeded by one day the six month limit authorized under CCP § 473."

The motion to set aside the default did not allege any grounds but recited that it would be based upon the declarations of defendants Thayer and Willette, "the attached points and authorities, and such other evidence, both oral and documentary, to be presented at the time of said hearing." No oral evidence was actually presented at the hearing.

The declaration of defendant Thayer submitted in support of the motion recited that the defendant Willette was his mother "who was engaged in business with me and doing business as Camarillo Gold & Silver. I was the person solely responsible for conducting the affairs of Camarillo Gold & Silver including any legal matters that arose during the course of that business."

Thayer further alleged that he received a copy of the summons and complaint in the matter on September 28, 1978, and,

"5. I was personally served with these documents when I was being arraigned in the Ventura County Municipal Court on multiple felony charges, one of which is related to the claim of Jo Ann Davis, the plaintiff in this case.

"6. I did not know how to answer the complaint personally since I am not an attorney. I did not have the funds with which to hire an attorney to help me on the civil matter since everything I had left had to be used to hire an attorney to defend me against the criminal charges.

"7. I spoke to my mother, Eileen Willett, who was also served with a copy of the complaint, and she left the entire matter to me.

"8. I did not file an answer to the complaint because I did not have the money to do so, and because my primary concern was over what would happen on the criminal matters."

Thayer took no steps to preserve his rights until "March or April 1979" when he spoke to attorney Robert L. McCord, Jr.

Thayer further stated:

"9. It (sic ) was then advised that Ms. David (sic ) had a judgment against me for Twenty Thousand Dollars ($20,000.00) on the loan agreement, plus had been awarded punitive damages for Fifty Thousand Dollars ($50,000.00) because of a supposed fraud.

"10. I was genuinely shocked at this disclosure. I owed Ms. Davis the Twenty Thousand Dollars ($20,000.00) and had paid her interest until I began to have financial difficulties, however, I had never defrauded her nor did I ever intend to do so. I did not have the money to defend the matter and since I owed her Twenty Thousand Dollars ($20,000.00) I felt it was prudent merely to allow her to obtain her judgment. I did not realize she was also claiming damages for fraud. Had I known this fact, I clearly would have made an effort to prevent the default against my mother and I. There has never been any intent to cheat or defraud Ms. Davis.

"11. In March or April of 1979, I asked Mr. McCord if I could have the judgment set aside. I was told then that the loan agreement was usurious and probably not enforceable but it would be difficult to set aside because the criminal prosecution was then pending, and a statement or affidavit of merit could not be prepared because it might be used against me in some way.

"12. On May 2, 1979, the criminal proceedings were disposed of and I immediately asked Mr. McCord to initiate this motion."

A proposed answer was filed with the motion. It recited that the appearing parties were "Defendants, CHARLES E. THAYER and EILEEN D. WILLETTE, individually and doing business as CAMARILLO GOLD & SILVER," and that defendants admit "they were doing business as Camarillo Gold & Silver."

Defendants also admitted that defendant Thayer executed the loan agreement attached to the complaint as Exhibit A and that they owed "the approximate sum of Twenty Thousand Dollars ($20,000.00) " They denied any fraud or false representations and alleged that plaintiff has been paid "the approximate sum of Six Hundred Dollars ($600.00) as and for interest," and that said sum should be set off against any amounts determined to be due.

The answer also included an affirmative defense:

"17. That the loan agreement executed by the plaintiff demands that the defendant pay an excessive amount of interest, that said interest rate constitutes usury within the meaning of Section 22, Article 20 of the California Constitution, and Section 1916 of the California Civil Code.

"18. That the loan agreement attached to plaintiff's complaint is usurious, null and void, and therefore unenforceable."

Thayer's declaration was dated May 3, 1979, at Ventura, California. The answer was dated May 4, 1979, at Ventura, California, and verified by attorney McCord who stated that the parties were absent from the county.

On May 17, 1979, defendant Willette executed a declaration which stated:

"1. I am 65 years of age and currently reside at 518 East Tunnel Street, Santa Maria, California.

"2. I do not have any ownership interest in Camarillo Gold & Silver and have never had such an interest "

She attached to her affidavit, as an exhibit, a fictitious name statement filed with the Ventura County Clerk, September 3, 1974, showing that C. E. Thayer was conducting the business of "Camarillo Gold & Silver Exchange" as a sole proprietorship.

Willette's declaration further stated:

"3. As an employee I worked for Camarillo Gold & Silver which was owned and operated solely by my son, Edgar Thayer. I was personally served with papers at my home in Santa Maria in the Davis and Hunt cases.

"4. At the time of service of these papers I was not in any condition, financially or physically, to defend either of "5. At the time these papers were served my son Charles was out of the state and I did not know where he was. I depend upon him totally, particularly in the last year because of a medical difficulties my husband and I have been having.

the actions. I was then under a doctor's care for a recent heart attack and was taking valium very heavily. I was also caring for my 86 year old mother who was recovering from a corneal transplant, and my husband who was dying of cancer. He died March 31, 1979.

"6. When my son returned to California I gave him all of the papers and he advised me he would take care of the problem.

"7. It was not until recently that I learned judgments were entered against me. I was shocked. I was not an owner of Camarillo Gold & Silver and had never represented myself as such.

"8. I did not borrow any money from JoAnne Davis or Afton B. Hunt and I do not owe them any sums of money. I never made any representations to these two individuals concerning business transactions, securities, gold, or any other transactions.

"9. Had I been physically capable and financially able I would have done so. I relied totally on my son to help me but unfortunately he too was having great difficulties in his business."

In addition to the documents mentioned above, defendants presented an original and a supplemental memorandum of points and authorities. None of the documents recites the "grounds" for the motion to set aside the default. However, the points and authorities state that the relief is being sought under section 473 of the Code of Civil Procedure. The order of the trial court denying the motion states...