Lynch v. Spilman

• Decision Date: 12 September 1967
• Citation: 67 Cal.2d 251,62 Cal.Rptr. 12,431 P.2d 636
• Court: California Supreme Court
• Parties: , 431 P.2d 636 Thomas C. LYNCH, as Attorney General, etc., Plaintiff and Appellant, v. Lyle A. SPILMAN et al., Defendants and Appellants. L.A. 28584.

Page 12

62 Cal.Rptr. 12

67 Cal.2d 251, 431 P.2d 636

Thomas C. LYNCH, as Attorney General, etc., Plaintiff and Appellant, v. Lyle A. SPILMAN et al., Defendants and Appellants.

L.A. 28584.

Supreme Court of California In Bank.

Sept. 12, 1967.

Rehearing Denied Oct. 11, 1967.

Thomas C. Lynch, Atty. Gen., and Carl Boronkay, Deputy Atty. Gen., for plaintiff and appellant.

Hanrahan & Kippen, John P. Hanrahan, Harold Kippen and Robert W. Stanley, Los Angeles, for defendants and appellants.

SULLIVAN, Justice.

This action was commenced by the Attorney General (plaintiff) to impress a charitable trust upon real property distributed by Medicine Lodge, a nonprofit corporation, to its individual members, defendants herein, upon its dissolution and to obtain other incidental relief. Initially, summary judgment was entered in favor of plaintiff; defendants upon a motion made under Code of Civil Procedure section 473 subsequently obtained an order vacating said judgment. Plaintiff appeals from the last mentioned order. We find no abuse of discretion in the vacating action of the trial court. Specifically, we hold that the court could properly conclude that the judgment in question was taken against defendants through their inadvertence and excusable neglect and that said defendants had a meritorious defense to the action. We therefore affirm the order vacating the judgment.

Plaintiff's first amended complaint (complaint) in three counts, alleges in substance that Medicine Lodge was incorporated in 1943 as a nonprofit corporation under California law; that its purposes are set forth in its articles of incorporation; that it acquired the real property involved in 1944; that upon its acquisition the real property 'became impressed with the charitable purposes' as set forth in the articles of incorporation; that in 1960 Medicine Lodge sold five acres of the property for $10,000; and that in 1961 upon its dissolution, the corporation without consideration and 'in violation of the charitable trust' impressed thereon, conveyed the property to its members, defendants herein, who have held the same 'as their own and not * * * in trust for charitable purposes.' Defendants' answers generally denied that the property had been impressed with a charitable trust or had been conveyed in violation of such a trust. ¹

On September 17, 1964, plaintiff made a motion for summary judgment. After declarations in support thereof and a declaration of defendant Lyle A. Spilman in opposition thereto were filed, the motion was denied. On November 25, 1964, plaintiff made a second motion for summary judgment, supporting the same by his declarations on file as well as by additional declarations then offered. Defendants filed no declaration in opposition. When the motion came on for hearing, defendants made no appearance and the motion was granted. Judgment was entered accordingly on December 15, 1964, generally granting plaintiff the relief prayed for.

On February 8, 1965, defendants, through new counsel, filed a motion to vacate the judgment and the order directing summary judgment upon the ground that the failure of their counsel to appear and to take an active part in the hearing of the motion for summary judgment was due to the inadvertence and excusable neglect on the part of said attorneys. (Code Civ.Proc. § 473.) Declarations of four attorneys and a 'supplemental' declaration of Mr. Spilman were filed in support of the motion and declarations in opposition were filed by plaintiff. The motion was granted. Plaintiff has appealed from the order granting the motion and setting aside the summary judgment; defendants have cross-appealed from the judgment itself. Initially, we inquire as to the correctness of the vacating order, since a determination upholding it will render moot the cross-appeal.

In determining whether or not the order appealed from can be upheld, we are required to consider two subsidiary questions: (1) Whether the summary judgment was taken against defendants because of the inadvertence or excusable neglect of their attorneys; and, (2) whether defendants have a meritorious defense to plaintiff's motion. We have pointed out: 'Before the trial court can be called upon to exercise its discretion in relieving from a default judgment, however, the party in default must show not only a good excuse for his default, but also, that he has a meritorious defense to the action.' (Beard v. Beard (1940), 16 Cal.2d 645, 648, 107 P.2d 385, 387.) We therefore first direct our attention to defendants' excuse for their default.

Plaintiff contends that the failure of defendants' counsel to appear at the hearing on the motion for summary judgment constituted neither inadvertence nor excusable neglect. However, the four supporting declarations of defendants' attorneys ² state: that Mr. Schulte who had successfully opposed the first motion for summary judgment was actively engaged in trial in another county on the day noticed for hearing the second motion; that he communicated with Deputy Attorney General Boronkay, counsel for plaintiff, and attempted to continue the hearing, explaining to the latter that he would be on trial; that Mr. Boronkay told Mr. Schulte that he would not stipulate to a continuance but that if someone would appear for Mr. Schulte the continuance would be granted; that upon request made of Mr. Rau, the latter said he would appear unless he could arrange with Mr. Stanley to do so; that Mr. Rau later advised Mr. Schulte that Mr. Stanley would appear for the purpose of obtaining a continuance; that Mr. Schulte believed that an attorney would be present and that a continuance would be granted; that Mr. Stanley told Mr. Rau that he would appear although he might be late since he had another matter set for 9 a.m. on the day in question; that he was not free until 9:20 a.m. at which time he telephoned the clerk that he would be late but was informed by the latter that the case had already been called and the motion granted because no one had appeared for defendants; that the clerk also told Mr. Schulte that the deputy attorney general did not mention anything to the judge about defendants seeking a continuance or intending to have someone appear on their behalf for that purpose.

The declaration of plaintiff's counsel, Mr. Boronkay, in opposition to the motion states: that when Mr. Schulte requested a continuance of the hearing, he refused to stipulate to it and told Mr. Schulte that the latter would have to appear in court and move for a continuance or perhaps rely on Mr. Rau to do so; that he never stated he would not oppose a motion for a continuance and in fact appeared in court prepared to oppose a continuance. Plaintiff also filed the declaration of the clerk of said department of the superior court which states: that when the case was called, no one answered on behalf of defendants and the motion for summary judgment was thereupon granted; that when an attorney telephoned a half-hour later, he advised the latter as to what happened but did not say that the court granted the motion because no one appeared for defendants.

It is well settled that a motion for relief from default under Code of Civil Procedure section 473 is addressed to the sound discretion of the trial court and that its ruling thereon will not be disturbed on appeal in the absence of a clear showing of abuse of discretion. (Weitz v. Yankosky (1966), 63 Cal.2d 849, 854, 48 Cal.Rptr. 620, 409 P.2d 700; Freeman v. Goldberg (1961), 55 Cal.2d 622, 625, 12 Cal.Rptr. 668, 361 P.2d 244; Beard v. Beard, supra, 16 Cal.2d 645, 647, 107 P.2d 385; McNeil v. Blumenthal (1938), 11 Cal.2d 566, 567, 81 P.2d 566.) We have heretofore observed 'that appellate courts have always been and are favorably disposed toward such action upon the part of the trial courts as will permit, rather than prevent, the adjudication of legal controversies upon their merits.' (Benjamin v. Dalmo Mfg. Co. (1948), 31 Cal.2d 523, 525, 190 P.2d 593, 594; Weitz v. Yankosky, supra, 63 Cal.2d at pp. 854--855, 48 Cal.Rptr. 620, 409 P.2d 700.)

We cannot say that in the light of all the circumstances the trial court abused its discretion in concluding that the order granting plaintiff's motion for summary judgment and the summary judgment entered thereon were taken against defendants as a result of the inadvertence and excusable neglect of their attorneys. The trial judge could very well believe that defendants, who had already successfully defeated one motion for summary judgment, were desirous of contesting the second and that, unavoidably occupied with other legal matters, they had made arrangements for the appearance of another attorney to obtain a continuance, believing in good faith that it would be granted. The judge was warranted in concluding that there was inadvertence and excusable neglect on the part of such substitute counsel, Mr. Stanley, who himself engaged in another department, had contacted the clerk of the court after a lapse of only twenty minutes during which time the deputy attorney general permitted the motion for summary judgment to be ruled on without advising the court in any way of his previous discussion with defendants' counsel. It could also be inferred from defendants' declarations that plaintiff's counsel had indicated that, while not stipulating to a continuance, he would not object to one and that if someone appeared 'the continuance would be granted.' Thus the court properly took into account with fairness and understanding the constant conflicts which plague the busy lawyer and seems to have looked 'with disfavor upon a party who, regardless of the merits of his case, attempts to take advantage of the * * * inadvertence, or neglect of his adversary.' (Berri v. Rogero (1914), 168 Cal. 736, 740, 145 P. 95, 97.)

We are not persuaded by plaintiff's argument that the motion for summary judgment was granted Not because defendants failed to appear at the calling...