Matera v. McLeod
| Decision Date | 22 November 2006 |
| Docket Number | No. B186714.,B186714. |
| Citation | 51 Cal.Rptr.3d 331,145 Cal.App.4th 44 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Denise MATERA et al., Plaintiffs and Respondents, v. James MCLEOD et al., Defendants and Appellants. |
Harding, Larmore, Mullen, Jakle, Kutcher & Kozal, Dennis M. Mullen, Christine Arden, Santa Monica; Law Offices of Roxanne Huddleston and Roxanne Huddleston, Los Angeles, for Defendants and Appellants.
Kulik, Gottesman, Mouton & Siegel and David S. Olson, Sherman Oaks, for Plaintiffs and Respondents.
James McLeod and Carolyn Minium appeal a default judgment and the denial of their motion for relief from the defaults and default judgment. Defendants moved for relief under Code of Civil Procedure section 473, subdivision (b)1 based on their attorney's neglect in failing to comply with a discovery order and failing to oppose a motion for a terminating sanction. On appeal, they contend plaintiffs failed to provide actual notice of the amounts of compensatory and punitive damages requested a reasonable time before the defaults were entered and therefore are not entitled to recover any damages in the default judgment. Defendants also contend the denial of their motion for relief was error. Plaintiffs contend defendants' notice of appeal was untimely.
We conclude that the notice of appeal was timely under rule 2(a) of the California Rules of Court,2 that plaintiffs failed to provide actual notice of the amounts of damages sought a reasonable time before the entry of defaults, and that defendants are entitled to mandatory relief from the defaults and default judgment based on their attorney's declaration of fault. We therefore reverse the judgment with directions and reverse the order denying the motion for relief.
Denise Matera owned and operated a business known as Dance and Twirl Studio where she taught children dance routines, baton twirling, and other performing arts. Matera's sister Deborah Webb also worked at the studio. Matera leased the studio space under a 10-year lease commencing in July 2003. She entered into a one-year sublease with McLeod in December 2003 granting him the right to occupy 500 square feet "for use as an office" for $1,500 per month. McLeod operated a business known as Palisades Electric, an electrical contractor. His sister Carolyn Minium also worked in the office. Disputes arose concerning defendants' use of the premises.
Matera and Webb filed a complaint on July 13, 2004, alleging that McLeod had leased office space only but was using and allowing his workers to use all of the private parking spaces on the premises, storage areas, and a bathroom, at times excluding plaintiffs and their students from use of those facilities. Plaintiffs alleged that McLeod had removed and damaged an alarm system, allowed his workers to walk through the studio to a bathroom while classes were in session, tampered with Matera's computer, fans, and window coverings in the studio, and on at least one occasion had locked plaintiffs out of the studio entirely. Plaintiffs alleged that Minium once parked her car behind plaintiffs' vehicle, refused to move it when they asked her to do so, and prevented plaintiffs' egress for an hour before driving away.
The complaint alleged counts for (1) breach of the sublease, by Matera against McLeod, (2) intentional misrepresentation, by Matera against McLeod and Minium, (3) negligent misrepresentation, by Matera against both defendants, (4) trespass, by Matera against both defendants, (5) trespass to chattel, by Matera against both defendants, (6) private nuisance, by Matera against both defendants, (7) public nuisance, by Matera against both defendants, (8) unjust enrichment, by Matera against both defendants, (9) intentional interference with prospective economic gain, by Matera against both defendants, (10) negligence, by both plaintiffs against both defendants, and (11) false imprisonment, by both plaintiffs against Minium. The complaint did not specify an amount of damages, but prayed for compensatory damages according to proof at trial and punitive damages.
Plaintiffs filed an ex parte application on July 15, 2004, for a temporary restraining order (TRO) to enjoin defendants from some of the acts alleged in the complaint. Gregory J. Khougaz appeared as counsel on behalf of defendants in opposition to the application. The court granted the application and issued a TRO. Plaintiffs filed an ex parte application on July 28, 2004, for an order to show cause concerning contempt sanctions for alleged violations of the TRO. Khougaz appeared on behalf of the defendants in opposition to the application. The court granted the application and issued an order to show cause on July 29, 2004.
Khougaz filed an answer on behalf of the defendants on August 16, 2004, together with a cross-complaint by McLeod against Matera for breach of the sublease and fraud, and against Webb for common counts. Khougaz represented defendants at the hearing on the order to show cause on September 9, 2004. After the hearing, the court found defendants in contempt for trespassing on the studio on two occasions, continuing to store equipment near plaintiffs' front storage area, and continuing to store equipment in and lock plaintiffs out of the front storage area. The court imposed a $4,000 monetary sanction against defendants. Defendants promptly paid the sanction. Plaintiffs then moved for an award of attorney fees incurred in connection with the contempt proceeding (§ 1218, subd. (a)). Khougaz did not oppose the motion. The court awarded $10,860 in fees.
Plaintiffs filed a motion to compel the production of documents on October 22, 2004, and filed a motion to compel further responses to document demands on October 26, 2004, both in connection with Matera's first set of document demands. On October 27, 2004, plaintiffs filed a motion to compel further answers to a form interrogatory propounded by Matera. The discovery motions were scheduled for hearing on November 29, 2004.
Plaintiffs filed an ex parte application for a second TRO on November 2, 2004. Declarations filed in support of the application stated that defendants and their workers continued to use plaintiffs' parking spaces and obstruct plaintiffs' customers' access to parking, posted signs purporting to prohibit parking by plaintiffs' customers in spaces that defendants had no right to use, mounted a video camera pointed directly at the studio entrance, would "often run up on me when I am coming and going from the Studio and take photographs or videotape of me," and made obscene gestures to plaintiffs in plain view of children. Plaintiffs declared that on a Saturday afternoon when plaintiffs were hosting a children's Halloween party, defendants blared loud music from their office toward the studio for the entire duration of the party, when defendants were not even present in the office. Khougaz appeared for defendants in opposition to the application. The court issued a second TRO and an order to show cause concerning a preliminary injunction.
Khougaz failed to file an opposition to any of the discovery motions. On the scheduled hearing date of November 29, 2004, the court continued the hearing to December 9, 2004, at plaintiffs' request. Defendants vacated the subleased premises on or about November 26, 2004. Khougaz failed to appear at the hearing on the order to show cause concerning a preliminary injunction on December 2, 2004. The court issued a preliminary injunction at that time. Khougaz also failed to appear at the continued hearing on the discovery motions on December 9, 2004. In an order dated December 16, 2004, the court granted the discovery motions in part and ordered defendants to provide further responses without objection to seven document demands, produce documents in response to twelve document demands, and provide a further response to one form interrogatory, all propounded by Matera, and pay $1,800 in monetary sanctions. Plaintiffs' counsel had the discovery order personally served on both Khougaz and McLeod. Matera closed her business as of December 31, 2004.
Defendants failed to provide further responses, produce documents, or pay the discovery sanctions as ordered by the court. Plaintiffs filed a motion for a terminating sanction on January 14, 2005, asking the court to strike defendants' answer and cross-complaint, enter their defaults, and enter a default judgment, or, in the alternative, impose a lesser sanction. The hearing on the motion was scheduled for February 10, 2005. Khougaz filed no opposition to the motion. On February 8, 2005, plaintiffs filed and personally served on Khougaz a statement of damages claiming $250,000 in general compensatory damages, $1,000,000 in punitive damages, and $200,000 in attorney fees.
Khougaz failed to appear at the hearing on the motion for a terminating sanction on February 10, 2005. In a minute order filed on that date, the court found that defendants had failed to comply with the discovery order, granted the motion for a terminating sanction, ordered defendants' answer stricken, entered defendants' defaults, ordered defendants to pay an additional $1,500 monetary sanction, and scheduled a prove-up hearing for April 7, 2005, to determine the amount of the default judgment. The court filed a signed order on February 14, 2005, stating the same and also striking McLeod's cross-complaint.
Plaintiffs filed declarations and other evidence to establish the amount of their damages. Matera declared that defendants' offensive behavior and interference with her business resulted in declining enrollment and the financial failure of her business. Matera requested a total of $346,305 in compensatory damages, including $344,805 in past and...
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