McCreadie v. Arques

• Decision Date: 24 January 1967
• Citation: 56 Cal.Rptr. 188,248 Cal.App.2d 39
• Court: California Court of Appeals Court of Appeals
• Parties: Blanche McCREADIE, Plaintiff and Respondent, v. D. J. ARQUES, Defendant and Appellant. Civ. 23315.

Page 188

56 Cal.Rptr. 188

248 Cal.App.2d 39

Blanche McCREADIE, Plaintiff and Respondent, v. D. J. ARQUES, Defendant and Appellant.

Civ. 23315.

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

Jan. 24, 1967.

Hearing Denied March 22, 1967.

Myers, Praetzel & Pierce, San Anselmo, for appellant.

Vincent Hallinan, Carl B. Shapiro, Patrick Sarsfield Hallinan, LeRoy W. Rice, San Francisco, for respondent.

ELKINGTON, Justice.

This is an appeal by defendant D. J. Arques from an order denying his motion to set aside a default and a default judgment entered on July 30, 1965.

On February 19, 1963, plaintiff Blanche McCreadie filed a complaint in the Superior Court of Marin County against defendant D. J. Arques individually and doing business as Arques Shipyards and against Nick Miscovich alleging breach of contract, negligence and breach of warranty. The substance of the complaint was that Arques had contracted with plaintiff to move her houseboat from its mooring at the Sausalito Yacht Harbor to a new and different morring on lands owned by Arques near that section of Sausalito known as Waldo Point. The complaint further alleges that the defendant Arques commenced the moving operation using the equipment of Arques and Miscovich and that the project was later abandoned with the houseboat somewhere offshore at Waldo Point. Additional counts alleged negligence and breach of warranty under the same general factual allegations.

On July 18, 1963, the record indicates that the defendants in that action having been duly served with process and having failed to appear or answer within the time allowed, had a default entered against them.

On November 19, 1963, a default judgment in the amount of $10,000 was filed against all defendants.

On June 11, 1965, defendant D. J. Arques (hereafter called defendant) filed a notice of motion to set aside default and default judgment. ¹ The motion alleged that 'Arques was prevented by extrinsic accident and mistake of fact from presenting his defense' to the action. The parties appear to be in agreement that the motion was for equitable relief and not a statutory motion under Code of Civil Procedure section 473.

The matter came on for a hearing at which evidence was produced and testimony taken on July 8, 1965, and the order denying the motion was filed on July 30, 1965. Appeal was taken from this order.

The defendant was personally served with summons and complaint in April 1963 and promptly turned the matter over to an attorney whom we shall hereafter refer to as 'the attorney.' The attorney, a family friend, undertook to represent defendant and told him that he would file an answer.

At this point the record outlines a tale of tragedy. It appears that during the sequence of events leading to the appealed from order (1963--1965) the attorney was suffering from some sort of physicalmental incapacity which prevented him from doing any work. The attorney testified that in April of 1963 he was practicing law in San Francisco, but that he was forced to close his office later in the year.

During that period the attorney testified 'I couldn't do any work. Every time I would start to work, I'd just stop and I'd quit, go out and walk around the street, come back, and nothing was done. It ultimately led toward the end of the year that I closed the office, * * *.'

The attorney started with a psychiatrist in the summer of 1964. He testified that 'They say I developed a pattern of selfdefeat and that what ultimately led to what finally caused me to go to them were a series of blackouts where I would find myself some place, not knowing how I got there, not knowing how long I had been there, * * *.'

In view of the foregoing, which is undisputed, it is little wonder that defendant may have gotten something less than he had a right to expect by way of legal representation. There is no indication from the record that the defendant knew of the attorney's problems although he evidently did know that the attorney had closed his San Francisco offices and was working from his home.

Following receipt of the complaint from the defendant in late April 1963 the attorney did nothing. According to allegations in opposition to this motion, the plaintiff's attorney notified the attorney, by letter dated May 17, 1963, that defendant had been served with copies of the complaint and summons. On May 17, 1963, counsel for plaintiff wrote to the defendant personally and informed him that no answer had been filed in the action and that if nothing further was done within ten days a default would be entered. ² The defendant immediately gave the letter to the attorney who assured him that it was all a mistake, that there was no default, and that he would see the judge about it. The attorney did nothing. The default was entered on July 18, 1963, and a judgment of default filed and entered on November 19, 1963.

On June 2, 1964, plaintiff's counsel sent a letter to the defendant personally advising him that the default judgment had been entered against him and mentioning a desire to effect a settlement in order to avoid the necessity of taking steps to enforce the payment. Defendant immediately took this letter to the attorney who again assured him that it was all a mistake, that the action was still pending and that there would be a trial on the merits. The defendant was evidently reassured and on June 17, 1964, he replied to the letter of plaintiff's counsel. The tenor of this letter indicated that defendant still thought he was going to court over the matter.

The first writ of execution was issued on September 4, 1964, and returned on January 25, 1965, unsatisfied. The writ had evidently been served on a bank with which defendant did not do business. Plaintiff finally found some assets, however, and on May 12, 1965, the defendant was notified that a San Pedro bank account had been levied upon. Defendant again contacted the attorney who informed the defendant that he would get a bond and have the bank account released. By this time, however, events had run their course and on May 13, 1965, the attorney and his wife came to see the defendant and informed him of the true state of affairs, i.e., advised him that no answer had been filed, that a default had been taken and that it was all over. At this point defendant contacted his present attorney and we have the instant appeal.

Defendant frames the questions thus: (1) Should a court set aside a default and default judgment where it appears from uncontroverted evidence that the judgment was entered by reason of the mental incapacity of the attorney for defendant, without fault on the part of the defendant? (2) Did the trial court err and abuse its discretion in refusing to grant the motion to set aside default and default judgment on grounds of intrinsic mistake by reason of a delay in making application to set aside, which said delay was occasioned solely by reliance upon defendant's counsel? ³

Plaintiff phrases the issue somewhat more succinctly: 'did the trial court abuse its discretion in denying appellant's motion to set aside the default under all the circumstances and facts of this case?'

We might again note the following dates:

July 18, 1963--default entered;

November 19, 1963--default judgment entered;

June 2, 1964--defendant personally notified by letter that judgment had been taken by default;

May 12, 1965--defendant learns of execution on a bank account and subsequently moves to set aside default on June 11, 1965.

We shall discuss the applicable law.

By his motion to set aside the default and the judgment entered thereon defendant invoked the broad equitable powers of the trial court to grant relief against extrinsic factors, including mistake. The applicable legal principles are settled. One who has been prevented by such extrinsic factors from presenting his case to the court may bring an independent action in equity to secure relief from the judgment entered against him. Where the court that rendered the judgment has a general jurisdiction in law and in equity, the jurisdiction of equity may be invoked by means of a motion addressed to that court. (See Olivera v. Grace, 19 Cal.2d 570, 575--576, 122 P.2d 564, 140 A.L.R. 1328, and authorities there cited.) Where the party seeking relief proceeds by motion in the court rendering the judgment, such motion is addressed to the sound discretion of the trial court and in the absence of a clear showing of abuse in the exercise thereof the order of such court will not be disturbed on appeal. All presumptions are in favor of the correctness of the order and the burden is upon the appellant to show that the court abused its discretion. (See Cope v. Cope (1964) 230 Cal.App.2d 218, 230--231, 40 Cal.Rptr. 917, and cases there cited.)

In seeking a favorable exercise of the court's discretion the moving party ordinarily has the burden of demonstrating to the court that a more favorable result might be obtained if the matter were to be heard on the merits. (Hite v. Mercantile Trust Co. (1909) 156 Cal. 765, 768, 106 P. 102; Turner v. Allen (1961) 189 Cal.App.2d 753, 759, 11 Cal.Rptr. 630; and see 3 Witkin, Cal. Procedure, pp. 2131--2133; 29 Cal.Jur.2d, pp. 124--125.) On this point the able trial judge below stated, 'Relying only on the evidence presented to me, I am doubtful that the defendant would be able to escape liability for the claimed damage, but a serious question exists as to the value of the boat and defendant might well be able to obtain a more favorable result in this regard.' There is ample evidence in the record to sustain this conclusion.

Further addressing himself to the court's discretion the moving party should show (1) a proper excuse for permitting the default to be taken, and (2) reasonable diligence to assert and protect his rights.

In this case the excuse for permitting the default to be taken, or the extrinsic mistake, rests upon the neglect of the attorney which is...