Northridge Financial Corp. v. Hamblin
Decision Date | 04 June 1975 |
Citation | 48 Cal.App.3d 819,122 Cal.Rptr. 109 |
Court | California Court of Appeals Court of Appeals |
Parties | NORTHRIDGE FINANCIAL CORP., etc., Plaintiff and Respondent, v. Arthur E. HAMBLIN et al., Defendants and Appellants. Civ. 45042. |
Franklin K. Lane, Los Angeles, for defendants and appellants.
Silver & Lazar, a Professional Corp., Bernard Silver, Beverly Hills, and Arthur E. Schwimmer, Los Angeles, for plaintiff and respondent.
This is an appeal from an order denying a motion made pursuant to Code of Civil Procedure section 473 for relief from the entry of a default judgment and from an order denying a motion for reconsideration of the first order. Since the facts are not in dispute, we adopt them substantially as set forth in plaintiff's brief.
On July 30, 1973, plaintiff Northridge Financial Corporation, dba American Mortgage Corporation, filed a complaint against defendants Arthur E. Hamblin (Hamblin) and Hamblin Mortgage Company, Inc. (HMC) for $20,485.82, including interest and costs. (There is no need to set forth the underlying facts giving rise to the complaint.) Subsequently, plaintiff's counsel, Bernard Silver, granted defendant's counsel, Franklin K. Lane, an extension to September 30, 1973 to answer on behalf of both defendants. On October 2, 1973, no answer having been filed, plaintiff filed a request with the court to enter default. The court granted plaintiff's request on the same date. Default judgment against both defendants was filed on November 16, 1973.
On March 29, 1974, five days prior to the expiration of the statutory limitation of six months in which to make application for relief from default, defendants filed a motion pursuant to section 473 to set aside the default judgment and entry of default, on statutory grounds of mistake, inadvertence, surprise, and excusable neglect. Filed in support of the motion were a declaration by defendants' counsel (Lane) and a proposed answer to the complaint. The motion to set aside the default was denied on April 17, 1974. On April 26, 1974, twenty-four days after the six-month expiration period had expired, Hamblin filed a motion for reconsideration of the order denying relief from default, on the same statutory grounds. The court denied the motion on May 14, 1974 on the basis that it no longer had jurisdiction. This appeal followed.
Code of Civil Procedure section 473 provides in pertinent part:
It is well established that it is within the discretion of the trial court to determine whether or not to grant a motion to vacate a default judgment, and absent a clear abuse of discretion the court's ruling should not be overturned. (Transit Ads, Inc. v. Motor Livery, Ltd., 270 Cal.App.2d 275, 278, 75 Cal.Rptr. 848; see also Ludka v. Memory Magnetics International, 25 Cal.App.3d 316, 321, 101 Cal.Rptr. 615.) Although section 473 is remedial and should be liberally construed, the moving party has the burden of proving that the default was entered by reason of one of the statutory grounds which would entitle him to relief. In support of defendants' motion to set aside the default, Lane stated in his declaration that he attempted to contact Silver (plaintiff's counsel) several days prior to September 30 to request a further extension of time to file defendants' answer, but that Silver was out of his office; that he left a message for Silver to call him back but Silver never did; that he had his secretary call Silver again approximately ten days later, but Silver was not in; that he received a letter dated October 12, 1973 from Silver advising him that a default was entered against defendants on October 2, 1973. The excuse Lane gave for not filing the answer by September 30 was that in late September or early October his practice was disrupted when the attorney from whom he was sub-leasing his office was evicted from the suite for non-payment of rent. 1 Thereafter, he negotiated a thirty-day tenancy agreement with the landlord. He spent a considerable amount of time in the latter part of October and November seeking a new office space, and from mid-October to mid-December, he was unable to spend more than one-third of his time practicing law; the rest of his time was spent resolving his legal problems which arose as a result of his practice being distrupted and his subsequent efforts in re-locating.
At the outset, it is clear from Lane's declaration that defendants' default was not the result of mistake, inadvertence, or surprise. Defendants had requested an extension to September 30. Therefore, the only remaining ground on which their motion could be granted is 'excusable neglect.' We find that the trial court could reasonably have inferred from Lane's declaration that a deliberate decision was made by defendants not to immediately move to have the default set aside. The inference then arose that defendant might choose not to answer. (See Fidelity Fed.Sav. & Loan Assn. v. Long, 175 Cal.App.2d 149, 155, 345 P.2d 568; Elms v. Elms, 72 Cal.App.2d 508, 513, 164 P.2d 936.) Specifically, Lane averred:
'On October 25, 1973, I discussed the question of defaults entered against my clients with the officers of Hamblin Mortgage Company, Inc., And it was decided to wait several more weeks until a final decision on filing a petition in bankruptcy was made before asking the plaintiff to set aside the defaults and permit the defendants to answer.
'Somehow, either prior to or during the move to my new offices . . . the pleading and the correspondence with the plaintiff's attorney in the above entitled action were filed in my file covering the bankruptcy matters for the defendants and after my move remained there undiscovered until approximately three weeks ago when the defendants decided to proceed with their petition in bankruptcy and I pulled that file to commence preparation of the petition.' (Emphasis added.)
The law is well settled that where a defendant (Yarbrough v. Yarbrough, 144 Cal.App.2d 610, 615, 301 P.2d 426, 429; see also Martin v. Taylor, 267 Cal.App.2d 112, 117, 72 Cal.Rptr. 847; Ray Kizer Constr. Co. v. Young, 257 Cal.App.2d 766, 769, 65 Cal.Rptr. 267.) Here, defendants were given additional time to file their answer, yet they did not file one. The fact that HMC may have been contemplating bankruptcy is no excuse. The assertion that Lane's practice was disrupted does not negate the fact that defendants were given an extension and still did not bother to file any answer (cf. Nicholson v. Nicholson, 85 Cal.App.2d 506, 508, 193 P.2d 112); nor does the fact that the file may have been misplaced militate against the inference that defendants decided not to file their answer because they were considering filing a petition for bankruptcy. (Cf. Kooper v. King, 195 Cal.App.2d 621, 629, 15 Cal.Rptr. 848; Yarbrough v. Yarbrough, Supra, 144 Cal.App.2d at 615, 301 P.2d 426.)
While we are of the opinion that the court did not abuse its discretion in denying the motion to set aside the default, the court could have also sustained such a ruling on the basis that defendants did not file their application for relief within a reasonable time. (Martin v. Taylor, Supra, 267 Cal.App.2d 112, 117, 72 Cal.Rptr. 847; Schwartz v. Smookler, 202 Cal.App.2d 76, 83, 20 Cal.Rptr. 507.) Under section 473...
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