Zamora v. Clayborn Contracting Group, Inc.

• Decision Date: 17 June 2002
• Docket Number: No. S100352.,S100352.
• Citation: 28 Cal.4th 249,47 P.3d 1056,121 Cal.Rptr.2d 187
• Court: California Supreme Court
• Parties: Pablo ZAMORA, Plaintiff and Respondent, v. CLAYBORN CONTRACTING GROUP, INC., Defendant and Appellant.

121 Cal.Rptr.2d 187

28 Cal.4th 249

47 P.3d 1056

Pablo ZAMORA, Plaintiff and Respondent, v.CLAYBORN CONTRACTING GROUP, INC., Defendant and Appellant.

No. S100352.

Supreme Court of California.

June 17, 2002.

Weintraub Genshlea Chediak Sproul, Charles L. Post, Thomas G. Trost and Thadd A. Blizzard, Sacramento, for Defendant and Appellant.

Glen E. Gates for Plaintiff and Respondent.

BROWN, J.

This appeal arises out of a typo.In typing up an offer to compromise pursuant to Code of Civil Procedure section 998¹(section 998 offer), an attorney's legal assistant types the word "against" instead of the phrase "in favor of."As a result, the typed document mistakenly offers to settle the matter for a judgment against the attorney's client in the amount of $149,999.Not surprisingly, the opposing party jumps at the offer.We now consider whether the party who made the erroneous section 998 offer may obtain relief pursuant to the discretionary relief provision of section 473, subdivision (b), and conclude he may.

FACTS

Pablo Zamora(Zamora), doing business as Creative Engineering and Fabrication, filed suit against Clayborn Contracting Group, Inc.(Clayborn), alleging breach of contract and other related claims.The complaint alleged that Clayborn failed to pay for road signs produced and supplied by Zamora and sought approximately $143,000 in damages plus attorney fees.Clayborn answered and filed a cross-complaint.Although the cross-complaint did not specify the amount of damages sought, Clayborn sent Zamora an invoice for approximately $157,000 before filing the cross-claim.

Less than two months before trial, Zamora's counsel mailed Clayborn a section 998 offer.Although Zamora apparently intended to offer to settle for a judgment in his favor in the amount of $149,999, the actual offer sent to Clayborn stated: "PlaintiffPablo Zamora aka Pablo Iniguez dba Creative Engineering and Fabrication hereby offers to have judgment taken against himself and fordefendantClayborn Contracting Group, Inc .... pursuant to Section 998 of the Code of Civil Procedure for the sum of $149,999 ...."

Clayborn filed a notice of acceptance of the offer approximately three days after reviewing it.One week later and two days after learning about the mistake in the offer, Zamora's counsel advised the court of his intention to file a motion to set aside"the judgment based on mistake, inadvertence and excusable neglect."After obtaining an order shortening the time for hearing the motion, Zamora filed a motion to set aside the section 998 offer or to vacate entry of judgment pursuant to the discretionary relief provision of section 473, subdivision (b).

In support of the motion, Zamora submitted declarations from himself, his counsel, the legal assistant who typed the section 998 offer and other litigants in related cases.Zamora averred that heonly authorized his attorney to settle for a judgment in his favor in the amount of $149,999 and never authorized his attorney to agree to any judgment in favor of Clayborn.

Zamora's counsel declared that he, by phone, instructed his legal assistant to prepare a document offering to settle for a judgment against Clayborn in the amount of $149,999 pursuant to section 998.Zamora's counsel, per office policy, authorized his legal assistant to send the document with his stamped signature even though he had not reviewed it, because he was out of town and time was of the essence.He further stated that, before making this offer, Zamora had never offered to settle the matter for less than $150,000 from Clayborn.His legal assistant largely corroborated his story and claimed that she"mistakenly typed the word `against' as opposed to the phrase `in favor of Pablo Zamora."

Zamora's counsel also stated that, after accepting the section 998 offer, Clayborn unilaterally cancelled depositions and took pending motions to coordinate this action with other actions and to amend the cross-complaint off calendar without informing Zamora or other interested parties.A declaration from another litigant involved in the coordination motion corroborated these statements.

In opposition, Clayborn submitted declarations claiming that it acted in good faith and believed the offer was correct as written.Clayborn claimed that the proposed amount of the settlement—$149,999—was consistent with the amount stated in its latest invoice to Zamora—approximately $157,000.Clayborn's counsel further stated that he had told Zamora's counsel that Clayborn would not give Zamora any money and had suffered significant damages due to Zamora's conduct.Finally, Clayborn identified two tax levies against Zamora for approximately $31,000, as grounds for its failure to question the validity of the offer.

After a hearing, the trial court found that Zamora's counsel made a ministerial or clerical error and granted the motion to set aside the judgment pursuant to the discretionary relief provision of section 473, subdivision (b).The Court of Appeal affirmed.After ordering the trial court to "enter judgment, nunc pro tunc as of February 17, 2000, pursuant to the section 998 offer filed that date,"²the court concluded that: (1)Section 473, subdivision (b) permitted relief from a judgment entered in accordance with a section 998 settlement for "mistake, inadvertence, surprise, or excusable neglect"; and (2)the trial court did not abuse its discretion by granting Zamora relief from the section 998 settlement.

We granted review.

DISCUSSION

As relevant here, the discretionary relief provision of section 473, subdivision (b) provides that: "The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect."According to Clayborn, this provision applies only to involuntary judgments or dismissals; therefore, Zamora could not obtain relief from the voluntary judgment entered pursuant to his section 998 settlement under section 473, subdivision (b).We disagree.Our analysis begins with the statutory language.(Wilcox v. Birtwhistle(1999)21 Cal.4th 973, 977, 90 Cal.Rptr.2d 260, 987 P.2d 727.)The discretionary relief provision of section 473, subdivision (b) applies to any"judgment, dismissal, order, or other proceeding."Ostensibly, this statutory language does not limit the application of the discretionary relief provision to involuntary judgments or dismissals.Indeed, our courts have interpreted the provision in this manner for over a century.

The Legislature first enacted the discretionary relief provision found in section 473, subdivision (b) in 1872, and the language of this provision has not changed appreciably since then.(See Historical Note, 15 West's Ann.Code Civ. Proc.(1979 ed.) foil. § 473, p. 96["As originally enacted in 1872, the section read: `The Court ... may, upon such terms as may be just, and upon payment of costs, relieve a party, or his legal representatives, from a judgment, order, or other proceeding taken against him through his mistake, inadvertence, surprise, or excusable neglect'"].)Since 1872, California courts have consistently applied the discretionary relief provision of section 473 to voluntary judgments or dismissals.For example, as early as 1901, this court affirmed an order setting aside a voluntary dismissal entered pursuant to a settlement agreement.In holding that the trial court had authority to do so under the discretionary relief provision of section 473, this court rejected Clayborn's very contention and held that a party who "consented to the dismissal to his injury, under a mistake of fact, excusable under the terms of the statute, ... is not barred of relief."(Palace Hardware Co. v. Smith(1901)134 Cal. 381, 384, 66 P. 474(Palace Hardware );see alsoTroxell v. Troxell(1965)237 Cal.App.2d 147, 151-152, 46 Cal.Rptr. 723(Troxell)[holding that the statutory phrase "taken against" does not limit the discretionary relief provision of § 473 to default judgments].)

Palace Hardware was not an aberration.California courts have long held that "[e]ven after a voluntary dismissal with prejudice has been filed, the trial courthas jurisdiction to vacate the judgment of dismissal under Code of Civil Procedure section 473 where it has been entered as a result of the plaintiffs`mistake, inadvertence, surprise, or excusable neglect.'"(Basinger v. Rogers & Wells(1990)220 Cal.App.3d 16, 21, 269 Cal.Rptr. 332, (Basinger,)fn. omitted).)Thus, "[a]n order or decree incorporating a settlement agreement may be set aside under section 473."(In re Marriage of Kerry(1984)158 Cal.App.3d 456, 465, 204 Cal.Rptr. 660.)"`Where justice requires it, a party in whose favor a judgment has been rendered is entitled to relief from the judgment as well as the party against whom it is rendered.'"(Stevens v. Stevens(1968)268 Cal.App.2d 426, 429, 74 Cal.Rptr. 54.)In accordance with these principles, California courts have consistently held that parties may obtain relief from judgments, dismissals, or stipulations voluntarily entered into pursuant to a voluntary agreement through the discretionary relief provision of section 473.³In fact, Clayborn cites no majority decision to the contrary.⁴

Indeed, this long-standing interpretation of the discretionary relief provision of section 473 comports with its underlying purpose.(SeeWilcox v. Birtwhistle, supra,21 Cal.4th at p. 977, 90 Cal.Rptr.2d 260, 987 P.2d 727[courts may look to the purpose behind the statute in interpreting it].)"It is well settled 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.(1948)31 Cal.2d 523, 525, 190 P.2d 593(Benjamin.))Thus, "the...