Zirbes v. Stratton

• Decision Date: 17 December 1986
• Docket Number: No. B017439,B017439
• Citation: 232 Cal.Rptr. 653,187 Cal.App.3d 1407
• Court: California Court of Appeals Court of Appeals
• Parties: William ZIRBES, individually and d/b/a Specialty Lease Co., Plaintiff and Appellant, v. Susan STRATTON, Defendant and Respondent.

Page 653

232 Cal.Rptr. 653

187 Cal.App.3d 1407

William ZIRBES, individually and d/b/a Specialty Lease Co., Plaintiff and Appellant, v. Susan STRATTON, Defendant and Respondent.

No. B017439.

Court of Appeal, Second District, Division 7, California.

Dec. 17, 1986.

Coskey, Coskey & Boxer and Hal L. Coskey and David G. Justl, Los Angeles, for plaintiff and appellant

Hill, Wynne, Troop & Meisinger and Neil R. O'Hanlon and David Halberstadter, Los Angeles, for defendant and respondent.

JOHNSON, Associate Justice.

Appellant William Zirbes appeals an order setting aside a judgment for breach of a restaurant equipment lease against respondent Susan Stratton. The issue on appeal is whether the evidence is sufficient to show Mrs. Stratton was a party in the underlying action. We conclude the trial court lacked jurisdiction over Mrs. Stratton because there was ineffective service of process and appearance on her behalf was unauthorized. Accordingly, we affirm the order setting aside the judgment.

I. STATEMENT OF FACTS AND PROCEEDINGS BELOW

Eugene and Susan Stratton were married in 1974. They began to experience marital problems in 1977 and subsequently separated. Mrs. Stratton filed a petition for marital dissolution in or about July 1979, the divorce becoming final in May 1982. On or about February 14, 1980, William Zirbes sued Eugene and Susan Stratton for breach of a restaurant equipment lease for use in Stratton's Restaurant in Westwood Village. Philip K. Horrigan who was representing Eugene Stratton in his dissolution proceeding against Susan Stratton filed an answer on behalf of both Eugene and Susan Stratton. Judgment was entered in favor of Zirbes. Eugene Stratton appealed. Both Stratton and Zirbes stated in their appellate briefs in that case Susan Stratton had been relieved of the judgment. The court regarded Eugene Stratton as the sole defendant and appellant and affirmed the judgment against him.

In January 1985, Eugene Stratton filed a voluntary bankruptcy petition. Mrs. Stratton declared she discovered Zirbes had named her as a judgment debtor arising out of above action in or about April 1985, when she received a telephone call from John R. Skoog. He identified himself as the lawyer for her former husband's new restaurant Stratton's Grill. Skoog informed her Zirbes did not know where to find her but "no doubt would be coming to Connecticut to levy upon [her] assets." In August 1985, Susan Stratton filed a motion pursuant to Code of Civil Procedure section 473 and the court's equitable power for relief from judgment on the ground Eugene Stratton's lawyer represented her without her knowledge and consent. The trial court set aside the judgment as to Susan Stratton.

Zirbes appealed. An order granting a motion to vacate is appealable. (Code Civ.Proc. § 904.1, subd. (b); see 9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 108, p. 127).

II. THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN GRANTING SUSAN STRATTON RELIEF FROM JUDGMENT

Zirbes contends the trial court abused its discretion in granting relief because the evidence was insufficient to support its ruling. He claims the judge did not consider any extrinsic evidence dealing with the credibility of witnesses therefore the trial court decision was essentially a question of law. In sum, appellant asks us to review the evidence anew. He analogizes to the standard of review of cases involving the construction of a writing which allow for independent interpretation where no extrinsic evidence is introduced. Appellant's argument is meritless.

Section 473 (Code Civ.Proc.) allows a court to relieve a party from a judgment taken against him or her because of mistake, inadvertence, surprise or excusable neglect. It is settled "[t]he granting or denial of a motion to set aside an order or judgment under section 473 rests largely in the discretion of the trial court, and its decision will not be disturbed on appeal unless there has been a clear abuse of discretion. [Citations omitted.]." (In re Marriage of Carter (1971) 19 Cal.App.3d 479, 494, 97 Cal.Rptr. 274.) Appellate courts "are favorably disposed toward orders excusing defaults and permitting controversies to be adjudicated upon their merits. Such orders are rarely reversed and never unless it clearly appears that there has been a plain abuse of discretion. [Citations omitted]." (Outdoor Imports, Inc. v. Stanoff (1970) 7 Cal.App.3d 518, 522, 86 Cal.Rptr. 593). Trial court discretion is limited by legal principles and subject to reversal where there is no reasonable basis for its action. (Westside Community for Independent Living, Inc. v. Obledo (1983) 33 Cal.3d 348, 355, 188 Cal.Rptr. 873, 657 P.2d 365 [citations omitted].)

The primary issue before us is whether the evidence was sufficient to show Susan Stratton was a party in the underlying action. Contrary to appellant's contentions, "we are bound by the established The record does not show an abuse of discretion. The trial court could reasonably have concluded on the basis of Mrs. Stratton's declarations she had not authorized Philip K. Horrigan to appear on her behalf in the underlying action initiated by Zirbes. ¹ This case is unlike Yarbrough v. Yarbrough (1956) 144 Cal.App.2d 610, 301 P.2d 426, cited by appellant. In that case the court was found to have abused its discretion as a matter of law because the respondent was served with a summons and complaint and his affidavit did not disclose a sufficient excuse of inadvertence or neglect to permit the trial court to set aside a default. (Id., at pp. 614-615, 301 P.2d 426.)

                rules of appellate review that all factual matters will be viewed most favorably to the prevailing party [citations omitted] and in support of the judgment [or order] [citation omitted]."  (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925, 101 Cal.Rptr. 568, 496 P.2d 480.)   This standard applies equally to oral or documentary evidence.  (Griffith Co. v. San Diego College for Women (1955) 45 Cal.2d 501, 508, 289 P.2d 476).  "When an issue is tried on affidavits, the rule on appeal is that those affidavits favoring the contention of the prevailing party establish not only the facts stated therein but also all facts which reasonably may be inferred therefrom, and where there is a substantial conflict in the facts stated, a determination of the controverted facts by the trial court will not be disturbed [Citation omitted.]."  (Ibid.)   We conclude this rule applies also to declarations.  (See generally Code Civ.Proc. § 2015.5.)
                

Neither is this case like Hall v. Osell (1951) 102 Cal.App.2d 849, 852-853, 228 P.2d 293, also cited by appellant, wherein the only evidence to support the judgment was the testimony of the defendant who alleged the airplane he crashed was in a faulty condition. Here the trial court must necessarily have determined Horrigan's appearance was unauthorized from Mrs. Stratton's declaration she would never have allowed the lawyer representing her husband in their divorce action to appear for her and Horrigan's declaration he answered for Mrs. Stratton on the authority of her husband.

Zirbes contends Horrigan appeared on Susan Stratton's behalf under an agency theory. He essentially argues Mrs. Stratton received notice of the answer through her lawyer and by her inaction ratified Horrigan's action. His tortured reasoning is along the following lines. Horrigan sent a letter dated February 13, 1981, on the husband's behalf to Elliott J. Dixon, Susan Stratton's dissolution lawyer. In it Horrigan stated among other things he had filed an answer on behalf of both the Strattons in the Zirbes suit. Because Dixon acknowledged receipt of this letter in his response to Horrigan dated February 24, 1981, and because there was a notation that Mrs. Stratton received a carbon copy of Dixon's letter, Zirbes concludes Mrs. Stratton received notice through Dixon. Dixon's letter, however, only states: "I recognize further progress in your letter of February 13." Zirbes offers no explanation of how Mrs. Stratton would have been alerted to the contents of the February 13th letter. On this point the trial court stated: "You would think that letter would Second, Zirbes argues Mrs. Stratton must be found to have constructive notice of Horrigan's appearance through the doctrine of imputation: Dixon's knowledge of the answer must be imputed to Mrs. Stratton because he was her attorney in the dissolution proceeding. Even though the knowledge of a lawyer is knowledge of the client, the client "will ordinarily be charged with constructive notice only where the knowledge of the attorney has been gained in the course of the particular transaction in which he has been employed by that principal." (Otis v. Zeiss (1917) 175 Cal. 192, 195-196, 165 Pac. 524 [Citation omitted.]; 1 Witkin Summary of Cal.Law (8th ed. 1973) § 141, pp. 744-745.)

                alert the lady's divorce lawyer when the husband's lawyer says he filed an answer for her in another lawsuit, but we don't have any evidence that the lady knew about that, and [Mrs. Stratton's] counsel points out you took the lady's deposition and haven't seen fit to provide it to me."   We must necessarily conclude Mrs. Stratton did not receive notice from Dixon about filing the answer
                

The court in Rosenthal v. Garner (1983) 142 Cal.App.3d 891, 895, 191 Cal.Rptr. 300, rejected "the notion that there is an identity of attorney and client so as to invariably impute to a client the attorney's inaction concerning his notice of new litigation to which the client is an unknowing party defendant." In that case the court addressed the question whether a lawyer's knowledge of a newly filed lawsuit arising out of previous litigation in which he had represented the client should be imputed to the client as actual notice under section 473.5 (Code Civ.Proc.). (Id., at p. 893-894, 191 Cal.Rptr. 300.) Plaintiffs mailed the defendant's attorney a copy of the summons and complaint and asked him to...