Becerra v. Hodges
Filed 12/16/13
Becerra v. Hodges CA6
OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a),
prohibits courts and parties from citing or relying on opinions not certified
for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
STEVE BECERRA,
Plaintiff and Respondent,
v.
DAVID HODGES
et al.,
Defendants and Appellants.
H038541
(
Super. Ct. No.
CV165559)
San Jose Cannabis Buyer’s Collective LLC (SJCBC) and David Hodges (collectively defendants) operated a medical marijuana dispensary on premises
Hodges leased from Steve Becerra doing business as Oxbridge
Properties (Becerra). The City of San Jose (City) issued
a compliance order (Order) stating that defendants’ medical marijuana dispensary constituted a
nuisance and violated the City’s zoning regulations. When defendants continued to operate the
medical marijuana dispensary
despite the Order, Becerra filed suit.
Defendants failed to answer Becerra’s amended complaint, and the clerk
entered default against them. The
judgment against defendant Hodges only.
Defendants appeal from the trial court’s
denial of their motion for relief from the default judgment. They claim the default was the result of their
attorney’s mistake, such that the relief was mandatory under
(b).
Defendants also argue that discretionary
relief from default was warranted under section 473 because their attorney’s
excusable neglect caused the default.
We dismiss SJCBC’s appeal because no
default judgment was entered against it, and an order denying a motion to
vacate a default is not independently appealable. We determine that Hodges’ request for discretionary relief was
untimely. Finally, with respect to
Hodges’ request for mandatory relief, we conclude the trial court did not err
by finding that Hodges failed to show that attorney
error caused the default. Accordingly, we
shall affirm.
and Procedural Background
A. The Compliance Order and Initial
Complaint
In 2009, Hodges and Becerra entered into a commercial lease for
premises located on South
Monroe Street in San Jose. Hodges operated a medical marijuana dispensary on
the leased premises through his limited liability
company SJCBC. In January 2010, the City issued the
Order stating that the medical marijuana dispensary constituted a nuisance and
violated the City’s zoning regulations.
The City’s Order threatened Becerra with administrative fines if he
failed to achieve compliance with municipal law.
Between February
25, 2010,
and March 5, 2010, Becerra’s attorney, Walter MacDonald, and defendants’ attorney,
J. David Nick, exchanged e-mails in which attorney MacDonald requested that defendants close the medical marijuana
dispensary. Defendants failed to do so,
and on March 5, 2010, Becerra filed suit against
defendants alleging breach of the lease and violation of City zoning laws, and
seeking injunctive relief. The trial
court entered a temporary restraining order following a hearing on March 5, at
which defendants appeared in pro per.
On March 17, 2010, Nick informed
Becerra’s counsel that, until further notice, he was no longer representing
defendants. Counsel for Becerra e-mailed
Hodges that same day, explaining that Nick had advised him that Nick no longer
represented defendants and attaching a letter regarding the upcoming
preliminary injunction hearing.
Following that hearing, at which defendants again appeared in pro per, the court entered a preliminary injunction.
In April 2010, Nick filed a separate
action on behalf of SJCBC against the City. That case, SJCBC, LLC v. Horwedel
(Sup. Ct. Santa Clara County, 2010, No. 1-10-CV-17027; hereafter,
City invoked in the January 2010 Order.
B. The Amended Complaint and Default
On March
24, 2011,
Becerra filed an amended complaint in this action. Defendants did not respond to the amended
complaint. On August
18, 2011,
the clerk entered default against defendants.
Approximately one month later, on September 15,
2011,
defendants filed a substitution of attorney identifying Russell Goodrow as
their counsel. The court held a default
judgment hearing on September 26, 2011, at which neither defendants, nor
their new counsel, appeared. Following
the hearing, in an order dated September 29, 2011, the court ordered a default
judgment against Hodges only.
C. The Motion for Relief from Default
Judgment
Defendants filed a motion for
relief from default judgment on March 26, 2012.
The motion sought mandatory relief on the ground that the default was attorney
Nick’s fault, as well as discretionary relief on the theory that they
reasonably believed Nick would timely respond to the amended complaint.
The motion was accompanied by a declaration from Nick stating that he
is, and was at all relevant times, “retained as in-house counsel for
defendants.†Nick explained that Hodges
contacted him about the amended complaint in this action, but that he failed to
respond or to inform Hodges that he would not represent Hodges and SJCBC in
this matter. Paragraphs 5, 6, and 7
contain the substance of Nick’s statement:
“5. Between the dates of
approximately March 29, 2011 and May 17,
2011, I
received voicemails and electronic emails from David Hodges regarding the above-entitled
case, but I failed to respond to Mr. Hodges because of my busy calendar.
“6. I never told David Hodges
that I would not be able to represent him in the above-entitled action. However, by the time I was able to return Mr.
Hodges’ voice mails and e-mails, the time to file an Answer in this matter had
already lapsed.
“7. On or about September
29, 2011,
when I discovered my inadvertence and failure to respond to plaintiff’s Amended
Answer [sic] had resulted in a default
being entered against defendants, I notified my colleague, Russell Goodrow, who
agreed to represent defendants in the instant matter.â€
Hodges also submitted a
declaration stating that he e-mailed a scanned copy of the amended complaint to
Nick when he was served with it on March 29, 2011.
Hodges declared that “from approximately March 29, 2011 until
approximately May 17, 2011, I contacted Mr. Nick several times by telephone and
e-mail regarding the [Amended] Complaint,†but that Nick did not return the
calls or e-mails. Nevertheless,
according to Hodges, he “understood†that Nick would respond to the amended
complaint because Nick was SJCBC’s in-house counsel and was representing SJCBC
in the related Horwedel action. Hodges further declared that he learned that
Nick had not timely filed an answer on or about May 17,
2011. According to Hodges’ declaration, on September
29, 2011,
“upon learning that Mr. Nick was not representing myself or SJCBC, LLC in this
matter, I retained Russell Goodrow as legal counsel to represent SJCBC, LLC and
myself in this matter.â€
Becerra opposed the motion for
relief on multiple grounds, including that defendants intentionally failed to
answer the amended complaint as part of a larger strategy to litigate the
underlying issues in the Horwedel
action first. In support of that
argument, Becerra’s counsel submitted a declaration
stating that in May 2010 he told Nick that Becerra was seeking a default
against Hodges in this case. According
to the declaration, Nick responded, in Hodges’ presence, “So what. When this Writ [in the
Horwedel action] is granted, we will go after you on the Becerra matter.â€
The trial court denied defendants’
motion for relief from default in an order dated May 24,
2012, and
filed on May 29, 2012. While the court did not make any express credibility
findings, it noted that Hodges’ assertion that he retained Goodrow on September
29, 2011,
was contradicted by the substitution of attorney, which was filed on September
15, 2011,
and signed by Goodrow on September 7, 2011.
The court concluded defendants were not entitled to mandatory relief under
section 473 because Nick’s admitted mistakes did not cause the default. The court noted that while Nick and Hodges
declared they did not communicate about this case between March
29, 2011,
and May 17, 2011, no evidence was submitted as to
whether they communicated about the case before or after that time period. In view of the facts that Nick represented
SJCBC in the related Horwedel action
and that default was not entered until August 2011, the court found it
“implausible†that Nick and Hodges never
communicated about this case. The court
refused to grant defendants discretionary relief, reasoning that defendants had
not carried their burden to show the default was entered through Hodges’
mistaken belief Nick would respond to the amended complaint. Defendants filed a notice of appeal on July
16, 2012.
and Standard of Review
Section 473, subdivision (b), provides for
both discretionary and mandatory relief from entry of default and default
judgment.
Discretionary relief is available from any
proceeding--including defaults and default judgments--resulting from “mistake, inadvertence, surprise, or excusable neglect.†(§ 473, subd. (b).) A court may exercise its discretion to grant
relief “ ‘only after the party seeking relief has shown that there is a proper
ground for relief, and that the party has raised that ground in a procedurally
proper manner, within any applicable time limits.’ †(Huh v. Wang (2007) 158 Cal.App.4th
1406, 1419.) Generally, we review a
trial court’s ruling on a motion for discretionary relief from default for abuse
of discretion. (Ibid.) However, “because the law strongly favors
trial and disposition on the merits,†we scrutinize the “trial court[’s] order
denying [discretionary] relief . . . more carefully than an order permitting trial
on the merits.†(Elston v. City of Turlock (1985) 38 Cal.3d 227, 233.)
The mandatory portion of section 473 requires
the court to vacate a default whenever (1) a timely application is made in
proper form; (2) the application is accompanied by an attorney’s sworn
affidavit attesting to his or her mistake, inadvertence, surprise, or neglect;
and (3) the attorney’s mistake, inadvertence, surprise or neglect in fact
caused the dismissal or entry of default.
(§ 473, subd. (b).) Relief may be
denied only when the trial court finds that the default or dismissal was not in
fact caused by attorney error. (
To establish the requisite link between the
default and the attorney’s mistake, the defaulting party must submit enough
evidence to permit a finding that the default was actually caused by the
attorney’s error. (Todd v. Thrifty Corp. (1995) 34 Cal.App.4th 986, 991.) The mistake “need not be the only proximate
cause of [the default] so long as there is causation in fact.†(Milton v. Perceptual Development Corp.
(1997) 53 Cal.App.4th 861, 867.) In the
context of section 473, causation in fact exists where counsel’s error was a “ ‘necessary
antecedent’ †to the default, without which no default would have
occurred. (See Maupin v. Widling
(1987) 192 Cal.App.3d 568, 573; PPG Industries, Inc. v. Transamerica Ins. Co. (1999) 20 Cal.4th 310, 315.)
Causation is a question of fact for the trial
court (cf. Slovensky v. Friedman (2006)
142 Cal.App.4th 1518, 1528) that, ordinarily, we would review under the
substantial evidence standard. (
finding was that the evidence was insufficient to support a finding of
causation. As this court explained in In
re I.W. (2009) 180 Cal.App.4th 1517, 1528, where “the trier of fact has
expressly or implicitly concluded that the party with the burden of proof did
not carry the burden and that party appeals, it is misleading to characterize
the failure-of-proof issue as whether substantial evidence supports the
judgment.†The trial court, as the
exclusive judge of the credibility of the evidence, was free to reject defendants’
evidence as unworthy of credence. (Oldenburg
v. Sears, Roebuck & Co.
(1957) 152 Cal.App.2d 733, 742; see also Shamblin
v. Brattain (1988) 44 Cal.3d 474, 479.)
Thus, the proper inquiry on appeal is whether the evidence compels a
finding in favor of the appellant as a matter of law. (Roesch v. De Mota (1944) 24 Cal.2d
563, 571.) Specifically, the question is whether the appellant’s evidence was (1) “uncontradicted
and unimpeached†and (2) “of such a character and weight as to leave no room
for a judicial determination that it was insufficient to support a finding.†(Ibid.)
Here, the trial court’s
refusal to set aside the default on attorney fault grounds is reversible if
there is uncontradicted and unimpeached evidence compelling the conclusion that
Nick’s acknowledged errors caused the default.
Order is Dismissed
An
order denying a motion to set aside a clerk’s entry of default is not
independently appealable. (See Rappleyea
v. Campbell (1994) 8 Cal.4th 975, 981; First American Title Co. v.
Mirzaian (2003) 108 Cal.App.4th 956, 960.)
Such an order can be reviewed only upon an appeal taken from the default
judgment. (Winter v. Rice (1986)
176 Cal.App.3d 679, 682.)
The
record contains no default judgment against SJCBC, and the parties confirmed in
supplemental briefing that none has been entered. Default judgment was entered against Hodges
alone.
“While there is a well recognized policy in favor of resolving
appeals on their merits [citation], this court has no power to make appealable
an order which is nonappealable.†(Winter
v. Rice, supra, 176
Cal.App.3d at p. 683.) Accordingly, as
defendants concede, SJCBC’s purported appeal from the order denying its motion
to set aside entry of its default must be dismissed. (Ibid.)
From Default Was Untimely
A section 473 motion invoking the court’s
discretion must be filed within six months, or 182 days, after the clerk’s
entry of default. (National
Diversified Services, Inc. v.
Bernstein (1985) 168 Cal.App.3d 410, 416.) Critically, it is the entry of default that
triggers the running of the six-month statutory period, not the entry of the default judgment. (Ibid.;
see also Weiss v. Blumencranc (1976) 61 Cal.App.3d 536, 541.)
Here, the default was entered on August
18, 2011. Defendants did not file their motion until
221 days later, on March 26, 2012.
Because the motion for discretionary relief from default was untimely
under section 473, the trial court did
not abuse its discretion by denying it.
D. Uncontradicted
Evidence Does Not Compel A Finding That Hodges Is Entitled To Mandatory Relief
from Default on Grounds of Attorney Fault
Unlike
the motion for discretionary relief, the motion for mandatory relief was timely
because it was filed within six months of the entry of default judgment. (Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 297 [six-month limitation on motion under
section 473’s mandatory provision runs from the date of the entry of judgment,
not the entry of default].) The court
entered default judgment against Hodges no earlier than September
26, 2011,
exactly 182 days before the motion was timely filed. We nevertheless affirm the denial of the
motion for mandatory relief from default because we determine there was not
uncontradicted and unimpeached evidence compelling a finding that Nick’s mistakes
caused the default.
Nick’s declaration admits two
errors: (1) failing to inform Hodges
that he would not represent Hodges and SJCBC in this action and (2) failing to
return Hodges’ calls and e-mails between March 29, 2011,
and May 17,
2011.
Hodges relies on the declarations he and Nick submitted to establish that
those mistakes caused the default. Hodges’
theory of causation rests on a number of premises, including: (1) when Hodges received the amended
complaint, he believed Nick was representing him in this case; and (2) the
failure to timely file an answer was the inadvertent result of that mistaken belief
and Nick’s failure to correct it. If
either premise is rejected, Hodges’ causation theory fails.
The parties submitted
conflicting evidence regarding both premises.
First, with respect to whether
Hodges believed Nick was representing him, there was evidence that in March
2010 Nick informed Becerra’s attorney that he no longer represented defendants,
and that Becerra’s attorney passed that information on to Hodges. The record also shows that defendants appeared
in pro per at two significant hearings in the spring of 2010. Hodges argues that
Nick’s subsequent representation of SJCBC in the Horwedel action led him to conclude that Nick was once again
representing his interests in this case.
Even accepting that Hodges drew that conclusion, to find that he
the amended complaint was filed, one must conclude Hodges and Nick never
discussed Nick’s
involvement in this case in the 11 months following the initiation of
inference that Hodges and Nick communicated about this case as well. The trial court drew that very inference, and
we are powerless to reject it by reweighing the evidence. (Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th
613, 622-623.) As noted, the court was
free to reject Hodges’ declaration to the contrary as incredible. (Shamblin
v. Brattain, supra, 44 Cal.3d at
p. 479.) Thus, uncontradicted evidence
did not compel the conclusion that Hodges believed Nick represented him in this
action. The trial court reasonably could
have concluded that Hodges knew Nick did not represent him and Nick “is simply covering
up for†Hodges’ failure to file a response himself. (Rogalski v. Nabers Cadillac (1992) 11
Cal.App.4th 816, 821 [mandatory relief from default is properly denied where default “was not in fact the attorney’s fault, for
example when the attorney is simply covering up for the clientâ€].)
Second, there also was competing
evidence as to whether the failure to answer the amended complaint was
inadvertent. Hodges relies solely on the
declarations he and Nick submitted to establish mistake. Hodges submitted no corroborating documentary
evidence, such as copies of the e-mails he claims to have sent Nick about the amended complaint. Nor did Hodges submit
evidence as to what action, if any, he took in the three months that elapsed
between the time he
learned Nick had not timely filed an answer and the entry of default. Similarly, while Nick’s declaration suggests
that he “was able to return Mr. Hodges’ voice mails and e-mails†sometime after
“the time to file an Answer in this matter had already lapsed,†but before
learning about the entry of default, there is no explanation for his failure to
take any action to avoid default. That
Hodges and Nick knew about the missed deadline but did nothing to avert default
gives rise to the reasonable inference that the initial failure to answer the amended
complaint was intentional. That inference is further supported by counsel for Becerra’s
assertion that Nick responded to a threat of default in this case by stating,
in Hodges’ presence, “So what. When this Writ [in the Horwedel action]
is granted, we will go after you on the Becerra matter.†This competing evidence precludes us from
determining that the trial court was required to conclude that Hodges
unintentionally missed the deadline to respond.
The trial court reasonably could have concluded that
the default was not caused by mistake, but knowing
and intentional conduct by Hodges and his counsel.
“This is simply not a case where undisputed facts lead to only one
conclusion.†(In re I.W.,
was not required, as a matter of law, to find that Nick’s mistakes caused the
default.
The trial court’s order denying relief from the default judgment is
affirmed.
Premo, J.
WE CONCUR:
Rushing, P.J.
Elia, J.
Hereafter all unspecified statutory references are to the Code of Civil
Procedure.
Section 473, subdivision (b) provides, in relevant part:
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. Application for this relief shall be
accompanied by a copy of the answer or other pleading proposed to be filed
therein, otherwise the application shall not be granted, and shall be made
within a reasonable time, in no case exceeding six months, after the judgment,
dismissal, order, or proceeding was taken. . . . Notwithstanding any other requirements of
this section, the court shall, whenever
an application for relief is made no more than six months after entry of
judgment, is in proper form, and is accompanied by an attorney’s sworn
affidavit attesting to his or her mistake, inadvertence, surprise, or neglect,
vacate any (1) resulting default
entered by the clerk against his or her
against his or her client, unless the court
that the default or dismissal was not in fact caused by the attorney’s mistake,
inadvertence, surprise, or neglect.â€
