Marriage of Ramirez

Filed 2/21/08 Marriage of Ramirez CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of San Bernardino County. Michael J. Torchia, Temporary Judge. (Pursuant to Cal. Const., art. VI, 21.) Affirmed.

Yolanda R. Garza for Appellant.

Law Office of Edmund L. Montgomery and Edmund L. Montgomery for Respondent.

Maria Olga Ramirez (Maria) appeals from an order granting relief from default, as well as from a stipulated judgment, made in favor of her former spouse, Israel Alejandro Ramirez (Israel).^[1] Maria argues that (1) the trial court erred in vacating the judgment; and (2) the court lacked authority to set aside Israels default. We find no error and affirm.

1. Background

Maria filed a petition for dissolution of marriage on September 1, 2005, which was served on Israel on September 9, 2005. On October 4, 2005, Israel tendered a response to the petition, but it was returned by the court, unfiled, on October 4, 2005. On October 11, 2005, Maria filed her request to enter Israels default, and his default was entered by the clerk.

Israel attempted to file a corrected response to the petition and filed an order to show cause (OSC) re child custody, visitation and support on October 27, 2005.^[2] Although the OSC was filed and calendared, the response to the petition was returned to Israel unfiled. The OSC was eventually heard on January 17, 2006; the courts minutes reflect that Maria was present, with counsel, that Israel was also present but unrepresented, and that a stipulation was reached. After the hearing, Israel went to Marias attorneys office and signed a settlement agreement and stipulation for judgment.

On March 26, 2006, the case management conference was scheduled but continued because Israel had just retained counsel. The minutes of the continued hearing, on May 17, 2006, reflect that an order was signed, and that the parties were ordered to appear at a mandatory settlement conference, but the order was not made a part of the record.

On June 29, 2006, Marias counsel filed a judgment of dissolution of marriage which incorporated a written stipulation for judgment between the parties. Item 4 of the judgment, which was prepared by Marias counsel, expressly refers to an attached written stipulation for judgment between the parties. Among other things, the judgment awarded the family residence to Maria as her sole and separate property, and awarded her custody of the children.

On July 14, 2006, Israel filed an OSC seeking modification of child custody, visitation, and an order setting aside the default and default judgment. In support of the motion to set aside the judgment, Israel submitted a declaration explaining that he signed the stipulation for judgment in opposing counsels office while he was unrepresented, could not read English, that Maria promised he could move back into the home and the parties would reconcile if he signed it. He agreed because he did not want the divorce and did not want the children to worry about being kicked out onto the streets. He did not realize he was relinquishing all his community property rights in the family home. He felt pressured to sign the judgment because his response was not filed. However, immediately after he signed the stipulation, Maria changed her phone number.

Maria opposed the motion to set aside the judgment, on the ground it was untimely, that vacating the judgment alone would be ineffectual since the default would remain intact, and that Israels declaration did not satisfy any of the statutory grounds for vacating a judgment under the Family Code. She attached a document written in Spanish and signed by Israel, that, when translated, indicated his belief that because the down payment for the family residence was made using the college fund of his [step]daughter, any legal right he might have over the house was to be granted to the [step]daughter.

After the hearing, the court issued a written ruling on February 5, 2007, granting Israels motion for relief from the default as well as the judgment. It first found the judgment was a stipulated judgment and that the motion to vacate it was timely, under Code of Civil Procedure section 473, because it was filed within 15 days of the date the judgment was filed. Alternatively, the court found the motion was timely under the statutory provisions for setting aside a division of property on the ground of mistake, because it was filed within one year of the entry of judgment. (Fam. Code, 2122, subd. (e).)

Maria made a motion for reconsideration of the order on February 20, 2007. She sought reconsideration of the courts characterization of the judgment as a stipulated judgment, and challenged the courts authority to set aside the default which had been entered in October 2005, under Code of Civil Procedure section 473. The original ruling was reaffirmed.^[3] Maria appeals. We affirm.

2. Discussion

We will address Marias contentions relating to what she asserts was a default judgment and the clerks entry of default separately.

A. Standard of Review

It is the policy of the law to favor, whenever possible, a hearing on the merits. (Bonzer v. City of Huntington Park (1993) 20 Cal.App.4th 1474, 1477-1478.) Upon application, a court may relieve a party of a judgment, dismissal, order or other proceedings taken against him or her through mistake, inadvertence, surprise, or excusable neglect. Applications for discretionary relief must be made within six months after the judgment, dismissal, order or proceeding was taken. (Code Civ. Proc., 473, subd. (b).)

A motion for relief from a default or a default judgment is addressed to the sound discretion of the trial court and an appellate court will not interfere unless there is a clear showing of an abuse of that discretion. (In re Marriage of Connolly (1979) 23 Cal.3d 590, 597-598; Stafford v. Mach (1998) 64 Cal.App.4th 1174, 1180.)

B. The Motion to Vacate the Judgment Was Timely Under Code of Civil Procedure, Section 473

Maria argues the motion for relief from the default and the subsequent judgment was untimely, and that the trial court erroneously used the date of the judgment, rather than the date of the entry of default, in finding the motion was timely. (Weiss v. Blumencranc (1976) 61 Cal.App.3d 536, 541.) She reasons that while the motion was made within six months of the judgment, vacating the judgment leaves the default in place. If the judgment is set aside but the default remains, the court can only enter a new judgment upon the same terms as the judgment set aside. (Ibid.; see also In re Marriage of Jacobs (1982) 128 Cal.App.3d 273, 281.) If the judgment were a default judgment, her point might have merit. We will first examine the nature of the judgment and the types of relief available.

i) Default Judgments

The term default means only a defendants failure to answer a complaint, and a default judgment means only a judgment entered after the defendant has failed to answer and the defendants default has been entered. (Vandermoon v. Sanwong (2006) 142 Cal.App.4th 315, 321.) The clerk has a ministerial duty to enter a default upon proper application if a defendant has failed to file an answer or other response pleading within the statutory time. (Code Civ. Proc., 585, subd. (b).)

Once a default has been entered, the party against whom it was entered has no right to participate in the litigation unless and until the default has been set aside or vacated. (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385.) Thus, where a motion for relief from the default is made, it must apply both to the entry of the default and the entry of the default judgment, or an order vacating a default judgment will have no effect on the underlying default. (Luz v. Lopes (1960) 55 Cal.2d 54, 61.)

There are three types of relief available to a party who has suffered a default: (1) Discretionary relief is available at any time within six months of a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. (Code Civ. Proc., 473, subd. (b).) (2) Mandatory relief is available if the application is made within six months of the judgment, and if the application is based on attorney neglect. (Ibid.; Sugasawara v. Newland (1994) 27 Cal.App.4th 294, 296-297.) If relief is granted under the mandatory provision, the underlying default must also be vacated. (Sugasawara v. Newland, supra, at p. 295.) (3) Equitable relief is available, even where statutory relief is unavailable, if the default was entered due to extrinsic mistake or fraud. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) A court exercising its inherent equity authority may grant relief even if the application is brought more than six months after the default or the judgment.

ii) Stipulated Judgments

A stipulation in open court is considered a proceeding within the meaning of section 473 of the Code of Civil Procedure, and where a property settlement agreement has been incorporated in the dissolution decree, the agreement merges into and is superseded by the decree. (In re Marriage of Jacobs, supra, 128 Cal.App.3d at p. 283.) In the case of a stipulated judgment, the six-month period runs from the entry of judgment. (Id. at pp. 281-282.)

iii) The Nature of the June 29, 2006 Judgment Governs How the Timeliness of the Motion Is Determined

The judgment filed on June 29, 2006, refers to the settlement agreement entered into by the parties throughout the document, and incorporates the agreement by reference. Maria did not file or submit proof of the grounds alleged in the petition, nor affidavits, nor an estimate of the monthly gross income of each party, nor an offer of proof of the value of the assets or debts of the community estate. Without such proof, a default judgment, disfavored in family law matters, may not be granted. (Fam. Code, 2336, subd. (a).)

In other words, like any civil case in which a partys default has been entered, a prove-up hearing is required before a judgment of dissolution may be entered as a default judgment. This rule reflects the public policy which disfavors default judgments in domestic cases to prevent fraud. (Buck v. Buck (1954) 126 Cal.App.2d 137, 142; see also Aldrich v. Aldrich (1928) 203 Cal. 433, 437-438.) Absent the requisite proofs, the judgment could not be a default judgment. Instead, the judgment incorporates a settlement agreement signed by both parties. The court correctly considered the judgment to be a stipulated judgment.

Because the judgment was a stipulated judgment rather than a default judgment, the six-month period began to run on the date of the entry of judgment, not the date of the entry of default. (In re Marriage of Jacobs, supra, 128 Cal.App.3d at p. 283.) The motion to vacate the judgment was filed within two weeks of the entry of judgment so it was timely filed within the reasoning of the Jacobs decision, irrespective of whether the court used the six-month time limit under the Code of Civil Procedure, or the one-year time limit for vacating a stipulated judgment due to mistake. (Fam. Code, 2122, subd. (e).)

However, an order vacating the judgment does not affect the prior entry of default. Because the court set aside the default also, our inquiry does not stop here.

C.     The Court Had Inherent Equity Power to Set Aside the Default for Mistake, Notwithstanding the Expiration of the Six-Month Period.

Maria argues that the court lacked jurisdiction to vacate the original default because the motion was filed more than six months after the clerk had entered the default. We disagree.

We agree that attorney fault did not justify the order vacating default because the default had been entered prior to the appearance of counsel in the action so attorney neglect could not provide a proper basis to vacate Israels initial default. (Cisneros v. Vueve (1995) 37 Cal.App.4th 906, 908, 912-913.) Nevertheless, we must consider whether there is another ground on which the court could have acted. We cannot undo the effect of the ruling on the ground that the court may have misapplied Code of Civil Procedure section 473, so long as any other correct legal reason exists to sustain it. (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 981.) We review the judgment, not the reasoning of the court below. (United Pacific Ins. Co. v. Hanover Ins. Co. (1990) 217 Cal.App.3d 925, 933.)

A trial court has inherent equity power to vacate or set aside a judgment or order entered because of extrinsic fraud or mistake even if the motion was made more than six months after the entry of the default. Where the motion is made more than six months after entry of default, the motion is not directed to the courts statutory power under Code of Civil Procedure section 473, but rather is directed to the courts inherent equity power under which it may grant relief from a default where there has been extrinsic fraud or mistake. (Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 736-737 [relief made two years after order of dismissal, deemed the practical equivalent of a default].) Thus, a trial court may still vacate a default on equitable grounds even if statutory relief is unavailable, and even if the application is made more than six months after the entry of default. (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 981; see also In re Marriage of Melton (1994) 28 Cal.App.4th 931, 937 [Extrinsic mistake involves the excusable neglect of a party.].)

The register of actions shows Israel attempted twice to file a response to the petition. The first attempt was timely, but the response was rejected for a technical defectfailure to attach a form, with the notation NEED CII FORM/NEED ORDER FOR INSTALLMENTS/COMPLETE WHERE CHECKED IN RED. Israels default was entered one week later.

These facts are sufficient to establish the default was entered because of a mistake on Israels part, not because of lack of diligence. (In re Marriage of Friedman (2002) 100 Cal.App.4th 65, 72.)

Normally, we would not disturb the default after vacating the judgment where the petition is regular on its face. However, where allowing the default to stand would prevent a party from litigating important issues relating to the characterization of property to which title was transferred after the petition was filed, we feel it necessary to vacate the default. (Garcia v. Garcia (1951) 105 Cal.App.2d 289, 291; see also Necessary v. Necessary (1962) 207 Cal.App.2d 780, 784.) The stipulated judgment entered in this case has all of these features.

There is substantial evidence to support the courts exercise of its inherent power to set aside the earlier default on the ground of mistake.

D. The Failure to Attach a Proposed Response to the Motion to Vacate His Default Does Not Compel Reversal

Maria complains that the trial court did not have authority to grant the motion to set aside because his motion was unaccompanied by the proposed response. Maria acknowledges that the relevant practice guides indicate the proposed pleading may be filed at any time before the hearing, so the rule does not appear to be jurisdictional. She cites no cases holding that a motion must be denied for lack of a proposed pleading alone. Additionally, the clause requiring the accompaniment of the proposed response relates to the discretionary statutory bases for relief from default. (Code Civ. Proc.,  473, subd. (b).)

While a party in default must show both a good excuse for his default, and that he has a meritorious defense to the action by providing a copy of the proposed pleading (Beard v. Beard (1940) 16 Cal.2d 645, 648), appellate review of an order granting relief is limited to the question of whether the trial court abused its discretion in granting relief. (Uriarte v. United State Pipe & Foundry Co. (1996) 51 Cal.App.4th 780, 791.) The register of actions shows Israel proffered two proposed responses, one prior to the entry of default, and one that was submitted shortly after the default was entered so a response was readily available. The question of whether Maria initiated a fraudulent transfer of title to her daughter by leading Israel to believe a reconciliation was possible if he agreed to transfer his interest in the property to Maria, qualifies as a meritorious defense to the petition.

In short, the fact the response did not accompany the motion did not preclude the court from determining the Israel had a meritorious claim. We find no abuse of discretion.

3. Disposition

The judgment is affirmed. Maria is ordered to pay Israels costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

s/Gaut

J.

We concur:

s/Ramirez

P. J.

s/King

J.

Publication Courtesy of San Diego County Legal Resource Directory.

Analysis and review provided by San Diego County Property line attorney.

^[1] We will refer to the parties by their first names for purposes of clarity and not out of disrespect. (Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1136, fn. 1, and cases cited therein.)

^[2] We must refer to entries in the register of actions for much of the case history as an incomplete record has been provided for our review. For instance, there is disagreement about the content of the order made on May 17, 2006. Maria argues strenuously that this was not a stipulation, it was an order after hearing. However, she has not made the order a part of the appellate record.

^[3] The minutes of the hearing reflect that the motion was granted, but the courts comments at the hearing reveal it was of the opinion that its original ruling was correct. We interpret this to mean that it reconsidered the original order before confirming it.