Turner v. Turner
Filed 9/19/13 Turner v. Turner CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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
SECOND APPELLATE
DISTRICT
DIVISION THREE
LISA TURNER,
Plaintiff
and Respondent,
v.
MARIAN TURNER,
Defendant
and Respondent;
HARTFORD CASUALTY INSURANCE COMPANY,
Movant
and Appellant.
B241265
(Los
Angeles County
Super. Ct.
No. BC463103)
APPEAL
from an order of the Superior Court
of
County, Abraham A. Khan, Judge. Reversed.
Smith
Ellison, Michael W. Ellison and Susan L. Goodkin for Movant and Appellant.
Amy
P. Lee for Plaintiff and Respondent.
Gary
A. Farwell for Defendant and Respondent.
_________________________
Hartford
Casualty Insurance Company (Hartford)
appeals from the trial court’s order denying a motion to vacate a $4.1 million
stipulated judgment entered into between the injured party, Lisa Turner, and Hartford’s
insured, Lisa’s mother Marian,
name="_ftnref1" title="">[1]
to resolve this personal injury action.
(Code Civ. Proc., § 473, subd. (b).)
originally was part of the settlement entered into in the personal injury
action Lisa filed against her mother and father, Hartford’s
insureds, in the United States District Court.
Over Hartford’s objections,
the district court did not sign the judgment and later dismissed the action on
jurisdictional grounds without prejudice to allow re-filing in state
court. Within 30 days of re-filing the
personal injury action in state court, and before an answer was due, Lisa filed
an ex parte application for entry of the $4.1 million stipulated judgment. Hartford
had no notice the personal injury action had been re-filed, the
filed, or the $4.1 million stipulated judgment had been entered against its
insured. We conclude the trial court erred
in denying Hartford’s motion to
vacate. Hartford
established “surprise†as required under section 473, and there is insufficient
evidence to support the trial court’s conclusion that Hartford
failed to accept the tendered defense and was therefore precluded from moving
to vacate the judgment. Accordingly, we
reverse.
FACTUAL
AND PROCEDURAL BACKGROUND
In
July 2008, Lisa suffered severe injuries when she fell through a glass shower
door not made of tempered glass in a home owned by her parents (Marian and
Cornelius) and her sister (Dorian). Hartford
had issued a homeowner’s policy to Marian and Cornelius.
1. United
States District Court Action
a. Lisa’s
Personal Injury Action Against Insureds
In
July 2010, Lisa filed a personal injury action in the United States District
Court against Cornelius, based upon
diversity jurisdiction.
name="_ftnref3" title="">[3] Hartford
was notified and investigated the claim.
On December 15, 2010,
Hartford agreed to provide
Cornelius a defense, subject to a reservation of rights.
On
November 30, 2010, Lisa
amended her complaint, adding as defendants Marian and Dorian. Marian did not acknowledge receipt of the
amended complaint until February 9,
2011.
b. Third
Party Complaints Against Hartford
Cornelius
filed a complaint in the district court action against Hartford
and other entities, alleging numerous causes of action arising from the
insurance claims handling and investigation into Lisa’s accident. Lisa and Marian, both represented by Lisa’s
counsel in the personal injury action, also filed a third party complaint
against Hartford, essentially
alleging the same causes of action.
c. Attempt
to Enter $4.1 Million Stipulated Judgment
The
Turners informed Hartford in
February 2011 that they had reached a settlement of the personal injury action
on December 10, 2010. As part of the settlement, Lisa and Marian
agreed to the entry of a $4.1 million judgment against Marian.
Lisa
submitted to the district court a “Stipulation for Entry of Judgment and
Dismissal with Prejudice of Dorian Turner and Marian Turner.†Hartford
objected to the stipulated judgment on several grounds. The district court dismissed Dorian with
prejudice, but the court did not sign the $4.1 million stipulated
judgment.
d. Dismissal
Without Prejudice of the Personal Injury Action
The
district court issued two orders to show cause regarding lack of jurisdiction
of the third party complaints and the underlying personal injury action. Based upon the realignment doctrine, the
district court concluded diversity had been destroyed because the Turners were
aligned, and Hartford and the remaining third-party defendants were
aligned.
On
May 19, 2011, the district court dismissed Lisa’s personal injury action
without prejudice to re-file in state court.
The district court also dismissed Cornelius’s complaint against Hartford
without prejudice to re-file in state court and declined to exercise
supplemental jurisdiction over the state law causes of action in Lisa’s and
Marian’s complaint against Hartford, dismissing the state law causes of action
without prejudice to re-file in state court.
Lisa and Cornelius appealed.
name="_ftnref4" title="">[4]
2. State
Court Action and Entry of the $4.1 Million Stipulated Judgment
On
June 20, 2011, Lisa re-filed her personal injury action against Marian in the
Los Angeles Superior Court. The
complaint alleged essentially the same claims asserted in the district court
action.
On
July 19, 2011, before Marian would have been obligated to answer the complaint,
Lisa filed an ex parte application seeking an order for entry of the $4.1
million stipulated judgment. The trial
court ruled on the ex parte application and signed the judgment.
Hartford
was not served with the complaint in the state court action. Hartford also was not served with the ex
parte application. Hartford received no
notice that the judgment had been entered against its insured.
On December 14, 2011, Hartford’s counsel wrote
to Marian’s counsel upon discovering the $4.1 million stipulated judgment
against its insured, seeking to confirm that Marian was not contending Hartford
had any obligations with respect to the $4.1 million stipulated judgment. Hartford got no response before it filed its
motion to vacate.
3. Hartford’s
Motion to Vacate the $4.1 Million Stipulated Judgment
Hartford
moved to vacate the $4.1 million stipulated judgment against its insured pursuant to section 473, subdivision (b), “on
the grounds of mistake, inadvertence, surprise or excusable neglect in that
neither Marian Turner nor anyone else tendered this case to Hartford, an
insurer of Ms. Turner, otherwise sought a defense from Hartford, informed
Hartford of the application for the Stipulated Judgment or informed Hartford of
entry of the Stipulated Judgment.â€
name="_ftnref5" title="">[5]
In
support of the motion, Hartford presented two declarations addressing whether
Marian had tendered the defense of the state court action. Attorney Michael Ellison stated: “To the best
of my knowledge, neither Marian Turner, counsel for Marian Turner, nor anyone
else tendered this case to Hartford.â€
Claims Service Consultant Alfonso Smith, who was assigned to the claim
file, stated he had sent Marian a letter confirming that Hartford intended to
offer to defend her in the district court action.
anyone else informed Hartford that they were seeking to obtain such a
stipulated judgment in this action at any time.â€
Lisa,
joined by Marian, opposed the motion to vacate.
Citing Sunseri v. Camperos Del
Valle Stables, Inc. (1986) 185 Cal.App.3d 559, Lisa principally contended a
stipulated judgment between an insured and a plaintiff cannot be set aside
under section 473, subdivision (b) when there is a failure to accept defense of
the insured. Lisa argued that Marian
“did not fail to tender her defense [to] Hartford,†rather Hartford “failed to
accept the defense.â€
In
support of her argument, Lisa submitted Marian’s and her counsel’s (Amy P. Lee)
declarations. Marian stated: “Hartford did not timely accept the tendered
defense and I had a right to settle the case in the manner I deemed
appropriate.†Lee stated: “Marian Turner
tendered her defense to Hartford and Hartford did not respond to her tendered
defense before settlement with Lisa Turner.â€
With respect to the Smith letter, Lee stated: “Al Smith provided a letter to Marian Turner
after complete resolution and settlement between the parties acknowledging that
Hartford was aware that Marian Turner had tendered her defense.â€
declaration, and also objected to Marian’s untimely declaration at the hearing
on the motion.
4. Denial
of Motion to Vacate and Hartford’s Appeal
The
trial court’s tentative ruling noted the conflicting
evidence, but for purposes of the motion to vacate concluded “the insurer
denied the insured’s tender of a defense.â€
No evidence is cited in the tentative ruling. In response to the evidentiary objections, the
court’s tentative ruling states: “The
Court has considered the parties’ evidentiary objections, and makes its
findings based upon evidence determined to survive the objections, including
the declaration of [Marian] Turner filed 3/13/12.†After taking the matter under submission
following oral argument on the motion, the trial court adopted its tentative
ruling as its final order. Hartford
timely appealed.
title="">[8]
DISCUSSION
Hartford
contends the trial court abused its discretion in denying its section 473
motion to set aside the $4.1 million stipulated judgment entered against its insured
because Hartford had no notice of the state court proceedings and its insured
never tendered the defense of the state court action. The
disposition of a section 473 motion “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.†(
Cal.3d 590, 597-598.) Here, the
trial court erred because its conclusion that Hartford denied Marian’s tendered
defense of this action is not supported by any admissible evidence in the
record.
Section
473 permits the court to relieve a “party
or his or her legal representative
from a judgment . . . taken
against him or her through his or her mistake, inadvertence, surprise, or
excusable neglect.†(§
473, subd. (b), italics added.)
representative†has been construed liberally and permits an insurer to move to
set aside a judgment under section 473 that it might otherwise be required to
satisfy. (Eigner v. Worthington (1997) 57 Cal.App.4th 188, 196,
fn. 5.)
In denying the motion to vacate the stipulated judgment,
the trial court apparently relied on the legal principle articulated in
supra, 185 Cal.App.3d 559, in which
the court denied the section 473 motion to vacate a stipulated judgment because
the insured tendered the defense, but the insurer rejected the opportunity to
defend. The insurer made a “conscious
decision to reject the defense of the underlying action.†(Sunseri
v. Camperos Del Valle Stables, Inc., supra,
at p. 561.) Therefore, there was no
justification to set aside the stipulated judgment on the grounds of
“ ‘mistake, inadvertence, surprise or excusable neglect.’ †(Ibid.)
Here,
unlike Sunseri, there is no evidence
Marian even tendered her defense of the state court action that would have
triggered Hartford’s duty to defend.
Lisa and Marian reached a settlement on December 10, 2010, while the
district court action was pending, in which Lisa and Marian agreed to the $4.1
million judgment against Marian.
name="_ftnref9" title="">[9] Marian vaguely states that Hartford did not
“timely accept the tendered defense,†and therefore she had a right to settle
“the case,†but the settlement occurred before the state court action was even
filed. Likewise, Lee’s declaration,
disregarding the viable foundational objections to its admissibility,
chronologically places tender before the settlement reached in December 2010,
and the settlement was reached six months before the state court action was
even filed.
Relying
on Lee’s declaration, respondents
name="_ftnref10" title="">[10] appear to contend
that Smith’s letter acknowledged that Marian tendered her defense of the state
court action. The letter actually shows
the opposite. Hartford offered to defend
Marian in the district court action even though she had not tendered her
defense. As of May 2011, Marian was
aware that Hartford would defend the personal injury action. The state court action was filed one month
later, on June 20, 2011, yet neither Marian’s nor Lee’s declaration
specifically addresses Marian’s tender at any time between June 20, 2011, the
date of filing, and July 19, 2011, the date Lisa filed
stipulated judgment.
Assuming
Marian had tendered her defense, the declarations do not state that Hartford
declined the opportunity to provide a defense in the state court action. Instead, the declarations state Hartford “did
not timely accept,†and “did not respond†to Marian’s tender. As noted, 29 days elapsed between re-filing
the personal injury action in state court and the ex parte application to enter
the $4.1 million stipulated judgment. As
a matter of right, a defendant has 30 days after a summons is served to answer
the complaint. (§ 412.20, subd.
(a)(3).) Here, the court signed the
judgment on the 30th day. Based upon
this time frame, we conclude the evidence of any so-called “delay,†does not
support an inference that Hartford implicitly denied a defense.
We
also reject respondents’ related argument that Hartford has not presented
sufficient evidence of “surprise†for relief from the $4.1 million stipulated
judgment. Although Hartford was aware of
the December 10, 2010 settlement, it was not aware that Lisa had re-filed her
personal injury action in state court, or filed an ex parte application for
entry of the $4.1 million stipulated judgment.
There is no conflicting evidence presented on these points. The record also reveals that, if given
notice, Hartford would have objected to the entry of the $4.1 million judgment,
having done so in the district court action.
And, if the defense of the state court action had been tendered, based
on inferences drawn from Smith’s letter, Hartford most likely would have agreed
to offer Marian a defense, with a reservation of rights.
Hartford
argues that the “rush†to re-file Lisa’s personal injury action in state court
and to seek an ex parte application to enter the $4.1 million stipulated
judgment, demonstrates fraud and collusion among the Turners because similar
efforts failed in the district court. A
section 473 motion to vacate is not a proper forum in which to litigate these
issues. Here, we conclude the trial
court abused its discretion in denying Hartford’s motion to vacate the $4.1
million stipulated judgment.
DISPOSITION
The order denying the
motion to vacate the $4.1 million stipulated judgment brought pursuant to Code
of Civil Procedure section 473 is reversed.
Marian Turner’s joinder request is granted. Respondents’ request for judicial notice is
denied. Hartford is entitled to
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS
ALDRICH,
J.
We concur:
CROSKEY,
Acting P. J.
KITCHING,
J.
some of the individuals in this case share the same surname, we use the first
names for the sake of clarity. No
disrespect is intended.
Procedure.
