Universal Underwriters v. Randol
Filed 2/27/12 Universal Underwriters v. Randol CA2/8
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
EIGHT
UNIVERSAL UNDERWRITERS
INSURANCE COMPANY,
Plaintiff and Appellant,
v.
HOWARD LEE RANDOL, JR.,
Defendant and Respondent.
B232597
(Los Angeles
County
Super. Ct.
No. GC042466)
APPEAL from
an order of the Superior Court
of
County. Joseph De
Vanon, Judge. Affirmed and remanded.
Philip Werner; Law Office of
Stephen M. Tamchin, for Appellant.
Law Offices of Bruce W. Atwell and
Bruce W. Atwell, for Respondent.
__________________________
Universal Underwriters Insurance Company appeals from the
trial court’s order setting aside the default judgment entered against Howard
Lee Randol, Jr. We affirm.
Because
this is an appeal from the trial court’s order setting aside a default
judgment, we rely on the allegations of appellant’s complaint for a description
of the underlying events. Appellant
Universal Underwriters Insurance Company insured a building in Pasadena. The building’s owner hired respondent Howard
Lee Randol, Jr.’s roofing company to replace the roof on the building. While working on the roof, respondent’s
company accidentally set fire to the building.
Appellant paid the building’s owner for the damage to the building under
the owner’s insurance policy with appellant.
Appellant then sued respondent to recover the approximately half-million
dollars appellant had paid the building’s owner because of respondent’s fire.
About eight
months after filing the complaint, appellant informed the court that appellant
could not locate respondent to personally serve him with the summons and
complaint. In November 2009, the court
ordered service on respondent by publication in Los
Angeles County. Respondent did not appear in response to the
publication. In February 2010, the clerk
of the trial court entered respondent’s default and on April 20, 2010, the trial court entered judgment
for appellant in the amount of $581,287.43 in damages, interest, and costs.
On July 12,
2010, the Orange County Recorder’s Office mailed to respondent a copy of the
abstract of judgment entered against him in the Los Angeles proceeding. The recorder’s office mailed the abstract of
judgment to the Orange County
home of respondent’s wife, with whom respondent did not live. Sometime after receiving the letter,
respondent’s wife forwarded it unopened to respondent, who was living in Colorado.
Respondent
received the forwarded letter sometime between July and September 2010. Believing the letter related to his May 2010
purchase of a home in Orange County,
respondent did not immediately open the letter upon its receipt. Instead, he opened it sometime in
mid-September.
After
opening the letter, respondent conferred on September 20, 2010, with attorney James Hornbuckle. On September
22, 2010, attorney Hornbuckle called appellant’s attorney, Philip
Werner, to ask appellant to stipulate to setting aside the default judgment,
but Hornbuckle did not reach Werner on the phone. On September 27, Werner left a voice
message returning Hornbuckle’s call, and on September 28 the two attorneys
spoke. Werner told Hornbuckle that a third
lawyer was handling the matter. Werner
said he would get the third lawyer to call Hornbuckle. When Hornbuckle did not hear from the other
attorney, Hornbuckle called Werner twice more, on November 12, 2010, and January 3, 2011, seeking a stipulation to set aside
the judgment. During the January 3
call, Werner told Hornbuckle that the other attorney was unlikely to agree to
set aside respondent’s default. Two days
later on January 5, respondent retained attorney Robert Johnson who filed
a motion to set aside the default judgment on January 7. Following a hearing, the trial court granted
the motion on the grounds that respondent had not received actual notice of the
complaint, and service by publication had occurred in Los Angeles County, a
county in which respondent did not live.
This appeal followed.
We review
for abuse of discretion a trial court’s order setting aside a default
judgment. (Sakaguchi v. Sakaguchi (2009) 173 Cal.App.4th 852, 862.) According to appellant, respondent did not
explain why he took 179 days to file his motion on January 7, 2011, after the Orange County Recorder
mailed the abstract of judgment to him on July 12, 2010.
As the moving party, respondent was obligated to act diligently in
setting aside his default. (
187 Cal.App.4th 175, 181; Goya v. P.E.R.U. Enterprises (1978) 87 Cal.App.3d 886, 890 (
Appellant contends the court abused its discretion because respondent
did not move within a reasonable time after learning his default had been
entered. Thus, appellant concludes, the
court as a matter of law lacked authority to set aside the default. We disagree.
Evidence
must exist in the record that would reasonably permit the trial court to find
respondent acted diligently. (
31 Cal.2d 523, 528; Stafford v. Mach
(1998) 64 Cal.App.4th 1174, 1181.)
Diligence depends on the circumstances.
(Benjamin, at p. 528;
177 Cal.App.4th 1193, 1206.) Here,
respondent filed several supporting declarations from his wife, attorneys, and
himself describing a tale involving his living out of state, unopened mail
forwarded to him from his wife in California
the significance of which he did not understand, and his attorney’s rebuffed
attempts to reach out to appellant’s counsel in the hope of stipulating to a
mutually-agreed solution. The trial
court resolves conflicts in the evidence regarding those circumstances. (Goya,
supra, 87 Cal.App.3d at p. 891.)
And the trial court determines if those facts and circumstances show
diligence. (Davis v. Thayer (1980) 113 Cal.App.3d 892, 905.)
In setting
aside the default, the trial court presumably found respondent’s delay in
opening the letter from the Orange County Recorder was reasonable given his
ignorance of appellant’s lawsuit coupled with his mistaken assumption that the
letter involved his purchase of a home in Orange County earlier in the
year. (Compare Davis v. Thayer, supra, 113 Cal.App.3d at pp. 906-907
[party not diligent in refusing to read what he knew was a complaint].)
Furthermore, the court presumably found the effort by respondent’s
counsel Hornbuckle to broker a stipulation to set aside the default was a
reasonable attempt to avoid the attorney’s fees and costs of a formal motion to
the court. (Compare Iott v.
Franklin (1988) 206 Cal.App.3d 521, 531 [suggesting no lack of
diligence where counsel’s phone calls and letters unsuccessful rather than
unanswered].) Appellant argues for
contrary findings from the foregoing circumstances in support of its contention
that respondent was not diligent in moving to set aside the default. In doing so, however, appellant asks us to
reweigh the evidence, which we may not do.
(Goya, supra, 87 Cal.App.3d
at p. 891 [trial court resolves conflicts in the evidence].)
Appellant
misreads Benjamim v. Dalmo Mfg. Co.,
supra, 31 Cal.2d 523 as creating a bright-line rule that taking more
than 90 days to move to set aside a default is, as a matter of law, not
diligent. Benjamin stated no such rule.
Instead, it held that whatever the delay’s length, the moving party must
explain the reasons for the delay and a failure to explain the delay precludes
the court from setting aside the default.
(Id. at p. 528;
1406, 1421 [lack of evidence explaining delay was “key” to Benjamin’s analysis whether moving party acted diligently];
24 Cal.App.4th 1521, 1525 [reason for delay of more than three months must
be explained].) Because respondent
explained his delay to the trial court’s satisfaction, we find no abuse of
discretion in the court setting aside the default.
Appellant
also contends the court erred because respondent’s motion did not establish
that respondent had a meritorious defense to appellant’s complaint. Code of Civil Procedure section 473.5, under
which the court set aside respondent’s default, requires that the moving party
file a copy of the answer the defendant proposes to file if the court sets
aside the default. (Code Civ. Proc.,
§ 473.5, subd. (b) [“The party shall serve and file with the notice a copy
of the answer, motion, or other pleading proposed to be filed in the
action.”].) Respondent filed his answer
with his motion to set aside his default, thus satisfying the plain statutory
language.
Appellant
cites, however, the Judicial Council comment to section 473.5, which states
that the defendant must show he has “has a meritorious defense” in order for
the court to grant the motion. Appellant
also cites Goya,
supra, 87 Cal.App.3d at page 891for
the proposition that the moving party must have a meritorious defense. From the comment and
must weigh and assess the veracity of the allegations in respondent’s proposed
answer. No published decision since Goya has cited it for the proposition appellant urges, and the
Judicial Council comment does not so state.
Indeed, the law is to the contrary.
As Tunis v. Barrow
(1986) 184 Cal.App.3d 1069 explains, “While a defendant moving for relief
from a default judgment is required to serve and file a copy of his proposed
answer with the motion (Code Civ. Proc., § 473.5, subd. (b)), hearing
on the motion is not the occasion to try the merits of the action. [Citations.]
‘The court’s inquiry is limited to whether the . . . pleading contains a
statement of facts sufficient to constitute a meritorious case, and the truth
concerning the meritorious defense is not at issue.’ [Citation.]” (Tunis
at p. 1080.)
Appellant’s
reliance to the contrary on Beard v.
Beard (1940) 16 Cal.2d 645, 648 is misplaced. Beard
involved a superseded version of Code of Civil Procedure section 473 in effect
in 1940 covering an attorney’s default by inadvertence or excusable
neglect. Former section 473 required a
moving party to file a verified pleading or affidavit to show its defense was
meritorious. But that requirement
involves a different statute and a different time which have no bearing
here. “In 1981 [the California
Legislature] amended section 473 to specifically provide that no affidavit or
declaration of merits need be provided by a party moving for relief
thereunder.” (
Co. (1996) 51 Cal.App.4th 780,
787-789.)
The order
setting aside the default judgment is affirmed and the matter is remanded for
further proceedings. Respondent to
recover his costs on appeal.
RUBIN,
ACTING P. J.
WE CONCUR:
FLIER,
J.
GRIMES,
J.
