Opinion
H042331
04-13-2017
KAREN AJLOUNI et al., Plaintiffs and Respondents, v. SCI APPAREL, LTD et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 113 CV242018)
Defendants and appellants SCI Apparel, Ltd., Derar Hawari, and Erick Searles (collectively Defendants) challenge the trial court's order denying their motion under Code of Civil Procedure section 473, subdivision (b) (hereafter section 473(b)) to set aside a stipulated judgment. The parties settled this case and their settlement agreement provided that the settlement would be paid in installments. After Defendants failed to make two payments on time, plaintiffs and respondents Karen Ajlouni and Sharon Ajlouni (hereafter jointly Plaintiffs) moved for entry of a stipulated judgment in accordance with the terms of the settlement agreement. Defendants' attorneys failed to oppose the motion for entry of judgment and the court entered judgment as requested, which Defendants then unsuccessfully moved to set aside.
The trial court ruled that Defendants were not entitled to mandatory relief under section 473(b) because the judgment entered here was neither a "default" nor a "default judgment" within the meaning of that section. The court also found that Defendants were not entitled to discretionary relief under the same section because the attorney neglect that resulted in Defendants' failure to oppose entry of judgment was not excusable. Finding no error, we will affirm the order.
I. FACTS & PROCEDURAL HISTORY
"Sprockets" is the brand name of a line of children's clothing. In 2009, Hawari, Searles, and others incorporated Sprockets Clothing, Inc. to pursue a business opportunity related to the Sprockets brand. The company later changed its name to SCI Apparel, Ltd. (We refer to both Sprockets Clothing, Inc. and SCI Apparel, Ltd. as SCI.) In July 2010, Plaintiffs purchased 100,000 common shares of SCI stock for $200,000.
A. Pleadings
Plaintiffs filed this action in February 2013 alleging violations of California and federal securities laws, fraud, negligent misrepresentation, and unfair businesses practices. Plaintiffs alleged that when they invested in SCI, Defendants did not own the Sprockets brand and misrepresented facts regarding the value of the investment.
Defendants filed an answer in April 2013. They also demurred to the fraud cause of action and moved to strike the prayer for attorney fees. The trial court overruled the demurrer and granted the motion to strike with leave to amend. Hawari filed a first amended answer, and Plaintiffs filed a first amended complaint.
This procedural history is based in part on the trial court's on-line docket entries, of which we have taken judicial notice on our own motion. (Evid. Code, §§ 452, 459.)
The parties settled this case in September 2013.
B. Settlement
Under the parties' settlement agreement (Agreement), Defendants would pay $100,000 to Karen Ajlouni and $100,000 to Sharon Ajlouni. The payments were to be made in monthly installments over a six-year period from November 2013 through October 2019, without interest or security, "on or before the first day of each month with the first payment due November 1, 2013." The Agreement provided that if Defendants failed to make a payment by the due date, "an Event of Default shall have occurred," that "[u]pon notice of such Event of Default" to Defendants, "Defendants shall have ten calendar days from the date [of the notice] to cure such Event of Default," and if Defendants fail to cure within 10 days, "a Default shall have occurred and the Plaintiffs may file the Stipulated Judgment" described in the Agreement. The Agreement provided that "[t]ime is of the essence," that time periods described in the Agreement "are to be strictly construed and enforced," and for attorney fees to the "prevailing party" in any proceeding arising out of the Agreement.
C. Defendants' Failure to Make Timely Payments
From November 2013 through August 2014, Defendants made monthly payments under the Agreement. Plaintiffs did not challenge the timeliness of those payments, even though some payments were at least a day late.
Plaintiffs did not receive the September 2014 payment on time. They waited until September 8 to e-mail notice of an "Event of Default" to Defendants. The following day, Plaintiffs' counsel, Michael Prozan, received an e-mail from Mark Cardinale, an officer of SCI, stating the check had been mailed on September 8. Plaintiffs received the September payment and took no further action because the Event of Default never matured into a Default under the Agreement.
Plaintiffs did not receive the October 2014 payment on time. Prozan waited until October 7 to send an e-mail to Cardinale, Hawari, Searles, and Defendants' counsel, advising them that another Event of Default had occurred. The e-mail stated: "If the October 1, 2014 payment is not received within (ten) 10 calendar days of this email ... the Ajlounis may proceed to exercise all available remedies under the ... Agreement, including, but not limited to, seeking entry of Stipulated Judgment against [Defendants]."
Plaintiffs waited six more days. During that time, Defendants did not respond to Prozan's e-mail and the October 2014 payment did not arrive. On October 13, Prozan sent another e-mail to Cardinale, Hawari, Searles, and Defendants' counsel, stating: "Confirming that today's mail has come and I have not yet received payment. A reminder that unless payment has been received within ten calendar days of October 7, 2014, my clients will likely be asking me to seek entry of Stipulated Judgment against you and, thereafter, use all available enforcement remedies." He suggested Defendants "use Federal Express or another delivery service" to ensure timely delivery.
The payment did not arrive by the October 17 deadline. Shortly after midnight on Monday, October 20, Cardinale sent Prozan an e-mail, stating: "The check was already mailed out at the end of last week. Can you confirm that the check has been received?" Later that day, three days after the October 17 deadline, Prozan received the October 2014 payment by regular mail. The envelope was postmarked October 18.
Prozan sent an e-mail on October 21 to Cardinale, Hawari, Searles, and Defendants' counsel, stating that he received the October payment on October 20, which was "too late" under the Agreement. Prozan said his clients intended to file an ex parte application to obtain the stipulated judgment provided for in the Agreement, and enclosed an accounting of the payments received.
D. Plaintiffs' Ex Parte Application
On October 31, Plaintiffs applied ex parte for an order to enter a stipulated judgment for the remaining amounts due under the Agreement. Plaintiffs sought $90,983.61 each, plus $2,665 in attorney fees and costs.
Attorney Motaz Gerges appeared on behalf of Defendants at the hearing on the ex parte application and filed written opposition to the application. Defendants argued: "[T]his is not an emergency and Plaintiffs should not use the ex-parte process to gain advantage against Defendants. This should be set as a noticed motion to give Defendants a chance to properly research and respond to Plaintiffs' allegations." They argued they had substantially performed under the Agreement and their "failures, if any, were so trivial or unimportant that they could have been easily fixed or paid for."
Defendant's opposition included a declaration from Hawari, which stated that Searles was supposed to make the October payment, that Searles thought his wife made the payment, and that there must have been a "miscommunication" because the payment was never made. Hawari apologized, said he will "personally make sure" future payments are made on time, and offered to pay late fees and reasonable attorney fees to compensate for the delay.
The court denied the ex parte application without prejudice to Plaintiffs seeking the same relief by way of noticed motion.
E. Plaintiffs' Noticed Motion
On November 10, Prozan and Gerges agreed that the noticed motion would be heard on December 9. The next day, Plaintiffs served the moving papers on Defendants' counsel by overnight mail. A tracking receipt confirmed that the moving papers were delivered on November 12 to defense counsel Leonard Chaitin's address in Sherman Oaks, a private mailbox service.
Plaintiffs' noticed motion made the same arguments and relied on the same evidence as their ex parte application. Plaintiffs also argued that under the terms of the Agreement, the doctrine of substantial compliance did not apply, and even if it did, Defendants had not made a good faith effort to make the October payment on time. Plaintiffs stated they agreed to a payment schedule without interest or security with only one requirement: that Defendants strictly adhere to the payment schedule. Plaintiffs' papers included a copy of Defendant's opposition to the ex parte application.
Defendants did not file opposition to the motion for entry of judgment.
Plaintiffs filed a reply memorandum on December 2, stating that they had not received written opposition to the motion and asking that any opposition papers filed with the court be stricken. Plaintiffs served their reply papers on Defendants' counsel via overnight mail on December 1.
Defendants did not appear at the December 9 hearing on the motion. The court granted the motion and entered judgment of $90,983.61 for each of the plaintiffs, plus attorney fees.
F. Defendants' Motion to Set Aside Judgment
Defendants moved under section 473(b) to set aside the stipulated judgment, seeking mandatory relief based on alleged inadvertence of their "counsel or staff" or discretionary relief on the grounds of surprise. Defendants argued that their attorney did not become aware of the motion for entry of judgment until December 9—the date of the hearing on the motion—and that the judgment was entered "by either surprise or inadvertence" of their counsel or the staff at the mailbox service.
In a declaration, defense attorney Chaitin stated that when he checked his private mailbox on December 7, it contained two notices of packages received at the counter dated December 2 and December 3. Since December 7 was a Sunday, the counter was closed so Chaitin could not pick up the packages. Chaitin returned to his mailbox service on Tuesday, December 9 to pick up the packages. When he gave the clerk the two notices, the clerk returned with three packages, one of which was unrelated to this matter. (The record confirms the package delivered on December 3 is unrelated to this matter.) The other two packages contained Plaintiffs' motion for entry of judgment (which was served by overnight mail on November 11) and Plaintiffs' reply (which was served by overnight mail on December 1). Chaitin declared: "I do not remember receiving any notices of packages in November. I suppose it is possible that I received a notice of such package and put it away and forgot about it[,] but I do not recall receiving any such notices. I do not recall ever forgetting about receiving a notice of package at the counter. [¶] ... [¶] It could be that the staff at the private mailbox location inadvertently did not provide me with notice of the package with the original motion [ ], I do not know." Defendants' motion was accompanied by a proposed opposition to Plaintiffs' motion for entry of judgment, which included a declaration signed by Hawari.
Hawari's declaration in opposition to the noticed motion was almost identical to the declaration he filed in opposition to the ex parte application, which Plaintiffs attached as an exhibit to their noticed motion. Thus, these facts were before the court when it ruled on the motion for entry of judgment.
Opposing Defendants' set-aside motion, Plaintiffs argued that Defendants were not entitled to mandatory relief under section 473(b) because it does not apply to the type of judgment entered in this case, and because Chaitin's declaration advanced wrongdoing by the mailbox service, not attorney fault, and the attorney had no supervisory connection to the mailbox service.
Plaintiffs argued that Defendants were not entitled to discretionary relief under section 473(b) since the parties had previously agreed to the December 9 hearing date for the noticed motion, Defendants' counsel knew the papers were coming and could have checked the court's website or contacted Plaintiffs' counsel to determine whether the motion had been served when he did not receive the papers. Plaintiffs' evidence included copies of the two mailbox notices, which Chaitin had faxed to Prozan, as well as evidence that Plaintiffs had served their moving papers and reply papers by overnight mail on November 11 and December 1 respectively. Plaintiffs argued that the mailbox notices confirmed the reply papers had been at Chaitin's mailbox service since December 2. They asserted that Chaitin had not checked his mail for a week; that after seeing the mailbox notice on Sunday, December 7 and knowing the package had been there for five days, Chaitin should have returned to his mailbox service on Monday, December 8; had he done so, he would have seen the papers and could have requested a continuance.
Defendants filed a reply in which they pointed to a split of authority on whether the mandatory relief in section 473(b) applies to the type of judgment entered here. As for discretionary relief, Defendants argued that even if Chaitin had picked up the reply papers on December 2, their opposition papers would still have been late; Chaitin did not know why he did not receive the moving papers before December 9, and it would have been fruitless to investigate the circumstances relating to the delivery of the moving papers. In a second declaration, Chaitin stated he had been a customer of the mailbox company since 2008, the company always leaves him a note when he receives a package, and this had never occurred before. Gerges declared that he had access to Chaitin's private mailbox, that he checked the mailbox "a number of times" between November 12 and "the latter part of November," and never saw any notices of packages.
The trial court denied Defendants' motion to set aside the stipulated judgment. It concluded that the mandatory provision in section 473(b) did not apply to the judgment entered here. As for discretionary relief, it found that Defendants had not met their burden of demonstrating surprise or excusable neglect. The court noted that Defendants' counsel had not explained why Chaitin had not checked his mailbox between December 2 and December 7 or collected the packages on December 8.
II. DISCUSSION
Defendants contend the trial court erred when it denied relief under the mandatory provision of section 473(b). Alternatively, they argue the court abused its discretion when it denied relief under the discretionary provision of section 473(b).
A. Mootness
As a threshold question, Plaintiffs argue this appeal is moot because even if we were to find that Defendants are entitled to relief under section 473(b), the trial court will be duty-bound to enter the stipulated judgment since Defendants concede they failed to make the October 2014 payment on time. Defendants do not respond to the mootness issue. The record on appeal does not contain a copy of the entire Agreement, only excerpts Plaintiffs quoted in their moving papers. Moreover, Defendants raised defenses in their opposition to the motion for entry of judgment that have not been briefed in this court, and the propriety of granting the motion for entry of judgment is not before us in this appeal. For these reasons, we cannot say the appeal is moot.
B. General Principles Governing Relief Under Section 473(b)
"Section 473(b) contains two distinct provisions for relief from default." (Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 838 (Even Zohar).) One "makes relief discretionary with the court; the other makes it mandatory." (Martin Potts & Associates, Inc. v. Corsair, LLC (2016) 244 Cal.App.4th 432, 438 (Martin Potts).)
The mandatory provision states: "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 client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect." (§ 473(b).) The California Supreme Court has described the mandatory provision as "a narrow exception to the discretionary relief provision for default judgments and dismissals" (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 257 (Zamora)) that "narrowly covers only default judgments and defaults that will result in the entry of judgments" (Even Zohar, supra, 61 Cal.4th at p. 838).
The discretionary provision is "broad in scope." (Even Zohar, supra, 61 Cal.4th at p. 838.) It provides: " 'The court may, upon 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.' " (§ 473(b).) "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." (§ 473(b)).)
The two provisions in section 473(b) differ in several respects. (Martin Potts, supra, 244 Cal.App.4th at p. 438.) First, the mandatory relief provision is available only for defaults, default judgments, and dismissals, while discretionary relief is available for a broader array of orders. (Ibid., citing Henderson v. Pacific Gas & Electric Co. (2010) 187 Cal.App.4th 215, 228-229 (Henderson) [mandatory relief not available to set aside summary judgment order] and Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 620 [listing types of dismissals falling outside the scope of the mandatory relief provision].) In contrast, the discretionary provision allows a trial court to relieve a party from a "judgment, dismissal, order, or other proceeding taken against" a party or the party's legal representative. (§ 473(b).) Second, "the mandatory relief provision is broader in scope insofar as it is available for inexcusable neglect [citation], while discretionary relief is reserved for 'excusable neglect' [citations]." (Martin Potts, at p. 438.) Third, "mandatory relief comes with a price—namely, the duty to pay 'reasonable compensatory legal fees and costs to opposing counsel or parties' " (Ibid., quoting § 473(b).)
"The general underlying purpose of section 473(b) is to promote the determination of actions on their merits. [Citation.] The additional, more specific purposes of section 473(b)'s provision for relief based on attorney fault is to 'relieve the innocent client of the burden of the attorney's fault, to impose the burden on the erring attorney, and to avoid precipitating more litigation in the form of malpractice suits.' [Citations.] To protect the opposing party, a court that grants [mandatory] relief based on an attorney's affidavit of fault must 'direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.' (§ 473(b).) The court may also order the offending attorney to pay a penalty of no more than $ 1,000 and a similar amount to the State Bar of California's Client Security Fund. (§ 473, subd. (c)(1)(A), (B).)" (Even Zohar, supra, 61 Cal.4th at p. 839.)
C. Standards of Review
The applicability of section 473(b) is a question of statutory interpretation, which we review de novo. (Martin Potts, supra, 244 Cal.App.4th at p. 437, citing Lee v. Hanley (2015) 61 Cal.4th 1225, 1232.) Whether section 473(b)'s "requirements have been satisfied in any given case is a question we review for substantial evidence where the evidence is disputed and de novo where it is undisputed." (Martin Potts, at p. 437.)
In reviewing a trial court's granting or denying section 473(b) discretionary relief (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478 [relief granted]; Monsan Homes v. Pogrebneak (1989) 210 Cal.App. 3d 826, 829 [relief denied]), our customary deference is tempered by the policy favoring trial on the merits. Any doubt should be resolved in favor of the party who sought timely relief under section 473(b), and an order denying section 473(b) discretionary relief is therefore subject to closer scrutiny than an order granting relief. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980; Murray & Murray v. Raissi Real Estate Development, LLC (2015) 233 Cal.App. 4th 379, 385; Huh v. Wang (2007) 158 Cal.App.4th 1406, 1419-1420 (Huh).) The latitude of our deference further depends on the nature of the record. While we respect and defer to the trial court's role to assess credibility, here we are called upon to review exactly the same record as the trial court. We therefore reach our conclusion with less deference to its exercise of discretion.
D. The trial court did not err when it denied mandatory relief under section 473(b) .
We begin by emphasizing that this case does not involve a clerk's entry of default or a default judgment. Defendants appeared in the action; they filed answers and attacked the pleadings with a demurrer and a motion to strike. The court did not take their default or enter a default judgment against them. The parties litigated the matter and the case was settled at mediation. In addition, this case does not involve any kind of dismissal. Plaintiffs' action was not dismissed. They settled the case and later obtained a stipulated judgment under the terms of the settlement agreement. Under the plain language of section 473(b), Defendants are not entitled to mandatory relief because this case does not involve a default, a default judgment, or a dismissal.
Citing In re Marriage of Hock & Gordon-Hock (2000) 80 Cal.App.4th 1438 (Hock), Defendants contend they are entitled to mandatory relief because the order on the motion for entry of judgment is the procedural equivalent of a default judgment. Defendants argue there is a split of authority on whether the mandatory provision in section 473(b) applies to dispositions other than defaults, default judgments, and dismissals.
Indeed, California courts are divided on this question. Some courts have construed the mandatory provision broadly to reach circumstances deemed to be procedural equivalents of defaults, default judgments or dismissals based on the rationale that a party should not be deprived of a hearing on the merits due to attorney neglect. (See, e.g., Hock, supra, 80 Cal.App.4th at p. 1443 [mandatory relief applied to judgment entered after attorney failed to appear at trial] and cases cited therein; Avila v. Chua (1997) 57 Cal.App.4th 860, 868 [mandatory relief from summary judgment after court struck untimely opposition]; Yeap v. Leake (1997) 60 Cal.App.4th 591 (Yeap) [majority held mandatory relief available from defense judgment rendered after counsel and client failed to attend arbitration, reasoning the judgment was analogous to default; dissent concluded mandatory provision did not apply].)
The "very same appellate district and division . . . that decided Yeap has now all but repudiated that decision's broad interpretation of section 473(b)'s mandatory provision ... ." (Noceti v. Wharton (2014) 224 Cal.App.4th 1062, 1067 (Noceti), citing Hossain v. Hossain (2007) 157 Cal.App.4th 454, 456, 458 (Hossain).)
More recent cases have limited construction of the mandatory provision to its express terms and denied mandatory relief when the judgment or order at issue is not a default, default judgment, or dismissal. (See, e.g., Peltier v. McCloud River R.R. Co. (1995) 34 Cal.App.4th 1809 (Peltier) [discretionary dismissal for delay in prosecution]; English v. IKON Business Solutions, Inc. (2001) 94 Cal.App.4th 130 (English) [summary judgment]; Prieto v. Loyola Marymount University (2005) 132 Cal.App.4th 290 [same]; Vandermoon v. Sanwong (2006) 142 Cal.App.4th 315, 317-321 (Vandermoon) [properly noticed defendant who did not attend trial not entitled to mandatory relief since judgment followed an uncontested trial, not a default or a default judgment]; Hossain, supra, 157 Cal.App.4th 454 [order enforcing settlement agreement]; Las Vegas Land & Development Co., LLC v. Wilkie Way, LLC (2013) 219 Cal.App.4th 1086, 1091 [summary judgment]; and Noceti, supra, 224 Cal.App.4th 1062 [defense judgment after plaintiffs' counsel failed to appear for trial was not a dismissal under § 473(b)].) This line of cases has been described as representing the "better view." (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (2016 Rutter Group) § 5:300.8, p.5-85.) The trial court and the parties describe it as the "majority view," a fair designation we adopt for reference.
The lead case expressing the majority view is English, supra, 94 Cal.App.4th 130. (See Vandermoon, supra, 142 Cal.App.4th at pp. 320-321; Hossain, supra, 157 Cal.App.4th at pp. 458-459; and Huh, supra, 158 Cal.App.4th at pp. 1415-1417.) "The English court based its conclusion in part on a comprehensive examination of the legislative history of [section 473(b)], and the cases interpreting that history." (Hossain, at p. 458, citing English, at pp. 138-143.)
Interpreting the statutory language, the English court stated: "As used in the mandatory provision of section 473(b), 'default' carries its narrower meaning. The mandatory provision of the statute requires the court to vacate not any 'default,' but only a 'default entered by the clerk ... which will result in entry of a default judgment ... .' By qualifying the word 'default' in this manner, the Legislature plainly conveyed its intent to use the word in its narrower sense. Thus, the mandatory provision of section 473(b) applies to a 'default' entered by the clerk (or the court) when a defendant fails to answer a complaint, not to every 'omission' or 'failure' in the course of an action that might be characterized as a 'default' under the more general meaning of the word." (English, supra, 94 Cal.App.4th at p. 143, fn. omitted.) "A 'default judgment' within the meaning of section 473(b) is a judgment entered after the defendant has failed to answer the complaint and the defendant's default has been entered. [Citations.]" (Hossain, supra, 157 Cal.App.4th at pp. 458-459, citing English, at pp. 143-144.)
In Huh, this court agreed with "the cogent analysis in English, which is faithful to legislative intent and consistent with established principles of statutory construction. As the English court said: 'It is not an appellate court's task, nor, indeed, its prerogative, when interpreting a statute, to extend the scope of the statute to encompass situations "analogous" to those the statute explicitly addresses. Rather, an appellate court's task is simply to determine what the Legislature meant by the words it used, relying first and foremost on the words themselves.' " (Huh, supra, 158 Cal.App.4th at p. 1417, citing English, supra, 94 Cal.App.4th at p. 144.) In Huh, this court adopted the majority view in the context of an unopposed summary judgment and concluded that "the mandatory relief provision applies only to defaults, default judgments, and dismissals," and not to their procedural equivalents. (Huh, at p. 1415.) Without expressly discussing the split in authority, the California Supreme Court has stated that the mandatory provision in section 473(b) "narrowly covers only default judgments and defaults that will result in the entry of judgments." (Even Zohar, supra, 61 Cal.4th at p. 838.)
Even though the trial court relied on Huh in its written order, Defendants do not mention Huh in their opening brief. Nor do they acknowledge the Supreme Court's statement in Even Zohar. Instead, they argue that there are problems with the majority view, pointing to Vandermoon and English. Defendants argue "attorneys can have bad moments" and forget to calendar things and that those lapses do not mean "such attorneys are inept or not conscientious." Defendants assert that the Vandermoon court's statement that the mandatory provision was not meant to protect " 'inept attorneys,' " directly conflicts with the purpose of the mandatory provision as stated in Matera v. McLeod (2006) 145 Cal.App.4th 44, which is "to relieve the client of the burden caused by the attorney's error, impose a burden on the attorney instead, and avoid additional malpractice litigation." (Id. at p. 63, footnote omitted; see also Even Zohar, supra, 61 Cal.4th at p. 838.)
We do not perceive any conflict between the passage from Vandermoon and the purpose of the mandatory provision. The Vandermoon court stated: " '[W]e disagree with the growing number of decisions, including Avila ..., Yeap ..., and ... Hock ... which, in understandable, yet ultimately misguided quests to salvage cases lost by inept attorneys, have applied the mandatory provision far beyond the limited confines the Legislature intended.' " (Vandermoon, supra, 142 Cal.App.4th at p. 321, quoting English, supra, 94 Cal.App.4th at p. 148.) The conclusion that cases following the minority view have applied the mandatory provision to situations beyond those intended by the Legislature in no way conflicts with the purpose of the mandatory relief provision.
Defendants assert that the majority view leaves defendants and plaintiffs on an unequal footing thereby creating equal protection issues, arguing: "there are a number of ways a case can result in a default dismissal. There is, however, only one way a defendant can have a default judgment provided for under the mandatory relief provisions of section 473(b) according to the Vandermoon holding and that is at the onset of the case by failing to respond to the complaint." Defendants do not develop this point further.
The discretionary relief provision in section 437(b) was codified in 1872 and has remained largely unchanged. (Zamora, supra, 28 Cal.4th at p. 254.) The mandatory relief provision was added in 1988 and as originally enacted, provided relief only from " 'a default judgment.' " (English, supra, 94 Cal.App.4th at p. 138.) It was amended in 1991, to require the court to grant relief from a " 'resulting default.' " (Id. at p. 139.) And in 1992, the mandatory provision was amended again to add the word "dismissal" to put plaintiffs on an equal footing with defendants and give them some of the mandatory relief that had been available to defendants since the 1988 amendment. (Id. at p. 140; Noceti, supra, 224 Cal.App.4th at p. 1066.) In light of this legislative history, we are not persuaded by Defendants' equal protection argument.
Defendants complain that the majority view "contradicts the almost century long policy of the law to decide cases on the merits" and "ignore[s] the fact that the Legislature expressly provided where the mandatory relief provision does not apply, namely [Code of Civil Procedure] section 583.310." The latter point seems to be a reference to the last sentence in section 473(b), which states: "However, this section does not lengthen the time within which an action shall be brought to trial pursuant to Section 583.310." Code of Civil Procedure section 583.310 provides that an action shall be brought to trial within five years after it is commenced. That the Legislature chose to limit application of section 473(b) in this way does not mean that this is the only limitation on the relief provided in the statute. The express wording of the mandatory relief provision also limits its application. As this court has stated, our adherence to the majority view "is faithful to legislative intent and consistent with established principles of statutory construction." (Huh, supra, 158 Cal.App.4th at p. 1417.) None of the points raised by Defendants persuades us to depart from the reasoning in Huh.
Since the order granting Plaintiffs' motion for entry of judgment was not a default, a default judgment, or a dismissal, we conclude that Defendants are not entitled to mandatory relief under section 473(b). In light of our conclusion, we do not reach the parties' contentions regarding the adequacy of Chaitin's and Gerges's declarations to show attorney fault under the mandatory provision in section 473(b).
E. The court did not abuse its discretion when it denied discretionary relief under section 473(b) .
Defendants contend the trial court abused its discretion when it denied relief under the discretionary provision in section 473(b). Defendants do not cite any legal authority to support their position and do not expressly state which ground for relief they rely on. We understand their argument to be based on inadvertence or excusable neglect by counsel.
" 'A party who seeks [discretionary] relief under section 473 on the basis of mistake or inadvertence of counsel must demonstrate that such mistake, inadvertence, or general neglect was excusable because the negligence of the attorney is imputed to his client and may not be offered by the latter as a basis for relief.' [Citation.] In determining whether the attorney's mistake or inadvertence was excusable, 'the court inquires whether "a reasonably prudent person under the same or similar circumstances might have made the same error." ' [Citation.] In other words, the discretionary relief provision of section 473 only permits relief from attorney error 'fairly imputable to the client, i.e., mistakes anyone could have made.' [Citation.] 'Conduct falling below the professional standard of care, such as failure to timely object or to properly advance an argument, is not therefore excusable. To hold otherwise would be to eliminate the express statutory requirement of excusability and effectively eviscerate the concept of attorney malpractice.' " (Zamora, supra, 28 Cal.4th at p. 258.)
To obtain discretionary relief, Defendants have the burden to demonstrate "that due to some mistake, either of fact or of law, of [their own] or of [their] counsel, or through some inadvertence, surprise or neglect which may properly be considered excusable, the judgment or order from which [they seek] relief should be reversed." (Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1410.) The burden is on the moving party to show that the neglect was excusable, such that the order at issue could not have been avoided through the exercise of ordinary care. (Jackson v. Bank of America (1983) 141 Cal.App.3d 55, 58.)
Where the case involves neglect by an attorney, the court inquires whether a reasonably prudent attorney might have made the same error under similar circumstances. (Generale Bank Nederland v. Eyes of the Beholder Ltd. (1998) 61 Cal.App.4th 1384, 1399.) The inexcusable neglect of an attorney is usually not a proper basis for granting discretionary relief under section 473. (Huh, supra, 158 Cal.App.4th at p. 1419, citing Elston v. City of Turlock (1985) 38 Cal.3d 227, 236, fn. 6.)
After Defendants successfully defeated Plaintiffs' effort to obtain the stipulated judgment on an ex parte basis, the attorneys agreed to a December 9 hearing date for the noticed motion. Defendants do not claim their counsel failed to calendar the hearing date. Plaintiffs presented evidence their moving papers were delivered to Chaitin's mailbox service on November 12. Chaitin declared that he did "not remember receiving any notices of packages in November," that it was "possible that [he] received a notice of such [a] package and put it away and forgot about it," but that he did "not recall ever forgetting about receiving a notice of a package at the counter." Chaitin stated it was possible the staff at the mailbox service "inadvertently did not provide [him] with notice of the package." But he did not investigate the matter and did not know one way or the other.
Plaintiffs also presented evidence that their reply papers were delivered to Chaitin's mailbox service on December 2. Chaitin first saw the December 2 notice regarding the reply papers when he checked his mailbox on Sunday, December 7. There was no evidence the mailbox service delayed placing the notices in Chaitin's box. Indeed, Chaitin declared that the "mailbox company's employees always leave a note that a package is waiting for me ... ." Thus, the evidence compels the conclusion that Defendants' counsel had not checked the mailbox for at least five days prior to December 7. If they had, they would have seen both the reply papers and the moving papers in time to request a continuance. To compound matters, after receiving the notices on December 7, Chaitin did not return the next business day to retrieve the packages. Instead, he waited until December 9. By then, it was too late to request a continuance.
In our view, a reasonably prudent attorney with a practice that involves law and motion matters would not go five days without checking the mail nor delay retrieving packages after not checking the mail for several days. The record amply supports the trial court's conclusion that Defendants failed to establish excusable neglect by their counsel and therefore were not entitled to discretionary relief under section 473(b).
III. DISPOSITION
The court's March 3, 2015 order denying Defendants' motion to set aside the stipulated judgment is affirmed. Plaintiffs are entitled their costs on appeal. Plaintiffs' request for appellate attorney fees is properly directed to the trial court. (Huh, supra, 158 Cal.App.4th at p. 1426, fn. 6.)
/s/_________
Grover, J.
WE CONCUR:
/s/_________ Rushing, P.J. /s/_________ Walsh, J.