Opinion
B229767
11-07-2011
CLAUDIA ARIAS, Plaintiff and Respondent, v. LIONEL GIRON, Defendant and Appellant.
Law Offices of Dulio R. Chavez, II, Dulio R. Chavez, II and Jason J. Allison for Defendant and Appellant. Law Offices of Clemente Franco, Clemente Franco for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC 416681)
APPEAL from an order of the Superior Court of Los Angeles County, Teresa Sanchez-Gordon, Judge. Affirmed.
Law Offices of Dulio R. Chavez, II, Dulio R. Chavez, II and Jason J. Allison for Defendant and Appellant.
Law Offices of Clemente Franco, Clemente Franco for Plaintiff and Respondent.
INTRODUCTION
Defendant and appellant Lionel Giron appeals from an order denying his motion in equity to set aside a default and default judgment on the ground of extrinsic mistake. Defendant contends that the trial court erred by concluding that the motion was barred by the doctrine of res judicata, and not considering the substance of defendant's extrinsic mistake argument. We affirm.
BACKGROUND
A. Default Judgment
On June 26, 2009, plaintiff and respondent Claudia Arias filed a complaint alleging causes of action for assault, battery, and infliction of emotional distress, arising out of an alleged physical confrontation between her and defendant. On July 17, 2009, defendant was served with the complaint. On October 8, 2009, plaintiff filed a request for entry of default, and a default was entered against defendant. On February 25, 2010, a default judgment was entered in the amount of $310,590.
B. First Motion to Set Aside Default
On July 14, 2010, defendant, represented by Dulio R. Chavez, filed a motion to set aside default pursuant to Code of Civil Procedure section 473 (first motion), on the ground of attorney mistake, supported by attorney Chavez's declaration stating, in effect, that he was confused and erroneously believed that defendant's bankruptcy proceeding was still pending at the time defendant's answer to the complaint was due. Plaintiff opposed the motion contending that defendant was not represented by attorney Chavez, defendant failed to show that the default was caused by his attorney, and defendant failed to seek relief from default within a reasonable time. The minute order states that the trial court denied the motion "for the reasons stated on the record," but the record before us does not include a transcript of the hearing on the motion. The record does not reflect that defendant appealed the trial court's order denying the first motion and, except for the trial court's ruling that the ruling on the first motion barred defendant's second motion, discussed post, it is not the subject of this appeal.
All statutory references are to the Code of Civil Procedure, unless otherwise indicated.
Unsupported by the record, defendant states that, "the trial court . . . denied [defendant's] statutory motion to set aside based on attorney mistake by determining that [defendant] was not represented by counsel during the time the default was taken. Therefore, there could be no relief based on 'attorney mistake.'" As discussed post, the inadequacy of the record is another ground for the affirmance. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295-1296.)
C. Second Motion to Set Aside Default
On September 17, 2010, defendant, through attorney Chavez, filed a motion to set aside default brought on equitable grounds (second motion) based on defendant's alleged extrinsic mistake of "rel[ying] on the Law Offices of Dulio R. Chavez, II to represent him in this matter." The motion also stated that defendant "was confident that his matter was handled and it did not get handled properly but for the extrinsic mistake that Mr. Chavez thought this matter was stayed due to active bankruptcy proceedings."
The second motion was supported by the declarations of defendant, attorney Chavez, and Jason J. Allison, an associate of the law firm, stating essentially the same facts asserted in the first motion. Defendant and attorney Chavez submitted declarations stating that in July 2009, they discussed the complaint and attorney Chavez agreed to represent defendant. Allison stated that attorney Chavez gave him the complaint and instructed him to call plaintiff's attorney to "ascertain the date of service and then obtain a stipulation to a date certain for Defendant's response to the Complaint." Allison told plaintiff's counsel "that Defendant had retained Mr. Chavez to represent him in this matter. We discussed the date of service and agreed to a date certain for Defendant's response. We also spoke about the case in general terms."
Consistent with Allison's declaration, the declaration of plaintiff's counsel in support of plaintiff's opposition to the first motion stated that on or about August 8, 2009, plaintiff's counsel received a telephone call from Chavez's office "inquiring about the service date of the summons and complaint." Plaintiff's counsel confirmed that conversation in a letter to Chavez dated August 31, 2009, which also stated that Chavez's office "represent[ed] that a responsive pleading would be forthcoming."
Attorney Chavez stated that when he met with defendant in July 2009, to discuss the complaint, Chavez referred defendant to a bankruptcy attorney who thereafter advised Chavez that defendant had filed a bankruptcy proceeding which stayed the civil litigation. The record does not contain any direct evidence that defendant filed a bankruptcy petition, nor does the record reflect when Chavez was advised that a bankruptcy proceeding had been filed that stayed the litigation.
Defendant and Chavez declared that they agreed that if the civil action were to "continue," Chavez "would take all reasonable steps to represent [defendant] and protect [defendant's] interests," including filing an answer to the complaint. Chavez stated that he "represented to defendant that if the bankruptcy did not materialize or if the bankruptcy did not discharge this immediate lawsuit, that [Chavez] would represent [defendant] in this matter." Allison stated that Chavez told him that "if the Bankruptcy did not 'go through' we would have to file an Answer in this case."
The declaration of plaintiff's counsel in support of plaintiff's opposition to the first motion attached a letter from Chavez dated on or about September 3, 2009, received by plaintiff's counsel, stating that Chavez did not represent defendant. The declaration also attached a letter from plaintiff's counsel to defendant, dated September 8, 2009, stating that Chavez advised plaintiff's counsel that Chavez did not represent defendant, and Chavez directed plaintiff's counsel to contact defendant directly. The letter advised defendant that if plaintiff's counsel did not receive a response to the complaint by September 11, 2009, plaintiff's counsel would request a default.
Defendant and Chavez declared that in January 2010, defendant advised Chavez that "there was a problem with" defendant's bankruptcy. Chavez stated that "[i]t was, and is, my understanding that the bankruptcy action had been ruled deficient, in part because defendant's filings were not complete. . . . However, I did not realize that the bankruptcy action had actually been dismissed, thus lifting the stay. I was under the belief that the bankruptcy filing could be amended. I had the further understanding that defendant would retain another bankruptcy attorney and refile, or amend the petition. Apparently that did not happen. [¶] In reality, the bankruptcy petition was dismissed and apparently, defendant did not refile the petition." Defendant stated that in January 2010, "I told Mr. Chavez that the matter was dismissed. However, after discussion with Mr. Chavez, I was not sure if my Bankruptcy was completely dismissed; I thought I might be able to hire another attorney to made [sic] amended filings. In any event, I was of the understanding that he would file an Answer to the Complaint since my Bankruptcy matter was not active and the stay was lifted. I was confident that Mr. Chavez understood the situation and that he would file the Answer within a few days of that meeting and prior to him leaving on vacation."
Chavez's declaration also provided that, "After meeting with defendant in January to discuss the matter, I left the country on vacation. During that time the default judgment in this matter was entered." Defendant stated that, "[a]fter Mr. Chavez returned from vacation, I informed him that a default and default judgment were taken against me in this matter. I was upset because I had been relying on him to represent me in the case by filing an Answer and presenting my defense. [¶] Had I known otherwise, I would have made sure Mr. Chavez filed the Answer before leaving on vacation or I would have found another attorney to do it in his stead."
Plaintiff opposed the second motion contending that: (i) the denial of defendant's first motion barred it based on the doctrine of res judicata; (ii) defendant did not state a valid reason under which the requested relief is warranted; (iii) defendant did not act diligently in requesting the relief; (iv) and granting the motion would result in prejudice to plaintiff.
The captions of defendant's reply to the opposition to the second motion stated that, "Defendant is Not Claiming 'Attorney Mistake'," and "Defendant is Claiming Extrinsic Mistake—His Own." Defendant argued in his reply that, "Indeed, as Plaintiff points out, this motion is brought under essentially the same facts as the prior motion seeking statutory relief. However, the prior motion relied on the mistaken assertion that the facts showed attorney mistake which would allow Defendant relief under CCP § 473(b). Instead, the facts showed unequivocally that Defendant was not represented by Mr. Chavez during the relevant time period (if ever at all) thus making him ineligible for such relief (as attorney mistake was an impossibility). Had Defendant been under the proper understanding that he was not represented, but that he merely thought he was represented, he would have sought relief pursuant to equitable grounds such as in the present motion. Because relief is mandatory under CCP § 473(b), and because Defendant thought he was represented during the relevant time period, it appeared unnecessary to bring the first motion under equitable grounds." Defendant concluded that he "was under the mistaken understanding that his interests in this matter were represented by the Law Offices of Dulio R. Chavez, II."
At the hearing on the second motion, the trial court observed that "in defendant's prior motion to set aside the judgment, defendant sought relief based upon statutory grounds that is CCP section 473. Defendant asserted attorney mistake in [the] prior motion. The court denied the defendant's prior motion. In the instant case, defendant now seeks relief on equitable grounds by asserting extrinsic mistake. [¶] Defendant appears to again assert attorney mistake in the instant motion." The trial court continued, "In the instant case, defendant appears to be moving to set aside the judgment on the basis of mistake which was asserted in his previous set aside motion. As such, defendant's motion is barred [pursuant to Darlington v. Basalt Rock Co. (1961) 188 Cal.App.2d 706]. [¶] Even assuming that the instant motion is not barred, defendant offers no evidence to show that default was entered due to extrinsic mistake. Defendant essentially asserts that his attorney made a mistake, and thus, default judgment was improperly entered. As noted above, the court already determined that attorney mistake was not a proper ground pursuant to CCP section 473(b) to grant defendant's prior motion to set aside the judgment. Accordingly, defendant cannot sufficiently show extrinsic mistake."
Defendant's counsel argued that defendant's second motion was not barred because each motion was based on different grounds; the first motion was based on attorney mistake, and the second motion was based on defendant's mistaken belief that he was being represented by counsel. The trial court denied defendant's second motion to set aside the default and default judgment.
DISCUSSION
A. Standard of Review
"A challenge to a trial court's order on a motion to vacate a default on equitable grounds is reviewed for an abuse of discretion. (Rappleyea v. Campbell [(1994)] 8 Cal.4th [975,] 981.)" (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 503.) "'When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court.' (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479 [243 Cal.Rptr. 902, 749 P.2d 339].)" (Walker v. Superior Court (1991) 53 Cal.3d 257, 272; see also Villanueva v. City of Colton (2008) 160 Cal.App.4th 1188, 1200.) A trial court abuses its discretion when it exceeds the bounds of reason by making a determination that is arbitrary, capricious, or patently absurd. (In re Stephanie M. (1994) 7 Cal.4th 295, 318.) We apply a de novo standard of review to an issue of law—whether defendant's second motion was barred under res judicata by the denial of the first motion. (Robbins v. Foothill Nissan (1994) 22 Cal.App.4th 1769, 1774.)
B. Res Judicata
Defendant contends that the trial court erred in denying the second motion on the ground that it was barred by the doctrine of res judicata, which presumably includes the doctrine of collateral estoppel in this case, because the trial court denied defendant's previous motion. (See Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896, fn. 7 ["the term 'res judicata' has been used to encompass both claim preclusion and issue preclusion . . . [although] the two terms have distinct meanings"].)
The doctrine of res judicata or claim preclusion precludes parties to an action from relitigating a cause of action a second time. Collateral estoppel or issue preclusion is an aspect of res judicata. (Mycogen Corp. v. Monstanto Co., supra, 28 Cal.4th at pp. 896-897.) "Under collateral estoppel, a prior judgment between the same parties operates as an estoppel or conclusive adjudication as to those issues that were actually litigated and necessarily determined in the prior action." (Groves v. Peterson (2002) 100 Cal.App.4th 659, 667; Rohrbasser v. Lederer (1986) 179 Cal.App.3d 290, 297.) Denial of motion to vacate "is not a bar when it fails to raise the same grounds urged in the later action." (Darlington v. Basalt Rock Co., supra, 188 Cal.App.2d at p. 709.)
Defendant contends that his second motion was not barred by the trial court's denial of the first motion because the two motions were based on different grounds. Defendant argues, "The hearing on [the first] motion did not explore any of the issues or facts as far as the conduct of [defendant] would be applied to a ground for relief based on his own mistake. The Court ruled there was no attorney mistake . . . . [¶] Accordingly, the prior hearing regarding attorney mistake does not bar the later motion in equity as the core issue of extrinsic mistake was not presented or considered." Defendant's contention that the denial of the first motion did not bar his second motion is premised on what transpired at the hearing on the first motion. The record, however, does not include a transcript of the hearing on the first motion, so we are unable to determine the grounds argued at the hearing, which may have been different than those asserted in the motion itself. Defendant has failed in his responsibility to provide an adequate record on appeal. (Maria P. v. Riles, supra, 43 Cal.3d at pp. 1295-1296.) Nothing in California Rules of Court, rule 8.130, subdivision (a)(4), which allows this court to order the record to be augmented with a reporter's transcript, relieves defendant of its obligation of providing an adequate record on appeal.
Because defendant failed to furnish an adequate record of the proceedings, defendant's challenge to the trial court's ruling on the res judicata issue must be resolved against him. (Maria P. v. Riles, supra, 43 Cal.3d at pp. 1295-1296.) Moreover, as discussed post, even if the trial court did err by finding that the second motion was barred, it did not err regarding the merits of the motion.
C. Extrinsic Mistake
Defendant contends that the trial court abused its discretion by failing to set aside the judgment on the basis of extrinsic mistake. Based on the evidence in the record concerning defendant's extrinsic mistake, we reject that contention.
"[A] trial court may still vacate a default on equitable grounds even if statutory relief is unavailable. [Citation.]" (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 981.) The trial court has inherent equity power to grant relief from a default or default judgment procured by extrinsic mistake. (Gibble v. Car-Lene Research, Inc. (1998) 67 Cal.App.4th 295, 314.) "'Extrinsic mistake' refers to circumstances outside of the litigation that have prevented a party from obtaining a hearing on the merits." (Cruz v. Fagor America, Inc., supra, 146 Cal.App.4th at p. 502.) "'To set aside a judgment based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second[], the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last[], the moving party must demonstrate diligence in seeking to set aside the default once . . . discovered.' [Citation.]" (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 982, italics omitted.)
Defendant argues that the trial court erred because the second motion was made on the grounds of his alleged extrinsic mistake, and the trial court did not consider whether defendant's extrinsic mistake, as opposed to his attorney's mistake, compelled equitable relief from the default. Although it is unclear whether the trial court considered and rejected defendant's contention based on his own alleged extrinsic mistake, we presume that the trial court considered the issue. "'"All intendments and presumptions are indulged to support [the order] on matters as to which the record is silent, and error must be affirmatively shown."' (Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [86 Cal. Rptr. 65, 468 P.2d 193].)" (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140.) In Roman v. Liberty University, Inc. (2008) 162 Cal.App.4th 670, plaintiff contended that the trial court abused its discretion by failing to balance factors relevant to defendant's motion based on the doctrine of forum non conveniens. The court stated, "The record shows that both parties briefed the relevant factors, and plaintiff's counsel argued those factors in the trial court at the hearing on the motion. We presume the trial court considered the appropriate factors . . . ." (Id. at p. 684; see Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 67 ["In the absence of evidence to the contrary, we presume that the trial court considered the relevant factors [in ruling on a motion for attorney fees]; GGIS Ins. Services, Inc. v. Superior Court (2008) 168 Cal.App.4th 1493, 1504, fn. 1 ["We presume that the trial court considered all of the papers filed in connection with Petitioners' motion for summary adjudication, and Petitioners have not shown otherwise"]; Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1214 ["we must presume the trial court considered [defendant's] argument . . ."].) Defendant has not shown that the trial court failed to consider his contention that he committed an extrinsic mistake. We therefore presume that trial court considered and rejected defendant's contention.
Defendant also contends that he "established" as an evidentiary matter that the default judgment was entered due to his extrinsic mistake in believing Chavez would file an answer to the complaint on his behalf. Although defendant does not specifically contend that substantial evidence was lacking in a rejection of his assertion of extrinsic mistake or that sufficient evidence supported his assertion, his evidentiary contentions can be construed fairly as based on such arguments.
"Under the substantial evidence standard of review, our review begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the trial court's factual determinations." (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 501.)
In denying defendant's motion, the trial court stated that, "Even assuming that the instant motion is not barred, defendant offers no evidence to show that default was entered due to extrinsic mistake." Again, although it is unclear whether the trial court denied the motion based upon defendant's mistake or the mistake by Chavez, there is insufficient evidence in the record to support a finding that defendant's mistake was excusable and therefore extrinsic.
If the trial court did not deny defendant's motion on that basis, nevertheless, an appealed judgment or order correct on any theory will be affirmed, even when the trial court's reasoning may have been erroneous. (Muller v. Fresno Community Hospital & Medical Center (2009) 172 Cal.App.4th 887, 906-907; Perlin v. Fountain View Management, Inc. (2008) 163 Cal.App.4th 657, 663-664.)
"When a default judgment has been obtained, equitable relief may be given only in exceptional circumstances. '[W]hen relief under section 473 is available, there is a strong public policy in favor of granting relief and allowing the requesting party his or her day in court. Beyond this period there is a strong public policy in favor of the finality of judgments and only in exceptional circumstances should relief be granted.' [Citations.]" (Rappleyea v. Campbell, supra, 8 Cal.4th at pp. 981-982; In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1071.) "To the extent that the court's equity power to grant relief [from default] differs from its statutory power [citation], the equity power must be considered narrower, not wider. [Citation.]" (Orange Empire Nat. Bank v. Kirk (1968) 259 Cal.App.2d 347, 353.)
"'"Extrinsic mistake involves the excusable neglect of a party. [Citation.] When this neglect results in an unjust judgment, without a fair adversary hearing, and the basis for equitable relief is present, this is extrinsic mistake. [Citation.]"'" (Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 290; Heyman v. Franchise Mortgage Acceptance Corp. (2003) 107 Cal.App.4th 921, 926.) "[A] motion to vacate a judgment should not be granted where the party requesting equitable relief was guilty of inexcusable neglect. (In re Marriage of Park (1980) 27 Cal.3d 337, 345 [165 Cal.Rptr. 792, 612 P.2d 882].)" (Aheroni v. Maxwell (1988) 205 Cal.App.3d 284, 293.) The moving party has the burden of showing good cause for relief from a default or a default judgment. (Tunis v. Barrow (1986) 184 Cal.App.3d 1069, 1079-1080.) Defendant failed to sustain his burden that his mistake was excusable.
Defendant asserts his excusable neglect was in believing that he had retained counsel to represent him in the litigation and that counsel would comply with the time requirements. He acknowledges that he had not retained counsel, and represents on appeal that the trial court denied his first motion finding that defendant was not represented by counsel at the time the default was taken.
In September 2009, plaintiff's counsel received a letter from Chavez stating that Chavez did not represent defendant. Thereafter, in September 2009, plaintiff's counsel sent a letter to defendant stating that Chavez advised plaintiff's counsel that Chavez had not been retained to represent defendant and Chavez directed plaintiff's counsel to contact defendant directly. The letter also advised defendant that if plaintiff's counsel did not receive a response to the complaint, plaintiff's counsel would request a default. Defendant, who apparently is an attorney, therefore had notice that Chavez was taking the position that he was not representing defendant at that time, and that a default would be taken if defendant did not file a response to the complaint or retain another attorney to do so.
The two September 2009 letters were submitted by plaintiff in opposition to the first motion. Because plaintiff argued in opposition to the second motion that it was barred by the ruling on the first motion under the doctrine of res judicata, we presume that the trial court necessarily considered those two letters when ruling on the res judicata argument in the second motion.
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Defendant testified that in January 2010, it was his "understanding" that Chavez would file an answer to the complaint, and he was "confident" that Chavez would file an answer prior to leaving on vacation. Defendant also states that "the issue [is] whether [defendant] reasonably relied upon his belief that Mr. Chavez was operating as his attorney." But the two September 2009 letters establish that Chavez was no longer representing defendant's interests in this case and that plaintiff was expecting defendant or someone else, but not Chavez, to file an answer. In light of this knowledge, defendant's subsequent conduct concerning the outstanding civil complaint against him was unreasonable. There is no evidence that Chavez ever reversed his position that he was not acting as defendant's attorney, in writing or otherwise, and there is no evidence that defendant attempted to retain other counsel to represent him. Moreover, the record does not disclose the basis of defendant's purported understanding that Chavez would file an answer to the complaint, and, in any event, any such understanding would have been unreasonable. The record does not reflect that defendant instructed Chavez to file the answer to the complaint before Chavez left for vacation, or that Chavez agreed to do so. In addition, although defendant stated that in January 2010, he told Chavez that defendant's bankruptcy proceeding had been dismissed, thereby lifting the stay of the litigation, he also stated that "after discussion with Mr. Chavez, [however] I was not sure if my Bankruptcy was completely dismissed; I thought I might be able to hire another attorney to made [sic] amended filings." Because the record supports an inference that defendant's conduct following the September 2009 letters was unreasonable under the circumstances, there is insufficient evidence that defendant's mistake in relying on Chavez to file an answer to the complaint was excusable.
Defendant, represented on appeal by Chavez, stated, "the alleged mistake is not the action or inaction of Mr. Chavez, it is the reliance of [defendant] on his belief that Mr. Chavez would take proper steps to protect his interests. . . . [¶] Accordingly, if [defendant] did not provide proper facts to support his motion for set aside based on his own extrinsic mistake, he would not be entitled to relief." For the reasons set forth above, therefore, the order is affirmed.
DISPOSITION
The order is affirmed. Plaintiff is awarded her costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
MOSK, J. We concur:
TURNER, P. J.
ARMSTRONG, J.