Toon v. Pickwick Stages, Northern Division, Inc.

This is an appeal from an order denying defendant’s motion to vacate a default judgment.

The action is one having for its purpose the recovery of damages for injuries suffered by plaintiff in an automobile accident alleged to have been caused by defendant’s negligence. Defendant, a California corporation having its principal place of business in the city of Los Angeles, is a common carrier of passengers by automobile stage. The complaint, which was filed in the superior court for Santa Barbara County on October 21, 1921, alleges that on March 14th of that year, in the city of Santa Barbara, the driver of one of defendant’s autostages so negligently operated his vehicle that it ran into the automobile which plaintiff was driving, thereby injuring the latter.

On October 26, 1921, in the city of Los Angeles, the summons and a copy of the complaint were served upon defendant’s secretary. On November 29, 1921, no appearance having been made by defendant within the time allowed by law therefor, plaintiff caused defendant’s default to be entered, and on December 30, 1921, after an ex pwrte hearing of evidence presented by plaintiff, the lower court entered a judgment in plaintiff’s favor. Defendant moved expeditiously to set aside the default and the judgment entered thereon by serving and filing on January 7, 1922, its notice of motion under section 473 of the Code of Civil Procedure. The showing made by defendant in support of its motion was not contradicted 'by any evidence on the part of plaintiff. The only question, therefore, is whether the facts set forth in the affidavits filed on behalf of defendant are sufficient to show that it would be an abuse of discretion to deny the motion to open the default.

The affidavits disclose the following: At the time of the accident defendant was insured against loss by the Califor

Upon being served with the summons and complaint on October 26, 1921, defendant’s secretary caused the documents to be placed in an envelope and mailed to the insurance carrier, whose office, as we have stated, is in the city of Los Angeles. That the papers were received by the insurance carrier in due course is evident from the fact that later when search was made they were found among the files in the office of its claims attorney. No letter of instructions was inclosed with the summons and complaint, and no instructions were given to the officers or agents of the insurance carrier. None of defendant’s officers or employees had any knowledge that defendant’s default had been entered until notified thereof by defendant’s attorney.

Prior to the commencement of this action, and covering a period of some weeks, a correspondence was carried on between attorneys of the Automobile Club of Southern California and defendant’s attorney, the purpose of which was to effect a compromise settlement of plaintiff’s claim for damages. No satisfactory settlement having been arrived at, plaintiff took his claim out of the hands of the automobile club’s attorneys and thereafter caused this action to be commenced by his present counsel.

Not until December 20, 1921, did defendant’s attorney have any - notice or knowledge that this action had been commenced. On that day, happening to be in the courtroom of the superior court for Santa Barbara County for the purpose of representing this defendant in the trial of another action, he overheard a chance remark which led him to examine the files in the office of the clerk of that court. This examination led to the discovery that summons and complaint had been served upon defendant’s secretary and that defendant’s default had been entered.

None of defendant’s officers has any personal knowledge of the facts involved in the accident. An investigation of the facts relating to the accident was made by defendant’s attorney, who prosecuted inquiries and conducted an examination of the scene of the collision and, according to his affidavit, “has personal knowledge of the locality, facts and circumstances under which the accident is alleged to have occurred.” For this reason he made the affidavit of merits and sets forth therein facts which, if true, show that defendant has a good and meritorious defense to the action.

[1] The legal principles by which courts are guided in considering motions to set aside defaults are well established and are comparatively simple. The trial court is to exercise a sound and legal discretion in passing upon the application. This discretion is not capricious or arbitrary,

[2] Tested by these principles we believe that the learned trial court went beyond the limits of a sound judicial discretion in refusing defendant’s application to be relieved from the judgment taken against it by default. No negligence or culpability can be predicated of the conduct of defendant’s secretary. When that officer was served with the summons and complaint he “thereupon,” i. e., immediately, mailed them to his company’s insurance carrier, by whom, it seems, they were received in due course of the mail. Under the circumstances of this case it was not incumbent upon defendant’s secretary to do more than simply to mail the summons and complaint to the insurance carrier, whose duty it was, under its contract of insurance, to assume charge and control of the action. The facts of the ease and the nature of defendant’s defense were already known to the insurance carrier’s claims attorney, who previously had carried on negotiations with the attorneys of the automobile club for a compromise settlement of plain

Nor was there any personal neglect or culpable fault on the part of defendant’s attorney. He had no personal knowledge or notice of the service of the summons and complaint until after the default had been entered. As soon as possible after hearing the chance remark which put him upon inquiry he made an investigation, and then with all diligence presented the motion to set aside the default.

The person who was responsible and solely responsible for defendant’s failure to appear in the action within the time provided by law is none other than that unidentified, inexperienced employee in the office of the claims attorney who filed the documents in his employer’s office files and then failed to call the latter’s attention to them. But such thoughtlessness on the part of a new employee inconversant with the office routine was pardonable, and in so far at least as it affected defendant’s rights his neglect was excusable. What was said by the supreme court in Downing v. Klondike Min. etc. Co., 165 Cal. 786 [ 134 Pac. 970 ], when considering a somewhat analogous situation, is apposite: “Our knowledge of the methods in vogue in law offices convinces us that such a mistake as the one detailed in the affidavits herein might be easily made and the consequent default might take place without any culpable carelessness on the part of the attorneys of record.”

There is nothing to indicate that plaintiff will be prejudiced in any way by a trial upon the merits, especially in view of the fact that it is within the power of the-superior court to impose terms in granting the motion; and since the affidavits disclose a meritorious defense, defendant should be given an opportunity to present that defense.

Works, J., and Craig, J., concurred.