Romer, O'Connor & Co. v. Huffman

This is an appeal by the plaintiff from an order which set aside the entry of a default by the clerk and a default judgment entered thereon by the court. It is urged that the trial court abused its discretion in granting such relief under the provisions of section 473 of the Code of Civil Procedure.

At the outset the plaintiff-appellant contends that the

We proceed now to state the salient facts which gave rise to the controversy before us.

It appears that the plaintiff’s assignor under a written contract with the defendant consigned goods to the defendant for resale pursuant to certain restrictions and conditions set forth in the written contract. On January 21, 1955, an action was filed to recover the sum of $19,362.71, on a book account, and for alleged breach of that contract; an amended complaint was duly filed on November 30, 1955; on January 17, 1956, the plaintiff filed a bill of particulars; on March 8, 1956, the trial court denied a motion of a third party who entered the ease as an intervener. The defendant never filed an answer and this apparently was due in part to the fact that four different written stipulations, and several oral stipulations extending the time to answer, were entered into by the counsel for plaintiff and by the counsel for defendant. Moreover, during the summer of 1956, the parties’ counsel entered into extensive negotiations with a view to settlement. In the month of July 1956, counsel for defendant prepared an answer for filing, but further negotiations were carried on with the result that the answer was not filed. After August 4, 1956, no further negotiations were had.

On October 15, 1956, the clerk entered a default, and on October 16, 1956, the court signed and filed a default judgment for the amount prayed for in the amended complaint, notwithstanding that Miller, counsel for plaintiff, had conceded in the course of the negotiations that certain credits were due to the defendant that would reduce the demand of appellant. These proceedings were not discovered by counsel for defendant until February 26, 1957, whereupon he immediately communicated with Miller, a member of the Romer law firm with whom he had dealt exclusively, requesting a

The foregoing facts, gleaned from the affidavits of counsel for defendant which the court was entitled to believe, were not contradicted in the affidavit of Miller except that he stated in his own affidavit that during the summer of 1956 he made several oral requests to counsel for defendant that he file an answer and appear in the case and that the response to these requests was that it would be attended to shortly. Likewise Miller in his affidavit stated that he was “removed from active handling of this file [the case] some time in September 1956. ...”

The time elapsing between the entry of default and the filing of defendant’s moving papers was five months and twenty-six days.

On May 28, 1957, defendant filed a motion to amend his first motion (of April 12, 1957) so that the original motion would provide nunc pro tunc for the setting aside of not only the default judgment (October 16, 1956) but also the setting

"Upon the records, files, and affidavits of the parties, and upon the argument of counsel, the court ordered on September 18, 1957, that both the default and the default judgment entered in favor of the plaintiff be set aside and granted the defendant leave to file the answer that had been submitted with the original motion. The court further ordered that the defendant’s motion of May 28, 1957, for an amendment nunc pro tunc of his original motion be denied.

Appellant’s first contention is that the trial court abused its discretion in setting aside the default judgment of October 16, 1957.

The granting or denying of a moton to set aside a default judgment is within the sound discretion of the trial court (see, e.g., Gore v. Witt, 149 Cal.App.2d 681 [ 308 P.2d 770 ]), and generally, since the code section allowing such a motion, Code of Civil Procedure, section 473, is a remedial measure and to be liberally construed (Waybright v. Anderson, 200 Cal. 374 , 377 [ 253 P. 148 ]; Estate of Strobeck, 111 Cal.App.2d 853 , 858 [ 245 P.2d 317 ]), any doubts existing as to the propriety of the trial court’s action will be resolved in favor of a hearing on the merits. (Beckley v. Reclamation Board, 48 Cal.2d 710 , 718 [ 312 P.2d 1098 ] ; Benjamin v. Dalmo Mfg. Co., 31 Cal.2d 523 , 525-526 [ 190 P.2d 593 ] ; Nomellini Construction Co. v. Deane, 160 Cal.App.2d 57 , 59 [ 324 P.2d 654 ]; Yarbrough v. Yarbrough, 144 Cal.App.2d 610 , 614 [ 301 P.2d 426 ].)

Further, as in any other ease, the trial court’s determination of the facts as found from the affidavits of the parties will be conclusive upon the appellate court (Nomellini Construction Co. v. Deane, 160 Cal.App.2d 57 , 59 [ 324 P.2d 654 ]), but if the facts as stated in the moving party’s affidavit do not constitute valid grounds for the relief sought, the trial court’s action in setting aside the default will be reversed (Benjamin v. Dalmo Mfg. Co., 31 Cal.2d 523 [ 190 P.2d 593 ]; Yarbrough v. Yarbrough, 144 Cal.App.2d 610 [ 301 P.2d 426 ]). Hence the question, narrows to whether or not the facts stated in the affidavit of defendant’s counsel show reasonable grounds for setting aside the default judgment.

In substance the affidavit alleges that after the original complaint and the filing of the amended complaint the defendant’s counsel and the plaintiff’s counsel were engaged in rather extensive negotiations in an effort to settle the case;

In Beard v. Beard, 16 Cal.2d 645 , 648 [ 107 P.2d 385 ], the court said: “In the present case the trial court found that there was a sufficiently reasonable excuse to justify the setting aside of the default judgment, apparently on the basis of respondent’s allegation that the continued negotiations . . . had lulled the respondent’s attorney into a sense of security. This exercise of discretion presents no apparent abuse to justify interference by this court.”

So too in this case it cannot be said that the trial court abused its discretion in granting the relief sought under the allegations of counsel for defendant. After a long period of negotiation, along with numerous oral and written stipulations for extensions of time, defendant’s counsel might well have been lulled into a sense of security, and, in any event, could have at least expected some notice upon the part of plaintiff’s counsel before a default was entered.

The next contention of the appellant is that the trial court abused its discretion in vacating the default judgment because the defendant waited too long from the discovery of the default judgment until filing his motion to set it aside.

Although the excuse for failing to answer and appear within the time allowed by law might be legitimate, if a party after discovery of the default should fail to act promptly in filing moving papers to set aside the default, he may be precluded from any relief. Thus, in Benjamin v. Dalmo Mfg. Co., 31 Cal.2d 523 [ 190 P.2d 593 ], the party against whom the default was taken had what would seem to be a reasonable excuse for failing to answer and appear. However, after discovering the default nothing was done for a period of more

In the instant case the defendant alleges in his affidavit that he discovered the entry of the default on February 26, 1957. The record shows that he did not file his notice of motion to set aside the default judgment until April 12, 1957. However, in the defendant’s supplemental affidavit in support of the motion, counsel for defendant gives an explanation why he had not acted more promptly upon learning of the delay. After having learned of the default, defendant’s counsel immediately attempted to communicate, and did communicate with counsel for plaintiff, and sought to obtain a stipulation setting aside the default. After plaintiff’s counsel indicated that such a stipulation could not be entered into by himself (Miller), defendant’s counsel informed him that he would attempt to contact his client, defendant in the matter. Attempts were then made by him to contact the client, but to no immediate avail since defendant was on business in Europe and traveling about in many countries. Finally, on April 12, 1957, defendant’s counsel went ahead on his own initiative and filed the notice of motion, which action was ratified five days later by letter then received from the defendant.

In view of the strong policy to allow cases to be heard on the merits (Jones v. Title Guaranty & Trust Co., 178 Cal. 375 , 376-377 [ 173 P. 586 ]), it would seem that this explanation is adequate. If there are any doubts they should be resolved in favor of the action taken by the trial court: “If it be doubted whether the excuse offered is sufficient or not, or whether the defense set up is with or without merit in foro legis, when examined under those rules of law by which Judges are guided to a conclusion, the judgment of the Court below will not be disturbed.” (Benjamin v. Dalmo Mfg. Co., 31 Cal.2d at 526 [ 190 P.2d 593 ], quoting from Bailey v. Taaffe, 29 Cal. 422 , 424.)

The next contention is that the court erred in granting full relief from both the default and the default judgment.

There is much authority to the effect that an order setting aside a default judgment has the effect of also setting aside the clerk’s default absent circumstances showing specifically that it was not the trial court’s intention to set aside both. This division of the court in an opinion by Justice Knight in Week v. Sucher (1929), 96 Cal.App. 422 [ 274 P. 579 ], hearing denied by Supreme Court said: “Further contention is made that the moving papers and the order based thereon relate exclusively to the matter of vacating the judgment rendered by the court and consequently do not affect the default entered by the clerk. Plaintiff did not question the scope of the motion at the time it was presented and determined, the bill of exceptions reciting merely that he appeared and opposed the granting of the motion upon the grounds of an insufficient showing under section 473 of the Code of Civil Procedure. However, even assuming that he may do so now, we find no merit in the point because the terms of said motion and the contents of the documents attached thereto adequately apprised plaintiff that defendants were seeking to obtain complete relief . . . and in our opinion the order subsequently made by the court pursuant to said motion is legally sufficient, in form and substance, to grant such relief.”

This court in Airline Transport Carriers, Inc. v. Batchelor, 102 Cal.App.2d 241 [ 227 P.2d 480 ], reaffirmed the Week case. It was held that the granting of a motion to set aside

In the Week and the Batchelor cases it is seen that the court held the default entered by the clerk was deemed set aside by the order setting aside the default judgment even though no mention was made to the default itself in either the order or the defendant’s moving papers. In this case, no such implication need be made since the trial court expressly ordered the default be set aside. In this respect Tapscott v. Tapscott, 149 Cal.App.2d 379 [ 308 P.2d 399 ], is helpful: “On this appeal from the judgment plaintiff claims that the court erred in vacating and setting aside the default where no motion was made to set it aside, as distinguished from the default judgment; that although the title indicated it was a motion to set aside the default, the body of the motion was directed toward the default judgment; that the nature and character of a pleading is to be determined . . . by its contents rather than a selected designation; that accordingly the court was without jurisdiction to set aside the default [citations],

“We see no merit to this argument, under the circumstances here related.” [Citing and quoting at length from Week v. Sucher, 96 Cal.App. 422 , 426 [ 274 P. 579 ].] (149 Cal.App.2d at 381.) The court granted complete relief, notwithstanding relief from the default was not mentioned in the body of the moving papers.

There are cases, which appellant vigorously contends are controlling, which hold that there is a distinction between the default entered by the clerk, and the judgment entered pursuant to a default.

These cases and similar ones are distinguished in Airline Transport Carriers, Inc. v. Batchelor, 102 Cal.App.2d 241 , 244-246 [ 227 P.2d 480 ], in that in each the entry of the default was a substantial time before the entry of the default judgment, or that in the Capritti case the entry of the default was ruled upon by the trial court prior to its issuing a judgment on the default and denying the setting aside of that

The appellant’s second argument would thus seem to place more emphasis on form than substance. ‘1 The practice of the law should not be considered a game or a mere battle of wits but should be regarded as a means to promote justice,” as was said by this court in relation to the plaintiff’s contention that the trial court did not rule upon the default but only upon the default judgment. (Airline Transport Carriers, Inc. v. Batchelor, 102 Cal.App.2d 241 , 246-247 [ 227 P.2d 480 ].)

Thus, the contention of the appellant that the trial court’s order ‘‘was in excess [of] and beyond the relief prayed for by respondents” we regard as being without merit.

Order affirmed.

Bray, P. J., and Wood (Fred B.), J., concurred.