Cavanaugh v. Landa
Filed 4/17/07 Cavanaugh v. Landa CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
SANDRA W. CAVANAUGH, as Trustee, etc., Plaintiff and Respondent, v. JEFFREY B. LANDA, Defendant and Appellant. | D048554 (Super. Ct. No. GIN036495) |
APPEAL from an order and judgment of the Superior Court of San Diego County, Jacqueline M. Stern, Judge. Affirmed.
Defendant Jeffrey B. Landa appeals from both an order denying his motion to set aside the entry of a default and the resulting default judgment against him that followed his failure to file an answer to the complaint of plaintiff Sandra W. Cavanaugh, as Trustee of the John R. Wierenga Living Trust (Cavanaugh). In denying the motion, the court found that Landa had made a general appearance in the case and that his mistaken belief that he had only made a special appearance was unreasonable.
Landa contends that, in light of the public policy favoring cases being heard on their merits, the court abused its discretion by finding an inexcusable mistake of law and denying Landa's motion to set aside the entry of default and default judgment under Code of Civil Procedure[1]section 473, subdivision (b) (hereafter section 473(b)). Specifically, he contends that his mistaken belief that he had never subjected himself to the jurisdiction of the court was not unreasonable given that the court failed to order him to file an answer. We reject this contention and affirm the order and the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In April 2004 Cavanaugh filed a verified complaint for breach of contract alleging that Landa had failed to repay an outstanding loan owed to the John R. Wierenga Living Trust in the amount of $69,833.57. In July 2004 Landa was served, by substitute service, with the summons and complaint at the office address of a fellow attorney with whom Landa worked in early 2003. Landa failed to answer the complaint and in December 2004 the court entered a default judgment against him.
Landa moved to set aside the default judgment on the basis that proper service of the summons and complaint was not effectuated and therefore the court lacked personal jurisdiction over him. Landa's moving papers stated that his appearance was a special appearance for the limited purpose of contesting personal jurisdiction. However, in the concluding sentence of Landa's reply memorandum he asked to be allowed to "answer the claims set forth against him in accordance with California procedural law."
In April 2005 at the hearing on his motion to set aside the default judgment, Landa asked the court if it concurred with his position that he had made a special appearance. The court stated that it "understood" Landa's position but it did not indicate its agreement with that position. The court found that it did not have personal jurisdiction over Landa because the service upon him was improper and it voided the default judgment. However, it redacted from Landa's proposed order a statement that he had made only a special appearance in the case. The court also did not order Landa to answer the complaint.
In June and July 2005 Cavanaugh sent letters to Landa stating that (1) Landa was required to answer the complaint because he had made a general appearance which cured any defects in service of process, and (2) she would seek a default judgment if Landa failed to answer.
In July 2005 Cavanaugh again requested an entry of default against Landa. The clerk denied this request based on the ruling at the earlier motion hearing that proof of service was defective. In August 2005 Cavanaugh moved for an order directing the clerk to enter Landa's default and default judgment. Before the court ruled on Cavanaugh's motion, two additional requests for entry of default against Landa were denied by the clerk for other reasons.
In December 2005 the court granted Cavanaugh's motion to order the clerk to enter a second default judgment against Landa. The court found that Landa made a general appearance in April 2005 when he, in his reply memorandum, requested leave to answer the claims against him.
In February 2006 Landa moved to set aside the second default judgment and allow the matter to proceed on the merits.[2] Landa contended that he made an excusable mistake as to the law because he reasonably believed that in moving to set aside the first default judgment he had made a special appearance and was therefore not under the court's jurisdiction. His belief was based on: (1) statements he made both in his moving papers and before the court that he was making only a special appearance; (2) the court's silence at the hearing; (3) the lack of an affirmative order to answer; and (4) the court's previous rejections of Cavanaugh's attempts to enter a default judgment against him.
In response, Cavanaugh argued that Landa was informed of her intent to secure a default judgment and that it was inexcusable mistake to ignore settled law regarding general appearances. The court agreed with Cavanaugh and denied Landa's motion to set aside the second default judgment. The court found: (1) the issue of whether Landa made a general appearance was neither complex nor debatable; (2) Landa was given "ample signals" that should have prompted him to conduct research on the issue; and (3) Landa's failure to file an answer was an inexcusable mistake. In April 2006, the court entered the second default judgment against Landa.[3]
DISCUSSION
A. Standard of Review
A trial court's ruling on a section 473(b) motion to set aside a default judgment is reviewed for an abuse of discretion. The outcome of such a motion "'rests almost entirely in the discretion of the court below, and appellate tribunals will rarely interfere, and never unless it clearly appears that there has been a plain abuse of discretion.' [Citations.]" (City of Ontario v. Superior Court (1970) 2 Cal.3d 335, 347 (City of Ontario).) "Discretion is abused whenever, in its exercise, the court exceeds the bounds of reason, all of the circumstances before it being considered." (Denham v. Superior Court (1970) 2 Cal.3d 557, 566.)
We acknowledge that the trial court's discretion in such motions is limited by the public policy that favors trials on the merits and that "very slight evidence is required to justify a trial court's order setting aside a default." (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.) Thus, "'a trial court order denying relief is scrutinized more carefully than an order permitting trial on the merits.' [Citations.]" (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980.)
B. Analysis
In light of the public policy requiring cases be heard on their merits, Landa contends that the court abused its discretion by denying his motion to set aside the second default judgment under section 473(b) when it found inexcusable Landa's mistaken belief that he had never subjected himself to the jurisdiction of the court. Specifically, Landa argues that his mistake of law was excusable given the court's "inaction" in failing to order him to file an answer and its "unstated opinion" that Landa made a general appearance at the hearing on his motion to set aside the first default judgment. We reject this contention.
Section 473(b) provides in part that the court may relieve a party from a default judgment taken against him through his mistake. The mistake may be either of fact (see Lieberman v. Aetna Ins. Co. (1967) 249 Cal.App.2d 515, 524) or law (see Anderson v. Sherman (1981) 125 Cal.App.3d 228, 237), and mistakes made by a party's attorney are attributed to the party unless the attorney makes a sworn declaration attesting to his or her mistake. ( 473(b)). Not all mistakes of law are excusable under section 473(b). (City of Ontario, supra, 2 Cal.3d at p. 346.) "'"The issue of which mistakes of law constitute excusable neglect presents a fact question; the determining factors are the reasonableness of the misconception and the justifiability of lack of determination of the correct law. [Citation.] Although an honest mistake of law is a valid ground for relief where a problem is complex and debatable, ignorance of the law coupled with negligence in ascertaining it will certainly sustain a finding denying relief." [Citation.]' [Citation.]" (Ibid.)
Where the mistake of law concerns either a matter of first impression or an unsettled area of law, courts are likely to find the misconception both justified and reasonable. (See City of Ontario, supra, 2 Cal.3d335, 345-346; see Brochtrup v. Intep (1987) 190 Cal.App.3d 323, 332.) Relief from default will normally be denied where the mistake of law was due to ignorance of settled law. (Fidelity Federal Sav. and Loan Ass'n of Glendale v. Long (1959) 175 Cal.App.2d 149, 154.) "While courts are liberal in relieving parties of defaults caused by inadvertence or excusable neglect, yet they do not act as guardians for incompetent parties or parties who are grossly careless as to their own affairs." (Gillingham v. Lawrence (1909) 11 Cal.App. 231, 233.)
Here, the court was justified in its finding that the law at issue was neither complex nor debatable. It was unreasonable for Landa, who is an attorney, to be mistaken as to the settled law regarding appearances. Special appearances "'"find no especial favor in the law."'" (Fireman's Fund Ins. Co. v. Sparks Const., Inc. (2004) 114 Cal.App.4th 1135, 1148.) Thus, it is only when the defendant solely confines his participation in the action to objecting to lack of personal jurisdiction that there is a special appearance. (People v. Ciancio (2003) 109 Cal.App.4th 175, 192.) In fact, a court is "required to analyze the defendant's papers to determine if any affirmative relief could be granted on the merits, which is a general appearance." (Dial 800 v. Fesbinder (2004) 118 Cal.App.4th 32, 54, italics added.)
Also, although section 1014 provides an illustrative list of acts constituting a general appearance,[4]case law has clarified that a general appearance is made in an action whenever a defendant "intentionally submits himself to the jurisdiction of the court in that action for the purpose of obtaining any ruling or order of the court going to the merits of the case . . . which may reasonably be construed to imply that the court has, in that action, acquired jurisdiction of the person of the defendant . . . ." (Davenport v. Superior Court of Cal. in and for Imperial County (1920) 183 Cal. 506, 511.) Thus, no formal or technical act is required. (Sanchez v. Superior Court (1988) 203 Cal.App.3d 1391, 1397.)
California courts have found that parties have appeared generally under a variety of circumstances. (See Dial 800 v. Fesbinder, supra, 118 Cal.App.4th at p. 54.) Importantly, case law illustrates that defendants have made general appearances by reflecting an intent to submit to the court's jurisdiction when they agree to file a pleading in response to a complaint. (O'Keefe v. Miller (1965) 231 Cal.App.2d 920, 923.) Also, a party makes a general appearance when it receives an extension of time in which to answer the complaint. (Billings v. Edwards (1979) 91 Cal.App.3d 826, 829.)
Landa, like the defendant in O'Keefe, demonstrated his intent to submit to the court's jurisdiction when he asked the court in his moving papers to set aside the first default judgment in order to be allowed to "answer the claims set forth against him in accordance with California procedural law." (Italics added.) Furthermore, it is inconsequential that Landa classified his appearance as special. (In re Clarke (1899) 125 Cal. 388, 392.) Landa made a general appearance and it is of "no matter how carefully or expressly it may be stated that the appearance is special." (Ibid.)
Landa, after making a general appearance, was required to file an answer to Cavanaugh's complaint. "'A general appearance operates as a consent to jurisdiction of the person, dispensing with the requirement of service of process, and curing defects in service.'" [Citation] (Fireman's Fund Ins. Co. v. Sparks Const., Inc., supra, 114 Cal.App.4th at p. 1145.) Landa's failure to provide an answer in the over seven months between his general appearance and the court's order to compel the clerk to enter the second default judgment against him was unreasonable.
The court's silence at the motion hearing for the first default judgment did not indicate agreement with Landa's position that he had made only a special appearance; therefore he was not relieved of his duty to ascertain the pertinent law. Furthermore, the court was correct in concluding that (1) the redaction of language in the order granting his motion to set aside the first default judgment regarding Landa's special appearance, coupled with (2) Cavanaugh's letters stating her intent to seek default judgment based on Landa's general appearance, provided Landa with "ample signals" to alert him of the need to conduct more legal research. The court was justified in finding an inexcusable mistake as Landa's failure to conduct simple research "indicated at least indifference." (Security Truck Line v. City of Monterey (1953) 117 Cal.App.2d 441, 446.)
After reviewing the record, we conclude that Landa failed to meet his burden of showing that the court abused its discretion. Although a court needs only "very slight evidence" (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478) to justify setting aside a default judgment due to the policy favoring decisions on their merits, court's are not "guardians" (Gillingham v. Lawrence, supra, 11 Cal.App. at p. 233) of persons who are ignorant of settled law. Given the settled nature of the law regarding appearances, the court acted within the bounds of its discretion when it concluded that it was an inexcusable mistake of law for Landa to believe that he had made a special appearance and was therefore not required to answer the complaint.
DISPOSITION
The order and judgment are affirmed.
NARES, Acting P. J.
WE CONCUR:
McDONALD, J.
O'ROURKE, J.
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[1] All further statutory references are to the Code of Civil Procedure.
[2] Although the motion was titled motion to set aside default "judgment," from our review of the record it does not appear that a judgment was entered prior to the motion being filed. Rather, it was not entered until after the court denied his motion to set aside the default.
[3] See footnote 2, ante.
[4] A defendant appears when he "answers, demurs, files a notice of motion to strike, files a notice of motion to transfer pursuant to Section 396b, moves for reclassification pursuant to Section 403.040, gives the plaintiff written notice of his appearance, or when an attorney gives notice of appearance for the defendant." ( 1014.)
