Filed 12/4/18 Chen v. Chiu CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

After defendant Andrew Chiu failed to comply with several discovery orders, the trial court issued terminating sanctions and entered a default judgment against him. The court held a prove-up hearing and entered judgment for plaintiff Joanna Qi Chen (plaintiff), which included punitive damages. Several months later, Chiu moved to set aside the discovery orders and the order issuing terminating sanctions, and to vacate the default and default judgment. The court denied the motion.

We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff and Chiu agreed to develop and sell two residences in San Francisco, and she invested approximately $850,000 in the project. Plaintiff lost her investment. In February 2016, she filed a complaint against Chiu, alleging claims for breach of promissory note and fraud. The complaint sought compensatory and punitive damages. Chiu answered the complaint in propria persona. In May, plaintiff propounded interrogatories, requests for production, and requests for admission. Chiu did not provide responses. In late June, plaintiff’s counsel advised Chiu that plaintiff would move to compel if he did not respond to the discovery requests. Chiu did not provide responses; in July, plaintiff moved to compel responses and to deem the requests for admission admitted. Plaintiff served Chiu with the motions but he did not oppose them.

In August 2016, the court granted the unopposed motions and ordered Chiu to respond to the interrogatories and produce responsive documents. The court also deemed the requests for admission admitted. Plaintiff served Chiu with notice of entry of the discovery orders in September. That same month, plaintiff served Chiu with the first amended complaint and a deposition notice; she also requested Chiu comply with the discovery orders. Chiu did not appear for the deposition and did not comply with the discovery orders. In October, plaintiff served Chiu with notice that she was seeking $1,000,000 in punitive damages (Code Civ. Proc., § 425.115).[1]

Chiu did not respond to the first amended complaint. In November 2016, the court entered his default. Plaintiff also moved for terminating sanctions and for a default judgment. The hearing on the motion was scheduled for November 29. Two court days before the hearing, Chiu filed an opposition—unaccompanied by a proof of service—in propria persona. The opposition offered an explanation for Chiu’s failure to respond to the first amended complaint, but did not argue terminating sanctions were unwarranted. The court did not allow Chiu to argue at the hearing because he had not timely notified plaintiff’s counsel of his intent to contest the tentative ruling. It struck Chiu’s opposition as untimely and unaccompanied by a proof of service. The court granted plaintiff’s motion for terminating sanctions, struck Chiu’s answer to the original complaint, and entered a default judgment against him. It noted, “[e]ven if the Court were to consider . . . [the] Opposition, it would still grant [the] Motion.”

The court held a prove-up hearing in January 2017. Chiu attended the hearing in propria persona. At the conclusion of the hearing, the court entered judgment for plaintiff for $1,944,683, which included $1,000,000 in punitive damages. Chiu did not timely appeal from the judgment.

On May 5, 2017, counsel for Chiu moved—pursuant to section 473 and “the equitable power of the Court”—to set aside the discovery orders and the order granting terminating sanctions, and to vacate the default and default judgment. The motion argued (1) Chiu was denied due process because the court heard the discovery motions when

he was “out of the country”; (2) the punitive damages award was “contrary to law”; (3) terminating sanctions were “excessively punitive”; (4) the orders and the judgment were an abuse of discretion, were unsupported by sufficient evidence, and resulted from “irregularity in the proceedings of the Court”; and (5) the “cumulative impact of the excusable neglect, [and] irregular proceedings” resulted in “unfairness” and “a miscarriage of justice.”

Chiu supported the motion with a lengthy declaration. Chiu stated he told plaintiff’s counsel he would be out of the country from July 18, 2016 “until [the] beginning of [the] school year” and the hearing on the motion to compel was held before he returned. Chiu also averred he did not receive the discovery orders and was not served with the first amended complaint. Finally, Chiu averred he acted in good faith, and diligently sought relief “as soon as [he] was able to retain counsel.”

Plaintiff opposed the motion. She argued the motion was untimely under section 473, subdivision (b). Plaintiff also contended Chiu was not entitled to equitable relief because he could not demonstrate the orders, the default, or the default judgment were

the product of surprise, inadvertence, or excusable neglect. In addition, plaintiff argued Chiu had notice of the proceedings, and that he could not challenge the sufficiency of

the evidence supporting the judgment. Finally, plaintiff claimed she would be prejudiced if the court granted the motion, in part because she had already incurred “substantial

post-judgment costs and fees retaining investigators to try to get her money back from Chiu.”

In July 2017, the court denied the motion. It determined the motion to set

aside the discovery orders was filed “after the six-month period” in section 473, subdivision (b). The court also denied the motion to set aside the order imposing terminating sanctions, concluding Chiu had not identified “any mistake, inadvertence, surprise, or excusable neglect . . . that resulted in the Court’s granting Plaintiff’s motion. . . . Chiu . . . filed a late Opposition to the motion for terminating sanctions.

The Court exercised its discretion to strike the Opposition as untimely and

un-served. . . . Chiu fails to show that the Court abused its discretion in doing so.” Finally, the court declined to vacate the default and the default judgment.

Chiu appealed. Plaintiff moved to dismiss the appeal as untimely. We denied the motion and construed the appeal as from the order denying the motion to set aside and vacate, rather than as an appeal from the January 2017 judgment.

DISCUSSION

Section 473 subdivision (b) permits the court to “ ‘relieve a party . . . from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.’ ” (Pulte Homes Corp. v. Williams Mechanical, Inc. (2016) 2 Cal.App.5th 267, 273.) A party seeking discretionary relief under section 473 subdivision (b) must file the motion within six months of the judgment or order. (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1422.) “Once six months have elapsed since the entry of a judgment, ‘a trial court may grant a motion to set aside that judgment as void only if the judgment is void on its face.’ ” (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495–496.)

In addition to its statutory authority, a trial court has equitable power to set aside a judgment on the grounds of extrinsic fraud or mistake. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) “Extrinsic fraud usually arises when a party is denied a fair adversary hearing because he has been ‘deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense.’ ” (Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471.) Extrinsic mistake applies to circumstances outside the litigation that have unfairly cost a party a hearing on the merits. (Rappleyea, at p. 981.) “When a default judgment has been obtained, equitable relief may be given only in exceptional circumstances.” (Ibid.) A party in default must show a meritorious defense, a satisfactory excuse for not presenting a defense to the original action, and diligence in seeking to set aside the default once discovered. (Id. at p. 982.) Regardless whether a motion is directed to a court’s statutory authority or its equitable power, the decision is vested in the court’s sound discretion and we review that decision under the deferential abuse of discretion standard. (Id. at p. 981.)

I.

No Abuse of Discretion in Denying the Motion to Set Aside

Discovery Orders

Chiu argues the court erred by denying his motion to set aside the discovery orders. We disagree. The court issued the discovery orders in August 2016 and plaintiff served Chiu with notice of entry of the orders in September. Chiu moved to set aside the discovery orders in May 2017, almost eight months later. Six months is “the outside limit ‘of the court’s jurisdiction to grant relief’ ” under section 473, subdivision (b). (Huh v. Wang, supra, 158 Cal.App.4th at p. 1422.) “[B]ecause more than six months had elapsed[,] . . . relief under section 473 was unavailable” and the court did not err by denying relief pursuant to that statute. (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 980.)

Chiu suggests the discovery orders should have been set aside on equitable grounds. He also claims the discovery orders were “void” for lack of notice or due process. We disagree. The record establishes Chiu received notice of the proceedings—he was served with the discovery requests, and he knew plaintiff intended to move to compel if he did not respond. Plaintiff served Chiu with the motion to compel and to deem the requests for admission admitted. Chiu did not respond to the discovery requests or oppose the motions.

Chiu left the country and made no arrangements to receive or respond to mail, after he had notice a motion to compel would be filed. This does not constitute excusable neglect. “ ‘Excusable neglect is that neglect which might have been the act of a reasonably prudent person under the same circumstances.’ ” (Huh v. Wang, supra, 158 Cal.App.4th at p. 1419.) Nor has Chiu established entitlement to equitable relief based on extrinsic mistake or fraud. (See In re Marriage of Thorne & Raccina (2012) 203 Cal.App.4th 492, 505; Manson, Iver & York v. Black (2009) 176 Cal.App.4th 36, 47.)

II.

No Abuse of Discretion in Denying the Motion to Set Aside Order

Imposing Terminating Sanctions

Chiu also challenges the denial of his motion to set aside the order imposing terminating sanctions. The court determined Chiu did not establish mistake, inadvertence, surprise, or excusable neglect under section 473, subdivision (b). This conclusion was not an abuse of discretion. The record demonstrates Chiu was served with the motion for terminating sanctions and that he lacked sufficient justification for filing an untimely and procedurally deficient opposition. The court did not abuse its discretion by declining to consider Chiu’s opposition. (§ 1005, subd. (b); Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, 261–262 [court within its discretion to decline to consider self-represented litigant’s late-filed opposition].) In any event, consideration of the opposition would not have “made any difference in the trial court’s determination” of terminating sanctions because the opposition did not establish Chiu’s failure to respond to the discovery requests was inadvertent, or that terminating sanctions were unwarranted. (Id. at p. 262.) The court did not abuse its discretion in granting the motion for terminating sanctions. (See Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 991–992; § 2023.030, subd. (d).)

Chiu has not demonstrated the court abused its discretion in declining to set aside the order imposing terminating sanctions. “A party cannot justly be permitted to seek relief under section 473(b) from sanctions imposed for deliberate failure to respond to discovery or oppose discovery motions.” (Jerry’s Shell v. Equilon Enterprises, LLC (2005) 134 Cal.App.4th 1058, 1074; Parage v. Couedel (1997) 60 Cal.App.4th 1037, 1042.)

III.

Chiu’s Other Arguments Fail

To the extent Chiu contends the court erred by denying his motion to vacate the default and default judgment, we are not persuaded. The default judgment was not void, and Chiu has not established the default or default judgment should have been vacated

on equitable grounds. (See Cruz v. Fagor America, Inc., supra, 146 Cal.App.4th at pp. 503–507.) We have considered and rejected Chiu’s other arguments, including his claim that the punitive damages award must be vacated because there is insufficient evidence of his financial condition. Chiu cites no authority for an appellate court to “review the evidence presented at the prove-up hearing on an appeal from a motion to vacate the default judgment filed long after the judgment has become final.” (Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1303.)

DISPOSITION

The July 2017 order denying Chiu’s motion to set aside the discovery orders and the order imposing terminating sanctions, and to vacate the default and default judgment, is affirmed. Plaintiff is entitled to costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).)

_________________________

Jones, P. J.

We concur:

_________________________

Simons, J.

_________________________

Bruiniers, J.^*

A152114