Padgett v. Hubbard

1

JAMES LEE PADGETT, Plaintiff and Respondent, v. DAVID ADONIS HUBBARD, Defendant and Appellant.

B316157

California Court of Appeals, Second District, Seventh Division

July 24, 2023

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County No. BC599103 Mark V. Mooney, Judge. Affirmed in part and reversed in part.

Law Offices of Barak Isaacs and Barak Isaacs for Defendant and Appellant.

James Lee Padgett, in pro. per., for Plaintiff and Respondent.

FEUER J.

David Adonis Hubbard appeals from an order denying his motion to vacate the default and default judgment that were entered after the trial court struck his answer as a terminating sanction due to Hubbard's failure to appear at a trial setting conference. Hubbard contends the trial court abused its discretion in denying relief because he was not given notice of the hearing at which the court entered the terminating sanction. Given the lack of notice, Hubbard made a sufficient showing the default and default judgment were entered as a result of surprise, and the trial court abused its discretion in denying Hubbard's motion with respect to the default judgment under Code of Civil Procedure^[1] section 473, subdivision (b).

However Hubbard's motion to vacate was untimely as to entry of the default, and therefore the court did not abuse its discretion in denying the motion as to the default under section 473, subdivision (b). Nor was Hubbard entitled to relief under section 473, subdivision (d), for a void order. We reverse the order to the extent it denied relief from the default judgment and affirm the order as to the default.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Complaint, Entry of Default, and Default Judgment

James Lee Padgett filed this action as a self-represented litigant on October 23, 2015. The first amended complaint (complaint) filed on August 14, 2018 asserted causes of action against Hubbard, Jason Thomas Yates, and Jay Jay Industries, Inc. for breach of contract, unfair business practices, and breach of the implied covenant of good faith and fair dealing. The complaint alleged Hubbard knowingly made misrepresentations about the returns on an illegitimate credit leveraging program promoted by Yates and Jay Jay Industries, as a result of which Padgett invested in the program. Further, the defendants breached an agreement to return portions of Padgett's investment. The complaint sought as compensatory damages $26,060 in unreturned investment funds, plus interest, and punitive damages. On September 25, 2018 Hubbard, as a self-represented litigant, filed an answer with a general denial and eight affirmative defenses.

The trial court initially set the matter for a jury trial to be held on April 13, 2020. However, due to the COVID-19 pandemic, on March 17, 2020 the court on its own motion vacated the final status conference and trial dates and set a trial setting conference for May 14, 2020. On April 21 the court on its own motion continued the trial setting conference to July 8, 2020. The clerk certified that notice of the continuance was mailed to Hubbard.

Hubbard did not appear at the July 8, 2020 trial setting conference, and on the same day the trial court set for September 25, 2020 an order to show cause re: sanctions up to and including potential terminating sanctions for David Hubbard's failure to appear (OSC). The court continued the final status conference to September 25. The court ordered Padgett to give Hubbard notice of the OSC; it is undisputed that Padgett failed to do so. Hubbard did not appear at the September 25, 2020 hearing (September 25 hearing) on the OSC and final status conference, and the court struck his answer.^[2]

On September 29, 2020 Padgett filed a request for entry of default, and the clerk entered the default the same day. The request for entry of default included a declaration of mailing, in which Padgett attested that he mailed a copy of the "Request for Entry of Default" to Hubbard. On July 6, 2021 the trial court entered a judgment by default against Hubbard in the amount of approximately $43,000,^[3] and the court clerk served notice of the entry of judgment on Padgett and Hubbard the same day.

B. Hubbard's Motion To Vacate the Default and Default Judgment

On July 23, 2021 Hubbard filed a motion to vacate the default and default judgment (motion to vacate) and to have his answer reinstated. In his supporting declaration, Hubbard averred that Padgett failed to comply with the court's July 8, 2020 order to provide Hubbard notice of the September 25 hearing on the OSC. Hubbard also attested he did not receive any documents notifying him of Padgett's request for entry of default against him. He first learned to his "surprise[]" that his answer had been stricken, Padgett had requested entry of default, and the default had been entered when he received from the clerk the July 6, 2021 notice of entry of the default judgment. In his memorandum, Hubbard argued he was entitled to relief under section 473, subdivisions (a) and (b), in that he had produced evidence of mistake, inadvertence, surprise or excusable neglect requiring relief.^[4] Hubbard also asserted the court's order granting terminating sanctions was excessive, "especially in light of the fact that [Hubbard] never received notice of the hearing that resulted in the ultimate imposition of the sanction, coupled with the fact that the Plaintiff, acting in pro per, was ordered to give notice of that hearing and failed to so."

Padgett argued in his opposition that Hubbard received notice of the trial setting conference set for July 8, 2020, as shown by the clerk's proof of mailing, yet Hubbard failed to appear. Padgett admitted he failed to notify Hubbard of the court's orders made at the July 8, 2020 hearing, including the order setting the September 25 hearing on the OSC for possible terminating sanctions. However, Padgett argued Hubbard should have known about all scheduled hearings and orders in the case because the orders and documents setting the hearings are available on the court's online portal, and any reasonable self- represented litigant would check the website regularly. Padgett's opposition attached a statement (not under penalty of perjury) from Margaret Lois Ottesen that on June 10, 2021 she personally placed in a postal service mailbox an envelope addressed to Hubbard at 8757 Hazelnut Drive in Eastvale, California containing a copy of Padgett's request for entry of default, and on June 24, 2021 she similarly placed in a postal service mailbox a "manila folder" addressed to Hubbard at the 8757 Hazelnut address containing a copy of Padgett's application for a default judgment and supporting documents. Ottesen's son John Otteson signed a statement (also not under penalty of perjury) that he witnessed Otteson place the request for entry of default addressed to Hubbard in a postal service mailbox on June 10.^[5]The mailing address for Hubbard referenced in the Ottesons' statements is not the same as the one that appears on Hubbard's pleadings (with the street number partially transposed).

On September 1, 2021 Padgett filed a supplemental opposition in which he argued that Hubbard's conduct constituted inexcusable neglect because he waited more than 300 days from the entry of default (on September 29, 2020) before filing his motion to vacate on July 23, 2021, and therefore, he should not be granted relief under section 473. At a hearing on the same date, the trial court denied Hubbard's motion to vacate the default and default judgment. The minute order stated the motion was denied "for failure to meet the burden to establish [Hubbard] did not receive notices to appear or the ability to determine the applicable court dates for which [he] failed to appear."^[6]

Hubbard timely appealed from the order denying the motion to vacate.^[7]

DISCUSSION

A. The Trial Court Abused Its Discretion in Denying Hubbard's Motion To Vacate the Default Judgment Under Section 473, Subdivision (b), but the Motion Was Untimely as to Entry of the Default

1. Governing law and standard of review

Section 473, subdivision (b), provides in relevant part, "The court may, upon any terms as may be just, 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. Application for this relief . . . shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken." To qualify for discretionary relief under section 473, subdivision (b), "the party seeking relief must show (1) a proper ground for relief, and (2) 'the party has raised that ground in a procedurally proper manner, within any applicable time limits.'"

(Henderson v. Pacific Gas &Electric Co. (2010) 187 Cal.App.4th 215, 229 (Henderson); accord, Huh v. Wang (2007) 158 Cal.App.4th 1406, 1419 (Huh).)

As the Court of Appeal in Henderson explained "'"[T]he term 'surprise,' as used in section 473, refers to '"some condition or situation in which a party . . . is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against."'"'" (Henderson, supra, 187 Cal.App.4th at p. 230; accord, County of Los Angeles v. Financial Casualty &Surety Inc. (2015) 236 Cal.App.4th 37, 44 [bond surety demonstrated surprise and excusable neglect in failing to appear to argue its motion to vacate a bail bond forfeiture after a courtroom clerk misinformed its attorney on the morning of the hearing that the court had already granted the motion].) The trial court has discretion to grant relief under section 473, subdivision (b), "based on its...