Pagnini v. Union Bank, N.A.

28 Cal.App.5th 298

239 Cal.Rptr.3d 263

Joshua P. PAGNINI, Plaintiff and Appellant,

v.UNION BANK, N.A., et al. Defendants and Respondents.

A151390

Court of Appeal, First District, Division 5, California.

Filed October 17, 2018

William E. Gilg, San Bruno, for Plaintiff and Appellant.

Serlin & Whiteford, LLP, Mark A. Serlin, Sacramento, for Defendants and Respondents.

SIMONS, J.

After plaintiff and appellant Joshua P. Pagnini (appellant) failed to respond to a demurrer filed by defendants and respondents Union Bank, N.A. and Unionbancal Mortgage Corporation (respondents), the trial court sustained the demurrer and entered judgment in favor of respondents. Appellant appeals from the court's denial of his motion for relief under Code of Civil Procedure section 473, subdivision (b) ( Section 473(b) ).¹ We conclude the trial court was obligated to grant relief under the mandatory provision of Section 473(b), where appellant presented a sworn declaration from his counsel attesting that counsel mistakenly failed to respond to the demurrer by timely filing an amended complaint. Although a number of court of appeal decisions have declined to give plaintiffs the benefit of the mandatory provision of Section 473(b) in other circumstances, we hold respondents' demurrer was effectively a "dismissal motion" and appellant's counsel's mistaken failure to respond to the motion obligated the trial court to relieve appellant from counsel's error. ( Peltier v. McCloud River R.R. Co. (1995) 34 Cal.App.4th 1809, 1824, 41 Cal.Rptr.2d 182 ( Peltier ) [concluding mandatory provision of statute applies to "plaintiffs whose cases are dismissed for failing to respond to a dismissal motion"].)

BACKGROUND

In September 2014, appellant filed the present action against respondents, alleging wrongful foreclosure and related causes of action arising from a July 2012 trustee's sale of appellant's real property.

In May 2016, respondents demurred to all causes of action in appellant's complaint. On June 10, respondents filed a notice of non-receipt of opposition to the demurrer. On July 13, the trial court sustained the demurrer without leave to amend and entered judgment in favor of respondents.

On January 12, 2017, almost six months after entry of the judgment, appellant moved for relief from the judgment under Section 473(b). He submitted a sworn declaration from his counsel in which counsel averred he attempted to file an amended complaint on June 14, 2016, shortly before the June 16 hearing on the demurrer. The court clerk declined to file the amended complaint because the statute allowing the filing of an amended complaint pending a hearing on a demurrer (§ 472) had been amended effective January 1, 2016, to require that an amended complaint be filed within the time provided for filing opposition to the demurrer (Stats. 2015, ch. 418, § 2). Appellant's counsel averred that he was not aware of the amendment to the statute, which previously permitted the filing of an amended complaint at any point before the hearing.²

In March 2017, the trial court denied the Section 473(b) motion. This appeal followed.

DISCUSSION

The parties dispute whether the trial court was obligated to grant appellant relief under Section 473(b) due to appellant's counsel's mistake that resulted in the sustaining of respondents' demurrer and dismissal of the complaint. This is an issue of statutory interpretation we review de novo. ( The Urban Wildlands Group., Inc. v. City of Los Angeles (2017) 10 Cal.App.5th 993, 998, 217 Cal.Rptr.3d 16 ( Urban Wildlands ).)

Section 473(b) provides for both discretionary and mandatory relief. ( Gee v. Greyhound Lines, Inc. (2016) 6 Cal.App.5th 477, 484, 211 Cal.Rptr.3d 137 ( Gee ).) The mandatory provision provides: "the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect." (Italics added.) " ‘The range of attorney conduct for which relief can be granted in the mandatory provision is broader than that in the discretionary provision, and includes inexcusable neglect.’ [Citation.] The purposes of the mandatory relief provision is to promote the determination of actions on their merits, to relieve innocent clients of the burden of the attorneys' fault, to impose the burden on the erring attorney, and to avoid the precipitation of additional litigation in the form of malpractice suits." ( Gee , at p. 492, 211 Cal.Rptr.3d 137.) " ‘[I]f the prerequisites for the application of the mandatory provision of [ Section 473(b) ] exist, the trial court does not have discretion to refuse relief.’ " ( Id. at p. 484, 211 Cal.Rptr.3d 137 ; see also Tackett v. City of Huntington Beach (1994) 22 Cal.App.4th 60, 65, 27 Cal.Rptr.2d 133 ["a mea culpa declaration by an attorney establishing that a default, default judgment, or dismissal was entered against his or her client as a result of attorney neglect deprives the trial court of discretion to deny relief, even without a showing that the neglect was excusable."].)

"[T]he reason the Legislature added the word ‘ "dismissal" ’ to the mandatory provision of the statute ‘was the State Bar's conclusion " ‘that it is illogical and arbitrary to allow mandatory relief for defendants when a default judgment has been entered against them due to defense counsel's mistakes and to not provide comparable relief to plaintiffs whose cases are dismissed for the same reason.’ " ’ [Citation.] ... ‘By inserting the word "dismissal" into the mandatory provision of the statute, the Legislature now required the courts to vacate any "resulting default" or "resulting default judgment or dismissal" when the other requirements of the mandatory provision were met.’ " ( Gee , supra , 6 Cal.App.5th at pp. 490–491, 211 Cal.Rptr.3d 137.)

As respondents point out, numerous court of appeal decisions have limited the reach of Section 473(b) as it relates to relief from a "dismissal." Although the statutory language "on its face, ‘affords relief from unspecified "dismissal" caused by attorney neglect, our courts have, through judicial construction, prevented it from being used indiscriminately by plaintiffs' attorneys as a "perfect escape hatch" [citations] to undo dismissals of civil cases.’ [Citation.] Courts have limited the application of the mandatory provision to those dismissals procedurally equivalent to defaults. [Citations.] ‘ "[A] default judgment is entered when a defendant fails to appear, and, under section 473, relief is afforded where the failure to appear is the fault of counsel. Similarly, under our view of the statute, a dismissal may be entered where a plaintiff fails to appear in opposition to a dismissal motion, and relief is afforded where that failure to appear is the fault of counsel. The relief afforded to a dismissed plaintiff by our reading of the statute is therefore comparable to the relief afforded a defaulting defendant." ’ [Citations.] This interpretation is consistent with the statute's policy to put plaintiffs whose cases are dismissed for counsel's failure to respond to the dismissal motion on the same footing as defendants who have defaulted because of counsel's failure to respond. [Citation.] The purpose of the statute is to relieve the hardship on those parties who have lost their day in court solely because of counsel's inexcusable failure to act." ( Gotschall v. Daley (2002) 96 Cal.App.4th 479, 483, 116 Cal.Rptr.2d 882.)

For example, "[c]ourts have held the mandatory provision is inapplicable to voluntary dismissals [citation] and dismissals for lapsing of the statute of limitations [citation], failure to serve a complaint in a timely manner [citation], failure to prosecute [citation], and failure to file an amended complaint after a demurrer has been sustained with leave to amend." ( Gotschall , supra , 96 Cal.App.4th at pp. 483–484, 116 Cal.Rptr.2d 882 ; see also UrbanWildlands , supra , 10 Cal.App.5th at p. 999, 217 Cal.Rptr.3d 16 [listing additional cases declining to apply mandatory provision, including in summary judgment context].)

Nevertheless, the courts uniformly agree the Legislature intended at least "to put plaintiffs whose cases are dismissed for failing to respond to a dismissal motion on the same footing with defendants who are defaulted for failing to respond to an action." ( Peltier , supra , 34 Cal.App.4th at p. 1824, 41 Cal.Rptr.2d 182 ; accord, e.g., Urban Wildlands , supra , 10 Cal.App.5th at p. 1001, 217 Cal.Rptr.3d 16 ; Gotschall , supra , 96 Cal.App.4th at p. 483, 116 Cal.Rptr.2d 882 ; English v. IKON Business Solutions, Inc. (2001) 94 Cal.App.4th 130, 145, 114 Cal.Rptr.2d 93 ( English ); Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 618–619, 107 Cal.Rptr.2d 489 ( Leader ); see also Peltier , at pp. 1819–1820, 41 Cal.Rptr.2d 182 [discussing legislative history].)

We conclude respondents' demurrer was a dismissal motion for purposes of Section 473(b), as construed by the above cases. Section 581 ("Dismissal; definitions") lists the "instances" in which "[a]n action may be dismissed," including "after a demurrer to the complaint is sustained without leave to amend and either party moves for dismissal." (§ 581, subd. (f)(1).) In a revealing contrast, the court in English , supra , 94 Cal.App.4th at pages 144–145, 114 Cal.Rptr.2d 93, 94 Cal.App.4th 708C at pages 144–145, determined that the mandatory provision of Section 473(b) did not apply to a motion for summary judgment, observing, "[a]lthough ... section 581 describes...