EVEN ZOHAR CONSTRUCTION & REMODELING, INC., Plaintiff and Appellant, v. BELLAIRE TOWNHOUSES, LLC, et al., Defendants and Respondents.
No. S210804
Supreme Court of California
July 20, 2015
61 Cal. 4th 830
Daniel B. Harris; Crowell & Moring, Ethan P. Schulman and J. Daniel Sharp for Plaintiff and Appellant.
James S. Link; Reed Smith, Paul D. Fogel, Dennis Peter Maio; Gibalevich & Associates and Daniel Andrew Gibalevich for Defendants and Respondents.
OPINION
WERDEGAR, J.—Code of Civil Procedure1
I. BACKGROUND
Plaintiff Even Zohar Construction & Remodeling, Inc., sued defendants Bellaire Townhouses, LLC, Samuel N. Fersht and the Fersht Family Living Trust for breach of contract and related claims arising out of a project to develop a condominium in North Hollywood. Defendants unsuccessfully petitioned to compel arbitration and then failed to file a responsive pleading to the complaint. Thereafter, the clerk entered defendants’ default, and the court entered a default judgment in the amount of $1,701,116.70.
Defendants subsequently filed an application under
Accompanying the application was the affidavit of defendants’ attorney, Daniel Gibalevich. In that sworn statement, Attorney Gibalevich attributed the default primarily to errors by his staff. He declared that, at the time defendants’ responsive pleading was due, he “had to spend substantial amounts of time away from the office” on personal matters. “I believed,” he continued, “that I had sufficient staff to assure competent handling of client files. My associates were instructed to notify me immediately of issues that would require my personal attention. It appears that my staff failed to maintain this file in accordance with this firm‘s policies and procedures. [¶] Due to my frequent absences, I failed to file and serve the responsive pleading. . . . It is clear that my mistake and excusable neglect resulted in the entry of defaults and default judgments against the Defendants.” Plaintiff opposed the motion with evidence that its attorney had repeatedly informed Gibalevich, by mail, e-mail and fax, of the impending default. Plaintiff also contended that Gibalevich and defendant Fersht had allowed the default to be taken as part of a practice of avoiding defendants’ obligations to contractors by delaying payment and driving up legal fees and costs.
The superior court denied defendants’ motion for relief from default, expressly finding Gibalevich‘s declaration “not credible.” At the hearing on the motion, the court had criticized the declaration as “too vague and conclusory” and as “fuzz[ing] up the issue” of Gibalevich‘s own responsibility. The court repeated this criticism in its order, describing the declaration as
Thirty-three days later defendants filed a second “Notice of Motion for Mandatory Relief under [section] 473 to Vacate Defaults and Default [Judgments].” Accompanying the renewed motion was a second affidavit by Gibalevich, in which he offered a different explanation for his failure to file a responsive pleading. That failure, he now asserted, had resulted from preoccupation with efforts to secure the return of other clients’ files seized from his office as part of a criminal investigation. “[I]nvestigators with the Los Angeles District Attorney‘s Office,” Gibalevich declared, had served a search warrant at his office as part of an “investigation focused on medical providers and not on me or my practice.” “[O]ne of my associates, Mr. Savransky, resigned his position right after the search. That left me and Ms. Gina Akselrud as [the] only attorneys shouldering this heavy load.” Gibalevich continued: “In my effort to secure the return of my client files, I engaged Mr. Shkolnikov, a criminal defense attorney. I volunteered to assist him in his research and drafting efforts.” “I spent all of my time on efforts to return my client‘s files. I researched and wrote many drafts of the motions that were filed. This consumed me. I was working on this most of the day, every day. When I wasn‘t in front of the computer, I thought of nothing else. [¶] I began to obsess over my reputation and the disclosures that I had to make to Judges and opposing counsel alike.” “I have to confess,” Gibalevich concluded, “that this feeling of embarrassment is the reason why I failed to set out these facts in the declaration previously filed.”
Gibalevich‘s associate attorney Akselrud submitted a declaration confirming the search, Gibalevich‘s and her own frequent absences from the office to make court appearances to continue hearings and trials, and Gibalevich‘s obsession with securing the return of his clients’ files. Akselrud did not, however, confirm or mention Gibalevich‘s earlier sworn statement that his staff had failed to maintain the file in the instant case. Attorney Shkolnikov also submitted an affidavit stating that Gibalevich had devoted “all of his time and effort” to assisting Shkolnikov in recovering the seized files.
The superior court stayed execution of the default judgment to allow time to consider defendants’ renewed motion for relief from default. In the hearing on that motion, the court stated: “Mr. Gibalevich, you are presenting an entirely different story with this application than you have presented to the court originally.” “You tried to blame it on a miscalendaring when the evidence is that your office received multiple, multiple notices before the
Ruling on defendants’ second application under
Even while concluding defendants had not satisfied the requirements of
We granted defendants’ petition for review.
II. DISCUSSION
As noted, the Court of Appeal held defendants’ failure to comply with
The question whether
“Our fundamental task in construing”
In this case, the parties disagree less over what
The general underlying purpose of
We have recognized only one exception to
We perceive no conflict between
Defendants argue that
Defendants misread the statute. Read in the context of the full sentence in which it appears, the direction that the court shall grant relief “whenever an application for relief is made” (
To recognize that
Because
This is not to say that
In three decisions, lower courts have expressed the view that motions for relief from default under
The first decision is Standard Microsystems, supra, 179 Cal.App.4th 868, which the superior court below (see
The second decision holding that repeated applications for relief under
Third and finally, the court in Wozniak v. Lucutz (2002) 102 Cal.App.4th 1031 [126 Cal.Rptr.2d 310] (Wozniak) held a party‘s failure to comply with
We disapprove Standard Microsystems Corp. v. Winbond Electronics Corp., supra, 179 Cal.App.4th 868, Ron Burns Construction Co., Inc. v. Moore, supra, 184 Cal.App.4th 1406, and Wozniak v. Lucutz, supra, 102 Cal.App.4th 1031, to the extent those decisions are inconsistent with the views set out in this opinion.5
III. DISPOSITION
The judgment of the Court of Appeal is affirmed.
Cantil-Sakauye, C. J., Chin, J., Corrigan, J., Liu, J., Cuéllar, J., and Kruger, J., concurred.
Respondents’ petition for a rehearing was denied September 9, 2015. Werdegar, J., did not participate therein.
