Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. BC348897, Michael L. Stern, Judge.
Scott J. Seiden, in pro. per., for Defendant and Appellant.
Law Offices of Federico C. Sayre, Federico C. Sayre and James F. Rumm for Plaintiffs and Respondents.
RUBIN, Acting P. J.
This appeal arises from a legal malpractice action against a lawyer who had filed a bankruptcy petition several years earlier. When advised about the bankruptcy case, the trial court signed and entered an order dismissing –– not staying –– the plaintiff’s legal malpractice action to allow the plaintiff an opportunity to make a request to the bankruptcy court for an order re-opening the defendant lawyer’s bankruptcy case, and permitting the legal malpractice action to go forward. More than one year later, the plaintiff returned to the trial court and filed a motion under Code of Civil Procedure section 663 to set aside the trial court’s “judgment of dismissal.” The trial court vacated its earlier judgment, not under section 663 but under section 473, subdivision (b) and because, as the trial court stated, “I’m going to stand by my word.” The defendant lawyer then filed the instant appeal, arguing, among other claims of error, that the trial court’s decision to grant relief from its judgment of dismissal came too late under any statutory scheme. While we agree that resort to statutory authority does not avail the plaintiff, we affirm, finding no abuse of discretion in the trial court’s exercise of its nonstatutory power to reinstate the case.
All further section references are to the Code of Civil Procedure unless otherwise specified.
FACTS
The facts relevant to this appeal are as follows. In May 1999, Benjamin Rios Gonzalez, Jr., suffered injuries during the course of his employment when a crane upon which he was working collapsed. In June 1999, Attorney Scott James Seiden commenced a proceeding for workers’ compensation benefits on Gonzalez’s behalf. In September 1999, Seiden filed a personal bankruptcy petition. In March 2006, Gonzalez sued Seiden for legal malpractice. On May 12, 2006, Gonzalez filed a first amended complaint. The operative complaint alleges that Seiden failed to file a timely claim for “serious and willful misconduct” in Gonzalez’s underlying workers’ compensation case, and that the amount of compensation otherwise recoverable would have been increased by one-half upon a showing that Gonzalez had been injured by reason of such misconduct. (Lab. Code, § 4553.) On June 16, 2006, Seiden filed a “Notice of Stay of Proceedings” in Gonzalez’s legal malpractice action. Seiden’s notice indicated that a permanent bankruptcy stay had been entered in his favor on January 12, 2000, in the local bankruptcy court.
To be accurate, Benjamin died on March 18, 2005, and the complaint for legal malpractice was filed by his parents, Benjamin F. Gonzalez and Maria D. Gonzalez, as his alleged “successors in interest.” For purposes of presentation, we refer to the plaintiffs as “Gonzalez.”
Following a hearing on August 24, 2006, the trial court signed and entered an order in Gonzalez’s legal malpractice action, which reads as follows: “The Court orders [this] case dismissed without prejudice with the Court retaining jurisdiction to enforce any issue returned from the bankruptcy court.” Nearly one year later, on August 8, 2007, Gonzalez filed a motion in the local bankruptcy court, asking the court to reopen Seiden’s bankruptcy case, and to designate Gonzalez’s action in the superior court for legal malpractice a permissible “postpetition” claim. On September 5, 2007, a bankruptcy court judge signed the following order in Seiden’s bankruptcy case: “The... case is reopened. The Claim arising out of an alleged failure of debtor to perform attorney-client services that could have been timely performed after the filing of debtor’s case is a post-petition claim, not subject to the discharge in the debtor’s... case.”
We pause for one moment to express some perplexity at the nature of the trial court’s order. The notice filed by appellant is a Judicial Council Notice of Stay form, referencing the bankruptcy proceeding. At oral argument, the court first characterized the motion before it as one requesting a “stay.” The order, entitled “Motion Hearing on Defendant’s Request for Stay,” has characteristics of a stay because it states that the court was “retaining jurisdiction” over the cause pending the return of any issues from the bankruptcy court. But, at the same time, the trial court’s comments during the hearing on August 24, 2006, show that the court plainly recognized a difference between a “stay” and a “dismissal,” and that the court did, indeed, intend to effect a “dismissal” of Gonzalez’s action. We are unsure what the court meant by stating that it was both “dismissing” Gonzalez’s action, and, at the same time, “retaining jurisdiction” over the action. Be all of this as it may, we have decided the best course is to view the document signed and entered by the trial court on August 24, 2006, as a true and effective “judgment of dismissal.” The parties have done so, and, although we believe it might be logical to construe the document as a stay, we feel confined by the substance of the parties’ filings in the trial court (and on appeal) to consider the document to be an actual judgment of dismissal.
On October 10, 2007, Gonzalez returned to the superior court where he filed a motion in his legal malpractice action to set aside the trial court’s “judgment... entered on August 24, 2006, dismissing [his] case without prejudice.” And finally, on December 17, 2007, the trial court entered a formal written order that reads as follows: “[T]his Court’s Minute Order entered on August 24, 2007 [sic], dismissing this case without prejudice, is set aside using the Court’s discretionary powers under Code of Civil Procedure [section] 473(b)....”
As we previously observed, the original superior court order was in 2006, not 2007.
Seiden appeals.
DISCUSSION
Seiden contends the trial court “lacked jurisdiction” to grant Gonzalez’s motion to set aside the court’s judgment of dismissal. Insofar as we understand his opening brief, Seiden essentially argues there is a 180-day limitation for bringing a statutory motion to set aside a judgment of dismissal, and that, once this time limit has passed, a trial court loses all judicial power to set aside the judgment. We agree with Seiden on this point, but find the trial court’s decision to reinstate the case was not an abuse of discretion in light of its equitable powers. As a result, we affirm.
Gonzalez’s motion to set aside the trial court’s judgment of dismissal cited and rested on section 663. A motion for relief from a judgment under section 663 is subject to the time limits prescribed by section 663a. Section 663a provides that such a motion “must” be filed no later than “180 days after the entry of judgment.” Although neither party has cited us to a published case which uses the word “jurisdictional” to describe the time limit in section 663a (and we have found no such case ourselves), it is well-settled that section 663a’s time limit “must be strictly enforced.” (See, e.g., Advanced Building Maintenance v. State Comp. Ins. Fund (1996) 49 Cal.App.4th 1388, 1394; see also County of Inyo v. City of Los Angeles (1984) 160 Cal.App.3d 1178, 1183.) Gonzalez did not file his motion to set aside the judgment of dismissal for more than one year.
The record suggests to us that the trial court may have recognized the “strict” 180-day time limit prescribed by section 663a, and, for this reason, went looking elsewhere to find an avenue for relief from the judgment of dismissal. The trial court’s order setting aside its judgment of dismissal (which the court was then labeling a “minute order”) plainly states that the court was setting aside the judgment of dismissal “using [its] discretionary powers under... section 473, [subdivision] (b).” The problem with the trial court’s decision to use its “discretionary powers” under section 473, subdivision (b) (section 473(b)), is that it, too, has a prescribed time limit. Section 473(b) provides that a party’s application for relief from a judgment, dismissal, order, or other proceeding on the ground of mistake, inadvertence, surprise, or excusable neglect “shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” The time limit prescribed by section 473(b) is jurisdictional. (Puryear v. Stanley (1985) 172 Cal.App.3d 291, 293.)
The bottom line is that, regardless of whether Gonzalez sought and/or was granted relief from the trial court’s judgment of dismissal under section 663/663a or section 473(b), his motion for relief was filed too late, and the trial court’s order granting relief came too late. Gonzalez did not file his motion for relief from the judgment of dismissal until long after 180 days and six months had passed from the date of the trial court’s judgment of dismissal. Given the nature of the trial court’s judgment (see fn. 3, ante), we cannot avoid the time limits prescribed by the Code of Civil Procedure.
Apart from that, there is little in the record to show that Gonzalez could not have returned to the trial court sooner, i.e., within six months of the date the judgment of dismissal was entered, to seek relief. The information before the trial court was that the delay was due to Gonzales having difficulty retaining a workers’ compensation expert on standard of care, because Attorney Seiden had since become a Workers Compensation Appeals Judge. As it was, the trial court entered its judgment of dismissal in August 2006, and Gonzalez did not get himself to the local bankruptcy court until August 2007, and did not get back to the trial court until October 2007. By then, the time for relief under sections 663/663a and 473(b) had expired.
We do agree with Gonzalez’s argument that the trial court’s decision to set aside its prior judgment of dismissal should be affirmed as a permissible exercise of the court’s inherent equitable power. We agree with Gonzalez –– as Division Three of our court explained in Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725 (Aldrich) –– that our trial courts have the inherent equitable power, apart from any other available statutory authority, “to vacate a judgment obtained under circumstances of extrinsic fraud or mistake” (id. at pp. 735-736), and that our task upon review of such a decision is to determine whether there was an abuse of discretion. In Aldrich, Division Three affirmed a trial court’s decision to vacate an order of dismissal entered nearly three years earlier where the plaintiff explained why he had not opposed the motion to dismiss (i.e., he had not been given notice of the motion), and explained why he had not acted earlier to challenge the order of dismissal after it had been entered (he had been effectively abandoned by his prior attorney). (Id. at p. 739.) In other words, Division Three ruled that relief from an order of dismissal was permissible because the plaintiff’s lawyer had been guilty of a “dereliction of professional duties [that] constituted actual misconduct [leaving the plaintiff] not even nominally represented.” (Ibid.) Although this type of attorney abandonment is not shown in the record before us in Gonzalez’s current case, when the standard of abuse of discretion is applied to the facts of this case, we cannot say the trial court’s decision was beyond the bounds of reason.
At the hearing on August 24, 2006, the trial court expressly rejected the idea of an order staying Gonzalez’s legal malpractice action, and then made the following comments to Gonzalez’s counsel: “No, I’m going to dismiss [this case] without prejudice. You can come back after the two months, if that’s what it [takes to obtain a bankruptcy order], and make your motion to vacate my order. It would be well within the time that you would be able to do that.” Given that the trial court promised to reinstate the case despite its “dismissal,” and in light of the unusual nature of the order (see fn. 3, ante), we think it is within the bounds of reason that the court follow through on its promise and reinstate the action despite the passage of time.
Before concluding, we state our concern about the procedural turn this case took once the request was made by Seiden to stay the superior court proceedings, force Gonzalez to seek leave from the bankruptcy court for an order re-opening Seiden’s bankruptcy case, and permit the state court action to go forward as a postpetition claim. Certainly, the court had the power, and in all likelihood the obligation,to stay the proceedings (11 U.S.C §§ 362(a), 524). Gonzalez tried unsuccessfully to convince the court to issue a stay and when that failed to issue an order to show cause regarding the dismissal, returnable at some future date. Unlike a stay, presumably a dismissal with a “retention” of jurisdiction would remove a case from the court’s docket. Although trial court efficiency is a goal both laudable on its own and recognized by law (see Gov. Code, § 68607), it may be achieved only when permitted by law.
We are equally troubled by Gonzalez’s failure to avail himself of the accepted remedies he had available when the trial court erroneously entered a judgment of dismissal. It appears Gonzalez had at least three remedies he should have expeditiously undertaken in response. First, he could have filed a timely notice of appeal and challenged the dismissal in our court (see Traweek v. Finley, Kumble, etc. Myerson & Casey (1991) 235 Cal.App.3d 1128, 1134-1135), which he failed to do. Second, he could have filed a timely statutory motion to vacate the judgment of dismissal under section 663 or section 473, which he failed to do. Finally, he could have filed a properly supported motion to vacate the judgment of dismissal expressly invoking the trial court’s inherent equitable power (see Aldrich, supra, 170 Cal.App.3d 725), which he failed to do.
It is the latter point that understandably troubles the dissent. We acknowledge the closeness of the issue; at best, the equitable argument was only lurking in the shadows of the superior court proceedings rather than being fully present. In his moving papers, Gonzalez made reference to section 663a but stated that the time limits of that section were “inapplicable” because the key fact was that the court had stated that it would reinstate the case once Gonzalez had obtained authority from the bankruptcy court. A declaration from one of Gonzalez’s attorneys attempted to explain the reason for the lengthy delay. This argument appears primarily to be directed to the equitable powers of the court, colloquially: “Your Honor, you told me to come back when I was able to do so, and now I am able, and here is why.” At oral argument, Gonzalez said that, because of their time limitations, sections 663a and 473(b) “would not apply.” Seiden agreed. The court seemed to settle finally on section 473(b) for the basis of the order and then Seiden’s counsel said: “Okay. Good for any other reason, just for the record, Your Honor? Just 473(b)?” To which the trial court replied: “Yeah, there is another good reason. I’m going to stand by my word. When I said we will retain jurisdiction, I could have just stayed the action and said see you every month until the bankruptcy is resolved, but it didn’t make any sense under the circumstances.” The written order did not expressly mention equitable powers.
In his opening brief, Seiden acknowledged that the court based its decision in part on equitable powers and expressly framed one of the issues on appeal as: “Did the Trial Court Abuse its Discretion by Granting a Motion to Set Aside the Judgment Statutory or Equitable Given the State of the Evidence before the Trial Court?” In his legal discussion of the point, Seiden explained: “Apart from any statutory grant of authority, the Trial Court had inherent, equitable power to set aside its judgment of dismissal on the ground of ‘extrinsic fraud or mistake.’ Olivera v. Grace (1942) 19 Cal.2d 570, 576.” Seiden proceeded to argue that there was an insufficient factual showing to justify the exercise of the court’s inherent equitable powers. Seiden’s argument thus recognized: (1) the trial court’s decision rested in part on equitable powers; and (2) the factual showing before the court was insufficient. In his respondent’s brief on appeal, Gonzalez for the first time mentioned the Aldrich case as support for a trial court’s equitable authority. Tellingly, Seiden filed no reply brief, choosing not to discuss Aldrich,and not claiming that he was prejudiced by not realizing until it was too late that the equitable argument was before the trial court. Although the dissent suggests that Seiden’s due process rights were denied because he did not have the opportunity to contest factual issues in the trial court, Seiden himself has not made that argument. There does not appear to be any material disputed facts that could have been litigated below.
Under these circumstances, we conclude that the parties fairly presented the equitable issues to the trial court and to this court, and that the trial court acted within its discretion in exercising those equitable powers to vacate the dismissal.
Seiden recognizes that the standard of review is abuse of discretion. His argument, in part, is that there was insufficient evidence to support the exercise of the court’s discretion. Under either standard, the trial court had before it all the relevant facts, including the proceedings before the dismissal, the circumstances of the dismissal, the subsequent proceedings – and the reasons for the delay in those proceedings – that supported the trial court’s ruling.
DISPOSITION
The trial court’s order dated December 17, 2007, is affirmed. The parties are to bear their own costs on appeal.
Judge of the Ventura Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
BIGELOW, J., Dissenting:
I respectfully dissent from the majority’s holding that an affirmance may be based on the exercise of the trial court’s inherent equitable powers.
First, plaintiff did not seek relief in the trial court on the basis of extrinsic mistake or fraud giving rise to the court’s inherent equitable power. Nor did the trial court did not base its ruling on its inherent equitable power. Under settled California authority, an issue not raised in a motion to set aside a dismissal may not be raised for the first time on appeal. (In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 117 [“none of these issues may be addressed on this appeal, because they were never raised in the trial court below on appellant’s section 473 motion to set aside the dissolution judgment or at any other time. It is well established that issues or theories not properly raised or presented in the trial court may not be asserted on appeal, and will not be considered by an appellate tribunal”].) Therefore, the issue is forfeited.
Second, Seiden did not, as the majority suggests, “acknowledge” in his opening brief that the trial court based its decision to vacate the judgment of dismissal on the invocation of its equitable powers. Rather, Seiden made an argument in the alternative: he explained why the trial court’s ruling based on section 473, subdivision (b), was invalid, and then, as a preemptive protective measure, he explained why equitable relief was not an issue – because Gonzalez made no showing in the trial court in support of granting relief pursuant to the trial court’s equitable powers. Seiden’s appellate advocacy does not change the trial court record. The trial court’s order setting aside the dismissal was based on one ground, and only one ground – Code of Civil Procedure section 473, subdivision (b). In the end, the court made clear the basis for its ruling; it stated: “I’m granting it pursuant to 473(b)....” That ruling cannot be affirmed, because the six month time period for relief under that provision had expired long before plaintiff moved to set aside the dismissal.
Third, because the court never purported to exercise its inherent equitable authority, the majority’s invocation of that theory deprives the defendant of the opportunity to litigate the disputed factual issues. We ought not purport to review an exercise of discretion that was never made, and in so doing deny the defendant of a full opportunity to present whatever equities might exist in his favor.
Finally, even if we apply the theory of inherent equitable power, the elements of that theory are not met. Three elements are prerequisites to equitable relief: a meritorious case; a satisfactory excuse for not presenting a defense to the original action; and diligence in seeking to set aside the default when it is discovered. (Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 738 (Aldrich); Rappleyea v. Campbell (1994) 8 Cal.4th 975, 982.) Because this theory was never presented below, there is insufficient evidence for this court to determine if any of those elements are present. Also, the trial court’s error in dismissing rather than staying the action, and its subsequent attempt to rectify its own error on the ground that it was “going to stand on [its] word” to reinstate the action, do not constitute “extrinsic fraud or mistake” in this case. (Aldrich, supra, 170 Cal.App.3d at p. 735.) Extrinsic fraud or mistake only applies if the defendant was deprived of the opportunity to be heard. Here, every event which transpired in the trial court was an internal, open mistake, which the parties saw unfolding before their eyes. And, as the majority notes, Gonzalez had three available procedural avenues to remedy the trial court’s initial error, but failed to pursue any one of those remedies in a timely or properly supported manner. Thus, there is no basis in this record to support an exercise of inherent equitable power.
I understand the majority’s desire to give effect to the trial court’s ill-considered ruling dismissing plaintiff’s case without prejudice to reinstating it. But the hard reality is that there is no justifiable way to do so if we are to abide by our role as an appellate court. Two basic mistakes were made – the trial court’s error in entering a dismissal and Gonzalez’s failure to pursue his available remedies. I cannot join in an opinion which now lays the burden of those mistakes at Seiden’s feet.