ReplyCal. Super. - 3rd Dist.September 14, 2018Ww Nn nN aw 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Matthew A. Brinegar (SBN 277517) Superior C urt of California THE BRINEGAR LAW FIRM - 1901 Harrison Street, 14" Floor Oakland, CA 94612 Telephone: (415) 735-6856 execute Piticer & Clerk Facsimile: (415) 529-4276 By: S. Hubbard, Deputy E-mail: mbrinegar@brinegarlaw.com Attorneys for Defendants IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF PLACER UNLIMITED JURISDICTION JD2, INC., Case No. MCV0071316 Plaintiff, REPLY ISO MOTION FOR RELIEF FROM DEFAULT JUDGMENT VS. H2L1-CSC, JV, H2L1 Engineering, Inc, Date: April 11, 2019 BY FAX And Coleman Spohn Corporation, Time: 8:30am Place: Department 42 Defendants. REPLY I. Defendants are Entitled to Discretionary Relief under CCP Section 473(b) A. Defendants Were Diligent in Seeking Relief from Default JD2, Inc. claims that “failure to bring a motion to set aside default within three months of the entry of default is fatal to such motion.” (Opposition at pg. 3.) First, this is an incorrect statement of the law. There is no hard and fast rule that failing to bring the motion within three months shows a lack of diligence. The statute makes it clear that such a motion can be brought within six months of the default. CCP §473 (b). Had the legislature wanted to set a hard limit at three months it could have easily done so. Instead, “diligence” for discretionary relief depends on the “facts and circumstances” of each case. See, e.g., Stafford v. Mach (1998) 64 Cal.App.4th Q o NN D \o 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1174, 1181. Moreover, whether the non-defaulting party suffered prejudice by the delay is a significant factor in evaluating diligence. Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.4th 725, 740. Here, under the circumstances, Defendants were diligent in seeking to set aside the default. Prior to bringing the motion, Defendants’ California counsel engaged in the meet and confer process with Plaintiff's counsel and sought to resolve the entire dispute without wasting judicial resources and driving up attorney’s fees for what amounts to a relatively small claim. These efforts were rebuffed in bad faith. (Opposition at pg. 2.) Only after Plaintiff made it clear that it would seek to take advantage of Defendants’ mistake of fact and excusable neglect were Defendants forced to file the present motion. More importantly, Plaintiff has not shown-or even tried to show-how it is prejudiced by this short delay. Under these circumstances, and especially in light of the strong public policy of resolving disputes on their merits and the fact that this motion was filed on the same day as the default hearing, Plaintiff is unable to prove a lack of diligence. Aldrich, 170 Cal.App.4th at 740. B. Defendants Have Shown a Mistake of Fact and Excusable Neglect Plaintiff claims that Defendants have failed to show a mistake of fact or excusable neglect. (Opposition at pg. 4-5.) This is not true. Mr. Mandel’s mistakes of fact were his belief that the parties would settle this dispute prior to incurring additional attorney’s fees and costs and that this Court did not have jurisdiction over this matter. (Mandel Declaration at §§3-4.) Both of these good faith beliefs of facts proved to be unfounded. Furthermore, it is “excusable neglect” to delay answering a complaint based on a good faith belief that the parties would be imminently resolving their differences. To hold otherwise would incentivize parties to waste judicial resources by clogging up the courts with unnecessary pleadings and hearings. Plaintiff objections to Mr. Mandel’s declaration based upon an alleged failure to make a -2- REPLY ISO MOTION FOR RELIEF FROM DEFAULT JUDGMENT S o Oe N Y DW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “plain statement of facts.” (Objections at 12-3.) There is nothing in the Evidence Code that permits this objection to Mr. Mandel’s statements. Plaintiff's characterization of the declaration is also erroneous. Mr. Mandel’s declaration relates his personal beliefs and provides concrete evidence of the fact the parties had been engaging in settlement discussions. Moreover, Plaintiff claims that a statement referring to conversations is somehow hearsay. This is absurd. Evidence Code §1200 prohibits the introduction of some out-of-court statements submitted for the truth of the matter asserted. Mr. Mandel’s reference to the settlement discussions relates to the fact that the settlement conversations occurred: not for the truth of any statements that the parties’ respective counsels or agents made therein. Thus, the declaration is not hearsay. Evidence Code §1200. Plaintiff goes on and claims that Mr. Mandel declaration regarding settlement discussions is not true. (Opposition at pg. 4.) Given that “any doubts in applying Section 473 must be resolved in favor of the party seeking relief from default” and only “very slight evidence is required to set aside the default’,” Plaintiff's counsel’s competing declarations regarding a disputed issue of fact is not enough to defeat Defendants’ motion. In the event that the Court would be inclined to hold otherwise, Defendants should be able to conduct limited discovery regarding the veracity of Plaintiff's counsel’s and Mr. Duke’s declarations. Since Plaintiffs counsel has voluntarily made himself into a witness, in the event that the Court believes discovery is necessary, Defendants respectfully request to take his deposition prior to ruling on the merits of this motion. Defendants also request leave to depose Mr. Duke regarding communications that he had ' Plaintiff also objects to the first sentence of paragraph 3 of Mr. Mandel declaration because it is allegedly “vague and ambiguous as to time.” Mr. Mandel’s declaration, however, states that settlement discussions occurred “in or around October 2018.” This is more than enough specificity to constitute admissible evidence. ? Elston v. City of Turlock (1985) 38 Cal.3d 227, 233; Slusher v. Durrer (1977) 69 Cal. App. 3d 747, 753 3 Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal.2d aa. 531. REPLY ISO MOTION FOR RELIEF FROM DEFAULT JUDGMENT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 with Plaintiff's counsel, because Mr. Duke has waived the privilege by asserting in his declaration “T did not respond to such query based on the advice of counsel.” Plaintiff cannot use the attorney- client privilege as both a sword and a shield, and if discovery proves necessary to resolve this motion, Plaintiff has opened the door to questions regarding any such conversations. II. Defendants are Entitled to Mandatory Relief for Their Counsel’s Mistake of Fact and Neglect Plaintiff claims that Defendants are not entitled to mandatory relief under Section 473(b) because Mr. Mandel did not expressly state the words “fault” or “error” in his declaration. (Opposition at pg. 3-4.) Any good faith reading of Mr. Mandel’s declaration makes it evident that he is conceding that he was in error. As stated in Plaintiff's Opposition, Mr. Mandel made a “ridiculously erroneous” assumption regarding jurisdiction (Opposition at pg. 5), and he was obviously wrong about Plaintiff's appetite to resolve this dispute without litigation. None of the authorities cited by Plaintiff requires the affidavit of fault to specifically utter the words “error” or “fault.” Moreover, the principal case that Plaintiff relies on, State Farm & Casualty Co. v. Pietak (2001) 94 Cal.App.4th 600, 609, is readily distinguishable. In Pietak, rather than admitting fault, the defaulting attorney’s affidavit “chiefly authenticates documents,” and the attorney stated that what happened was “not a case of neglect.” (Jd) (Emphasis added). By contrast, Mr. Mandel concedes that he was wrong about his belief that the parties would be able to settle the matter and wrong about his belief regarding jurisdiction. (Declaration of Mr. Mandel at 493-4.) Regardless, in the event that the Court finds that it is necessary for Defendants’ Ohio counsel to write the words “error” or “fault” in his declaration to grand mandatory relief, Defendants seek leave to do so, and they will not object to Plaintiff filing a response to any supplemental declaration. -4- REPLY ISO MOTION FOR RELIEF FROM DEFAULT JUDGMENT 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 a 28 II. Conclusion There is a strong public policy in favor of hearing disputes on the merits, Elston v. City of Turlock (1985) 38 Cal.3d 227, 233, and when (as in here) there is no prejudice to the non-defaulting party, only “very slight” evidence is necessary to set aside a default. Dalmo Mfg. Co., 31 Cal.2d at 531. Defendants have submitted competent and admissible evidence that its Ohio counsel make a mistake of fact and committed excusable neglect, thereby entitling Defendants to a discretionary set aside of the default pursuant to CCP §473(b). This is especially true because Plaintiff has conceded that it suffered zero prejudice from this delay. Alternatively, Mr. Mandel has admitted that he made errors with respect to his beliefs regarding the possibility of settlement and jurisdiction. This entitles Defendants to mandatory relief under CCP §473(b). Dated: April 4, 2019. Respectfully submitted, THE BRINEGAR LAW FIRM Mlatihew Pronegar Matthew Brinegar (SBN 277517) Attorney for Defendants -5- REPLY ISO MOTION FOR RELIEF FROM DEFAULT JUDGMENT C o e e NN DR 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE JD2, Inc. vs. H2L1-CSC, JV, H2L1Engineering, Inc. and Coleman Spohn Corporation Superior Court of State of California, County of Placer Case No.: MCV0071316 I, the undersigned, herby certify that I am a citizen of the United States, over the age of eighteen years, and not a party to the within action. I am employed at The Brinegar Law Firm in the County of Alameda, California, and my business address is 1901 Harrison Street, 14" Floor, Oakland, California 94612. On April 4, 2019, I served on the following REPLY ISO MOTION FOR RELIEF FROM DEFAULT JUDGMENT; On interested parties below: Mark A. Serlin Attorney for Plaintiff JD2, Inc. Serlin & Whiteford, LLP 701 E. Street Sacramento, California 95814 BY OVERNIGHT MAIL: I cause true and correct copies of the above documents to be placed and sealed in envelope(s) addressed to the addressee(s) with postage thereon fully prepaid, and I further caused said envelope(s) to be placed with FedEx, in the City of San Francisco, and County of San Francisco, California. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on April 4, 2019, at Oakland, California. Matthew Brinegar REPLY ISO MOTION FOR RELIEF FROM DEFAULT JUDGMENT
