Metropolitan News-Enterprise


Friday, January 29, 2016


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Attorney’s Declaration of Fault Need Not State Reasons—C.A.




An attorney’s declaration of fault in support of a motion to set aside a default need not detail the reasons for the attorney’s “mistake, inadvertence, surprise, or neglect,” the Court of Appeal for this district ruled yesterday.

Div. Two affirmed Los Angeles Superior Court Judge Ruth Kwan’s order setting aside a default judgment entered in a dispute between a real estate developer and the company it hired to manage a project.

The developer, Corsair, LLC hired Martin Potts & Associates, Inc. in 2011. When Corsair stopped paying for those services, Potts sued.

A default judgment was entered in 2014 for more than $100,000. Corsair moved to set aside the default and judgment, submitting affidavits from attorney Nicholas Klein.

Klein explained that he had been representing Corsair for more than 15 years, and that he had received the complaint from the assistant to Corsair’s principal, but neglected to respond to the pleading.

Lawyer’s Fault

Kwan ruled that the entry of default and judgment was solely the result of Klein’s mistake, inadvertence, surprise or neglect in failing to either file a response or advise the client to do so. The judge gave Corsair 30 days to file a response and sanctioned Klein more than $5,200.

Justice Brian Hoffstadt, writing for the Court of Appeal, said the trial judge acted correctly under the mandatory provisions of Code of Civil Procedure §473(b), and that Klein was not required to explain why he failed to act in the matter.

Nothing in the text of the statute requires such an explanation, the justice noted, nor would imposing such a requirement serve the law’s purposes—to promote determination of cases on their merits, to relieve the innocent client of the consequences of the attorney’s fault, and to discourage additional litigation in the form of malpractice suits.

“[T]he purpose of the mandatory relief provision under section 473, subdivision (b) is achieved by focusing on who is to blame, not why,” Hoffstadt wrote. “Indeed, in many cases, the reasons for the attorney’s mistake, inadvertence, surprise, or neglect will be irrelevant; that is because…the mandatory relief provision entitles a party to relief even when his or her attorney’s error is inexcusable.”

He cited a case in which relief was granted because an attorney consciously decided not to file an answer, contrasting it with one in which relief was denied to a client whose lawyer made a strategic decision to err with intent to have the client later move under §473(b).

“We are reluctant to construe section 473, subdivision (b), to require in every case the production of information that will in many cases be of no use in deciding whether to grant relief,” the justice said.

Relevant, Not Mandatory

The jurist acknowledged that the reasons for the attorney’s failure to act may be relevant to the issue of whether fault lies with the attorney or the client, but said this was not a reason to require that those reasons be stated every time the statute is invoked.

“Because it is often unknown at the time a motion for mandatory relief is filed whether causation will be disputed, an attorney would be well served to include the reasons for his or her ‘mistake, inadvertence, surprise, or neglect’ in the affidavit of fault,” he wrote. “This is no doubt why practice guides so recommend….But the fact that it may be a very good idea to include an explanation of attorney fault does not mean it is a requirement of section 473, subdivision (b)’s mandatory relief provision.”

In this case, he went on to say, the attorney’s affidavit was sufficient.

“Klein’s acknowledgment that he received plaintiff’s lawsuit filings from Corsair and did nothing with them qualifies as not giving them proper attention, and thus as neglect,” the jurist wrote. “Because we are dealing with the mandatory relief provision, it does not matter whether Klein’s neglect was excusable or inexcusable.”

Potts, he acknowledged, presented evidence from which the trial judge might have inferred that Klein was acting at the direction of someone at Corsair in not filing a response. But since the order is reviewed under the substantial evidence test, and the defendant presented substantial evidence of Klein’s neglect, the order must be affirmed, Hoffstadt wrote.

Attorneys on appeal were Russ August & Kabat’s Matthew A. Rips for the plaintiff and Lerner & Weiss’s Leonard D. Lerner for the defendant.

The case is Martin Potts & Associates, Inc. v. Corsair, LLC, 16 S.O.S. 548.


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