Monday, January 27, 2020
Court of Appeal:
Wilhite Points to CCP §580, Precluding Default Judgment Exceeding Demand
By a MetNews Staff Writer
The Court of Appeal for this district declared Friday that Los Angeles Superior Court Judge Joseph R. Kalin erred in granting a judgment for $27 million after a default prove-up where the complaint, in a legal malpractice action, sought $5 million.
“A default judgment that exceeds the amount demanded in the complaint is void as a matter of law,” Justice Thomas Wilhite of Div. Four said in an opinion that was not certified for publication.
The action was brought by Westwood attorney Douglas Bagby against Pasadena personal injury lawyer Joseph Davis. Although Davis succeeded in gaining a $5 million judgment against a 93-year-old motorist who caused an accident in 2013, resulting in the amputation of a portion of one of Bagby’s legs, no damages were assessed against a homeowner’s association.
Bagby sued his former lawyer, asserting that liability would have been established had Davis not neglected to present certain evidence. Davis, while announcing he would seek arbitration, did not file answer, and a default was entered.
Earlier Appellate Action
Los Angeles Superior Court Judge John P. Doyle in 2017 granted relief from the default pursuant to Code of Civil Procedure §473, finding excusable neglect. On April 16, 2018, Div. Four, also in an opinion by Wilhite, issued a writ directing that the default be reinstated, declaring:
“Conduct that amounts to substandard legal services or legal malpractice does not qualify as ‘excusable’ because the negligence of an attorney (whose client is himself) may not be a basis for relief.”
Following a prove-up, Kalin, to whom the case had been shifted, on Sept. 25, 2018, assessed damages at $27,146,021.41.
In his unpublished opinion on Friday, reversing the judgment, Wilhite pointed to Code of Civil Procedure §580 which provides:
“The relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint.”
Kalin exceeded his jurisdiction in making an award in violation of §580, Wilhite said.
“We… reject Bagby’s argument that, as his counsel in the underlying action, Davis was uniquely positioned to know of the maximum of his potential liability, and thus had actual or constructive notice of his potential exposure upon default. Neither actual nor constructive notice is sufficient to provide formal notice to a defendant of the maximum amount of his potential liability in the case of a default.”
Wording of Disposition
The opinion declares:
“The default judgment against Davis is vacated. The case is remanded with instructions for the trial court to do one of two things. It may permit Bagby to accept a new default judgment reducing the amount of his compensatory damages award to $5 million….Alternatively, the court may permit Bagby to file and serve an amended complaint demanding the amount and type of damages he seeks. If the latter option is pursued, the trial court shall vacate the default, entitling Davis to either attack the pleadings, or answer the amended complaint.”
The case is Bagby v. Davis, B294081.
Frank W. Nemecek and Mark Schaeffer represented Davis. Bagby was joined by James L. Keane in seeking an affirmance.
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